Leventhal v. American Bankers Ins. Co. of Florida

• Decision Date: 29 June 1980
• Docket Number: No. 62078,62078
• Citation: 283 S.E.2d 3,159 Ga.App. 104
• Parties: LEVENTHAL et al. v. AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA.
• Court: Georgia Court of Appeals

Page 3

283 S.E.2d 3

159 Ga.App. 104

LEVENTHAL et al. v. AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA.

No. 62078.

Court of Appeals of Georgia.

June 29, 1980.

Certiorari Denied Sept. 8, 1981.

William C. Lanham, Clark H. McGehee, Atlanta, for appellants.

E. A. Simpson, Jr., Charles L. Weatherly, J. Arthur Mozley, Donald R. Anderson, David L. Frazier, F. C. Schenck, Ronald A. Williamson, Atlanta, for appellee.

DEEN, Presiding Judge.

Leventhal brought an action for personal injuries resulting from the crash of an airplane he was piloting, naming as defendants Pro-Travel, Inc., the owner of the plane; John Wesley Weekes as administrator of the estate of William Stewart (an employee of Pro-Travel and pilot killed in the crash) and others not necessary to this decision. Mrs. Leventhal thereafter filed a companion complaint. Naming all parties as defendants, American Bankers Ins. Co. of Fla. brought a declaratory judgment action acknowledging a policy of insurance covering Pro-Travel, Inc. but seeking a judgment affirming its contention that under the circumstances it had no duty to defend the action against Stewart, designated by name as an additional insured. From a judgment in favor of the insurer the defendants appeal.

1. The Policy.

The insurer, contending that the Stewart estate failed to comply with conditions precedent to the policy, cites the following policy provisions: "No action shall lie against the Company unless as a condition precedent thereto the insured shall have fully complied with all the terms of this policy." "If claim is made or suit is brought against the insured, the insured shall immediately forward to the Aviation Managers every demand, notice, summons or other process received by him or his representative." This policy has no definition for the phrase "the insured." It defines "Named Insured" as the individual named in the declaration; i. e., Pro-Travel, Inc., and it designates by name without further definition, Leventhal and Stewart as "additional insureds." The insurer concedes receiving prompt notice and suit papers from Pro-Travel, Inc. in the Leventhal cases, which papers informed it that its insured Stewart who was killed in the crash was a co-defendant and that the action against Pro-Travel was based on the alleged negligence of Stewart.

2. The Chronology.

The crash occurred in May, 1975. The Stewart estate was without administration until May 16, 1977, when Weekes was appointed. The first Leventhal action was filed the same month, went into default as to the Stewart estate, and the default was opened by Weekes on August 22, 1977. The following month, on September 6, 1977, appellee filed its declaratory judgment suit. Leventhal filed an answer; the case against Weekes went into default. In April of 1980 the insurer filed a motion to open the default against the Stewart estate setting out substantially the following: that Weekes made no response to the original complaint filed in September, 1977 "having been taken seriously ill and having been replaced as administrator of said estate after having been served with" an amendment dated September, 1979; that Weekes died on November 28, 1979; "that such failure to respond has resulted in the default of John Wesley Weekes, Administrator of the Estate of William L. Stewart, but that such failure in light of the circumstances is excusable" and praying that in the interests of justice the default should be set aside and Charles Weatherly, administrator d. b. n. be substituted as a defendant in the declaratory judgment action. This motion was granted. A bench trial followed in 1980 resulting in a judgment in favor of the insurer.

3. The Question of Notice of the Tort Action.

The trial court properly held in his conclusions of law: "The insurer had, from the owner of the aircraft, immediate notice of the pendency of the lawsuit against the owner of the aircraft, Pro-Travel. A full and ample investigation of the matter was conducted by the insurer and it has at all times been actively involved in the investigation of the incident and the defense of the same lawsuits in behalf of the aircraft owner... This Court concludes that notice of the crash itself was given on a timely and adequate basis to the insurer and is effectual as to all insureds whether 'named' or 'named additional' or 'omnibus additional.' Such notice need be given only once and inures to the benefit of all 'insureds.' " This was established in Stonewall Ins. Co. v. Farone, 129 Ga.App. 471, 199 S.E.2d 852 (1973), where it was held that "it makes no difference who gives the notice, so long as a reasonable and timely notice is given the company and it has actual notice of the pendency of a claim or suit." See also Kitt v. Shield Ins. Co., 240 Ga. 619, 241 S.E.2d 824 (1978). The Stewart estate is not foreclosed by any failure to give notice of the wreck.

4. The Forwarding of Suit Papers.

As the trial court noted, Georgia case law has held practically without exception that any person designated an "additional insured" in a policy taken out by another must both elect coverage and comply with all policy conditions or the insurer will have no duty to him under the policy. In Hicks v. Continental Ins. Co., 146 Ga.App. 124, 245 S.E.2d 482 (1978), the tortfeasor was driving a substitute vehicle while her own was being repaired. She was described as a "third party beneficiary"; her failure to notify the insurer of her election of coverage or to forward suit papers was fatal to her claim. In Southeastern Stages, Inc. v. General Fire & Cas. Co., 151 Ga.App. 487, 260 S.E.2d 399 (1979), the appellant was the lessee and operator of a bus owned by the named insured, Greyhound Lines, Inc. There was no notice of claim, except a printed form by one performing medical services for which it sought subrogation against Greyhound; Southeastern was not mentioned at all, and no suit papers were forwarded. These cases and others like them obviously reached a proper result. They dealt with entities having disparate interests which might well have chosen to rely on their own insurance protection, and the cases do little more than point that if the insurer cannot (as is settled law) force a third party to relinquish a right by treating it as an insured without its consent, such third party has a right of election. Georgia case law has, however, carried the rule to the extreme of holding that under the circumstances arising therein the failure to give notice and forward suit papers will result in no coverage whether the insurer was in fact informed or not and whether the action prejudiced it or not. See, for example, Wolverine Ins. Co. v. Sorrough, 122 Ga.App. 556, 177 S.E.2d 819 (1970); Ballew v. State Farm Mut. Auto. Ins. Co., 122 Ga.App. 417, 177 S.E.2d 172 (1970); Bituminous Cas. Corp. v. J. B. Forrest & Sons, Inc., 132 Ga.App. 714(3), 209 S.E.2d 6 (1974).

The present case is distinguishable in several crucial respects. In the first place, the tort action against Pro-Travel, Inc. is based entirely on the alleged negligence of Stewart on the theory of respondeat superior. Stewart, had he lived, would obviously have looked to the policy in which he was named as an insured to cover him while piloting a Pro-Travel airplane for either business or pleasure, as this was exactly what the policy was tailored to do....