Reserve Life Insurance Co. v. Peavy

105 S.E.2d 465, 98 Ga. App. 268, 1958 Ga. App. LEXIS 565
CourtCourt of Appeals of Georgia
DecidedSeptember 19, 1958
Docket37108
StatusPublished
Cited by13 cases

This text of 105 S.E.2d 465 (Reserve Life Insurance Co. v. Peavy) 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
Reserve Life Insurance Co. v. Peavy, 105 S.E.2d 465, 98 Ga. App. 268, 1958 Ga. App. LEXIS 565 (Ga. Ct. App. 1958).

Opinions

Quillian, Judge.

1. Under the law of this case (Reserve Life Ins. Co. v. Peavy, 95 Ga. App. 195, 97 S. E. 2d 542), as a matter of law the policy issued by the defendant to the plaintiff had not lapsed when the claim sued for arose.

2. Under the law of this case (Reserve Life Ins. Co. v. Peavy, 95 Ga. App. 195, supra), the jury was authorized to find that the evidence was sufficient to show that the plaintiff-insured was in good health and free from disease at the time of the issuance of the policy and for fifteen days thereafter, and according to the standard stated in the opinion of this court on the first appearance of the case here (Reserve Life Ins. Co. v. Peavy, 94 Ga. App. 31, 93 S. E. 2d 580).

[269]*2693. Since it already appeared in a letter from the defendant to the plaintiff, which letter was in evidence, that the insurer could not tell the plaintiff why it could no- longer afford coverage for the plaintiff’s wife, the admission of the testimony of the same import which is excepted to in special ground 20 of the amended motion for a new trial was not harmful.'

4. Since counsel for both parties made improper remarks and since the instructions of the court properly removed this matter from the jury’s consideration, it was not error, under the facts of this case, for the judge to refuse to grant a mistrial as complained of in special ground 19 of the amended motion for a new trial. The remarks of both counsel for plaintiff and defendant referred to matters not in the record, and hence were not permissible. It is not always true that the impropriety of statements made by counsel for the opposite parties can be balanced the one against the other, but where as in this case, they concerned the same matter and were equally prejudicial they may be fairly balanced and held to neutralize each other.

5. In a suit on an insurance policy whether the insurance company acted in bad faith in refusing to pay the loss which the policy purports to- cover is usually for the jury. National Life &c. Ins. Co. v. Moore, 86 Ga. App. 618, 626 (72 S. E. 2d 141); Life & Cas. Ins. Co. of Tenn. v. Freemon, 80 Ga. App. 443, 444 (56 S. E. 2d 303) . In the present case as in Metropolitan Life Ins. Co. v. Lathan, 77 Ga. App. 6 (1) (47 S. E. 2d 596) the question of whether the insurance company acted in bad faith was for the jury. The evidence in this case amply authorized the award of attorney’s fees to- the plaintiff. There is no merit in the ground of the motion for new trial excepting to- the verdict on the ground that it included the attorney’s fees.

6. Special ground 21 is without merit. The remaining special grounds of the amended motion for a new trial except grounds 23 and 24 are covered by the rulings in divisions 1, 2 and 5 above.

7. The twenty-third ground of the amended motion for new trial complains of the exclusion of a verdict and judgment found and entered up in the defendant’s favor on the former trial of the same case offered, as stated by movant’s counsel, for the purpo-se of refuting the charge made in the petition that the de[270]*270fendant in bad faith refused to pay the loss for which the suit was brought.

Code § 56-706 provides that when it is made to appear to a jury trying a case brought to recover loss covered by an insurance policy that the insurance company within 60 days after demand for payment of the loss, in bad faith refuses to- pay the same the policy holder may recover, in addition to the amount of the loss, 25 percent damages and reasonable attorney’s fees.

The petition alleged that the defendant was liable to him for the loss covered by an insurance policy and after the requisite demand, in bad faith, refused to- pay the loss and hence he was entitled to recover in addition to the amount of the loss the statutory penalty and attorney’s fees.

Liability for the penalty and attorney’s fees attaches at the time when the insurer in bad faith and within sixty days after demand for payment of the loss fails or refuses to pay the same; this is true regardless of whether at a later date there is reasonable cause to refuse the claim of loss. Independent Life &c. Ins. Co. v. Hopkins, 80 Ga. App. 348 (3) (56 S. E. 2d 177).

It is held that probable cause for refusing payment for a claim will negative imputation of bad faith on the part of the insurer. Georgia Life Ins. Co. v. McCranie, 12 Ga. App. 855, 860 (78 S. E. 1115); Life & Cas. Co. of Tenn. v. Smith, 51 Ga. App. 122 (2) (179 S.E. 744).

“A defence going far enough to show reasonable and probable cause for making it, would vindicate the good faith of the company as effectually as would a complete defence to the action. Oh the other hand, any defence not manifesting such reasonable and probable cause, wo-uld expose the company to the imputation of bad faith -and to the assessment of damages therefor under § 2850 of the Code.” Travelers Ins. Co. v. Sheppard, 85 Ga. 751, 765 (12 S. E. 18).

A verdict of guilty not obtained by fraud has been held by our appellate courts to be conclusive evidence of probable cause for the prosecution. Davis v. Gilbert, 67 Ga. App. 277 (19 S. E. 2d 920); Hartshorne v. Smith, 104 Ga. 235 (30 S. E. 666). The same rule has been applied in cases of malicious abuse of civil process. In Georgia Loan &c. Co. v. Johnston, 116 Ga. 628, 630 [271]*271(43 S. E. 27) it is held: “The same rule applies in actions for damages alleged to have been sustained in consequence of the malicious use of legal process in civil cases.”

The United States Circuit Court of Appeals in Fireman’s Fund Ins. Co. of San Francisco v. McConnell, 198 Fed. 2d 401, 402, extended the ruling to include verdicts in the favor of defendant insurance companies as evidence of probable cause for refusing to pay losses. We are not bound to follow the bolding, and are not inclined to adopt all that is held in the McConnell case. We are of the opinion that for t-he general rule to be applied to the defense of a suit to recover loss covered by an insurance policy, the previous verdict in the insurer’s favor would not only have to be not obtained by fraud, but must also meet the requirements that it has been found upon the merits of the case and not to have resulted from the insured having been illegally prevented by some error of the court from making out his case and showing that he was according to the terms of the policy prevented from proving that the insurer was liable to him for the loss. For instance, if the court ruled out admissible evidence necessary to show jurisdiction or any other essential element of the insurer’s case, or so charged as to prevent a fair consideration of facts necessary to fehow the insured’s right to recover, or erroneously-place upon the insured the burden of proving a fact not legally necessary in making out the case, it could not be held that the jury ever passed upon the facts of the case, so that the verdict rendered would be indicative, much less conclusive, that the defense to the action was interposed upon probable cause. In this connection it should be observed that the basis upon which a verdict of guilty in a criminal case or a.

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Reserve Life Insurance Co. v. Peavy
105 S.E.2d 465 (Court of Appeals of Georgia, 1958)

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Bluebook (online)
105 S.E.2d 465, 98 Ga. App. 268, 1958 Ga. App. LEXIS 565, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reserve-life-insurance-co-v-peavy-gactapp-1958.