Transamerica Ins. Co. v. Thrift-Mart, Inc.

• Decision Date: 22 September 1981
• Docket Number: No. 61857,INC,THRIFT-MAR,61857
• Citation: 285 S.E.2d 566,159 Ga.App. 874
• Parties: TRANSAMERICA INSURANCE COMPANY v.et al.
• Court: Georgia Court of Appeals

Page 566

285 S.E.2d 566

159 Ga.App. 874

TRANSAMERICA INSURANCE COMPANY v. THRIFT-MART, INC. et al.

No. 61857.

Court of Appeals of Georgia.

Sept. 22, 1981.

Rehearing Denied Oct. 9, 1981.

David F. Root, Dennis J. Webb, Robert C. Semler, Atlanta, for appellant.

Jack O. Morse, David A. Handley, Charles L. Barrett, III, Atlanta, Jack F. Witcher, Bremen, for appellees.

CARLEY, Judge.

On January 11, 1976, the Thrift-Mart grocery store was destroyed by fire. Subsequently appellee-Thrift-Mart and appellee-Lamar Cook filed separate civil actions against Wayne Allen Moore and the administratrix of the estate of Dennis C. Williams seeking to recover damages for the destruction of the property. Commercial Union Assurance Companies, insurer of Moore's father, brought a declaratory judgment action to determine whether coverage was afforded to Moore under an exclusion of the policy providing that "This policy does not apply ... to bodily injury or property damage which is either expected or intended from the standpoint of the Insured." It was Commercial Union's contention that the fire was the "expected or intended" result of the acts of Moore and that, therefore, it was required to afford Moore neither coverage nor a defense to the pending tort action. In that declaratory judgment action the jury rendered a verdict in favor of Commercial Union and against Moore. The judgment entered on that verdict was affirmed on appeal. Thrift-Mart v. Commercial Union Assurance Companies, 154 Ga.App. 344, 268 S.E.2d 397 (1980).

Transamerica Insurance Company, the appellant in the instant case, is the insurer of Williams' father. Transamerica's policy contains the following provision: "EXCLUSIONS. This policy does not apply to personal injury or property damage which is either expected or intended from the standpoint of the Insured." Subsequent to this court's affirmance in Thrift-Mart, supra, of the judgment entered on the verdict finding Moore was not afforded liability coverage under the policy from Commercial Union, Transamerica filed the instant declaratory judgment action alleging that the destruction by fire of the premises was likewise the result of its insured's "expected or intentional" acts. Accordingly, Transamerica sought a declaration that it was "in no way obligated to afford liability insurance coverage or a defense to [appellee] Mary Ann Weatherby, as Administratrix of the estate of Dennis C. Williams, Jr...." in appellees' pending suits. The case was submitted to the jury and, unlike the result in Thrift-Mart, supra, a verdict in favor of the insured and against Transamerica was returned. Judgment was entered on this verdict and Transamerica's subsequent motions for new trial and judgment n.o.v. were denied. Transamerica appeals.

1. Transamerica asserts that it is entitled to invoke the doctrine of res judicata and claim the benefit of the judgment affirmed in Thrift-Mart, 154 Ga.App. 344, 268 S.E.2d 397, supra. Essentially Transamerica urges that it is entitled to a declaration that Williams, its insured, is afforded no coverage and no defense to the pending action because Commercial Union initially sought and obtained such a declaration with regard to Moore, its insured.

"Read together and affirmatively, Code §§ 110-501 and 110-503 provide that a judgment on the merits of a court of competent jurisdiction shall be conclusive between the same parties and their privies as to all matters put in issue, or which under the rules of law might have been put in issue, in the cause wherein the judgment was rendered, until such judgment shall be reversed or set aside." Gilmer v. Porterfield, 233 Ga. 671, 674(2), 212 S.E.2d 842 (1975). Commercial Union was the plaintiff in the prior declaratory judgment action and the sole issue which was or could have been litigated in that action was whether Commercial Union's insured, Moore, was afforded coverage and a defense in the pending suit. Southern Trust Ins. Co. v. Eason, 134 Ga.App. 827, 216 S.E.2d 667 (1975). In contrast, Transamerica was the plaintiff in the instant declaratory judgment proceeding and the sole issue which was or could have been litigated was whether Transamerica's insured, Williams, was afforded coverage under its policy and his administratrix entitled to a defense by the insurer in the pending suit. Under these facts there is no "privity" between Transamerica in the instant suit and Commercial Union in the former and, there being no identity of parties plaintiff, Transamerica cannot claim that Commercial Union's judgment is res judicata on the issue of Transamerica's liability under its own policy to its own insured. See Walka Mtn. Camp v. Hartford Acc. & Indem. Co., 222 Ga. 249, 149 S.E.2d 365 (1966). Nor, on these facts, is there any reason why Williams' administratrix, who was in essence a "stranger" to the prior declaratory judgment action, should be estopped by the judgment in that case to assert against Williams' own insurer and under his own policy the right to coverage and a defense in the pending tort action. See Montgomery v. DeKalb Steel, 144 Ga.App. 191, 193(3), 240 S.E.2d 741 (1977). Transamerica's reliance on the doctrine of res judicata or estoppel by judgment is without merit.

2. In 1979 the deposition of Wayne Allen Moore, Commercial Union's insured, was taken in connection with Thrift-Mart's and Cook's pending tort actions and Commercial Union's then pending declaratory judgment action. Moore testified in the declaratory judgment action but died subsequent to the judgment in that case, affirmed in Thrift-Mart, supra. Moore's death occurred, however, prior to the institution of the instant declaratory judgment proceeding by Transamerica seeking a similar declaration against Williams, its insured. During the trial of the instant case, over Transamerica's objection, the court permitted appellees to use Moore's deposition which had been taken in connection with Commercial Union's declaratory judgment action. As was the case with Moore's testimony during the trial of Commercial Union's declaratory judgment action, the account of the events leading up to the fire as reflected in Moore's deposition differed significantly from the more incriminating version of those events he had made earlier to certain third persons shortly after the incident. As Commercial Union had done in Thrift-Mart, supra, Transamerica in the instant case introduced Moore's earlier version of how the fire began through the testimony of those third persons to whom Moore had made the incriminating statements. But whereas Commercial Union had relied upon Moore's earlier version of the events to impeach his trial testimony, Transamerica in the instant case relied upon Moore's earlier account to prove its prima facie entitlement to declaratory judgment. And, whereas the appellants in Thrift-Mart, supra, had relied upon Moore's trial testimony to defend against Commercial Union's declaratory judgment action, appellees in the instant case relied upon Moore's deposition testimony for the same purpose against Transamerica.

"The testimony of a witness, since deceased, ..., given under oath on a former trial, upon substantially the same issue and between substantially the same parties, may be proved by anyone who heard it, and who professes to remember the substance of the entire testimony as to the particular matter about which he testifies." Code Ann. § 38-314. This statute requires as the prerequisite to the admission in a subsequent action of the prior testimony of a since deceased witness that the parties and issues in the two actions be substantially the same. Atlanta & W. P. R. Co. v. Venable, 67 Ga. 697 (1881). Applying this rule in the instant case demonstrates that even assuming that the issue in the prior actions in which Moore's deposition was taken (whether Moore's actions on the night of the fire were "expected or intended") was substantially the same as the issue in the instant action (whether Williams' actions that night were "expected or intended"), it is clear that the parties in the two actions were not "substantially the same" within the contemplation of Code Ann. § 38-314. "[T]he purpose for requiring that the former testimony had been received in a proceeding having substantially the same issues and parties is to insure that the party against whom the testimony is now offered had an opportunity adequately to cross examine the witness at the previous proceeding. Hence, the parties and the issues both can properly be viewed as substantially the same wherever the party against whom the former testimony is now offered had the opportunity, at the former trial, to cross examine the witness fully as to the matter in issue at the second trial. [Cit.] " Prater v. State, 148 Ga.App. 831, 836, 253 S.E.2d 223 (1979). We believe that Prater states the outside limits of the concept of "substantially the same parties" as that phrase is used in Code Ann. § 38-314 and that the statute requires at the minimum that "the party against whom the former testimony is offered is the same ... '[I]t is only the party against whom the former testimony is now offered, whose presence as a party in the previous suit is significant...' [Cit.]... 'The sole question is whether [the party against whom the former testimony is now offered] had an adequate opportunity by cross-examination to sift this testimony ...' [Cit.]" Prater, 148 Ga.App. at 836-837, 253 S.E.2d 223, supra. Transamerica was not a "party" to the prior actions in which Moore's deposition was taken. It follows that Transamerica was not afforded an opportunity to cross-examine Moore's deposition testimony and it was error to admit it into evidence in the instant case over Transamerica's objection.

Nor do we believe that Moore's deposition was admissible under Code Ann. § 81A-132(a). It is true that interpretation by some federal courts of the analogous Rule 32 of the Federal Rules of Civil Procedure has resulted in the...