Southern General Ins. Co. v. Ross

Decision Date27 June 1997
Docket NumberA97A0554,Nos. A97A0546,s. A97A0546
Citation227 Ga.App. 191,489 S.E.2d 53
Parties, 97 FCDR 2452 SOUTHERN GENERAL INSURANCE COMPANY v. ROSS. ROSS v. SOUTHERN GENERAL INSURANCE COMPANY.
CourtGeorgia Court of Appeals

Page 53

489 S.E.2d 53
227 Ga.App. 191, 97 FCDR 2452
SOUTHERN GENERAL INSURANCE COMPANY
v.
ROSS.
ROSS
v.
SOUTHERN GENERAL INSURANCE COMPANY.
Nos. A97A0546, A97A0554.
Court of Appeals of Georgia.
June 27, 1997.
Reconsideration Denied July 10, 1997.
Certiorari Denied Jan. 5, 1998.

Page 55

[227 Ga.App. 197] Long, Weinberg, Ansley & Wheeler, Arnold E. Gardner, Johnathan T. Krawcheck, J. Kenneth Moorman, Atlanta, for appellant.

Gambrell & Stolz, Irwin W. Stolz, Jr., Seaton D. Purdom, Atlanta, for appellee.

[227 Ga.App. 191] RUFFIN, Judge.

These appeals stem from a declaratory judgment action brought [227 Ga.App. 192] by Southern General Insurance Company ("Southern General") against Barbara Ross and Southern General's insureds on a liability policy, Willy Barber and Tracy Massie. Southern General and Ross both contest the trial court's interpretation of policy language requiring the insurer to pay post-judgment interest on a personal injury judgment awarded Ross against Barber and Massie. In her cross-appeal, Ross further claims the trial court erred by refusing to dismiss the declaratory judgment action and realign the parties, and by granting summary judgment to Southern General on her counterclaims for bad-faith failure to settle. For reasons which follow, we affirm in part and reverse in part the trial court's judgment and remand this case for further proceedings.

We review a trial court's grant of summary judgment de novo, construing the evidence in favor of the nonmovant to determine if any genuine issue of material fact exists and if the movant was entitled to judgment as a matter of law. Gentile v. Bower, 222 Ga.App. 736, 737, 477 S.E.2d 130 (1996). On December 16, 1991, Ross obtained a personal injury judgment of $545,000 against Barber and Massie. 1 On December 24, 1991, the attorney retained by Southern General to represent Barber and Massie wrote Ross' attorney and offered "to settle any and all the claims of Barbara Ross against them upon payment of the total sum of $100,000.00." After Ross refused this offer, the case was appealed to this Court, and we affirmed the personal injury judgment in Massie v. Ross, 211 Ga.App. 354, 439 S.E.2d 3 (1993). On March 15, 1994, Southern General paid Ross the $100,000 policy limits on behalf of its insureds. However, the parties could not agree on how much, if any, post-judgment interest Southern General might owe under the terms of its policy and reserved that issue for later discussion. The insurer then filed this declaratory judgment action. Although Southern General's insureds filed no responsive pleadings, Ross filed an answer and counterclaims seeking post-judgment interest and asserting statutory and tort claims for bad-faith failure to settle.

The trial court found the parties to be in controversy over the meaning of a "supplemental payments" provision of the Southern General policy. That provision reads, in relevant part: "With respect to such insurance as is afforded by this policy for bodily injury liability and for property damage liability, the company shall: ... (2) pay all expenses incurred by the company, all costs taxed against the insured in any such suit and all interest accruing after entry of judgment until the company has paid or tendered or deposited in court [227 Ga.App. 193] such part of such judgment as does not exceed the limit of the company's liability thereon." (Emphasis supplied.)

On cross-motions for summary judgment, the trial court found Southern General responsible for paying accrued interest on the entire judgment as opposed to interest on only the portion of the judgment covered by Southern General's $100,000 policy. The court found that duty to pay interest abated when Southern General tendered its $100,000 limits to Ross in March 1994. It ordered the insurer to pay the post-judgment interest accrued on the judgment before March 15, 1994 and to pay interest on this unpaid interest amount at a 12 percent rate between March 15, 1994 and the date of the court's order. Although Ross obtained from Massie an assignment of Massie's potential cause of action for bad-faith failure to settle, the trial court found that assignment ineffective to

Page 56

allow Ross to pursue the claim against Southern General. Therefore the court granted Southern General's motion for summary judgment on Ross' statutory and tort bad-faith counterclaims.

Case No. A97A0546

1. In its first enumeration of error, Southern General claims it owed no post-judgment interest because it "tendered" to Ross the amount of the policy limits by means of the settlement offer it made on December 24, 1991. We disagree. Pursuant to OCGA § 13-4-24, an effective tender "must be certain and unconditional, except for a receipt in full or delivery of the obligation.... The tender must be in full payment of the specific debt, and not in part...." A tender conditioned on a release of "all claims," which includes claims not included within the obligation at hand, is not effective. See Edwards-Warren Tire Co. v. Coble, 102 Ga.App. 106, 110-111(1), 115 S.E.2d 852 (1960).

Here, Southern General attempted to stop its accrual of interest under the policy by "tendering" its policy limits. But as the "tender" letter of December 24, 1991, makes clear, it offered those policy limits only in exchange for a release of the remaining amount owed by its insureds, a debt of $445,000. The trial court did not err in finding this first tender ineffective, as Southern General was not allowed to condition this partial payment upon a forgiveness of the entire debt. See Adcock v. Sutton, 224 Ga. 505, 507-508, 162 S.E.2d 732 (1968). Southern General's citation to Ins. Co. of Penn. v. Giles, 196 Ga.App. 271, 395 S.E.2d 833 (1990), has no bearing on this issue. In Giles, we determined the attorneys for the insurer and the claimant had made a pre-trial agreement to divide the policy limits at the conclusion of several ongoing lawsuits. See...

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