MATJOULIS v. INTEGON

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Docket Number

A97A0671.

Attorney(S)

Cofer, Beauchamp, Stradley Hicks, Frank R. Seigel, for appellant. Smith, Howard Ajax, James T. Brieske, for appellees.

Judges

JOHNSON, Judge.

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Smart Summary

Factual and Procedural Background

Terry Matjoulis held a car insurance policy with Integon General Insurance Corporation that included collision damage coverage. After leaving her car at a garage for service, the garage rented a Toyota Camry to her. Matjoulis totaled the Camry in a single-car accident. Integon refused to pay for the damages to the Camry, asserting that Matjoulis' policy only provided liability coverage, not collision damage coverage, for "temporary substitute" vehicles. Additionally, Integon declined to defend Matjoulis against a lawsuit filed by the rental company owning the Camry. Matjoulis filed suit seeking a declaratory judgment that Integon was obligated both to pay for the Camry's damages and to defend her in the lawsuit. The trial court denied Matjoulis' motion for summary judgment and granted Integon's cross-motion for summary judgment. Matjoulis appealed, and this opinion affirms the trial court's decision.

Legal Issues Presented

Whether the insurance policy provided collision damage coverage for a temporary substitute vehicle (the rented Toyota Camry) under its terms.
Whether OCGA § 33-34-3 mandates collision coverage for a temporary substitute vehicle despite the policy language.
Whether public policy requires collision coverage for temporary substitute vehicles even if the policy and statute do not provide it.

Arguments of the Parties

Appellant's Arguments

The policy language provides collision damage coverage for the rented Camry, either through the "temporary substitute" provision or the "acquired auto" provision, or at least creates ambiguity requiring coverage.
Even if the policy language excludes coverage, OCGA § 33-34-3 mandates such coverage for temporary substitute vehicles.
Public policy requires collision coverage for temporary substitutes to avoid exposing insureds to unanticipated liability, especially since Matjoulis chose full coverage for her own vehicle but was not given an option for temporary substitutes.

Appellee's Arguments

The policy explicitly excludes collision damage coverage for temporary substitute vehicles under Part D of the policy, making coverage for the Camry unavailable.
The "acquired auto" provision applies only to vehicles the insured owns, which the rented Camry was not, so it does not create ambiguity or coverage.
OCGA § 33-34-3 does not apply to the facts of this case.
Public policy does not require collision coverage even for the insured’s own vehicle, and thus does not mandate coverage for temporary substitutes.
The precedent cited by the appellant regarding public policy (Stepho v. Allstate) is distinguishable because it involves bodily injury to third parties, whereas this case involves economic loss between contracting parties.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Rice v. Huff, 221 Ga. App. 592 (1996)	Standards for summary judgment review: no genuine issue of material fact, de novo review, and viewing evidence in favor of nonmovant.	Applied to affirm grant of summary judgment to Integon as a matter of law.
Duke v. KHD Deutz of America Corp., 221 Ga. App. 452 (1996)	Contract construction is a question of law unless ambiguity exists.	Used to determine that the insurance policy language was unambiguous in excluding collision coverage for the temporary substitute vehicle.
Lumbermens Mut. Cas. Co. v. Plantation Pipeline Co., 214 Ga. App. 23 (1994)	Coverage exclusions in insurance policies must be clearly defined and ambiguities construed against insurer.	Applied to construe the policy language and confirm the exclusion was clear and enforceable.
American Home Assur. Co. v. Smith, 218 Ga. App. 536 (1995)	Insurers may exclude certain risks if policy does not violate law.	Supported the court’s acceptance of the collision coverage exclusion for temporary substitute vehicles.
Harris County v. Penton, 211 Ga. App. 498 (1993)	Contracts should be construed to give meaning to all terms and avoid rendering any provision meaningless.	Applied to reject appellant’s interpretation that would nullify the temporary substitute exclusion.
Stepho v. Allstate Ins. Co., 259 Ga. 475 (1989)	Public policy protects third parties suffering bodily injury under insured’s policy when intrafamily immunity does not apply.	Distinguished because the present case involves economic loss between parties to the contract, not bodily injury to third parties.
Barfield v. Allstate Ins. Co., 172 Ga. App. 882 (1984)	Public policy does not require collision coverage for the insured’s own vehicle.	Used to support that public policy does not mandate collision coverage for temporary substitute vehicles.

Court's Reasoning and Analysis

The court began by confirming the standard for summary judgment review, applying a de novo standard and viewing facts in the light most favorable to the nonmovant. It then examined the insurance policy language, focusing on the definition of "your covered auto," which explicitly excludes collision damage coverage for temporary substitute vehicles under Part D of the policy. The court found this language clear and unambiguous, thereby excluding coverage for the rented Camry.

The court rejected the appellant's argument that the "acquired auto" provision created ambiguity or coverage, noting that this provision applies only to vehicles the insured owns, which the rental car was not. The court emphasized the principle that contract terms should be construed to give effect to all provisions, and the appellant’s interpretation would render the temporary substitute exclusion meaningless.

Regarding statutory coverage under OCGA § 33-34-3, the court found no applicable subsection mandating collision coverage for temporary substitute vehicles in the facts of this case.

Finally, the court addressed the public policy argument, distinguishing the controlling precedent (Stepho) as involving bodily injury to third parties rather than economic loss between contracting parties. It noted that public policy does not require collision coverage even for the insured’s own vehicle, and thus does not mandate such coverage for temporary substitutes.

Because no genuine issues of material fact existed and the insurer was entitled to judgment as a matter of law, the court affirmed the trial court’s grant of summary judgment to Integon.

Holding and Implications

The Court affirmed the trial court’s grant of summary judgment in favor of Integon General Insurance Corporation.

The court held that the insurance policy unambiguously excluded collision damage coverage for temporary substitute vehicles, that no statutory provision mandated such coverage under the facts, and that public policy did not require it. The direct effect is that Integon had no obligation to pay for damages to the rented Camry or to defend Matjoulis in the related lawsuit. The opinion does not establish new precedent beyond affirming the enforceability of the policy’s exclusion and the inapplicability of the cited statute and public policy arguments in this context.

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MATJOULIS v. INTEGON GENERAL INSURANCE CORPORATION et al.

JOHNSON, Judge.

Terry Matjoulis had a car insurance policy with Integon General Insurance Corporation which included collision damage coverage. When Matjoulis left her car at a garage for service, the garage rented a Toyota Camry for her to use. Matjoulis totaled the Camry in a one-car accident. Integon refused to pay for the Camry, claiming Matjoulis' policy provided only liability coverage, not collision damage coverage, for "temporary substitute" vehicles. Integon also refused to defend Matjoulis when she was sued by the rental company that owned the Camry. Matjoulis then filed this action against Integon, seeking a declaratory judgment that it was obligated both to pay for the Camry and to defend the action against her. The trial court denied Matjoulis' motion for summary judgment and granted Integon's cross-motion for summary judgment. Matjoulis appeals. For the reasons set out below, we affirm.

1. Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56 (c). A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant. Rice v. Huff, 221 Ga. App. 592 593 ( 472 S.E.2d 140) (1996).

2. Matjoulis claims the language of the policy provides collision damage coverage for the Camry. Construction of a contract is generally a matter of law for the court, unless the contract contains an ambiguity that cannot be resolved under the rules of construction. Duke v. KHD Deutz of America Corp., 221 Ga. App. 452, 453 ( 471 S.E.2d 537) (1996); see OCGA § 13-2-1. A coverage exclusion in an insurance policy must be clearly defined to be enforceable, and any ambiguity is to be construed against the insurer. Lumbermens Mut. Cas. Co. v. Plantation Pipeline Co., 214 Ga. App. 23, 28-29 (2) ( 447 S.E.2d 89) (1994). So long as the policy does not violate the law, however, an insurer may insure against certain risks and exclude others. American Home Assur. Co. v. Smith, 218 Ga. App. 536, 538 (1) ( 462 S.E.2d 441) (1995).

The policy states: "`Your covered auto' means . . . 4. Any auto or trailer not owned by you while used as a temporary substitute for any other auto described in this definition which is out of normal use because of its (a) breakdown; (b) repair; (c) servicing; (d) loss; or (e) destruction. This provision 4. does not apply to Part D — Coverage for Damage to Your Auto [the collision damage portion of the policy]." (Emphasis supplied.) This language clearly excludes the Camry from collision damage coverage.

Matjoulis contends, however, that the "acquired auto" portion of the policy provides such coverage, or at least creates ambiguity regarding whether such coverage exists. We do not agree. The "acquired auto" provision of the policy states that if the insured acquires a vehicle, then on the date the insured becomes the owner the acquired vehicle will have the same coverage as the vehicle it replaced, or the broadest coverage provided for any vehicle shown in the declarations, if the insured asks Integon to insure it within 30 days after the insured becomes the owner. Because the "acquired vehicle" language includes these two references to the policyholder's owning the acquired vehicle, and because the "temporary substitute" vehicle clause clearly describes the situation in which Matjoulis drove the rented Camry, the trial court was correct in finding that the policy unambiguously excludes collision damage coverage for the Camry. Any other reading would render the "temporary substitute" language meaningless, in violation of the principle that a contract should be construed, if possible, so as to give meaning to all its terms. See Harris County v. Penton, 211 Ga. App. 498, 499 (1) ( 439 S.E.2d 729) (1993).

3. Matjoulis contends even if the policy language does not provide collision coverage for the Camry, such coverage is mandated by OCGA § 33-34-3. Matjoulis does not specify which subsection of the statute she relies upon. Nevertheless, we have read the entire statute and do not find it to be applicable to the facts of this case. Matjoulis' statutory argument therefore fails.

4. Finally, Matjoulis contends that even absent a contractual or statutory right to coverage for the rental car, she has a right to such coverage based on public policy against exposing insureds to unanticipated liability. See generally Stepho v. Allstate Ins. Co., 259 Ga. 475, 476 (1) ( 383 S.E.2d 887) (1989). Matjoulis argues that the law should impose such coverage because she chose full coverage for her own vehicle, and was not given the option of electing full coverage for temporary substitutes.

We do not agree with Matjoulis' analysis. Public policy does not even require collision coverage for the insured's own vehicle. See generally Barfield v. Allstate Ins. Co., 172 Ga. App. 882, 884 (2) ( 324 S.E.2d 731) (1984). Matjoulis has shown no basis for holding that public policy requires more for temporary substitutes.

Stepho, supra, is distinguishable. It holds public policy does not allow a third party who suffers bodily injury to go unprotected under the insured's policy when intrafamily immunity does not demand such a result. Id. at 475-77. Stepho therefore does not control the situation before us, which involves purely economic injury to one of the parties to the contract.

Because there are no genuine issues of material fact and Integon is entitled to judgment as a matter of law, the trial court did not err in denying Matjoulis' motion for summary judgment and granting summary judgment to Integon.

Judgment affirmed. Pope, P.J., and Blackburn, J., concur.

DECIDED MAY 14, 1997 — CERT. APPLIED FOR.