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DEHART v. LIBERTY MUTUAL INSURANCE COMPANY12/4/1998
Craig and Jeannie DeHart filed this action in federal court seeking a declaration that a liability insurance policy issued by Liberty Mutual Insurance Company was in effect when their son was injured in an automobile collision in North Carolina. The Eleventh Circuit U.S. Court of Appeals has asked this Court whether the Georgia Public Service Commission's "continuous coverage" provision applies outside the state of Georgia and whether state law permits the stacking of a motor carrier's liability insurance policies. We conclude that the state regulation applies to the same territory outside the state as the motor carrier's insurance policy and that an injured person may recover under that policy when the insurance company has failed to file a termination form with the Georgia PSC.
FACTS
The PSC regulations require insurance companies to certify insurance coverage of motor carriers by filing a Form E and to provide notice of termination of coverage by filing a Form K. In June
1986, Liberty Mutual certified to the PSC that it provided liability insurance coverage for Senn Trucking Company of Georgia in a policy effective May 27, 1986. In November 1986 it filed a Form K notifying the PSC that the policy would be cancelled in thirty days, but filed a Form E reinstating the policy before the cancellation took effect. Although the policy expired in May 1987, Liberty Mutual did not file another Form K notifying the PSC that coverage had terminated. On May 27, 1987, Senn Trucking acquired a liability insurance policy from National Continental Insurance Company. On May 26, 1988, a driver for Senn Trucking caused a collision on a North Carolina highway that severely injured Adam Shane DeHart. The DeHarts sued the trucking company and both insurance companies in state court. The trial court denied summary judgment to Liberty Mutual, but the Georgia Court of Appeals reversed, holding that Liberty Mutual had been improperly joined because the accident occurred outside the state of Georgia.
The DeHarts settled with National Continental for the policy limits of one million dollars and with Senn Trucking for $125,000. The settlement agreement stated that it was not intended to affect the litigation between the DeHarts and Liberty Mutual. The DeHarts then filed this action in federal district court seeking a declaration that Liberty Mutual was liable based on the PSC regulation that motor carrier liability insurance policies are continuous until the PSC receives actual written notice that the coverage will terminate. The district court held that Liberty Mutual's failure to file the termination form with the PSC meant that the policy was effective on the date of the accident and granted summary judgment to the DeHarts. Liberty Mutual appealed and the Eleventh Circuit certified the following two questions to this court:
1. Does the GPSC regulatory provision mandating that motor carrier liability insurance policies properly registered with the GPSC are continuous until not less than thirty days after the GPSC receives actual written notice that such coverage will terminate — i.e., the continuous coverage provision — have extraterritorial application . . . when a motor vehicle collision occurs outside the state of Georgia?
2. Where an insurer has certified to the GPSC that it insures a Georgia motor carrier and, notwithstanding the expiration of the policy in question, fails to notify the GPSC that such certification has been canceled prior to the loss, and the motor carrier subsequently purchases a second policy
also in effect at the time of the loss, does Georgia law permit extension of the GPSC continuous coverage provision to provide "stacking" of
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