Case Name: WRIGHT BODY WORKS, INC. v. COLUMBUS INTERSTATE INSURANCE AGENCY
Court: Court of Appeals of Georgia
Jurisdiction: Georgia
Decision Date: 1974-06-18
Citations: 132 Ga. App. 307
Docket Number: 48809
Parties: WRIGHT BODY WORKS, INC. v. COLUMBUS INTERSTATE INSURANCE AGENCY.
Judges: Eberhardt, P. J., Stolz and Webb, JJ, concur. Deen, J., concurs specially. Bell, C. J., Pannell, P. J., Quillian and Evans, JJ., dissent.
Reporter: Georgia Appeals Reports
Volume: 132
Pages: 307–314

Head Matter:
48809.
WRIGHT BODY WORKS, INC. v. COLUMBUS INTERSTATE INSURANCE AGENCY.

Opinion:
Clark, Judge.
"Where an insured has possession of a policy of insurance, and where an examination of that policy would reveal an amount of insurance less than that necessary to completely cover a casualty loss of the insured, is the insured in an action against the agent who procured the insurance entitled to damages for the failure of the agent to procure a sufficient amount of insurance?" The appellee's brief thus succinctly states the question presented for our decision.
Wright Body Works, Inc. applied in 1968 to Columbus Interstate Insurance Agency for business interruption insurance. A financial audit was supplied from which the agency calculated the amount of insurance required by the co-insurance provisions. Two policies were issued through the agency and delivered to the insured. These were identical and provided coverage for three years beginning August 6, 1968. The insured admits these policies were never examined. A fire loss occurred on June 28, 1971, more than two years and ten months after delivery of the policies. In the interim the insured had supplied the agency with additional audits at the end of each of two fiscal years but no changes were made in the policies. The actual loss sustained by the insured was $74,919.15. After plaintiff was paid $46,444.40 by the two insurance companies, Aetna and Firemen's Fund, the instant suit for the difference of $28,474.75 was brought against the insurance agency contending this loss was "due to negligent errors and omissions made by the defendant."
The negligence alleged was that the defendant agency "miscalculated on 'gross profit' figures of the plaintiffs business rather than on 'gross earnings' figures of the plaintiffs business as called for and required by the insurance contracts and policies issued by the defendant." (R. 4). Each policy defined the manner in which "gross earnings" were to be computed and each contained a 70% co-insurance clause.
Defendant agency moved for summary judgment based upon the terms of the insurance policies and cross examination testimony of the president of the plaintiff corporation which established that the two policies had never been examined during the period of two years and ten months that the policies had been in insured's possession. This motion for summary judgment was sustained from which this appeal was taken.
1. In contrast with some foreign jurisdictions our Georgia courts have expressly ruled that an insured having possession of an insurance policy is charged with knowledge of the amount of coverage therein provided. Fields v. Goldstein, 97 Ga. App. 286, 288 (3) (102 SE2d 921) which the Supreme Court affirmed on certiorari in 214 Ga. 277 (104 SE2d 337) without an opinion, the court noting that such affirmance was "after a careful consideration." This was followed by our court in S & A Corp. v. Berger & Co., 111 Ga. App. 39 (140 SE2d 509). Upon affirming the grant of a summary judgment for a defendant insurance agent Judge (now Justice) Nichols concluded that "Consequently the appellant being, under the law, charged with knowing the terms and conditions of the policy, any negligence, if any, on the part of the defendant in failing to procure the amount of insurance coverage contracted for could have been avoided by the plaintiff and therefore a finding for the defendant is demanded." Judge (now Justice) Hall concurred specially on the basis of our court being bound by the Supreme Court affirmance in Fields v. Goldstein, supra, even though he expressed his personal preference based upon authorities from other jurisdictions that the matter of "plaintiffs own negligence in not reading his policy should be submitted to the jury."
The most recent case in which this court was called upon to deal with this question is Parris & Son v. Campbell, 128 Ga. App. 165 (196 SE2d 334). There the plaintiff did not open the envelope containing the policy until after the loss which occurred nine months later. Division 13 of that opinion beginning on the last line of page 172 contains the principles and authorities determinative of the case sub judice. We therefore deem it proper to quote it in full: "13. That the plaintiff-insured was under a duty to examine his policy and ascertain for himself what coverage he had is well settled. [Cits.] 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. [Cits.] 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. [Cit.] '[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. [Cits.]' Mitchiner v. Union Central Life Ins. Co., 185 Ga. 194, 197 (194 SE 530). 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. [Cit.]"
See also the opinion of this court in Hawkins Iron & Metal Co. v. Continental Ins. Co., 128 Ga. App. 462 (196 SE2d 903). There the insured's suit against both the agent and the insurer charged that the agent with knowledge of the insured's business practices had made a comprehensive review of the insured's policies and then represented to the insured that it was "fully covered in all areas." Our holding was against the insured because of the principle that an insured is charged with knowledge of the contents of the insurance contract. See also Sutker v. Pennsylvania Ins. Co., 115 Ga. App. 648 (155 SE2d 694).
2. Does the fact that this appeal involves a summary judgment in which plaintiff sues on the theory of negligence require the matter to be submitted to a jury as to the plaintiffs failure to exercise the duty of ordinary care? It should be noted that both Parris & Son v. Campbell, supra, and Hawkins Iron & Metal Co. v. Continental Ins. Co., supra, were summary judgment cases and decided after Garrett v. Royal Bros. Co., 225 Ga. 533 (170 SE2d 294). Even though questions of negligence, diligence and contributory negligence are not ordinarily susceptible of adjudication on summary judgment, our appellate courts have in many instances ruled that the clear failure of the plaintiff to exercise the required duty of ordinary care entitles a defendant to such summary judgment. Examples are Southland Butane Gas Co. v. Blackwell, 211 Ga. 665 (88 SE2d 6); Taff v. Harris, 118 Ga. App. 611 (164 SE2d 881); Crawford v. McDonald, 125 Ga. App. 289 (187 SE2d 542); Seaboard C. L. R. Co. v. Sheffield, 127 Ga. App. 580 (194 SE2d 484); and Parson v. Central of Ga. R. Co., 129 Ga. App. 218 (199 SE2d 396). As was said in Fields v. Goldstein, 97 Ga. App. 286, 288 (3) (102 SE2d 921): "[TJheir loss is attributable to their own negligence."
3. Where, as here, the record discloses the absence of any right of recovery in the plaintiff, the grant of summary judgment to defendant is proper. Code Ann. § 81A-156 (c) and 110-1203; Scales v. Peevy, 103 Ga. App. 42 (118 SE2d 193); Tingle v. Arnold, Cate & Allen, 129 Ga. App. 134 (199 SE2d 260).
Argued January 7, 1974
Decided June 18, 1974
Rehearing denied July 10, 1974
Martin, Kilpatrick & Davidson, Paul Kilpatrick, for appellant.
Kelly, Champion, Denney & Pease, Edward W. Szczepanski, Jr., for appellee.
Judgment affirmed.
Eberhardt, P. J., Stolz and Webb, JJ, concur. Deen, J., concurs specially. Bell, C. J., Pannell, P. J., Quillian and Evans, JJ., dissent.