Dairyland Insurance v. Kelley

McMurray, Presiding Judge. The unpredictable flow of cases stemming from the holdings in Jones v. State Farm &c. Ins. Co., 156 Ga. App. 230 (274 SE2d 623), and Flewellen v. Atlanta Cas. Co., 250 Ga. 709 (300 SE2d 673), prompted Dairyland Insurance Company (“Dairyland”) to file a de [231] claratory judgment action against its insured, Margie S. Kelley, to determine its liability for optional personal injury protection (PIP) benefits under Georgia “no-fault” law, OCGA § 33-34-1 et seq. After discovery, Dairyland filed its motion for summary judgment and Mrs. Kelley filed her motion for partial summary judgment, each with supporting affidavits. The relevant facts are as follows: On March 31, 1975, Mrs. Kelley’s husband, William F. Kelley, applied for and was issued an automobile insurance policy in the name of “Margie S. Kelley.” The policy was renewed annually and remained effective through February 29, 1984. Under a section in the insurance application entitled: “NO-FAULT OPTIONAL COVERAGES ACCEPTANCE OR REJECTION STATEMENTS,” under the “Reject” section, there is drawn a diagonal line through six signature lines which are apparently provided for rejecting four optional insurance coverages. (See Appendix I.) The purported signature of “Willie F. Kelley” is written on the diagonal line. However, it is uncontradicted that this signature is not that of William F. Kelley. (Mr. Kelley died on March 11, 1980, as a result of injuries he sustained in an automobile collision.) On January 14, 1986, the trial court entered an order denying Dairyland’s motion for summary judgment, granting partial summary judgment in favor of Mrs. Kelley and holding that “[t]he maximum optional benefits coverage has been in effect since the effective date of the policy, March 31, 1975.” Dairyland now appeals. Held: The controlling issue in this appeal is whether the insurance application provided by Dairyland was executed in compliance with OCGA § 33-34-5 (b). (This case involves OCGA § 33-34-5 (b) as it existed prior to its amendment in Ga. L. 1982, p. 1234.) This statute provided: “Each application for a policy of motor vehicle liability insurance sold in this state must contain separate spaces for the insured to indicate his acceptance or rejection of each of the optional coverages listed in subsection (a) of this Code section and no such policy shall be issued in this state unless these spaces are completed and signed by the prospective insured.” (Emphasis supplied.) It is undisputed that the application form provided by Dairyland was in compliance with former OCGA § 33-34-5 (b) by providing “separate spaces for the insured to indicate his acceptance or rejection of each of the optional coverages . . .” However, an examination of the application form shows that it was not properly executed by the insured, or an authorized agent of the insured,1 by signing the [232] separate spaces provided in the application for rejection of the optional benefits. See Government Employees Ins. Co. v. Mooney, 250 Ga. 760 (1) (300 SE2d 799). “ ‘(T)he intent of OCGA § 33-34-5 (cit.) is to ensure “that insurers offer optional coverages to applicants for no-fault insurance and that an applicant’s waiver of his privilege to obtain optional coverages be made knowingly and in writing.” Jones, at p. 232. The purpose of the statute is to resolve conflicts which arise when an insured contends that he was not informed of his statutory right to optional benefits. When this claim is made, the resolution of the issue will be to look to the policy to determine if there was reduction or rejection of those benefits in conformance with the statutory scheme.’ Flewellen v. Atlanta Cas. Co., supra at 714.” Douglas v. Jefferson-Pilot &c. Co., 175 Ga. App. 457 (333 SE2d 634). In the case sub judice, the purported signature of William F. Kelley was not placed on the insurance application in conformance with the statutory scheme. Notwithstanding this obvious defect, Dairyland cites St. Paul Fire &c. Ins. Co. v. Nixon, 252 Ga. 469 (314 SE2d 215), arguing that the signature, “Willie F. Kelley,”2 substantially complied with the execution requirements of OCGA § 33-34-5 (b). We do not agree. “In St. Paul Fire &c. Ins. Co. v. Nixon, 252 Ga. 469 (314 SE2d 215) (1984), the Supreme Court held that the application form under review in that case was in substantial compliance with OCGA § 33-34-5 (b). That application contained separate spaces for the insured to indicate his acceptance or rejection of the optional coverages, but the insured’s signature appeared only at the bottom of the page offering the optional coverages . . . Following the holding in Nixon, this court found a similar application form in Reed v. Ga. Farm Bureau Mut. Ins. Co., 171 Ga. App. 126 (318 SE2d 746) (1984), to be in substantial compliance with the statute . . . The applications approved by the courts in Nixon and Reed clearly reveal that the intent of the insured was to reject optional PIP benefits and vehicle-damage protection. The optional coverages information in those cases was prominently displayed in a separate part of the form and was provided in clear and easily readable sentences.” Douglas v. Jefferson-Pilot &c. Co., 175 Ga. App. 457, 458, supra. While Nixon and Reed applied a “sub [233] stantial compliance” rationale to avoid the strict requirements of OCGA § 33-34-5 (b) in cases where the application forms clearly revealed the intent of the insured to reject the optional coverages, there is no indication that the “substantial compliance” rationale is to be applied to the execution requirements of the statute. However, assuming the contrary, the signature on the application in the case sub judice, purporting to reject four optional coverages in one stroke, does not indicate a clear rejection of the optional benefits. Consequently, since Dairyland was in violation of the execution requirements of OCGA § 33-34-5 (b), the trial court was correct in declaring that “[t]he maximum optional benefits coverage has been in effect since the effective date of the policy . . .” See Government Employees Ins. Co. v. Mooney, 250 Ga. 760 (1), supra. Accordingly, the trial court did not err in denying Dairyland’s motion for summary judgment and granting partial summary judgment in favor of Mrs. Kelley with regard to her right to the maximum optional benefits coverage. There being no other issues before the trial court for resolution, this court is without jurisdiction to consider other issues raised by Dairyland in this appeal. Judgment affirmed. Pope, J., concurs. Carley, J., concurs in the judgment only. [234] [[Image here]] Appendix I [235] Decided November 4, 1986 Rehearing denied December 10, 1986 Richard B. Eason, Jr., Carolyn J. Kennedy, for appellant. William L. Skinner, for appellee. Footnotes [1] In the interest of avoiding those ills of Pandora’s box relating to the issue of the “authority” of another to reject the insured’s optional benefits, we shall assume that the person who signed “Willie F. Kelley” on the insurance application was acting upon the authority of the insured. However, in this regard we make reference to Miller v. State Farm &c. Ins. Co., [232] 155 Ga. App. 487 (2) (271 SE2d 14), and Holt v. Intl. Indem. Co., 171 Ga. App. 817, 819 (321 SE2d 374). [2] For discussion concerning whether an insurance carrier may rely on an unauthentic signature purporting to reject optional coverages see Morris v. Fidelity & Cas. Co., 169 Ga. App. 883, 884 (1) (315 SE2d 451) and National Indem. Co. v. Smith, 172 Ga. App. 415 (323 SE2d 274). In this regard, the circumstances in the case sub judice are in line with this court’s holding in Southern Guaranty Ins. Co. v. Cotton States Mut. Ins. Co., 176 Ga. App. 140, 143 (3) (335 SE2d 598).