Byron Miller v. Harco National Insurance Company

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 00-15055 JANUARY 31, 2002
Non-Argument Calendar THOMAS K. KAHN
________________________ CLERK

D. C. Docket No. 99-00417-CV-JEC-1

BYRON MILLER,
ADER MILLER,
Plaintiffs,
Counter-Defendants,
Appellants,

versus

HARCO NATIONAL INSURANCE COMPANY,
Defendant,
Counter-Claimant,
Appellee,

GALO MOYA, d.b.a. Shippers Services Express,
SHIPPERS SERVICES EXPRESS,

Defendants-Appellees.

____________________________________________________________________
________________________

No. 00-15444
Non-Argument Calendar
________________________

D. C. Docket No. 99-00417-CV-JEC-1
BYRON MILLER,
ADER MILLER,
Plaintiffs-
Counter-Defendants,
Appellees,

versus

HARCO NATIONAL INSURANCE COMPANY,
Defendant,
Counter-Claimant,

GALO MOYA, GALO MOYA, d.b.a.
Shippers Services Express,
SHIPPERS SERVICES EXPRESS,

Defendants-Appellants.

_________________________

Appeals from the United States District Court
for the Northern District of Georgia
_________________________
(January 31, 2002)

Before BIRCH, BARKETT and WILSON, Circuit Judges.

PER CURIAM:

We now revisit this case upon its return to us from the Georgia Supreme

Court, to which we certified questions of Georgia state law. Miller v. Harco Nat’l

Ins. Co., 241 F.3d 1331, 1334 (11th Cir. 2001) (per curiam). Based on the Georgia

Supreme Court’s response, we conclude that the district court’s grant of summary

judgment in favor of Harco National Insurance Co. (Harco) was in error.

2
 Byron Miller was involved in a traffic accident with a truck allegedly owned

by Galo Moya and his company, Shippers Services Express, Inc.1 Byron and his

wife, Ader Miller, sued in Michigan state court seeking compensation for their

injuries. After the Michigan court granted them a default judgement, the Millers

sought to have the order enforced in Georgia against Moya, his company and his

insurance carrier, Harco.

The district court granted summary judgment in favor of the Millers and

against Moya and his company, enforced the Michigan order and held Moya and

his company liable for the injuries resulting from the accident. Relying principally

on Shelby Ins. Co. v. Ford, 454 S.E.2d 464, 465–66 (Ga. 1995), the district court

found that Harco had only insured Galo Moya, doing business as Shippers Services

Express, not Shippers Services Express, Inc. Therefore, the district court granted

Harco’s motion for summary judgment.

Upon consolidated appeal, we affirmed the district court’s decision to grant

summary judgment against Moya and Shippers Services Express. Miller, 241 F.3d

at 1332–33. After thoroughly reviewing the briefs and record for this case, we

determined that the remaining issue of whether Harco is liable to the Millers as a

1
We again note that for the reasons stated in the district court’s opinion, Shippers
Services Express, Inc., and Shippers Services Express may be used interchangeably throughout
this opinion.

3
motor carrier insurer turns on unresolved questions of Georgia law. We therefore

certified the following questions to the Georgia Supreme Court:

1. Whether Georgia law recognizes a distinction between a suit
against an individual doing business as a corporate entity and a
suit against just the aforementioned legal entity? The question
becomes whether insurance coverage given to final judgments
against a named individual doing business as a corporate entity
also provides such coverage when the final judgment is
rendered solely against the corporate entity in suits under the
motor common carrier provisions?

2. When the insured party is found liable based on a theory of
piercing the corporate veil, is the insurer then liable for the
same, even if no independent coverage exists under the
insurance policy?

3. Does the mere fact that a court held the insured liable for an
act covered by his policy create liability for the insurer?

Id. at 1334. After a thorough review of the questions, the Supreme Court of

Georgia issued an opinion addressing these questions. Miller v. Harco Nat’l Ins.

Co., 552 S.E.2d 848 (Ga. 2001).

Relying on Shelby Ins. Co., the Georgia Supreme Court held that “[i]f an

insurer contracts to provide insurance coverage to a sole proprietor, the courts

cannot enlarge the contract to include as a named insured the wholly distinct legal

entity of a corporation, even if the sole proprietor owns a majority of the stock

thereof.” Id. at 851. Furthermore, the court held that “[b]ecause corporations and

their shareholders are separate and distinct entities, insurance coverage for final

4
judgments against the latter cannot ordinarily be enlarged to include final

judgments against the former.” Id.

Our second question presented an issue of first impression for the Georgia

Supreme Court. Recognizing the purpose and intent of the State of Georgia’s

motor carrier laws, the court held that where a judicial determination has been

made “that a corporate motor carrier is the alter ego of its controlling shareholder,

Shelby Ins. Co. is distinguishable.” Id. at 852. The court stated that “Shelby did

not involve either a motor carrier or a piercing of the corporate veil. Its holding

applies only to the expansion of insurance coverage ‘to include as a named insured

a wholly distinct legal entity.’ By definition, two entities are not legally distinct

when they are alter egos.” Id. (citation omitted) (quoting Shelby Ins. Co., 454

S.E.2d at 466).

The Georgia Supreme Court responded to the third question by stating that,

“[w]ith respect to the motor carrier policy at issue in this case, we answer the

question in the affirmative. That policy requires Harco to pay any final judgment

against the Sole Proprietorship, as named insured, for an act of negligence

involving its vehicle, no matter who committed that act.” Id. at 853.

It follows that the district court’s grant of summary judgment in favor of

Harco was in error. Accordingly, we REVERSE the district court’s grant of

5
summary judgment in favor of Harco and REMAND the case to the district court

for further proceedings.

6