SAXON v. STARR INDEMNITY & LIABILITY COMPANY Et Al.

SECOND DIVISION
BARNES, P. J.,
BOGGS and RICKMAN, JJ.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules
November 16, 2016
In the Court of Appeals of Georgia
A16A1249. SAXON v. STARR INDEMNITY & LIABILITY
COMPANY et al.
RICKMAN, Judge.
In this declaratory judgment action, Gregory Saxon appeals from three trial
court orders granting summary judgment in favor of three insurance companies –
Starr Indemnity & Liability Company (“Starr Indemnity”), First Acceptance
Insurance Company of Georgia, Inc. (“First Acceptance”), and Knightbrook
Insurance Company (“Knightbrook”). We affirm.
The material facts of this case are undisputed. Talmadge Royal d/b/a Sno Frost
was involved in the business of selling ice cream freezers and ice cream to
convenience stores. Royal’s ice cream truck usually went on deliveries with one
employee driver and one employee helper, and the two often switched duties from
day to day. On November 9, 2012, Saxon and Arron Meyers were employed by Royal
as delivery drivers, and rode together to make deliveries – Meyers as driver and
Saxon as helper. As they were en route to make some final deliveries, Meyers struck
the rear of a vehicle which was stopped at a red traffic light, and he was cited for
following too closely. At the time of the accident, Saxon and Meyers were employees
of Royal and were performing duties in the course and scope of and/or related to their
employment with Royal. At the time of the accident, although Royal had three or
more employees 1 and was subject to the Georgia Workers’ Compensation Act (the
“Act”),2 he had not procured workers’ compensation coverage. Saxon did not file a
claim for workers’ compensation benefits with the State Board of Workers’
Compensation, and he received no workers’ compensation benefits.
On November 21, 2013, Saxon filed a complaint for damages (“tort action”)
against Meyers and Royal. He asserted a claim for negligence against Meyers, and
claims for imputed liability and for negligent hiring, training, and supervision, and
1
See OCGA § 34-9-2 (a) (2) (2012) (“This chapter shall not apply to . . . any
person, firm, or private corporation . . . that has regularly in service less than three
employees in the same business within this state . . . .”). In addition to the accident
occurring in 2012, the policies of all three insurance companies involved were issued
in 2012.
2
See OCGA § 34-9-1 et seq. (2012).
2
negligent entrustment against Royal. In January 2014, Starr Indemnity, which
company provided liability insurance to Royal for Royal’s truck that was involved in
the accident, filed the instant petition for declaratory judgment. Starr Indemnity
sought a judgment declaring that under its liability policy, there were no coverage
benefits available for damages in the tort action. In February 2015, the trial court
granted First Acceptance’s motion to intervene in the declaratory judgment action;
First Acceptance provided liability insurance to Meyers for Meyers’s personal
automobile. In March 2015, the trial court granted Knightbrook’s motion to intervene
in the declaratory judgment action; Knightbrook had issued an insurance policy to
Saxon for Saxon’s personal vehicles, and that policy provided uninsured motorist
coverage. Saxon sought indemnity or liability coverage benefits under the policies
issued by Starr Indemnity and First Acceptance. Saxon sought uninsured motorist
benefits from Knightbrook.
All three insurance companies moved for summary judgment, arguing that
certain provisions in their respective policies excluded coverage for damages Saxon
sought in the tort action,3 and that the Act provided Saxon’s exclusive remedy. Saxon
3
Starr Indemnity’s policy contained provisions excluding coverage for
workers’ compensation obligations for which Royal may liable, and for bodily injury
to Royal’s employees or fellow employees, arising out of and in the course of
3
did not dispute the plain language of the policies’ exclusion provisions, or of the Act.
Rather, he argued that if the Act and the policies’ exclusion provisions were enforced,
he would be left without a remedy and such a result would be against public policy.
This is also Saxon’s argument on appeal.
In well-reasoned and detailed orders, the trial court granted summary judgment
in favor of all three insurance companies. With regard to Starr Indemnity and First
Acceptance, the trial court correctly ruled that the Act provided Saxon’s exclusive
remedy, that there was no applicable exception to the exclusive remedy provision of
the Act, and that in this case enforcement of the Act and of the policies’ exclusion
provisions did not violate public policy. With regard to Knightbrook, the trial court
reiterated that the Act provided Saxon’s exclusive remedy, and concluded that given
that Saxon could not recover in the tort action as a matter of law because the Act
provided his exclusive remedy, he could not recover UM benefits from Knightbrook.
employment. First Acceptance’s policy contained a provision similarly excluding
coverage for the insured’s employee and fellow employee; it additionally contained
a business-use exclusion provision. The policy issued by Knightbrook contained a
workers’ compensation obligation exclusion provision and a business-use exclusion
provision.
4
1. On appeal, Saxon contends that the trial court erred in granting summary
judgment in favor of the insurance companies when enforcement of the Act in this
case violates public policy because “injured parties would be unfairly punished just
because they were employed by someone who breached his or her duty to purchase
worker’s compensation insurance.”
Saxon had one year after his injury to file a claim for workers’ compensation
benefits with the State Board of Workers’ Compensation. See OCGA § 34-9-82 (a)
(2012). But Saxon failed to do so in this case. And despite Royal’s failure to procure
workers’ compensation coverage, relief under the Act was Saxon’s only available
remedy.
OCGA § 34-9-11 (a) (2012) pertinently provides as follows.
The rights and the remedies granted to an employee by this chapter
shall exclude all other rights and remedies of such employee, his
personal representative, parents, dependents, or next of kin, at common
law or otherwise, on account of such injury, loss of service, or death;
provided, however, that no employee shall be deprived of any right to
bring an action against any third-party tort-feasor, other than an
employee of the same employer . . . .
(Emphasis supplied). “[I]t has been held repeatedly that [OCGA § 34-9-11] grants the
injured employee’s employer statutory immunity from suit by the employee to recover
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damages other than workers’ compensation benefits,” and it has also been made clear
that this “statutory immunity from suit includes the statutory employer regardless
whether that statutory employer had actually paid the workers’ compensation
benefits.” (Citations omitted; emphasis supplied) Modlin v. Swift Textiles, Inc., 180
Ga. App. 726, 731 (2) (350 SE2d 273) (1986).
The Act requires that employers insure the payment of workers’
compensation benefits to injured workers, either by procuring insurance
or by qualifying as a self-insurer. If no insurance is obtained, the
employer remains liable for payment of benefits. If the employer
becomes insolvent, then the agent of the employer responsible for
procuring workers’ compensation benefits may be held personally liable
for payment of such benefits [awarded by the State Board of Workers’
Compensation].
(Citations omitted.) Sheehan v. Delaney, 238 Ga. App. 662 (1) (521 SE2d 585)
(1999); see Samuel v. Baitcher, 247 Ga. 71-72, 74 (274 SE2d 327) (1981).
Therefore, contrary to Saxon’s contention, an injured party would not be
unfairly punished, because an employer (or employer’s agent) who failed to obtain
insurance would remain liable for payment of benefits awarded by the Board.4
4
Saxon’s further argument that Georgia should mirror other states and provide
an exception to the Act’s exclusive remedy provision was not made below, and
therefore, we will not consider it on appeal. See Pfeiffer v. Ga. Dept. of Transp., 275
6
2. Saxon also contends that the trial court erred in granting summary judgment
in favor of the insurance companies when enforcement of the policies’ exclusion
provisions violates public policy because such enforcement would “not protect [him]
as to his actual losses.” In Southern Guaranty Ins. Co. v. Preferred Risk Mut. Ins.,
257 Ga. 355, 356 (359 SE2d 665) (1987), the Supreme Court of Georgia held:
If the compensation of victims were the overriding consideration in
every case, we would conclude that no exclusion is possible in
automobile liability policies. However, since Georgia law does not
require liability insurance in every case, we have concluded that
exclusions are not per se prohibited but must be individually evaluated
to determine whether they are against public policy.
(Citation omitted.) Such an evaluation requires that we determine “whether in the
context of [each] case the exclusion either unfairly penalizes innocent victims or
unfairly exposes the insured to liability” Id. “This results in a basic rule that if either
of the interests dealt with is left unprotected, the exclusionary clause in the insurance
contract offends public policy. This rule, of course, does not, apply when neither the
injured party nor the unsuspecting insured is left unprotected.” (Citation and
Ga. 827, 829 (2) (573 SE2d 389) (2002) (“[A]n appellate court need not consider
arguments raised for the first time on appeal.”) (footnote omitted).
7
punctuation omitted.) Federated Mut. Ins. Co. v. Dunton, 213 Ga. App. 148, 149 (1)
(444 SE2d 123) (1994).
Given that in the instant case, the remedy of the Act was available to Saxon,
he was not left unprotected. Indeed, Saxon’s complaints about the Act are not about
being left unprotected; he complains about not being “adequately compensate[d] . .
. for his injuries,”5 about not being protected as to his “actual losses,” and about the
lack of a “realistic remedy at law,” particularly because, as he claims, the procedures
of the Act are cumbersome and enforcing any judgment obtained by the Board “can
be extremely difficult or impossible due to extenuating circumstances such as
businesses closing, bankruptcy, or corporate shell games.” Saxon’s complaints about
the Act are for the General Assembly’s determination, not this Court. Even assuming
that any of the foregoing allegedly difficult or impossible circumstances could work
to bar enforcement of the policies’ exclusion provisions, Saxon did not assert or
show, either below or on appeal, that any of those circumstances existed in this case,
and his guesses or speculation about them are insufficient on summary judgment. See
Heath v. Rush, 259 Ga. App. 887, 888 (578 SE2d 564) (2003) (“Guesses or
speculation which raise merely a conjecture or possibility are not sufficient to create
5
(Emphasis supplied.)
8
even an inference of fact for consideration on summary judgment.”) (citation and
punctuation omitted). As the trial court recognized, “the [p]olicy exclusions ‘dovetail’
with the statutory immunity provided . . . under the Act” and are not against public
policy. Compare generally Govt. Employees Ins. Co. v. Dickey, 255 Ga. 661 (340
SE2d 595) (1986) (family-purpose exclusion in automobile insurance policy
purchased in Georgia was against public policy where it was broader than the tort
immunity of the state in which the insured was sued, North Carolina).
3. Saxon argues that enforcement of the policies’ exclusion provisions would
violate federal and Georgia public policy of requiring statutory compulsory minimum
automobile limits coverage.
Saxon cites Anderson v. Southeastern Fidelity Ins. Co., 251 Ga. 556, 557 (307
SE2d 499) (1983), wherein the Supreme Court of Georgia iterated “the public policy
of our state, enunciated in the advent of compulsory motor vehicle liability
insurance[] [is] that innocent persons who are injured should have an adequate
recourse for the recovery of their damages.” (Citations omitted.) As previously
addressed, Saxon did not point to any evidence showing that in this case the remedy
available to him (the Act) was inadequate. Additionally, Saxon did not cite any
federal public policy that was violated by enforcing the policies’ exclusion
9
provisions. The policies’ exclusion provisions are consistent with Georgia’s liability
and Workers Compensation statutes, and are enforceable. See generally Williams v.
Lumbermens Mut. Cas. Co., 164 Ga. App. 435 (297 SE2d 345) (1982).
4. Saxon relies on Hudson v. Whited, 250 Ga. App. 451 (552 SE2d 447) (2001),
as support that UM coverage is available in this case. But Saxon’s reliance on Hudson
is misplaced. A third-party as tortfeasor was not specifically pointed out in Hudson;
but given the reference in Hudson to “the discovery process and trial of this case,” Id.
at 454, and given the Act’s grant of tort immunity for employers and co-employees,
see OCGA § 34-9-11 (a) (2001), the discussion in Hudson regarding UM coverage
necessarily presumed the existence of a third-party tortfeasor, which is not present in
the instant case. See, e.g., Lewis v. Cherokee Ins. Co., 258 Ga. 839 (375 SE2d 850)
(1989). Accordingly, the discussion in Hudson, about the enforceability of a clause
that could thwart an insured’s ability to recover all sums to which he could be legally
entitled, does not apply to the instant case.6 Hudson, 250 Ga. App. at 452-454.
6
Although Saxon claims that the trial court erred in granting summary
judgment because a genuine issue of material fact exists as to whether he properly
notified Knightbrook of the car collision, we deem this claim abandoned, as Saxon
did not present any argument or citation of authority on that issue in his brief. See
Court of Appeals Rule 25 (c) (2) (“Any enumeration of error which is not supported
in the brief by citation of authority or argument may be deemed abandoned.”) ; see
also Johnson v. State, 290 Ga. App. 255, 259 (1) (d) (659 SE2d 638) (2008) (deeming
10
Saxon failed to meet his burden on summary judgment, see generally Canaan
Land Properties v. Herrington, 330 Ga. App. 17 (766 SE2d 493) (2014) (nonmovant
must point to specific evidence giving rise to a triable issue), and the trial court did
not err in granting summary judgment in favor of the insurance companies.
Judgment affirmed. Barnes, P. J., and Boggs, J., concur.
abandoned an argument that was unsupported by citation to authority).
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