Insurance policies frequently cover any damages incurred due to a car accident. But it is not unusual in Georgia for insurance companies to disclaim or otherwise reject coverage if the insured does not strictly comply with all terms of the policy. In some cases, insurance companies may end up fighting among themselves over who is liable for any damages arising from a personal injury claim.
Selective Insurance Company of America v. Russell
A federal judge in Gainesville recently addressed such a case. This is one of two lawsuits arising from a 2011 car accident. Two vehicles collided, resulting in the death of a passenger in one of the cars. The driver of Car A and the estate of the deceased passenger sued the driver of Car B in Georgia state court.
The second, federal lawsuit revolves around two insurance companies. The plaintiff issued an insurance policy to the employer of the driver of Car B. This policy covered any vehicles owned by the employer. The plaintiff argued that on the day of the accident, Car B no longer belonged to the employer and therefore another insurance policy applied. The other insurance company, the employer, and the driver disagreed.
On the day of the accident, the driver had gone to the local Department of Motor Vehicles office to transfer title to Car B from the employer to herself. She “informed the DMV of her wish to transfer the title, signed the certificate of title, and paid for the transfer” that day just before the accident. She received the new title a few days later. However, before the court she argued that it was not her “intent” to effect the title transfer until two weeks later, when Car B could be added to her personal auto insurance policy.
The judge did not accept that argument. He said that based on his reading of Georgia law, “the opportunity for the parties’ intent to affect the ownership of a vehicle is before the title has been transferred.” (Italics in original) The judge said there was no precedent in Georgia “where title was legally transferred but the parties later claim they did not intend to hand over ownership at that time.” Accordingly, the title transfer took place the day of the accident, and at the time of the accident, the driver was the legal owner of the vehicle.
It should be noted the judge’s decision was limited to this one issue of law. The judge previously stayed any further proceedings in this case while the state court lawsuit—the underlying personal injury and wrongful death claims—remain pending. As the judge noted in an earlier order, the remaining legal claims raised by the insurance companies “will likely be resolved in the underlying lawsuit” and the federal courts generally abstain from “ruling on a factual issue that could be at odds with a later ruling by the state court.”