Donovan v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 13 November 2014
• Docket Number: No. A14A1248.,A14A1248.
• Citation: 329 Ga.App. 609,765 S.E.2d 755
• Court: Georgia Court of Appeals
• Parties: DONOVAN v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

329 Ga.App. 609

765 S.E.2d 755

DONOVAN

v.STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

No. A14A1248.

Court of Appeals of Georgia.

Nov. 13, 2014.

Certiorari Denied Feb. 22, 2015.

Malia Phillips-Lee, Thomasville, Whitehurst Blackburn & Warren, Christopher Kenneth Rodd, for Appellant.

Alexander & Vann, George R. Lilly II, Thomasville, for Appellee.

Opinion

MILLER, Judge.

Lara Donovan was injured in an automobile accident involving a vehicle driven by Jonathon McMillon. Donovan sued McMillon and three underinsured motorist (“UM”) carriers, including State Farm, her mother's insurance carrier.¹ McMillon's insurance carrier, Progressive Insurance Company, paid Donovan the $25,000 limit of his liability insurance policy. State Farm subsequently moved for summary judgment, contending that it is entitled to a set-off for the $25,000 paid by McMillon's insurer. The trial court granted State Farm's motion, and Donovan appeals. On appeal, Donovan contends that State Farm is not entitled to set off the $25,000 paid under McMillon's insurance policy against State Farm's $25,000 UM coverage limit. For the reasons that follow, we affirm.

“On appeal from the grant of summary judgment this Court conducts a de novo review of the evidence to determine whether there is a genuine issue of material fact and whether the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law.” (Citations and punctuation omitted.) Campbell v. The Landings Assn., Inc., 289 Ga. 617, 618, 713 S.E.2d 860 (2011).

So viewed, the evidence shows that in October 2009, Donovan was riding as a passenger in a pickup truck when the truck was involved in a collision with McMillon's vehicle. At the time of the accident, Donovan, who is an adult, resided with her mother in Thomasville, Georgia. Donovan sustained injuries in the accident that she claims exceed $100,000.

In addition to McMillon's $25,000 liability insurance policy issued by Progressive Insurance, three UM policies potentially provide coverage: (1) the State Farm policy issued to Donovan's mother; (2) a Grange Mutual Casualty Company policy issued to Donovan's mother; and (3) a GMAC policy issued to the owner of the truck in which Donovan was riding as a passenger. Each of the UM policies has a $25,000 coverage limit. The Grange and GMAC policies are standard/excess UM policies, which potentially provide coverage in excess of McMillon's $25,000 liability insurance limits. The State Farm UM policy is a difference-in-limits policy.

In her sole enumeration of error, Donovan contends that the trial court erred in holding that State Farm is entitled to a set-off for the $25,000 in liability coverage that she received from McMillon's insurer. Specifically, Donovan argues that both stacking and priority of payments rules apply under Georgia law when more than one UM carrier is available regardless of the type of policies involved. Under the circumstances of this case, the trial court did not err in granting summary judgment to State Farm.

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.

(Citations and punctuation omitted.) State Farm Mut. Automobile Ins. Co. v. Adams, 288 Ga. 315, 316–317, 702 S.E.2d 898 (2010). Under Georgia law, there are two types of available UM coverage. OCGA § 33–7–11(b)(1)(D)(ii). The first option is an excess policy which provides for UM insurance in excess of any available liability insurance. OCGA § 33–7–11(b)(1)(D)(ii)(I). The second option is a difference-in-limits policy which provides for UM coverage only for the amount of the difference between the available liability insurance and the limits of the insured's UM coverage. OCGA § 33–7–11(b)(1)(D)(ii)(II).

Where more than one UM policy is available to cover an injured party's damages, Georgia law allows an insured to stack the limits of all available UM coverage to satisfy a judgment. See Progressive Classic Ins. Co. v. Nationwide Mut. Fire Ins. Co., 294 Ga.App. 787, 788, 670 S.E.2d 497 (2008). Georgia courts employ three priority-of-payment rules or tests for determining the order in which the available UM policies should be stacked: the “receipt of premium” test, the “more closely identified with” test, and the “circumstances of the injury” test.² See Progressive, supra, 294 Ga.App. at 788, 670 S.E.2d 497. In cases involving more than one difference-in-limits UM policy, trial courts use these priority of payment rules to determine which UM carrier is entitled to a set-off for the available amount of liability insurance coverage. See Ga. Farm Bureau Mut. Ins. Co. v. State Farm Mut. Automobile Ins. Co., 255 Ga. 166, 167, 336 S.E.2d 237 (1985) (...