McCoury v. Allstate Insurance

BARNES, Judge,

concurring in part and dissenting in part.

Although I concur with reversing the grant of summary judgment to defendant Wilson, I must respectfully dissent from affirming the grant of summary judgment to defendant Allstate based on the one-year condition in the Allstate insurance policy.

Although such limitation clauses have been enforced for some time in actions on policies (see, e.g., Melson v. Phenix Ins. Co. &c., 97 Ga. 722 (25 SE 189) (1895)), the clause does not apply here because this is not an action on the policy. The basis for enforcing such clauses is that parties to a contract may “agree among themselves upon a period of time which would amount to a statute of limitations, either greater or less than the period fixed by the law.” Massachusetts Benefit Life Assn. v. Robinson, 104 Ga. 256, 272 (1) (30 SE 918) (1898). This holding was based on our Supreme Court’s earlier decision in Brown v. Savannah Mut. Ins. Co., 24 Ga. 97, 101 (2) (1858), holding that

[t]he rule is that a condition in a contract which is either mala prohibita or mala per se is void, and can not be enforced. If it do [sic] not contravene public policy it is good. No principle of public policy is violated by a condition in a policy of insurance, that the injured party shall sue within six months from the time of the loss or lose his remedy. There is no reason why a party may not enter into a covenant, that for an alleged breach of contract, the injured party shall sue within a period less than that fixed by the statute of limitations as a bar.

*30Such limitations, however, are conditions in the policy. SunTrust Mtg. v. Ga. Farm &c. Ins. Co., 203 Ga. App. 40, 42 (416 SE2d 322) (1992); Gen. Elec. Credit Corp. v. Home Indem. Co., 168 Ga. App. 344, 347 (309 SE2d 152) (1983).

Indeed, the limitation provision in this policy is in Paragraph 12, Suits against Us, under Section I, Conditions: “No suit or action may be brought against us unless there has been full compliance with all policy terms. Any suit or action must be brought within one year after the inception of the loss or damages.” Accordingly, this one-year period is a condition to recovery on the policy, and not a general limitation period. The result is that McCoury and Kochie have agreed that a condition to any suit on the policy is bringing the action within one year after the inception of the loss. Nothing in the policy, however, states that the condition applies to any and all actions they might bring against Allstate. Therefore, no basis exists for applying the condition to actions not based on the policy. It is one thing to apply a condition to actions based on the contract in which the condition is contained; it is a far different matter to apply a condition in a single contract to other dealings between the parties which are not based on the contract.

Here, McCoury and Kochie’s complaint alleges that Allstate and Wilson are liable because of their negligent failure to provide coverages requested.

In Wright Body Works v. Columbus Interstate Ins. Agency, 233 Ga. 268 (210 SE2d 801) (1974), the Supreme Court recognized that an insurance agent or broker who holds himself out as an expert in the field of insurance and who undertakes to provide such expert services to an insured in addition to issuing a policy may be liable for the negligent failure to procure the required coverage.

Fregeau v. Hall, 196 Ga. App. 493, 494 (396 SE2d 241) (1990). Such actions are based on negligence, not contract, and exist irrespective of contractual duty. See Brown v. Mack Trucks, 111 Ga. App. 164, 165-166 (141 SE2d 208) (1965). Consequently, none of the conditions in the policy apply to this action based on negligence.

Moreover, Allstate’s liability is not based on the contract because Wilson was an Allstate employee and agent under its supervision and control. Thus, Wilson’s negligence, if any, in failing to procure the necessary coverage could be imputed to Allstate under the doctrine of respondeat superior. See Ga. Farm &c. Ins. Co. v. Arnold, 175 Ga. App. 850, 851 (1) (334 SE2d 733) (1985).

Under these circumstances, I would reverse the grant of summary judgment to Allstate.

*31Decided February 22, 2002. Bennett & Associates, Andrea R. Bennett, Swift, Currie, McGhee & Hiers, Michael T. Bennett, for appellants. Webb, Zschunke, Miller & Dikeman, Edward A. Miller, for appel-lees.

Additionally, if the majority is correct on this point, then any of Allstate’s many policyholders would be obligated to bring any suits against Allstate within one year of the incident giving rise to the action and would be obligated to satisfy any of the other conditions in their policies, even though the litigation is completely unrelated to any insurance policy containing the limiting clause. In my opinion, such a result is contrary to our law, and any provision attempting to achieve that result would be contrary to the public policy of this State.

Accordingly, even though I concur with reversing the grant of summary judgment to defendant Wilson, I must respectfully dissent from affirming the grant of summary judgment to defendant Allstate Insurance Company.