WHITESIDE v. GEICO INDEMNITY COMPANY

Filing 147

ORDER denying 137 Motion for Judgment as a Matter of Law; denying 137 Motion for New Trial; denying 138 Motion to Certify Questions of Law to the Georgia Supreme Court. Ordered by US DISTRICT JUDGE CLAY D LAND on 11/13/2018. (CCL)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COLUMBUS DIVISION
FIFE M. WHITESIDE,

*

Plaintiff,

*

vs.

*

GEICO INDEMNITY COMPANY,

*

Defendant.

CASE NO. 4:16-CV-313 (CDL)

*
O R D E R

Defendant renewed its motion for judgment as a matter of law
that it made during the trial.
seeks a new trial.

In the alternative, Defendant

Defendant also asks the Court to certify

three questions to the Georgia Supreme Court.

For the reasons

explained in the remainder of this Order, the motions (ECF Nos.
137 & 138) are denied.
THE TRIAL
As

recounted

in

more

detail

below,

Defendant

rejected

a

time-limited offer to settle a liability claim for its insured’s
policy limits of $30,000.
the

insurance

policy.

At that time, coverage existed under
After

the

time-limited

demand

expired

without acceptance, Terry Guthrie, the injured person, filed an
action against the driver of the vehicle, Bonnie Winslett.

When

that action was filed, Winslett would have been a covered insured
under the policy.

Winslett allowed the case to go into default,

and a default judgment was entered against her in the amount of
$2,916,204.00.

Guthrie filed an involuntary bankruptcy petition

against Winslett, and the bankruptcy trustee (“Plaintiff”) filed
this

action

against

Defendant

to

recover

for

bad

faith

or

negligent failure to settle the underlying personal injury claim.
The jury returned a verdict in favor of Plaintiff, finding
as follows: (1) Defendant failed to exercise the degree of care a
reasonably prudent insurance company should exercise when it did
not accept the policy limits demand of $30,000; (2) Defendant’s
failure to accept the demand was a proximate cause of the default
judgment that was later entered against Winslett; (3) Winslett’s
contributory negligence was also a proximate cause of the default
judgment; and (4) Winslett was 30% at fault and Defendant was 70%
at fault for the default judgment.

Verdict 1-2, ECF No. 117.

Based on these findings, the jury awarded damages to Plaintiff
for the amount that the default judgment exceeded the liability
limits of $30,000, to be reduced by 30%.

Based on the parties’

stipulation as to accrued interest on the judgment and after
reduction for Winslett’s fault, the Court entered judgment in
favor of Plaintiff in the amount of $2,763,742.00.

Am. J., ECF

No. 124.
DEFENDANT’S ARGUMENTS
Defendant
motion

for

makes

judgment

three
as

a

basic
matter

2

arguments
of

law:

in

support

(1)

the

of

its

evidence

introduced

at

trial

established

as

a

matter

of

law

that

Winslett’s failure to notify Defendant of the lawsuit when it was
served

upon

judgment;

her

(2)

was

the

sole

O.C.G.A. §

proximate

33-7-15(c)

and

cause
the

of

the

default

insurance

policy

excuse Defendant of any liability for its failure to accept the
policy

limits

demand

because

its

insured

failed

to

notify

Defendant of the lawsuit when it was served upon her; and (3) the
Court’s ruling that Defendant could not contest the amount of the
default judgment violates Defendant’s constitutional due process
rights.

The Court addresses each of these arguments in turn.
DISCUSSION

I.

Proximate Cause
This

case

causation.

presented

classic

issues

related

to

legal

Guthrie, who was riding his bicycle, was struck by

Winslett, who was operating a motor vehicle.

Guthrie was taken

to the hospital by ambulance where he received treatment and
diagnostic tests.

His medical expenses for two hospital visits

slightly exceeded $9,000.

At the time of the wreck, Winslett was

operating a vehicle she had borrowed from a friend.
not

have

a

driver’s

license

vehicle without a license.

and

was

cited

for

Winslett did
operating

the

Defendant nevertheless treated her as

a permissive driver and accepted her as an insured under its
policy that covered the vehicle.
for

the

accident

prior

to

the

It never questioned coverage
entry

3

of

the

default

judgment

against

Winslett,

its

insured,

the

wreck,

and

it

never

disputed

that

Winslett was liable.
Shortly
limited

after

demand

for

the

Guthrie’s

policy’s

counsel

$30,000

Defendant made a counteroffer of $12,000.

made

liability

a

time-

limits.

Defendant did not ask

for additional time or information before it rejected the policy
limits demand with its counteroffer.

Guthrie’s counsel ignored

the counteroffer and filed suit on behalf of Guthrie against
Winslett.

Winslett was served with the lawsuit, but neither she

nor Guthrie’s counsel notified Defendant of the lawsuit.
lawsuit

went

into

default,

and

Guthrie’s

counsel

The

subsequently

obtained a default judgment against Winslett in the amount of
$2,916,204.00.

Defendant had no notice of the default judgment

until after it was entered.

Defendant sought to have the default

judgment set aside, but that motion was denied and the denial was
affirmed by the Georgia Court of Appeals.

Accordingly, Winslett

has a final and enforceable judgment against her in the amount of
$2,916,204.00.
Winslett was forced into bankruptcy, and the trustee of her
bankruptcy estate filed this action against Defendant on behalf
of her creditors, including Guthrie.

Plaintiff claimed in this

action that Defendant’s bad faith failure to accept the policy
limits
against

demand

proximately

Winslett

in

caused

excess

of

the

the

4

judgment

policy

to

limits.

be

rendered
Defendant

maintains that it cannot be liable for the excess judgment, even
if it should have paid the policy limits demand, because it was
never notified of the lawsuit before it went into default.
The Court concluded that genuine factual disputes existed as
to

proximate

negligence.

cause,

intervening

cause,

and

contributory

Without objection, the Court instructed the jury on

these issues as follows:
If you find that GEICO failed to exercise that degree
of care that a reasonably prudent insurance company
would exercise under the circumstances in this case,
then the second issue you must decide is whether the
Plaintiff has proved by a preponderance of the evidence
that the default judgment against Bonnie Winslett was
caused by GEICO’s failure to exercise this degree of
care.
When considering whether GEICO’s conduct “caused” the
default judgment, you must use the legal meaning of
“causation.”
Under the law, there are two aspects of
legal causation.
First, for the default judgment to
have been caused by GEICO’s failure to exercise the
degree of care that a reasonable insurance company
would have exercised under the circumstances, Plaintiff
must prove that the default judgment would not have
occurred if GEICO had acted in a reasonably prudent
manner.
So that is the first step in the causation
analysis.
The second aspect of legal causation is
known as “proximate cause.” Proximate cause under the
law places some boundaries on what can be considered
the legal cause of an injury and damages.
For example, if on your way to court this morning, you
ran a red light and collided with someone in the
intersection who had a green light, what caused you to
collide with the other vehicle? Someone might say that
if you had stayed in bed this morning and had not come
to court, the wreck would have never have happened.
So you coming to court this morning caused you to be in
that intersection and caused the wreck. But under the
law you coming to court would not be the proximate

5

cause of the wreck. The connection between you coming
to court and the wreck is not sufficiently close to be
the proximate cause of the collision.
The proximate
cause of the wreck would be your failure to stop when
the light was red.
Under the law, “proximate cause” means that cause
which, in a natural and continuous sequence, produces
an event, and without which cause such event would not
have occurred.
So, when I use the expression
“proximate cause,” I mean a cause that, in the natural
or ordinary course of events, produced the event.
In
order to be a proximate cause, the act or omission
complained of must be such that a person using ordinary
care would have foreseen that the event, or some
similar event, might reasonably result from it. There
may be more than one proximate cause of an event.
The mere fact that one event chronologically follows
another is not enough, on its own, to establish a
causal connection between them.
In some cases, an
intervening act may “cut off” causation for an event
that occurred after that intervening act.
But an
intervening act does not break the causal connection
between a defendant’s conduct and an event if the
intervening act was triggered by the defendant’s
conduct and could have reasonably been anticipated or
foreseen by the defendant. So, a defendant may be held
liable for an injury or damages when that defendant’s
failure to exercise reasonable care puts other forces
in motion or operation resulting in the injury or
damages when such other forces are the natural and
probable result of the act that the defendant committed
and that reasonably should have been foreseen by the
defendant.
When the injuries or damages could not
reasonably
have
been
foreseen
as
the
natural,
reasonable, and probable result of the original failure
by the defendant to exercise reasonable care, then the
defendant’s original failure to exercise reasonable
care is not a proximate cause of the injury or damages,
and there can be no recovery.
If the chain reaction
that resulted from the defendant’s alleged failure to
exercise reasonable care could reasonably have been
foreseen as the natural, reasonable, and probable
result of the defendant’s original failure by the
defendant to exercise reasonable care, then the
defendant’s original failure to exercise reasonable

6

care can be a proximate cause of plaintiff’s injuries
or damages, and plaintiff may recover.
In this case, you must decide whether GEICO’s failure
to pay the policy limits demand was a proximate cause
of the default judgment.
GEICO contends that Bonnie
Winslett’s failure to notify GEICO of the lawsuit was
an intervening act that breaks the causal chain between
GEICO’s conduct in declining Terry Guthrie’s policy
limits demand and the default judgment against Bonnie
Winslett.
GEICO further asserts that it could not
reasonably have anticipated that an insured like Bonnie
Winslett would fail to notify it of a lawsuit against
her and allow the lawsuit to go into default because
GEICO’s insurance policy required that GEICO receive
notice of any lawsuit against its insured as a
condition of coverage.
To decide whether Bonnie
Winslett’s conduct was an intervening act that cuts off
causation from GEICO’s failure to pay the policy limits
demand, you must determine whether GEICO reasonably
could have anticipated under the circumstances that
Bonnie Winslett would not notify GEICO of the lawsuit
and that it would go into default and result in a
default judgment against Bonnie Winslett.
GEICO’s
failure to pay the policy limits demand cannot be a
proximate cause of the default judgment unless, under
the
circumstances,
GEICO
should
have
reasonably
anticipated that Bonnie Winslett would not notify it of
the lawsuit and a default judgment could result against
Ms. Winslett.
If you determine that GEICO’s failure to exercise that
degree of care that a reasonably prudent insurance
company would have exercised under the circumstances
was a proximate cause of the default judgment, then you
would answer “Yes” to Question 2 on the verdict form.
If you find that Plaintiff failed to prove that GEICO’s
conduct was a proximate cause of the default judgment,
you would answer “No” to Question 2 on the verdict
form, and that would end your deliberations.
If you answer “Yes” to Question 2, then you must next
determine
whether
GEICO’s
conduct
was
the
sole
proximate cause of the default judgment.
To answer
this question, you must determine whether Bonnie
Winslett was negligent and, if so, whether her
negligence, combined with GEICO’s conduct, was a
proximate cause of the default judgment.
If you find
7

that Bonnie Winslett was not negligent or that her
negligence was not a proximate cause of the default
judgment, that means you find that GEICO’s conduct was
the sole proximate cause of the default judgment.
GEICO contends that Bonnie Winslett was negligent when
she failed to notify GEICO of Terry Guthrie’s lawsuit
and when she failed to respond to the lawsuit.
GEICO
also contends that Bonnie Winslett’s negligence was a
proximate cause of the default judgment against Bonnie
Winslett.
Plaintiff denies that Bonnie Winslett was
negligent.
GEICO has the burden of proof on this
defense. “Negligence” is the failure to use reasonable
care, which is the care that a reasonably careful
person would use under like circumstances.
Negligence
is doing something that a reasonably careful person
would not do under like circumstances or failing to do
something that a reasonably careful person would do
under like circumstances.
If you find that Bonnie Winslett was negligent, then
you must determine whether her negligence was a
proximate cause of the default judgment.
As I stated
previously, there may be more than one proximate cause
of an event.
If two or more acts operate directly or
happen together in bringing about an event, then both
acts together can be considered the proximate cause of
the event.
The fact that the event would not have
happened if only one of the acts had occurred does not
prevent (or limit) the other act from constituting the
proximate cause. If both acts contributed directly and
concurrently or together in bringing about the event,
they together constitute the proximate cause.
If you find by a preponderance of the evidence that
Bonnie
Winslett
was
not
negligent
or
that
her
negligence was not a proximate cause of the default
judgment against her, you would answer “No” to Question
3 on the verdict form. If you answer “No” to Question
3, this means that you find that GEICO’s conduct was
the sole proximate cause of the default judgment
against Bonnie Winslett and that Plaintiff should be
awarded $2,886,204.00, and you should place a check on
that finding in the verdict form.
If you award
Plaintiff damages, you should go to Question 5 on the
verdict form.

8

If you find by a preponderance of the evidence that
Bonnie Winslett was negligent and that her negligence
was a proximate cause of the default judgment, you
would answer “Yes” to Question 3 on the verdict form.
If you answer “Yes” to Question 3, this means that you
find that GEICO’s conduct was not the sole proximate
cause of the default judgment, and you must go to
Question 4 and determine Bonnie Winslett’s percentage
of fault compared to that of GEICO.
If you find that
Bonnie Winslett’s percentage of fault is 50% or
greater, then Plaintiff is not entitled to recover any
damages on behalf of Bonnie Winslett’s bankruptcy
estate, and that would end your deliberations. If you
find that Bonnie Winslett’s percentage of fault is less
than 50%, then that means you are making an award in
favor of Plaintiff against GEICO in the amount of
$2,886,204.00 (the amount of the verdict in excess of
the policy limits), reduced by the percentage of fault
you assign to Bonnie Winslett. And you should place a
check on that finding in the verdict form. If you find
that Bonnie Winslett’s percentage of fault is less than
50%, then you should continue to Question 5.
Jury Instructions 9-16, Charge No. 8, ECF No. 121.
The jury answered the special interrogatories as follows:
(2) Do you find by a preponderance of the evidence
that Defendant GEICO Indemnity Company’s failure to
accept Terry Guthrie’s offer to settle his claims
against Bonnie Winslett for $30,000 was a proximate
cause of the default judgment against Bonnie Winslett?
Answer Yes or No

yes

* * *
(3) Do you find by a preponderance of the evidence
that Bonnie Winslett was negligent and that her
negligence was a proximate cause of the default
judgment against her?
Answer Yes or No

yes

* * *
(4) Indicate Bonnie Winslett’s percentage of fault
compared to that of Defendant GEICO Indemnity Company.

9

Please answer in terms of percentages.
the percentages should add up to 100%.
Bonnie Winslett

30

The total of

%

GEICO Indemnity Company

70

%

* * *
X
We, the jury, find that damages shall be awarded
to Plaintiff and against Defendant in the amount of
$2,886,204.00 less the percentage of Ms. Winslett’s
fault as found above.
Verdict 1-2.
Defendant

contends

that

no

reasonable

jury

answered these interrogatories the way this jury did.

could

have

The Court

disagrees.

On the issue of whether Winslett’s conduct was an

intervening

act

sufficient

to

break

the

causal

chain

between

Defendant’s denial of the policy limits demand and the default
judgment, the question is whether it was reasonably foreseeable
to Defendant when it denied the demand that a lawsuit would be
filed, that Winslett may not notify Defendant of the lawsuit,
that the lawsuit thus may go into default, and that a judgment in
excess of the policy limits may be entered against Winslett.
jury found that it was reasonably foreseeable,

The

and there was

evidence to support the jury finding.
Defendant knew that Winslett was not the named insured on
its policy and that she likely would not have a copy of the
policy.

It also knew that she had been cited for driving without

a license, and through minimal investigation could have concluded

10

that she did not have a driver’s license.
information

reasonably

available

to

it

that

Defendant also had
Winslett

was

not

stable, and that she lived in an unrentable apartment with no
electricity and no furniture except for a mattress on the floor.
Defendant had information available to it that should have put it
on notice of Winslett’s unreliability and lack of sophistication,
which would lead a reasonable insurance company to conclude that
such a person may not notify it of a lawsuit or respond to one
served upon her.

Remarkably, no evidence was produced at trial

that Defendant ever explicitly informed Winslett that she should
notify it if she was sued.

Winslett testified that she did

nothing after being served with the suit because she thought
Defendant was handling it based on its prior contact with her.
Notably,

Defendant’s

own

claims

manual

recognizes

that

notwithstanding the notice requirements in the policy, it should
be anticipated that some insureds may not notify Defendant of a
lawsuit and Defendant’s employees should take precautions:
When an insured is served, he is then obligated by the
terms of the policy to “send us all papers dealing with
claims or suits immediately.”
While an insured has
this obligation placed upon him or her by the terms of
the policy, good practice is to remind the insured of
the
importance
of
this
obligation
while
the
investigation of the claim is underway. If the examiner
feels there is a good chance that suit will be filed,
remind the insured of his or her obligation in writing.
The insured should be instructed to call us immediately
upon receipt of a summons and complaint and to send to
us the summons and complaint via registered or
certified mail.

11

Pl.’s Trial Ex. P48 at IX-6 to IX-7, Claims Manual, ECF No. 119-9
at 12-13
Based
existed

on

from

the
which

foregoing,
a

the

reasonable

Court

finds

that

evidence

jury

could

conclude

that

Defendant’s failure to accept the policy limits demand was
proximate

cause

of

the

excess

judgment

and

that

a

Winslett’s

intervening conduct was reasonably foreseeable such that it did
not break the chain of causation as a superseding cause.

As

courts have long recognized, jurors, using their common sense and
every day experience, are best equipped to answer these types of
questions involving legal causation.

See, e.g., Ontario Sewing

Co., Ltd. v. Smith, 572 S.E.2d 533, 536 (Ga. 2002) (in which
former

Justice

Sears,

who

coincidentally

appears

to

be

lead

counsel for Defendant in this action for post-trial motions and
presumably appeal purposes, stated that “it is axiomatic that
questions

regarding

proximate

cause

are

‘undeniably

a

jury

question’ and may only be determined by the courts ‘in plain and
undisputed cases’” (quoting Atlanta Obstetrics & Gynecology Grp.,
P.A. v. Coleman, 398 S.E.2d 16, 18 (Ga. 1990))).
question presented here is not plain and undisputed.

The causation
It would be

judicial arrogance for a single judge to second guess the jury’s
resolution of the disputed facts, even if he disagreed with how
the jury resolved them.

12

The jury here found that Defendant breached its duty to its
insured when it did not accept the policy limits demand; that
this breach was a proximate cause of the default judgment; that
Winslett’s negligence was also a proximate cause of the default
judgment; and that her negligence was 30% compared to Defendant’s
70%.

These findings demonstrate that the jury understood the law

and properly followed the verdict form.

No basis exists for the

Court to second guess the jury.
II.

O.C.G.A. § 33-7-15 and the Policy’s Notice Provisions
The

Court

agrees

with

Defendant

that

under

the

policy’s

notice provisions, Winslett had a duty to notify GEICO when she
was served with Guthrie’s lawsuit, and she breached the policy’s
notice provisions when she failed to do so.

The Court further

agrees that Winslett’s failure to notify Defendant would likely
prevent her from recovering against Defendant on a

breach of

contract claim for the policy limits of that policy.

But the

claim in this court is not a breach of contract claim on the
policy.

It is a tort claim for bad faith failure to settle the

liability claim—a claim that was undisputedly covered under the
policy

at

the

time

of

Guthrie’s

settlement

demand.

While

Winslett’s conduct in failing to notify Defendant of the lawsuit
could certainly be considered as evidence of her negligence and
if that negligence were found to be 50% or greater would prevent
her recovery on the tort claim, the Court has concluded that it

13

does not prevent her recovery on the tort claim as a matter of
law.

The

jury

was

properly

instructed

on

these

issues

and

rejected, as a matter of fact, that Winslett’s negligence was
equal to or greater than Defendant’s failure to exercise that
degree of care that a reasonably prudent insurance company would
exercise under the circumstances.

As the Court has previously

explained, this was a jury question.

Whiteside v. GEICO Indem.

Co., No. 4:16-CV-313 (CDL), 2017 WL 6347174, at *5-*8 (M.D. Ga.
Dec. 12, 2017).

At trial, sufficient evidence was introduced to

support the jury’s finding.
Defendant argues that O.C.G.A. § 33-7-15 prevents recovery
here.

That statute states:

(a) No motor vehicle liability insurance policy
covering a motor vehicle principally garaged or
principally used in this state shall be issued,
delivered or issued for delivery, or renewed in this
state unless such policy contains provisions or has an
endorsement thereto which specifically requires the
insured to send his insurer, as soon as practicable
after the receipt thereof, a copy of every summons or
other process relating to the coverage under the policy
and to cooperate otherwise with the insurer in
connection with the defense of any action or threatened
action covered under the policy.
(b) Noncompliance by the insured with this required
provision or endorsement shall constitute a breach of
the insurance contract which, if prejudicial to the
insurer, shall relieve the insurer of its obligation to
defend its insureds under the policy and of any
liability to pay any judgment or other sum on behalf of
its insureds.
(b.1) In the event the insurer denies coverage and it
is determined by declaratory judgment or other civil

14

process that there is in fact coverage, the insurer
shall be liable to the insured for legal cost and
attorney’s fees as may be awarded by the court.
(c) Subsections (a) and (b) of this Code section shall
not operate to deny coverage for failure to send a copy
of a summons or other process relating to policy
coverage if such documents are sent by a third party to
the insurer or to the insurer’s agent by certified mail
or statutory overnight delivery within ten days of the
filing of such documents with the clerk of the court.
If the name of the insurer or the insurer’s agent is
unknown, the third party shall have a period of 30 days
from the date the insurer or agent becomes known in
which to send these required documents. Such documents
must be sent to the insurer or agent at least 30 days
prior to the entry of any judgment against the insured.
O.C.G.A. § 33-7-15.
The

plain

language

of

the

statute

provides

that

if

an

insured fails to notify its insurance carrier of a lawsuit, this
noncompliance

“shall

constitute

a

breach

of

the

insurance

contract which, if prejudicial to the insurer, shall relieve the
insurer

of

its

obligation

to

defend

its

insured[]

under

the

policy and of any liability to pay any judgment or other sum on
behalf of its insured[].”

Id. § 33-7-15(b) (emphasis added);

accord Def.’s Trial Ex. D23, Ga. Family Auto. Ins. Policy 6, ECF
No. 119-27 at 9 (tracking the language of O.C.G.A. § 33-7-15(b)
and stating that if the insured fails to comply with the policy’s
notice provision, Defendant will be relieved of “any liability to
pay any judgment or other sum on [the policyholder’s] or any
other insured[‘]s behalf”).
its

insurer

of

a

lawsuit

Thus, if an insured fails to notify
and

the

15

insurer

is

prejudiced,

the

insured loses any coverage she may have under the policy and the
insurer has no obligation to pay any person who has a claim
against its insured.

But this provision does not immunize an

insurance company from having to compensate its own insured if it
commits tortious conduct by failing to pay a policy limits demand
in bad faith.

The phrase “on behalf of its insured” does not

mean “to its insured.”

Defendant’s policy may not contractually

require it to pay Guthrie “on behalf of” its insured, Winslett;
but neither the statute nor the policy relieves Defendant from
compensating

its

insured,

Winslett,

for

its

tortious

conduct

directed toward her.
Defendant also argues that the policy bars all claims, not
just breach of contract claims, if the insured does not comply
with the policy’s terms and conditions because it states that
“[n]o

suit

insured

has

conditions.”

will
fully

lie

against

complied

bars

with

all

the

. . .

[u]nless

policy’s

terms

the
and

Def.’s Trial Ex. D23, Ga. Family Auto. Ins. Policy

6, ECF No. 119-27 at 9.
clearly

[Defendant]

not

only

Defendant argues that this provision

claims

under

the

policy

but

also

claims for bad faith or negligent failure to settle a claim.

tort
But

this language does not clearly or expressly bar extra-contractual
damages claims resulting from Defendant’s tortious conduct.
Defendant further emphasizes that if a claim had been made
under the policy after Winslett failed to comply with certain

16

policy provisions, then the claim would not have been covered
under the policy.

Defendant is correct that if there is no

coverage for a claim, there can be no recovery for bad faith
refusal to pay the claim.

See, e.g., Parris & Son, Inc. v.

Campbell, 196 S.E.2d 334, 340–41 (Ga. Ct. App. 1973) (finding
that because the insurer offered to pay the full amount of its
liability under the policy, it could not be liable for refusing
to pay a larger amount demanded by the insured).

But Defendant

cited no authority suggesting that if an insurer in bad faith or
negligently

rejects

a

settlement

demand

for

a

claim

that

is

covered under the policy—like Guthrie’s claim was—the insured’s
subsequent

conduct

voids

the

insured’s

failure-to-settle

tort

claim as a matter of law.
Of course, the insured’s failure to notify her insurer can
certainly

be

considered

in

determining

whether

the

insured’s

failure to notify the insurer constitutes contributory negligence
or the proximate cause of the default judgment.
this

case

Defendant’s

did

consider

continued

that

conduct.

insistence

that

But
a

And the jury in

the

Court

breach

of

rejects
contract

defense excuses its tortious conduct as a matter of law.
III. Opportunity to Contest Amount of Excess Verdict
Defendant argues that its constitutional due process rights
were violated by the Court’s ruling that it could not contest the
amount of the

final judgment

against its insured.

17

Defendant

further argues that the amount of the default judgment was not
the

proper

Defendant

measure

of

misunderstands

damages
the

for

nature

its
of

insured’s

the

injury

injury.
that

its

insured suffered due to its failure to settle the claim and the
constitutional implications.

Defendant’s insured has a final and

enforceable judgment against her in the amount of $2,916,204.00.
That judgment has not been set aside and was affirmed on appeal.
Thus, it is a certain liability of Winslett.
amount of the judgment.

She owes the full

Had Defendant complied with its duties

under the law, as found by the jury, she would not be facing this
certain liability.

Consequently, it is undisputed that because

of Defendant’s failure, Winslett suffered damages in the amount
of the judgment (less the reduction for her own negligence and
the

$30,000

policy

coverage

pursue in this action).

limits,

which

Plaintiff

did

not

Allowing Defendant to argue that the

judgment amount was not reasonable would not change the amount of
liability
judgment.

that

Winslett

is

exposed

to

as

a

result

of

that

Moreover, it would require a separate mini-trial of

the underlying case which has already been litigated once.
As

to

the

constitutional

implications,

it

was

reasonably

foreseeable to Defendant when it failed to accept the policy
limits demand that a lawsuit would be filed and that it was
possible for a verdict in excess of the policy limits to be
rendered.

It

was

also

foreseeable

18

that

if

a

jury

found

Defendant’s failure to pay the limits to have been unreasonable,
then

Defendant

could

be

on

the

hook

for

any

excess

verdict,

particularly an excess verdict that has been reduced to a final
judgment and upheld on appeal.
have

an

opportunity

to

Thus, while Defendant did not

attack

the

amount

of

the

underlying

judgment, it certainly had an opportunity to avoid it by paying
the policy limits demand; and it had an opportunity to contest it
after it was issued in the state court action by seeking to have
it set aside, which it did, albeit unsuccessfully.
In support of its due process argument, Defendant points to
the general principle that due process requires notice and an
opportunity to be heard.

Def.’s Br. in Supp. of Mot. for J. as a

Matter of Law 12, ECF No. 137-1 (citing Mullane v. Cent. Hanover
Bank & Tr. Co., 339 U.S. 306, 320 (1950), which concluded that
notice by publication on beneficiaries of a common trust fund did
not

satisfy

due

process

for

depriving

beneficiaries

whereabouts are known of their property interests).
also

relies

on

one

Georgia

case,

which

whose

Defendant

stands

for

the

unremarkable principle that when an insurer receives notice of a
lawsuit against its insured but fails to participate in
is

no

denial

of

due

process

based

on

that

action,

there

lack

of

notice.

Ga. Farm Bureau Mut. Ins. Co. v. Martin, 433 S.E.2d 315,

316-17 (Ga. Ct. App. 1993), rev’d on other grounds, 444 S.E.2d

19

739 (Ga. 1994).

But Martin is silent on the issues raised in

this case.
In addition, Defendant cites a number of non-Georgia cases
concluding
uninsured

that

the

motorist

amount
is

not

of

a

binding

default
on

the

judgment

against

uninsured

an

motorist

carrier in the insured’s subsequent action against the carrier to
recover uninsured motorist benefits under the policy unless the
carrier receives due process, such as an opportunity to intervene
in the underlying action between the insured and the uninsured
motorist.

See, e.g., Burge v. Mid-Continent Cas. Co., 933 P.2d

210 (N.M. 1996); Champion Ins. Co. v. Denney, 555 So. 2d 137, 138
(Ala. 1989); Nationwide Mut. Ins. Co. v. Webb, 436 A.2d 465 (Md.
1981).1

None of these cases addresses the unique circumstances in

this action.

Here, the issue is not whether policy coverage

exists for the amount of Guthrie’s judgment against Winslett but
rather the amount of damages Winslett suffered because Defendant
unreasonably rejected Guthrie’s policy limits demand.

1

All but one of the twelve non-Georgia cases cited by Defendant on this
issue involve the same basic uninsured motorist coverage issue, and the
policy in many of the cases stated that an underlying judgment against
an uninsured motorist was not conclusive on liability or damages unless
the insurer received notice of the underlying action. The other case,
Topliff v. Chicago Insurance Co., 122 P.3d 922 (Wash. Ct. App. 2005),
was an action by an attorney against his malpractice insurer that
declined coverage under a policy exclusion.
Though the attorney
properly served the insurer under the relevant state law by delivering
a copy of the summons and complaint to the insurance commissioner, the
insurance commissioner did not notify the insurer.
Therefore, the
court of appeals affirmed the trial court’s decision to vacate the
attorney’s default judgment against the insurer.

20

This

case

presented

constitutional implications.
result.

classic

jury

issues

with

no

Defendant simply does not like the

Verdict disappointment has never been a proper basis for

nullifying

the

findings

of

a

jury,

supported by the evidence and the law.
to judgment as a matter of law.

when

those

findings

are

Defendant is not entitled

And because the Court cannot

conclude that the verdict is against the great weight of the
evidence, a second bite at the apple is likewise not warranted.
Defendant’s motions are denied.
DEFENDANT’S MOTION TO CERTIFY
In addition to its motions attacking the judgment, Defendant
asks the Court to certify three questions to the Georgia Supreme
Court:
1. Under O.C.G.A. § 33-7-15 and the terms of the motor
vehicle insurance policy at issue, can GEICO be held
liable for an alleged bad faith refusal to accept a
pre-suit policy limits demand when GEICO received no
notice
of
the
subsequently-filed
personal
injury
lawsuit and a default judgment was entered in that
lawsuit without notice to GEICO?
2. Was the failure of Ms. Winslett to timely provide
copies of the summons and complaint served upon her to
GEICO the intervening proximate cause of the entry of
the default judgment such that GEICO could not be held
liable for an alleged bad faith refusal to accept a
pre-suit policy limits demand?
3. In a suit alleging a bad faith refusal to accept a
pre-suit policy limits demand, when a default judgment
is entered against the insured in the subsequentlyfiled personal injury lawsuit without the knowledge of
the insurer, is the insurer bound by the default
judgment and is the measure of damages for the bad
faith claim against the insurer the amount of the
21

default judgment entered in that lawsuit against the
insured?
Def.’s Mot. to Certify Questions 1-2, ECF No. 138.
This Court may certify questions of state law to the Georgia
Supreme Court if there are questions of Georgia law that “are
determinative of the case and there are no clear controlling
precedents

in

the

decisions

O.C.G.A. § 15-2-9(a).

of”

the

Georgia

Supreme

Court.

The decision whether to certify a question

“rests in the sound discretion of the federal court.”
Bros. v. Schein, 416 U.S. 386, 391 (1974).

Lehman

Defendant argues that

certification of its questions will promote judicial economy.

In

some cases, certification may certainly “save time, energy, and
resources.”

Id.

Not here.

Defendant did not ask the Court to

certify these questions in its summary judgment motion, following
the Court’s denial of that motion, or following the Court’s order
explaining the causation and damages principles to be applied at
trial—even though it has been clear for months that there are no
Georgia

cases

unique case.

squarely

addressing

the

precise

issues

in

this

Certification at this point, after the Court has

held a trial and a jury has returned a verdict against Defendant,
would not serve the interests of judicial economy.
Court

acknowledges

addressed

the

that

precise

the

issues

Georgia
in

22

this

Supreme
case,

Although the

Court

the

Court

has

not

is

not

convinced that certification is warranted at this stage in the
litigation.2
CONCLUSION
Defendant’s motion for judgment as a matter of law, or in
the

alternative

for

new

trial

(ECF

No.

137),

is

denied.

Defendant’s motion to certify (ECF No. 138) is also denied.
IT IS SO ORDERED, this 13th day of November, 2018.
S/Clay D. Land
CLAY D. LAND
CHIEF U.S. DISTRICT COURT JUDGE
MIDDLE DISTRICT OF GEORGIA

2

Of course, on appeal, the Court of Appeals may determine that asking
the Georgia Supreme Court for help on these issues is appropriate.

23