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LUNCEFORD v. PEACHTREE CAS.12/5/1997
The issue in this appeal is whether an automobile insurance policy issued by Peachtree Casualty Insurance Company (Peachtree) covers punitive damages. We conclude that the broad language of the policy encompasses this type of coverage, and we therefore reverse the trial court's grant of summary judgment to Peachtree.
Terry Lunceford was involved in an automobile collision with Susan Brown. He filed suit against her and alleged, among other things, that she was driving while under the influence of alcohol. He sought damages for personal injuries and punitive damages. Peachtree, Brown's insurer, then brought this declaratory judgment action against Brown and Lunceford, contending that its policy did not cover punitive damages. The trial court concluded that the policy did not provide coverage for such damages and granted summary judgment to Peachtree. This appeal by Lunceford ensued.
1. The insurance policy provides the following with regard to
coverage: "We will pay, on behalf of an insured person, damages for which any insured person is legally liable because of bodily injury and property damage arising out of an accident involving your insured car or a non-owned car." We do not agree with Peachtree that this language plainly "does not provide coverage for punitive damages." On the contrary, the language of the policy leads to the opposite conclusion. The coverage language is broad, encompassing "damages" without limitation. Although it contains an exclusion for bodily injury or property damage caused by intentional acts, the policy does not contain an exclusion for punitive damages. And the law is clear in this state that an insurer, "having affirmatively expressed coverage in broad promissory terms, has a duty to define any limitations or exclusions clearly and explicitly. (Citations and punctuation omitted.)" MAG Mut. Ins. Co. v. Gatewood, 186 Ga. App. 169, 173 (367 S.E.2d 63) (1988).
It is true, as argued by Peachtree, that the definitions section of the policy defines bodily injury, property damage, and accident without reference to punitive damages. And, as further argued by Peachtree, the policy does not expressly recite that it will pay "all sums" that its insured could recover. But the failure to use this language or to specifically reference punitive damages in the definitions section does not prevent coverage. Had Peachtree wished not to cover or to exclude punitive damages, it could have done so clearly and specifically. It did not, and consequently it is bound by the broad language of the policy.
Peachtree cites two decisions in support of its argument that the policy language plainly excludes coverage for punitive damages. Both are inapposite. Both involve statutory construction of legislation rather than interpretation of an insurance contract. In O'Gilvie v. United States, 519 U.S. ___ (117 SC 452, 136 L.Ed.2d 454) (1996) the United States Supreme Court interpreted 26 U.S.C. § 104 (a) (2) and examined the meaning of the language "damages received . . . on account of personal injuries or sickness" in the context of whether punitive damages were excluded from gross income for tax purposes. Recognizing the ambiguity of the phrase, 136 L.Ed.2d at 460, the Court applied rules concerning statutory interpretation and concluded that punitive damages were not included within the phrase at issue. In Roman v. Terrell, 195 Ga. App. 219 (393 S.E.2d 83) (1990), relied on by the trial court, we considered whether punitive damages were recoverable from an uninsured motorist carrier. We construed former OCGA § 33-7-11 (a) (1) as requiring a UM carrier "to compensate its insured for all sums the insured could recover from the tortfeasor because of bodily inj
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