Archive for February, 2011

Georgia Supreme Court Clarifies Statute of Repose

Answering a question certified by the 11th Circuit Court of Appeals, on February 7, 2011 the Georgia Supreme Court overruled Johnson v. Ford Motor Co., 281 Ga. App. 166 (2006) and held that the Statute of Repose, which provides a cutoff for claims against manufacturers of personal property and is codified at O.C.G.A. §51-1-11(b)(2), begins to run when a finished product is sold as new to the intended consumer who is to receive the product and not when the product is being tested or assembled. Campbell v. Altec Indus., Inc., No. S10Q1379 (Ga. Feb. 7, 2011).

The statute defines the period of ultimate repose for any action brought under subsection (b)(1), which imposes liability on a manufacturer when a person is injured because the product was “not merchantable and reasonably suited to the use intended, and its condition when sold is the proximate cause of the injury sustained.” The Court noted that in constructing the language of the statute the General Assembly did not begin the period of repose on the date of the first sale of a product but rather by the date of first sale for use or consumption, thereby indicating that the statute was intended to begin running when the product is in the hands of the end consumer. With this decision, the Court cements the period of ultimate repose within which a right of action must accrue as ten years from the date of the sale of the finished product to the end user.

For more information, please contact Timothy Buckley III, Esq. at (404) 633-9230.

Insurer’s Actual Notice of Accident Did Not Relieve Insured of Obligation to Provide Written Notice of Accident

In Lankford v. State Farm Mut. Auto. Ins. Co., 2010 WL 4723394 (Ga.App., 2010), the Georgia Court of Appeals held that an insured is still required to provide its insurer with timely notice of an accident under the insured’s policy even if the insurer receives prior notice from an unrelated third party. In Lankford, the insured, while driving his employer’s truck, was involved in a collision with Charles Kaucky, who had an automobile insurance policy that provided $50,000 in liability coverage. The insured also had a policy with the same insurer, which provided potential uninsured motorist (UM) coverage in excess of Kaucky’s policy. Three days after the accident, the insured received a letter from the insurer referencing Kaucky’s policy and discussing the insured’s “recent accident.” One year later, after the insured had undergone back surgery, the insured first discussed his injuries with the insurer. Almost two years after the accident, the insured first provided written notice of the accident to the insurer and raised the issue of UM coverage. Soon thereafter, the insured filed suit against the insurer seeking UM coverage. The insurer moved for summary judgment, asserting that it had not received timely written notice under the policy, which required written notice of the accident “as soon as reasonably possible.” The trial court granted summary judgment, holding that the insured had failed to provide the requisite notice or present any facts to justify his delay.

It is well established that where an insured has not demonstrated justification for failure to give notice under the policy, the insurer is not obligated to provide coverage. Although the “as soon as reasonably possible” language affords some leeway in providing notice, Georgia courts have found that a two-year delay constitutes an unreasonable delay as a matter of law. The insured argued that his oral notice to the insurer one year after the accident should have been sufficient. However, the Georgia Court of Appeals also refused to find that one year amounted to a reasonable delay.

The insured also asserted that this claim should not be barred because the insurer had actual notice of the accident, pointing to the fact that he received a letter from the insurer referencing the accident three days later. However, notification by an unrelated third party does not relieve the insured from his separate, contractual obligation to provide notice to the insurer under his own policy. It was only a matter of coincidence that the insured and Kaucky shared the same insurer. All of the correspondence submitted on behalf of the insured prior to the lawsuit referenced Kaucky’s policy without mentioning the insured’s own policy. The insurer would have been entitled to conclude from this correspondence that the insured was a stranger seeking benefits under Kaucky’s policy. In affirming summary judgment, the court held that there is no requirement that an insurer cross-reference the names of all parties involved in an accident to determine whether they have the same
insurer.

For more information, please contact Denny Brown at (404) 633-9230.


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