Hughes v. ACE Am. Ins. Co.

• Docket Number: A23A0609
• Decision Date: 26 May 2023
• Parties: HUGHES v. ACE AMERICAN INSURANCE COMPANY.
• Court: Georgia Court of Appeals

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HUGHES v. ACE AMERICAN INSURANCE COMPANY.

No. A23A0609

Court of Appeals of Georgia, Fifth Division

May 26, 2023

MCFADDEN, P. J., BROWN and MARKLE, JJ.

BROWN JUDGE

Kenneth Hughes appeals from the trial court's order granting Ace American Insurance Company's ("Ace Insurance") motion for summary judgment. Hughes asserts that a genuine issue of material fact exists as to whether a passenger van insured by Ace was owned or operated by a "motor carrier" under OCGA § 40-1-100 et seq. For the reasons explained below, we disagree and affirm.

To prevail at summary judgment, the moving party must demonstrate that there is no genuine issue of material fact and that the undisputed facts, viewed in the nonmovant's favor, warrant judgment as a matter of law. We review de novo a trial court's [grant or] denial of summary judgment construing the evidence in a light most favorable to the nonmoving party.

(Citation and punctuation omitted.) Mornay v. Nat. Union Fire Ins. Co. of Pittsburgh, PA., 331 Ga.App. 112 (769 S.E.2d 807) (2015).

So viewed, the record shows that a seven-passenger Dodge Caravan driven by Jeremiah Belk collided with a Chevrolet Colorado truck driven by Kenneth Hughes after Belk made an improper lane change. Hughes filed a complaint, as amended, against Belk's employer, Normal Life of Georgia, Inc. ("Normal Life"), Res-Care, Inc. ("Res-Care"), the parent company of Res-Care, and Ace Insurance, the insurance carrier of Res-Care, asserting various theories of liability for the negligent and/or reckless conduct of Belk. Hughes asserted a direct action claim against Ace Insurance pursuant to OCGA § 40-1-112 based on his contention that Normal Life and ResCare are motor carriers under OCGA § 40-1-100. The trial court subsequently granted Ace Insurance's motion for summary judgment based on its conclusion that there was no genuine issue of material fact as to whether any of the defendants were a motor carrier.

Georgia's direct action provision of the Georgia Motor Carrier Act ("the Act") states: "It shall be permissible under this part for any person having a cause of action arising under this part to join in the same action the motor carrier and the insurance carrier, whether arising in tort or contract." OCGA § 40-1-112 (c). See generally Sapp v. Canal Ins. Co., 288 Ga. 681, 682-683 (1) (706 S.E.2d 644) (2011). "The purpose of permitting joinder of [an insurance company] in a claim against a [motor] carrier is to further the policy of the Motor Carrier Act, that is, to protect the public against injuries caused by the motor carrier's negligence." Andrews v. Yellow Freight System, 262 Ga. 476 (421 S.E.2d 712) (1992). See also Reis v. OOIDA Risk Retention Group, 303 Ga. 659, 664, n.12 (814 S.E.2d 338) (2018) (Noting that former OCGA § 46-7-12 (c) provided: "'It shall be permissible under this article for any person having a cause of action arising under this article to join in the same action the motor carrier and the insurance carrier, whether arising in tort or contract.'"). Additionally, it "enables injured persons to recover compensation more efficiently and quickly and encourages insurers to resolve legitimate claims by settlement." Grissom v. Gleason, 262 Ga. 374, 378 (3) (418 S.E.2d 27) (1992). "Importantly, the direct action statute is in derogation of common law, and its terms require strict compliance." (Citation and punctuation omitted.) Stubbs Oil Co. v. Price, 357 Ga.App. 606, 616 (4) (848 S.E.2d 739) (2020). Cf. Record Truck Line v. Harrison, 220 Ga. 289, 291 (1) (138 S.E.2d 578) (1964) (holding different provision of statutory scheme governing motor carriers in derogation of common law and must be strictly construed).

The first step of the analysis is to determine whether Normal Life and Res-Care fall within the definition of "motor carrier" in the Act. OCGA § 40-1-100 (12) (A) provides that this term

means: [e]very person owning, controlling, operating, or managing any motor vehicle, including the lessees, receivers, or trustees of such persons or receivers appointed by any court, used in the business of transporting for hire persons, household goods, or property or engaged in the activity of nonconsensual towing pursuant to Code Section 44-1-13 for hire over any public highway in this state.

(Emphasis supplied.) OCGA § 40-1-100 (8) defines "'for hire'" to mean "an activity relating to a person engaged in the transportation of goods or passengers for compensation." (Emphasis supplied.) And,

"[p]assenger" means a person who travels in a public conveyance by virtue of a contract, either express or implied, with the carrier as to the payment of the fare or that which is accepted as an equivalent therefor. The prepayment of fare is not necessary to establish the relationship of passenger and carrier, although a carrier may demand prepayment of fare if persons enter his or her vehicle by his or her permission with the intention of being carried; in the absence of such a demand, an obligation to pay fare is implied on the part of the passenger, and the reciprocal obligation of carriage of the carrier arises upon the entry of the passenger.

OCGA § 40-1-100 (13). Finally, "'[c]arrier'" is defined to mean "a person who undertakes the transporting of goods or passengers for compensation." OCGA § 40-1100 (1). Taken together, it is clear from the plain language of the statute that the term "motor carrier" depends in turn on the definition of "for hire," which in turn depends upon the definition of "passenger" found in OCGA § 40-1-100 (13).

Hughes contends that record evidence shows that Normal Life and Res-Care "operate as a joint enterprise" with both companies "employing" and "directing" Belk's activities,^[1] which included transporting their clients. In his view, a genuine issue of material fact exists as to "whether the for-profit companies that charged to provide services including transportation over Georgia roadways" fall within the definition of motor carrier. He argues that "[t]he law just requires that one purpose of the vehicle falls within the statutory definition of 'motor carrier' - there is no percentage allocation or analysis of whether the statutorily enumerated services of a motor carrier are 'ancillary' to a business goal."

Ace Insurance, on the other hand, asserts that the van was not used for "the business of transporting people for compensation" and that it was "an entirely ancillary part of [Normal Life's] service of providing home health care." According to Ace, the defendant companies "are solely in the business of providing rehabilitative home health care support to...