Transport Ins. Co. v. Maryland Cas. Co.
| Decision Date | 16 May 1988 |
| Docket Number | No. 76074,76074 |
| Citation | 370 S.E.2d 188,187 Ga.App. 361 |
| Parties | TRANSPORT INSURANCE COMPANY v. MARYLAND CASUALTY COMPANY. |
| Court | Georgia Court of Appeals |
Michael L. McGlamry, Atlanta, for appellant.
Robert M. Darroch and Elizabeth A. Obenshain, Atlanta, for appellee.
This is a subrogation action brought by Maryland Casualty Company against Transport Insurance Company to obtain reimbursement for certain "no-fault" benefits paid by Maryland Casualty to one of its policyholders. Transport Insurance Company filed this appeal from an order granting summary judgment to Maryland Casualty and denying its own motion for summary judgment.
The parties have stipulated to the following facts: Mr. and Mrs. Martin were issued a policy of automobile insurance by Maryland Casualty in 1975, providing basic personal injury protection (PIP) coverage in the amount of $5,000. This policy was renewed annually and was in force in January of 1977, when Mrs. Martin was injured in a collision involving the insured automobile and a tractor-trailer truck weighing in excess of 6,500 pounds. This truck was owned and operated by Old Dominion Freight Lines and insured by Transport Insurance Company. As a result of her injuries, Mrs. Martin incurred medical expenses in excess of $45,000; however, Maryland Casualty initially paid her only the minimum $5,000 in no-fault benefits provided for under the terms of its policy. In subsequent litigation against Old Dominion, its driver, and Transport Insurance Company, Mrs. Martin was awarded damages in the amount of $200,000; and Mr. Martin, in a separate action, was awarded damages in the amount of $300,000.
Pursuant to this court's decision in Jones v. State Farm & c. Ins. Co., 156 Ga.App. 230, 274 S.E.2d 623 (1980), the Martins later brought suit against Maryland Casualty and its agent seeking to recover additional PIP benefits, penalties, and attorney fees. Thereafter, Maryland Casualty evaluated its insurance application form to determine if it was in compliance with the Jones standard. After the Supreme Court rendered its decision in Flewellen v. Atlanta Cas. Co., 250 Ga. 709, 300 S.E.2d 673 (1983), Maryland Casualty determined that its application form did not comport with the applicable requirements of OCGA § 33-34-5 (b) and consequently paid the Martins an additional $40,000 in settlement of their optional coverage claim. Thereafter, Maryland Casualty brought the present subrogation action against Transport Insurance Company, pursuant to the then existing version of OCGA § 33-34-3 (d)(1). As previously indicated, the present appeal arises from the trial court's grant of summary judgment to Maryland Casualty in that action. Held:
1. In this most unusual variation on the Jones/Flewellen theme, Maryland Casualty contends that its own application was defective, while the opposing party, Transport Insurance Company, contends that the application was in substantial compliance with the applicable statutory requirements, with the result that Maryland Casualty acted as a mere volunteer in paying the additional $40,000 to Mrs. Martin and therefore has no right to be reimbursed for this expenditure. See generally Federated Mut. Ins. Co. v. Northland Ins. Co., 254 Ga. 402, 329 S.E.2d 493 (1985). The statute applicable to the application was Ga.L.1974, p. 113, § 4 (former Code Ann. § 56-3404b (b)), which provided as follows: "Each application for a policy of motor vehicle liability insurance sold in this state must contain separate spaces for the insured to indicate his acceptance or rejection of each of the optional coverages listed in subsection (a) [of this Code section], and no such policy shall be issued in this state unless these spaces are completed and signed by the prospective insured."
Associated Indem. Corp. v. Sermons, 175 Ga.App. 513, 516, 333 S.E.2d 902 (1985).
An examination of Maryland Casualty's application form reveals that it was in substantial compliance with the former Code section. The application consisted of four pages. The first two pages comprised the basic application form. This portion was signed by Mr. Martin at the end of the second page. The second two pages set forth the various available optional coverages, under the heading: "GEORGIA NO-FAULT AUTOMOBILE ADDITIONAL COVERAGES OFFER." This portion of the application was divided into four separate sections. The first pertained to "Additional Personal Injury Protection" and specified as follows: "You have been furnished with the Basic PIP endorsement which provides coverage required by the No-Fault Law. Total aggregate limit provided is for $5,000 per person.... The following options are available to you which provide for higher protection benefits:
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