Smith v. National Union Fire Insurance

195 S.E.2d 205, 127 Ga. App. 752, 1972 Ga. App. LEXIS 1015

• Court: Court of Appeals of Georgia
• Decided: November 29, 1972
• Docket: 47343, 47344, 47345
• Status: Published

Opinions

Hall, Presiding Judge.

The origins of these consolidated appeals were three wrongful death actions against the defendants Smith, who are licensed motor carriers, and their two insurers. Following either a jury verdict for the plaintiffs or a negotiated settlement, National Union paid out substantial sums. It had earlier filed cross claims against the Smiths for reimbursement of any payments it would be obligated to make. Both the Smiths and National Union filed motions for summary judgment on the cross claims, stipulating (in effect) there were no factual issues and that one or another should have the judgment. The court granted National Union’s motion.

The basis for National Union’s liability to the plaintiffs is that it had filed a certificate of insurance with the Public Service Commission which, until 30 days after written notice of cancellation, provides coverage for the benefit of the general public under the law of Georgia and rules of the commission. Code Ann. § 68-612. National Union concedes that it did not give the required notice to the commission before the wrongful death and that it was therefore legally obligated to pay the plaintiffs.

The basis for its claim for reimbursement from the Smiths is that, as between them, there was no coverage because the policy had lapsed. The policy period stated in the contract of insurance was from April 26, 1964, to April 26, 1965. There was no renewal of the policy and no further premium or any other form of consideration was given by the Smiths. They had, in fact, procured a liability insurance contract from another company for the following year. The wrongful death occurred on November 12, 1965. The policy itself provided for reimbursement in those instances in which the company made a payment it would not otherwise be obligated to make except for the certification to a public authority. However, the contractual provision need not be relied upon since the same result is required by the rules of the Public Service Commission and by Garden City Cab Co. v. Fidelity & Cas. Co., 80 Ga. App. 850 (57 SE2d 683).

That National Union made a form certification to the Public Service Commission stating the policy was effective "until canceled” (and notice given) does not mean the contract of insurance could not terminate in any other way except cancellation; and certainly no hypothetical rules of the Public Service Commission could purport to extend or renew a contract between private parties which they did not intend and for which there was no consideration. The rules can only provide that until proper notice is given to the commission, the policy is effective for the benefit of the public.

The only distinction between the Garden City case and this one is that the former involved the cancellation of the policy and a municipal ordinance where this one involves the termination of the policy by lapse of time and a State statute. In both cases there was no policy in effect between the insurer and the alleged insured at the time of the injury to the public. By substituting the words "terminated or expired” in place of the word "canceled” and the word "statute” in place of the word "ordinance” in the Garden City opinion, the result here is, clear. "The policy of insurance at the time of the injury to the member of the public had been canceled and the premium returned. It was therefore in force only insofar as was required by the ordinance which prevented the taxicab company from operating without the required bond. Clearly the endorsements when construed in conjunction with the ordinance as herein outlined leave the bond in force only for the protection of the public and not for the protection of the insured, and such was manifestly the intention of the parties . . . Except for the ordinance there was no liability on the part of the insurance company after it had canceled the policy in accordance with its terms and had refunded the unearned premium. Except for the ordinance the insurance company could not have been sued in the same action with the insured by a member of the public. Except for the ordinance the plaintiff, after it had canceled the policy in accordance with its terms, would have had no interest in any subsequent claim against the insured and would not have adjusted the same . . . Consequently, when the liability of the insurance company ceased under the terms of the original policy, any liability incurred thereafter under the provisions of the city ordinance was such a liability as might be recovered by it under the indemnity endorsement.” Garden City Cab Co. v. Fidelity & Cas. Co., supra, p. 853. See also St. Paul Fire & Marine Ins. Co. v. Fleet Transport Co., 116 Ga. App. 606 (158 SE2d 476).

The Smiths also contend the payment made in settlement of one case was "voluntary” and therefore not recoverable from them. The contention is without merit. The payment in the Garden City case was also a settlement. The trial court properly granted National Union’s motion for summary judgment.

Argued July 6, 1972 Decided November 29, 1972 Rehearing denied December 19, 1972 Walton Hardin, Walter N. Adams, for appellants. Barwick, Bentley & Binford, Gilbert B. Meredith, M. Cook Barwick, for appellee.

Judgment affirmed.

Bell, C. J., Eberhardt, P. J., Deen, Clark and Stolz, JJ., concur. Pannell, Quillian and Evans, JJ., dissent.