Court Opinion

ID: 9577156
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:32:09.268969+00
Date Added: 2024-06-11T13:20:01.631055
License: Public Domain

Hines, Justice,
concurring specially.
I write separately because the rule fashioned today by the majority effectively precludes an insured from obtaining expeditious relief by settlement with the tortfeasor’s liability insurance carrier, and thus, is contrary to the very purpose of uninsured motorist coverage.
We granted review to consider the Court of Appeals’ determinations that plaintiff Daniels was required to exhaust available liability coverage as a condition precedent to a claim under his own policy for uninsured/underinsured motorist (UM) benefits, and that Daniels failed to do so. I agree that exhaustion of liability coverage is a statu*292tory prerequisite to recovery of UM benefits and that the judgment of the Court of Appeals must be reversed because the Daniels’ settlement of claims under the available liability coverage satisfied the requirement. However, mandating that an insured “settle” for the face limits of the liability policy in order to satisfy the exhaustion requirement is in reality a call to litigate.
Uninsured motorist legislation is to provide for insurance coverage in order to facilitate indemnification for injuries to a person legally entitled to recover damages from an uninsured motorist, and thereby, protect innocent victims from the negligence of irresponsible drivers. Uninsured motorist statutes are, by nature, remedial and are to be broadly construed to accomplish the legislative goal. Hinton v. Interstate Guaranty Ins. Co., 267 Ga. 516, 517 (480 SE2d 842) (1997). As the majority acknowledges, the legislature enacted OCGA § 33-24-41.1, allowing a limited release, in order to provide a meaningful mechanism whereby a claimant/insured could settle with the tortfeasor’s insurer and still avail himself of his UM coverage. Thus, for the purpose of the exhaustion requirement, an insured who enters into a good faith settlement with a tortfeasor’s liability insurance carrier should be considered to have received the liability policy limits and thus, eligibility for uninsured/underinsured motorist coverage. Otherwise, the insured is effectively barred from settling his claim against the tortfeasor for an amount less than the tortfeasor’s limits of liability, or he suffers the penalty of completely forfeiting UM benefits. Other jurisdictions have reached similar conclusions. See, e.g., In re Estate of Rucker, 442 NW2d 113 (Iowa 1989); Schmidt v. Clothier, 338 NW2d 256 (Minn. 1983). The reasoning is that to require an insured to litigate every claim to obtain coverage limits would defeat both the important policy favoring settlement of lawsuits and the underlying compensatory purpose of uninsured motorist coverage by delaying the payment of claims and by increasing the costs and burdens borne by the insured in attempting to obtain compensation. Appleman, 8C Insurance Law & Practice, § 5108. Such a rule balances public policy concerns with the interests of both the insurer and the insured. It does so by allowing the insured to settle with the tortfeasor for less than the limits of the tortfeasor’s liability insurance and still obtain UM benefits, but requiring that liability for UM coverage is triggered only when the insured’s damages exceed the actual limit of the tortfeasor’s liability insurance. The insured is held responsible for any gap between the amount of the settlement and the tortfeasor’s liability limits. Id. This result comports with the express definition of available coverages contained in OCGA § 33-7-11 (b) (1) (D) (ii). What is more, it is powerful motivation for the insured to obtain the maximum possible settlement, in accord with the letter and spirit of the exhaustion requirement. When he does so, *293he has settled in good faith.
Decided December 4, 1998.
Beauchamp & Associates, Robert M. Beauchamp, Patrick S. Bid-son, for appellants.
Watson, Spence, Lowe & Chambless, John M. Stephenson, for appellee.
The Daniels obtain relief today because of the peculiar circumstances of their case, but the harsh line drawn by the majority ensures that other policyholders will not be so fortunate.
I am authorized to state that Chief Justice Benham and Justice Hunstein join in this special concurrence.