Summary
In Francis, as here, the injured party in an automobile collision obtained a judgment, then served a garnishment on an insurance company based on that insurer's failure to settle the injured party's claim within policy limits.
Summary of this case from Metropolitan Property Casualty Ins. Co. v. CrumpOpinion
31582.
DECIDED MAY 29, 1947. REHEARING DENIED JUNE 27, 1947.
Garnishment; from Fulton Superior Court — Judge Hendrix. February 4, 1947. (Application to Supreme Court for certiorari.)
G. Seals Aiken, for plaintiff.
Sidney Smith, R. M. Maxwell, Matthews, Long Moore, for defendants.
1. While a liability insurance company may be held liable to its insured for negligence or fraud or bad faith in failing to adjust a claim against the insured which is covered by its policy, it does not follow that a person injured by the insured may complain of such negligence or bad faith of the insurer towards its policyholder, for the duty of the insurer to use ordinary care and good faith in the handling of a claim against its insured arises out of the relationship between them created by the policy or contract of insurance, and there is no fiduciary relationship or privity of contract existing between the insurer and a person injured by one of its policyholders.
( a) The evidence and all reasonable deductions therefrom demanded a finding that the garnishee was not indebted to the defendants at the time of the service of the summons of garnishment upon it and that it had not become indebted to them since said service, and the judge did not err in so holding and in granting the motion of the garnishee for a judgment of nonsuit.
2. Since the above ruling is controlling in this case, it is not necessary to pass on the other assignments of error.
DECIDED MAY 29, 1947. REHEARING DENIED JUNE 27, 1947.
Marvin Francis, by next friend Tilmon Francis, caused a summons of garnishment to be issued on May 21, 1940, and served on May 22, 1940, upon Indemnity Insurance Company of North America, based on a judgment obtained by the plaintiff on June 2, 1939, against Mrs. E. P. Newton and J. D. Leapard. The garnishee answered on July 1, 1940, and set out that it had no money, property or effects of the defendants in its possession at the time of the service of said summons of garnishment upon it and that no money, property or effects of said defendants had come into its possession since said service. The plaintiff, on July 2, 1940, filed a traverse to the answer of the garnishee, and the issue formed by the answer and traverse came on for trial in the Superior Court of Fulton County on February 3, 1947.
On the trial the plaintiff introduced evidence to the effect that he was injured on March 31, 1938, in an automobile accident caused by the negligence of the defendants; that he and his father, Tilmon Francis, employed an attorney at law to represent them in the matter and to handle their claims for damages against the defendants; that their attorney was informed or learned that Mrs. E. P. Newton held a policy of liability insurance issued by Indemnity Insurance Company of North America and that a certain attorney at law was representing the defendants through this insurance company; that plaintiff's attorney notified the attorney handling the matter for the defendants that he represented the plaintiff and his father and gave him their contentions and told him if he desired to settle the claims to advise him so that they might discuss the matter; that the plaintiff was examined by a bone surgeon employed by the insurance company and the insurance company's lawyer was given an order authorizing him to look at all the hospital records with reference to the plaintiff's injuries; that certain depositions were taken by agreement of the parties; that plaintiff's attorney wrote and offered to settle the claims of the plaintiff and his father arising out of plaintiff's injuries for $10,000; that plaintiff's attorney asked to be allowed to see the policy issued to Mrs. Newton and stated that the plaintiff and his father would be willing to accept an amount within the limits of the policy, but that the policy was never shown to him and he was not informed as to the limits of the policy; that the insurance company offered the sum of $1500 in settlement of the claims of the plaintiff and his father, which was inadequate; that no settlement was reached and the case of the plaintiff was tried in the superior court, where a judgment in plaintiff's favor was returned for $7500; that the defendants' motion for a new trial was overruled; that the insurance company on or about December 7, 1939, paid into court the sum of $5000, and later paid interest on this sum to that date, which was credited on the plaintiff's judgment; that the garnishment in the present case was based on the execution held by the plaintiff against the defendants, Mrs. E. P. Newton and J. D. Leapard. Various letters and other documents were placed in evidence by the plaintiff.
At the conclusion of the plaintiff's evidence, the court, on motion of counsel for the insurance company, granted a nonsuit, and the plaintiff excepted.
1. While an automobile liability insurance company may be held liable for damages to its insured for failing to adjust or compromise a claim covered by its policy of insurance, where the insurer is guilty of negligence or of fraud or bad faith in failing to adjust or compromise the claim to the injury of the insured (Cavanaugh Bros. v. General Accident Fire Life Assurance Corp., 79 N.H. 186, 106 A. 604; Douglas v. U.S. Fidelity Guaranty Co., 81 N.H. 371, 127 A. 708, 37 A.L.R. 1477; Tiger River Pine Co. v. Maryland Casualty Co., 163 S.C. 229, 161 S.E. 491; Tiger River Pine Co. v. Maryland Casualty Co., 170 S.C. 286, 170 S.E. 346; J. Spang Baking Co. v. Trinity Universal Insurance Co. (Ohio App.) 68 N.E.2d, 122; American Mutual Liability Insurance Co. v. Cooper, 61 Fed. 2d, 446; Maryland Casualty Co. v. Elmira Coal Co., 69 Fed. 2d, 616); it does not follow that a person injured by the insured and who is not a party to the insurance contract may complain of the negligence or bad faith of the insurer towards its policyholder in failing to adjust or compromise a claim against such policyholder, for the duty of the insurance company to use ordinary care and good faith in the handling of a claim against its insured arises out of the relationship between the insurer and the insured created by the contract or policy of insurance, and there is no fiduciary relationship or privity of contract existing between the insurer and a person injured by one of its policyholders. In this connection, see Duncan v. Lumbermen's Mutual Casualty Co., 91 N.H. 349 ( 23 A.2d, 325). A motion to nonsuit is in the nature of a demurrer to the evidence, and should not be granted where there is any evidence to support the plaintiff's action or where the jury could fairly infer from the evidence a state of facts favorable to the plaintiff. Hawkins v. National Surety Corp., 63 Ga. App. 367, 371 ( 11 S.E.2d 250), and citations. However, where the plaintiff fails to make out a prima facie case or if admitting all the facts proved and all reasonable deductions from them the plaintiff ought not to recover, a nonsuit may be granted. Code, § 110-310; Stenger v. Mitchell, 70 Ga. App. 563, 565 ( 28 S.E.2d 885).
The ruling of this court in the case of Hodges v. Ocean Accident Guarantee Corp., 66 Ga. App. 431 ( 18 S.E.2d 28), cited and relied on by the plaintiff in error, does not require or authorize a different ruling from the one being made in the present case. In that case the plaintiff sued and recovered a judgment against G. F. Langran due to Langran's negligence in operating an automobile. Upon Langran's failure to pay the judgment, the plaintiff sued out a garnishment against his employer's insurer, contending that Langran was insured against liability under the terms of the policy issued to his employer. On the trial it appeared that Langran was only insured while he was operating the car with the permission of the employer and that at the time of the accident he did not have permission of the insured to use the automobile and was not an additional insured under the terms of the policy, and the court properly directed a verdict in favor of the insurance carrier, the garnishee in that case. In the present case, it affirmatively appears that the limit of liability provided in the policy to each person injured by the insured was $5000 and that the insurer, after the judgment had been obtained against the insured, had paid that amount and interest thereon into court and that these sums had been credited on the plaintiff's judgment against the defendants. There is no contention by the insured that the insurer was negligent or failed to exercise good faith towards her in handling the claims of the plaintiff and his father against her, and the evidence does not authorize a finding that the insurer violated any legal duty it owed to the plaintiff by failing to adjust or compromise his claim against the insured or in defending his action against the insured as it was authorized to do under the terms of its contract with the insured.
The evidence and all reasonable deductions therefrom demanded a finding that the garnishee was not indebted to either of the defendants at the time of the service of the summons of garnishment upon it and that no money, property or effects of the defendants had come into its possession since said service, and the trial judge did not err in so holding and in granting the motion of nonsuit.
2. The above ruling is controlling in this case, and it is not necessary to pass on the other assignments of error.
Judgment affirmed. Felton and Parker, JJ., concur.
ON MOTION FOR REHEARING.
The additional authorities cited by the plaintiff in error on the motion for a rehearing are merely cumulative of those cited in his original brief and are to the effect that the holder of a judgment against a person covered by an insurance policy may proceed against the insurance company by garnishment to the extent of such company's liability under the policy. This feature of the case was fully dealt with in the original opinion. In the present case, the amount due under the provisions of the policy was paid to the plaintiff before the garnishment issued.
The fact that it now develops that Mrs. Newton, who was one of the defendants in the main case, died several years ago is not ground for reversing the judgment of the trial court in the present garnishment proceedings, which is a separate and distinct case from that in aid of which it was instituted. Jones v. Maril, 19 Ga. App. 216 ( 91 S.E. 445).
The motion for rehearing is denied.
Felton and Parker, JJ., concur.