Lead Opinion
Luis Cаstellanos filed this action in the State Court of Gwinnett County against Travelers Home & Marine Insurance Company to recover uninsured motorist (UM) insurance benefits, statutory penalties for Travelers’ alleged bad faith in refusing to pay benefits, and attorney fees. The trial court granted Travelers’ motion for summary judgment and denied Castellanos’ motion, and he appeals both rulings. For the reasons explained below, we reverse in part, as to the court’s grant of summary judgment in favor of Travelers.
Under OCGA § 9-11-56 (c)
[sjummary judgment is warranted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. We review*675 the grant or denial of a motion for summary judgment de novo, and we view the evidence, and the reasonable inferences drawn therefrom, in a light most favorable to the nonmovant.
(Punctuation and footnotes omitted.) Assaf v. Cincinnati Ins. Co.,
So viewed, the record shows the following undisputed evidence. On September 22,2009, Castellanos was injured in a wreck caused by the negligence of another driver, Jose Santiago. At the time of the wreck, Castellanos was a named insured under a UM policy Travelers issued to Lucrecia Arias, and he was driving a covered automobile.
Castellanos filed suit against Santiago for his injuries. Santiago’s liability insurance carriеr, United Automobile Insurance Company, provided a defense. Castellanos also served the summons and complaint on Travelers as his UM carrier, and Travelers’ counsel participated in the suit through the end of the trial. After a trial, which Santiago did not attend, a jury returned a verdict in favor of Castellanos, and, on February 1, 2012, the trial court entered judgment against Santiago for $3,731 in compensatory damages, $3,269 in punitive damages, and $135.50 in court costs.
Castellanos demanded payment of the judgment from United as Santiago’s liability carrier. After some communication between counsel, United formally denied any coverage, based on Santiago’s “lack of cooperation in the defense of [Castellanos’] lawsuit and [his] failure to attend the resulting trial.” Castellanos then demanded that Travelers pay the compensatory damages under Arias’ UM policy. Travelers failed to pay UM benefits within 60 days of Castellanos’ demand.
Castellanos filed the instant action against Travelers, alleging, inter alia, that Travelers’ refusal to pay UM benefits was made in bad faith.
1. Castellanos cоntends that the trial court’s ruling improperly shifted to him the burden of coming forward with evidence that supported United’s denial of coverage and that the trial court erred in granting Travelers’ motion for summary judgment. We agree.
One essential element of Castellanos’ action against Travelers was that Santiago was the owner or operator of an uninsured motor vehicle, as defined by Arias’ UM policy and Georgia law. OCGA § 33-7-11 (j).
In this case, it is undisputed that Santiago’s liability policy required him to cooperate with United’s defense against Castellanos’ tort action and authorized United to withdraw coverage if Santiago failed to cooperate in the defense. Such cooperation clauses are enforceable under Georgia law.
Travelers contends that it was nonetheless justified in failing to pay UM benefits, and the trial court agreed, finding that Castellanos failed to come forward with evidence that United’s denial of coverage was a legal denial. In casting upon Castellanos the burden of coming forward with evidence that United reasonably requested Santiago’s cooperation, that Santiago willfully and unjustifiably failed to cooperate, and that his failure to cooperate was prejudicial to United, the trial court required Castellanos to discharge a burden that United would have borne as a defendant in a suit under OCGA § 33-4-6
2. Castellanos contends that the trial court erred in denying his motion for summary judgment. Because the question of bad faith is for the jury,
Judgment affirmed in part and reversed in part.
Notes
OCGA § 33-7-11 (j) provides, in pertinent part:
If the [UM] insurer shall refuse to pay any insured any loss covered by this Code section within 60 days after a demand has been made by the insured and a finding has been made that such refusal was made in bad faith, the insurer shall be liable to the insured in addition to any recovery under this Code section for not more than 25 percent of the recovery and all reasonable attorney’s fees for the prosecution of the case under this Code section. . . .
The precise issue presented by the record, the trial court’s ruling, and Castellanos’ arguments on appeal appears to be a matter of first impression. We do not find it necessary to overrule any contrоlling precedent. Accordingly, we reject the dissenters’ contention, see dissent at 685, that this opinion necessitates appellate review by all 12 judges of this Court.
Footnote 1, supra. See generally Frank E. Jenkins III, Ga. Auto. Ins. Law, §§ 37:4 (demand for payment and bad faith), 37:5 (separate action for bad faith), 37:22 (proving uninsured status of offending motorist) (2013-2014 ed., updated October 2013).
Under the terms of Arias’ UM policy, Travelers agreed to “pay compensatory damages which an ‘insured’ is legally entitled to recover from the owner or operator of an ‘uninsured motor vehicle’ because of” an insured’s bodily injury or property damage caused by an accident. In pertinent pаrt, the policy defines an “uninsured motor vehicle” as a motor vehicle “[t]o which a liability bond or policy applies at the time of the accident but the bonding or insurance company . . . [l]egally denies coverage[.]”
The UM statute provides in pertinent part that “ ‘[ujninsured motor vehicle’ means a motor vehicle... as to which there is... [bjodily injury liability insurance and property damage liability insurance in existence but the insurance company writing the insurance has legally denied coverage under its policy[.]” OCGA § 33-7-11 (b) (1) (D) (iii).
Southern Gen. Ins. Co. v. Thomas,
Hemphill v. Home Ins. Co.,
Vaughan v. ACCC Ins. Co.,
In the event of a loss which is covered by a policy of insurance and the refusal of the insurer to pay the same within 60 days after a demand has been made by the holder of the policy and a finding has been made that such refusal was in bad faith, the insurer shall be liable to pay such holder, in addition to the loss, not more than 50 percent of the liability of the insurer for the loss or $5,000.00, whichever is greater, and all reasonable attorney’s fees for the prosecution of the action against the insurer. .. .
OCGA § 33-4-6 (a).
Once a plaintiff establishes [the] right to payment of a judgment against the insured tortfeasor, the [tortfeasor’s liability carrier] may defend agаinst the [plaintiff’s] claim [for bad faith refusal to pay the tort judgment] by showing that it properly withdrew its coverage of the underlying incident because its insured failed to cooperate in [the] defense. [To justify a withdrawal of coverage based on the insured’s failure to cooperate,] [t]he insurer must show: (a) that it reasonably requested its insured’s cooperation in defending against the plaintiff’s claim, (b) that its insured wilfully and intentionally failed to cooperate, and (c) that the insured’s failure to cooperate prejudiced the insurer’s defense of the claim. Once the [tortfeasor’s liability carrier] presents evidence that it was entitled to withdraw coverage, the burdеn shifts to the plaintiff to establish that the [insured tortfeasor’s] failure to cooperate was justified.
(Citations omitted.) Vaughan v. ACCC Ins. Co.,
Every person familiar with the trial of cases by jury knows that the case of an individual defendant is seriously, if not hopelessly, prejudiced by his absence from the trial. His failure to be present in defense of the claim can have an intangible effect upon the jury both as to the question of liability and the amount of the verdict, the net effect of which is difficult to measure. Unexpected developments in the plaintiff’s evidence might be offset by an explanation on the part of the insured.
(Citations and punctuation omitted.) H. Y. Akers & Sons v. St. Louis Fire & Marine Ins. Co.,
Cf. Anthony v. Larios,
In response to the dissent at 684, we clarify that Castellanos made out a prima facie сlaim for UM benefits by showing that he is legally entitled to recover from Santiago for injuries he sustained in the accident; that Travelers provided him UM coverage, under Arias’ policy, which defined an uninsured motor vehicle as one to which, although a liability policy applied
The dissenters contend that the burden of proving a legally sustainable denial of coverage “is not unduly onerous.” Dissent at 684, n. 23. But the burden of proving the opposite — Travelers’ burden — is no more onerous and can be satisfied by the same mechanisms the dissent suggests. Travelers could name United as a third-party defendant and seek a declaration as to which policy provides coverage for Castellanos’ judgment, “thus placing the burden on United to prove a legal denial of coverage.” Id. Alternatively, Travelers could depose United’s counsel to determine what efforts counsel made to secure Santiago’s cooperation. Id. In discerning the parties’ relative burdens of coming forward, we must not lose sight of the purpose of UM insurance motorist legislation, which is “to require some provision for first-party insurance coverage to facilitate indemnification for injuries to a person who is legally entitled to recover damages from an uninsured motorist, and thereby to protect innocent victims from the negligence of irresponsible drivers.” (Citation and punctuation omitted.) Hinton v. Interstate Guar. Ins. Co.,
Willis v. Kemp,
In Southern Gen. Ins. Co. v. Thomas, the trial court correctly denied a UM carrier’s motion for summary judgment where the liability carrier denied coverage on the basis that the tortfeasor violated the liability pоlicy’s cooperation clause by failing to appear at trial and the UM carrier did not contend that there was a genuine issue of material fact as to whether the particular circumstances of the tortfeasor’s failure to cooperate would form a legally sustainable basis for the liability carrier’s denial of coverage.
Jimenez v. Chicago Title Ins. Co.,
Dissenting Opinion
dissenting.
I respectfully dissent to the majority’s opinion in this case because I believe it ignores long-standing principles of Georgia law and the language of the insurance policy at issue to improperly shift the burden to Travelers to prove Castellanos’s claim.
Thе primary issue raised on appeal is the legal question of whether the insured seeking UM coverage or the UM carrier bears the burden of proving that UM coverage applies in order to survive summary judgment. It is well settled, however, that Castellanos, as the insured, had “the ... burden to prove (1) the existence of a policy of liability insurance containing uninsured motorist protection, and (2) that [Santiago] was an uninsured motorist at the time of the [wreck]. The court could not presume that [Santiago] was an uninsured motorist.” (Citations and punctuation omitted.) Williams v. Safeway Ins. Co.,
This requirement is simply a reiteration of the principle that an insured claiming an insurance benefit “has the burden of proving that a claim falls within the coverage of the policy.” Ga. Farm Bureau Mut. Ins. Co. v. Hall County,
The applicable policy provisions state that Travelers agreed to “pay compensatory damages which an ‘insured’ is legally entitled to recover from the owner or operator of an ‘uninsured motor vehicle’ ” because of an insured’s bodily injury or property damage caused by an accident. The Policy defines an “uninsured motor vehicle” in pertinent part as “a land motor vehicle or trailer of any type ... [t]o which a liability bond or policy applies at the time of the accident but the bonding or insurance company . . . [IJegally denies coverage.”
The record reflects that United cited Santiago’s lack of cooperation as the basis for its denial of coverage,
[a] co-operation clause is a material condition of a liability policy аnd a breach of it in any material respect relieves the insurer of liability. The voluntary and unexcused failure of an insured to attend a trial, after notice or request to do so, upon a claim covered by his policy of insurance is such a breach of the clause.
H. Y. Akers & Sons, Inc. v. St. Louis Fire & Marine Ins. Co.,
Travelers sought summary judgment on the ground that Castellanos failed to present evidеnce to support any of the three elements required to prove the lack of cooperation required for establishing a legal denial of coverage. It is well settled that
a defendant who will not bear the burden of proof at trial need not affirmatively disprove the nonmoving party’s case, but may point out by reference to the evidence in the record*683 that there is an absence of evidence to support any essential element of the nonmoving party’s case. Where a defendant moving for summary judgment discharges this burden, the nonmoving party cannot rest on its pleadings, but rather must point to specific evidence giving rise to a triablе issue.
(Citations and punctuation omitted.) Cowart v. Widener,
Castellanos initially argued below that he carried his burden of proof merely by showing that Santiago failed to attend the trial, which he asserted showed per se prejudice to United. But following the hearing on the motion for summary judgment, Castellanos’s attorney submitted a post-hearing brief and his own affidavit making additional assertions, apparently in support of the first two required elements for a lack of cooperation.
But neither these assertions nor any other evidence of record provide proof of any efforts made by United to locate Santiago, to obtain his cooperation, or to secure his attendance at trial. Accordingly, Castellanos failed to carry his burden of establishing that an issue of fact exists as to whether United “exercised good faith and diligence in an effort to procure the attendance of the insured at the trial,” H. Y. Akers,
The record also contains no evidence demonstrating, or raising an inference of, an intentional or wilful refusal by Santiago to comply with any request by United for cooperation.
Because Castellanos failed tо present evidence creating a material issue of fact as to the first two requirements for showing a legal denial of coverage by United,
The majority’s analysis erroneously shifts the burden of proving Castellanos’s prima facie case to Travelers. The majority asserts that Castellanos made out a prima facie claim merely by showing that Travelers provided him UM coverage, that he is legally entitled to recover from Santiago for the injuries he sustained in the accident, that United denied coverage on the basis of Santiago’s lack of cooperation, and that proof of Santiago’s failure to attend the trial is alone sufficient to show a lack of cooperation. But as discussed above, proof that an insured failed to attend trial is insufficient to establish the lack of cooperation necessary to establish a legal denial of
Significantly, the majority fails to cite any authority to support its argument that the evidence of record is sufficient to make out a prima facie case for a legal denial of coverage. The case of Southern General Ins. Co. v. Thomas,
The majority also fails to cite any authority to support shifting the burden to an UM insurer to make out its insured’s prima facie case for coverage, because no such authority exists. Indeed, to make the radical shift in the law the majority is suggesting would require the overruling of longstanding Georgia case law and would necessitate appellate review by all 12 judges of this Court. OCGA § 15-3-1 (d). Contrary to the majority’s analysis, an insurer, likе Travelers, who merely points to an insured’s lack of evidence to support his claim for coverage is not asserting an affirmative defense. Rather, it is simply arguing for summary judgment under the applicable standard for a party who will not bear the burden of proof at trial by pointing to its opponent’s failure to make out his prima facie case. Although the majority contends that Travelers’ argument on summary judgment equates with an affirmative defense because once this Court shifts the burden of proof to the insurer to make out its insured’s prima facie case, the insurance company will have to set up
For these reasons, I would affirm the trial court’s order granting summary judgment to Travelers.
I am authorized to state that Presiding Judge Andrews and Judge Ray join in this dissent.
Although an insured must also prove the uninsured motorist’s liability for the insured’s damages, Santiago’s liability in this case was determined in the underlying suit filed by Castellanos. See Morton v. Horace Mann Ins. Co.,
The Policy’s language mirrоrs the statutory definition of “uninsured motor vehicle” under OCGA § 33-7-11 (b) (1) (D) (iii).
In response to Castellanos’s demand for payment, United’s counsel originally told him that United was prepared to pay the compensatory damages portion of the judgment in exchange for a satisfaction of judgment but would not pay the remainder of the award, asserting
In the affidavit, the attorney averred that “[t]he facts alleged by me in Plaintiff’s Reply Brief to Defendant’s Post-Hearing Brief as to the attached pleadings as Exhibits and my conversations with United’s ... [attorney] in the underlying case are true and based upon my personal knowledge.” Although the affidavit was a clear attempt to affirm hearsay as fact, Travelers raised no objection below, and thus the averments containing hearsay must be considered as evidence. See OCGA § 24-8-802.
To the contrary, Castellanos’s counsel represented that United’s counsel told the jury in the prior litigation that Santiago had no idea that the trial was taking place. This led to a sustained objection on the ground that United was addressing facts not in evidence in its argument. As the objection indicates, Castellanos’s counsel was well aware that such representations are not evidence.
I note that this burden is not unduly onerous. Castellanos could have named both United and Travelers as party defendants and sought a declaration as to which insurer had liability for his claims, thus placing the burden on United to prove a legal denial of coverage. At the very least, he could have deposed United’s counsel to determine what efforts he made to secure Santiago’s cooperation. But Castellanos took no such action.