Atlanta Cas. Co. v. Fountain
| Decision Date | 27 February 1992 |
| Docket Number | No. S91G1533,S91G1533 |
| Citation | 262 Ga. 16,413 S.E.2d 450 |
| Parties | ATLANTA CASUALTY COMPANY v. FOUNTAIN et al. |
| Court | Georgia Supreme Court |
Gary L. Seacrest, Bentley, Karesh & Seacrest, Karsten Bicknese, Bentley, Karesh, Seacrest, Labovitz & Campbell, Atlanta, for Atlanta Cas. Co. Thomas J. Cullen, Kirby G. Atkinson, Boyce, Ekonomou & Atkinson, Atlanta, for Fountain et al.
We granted certiorari to consider whether the Atlanta Casualty Company should have been allowed to pursue an action for declaratory judgment under the circumstances of this case. We conclude that it should have, and therefore reverse.
Stanley and Marsha Fountain bought automobile insurance from Atlanta Casualty Company. They agreed to a "named driver exclusion" which excluded their sixteen-year-old daughter, Cynthia Fountain, from any coverage except personal injury protection. They also rejected in writing "all uninsured motorist coverage if the vehicle is being driven by the excluded driver in the policy." While the policy was in effect, Cynthia was hit by an uninsured driver. She was driving a 3-wheel all terrain vehicle. Her family made a claim under the insurance policy. The insurance company denied PIP coverage on the grounds that the 3-wheeler was not a "motor vehicle" as defined by the policy. The Fountains responded by a letter demanding coverage under the policy's uninsured motorist provisions. The letter further stated that the company's failure to pay the claim appeared to be in bad faith and that the family would pursue an action for the coverage amount plus penalties, attorney fees and expenses if payment were not issued within 60 days. The insurance company wrote back to the Fountains saying that it was unable to determine whether the policy provided coverage under the circumstances. It then filed an action for declaratory judgment.
The trial court granted the insurance company's motion for summary judgment and denied the insured's cross-motion for summary judgment. The Court of Appeals reversed, holding that the declaratory judgment action should have been dismissed. Fountain v. Atlanta Casualty Company, 200 Ga.App. 643, 409 S.E.2d 239 (1991). The Court of Appeals reasoned that the declaratory judgment petition did not disclose why the insurance company needed direction from the court with regard to future action. The Court of Appeals held that because the insurance company took the position that the policy did not cover the claim, a declaratory judgment action was inappropriate and should have been dismissed.
In this appeal, the insurance company argues that it must be able to file a declaratory judgment action in these types of cases so that it can determine the validity of a policy exclusion clause before it refuses to pay a claim. The company points out that it may subject itself to a substantial punitive damage award if it wrongly refuses to pay.
The declaratory judgment statute is construed liberally. Athens v. Gerdine, 202 Ga. 197, 42 S.E.2d 567 (1947). It is available in situations presenting an " 'actual controversy' ... where interested parties are asserting adverse claims upon a state of facts wherein a legal judgment is sought that would control or direct future action." Darnell v. Tate, 206 Ga. 576, 580, 58 S.E.2d 160 (1950). Thus, when a claim for insurance has been made, and a legitimate question exists as to the propriety of denying coverage, the insurance company may file a declaratory judgment action before denying the claim. It is not necessary for the insurance company to wait...
To continue reading
Request your trial
-
Lapolla Indus., Inc. v. Hess
...to that of the petitioner. Famble v. State Farm Ins. Co., 204 Ga.App. 332, 333–334, 419 S.E.2d 143 (1992) ; Atlanta Cas. Co. v. Fountain, 262 Ga. 16, 17, 413 S.E.2d 450 (1992).We find under the circumstances of this case that the requirements for application of the declaratory judgment stat......
-
Department of Human Resources v. Citibank
...314, 66 S.E.2d 726 (1951). The Declaratory Judgment Act is to be liberally construed to effect its purpose. Atlanta Cas. Co. v. Fountain, 262 Ga. 16, 17, 413 S.E.2d 450 (1992). See also Calvary Independent Baptist Church v. City of Rome, supra at 314, 66 S.E.2d 726. Although DHR has been he......
-
Wilder v. Jefferson Ins. Co. of New York, A01A1410.
...an actual controversy as to coverage remained, and the trial court correctly denied the motion to dismiss. Atlanta Cas. Co. v. Fountain, 262 Ga. 16, 413 S.E.2d 450 (1992). 2. The trial court also correctly ruled that the tow truck involved in the accident was not listed as an insured vehicl......
-
Pinnacle Benning, LLC v. Clark Realty Capital, LLC
...guide and protect the petitioner from uncertainty and insecurity with respect to future conduct”). 15. Compare Atlanta Cas. Co. v. Fountain, 262 Ga. 16, 18, 413 S.E.2d 450 (1992) (“[D]eclaratory judgment is not available where a judgment cannot guide and protect the petitioner with regard t......