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

• Decision Date: 05 April 1972
• Docket Number: No. 2,No. 47022,47022,2
• Citation: 126 Ga.App. 45,190 S.E.2d 113
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. Joe W. JOHNSON et al
• Court: Georgia Court of Appeals

Page 113

190 S.E.2d 113

126 Ga.App. 45

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. Joe W. JOHNSON et al.

No. 47022.

Court of Appeals of Georgia, Division No. 2.

April 5, 1972.

Miller, Beckmann & Simpson, Luhr G. C. Beckmann, Jr., Savannah, for appellant.

Pierce, Ranitz, Lee, Berry & Mahoney, John M. Ranitz, Jr., Morton G. Forbes, Savannah, for appellees.

Syllabus Opinion by the Court

CLARK, Judge.

This appeal arises in a declaratory judgment action by State Farm Mutual Automobile Insurance Company against its insured, the wife of the insured, and an uninsured motorist.

Tort suits had been instituted by the insured (Billie Phillip Stanford) and his wife (Freeda Louise Stanford) against the uninsured motorist (Joe Willie Johnson) for injuries received in an intersectional collision between a Fiat automobile driven by the insured in which his spouse was a passenger and a vehicle driven by Johnson on which there was no public liability insurance. This accident occurred on October 6, 1968, one day after the purchase of the Fiat by the insured.

On that day there were in existence two policies issued by State Farm to Stanford, one covering a Volkswagen sedan and the other covering a Taunus station wagon.

Both policies contained the same provisions which included the following pertinent language dealing with a newly acquired automobile: 'Newly Acquired Automobile-means an automobile, ownership of which is acquired by the named insured or his spouse, if a resident of the same household, if (1) it replaces an automobile owned by either and covered by this policy, or the company insures all automobiles owned by the named insured and such spouse on the date of its delivery, and (2) the named insured within 30 days following such delivery date applies to the company for insurance on such newly acquired automobile. If more than one policy issued by the company could be applied to such automobile the named insured shall elect which policy shall apply. The named insured shall pay any additional premium required because of the application of the insurance to such newly acquired automobile.'

On the date of the accident the Fiat was not covered by insurance but acting under the quoted terms of the two policies insured timely notified State Farm that he wished coverage of his newly acquired automobile under the policy which already covered the Taunus. State Farm then issued its binder. Thereafter a third policy was delivered to cover the Fiat. Thus, in accordance with the insuring agreement in the Taunus policy, coverage thereunder was retroactively extended for the accident of October 6, 1968.

All three liability policies contained the usual medical reimbursement coverage as well as uninsured motorist coverage. Each policy stated the medical reimbursement coverage was limited to $5,000 for medical expenses incurred for each person.

The uninsured automobile coverage for each policy was in conformity with the Georgia Automobile Financial Responsibility Act, the pertinent portion of which at that time ¹ required the insurer to agree

'. . . (T)o pay the insured all sums which he shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle, within limits exclusive of interests and costs which shall be no less than $10,000 because of bodily injury to or death of one person in any one accident, and, subject to such limit for one person, $20,000 because of bodily injury to or death or two or more persons in any one accident. . . .' (Ga.L.1964, p. 306)

All three policies contained a provision in the Uninsured Motorists Clause whereby State Farm was permitted to deduct payments made under the medical reimbursement provisions from the amounts due under the uninsured motorist portion.

State Farm contends its liability for uninsured motorist coverage is limited to $10,000 for one person and that it is permitted by the express terms of its policy to deduct the amounts of $5,000 paid to the wife and $716.37 paid to the husband as an offset against the uninsured motorist coverage.

The insured and his wife contend the Georgia statute for uninsured motorists insurance does not permit such setoff of medical payment coverage so that this set-off provision is illegal. Furthermore, they contend there is a total of $30,000 liability coverage for each and a total of $15,000 medical payment coverage for each by reason of there being three separate policies. Both State Farm and the Stanfords filed motions for summary judgment.

The scholarly trial judge, Honorable W. Colbert Hawkins, ruled against State Farm and for the Stanfords. His written order from which State Farm has brought this appeal states that the provision in each policy permitting setoff for medicals against payments required under the uninsured motorist clause was void for the reasons stated in State Farm Mutual Automobile Insurance Company v. Murphy, 226 Ga. 710, 177 S.E.2d 257, and additionally that such provision conflicted with our uninsured motorist statute. He further ruled that 'pyramiding of coverage should be allowed under all three policies, both as to the medical payments and as to recovery against the uninsured motorist.'

The questions for this court to determine are: 1. Does State Farm have the right as stated in its policies to deduct from amounts payable under the uninsured motorist coverage sums paid under the medical reimbursement coverage? 2. Does the medical reimbursement coverage 'stack' by reason of these being multiple policies? 3. Does the uninsured motorist coverage 'stack' because of the multiple policies? 4. If we hold pyramiding existed, then is the 'stacking' confined to the two policies which were in existence on the date of the accident or to three policies? Held:

1. The first three questions have been answered adversely to State Farm in the opinion rendered on March 10, 1972, by Judge Quillian with concurrence of Judges Jordan and Evans in State Farm Mutual Automobile Insurance Company v. Harper, 125 Ga.App. 696, 188 S.E.2d 813...