Pate v. Federated Mut. Ins. Co.

• Court: Georgia Court of Appeals
• Writing for the Court: CARLEY; McMURRAY; BEASLEY
• Citation: Pate v. Federated Mut. Ins. Co., 325 S.E.2d 831, 173 Ga.App. 163 (Ga. App. 1984)
• Decision Date: 05 December 1984
• Docket Number: No. 68571,68571
• Parties: PATE v. FEDERATED MUTUAL INSURANCE COMPANY.

Page 831

325 S.E.2d 831

173 Ga.App. 163

PATE v. FEDERATED MUTUAL INSURANCE COMPANY.

No. 68571.

Court of Appeals of Georgia.

Dec. 5, 1984.

Rehearing Denied Dec. 20, 1984.

Certiorari Granted Jan. 25, 1985.

David N. Rainwater, Cordele, for appellant.

James B. Hamilton, Fayetteville, for appellee.

CARLEY, Judge.

In February of 1980, appellant-insured was injured in an automobile collision. He received $5,000 in basic no-fault benefits from the appellee-insurer.

On April 13, 1983, appellant's counsel sent a letter to appellee regarding the collision of February 1980. In this letter, appellant's counsel cited Flewellen v. Atlanta Cas. Co., 250 Ga. 709, 300 S.E.2d 673 (1983) and Jones v. State Farm Mut. Auto. Ins. Co., 156 Ga.App. 230, 274 S.E.2d 623 (1980). The letter continued: "Under the holding of these cases, please provide my client's application for insurance covering the time period of the accident. In the event the application cannot be located, or the application fails to provide a separate written rejection of the additional no-fault benefits, please provide any document or writing which evidences your compliance with OCGA § 33-34-5. Please be further advised that my client wishes to accept the statutory continuing offer of optional benefits, and elects the maximum optional personal injury protection benefits of $50,000 as provided by the above cited cases. My client hereby tenders to Federated Insurance the total additional premium which he would have been required to pay to obtain the maximum optional personal injury protection benefits under his policy with you had such optional coverages been made available at the time the application was taken from the effective date of that insurance contract in force on the date of the accident until and including the date of the accident. Please let us know as soon as possible the amount of the premiums to obtain such benefits for the referenced time period and we will immediately remit said sum to you. Please accept this as my client's unconditional tender of such sums. We await only your specifications of the amount due to place the cash in your hands.... [O]ur demand is ... $26,454.24.... Please be advised that in accordance with the law, we expect to receive the above amount from you within thirty (30) days of your receipt of this letter."

On April 20, 1983, appellee's claims supervisor responded to the letter from appellant's counsel. Appellee's response to appellant's counsel contained the following: "This will ... acknowledge that your client elects the maximum optional personal injury protection benefits as provided in the cases of Flewellen v. Atlanta Casualty and etc. The maximum additional personal injury protection coverage that will be available is $45,000 plus the basic coverage of $5,000 which has already been paid to your client. We also acknowledge your offer to tender to Federated Mutual Insurance Company the total premium required. We have requested our underwriting department to calculate this premium and we will be advising you of this amount very shortly. By return mail would you please provide me with verification from your client's doctors of his disability and also verification of his salary loss over and above that that has been reimbursed under basic coverage."

On April 22, 1983, the promised "follow up" letter was sent by appellee's claims supervisor to appellant's counsel. This letter contained the following: "This will follow my letter of April 20, 1983. Total premium due for additional PIP benefits in the maximum amount of $45,000 is $2,476. If your clients desire additional no-fault coverage we would ask that you please remit the above amount by return mail."

On June 8, 1983, appellant's counsel mailed a response enclosing appellant's check in the amount of $2,476. This letter stated: "This check is tendered to you as the required premium which you indicated in your letter dated April 22, 1983.... Needless to say, we expect the full amount of our demand in the amount of $26,464.24 within the time required by law." Appellee received this letter and the check on June 15, 1983.

However, on June 13, 1983, five days after the check had been mailed but two days before appellee had received it, appellee had mailed another letter to appellant's counsel. This letter stated that appellee had "now completed our research into the question of the additional PIP benefits being afforded to your client and wish to advise you of our position in this matter." In essence, the text of this letter stated that, because appellant's policy had been in existence "at the inception of no-fault coverage in Georgia," any issue regarding entitlement to optional no-fault benefits would be controlled by former OCGA § 33-34-5(c) (Ga.L.1975, pp. 3, 4) rather than the Flewellen decision. The letter further informed appellant's counsel that appellee had taken actions to apprise appellant of his right to obtain optional no-fault coverage under his existing policy, which actions it deemed to be in compliance with the requirements of former OCGA § 33-34-5(c). The letter ended with appellee's statement that it would "maintain the position that no additional personal injury protection benefits are due...."

When appellee's letter of June 13, 1983, was received, appellant's counsel wrote back and asserted that "[a]s a result of [the prior] transactions, there is now a contract for the additional coverage." Appellee's final response was to return appellant's check, repeating the statement that it would "maintain the position that no additional PIP benefits are due...."

Appellant then instituted the instant lawsuit, seeking $26,464.24 in additional no-fault benefits, statutory penalties and attorneys fees, and punitive damages. Appellee answered, denying the material allegations of the complaint. Subsequently, cross motions for summary judgment were filed. After conducting a hearing, the trial court denied appellant's motion and granted appellee's. Appellant appeals.

1. The record clearly demonstrates that appellant has no entitlement to additional no-fault benefits under Flewellen v. Atlanta Cas. Co., supra. See Stafford v. Allstate Ins. Co., 252 Ga. 38, 311 S.E.2d 437 (1984). Compare Enfinger v. Int. Indem. Co., 253 Ga. 185, 317 S.E.2d 816 (1984).

2. Appellant further contends, however, that genuine issues of material fact remain regarding the allegation of his complaint that appellee had "contractually obligated itself" to provide him retroactive optional no-fault coverage. Appellant's contention in this regard is that appellee's communications of April 20 and 22, 1983, were an unconditional "offer" to provide that coverage in consideration of a specified premium, which unrevoked offer appellant then "accepted" on June 8, 1983, when his check for the specified amount was mailed to appellee. See OCGA § 13-3-3. According to appellant, this "contract" would be enforceable against appellee notwithstanding any defense that it might otherwise have had to a claim for optional no-fault coverage under the policy pursuant to Flewellen.

As noted above, appellee's communications were precipitated by appellant's initial letter of April 13, 1983. In that letter, appellant specifically invoked the Flewellen decision, which provides: "The insured has the right to demand and receive the benefit of $50,000 coverage upon tender by the insured of such additional premium as may be due and filing of proof of loss by the injured party." (Emphasis supplied.) Flewellen v. Atlanta Cas. Co., supra, 250...