Hospital Authority v. Martin

Andrews, Judge. We granted the Hospital Authority of Clarke County’s application to file this interlocutory appeal from the order of the trial court denying its motion for partial summary judgment in a medical malpractice action brought by Martin and others. In the order appealed from, the trial court found that the Hosptial Authority had waived sovereign immunity to the extent it was covered by insurance, and that the Hospital Authority was also subject to punitive damages to the extent it had insurance for such damages. The issue is whether punitive damages may be awarded against the Hospital Authority. Sovereign immunity is not at issue. It is undisputed that the present cause of action accrued prior to the January 1, 1991 amendment to the 1983 Georgia Constitution deleting provisions waiving sovereign immunity to the extent of insurance coverage, and that this action is controlled by the pre-1991 constitutional provisions. See Ga. L. 1990, p. 2435, § 1. It is also undisputed that the Hosptial Authority carried insurance creating a waiver of sovereign immunity under the pre-1991 provisions of the Georgia Constitution, Art. I, Sec. II, Par. IX. See Curtis v. Bd. of Regents of the Univ. System of Ga., 262 Ga. 226 (416 SE2d 510) (1992); Litterilla v. Hosp. Auth. of Fulton County, 262 Ga. 34 (413 SE2d 718) (1992). The Hospital Authority is a public funded governmental entity created pursuant to the Hospital Authorities Act (OCGA § 31-7-70 et seq.). Cox Enterprises v. Carroll City/County Hosp. Auth., 247 Ga. 39 (273 SE2d 841) (1981); Colquitt County Hosp. Auth. v. Health Star, 262 Ga. 285 (417 SE2d 147) (1992); Macon-Bibb County Hosp. Auth. v. Madison, 204 Ga. App. 741, 742 (420 SE2d 586) (1992); Hosp. Auth. of Fulton County v. Litterilla, 199 Ga. App. 345 (404 SE2d 796) (1991), rev’d on other grounds, Litterilla v. Hosp. Auth. of Fulton County, 262 Ga. 34, supra. Although an award of punitive damages against a hospital authority was sustained in Hosp. Auth. of Gwinnett County v. Jones, 259 Ga. 759 (386 SE2d 120) (1989), vacated, _U. S._(111 SC 1298, 113 LE2d 234) (1991), the Georgia Supreme Court noted in its opinion that “[n]one of the parties before us raised the question whether punitive damages are appropriately awarded against a public authority and we express no opinion on this issue.” Id. at 759, n. 1. Subsequently, in MARTA v. Boswell, 261 Ga. 427 (405 SE2d 869) (1991), the Supreme Court ruled that MARTA was not subject to an award of punitive damages because such an award against a governmental entity would violate Georgia [894] public policy.1 Quoting U. S. Supreme Court discussion of this issue in City of Newport v. Fact Concerts, 453 U. S. 247 (101 SC 2748, 69 LE2d 616) (1981), the Court reasoned that an award of punitive damages against a governmental entity “would burden the very taxpayers and citizens for whose benefit the wrongdoer was being chastised . . . [;] likely [be] accompanied by an increase in taxes or a reduction of public services for the citizens footing the bill . . . [and would levy punishment, not against the government official who knowingly or maliciously committed the wrong, but against a governmental entity which] can have no malice independent of the malice of its officials. Damages awarded for punitive purposes, therefore, are not sensibly assessed against the governmental entity itself.” (Emphasis in original; citations and punctuation omitted.) MARTA, supra at 428. After MARTA v. Boswell was decided, the case of Hosp. Auth. of Gwinnett County v. Jones made its second appearance before the Supreme Court. Id. at 261 Ga. 613. The Court again noted that the appropriateness of the punitive damages award against the hospital authority was not raised as an issue, and followed this comment with a reference to its recent decision in MARTA v. Boswell. Jones, supra, 261 Ga. at 613-614, n. 1. We conclude that MARTA v. Boswell, supra controls this issue and establishes that it is against Georgia public policy to allow an award of punitive damages against a hospital authority created as a government entity under the Hospital Authorities Act (OCGA § 31-7-70 et seq.). There is no merit in the argument that punitive damages should, nevertheless, be available to the extent the Hosptial Authority has obtained insurance to cover an award of punitive damages. The clear import of the public policy acknowledged in MARTA v. Boswell, supra, is to eliminate the self-defeating expenditure of funds for punitive damages, or for insurance for such damages, by a governmental entity funded by tax revenues. Although the sovereign immunity applicable to the Hospital Authority in this case, and its waiver to the extent of liability insurance protection,2 springs from the same public policy concerns for protection of the public purse (see Googe v. Fla. Intl. Indem. Co., 262 Ga. 546, 550 (422 SE2d 552) (1992)), the public policy against the award of punitive damages stands on independent grounds unaffected by the existence of insurance coverage. Moreover, the public policy against the award of punitive damages [895] against governmental entities enunciated by the U. S. Supreme Court in City of Newport, supra, and adopted by the Georgia Supreme Court, was based not only on a concern for the taxpayer’s purse, but also on the belief that the punitive and deterrent purposes of such an award would not be served when it is levied against the governmental entity itself, which can have no malice independent of its officials, rather than against the governmental official who committed the wrong. One concern is obviously that an award of punitive damages in this context makes no sense because it will not deter the wrongdoing public official regardless of whether the award is paid out of government coffers or from insurance purchased by the government. If the Hospital Authority has insurance which would cover an award of punitive damages, this does not alter the public policy against the award of such damages. It simply means the Authority has purchased insurance it does not need. The cases cited by the dissent dealing with the waiver of sovereign immunity to the extent of insurance coverage are not analogous, since the waiver in that context was specifically provided for by the Georgia Constitution. The trial court erred by denying partial summary judgment in favor of the Hospital Authority. Judgment reversed. McMurray, P. J., Birdsong, P. J., Johnson, Blackburn and Smith, JJ., concur. Pope, C. J., Beasley, P. J., and Cooper, J., dissent. Footnotes [1] The case of MARTA v. Binns, 252 Ga. 289 (313 SE2d 104) (1984) is distinguishable. In that case, MARTA was held liable for punitive damages awarded against it, not as a tortfeasor, but as a self-insurer liable pursuant to OCGA § 33-34-6 for a bad faith refusal to pay no-fault benefits. [2] We need not address whether the waiver to the extent of liability insurance protection would encompass punitive damages.