Court Opinion

ID: 9565955
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:30:46.077197+00
Date Added: 2024-06-11T09:18:17.649369
License: Public Domain

McMurray, Chief Judge,
dissenting.
“ ‘Estoppel is usually an issue of fact to be decided by the jury. [Cit.]’ Vines v. Citizens Trust Bank, 146 Ga. App. 845, 848 (247 SE2d 528) (1978).” Adamson v. McDonald, 163 Ga. App. 38, 39 (2) (293 SE2d 512). The majority holds that as a matter of law “there was nothing done by Monarch that could have prejudiced Prescott’s rights or jeopardized its defense,” so that no genuine issue of material fact exists as to the defendant’s contention that Monarch is estopped to deny coverage. As I find, within the record, evidence that Monarch’s conduct has prejudiced Prescott’s defense of Boatwright’s negligence *549action, I respectfully dissent.
“ ‘A liability insurer, which with knowledge of a ground of forfeiture or noncoverage under an insurance policy assumes and conducts the defense of an action brought against the insured, is thereafter es-topped in an action upon the policy from asserting such forfeiture or noncoverage.’ State Farm Mut. Auto. Ins. Co. v. Anderson, 104 Ga. App. 815 (123 SE2d 191). Accord: Jones v. Georgia Cas. &c. Co., 89 Ga. App. 181 (78 SE2d 861); State Farm Mut. Ins. Co. v. Anderson, 107 Ga. App. 348, 351 (2) (130 SE2d 144).” Gant v. State Farm Mut. Auto. Ins. Co., 109 Ga. App. 41, 43 (134 SE2d 886). If an insurer enters a defense without knowledge of the facts of noncoverage, estoppel will not necessarily arise. Gant v. State Farm Mut. Auto. Ins. Co., 109 Ga. App. 41, 43, supra; Home Indem. Co. v. Godley, 122 Ga. App. 356, 361 (1) (177 SE2d 105). In the case sub judice, the complaint in the negligence action, which set forth the alleged date of the injury to defendant Boatwright (plaintiff in the negligence action), such date being the basis of the noncoverage alleged in the case sub judice, was delivered to Monarch before Monarch’s counsel requested that his law firm be added as additional counsel for Prescott’s in the negligence action. Thus, the record in the case sub judice contains some evidence of Monarch’s knowledge of the facts giving rise to its non-coverage assertion prior to that time at which Monarch’s counsel first assumes and conducts the defense of Prescott’s.
Monarch contends that its counsel did not assume and conduct the defense until after the reservation of rights letter had been sent to Prescott’s. Thus, Monarch’s position is that its counsel did not “assume and conduct the defense” in the interval of time after he was added as requested upon the records of the trial court as an additional counsel of Prescott’s and prior to the reservation of rights letter. Apparently an insurer’s counsel “assumes” the defense of an action when he files defensive pleadings on behalf of the insured. State Farm Mut. Auto. Ins. Co. v. Wheeler, 160 Ga. App. 523, 526 (287 SE2d 281); Gant v. State Farm Mut. Auto. Ins. Co., 109 Ga. App. 41, 42, supra. The case sub judice is somewhat different in that Prescott’s answer in the negligence action was filed by Prescott’s individual counsel who was not retained by Monarch, and subsequently Monarch’s counsel requested to be added as additional counsel for Prescott’s. Did Monarch thereby “assume” the defense of the negligence action against Prescott’s? I believe that a positive answer is required as to “assume” the defense is “to take up” or to take “upon oneself” the defense. See Webster’s New International Dictionary, 2d ed., Unabridged. Also see Jones v. Ga. Cas. &c. Co., 89 Ga. App. 181, 186 (78 SE2d 861). By having his law firm added as additional counsel, Monarch’s counsel indicated that he had undertaken the defense of Prescott’s. Furthermore, I decline to accept the majority’s position that, as *550a matter of law, Monarch’s counsel by inaction did not conduct a defense of Prescott’s. Inaction is always a tactical alternative to action.
“[A]n insurer who assumes and conducts a defense with knowledge of a ground of forfeiture and without ‘proper notice’ of a reservation of rights estops itself . . . [and] ... a notice of reservation of rights by an insurer must be both timely and sufficient...” Winters v. Government Employees Ins. Co., 132 Ga. App. 756, 759 (209 SE2d 32). As there is evidence of Monarch’s knowledge of the facts giving rise to the claim of noncoverage prior to January 20,1982, when Monarch’s counsel wrote a letter requesting that his law firm be added as additional counsel for Prescott’s, and there is evidence that Monarch had from receipt of that letter assumed and conducted the defense of Prescott’s in the negligence action, the next question is whether the reservation of rights letter dated April 15, 1982, was timely. It has been held that a period of five months without notice of a reservation of rights constitutes an estoppel. Winters v. Government Employees Ins. Co., 132 Ga. App. 756, 759, supra. The period in the case sub judice is approximately three months, a shorter period but one from which it may be implied that prejudice resulted.
The majority cites Ballinger v. C. & S. Bank of Tucker, 139 Ga. App. 686, 689 (229 SE2d 498), for the proposition that the “doctrines of implied waiver and of estoppel, based upon the conduct or action of the insurer, or its agent, are not available to bring within the coverage of a policy risks not covered by its terms, or risks expressly excluded therefrom.” Ballinger is predicated in part upon Quillian v. Equitable Life Assurance Society, 61 Ga. App. 138, 144 (6 SE2d 108), also cited by the majority as authority for substantially the same concept as that for which Ballinger is cited. In Southeastern Color Lithographers v. Graphic Arts Mut. Ins. Co., 164 Ga. App. 70, 72-73 (296 SE2d 378), we held that Ballinger (and by implication Quillian v. Equitable Life Assurance Society, 61 Ga. App. 138, 144, supra) is factually distinguishable from cases, such as the case sub judice, having to do with insurers which actually undertake the legal defense of the insured but nevertheless deny coverage. As Southeastern Color Lithographers v. Graphic Arts Mut. Ins. Co., 164 Ga. App. 70, 72-73, supra, involves the application of the Ballinger rule which is distinguished by that case from circumstances such as in the case sub judice, I am unable to accept the reasoning of the majority in concluding that this case supports its position. See also Sargent v. Allstate Ins. Co., 165 Ga. App. 863, 865 (1) (303 SE2d 43), in further support of the distinguished Ballinger v. C. & S. Bank of Tucker, supra (and Quillian v. Equitable Life Assurance Society, supra) rule. The essence of the Sargent case relates more to the proposition that an insurer may waive a provision of an otherwise valid policy which was inserted for the benefit of the insurer.
*551Genuine issues of material fact remain as to whether Monarch is barred by estoppel from denying coverage of Prescott’s. Therefore, I would hold that the trial court erred in granting summary judgment to Monarch.
I am authorized to state that Presiding Judge Deen and Presiding Judge Shulman join in this dissent.