Progressive Preferred Ins. Co. v. Ramirez, S03Q0854.
| Decision Date | 17 November 2003 |
| Docket Number | No. S03Q0854.,S03Q0854. |
| Citation | 588 S.E.2d 751,277 Ga. 392 |
| Parties | PROGRESSIVE PREFERRED INSURANCE COMPANY v. RAMIREZ. |
| Court | Georgia Supreme Court |
OPINION TEXT STARTS HERE
Shur, McDuffie, Williams & Morgan, Michael L. Morgan, Atlanta, Schindel, Farman & Lipsius, Laurence J. Rabinovich, New York, for appellant.
Wood, Odom, & Edge, Gus L. Wood III, P.A., Newnan, for appellee.
We are called upon in this case to answer two questions certified to us by the United States Court of Appeals for the Eleventh Circuit pursuant to constitutional and statutory authority. 1983 Ga. Const. Art. VI, Sec. VI, Para. IV; OCGA § 15-2-9(a). We have been asked to determine whether an insurer's failure to notify the Georgia Public Service Commission ("PSC") of the insurer's cancellation of coverage after the insurance policy lapsed for non-payment of premiums, continues the policy and its limits of liability, or continues the minimum limits of insurance coverage under the certificate of insurance attesting to the fact that the insured had obtained at least the minimum insurance coverage required by law, earlier filed by the insurer with the PSC. We are also asked to examine whether a limitation of liability clause in the insurance policy limits coverage to the statutory minimum when the insurance policy has lapsed but the insurer has not notified the PSC of the cancellation of coverage. Ramirez v. Progressive Preferred Ins. Co., 321 F.3d 1055 (11th Cir.2003).
The questions arose in the following context. In April 1999,1 Progressive Preferred Insurance Company ("Progressive") issued a policy to Paul Haney covering trucks used in his business and, in order to comply with Rule 1-8-1-.01 of the PSC, sent a certificate of insurance to the PSC ("Form E") in July 1999. When Haney did not pay the premiums, Progressive cancelled the policy in July 1999 by giving notice to Haney, but did not give notice to the PSC until September 1999, after Ramirez's mother was killed in a vehicular collision involving one of Haney's trucks. Ramirez obtained a $1,000,000 wrongful death judgment against Haney and filed suit in the Superior Court of Coweta County against Progressive seeking the $500,000 limits of the policy Progressive had issued to Haney. Progressive removed the case to the United States District Court for the Northern District of Georgia, which granted summary judgment to Ramirez. Progressive appealed to the Eleventh Circuit which found Georgia law unclear on two points and certified two questions of law to this Court.2 1. OCGA § 46-7-3 requires motor carriers to obtain a certificate of public convenience which may not be issued until a surety bond or evidence of a policy of indemnity insurance is filed with the PSC. OCGA § 46-7-12. PSC Rule 1-8-1-.01 mandates motor carriers provide a surety bond or proof of insurance of $100,000 coverage for bodily injury to or for the death of one person, and $300,000 for bodily injuries to or for the death of all persons injured or killed in an accident caused by a motor carrier. Evidence of the minimum insurance coverage or coverage in greater amounts must be provided by filing with the PSC the actual policy or a certificate of insurance.3 Rule 1-8-1-.07(c) provides that "policies of insurance, endorsement, or certificates of insurance ... shall be continuous and shall not be cancelled or withdrawn until 30 days notice in writing by the insurance company ... has been given to the [PSC]."
Progressive contends its liability is based on the certificate it submitted to the PSC rather than the policy it issued to Haney. Progressive argues that Rules 1-8-1-.01, permitting the filing of a certificate of insurance in lieu of filing the actual policy, and 1-8-1-.07(c), providing that "policies of insurance ... or certificates of insurance ... shall not be cancelled ... until ... notice ... has been given the [PSC]," should not be read together to provide that the policy certified by the certificate to be in effect remains in effect until the certificate of insurance is cancelled by way of proper notice to the PSC. Rather, Progressive argues, a certificate of insurance has a legal existence separate from the insurance policy the existence of which it certifies, and since Progressive filed a certificate of insurance rather than the actual policy with the PSC, it is liable only for the statutorily-mandated coverage of $100,000, not the $500,000 limit under the actual policy.
We disagree. PSC Rule 1-8-1-.01 allows insurers to file a certificate of insurance in lieu of filing the actual policy, the existence of which is mandatory under OCGA § 46-7-12. The certificate of insurance is not an insurance policy, but merely serves to assure the PSC that the motor carrier has complied with the requirement of providing either a surety bond or insurance for the protection of the motoring public. By filing the Form E certificate, the insurer certifies to the PSC that it "has issued a policy ... of insurance effective from [a stated date] and continuing until cancelled ... by ... giving thirty (30) days notice to the ... [PSC]." Thus, the language of the Form E certificate demonstrates it is the policy of insurance, not the certificate, which establishes the extent of the insurer's liability. Progressive's argument that if the certificate were intended to provide the full coverage of the policy, it would have a place on it to show the extent of coverage ignores the fact that the required information on the certificate includes the policy number, which would make establishment of the extent of coverage simple. We conclude, therefore, that under PSC Rule 1-8-1-.07, policies of insurance evidenced by a Form E certificate filed with the PSC remain in effect until cancelled as prescribed by the rule.
Our conclusion is supported by prior decisions of the appellate courts of Georgia. In Smith v. Nat. Union Fire Ins. Co., 127 Ga. App. 752, 753, 195 S.E.2d 205 (1972), the Court of Appeals addressed the question whether, as between the...
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