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VEHICULAR COLLISION; INSURANCE DISPUTE; DECLARATORY JUDGMENT; MATERIAL MISREPRESENTATIONS; ESTOPPEL AND WAIVER: JURY VERDICT; SETTLEMENT
David J. Hanko, Widower and Administrator of the Estate of Camela K. Hanko vs.Carolina Casualty Insurance Company, a Florida Corporation, RMC Trucking, Inc., a Georgia Corporation, and Robert J. Harrell
FCCI Insurance Group vs. Rodgers Metal Craft, Inc., RMC Trucking, Inc., Robert Harrell, Individually, and David J. Hanko, Widower and Executor of the Estate of Camela K. Hanko
A $3.5 million settlement was reached for the death of a 41-year old woman occasioned in a motor vehicle collision pursuant to a high-low agreement following a jury verdict in a declaratory judgment action concerning an insurer’s obligations under policies it had issued.
Suit was instituted against RMC by Camela K. Hanko’s husband, David J. Hanko (“Hanko”), on behalf of himself and their two minor children, who contended that RMC and its driver had an aggregate of $5 million in coverage available for this incident. FCCI filed a declaratory judgment action, during which the underlying case was stayed, seeking a declaration of no coverage on the grounds of mutual mistake, material misrepresentation, and reformation, based on insurance applications submitted to it by Rodgers, in which, inter alia, Rodgers denied it was engaged in trucking or leased vehicles to others. FCCI contended that had it known that Rodgers was engaged in trucking operations with a related corporation and leased vehicles to it, it would not have issued the policies, or would have issued the policies with exceptions for the leased trucks at issue, or would have charged a higher premium, authorizing it to void the policies, pursuant to provisions of O.C.G.A. §33-24-7.
The trial court denied the parties’ cross-motions for summary judgment, holding that there was coverage as a matter of law, but found that jury questions existed on the issues of material misrepresentation, and whether FCCI had waived or was estopped from raising material misrepresentations in order to avoid coverage through its actions after it learned of the alleged misrepresentation.
The matter proceeded to trial, where FCCI argued that the initial and renewal applications had typewritten checks indicating that Rodgers did not lease vehicles when, in fact, it had leased three vehicles to RMC, one of which was involved in the incident at issue. It further noted that it had not become aware of the leased vehicles until a few months following the tragic collision when it had been advised of same by counsel for Hanko, at which time it had immediately instituted its declaratory judgment action. Rodgers responded that it did not recall making the misrepresentations at issue, had not signed the applications, had no knowledge that they had been prepared and submitted to FCCI and, that in any event, FCCI had waived and was estopped from voiding coverage by continuing to accept premiums and provide coverage to Rodgers for seven months following the initiation of the declaratory judgment action before issuing a policy exclusion.
On September 15, 2008, the jury, in responding to special interrogatories, found that Rodgers had made material misrepresentations, but that FCCI had waived and was estopped from avoiding coverage on this basis due to its subsequent actions. The underlying litigation was thereafter settled for $3.5 million pursuant to a high-low agreement the parties had reached during jury deliberations.
[Hanko was represented by ATLA and GTLA members William C. Lanham, Esq., and Clark H. McGehee, Esq., of the Atlanta, Georgia, law firm of Johnson & Ward]
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