835 F.2d 857 (11th Cir. 1988), 87-8425, Walker v. Omaha Mut. Indem. Co.

Docket Nº:87-8425
Citation:835 F.2d 857
Party Name:M.C. WALKER, Plaintiff-Appellant, v. OMAHA MUTUAL INDEMNITY COMPANY, Defendant-Appellee.
Case Date:January 15, 1988
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit
 
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835 F.2d 857 (11th Cir. 1988)

M.C. WALKER, Plaintiff-Appellant,

v.

OMAHA MUTUAL INDEMNITY COMPANY, Defendant-Appellee.

No. 87-8425

United States Court of Appeals, Eleventh Circuit

January 15, 1988

C. Nathan Davis, Albany, Ga., for plaintiff-appellant.

Ben Kingree, Carter & Ansley, Atlanta, Ga., for defendant-appellee.

Appeal from the United States District Court for the Middle District of Georgia.

Before HILL, FAY and VANCE, Circuit Judges.

VANCE, Circuit Judge:

This case involves a narrow issue of Georgia law concerning whether an insured mortgagor has a legal interest in a credit disability insurance policy. Because the district court erroneously relied on vitiated Georgia case law, we reverse the district court's grant of summary judgment in favor of the insurer.

In 1974 appellant M.C. Walker purchased property in Albany, Georgia. Pursuant to the financing arrangement with Southwestern Mortgage Company, appellant became eligible for and received group mortgage disability insurance under a credit policy issued by Continental Casualty Company. Appellee Omaha Mutual Indemnity Company subsequently assumed appellant's policy.

In March, 1983 appellant was injured when a tree fell on his back. Because he became disabled and unable to work, appellant applied for benefits under the policy. Appellee made payments from April, 1983 to February, 1984, and then again from May, 1984 to August, 1984. Appellee made no further disability payments and as a result appellant was unable to make his mortgage payments. In November, 1984 appellant lost his house and property through foreclosure.

After removing appellant's subsequent state court action to federal district court, appellee moved for summary judgment on

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the grounds that appellant had no interest in the policy to maintain an action, or, in the alternative, that appellant's action was barred as a result of his failure to submit certain disability reports. The district court, relying on Murray v. Life Insurance Co. of Georgia, 107 Ga.App. 545, 130 S.E.2d 767 (1963), granted summary judgment on the first ground.

In Murray the Court of Appeals of Georgia held that the purpose of a group creditors insurance policy was to provide the creditor mortgagee "with security for its outstanding loans by paying it the balance of indebtedness owed thereon in the event of the death or disability of the debtors." 130 S.E.2d at 769. The court concluded therefore that any cause of action on the policy was vested in the...

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