A. Atlanta Autosave, Inc. v. Generali - U. S. Branch , 270 Ga. 757 ( 1999 )

Hines, Justice.

We granted certiorari to the Court of Appeals to consider its decision in A. Atlanta AutoSave v. Generali — U. S. Branch, 230 Ga. App. 887 (498 SE2d 278) (1998), an appeal in an action for declaratory judgment about the priority of insurance coverage for a rental vehicle involved in a collision. We affirm because the Court of Appeals correctly concluded that the car rental agency, AutoSave, could not avail itself of the exemption provided a U-drive-it owner under OCGA § 40-9-102,¹ rendering its insurance for the rental car primary for coverage of the collision.

The facts are set forth in the Court of Appeals opinion. On January 12, 1995, A. Atlanta AutoSave rented a car to Cabey. Cabey’s companion, Roberts, was named in the rental agreement in the space provided for additional drivers, but she did not sign the contract. Cabey and Roberts both presented insurance information to the rental agent and manager, Haraka. Cabey produced an insurance card showing she had automobile liability coverage with Southern General Insurance Company through February 24, 1995. Roberts provided an insurance card showing she had automobile liability insurance with Generali — U. S. Branch through April 14, 1995. Cabey’s insurance information was entered on the contract under “Renter’s Applicable Insurance.” Roberts’ insurance information was handwritten in the middle of the rental agreement under the heading “Local.” Haraka averred that he called INSURGEORGIA, the agent for both Cabey and Roberts, and verified that both policies were in effect and applied to the rental. However, Cabey’s policy had been canceled with Cabey’s consent about three weeks before.

While driving the car, Roberts was involved in a collision with a vehicle driven by Williams. Williams and her passenger, Jones, alleged they received injuries and filed claims for damages with Generali and AutoSave. Generali and AutoSave each contended that the other had primary coverage for any bodily injury claims arising from the collision.

Generali filed a declaratory judgment action naming AutoSave, Roberts, Jones, and Williams as defendants. Williams moved for summary judgment on the issue of priority of coverage between Generali and AutoSave, contending that Generali’s coverage was primary because Roberts was driving. Generali also filed a motion for summary judgment, arguing that it provided only excess coverage and that primary coverage from the subject collision was with AutoSave. The trial court granted Generali’s motion and denied Williams’ motion, effectively declaring AutoSave’s coverage primary.²

The Court of Appeals affirmed the grant of summary judgment to Generali, concluding that despite AutoSave’s attempted verification of coverage, AutoSave’s insurance must become primary under OCGA § 40-9-102. It found undisputedly that Cabey did not have insurance at the time of the rental, and that Roberts was not a party to the rental agreement.

1. The clear language of OCGA § 40-9-102 addresses itself to the renter of the vehicle, not the operator, authorized or not, inasmuch as the relationship with the rental agency is a matter of contract. Thus, even though Roberts could be liable in a tort action if she was at fault in the collision, the priority of liability coverage between the renter’s insurance carrier and the insurer of the rental vehicle is the issue here.

AutoSave asserts Roberts’ alleged intent to be a co-renter, and thus a party to the contract, citing the affidavit of Haraka, Auto-Save’s manager/rental agent. But such assertion based on intent found outside the contract is unavailing. The rental agreement is unambiguous on its face that Cabey is the sole renting party; there is nothing in the agreement demonstrating that Roberts assented to its terms or intended to be bound by the contract. See OCGA § 13-3-1. If Roberts was intended to be a co-renter, nothing prevented AutoSave from indicating it in the rental agreement; there is no allegation of fraud, mistake, or accident. That the agreement listed Roberts’ address and insurance information specifically as the listed additional driver did not, as a matter of law or fact, transform her into a contracting party. Accordingly, the contract is not susceptible to variance by parol evidence. OCGA § 13-2-2 (1); American Cyanamid Co. v. Ring, 248 Ga. 673, 674 (286 SE2d 1) (1982).

The Court of Appeals correctly determined that driver Roberts was not a renter or co-renter under the agreement, and therefore not subject to the provisions of OCGA § 40-9-102. Compare Jones v. Wortham, 201 Ga. App. 668 (411 SE2d 716) (1991), in which the driver was also the lessee of the rental vehicle.

2. OCGA § 40-9-102 imposes upon the car rental agency the duty to verify that the renter has insurance for the rental, and if not, mandates the purchase of “spot” liability insurance prior to furnishing the vehicle. Alamo Rent-A-Car v. Hamilton, 216 Ga. App. 659, 660 (455 SE2d 366) (1995). The rental is to be insured, through either the renter’s own vehicle insurance policy if it would cover the rental situation or by the purchase of insurance coverage for the rental vehicle from the rental agency. Atlanta Rent-A-Car v. Jackson, 204 Ga. App. 448 (419 SE2d 489) (1992). The Court of Appeals determined the existence of genuine issues of material fact as to AutoSave’s compliance with OCGA § 40-9-102. A. Atlanta AutoSave v. Generali - U. S. Branch, supra at 888 (1). But accepting for the sake of argument that AutoSave did all that it could or all that was reasonable to verify coverage before turning over the rental vehicle, the question is whether the car rental agency loses the statutory exemption provided by OCGA § 40-9-102 when it is later determined that the renter did not have insurance coverage. The answer to such question must be yes. This is so because of the clear legislative purpose behind OCGA § 40-9-102 and because of the public policy of this state.

OCGA § 40-9-102 is plainly remedial. Rabinovitz v. Accent Rent-A-Car, 213 Ga. App. 786 (446 SE2d 244) (1994). Its focus is not the effectiveness of the rental agency in ascertaining the renter’s coverage, nor is its ultimate aim to sanction the rental agency for a less-than-diligent or unsuccessful effort in that regard. The obvious purpose of the statute is to protect the public against injury by an irresponsible renter of a U-drive-it vehicle. It does not do this by attempting to prevent tortious acts by the renter; it does not address such a problem, but rather assures that there is insurance coverage for the rental. That is the object of OCGA § 40-9-102. Alamo Rent-A-Car v. Hamilton, supra at 661. Thus, the statutory requirement for the rental agency rightfully has been considered to be in the nature of a bond. Id.; Rabinovitz v. Accent Rent-A-Car, supra; Continental Cas. Co. v. Owen, 90 Ga. App. 200, 209 (2) (82 SE2d 742) (1954). This is entirely consistent with the mandate of OCGA § 33-34-4, which directs that no owner of a motor vehicle required to be registered in Georgia will operate or authorize any other person to operate the motor vehicle unless the owner has motor vehicle liability insurance equivalent to that required as evidence of security for bodily injury and property damage liability under the Motor Vehicle Safety Responsibility Act, OCGA § 40-9-1 et seq.

The advent of compulsory liability insurance in Georgia does not render anachronistic the concept of the rental agency as a guarantor of insurance coverage in the event of mishap involving the rental vehicle. Quite the contrary. For regardless of our state’s requirements to carry insurance, the reality is that some will be unwilling or financially or otherwise be incapable of securing the necessary liability insurance or the protection of uninsured/underinsured motorist coverage. As importantly, “[o]ur compulsory insurance law established the public policy that ‘innocent persons who are injured should have an adequate recourse for the recovery of their damages,’ ...” Cotton States Mut. Ins. Co. v. Neese, 254 Ga. 335, 341 (1) (329 SE2d 136) (1985). See also Cotton States Mut. Ins. Co. v. Starnes, 260 Ga. 235, 237 (392 SE2d 3) (1990); Integon Indem. Corp. v. Canal Ins. Co., 256 Ga. 692 (353 SE2d 186) (1987). Complete insurance coverage for all persons is more than a laudable goal; this Court has considered complete liability coverage for the protection of the public to be a policy that is “overriding.” Stepho v. Allstate Ins. Co., 259 Ga. 475, 476 (1) (383 SE2d 887) (1989); GEICO v. Dickey, 255 Ga. 661, 663 (340 SE2d 595) (1986). Consequently, this Court must focus not on a perceived statutory entitlement for car rental agencies under OCGA § 40-9-102 but rather on fulfillment of the statute’s goal. Otherwise, the innocent victim of a traffic mishap with a rental vehicle might well be left injured but without remedy even though the car rental agency carries full liability coverage on the offending vehicle.

Holding the U-drive-it owner, effectively the car rental agency, ultimately responsible for primary coverage when the renter is uninsured, even if the lack of insurance is discovered post-collision, results in no unfairness to the agency. It is part of the cost of doing business. What is more, by providing the possibility of exemption, OCGA § 40-9-102 accords the rental agencies special treatment in the first place. Jones v. Wortham, supra at 670.

Judgment affirmed.

All the Justices concur, except Benham, C. J, Carley and Thompson, JJ, who dissent.

1 OCGA § 40-9-102 provides:

Any person who rents motor vehicles from a U-drive-it owner is required to provide his own insurance, and insurance companies authorized to issue automobile policies in this state shall be required by the Commissioner of Insurance to provide “spot” insurance, which shall be purchased by such person before the U-drive-it owner shall be authorized to turn a motor vehicle over to such person. If a U-drive-it owner turns over any motor vehicle to any person without first ascertaining that such “spot” insurance has been obtained, the U-drive-it owner shall not, as to that particular rental transaction, be exempted from the provisions of this chapter as provided in Code Section 40-9-4.

2 AutoSave also argued to the trial court that the rental vehicle in question was actually owned by Prime Sales and Leasing, Inc., was leased to AutoSave, and that the vehicle was insured under Prime’s self-insurance plan rather than its own. However, AutoSave did not seek a specific ruling in this regard, and both the trial court and the Court of Appeals effectively treated AutoSave as the self-insurer of the vehicle.