Georgia Insurers Insolvency Pool v. Carla R. Dubose ( 2019 )

SECOND DIVISION
MILLER, P. J.,
BROWN and GOSS, JJ.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules
March 7, 2019
In the Court of Appeals of Georgia
A18A1531. GEORGIA INSURERS INSOLVENCY POOL v. GS-057
DUBOSE.
A18A1532. DUBOSE v. GEORGIA INSURERS INSOLVENCY GS-058
POOL.
GOSS, Judge.
After she was injured in an automobile collision while in the scope of her
employment, Carla DuBose filed for workers’ compensation benefits. After her
employer’s workers’ compensation insurer became insolvent, the Georgia Insurers
Insolvency Pool (the “Pool”) took over her claim. The Pool then filed the instant
declaratory judgment action asking the trial court to declare that the exhaustion
provision of the Georgia Insurer’s Insolvency Pool Act (the “Pool Act”), OCGA § 33-
36-14, required that any proceeds that DuBose received from other solvent insurance
carriers (including settlements from the automobile liability insurance for the other
driver and her own uninsured/underinsured policies, as well as benefits received
under her disability policy) should reduce her claim against the Pool by the full
amounts received. The trial court denied the Pool’s motion for summary judgment,
holding that OCGA § 33-36-14 (a) limited “the offset to money recovered for lost
wages and medical expenses – ‘claims’ that could be made under the workers’
comp[ensation] statute[.]” The trial court further held that an issue of fact existed as
to the purpose of the insurance proceeds DuBose had already received. We granted
the parties’ cross-motions for interlocutory appeal.
In Case No. A18A1531, the Pool appeals from the trial court’s order, arguing
that the Pool is entitled to offset any money recovered by DuBose under policies of
solvent insurers. The Pool argues, alternatively, that the trial court erred in concluding
that a fact issue precluded summary judgment. In Case No. A18A1532, DuBose filed
a cross-appeal, contending that the trial court erred to the extent that the Pool is
entitled to any offset from proceeds she received from other insurers. Because we
conclude that the language of the Pool Act’s exhaustion provision at OCGA § 33-36-
14 (a) does not require solvent and insolvent carriers provide identical coverage, we
reverse the trial court’s denial of the Pool’s motion for summary judgment in part,
2
vacate it in part and remand the case for further proceedings consistent with this
opinion.
Summary judgment is appropriate when there is no genuine issue of
material fact and the movant is entitled to judgment as a matter of law.
In reviewing the grant or denial of a motion for summary judgment, we
apply a de novo standard of review, and we view the evidence, and all
reasonable conclusions and inferences drawn from it, in the light most
favorable to the nonmovant.
(Footnote omitted.) Grizzle v. Norsworthy, 292 Ga. App. 303, 303-304 (664 SE2d
296) (2008).
The relevant facts are not in dispute. This case arose from a motor vehicle
collision on June 20, 2014, between Carla DuBose and Kimberly Dyar. DuBose was
injured when her vehicle was struck by a vehicle driven by Dyar.
At the time of the collision, DuBose was employed by Compassionate Care
Hospice (“Compassionate”) and she was working within the course and scope of her
employment. DuBose then filed a claim with the State Board of Workers’
Compensation. Compassionate had a workers’ compensation policy issued by
Lumberman’s Underwriting Alliance (“Lumberman’s”). On May 23, 2016,
Lumberman’s was placed into liquidation, with all of its Georgia claims transferred
3
to the Pool by the liquidator, and the Pool undertook responsibility for the
administration of Lumberman’s claims. These claims included DuBose’s workers’
compensation claim.
DuBose also filed a claim against Dyar, the driver responsible for the collision.
Dyar was insured by Geico Insurance Company (“Geico”). On December 17, 2014,
DuBose settled with Geico for the automobile liability insurance policy limits of
$250,000.
At the time of the collision, DuBose had additional insurance under two
uninsured/underinsured motorist coverage policies and two personal disability
policies issued by State Farm Insurance Company (“State Farm”). DuBose settled
with State Farm for $200,000 under the uninsured/underinsured motorist carrier
policies. State Farm denied her coverage as to one of the disability policies; however,
she is receiving $540 per month for up to 58 months under the other personal
disability policy.1
Case No. A18A1531
1
The sparse appellate record does not indicate whether the State Farm
disability policy is providing payments to DuBose for claims related to the same
automobile accident at issue in the instant case. Copies of these insurance policies are
not in this record.
4
1. In A18A1531, the Pool argues that the trial court erred by limiting the offset
rights of the Pool under OCGA § 33-36-14 to amounts received by DuBose specific
to lost wages and medical expenses. The Pool claims that its obligations do not arise
unless and until the amounts owed under the workers’ compensation claim exceed the
amount paid out by all other solvent insurers, regardless of what coverage was
provided by the solvent policies. Because we conclude that OCGA § 33-36-14 (a)
does not require the policies of the solvent and insolvent carriers to provide identical
coverage and the Pool is entitled to offset the amounts recovered from the Geico
automobile liability policy and the State Farm uninsured/underinsured motorist
policies, we reverse the trial court’s denial of the Pool’s motion for summary
judgment in part.
At the outset, we note that the interpretation of a statute is a question of law,
which this Court “review[s] de novo on appeal.” (Punctuation omitted.) Brantley
Land & Timber, LLC v. W&D Investments, Inc., 316 Ga. App. 277, 279 (729 SE2d
458) (2012). When interpreting any statute, we begin our analysis with “familiar and
binding canons of construction.” Holcomb v. Long, 329 Ga. App. 515, 517 (1) (765
SE2d 687) (2014). In considering the meaning of a statute, our charge as an appellate
5
court is to “presume that the General Assembly meant what it said and said what it
meant.” (Punctuation and footnote omitted.) Id. Accordingly,
we must afford the statutory text its plain and ordinary meaning,
consider the text contextually, read the text in its most natural and
reasonable way, as an ordinary speaker in the English language would,
and seek to avoid a construction that makes some language mere
surplusage.
(Punctuation and footnotes omitted.) Harris v. Mahone, 340 Ga. App. 415, 417-418
(1) (797 SE2d 688) (2017). Accord Oxendine v. Comm’r of Ins. of N. C., 229 Ga.
App. 604, 607 (1) (a) (494 SE2d 545) (1997).
The Georgia Insurers Insolvency Pool is a non-profit legal entity created by the
Georgia General Assembly and governed by the Pool Act, OCGA § 33-36-1 et seq.
OCGA § 33-36-6. The Pool provides a limited safety net for insurers that experience
liquidation pursuant to the “Insurers Rehabilitation and Liquidation Act,” OCGA §
33-37-1 et seq. When an insurance company is placed into liquidation, all existing
claims of the insolvent carrier are transferred to the Pool by the liquidator and the
Pool undertakes responsibility for the handling and administration of those claims in
keeping with the Pool Act. OCGA § 33-36-9. The Pool then steps into the shoes of
the insolvent insurer: “The Pool shall be deemed the insurer only to the extent of its
6
obligation on the covered claims and to such extent, subject to the limitations
provided in this chapter, shall have all rights, duties, and obligations of the insolvent
insurer. . . .” OCGA § 33-36-9. The Pool is then “responsible for the investigation,
adjustment, compromise, settlement, and payment of covered claims; for the
investigation, handling, and denial of noncovered claims; and for the management
and investment of funds administered by the pool.” OCGA § 33-36-2.
At issue in the instant case is the interpretation of the exhaustion of other
insurance and set-off provision of the Pool Act, OCGA § 33-36-14. Under this
provision, a claimant is required to exhaust certain sources of insurance coverage
before seeking any payment of his or her claim from the insolvency pool. OCGA §
33-36-14 (a) provides:
any person having a claim against a policy or an insured under a policy
issued by an insolvent insurer, which claim is a covered claim2 and is
2
The Pool Act defines a “covered claim” as “an unpaid claim which: (i) [a]rises
out of a property or casualty insurance policy issued by an insurer which becomes an
insolvent insurer . . .” and (ii) [i]s within any of the classes of claims under
subparagraph (B) of this paragraph.” OCGA § 33-36-3 (4) (A) (Emphasis supplied.)
Subparagraph (B) lists several types of claims that can be covered, including “[a]
claim under a liability or workers’ compensation insurance policy when either the
insured or third-party claimant was a resident of the state at the time of the insured
event.” OCGA § 33-36-3 (4) (B) (v). “Property and casualty insurance policy” is
broadly defined, but some disability claims are excluded. OCGA § 33-36-3 (11) (B).
7
also a claim within the coverage of any policy issued by a solvent
insurer, shall be required to exhaust first his or her rights under such
policy issued by the solvent insurer. The policy of the solvent insurer
shall be treated as primary coverage and the policy of the insolvent
insurer shall be treated as secondary coverage and his or her rights to
recover such claim under this chapter shall be reduced by any amounts
received from the solvent insurers.
(Emphasis supplied).
(a) OCGA § 33-36-14 (a)’s use of the word “claim.”
Interpreting OCGA § 33-36-14 (a), we find that before a policy issued by a
solvent insurer may be deemed primary, two conditions must be met. First, the
claimant must “hav[e] a claim against a policy or an insured under a policy issued by
an insolvent insurer,” which is a “covered claim” under the policy of the insolvent
insurer; and second, “[that] which claim [must] also [be] a claim within the coverage
of any policy issued by a solvent insurer.” OCGA § 33-36-14 (a). As is more
thoroughly discussed in Division (1) (b), once a policy issued by a solvent insurance
Workers compensation insurance falls within the definition of “casualty insurance
policy.” See OCGA § 33-36-3 (11) (B); OCGA § 33-7-3 (2).
8
company is deemed primary, the claimant’s rights to recover “shall be reduced by any
amounts received from the solvent insurers.” OCGA § 33-36-14 (a).
The Pool Act does not expressly define the term “claim.” The Pool argues that
because DuBose’s personal injury and disability claims arose from the same collision,
the Pool’s obligation for workers’ compensation benefits should be offset by
DuBose’s recovery under the other, solvent, insurance policies. DuBose contends, on
the other hand, that “claim” should be interpreted more narrowly to include only
“claims for the types of damages that are the Pool’s responsibility.” DuBose argues
that her workers’ compensation claim is not a “claim within the coverage” of the
other solvent policies in this case because it is not under an insurance policy that
covers the same liability and risks that are covered by the policies of the solvent
insurers. Thus, DuBose argues, because at least some of the damages covered by the
benefits paid by solvent insurers involve damages not available under the workers’
compensation system, “an offset should be allowed only to the extent those payments
duplicate payments for which the Pool would have been responsible.”
Although neither the Pool Act nor Georgia case law has addressed the meaning
of “claim” in the exhaustion provision at OCGA § 33-36-14, other jurisdictions have
done so. All fifty states have enacted similar guaranty statutes to protect the insured
9
of insolvent insurance companies from “suffering the hardship of uncompensated
losses.” (Citation omitted.) Mosier v. Oklahoma Prop. and Cas. Ins. Guar. Ass’n, 890
P.2d 878, 880 (Okla. 1995). Accordingly, we look to case law from other states
interpreting similar laws for guidance. See, e. g., Smith v. Stewart, 291 Ga. App. 86,
92 (1) (a), n. 7 (660 SE2d 822) (2008) (“Because Georgia law on defamation claims
. . . is relatively underdeveloped, the parties rely heavily on the laws of other states.
. . . On those issues that have not been fully addressed in Georgia, we also look to the
laws of other states and the federal courts as persuasive authority”).
In Bird v. Norpac Foods, Inc., 934 P.2d 382 (325 Or. 55) (1997), the Supreme
Court of Oregon reviewed the relationship between a “claim” under an insurance
policy against a solvent insurer and a “covered claim” under an insurance policy
against an insolvent insurer, the same terms used in OCGA § 33-36-14 (a), and
concluded that the “legislature intended that the word ‘claim’ refer simply to a
generic assertion of a right to property or money arising out of a common injurious
10
event.” (Footnote omitted.) Id at 63-64.3 The Oregon Supreme Court further
explained that
any ‘claim’ against a solvent insurer arising out of a particular injury,
without regard to the operative facts or the source of the legal right that
would entitle a claimant to a recovery, must be exhausted before that
claimant may pursue a ‘covered claim’ against an insolvent insurer
arising out of the same injury. In light of the legislature’s overarching
goal of ensuring that [the guaranty association] remain the carrier of last
resort, . . . we conclude that [the claimant’s] claim for workers’
compensation benefits is logically indistinguishable from a tort claim
against a solvent insurer.
(Citation omitted.) Id. Similarly, Georgia’s Pool Act does not distinguish between a
workers’ compensation claim and a tort claim. There is nothing in the plain language
of the Pool Act to indicate that its use of the word “claim” is restricted to the same
type of coverage for which the Pool is responsible.
Decisions by other states also support the Pool’s contention that the coverage
provided by the solvent carrier does not have to be the same type of coverage
3
Oregon’s “[p]riority of claims” statute provides, in relevant part, “[a]ny
person who has a claim under an insurance policy against an insurer other than an
insolvent insurer which would also be a covered claim against an insolvent insurer
must first exhaust the remedies under such policy[.]” (Emphasis supplied.) O. R. S.
§ 734.640.
11
provided by the insolvent carrier. In Mississippi Ins. Guaranty Assoc. v. Blakeney, 54
So. 3d 203, 206 (II) (Miss. 2011), the Supreme Court of Mississippi interpreted a
provision similar to OCGA § 33-36-144 to conclude that the Mississippi Insurance
Guaranty Association (“MIGA”) could offset the amounts paid to a claimant by other
solvent insurance policies before it was liable to pay for her claims under her
insolvent workers’ compensation carrier. The claimant in Blakeney was involved in
an automobile accident during the course of her employment. She collected the policy
limits of the adverse driver’s liability insurance policy and settled with her employer’s
underinsured/uninsured insurance policy, and then began receiving workers’
compensation benefits from her employer’s workers’ compensation carrier. When her
4
The relevant portion of the Mississippi Insurance Guaranty Association Act
provides that
Any person having a claim against an insurer under any provision in an
insurance policy other than a policy of an insolvent insurer, which is
also a covered claim, shall be required to exhaust first his right under
such policy. Any amount payable on a covered claim under this article
shall be reduced by the amount of any recovery under such insurance
policy.
Miss. Code. Ann. § 83-23-123 (1).
12
workers’ compensation carrier was deemed insolvent, MIGA took over that claim. Id.
at 204. The Mississippi Supreme Court held that MIGA was entitled to offset the
amounts paid by the other insurance policies per the clear language of the exhaustion
provision of the guaranty statute.5 Id. at 206-207. See also California Ins. Guarantee
Assoc. v. Workers’ Compensation Appeals Board, 112 Cal. App. 4th 358 (5
Cal. Rptr. 3d 127) (2003) (the California Insurance Guarantee Association was entitled
to offset a claimant’s workers’ compensation benefits being paid by the guaranty
association by amounts the claimant had received from an adverse driver’s liability
insurance and from the claimant’s own uninsured/underinsured motorist carrier).
Based upon the above, we conclude that the language of OCGA § 33-36-14 (a)
means that the insurance policies issued by Geico, as Dyar’s automobile liability
insurance carrier, and by State Farm, as uninsured/underinsured motorist coverage
carrier, are primary to the Pool coverage as they have paid claims to DuBose within
the coverage of these policies arising from this collision.
5
DuBose claims that persuasive authority from Mississippi is negated because
its workers’ compensation laws differ from Georgia’s. However, we conclude that the
Pool’s rights in the instant case are not based in the workers’ compensation statute,
but instead, are based solely on the language of the Pool Act, OCGA § 33-36-14. See,
e. g., Mississippi Guaranty Assn., 54 So. 3d at 208 (“We find no connection between
a comp carrier’s Section 71-3-71 subrogation rights and the [guaranty association]
Act’s exhaustion provision”).
13
(b) The Pool Act’s Exhaustion Provision, OCGA § 33-36-14 (a).
The Pool next argues that the trial court erred in limiting the offset rights of the
Pool under OCGA § 33-35-14 to amounts received by DuBose specific to lost wages
and medical expenses. We agree.
As originally enacted, the exhaustion provision in the Pool Act provided, in
pertinent part, that “any person . . . having a claim against his insurer under any
insolvency provision contained in his insurance policy, which claim arises out of the
insolvency of a participating insurer, shall be required to exhaust first his rights under
the policy; and his rights to recover such claim [under the Pool Act] shall be reduced
accordingly.” (Emphasis supplied.) Ga. Laws 1970, p. 700, §11. In 1989, however,
the above-quoted exhaustion provision was amended and re-written to exhaust claims
“within the coverage of any policy issued by a solvent insurer[.]” (Emphasis
supplied.) Ga. Laws 1989, p. 74, §8. It was again revised in 2005, and currently reads
that a claimant’s “rights to recover such claim under this chapter shall be reduced by
any amounts received from the solvent insurers.” (Emphasis supplied.) OCGA § 33-
36-14 (a) (Ga. Laws 2005, Act 108, §20). In addition, the 2005 amendment added
subsection (c) to OCGA § 33-36-14, which provides that “[t]o the extent that the
pool’s obligation is reduced by application of this Code section, the liability of the
14
person insured by the insolvent insurer’s policy for the claim shall be reduced in the
same amount.” OCGA § 33-36-14 (c).
The General Assembly has amended the exhaustion provision, OCGA § 33-36-
14 (a), on multiple occasions, expanding it to include the exhaustion of all applicable
insurance coverages. See, e. g., G & MSS Trucking, Inc. v. Rich, 224 Ga. App. 130,
132-133 (2) (479 SE2d 761) (1996) (trial court erred by failing to reduce the amount
of claimant’s judgment against the Pool by the amount of medical expenses he had
already received from his own carrier under medical payments coverage). The
language of OCGA § 33-36-14 (a) allows the Pool to offset claims that are “within
the coverage of any policy issued by the solvent insurer.” (Emphasis supplied.)
OCGA § 33-36-14 (a). The term “any policy” clearly expands the possibilities of
policies to offset, rather than to restrict them.
Based upon the above, we find that the trial court in the instant case erred by
limiting the offset rights of the Pool under OCGA § 33-36-14 (a) to amounts received
by DuBose specific to lost wages and medical expenses. We conclude that the
language of OCGA § 33-36-14 (a) does not require that the policy issued by the
insolvent carrier under which the claim against the Pool arises has to be for the same
type of coverage as provided by the solvent insurer’s policy. Further, the plain
15
language of OCGA § 33-36-14 (a) does not require that the amount of offset must be
for the “same claim” or for amounts paid by a solvent carrier that are also at issue
under the insolvent carrier’s policy underlying the claim against the Pool.
The Pool is a statutorily created non-profit entity intended to be a safety net for
those whose insurers go out of business. OCGA § 33-36-6 (a). All expenses incurred
by the Pool in resolving the claims of an insolvent carrier are borne by the
policyholders of member insurers of the Pool. OCGA §§ 33-36-5; 33-36-7.1. As a
result, guaranty associations have been viewed by courts as a guarantor of last resort,
providing benefits only when there is no other insurance available. See Bird, 934 P.2d
at 387 (“By protecting claimants and insureds from ‘financial loss’ resulting from the
insolvency of insurers, the legislature did not thereby necessarily intend that
claimants receive the exact recovery that they would have received from a solvent
insurer, to the detriment of the legislative goal of making [the guaranty association]
the insurer of ‘last resort’”).6
6
DuBose argues that Georgia has a “strong public policy of complete
compensation[.]” However, there is no language in the Pool Act that demonstrates an
intent that an insured be fully and completely compensated under the policy of an
insolvent insurer, as suggested by DuBose. In fact, it is clear that the General
Assembly has not embraced that public policy in the current version of the Pool Act.
Although a former version of the Pool Act provided that it was enacted as “a remedy
for covered claims under property and casualty insurance policies when the insurer
16
(c) We next address how our holding applies to the insurance policies that
DuBose has received payments from in the instant case. It is clear from the record that
the settlements that DuBose received from the adverse drivers’ Geico automobile
liability policy and her State Farm uninsured/underinsured motorist coverage arise
from the automobile collision from which her workers’ compensation claim arose.7
has become insolvent and is unable to perform its contractual obligations[,]” OCGA
§ 33-36-2 (Ga. L. 1987, p. 3, §33), the General Assembly deleted that language in
2005. See Ga. L. 2005, p. 572, §11.
7
We note that the appellate record is silent as to whether DuBose settled for
the policy limits available under the State Farm automobile underinsured/uninsured
motorist coverage or for an amount less than the policy limits. However, this
distinction does not matter because the language of the Pool Act’s exhaustion
provision clearly states that the Pool is entitled to offset only the “amount received
from the solvent insurers.” OCGA § 33-36-14 (a). See G & MSS Trucking, Inc., 224
Ga. App. at 132-133 (2) (Under the Pool Act’s exhaustion provision, the “trial court
should have reduced the amount of medical payment benefits actually received from
the final judgment”). See, e. g., Hasemann v. White, 686 N.E.2d 571 (177 Ill. 2d 414)
(1997) (outlining the three different approaches that states have adopted when
deciding how a claimant “exhausts” his or her rights under another applicable policy).
Under the clear language of the Pool Act’s exhaustion provision, which allows for an
offset of only the amounts actually received by the claimant, it is clear that Georgia
has adopted the approach to exhaustion also adopted by, inter alia, Mississippi and
Michigan courts. This approach concludes that a claimant who settles with the solvent
carrier for less than the policy limits has exhausted his rights and that the guaranty
fund’s liability is offset by the amount of the settlement received, provided that it was
reached in good faith. See e. g., Watts v. Michigan Dept. of State, 394 Mich. 350, 357
(231 NW2d 45) (1975); Blakeney, 54 So. 3d at 209-210 (IV) (Miss. 2011).
17
Accordingly, we reverse the trial court’s denial of summary judgment to the Pool as
it pertains to its ability to offset the money DuBose received under these policies.
However, the sparse record before us does not make clear whether the money
received by DuBose from the State Farm disability policy is to compensate for losses
connected with the automobile collision at issue in the instant case. Accordingly, we
remand the case to the trial court for further proceeding to determine whether the
claims as to the State Farm disability policies arise from the same collision as
DuBose’s workers’ compensation claim and whether any such claims are within the
coverage of such disability policies pursuant to OCGA § 33-36-14 (a). The trial court
should proceed consistent with this opinion as to any claims for offset as between the
State Farm disability policies and the Pool coverage.
2. As a result of our holding in Division 1 of this opinion, we need not address
the Pool’s remaining enumeration.
Case No. A18A1532
3. In her cross-appeal in Case No. A18A1532, DuBose contends that the Pool
is not entitled to any offset for money she received from various automobile liability
policies and disability policies because her workers’ compensation claim is a separate
18
“claim” under the language of the Pool Act. As a result of our holding in Division 1,
we need not address her enumeration.
Judgment reversed in part and vacated in part, and case remanded with
direction. Miller, P. J., and Brown, J., concur.
19