Smith v. Phillips

• Decision Date: 29 October 1984
• Docket Number: No. 68485,68485
• Citation: 172 Ga.App. 459,323 S.E.2d 669
• Parties: SMITH v. PHILLIPS.
• Court: Georgia Court of Appeals

Page 669

323 S.E.2d 669

172 Ga.App. 459

SMITH v. PHILLIPS.

No. 68485.

Court of Appeals of Georgia.

Oct. 29, 1984.

Wayne C. Wilson, Atlanta, for appellant.

Stewart R. Brown, Macon, for appellee.

BENHAM, Judge.

Plaintiff/appellee Phillips was injured when he was struck by an automobile being driven in Georgia by defendant/appellant Smith, a non-resident motorist. Phillips subsequently filed suit against Smith and requested that Smith be served pursuant to OCGA § 40-12-2. Service was made upon the Secretary of State, who forwarded a copy of the complaint and summons by certified mail to Smith at a Florida address. The letter was returned to the Secretary of State with the notation "undeliverable as addressed, no forwarding order on file." The trial court then ordered service by publication of the summons, and copies of the pleadings were served upon appellee's uninsured motorist carrier (OCGA § 33-7-11(e)), which subsequently filed defensive pleadings in Smith's name. OCGA § 33-7-11(d). After the uninsured motorist carrier, on behalf of Smith, requested a stay of the proceedings under the Soldiers' & Sailors' Civil Relief Act of 1940 (50 USCAApp. § 501 et seq.) and had its motion denied, the case proceeded to trial. The jury rendered a verdict in favor of appellee and the court entered a judgment against appellee's uninsured motorist carrier (hereinafter "UMC"). It is from that judgment that this appeal is brought.

1. In one of his several enumerated errors, appellant takes issue with the entry of judgment against appellee's UMC.

Appellant contends that the UMC was not a named party to the action and notes that no judgment was entered against the tortfeasor prior to the entry of judgment against the UMC. Appellee maintains that the UMC was the real party in interest and became a defendant in fact, subject to having judgment entered against it, when the trial court was unable to obtain in personam jurisdiction over the tortfeasor. Appellee also labels the failure to obtain a judgment against the tortfeasor as the omission of "a meaningless step which is not required by the law and would add needless involvement in the case." However, "[t]his court has interpreted the Uninsured Motorist Act to require, as a condition precedent to a suit against the insurance carrier, that the insured first sue and recover a judgment against the uninsured motorist, whether known or unknown. Although the statute does not, by its express terms, require such a condition precedent, since the insurer is liable for the amount which the insured 'shall be legally entitled to recover' from the uninsured motorist (OCGA § 33-7-11(a)), that liability for damages 'should be ascertained in an appropriate forum before the bringing of a suit against the insurance company under such coverage.' [Cits.]" Allstate Ins. Co. v. McCall, 166 Ga.App. 833, 305 S.E.2d 413 (1983), affd., 251 Ga. 869, 310 S.E.2d 513 (1984). Inasmuch as the statutory/judicial scheme which has evolved requires a determination of the uninsured motorist's tort liability before a UMC can be held accountable on its contractual obligation to its insured, we cannot agree with appellee that the entry of judgment against the tortfeasor/uninsured motorist is a meaningless step. The condition precedent to a lawsuit against the UMC being unfulfilled, it was error to enter judgment against the UMC. See Railey v. State Farm, etc., Ins. Co., 129 Ga.App. 875(5), 201 S.E.2d 628 (1973).

Resolution of the question whether the UMC was a party against whom judgment could be entered requires a discussion of the role of the UMC in litigation brought under the Uninsured Motorist Act (OCGA § 33-7-11). Subsection (e) of the statute provides that service may be made on a non-resident operator or owner by the publication of summons. Furthermore, "[a] copy of any action filed and all pleadings thereto shall be served as prescribed by law upon the insurance company issuing the [uninsured motorist] policy as though the insurance company issuing the policy were actually named as a party defendant. Subsection (d) of this Code section shall govern the rights of the insurance company ..." Subsection (d) provides for service of a copy of the action and the pleadings upon the UMC as though the UMC were actually named as a party defendant in cases where the owner or operator of the injury-causing vehicle is known, as well as in cases where the owner or operator is unknown and an action against "John Doe" has been instituted. Once so served, the insurance company has the right "to file pleadings and take other action allowable by law" in its own name or in the name of John Doe or the known operator or owner. Thus, the statute gives the UMC "the right at its election to participate indirectly in the proceedings, without becoming a named party, by filing pleadings or taking other action allowable by law, in the name of the owner or operator, or both. Such insurer may also participate directly in its own name in the proceedings by filing pleadings or taking other action allowable by law, in which event it assumes the status of a named party. [Cits.]" Home Indem. Co. v. Thomas, 122 Ga.App. 641, 178 S.E.2d 297 (1970).

In the case at bar, the UMC, after being served with a copy of the action and pleadings when service on appellant by publication of summons was authorized, chose to take action in the proceedings in the name of appellant, the alleged operator of the injury-causing vehicle, thereby choosing to participate indirectly in the litigation without becoming a named party. In effect, the UMC elected "to plead only in the name of the alleged tortfeasor, thereby obtaining an adjudication of tort liability without the potentially prejudicial injection into the case of the presence of insurance coverage." Moss v. Cincinnati Ins. Co., 154 Ga.App. 165, 170, 268 S.E.2d 676 (1980). By filing an answer and other pleadings in the name of the tortfeasor rather than in its own name, appellant avoided becoming a named party to the proceedings. Rosenbaum v. Dunn, 136 Ga.App. 870 (1), 222 S.E.2d 596 (1975). Compare Home Indem. Co. v. Thomas, supra; Moss v. Cincinnati Ins. Co., supra. Therefore, no judgment could be entered against the UMC since it was not a named party to the proceedings.

Citing Norman v. Daniels, 142 Ga.App. 456, 236 S.E.2d 121 (1977), appellee maintains that judgment could be entered against the UMC in this case because the insurer became the "defendant in fact" when personal jurisdiction over, and therefore a valid judgment against, the tortfeasor could not be had. Norman involved the dismissal of a lawsuit against a non-resident uninsured motorist on the motion of the UMC on the ground that the non-resident tortfeasor had not been personally served within the applicable statute of limitation. In a discussion of the ramifications of the insurer's right to due process when the known, non-resident uninsured motorist has not been personally served, this court likened the situation to one involving a "John Doe" tortfeasor who, by the very nature of the action, cannot be personally served. The court then stated that, in such a situation, "the insurer becomes the defendant in fact." Id., p. 458, 236 S.E.2d 121. However, this is not to say that the insurer becomes a defendant in a legal sense, subject to the entry of judgment for or against it. In actuality, a representative of the insurer will be the person physically conducting the defenses to the plaintiff's allegations of the missing tortfeasor's tort liability. The legal liability of the UMC in defending such a suit, however, depends upon the role in the litigation that the UMC has chosen, under OCGA § 33-7-11 (d), to play: whether the UMC is acting on its own behalf and therefore subject to judgment against it or whether it is participating indirectly in the proceedings by filing pleadings on behalf of "John Doe" or the missing tortfeasor. See Moss v. Cincinnati Ins. Co., supra, 154 Ga.App., p. 170, 268 S.E.2d 676. The purpose of the action, then, is to give the insured/plaintiff the opportunity to establish " 'all sums which he shall be legally entitled to recover as damages' " due to the tortious conduct of the uninsured motorist. Norman v. Daniels, supra, 142 Ga.App., p. 461, 236 S.E.2d 121. Upon successful completion of this task, the plaintiff then must present the judgment to his UMC. At that point, if the UMC has only indirectly participated in the tort liability suit, the issue of the UMC's contractual liability to the plaintiff becomes the issue. If, on the other hand, the UMC chose to directly participate in the tort suit by filing pleadings in its own name, it may receive an adjudication of its contractual liability without resorting to an action for declaratory judgment. See Moss v. Cincinnati Ins. Co., supra, 154 Ga.App., p. 170, 268 S.E.2d 676; Flamm v. Doe, 167 Ga.App. 587, 307 S.E.2d 105 (1983); Ins. Co. of North America v. Dorris, 161 Ga.App. 46, 288 S.E.2d 856 (1982); Houston v. Doe, 136 Ga.App. 583, 222 S.E.2d 131 (1975).

In the case at bar, the trial court was unable to exercise in personam jurisdiction over the non-resident tortfeasor, and the service by publication of summons was "insufficient to grant jurisdiction in Georgia for due process reasons." Norman v. Daniels, supra, 142 Ga.App., p. 459, 236 S.E.2d 121; Railey v. State Farm, etc., Ins. Co., supra, Division 1 (d) and (h). However, "[u]nder [OCGA § 33-7-11 (e) ], a motorist or vehicle owner against whom a claim is pending, but who cannot be located, is treated as an uninsured motorist, since 'whereabouts unknown' is now equal to 'identity unknown' [cit.] and 'identity unknown' is equal to 'uninsured motorist' under [OCGA § 33-7-11 (d) ]." Wentworth v. Fireman's Fund, etc., Ins. Cos., 147 Ga.App. 854(1), 250 S.E.2d 543 (1978). In effect, the tortfeasor became an uninsured motorist whose identity was unknown. The proceeding "should have been allowed to proceed...