Reece v. Georgia Insurers Insolvency Pool

750 S.E.2d 746, 324 Ga. App. 437, 2013 Fulton County D. Rep. 3385, 2013 WL 5832546, 2013 Ga. App. LEXIS 858
CourtCourt of Appeals of Georgia
DecidedOctober 31, 2013
DocketA13A1409
StatusPublished

This text of 750 S.E.2d 746 (Reece v. Georgia Insurers Insolvency Pool) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Reece v. Georgia Insurers Insolvency Pool, 750 S.E.2d 746, 324 Ga. App. 437, 2013 Fulton County D. Rep. 3385, 2013 WL 5832546, 2013 Ga. App. LEXIS 858 (Ga. Ct. App. 2013).

Opinions

Boggs, Judge.

Hugh Reece appeals from a judgment declaring that he was not an “emergency claimant” entitled to workers’ compensation benefits from the Georgia Insurers Insolvency Pool (“Insolvency Pool”) under OCGA § 33-36-20 (b) (3). He contends: (1) that the trial court improperly resolved questions of fact in allegedly ruling on a motion for summary judgment; and (2) that the undisputed evidence showed that his former employer was “insolvent pursuant to OCGA § 33-36-20 (b) (3).” For the reasons explained below, we affirm.

In 2010, the General Assembly amended the “Georgia Insurers Insolvency Pool Act,” OCGA § 33-36-1 et seq., with the following stated intent:

It is the policy of this state to protect insureds and their claimants from liability as a result of the insolvency of insurers. In furtherance of this policy, it is the intent of the legislature, notwithstanding any provision of law to the contrary, that the Georgia Insurers Insolvency Pool shall be liable to claimants and electing insureds in emergency circumstances.

OCGA § 33-36-20 (a). The amendment includes the following relevant definitions:

“Emergency circumstance” means a circumstance in which an association or industrial insured captive insurance company, including such a captive company that subsequently was authorized to transact business pursuant to Chapter 3 of this title, that is issuing, or which has issued, workers’ compensation insurance contracts and has been declared insolvent.
“Emergency claimant” means any third-party claimant, under a workers’ compensation insurance policy, who is impacted by an emergency circumstance and whose employer has, by a court of competent jurisdiction, been declared bankrupt or insolvent.

[438]*438OCGA § 33-36-20 (b) (2) and (3).

Reece, the claimant here, was employed by Tri-County Ambulance LLC (“Tri-County) when he was injured on March 20, 2006. Southeastern U. S. Insurance Company (“Southeastern) provided workers compensation benefits to Reece for his injury, but Southeastern was liquidated on October 27, 2009.

Following the 2010 amendment of the Act, Reece sought benefits from the Insolvency Pool as an “emergency claimant under OCGA § 33-36-20 (b) (3).1 The Insolvency Pool subsequently filed a declaratory judgment action in the Superior Court of DeKalb County2 against Reece and Tri-County based upon its

uncertainty as to the circumstances under which a Georgia Court can declare an entity bankrupt or insolvent within the meaning of OCGA § 33-36-20 (b) (3) and uncertainty as to what showing must be made by a claimant to qualify as an “emergency claimant under this provision.

It is undisputed that, at the time the Insolvency Pool filed its action, no court had declared Tri-County bankrupt or insolvent. Tri-County did not file an answer to the complaint.

In his answer, Reece admitted all of the allegations in the Insolvency Pool’s complaint, asserted a cross-claim against TriCounty, and prayed for the “[c]ourt to determine the insolvency of Respondent Tri-County Ambulance. Reece alleged that “Tri-County Ambulance is subject to the jurisdiction of this Court by virtue of the allegations contained in the Complaint for Declaratory Judgment filed by the Georgia Insurers Insolvency Pool.3 Pursuant to OCGA § 9-11-12 (a), the allegations against Tri-County in the cross-claim “automatically stand denied.

[439]*439Reece subsequently moved for summary judgment in his favor and asked the superior court to declare Tri-County insolvent within the meaning of OCGA § 33-36-20 (b) (3). The Insolvency Pool filed a cross-motion for summary judgment requesting the court to find “that until a court of competent jurisdiction declares Tri-County insolvent or bankrupt, Respondent Reece may not be considered an emergency claimant, and therefore, the Pool would have no obligation with respect to his outstanding workers’ compensation claim.” The record includes an affidavit from the owner of Tri-County, Jackie Ellington, in which he averred that he sold Tri-County to South-land Health Services of Georgia on March 23, 2007, that Tri-County was administratively dissolved, and that Southland Health Services “defaulted on its loans because it did not have the means or property sufficient to pay its debts.”

Following a hearing that has not been transcribed for our review, the trial court denied both pending motions for summary judgment. It concluded “that an evidentiary hearing regarding whether TriCounty Ambulance is insolvent is required. Therefore there are genuine issues of material fact that exist for a jury to determine in this case.” Two months later, it issued an order scheduling “an evidentiary hearing.”

At the beginning of the evidentiary hearing, Reece’s counsel stated, “We’re here today to ask the court, based on Mr. Ellington’s testimony, to find that Tri-County Ambulance is insolvent and to declare Tri-County Ambulance insolvent for the purpose of Code Section 33 . . . and name Mr. Reece an emergency claimant.” Reece made no objection at any time during the hearing to the trial court, as opposed to a jury, making an evidentiary finding on the issue of insolvency.

During the hearing, Ellington testified that he was the sole member of Tri-County, LLC, that Tri-County was located in Ellijay, Georgia, that Reece was injured in an automobile accident while traveling between Chattanooga, Tennessee and Dalton, Georgia, that Tri-County’s workers’ compensation carrier paid benefits to Reece after the accident, that he sold Tri-County to Southland Health Services of Georgia in 2007 for $540,000, that the sale included the transfer of 12-14 vehicles owned by Tri-County, that he received only $140,000 from the sale because the purchaser was “closed down by the Internal Revenue Service” eight months later, that he never instituted legal proceedings to collect the debt owed by the buyer, that he entered into a noncompete agreement with the buyer, that the $140,000 from the sale was used to pay existing debt of Tri-County, that Tri-County was administratively dissolved in 2010, that TriCounty had no assets with which to pay workers’ compensation [440]*440benefits to Reece, and that he started an automotive service center business after he sold Tri-County. No documents, such as the contract of sale, bank statements, bills, cancelled checks, or accounting records were admitted into evidence during or after the evidentiary hearing.

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Bluebook (online)
750 S.E.2d 746, 324 Ga. App. 437, 2013 Fulton County D. Rep. 3385, 2013 WL 5832546, 2013 Ga. App. LEXIS 858, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reece-v-georgia-insurers-insolvency-pool-gactapp-2013.