Summary
finding that because the insurer offered to pay the full amount of its liability under the policy, it could not be liable for refusing to pay a larger amount demanded by the insured
Summary of this case from Whiteside v. Geico Indem. Co.Opinion
47512, 47513.
ARGUED SEPTEMBER 15, 1972.
DECIDED JANUARY 4, 1973. REHEARING DENIED FEBRUARY 14, 1973.
Action on insurance policy. DeKalb State Court. Before Judge Mitchell.
John F. Davis, Jr., Hopkins Gresham, L. Penn Spell, Jr., Thomas P. Gresham, for appellants.
Swertfeger, Scott, Pike Simmons, Joseph Szczecko, for appellees.
All evidence submitted in support of and in opposition to the motions for summary judgment reveals the lack of any right of recovery by the plaintiff against either the insurer or its agent beyond the terms of the policy currently in force when the loss occurred, which the insurer has offered to pay, hence it was error to deny the motions for summary judgment submitted by the defendants.
ARGUED SEPTEMBER 15, 1972 — DECIDED JANUARY 4, 1973 — REHEARING DENIED FEBRUARY 14, 1973.
Plaintiff purchased his various coverages of insurance through Parris Son, Inc., a local agent for United States Fidelity Guaranty Company. A homeowner's policy was among them. It was issued on a three-year term, the premium being payable in advance annually with the coverage to be extended at the end of the first and second years if the premiums therefor were paid when due. Under Coverage C the coverage for theft of any one item of jewelry, watches, necklaces, bracelets, gems, precious and semi-precious stones, etc. and of any article or item of fur, was limited to $1,000.
During the three-year term of the policy the company applied to the Insurance Commissioner for approval of a homeowner's policy form which further limited the coverage to $500 in the aggregate for losses by theft of jewelry, watches, necklaces, etc. and furs. Approval was granted and the company thereafter issued all homeowner's policies on the newly approved form.
Upon expiration of the three-year term of the policy No. HOU1175643 March 17, 1970 the agent prepared for the plaintiff a new policy No. HP464931, written on the newly approved form, effective March 17, 1970 to March 17, 1973, and sent it to him by mail. Plaintiff duly received the policy in a sealed envelope, put it away in a filing cabinet where his policies were kept, without opening the envelope or examining the policy.
Some nine months later, in February, 1971, his home was burglarized and he suffered a loss of jewelry and furs which he valued at more than $3,000, as well as other items which were also covered by the policy terms. He made claim for his loss in the total amount of $6,063.70, and the company offered to pay $1,715.73, the amount being reduced because of the change in coverage occurring in the newly approved policy form upon which the current policy had been written.
He brought suit in two counts against both the insurer and its agent, seeking recovery of his full loss, alleging in Count 1 that at no time had he been informed by them of the decrease in coverage, that he had relied upon them to provide coverage which would properly protect him, and that the reduction had been such a dereliction of duty as to constitute bad faith, for which he also sought damages and attorney fees.
In Count 2 he alleged that all items lost in the burglary had been protected under coverage of his policy of insurance with defendants and that he was entitled to recover their full value. Copies of both policies were attached.
Defendant admitted that it had issued the policies and delivered them to plaintiff, asserted that policy No. HOU 1175643 had expired prior to plaintiff's loss and that it had offered to pay to the extent of the coverage provided in policy No. HP464931 which was in force and effect at the time of the loss, and asserted that if any false representations had been made concerning the coverage they had been made by the agent without authority to do so and were not binding on the defendant, that the policy No. HP464931 as written constitutes the whole contract between plaintiff and defendant and that plaintiff is entitled to no coverage beyond that provided in it.
Depositions were taken. Plaintiff admitted that he had received the second policy about the time the first had, by its terms, expired, and that he had not opened the envelope in which it came to him, that he had not examined or read either policy until after the burglary occurred, and asserted that he had simply relied upon the agent to provide him with suitable coverage. After the loss he had communicated with the agent, who then told him that he was "fully covered," and that he "should not worry."
The agent admitted that it had written policies for the plaintiff for several years, including the two referred to in the complaint, but denied that it had made any misrepresentations to him relative to the coverage.
In answer to interrogatories served upon it the insurer asserted that numerous changes in policy forms had been made during the years since plaintiff started doing business with it, but that these changes are regulated and must be approved by the Insurance Commissioner; that when changes are approved and made the company (as do all others) sends out information relative thereto and new forms for writing policies to its agents, and that such was done in this instance. The changes apply only to policies issued on the new forms, and it has not been the practice to send notices directly to policyholders.
Each of the defendants moved for summary judgment and from denials thereof this appeal was filed, the required certificate for immediate review having been obtained.
1. Most of the issues before us are controlled by general contract law, insurance being a matter of contract. Cherokee Credit Life Ins. Co. v. Baker, 119 Ga. App. 579 (1) ( 168 S.E.2d 171). "There is no greater sanctity and no more mystery about a contract of insurance than any other. The same rules of construction apply to it as to other contracts." Clay v. Phoenix Ins. Co., 97 Ga. 44, 53 ( 25 S.E. 417). Accord: North British c. Ins. Co. v. Tye, 1 Ga. App. 380 (1) ( 58 S.E. 110). "`It is well to keep in mind . . . that insurance is purely a matter of contract.'" Mitchell v. Federal Life Ins. Co., 57 Ga. App. 206, 208 ( 194 S.E. 921).
2. Plaintiff's first three-year policy was extended from year to year upon the payment of an additional year's premium until expiration of the three-year term. The current policy is upon a standard form, approved by the State Insurance Commissioner as the law provides. It made some changes in the coverage as compared with the prior policy. It was a new contract, qualifying as a renewal as renewals are defined in Citizens Oil Co. v. Head, 201 Ga. 542 (2) ( 40 S.E.2d 559). The parties are free to make their own contracts, within the prescribed bounds of law, and the courts are not authorized, by interpretation, to rewrite or to change them, or to extend the converge. McCullough v. Kirby, 204 Ga. 738 (5) ( 51 S.E.2d 812); West View Corp. v. Alston, 208 Ga. 122, 127 ( 65 S.E.2d 406). This principle applies to insurance contracts. Cato v. Aetna Life Ins. Co., 164 Ga. 392, 398 ( 138 S.E. 787); Hartford Accident c. Co. v. Hulsey, 220 Ga. 240, 241 ( 138 S.E.2d 310).
3. The representations alleged to have been made by the agent of the insurer, whether prior to or after the loss, to the effect that the insured was "fully covered" can amount to no more than an opinion as to coverage or a legal opinion as to the effect of the contract, which does not give rise to actionable fraud. See Self v. American Nat. Ins. Co., 51 Ga. App. 251 (2) ( 180 S.E. 21); Home Ins. Co. v. Montgomery, 59 Ga. App. 173, 175 ( 200 S.E. 168); National Life c. Ins. Co. v. Parker, 67 Ga. App. 1, 8 ( 19 S.E.2d 409); Sherwin-Williams Co. v. St. Paul-Mercury Indem. Co., 97 Ga. App. 298 ( 102 S.E.2d 919), and cits.; Fields v. Fire Cas. Ins. Co., 101 Ga. App. 561 ( 114 S.E.2d 540); Wells v. Metropolitan Life Ins. Co., 107 Ga. App. 826, 834 ( 131 S.E.2d 634); Bryant v. Motors Ins. Corp., 109 Ga. App. 47, 52 ( 134 S.E.2d 905); Brown v. Mack Trucks, Inc., 111 Ga. App. 164 ( 141 S.E.2d 208); Sasser v. Coastal States Life Ins. Co., 113 Ga. App. 17, 21 ( 147 S.E.2d 5); Posey v. Gulf Life Ins. Co., 115 Ga. App. 531 ( 154 S.E.2d 754). And see Sorrells v. Atlanta Transit System, 218 Ga. 623 ( 129 S.E.2d 846); Williams v. Lockhart, 221 Ga. 343 (3) ( 144 S.E.2d 528); Walker v. Story, 14 Ga. App. 803 ( 82 S.E. 355); DeMayo v. Walton, 114 Ga. App. 483 ( 151 S.E.2d 886).
4. There was no relationship of principal and agent between the insured and the agent of the insurer, and thus no fiduciary relationship. Sherwin-Williams Co. v. St. Paul-Mercury Indem., Co., 97 Ga. App. 298, 299, supra; Fields v. Fire Cas. Ins. Co., 101 Ga. App. 561, 562, supra; Clinton v. State Farm Mut. Auto. Ins. Co., 110 Ga. App. 417 (2) ( 138 S.E.2d 687); Sutker v. Penn. Ins. Co., 115 Ga. App. 648, 653 ( 155 S.E.2d 694).
5. Nor does the expression of an opinion as to coverage work an estoppel — even against the agent who voiced it, or against his principal. Trust Co. of Ga. v. S. W. Cafeteria, 97 Ga. App. 268, 285 ( 103 S.E.2d 63). Fowler v. Preferred Acc. Ins. Co., 100 Ga. 330 ( 28 S.E. 398); Posey v. Gulf Life Ins. Co., 115 Ga. App. 531 ( 154 S.E.2d 745); Sasser v. Coastal States Life Ins. Co., 113 Ga. App. 17 ( 147 S.E.2d 5).
6. The representations or expressions alleged to have been made are too indefinite to constitute a contract. Necessary elements of the risk must be specified with definiteness, including the amount of the indemnity and the premium. Todd v. German-American Ins. Co., 2 Ga. App. 789, 794 (2) ( 59 S.E. 94). "The insurance company might have been willing to insure the stock of goods and ten bales of hay for a certain premium, and yet unwilling, for the same premium, to insure the same goods if it had known that sixty bales of hay were stored in the building." Alston v. Greenwich Ins. Co., 100 Ga. 282, 285 ( 29 S.E. 266). And see Sasser v. Coastal States Life Ins. Co., 113 Ga. App. 17, 20 supra. "The requirement of certainty extends not only to the subject matter and purpose of the contract, but also to the parties, consideration, and even the time and place of performance, where these are essential. Its terms must be such that neither party can reasonably misunderstand them. It would be inequitable to carry a contract into effect where the court is left to ascertain the intention of the parties by mere guess or conjecture, because it might be guilty of erroneously decreeing what the parties never intended or contemplated." Williams v. Manchester Building Supply Co., 213 Ga. 99, 101 ( 97 S.E.2d 129).
If it be conceded that the representations were made, what did they mean? Did a statement that you are "fully covered" mean that everything plaintiff had was covered, or did it mean that certain items or types of property were covered to their full value? Since each of the policies provided limited coverage for the items in question, how could "fully covered" square with either of them? The representations are no more certain than a provision in an employment contract that services are to be performed "at a price to be agreed on" ( Oliver Construction Co. v. Reeder, 7 Ga. App. 276 ( 66 S.E. 955)), or an agreement to purchase certain shares of stock "at a price to be mutually agreed upon of not less than $1,500." Martin v. Cox, 13 Ga. App. 236 ( 79 S.E. 39). It is fully as indefinite as an agreement to sell "all the boxes wanted." McCaw Mfg. Co. v. Felder, 115 Ga. 408 ( 41 S.E. 664). And see Morrow v. Southern Express Co., 101 Ga. 810 ( 28 S.E. 998); Burden v. Thomas, 104 Ga. App. 300 ( 121 S.E.2d 684). The alleged representations cannot make a contract.
And for the reasons stated in other Divisions hereof the representations, even if made, did not constitute actionable fraud.
7. The representations alleged to have been made are uncertain and ambiguous, but the policy issued, delivered and kept by the plaintiff is plain, certain and entirely free of ambiguity as to the coverage. "[W]hen the policy limits the coverage in unambiguous terms, as was done here, courts, despite their dislike of such coverage, have no choice but to accept without alteration all such terms and limit liability thereto." State Farm Mut. Auto. Ins. Co. v. Sewell, 223 Ga. 31, 32 ( 153 S.E.2d 432). We do not deal with a binder here, but with a complete policy that was issued and delivered many months before the loss occurred.
The attempt to expand or extend the coverage by evidence of statements made by the selling agent to the insured to the effect that the insured was "fully covered," and thus convert a definite, plain and certain provision of the contract into one indefinite, uncertain and ambiguous must fail. Cf. Fowler v. Liberty Nat. Life Ins. Co., 73 Ga. App. 765, 770 ( 38 S.E.2d 60); Sasser v. Coastal States Life Ins. Co., 113 Ga. App. 17, 21, supra.
8. While a temporary binder may be in parol, Code Ann. § 56-2420, the contract itself must be in writing. It cannot be partly in writing and partly oral. Georgia Cas. c. Co. v. Hardrick, 211 Ga. 709, 712 ( 88 S.E.2d 394); Mitchiner v. Union Central Life Ins. Co., 185 Ga. 194, 195 ( 194 S.E. 530). Nor can there be a parol renewal of a policy. Rowell v. Georgia Casualty Surety Co., 109 Ga. App. 631 (1) ( 136 S.E.2d 917). Consequently, the agent's oral statements to the insured could, in no event, operate to keep the first policy in effect.
9. The policy provides that "No permission affecting this insurance shall exist, or waiver of any provision be valid, unless granted herein or expressed in writing added hereto." Certainly there is no added written provision which attempts to add to the stated coverage, nor is it contended that there is. The agent was thus not authorized orally to modify the contract. Gulf Life Ins. Co. v. Yearta, 63 Ga. App. 43 (2) ( 10 S.E.2d 120).
10. The courts have no more right or power, by construction, to extend the coverage of a policy or to make it more beneficial to the insured than they do to rewrite the contract and increase the coverage. Prudential Ins. Co. v. Kellar, 213 Ga. 453, 458 ( 99 S.E.2d 823); Pilot Life Ins. Co. v. Morgan, 94 Ga. App. 394, 399 ( 94 S.E.2d 765); Southern Indem. Co. v. Young, 102 Ga. App. 914 (1) ( 117 S.E.2d 882); Cotton States Mut. Ins. Co. v. Falls, 114 Ga. App. 812, 814 ( 152 S.E.2d 811).
11. The coverage is not to be extended by estoppel or by waiver. "`The doctrines of implied waiver and of estoppel, based upon the conduct or action of the insurer, are not available to bring within the coverage of a policy risks not covered by its terms, or risks expressly excluded therefrom ...' 29 AmJur 690, Insurance, § 903; Quillian v. Equitable Life Assur. Soc., 61 Ga. App. 138 (3) ( 6 S.E.2d 108); Life Cas. Ins. Co. v. Williams, 200 Ga. 273 ( 36 S.E.2d 753, 161 ALR 686); Doubrly v. Carolina Life Ins. Co., 58 Ga. App. 178 ( 198 S.E. 76); Life Cas. Ins. Co. v. Carter, 55 Ga. App. 622 ( 191 S.E. 153), affirmed 185 Ga. 746 ( 196 S.E. 415)." Reserve Life Ins. Co. v. Ramsey, 98 Ga. App. 732 (2) ( 106 S.E.2d 820). No estoppel or waiver results from the collection and retention of premiums. McGlothin v. U.S. Nat. Life Cas. Co., 36 Ga. App. 325 (3) ( 136 S.E. 535); Doubrly v. Carolina Life Ins. Co., 58 Ga. App. 178 (2), supra; Pacific Ins. Co. v. R. L. Kimsey Cotton Co., 114 Ga. App. 411, 413 ( 151 S.E.2d 541); Fowler v. Preferred Acc. Ins. Co., 100 Ga. 330 (2) ( 28 S.E. 398).
12. The local agent is without authority, after a loss has occurred, to waive or change the terms of the contract. Mitchell v. Universal Life Ins. Co., 54 Ga. 289; Underwriters' Agency v. Sutherlin, 55 Ga. 266 (2); Lippman v. Aetna Ins. Co., 108 Ga. 391 ( 33 S.E. 897, 75 ASR 62). Nor can he effect a new contract with retroactive effect on the subject matter after the loss has occurred. Mutual Benefit Life Ins. Co. v. Ruse, 8 Ga. 534, 545; McGlothin v. U.S. Nat. Life Cas. Co., 36 Ga. App. 325, supra.
13. That the plaintiff-insured was under a duty to examine his policy and ascertain for himself what coverage he had is well settled. See Security Life Ins. c. Co. v. Gober, 60 Ga. 404 (2); Massey v. Cotton States Life Ins. Co., 70 Ga. 794; Thomson v. Southern Mut. Ins. Co., 90 Ga. 78 (1) ( 15 S.E. 652); Hart v. Waldo, 117 Ga. 590 ( 43 S.E. 998); Bankers Health c. Ins. Co. v. Givens, 43 Ga. App. 43, 50 ( 157 S.E. 906); Newton v. Gulf Life Ins. Co., 55 Ga. App. 330 ( 190 S.E. 69); Equitable Life Assur. Soc. v. Adams, 56 Ga. App. 5 (2) ( 192 S.E. 90); Hatfield v. Colonial Life c. Ins. Co., 102 Ga. App. 630, 632 ( 116 S.E.2d 900); American Liberty Ins. Co. v. Sanders, 120 Ga. App. 1 (2) ( 169 S.E.2d 342). It appears that the plaintiff received the policy in the mail and kept it without opening the envelope for something like nine months. Thus, he made no effort whatever, until after the loss, to determine what his coverage under the policy was. He was charged by law with knowledge of the coverage. Security Life Ins. c. Co. v. Gober, 50 Ga. 404 (2), supra; Prudential Ins. Co. v. Sailors, 69 Ga. App. 628, 634 ( 26 S.E.2d 557); Hatfield v. Colonial Life c. Ins. Co., 102 Ga. App. 630, 632, supra.
The insured was not only free to examine the contract, he was under a duty to do so, and if he had done that he would have observed just what coverage it provided to him. If it was not what he wished to have he could have renegotiated his contract, or, if the company was unwilling to do that, he could have returned it as unacceptable and negotiated a contract with another company. If he had done so it probably would have involved a greater premium than was demanded under the contract that was delivered and which he kept, for it would have increased the risk. Cf. Cherokee Credit Life Ins. Co. v. Baker, 119 Ga. App. 579, 584, supra. "[I]f ... the policy issued [was] essentially different from the one that the plaintiff desired, the remedy of the plaintiff would have been to reject, when tendered, the policy as written. Jones v. Gilbert, 93 Ga. 604, 607 ( 20 S.E. 48); Empire Mutual Annuity Life Ins. Co. v. Avery, 3 Ga. App. 97 (2, 3), 99 ( 59 S.E. 324)." Mitchiner v. Union Central Life Ins. Co., 185 Ga. 194, 197, supra. "When a policy of insurance, duly delivered to the applicant differs materially from the kind of policy for which he applied or intended to apply, it is his duty, if he does not desire to accept the policy issued to him, to return or offer to return the same, within a reasonable time,... and if the applicant neglects to examine the policy delivered to him" the contract is binding and he must pay the premium. Johnson v. White, 120 Ga. 1010 ( 48 S.E. 426).
14. Nor is parol evidence admissible to vary the terms of this unambiguous contract. Sullivan v. Cotton States Life Ins. Co., 43 Ga. 423; Fowler v. Preferred Acc. Ins. Co., 100 Ga. 330 (1), supra; Wheeler v. Fidelity Cas. Co., 129 Ga. 237, 240 ( 58 S.E. 709); Athens Mut. Ins. Co. v. Evans, 132 Ga. 703 (3) ( 64 S.E. 993); Peoples Bank v. Ins. Co. of N. A., 146 Ga. 514 (2) ( 91 S.E. 684, LRA 1917D 868); Newark Fire Ins. Co. v. Smith, 176 Ga. 91 ( 167 S.E. 79, 85 ALR 1330); Mitchiner v. Union Central Life Ins. Co., 185 Ga. 194, 195, supra; Peninsular Cas. Co. v. McCloud, 47 Ga. App. 316 (8) ( 170 S.E. 396); Carolina Life Ins. Co. v. Murphy, 47 Ga. App. 425 (4) ( 170 S.E. 817); Fowler v. Liberty Nat. Life Ins. Co., 73 Ga. App. 765, 770, supra; Prudential Ins. Co. v. Perry, 121 Ga. App. 618, 632 ( 174 S.E.2d 570).
15. No reformation of the contract is sought in this action, nor indeed could it have been, for neither the trial court (State Court of DeKalb) nor this court would have jurisdiction of such an action or be empowered to grant it. Hartford Fire Ins. Co. v. Garrett, 60 Ga. App. 816 (3) ( 5 S.E.2d 276). And see Mitchiner v. Union Central Life Ins. Co., 185 Ga. 194, supra; Davis v. United American Life Ins. Co., 215 Ga. 521 (1) ( 111 S.E.2d 488).
16. Since it appears that the insurer has offered to pay the full amount of its liability under the policy in force and effect at the time of the loss there can be no recovery for bad faith. Cf. Banister v. National Fire Ins. Co., 108 Ga. App. 202 (1) ( 132 S.E.2d 518). Further, when, as here, there was no coverage for the amount sought by the plaintiff there can be no recovery for bad faith in refusing to pay the amount demanded. Morris v. Ins. Co. of N. A., 114 Ga. App. 517 (1, 4) ( 151 S.E.2d 813).
17. Conceding everything that plaintiff says to be true, he shows no right of recovery save under the terms of the policy in force, or beyond the offer of the insurer to pay.
Judgments reversed with direction that summary judgment be entered for the defendant. Hall, P. J., Pannell, Quillian, Clark and Stolz, JJ., concur. Bell, C. J., Deen and Evans, JJ., dissent.
A renewal of a policy of insurance contemplates that it is a policy issued in place of, for the same amount, and under the same terms and conditions as the original policy, but covering a different period of time. Long Bros. Grocery Co. v. U.S. F. G. Co., 130 Mo. App. 421 ( 110 S.W. 29); De Jernette v. Fidelity Cas. Co. of N. Y., 98 Ky. 558 ( 33 SW 828); Fla. Cent. P. R. Co. v. Amer. Surety Co., 99 F 674; Springfield Fire c. Ins. Co. v. Hubbs-Johnson Motor Co. (Tex.App.) 42 S.W.2d 248; Schock v. Penn Tp. Mut. Fire Ins. Assn. of Lancaster Co., 148 Pa. Super. 77 ( 24 A.2d 741).
Where over a period of years the plaintiff dealt with an insurance agency which wrote and delivered insurance policies to him in several different areas of coverage, and such agency had a general authority to renew insurance, payments being made not on a basis of specific delivery of policies but rather at periodic time intervals, and the agency automatically wrote and forwarded to the insured a renewal policy covering his interest as a homeowner, with the assurance that such policy and its predecessors afforded him "full coverage," this constituted a representation by the agent that the policy was in fact a renewal of the previous policy (that is, subject to the same terms and conditions other than time of coverage) and that it afforded him full coverage. If such statement was made knowingly falsely with the purpose of deceiving the plaintiff and if he did in fact rely on it and was deceived thereby, and as a result of these facts suffered a monetary loss, he has shown facts which should be submitted to a jury in support of an action based on a wilful and intentional tort.
I am authorized to state that Chief Judge Bell and Judge Evans concur in this dissent.