Stepho v. Allstate Ins. Co.

• Decision Date: 29 September 1989
• Docket Number: No. S89G0064,S89G0064
• Citation: 259 Ga. 475,383 S.E.2d 887
• Parties: STEPHO v. ALLSTATE INSURANCE CO.
• Court: Georgia Supreme Court

Page 887

383 S.E.2d 887

259 Ga. 475

STEPHO v. ALLSTATE INSURANCE CO.

No. S89G0064.

Supreme Court of Georgia.

Sept. 29, 1989.

Reconsideration Denied Oct. 18, 1989.

Edgar L. Crossett III, Christopher J. McFadden, Atlanta, for Stephen E. Stepho.

Clyde E. Richard III, Chambers, Mabry, McClelland & Brooks, Thomas E. Brennan, Fain, Major & Wiley, Atlanta, for Allstate Ins. Co.

CLARKE, Presiding Justice.

Stephen Stepho owned a pick-up truck insured by Allstate. The policy excluded liability for injury to any person related by blood to the insured and residing in insured's house. Stephen's adult son, Saad Stepho, was a named insured on the policy. Saad was authorized to use Stephen's truck. Stephen's 14-year-old son Nashwan, a passenger in the truck driven by Saad, was injured in an accident.

Stephen, on behalf of Nashwan, brought an action against Saad and against Allstate. Disputing coverage on the basis of the family exclusion provision, Allstate moved for summary judgment. The summary judgment was granted, and Stephen appealed.

The Court of Appeals, Stepho v. Allstate Insurance Co., 191 Ga.App. 494, 382 S.E.2d 154 (1989), found that if intrafamily tort immunity were the only question under consideration, Nashwan could sue his adult brother even if they lived in the same household. However, the grant of summary judgment was based upon a provision in an insurance contract. Therefore, the question addressed by the Court of Appeals was whether the contract provision was against public policy. Concluding that insured would not be exposed to additional liability by enforcement of the clause, the Court of Appeals found that the exclusion was not against public policy and affirmed the trial court. We reverse.

1. The public policy considerations relating to family exclusion provisions in automobile liability insurance policies stem from the legislature's enactment of the mandatory insurance statute. The purpose of the statute was to provide protection in the form of insurance. We have held that compulsory insurance is required for the protection of the innocent victims of the negligent members of the motoring public. Cotton States Mutual Insurance Co. v. Neese, 254 Ga. 335, 329 S.E.2d 136 (1985). We have also held that the legislature intended that Georgia's compulsory insurance law protect the insured from unfair exposure to unanticipated liability. GEICO v. Dickey, 255 Ga. 661, 340 S.E.2d 595 (1986). In GEICO v. Dickey, we held that "In view of our overriding policy of complete liability coverage for the protection of the public and the insured, if the exclusion were broader than the tort immunity of this state, the exclusion would be against public policy." Id. at 663, 340 S.E.2d 595.

In Southern Guaranty Ins. Co. v. Preferred Risk Mutual Ins. Co., 257 Ga. 355, 359 S.E.2d 665 (1987), we dealt with a peculiar set of facts under which neither the injured party nor the insured was left unprotected. We therefore concluded that the exclusion clause under those unusual circumstances did not offend public policy and should be upheld.

A clear thread of consistency runs through each of these cases as they apply the dual policies of protection for innocent victims of negligent members of the motoring public and protection of the insured against unfair exposure to unanticipated liability. This results in a basic rule that if either of the interests dealt with in those cases is left unprotected, the exclusionary clause in the insurance contract offends public policy. This rule, of course, does not apply...