Voyager Cas. Ins. Co. v. Colwell, 65168

• Decision Date: 11 March 1983
• Docket Number: No. 65168,65168
• Citation: 166 Ga.App. 17,303 S.E.2d 152
• Parties: VOYAGER CASUALTY INSURANCE COMPANY v. COLWELL.
• Court: Georgia Court of Appeals

Page 152

303 S.E.2d 152

166 Ga.App. 17

VOYAGER CASUALTY INSURANCE COMPANY v. COLWELL.

No. 65168.

Court of Appeals of Georgia.

March 11, 1983.

Rehearings Denied March 23 and 25, 1983.

Certiorari Granted May 13, 1983.

William A. Erwin, Kenneth B. Hodges, Jr., Albany, for appellant.

Kenneth M. Henson, Jr., Columbus, Millard D. Fuller, Americus, for appellee.

CARLEY, Judge.

Appellee-plaintiff instituted suit against appellant-defendant, originally seeking to recover $5,000 in basic PIP benefits and, pursuant to OCGA § 33-34-6 (Code Ann. § 56-3406b), 25% penalty, punitive damages, and attorney's fees. Appellee subsequently amended her complaint to seek an additional $45,000 in optional PIP benefits. See Jones v. State Farm Mut. Auto. Ins. Co., 156 Ga.App. 230, 274 S.E.2d 623 (1980). The case proceeded to trial and, at the close of the evidence, the trial court directed a verdict for appellee as to her entire PIP claim. The issue of appellant's liability for the 25% penalty, punitive damages and attorney's fees was submitted to the jury and a verdict as to these claims was returned for appellee. Appellant appeals from the entry of judgment on the verdicts.

1. Appellant enumerates as error the direction of a verdict for appellee as to her claim for optional PIP benefits. All arguments advanced by appellant in this regard have been rejected in Flewellen v. Atlanta Cas. Co., 250 Ga. 709, 300 S.E.2d 673 (1983). Accordingly, this enumeration is without merit.

2. Appellant asserts that the trial court erred in refusing to allow into evidence certain testimony concerning its agent's oral "offers" regarding optional PIP coverage, which were made to but declined by the applicant. It is asserted that this evidence was relevant with regard to the issue of whether the optional PIP coverage had been rejected by the applicant and therefore whether appellee was entitled to recover those benefits. "While [the insurer] offered the ... testimony of its agent ... to prove that [the insured] had been informed of the optional coverages and had knowingly rejected these coverages, [former OCGA § 33-34-5 (Code Ann. § 56-3404b)] clearly sets out the requirements that the application contain 'separate spaces' and that an applicant's rejection of optional no-fault coverages must be in writing as evidenced by his signature on 'separate spaces.' " Jones v. State Farm Mut. Auto. Ins. Co., supra, 156 Ga. at 233, 274 S.E.2d 623. "The statute ... says this offer of coverage may be refused only by a signed rejection in writing. OCGA § 33-34-5(a) and (b). In the absence of such a rejection, the policy, therefore, provides $50,000 PIP coverage from its inception. The insured has the right to demand and receive the benefit of $50,000 coverage upon tender by the insured of such additional premium as may be due and filing of proof of loss by the injured party." (Emphasis supplied.) Flewellen v. Atlanta Cas. Co., supra, 250 Ga. at 712, 300 S.E.2d 673. Accordingly, we find that the evidence concerning the oral communications between appellant's agent and the applicant had no relevance with reference to appellee's entitlement to recover optional PIP benefits. This enumeration is without merit.

3. In his closing argument to the jury, appellant's counsel was not allowed to discuss the fact that on the original policy application, which did not comply with OCGA § 33-34-5 (Code Ann. § 56-3404b) as interpreted in Jones and Flewellen, the insured had "accepted" only the basic $5,000 PIP coverage. Appellant asserts on appeal that this evidence was relevant on the issue of its good faith in denying appellee's claim for optional PIP benefits and was erroneously excluded from the jury's consideration as to that issue.

The policy application had no relevance with regard to appellant's good faith in refusing to pay appellee's claim for optional PIP benefits. As noted in Division 1, the trial court had correctly determined that, as a matter of law, appellee was entitled to those benefits as against appellant's defense which apparently was merely an attack upon the interpretation of OCGA § 33-34-5 (Code Ann. § 56-3404b), reached in Jones and subsequently upheld in Flewellen, that a single signature at the end of the application was not a sufficient rejection of optional PIP benefits. If anything, appellant's refusal to pay the claim solely on the basis that the applicant for coverage had "rejected" optional PIP benefits in the guise of an application form which did not comport with the requirements of OCGA § 33-34-5 as interpreted in Jones and Flewellen demonstrates appellant's "bad faith." See generally Bituminous Cas. Corp. v. Mowery, 145 Ga.App. 45, 244 S.E.2d 573 (1978). Compare Sentry Indemnity Co. v. Sharif, 156 Ga.App. 828, 829(2), 280 S.E.2d 354 (1980). "[T]he mandate of the law was clear and [had] the obvious purpose of making the insured aware of the absolute right to minimum optional benefits. There was no prior approval of the [appellant's] forms. The law had been in effect since 1975, Ga.L.1974, p. 113, and the insurer proceeded at its own risk in failing to comply with the statute when issuing this policy..." Flewellen, supra, 250 Ga. at 714, 300 S.E.2d 673. Whether or not there had been a valid rejection of optional PIP benefits under the circumstances in the instant case was not a question of first impression at the time of trial, Jones having already specifically decided against appellant's contentions in this regard and the mandate of the law being otherwise clear. The evidence was in no way relevant to appellant's good faith and was not erroneously rejected as such by the trial court.

4. Appellant was not permitted to introduce evidence concerning its unsuccessful efforts to reach a compromise with appellee concerning its untimely failure to pay her original claim for basic PIP benefits. The trial court's refusal to admit evidence of these compromise efforts is enumerated as error, the argument being that it was relevant as to appellant's "good faith" failure to pay that claim.

" '[A]dmissions or propositions made with a view to a compromise, are not proper evidence.' [Cits.] 'The rule against allowing evidence of compromises is founded upon recognition of the fact that such testimony is inherently harmful, for the jury will draw conclusions therefrom in spite of anything said by the parties at the time of discussing the compromise, and in spite of anything which may be said by the judge in instructing them as to the weight to be given such evidence.' [Cit.]" Newton Bros. v. Shank, 240 Ga. 471, 241 S.E.2d 231 (1978).

A review of the record in the instant case demonstrates that appellant was afforded the opportunity to introduce evidence that its original untimely failure to pay appellee's basic PIP claim was the result of a clerical error, evidence which would authorize but not demand a finding that appellant was acting in good faith when it did not pay the claim in a timely fashion. See Atlanta Cas. Co. v. Jones, 247 Ga. 238, 241(4), 275 S.E.2d 328 (1981). We find nothing which would take appellant's refused evidence of its subsequent unsuccessful efforts to compromise all of appellee's disputed potential claims arising from that untimely failure to pay--including attorney's fees, penalties and punitive damages--outside the general rule that such evidence would be "inherently harmful." "The evidence implies that [appellee] refused to cooperate in...