Atkinson v. Atkinson, s. 41320-41322

• Decision Date: 19 February 1985
• Docket Number: Nos. 41320-41322,s. 41320-41322
• Citation: 326 S.E.2d 206,254 Ga. 70
• Parties: ATKINSON v. ATKINSON. CHUBB GROUP OF INSURANCE COMPANIES v. ATKINSON et al. GENERAL ACCIDENT GROUP v. ATKINSON et al.
• Court: Georgia Supreme Court

Page 206

326 S.E.2d 206

254 Ga. 70

ATKINSON v. ATKINSON.

CHUBB GROUP OF INSURANCE COMPANIES v. ATKINSON et al.

GENERAL ACCIDENT GROUP v. ATKINSON et al.

Nos. 41320-41322.

Supreme Court of Georgia.

Feb. 19, 1985.

Rehearing Denied March 14, 1985.

A. Paul Cadenhead, Hurt, Richardson, Garner, Todd & Cadenhead, R. Dennis Withers, Brent J. Kaplan, Atlanta, for Thomas H. Atkinson in No. 41320 and for Judith Ellen Atkinson et al in Nos. 41321 and 41322.

Long, Weinberg, Ansley & Wheeler, Palmer H. Ansley, Joseph W. Watkins, Atlanta, for Judith Ellen Atkinson et al. in Nos. 41320 and 41322 and for Chubb Group of Ins. Companies in No. 41321.

Swift, Currie, McGhee & Hiers, James B. Hiers, Jr., Michael H. Schroder, Atlanta, for Judith Ellen Atkinson et al. in Nos. 41320 and 41321 and for General Acc. Group in No. 41322.

Meals & Parks, P.C., Robert N. Meals, Larry H. Chesin, Neely & Player, James A. Eichelberger, Randall H. Davis, Lokey & Bowden, Glenn Frick, Atlanta, for Judith Ellen Atkinson et al. in all cases.

HILL, Chief Justice.

In this multi-party suit for declaratory judgment, the trial court granted permanent equitable relief; e.g., rescinding a settlement agreement entered into in a wrongful death case. This court therefore has jurisdiction. Compare Felton v. Chandler, 201 Ga. 347(4), 39 S.E.2d 654 (1946).

In July, 1979, a divorce was granted to Thomas and Judith Atkinson, but the alimony and child custody issues were reserved. In September, their 15-year- old daughter, Tracy, was critically injured while riding as a passenger in an automobile driven by Peter Tranakos, a minor, when it and an automobile driven by James Spalding, also a minor, collided. While Tracy lay hospitalized in a coma, a consent order was entered placing her in her mother's temporary custody and requiring her father to pay her medical expenses.

On the night of the accident, Peter Tranakos was driving a car owned by his father and insured by Royal Globe Insurance Companies. James Spalding was driving a car owned by his grandfather and insured by General Accident Life & Assurance Corp., a member of the General Accident Group. Spalding's grandfather also had an excess liability policy which was issued by a member company of the Chubb Group. James Spalding was also an insured under his father's automobile policy issued by Commercial Union Insurance Company.

Following Tracy's death, her mother, Judith Atkinson, instituted suit for wrongful death naming as defendants the two minor drivers and their fathers, as well as James Spalding's grandfather, alleging that the automobiles involved in the collision were family purpose vehicles furnished to the minors by the adult defendants.

Tracy's father, Thomas Atkinson, moved to be allowed to intervene in the wrongful death action, but his motion was denied. He then instituted a suit for the wrongful death of his daughter, but it was dismissed on motion for summary judgment. Thereafter, Judith Atkinson entered into a Release, Covenant and Indemnity Agreement with the defendants in her wrongful death action and their insurance companies. The agreement provides that in consideration of the receipt of $110,000, Judith Atkinson releases the named defendants in her wrongful death case and their insurers from any and all claims arising from the injuries to and death of Tracy Atkinson, except that she did not release any claim Thomas Atkinson might have for the expenses of Tracy's last illness, funeral and burial. Judith also agreed to indemnify and hold harmless the individual defendants and their insurers for any loss sustained by them on account of any claim for damages arising from the injuries to and death of Tracy, except for her father's claim for the expenses of her last illness, funeral and burial. A consent judgment was entered accordingly in the mother's wrongful death case, and Thomas Atkinson filed notice of appeal, appealing the denial of his motion to intervene therein.

At this point, Judith and Thomas Atkinson signed an agreement settling the unresolved alimony and property issues in their divorce action. Paragraph 11 of that agreement reads, in relevant part, as follows: "Husband did not participate in the settlement of Wife's claim, was not privy thereto, and is without knowledge of the contents thereof. Husband agrees, while not condoning said settlement, that he will not assert a claim against said proceeds. Husband reserves the right to pursue his personal appeal and to enforce his personal rights against all defendants in said Civil Action Numbered above [the wrongful death case instituted and settled by the wife]. Additionally, Husband, as father of said child, instituted his own action ... and Husband reserves the right to proceed in said cause. Wife releases to Husband any claims or rights she has against any judgment or settlement proceeds paid after the date of this Agreement to Husband or to Husband and Wife jointly in either or both of said Civil Actions." ¹

Before the alimony settlement agreement was approved by the court, this court held in Atkinson v. Atkinson, 249 Ga. 247, 290 S.E.2d 423 (1982), that Thomas Atkinson's motion to intervene in his wife's wrongful death action should have been granted because the temporary custody order did not divest him of his cause of action for the wrongful death of their child.

In the final judgment in the divorce action, the trial court rejected paragraph 11 of the alimony settlement agreement, above, stating that: "[T]he court finds that this agreement has as its basic foundation the condition that the wife be allowed to keep what proceeds she now has from the wrongful death action. This is the condition upon which she agreed to give up the house and allow it to be sold without contest. Therefore, the court does not approve Item 11 of the agreement as it does not clearly express the wife's right to keep the wrongful death proceeds. Item 11 is therefore ordered stricken from the agreement. In place of Item 11, the court hereby provides that the wife shall be allowed to keep all the proceeds from the wrongful death action which she now has." No appeal was taken from this order.

After Thomas Atkinson prevailed in this court and intervened in his former wife's wrongful death action, she filed this declaratory judgment action, naming him as a defendant along with the defendants in the wrongful death case and their insurance companies. In the declaratory judgment action, the trial court made the following rulings: (1) Judith Atkinson's settlement agreement in the wrongful death action "must be set aside for mutual mistake of law and fact that she had the right and power to enter into a total settlement of such cause of action when in fact such cause of action was vested in her and Thomas H. Atkinson jointly." The consent judgment incorporating the wrongful death settlement agreement was also set aside and Judith Atkinson was ordered to repay the $110,000. (2) The court declared that paragraph 11 of the alimony settlement agreement between Judith and Thomas is still binding on the parties and is construed as an indemnity and surety agreement whereby he agreed that she should recover $110,000. He was ordered to pay her $110,000 simultaneously with her repayment of the $110,000. The court's substitution for paragraph 11 was also construed as a guarantee by Thomas that Judith will recover $110,000. (3) Judith was directed to enter a voluntary dismissal with prejudice in the joint action for the wrongful death of Tracy so that Thomas alone may proceed to recover the full value of Tracy's life. (4) Although General Accident had paid out its policy limits, upon its receipt of $35,000 of the $110,000, it will not have done so and its duties under the policy therefore have not ended; furthermore, even if the policy limits were exhausted, it still has the primary duty to provide defenses to its insureds. (5) The excess coverage provided by a member of the Chubb Group comes into play when General Accident's coverage is exhausted, and the coverage provided by Commercial Union comes into play only when the Chubb Group coverage is exhausted.

Thomas Atkinson, the Chubb Group and General Accident each appeal.

1. Mr. Atkinson enumerates as error the overruling of his motion for summary judgment, urging that declaratory judgment is not an available remedy as against him for the reason that the issues raised as to him can be resolved in the wrongful death action into which he has intervened. He urges further that it was error to stay proceedings in that wrongful death action because he is entitled to a prompt trial of his wrongful death claim.

We find that declaratory judgment does lie to determine General Accident's duty to defend, see Shield Ins. Co. v. Hutchins, 149 Ga.App. 742(2), 256 S.E.2d 108 (1979), and thus suit for declaratory judgment naming all parties and the order staying the wrongful death action were appropriate. Moreover, in view of the requirement that Mrs. Atkinson refund the $110,000 settlement to its payors, it would be inappropriate to leave that requirement in effect without resolving Mr. Atkinson's obligation, if any, to reimburse her. Finally, this litigation has been prolonged and made complicated because Mr. Atkinson was not originally allowed to become a party to the wrongful death action. ² Were he now to be dismissed as a party to this litigation, the wrongful death action would not be expedited and likely would be more prolonged and complicated.

The trial court did not err in denying Mr. Atkinson's motion for summary judgment or in staying the wrongful death action.

2. The next issue which must be resolved, raised by all the appellants, is whether the trial court erred in setting aside the wrongful death settlement agreement and consent judgment entered into by Judith Atkinson and all the defendants except Thomas Atkinson. We find that it did.

OCGA § 23-2-21 provides that: "(a) A mistake relievable in...