Does Georgia Permit Direct Actions Against a Trucking Company’s Insurance Carrier?

Posted in truck accident on October 8, 2020

Does Georgia Permit Direct Actions Against a Trucking Company’s Insurance Carrier?

This was the question in a recent appeal, and the answer is “it depends.”

The Georgia Court of Appeals was asked whether Georgia law authorizes the direct actions of a car driver and her passenger against the insurer of an interstate motor carrier. One of Georgia’s direct action statutes, OCGA § 40-1-112(c), doesn’t authorize these actions because it’s applicable only to intrastate motor carriers. However, the state has another direct action statute, OCGA § 40-2-140(d)(4), that’s applicable to interstate carriers and does authorize them.

As a reminder, “interstate” means driving a commercial vehicle between two or more states, while “intrastate” means driving within a state. That’s was a key distinction for the court in determining if the accident victims could sue the truck company’s insurer directly under Georgia negligence and personal injury law.

Veronica and Marleaux Williams were injured in July 2014 when a tractor-trailer driven by Edward Heard struck their car. Heard owned and operated CC&D Trucking as a sole proprietorship and was driving in the scope of the business at the time of the accident. Daily Underwriters of America (“insurance company”) issued a liability insurance policy to the trucking company which was in effect at the time of the accident.

The Williamses’ brought separate negligence actions against the truck driver, the trucking company, and the insurance company. They cited § 40-1-112 (c) in their complaints as permitting their direct actions against the insurance company.

The Insurance Company’s Argument: § 40-1-112(c) applies only to insurers of intrastate motor carriers.

The insurance company moved to dismiss both cases, arguing that § 40-1-112(c) applies only to insurers of intrastate motor carriers. They argued that the trucking company was an interstate motor carrier at the time of the crash. Because of this, the statute didn’t authorize the Williamses’ direct actions against the insurer. However, the Williamses cited, among other things, § 40-2-140 as authorizing the direct actions against the insurer. The trial court denied the insurance company’s motions to end the cases, and the insurer appealed.

The insurance company argued on appeal that direct actions against the insurer of an interstate motor carrier aren’t permitted in Georgia. Chief Judge Christopher J. McFadden of the Georgia Court of Appeals wrote the opinion for a panel and acknowledged that the general rule in Georgia is that a liability insurer may not be joined directly as a defendant in an action for damages against its insured. However, exceptions for motor carriers to that general rule are provided by the two separate direct action statutes: §§ 40-1-112 (c) and 40-2-140 (d) (4).

The Court’s Rationale: § 40-2-140(d)(4) does authorize direct actions against insurers of motor carriers engaged in interstate commerce.

The Chief Judge explained that § 40-1-112(c), when read together with § 40-1-126, authorizes direct actions against insurers of motor carriers engaged in intrastate commerce — but not against insurers of motor carriers engaged in purely interstate commerce. However, the Court said that § 40-2-140(d)(4) does authorize direct actions against insurers of motor carriers engaged in interstate commerce.

The right to pursue a direct action against an insurer is set out in § 40-1-112(c), which provides: “It shall be permissible under this part [i.e., Title 40, Chapter 1, Article 3, Part 2] for any person having a cause of action arising under this part to join in the same action the motor carrier and the insurance carrier, whether arising in tort or contract.” (emphasis by the court.)

The purpose of permitting joinder of the insurance company in a claim against a common carrier, the Court explained, is to further the policy of the Motor Carrier Act, which is “to protect the public against injuries caused by the motor carrier’s negligence.” The intent of Georgia’s motor carrier laws is that the insurer is to stand in the shoes of the motor carrier and be liable in any instance of negligence where the motor carrier is liable.

The Court’s Ruling

In light of this reasoning, the Chief Judge explained that these “statutes relating to the same subject matter are in pari materia [Latin for “in a like matter”] and must be construed together and harmonized whenever possible.” The Chief Judge and the appellate panel found that the plain language of § 40-1-112(c) expressly allows an injured party to file a direct action against a motor carrier’s insurance carrier for causes of action arising under the part of Title 40 that deals with the certification of motor carriers. And the plain language of § 40-1-126 clearly provides that “[t]he provisions of this part do not apply to purely interstate commerce nor to carriers exclusively engaged in interstate commerce.” So, viewed together with § 40-1-112, the Court held that it was apparent that the plain language of § 40-1-126 shows the legislative intent that the direct action provision of § 40-1-112(c) doesn’t apply to purely interstate commerce or to a carrier engaged exclusively in interstate commerce.

At the time of the accident, the truck driver was driving his semi back to CC&D’s office in Bainbridge, Georgia. He’d picked up a load in North Carolina, delivered it in Monroe, Georgia, and was driving back to Bainbridge when the accident occurred. The Williamses argue that a fact question exists as to whether the truck driver was making an intrastate or interstate delivery at the time of the accident because he had delivered the load to a store in Georgia and was on his way back to his home in Georgia at the time of the accident. They also argued that because the truck driver testified that he “very rarely” made deliveries within Georgia, he should not be considered a purely interstate carrier.

The “Trip Specific” Approach: § 40-2-140(d)(4) does authorize direct actions against insurers of motor carriers engaged in interstate commerce.

§ 40-2-140(d)(4) does authorize direct actions against insurers of motor carriers engaged in interstate commerce.

The distinction between interstate and intrastate motor carriers depends on whether the carrier was acting as an interstate or an intrastate carrier at the time of the accident. The Court of Appeals adopted a “trip specific” approach, which requires an analysis of whether the carrier was engaged in interstate or intrastate commerce “during the specific trip it was engaged in at the time of the accident.”

The Chief Judge found that it was clear that when the trip began, the truck driver’s “fixed and persisting intent” at the time of shipment was to pick up a load of goods in North Carolina and drop it off at a store in Georgia. The fact that he had to drive his truck home after the delivery didn’t change the purpose of the travel into an intrastate trip.

So the Court concluded that there was no issue of fact as to whether the truck driver and the trucking company were engaged in an interstate trip at the time of the accident. Because they were engaged exclusively in interstate commerce at the time of the accident, the direct action provision of OCGA § 40-1-112(c) does not authorize including the insurance company as a named defendant in the underlying actions. So the Court concluded that the trial court’s denial of summary judgment to the insurance company was not supported by that direct action statute.

 However…

The Court said that the denial of summary judgment will be affirmed if it is right for any reason. In this case, the direct actions against the insurance company were authorized by Georgia’s other direct action statute, so the denial of summary judgment was correct.

The Court explained that, even though the truck driver and the trucking company were engaged in interstate commerce at the time of the accident, the joinder of the insurance company as a defendant in the underlying actions was authorized by the direct action provision of § 40-2-140(d)(4). As a result, the trial court’s denial of summary judgment to the insurance company was therefore correct.

Thus, the Court of Appeals held that the plain language of the Georgia statute indicated that injured parties were able to join the insurers of interstate motor carriers, and the semi accident victims’ claims could move forward. Daily Underwriters of America v. Williams,  354 Ga. App. 551, —, 841 S.E.2d 135, — (Ga. App. March 13, 2020).

Should I Hire An Attorney After A Truck Accident?

Yes, and Tobin Injury Law can help.

You should work with an experienced Atlanta truck accident attorney that Atlanta residents trust and use on a routine basis to win. You want an Atlanta truck accident attorney residents trust knows state and federal commercial carrier laws and the fine distinctions between interstate and intrastate trucking.

Contact Tobin Injury Law, and we will speak with you and educate you on what to look for when suing a trucking company.

You can contact our team 24 hours a day, 7 days a week by calling 404-JUSTICE (404-587-8423) or using our online contact form.