State Farm Mut. Auto. Ins. Co. v. Harper

• Decision Date: 10 March 1972
• Docket Number: No. 46454,No. 2,46454,2
• Citation: 125 Ga.App. 696,188 S.E.2d 813
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. Cecil M. HARPER et al
• Court: Georgia Court of Appeals

Page 813

188 S.E.2d 813

125 Ga.App. 696

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. Cecil M. HARPER et al.

No. 46454.

Court of Appeals of Georgia, Division No. 2.

March 10, 1972.

Syllabus by the Court

1. In this case the plaintiffs met the statutory definition of insureds (Code § 56-407(a)) under the provisions of two separate and distinct policies which listed two different automobiles owned by one of the plaintiffs. Thus, the plaintiffs were entitled to the uninsured motorist coverage of each policy up to the amount of their actual damages.

2. Under the facts of the case sub judice the deendant is entitled to credit for the amount paid under medical payment coverage since to deny such credit would result in recovery by the plaintiffs of an amount in excess of the judgments they obtained against the uninsured motorist.

3. There was no basis for the imposition of bad faith penalty and attorney's fees.

Cecil M. Harper and Sherry Gail Harper brought suit against State Farm Mutual Insurance Company in the State Court of Bibb County. The complaint as amended alleged that the defendant corporation (hereinafter referred to as State Farm) had issued two insurance policies, No. 2699 165-824-11A listing a 1967 Ford (hereinafter referred to as the Ford policy) and No. 4001 604-A05-11A listing a 1963 Corvair (hereinafter referred to as the Corvair policy), which provided uninsured motorist coverage protection for plaintiffs; that premiums for the policies had been paid; that at the time policies were in force the plaintiffs, while riding in a 1967 Ford which was described in the Ford policy, were injured in a collision with an uninsured vehicle; that Mrs. Harper obtained a judgment against the uninsured motorist in the sum of $12,500 and Mr. Harper obtained a judgment against the uninsured motorist in the sum of $20,000.

The complaint further alleged that each of the policies provided for the defendant to pay all sums which the insured shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury sustained, with a limitation of $10,000 per person or $20,000 per accident; that the combined coverage afforded $20,000 for each of the plaintiffs; that the defendant has paid $9,000 to each of the plaintiffs under the uninsured motorist coverage and $1,000 to each of the plaintiffs under the medical payment coverage; that demand was made upon the defendant for the payment of sums owing under the policy stating that suit would be filed in the event the sums were not paid. The complaint sought recovery of the principal sum of $14,500, plus $3,625 as penalty and reasonable attorney's fees in the sum of $10,000.

State Farm filed its defenses, including motions and an answer. Thereafter, plaintiffs filed a motion for summary judgment, State Farm filed a motion for judgment on the pleadings and a motion for judgment on the pleadings as to any recovery of penalty or attorney's fees. The trial court in one order and judgment granted plaintiffs their summary judgment, or in the alternative, judgment on the pleadings, in the principal amount for which they sought recovery, $14,500 ($11,000 to Mr. Harper and $3,500 to Mrs. Harper). The trial court further granted plaintiffs $3,625 as penalty and $6,041 as attorney's fees after a jury was waived and evidence was submitted to the court, the trial court denied all of defendant's motions to dismiss and both defendant's motions for judgment on the pleadings. Appeal was taken from this order and judgment.

Martin, Snow, Grant & Napier, Cubbedge Snow, Jr., George C. Grant, Macon, for appellant.

McKenney & Thornton, Neal D. McKenney, Richard B. Thornton, Macon, for appellees.

QUILLIAN Judge.

The defendant makes three principal contentions: 1) that since the plaintiffs recovered under the Ford policy they were not entitled to recover any sums under the Corvair policy; 2) that the amount paid under the uninsured motorists coverage should be reduced by the amounts paid under medical payments coverage; 3) that in view of the novel legal questions presented there was no legal basis for the imposition of bad faith penalty and attorney's fees.

1. In this case there were two separate insurance policies-the Ford policy and the Corvair policy. The inception of both policies was on the same day. However, they each had different expiration dates and were for different premiums. Neither policy made reference to the other and while they contained many identical provisions they were in all material respects separate policies.

As held in Gulf American Fire & Cas. Co. v. McNeal, 115 Ga.App. 286, 291, 154 S.E.2d 411, the Uninsured Motorist Act provides for two classes of insured persons. One of these classes are insured persons only when the insured automobile is involved, but as to the other they are insured persons even where the insured automobile is not in any way involved in the insured's injuries. This class is: 'The named insured and, while resident of the same household, the spouse of any such named insured, and relatives of either, while in a motor vehicle or otherwise.' See Code, § 56-407A(b) (Code Ann. § 56-407.1; Ga.L.1963, p. 588; 1964, p. 306; 1967, pp. 463, 464; 1968, pp. 1089, 1091; 1968, pp. 1415, 1416; 1971, pp. 926, 927). Therefore, the plaintiff and his wife were insured under the Corvair policy.

It is urged that provisions of the Corvair policy serve to exclude the plaintiffs from coverage while occupying the Ford automobile. In Travelers Indemnity Co. v. Williams, 119 Ga.App. 414, 416, 167 S.E.2d 174, 175, we pointed out that any policy provision which attempts to contravene the clear intent of the Uninsured Motorists' Act is void and not enforceable. In that case we held that an insured under two separate uninsured motorist policies, may recover on both policies not to exceed his actual damages pursuant to the uninsured motorist statute. The Supreme Court approved this decision in State Farm Mut. Auto. Ins. Co. v. Murphy, 226 Ga. 710, 177 S.E.2d 257, and allowed recovery of plaintiffs' actual loss within the limits of the policies involved. In this case the plaintiffs were in the position of being the insureds in the Ford policy, both because they were insured persons and the insured automobile was involved, and were insured under the Corvair policy since they fell in the class of the named insured and his spouse.

Doerpinghaus v. Allstate Ins. Co., 124 Ga.App. 627, 628, 185 S.E.2d 615, 616, is not contolling here since in that case the court found that there was only one policy involved. It was there pointed out: 'The extension certificates and the stipulation of fact reveal that there is only one policy involved insuring two automobiles.' From the language of the opinion, this was the sole basis for holding that the $10,000 per person for one accident was the maximum amount which the plaintiff could recover. It may be true that the defendant here could have avoided the result reached by issuing only one policy but it did not choose to do so and where two policies are used even by the same company, we can see no reason for not applying the rules set forth in Travelers Indemnity Co. v. Williams, 119 Ga. 414, 167 S.E.2d 174, supra, and State Farm Mut. Auto. Ins. Co. v. Murphy, 226 Ga. 710, 177 S.E.2d 257, supra.

2. In this case the trial judge did not give credit for the $1,000 the defendant paid each plaintiff under the provisions for medical payment but only credited the two payments made under the uninsured motorist provision totalling $18,000. As a result the principal amount of the judgment was $14,500 allowing the plaintiffs to recover $34,500 on the two policies when their judgment on which recovery was predicated totaled $32,500. The policies contain language providing that the amount payable as uninsured motorists coverage be reduced by any sums paid under medical coverage.

In Phillips v. State Farm Mut. Auto. Ins. Co., 5 Cir., 437 F.2d 365, the federal court held that sums paid under medical provisions of a policy could not serve to reduce the amount owed as uninsured motorist coverage. In that case plaintiff had damages in excess of the $10,000 coverage for uninsured motorists. We think the result there reached was correct.

However, this is not the situation in the instant case. Here under the two policies, the plaintiffs were able to recover the full amounts for their claims, to wit, $12,500 and $20,000 respectively. In State Farm Mut. Auto. Ins. Co. v. Murphy, 226 Ga. 710, 714, 177 S.E.2d 257, 260, supra, it is pointed out: 'There is no danger of pyramiding multiple policies so as to recover beyond actual damage, a factor considered in some of the reported cases from other jurisdictions, as the insured would not be legally entitled to recover amounts beyond his actual damages no matter how many policies he was the beneficiary of.' (Emphasis supplied.) This same problem was recognized by this court in Travelers Indemnity Co. v. Williams, 119 Ga.App. 414, 416, 167 S.E.2d 174, 175, supra, where the question was considered as to whether the insured 'under two separate uninsured motorist policies, may recover on both policies not to exceed his actual damages pursuant to the uninsured motorist statute.' (Emphasis supplied.) It seems clear the policy of the Uninsured Motorists Act is not to allow an insured to 'stack coverage' in order to recover amounts in excess of his actual damages. Thus, policy provisions which would limit coverage in this respect would not be void but would be enforceable.

In a recent case, Ramsden v. Govt. Employees Ins. Co., 123 Ga.App. 163, 166, 179 S.E.2d 671, 674, this court in considering medical payments held: 'The contracts here involved, as to medical payments and funeral expenses incurred, were contracts of indemnity (Exchange Bank of Macon v. Loh, 104 Ga. 446, 31 S.E. 459, 44 L.R.A. 372; Laurie v. Holland America Ins. Co., 31 Ill.App.2d 437, 176 N.E.2d...