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Appeals Court Holds Estate Cannot Directly Sue Insurer Over Fatal Van Accident

Motor carriers—persons and corporate entities who contract for the transportation of household goods or passengers—must carry insurance in order to legally operate in Georgia. Georgia law further provides a person injured as the result of a motor carrier’s negligence may directly sue the carrier’s insurance company for damages. But there are exceptions to this rule, as the Georgia Court of Appeals explained in a recent decision.

Mornay v. National Union Fire Insurance Co.

This case arose from the death of a 69-year-old woman who had been living in a nursing home. The woman was also receiving Medicaid benefits. The State of Georgia had a contract with a motor carrier to provide transportation services for Medicaid patients. The contractor, in turn, hired a subcontractor to help carry out the state contract.

In April 2010, the subcontractor dispatched a van to transport the woman from her nursing home to a medical appointment. During transport, the van stopped short, causing the woman fall out of her wheelchair. She sustained serious injuries as a result, which sadly led to her death approximately two months later.

The woman’s estate filed suit against the transportation contractor and, pursuant to Georgia law, its insurance company. A trial court, however, dismissed the insurer as a defendant, holding it could not be directly sued. The estate appealed that decision to the Court of Appeals.

But a three-judge panel of the Court of Appeals unanimously affirmed the trial court’s judgment. The reason the estate could not maintain a direct lawsuit against the insurer was because the insured party—the subcontractor that provided the van—fell outside the legal definition of a “motor carrier.” Georgia law carves out a number of exceptions to the definition of “motor carrier.” As applicable here, the insurer said the subcontractor fell under an exemption for vehicles “capable of transporting not more than ten persons for hire when such vehicles are used exclusively to transport persons who are elderly, disabled, en route to receive medical care or prescription medication, or returning after receiving medical care or prescription medication.”

Here, the subcontractor used a van with space for four passengers, including one person in a wheelchair. Since this fell below the ten-person threshold, the Court said the subcontractor was not a motor carrier, and therefore its insurance company could not be directly sued. The court rejected the estate’s argument the van should not fall within the exemption because it was actually designed to transport at least 12 passengers, two more than the statutory requirement. This was irrelevant, the court said, because the exemption “is based on the vehicle’s actual seating capacity”—which was four—“not its initially designed capacity.”

The appeals court also rejected the estate’s claim the van fell outside the exemption because it was not exclusively used to transport elderly and disabled patients; it also transported children, who are not a specified group in the statute. The court said the exemption still applied, because the van was used to transport children to medical appointments, and the statute applies to vans used to transport the elderly and disabled “or” persons going to or returning from a medical appointment. The court thus chose to read the “or” as defining a separate group of persons.

Although the estate can no longer maintain a direct lawsuit against the insurer, its case against the transportation contractor is unaffected. And the insurer may still be liable for paying any judgment against the contractor, even though it is no longer a named party to the litigation.