Georgia Supreme Court Refuses to Allow Bad Injuries Make Bad Law
Justice is Blind but it is Not Stupid
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Posted on February 22, 2022 by Barry Zalma
Dorothy Wright and her grandchildren, Cameron Costner and Layla Partridge, (collectively, the “Decedents”) were killed when their vehicle was struck by a stolen vehicle that was being chased by College Park, Georgia Police Department officers. At the time of the accident, the City of College Park had an insurance policy provided by Atlantic Specialty Insurance Company (“Atlantic”), which provided coverage for negligent acts involving the City’s motor vehicles up to $5,000,000 but also included immunity endorsements which say that Atlantic has no duty to pay damages “unless the defenses of sovereign and governmental immunity are inapplicable.” In Atlantic Specialty Insurance Company v. City Of College Park et al., No. S21G0482, Supreme Court of Georgia (February 15, 2022) the Georgia Supreme Court analyzed the policy and state statutes and refused to allow the sadness of the great loss of life to change the law of sovereign immunity.
FACTS
Joi Partridge, Floyd Costner, and Douglass Partridge (collectively, the “Plaintiffs”) filed a lawsuit against the City, raising claims of negligence and recklessness resulting in the wrongful deaths of the three Decedents, to which the City raised sovereign immunity as a defense. The Plaintiffs assert that the insurance policy limit is $5,000,000 for the three deaths, while Atlantic maintains that the policy limit is capped at $700,000 under the relevant statutory scheme and the terms of the City’s policy.
Pursuant to OCGA § 36-92-2 (a) (3), the sovereign immunity of local government entities is automatically waived up to $700,000, regardless of whether the City has a liability insurance policy. However, OCGA § 36-92-2 (d) (3) provides that “[a] local government entity [that] purchases commercial liability insurance in an amount in excess of the [statutory minimum] waiver” increases the waiver to the extent of the excess insurance.
Atlantic intervened in the case to litigate the limit of the insurance policy. The trial court ruled that the policy limit was $5,000,000, and the Court of Appeals affirmed.
At the time of the accident, the City held an insurance policy (the “Policy”) issued by Atlantic. The Policy included business auto and excess liability coverage, among other things. The limits under the Policy are $1,000,000 under the business auto section and $4,000,000 under the excess liability section. Both sections of the Policy, however, contained endorsements entitled “Georgia Changes – Protection of Immunity,” which we will refer to as the “Immunity Endorsements.” The business auto section’s Immunity Endorsement provides “We have no duty to pay damages or any ‘covered pollution cost or expense’ on your behalf under this policy unless the defenses of sovereign and governmental immunity are inapplicable to you.”
The Plaintiffs filed suit against the City in the State Court of Fulton County (“trial court”), asserting claims of negligence and recklessness in connection with the wrongful deaths of the Decedents. The City answered, raising the defense of sovereign immunity.
Plaintiffs filed a motion for partial summary judgment, seeking a ruling that the relevant Policy limit is $5,000,000. They contended that, by purchasing the Policy, the City waived its sovereign immunity up to $5,000,000. The Plaintiffs also asserted that the Immunity Endorsements are void because they are contrary to public policy.
The trial court issued a summary judgment that the relevant Policy limit is $5,000,000. The court held that the Immunity Endorsements improperly attempted to “contract around” the sovereign immunity waiver “requirements” of OCGA §§ 36-92-2 and 33-24-51. Atlantic appealed. The Court of Appeals affirmed the trial court’s ruling.
DISCUSSION
The Georgia Constitution provides municipalities performing their governmental functions with immunity from civil liability, which only the General Assembly (or the Constitution itself) may waive. In OCGA § 36-33-1 (a), the General Assembly reiterated that sovereign immunity for municipalities is the State’s public policy, while also expressly providing several narrow waivers. Where there is no insurance coverage, there is no waiver of sovereign immunity. In 2005 the General Assembly established an automatic waiver of sovereign immunity for losses arising out of claims for the negligent use of covered motor vehicles up to certain prescribed limits, including $700,000 for the bodily injury or death of two or more persons in a single occurrence.
The enactment of the automatic immunity waiver in 2002 changed only the analysis with respect to a loss under the applicable automatic waiver limit, as to which the local government entity’s purchase of liability insurance is irrelevant. Because of the automatic waiver, there is no dispute in this case that the City’s sovereign immunity was waived up to $700,000. But to increase the waiver of sovereign immunity beyond $700,000, the court must determine whether the City, in its discretion, purchased commercial liability insurance in excess of $700,000 that covers the claim at issue.
Insurance policies do not normally provide blanket coverage for any and all claims. Insurance policies are contracts that specify what types of losses are covered and to what monetary limits, and the premiums paid by policyholders are normally determined by assessing the risk that the insurer assumes for the specific claims covered.
The purchase of insurance providing coverage in excess of the automatic waiver limits, thus further waiving sovereign immunity, remains a decision left to the discretion of local government entities. Under current Georgia law, it is not against public policy for local government entities to decline to purchase liability insurance or to purchase liability insurance that does not cover any and all losses resulting from the use of their motor vehicles. Thus, the Immunity Endorsements do not contravene public policy.
To determine whether the insurance contract between the City and Atlantic provides more than $700,000 of coverage for the Plaintiffs’ claims, the Immunity Endorsement to the Policy’s business auto section states in relevant part: “We have no duty to pay damages … on your behalf under this policy unless the defenses of sovereign and governmental immunity are inapplicable to you.” These endorsements do not exclude claims for damages to which the defenses of sovereign and governmental immunity do not apply. The defenses of sovereign and governmental immunity are clearly not applicable to losses from the Plaintiffs’ claims up to $700,000. Under a plain reading of the endorsements, the insurance that the City purchased does not cover claims for damages to which the defenses of sovereign and governmental immunity do apply.
The Immunity Endorsements do not render the Policy’s higher- than-$700,000 limits meaningless. For example, claims involving police chases brought under 42 USC § 1983 would not be subject to sovereign immunity and thus could be covered up to the Policy’s aggregate maximum limit of $5,000,000.
These types of claims are undoubtedly less likely to occur than claims involving the general use of the City’s covered motor vehicles – but presumably the premiums paid for that additional coverage would take that factor into account.
In light of the Immunity Endorsements, the City did not purchase insurance coverage for the Plaintiffs’ asserted claims above the applicable automatic sovereign immunity waiver of $700,000. As a result the judgment was reversed and the plaintiffs recovery was limited to the statutory waiver.
ZALMA OPINION
Statutory and insurance policy interpretation requires a court to read the full statute and the entire wording of the insurance policies before making a decision and must ignore the extent of the injuries of the people suing the public entity. Georgia waived sovereign immunity up to $700,000, whether insured or not. Since the city had sovereign immunity over $700,000 the trial court and court of appeal did not have the right to change the policy wording or the statute because the injuries were so severe. Justice is blind but not stupid. Justice requires application of the words of statutes and contracts fairly and as written.
© 2022 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.
He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business.
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You may find interesting the podcast “Zalma On Insurance” at https://anchor.fm/barry-zalma; you can follow Mr. Zalma on Twitter at; you should see Barry Zalma’s videos on https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg/featured; or videos on https://rumble.com/zalma. Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims–library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/
Notice of Claim Later than 60 Days After Expiration is Too Late
Post 5089
Injury at Massage Causes Suit Against Therapist
Read the full article at https://lnkd.in/gziRzFV8, see the full video at https://lnkd.in/gF4aYrQ2 and at https://lnkd.in/gqShuGs9, and at https://zalma.com/blog plus more than 5050 posts.
Hiscox Insurance Company (“Hiscox”) moved the USDC to Dismiss a suit for failure to state a claim because the insured reported its claim more than 60 days after expiration of the policy.
In Mluxe Williamsburg, LLC v. Hiscox Insurance Company, Inc., et al., No. 4:25-cv-00002, United States District Court, E.D. Missouri, Eastern Division (May 22, 2025) the trial court’s judgment was affirmed.
FACTUAL BACKGROUND
Plaintiff, the operator of a massage spa franchise, entered into a commercial insurance agreement with Hiscox that provided liability insurance coverage from July 25, 2019, to July 25, 2020. On or about June 03, 2019, a customer alleged that one of Plaintiff’s employees engaged in tortious ...
ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Posted on June 2, 2025 by Barry Zalma
Post 5087
See the full video at and at
Read the full article and the full issue of ZIFL June 1, 2025 at https://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-06-01-2025.pdf
Zalma’s Insurance Fraud Letter – June 1, 2025
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ZIFL – Volume 29, Issue 11
The Source for the Insurance Fraud Professional
Read the full article and the full issue of ZIFL June 1, 2025 at https://lnkd.in/gTWZUnnF
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at ...
No Coverage if Home Vacant for More Than 60 Days
Failure to Respond To Counterclaim is an Admission of All Allegations
Post 5085
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In Nationwide Mutual Insurance Company v. Rebecca Massey, Civil Action No. 2:25-cv-00124, United States District Court, S.D. West Virginia, Charleston Division (May 22, 2025) Defendant Nationwide Mutual Insurance Company's (“Nationwide”) motion for Default Judgment against Plaintiff Rebecca Massey (“Plaintiff”) for failure to respond to a counterclaim and because the claim was excluded by the policy.
BACKGROUND
On February 26, 2022, Plaintiff's home was destroyed by a fire. At the time of this accident, Plaintiff had a home insurance policy with Nationwide. Plaintiff reported the fire loss to Nationwide, which refused to pay for the damages under the policy because the home had been vacant for more than 60 days.
Plaintiff filed suit ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
A Heads I Win, Tails You Lose Story
Post 5062
Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...