Ramirez v. Progressive Preferred Ins. Co., No. 02-12274.

• Decision Date: 13 February 2003
• Docket Number: No. 02-12274.
• Citation: 321 F.3d 1055
• Parties: Jason RAMIREZ, Plaintiff-Appellee, v. PROGRESSIVE PREFERRED INSURANCE COMPANY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

321 F.3d 1055

Jason RAMIREZ, Plaintiff-Appellee, v. PROGRESSIVE PREFERRED INSURANCE COMPANY, Defendant-Appellant.

No. 02-12274.

United States Court of Appeals, Eleventh Circuit.

February 13, 2003.

Michael Lawrence Morgan, Shur, McDuffie, Brockman & Levielle, Atlanta, GA, Laurence J. Rabinovich, New York City, for Defendant-Appellant.

Gus L. Wood, Wood, Odom & Edge, P.A., Newnan, GA, for Plaintiff-Appellee.

Appeal from the United States District Court for the Northern District of Georgia.

Before ANDERSON, BIRCH and BARKETT, Circuit Judges.

ANDERSON, Circuit Judge:

CERTIFICATION FROM THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT TO THE SUPREME COURT OF GEORGIA, PURSUANT TO O.C.G.A. § 15-2-9.

TO THE SUPREME COURT OF GEORGIA AND ITS HONORABLE JUSTICES:

This diversity action presents unanswered questions under Georgia law that are determinative of this appeal. We therefore certify questions to the highest court of the State for resolution. To assist the court in resolving these questions, we briefly lay out the facts of the case and the parties' arguments.

I. BACKGROUND

This case concerns the obligations of a motor carrier and its insurer, specifically the extent of an insurer's liability when it fails to cancel a certificate of insurance filed with the State after a policy lapses. Georgia, like most other states, requires motor carriers to provide some assurance of financial responsibility in the event that a member of the public is injured by one of the carrier's vehicles. See DeHart v. Liberty Mut. Ins. Co., 270 Ga. 381, 509 S.E.2d 913, 916 (1998) (noting that "[t]he state motor carrier acts were enacted to protect members of the general public against injuries caused by the negligence of a Georgia motor carrier."). Thus, in order to operate as a motor carrier in Georgia, the State requires a carrier to first obtain a certificate of public convenience. O.C.G.A. § 46-7-3.

Pursuant to rules adopted by the Georgia Public Service Commission ("PSC"), motor carriers that wish to obtain a certificate of public convenience are required to provide the PSC with a surety bond of $100,000 for bodily injury to or the death of one person, and $300,000 for bodily injuries to or the death of all persons injured or killed in an accident caused by a motor carrier. Ga. Pub. Serv. Comm'n Rule 1-8-1-.01. Alternatively, the carrier can provide the PSC with proof of insurance in the same amounts or more. Id. That proof can consist of either the actual insurance policy or a certificate of insurance that attests to the fact that the carrier has the minimum amount of insurance required under Georgia law. Id. Insurers that choose to submit a certificate of insurance rather than the actual policy must submit what is known as a "Form E" certificate, the contents of which are specifically prescribed. Ga. Pub. Serv. Comm'n Rule 1-8-1-.07(d).

On April 16, 1999, Paul Haney, on behalf of his company, West Georgia Transport Wrecker Service, submitted an application for insurance with the Appellant, Progressive Preferred Insurance Company (hereinafter "Progressive"). That application was accepted on April 22, 1999, and a policy covering Haney's company vehicles was issued by Progressive. The policy limited the total reimbursement for any injury or death involving a scheduled vehicle to $500,000. On April 23, 1999, Progressive sent a Form E certificate to the PSC on behalf of Haney attesting to the fact that he met the minimum insurance requirements for obtaining a certificate of public convenience. The PSC subsequently issued a certificate of public convenience to Haney authorizing his company to serve as a motor carrier in the State of Georgia.¹

On June 6, 1999, Progressive sent Haney an invoice for premiums due in the amount of $1,267.37. That payment was due on June 21, 1999, but it was never received. In early July, Progressive sent Haney a notice of cancellation, informing him that his policy would be cancelled on July 14, 1999, unless his payment was received. After Haney failed to make the necessary payments, his policy lapsed on July 15, 1999. Progressive did not cancel the corresponding certificate of insurance, however, until September 7, 1999.² On July 17, 1999, two days after the policy lapsed, a vehicle driven by Donald Costley and owned by Haney was involved in a multi-vehicle collision that resulted in the death of Frances L. Ramirez.

Ms. Ramirez's son, Jason Ramirez, subsequently initiated a wrongful death suit against Haney and his company, ultimately obtaining a judgment against them in the amount of $1 million. Mr. Ramirez then filed the instant suit against Progressive in the Superior Court of Coweta County, claiming that Progressive was required to pay $500,000 of the $1 million judgment on account of the certificate of insurance the company filed with the State of Georgia on Haney's behalf. Progressive then removed the case to the United States District Court for the Northern District of Georgia on the basis of diversity between the parties.

Both sides moved for summary judgment. Ramirez insisted that as a result of Progressive's failure to cancel the Form E before the accident, Haney's policy was still in effect at the time of the accident. Thus, according to Ramirez, Progressive was liable to pay $500,000 of the $1 million judgment. Progressive, by contrast, argued that the certificate only obliged it to pay the minimum amount required under Georgia law for an accident involving a single individual: $100,000. The district court sided with Ramirez and ordered Progressive to pay him $500,000.

II. THE PARTIES' ARGUMENTS

The dispute here is not about whether Progressive is liable but instead the amount of its liability. There is no question but that Progressive's Form K cancellation notice was not received by the PSC until September 7, 1999, nearly two months after the accident occurred. Under Georgia law, once a certificate of insurance is filed with the PSC, the certification is said to be "continuous" and cannot be cancelled until thirty days after the insurance company provides written notice to the PSC. Ga. Pub. Serv. Comm'n Rule 1-8-1-.07(c). Thus, at the time the accident occurred, Progressive had certified to the State that it had issued to Haney a policy of insurance that would continue until cancellation by giving the PSC 30 days written notice, and that the policy provided insurance covering the obligations imposed upon motor carriers in order to operate in the State of Georgia. See Form E (discussed supra at 1060-1061). Accordingly, because of Progressive's certification, it is at the very least liable for $100,000 of the $1 million judgment obtained against Haney.

The remaining question is whether Progressive, by failing to cancel the certificate of insurance, extended the life of the underlying insurance policy. In other words, must an insurer cancel a certificate of insurance in order to also cancel the underlying policy, at least with respect to the public at large.³ Progressive insists that the answer is no, arguing that any liability that it has as a result of its failure to cancel the certificate of insurance is limited solely to the certificate of insurance. Progressive argues that because it only certified that it was providing the minimum amount of insurance required under Georgia law, it should only be held liable for that amount.

Progressive relies chiefly on the language of the PSC rules that govern motor carrier insurance obligations. Progressive first contends that the rules provide only for continuing effect of the particular instrument filed with the State. Progressive notes that the State permits a motor carrier to satisfy its obligation to the motoring public by filing, among other things, a surety bond, an insurance policy, or a certificate of insurance. Ga. Pub. Serv. Comm'n Rule 1-8-1-.01. The rules further provide that:

Surety bonds, policies of insurance, endorsements, or certificates of insurance and other securities and agreements shall be continuous and shall not be cancelled or withdrawn until thirty (30) days notice in writing by the insurance company ... has been given to the Commission ....

Ga. Pub. Serv. Comm'n Rule 1-8-1-.07(c) (emphasis added). Relying on the disjunctive nature of the language in the regulation, Progressive argues that the rule clearly indicates that only the particular instrument filed with the state has continuing effect. And, because the instrument filed here was the certificate of insurance, not the actual policy, Progressive insists that only that certificate remained valid prior to its submission of the Form K.

Progressive next points to language in the regulations that it contends limits an insurer's continuing obligation to the amounts specified in the regulations. Specifically, the rules provide that "[t]he liability of the insurance ... company on each motor vehicle for [the amounts listed in the schedule] shall be a continuing one." Ga. Pub. Serv. Comm'n Rule 1-8-1-.01. According to Progressive, this language contemplates insurer liability only for the minimum amount of insurance required for a motor carrier under Georgia law. Progressive insists that had the PSC intended to extend the life of the policy along with the certificate of insurance, the rule would have referred to an insurer's liability "under the policy" rather than its liability for the amounts listed.

Progressive also claims that even if Haney's policy was in effect at the time the accident occurred, that policy expressly limits the company's liability to the minimum amount of insurance required for motor carriers under Georgia law. In making this argument, Progressive relies heavily on the decision in Ross v. Stephens, 269 Ga. 266, 496 S.E.2d 705 (1998). There, the Georgia Supreme Court examined the extent of an insurer's liability for injuries resulting from an accident involving an unscheduled vehicle. Relying on the express terms of PSC Rule...