Georgia Court Rejects Insurer’s Initial Attempt to Avoid Accident Coverage

When it comes to personal injury lawsuits, many plaintiffs do not only need to contend with the negligent defendant. They also need to deal with the negligent defendant’s insurance company. Even where the insurer has a contractual duty to indemnify and defend a policyholder, you can rest assured that the company will make every legal effort to avoid providing coverage.

ACCC Insurance Company v. Walker

Take this ongoing lawsuit, ACCC Insurance Company of Georgia v. Walker. This case involves a 2015 auto accident. The defendant was one of the parties involved in the accident. He subsequently filed a personal injury lawsuit against two men, who were insured by the plaintiff, ACCC Insurance.

ACCC initially retained defense counsel for the two defendants in the personal injury lawsuit. That attorney then filed an answer to the lawsuit. Simultaneously, ACCC filed a separate lawsuit as the plaintiff, alleging it was not legally required to defend the personal injury lawsuit due to certain exclusions in the insurance policy. ACCC further moved for summary judgment on its lawsuit, arguing that there were no “genuine issues of material fact” requiring a full trial.

The trial court denied this motion, prompting ACCC to appeal. But the Court of Appeals likewise concluded that summary judgment was not appropriate. The main issue here was actually not whether the policy exclusions applied to this case. Rather, it was whether or not ACCC “effectively reserved its rights to deny coverage” in the first place.

As noted above, ACCC did take steps to defend its policyholder by retaining counsel. But ACCC maintained it still reserved the right to ultimately deny coverage. Specifically, ACCC said it “orally informed” the policyholder of its reservation 19 days prior to retaining the lawyer. This evidence was disputed, the Court of Appeals noted, as the ACCC employee who actually left the voicemail only referred to “coverage concerns.”

Georgia law requires an insurance company to make an “unambiguous” reservation of rights. Whether this voicemail “unambiguously” qualified as a reservation was therefore an issue requiring trial, the Court of Appeals said.

The Court of Appeals also rejected ACCC’s claim that it properly reserved its right to deny coverage after learning during a deposition that the actual driver of the vehicle at the time of the accident–the policyholder’s son–had done so on an invalid license and without his father’s permission. Additional evidence showed ACCC may have actually known about the son’s license status more than a year before the deposition. If true, that would cut against the insurer’s argument that it reserved its right to deny coverage in a timely manner. Once again, the Court of Appeals said this was a disputed question of fact that would need to be resolved at trial.

If a trial ultimately determines ACCC did properly reserve its rights, then the plaintiff in the personal injury lawsuit would be unable to recover any damages on his claim from the policyholder’s insurance policy. If the trial goes against ACCC, it could be on the hook for the accident plaintiff’s civil damages.