Francis v. Newton
| Decision Date | 29 May 1947 |
| Docket Number | 31582. |
| Citation | 43 S.E.2d 282,75 Ga.App. 341 |
| Parties | FRANCIS v. NEWTON et al. |
| Court | Georgia Court of Appeals |
Rehearing Denied June 27, 1947.
SYLLABUS BY THE COURT
1. While a liability insurance company may be held liable to its insured for negligence or fraud or bad faith in failing to adjust a claim against the insured which is covered by its policy, it does not follow that a person injured by the insured may complain of such negligence or had faith of the insurer towards its policyholder, for the duty of the insurer to use ordinary care and good faith in the handling of a claim against its insured arises out of the relationship between them created by the policy or contract of insurance, and there is no fiduciary relationship or privity of contract existing between the insurer and a person injured by one of its policyholders.
(a) The evidence and all reasonable deductions therefrom demanded a finding that the garnishee was not indebted to the defendants at the time of the service of the summons of garnishment upon it and that it had not become indebted to them since said service, and the judge did not err in so holding and in granting the motion of the garnishee for a judgment of nonsuit.
2. Since the above ruling is controlling in this case, it is not necessary to pass on the other assignments of error.
Marvin Francis, by next friend Tilmon Francis, caused a summons of garnishment to be issued on May 21, 1940, and served on May 22, 1940, upon Indemnity Insurance Company of North America based on a judgment obtained by the plaintiff on June 2 1939, against Mrs. E. P. Newton and J. D. Leapard. The garnishee answered on July 1, 1940, and set out that it had no money, property or effects of the defendants in its possession at the time of the service of said summons of garnishment upon it and that no money, property or effects of said defendants had come into its possession since said service. The plaintiff, on July 2, 1940, filed a traverse to the answer of the garnishee, and the issue formed by the answer and traverse came on for trial in the Superior Court of Fulton County on February 3, 1947.
On the trial the plaintiff introduced evidence to the effect that he was injured on March 31, 1938, in an automobile accident caused by the negligence of the defendants; that he and his father, Tilmon Francis, employed an attorney at law to represent them in the matter and to handle their claims for damages against the defendants; that their attorney was informed or learned that Mrs. E. P. Newton held a policy of liability insurance issued by Indemnity Insurance Company of North America and that a certain attorney at law was representing the defendants through this insurance company; that plaintiff's attorney notified the attorney handling the matter for the defendants that he represented the plaintiff and his father and gave him their contention and told him if he desired to settle the claims to advise him so that they might discuss the matter; that the plaintiff was examined by a bone surgeon employed by the insurance company and the insurance company's lawyer was given an order authorizing him to look at all the hospital records with reference to the plaintiff's injuries; that certain depositions were taken by agreement of the parties; that plaintiff's attorney wrote and offered to settle the claims of the plaintiff and his father arising out of plaintiff's injuries for $10,000; that plaintiff's attorney asked to be allowed to see the policy issued to Mrs. Newton and stated that the plaintiff and his father would be willing to accept an amount within the limits of the policy, but that the policy was never shown to him and he was not informed as to the limits of the policy; that the insurance company offered the sum of $1,500 in settlement of the claims of the plaintiff and his father, which was inadequate; that no settlement was reached and the case of the plaintiff was tried in the Superior Court, where a judgment in plaintiff's favor was returned for $7,500; that the defendants' motion for a new trial was overruled; that the insurance company on or about December 7, 1939, paid into court the sum of $5,000, and later paid interest on this sum to that date, which was credited on the plaintiff's judgment; that the garnishment in the present case was based on the execution held by the plaintiff against the defendants, Mrs. E. P. Newton and J. D. Leapard. Various letters and other documents were placed in evidence by the plaintiff.
At the conclusion of the plaintiff's evidence, the court, on motion of counsel for the insurance company, granted a nonsuit, and the plaintiff excepted.
G. Seals Aiken, of Atlanta, for plaintiff in error.
T. J. Long, Matthews, Long & Moore, Sidney Smith and Richard M. Maxwell, all of Atlanta, for defendant in error.
SUTTON, Chief Judge (after stating the foregoing facts).
1. While an automobile liability insurance company may be held liable for damages to its insured for failing to adjust or compromise a claim covered by its policy of insurance, where the insurer is guilty of negligence or of fraud or bad faith in failing to adjust or compromise the claim to the injury of the insured (Cavanaugh Bros. v. General Accident Fire & Life...
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... ... S.E.2d at 811, 812 (describing "the duty owed by any prudent insurer to refrain from taking an unreasonable risk on behalf of its insured"); Francis v. Newton, 75 Ga.App. 341, 43 S.E.2d 282, 284 (1947) (insured may recover "where the insurer is guilty of negligence or of fraud or of bad faith in ... ...
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