Court Opinion

ID: 9584732
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:52:11.896653+00
Date Added: 2024-06-11T15:13:59.914856
License: Public Domain

McMurray, Presiding Judge,
dissenting.
I respectfully dissent from the judgment affirming summary judgment on behalf of the excess liability carrier, First State Insurance Company, both as to the main claim and the counterclaim. Plaintiff Southeast Atlantic Cargo Operators, Inc. (“Southeast”) brought this contract action on an excess-coverage liability insurance policy issued to Southeast by defendant First State Insurance Company (“First State”), alleging that First State “is liable to [Southeast] in the amount of $115,065.30.” This dollar amount represents “accrued post[-]judgment interest . . .” which Southeast paid to the Georgia Ports Authority (“the Authority”) in its role as the Authority’s judgment-debtor. See Ga. Ports Auth. v. Southeast Atlantic &c., 202 Ga. App. 318 (414 SE2d 232). The complaint further alleged that First State was responsible for this sum “due to the insolvency of Midland Insurance Company,” Southeast’s primary insurer. See Southeast Atlantic &c. v. First State Ins. Co., 197 Ga. App. 371 (398 SE2d 264). First State denied the material allegations and counterclaimed for “the $28,640.95 paid by it for post-judgment interest that accrued on the [Georgia Ports Authority] judgment.”
First State subsequently moved for summary judgment both as to Southeast’s claim and its own counterclaim against Southeast. Specifically, First State asked for a “declaration] that First State has no obligation to pay any post-judgment interest to [Southeast] and . . . a money judgment against [Southeast] for the $28,640.95 in post-judgment interest that it paid to the [Georgia Ports Authority] on *796behalf of [Southeast].” In opposition, Southeast filed a cross-motion for summary judgment, arguing that “First State is responsible for all post-judgment interest awarded against [Southeast], [or] in the alternative, [that] First State is responsible for its pro-rata portion of post-judgment interest above the primary carrier’s insured limits.”
The following chronology is undisputed: In 1983, Southeast purchased a primary comprehensive general liability insurance policy from Midland Insurance Company with “limits of liability of $500,000.00.” About the same time, Southeast also purchased from First State an umbrella liability policy, providing up to $10,000,000 in excess liability coverage above the underlying coverage threshold of $500,000. In 1984, during the coverage period of the Midland primary policy, an employee of Southeast was injured on premises owned by the Georgia Ports Authority and leased to Southeast. On April 11, 1986, Midland Insurance Company was declared insolvent. In October 1987, the employee settled his tort action against the Georgia Ports Authority for approximately $1.3 million. In 1990, the Authority obtained a judgment for indemnification against Southeast for $625,332.96. This judgment is based on a jury verdict of proportionate fault among the Georgia Ports Authority (sixty percent at fault), Southeast (thirty-five percent at fault) and the employee (five percent at fault) for the employee’s injuries. In 1992, Southeast and First State jointly satisfied the Authority’s indemnification judgment. Southeast paid $500,000 of the principal amount of the judgment plus $115,065.30 in post-judgment interest. First State contributed “$153,973.91 which represented [the sum of] the principal amount of the judgment exceeding $500,000.00 ($125,332.96), plus post-judgment interest on that amount calculated from the date of the judgment ($28,640.95).” At the time of this payment, First State’s counsel confirmed in writing the mutual understanding of the parties that “this payment by First State and the payments by [Southeast] on the judgment do not constitute a waiver by either of them of any claims that either might have against the other that the other’s respective payment should have been greater under the terms of the policy number 00952473 issued by First State to [Southeast].”
The trial court granted First State’s motion and denied Southeast’s motion, ruling that the case sub judice was controlled by the “drop down” action, i.e., Southeast Atlantic &c. v. First State Ins. Co., 197 Ga. App. 371, supra. The trial court further ordered that Southeast “shall pay all of the post-judgment interest.”
1. It is my view that Southeast Atlantic &c. v. First State Ins. Co., 197 Ga. App. 371, supra, the so-called “drop down” action, is not controlling under the circumstances here. The doctrine of res judicata is inapplicable for the simple reason that the insured’s liability in indemnification was not fixed until this court’s subsequent decision in *797Ga. Ports Auth. v. Southeast Atlantic &c., 202 Ga. App. 318, supra.
The prior decision of this court in Southeast Atlantic &c. v. First State Ins. Co., 197 Ga. App. 371, supra, was that First State’s excess policy was not ambiguous and did not require it to “drop down” and provide so-called “first dollar” coverage where the named insured’s primary insurer had become insolvent. That decision is in the nature of declaratory judgment. However, it is not res judicata as to the issue in the cases sub judice, i.e., whether, under the unambiguous terms of that same policy, First State is responsible to its insured for post-judgment interest in any amount, after the limits of retained coverage of any primary liability insurance. This question was not ripe for decision and could not reasonably have been put in issue in the prior litigation even though it arises out of the same general subject matter. “The facts in the two records make, therefore, different cases, and a decision by this [C]ourt, upon one state of facts is not binding upon another. Therefore, [it is my view that,] the trial [court’s grant of summary judgment to First State cannot be sustained on the inapplicable ground] of res judicata. Bass Dry Goods Co. v. Granite City Mfg. Co., 116 Ga. 176 (3) (42 SE 415).” Sammons v. Tingle, 216 Ga. 814, 815 (3) (120 SE2d 124). See also Lawson v. Watkins, 261 Ga. 147, 149 (2) (401 SE2d 719).
2. First State undertook the express contractual duty to “indemnify the INSURED for ULTIMATE NET LOSS, ... in excess of RETAINED LIMIT,... all sums which the INSURED shall be obligated to pay by reason of liability imposed upon the INSURED by law ... for damages and expenses, because of: . . . PERSONAL INJURY.” First State “shall be liable only for the ULTIMATE NET LOSS in excess of . . . the limits of liability indicated ... in the Schedule A of underlying insurance,” i.e., the $500,000 primary coverage which would have been provided pursuant to the Midland policy. Despite this express undertaking, the majority accepts First State’s argument that this court’s prior ruling that First State has no duty to “drop down” means that the named insured “steps into the shoes of [the insolvent primary insurer,] Midland and any duty that Midland had under the Midland policy now becomes a duty of [Southeast].” First State reasons that Southeast is responsible for all post-judgment interest pursuant to the “standard interest clause”2 in the Midland policy. As a result, it is argued that “any analysis of First State’s duties assumes the continued existence of the Midland policy[.]” In my *798view, this position ignores the express undertaking of the excess liability policy, and reforms the policy to the detriment of the insured.
Post-judgment interest on the entire judgment is, as between these two insurers, a joint and several obligation of both the primary and excess liability insurers. See Hartford Steam Boiler &c. Co. v. Cochran Oil Mill & Ginnery Co., 26 Ga. App. 288, 296 (105 SE 856), where this court held that “any proper rule of apportionment must afford to the assured the fullest measure of indemnity under all the policies.” “The threshold point at which coverage begins [under the First State umbrella policy] is $500,000. The policy does not obligate [First State] to provide first dollar coverage in the event the underlying insurer is insolvent[.] ... On the other hand, [First State] is not relieved of its obligation to provide excess coverage because of the insolvency of the underlying insurer.” Lamb Brothers Lumber Co. v. South Carolina Ins. Co., 186 Ga. App. 51, 53 (366 SE2d 388). The majority has established the curious proposition that the insolvency of a primary insurer requires the named insured to assume (without consideration) any of the insolvent primary insurer’s contractual obligations for the benefit of an excess liability carrier. At most, the named insured is sei/-insured to the extent of the underlying or retained limits contemplated in the excess liability policy. Compare Wilkinson v. Vigilant Ins. Co., 236 Ga. 456, 457 (2) (224 SE2d 167), where the Georgia Supreme Court held that “ ‘the liability of the (insurer) is not altered by the discharge of the bankrupt [insured].’ ” Accordingly, the presence of a “standard interest clause” in a primary policy issued by a now-insolvent insurer should not alter the unambiguous obligation of First State, as the excess liability carrier, to “indemnify the INSURED for . . . all sums which [Southeast] shall be obligated to pay by reason of the liability imposed upon [Southeast] ... for damages and expenses. . . .” In my judgment, the trial court erred in granting First State’s motion for summary judgment on both the main claim by Southeast and on First State’s counterclaim to recover the post-judgment interest it had already paid. In the cases sub judice, accrued post-judgment interest on the entire judgment amount falls within the express limits of coverage, i.e., above the $500,000 retained limit and below the $10,000,000 upper limit of excess liability coverage. Moreover, post-judgment interest is a legal item of recoverable damages (OCGA §§ 9-12-10 and 7-4-12), and is included within the meaning of “all sums which the INSURED shall be obligated to pay by reason of the liability imposed upon the INSURED by law ... for damages and expenses, because of . . . PERSONAL INJURY.” See, e.g., Greenwood Cemetery v. Travelers Indem. Co., 238 Ga. 313, 317 (232 SE2d 910) (“Punitive damages is a legal liability . . .”). It follows that the trial court also erred in denying Southeast’s motion for summary judgment. The judgments of the *799trial court should be reversed and remanded with direction to enter judgment for Southeast, in accordance with the insured’s motion for summary judgment. OCGA § 9-11-50 (e).
Decided March 17, 1995
Adams & Ellis, George L. Lewis, Laura J. Tromly, for appellant.
Lightmas & Delk, Frank A. Lightmas, Jr., for appellee.
I am authorized to state that Judge Blackburn joins in this dissent.

 The section on Supplementary Payments provided: The Company [Midland] will pay, in addition to the applicable limit of liability: ... all expenses incurred by the company, all costs taxed against the insured . . . and all interest on the entire amount of any judgment. . . .” This is referred to as the “standard interest clause.” 8A Appleman, Insurance Law & Practice, § 4894.25, p. 80, n. 3.