Progressive Classic Insurance Co. v. Nationwide Mutual Fire Insurance Co.

Citations: 670 S.E.2d 497; 294 Ga. App. 787; 2008 Fulton County D. Rep. 3880; 2008 Ga. App. LEXIS 1319Docket: A08A1175, A08A1176

Court: Court of Appeals of Georgia; November 24, 2008; Georgia; State Appellate Court

Combined Opinion SummaryCombined Opinion Original

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Progressive Classic Insurance Company and Nationwide Mutual Fire Insurance Company engaged in cross-appeals regarding priority of uninsured motorist (UM) coverage stemming from the 2004 death of William Alexander, who was run over by a vehicle driven by the deceased Sterling A. Jackson. The Alexanders filed a wrongful death lawsuit alleging William's injuries led to his death. Jackson had a liability policy with Nationwide providing $25,000, which was settled and is not contested. William held a separate Nationwide policy with $300,000 in UM coverage, acknowledged to be the primary source of coverage.

Disputed are three additional policies that could provide UM coverage if the primary policies are exhausted: (1) a Nationwide policy solely in Clifford Alexander's name with $300,000 in UM coverage; (2) a Nationwide personal liability umbrella policy issued to Clifford with $2 million in UM coverage; and (3) a Progressive policy with $500,000 in UM coverage, initially issued to William's sister but later amended to include Clifford and Judy Alexander.

In Georgia, multiple UM coverages can be stacked, and courts apply three tests to determine priority: the 'receipt of premium' test, the 'more closely identified with' test, and the 'circumstances of the injury' test. The trial court opted not to prorate the policies and applied the 'more closely identified with' test, concluding that the policies cover all family members but are distinguished by the primary insured's identity. Progressive argued for the policies to be prorated or for its policy to follow the Nationwide policies, while Nationwide argued for its policy's precedence due to the familial connections.

The trial court determined that a child's primary relationship is with their parents, then siblings, leading to the conclusion that William was more closely associated with his father, making Clifford's Automobile Policy the second priority after William's own policy. The court clarified that automobile policies take precedence over umbrella policies, placing the Umbrella Policy last in priority after the Progressive Policy. On appeal, the parties reiterated their previous arguments. Georgia courts typically do not prorate stackable uninsured motorist (UM) coverage unless none of the three priority tests resolves the matter. The receipt of premium test was not applicable since Clifford Alexander paid for all three policies. The second test examines William's relationship to the policies to identify any closer association. This test prioritizes family relationships over others, but all policies in this case are family policies. Although William is not listed as an insured, he is referenced as a rated driver on Clifford's Automobile Policy, which likely pertains to him. The Progressive Policy was initially purchased for his sister, Catherine, indicating a different relationship compared to the Nationwide policies, which were solely in Clifford's name. The law generally recognizes the parent-child relationship as closer than sibling relationships, influencing the conclusion that William is more closely identified with the Nationwide policies. Among these, the Umbrella Policy's UM provision specifies that it offers coverage exceeding amounts received from the liable party and underlying insurance.

Clifford was required by policy to maintain an underlying insurance policy providing uninsured motorist (UM) coverage, which was satisfied by Clifford's Automobile Policy. William, as a rated driver on that policy, is associated with it, granting him secondary UM coverage under the Nationwide policy. The issue then arises regarding whether William is more closely linked to the Umbrella Policy or the Progressive Policy. Although Clifford is the sole named insured on the Umbrella Policy, the trial court ranked it lowest in priority based on the nature of umbrella policies providing excess coverage. However, this reasoning was deemed incorrect, as prior rulings established that umbrella policies providing automobile liability coverage must comply with OCGA § 33-7-11 and can be stacked to provide UM coverage.

Both insurers argue for stacking based on specific policy language. Progressive contends that the UM provision of the Umbrella Policy only offers excess coverage behind the Jackson and Clifford's Automobile Policies, while Nationwide points to the Umbrella Policy's clause indicating it is excess over any other valid insurance, asserting it should be prioritized last. The court found that the existence of 'other insurance' provisions does not negate the application of the 'more closely identified with' test. Given that William is more closely associated with the Umbrella Policy than the Progressive Policy, the court concluded that the Umbrella Policy ranks third in priority, with the Progressive Policy last. Consequently, the court reversed the trial court's partial summary judgment in favor of Nationwide and its denial of Progressive's partial summary judgment regarding policy priority.

The court disapproves of certain language in the Dairyland opinion that conflicts with its current ruling, specifically regarding the stacking of uninsured motorist (UM) policies. The cited 1971 case, Southern Home Ins. Co. v. Willoughby, addressed the issue of primary insurance and the insurer's duty to defend, not UM policy stacking. The court determines that the priority of the three insurance policies can be assessed using the "more closely identified with" test, concluding that proration does not apply in this instance. The judgment is affirmed in part and reversed in part. Additionally, both Nationwide and Progressive were served with duplicate originals of the wrongful death action as UM carriers, and the Progressive Policy includes an "Other Insurance" provision.