United States Court of Appeals, Eleventh Circuit
Uploaded by
Scribd Government DocsUnited States Court of Appeals, Eleventh Circuit
Uploaded by
Scribd Government Docs788 F.
2d 1522
EMPLOYERS' FIRE INSURANCE COMPANY, Plaintiff,
v.
CANAL INSURANCE COMPANY, Defendant.
CANAL INSURANCE COMPANY, Plaintiff-Counter-Claim
Defendant-Appellee,
v.
EMPLOYERS' FIRE INSURANCE COMPANY,
Defendant-Counter-Claim-Plaintiff/Cross-Claim
Defendant-Appellee,
John Calvin Smith,
Defendant-Cross-Claim-Plaintiff/Counter-Claim
Plaintiff-Appellant,
Jimmy Carter, Defendant-Cross-Claim-Defendant.
No. 84-8821.
United States Court of Appeals,
Eleventh Circuit.
May 13, 1986.
Richard B. Eason, Jr., Atlanta, Ga., for John Calvin Smith.
Gary L. Seacrest, Stephen M. Worrall, Atlanta, Ga., for Employer's Fire
Ins. Co.
Appeal from the United States District Court for the Northern District of
Georgia.
Before RONEY and FAY, Circuit Judges, and DUMBAULD* , Senior
District Judge.
PER CURIAM:
In this diversity action, the Court certified to the Supreme Court of Georgia a
controlling question of state law. Employers' Fire Insurance Co. v. Canal
Insurance Co., 769 F.2d 714 (11th Cir.1985).
2
The Court has now answered the certified question in an opinion attached
hereto as an Appendix. See Smith v. Employers Fire Insurance Co., 340 S.E.2d
606 (Ga.1986).
The district court reached a contrary decision. This being a diversity case, the
federal court is bound by the interpretation of the Georgia law by its Supreme
Court. The judgment of the district court is reversed and the case remanded for
further proceedings to correctly apply the Georgia law.
REVERSED and REMANDED.
APPENDIX
SMITH
5v.
6EMPLOYERS' FIRE INSURANCE COMPANY et al.
7No. 42663.
8Supreme Court of Georgia.
9March 11, 1986.
10
SMITH, Justice.
11
John Smith, the appellant, appealed a ruling by the United States District Court
for the Northern District of Georgia which granted Smith's insurer, appellee
Employers' Fire Insurance Co., priority over Smith in recovering from the
insurer of Jimmy Carter, the tortfeasor who injured Smith in a car wreck. The
United States Court of Appeals for the Eleventh Circuit subsequently certified
the following question to this court: "Is a no-fault insurer which has paid
personal injury benefits to its insured injured in a 1981 motor vehicle accident,
entitled, under Georgia law, to a right of action by subrogation against the
tortfeasor's liability insurer before its [insured] is fully compensated for
uncompensated economic and non-economic losses?" We respond in the
negative.
12
A truck driven by Carter, which weighed over 6500 pounds, ran into a
stationary car occupied by Smith, causing Smith personal injuries and medical
expenses, he alleges, in excess of $100,000. Employers' paid Smith $50,000
pursuant to his no-fault policy. Carter owned a policy with appellee Canal
Insurance Co. for $50,000 coverage. When Smith and his insurer both claimed
the right to recover from Carter's policy, Canal filed an interpleader action to
determine its rights and liabilities relative to Smith and Employers'.
13
The District Court, citing McGlohon v. Ogden, 251 Ga. 625, 308 S.E.2d 541
(1983), ruled that Employers' could recover the amount it had paid Smith from
the tortfeasor's insurance company before Smith was entitled to recover for any
of his damages from the tortfeasor's insurer. The Eleventh Circuit Court of
Appeals read McGlohon, supra, as simply preventing a plaintiff from receiving
a double recovery in a situation where the plaintiff's insurer is entitled to
subrogation. We agree with the Eleventh Circuit1 and thus reach the following
question of the proper application of OCGA Sec. 33-34-3(d)(1): Where Smith's
insurer has paid him to the limits of his policy, and he is still not fully
compensated for his injuries, does he get the first shot at the tort-feasor's
insurance to compensate him fully, or does his insurer receive the first shot at
the tort-feasor's insurance to compensate it for the money that it paid to Smith
under his policy?
14
As the appellee notes, the legislature has set out separate procedural and
substantive rules for dealing with financially responsible and financially
irresponsible tort-feasors. Financially responsible means insured or selfinsured. OCGA Sec. 40-9-2. Since this case involves a financially responsible
tort-feasor, we look to the portion of OCGA Sec. 33-34-3(d)(1) which governs
actions involving that type of tort-feasor.
15
The original forerunner of present OCGA Sec. 33-34-3(d)(1) appeared as
Section 5(d) of the Reparations Act, Ga.L.1974, p. 119. While this statute
provided for subrogation, it did not establish priorities between insureds and
insurers in situations such as the one found in this case. In 1976, the legislature
amended Section 5(d) to clearly place an injured insured before his insurance
company as far as claims to the tort-feasor's insurance were concerned, where
the injured party had not been fully compensated by his own insurance policy.
After this amendment this court ruled in Blaylock v. Georgia Mut. Ins. Co.,
239 Ga. 462, 238 S.E.2d 105 (1977) that the original Section 5(d) established a
priority identical to that set out by the legislature in the 1976 amendment. In
1978, the legislature again altered Section 5(d), and the wording, for the
purposes of financially responsible tort-feasors, reverted back almost identically
to the wording found in the original Section 5(d). OCGA Sec. 33-34-3(d)(1).
16
The legislature is charged with the knowledge of our interpretations of statutes.
Berman v. Berman, 253 Ga. 298, 299, 319 S.E.2d 846 (1984). In this instance,
thus, the legislature is charged with the knowledge of our interpretation of the
language of the original Section 5(d) in Blaylock, supra. In readopting the
language that we construed in Blaylock, supra, the legislature adopted our
construction, as well, since there were no other relevant, material changes made
in the language of OCGA Sec. 33-34-3(d)(1). Smith, accordingly, is entitled to
priority in access to the funds provided by the tortfeasor's insurance policy.
17
Certified Question Answered.
18
All the Justices concur.
Honorable Edward Dumbauld, Senior U.S. District Judge for the Western
District of Pennsylvania, sitting by designation
The Court of Appeals stated, "[W]here 'plaintiff's no-fault insurer is entitled to
subrogation, the plaintiff's recovery from the tort-feasor must not include
damages for which the plaintiff has been compensated by his or her no-fault
insurer.' McGlohon, 308 S.E.2d at 543, (emphasis supplied). This case is
different because the [insured] seeks damages for as yet uncompensated loss."
