Commercial Union Ins. Co. v. Bradley Co.

• Citation: 186 Ga.App. 610,367 S.E.2d 820
• Decision Date: 08 March 1988
• Docket Number: No. 75139,75139
• Parties: COMMERCIAL UNION INSURANCE COMPANY v. BRADLEY COMPANY.
• Court: United States Court of Appeals (Georgia)

Page 820

367 S.E.2d 820

186 Ga.App. 610

COMMERCIAL UNION INSURANCE COMPANY v. BRADLEY COMPANY.

No. 75139.

Court of Appeals of Georgia.

March 8, 1988.

Rehearing Denied March 31, 1988.

John P. Reale, Atlanta, for appellant.

G. Terrell Davis, Brian P. Turcott, Atlanta, for appellee.

CARLEY, Judge.

Although it is now defunct, Regal Trucking Company, Inc. (Regal) previously operated as a motor common carrier. Regal was afforded insurance coverage under a policy which had been issued by appellant-defendant Commercial Union Insurance Company. Under the terms of that policy, liability coverage with limits of $250,000 was provided to Regal in connection with the loss of or damage to any cargo "while loaded for shipment in or on vehicles and in transit anywhere within the limits of the Continental United States or Canada...."

In addition to providing liability coverage to Regal, the policy also contained an "Endorsement for Motor Common Carrier Policies of Insurance for Cargo Liability Under Section 215, Interstate Commerce Act" (ICC Endorsement). Pursuant to the terms of this ICC Endorsement, appellant agreed that, without regard to any condition, provision, stipulation or limitation otherwise contained in the policy, it would pay up to $5,000 to "any shipper or consignee for all loss of or damage to all property belonging to such shipper or consignee, and coming into the possession of [Regal] in connection with [Regal's] transportation service [under a certificate of public convenience and necessity issued to Regal by the ICC] for which loss or damage [Regal] may be held legally liable...." (Emphasis supplied.) Thus, by this ICC Endorsement, appellant agreed that it would provide up to $5,000 in coverage for lost or damaged cargo directly to those shippers who had employed Regal to transport their goods, which direct coverage to Regal's shippers was to be supplemental to the liability coverage which appellant had otherwise agreed to afford to Regal. "The ICC endorsement constitutes a supplemental insurance agreement at law, by which [appellant as] the insurer is obligated to pay the shippers of goods ... for any loss of or damage to property that results from the transportation of the shipped goods by [Regal as] the insured cargo carrier, up to a specified maximum amount." Ford Motor Co. v. Transport Indem. Co., 41 B.R. 433, 436 (E.D.Mich.1984).

In the course of its business, Regal undertook the transportation of shipments of cargo for appellee-plaintiff W.C. Bradley Company. The major portion of one such shipment, which originated in Georgia, was stolen in Alabama, while en route to various points in other states. Appellee, having unsuccessfully sought reimbursement from Regal for the loss of the stolen merchandise, eventually brought suit to recover for that loss. Appellee filed its suit to recover for its lost merchandise against Maranda Motor Freight Company, Inc. (Maranda), based upon Maranda's alleged capacity as Regal's successor in interest. Appellee obtained a default judgment against Maranda but the bankrupt Maranda was unable to satisfy that judgment. Appellee then filed this direct action against appellant, based upon appellant's capacity as Regal's insurer. Appellant filed a timely answer, wherein it asserted various defenses to being subjected, in its capacity as Regal's insurer, to appellee's direct action. After a brief period of discovery, appellant filed a motion for partial summary judgment. In its motion, appellant sought, in effect, a ruling that appellee had no right to bring a direct action against it as to the liability coverage of the Regal policy but could, as a matter of law, bring a direct action on the policy only as to the $5,000 in supplemental coverage that was afforded under the ICC Endorsement. The trial court denied appellant's motion, but certified its order for immediate review.

This court granted appellant's application for an interlocutory appeal so that we might address the issue of appellee's entitlement, in its capacity as the shipper of goods lost while in Regal's possession, to bring this direct action against appellant, in its capacity as Regal's insurer. As noted previously, there are two coverages under the Regal policy involved in the present case, to wit: coverage to Regal under the liability provisions of the policy; and, coverage to appellee under the provisions of the ICC Endorsement. Although there are exceptions, the general rule is that a party who alleges he has been damaged is not entitled to bring a direct action against the liability insurer of the party who allegedly caused the damage. See generally Seaboard Coast Line R. Co. v. Freight Delivery Svc., 133 Ga.App. 92, 95(3), 210 S.E.2d 42 (1974). However, because the ICC Endorsement in the Regal policy provides supplemental coverage from appellant directly to a shipper of goods who had employed Regal, coverage under the ICC Endorsement would not fall within the general rule as to liability coverage. Accordingly, it is undisputed that appellee would be entitled to predicate this direct action against appellant upon the $5,000 in supplemental coverage afforded under that ICC Endorsement. The question to be resolved is whether appellee can predicate this direct action against appellant only upon the ICC Endorsement. Appellant urges that its motion for summary judgment eliminated any possible exception upon which appellee could...