Shipes v. Hanover Ins. Co., s. 88-8546

• Citation: 884 F.2d 1357
• Decision Date: 29 September 1989
• Docket Number: 88-8582,Nos. 88-8546,s. 88-8546
• Parties: Ray SHIPES, Plaintiff-Appellant, v. The HANOVER INSURANCE COMPANY, Defendant-Appellee. Ray SHIPES, Plaintiff-Appellee, v. HANOVER INSURANCE COMPANY, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

Page 1357

884 F.2d 1357 Ray SHIPES, Plaintiff-Appellant,
v.
The HANOVER INSURANCE COMPANY, Defendant-Appellee.
Ray SHIPES, Plaintiff-Appellee,
v.
HANOVER INSURANCE COMPANY, Defendant-Appellant. Nos. 88-8546, 88-8582. United States Court of Appeals,
Eleventh Circuit. Sept. 29, 1989.

Page 1358

Elizabeth R. Francisco, Sinnreich & Francisco, Burton Lee, Dozier, Atkin & Lee, Macon, Ga., for plaintiff-appellant.

George C. Grant, Cubbedge Snow, III, Martin, Snow, Grant & Napier, Macon, Ga., for defendant-appellee.

Appeals from the United States District Court for the Middle District of Georgia.

Before RONEY, Chief Judge, JOHNSON, Circuit Judge, and YOUNG ^*, Senior District Judge.

JOHNSON, Circuit Judge:

This case consolidates two appeals, by the Hanover Insurance Co. ("Hanover") and Ray Shipes, respectively, from the district court's order (1) entering summary judgment for Shipes on his claim against Hanover for certain no-fault motor vehicle personal injury protection ("PIP") insurance benefits, and (2) entering summary judgment for Hanover on Shipes's claim for additional damages against Hanover based on Hanover's alleged lack of good faith in denying the disputed benefits. We affirm on both issues.

I. STATEMENT OF THE CASE

Shipes, an employee of Macon Mine and Mill Co. ("Macon"), was injured while driving a company vehicle on October 10, 1985, resulting in the loss of his weekly wages of $224.67. In addition to workers' compensation benefits, Macon provided PIP benefits through a policy with Hanover. Following the accident, Shipes received $149.78 in weekly workers' compensation, leaving weekly lost wages of $74.89. Of that amount, Hanover paid Shipes 85%, or $63.66, in PIP benefits. This left Shipes with an overall weekly shortfall of $11.23 in lost wages. On April 17, 1986, Shipes's attorney, invoking his interpretation of O.C.G.A. Sec. 33-34-8(c) (1982), wrote Hanover's claims representative, Emita Hyman, to demand that Shipes's benefits be adjusted upward by $11.23 weekly, so as to compensate him for the entire amount of lost wages. Hyman responded on May 1, 1986, asserting the correctness of Hanover's coordination of Shipes's benefits based on Hanover's interpretation of section 33-34-8(c). Shipes's benefits, as calculated by Hanover, continued until November 24, 1986, for a total of 58 weeks. The only dispute between the parties concerns the proper coordination, under Georgia law, of Shipes's workers' compensation and PIP benefits, and Hanover's good faith or lack thereof in following its chosen coordination of benefits.

Shipes brought suit against Hanover in Georgia state court, and Hanover removed to the district court on diversity grounds.

Page 1359

On September 30, 1987, the district court granted summary judgment for Shipes on the benefits issue. Shipes v. Hanover Ins. Co., 670 F.Supp. 354 (M.D.Ga.1987). ¹ On February 12, 1988, Shipes filed an amended complaint seeking to recast his suit as a class action and to add claims under the federal Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.A. Secs. 1961-1968 ("RICO"). Hanover responded on March 14, 1988 with a motion for summary judgment on the good faith issue, along with objections to discovery sought by Shipes and to Shipes's amended complaint. On April 14, 1988, Shipes filed an opposing affidavit under Fed.Rule Civ.P. 56(f). This was followed, on June 16, 1988, by a motion from Shipes to compel discovery. On July 1, 1988, the district court granted summary judgment for Hanover on the good faith issue. Shipes v. Hanover Ins. Co., 687 F.Supp. 601 (M.D.Ga.1988). ²

II. DISCUSSION

We note at the outset that a grant of summary judgment is subject to de novo review. Carlin Communication, Inc. v. Southern Bell Tel. & Tel. Co., 802 F.2d 1352, 1356 (11th Cir.1986). However, in a case such as this one involving a district court's interpretation of the law of the state where it sits, that interpretation is entitled to deference. See Alabama Electric Cooperative, Inc. v. First National Bank of Akron, 684 F.2d 789, 792 (11th Cir.1982). With this in mind, we address in turn the two issues raised in this appeal.

A. The Benefits Issue

PIP benefits themselves are governed by O.C.G.A. Secs. 33-34-4 and 33-34-5 (1982 & Supp.1989). ³ Those sections are silent, however, on how to coordinate PIP benefits with workers' compensation. That issue is governed solely by section 33-34-8(c), which provides that PIP benefits will be reduced or eliminated to the extent a worker receives workers' compensation,

provided that in no event shall the aggregate amount of benefits which the insured injured person is entitled to receive as compensation for the loss of income or earnings during disability under this chapter without regard to fault [i.e., under a PIP benefits plan] and under any workers' compensation law be less than an amount which is equal to the person's loss of income or earnings during disability or an amount which is equal to the amount the person is entitled to receive as compensation for the loss under any workers' compensation law plus the limits of the coverage under any applicable policy of motor vehicle insurance or under any program of self-insurance providing such benefits, whichever is less. [Emphasis added.]

Although the language is convoluted, it clearly indicates that PIP benefits can be reduced by the amount of workers' compensation only to the extent necessary to prevent the total benefits from running higher than the worker's total lost wages. The worker's total benefits cannot fall below either (1) the amount of lost wages, or (2) the sum of the workers' compensation benefits plus the maximum PIP coverage,

Page 1360

whichever is less. This means that Shipes's total benefits could not fall below the lesser of (1) his weekly lost wages of $224.67, or (2) $340.75. ⁴

The district court, in adopting this interpretation of the statute, relied on its plain language and noted a 1980 Georgia Attorney General Opinion precisely on point. ⁵ Hanover's contrary position is based on dicta contained in two Georgia cases. Brown v. Boston Old Colony Ins. Co., 247 Ga. 287, 275 S.E.2d 651 (1981), held simply that receipt of workers' compensation benefits did not entirely preclude receipt of PIP benefits. Brown 's...