Morgan v. Guaranty Nat. Companies, S97G0172

• Court: Supreme Court of Georgia
• Writing for the Court: HUNSTEIN
• Citation: 489 S.E.2d 803,268 Ga. 343
• Parties: , 97 FCDR 3418 MORGAN v. GUARANTY NATIONAL COMPANIES.
• Docket Number: No. S97G0172,S97G0172
• Decision Date: 15 September 1997

Page 803

489 S.E.2d 803 268 Ga. 343, 97 FCDR 3418 MORGAN
v.
GUARANTY NATIONAL COMPANIES. No. S97G0172. Supreme Court of Georgia. Sept. 15, 1997.

Page 804

[268 Ga. 346] Larry Eugene Stewart, Murray & Associates, Cumming, for Daniel Morgan.

Page 805

Warner S. Fox, Kevin J. Bahr, Hawkins & Parnell, Atlanta, for Guaranty National Companies.

[268 Ga. 343] HUNSTEIN, Justice.

We granted writ of certiorari from the Court of Appeals' opinion in Morgan v. Guaranty National Companies, 223 Ga.App. 41, 477 S.E.2d 26 (1996) to consider whether that court correctly affirmed the trial court's order denying Daniel Morgan's motion to dismiss the declaratory judgment action filed by Guaranty National Companies, the insurer of Morgan's judgment debtor, Georgia CSM, Inc. Because under the facts of the case there was no uncertainty or insecurity with regard to the propriety of some future act or conduct of the insurer, declaratory relief did not lie and we therefore reverse the Court of Appeals.

Morgan filed a tort suit against Georgia CSM, which answered the suit but waited several months before it gave notice of the suit to Guaranty. Guaranty informed Georgia CSM by letter that it had retained counsel to investigate the claim and was acting under a complete reservation of rights. Georgia CSM's counsel thereafter withdrew and notified Guaranty of his withdrawal. Morgan, through counsel, advised Guaranty that the action had been stipulated to the next jury trial calendar; Morgan offered to delay the trial and to provide [268 Ga. 344] all documents necessary for Guaranty to provide an adequate defense. Guaranty responded that it was investigating coverage under a reservation of rights and that it was "unclear" whether there was coverage. The case came on for trial. Neither Georgia CSM nor Guaranty appeared; the trial court struck the answer; and damages were tried to a jury, which awarded Morgan $87,500. Morgan then demanded payment from Guaranty, which responded by filing a complaint seeking declaratory relief. Morgan's motion to dismiss the declaratory judgment action was denied.

The purpose of the Declaratory Judgments Act is "to settle and afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations." OCGA § 9-4-1. However,

where the rights of the parties have already accrued and there are no circumstances showing any necessity for a determination of the dispute to guide and protect the plaintiff from uncertainty and insecurity with regard to the propriety of some future act or conduct, which is properly incident to his alleged rights and which if taken without direction might reasonably jeopardize his interest, the plaintiff is not entitled to a declaratory judgment. [Cit.] The declaratory judgment action makes no provision for a judgment which is advisory. [Cit.]

State Farm, etc., Ins. Co. v. Hillhouse, 131 Ga.App. 524, 525-526(2), 206 S.E.2d 627 (1974).

The law is well settled that an insurer, uncertain how to handle a claim made on a policy, " 'may enter upon a defense under a reservation of rights and then seek a declaratory judgment.' ... [Cit.]" Bowen v. Ga. Farm, etc., Ins. Co., 162 Ga.App. 707, 708(1), 293 S.E.2d 8 (1982). However,...