Cincinnati Ins. Co. v. Reybitz

• Decision Date: 16 July 1992
• Docket Number: A92A0104,Nos. A92A0103,s. A92A0103
• Citation: 421 S.E.2d 767,205 Ga.App. 174
• Parties: CINCINNATI INSURANCE COMPANY v. REYBITZ. STEWART et al. v. REYBITZ.
• Court: Georgia Court of Appeals

Page 767

421 S.E.2d 767

205 Ga.App. 174

CINCINNATI INSURANCE COMPANY v. REYBITZ.

STEWART et al. v. REYBITZ.

Nos. A92A0103, A92A0104.

Court of Appeals of Georgia.

July 16, 1992.

Reconsideration Denied July 27, 1992.

Alston & Bird, G. Conley Ingram and Nancy Glenn, Atlanta, for appellant (case no. A92A0103).

Goodman, McGuffey, Aust & Lindsey, William S. Goodman and Kathryn A. Cater, Atlanta, for appellants (case no. A92A0104).

William R. Waldrop, Marietta, for appellee.

SOGNIER, Chief Judge.

Konrad Reybitz brought suit against Deborah and Mark Stewart and the Stewarts' automobile insurance carrier, Cincinnati Insurance Company. In Counts 1 and 2, Reybitz sought to recover from the Stewarts damages for injuries he incurred when Deborah Stewart, while driving a vehicle owned by Mark Stewart, allegedly struck Reybitz as he bicycled down a public street. In Count 3, Reybitz sought to recover from Cincinnati the personal injury protection (PIP) benefits he claimed pursuant to former OCGA § 33-34-7(a)(3) as a pedestrian under the Stewarts' policy, statutory penalties, and penalties for bad faith failure to pay insurance proceeds. ¹ The trial court denied the defendants' motion to bifurcate the claims, and the case proceeded to trial. The jury returned a verdict against the Stewarts for $75,000 in actual damages and $75,000 in punitive damages. The jury returned a verdict against Cincinnati for $4,304 in PIP benefits, $5,380 in statutory penalties, $33,500 in attorney fees, and $750,000 in punitive damages. The appeals by the Stewarts and Cincinnati are consolidated in this opinion.

At trial appellee testified that he was bicycling near the roadside edge of the right lane of a four lane road in Cobb County when Ms. Stewart, driving a red Jeep Cherokee, moved into his lane as the road curved sharply heading downhill. Appellee testified that he was travelling 15 to 20 miles per hour and braking only slightly when the Jeep moved entirely into his lane. He testified that the right rear quarter of the vehicle hit his left shoulder with such force that the side of the Jeep momentarily dented and then popped out. Statements appellee made indicated that as a result of the contact, his bicycle was knocked out from under him and he flew through the air then slid on his arms a total of approximately 40 yards. Appellee suffered abrasions and a torn rotator cuff in his left shoulder as a result of his fall. Evidence was adduced that appellee's medical bills totalled under $4,000; that surgery to repair the slow-healing rotator cuff could cost around $7,000; and that the damage to appellee's bicycle was repaired for $57.29.

Ms. Stewart testified that when she passed appellee, her vehicle was mostly in the inside lane with only the right wheels in appellee's lane. She stated she cleared him on the curve and moved into his lane ahead of him and that when she was three or four car lengths past him she looked in her car mirror and saw that he had fallen. She stated that she did not hear or feel any contact between her vehicle and appellee. Cynthia Milum, a motorist who stopped to offer help to appellee, testified that he declined her offer to telephone for an ambulance and asked her instead to get the license plate number of the Jeep. Milum testified that after she pursued Ms. Stewart and got the number, she informed Ms. Stewart that appellee claimed she had hit him and that Ms. Stewart denied having done so. The evidence conflicted whether Milum told Ms. Stewart that she should return to the scene of appellee's fall, but it is uncontroverted that she did not return.

There were no eyewitnesses to the incident although Betty Weaver, who worked at an office building near the scene, testified that after she heard tires screeching, she looked out her window to see a red vehicle ahead of the bicyclist, who was airborne at the time. Evidence regarding the condition of the road at the sharp curve where the incident occurred was conflicting, as was the testimony whether appellee's description of his fall was more consistent with being sideswiped by a 3,000 pound vehicle than with losing control of the bicycle because of contact with debris or pavement ripples on the road.

1. Appellants in both appeals contend that the trial court erred by denying their joint motion to bifurcate the trial of appellee's negligence claim against the Stewarts from the trial of the PIP claim against Cincinnati.

The Stewarts contend that the jury's consideration of appellee's negligence claim against them was prejudiced by the joinder of the claims against their insurance carrier, the result of which was to authorize the introduction of matters irrelevant to the negligence claim, such as the PIP benefits portion of the Stewarts' policy (thereby indicating to the jury that the Stewarts possessed liability coverage) and the particulars of Cincinnati's investigations into the claim, including an internal evaluation by a Cincinnati representative of the credibility of Ms. Stewart and appellee as witnesses.

The law of this State clearly supports the Stewarts' position that the admission of this evidence was reversible error. " 'In an ordinary negligence case, not only is a liability insurance policy of a litigant not admissible in evidence, but disclosure to the jury of the mere existence of such contract is ground for a mistrial. (Cits.)' [Cit.] This principle is operative not only with reference to liability insurance but also with regard to no fault coverage. [Cits.]" Moore v. Price, 158 Ga.App. 566, 567, 281 S.E.2d 269 (1981). "We have repeatedly adhered to the rule that evidence of insurance coverage is so prejudicial by nature that it should not be admitted unless it is clearly relevant and, as with any generally prejudicial evidence, in determining its admissibility, the trial court should not admit it unless its relevance outweighs its prejudice. The prejudice lies in the infectious nature of collateral source evidence, contaminating as it does the issue of loss with the issues of injury and liability. [Cit.] Such evidence is prejudicial because by its nature its effect is not self-limiting, but it laps over into other considerations." Collins v. Davis, 186 Ga.App. 192, 193, 366 S.E.2d 769 (1988). The Supreme Court has recently reaffirmed the general principle that evidence of a collateral source such as insurance coverage is inherently prejudicial and readily subject to misuse by juries. Denton v. Con-Way Southern Express, 261 Ga. 41, 42-43, 402 S.E.2d 269 (1991) (addressed constitutional challenge to OCGA § 51-12-1(b)). ²

(a) The primary reason set forth by the trial court for joining appellee's claims despite the prejudice to the Stewarts presented by the admission of insurance coverage evidence was that because appellee claimed to be entitled to PIP benefits as a "pedestrian struck by" Ms. Stewart, see former OCGA § 33-34-2(5), appellee was authorized under former OCGA § 33-34-6(b) to bring an action against Cincinnati directly to recover the benefits. Based on the fact that appellee could bring direct actions against both the Stewarts (for the negligence claim) and Cincinnati (for the PIP benefits), the trial court determined that OCGA § 9-11-20(a) applied and authorized joinder of the two actions because the claims against appellants arose out of the same occurrence and shared the common question of fact as to whether appellee had indeed been struck by Ms. Stewart.

The trial court analogized this situation to the joinder in OCGA §§ 46-7-12(e) and 46-7-58(e) of a motor carrier and its insurer in a suit by an injured plaintiff, as discussed in Continental Ins. Co. v. Mercer, 130 Ga.App. 339, 340(1), 203 S.E.2d 297 (1973) (citing former Ga.Code Ann. § 68-612). Both OCGA §§ 46-7-12(e) and 46-7-58(e) expressly provide in identical language that "it shall be permissible to join the motor carrier and the insurance carrier in the same action." In the recent opinion in Grissom v. Gleason, 262 Ga. 374, 418 S.E.2d 27 (1992), involving an equal protection challenge to OCGA § 46-7-12(e), the Supreme Court acknowledged that the statute results in "disparate" and "differential" treatment of motor carriers from "other insured defendants," and upheld the constitutionality of the statute authorizing joinder of motor carriers and their insurers only after determining that the provision "is based on a rational distinction directly related to the purpose of the Motor Carrier Act." Id. at 377(3), 418 S.E.2d 27.

There is no explicit language in the 1974 version of the Georgia Motor Vehicle Accident Reparations Act (former OCGA § 33-34-1 et seq., hereinafter "the Act") comparable to the joinder provision in OCGA §§ 46-7-12(e) and 46-7-58(e). It does not follow from the fact that a pedestrian struck by an insured may bring actions against both the insured and the insured's no-fault carrier that joinder is proper absent a statutory provision restricting such joinder. Rather, because joinder in these circumstances results in the "differential treatment" of defendants with no-fault insurance from other insured defendants, see Grissom, supra, we conclude that in the absence of an express statutory provision authorizing the joinder of the pedestrian's negligence claim against the insured with the claim against the insurer for failure to pay PIP benefits, such joinder is not permitted.

The admission of evidence of no-fault insurance coverage is inherently prejudicial in a negligence action against the insured. Denton; Collins; Moore, supra. Prejudice to the parties is one of the statutory grounds for severance. OCGA § 9-11-42(b); see Atlanta Air Fleet v. Ins. Co. of N.A., 130 Ga.App. 15, 16(2), 202 S.E.2d 192 (1973); see also Plaza Pontiac v. Shaw, 158 Ga.App. 799, 800(1), 282 S.E.2d 383 (1981) (admission of prejudicial evidence is sufficient to trigger the authority granted by OCGA § 9-11-42(b) to order a separate trial). In Chupp v. Henderson, 134 Ga.App. 808...