Court Opinion

ID: 9567620
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:56:13.790064+00
Date Added: 2024-06-11T10:00:43.569289
License: Public Domain

MELTON, Justice,
dissenting.
Under the unique facts and posture of this case, I believe that the Court of Appeals correctly concluded that summary judgment should have been granted to Auto-Owners Insurance Company. Therefore, I respectfully dissent.
The facts of this case are straightforward. A default judgment was entered against Karan, Inc. in the State Court of Chatham County, and Karan subsequently moved to open default on the sole ground that it had never been properly served with the underlying lawsuit. Karan fully briefed this, its only argument, and provided the state court with affidavits to support its claim that service had never been received. The state court considered Karan’s argument and supporting evidence, and, on October 2, 2003, it rejected Karan’s sole ground for opening default, citing two cases, Oden v. Legacy Ford-Mercury, 222 Ga. App. 666 (476 SE2d 43) (1996), and Carter v. Progressive Ins. Co., 246 Ga. App. 562 (541 SE2d 418) (2000). In each of these cases, the moving party’s motion for default was denied on *549the basis that the party had failed to prove its claim that it had not received proper service of the underlying lawsuit. Given that Karan had only one argument and the cases specifically cited by the state court dealt specifically with that one argument, it becomes clear that the state court did, in fact, determine that service on Karan had not been insufficient.
Although Karan’s insurance policy with Auto-Owners insurance required Karan to notify Auto-Owners about the lawsuit “as soon as practicable,” Karan failed to do so until some time after the default judgment had already been entered against it. As a result, Auto-Owners filed a declaratory judgment action in the Superior Court of Chatham County, requesting a finding that it owed Karan no coverage due to its failure to properly notify Auto-Owners. On December 10, 2003, Auto-Owners filed a motion for summary judgment, contending that no issues of fact remained whether Karan had properly notified it as required by the policy. In opposition, Karan raised as the sole reason why it had been justified in failing to notify Auto-Owners that it had never received service of the underlying lawsuit. In raising this argument once again, Karan simply repeated the contentions that it had previously made before the state court in the default proceedings. Karan attempted to overcome Auto-Owners’ motion for summary judgment with the exact factual issue that had been adversely decided against it in the prior state court proceeding.
In a nutshell, Karan fully briefed and litigated the sole question of whether it received improper service in the state court, the state court entered an order rejecting Karan’s sole contention, and Karan subsequently tried to resurrect the sole contention that had already been decided in the state court in subsequent superior court proceedings. The issue was litigated and decided, and, as a result, Karan was collaterally estopped from its attempt to relitigate the same issue. See, e.g., Simmons v. State, 276 Ga. 525, 527 (579 SE2d 735) (2003) (collateral estoppel prevents relitigation of issue litigated and adjudicated between same parties or privies).
The effect of this estoppel must next be considered in light of Auto-Owners’ motion for summary judgment in the superior court. Auto-Owners contended that it was not required to extend coverage to Karan because it failed to notify Auto-Owners of the underlying suit until after a default judgment had already been entered in the underlying case. Karan’s only justification for not notifying Auto-Owners was its argument that it never received service of the underlying lawsuit. This justification had already been rejected by the state court as a matter of fact and law, and Karan was estopped from raising it again in the superior court action. As a result, in response to Auto-Owners’ motion for summary judgment, Karan had no excuse for its failure to notify Auto-Owners, and it cannot be *550maintained that failing to notify an insurer about the filing of a lawsuit until after a default judgment is entered is notice given “as soon as practicable.” Given this unique set of circumstances, summary judgment should have been granted to Auto-Owners.
Decided April 25, 2006
Reconsideration denied May 19, 2006.
Ellis, Painter, Ratterree & Adams, Kimberly C. Harris, Lee, Black, Hart & Rouse, Christopher L. Rouse, for appellants.
Glover, Blount & Millians, Michael W. Millians, for appellee.
The majority states that “even if the refusal to open default was premised on the state court’s finding that Karan failed to prove the merits of its claim of insufficiency of service of process, this still would not equate to a ruling that Karan failed to provide Auto-Owners with notice in accordance with the insurance policy.” Although I agree that these two decisions are different, I believe that the majority overlooks the necessary effect that the prior decision regarding the adequacy of service necessarily has on the subsequent decision regarding notice where, as in this case, both decisions are dependent on exactly the same question of fact. Here, the initial decision that service on Karan was not, in fact, improper mandates the rejection of the subsequent argument that late notice was justified due solely to improper service. At the time that it argued against Auto-Owners’ motion for summary judgment, the only question of fact underlying Karan’s defense had already been decided. As a result, Karan failed to present any question of fact at all to the superior court. The only evidence was that Karan failed to notify Auto-Owners as soon as practicable because it was not informed of the underlying suit until a default judgment had been entered. Since no question of fact remained that notice was not given “as soon as practicable,” summary judgment should have been entered in favor of Auto-Owners.
I am authorized to state that Chief Justice Sears joins in this dissent.