Standard Guar. Ins. Co. v. Hulsey

• Decision Date: 08 June 1992
• Docket Number: No. A92A0438,A92A0438
• Citation: 420 S.E.2d 54,204 Ga.App. 508
• Parties: STANDARD GUARANTY INSURANCE COMPANY v. HULSEY et al.
• Court: Georgia Court of Appeals

Page 54

420 S.E.2d 54

204 Ga.App. 508

STANDARD GUARANTY INSURANCE COMPANY v. HULSEY et al.

No. A92A0438.

Court of Appeals of Georgia.

June 8, 1992.

Jenkins & Eells, Frank E. Jenkins, III, Kirk R. Fjelstul, Atlanta, for appellant.

Ronald L. Hilley, Tucker, Murray & Temple, William D. Strickland, Decatur, for appellees.

CARLEY, Presiding Judge.

The relevant facts in this declaratory judgment action are as follows: As the result of an automobile collision, appellee-defendant Olin Usher filed suit against appellee-defendant Ricky Hulsey. Hulsey answered and counterclaimed against Usher. Usher was purportedly afforded liability coverage under a policy issued by appellee-defendant Progressive Casualty Insurance Company (Progressive) and Hulsey was afforded uninsured motorist coverage under a policy issued by appellant-plaintiff Standard Guaranty Insurance Company (Standard). In its capacity as Hulsey's uninsured motorist carrier, Standard was served with a copy of Hulsey's counterclaim against Usher. However, Standard did not become a party to the action. The trial court eventually entered judgment in favor of Hulsey on his counterclaim against Usher. Concluding that Usher was an uninsured motorist despite his policy with Progressive, the trial court also entered judgment in favor of Hulsey against Standard. After Hulsey demanded uninsured motorist coverage, Standard successfully moved to set aside the judgment that had been entered against it, correctly asserting that it had not been a party to the action. Hulsey v. Standard Guar. Ins. Co., 195 Ga.App. 803, 395 S.E.2d 282 (1990). Before denying Hulsey's demand for uninsured motorist coverage, Standard had also filed the instant declaratory judgment action, seeking a declaration that it had no contractual obligation as Hulsey's uninsured motorist carrier to satisfy the judgment entered against Usher. Usher failed to answer, Hulsey answered and counterclaimed for attorney's fees, and Progressive answered and moved to dismiss. The trial court granted Progressive's motion to dismiss and, after denying Standard's motion to dismiss Hulsey's counterclaim, awarded Hulsey attorney's fees pursuant to OCGA § 33-7-15(b.1). Standard appeals.

1. The grant of Progressive's motion to dismiss Standard's action for declaratory judgment is enumerated as error.

" 'The Declaratory Judgment Act of this State is not intended to be used to set aside, modify, or interpret judicial decrees or judgments of courts having jurisdiction of the subject matter and parties, but is to be used to obtain a declaration of rights not already adjudicated.' [Cits.]" Peeples Indus. v. Parker Hannifin Corp., 189 Ga.App. 857, 859, 377 S.E.2d 691 (1989). Progressive urges that the grant of its motion to dismiss was proper because Standard is not using the instant declaratory judgment action to obtain a declaration of rights, but for the unauthorized purpose of collaterally attacking the original judgment of the trial court wherein Usher had been "deemed to be an uninsured motorist...." Hulsey v. Standard Guar. Ins. Co., supra 195 Ga.App. at 804, 395 S.E.2d 282.

This contention is clearly without merit. The original judgment of the trial court is not being collaterally attacked in the instant declaratory judgment action, because that original judgment has already been directly attacked and correctly set aside on the ground that the trial court lacked personal jurisdiction over Standard. Having successfully secured the setting aside of the original trial court's judgment wherein Usher had been "deemed to be an uninsured motorist," Standard now submits itself to the personal jurisdiction of the trial court and seeks a declaration that it is not contractually obligated to pay the judgment secured by Hulsey. As this court clearly held in affirming the setting aside of the original judgment, "... Hulsey will have to assert his rights under his insurance contract with Standard in another action." (Emphasis supplied.) Hulsey v. Standard Guar. Ins. Co., supra at 804, 395 S.E.2d 282. Accordingly, "another action" was contemplated and the validity of the trial court's grant of Progressive's motion to dismiss is dependent upon whether the instant declaratory judgment action constitutes "another action" in which the issue of Hulsey's contractual rights under his policy with Standard can properly be determined.

Declaratory judgment will not be rendered based on a possible or probable contingency. City of Nashville v. Snow, 204 Ga. 371, 377(1), 49 S.E.2d 808 (1948). A claim for uninsured motorist benefits is contingent upon the claimant's securing a judgment against the alleged tortfeasor. Nevertheless, there is authority for the proposition that a separate declaratory judgment action can be maintained where it is instituted by the insurer before judgment has been obtained against the tortfeasor. Knight v. Ga. Farm, etc., Ins. Co., 184 Ga.App. 312, 315(3), 361 S.E.2d 190 (1987). However, there is clear authority for the proposition that a separate declaratory judgment action can not be maintained where, as here, it is instituted by the insurer only after judgment has been obtained against the tortfeasor. It has been held that, under such circumstances, no claim for declaratory relief is stated and the insurer must wait until suit on the policy is initiated against it by the claimant. "[A] judgment has been obtained against an insurer's putative insured, and the insure[r] now seeks a declaratory judgment that it is not liable under the policy. All rights have accrued; the [insurer] is either liable under the terms of its polic[y] for the judgment entered against [the tortfeasor] or it is not. The [insurer] faces no risk of taking future undirected action; its defenses can be presented when suit is entered by the [claimant]. [Cit.]" Shield Ins. Co. v. Hutchins, 149 Ga.App. 742, 744-745(2), 256 S.E.2d 108 (1979). "[S]uit looms against the insurer itself and its own defenses to liability can be presented without jeopardy when suit is entered by the claimant. (Cit.) Under these circumstances, there being no uncertainty or insecurity with regard to the propriety of some future act or conduct, declaratory relief will not lie. (Cit.)....' [Cit.]" (Emphasis in original.) Baron v. State Farm, etc., Ins. Co., 157 Ga.App. 16, 18-19(1), 276 S.E.2d 78 (1981).

It appears, however, that Shield Ins. Co., Baron and other similar decisions have been overruled sub silentio by the recent opinion of the Supreme Court in Atlanta Cas....