Curry v. Allstate Prop. & Cas. Ins. Co.

• Decision Date: 11 March 2022
• Docket Number: A21A1446
• Citation: 870 S.E.2d 808
• Parties: CURRY v. ALLSTATE PROPERTY & CASUALTY INSURANCE CO.
• Court: Georgia Court of Appeals

870 S.E.2d 808

CURRY

v.ALLSTATE PROPERTY & CASUALTY INSURANCE CO.

A21A1446

Court of Appeals of Georgia.

March 11, 2022

Reconsideration Denied March 24, 2022

Neal B. Graham, Joel Max Grist Jr., Macon, for Appellant.

Sean Lamar Gill, Neal B. Graham, Macon, for Appellee.

Gobeil, Judge.

James T. Curry filed the instant action against Allstate Property & Casualty Insurance Company ("Allstate") pursuant to OCGA § 33-7-11 (j), a statute which penalizes an insurer for bad faith refusal to pay a demand for uninsured or underinsured motorist ("UM") insurance. The trial court granted partial summary judgment to Allstate on the issue of damages permitted under the statute. Curry appeals, challenging the court's rulings pertaining to the extent of damages and attorney fees he may seek. For the reasons stated below, we affirm in part the trial court's order, reverse in part, and remand the case for additional proceedings consistent with this opinion.

The facts relevant to the issues on appeal are not in dispute. On January 12, 2015, Curry was injured in a car accident that was caused by the negligence of a third-party driver. The other driver was insured for $25,000, which Curry received from the other driver's insurance company under a limited release allowing Curry the right to pursue UM benefits.

At the time of the accident, Curry was insured with Allstate under an automobile policy that provided $30,000 worth of UM coverage. On May 17, 2016, Curry made a demand for the policy limits of his UM coverage. Allstate did not tender this money to Curry within 60 days of his demand. Curry then sued the at-fault driver and was awarded a judgment of $85,579.02 plus costs (the "underlying tort action").

In October 2020, Curry filed the instant suit against Allstate pursuant to OCGA § 33-7-11 (j),¹ claiming that Allstate rejected his demand in bad faith.² Curry sought: (1) 25 percent of the entire verdict of $85,579.02 from the underlying tort action, and (2) attorney fees for expenses associated with both the instant suit and the underlying tort action. Allstate answered the complaint, denying the claim of bad faith. Allstate also filed a motion for partial summary judgment, arguing that the 25 percent figure listed in OCGA § 33-7-11 (j) limited Curry to recovering 25 percent of his UM policy limit of $30,000, rather than 25 percent of the verdict in the underlying tort action. Allstate also contested Curry's request for attorney fees, arguing that he was limited to recovering attorney fees incurred in the instant action, rather than those associated with the underlying tort action.

The trial court issued an order granting Allstate's motion for partial summary judgment. Specifically, the court found that Curry "may seek to recover not more than twenty-five percent (25%) of the $30,000.00 UM coverage already paid by [Allstate] in the original tort action, plus reasonable attorney's fees for the prosecution of the instant action." The instant appeal followed.³

It is well established that on appeal of a grant of summary judgment, the appellate court must determine whether the trial court erred in concluding that no genuine issue of material fact remains and that the party was entitled to judgment as a matter of law. This requires a de novo review of the evidence.

Rubin v. Cello Corp. , 235 Ga. App. 250, 250-251, 510 S.E.2d 541 (1998) (citation and punctuation omitted). "When a question of law is at issue, as here, we owe no deference to the trial court's ruling and apply the ‘plain legal error’ standard of review." Suarez v. Halbert , 246 Ga. App. 822, 824 (1), 543 S.E.2d 733 (2000) (citation omitted).

1. On appeal, Curry first contests the trial court's finding that he may seek damages of only 25 percent of the limits of his UM coverage. Instead, he argues he is entitled to seek 25 percent of the verdict in his underlying tort action.⁴ We disagree.

The statute at issue is the Georgia Uninsured Motorist Act, OCGA § 33-7-11. To provide context for Curry's arguments, we first consider the structure of the statute as a whole. We have explained that the

purpose of uninsured motorist or UM coverage is to place the injured insured in the same position as if the offending uninsured motorist were covered with liability insurance. The Georgia uninsured motorist statute is designed to protect the insured as to his actual loss, within the limits of the policy or policies of which he is a beneficiary.

Donovan v. State Farm Mut. Automobile Ins. Co. , 329 Ga. App. 609, 611, 765 S.E.2d 755 (2014) (citation and punctuation omitted). To that end, the statute sets minimum requirements for UM endorsements in auto insurance policies. OCGA § 33-7-11 (a). The statute then defines several terms, including "[u]ninsured motor vehicle[,]" which is defined to include, as relevant here, a motor vehicle for which the liability insurance covering the vehicle does not cover the UM claimant's full damages. OCGA § 33-7-11 (b) (1) (D) (ii) (I). See Donovan , 329 Ga. App. at 611, 765 S.E.2d 755 (explaining that one type of UM coverage is an "excess policy which provides for UM insurance in excess of any available liability insurance").

The statute goes on to explain that a UM claimant may file an action against the at-fault driver, and, if there is a belief that the UM claimant will be filing a claim against his UM insurer, the UM claimant must serve the insurer with a copy of the action and all pleadings. OCGA § 33-7-11 (d). See Ward v. Allstate Ins. Co. , 265 Ga. App. 603, 603-604, 595 S.E.2d 97 (2004) ("Generally, the insured's right to recover under an uninsured motorist policy is established by obtaining a judgment against the uninsured motorist, thus showing that the insured is legally entitled to recover those damages.") (citation and punctuation omitted). The insurer is entitled to certain protections in the underlying tort lawsuit and in the calculation of how much the insurer may owe the UM claimant. OCGA § 33-7-11 (d), (f), (h), (i).

Finally, as stated above, subsection (j) provides that if an insurer fails to pay a UM coverage demand within 60 days, and such failure is found to be in bad faith, "the insurer shall be liable to the insured in addition to any recovery under this Code section for not more than 25 percent of the recovery or $25,000.00, whichever is greater, and all reasonable attorney's fees for the prosecution of the case under this Code section." (Emphasis supplied.)

We had the opportunity to consider the meaning of the term "the recovery" in Jones v. Cotton States Mut. Ins. Co. , 185 Ga. App. 66, 69-70 (2), 363 S.E.2d 303 (1987). There, we considered the same argument put forth by Curry (that the statute intended to refer to a claimant's recovery in the underlying tort action), and rejected such argument. Id. at 69 (2), 363 S.E.2d 303. Instead, we found that "the statute [provides] for a penalty of 25 percent of the recovery of the total UM coverage for which [the UM insurer] is liable." Id. We explained that, with this statute, the legislature "provide[d] a specific procedure and a limited penalty for noncompliance with OCGA § 33-7-11 [,]" and "the ‘recovery’ allowed under OCGA § 33-7-11 (j) was intended to be limited to ‘recovery under this Code section,’ i.e., recovery of the sums for which the UM carrier is liable." Id. at 69-70 (2), 363 S.E.2d 303.

We agree with Allstate that Jones applies to the instant appeal. OCGA § 33-7-11 covers UM endorsements in our state, and provides the requirements of coverage and the process by which a UM claimant shall recover funds from their insurer. The statute contemplates the UM claimant filing an underlying tort suit against the driver of the "uninsured motor vehicle" along with the UM insurer. However, the underlying tort suit is merely the avenue by which the UM claimant recovers under the UM endorsement in his auto policy. Nothing in the statute would allow a UM claimant to recover more than the limits of his UM endorsement. Thus, we agree that "the recovery" under OCGA § 33-7-11 (j) refers to "sums for which the UM carrier is liable." Jones , 185 Ga. App. at 69-70 (2), 363 S.E.2d 303.⁵

Curry attempts to distinguish his case from Jones because in Jones there was no liability insurance in the underlying tort case. We, however, fail to see how this changes the application of the Jones holding to this instant appeal. In Jones , the claimant had not yet received a verdict in the underlying tort case, so the amount of the verdict was hypothetical when our Court rendered its holding. Jones , 185 Ga. App. at 69 (2), 363 S.E.2d 303. Thus, the specifics of how much liability insurance may be available to the claimant or may offset the verdict was irrelevant to our holding in Jones and does not prevent its application to this appeal.

In conclusion, we follow the precedent set in Jones , and hold that Curry may recover, pursuant to OCGA § 33-7-11 (j), "not more than 25 percent" of the limits of his UM coverage with Allstate or "$25,000, whichever is greater." OCGA § 33-7-11 (j). We affirm the order of the trial court to this extent.

2. Curry also contests the trial court's finding that the attorney fees he may recover in the instant action are limited to expenses associated with the instant action, as opposed to the expenses associated with the underlying tort action. On this issue, we agree, at least in part, with Curry's arguments.⁶

As to attorney fees, OCGA § 33-7-11 (j) states that, if bad faith is found on the part of the insurance company in refusing to pay a demand within 60 days, the insured shall be entitled to

all reasonable attorney's fees for the prosecution of the case under this Code section. The question of bad faith, the amount of the penalty, if any, and the reasonable attorney's fees, if any, shall be determined in a separate action^{[7 ]} filed by the insured against the insurer after a judgment has been rendered against the uninsured motorist in the original tort action.

(Emphasis supplied.)

The...