Enfinger v. International Indem. Co.

• Court: Supreme Court of Georgia
• Citation: 317 S.E.2d 816,253 Ga. 185
• Docket Number: No. 41070,41070
• Parties: ENFINGER v. INTERNATIONAL INDEMNITY COMPANY.
• Decision Date: 29 June 1984

Page 816

317 S.E.2d 816

253 Ga. 185

ENFINGER v. INTERNATIONAL INDEMNITY COMPANY.

No. 41070.

Supreme Court of Georgia.

June 29, 1984.

Rehearing Denied July 25, 1984.

Ben Kirbo, Kirbo & Conger, Bainbridge, for Jimmy Enfinger.

Michael L. Wetzel, Gurley & Fowler, P.C., Atlanta, for International Indem. Co.

Robert M. Darroch, Richard T. Gieryn, Jr., amicus curiae.

GREGORY, Justice.

We granted certiorari to review the Court of Appeals' decision in Enfinger v. International Indemnity Co., 170 Ga.App. 443, --- S.E.2d ---- (Nos. 66925 and 66926, Decided February 28, 1984). The issue for our determination is whether OCGA § 33- 34-5(c) may be utilized to "cure" noncompliance with the signature requirements of OCGA § 33-34-5(b). We answer this question in the negative and reverse.

On August 26, 1980, appellant Enfinger applied for automobile liability insurance with appellee International Indemnity Company (IIC). It is undisputed that the policy application form executed by Enfinger did not comply with the signature requirements of OCGA § 33-34-5(b) (Code Ann. § 56-3404b). The policy issued to Enfinger provided the minimum $5,000 personal injury protection (PIP) coverage. In an attempt to remedy its defective policy application, on September 22, 1980, IIC sent Enfinger a letter following the requirements of OCGA § 33-34-5(c), by first class mail and postage prepaid, advising him of optional PIP coverage and the additional premiums necessary for such coverage. This letter conformed to the standards for such letters set down in Wiard v. Phoenix Ins. Co., 251 Ga. 698, 700, 310 S.E.2d 221 (1983). IIC received no response to this letter from Enfinger. On October 30, 1980, Enfinger was seriously injured in an automobile accident. IIC paid him the $5,000 basic PIP benefits under the policy.

In May, 1982, Enfinger, through his wife, requested payment of $45,000 additional PIP benefits from IIC and tendered the required premiums. IIC denied the additional coverage and Enfinger commenced this action seeking the $45,000 additional PIP benefits, penalties and attorney fees based on the insurer's alleged bad faith refusal to pay the claim. The trial court ruled that the insurance policy issued to Enfinger provided for $50,000 PIP benefits from its inception because the IIC application form did not contain the signature spaces for the applicant to accept or reject optional coverage as required by OCGA § 33-34-5(b); that IIC's letter of September 22, 1980, was ineffectual to constitute a rejection of the optional coverage; and that Enfinger was not entitled to penalties and attorney fees because as a matter of law there had been no bad faith refusal to pay the claim. Both parties appealed.

The Court of Appeals reversed the trial court's ruling in a 5-4 decision and held OCGA § 33-34-5(c) could be used to cure noncompliance with the signature requirements of OCGA § 33-34-5(b) (Code Ann. § 56-3404b), therefore, Enfinger's failure to respond to IIC's letter of September 22, 1980, effectuated a rejection of any optional PIP coverage. We disagree.

A cardinal rule of statutory construction is that courts must look to the purpose and intent of the legislature and construe statutes so as to implement that intent. Wilson v. Board of Regents, 246 Ga. 649, 650, 272 S.E.2d 496 (1980). Therefore, we examine a portion of the history of our "no-fault" law and the decisions interpreting it to determine whether the legislature intended OCGA § 33-34-5(c) to apply to policies issued after the effective date of the statute. The original no-fault Act, Ga.Laws, 1974, p. 113, required insurers to utilize forms for application for insurance which contained separate spaces for the insured to indicate acceptance or rejection of each of the optional coverages provided for in the Act. OCGA § 33-34-5(b). One of the required optional coverages was up to $50,000 personal injury protection. In Flewellen v. Atlanta Cas. Co., 250 Ga. 709, 300 S.E.2d 673 (1983), we held that a policy of insurance issued after the effective date of the statute provides for $50,000 PIP benefits, absent a signed rejection of the optional coverages by the insured. (Emphasis supplied). See also, GEICO v. Mooney, 250 Ga. 760, 300 S.E.2d 799 (1983). However, the original Act failed to take into account policies which would be in existence on the effective date, March 1, 1975, since no application would be submitted on these existing policies. ¹ To alleviate this oversight, in 1975 the legislature amended the statute by adding OCGA § 33-34-5(c) which provides in pertinent part "On and after the effective date of this Act, all named insureds in existing motor vehicle liability...