Allstate Ins. Co. v. Shuman

• Decision Date: 13 July 1982
• Docket Number: No. 63808,63808
• Citation: 293 S.E.2d 868,163 Ga.App. 313
• Parties: ALLSTATE INSURANCE COMPANY v. SHUMAN.
• Court: Georgia Court of Appeals

Page 868

293 S.E.2d 868

163 Ga.App. 313

ALLSTATE INSURANCE COMPANY v. SHUMAN.

No. 63808.

Court of Appeals of Georgia.

July 13, 1982.

As Amended on Denial of Rehearing

July 30, 1982.

E. B. Wilkin, Jr., Richard W. Fields, Thomas S. Carlock, R. Clay Porter, Atlanta, for appellant.

Walter H. Burt, III, William L. Swan, Albany, for appellee.

William C. Sanders, G. Conley Ingram, Oscar N. Persons, Vickie Cheek Lyall, Atlanta, Milton A. Carlton, J. Franklin Edenfield, Swainsboro, for amicus.

POPE, Judge.

Appellant Allstate Insurance Company brought an action for declaratory judgment and other relief in the court below and now appeals the granting of appellee's motion to dismiss on grounds that the complaint failed to set forth a sufficient basis for declaratory relief.

The fact situation giving rise to the action is typical of a substantial number of cases pending before both state and federal courts in Georgia in the wake of Jones v. State Farm, etc., Ins. Co., 156 Ga.App. 230, 274 S.E.2d 623 (1980). Briefly stated, appellee became insured by appellant on or about February 23, 1979 through the Georgia Assigned Risk Plan. On the basis of appellee's assigned risk application, appellant provided her with minimum personal injury protection (PIP) coverage of $5,000. On April 4, 1979 appellee was involved in an automobile accident. Appellant paid the $5,000 PIP benefits pursuant to the policy.

In September and October of 1981, appellee, through her attorney, demanded retroactive maximum optional PIP coverage, citing Jones v. State Farm, supra, as support therefor. Appellee concurrently made a claim for an additional $18,624.77 in benefits for injuries and losses suffered as a result of the April 4, 1979 accident.

Appellant, contending that the optional PIP coverages had been rejected by appellee and therefore she was not entitled to any additional PIP benefits, filed the case at bar. Appellant specifically sought a declaration by the court that appellee's rejection of the optional PIP coverages was effective; that the assigned risk application was in compliance with the Motor Vehicle Accident Reparations Act; and that appellant had discharged all its duties and liabilities under the insurance policy.

Appellee filed a motion to dismiss the complaint on the grounds that the complaint failed to state a claim upon which relief could be granted, in that it failed to set forth sufficient grounds for a declaratory judgment. The trial court granted the motion and dismissed the complaint. The court concluded that the complaint was asking for an advisory opinion of the viability of appellant's defenses to appellee's claim for benefits; that all rights had accrued and appellant was not faced with uncertainty and insecurity in making a jeopardizing election with regard to the propriety of some future act or conduct; and that appellant's asserted bases of seeking to avoid the imposition of bad faith penalties and attorney fees under Code Ann. § 56-3406b(b) were insufficient to support the claim for declaratory relief. Appellant challenges each of these findings in this appeal.

1. Although appellant and amici curiae have presented a number of worthy arguments on the merits of this case, we cannot decide them. The sole question before us is whether the trial court erred in dismissing appellant's complaint, or, in other words, whether the issues presented to the trial court were appropriate for declaratory relief under Code Ann. § 110-1101. We can only decide if the court should have rendered a declaratory judgment, not how that declaratory judgment should have been rendered.

2. In our review of the dismissal of the action, we are obliged to construe the complaint most favorably to appellant and, from that viewpoint, determine whether the allegations therein disclose with certainty that appellant is not entitled to the declaratory relief sought. American Nat. Bank, etc., Co. v. Davis, 241 Ga. 333, 245 S.E.2d 291 (1978). We are further guided by Code Ann. § 110-1111, which provides that the declaratory judgment act is to be liberally construed toward the stated purpose of settling and affording relief from uncertainty and insecurity with regard to the rights and legal relations of the parties. On the other hand, we are constrained by a general disfavor by the judiciary of declaratory relief when an adequate alternative form of relief is available. (See cases cited in Division 4, infra.)

3. Code Ann. § 110-1101 empowers the superior courts to render declaratory judgments. The courts, however, have no subject matter jurisdiction to issue advisory opinions. State Farm, etc., Ins. Co. v. Hillhouse, 131 Ga.App. 524(2), 206 S.E.2d 627 (1974). The distinction between the two is the existence of an actual, or justiciable, controversy between the parties. Code Ann. § 110-1101(a) expressly provides "[i]n cases of actual controversy" the courts may render declaratory judgments. Thus, the first issue for us to decide is whether the controversy between appellant and appellee is a justiciable controversy.

In Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 57 S.Ct. 461, 81 L.Ed. 617 (1937), the United States Supreme Court dealt with the issue of the nature of a justiciable controversy. Although the case was brought under the Federal Declaratory Judgment Act, 28 U.S.C. § 400 (now 28 U.S.C. § 2201), and therefore is not binding upon us, we find the Court's analysis of the justiciability of the controversy relevant and persuasive. Haworth provides us the basic parameters of a justiciable controversy: A controversy is justiciable when it is appropriate for judicial determination. It must be definite and concrete, touching the legal relations of parties having adverse legal interests, rather than being hypothetical, abstract, academic or moot. The controversy must be such that it will be resolved immediately and definitely by the judicial declaration. Haworth, supra 300 U.S. at 239-41, 57 S.Ct. at 463-64. Accord, Lott Investment Corp. v. City of Waycross, 218 Ga. 805(1), 130 S.E.2d 741 (1963); Mayor, etc., of Savannah v. Bay Realty Co., 90 Ga.App. 261(1), 82 S.E.2d 710 (1954).

The core of the controversy between the parties at bar is the issue of how, if at all, Jones v. State Farm, affects their legal relations. We find that this controversy falls within the general parameters of a justiciable controversy. It is a question of law, determinative of their dispute.

4. The finding of a justiciable controversy, however, is only the beginning, rather than the end, of our inquiry. We must now determine if the asserted grounds for declaratory relief fall within the further limitations established for declaratory judgments by a long line of Georgia cases.

The seminal case appears to be Mayor, etc., of Athens v. Gerdine, 202 Ga. 197(1), 42 S.E.2d 567 (1947), where the Supreme Court stated: "While our declaratory judgment statute itself says that it should be liberally construed, it manifestly was never intended to be applicable to every occasion or question arising from any justiciable controversy since the statute does not take the place of existing remedies. It therefore follows that where there exists a remedy, either in law or in equity, a petition for declaratory judgment will lie only when there be some fact or circumstances which necessitate a determination of disputes, not merely for the purpose of enforcing accrued rights, but in order to guide and protect the petitioner from uncertainity and insecurity with respect to the propriety of some future act or conduct which is properly incident to his alleged rights, and which future action without such direction might reasonably jeopardize his interest."

This language was expressly reaffirmed in Sumner v. Davis, 211 Ga. 702(1), 88 S.E.2d 392 (1955) and McCallum v. Quarles, 214 Ga. 192(1), 104 S.E.2d 105 (1958). The principles have been reaffirmed and applied in a great number of cases over the years. See, e.g., Provident Life & Acc. Ins. Co. v. United Family Life Ins. Co., 233 Ga. 540(2), 212 S.E.2d 326 (1975); Baron v. State Farm, etc., Ins. Co., 157 Ga.App. 16(1), 276 S.E.2d 78 (1981); Shield Ins. Co. v. Hutchins, 149 Ga.App. 742(2), 256 S.E.2d 108 (1979); State Farm, etc., Ins. Co. v. Hillhouse, supra; St. Paul, etc., Ins. Co. v. Fleet Transport Co., 116 Ga.App. 606(3), 158 S.E.2d 476 (1967); Phoenix Assur. Co. v. Glens Falls Ins. Co., 101 Ga.App. 530, 114 S.E.2d 389 (1960).

The principles enunciated in Gerdine have been developed in the subsequent cases. One development particularly relevant to this case is that declaratory judgment is not available to a party merely to test the viability of its defenses. Baron v. State Farm, supra; State Farm, etc., Co. v. Fuller, 150 Ga.App. 387, 258 S.E.2d 13 (1979); Shield Ins. Co. v. Hutchins, supra. Here, appellant's defense to appellee's claim is essentially a contest over the asserted applicability of Jones v. State Farm. Thus, it may be said that appellant, by bringing this action for declaratory judgment, is seeking a judicial opinion of the viability of its defenses in the event appellee files suit for the claimed benefits. On the surface, therefore, Baron, Fuller and Hutchins call for a decision unfavorable to appellant. However, we find a significant distinction between those cases and the one at bar.

In each of those cases, the petitioner was seeking a declaration by the court of how a given law applied to a given set...