Ability to file individual claims against motor carrier insurers under the georgia direct action statutes

By: Gillian Crowl

Under Georgia’s apportionment statute, the jury must apportion the award of damages “among the persons who are liable according to the percentage of fault of each person.” O.C.G.A. § 51-12-33(b). “In assessing percentages of fault, the trier of fact shall consider the fault of all persons or entities who contributed to the alleged injury or damages, regardless of whether the person or entity was, or could have been, named as a party to the suit.” O.C.G.A. § 51-12-33(c). However, in August 2021, the Georgia Supreme Court issued a ruling in Alston & Bird, LLP v. Hatcher Mgmt. Holdings, LLC, 862 S.E.2d 295 (2021), holding that apportionment of damages to third parties under O.C.G.A. § 51-12-33(b) “does not apply to tort actions brought against a single defendant.” As a result of this ruling, we have seen plaintiffs strategically file suits against a single defendant or dismiss superfluous parties from pending actions to prevent possible apportionment of damages to third parties. In the future, we may even see plaintiffs dismiss pending lawsuits and refile against individual defendants to preclude apportionment. We may also see an increase in direct action claims filed solely against motor carrier insurers in cases where possible apportionment is at issue.

Two provisions under Georgia law, O.C.G.A. §§ 40-1-112 and 40-2-140, allow joinder of a motor carrier's insurer in certain instances. O.C.G.A. § 40-1-112 states, “it shall be permissible under this part 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.” O.C.G.A. § 40-1-112(c). O.C.G.A. § 40-2-140 states, “any person having a cause of action, whether arising in tort or contract, under this Code section may join in the same cause of action the motor carrier and its insurance carrier.” O.C.G.A. § 40-2-140(d)(4).

Georgia courts have held that the direct-action statutes “were designed ‘to protect members of the general public against injuries caused by the negligence of a Georgia motor carrier.’”
McGill v. Am. Trucking & Transportation Ins. Co., 77 F. Supp. 3d 1261, 1265 (N.D. Ga. 2015). These statutes do not create a separate claim for damages against the motor carrier's insurer and the insurance carrier is not a separate party for purposes of liability. Because there is no separate claim for damages against the insurer, plaintiffs typically include the insurance carrier as a joint party in the suit against the motor carrier and/or driver. This prevents duplicate litigation and discovery, streamlines the resolution of the case, and allows the jury to see an insurance carrier’s name on the pleadings, which suggests that there is insurance money available to pay the verdict.

However, despite the statutory language allowing the parties to be named jointly, Georgia courts have held that a plaintiff has the choice to assert claims against the insurer independently or jointly with the motor carrier. The courts have held:

Plaintiff could have sued the driver alone, or the motor carrier alone, or have sued them jointly. She could have sued the insurance carrier alone or as authorized by the act she could have joined the motor carrier and the insurance carrier in the same action, irrespectively whether it sounded in tort or in contract.

Tarrant v. Davis, 62 Ga. App. 880, 10 S.E.2d 636, 638 (1940). See also Jackson v. Sluder, 256 Ga. App. 812, 817–18, 569 S.E.2d 893, 898 (2002)(“The statute therefore does not forbid the maintenance of separate actions against the insurer and the carrier.”); Hogan v. Williams, 193 F.2d 220, 225 (5th Cir. 1951)(“it was permissible for the insurance company to be sued jointly with the motor carrier . . . , and, . . . the Georgia statute permits an action to be maintained against the surety or insurance carrier without joining the motor carrier, although the suit is based on the negligence of the motor carrier.”)

Although these courts were interpreting the language of prior direct-action statutes, these holdings have been adopted and applied to the current versions of the statutes passed in 2009 (§ 40-1-140) and 2012 (§ 40-1-112). As recently as 2016, the Northern District of Georgia stated, “when a direct action statute applies at Georgia law, the injured party has an independent cause of action against the liability insurer and may pursue that cause of action against the insurer alone.” Scarff Bros., Inc. v. Bullseye Dispatch, Inc., No. 2:14-CV-00128-WCO, 2016 WL 3128554, at *3, fn. 4 (N.D. Ga. Jan. 19, 2016). Therefore, should a plaintiff choose to maintain separate actions against a motor carrier and its liability insurer, the claims would be permissible as long as the requirements of the direct-action statutes are met.

In light of the Alston & Bird Decision and the precedent allowing for independent lawsuits against an insurer, companies that insure motor carriers could expect to see independent lawsuits against them when there is a strong argument for apportionment of fault to a third party. This is more likely to occur in John Doe driver claims and claims by passengers whose drivers contributed to causing the accident. Depending on the strength of any apportionment argument and the amount of the alleged damages, a plaintiff may obtain a larger recovery by filing individual claims against the commercial motor vehicle operator, motor carrier and insurer to avoid a reduction in their recovery by the apportionment of damages to a third party.

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Gillian S. Crowl

In the future, we may even see plaintiffs dismiss pending lawsuits and refile against individual defendants to preclude apportionment.
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