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Fulton County Judge: Uninsured Motorist Carrier Liable for Umbrella Policy Limit As Well As Uninsured Motorist Coverage

In 2001, Georgia’s uninsured motorist (UM) law was changed to make the limit of automobile coverage the default amount of UM coverage. A Georgia Court of Appeals decision, Abrohams v. Atlantic Mut. Ins. Agency, 282 Ga.App. 176 (2006), held that provision applied to umbrella policies as well.

In August 2007, Carol Thurman was injured in a motor vehicle accident involving Stephen Brown and an unknown driver who cut across traffic. Thurman later filed suit against Brown and “John Doe,” the unknown driver. USAA, Thurman’s UM carrier carrier, undertook the Doe defense. After a two-day trial, a Fulton County jury awarded Thurman $1,370,031. USAA subsequently filed a motion to reduce the verdict to no more than $300,000, the per-person limit of Thurman’s primary policy’s UM benefits. USAA also argued that Thurman’s umbrella policy, which carried a $1 million per occurrence limit, contained no UM coverage.

USAA contended that, under Abrohams, it should be liable for no more than the $15,000 minimum coverage available under the umbrella policy when it was issued in 1989, along with the $300,000 UM benefits contained in the primary policy. The judge disagreed, ruling that under Abrohams, USAA was liable for the full $1 million umbrella policy limit as well as the $300,000 UM coverage. The judge stated that, under applicable law, unless an insured driver had expressly rejected UM coverage being included in an umbrella policy, that policy’s limits must be available for payout even though the insured never signed up for or paid premiums for such coverage. The judge adjusted the award to $1.3 million. USAA has since filed a second motion for new trial or reduction in the verdict which is pending as of this writing.

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

Workers’ Compensation Claimant Not Required to Authorize Ex Parte Communications with Treating Physician

The Georgia Court of Appeals recently issued a ruling which appears inconsistent with common practices in the workers’ compensation setting and held that a claimant is not required, as a condition of receiving benefits, to execute a release authorizing a treating physician to engage in ex parte (i.e. outside of the claimant’s or the claimant’s attorney’s presence) communications with the claimant’s employer. In McRae v. Arby’s Restaurant Group, Inc., 2011 WL 6015797 (Ga.App., Dec. 1, 2011), the claimant sustained a compensable injury, began receiving income benefits, and signed a Form WC-207 authorizing the release of her medical information. The employer’s attorneys subsequently tried to schedule an ex parte consultation with the physician, but the physician declined to meet with them unless they obtained express permission from the claimant. The Board subsequently ordered the claimant to sign a release authorizing her physician to speak with the employer’s attorneys, reasoning that the claimant could informally contact her physician and inquire about any communications made with the employer.

On appeal, the Georgia Court of Appeals noted that the Workers’ Compensation Act provides that a claimant waives her right to privacy regarding related “communications…that the employee has had with any physician” and directs a physician to disclose to the employer “all information and records” related to the employee’s treatment for the injury. The Act also requires a claimant to give the employer a release for “medical records and information” related to the claim. See O.C.G.A. § 34-9-207. The court held that nothing in the Act indicates that the word “information” was intended to extend to ex parte communications.

Additionally, the court compared workers’ compensation claims to medical malpractice lawsuits. In doing so, the court noted the dangers associated with ex parte interviews of physicians, including the potential for unwarranted probing into irrelevant matters, unintended disclosure of sensitive information, and improper influence by defense counsel. Furthermore, unlike a patient who sues for medical malpractice, an injured employee has no choice in whether to participate in the workers’ compensation process. Therefore, the court was especially hesitant to compel a workers’ compensation claimant to authorize such ex parte communications.

It should be noted that the court stopped short of deciding whether an employer is otherwise prohibited from ex parte interviews under the terms of a qualified protective order.

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

At-Fault Driver Distracted by Cell Phone Not Liable for Punitive Damages Absent Evidence of Aggravating Circumstances

The Georgia Court of Appeals recently held that punitive damages are not necessarily warranted where a driver causes a motor vehicle accident while distracted by his or her cell phone. In Lindsey v. Clinch County Glass, Inc., 2011 WL 4057533 (Ga.App. Sep. 14, 2011), the plaintiff sued the defendant for injuries sustained in a collision and sought punitive damages because the defendant admitted that he was looking at his cell phone immediately before the impact. The trial court granted the defendant’s partial motion for summary judgment on the punitive damages claim and the plaintiff appealed. As an initial matter, punitive damages may be awarded only where the defendant’s actions show “willful misconduct, malice, fraud, wantonness, oppression, or that entire want of care which would raise the presumption of conscious indifference to consequences.”

On appeal, the plaintiff pointed to evidence that the defendant frequently used his cell phone while driving although he knew it was dangerous and cited several studies showing that talking on a cell phone while driving is more dangerous than driving while intoxicated. The plaintiff argued that the evidence established a pattern or policy of driving dangerously. The Georgia Court of Appeals disagreed, noting that in cases involving automobile collisions, punitive damages are typically authorized in instances such as excessive speeding or driving while intoxicated, but not when a driver simply violates a rule of the road. Moreover, although the defendant admitted he was distracted by his cell phone, mere negligence, even gross negligence, is not enough to support a claim for punitive damages. In this case, there was no evidence that the defendant was speeding, driving while intoxicated, or that he had a history of distraction-related accidents. The Georgia Court of Appeals clarified that cell phone use does not, without evidence of aggravating circumstances, establish a policy or pattern of dangerous driving. Therefore, the plaintiff was not entitled to punitive damages.

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

Recent Decisions Involving Waiver of Sovereign Immunity for Use of Motor Vehicles

The Georgia Court of Appeals recently addressed a county’s waiver of sovereign immunity for claims arising out of the use of a government vehicle.

In Strength v. Lovett, 2011 WL 2716018 (Ga.App. Jul. 14, 2011), the plaintiffs sued a county sheriff for wrongful death arising out of a fatal collision during a high speed chase involving a sheriff’s deputy. The plaintiffs alleged the deputy acted in reckless disregard of proper police procedures in choosing to pursue a fleeing a suspect at high speed and causing a collision. The trial court denied the sheriff’s motion for summary judgment on grounds of sovereign immunity and the sheriff appealed. Under O.C.G.A. § 36-92-2, a county’s sovereign immunity is waived “for a loss arising out of claims for the negligent use of a covered motor vehicle.” While the sheriff did not dispute that the deputy’s patrol car was a “covered motor vehicle,” he contended that the plaintiffs’ claim was not one for “the negligent use of” the vehicle. Specifically, the sheriff argued that a deputy makes a “negligent use of” a vehicle only when he operates the vehicle in a negligent manner, not when he makes a reckless decision while safely operating the vehicle. The Georgia Court of Appeals disagreed, holding that a claim that an officer acted in reckless disregard of proper procedures in pursuing a fleeing suspect falls within the scope of claims for negligent use of a county-owned motor vehicle. Therefore, the sheriff was not entitled to sovereign immunity.

In Glynn County v. Johnson, 2011 WL 4057437 (Ga.App. Sep. 14, 2011), the plaintiff sued the county alleging he sustained permanent lung injuries after breathing chemicals sprayed by the county’s mosquito control helicopter. The trial court denied the county’s motion to dismiss on grounds of sovereign immunity and the county appealed. The plaintiff argued that the county waived its immunity under O.C.G.A. § 33-24-51 by purchasing liability insurance for the helicopter. That statute provides that sovereign immunity is waived where a county purchases insurance to cover damages “arising by reason of ownership, maintenance, operation, or use of any motor vehicle.” The county argued that its helicopter did not constitute a “motor vehicle” within the meaning of the statute. The Georgia Court of Appeals agreed, holding that “any motor vehicle” refers to a vehicle that “is capable of being driven on the public roads.” Because a helicopter does not fit this definition, there could be no waiver of the county’s sovereign immunity, despite the purchase of insurance for the helicopter.

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

Workers Compensation: After Termination for Cause, Claimant Has Burden to Prove Causal Relation Between Injury and Inability to Find Work

In Veolia Environmental Services v. Vick, 309 Ga.App. 658 (2011), the claimant was injured when he fell off a piece of equipment at work and began receiving TTD benefits until he returned to light duty work. After he was terminated for failing to follow the employer’s drug policy, the claimant sought an award of TPD benefits from the time he returned to light duty until his last day of work, in addition to TTD benefits from his last day of work and continuing. After a hearing, the ALJ denied TTD benefits because the claimant had not made a sincere and diligent effort to find other work. However, the ALJ did award TPD benefits for the requested time period following termination and further concluded that such benefits should continue because the employer had not met its burden to prove a change in condition.

On appeal, the Georgia Court of Appeals noted that if a claimant accepts TPD benefits and does not seek to return to a higher benefit level of TTD, then the lower benefit level of TPD would continue after termination of the light-duty job. Here, the claimant requested and was awarded TPD benefits during the time he returned to light duty and then further sought TTD benefits after termination of his light-duty job. Under such circumstances, the claimant has the burden of proving his entitlement to the higher level of benefits requested after termination. Furthermore, in seeking a resumption of benefits, the burden is on the claimant to show that, after his termination for cause, his inability to secure suitable employment elsewhere was proximately caused by his work-related injury. Therefore, the Court held that because the claimant failed to make a sincere and diligent effort to secure other employment, the claimant could not prove that his inability to find a job was causally related to his injury.

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

Georgia Court of Appeals Revisits Standard of Review in Workers’ Compensation Appeals

In Bonus Stores, Inc. v. Hensley, 2011 WL 1238420 (Ga.App., 2011), an ALJ granted TTD benefits after finding that the claimant had sustained a catastrophic injury. In its award, the ALJ relied on the conclusions of the claimant’s family physician and vocational specialist that the claimant could not perform any jobs in the national economy. On appeal, the appellate division conducted a de novo review of the entire record and noted that other physicians and specialists had more recently concluded that the claimant could work with no or few restrictions and reversed the ALJ’s award of catastrophic designation. The claimant appealed and the superior court found that the appellate division erred by improperly applying a de novo standard of review and that the application of the correct standard required it to uphold the ALJ’s award.

On appeal, the Georgia Court of Appeals noted that pursuant to O.C.G.A. § 34-9-103(a), the ALJ’s findings of fact “shall be accepted…where such findings are supported by a preponderance of competent and credible evidence” and the appellate division is limited to the evidence that was received by the ALJ. However, if after assessing the evidence in the record, the appellate division concludes that the award does not meet the statutes’ evidentiary standards, it may substitute its own alternative findings for those of the ALJ. The appellate division is authorized to draw factual conclusions different from those reached by the ALJ. In reversing the superior court, the Georgia Court of Appeals found that, after weighing the evidence received by the ALJ, the appellate division concluded that the preponderance of evidence did not support a finding of a catastrophic injury. Therefore, the appellate division substituted its own findings for those of the ALJ, as it was authorized to do.

The Court went on to point out that unlike the appellate division, the superior court performs a more limited review. The factual findings of the appellate division, when supported by “any evidence,” are conclusive and binding on the superior court and it may not substitute itself as a fact-finding body in lieu of the appellate division. Therefore, because there was “some evidence” that Claimant’s injury was not catastrophic, the superior court erred in reversing the appellate division.

In a case decided the following day, the Georgia Court of Appeals reaffirmed its holding in Hensley. In Georgia Mount Excavation, Inc. v. Dobbins, 2011 WL 1287902 (Ga.App., 2011), the appellate division reversed an ALJ’s award of TTD benefits and the claimant appealed to the superior court, which concluded that the evidence did not support the decision of the appellate division and reinstated the ALJ’s award. The Georgia Court of Appeals held that because the record contained “some competent evidence” to support the findings of the appellate division, the superior court had no authority to set aside the decision.

As these cases demonstrate, with respect to workers’ compensation appeals, the appellate division has discretion to substitute its own findings for that of the ALJ, whereas the superior court’s review is limited by the highly deferential “any evidence” standard.

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

Entry of Default Judgment Does Not Bar Assertion of Official Immunity

In Cosby v. Lewis, 2011 WL 1018996 (Ga.App., 2011), the parents of a high school student who drowned in a hotel pool during a class trip brought a wrongful death action against the school district and several of its employees. The defendants, who were employees of the high school, served as chaperones for the trip and had left the hotel shortly after checking in to get something to eat. Meanwhile, several students decided to go swimming and one of the students drowned. The student’s parents sued the defendants in their official and individual capacities. As a result of some confusion regarding whether they had been served, the defendants failed to timely file answers. The defendants thereafter filed a motion to dismiss based upon sovereign and official immunity. The trial court dismissed the claims in their official capacities but granted a default judgment against them in their personal capacities, holding that they were not entitled to the “defense” of official immunity.

On appeal, the defendants argued the trial court lacked jurisdiction to enter a default judgment because they were entitled to official immunity. The doctrine of official immunity, also known as qualified immunity, shields public employees from suit when they negligently perform discretionary acts. Official immunity is not a mere defense but rather an entitlement not to be sued that must be addressed as a threshold matter before a lawsuit may proceed. In reversing the trial court, the Georgia Court of Appeals held that because the lawsuit arose from actions the defendants took in their official capacities as employees of the school, the entry of default judgment did not bar the defendants from asserting official immunity. The Court remanded the case back to the trial court to determine whether the defendants’ acts were ministerial or discretionary in nature.

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

Fraud Exception to Statute of Repose for Construction Defects Does Not Apply Where Injury Occurred Outside the Statutory Period

The Supreme Court of Georgia recently held that a homebuilder, who allegedly concealed a construction defect, was shielded by the statute of repose where the plaintiff’s injuries occurred more than eight years after the construction of a faulty deck. Rosenberg v. Falling Water, Inc., 2011 WL 977816 (Ga., 2011).

On March 28, 2002, Rosenberg purchased a home built by Falling Water in 1994. On August 31, 2005, Rosenberg fell and sustained serious injuries when the back deck collapsed. Rosenberg sued Falling Water, alleging it had negligently constructed the deck and committed fraud by hiding the defective construction by using certain bolts that made it appear that the deck was properly attached to the house. Falling Water moved for summary judgment, asserting that Rosenberg’s claims were barred by O.C.G.A. § 9-3-51(a), which prohibits recovery for personal injuries resulting from a construction defect of an improvement to real property more than eight years after “substantial completion of such an improvement.” Rosenberg argued that because Falling Water committed fraud, it should not be allowed to assert the statute of repose defense.

The statute of repose should not be applied to relieve a defendant of liability for injuries which occurred during the period of liability, but which were concealed from the plaintiff by the defendant’s fraud. In other words, the defendant is not allowed to cause the plaintiff to miss the deadline imposed by the statute or repose and then use that same statute to defeat the plaintiff’s otherwise viable action. The Supreme Court of Georgia declined to extend this exception in Rosenberg because the plaintiff was injured years after the statute had expired. Therefore, Rosenberg never had a viable cause of action to pursue. Additionally, Falling Water had taken no action to prevent Rosenberg from discovering a cause of action or to discourage Rosenberg from filing a lawsuit. Under the plain language of the statute, the Court held, Rosenberg’s claims were barred because they accrued more than eight years after the construction was completed.

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

Faulty Workmanship Constitutes “Occurrence” Under Commercial General Liability Policy

The Supreme Court of Georgia recently held that an insured’s faulty workmanship constitutes an “occurrence” within the meaning of the insured’s commercial general liability policy. American Empire Surplus Lines Ins. Co. v. Hathaway Development Comp., Inc., 2011 WL 768117 (Ga., 2011).

In American Empire, Hathaway, a general contractor, sued Whisnant, its plumbing subcontractor, for costs of repairs and damage to surrounding properties caused by Whisnant’s faulty workmanship. After obtaining a default judgment, Hathaway sought payment from American Empire, Whisnant’s insurer. American Empire denied liability, asserting that Hathaway’s claim was not covered under Whisnant’s policy because it did not arise out of an “occurrence,” defined under the policy as “an accident, including continuous or repeated exposure to substantially the same, general harmful conditions.” In granting summary judgment to American Empire, the trial court held that Whisnant’s negligent workmanship could not be deemed an “accident.” The Georgia Court of Appeals reversed, holding that because Whisnant caused damage to surrounding properties, Whisnant’s acts constituted “occurrences” within the meaning of the policy. American Empire appealed.

Because Whisnant’s policy did not define the term “accident,” the Georgia Supreme Court looked to the commonly accepted meaning of the term. When used in an insurance policy, an “accident” is deemed to be “an event happening without any human agency, or, if happening through such agency, an event which, under circumstances, is unusual and not expected by the person to whom it happens.” It also means “an unexpected happening rather than one occurring through intention or design.” Applying this definition, the Court found that policies with similar “occurrence” language provided coverage for “the risk that…defective or faulty workmanship will cause injury to people or damage to other property.” Because Whisnant’s faulty workmanship caused damage to neighboring properties, such acts constituted an “occurrence” under Whisnant’s policy. In affirming the decision of the Court of Appeals, the Supreme Court held that an occurrence can arise where faulty workmanship causes unforeseen damage to other property. The Court also rejected the notion that Whisnant’s acts could not be deemed accidents because they were performed intentionally, holding that a deliberate act, performed negligently, is an accident if the effect is not the intended or expected result.

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

“Regular Use” Provision Bars Coverage for Non-Incidental Use of Borrowed Vehicle

The Georgia Court of Appeals recently held that the “regular use” exclusion in an insured’s automobile insurance policy barred coverage for an accident that occurred while the insured was using a friend’s car. State Automobile Mutual Insurance Co. v. Todd, 2011 WL 753282 (Ga.App., 2011).

In Todd, the insured had an automobile insurance policy that specifically excluded from liability coverage “[a]ny vehicle, other than ‘your covered auto,’ which is: a. owned by you, or b. furnished or available for your regular use.” On August 16, 2003, while driving her friend Ernest Camden’s car, the insured was involved in a collision with another vehicle operated by Steve Purvis. The insured had borrowed Camden’s car to go on vacation and was returning from a nine-day trip when the accident occurred. She had been staying with Camden and did not have her own vehicle, so Camden allowed her to use his car. Because Camden had certain health issues, the insured used his car to run all of his errands in exchange for food and other necessities. Following a divorce earlier that year, the insured’s husband gave her a truck pursuant to a court order, but the insured preferred to drive Camden’s car. At times, the insured parked the car at her house and drove it while Camden was out of town. When asked whether she drove the car daily, the insured replied: “Regularly, but maybe not a daily basis, but regularly.”

As a result of the accident, Purvis’s passenger, Anthony Bonner, sustained injuries and subsequently sued the insured. The insurer filed a declaratory judgment action seeking a ruling that it was not obligated to defend the insured because Camden’s car was available to the insured for her regular use and was thus excluded from coverage. The trial court denied the insurer’s motion for summary judgment.

The Georgia Court of Appeals reversed since the purpose of the “non-owned regular use provision is to cover occasional or incidental use of other cars without the payment of an additional premium, but to exclude the habitual use of other cars, which would increase the risk on the insurance company without a corresponding increase of the premium.” The covered use has also been described as “casual” and “infrequent,” while “regular use” has been held to suggest a “principal (though not necessarily exclusive) use.” Applying this reasoning and definition, the Court held that the insured, by her own admission, regularly used Camden’s car. Therefore, the insurer was not obligated to defend the insured.

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


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