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.

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.