Atlanta Casualty Co. v. Flewellen ( 1982 )

Birdsong, Judge.

Insurance Coverage. Each of the cases considered in this decision reached this court as a separate appeal. Atlanta Cas. Co. v. Flewellen, case no. 64501, resulted in summary judgment being entered for the insured, Mrs. Flewellen. In Van Dyke v. Allstate Ins. Co., case no. 64511, the opposite result occurred with summary judgment for Allstate, the insurer. However, the facts are substantially the same and the pivotal issue presented to this court in each case simply stated is whether the optional coverages of Code Ann. § 56-3404b (b), effectively were offered to and rejected by Flewellen and Van Dyke. This one issue can be resolved in a single opinion; therefore, the court in the interest of judicial economy consolidates the two cases as one. Nevertheless, the facts will be separately stated.

In no. 64501, Flewellen, the facts show that Mrs. Flewellen was issued automobile insurance by Atlanta Cas. Co. effective March 6, 1979 for one year. This policy was issued pursuant to an application accepted by Atlanta Casualty on March 5. The application consisted of two pages. Page 1 is entitled “Private Passenger Auto Application.” This page contained general personal information pertaining to mandatory minimum coverage for liability and no-fault coverage. On the obverse of the application there appeared at the top of the page in large capital letters “OFFER TO PURCHASE ADDITIONAL COVERAGE.” (See Appendix I.) Only the statutorily required optional coverages of no-fault insurance appear on this obverse side. The first offer related to optional, additional personal injury protection required by Code Ann. § 56-3404b (a). The application provided as follows: “I elect the following aggregate personal injury protection (PIP) and reject all other options. Additional benefits include the basic $5,000.” The form then set forth spaces providing for a possible choice of $10,000, $25,000, $50,000 and finally a rejection of all PIP options (Code Ann. § 56-3404b (a) (1)) (OCGA § 33-34-5 (a) (1) (Michie 1982) (Editorial Change only)). The form reflects by a written entry in each appropriate space that Mrs. Flewellen rejected all offered optional coverage. The second offer pertained to additional property loss coverage and specifically offered full coverage collision; full coverage comprehensive; and loss of use coverage. (Code Ann. § 56-3404b (a) (2)) (OCGA § 33-34-5 (a) (2) (Michie 1982) (Editorial change only)). These optional coverages provided spaces for acceptance or rejection, and reflected that Mrs. Flewellen rejected this coverage by appropriate execution in the space provided.

Immediately below these separate offers, the language appears: “IMPORTANT: All above coverages must indicate accepted or rejected before application is signed by applicant.” Then immediately above the space reserved for the applicant’s signature appears the following, all in capital letters: “APPLICANT’S STATEMENT — READ BEFORE SIGNING.” Thereafter on the same page as that containing the offer to purchase the optional coverage and fully separated from the other provisions pertaining to the application which appear on the front side of the application, there is affixed the signature of Mrs. Flewellen.

In case no. 64511, Van Dyke v. Allstate Ins. Co., the facts are slightly different. Allstate issued Vera Van Dyke an auto insurance policy based upon an application dated December 10, 1975 for a period of five years with a premium renewal each six months. This application consisted of three pages. The first page was entitled “Application for Automobile Insurance.” This first page reflected personal information concerning mandatory minimum liability and PIP coverage and contained the signature of the applicant. Page 2 listed the operators, driving records and insurance record, likewise signed by the applicant. Page 3 was entitled “ACCEPTANCE/REJECTION OF OPTIONAL COVERAGES.” (See Appendix II.) The following advice was provided on page 3: “You have the right to reject these coverages or to select other options if available.” Under this advice, there appear the two types of optional coverage required by Code Ann. § 56-3404b (a) (1) and (2) supra, i. e., personal injury protection with spaces for accepting or rejecting $10,000, $25,000 or $50,000 additional coverage; and property damage coverages with spaces for accepting coverages for collision, comprehensive, and loss of use — rental reimbursement. All spaces were executed reflecting Van Dyke had rejected all options except for her acceptance of comprehensive coverage. Separately under each of these four offers indicating her choice, there appears the signature of Mrs. Van Dyke.

Each of these cases reached this court following the grant of summary judgment by the trial court based upon its interpretation of the recent decision of this court in Jones v. State Farm Mut. Auto. Ins. Co., 156 Ga. App. 230 (274 SE2d 623). The confusion created by Jones is manifested by the fact that the two trial judges each reached opposite conclusions. Thus in case no. 64501, the trial court granted summary judgment to Mrs. Flewellen and denied summary judgment to the insurer, Atlanta Casualty. In the case of Van Dyke, the trial court granted summary judgment to the insurer Allstate and denied same to Van Dyke. The respective appeals followed. Held:

The question posed by each of these cases arises out of the interpretation placed upon the controlling statute by this court in the Jones case. In that case, this court held at p. 233: “We construe Code Ann. § 56-3404b as imposing an evidentiary burden upon no-fault insurers to demonstrate that optional coverages were expressly offered to, and knowingly accepted or rejected in writing by, each of their applicants for no-fault insurance. This evidentiary burden is satisfied if and when an insurer can demonstrate that its applicants completed and signed separate spaces on the no-fault insurance application form indicating their acceptance or rejection of each of the optional coverages listed in Code Ann. § 56-3404b (a).”

The insurers in the case under review, Atlanta Casualty and Allstate, now ask this court to re-examine the language of Code Ann. § 56-3404b (a) (2) as interpreted by the Jones case and reverse the requirement of that case which called for a separate space and a separate signature by or at each space setting forth each choice contained as a subpart of the two optional coverages mentioned in Code Ann. § 56-3404b (a); i. e., PIP and property damage. Thus, each insurer contends that the intent of the statute is satisfied where there is a separate election shown in writing as to optional property coverage and one of the optioned amounts of $10,000, $25,000, or $50,000, followed by a signature reflecting that the writing shows the selected choice was personally and knowledgeably made by the applicant for the particular coverage.

We accept that responsibility and have carefully re-examined the statute to glean from it the intent of the General Assembly. The cardinal rule of statutory construction is to ascertain the intent of the legislature. It is equally fundamental that it is our duty to look first to the language of the statute and if the legislative intent is plain and expressed unambiguously, there is no interpretation required before the court executes its sworn duty to enforce the statute. Thus our primary concern is whether Code Ann. § 56-3404b (b) is plain and unambiguous as this court has stated in Jones. Bauer Intl. Corp. v. Cagles, Inc., 225 Ga. 684, 686 (171 SE2d 314). To resolve this issue one must look not only to the literal language of the statute but also to the recognized rules of statutory construction as well as equally well recognized rules of reason and logic, among the foremost of which is to read and construe a statute so as to give effect to its author’s intent. Where language, rules of construction, and logic coincide the answer is apparent and simple. But where the literal language, that is the diction, grammar, and syntax, does not square with reason or intent, then the literal must yield. With full benefit of hindsight, aided by the insights of both bench and bar, we now conclude particularly that the portion of Code Ann. § 56-3404b (b) requiring “these spaces [to be] completed and signed” is neither clear nor free from ambiguity.

It appears manifest from a reading of Code Ann. § 56-3404b (b) that the legislature was addressing the subject of applications for motor vehicle liability insurance. Inasmuch as this code section referred to optional coverages, the legislature also required separate spaces designed to inform the applicant of his choice of additional coverage of PIP and property damage. Because of the position of words in a subordinate clause appearing at the end of an independent clause referring to policies of insurance for which applications are made wherein the subordinate clause required spaces to be executed and signed, did the legislature intend the spaces to be executed and the application signed? Or are we as a court required blindly to render a literal reading that would require a signature to accompany a space designed no larger than one that will accommodate a checkmark or an “X” to reflect a choice?

We conclude that to require a separate and repetitive signature by each subspace defies the rules of logic and reason and blindly applies a rule of literalness.

To illustrate the illogic of so literal an interpretation, the following examples may be pertinent: Had the statute required the insurer to prepare a multi-form document containing various copies in differing colors and require the insurer to furnish the insured with a “pink” copy and the insurer inadvertently furnished the insured with a “green” copy, there would be no compliance with the statute. Again, the section deals with applications for motor vehicle insurance. Surely the legislature would intend the applicant to sign his application. However, a literal interpretation would require only the spaces to be executed and signed and would not require the application itself to be signed. Furthermore, the statute provides that no policy shall be issued in this state unless the spaces are completed and signed. A literal interpretation would require a conclusion that if subspaces were not executed and signed, no policy could issue and a policy issued without the spaces signed would be void. Lastly, we observe that the bench and bar of this state long has interpreted a statute calling for a similar signing of subportions to mean only a signing at the end of the document to personalize it rather than to require the individual components of the document be signed. We refer to Code Ann. § 81A-133 (a) (OCGA 9-11-33 (a) (2) (Michie 1982)) wherein the pertinent statute provides: “(2) Each interrogatory shall be answered separately and fully in writing under oath____The answers are to be signed by the person making them — ” A literal interpretation of this provision mandates that each answer be signed, but the reasonable and logical interpretation suggests and practice demands only that the deponent sign at the end of the interrogatory, the practice long followed in this state.

If because of ambiguity we are forced to depart from a literal reading and proceed to a logical interpretation, we more comfortably read Code Ann. § 56-3404b (b), to require separate spaces for an insured to indicate by execution in those spaces his acceptance or rejection of each of the optional coverages (PIP and property damage) and no policy will issue unless these spaces are completed and the application appropriately signed by the insured. Some support is provided for this position from the fact that after Jones, supra, became the law of this court the legislature in its session in 1982 amended Code Ann. § 56-3404b (b) to read: “(b) Each initial application for a new policy of motor vehicle liability insurance sold in this state after November 1, 1982, shall contain a statement in bold-faced type signed by the applicant indicating that the optional coverages listed in subsection (a) of this Code section have been explained to the applicant.” Obviously, the legislature intended to and did remove any requirement that spaces be executed or signed. “ ‘If it can be gathered “from a subsequent statute in pari materia what meaning the legislature attached to the words of a former statute, this will amount to a legislative declaration of the meaning, and will govern the construction of the first statute.” ’ ” Forrester v. Interstate Hosiery Mills, 194 Ga. 863, 866 (23 SE2d 78), quoting Barron v. Terrell, 124 Ga. 1077, 1079 (53 SE 181) and citing Wingfield v. Kutres, 136 Ga. 345, 349 (71 SE 474); see also Moore v. Ga. Public Service Comm., 242 Ga. 182, 184 (249 SE2d 549). Lastly, when subsection (c) of this statute is considered in conjunction with (b), the notice requirement of subsection (c) makes illogical the multiple signature interpretation of Jones. Subsection (c) authorizes a presumption of rejection of optional coverage if after an insured of an existent insurance policy has been notified of the availability of optional coverages, the insured fails to notify the insurer of his written acceptance or rejection within 30 days after written notice of the offer by first class mail. It is hardly logical that the legislature would require such specific notice and acknowledgement as in subsection (b) and yet allow a presumption of rejection by failure to respond in (c).

Though we agree facially that a literal reading of Code Ann. § 56-3404b (b) seems to call for an execution and signing of each subspace as enunciated in Jones, supra, as previously observed “... [t]he intention of the Legislature, is the cardinal guide to construction and ‘[t]he real intention, when collected with certainty, will always, in Statutes, prevail over the literal sense of terms.’ ” Erwin v. Moore, 15 Ga. 361, 364. Stated otherwise, “ ‘[i]n construing a Statute, wherever the intention of the Legislature can be discovered, it should be followed with reason and discretion, though such construction should seem contrary to the letter of the Statute.’ ” Id. Accordingly, because we find the construction of Code Ann. § 56-3404b (b) in Jones v.State Farm Mut. Auto. Ins. Co., supra, tobe contrary to the intent of the General Assembly, we hereby overrule that case.

In view of the above, we read the provisions of Code Ann. § 56-3404b (b) to reflect the intent of the legislature to make certain that an applicant for auto insurance is aware that he (the applicant) optionally is entitled to higher amounts of PIP or property damage coverage than required by the statute as minimum mandatory coverage. In order to insure this awareness, it requires that the applicant be presented with the statutory options with spaces for acceptance or rejection of one of the three higher coverages of PIP or property damage. This election is to be made in writing and personally affirmed by the placement of a signature of the applicant on the application in such a manner that it reasonably demonstrates awareness of the availability of the options and the choices made. Inasmuch as the legislature did not mandate a particular format to be followed, it is clear that the insurer was left the power of preparing a form which would satisfy the statutory requirement of providing a separate space for each form of optional coverage allowing a showing of acceptance or rejection thereof, and a place for a signature reflecting that the applicant had had an opportunity and personally had exercised the option.

Examining the two cases in question in light of the legislation, we find the following: In Van Dyke on a separate (third) page dealing with nothing except acceptance or rejection of optional coverages, the form listed three optional amounts of PIP coverage ($10,000, $25,000 and $50,000) and provided a separate space for acceptance or rejection of each amount. There was a written choice shown for each amount (rejection). Immediately thereunder was the written signature of Vera Van Dyke. Likewise property damages choices pertaining to collision, comprehensive, and loss of use were separately offered with separate spaces allocated for the applicant’s acceptance or rejection. The application reflects a written rejection in the space for each option subscribed by the separate signature of Vera Van Dyke, thus a total of four signatures in all. In the Flewellen case, on the obverse side of the application and dealing only with the offer to purchase optional coverages, the applicant was required to elect one of three optional amounts of PIP ($10,000, $25,000, or $50,000) or reject all three; and to elect or reject full coverage collision, comprehensive, loss of use and uninsured motorist. Appearing thereon was a written choice in the spaces provided showing a rejection of all PIP and optional property damage coverage. The applicant, Mrs. Flewellen, was advised on the face of the application that each of these coverages individually must indicate acceptance or rejection before signing and that the applicant should read the statement before signing. Following immediately thereunder was Mrs. Flewellen’s written signature. The insureds (Flewellen and Van Dyke) do not (nor could they reasonably) contend that a separate space was not provided for each of the three optional amounts of PIP or property damage coverage or that a written election was not entered as to each election in their respective applications. Their only contention is that a separate signature did not accompany each of the three sub-PIP options.

As hereinbefore indicated, such a literal interpretation is inconsistent with the logical and meaningful purpose of the legislature and would place form over substance. The intent of neither Mrs. Flewellen nor Mrs. Van Dyke to reject all optional coverages of PIP would have been more clearly demonstrated by the placement of a separate signature after each written PIP rejection. Though the repeated signatures probably would not have been improper, the absence of these repetitive signatures does not detract from the clear awareness that the optional coverages were offered and rejected by the applicants. A signature does immediately follow the election concerning the only two types of coverage mentioned in Code Ann. § 56-3404b (a) as required by Code Ann. § 56-3404b (b) (PIP and property coverage). This placement of each signature in these cases reasonably satisfies the statutory intent that an applicant signify understanding of the optional coverages, the right to accept or reject the same, and the volitional and knowledgeable exercise of those rights by affirming and affixing a signature in such a place and way that no other reasonable conclusion is possible. In the light of the problem presented (to make the insured aware of the options), the remedy sought (a knowledgeable choice) and the insurer’s implementation of the statute (the preparation of the application forms), we conclude that the manifest legislative intent and purpose is satisfied.

Moreover, neither Mrs. Flewellen nor Van Dyke deny that they signed the applications on which was so prominently displayed the optional PIP coverages. They do not allege any legal reason or incapacity which enticed or precluded them from reading that which they signed. This being so, each applicant is presumed to have read the application and to have understood the contents thereof. Parker v. Fidelity Bank, 151 Ga. App. 733, 734 (261 SE2d 465); State Farm Fire &c. Co. v. Fordham, 148 Ga. App. 48, 52 (1) (250 SE2d 843); Jefferson Standard Life Ins. Co. v. Bridges, 147 Ga. App. 5, 7 (4) (248 SE2d 5); Feltman v. Nat. Bank of Ga., 146 Ga. App. 434, 437 (246 SE2d 447).

Decided December 1, 1982 Rehearing denied December 13, 1982 William C. Sanders, for appellant (case no. 64501). William H. Hendrick, for appellee. O. J. Mullininx, Don C. Keenan, for appellant (case no. 64511). Martin Kent, Thomas S. Carlock, R. Clay Porter, for appellee. John R. Rogers, James E. Butler, Jr., Alfred L. Allgood, Andrew W. Estes, Don C. Keenan, Lamar W. Sizemore, Jr., William S. Stone, William Lewis Spearman, James G. Jackson, Oliver B. Dickins, Jr., Bryan F. Dorsey, A. Terry Sorrells, Anthony J. McGinley, N. Forrest Montet, Robert M. Travis, Thomas D. Harper, H. Andrew Owen, Timothy J. Sweeney, amici curiae.

Based upon the foregoing it is concluded that the trial court erred in granting summary judgment to Mrs. Flewellen and denying summary judgment to Atlanta Casualty Company. We find no error in the grant of summary judgment to Allstate Ins. Co. Accordingly, the judgment in case no. 64501 is reversed and the judgment in case no. 64511 is affirmed.

Judgment reversed in No. 64501 and affirmed in No. 64511.

Deen, P. J., Shulman, P. J., SognierandPope, JJ., concur. Deen, P. J., concurs specially. Quillian, C. J., McMurray, P. J., Banke and Carley, JJ., dissent.

Appendix I

Appendix II

Appendix III