Khan v. Landmark American Insurance

BOGGS, Judge,

concurring fully and specially.

I agree with all that is said in the majority opinion, but write separately to emphasize that Khan would not be automatically entitled to recover $2,308,684.70 from Landmark.

Here, the parties filed a consent motion asking the trial court to address whether any damages would be limited to the policy’s assault and battery exclusion endorsement of $100,000, or, whether the jury would be allowed to “enter a judgment for the Plaintiff in an amount up to and including the amount of the default judgment obtained by Khan against Flashers . . . $2,308,684.70.” While the trial court concluded, in error, that any damages could not exceed the $100,000 policy limit, I wish to emphasize that the majority does not endorse the alternative potential recovery posed to the trial court. This is not a case in which a judgment was entered against a pro se insured following a trial. See Leader Nat. Ins. Co. v. Kemp & Son, Inc., 189 Ga. App. 115 (375 SE2d 231) (1988). Rather, here, a default judgment was entered for Flashers’ failure to complete discovery, and Flashers subsequently settled with Khan for $100,000. In exchange for the assignment of Flashers’ claim against Landmark for Landmark’s failure to defend, Khan agreed to “withhold from the execution of the Judgment against the assets of Flashers.”

Khan is not automatically entitled to $2,308,684.70, the full amount of the default judgment. As the assignee of Flashers, he could seek only those damages that are directly traceable to Landmark’s breach of its duty to defend Flashers. See Thomas v. Atlanta Cas. Co., *546253 Ga. App. 199, 204 (3) (d) (558 SE2d 432) (2001). Generally, where the insured has settled with the injured party and seeks damages for the insurer’s breach of its duty to defend, the damages are limited to the amount of settlement, expenses and attorney fees. Cf. Ga. Southern & Florida R. Co. v. United States Cas. Co., 97 Ga. App. 242, 244 (102 SE2d 500) (1958).

Decided March 26, 2014 Glenn A. Loewenthal, for appellant. Fields, Howell, Athans & McLaughlin, Michael J. Athans, Matthew A. Barrett, for appellee.