Opinion
Case No. 4:01cv223-SPM
September 12, 2002
ORDER ON MOTION FOR SUMMARY JUDGMENT
THIS CAUSE comes for consideration upon Plaintiff TIG Premier Insurance Company's Motion for Summary Judgment and Defendants Randy Haltiwanger and Bruce Middleton's responses thereto. For reasons set forth below, I will grant Plaintiff TIG Premier Insurance Company's Motion for Summary Judgment.
I. FACTS/PROCEDURAL HISTORY
Plaintiff TIG Premier Insurance Company ("TIG") issued an automotive liability policy to Defendant Bruce Middleton ("Middleton") in the State of Georgia on October 9, 1998. The policy states as follows, in relevant part:
We will pay damages for "bodily injury" . . . for which any "insured" becomes legally responsible because of an auto accident. Damages include prejudgment interest awarded against the "insured." We will settle or defend, as we consider appropriate, any claim or suit asking for these damages. In addition to our limit of liability, we will pay all defense costs we incur. Our duty to settle or defend ends when our limit of liability has been exhausted. We have no duty to defend any suit or settle any claim for "bodily injury" . . . not covered under this policy. . . .
The limit of liability shown in the Declarations for this coverage is our maximum limit of liability for all damages resulting from any one auto accident. This is the most we will pay regardless of the number of:
1. "Insureds";
2. Claims made;
3. Vehicles or premiums shown in the Declarations; or
4. Vehicles involved in the auto accident.
Policy Agreement, p. 2 and 4. The policy defines bodily injury as "bodily harm, sickness or disease, including death that results." The Declarations page limits bodily injury liability to $250,000.00 per person, and $500,000 per accident.
On the same day the TIG issued the policy to Middleton, Middleton was involved in a one-car accident. At the time of the accident, Middleton was the driver of a vehicle, and Defendant Randy Haltiwanger's ("Haltiwanger") wife, Deborah Haltiwanger, was a passenger. As a result of the accident, Haltiwanger's wife suffered severe and permanent injuries.
On March 12, 1999, Haltiwanger's wife negotiated a settlement in the amount of $250,000 and executed a full and complete release of TIG and Middleton. The release states that Haltiwanger's wife releases TIG and Middleton "to the extent of the $250,000 policy limits provided by [TIG] on behalf of [Middleton] . . . and specifically does not release any claims that [Haltiwanger] . . . has as a result of the injuries sustained by [Haltiwanger's wife] on October 9, 1998." Approximately one year later, on March 6, 2000, Haltiwanger filed a derivative action against Middleton seeking damages for loss of consortium resulting from his wife's injuries. In response, Middleton asked TIG to defend and indemnify him in a related action in Jefferson County Circuit Court, Haltiwanger v. Middleton, Case No. 00-106 CA.
II. STANDARD OF REVIEW
Summary judgment is appropriate only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see Southern Solvents, Inc. v. New Hampshire Ins. Co., 91 F.3d 102, 104 (11th Cir. 1996). The moving party bears the burden of showing that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Southern Solvents, Inc., 91 F.3d at 104. Rule 56(e) requires the non-moving party to go beyond the allegations raised in the pleadings; by affidavits, deposition testimony, and the like, the non-moving party must designate specific facts showing that there is a genuine issue for trial. Fed.R.Civ.P. 56(e); Celotex, 477 U.S. at 324. Since the movant bears the burden of proof, the district court typically resolves all reasonable doubts about facts in favor of the nonmovant and draws all justifiable inferences from the underlying facts in the nonmovant's favor. McCabe v. Sharrett, 12 F.3d 1558, 1560 (11th Cir. 1994); Anderson v. Liberty Lobby, Inc., 477 U.S. 252, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
III. DISCUSSION
TIG argues that no additional coverage exists for Haltiwanger's derivative claim. In particular, TIG contends that loss of consortium does not constitute an independent bodily injury. As such, the "per person" limits apply to his claim; thus, there is no coverage since Haltiwanger's wife exhausted the policy limits.
The Court must apply Georgia's substantive law when deciding this matter. See Shaps v. Provident Life Accident Ins. Co., 244 F.3d 876, 881 (11th Cir. 2001). If a district court's jurisdiction is based upon diversity of citizenship and suit is filed in Florida, the court must required to apply Florida's conflict-of-law rules. See id. "Under Florida's conflict-of-law rules, the doctrine of lex loci contractus directs that, in the absence of a contractual provision specifying governing law, a contract, other than one for performance of services, is governed by law of the state in which the contract is made." Id. (citingFioretti v. Massachusetts Gen. Life Ins. Co., 53 F.3d 1228, 1235 (11th Cir. 1995)). The insurance contract in this case was executed in Georgia, and the parties to not dispute that Georgia law governs the interpretation and application of the contract.
Under Georgia law, an insurer is not liable for consortium damages that exceed the paid "per person" policy limit. See State Farm Auto. Ins. Co. v. Hodges, 144 S.E.2d 723, 725-26 (Ga. 1965). In the instant case, Middleton's insurance policy is clearly capped at $250,000 for bodily injuries sustained by any one person in any one auto accident. The policy expressly states that TIG's settle "ends when our limit of liability has been exhausted." The "per person" policy limits were exhausted when TIG settled Haltiwanger's wife's claim for $250,000. As such, Haltiwanger cannot recover for his derivative claim under the policy. See id. at 726.
Moreover, payment of a settlement which wholly depletes the policy amount exhausts an insurer's limit of liability and satisfies the insurer's duty to defend. See Liberty Mut. Ins. Co. v. Mead Corp., 131 S.E.2d 534, 536-37 (Ga. 1963). In Liberty Mutual, the Georgia Supreme Court addressed "whether an insurer was required to defend remaining actions against the insured after it had, with the consent and contribution of the insured, exhausted the policy limit of liability by settling two of the suits arising from the same accident." Id. The court held the insured was not required to defend said actions. See id. at 537. When evaluating the terms of the policy which indicated it would defend any suit against the insured "with respect to such insurance as is afforded by [the] policy," the court reasoned that the duty to defend was limited by the amount of liability coverage afforded by the policy. See id. at 536. Since the insurer already exhausted the policy limits by settling two prior claims with the insured's consent, the court found that there was no obligation to defend the insured in the remaining claims and suits. See id.
Haltiwanger and Middleton essentially claim that Middleton did not consent to the release of Haltiwanger's claim. The Court finds this argument without merit. The Court's determination of a duty to defend "must be determined by the particular contract of insurance between the parties. [The Court must] examine the policy to determine whether it imposes a continuing duty to defend under the facts here." Anderson v. U.S. Fid. Guar. Co., 339 S.E.2d 660, 661 (Ga.Ct.App. 1986). When determining whether an insured consents to exhaustion of policy limits and settlement, courts must evaluate the terms of the insurance policy. Here, Middleton agreed to the terms of the contract specifying that TIG's "duty to settle or defend ends when [the] limit of liability has been exhausted [and has] no duty to defend any suit or settle any claim for `bodily injury' . . . not covered under this policy." Moreover, there is no evidence that Middleton did not consent to exhausting the "per person" liability limits when TIG settled the $250,000 claim of Haltiwanger's wife. As such, TIG's duty to defend was limited by the amount of liability coverage afforded by the policy.
IV. ORDER
Based upon the foregoing reasons, it is hereby
ORDERED and ADJUDGED that TIG's Motion for Summary Judgment is GRANTED and the Clerk is directed to close.
DONE AND ORDERED.