Penn-America Insurance Company v. Disabled American v.terans, Inc. Et Al., 224 Ga. App. 557, 481 S.E.2d 850 (1997)
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Summary
Judgment affirmed. McMurray, P. J., and Ruffin, J., concur.
Summary
Judgment affirmed. McMurray, P. J., and Ruffin, J., concur.
Text
Swift, Currie, McGhee & Hiers, Jonathan M. Engram, Dennis A. Brown, for appellant.
Disabled American Veterans, Inc. ("DAV") owned a facility which was covered under a liability insurance policy issued by Penn-America Insurance Company. When Lois Farley slipped and fell on the premises, she and her husband sued DAV, Robert Lee (the post's Commander), and McCrary-Adams, Chapter 9, DAV ("McCrary-Adams"). Although the insurance agreement provided that Penn-America would defend DAV, Lee and McCrary-Adams in actions filed against them, Penn-America refused to defend the Farley lawsuit. Farley subsequently dismissed the action against DAV, but not against Lee or McCrary-Adams. Lee and McCrary-Adams moved for summary judgment based on the grounds that: (1) Farley's exclusive remedy was to file a workers' compensation claim; (2) she failed to exercise ordinary care for her own safety; and (3) there was no negligence on Lee's part. The trial court granted summary judgment to Lee and McCrary-Adams without specifying its reason(s) therefor. DAV, Lee and McCrary-Adams then sued Penn-America for refusing to defend them in the Farley action. Penn-America moved for summary judgment, claiming that it had no duty to defend the suit because Farley was injured in the course of her employment, and the policy specifically excludes insurance coverage for bodily injuries to employees arising out of employment. DAV filed a cross-motion for summary judgment, arguing that Penn-America was obligated under the contract to defend the suit filed against DAV, McCrary-Adams and Lee (hereinafter collectively referred to as "the insureds") because the complaint asserted a claim covered by the policy. The trial court granted the insureds' cross-motion and denied Penn-America's motion for summary judgment. Penn-America appeals from the grant of the insureds' cross-motion.
The insurance contract states that Penn-America "will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury . . . arising out of the use of the premises . . . and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury . . . even if any of the allegations of the suit are groundless, false or fraudulent. . . ." The policy also provides that "[t]his insurance does not apply: (i) to bodily injury to any employee of the insured arising out of and in the course of his employment by the insured for which the insured may be held liable as an employer."
Whether an insurer is obligated to defend an action against its insured "is determined by the contract; and since the contract obligates the insurer to defend claims asserting liability under the policy; even if groundless, the allegations of the complaint are looked to to determine whether a liability covered by the policy is asserted. Thus, the issue . . . is not whether [the insured] is actually liable to the [plaintiffs] . . .; the issue is whether a claim has been asserted which falls within the policy coverage and which [the insurer] has a duty to defend." (Punctuation omitted; emphasis in original.) St. Paul Fire &c. Co. v. Mitchell,
Contrary to Penn-America's argument, the fact that the trial court in the Farley action granted summary judgment to the insureds does not require a different result. Although Penn-America claims the Farley court granted summary judgment to the insureds based on its finding that Farley was an employee, the order is silent as to which of the three grounds was the basis for the trial court's decision.
However, even if the court in the earlier action did find that Farley was injured in the course of employment and that action was therefore precluded by the exclusive remedy provision of the workers' compensation statute, Penn-America still had a duty to defend the action before the insureds received the favorable ruling. Indeed, it was Penn-America's duty to seek that favorable decision on its insureds' behalf.
We do not look to the outcome of an earlier action to determine if the insurer had a duty to defend. In Georgia, "an insurer's duty to pay and its duty to defend are separate and independent obligations. [Cits.]" Capital Ford &c. v. U. S. Fire Ins. Co., 180 Ga. App. 413, 416 (349 SE2d 201) (1986), rev'd on other grounds, 257 Ga. 77 (355 SE2d 428) (1987). The issue of the insureds' ultimate liability to the Farleys for their injuries is irrelevant to the question of whether the insurer was obligated to defend the insureds in the tort action. See Crook v. Ga. Farm Bureau &c. Ins. Co.,
Penn-America relies upon State Farm &c. Ins. Co. v. Keene, 111 Ga. App. 480, 482 (142 SE2d 90) (1965), for the court's holding that the ultimate test for determining whether the insurer has a duty to defend is whether the claim asserted actually falls within the coverage of the policy. The claim as asserted in this case does fall within the coverage of the policy. We cannot agree, however, with Penn-America's argument that Keene requires that we look beyond the complaint and policy language to extrinsic facts in order to determine whether a duty to defend exists. Subsequent state appellate decisions citing Keene have not interpreted it as Penn-America suggests. For example, Associated Petroleum Carriers v. Pan American Fire &c. Co., 117 Ga. App. 714, 716 (161 SE2d 411) (1968), which cites Keene, holds that the insurer is obligated to defend a suit both when the true facts are within the coverage of the policy, and also when the complaint alleges facts within the policy's coverage. Great American Ins. Co. v. McKemie, 244 Ga. 84, 86 (259 SE2d 39) (1979), also cites Keene. In Great American Ins. Co., even though additional facts were revealed during the course of litigation which had a bearing on whether the insurer had a duty to defend, the Supreme Court held that the allegations of the complaint are looked to "to determine whether a liability covered by the policy is asserted." (Citation and punctuation omitted; emphasis in original.) Id. at 85-86. The Court concluded that the insurer justifiably refused to defend based upon the complaint it received. The trial court in the instant case did not err in finding that Penn-America was obligated to defend the insureds in the Farley action.
Mullis, Marshall, Lindley & Powell, Julius A. Powell, Jr., Miguel A. Garcia, Jr., for appellees.
1997
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This document cites
- Supreme Court of Georgia - UNITED STATES FIRE INSURANCE COMPANY, INC. v. CAPITAL FORD TRUCK SALES, INC., 257 Ga. 77, 355 S.E.2.d 428
- Supreme Court of Georgia - GREAT AMERICAN INSURANCE COMPANY v. MCKEMIE., 244 Ga. 84, 259 S.E.2.d 39 (1979)
- Georgia Court Of Appeals - Capital Ford Truck Sales, Inc. v. United States Fire Insurance Company, Inc., 180 Ga. App. 413, 349 S.E.2d 201 (1986)
- Georgia Court Of Appeals - Associated Petroleum Carriers, Inc. Et Al. v. Pan American Fire &Amp; Casualty Company Et Al., 117 Ga. App. 714, 161 S.E.2d 411 (1968)
- Georgia Court Of Appeals - State Farm Mutual Automobile Insurance Company v. Keene., 111 Ga. App. 480, 142 S.E.2d 90 (1965)
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