In Cullara v. Building & Earth Sciences, Inc., Case No. A16A1735 (Ga. Ct. App., Dec. 8, 2016), the Georgia Court of Appeals seems to raise as many questions as it answers concerning an employer’s duty to investigate an employee before entrusting the employee with a company vehicle. In this case, a prospective employee at Building & Earth Sciences (“BES”) stated in his application that his criminal history consisted of only a prior conviction for possession of cocaine. BES did a background check on the employee, including his employment history, credit history, Social Security information, criminal history, and motor vehicle record. His driving record was clean, and the federal criminal history showed no convictions. One Saturday, a few months after the employee was hired, his supervisor allowed him to borrow a company truck to move a personal item to the employee’s new home. Several beers later, the employee collided with Plaintiff. The employee pled guilty to DUI.

The ensuing lawsuit included a claim against BES for negligent entrustment. In his deposition, the employee gave inconsistent testimony concerning an interview he had with BES prior to being hired. He testified again and again that he could not remember whether he told GES in the interview anything about his criminal history other than the cocaine conviction and a DUI conviction in 2002. He did have several prior DUI convictions, however, and in other parts of his deposition, he testified that he told the GES interviewers about all of his criminal history, including the prior DUIs. The trial court granted BES’s Motion for Summary Judgment, based on a finding that the employee reported only the prior cocaine conviction and the one prior DUI, and that such evidence was insufficient to support a claim of negligent entrustment. The Court of Appeals reversed, ruling the trial court improperly failed to consider the contrary evidence in the light most favorable to the plaintiff, the non-movant. The Court also rejected BES’s argument that an employer could rely solely on an investigation into an employee’s criminal history and driving record.

Given the conflicting evidence concerning the employer’s knowledge of the employee’s habitual recklessness, the Court’s decision is not surprising. The opinion, however, raises other unanswered questions. First, although the plaintiff also argued the trial court “failed to consider whether BES voluntarily assumed a duty to investigate the former employee’s driving background,” the Court reversed summary judgment only on the basis that there was an issue of fact concerning the employer’s knowledge of the multiple prior DUI convictions. The Court discussed neither the duty to investigate nor the sufficiency of any such investigation. The Court did give hints that the employer’s investigation fell short, however, pointing out the motor vehicle report “searched only for violations in the preceding three years,” and by dropping a footnote that said, while the employer conducted a federal criminal search on the employee, “[t]here is no explanation why BES did not order a state criminal background report.” Second, the Court leaves unexplained its statement that “the issue is whether BES knew or should have known that [the employee] was a high risk driver.” (Emphasis added.) This statement flatly contradicts established law and the Court’s own prior statement in the same case that to prove negligent entrustment, the plaintiff must show that the vehicle owner entrusted the vehicle to another “with actual knowledge that the driver is incompetent or habitually reckless.” (Emphasis added.) Can it be assumed that the Court’s inclusion of constructive knowledge is an inadvertent misstatement of the law on negligent entrustment, or is the Court attempting to establish an employer’s duty to investigate potential employees’ driving records?

What should business owners do before allowing employees to drive company vehicles? If you do a background check, do a thorough job. Get both the federal and state criminal records, and get a seven-year motor vehicle record, not just a three-year. Document any pre-hire interviews. You will not only increase your chances of getting summary judgment in claims of negligent entrustment, you will potentially keep an unsafe driver off the roads.

The Georgia Supreme Court recently held in Georgia Farm Bureau Mutual Insurance Co. v. Smith et al., No. S15G1177 (Ga. March 21, 2016), that lead paint unambiguously qualifies as a pollutant and that personal injuries from ingesting the paint were excluded from coverage by the plain language of the commercial general liability (CGL) policy’s absolute pollution clause.

In this case, Amy Smith, individually and as next friend of her daughter, sued her landlord, Bobby Chupp, for injuries her daughter sustained after ingesting lead paint. The rental home was insured by Chupp under a CGL policy issued by Georgia Farm Bureau Mutual insurance Company. Georgia Farm Bureau argued the policy’s absolute pollution exclusion clause excepted coverage.

Pollution exclusion clauses were originally developed by insurers as a response to environmental regulations enacted by Congress in the 60’s and 70’s and were directed specifically at environmental pollutants. These clauses were later broadened to exclude pollution beyond the natural environment to pollutants originating from places such as the rental property at issue in this case. The broadened clauses are known as “absolute exclusion clauses.”

Georgia courts have repeatedly upheld such clauses and found they extend beyond traditional environmental pollution to include for instance, carbon monoxide leaking from a furnace in a rental home, asbestos released from floor tiles during renovation, and smoke emanating from the premises. Importantly, Georgia courts enforced absolute pollution exclusion clauses without requiring the specific pollutant to be explicitly identified in the policy.

In the Smith case, the Georgia Supreme Court looked to the plain language of the policy and found lead paint to be unambiguously qualified as a pollutant as defined in the policy, even though it was not specifically named in the policy. The policy language upheld by the Georgia Supreme Court and which should be kept in mind when drafting absolute pollution exclusion clauses is as follows:

This insurance does not apply to:
(f) Pollution (1) “Bodily injury” or “property damage” arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of “pollutants: (a) At or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to, any insured

Pollution was defined as “any solid, liquid, gaseous or thermal, irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.”

The Smith case was a big win for Georgia insurers and further fortified that the plain language of the policy controls policy coverage.

In 2007, Joshua Martin, then nineteen-years-old, was walking with his brother and a friend from Six Flags Over Georgia to a nearby bus stop, when they were brutally attacked, according to the Athens Banner-Herald. Martin was severely injured by one man who allegedly beat him with brass knuckles and put him in a coma for over a week. Although the bus stop was not on Six Flags property, the four males eventually convicted of the attack on Martin were all seasonal Six Flags employees.

In 2009, Martin sued Six Flags, alleging that the park negligently failed to provide adequate security and negligently failed to keep their premises safe. Six Flags Over Ga. II, L.P. v. Martin, 320 Ga. App. 52 (2013). After a nine-day trial and an interlocutory appeal on an apportionment issue, the Cobb County jury awarded Martin $35 million in damages. The jury apportioned 8% of the award to the four assailants, and the remaining 92%, or $32.2 million to Six Flags. “Six Flags Fights $35M Verdict in Attack Near Park,” Daily Report (July 17, 2015).

Six Flags appealed the case based on the fact that the attack did not occur on Six Flags’ property. Oral arguments in front of the Georgia Court of Appeals were held on July 15. The central issue, according to the Daily Report article, was whether Six Flags could be held liable for an off-site injury; specifically, whether the bus stop constituted an “approach” to the property and whether Six Flags took steps to exercise dominion over the bus stop area.

Georgia law describes an approach as “property directly contiguous, adjacent to, and touching those entryways to premises under the control of an owner or occupier of land, through which the owner or occupier, by express or implied invitation, has induced or led others to come upon his premises for any lawful purpose, and through which such owner or occupier could foresee a reasonable invitee would find it necessary or convenient to traverse while entering or exiting in the course of the business for which the invitation was extended.” Motel Properties v. Miller, 263 Ga. 484, 486 (1993). One exception to this rule is if the landowner has exerted some “positive exercise of dominion” over a public way (or private property), usually referring to a sidewalk or ramp which is directly connected to the approach.

The remarkably high verdict aside, the Appellate Court’s ruling is significant for its potential to extend a landowner’s liability beyond its physical premises and approaches, or the “the last few steps taken by invitees, as opposed to ‘mere pedestrians,’ as they enter or exit the premises,” to include crimes or injuries off its property. Id. at 486. Should the Court uphold Martin’s argument of off-property liability, this decision will have profound impact on all business owners, large and small.

The Georgia Supreme Court recently clarified that it is the insured/plaintiff, not the UM carrier, who has the burden of proof as to whether the at-fault driver was in fact an uninsured motorist under the plaintiff’s UM policy. In Travelers Home & Marine Ins. Co. v. Castellanos, Case No. S14G1878, 2015 Ga. LEXIS 350 (Ga. S. Ct., June 1, 2015), the defendant did not appear at trial in the underlying case. After the plaintiff obtained a judgment, the defendant’s liability carrier, United Auto, denied coverage to the defendant based on a failure to cooperate in the defense. The plaintiff then sought payment from Travelers, his UM carrier, and eventually filed suit against Travelers for bad faith refusal to pay a covered loss. Travelers raised the defense that United Auto did not “legally deny” the underlying defendant’s liability coverage and, therefore, the defendant was not an “uninsured motorist” under the policy.

The parties filed cross motions for summary judgment. The trial court granted summary judgment to Travelers, holding the plaintiff had failed to present evidence of a legal denial of coverage by United Auto. On appeal, the Georgia Court of Appeals held the trial court had improperly shifted the burden to the plaintiff to produce evidence that would rebut Travelers’ affirmative defense. The Georgia Supreme Court, in turn, reversed the Court of Appeals and upheld the trial court’s grant of summary judgment to the UM carrier.

The Court held that the plaintiff has the burden of proof to show (1) the existence of the UM policy, and (2) that the at-fault driver was an uninsured motorist. Travelers’ policy defined “uninsured motor vehicle” to include a vehicle which is insured but the insurer “legally denies coverage.” Thus, the plaintiff had the burden to show United Auto’s denial of coverage was “legally sustainable.” To do that, the plaintiff had to establish the same elements an insurer needs to justify a denial of coverage based on non-cooperation: (1) the insurer made a reasonable request for cooperation in defending the case, (2) the insured willfully failed to cooperate, and (3) the failure to cooperate prejudiced the defense.

The Court first noted that the uninsured motorist statutes are remedial and must be broadly construed to provide coverage where possible. The Court also acknowledged the difficulty a plaintiff might have in procuring evidence where he is “a stranger to the relationship between the tortfeasor and its insurer.” The solution-and liability insurers should take note-is for the plaintiff to obtain discovery “from the insurer regarding its efforts to contact its insured and its lack of success in securing cooperation.” Although the Court found a presumption of prejudice resulted from the underlying defendant’s absence from trial, the Court held that the plaintiff had failed to show that the liability insurer had reasonably requested the defendant’s cooperation or that the defendant willfully refused to cooperate. Other than statements in the pleadings, the only evidence presented was an unauthenticated letter from United Auto to its insured stating that it was denying coverage because of his non-cooperation. The Court held this was simply not enough because it said nothing about United Auto’s efforts to contact its insured. The plaintiff failed to meet his burden of proof to show that United Auto had legally denied coverage, and the UM carrier was entitled to summary judgment.

Discovery issues rarely reach the Georgia Supreme Court, but in the case of Bowden v. Medical Ctr., Inc., No. S14G1632, *1-25 (June 15, 2015), a discovery dispute centered around a plaintiff’s medical bills merited a 25-page unanimous opinion. Briefly, the case arose from a car accident involving a 21-year-old plaintiff, Danielle Bowden, who was treated at The Medical Center, Inc. (TMC), without health insurance, for a broken leg and subsequently received physical therapy. TMC billed her $21,409.95 for her care and filed a hospital lien for that amount. Bowden sought to invalidate the lien on the grounds that the charges were grossly excessive and did not reflect the reasonable value of the care she received. Enterprise, the insurer of the defendant, tendered its $25,000 limits, but because TMC and Bowden were unable to agree on how to apportion the settlement proceeds, Enterprise filed a complaint in interpleader against both Bowden and TMC. As part of Bowden’s answer to the interpleader action, she filed a cross-claim against TMC. It is against this procedural backdrop that this discovery dispute arises.

Bowden, as part of her cross-claim, requested information from TMC (e.g., pricing agreements with various insurance companies and Medicaid/Medicare; TMC’s total gross revenues, the percentage of patients who paid certain rates, blank forms which reflected contractual service charge agreements, etc.) targeted at proving she was charged more than other patients for similar injuries. TMC objected on the grounds of relevancy. The Georgia Supreme Court disagreed, holding, “where the subject matter of a lawsuit includes the validity and amount of a hospital lien for the reasonable charges for a patient’s care, how much the hospital charged other patients, insured or uninsured, for the same type of care during the same time period is relevant for discovery purposes.” Id. at *2. The Court went on to explain that under Georgia discovery rules, courts must interpret “relevant” broadly, as opposed to the narrower evidentiary standard used at trial, and specifically, that the discovery Bowden sought “may have some relevance to the reasonableness of TMC’s charges for her care.” Id. at *18. In dicta, the Court also rejected the notion that the mere existence of an agreement by a patient to pay hospital charges does not prove that the charges themselves are reasonable.

On a very basic level, this case is merely a reaffirmation of the broad scope of discovery entitled to litigants but it should also help the defense side of the bar access the records of medical financing companies like ML Healthcare. But discovery aside, this case could also have far-reaching, perhaps even unintended ramifications for attacking the reasonableness of medical bills. In the meantime, Defendants might want to use the Bowden decision to argue that plaintiffs have incurred unreasonably excessive medical bills which are not reflective of the value of services provided, in order to gain leverage in settlement negotiations.

It is established law in Georgia that when an insurance company is served with a complaint as the plaintiff’s uninsured motorist carrier, the carrier has the option of answering in the name of the defendant, answering in its own name (and raising policy defenses), or filing no answer at all. The Georgia Court of Appeals recently held these options do not give the UM carrier the right to disregard the time requirements of the Civil Practice Act when the carrier voluntarily enters the case by filing an answer in its own name. Kelly v. Harris, Case No. A14A1004, 2014 Ga. App. LEXIS 776 (Ga. Ct. App., Nov. 18, 2014).

In Kelly, the plaintiff sued the defendant for damages arising from an auto accident, and the plaintiff served GEICO as his uninsured motorist carrier pursuant to O.C.G.A. § 33-7-11(d). Service was perfected on GEICO on November 5, 2012. GEICO chose to answer in its own name, raising the policy defense of late notice, but filed the answer on February 14, 2013–101 days after service of the complaint. The plaintiff moved for default judgment against GEICO. The trial court denied the plaintiff’s motion. The Court of Appeals reversed and remanded the case to determine whether the default should stand.

The Court first corrected a “typographical error” in Lewis v. Waller, 282 Ga. App. 8 (2006), a case relied on by GEICO and cited by the trial court. In Lewis, the opinion stated that when the UM carrier answers in its own name, its answer is timely “if filed within 30 days from service of the answer and complaint upon the UMC.” The trial court in Kelly ruled that this meant GEICO timely filed its answer within 30 days of the defendant’s answer. The Court of Appeals held, however, the Lewis opinion should have read “summons and complaint,” not “answer and complaint.” Thus, the thirty day deadline begins to run at the time of service of the summons and complaint on the UM carrier.

The Court rejected the argument that the “flexibility” of the Uninsured Motorist Act, including the option of filing no answer at all, allowed the UM carrier to file a late answer. The Court agreed that the statute allowed the option of joining the action, but found no authority “remotely suggesting that once a [uninsured motorist carrier]voluntarily becomes a party to a lawsuit it is exempt from fully complying with the dictates of the Civil Practice Act.” Thus, the Court flatly rejected the notion that a UM carrier can never be found in default.

In the early 90’s, the Georgia General Assembly recognized that because of the scope of the State government’s responsibilities, it could potentially face tremendous financial exposure if subjected to unlimited tort liability. Consequently, the General Assembly enacted the Georgia Tort Claims Act (“GTCA”) which struck a balance between the two: a limited waiver of sovereign immunity. “The stated intent of the [GTCA] is to balance strict application of the doctrine of sovereign immunity, which may produce ‘inherently unfair and inequitable results,’ against the need for limited ‘exposure of the state treasury to tort liability.'” Norris v. Ga. Dept. of Transp., 268 Ga. 192, 192 (1997). 

As a prerequisite to filing suit, the GTCA provides that no tort action can be filed against the State without first providing ante-litem notice within one year after the underlying incident. O.C.G.A. §50-21-26(a). The pre-suit notice must include the name of the state entity the claim will be asserted against, the time and place of the event from which the claim arose, the nature and amount of the loss suffered, and the acts or omissions that allegedly caused the loss. O.C.G.A. §50-21-26(a). The purpose of the ante-litem notice requirement is to give the State the opportunity to investigate the claim, evaluate the claim, and hopefully, facilitate settlement before a lawsuit is filed.

In July, we blogged about recent Georgia appellate rulings interpreting the ante-litem notice requirement. SeeSusan J. Levy, Esq. and Linda Yu, Esq., Georgia Supreme Court to Weigh in on Amount of Loss Requirement for Ante-Litem Notices to the State, Georgia Insurance Defense Lawyer, July 2, 2014, https://www.georgiainsurancedefenselawyer.com. Specifically, we discussed the 2013 ruling of the Georgia Court of Appeals which upheld the validity of an ante-litem notice despite the claimant’s failure to include the amount of the loss claimed. Myers v. Board of Regents, 324 Ga. App 685 (2013). In Myers, the plaintiff stepped on the edge of a pothole in a parking lot at Dalton State College and sustained left ankle injuries for which she received emergency medical treatment, orthopedic treatment, and physical therapy.

Myers sent ante-litem notice to the State approximately three months after the incident. In her notice, Myers stated that the amount of her loss was “yet to be determined as she is still incurring medical bills and does not yet know the full extent of her injury.” Lawyers for the State challenged the adequacy of the notice. The Georgia Court of Appeals refused to dismiss the case, however, finding that since Myers was still treating at the time her ante-litem notice was sent, she could not reasonably quantify the amount of her damages. In doing so, the Court of Appeals reasoned that a hyper-technical adherence to the statutory language would have barred the plaintiff’s recovery, and therefore, would not have advanced the purpose of the GTCA. The Georgia Supreme Court disagreed. Bd. of Regents of the Univ. Sys. of Ga. v. Myers, 2014 Ga. LEXIS 768 (Oct. 6, 2014).

In the 6-1 decision penned by Justice Carol Hunstein earlier this month, the High Court found that Myers could have provided the amount of her medical expenses known at the time of her ante-litem notice and simply stated that she was still undergoing treatment. Justice Hunstein further wrote that “[t]he function of the ante-litem notice is not to ‘bind’ a plaintiff to a certain amount, but to provide notice to the State of the magnitude of the claim, as practicable and to the extent of the claimant’s knowledge and belief” at the time of the notice.”

In Myers, Supreme Court upheld the legislative mandate that claimants include the amount of loss they have allegedly suffered in their ante-litem notice prior to filing suit against the State. Simply put, the Court held that the GTCA means what it says.

In Georgia, front seat passengers are required to use a seatbelt under most circumstances. O.C.G.A. §§ 40-8-76.1(b) and (c). Even so, under current Georgia law, when an individual is injured during an automobile accident, the fact that he was not wearing a seatbelt is not admissible to show that he caused or contributed to his own injuries. O.C.G.A. § 40-8-76.1(d). From the defense perspective, the law creates an “unfair” burden on the driver responsible for the accident by not allowing him to show the jury that the plaintiff may have made his injuries worse by choosing not to wear a seatbelt, even though it is required by law.

Consider the following example:

John and Jessica, both healthy individuals in their mid 20’s, are riding in the front seat of John’s Toyota Camry. John is wearing his seatbelt and Jessica is not. John slows down to stop at a red light. Unfortunately, Erica, the driver of the vehicle behind John, does not see that the light has turned red and hits John’s car square in the rear while driving about 45 mph. John walks away from the accident with muscle soreness and a couple of cuts and bruises. On the other hand, Jessica was thrown forward out of her seat and hit her head very hard on the front windshield. Jessica has serious injuries, including two fractured vertebra in her neck, a broken wrist and a deep facial laceration. John and Jessica both go to the emergency room by ambulance. John is released the same day and ends up with about $2,500 in medical expenses. Due to her serious injuries, Jessica remains in the hospital for approximately three weeks. During this time, she undergoes neck surgery, wrist surgery and plastic surgery to repair the cut on her face. Jessica also requires several weeks of physical therapy for her neck and wrist and will continue to experience pain for many years to come. Jessica will also be at a higher risk for getting arthritis in the future. Jessica’s medical expenses total $250,000 – one hundred times the amount of John’s medical bills.

What if Jessica had been wearing her seatbelt? Would her head have struck the windshield? Would she have broken her neck? Would she have required surgery? Would she have incurred $250,000 in medical bills? Or, would her injuries have been similar to John’s injuries? These are all questions the jury would not be able to consider under current Georgia law. The jury would not hear any evidence that Jessica was not wearing her seatbelt, even though Jessica’s decision likely contributed to the extent of her injuries.

In the upcoming legislative session, the House of Representatives will consider two bills that would modify the current seatbelt statute; HB 504 and HB 532. Each bill allows a party to introduce evidence of an individual’s failure to use a seatbelt if the court finds that (1) the defense was pled before the entry of a pre-trial order, and (2) the front seat passenger is at least 14 years of age. There are a few minor differences in the bills, however. HB 532 requires expert testimony to establish that failure to use a seatbelt contributed to the individual’s injuries, while HB 502 allows the court to make such a finding without the introduction of expert testimony. Additionally, while both bills provide for a reduction of damages to the extent that the failure to wear a seatbelt contributed to the individual’s injury, HB 532 allows the injured individual to recover all of the damages attributable to other parties even if the individual is 50% or more responsible for his own injuries. Typically, this type of claim would be barred by Georgia’s apportionment statute, O.C.G.A. § 51-12-33.

Needless to say, if either HB 504 or HB 532 are signed into law, it would be a great victory for the defense bar. Even so, it is likely that the new law would apply only to accidents that occur after the law’s effective date; therefore, it will take some time for the law to have a real effect on litigation matters.

In July, 2013, the Georgia Supreme Court heard oral arguments in Johnson v. Omondi. 318 Ga. App. 787 (2012). Johnson is a medical malpractice case where plaintiffs, the parents of a hospital patient, sued multiple defendants when the patient died after receiving care in the emergency room. The patient had knee surgery and presented to the emergency room eight days later complaining of chest pain. The doctors performed many tests and the patient was sent home after the pain resolved. Two weeks later, the symptoms resurfaced and the patient returned to the emergency room. He later died from a bilateral pulmonary embolism. The trial court granted summary judgment to the doctor on the plaintiffs’ professional negligence claim and plaintiffs appealed.

The Court of Appeals applied a “gross negligence” standard, given that the doctor was providing emergency care at the time of the patient’s death and affirmed the grant of summary judgment to the doctor based on the fact that Plaintiffs could not prove “by clear and convincing evidence that [the doctor] failed to exercise even slight care in treating [the patient].” The Georgia Supreme Court granted certiorari to determine whether “the Court of Appeals err[ed] in its application of the gross negligence standard for emergency room malpractice under OCGA § 51-1-29.5(c).” The Supreme Court is expected to make a decision by the end of the year. The Court’s ruling could narrow the circumstances under which a medical professional is considered to be providing emergency medical services, in which case, the “gross negligence” standard of care may apply in fewer cases in the future. This will be detrimental to healthcare providers, as it would hold them to a higher standard of care in situations that are arguably emergent.