Case Name: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. HARPER et al.
Court: Court of Appeals of Georgia
Jurisdiction: Georgia
Decision Date: 1972-03-10
Citations: 125 Ga. App. 696
Docket Number: 46454
Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. HARPER et al.
Judges: Jordan, P. J., concurs. Evans, J., concurs specially.
Reporter: Georgia Appeals Reports
Volume: 125
Pages: 696–704

Head Matter:
46454.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. HARPER et al.
Argued September 13, 1971
Decided March 10, 1972.
Martin, Snow., Grant & Napier, Cubbedge Snow, Jr., George G. Grant, for appellant.
McKenney & Thornton, Neal D. McKenney, Richard B. Thornton, for appellees.

Opinion:
Quillian, Judge.
The defendant makes three principal contentions: (1) that since the plaintiffs recovered under the Ford policy they were not entitled to recover any sums under the Corvair policy; (2) that the amount paid under the uninsured motorists coverage should be reduced by the amounts paid under medical payments coverage; (3) that in view of the novel legal questions presented there was no legal basis for the imposition of bad faith penalty and attorney's fees.
In this case there were two separate insurance policies — the Ford policy and the Corvair policy. The inception of both policies was on the same day. However, they each had different expiration dates and were for different premiums. Neither policy made reference to the other and while they contained many identical provisions they were in all material respects separate policies.
As held in Gulf American Fire &c. Co. v. McNeal, 115 Ga. App. 286, 291 (154 SE2d 411), the Uninsured Motorist Act provides for two classes of insured persons. One of these classes are insured persons only when the insured automobile is involved, but as to the other they are insured persons even where the insured automobile is not in any way involved in the insured's injuries. This class is: "The named insured and, while resident of the same household, the spouse of any such named insured, and relatives of either, while in a motor vehicle or otherwise.". See Code § 56-407A (b) (Code Ann. § 56-407.1; Ga. L. 1963, p. 588; 1964, p. 306; 1967, pp. 463, 464; 1968, pp. 1089, 1091; 1968, pp. 1415, 1416; 1971, pp. 926, 927). Therefore, the plaintiff and his wife were insured under the Corvair policy.
It is urged that provisions of the Corvair policy serve to exclude the plaintiffs from coverage while occupying the Ford automobile. In Travelers Indem. Co. v. Williams, 119 Ga. App. 414, 416 (167 SE2d 174), we pointed out that any policy provision which attempts to contravene the clear intent of the Uninsured Motorists' Act is void and not enforceable. In that case we held that an insured under two separate uninsured motorist policies, may recover on both policies not to exceed his actual damages pursuant to the uninsured motorist statute. The Supreme Court approved this decision in State Farm Mut. Auto. Ins. Co. v. Murphy, 226 Ga. 710 (177 SE2d 257), and allowed recovery of plaintiffs' actual loss within the limits of the policies involved. In this case the plaintiffs were in the position of being the insureds in the Ford policy, both because they were insured persons and the insured automobile was involved, and were insured under the Corvair policy since they fell in the class of the named insured and his spouse.
Doerpinghaus v. Allstate Ins. Co., 124 Ga. App. 627, 628 (185 SE2d 615), is not controlling here since in that case the court found that there was only one policy involved. It was there pointed out: "The extension certificates and the stipulation of fact reveal that there is only one policy involved insuring two automobiles." From the language of the opinion, this was the sole basis for holding that the $10,000 per person for one accident was the maximum amount which the plaintiff could recover. It may be true that the defendant here could have avoided the result reached by issuing only one policy but it did not choose to do so and where two policies are used even by the same company, we can see no reason for not applying the rules set forth in Travelers Indem. Co. v. Williams, 119 Ga. App. 414, supra, and State Farm Mut. Auto. Ins. Co. v. Murphy, 226 Ga. 710, supra.
In this case the trial judge did not give credit for the $1,000 the defendant paid each plaintiff under the provisions for medical payment but only credited the two payments made under the uninsured motorist provision totaling $18,000. As a result the principal amount of the judgment was $14,500 allowing the plaintiffs to recover $34,500 on the two policies when their judgment on which recovery was predicated totaled $32,500. The policies contain language providing that the amount payable as uninsured motorists coverage be reduced by any sums paid under medical coverage.
In Phillips v. State Farm Mut. Auto. Ins. Co., 437 F2d 365, the federal court held that sums paid under medical provisions of a policy could not serve to reduce the amount owed as uninsured motorist coverage. In that case plaintiff had damages in excess of the $10,000 coverage for uninsured motorists. We think the result there reached was correct.
However, this is not the situation in the instant case. Here under the two policies, the plaintiffs were able to recover the full amounts for their claims, to wit, $12,500 and $20,000 respectively. In State Farm Mut. Auto. Ins. Co. v. Murphy, 226 Ga. 710, 714, supra, it is pointed out: "There is no danger of pyramiding multiple policies so as to recover beyond actual damage, a factor considered in some of the reported cases from other jurisdictions, as the insured would not be legally entitled to recover amounts beyond his actual damages no matter how many policies he was the beneficiary of." (Emphasis supplied.) This same problem was recognized by this court in Travelers Indem. Co. v. Williams, 119 Ga. App. 414, 416, supra, where the question was considered as to whether the insured "under two separate uninsured motorist policies, may recover on both policies not to exceed his actual damages pursuant to the uninsured motorists statute." (Emphasis supplied.) It seems clear the policy of the Uninsured Motorists Act is not to allow an insured to "stack coverage" in order to recover amounts in excess of his actual damages. Thus, policy provisions which would limit coverage in this respect would not be void but would be enforceable.
In a recent case, Ramsden v. Govt. Employees Ins. Co., 123 Ga. App. 163, 166 (179 SE2d 671), this court in considering medical payments held: "The contracts here involved, as to medical payments and funeral expenses incurred, were contracts of indemnity (Exchange Bank of Macon v. Loh, 104 Ga. 446 (31 SE 459, 44 LRA 372); Laurie v. Holland America Ins. Co., 31 Ill. App. 2d 437 (176 NE2d 678)), and once the insured party is paid in full under one contract of indemnity, recovery cannot be had again under another similar contract."
Insofar as the judgment herein entered allowed the plaintiff recovery in excess of the actual damages, it is error and must be reversed.
As to the recovery of penalties, damages, and attorney's fees: "Refusal to pay in bad faith means a frivolous and unfounded denial of liability. If there is any reasonable ground for the insurer to contest the claim, there is no bad faith. . ." Dependable Ins. Co. v. Gibbs, 218 Ga. 305, 316 (127 SE2d 454). Where questions of law as to the proper construction of an insurance policy provision have not been decided by the courts of Georgia and are not of easy solution, then a finding of damages for bad faith and attorney's fees is not authorized. Life Ins. Co. of Ga. v. Burke, 219 Ga. 214 (1) (132 SE2d 737); Canal Ins. Co. v. Woodard, 121 Ga. App. 356 (2) (173 SE2d 727). Moreover, here we have found in favor of the defendant's contention with regard to the medical' payments and hence there is no legal basis for the application of any penalty. The portion of the judgment awarding damages for bad faith and attorney's fees is error.
The judgment is affirmed on the condition that the amount awarded to the plaintiff Cecil M. Harper in excess of $10,000 and the amount awarded to the plaintiff Sherry Gail Harper in excess of $2,500 and the sums for penalty and attorney's fees are written off within 15 days after the remittitur is made the judgment of the trial court, otherwise reversed.
Judgment affirmed on condition.
Jordan, P. J., concurs. Evans, J., concurs specially.