Atlanta Casualty Co. v. Gordon

ANDREWS, Presiding Judge.

We granted Atlanta Casualty Company’s application for interlocutory appeal of the trial court’s denial of its motion for summary judgment on this claim by a parent under his uninsured motorist’s policy for the wrongful death of his son. Because Georgia’s uninsured motorist statute does not require an insurance company to pay damages for the death of a person not insured under its policy, we reverse.

James Michael O’Neal, Jr., a minor, was struck and killed by an uninsured motorist. O’Neal, Jr.’s parents were separated at the time and he lived with his mother. The parents sued the car’s owner and driver for wrongful death, and the mother sued as administrator of her son’s estate for pain, suffering, and medical expenses.

Atlanta Casualty was served with the parents’ suit in its capacity as the father’s uninsured motorist carrier. It subsequently moved for summary judgment in the wrongful death case, contending the son’s death was not covered under the terms of his father’s policy.

The Atlanta Casualty policy at issue provides that the company “will pay damages, which a covered person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury or property damage sustained by a covered person and caused by an accident. . . .” (Emphasis supplied.) It is undisputed that O’Neal, Jr. was not a covered person under his father’s policy. The policy defines “covered person” as “you [the named insured] or any family member,” and further defines “family member” as “a person related to you . . . who is a resident of your household.” Under the policy definitions, therefore, O’Neal, Jr. was not a “covered person” under the contract because he did not live with his father.

The trial court denied Atlanta Casualty’s motion, holding that the policy’s definition of “covered person” was inconsistent with the coverage requirements of OCGA § 33-7-11 (a) (1), Georgia’s uninsured motorist statute. This Code section provides that no automobile liability policy or motor vehicle liability policy shall be issued in this State to the car owner “unless it contains an endorsement or provisions undertaking to pay the insured all sums which said insured shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle.. . .” OCGA § 33-7-11 (a) (1).

Although the language in the statute appears clear on its face, we do not believe the legislature enacted OCGA § 33-7-11 (a) (1) with the intention of requiring insurance companies to pay damages for the death of a person not insured under the policy in question. “Statutes must be construed as well so as to square with common sense and sound reasoning. It is the duty of the court to consider the results and consequences of any proposed construction and not so construe a statute as will result in unreasonable or absurd consequences not contemplated by the legislature.” (Citations and punctuation omitted.) City of Brunswick v. Atlanta Journal & Constitution, 214 Ga. App. 150, 153 (447 SE2d 41) (1994). Moreover, in construing the statute so as to give effect to the legislative intent, a mere segment of the statute should not be lifted out of context and construed without consideration of all the other parts of the statute. City of Jesup v. Bennett, 226 Ga. 606, 609 (176 SE2d 81) (1970).

In construing this Code section, we are mindful of the following description of the legislative intent behind the Uninsured Motorist Act: “The purpose of uninsured motorist legislation 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.’” Smith v. Commercial Union Assur. Co., 246 Ga. 50, 51 (268 SE2d 632) (1980). In the instant case, O’Neal, Sr. did not suffer any injuries nor is he the victim the Act was designed to protect. Therefore, there is nothing in the above statement of the statute’s purpose which would support an interpretation that the legislature intended to compensate insureds for consequential damages arising from the death of a third party.

Moreover, “[a] suit for wrongful death by the representative of the estate or by the next of kin authorized to bring suit is derivative to the decedent’s right of action.” Smith v. Rowell, 176 Ga. App. 100 (335 SE2d 461) (1985). See Jones v. Swett, 244 Ga. 715 (261 SE2d 610) (1979). Had O’Neal, Jr. been injured, there would have been no right of recovery under his father’s policy. There is no reason to reach a different result because the injuries were fatal.

Accordingly, there is no authority for interpreting OCGA § 33-7-11 (a) (1) in such a way as to invalidate the right of an insurer to “fix the terms of its policies] as it wishes, insuring against certain risks and excluding others.” Hurst v. Grange Mut. Cas. Co., 266 Ga. 712, 716 (470 SE2d 659) (1996). “Courts have no more right by strained construction to make an insurance policy more beneficial by extending the coverage contracted for than they would have to increase the amount of coverage.” Jefferson Pilot Life Ins. Co. v. Clark, 202 Ga. App. 385, 388 (414 SE2d 521) (1991).

In looking at other state’s case law on this issue, Ohio, Maryland, Iowa, and Nebraska adopted the position advocated by the dissent. See Sexton v. State Farm Mut. Auto. Ins. Co., 69 Ohio St. 2d 431 (433 NE2d 555) (1982); Hinners v. Pekin Ins. Co., 431 NW2d 345 (Iowa 1988); State Farm Mut. Auto. Ins. Co. v. Selders, 187 Neb. 342 (190 NW2d 789) (1971); Forbes v. Harleysville Mut. Ins. Co., 322 Md. 689 (589 A2d 944) (1991). But, in Ohio, the legislature amended the UIM statute to specifically overrule Sexton and permit a policy exclusion limiting coverage only to bodily injury suffered by an insured. See Beagle v. Walden, 78 Ohio St. 3d 59 (676 NE2d 506) (1997).

Likewise, Forbes v. Harleysville Mut. Ins. Co. is no longer the law in Maryland. The General Assembly enacted Section 19-509 (c) (2) to apply to, and require UIM coverage for, a wrongful death claim where the deceased is an “insured.” See Nickolson v. Nationwide Mut. Ins. Co., 2001 WL 985099 (Del. Super., 2001). Accordingly, only two remaining states have adopted the position advocated by the dissent.

By contrast, Oklahoma, Illinois, Colorado, Missouri, Delaware, Wisconsin, Alaska, Florida, Indiana, Mississippi, Washington, California, Arizona, Louisiana, and Rhode Island have taken the opposite position and have uniformly interpreted their respective statutes as providing coverage only for injuries to those insured under the policy. See, e.g., London v. Farmers Ins. Co., 63 P3d 552 (Okla. Civ. App. Div. 3, 2002); State Farm Mut. Auto. Ins. Co. v. George, 326 Ill. App. 3d 1065 (762 NE2d 1163) (2002); Farmers Ins. Exchange v. Chacon, 939 P2d 517 (Colo. App. 1997); Livingston v. Omaha Property & Cas. Ins. Co., 927 SW2d 444 (Mo. App. W.D. 1996); Temple v. Travelers Indem. Co., 2000 WL 33113814 (Del. Super. 2000); Ledman v. State Farm Mut. Auto. Ins. Co., 230 Wis. 2d 56 (Wis. App. 1999);¹ State Farm Mut. Ins. Co. v. Wainscott, 439 FSupp. 840 (D. C. Alaska 1977); Valiant Ins. Co. v. Webster, 567 S2d 408 (Fla. 1990) (disapproved on other grounds); Ivey v. Mass. Bay Ins. Co., 569 NE2d 692 (Ind. App. 1st Dist. 1991); Gillespie v. Southern Farm Bureau Cas. Ins. Co., 343 S2d 467 (Miss. 1977); Delancey v. State Farm Mut. Auto. Ins. Co., 918 F2d 491 (5th Cir. 1990) (interpreting Mississippi law); Allstate Ins. Co. v. Hammonds, 72 Wash. App. 664 (865 P2d 560) (1994); Smith v. Royal Ins. Co. &c., 186 Cal. App. 3d 239 (230 Cal. Rptr. 495) (1986); Bakken v. State Farm Mut. Auto. Ins. Co., 139 Ariz. 296 (678 P2d 481) (Ariz.App. 1983);Bartning v. State Farm Fire & Cas., 164 Ariz. 370 (793 P2d 127) (Ariz. App. 1990); Spurlock v. Prudential Ins. Co., 448 S2d 218 (La. App. 1984); Lafleur v. Fidelity & Cas. Co. &c., 385 S2d 1241 (La. App. 1980); Terilli v. Nationwide Mut. Ins. Co., 641 A2d 1321 (R.I. 1994).

In light of the above and for all of the reasons stated, we conclude that the policy language in this case and the language of the uninsured motorist statute do not allow the result reached by the trial court. It is contrary to Georgia law “and would lead to an unfair result where insured persons would be entitled to damages which were not factored into the cost of the policy premium.” Daley v. Allstate Ins. Co., 135 Wash. 2d 777 (958 P2d 990, 998) (1998).²

Judgment reversed.

Johnson, P. J., Blackburn, P. J., Adams and Mikell, JJ., concur. Eldridge and Barnes, JJ., dissent.

1 In Ledman, parents argued that they were entitled to recover under their uninsured motorist policy for the death of their 30-year-old daughter who lived in another state. The policy provision at issue tracked the language of the UIM statute, providing that State Farm must pay damages “for bodily injury an insured is legally entitled to collect from the owner or driver of an uninsured motor vehicle.” Id. at 314, n. 1. The court held that interpreting the policy provision in such a way as to allow recovery for injury to someone not insured under the policy “would lead to an absurd result.” Id. at 313.

2 Although the issue in Daley is whether the insured may recover from his UIM carrier for emotional distress, the Washington Supreme Court engaged in an extensive discussion of our issue in response to an amicus brief from the trial lawyers arguing that “as long as the insured has a cause of action in tort against the underinsured motorist he or she would be able to receive damages as long as some person suffered bodily injury.” Id. at 997. The Court rejected this argument. Id.