Robinson v. J. Smith Lanier & Co. , 220 Ga. App. 737 ( 1996 )

McMurray, Presiding Judge,

dissenting.

I respectfully dissent from the affirmance of summary judgment in favor of the defendant insurance agency, J. Smith Lanier & Company of Carrollton. In my view, a jury question is presented as to whether an estoppel (or lack of standing) precludes the insurance agency from asserting a defense ordinarily available only to the insurer, i.e., a duty of cooperation that would itself bar the plaintiff employers, Glenn R. Robinson and Ronald C. Robinson, from waiving the statute of limitation defense in any action by their injured but uninsured employee.

According to the complaint and the admitted allegations, on December 13, 1990, plaintiffs submitted a reprinted form application for workers’ compensation insurance, which form identified defendant as the “AGENCY AND PRODUCER.” Plaintiffs tendered a check drawn on the Georgia bank account of R & R Construction for $6,225, constituting one year’s premium. This check was paid that same day and deposited into defendant’s account. Plaintiffs received from Valva Banister, defendant’s authorized representative, a certificate of insurance indicating that coverage was effective as of 12:01 a.m. on December 14, 1990, through December 14, 1991. Also on December 14, 1990, plaintiffs’ employee, Barry Dryden, was injured while within the course and scope of his employment. Plaintiff Glenn Rudolph Robinson confirmed that, while his company paid no hospital bills on behalf of Barry Dryden, “[w]e paid him $200 a week essentially because he couldn’t meet his obligations to pay his bills without it. I told him that we was having some misunderstanding with the insurance company and . . . [defendant] hadn’t started it. ... So I paid him $200 a week until he returned to work just so he would have some sort of income.” This $200 per week represented what the injured employee “needed to get by until Workmen’s Comp got started.” When plaintiffs made a claim against the policy, coverage was denied by the insurer to whom the policy was assigned on the ground that insurance was not effective as of the time of the accident. Plaintiffs allege that defendant negligently failed to place the insurance coverage in a timely manner.

Defendant denied liability and moved for summary judgment, urging that plaintiffs have not suffered any legal damages due to the following circumstances: The injured employee never pursued a workers’ compensation claim and the one-year statute of limitation (plus extensions) established by OCGA § 34-9-82 (a) for filing any such claim has expired. Defendant argued that, since it was too late for the employee to file a workers’ compensation claim against his employers (plaintiffs), plaintiffs are not exposed to any legal liability and, therefore, have not been harmed by any negligence of defendant.

On appeal, plaintiffs contend summary judgment for the insurance agency was inappropriate because they could and would waive any available statute of limitation defense should a workers’ compensation claim be brought by the injured employee.

Plaintiffs correctly argue they could waive the statute of limitation defense to a workers’ compensation claim. Maryland Cas. Co. v. Smith, 122 Ga. App. 262 (1), 263 (176 SE2d 666); Pittman v. Elder, 76 Ga. 371, 376. “ ‘Where an employer or his insurance carrier has furnished or paid for medical and hospital services to an injured employee, it is generally held that this constitutes a payment of compensation, or a waiver which suspends the running of the time for filing a claim for compensation.’ 58 Am. Jur. 850, § 417.” Chevrolet Div., Gen. Motors Corp. v. Dempsey, 212 Ga. 560, 564 (93 SE2d 703). In the case sub judice, the trier of fact could reasonably conclude that the weekly payments of $200 by plaintiffs to their injured employee constituted payments of compensation, subject to a promise to reimburse the employer out of the proceeds of any eventual award. This conduct would operate to toll the running of the statute of limitation even without a waiver, at least until such time as the final payment has been made. But a waiver could come at any time, despite the running of the statutory period. “ ‘The bar of the statute (of limitation) is a privilege to the defendant, the benefit of which he may elect to take advantage of or waive as he pleases. The statute in most instances operates upon the remedy and not the right; and hence if the defendant chooses not to raise the objection of the lapse of the statutory time, the right will be enforced, and will result in a judgment which will possess all the attributes of, and be as effective as, a judgment rendered within the statutory period.’ Parker v. Thompson, 219 Ga. 293, 296 (133 SE2d 28).” Searcy v. Godwin, 129 Ga. App. 827, 829 (1) (201 SE2d 670). In the case sub judice, it is my view that the trial court erred in reasoning that “the employee is barred from initiating a claim at this point,” (emphasis supplied) because the employer can waive the privilege of the statute of limitation defense at any time. Although the majority asserts, without citation of authority, that the employer cannot waive a valid defense “to the detriment of its insurance carrier,” (majority, ante, p. 738) this position overlooks the material fact that this action is against the negligent insurance agency and not the insurer. I am unable to join in the curious proposition that an insured’s duty to cooperate with the insurer (lest coverage be voided) redounds to the benefit of a careless or possibly faithless insurance agency. Here, the employers paid $6,000 for immediate coverage but were denied that benefit owing to the negligence of the insurer’s agent for accepting applications, i.e., the negligent brokerage. In my view, the employer should not bear the financial consequences of the insurer’s agent’s negligence. “When one of two innocent persons must suffer by the act of a third person, he who put it in the power of the third person to inflict the injury shall bear the loss." (Emphasis supplied.) OCGA § 23-1-14.

Additionally, I would not apply the “avoidance of consequences” doctrine to these circumstances. Under that doctrine, plaintiffs, as the alleged victims of defendant’s negligence, would be under a duty to exercise ordinary care to avoid the consequences of that negligence. Burnsed v. City of Albany, 184 Ga. App. 297, 300 (361 SE2d 275). “ ‘Closely allied to the doctrine of contributory negligence is the rule of “avoidable consequences,” which denies recovery for any damages which could have been avoided by reasonable conduct on the part of the plaintiff. Both rest upon the same fundamental policy of making recovery depend upon the plaintiff’s proper care for the protection of his own interests, and both require of him only the standard of the reasonable man under the circumstances.’ Prosser, [Law of Torts (4th ed.)], at 422; see Harper and James, [Law of Torts, Vol. 2, Ch. XXI], at 1231.” Osburn v. Pilgrim, 246 Ga. 688, 695 (273 SE2d 118). In my view of the case sub judice, this argument confuses plaintiffs as the ostensibly insured employers with the injured employee. Defendant would attribute any default by the employee to the employer-plaintiffs to relieve itself of the consequences of its own negligence. An insurance broker who negligently fails to obtain coverage specified by an insured “could be found liable ‘for any resulting loss. (Cit.)’ Wright Body Works v. Columbus Interstate Ins. Agency, [233 Ga. 268, 270 (210 SE2d 801)]. This means that [plaintiffs] could recover for the resulting uninsured ‘loss or damage to the limit of the agreed policy. (Cits.)’ Beiter v. Decatur Fed. S&L Assn., 222 Ga. 516, 518 (2) (150 SE2d 687) (1966).” England v. Ga.-Fla. Co., 198 Ga. App. 704, 705 (2) (402 SE2d 783). I find no authority that would deny plaintiffs’ recovery against their negligent insurance agent or brokerage because an employee of the insured employer failed to pursue a workers’ compensation claim. To so deny recovery in the case sub judice would have the anomalous result of imposing a penalty upon an employer that did not contest a clear case of coverage under the Georgia Workers’ Compensation Act but extended payments without the formality of a claim. It is the public policy of Georgia to encourage settlements between the employee and the employer, “so long as the amount of compensation and the time and manner of payment are in accordance with [OCGA § 34-9-1 et seq.].” OCGA § 34-9-15. In my opinion, the trial court erred in granting summary judgment to the defendant insurance agency on the ground that plaintiffs have sustained no compensable injury. As my colleagues in the majority would nevertheless affirm that unwarranted grant of summary judgment, I respectfully dissent.

Decided March 15, 1996 Murphy, Murphy & Garner, Stephen E. Garner, for appellants. Tisinger, Tisinger, Vance & Greer, Robert H. Sullivan, for appellee.