Southern Guar. Ins. Co. v. Cotton States Mut. Ins. Co.
| Decision Date | 03 September 1985 |
| Docket Number | No. 70393,70393 |
| Citation | 335 S.E.2d 598,176 Ga.App. 140 |
| Parties | SOUTHERN GUARANTY INSURANCE COMPANY v. COTTON STATES MUTUAL INSURANCE COMPANY et al. |
| Court | Georgia Court of Appeals |
Terry A. Dillard, Waycross, Robert M. Darroch, Atlanta, for appellant.
Rudolph J. Chambless, C. Edwin Rozier, Waycross, Vernon L. Chambless, Waycross, J. Franklin Edenfield, Swainsboro, for appellee.
This is yet another case spawned by Jones v. State Farm Mut. Auto. Ins. Co., 156 Ga.App. 230, 274 S.E.2d 623 (1980), and Flewellen v. Atlanta Cas. Co., 250 Ga. 709, 300 S.E.2d 673 (1983), involving the liability of motor vehicle insurers for optional personal injury protection under OCGA § 33-34-5 (former Code Ann. § 56-3404b), as it existed prior to its amendment by Ga.L.1982, p. 1234, § 1.
In February of 1975, appellee Eloise Spivey contacted the Rains Insurance Agency (Rains) for the purpose of obtaining automobile insurance for herself and her husband, appellee Russell Vernon Spivey. In early March of 1975, appellant Southern Guaranty Insurance Company (Southern Guaranty) received from Rains an insurance application listing Mr. Spivey as the named insured. Also received from the Rains agency was an "optional coverage offer form." Both documents were dated February 25, 1975. The basic application was silent as to PIP coverage and was unsigned by the insured. The optional coverage form contained separate blocks for acceptance of "additional" PIP coverage in the amounts of $10,000, $25,000, or $50,000, as well as a block for complete rejection of any additional PIP coverage. It also contained a statement informing the insured that $5,000 in PIP coverage was automatically included in the policy. The block for rejection of "additional" PIP was checked, and a signature purporting to be that of Russell Vernon Spivey appeared on the form. Southern Guaranty subsequently issued an insurance policy covering the Spiveys, which purported to provide them no-fault benefits in the minimum required amount of $5,000.
In October of 1979, Mrs. Spivey was injured in an automobile accident. The vehicle in which she was riding was insured by appellee Cotton States Mutual Insurance Company (Cotton States); and she received $10,000 in PIP benefits from that company for medical expenses and lost wages, the maximum payable under the terms of that policy. In October of 1981, the Spiveys tendered to Southern Guaranty an additional premium for optional PIP coverage; and in December of 1981, they demanded payment of $5,232.73, the amount by which Mrs. Spivey's medical expenses and lost wages resulting from the accident exceeded the amount recovered from Cotton States. Southern Guaranty denied liability; and in March of 1982, the Spiveys filed this action to recover the additional PIP benefits, as well as a statutory bad-faith penalty, attorney fees, and $250,000 in punitive damages.
In their original complaint, the Spiveys alleged that Southern Guaranty had failed to offer them the required optional coverage in the manner required by the statute. On July 21, 1983, in an affidavit submitted in opposition to a motion for summary judgment filed by Southern Guaranty, Mr. Spivey averred that he had neither signed the optional coverage form nor authorized anyone else to sign it for him. On that same date, the Spiveys amended their complaint to allege forgery and fraud on the part of Southern Guaranty with respect to the signing of the form and increased to $1,000,000 the amount of punitive damages sought. On May 11, 1984, Southern Guaranty deposed a handwriting analyst who had compared the signature on the optional coverage form with exemplars submitted by both Mr. and Mrs. Spivey. (This witness later testified at the trial that in his opinion neither Mr. nor Mrs. Spivey had signed the document.) On June 29, 1984, the Spiveys amended their complaint a second time, increasing the claim for punitive damages to $25,000,000. The case was tried in September of 1984.
Southern Guaranty filed a third-party complaint against Cotton States, alleging that Cotton States, as the primary insurer of the vehicle, would be required to indemnify it for any damages recovered by the Spiveys. Cotton States answered and moved for summary judgment; however, no hearing was held on the motion prior to trial. Cotton States made no appearance at the trial of the case, and at the close of the evidence the trial court granted Southern Guaranty's motion to strike Cotton States' defensive pleadings. A default judgment was subsequently entered against Cotton States for the amount of any recovery by the Spiveys. The case proceeded to trial, resulting in a directed verdict in favor of the Spiveys with regard to their claim for $5,232.73 in optional PIP benefits and a jury verdict awarding them a bad-faith penalty in the amount of $1,308.18, attorney fees in the amount of $15,000, and punitive damages in the amount of $350,000. Subsequently, during the same term of court, Cotton States moved to set aside the default judgment entered against it, based on evidence that it had received no notice of the trial. The trial court granted these motions and also granted the motion for summary judgment previously filed by Cotton States on the third-party claim. Southern Guaranty appeals. Held:
1. The trial court did not err in setting aside the default judgment rendered against Cotton States, based on the evidence that it had received no notice of the trial. Accord Goode v. O'Neal, Banks, & Assocs., 165 Ga.App. 162, 300 S.E.2d 191 (1983); Williams v. Calloway, 171 Ga.App. 286(1), 319 S.E.2d 500 (1984).
2. Because Southern Guaranty has not enumerated as error the trial court's subsequent grant of summary judgment to Cotton States, the correctness of that ruling is not before us for review. See generally Farivar v. Yekta, 166 Ga.App. 676, 305 S.E.2d 422 (1983); Trowell v. Weston, 154 Ga.App. 572(2), 269 S.E.2d 74 (1980).
3. The trial court did not err in directing a verdict in favor of the Spiveys for the amount of optional PIP benefits claimed by them. Although their insurance application forms were submitted prior to March 1, 1975, the policy in question was not issued until after that date, and thus it was required to be preceded by a written acceptance or rejection of optional coverages, signed by the insured, pursuant to OCGA § 33-34-5(b). Cf. Lavender v. St. Paul Mercury Ins. Co., 169 Ga.App. 453, 313 S.E.2d 149 (1984); St. Paul Fire &c. Ins. Co. v. Gasaway, 165 Ga.App. 861, 303 S.E.2d 75 (1983). Appellant's reliance on Georgia Farm Bureau Mut. Ins. Co. v. White (Case No. 69619, decided March 29, 1985) for the proposition that subsection (c) rather than (b) is applicable in this situation is without merit. In the first place, the decision in that case is unreported and therefore does not constitute a binding precedent. See Court of Appeals Rule 37(b). Moreover, as in Lavender v. St. Paul Mercury Ins. Co., supra, and St. Paul Fire &c. Ins. Co. v. Gasaway, supra, the policy at issue in that case was both applied for and issued prior to March 1, 1975.
As reiterated in St. Paul Fire &c. Ins. Co. v. Nixon, 252 Ga. 469, 470, 314 S.E.2d 215 (1984), the intent of OCGA § 33-34-5 (Code Ann. § 56-3404b) is " " It is undisputed that neither Mr. nor Mrs. Spivey signed the document purporting to reject optional PIP coverage, and their denials that they authorized anyone else to sign the rejection form in their behalf are also unrefuted. Accordingly, the evidence is uncontroverted that the Spiveys did not knowingly and in writing waive their right to obtain optional PIP coverage.
Southern Guaranty cites this court's holding in Morris v. Fidelity & Cas. Co., 169...
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