Sargent v. Allstate Ins. Co.

• Decision Date: 07 March 1983
• Docket Number: 64939,Nos. 64940,s. 64940
• Citation: 303 S.E.2d 43,165 Ga.App. 863
• Parties: SARGENT et al. v. ALLSTATE INSURANCE COMPANY. ALLSTATE INSURANCE COMPANY v. SARGENT.
• Court: Georgia Court of Appeals

Page 43

303 S.E.2d 43

165 Ga.App. 863

SARGENT et al. v. ALLSTATE INSURANCE COMPANY.

ALLSTATE INSURANCE COMPANY v. SARGENT.

Nos. 64940, 64939.

Court of Appeals of Georgia.

March 7, 1983.

Rehearing Denied March 23, 1983.

John F. Daugherty, Atlanta, for appellants.

Wade K. Copeland, Atlanta, for appellee.

SOGNIER, Judge.

Allstate Insurance Company (Allstate) filed the instant declaratory judgment action seeking a determination of its obligation to afford coverage and to defend a wrongful death action filed against Joan Sargent and others by Mr. and Mrs. Jesse L Sewell for the death of their daughter. On January 13, 1981, Sargent collided with a car driven by Mrs. Sewell, in which her daughter, Penny was a passenger. Sargent's own car, a Mazda, was being repaired at the time of the collision, and she was driving, with permission, a car owned by Rickey Ford, who had no insurance. When Sargent purchased the Mazda in 1980, her father, who lived in Alabama, cosigned the note, registered the car in his name, and placed it under his Allstate policy. Sargent then moved to Atlanta to work, bringing the Mazda with her.

Sargent promptly reported the collision to Allstate, which had all the facts shortly thereafter. On January 28, 1981, Penny Sewell died. In January or February 1981, Allstate paid the property damage claim for Rickey Ford's car.

On May 12, 1981, the Sewells filed a wrongful death action against Sargent and others. Sargent immediately notified Allstate of the lawsuit and was referred to legal counsel with whom she met on May 27, 1981. At that meeting, Sargent gave a statement concerning the collision and signed a reservation of rights agreement in which she agreed not to assert any claim of waiver or estoppel against Allstate. The first law firm then referred the case to a second firm which filed defensive pleadings, apparently on the basis of information Sargent furnished the first firm.

On July 15, 1981, Allstate, represented by the first law firm, filed the instant action. Both Sargent and Allstate moved for summary judgment. The trial court granted summary judgment in favor of Sargent on the issue of Allstate's duty to defend and in favor of Allstate on the question of coverage. Sargent appeals and Allstate cross appeals. Sargent contends that the trial court erred in partially denying her motion for summary judgment and in partially granting Allstate's motion. She contends that Allstate is estopped to deny coverage, because the May 27, 1981 non-waiver document was neither effective nor timely as a reservation of rights agreement, and further because Allstate's payment of the property damage claim of Rickey Ford waived any coverage question. Allstate denies any waiver or estoppel and contends in its cross appeal that the trial court erred in partially granting Sargent's motion, and partially denying Allstate's, on the question of Allstate's duty to defend Sargent in the wrongful death action.

1. The first issue on appeal is whether Allstate is, by waiver, estopped to rely upon certain exclusions and conditions of its policy.

Allstate contends that Sargent was not covered while using a "non-owned auto" because she was not a resident relative of her father's household and because she was using Ford's car in her business or occupation as a nurse in a medical personnel pool. As to the second basis of exclusion, the undisputed evidence shows only that Sargent was using the vehicle to go to and from her work assignments. In the absence of any evidence of the elements necessary to establish that the vehicle was being used in the course of Sargent's employment, rather than for her own purposes, we conclude that the policy exclusion for nonowned vehicles being used in any business or occupation was inapplicable as a matter of law. See State Farm, etc., Ins. Co. v. Dilbeck, 120 Ga.App. 740, 742, 172 S.E.2d 139 (1969). See also Chattanooga Pub. Co., Inc. v. Fulton, 215 Ga. 880, 882(3), 114 S.E.2d 138 (1960); McKinney v. T.I.M.E.-D.C., Inc., 134 Ga.App. 57, 59(2), 213 S.E.2d 166 (1975); Stewart v. Roberts, 132 Ga.App. 700, 209 S.E.2d 119 (1974); 6 Blashfield, Automobile Law and Practice 280 et seq., § 253.96. See generally Sherar v. B and E Convalescent Ctr., 49 Cal.App.3d 227, 122 Cal.Rptr. 505 (1975); 52 A.L.R.2d 287, 325 § 13.

In asserting that, notwithstanding its payment of the property damage claim, it has not waived the issue of noncoverage based on Sargent's non-residency, Allstate relies upon the well-established principle: "The doctrines of implied waiver and estoppel, based upon the conduct or action of the insurer, or its agent, are not available to bring within the coverage of a policy risks not covered by its terms, or risks expressly excluded therefrom." Ballinger v. C. & S. Bank, 139 Ga.App. 686, 689, 229 S.E.2d 498 (1976). Accord Allstate Ins. Co. v. Walker, 114 Ga.App. 732, 733(1), 152 S.E.2d 895 (1966); Quillian v. Equitable Life, etc. Soc'y., 61 Ga.App. 138, 144, 6 S.E.2d 108 (1939). While waiver or estoppel may not be used to enlarge the coverage contained in a policy of insurance, nevertheless, "[a]n insurer may waive any provision in an insurance policy inserted for its benefit, and may waive any condition or limitation in the policy upon which it could otherwise rely." 16B Appleman, Insurance Law and Practice 510-512, § 9083, citing Jefferson Standard, etc., Co. v. Nelson, 83 Ga.App. 667, 64 S.E.2d 373 (1951). See also American Home, etc., Ins. Co. v. Harvey, 99 Ga.App. 582, 583(1b), 109 S.E.2d 322 (1959), and cases cited therein. Examples of conditions and limitations that may be waived include: conditions as to title or ownership (see Christian v. Allstate Ins. Co., 239 Ga. 850, 239 S.E.2d 328 (1977); Barnum v. Sentry Insurance, 160 Ga.App. 213, 216(2), 217(3), 286 S.E.2d 445 (1981); Bankers Fire, etc., Ins. Co. v. Hopkins, 93 Ga.App. 246, 91 S.E.2d 298 (1956); conditions as to other insurance or cancellation of other insurance (see Chester v. State Farm, etc., Ins. Co., 121 Ga.App. 599, 174 S.E.2d 582 (1970); conditions as to pre-existing health conditions (see Interstate Life, etc., Ins. Co. v. Merritt, 131 Ga.App. 825, 207 S.E.2d 231 (1974); American Life Ins. Co. v. Stone, 78 Ga.App. 98, 102(2), 50 S.E.2d 231 (1948)); conditions concerning location of insured cars (see Liverpool, etc., Ins. Co. v. Ga. Auto, etc., Co., 29 Ga.App. 334, 353(3), 357, 115 S.E. 138 (1922)); conditions requiring proof of loss (see New York Underwriters Ins. Co. v. Noles, 101 Ga.App. 922, 115 S.E.2d 474 (1960)); conditions requiring timely written notice (see Govt. Employees Ins. Co. v. Gates, 134 Ga.App. 795, 216 S.E.2d 619 (1975); exclusion based on age (see American Home, etc., Ins. Co. v. Harvey, 99 Ga.App. 582, 109 S.E.2d 322 (1959)); requirement of insurer's consent to assignment (see State Farm, etc., Co. v. Mills, etc., Co., 152 Ga.App. 531, 533, 263 S.E.2d 270 (1979)); requirement that all waivers be in writing (see South Carolina Ins. Co. v. Hunnicutt, 105 Ga.App. 257, 259, 124 S.E.2d 315 (1962)). See also 7 Blashfield, Automobile Law and Practice, 449 et seq, § 303.21-303.29; 16B Appleman, supra at 510 et seq., § 9083. "[C]onditions may be expressly waived, or waived by conduct inconsistent with an intention to enforce strict compliance with the condition.... [Cits.]" State Farm, etc., Ins. Co. v. Wright, 137 Ga.App. 819, 822, 224 S.E.2d 796 (1976).

The critical question in the instant case is whether Sargent is seeking to employ the theory of implied waiver to cover a loss not within the coverage of the Allstate policy. From the copy of the policy in the record, we discern that the automobile liability insurance covers bodily injury, sickness, disease or death to any person. Liability for injury and death of Penny Sewell, if found to result from collision with the car operated by Sargent is clearly a risk assumed by Allstate under the terms of the contract. Compare Southeastern, etc., Inc. v. Graphic Arts, etc., Co., 164 Ga.App. 70(1), 296 S.E.2d 378 (1982); Washington v. Hartford Accident, etc., Co., 161 Ga.App. 431, 288 S.E.2d 343 (1982); Allstate Ins. Co. v. Walker, supra. Sargent fulfilled all conditions of being an insured except that she did not reside at her father's home at the time of the collision. The resident relative requirement is a condition imposed for the benefit of Allstate, and is, therefore, subject to waiver. See generally State Farm, etc., Co. v. Mills, etc., Co., 152 Ga.App. 531, 533, 263 S.E.2d 270 (1979). Waiver of this condition in no way results in an expansion of the coverage so as to include a risk not assumed by the insurer. See generally American Life Ins. Co. v. Stone, 78 Ga.App. 98, 50 S.E.2d 231, supra. The undisputed evidence establishes that Allstate knew at the time Sargent reported...