Atl. Specialty Ins. Co. v. City of Coll. Park

Decision Date15 February 2022
Docket NumberS21G0482
Citation313 Ga. 294,869 S.E.2d 492
Parties ATLANTIC SPECIALTY INSURANCE COMPANY v. CITY OF COLLEGE PARK et al.
CourtGeorgia Supreme Court

Seth Michael Friedman, Lewis Brisbois Bisgaard and Smith, 600 Peachtree Street, NE, Suite 4700, Atlanta, Georgia 30308, for Appellant.

Karen Eleice Woodward, Cruser, Mitchell, Novitz, Sanchez, Gaston & Zimet, LLP, Meridian II, Suite 2000, 275 Scientific Drive, Norcross, Georgia 30092, Alwyn Robert Fredericks, Cash, Krugler & Fredericks, LLC, 5447 Roswell Road, N.E., Atlanta, Georgia 30342, James Darren Summerville, The Summerville Firm, LLC, 1226 Ponce de Leon Avenue, Atlanta, Georgia 30306, Anna Green Cross, The Cross Firm, LLC, 520 W. Ponce de Leon Avenue #1858, Decatur, Georgia 30030, Alisha I. Wyatt-Bullman, Reginald Bernard McClendon, Joshua Stanley Foster, Assistant City Attorney, City of Atlanta Law Department, 55 Trinity Avenue, SW, Suite 5000, Atlanta, Georgia 30303, for Appellee.

Jonathan Andrew Pope, Hasty Pope Davies, LLP, 509 Green Street, Gainesville, Georgia 30114, Robert Henry Snyder, Jr., Canella Snyder LLC, PO Box 1399, Decatur, Georgia 30030, Joseph M. Colwell, Butler Wooten & Peak LLP, 105 13th Street, Columbus, Georgia 31901, for Amicus Appellee.

Nahmias, Chief Justice.

Dorothy Wright and her grandchildren, Cameron Costner and Layla Partridge, (collectively, the "Decedents") were killed when their vehicle was struck by a stolen vehicle that was being chased by College Park Police Department officers. At the time of the accident, the City of College Park had an insurance policy provided by Atlantic Specialty Insurance Company ("Atlantic"), which provided coverage for negligent acts involving the City's motor vehicles up to $5,000,000 but also included immunity endorsements which say that Atlantic has no duty to pay damages "unless the defenses of sovereign and governmental immunity are inapplicable."

Joi Partridge,1 Floyd Costner,2 and Douglass Partridge3 (collectively, the "Plaintiffs") filed a lawsuit against the City, raising claims of negligence and recklessness resulting in the wrongful deaths of the three Decedents, to which the City raised sovereign immunity as a defense. The Plaintiffs assert that the insurance policy limit is $5,000,000 for the three deaths, while Atlantic maintains that the policy limit is capped at $700,000 under the relevant statutory scheme and the terms of the City's policy. As the parties agree, pursuant to OCGA § 36-92-2 (a) (3), the sovereign immunity of local government entities is automatically waived up to $700,000 in this instance, regardless of whether the City has a liability insurance policy. However, OCGA § 36-92-2 (d) (3) provides that "[a] local government entity [that] purchases commercial liability insurance in an amount in excess of the [statutory minimum] waiver" increases the waiver to the extent of the excess insurance.

Atlantic intervened in the case to litigate the limit of the insurance policy. The trial court ruled that the policy limit is $5,000,000, and the Court of Appeals affirmed. See Atlantic Specialty Ins. Co. v. City of College Park , 357 Ga. App. 556, 851 S.E.2d 189 (2020). This Court then granted Atlantic's petition for certiorari to decide whether the City's insurance policy waives the City's sovereign immunity under OCGA § 36-92-2 (d) (3). As explained below, because the Court of Appeals incorrectly ruled that the City's insurance policy increased the sovereign immunity waiver notwithstanding the immunity endorsements, which expressly preclude coverage when a sovereign immunity defense applies, we reverse.

1. The pertinent facts are undisputed. On January 31, 2016, the Decedents were killed when their vehicle was struck by a stolen vehicle involved in a high-speed chase with College Park Police officers. At the time of the accident, the City held an insurance policy (the "Policy") issued by Atlantic,4 which was effective from June 1, 2015 through June 1, 2016. The Policy included business auto and excess liability coverage, among other things. The limits under the Policy are $1,000,000 under the business auto section and $4,000,000 under the excess liability section.

Both sections of the Policy, however, contained endorsements entitled "Georgia Changes – Protection of Immunity," which we will refer to as the "Immunity Endorsements." The business auto section's Immunity Endorsement provides as follows:

A. Changes in Liability Coverage
The following is added to A. Coverage under SECTION II – LIABILITY COVERAGE
We have no duty to pay damages or any "covered pollution cost or expense" on your behalf under this policy unless the defenses of sovereign and governmental immunity are inapplicable to you.
B. Changes in Conditions
The following is added to SECTION IV – BUSINESS AUTO CONDITIONS
This policy and any coverages associated therewith does not constitute, nor reflect an intent by you, to waive or forego any defenses of sovereign and governmental immunity available to any Insured, whether based upon statute(s), common law or otherwise, including Georgia Code Section 36-33-1, or any amendments.

Likewise, the excess liability section's Immunity Endorsement provides:

The following is added to SECTION I – COVERAGE
A. INSURING AGREEMENT – EXCESS LIABILITY
We have no duty to pay "damages" on your behalf under this policy unless the defenses of sovereign and governmental immunity are inapplicable to you.
The following is added to SECTION V – CONDITIONS
This policy and any coverages associated therewith does not constitute, nor reflect an intent by you, to waive or forego any defenses of sovereign and governmental immunity available to any Insured, whether based upon statute(s), common law or otherwise, including Georgia Code Section 36-33-1, or any amendments.

In April 2016, the Plaintiffs filed suit against the City5 in the State Court of Fulton County ("trial court"), asserting claims of negligence and recklessness in connection with the wrongful deaths of the Decedents. The City answered, raising the defense of sovereign immunity.6

While the case was pending before the trial court, Atlantic filed a declaratory judgment action in the United States District Court for the Northern District of Georgia, seeking a declaration that the Policy's limit as to the Plaintiffs’ claims is $700,000 when reading the Immunity Endorsements in connection with OCGA § 36-92-2. OCGA § 36-92-2 says, in pertinent part:

(a) The sovereign immunity of local government entities for a loss arising out of claims for the negligent use of a covered motor vehicle is waived up to the following limits: ... (3) ... an aggregate amount of $700,000.00 because of bodily injury or death of two or more persons in any one occurrence[.]

Subsection (d) of that statute then says, in pertinent part, that the waiver "shall be increased to the extent that: ... (3) [t]he local government entity purchases commercial liability insurance in an amount in excess of the waiver set forth in this Code section." OCGA § 36-92-2 (d) (3).

In the trial court, meanwhile, the Plaintiffs filed a motion for partial summary judgment, seeking a ruling that the relevant Policy limit is $5,000,000. They contended that, by purchasing the Policy, the City waived its sovereign immunity up to $5,000,000. The Plaintiffs also asserted that the Immunity Endorsements are void because they are contrary to public policy. The trial court deferred ruling on the Plaintiffs’ motion until the federal court resolved Atlantic's declaratory judgment action.

In June 2018, the federal court dismissed Atlantic's action for lack of subject matter jurisdiction. See Atlantic Specialty Ins. Co. v. City of College Park , 319 F.Supp.3d 1287 (N.D. Ga. 2018). The Plaintiffs then renewed their motion for partial summary judgment in the trial court, and Atlantic was allowed to intervene in the state court lawsuit to litigate the Policy's limit. Atlantic filed its own motion for partial summary judgment, contending that the Policy's limit as to the Plaintiffs’ claims is $700,000.

In August 2019, the trial court ruled that the relevant Policy limit is $5,000,000. The court held that the Immunity Endorsements improperly attempted to "contract around" the sovereign immunity waiver "requirements" of OCGA §§ 36-92-2 and 33-24-51.7 Atlantic appealed.

The Court of Appeals affirmed the trial court's ruling. See Atlantic Specialty Ins. Co. , 357 Ga. App. at 565, 851 S.E.2d 189. Asserting that the legislature's intent in enacting OCGA §§ 36-92-2 and 33-24-51 was to "protect members of the public by waiving the sovereign immunity of local government entities with respect to claims for the negligent use of a motor vehicle and establishing the limits of the amount of the waiver in the event the government entity purchases liability insurance," the Court of Appeals concluded that "Atlantic's application of this statutory scheme runs counter to the General Assembly's clear legislative intent." Atlantic Specialty , 357 Ga. App. at 564-565, 851 S.E.2d 189. The court asserted it is "undisputed that the policy coverage amounts exceed the statutory limits of OCGA § 36-92-2 (a) (3)." Id. at 562-563, 851 S.E.2d 189. The court added that to interpret the Immunity Endorsements as argued by Atlantic would "grant insurers and local government entities carte blanche to contract around the legislature's clear intent to increase compensation for those who sustain injuries arising out of the use of a government motor vehicle." Id. Atlantic filed a petition for certiorari, which this Court granted.

2. The Georgia Constitution provides municipalities performing their governmental functions with immunity from civil liability, which only the General Assembly (or the Constitution itself) may waive. See Gatto v. City of Statesboro , 312 Ga. 164, 166-168, 860 S.E.2d 713 (2021). See also Ga. Const. of 1983, Art. IX, Sec. II, Par. IX ("The General Assembly may waive the immunity of counties, municipalities, and school districts by...

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