Opinion ID: 77524
Heading Depth: 2
Heading Rank: 2

Heading: Georgia Substantive Law

Text: 18 The remaining question is whether Georgia law permits an insurer to bring a subrogation claim against the tortfeasor-insured of an insolvent insurer. To answer that question, we first examine Georgia's own insolvent insurer scheme. 19 GIIP contains no analogue to FIGA's provision barring a member insurer from suing the insured of an insolvent member insurer. The closest GIIP comes is O.C.G.A. § 33-36-6(e), which provides, in pertinent part: The pool as a legal entity and any of its individual members shall have no cause of action against the insured of the insolvent insurer for any sums it has paid out except such causes of action as the insolvent insurer would have had if such sums had been paid by the insolvent insurer and except as otherwise provided in this chapter. § 33-36-6(e) (emphasis added). This provision has no apparent application to the present dispute, since there is no indication that Georgia's insolvency pool has paid out any sums on behalf of Moody, MasTec or Reliance. Indeed, there is no suggestion that any claim relevant to this case has been made against Georgia's insolvent insurer pool. 20 More fundamentally, GIIP does not apply in this case because Federated's subrogation claim is not a covered claim under the Act. Section 33-36-3(4) provides, in pertinent part: 21 (A) Covered claim means an unpaid claim which: 22 (i) Arises out of a property or casualty insurance policy issued by an insurer which becomes an insolvent insurer which was authorized to do an insurance business in this state either at the time the policy was issued or when the insured event occurred; 2 and 23 (ii) Is within any of the classes of claims under subparagraph (B) of this paragraph. 24 (B) A claim shall not be paid unless it arises out of an insurable event under a property or casualty insurance policy and it is: 25 (i) An unearned premium claim of a policyholder who at the time of the insolvency was a resident of this state; 26 (ii) An unearned premium claim of a policyholder under a policy affording coverage for property permanently situated in this state; 27 (iii) The claim of a policyholder or insured who at the time of the insured event was a resident of this state; 28 (iv) The claim of a person having an insurable interest in or related to property which was permanently situated in this state; or 29 (v) A claim under a liability or workers' compensation insurance policy when either the insured or third-party claimant was a resident of this state at the time of the insured event. 30 § 33-36-3(4) (footnote added). 31 Federated's claim does not fit within any of the five classes of claims set forth in § 33-36-3(4)(B)(i)-(v). Plainly, subsections (i), (ii) and (iv) do not apply. Subsection (iii) also does not apply because the policyholders and insureds to whom the statute refers are Moody and MasTec, and they were not Georgia residents when the accident occurred. Finally, although Federated's subrogation claim may be a claim under a liability insurance policy, subsection (v) is inapplicable because neither the insured (Moody/MasTec) nor the third-party claimant (Federated) were Georgia residents at the time of the accident. 3 For these reasons, we conclude that Federated's subrogation claim is not a covered claim under GIIP. 32 Moreover, even if Federated's claim were covered by GIIP, any statutory objections the pool might raise against such a claim are unavailable to Moody and MasTec. [T]he mere fact that one of the prerequisites to recovery under the Act is not satisfied does not create a `personal defense so as to bar [the claimant's tort case]' against a defendant other than GIIP. United States v. Rutland, Inc., 849 F.Supp. 806, 812 (S.D.Ga.1994) (alteration added) (quoting Lee v. Fulton Concrete Co., 195 Ga.App. 348, 349, 393 S.E.2d 449, 450 (Ga.App.1990)). This is consistent with the axiomatic Georgia rule that under normal circumstances, a defendant's tort liability is not contingent upon its insurance coverage[;] ... insurance is a non-issue. Id. at 811. 33 Before leaving GIIP, we address O.C.G.A. § 33-36-10(a), which the district court and Moody/MasTec have characterized as a choice of law provision. Section § 33-36-10(a) states: 34 It is not the purpose of this chapter to provide or permit duplicate recoveries of covered claims under this chapter and an insolvency fund or its equivalent of any other state. In the construction and application of this chapter with respect to a covered claim which may be recoverable under this chapter and under an insolvency fund or its equivalent in another state, the sole recovery: (1) with respect to a workers' compensation claim, shall be under the insolvency fund or its equivalent of the state of residence of the claimant; (2) with respect to a first-party claim of an insured for damage to or destruction of property with a permanent location, shall be under the insolvency fund or its equivalent of the state where the property is permanently situated; and (3) with respect to any other covered claim, shall be under the insolvency fund or its equivalent of the state of residence of the insured. 35 § 33-36-10(a) (emphasis added). 36 This statute cannot apply because, as previously discussed, Federated's subrogation claim is not a covered claim under GIIP. Further, by its plain terms, this provision is designed to prevent duplicative recoveries when more than one state's insolvent insurer scheme applies, rather than to referee the more general question of which state's statutory scheme controls in a conflict of law situation. This interpretation is buttressed by the immediately succeeding subsection of the statute, which states: 37 Any recovery obtained from the pool pursuant to this chapter shall be reduced by those amounts recovered in any other state from a similar or equivalent insolvency fund in such state when the recovery was obtained by the same claimant for the same claim filed against the pool in this state. 38 O.C.G.A. § 33-36-10(b). If § 33-36-10(a) were truly a choice of law provision, § 33-36-10(b) would be unnecessary. Accordingly, we reject the notion that § 33-36-10(a) mandates application of FIGA. 39 Having thus determined that GIIP does not bar Federated's subrogation claim, we now examine whether that claim, obtained by assignment, is permitted under Georgia law. We conclude that it is. See United Budget Co. v. Ga. Insurers Insolvency Pool, 253 Ga. 435, 437, 321 S.E.2d 333, 335 (Ga.1984) (assignee and attorney-in-fact for policyholders stood in insureds' shoes and were deemed entitled to receive unearned premiums on insolvent insurer's cancelled policies); J. Transp. Inc. v. Ga. Insurers Insolvency Pool, 209 Ga.App. 748, 751, 434 S.E.2d 552, 555-56 (1993) (discussing United Budget and stating [t]hat the insured's right to recover from the insolvent insurance company was assigned to another party does not relieve the Pool from its statutory duty to pay the claim). Hence, under Georgia law, Federated may proceed with its subrogation claim.