Wallis v. Cotton States Mutual Insurance

354 S.E.2d 842, 182 Ga. App. 147, 1987 Ga. App. LEXIS 1658

• Court: Court of Appeals of Georgia
• Decided: February 19, 1987
• Docket: 73441
• Status: Published

Opinions

Sognier, Judge.

Jimmy Wallis and Diane Carstensen, parents of Todd Wallis, deceased, brought suit against Cotton States Mutual Insurance Company seeking bad faith penalties under OCGA § 33-7-11 (j) for Cotton States’ failure to pay them the proceeds of Todd Wallis’ uninsured motorist insurance policy within 60 days after demand for payment was made. The trial court granted the motion for summary judgment made by Cotton States and this appeal ensued.

Appellants’ deceased died from injuries incurred in a collision with an automobile, driven by an uninsured motorist, in June 1984. Formal demand for payment under the deceased’s uninsured motorist policy was made on appellee in October 1984. Suit was filed against the uninsured motorist in December 1984; appellee was subsequently served with a copy of the complaint and filed an answer on behalf of the uninsured motorist. Appellee paid appellants’ claim in July 1985 prior to the entry of judgment against the uninsured motorist in December 1985. This suit for bad faith penalties and attorney fees was filed by appellants a week after entry of judgment against the uninsured motorist.

We find this case to be controlled adversely to appellants’ contention by this court’s opinion in Allstate Ins. Co. v. McCall, 166 Ga. App. 833 (305 SE2d 413) (1983) and we therefore affirm the trial court’s grant of summary judgment to appellee. Here, as in Allstate, the basis for the claim for bad faith penalties was the insurer’s refusal to pay the policy proceeds on demand where the demand was made prior to the entry of judgment against the uninsured motorist. “ ‘(T)his court has interpreted the Uninsured Motorist Act to require, as a condition precedent to a suit against the insurance carrier, that the insured first sue and recover a judgment against the uninsured motorist, whether known [cit.], or unknown, [cit.]. Although the statute does not, by its express terms, require such a condition precedent, . . . since the insurer [is] liable for the amount which the insured “shall be legally entitled to recover” from the uninsured motorist [OCGA § 33-7-11 (a)], that liability for damages “should be ascertained in an appropriate forum before the bringing of a suit against the insurance company under such coverage.” [Cit.]’ Moss v. Cincinnati Ins. Co., 154 Ga. App. 165, 166 (268 SE2d 676) (1980). ... A demand for payment and refusal by the insurer prior to trial on the tort liability of the uninsured motorist does not eliminate the requirement that a judgment first be obtained against the uninsured motorist as a condition precedent to suit against the insurer. [Cit.] Nor is there any indication that [appellee] waived the condition precedent. [Cit.]

“It follows that an insurer has no duty to accept an insured’s demand for payment of a claim prior to judgment being entered against an uninsured motorist. Inasmuch as the insurer is not required to make payment or settlement, it defies logic to argue that [appellee] could have acted in bad faith in failing to pay the claim prior to judgment in the tort case. [Cit.]” Id. at 833-834.

The Supreme Court in McCall v. Allstate Ins. Co., 251 Ga. 869 (310 SE2d 513) (1984), while not articulating the same reasons as stated in the opinion of the Court of Appeals, affirmed this court without any disavowal of the reasoning used.

Judgment affirmed.

Birdsong, C. J., McMurray, P. J., Banke, P. J., Carley, Pope, Benham and Beasley, JJ., concur. Deen, P. J., dissents.