On April 2, 1980, appellee Sermons was injured in an auto accident, as a result of which she sustained personal injuries necessitating medical expenses and loss of earnings in excess of $5,000. At the time of the accident, Mrs. Sermons was operating a car insured by appellant under a policy in which her husband was a named insured. She was shown as an operator of the listed 1965 Chevrolet. The policy provided only basic personal injury protection benefits of $5,000. Prior to its issuance, Mr. Sermons on March 4, 1975, had signed a Personal Automobile Application and a Georgia Supplemental Automobile Application (No-Fault) (Appendix I).
The subject policy was periodically renewed with the same coverage and was in full force and effect on the date of the accident. In accordance with the terms of the policy, appellant insurer paid to Mrs. Sermons only the basic PIP benefits.
Mrs. Sermons filed a motion for partial summary judgment as to the issues of liability and damages except for punitive damages and attorney fees. The insurer filed a motion for summary judgment seeking to dismiss the complaint on its merits. Counsel for the parties entered stipulations of fact in support of the motions, including the stipulation that Sermons had made demand upon the insurance company under the subject policy for $45,000 optional no-fault benefits.
The trial court overruled and denied the insurer's motion for summary judgment. It granted Sermons' motion for partial summary judgment but only as to liability on the issue of optional no-fault coverage in the amount of $45,000 and entered final judgment in this amount. The court also signed a certificate for immediate review of the denial of the insurer's motion for summary judgment. The insurer appeals both the denial of its motion and the grant of partial summary judgment to Sermons.
1. Appellant's first enumeration of error contends that the trial court erred in failing to find that the subject application for motor vehicle insurance was in substantial compliance with OCGA 33-34-5
The guidelines set forth in Flewellen v. Atlanta Cas. Co., 250 Ga. 709 (300 SE2d 673) (1983)
and its progeny control and necessitate an examination of the form and substance of the application. 2
The applicable version of OCGA 33-34-5
(b) (pre-November 1, 1982) provides that on each application for motor vehicle liability insurance the insured must indicate by signature his or her acceptance or rejection of optional PIP and vehicle property damage coverages. Tolison v. Ga. Farm Bureau Mut. Ins. Co., 253 Ga. 97
, 98 (317 SE2d 185
) (1984). The Georgia Motor Vehicle Accident Reparations Act (OCGA 33-34-1
et seq.) imposes upon every insurer the duty to offer certain coverages, namely personal injury protection (PIP) and property damage to the motor vehicle. A minimum of $50,000 PIP coverage must be offered, but there is statutory allowance for a prospective insured to reduce the coverage to not less than $5,000 per person. Such intent to reduce coverage must be in writing and signed. See Flewellen, supra at 711. Flewellen addressed baseline questions of the number and location of applicant signatures to effectively reduce coverage, and determined that the requirements of subsection (b) were satisfied by two signatures, one for acceptance or rejection of optional PIP and another for acceptance or rejection of vehicle damage coverage. Subsequently, our Supreme Court held that two signatures were not required in every case, and that the mandate of OCGA 33-34-5
(b) could be satisfied by substantial compliance therewith. See Chief Justice Hill's special concurrence to the dismissal of the writ of certiorari in Nalley v. Select Ins. Co., 251 Ga. 722
, 723 (310 SE2d 918
) (1983); St. Paul Fire &c. Ins. Co. v. Nixon, 252 Ga. 469 (314 SE2d 215) (1984)
; Tolison v. Ga. Farm Bureau Mut. Ins. Co., supra. To be in substantial compliance a form should satisfy " 'the intent of the General Assembly to ensure " 'that insurers offer optional coverages to applicants for no-fault insurance and that an applicant's waiver of his privilege to obtain optional coverages be made knowingly and in writing.' " Flewellen, supra, 250 Ga. at 714.' (Emphasis in original.) Nalley v. Select Ins. Co., 251 Ga., supra, p. 724 (Hill, C. J., concurring specially)." St. Paul Fire &c Ins. Co. v. Nixon, supra at 470.
Is the present application in substantial compliance? That is, is there enough on the form to show as a matter of law that the insured was offered these benefits and knowingly rejected them? And, is it clear from the form that the intent of the insured was to reject optional PIP benefits? We think not.
We first compare the instant form to that found to be defective in Flewellen. Appellant's form is similar to that in Flewellen in having varied optional coverages clustered together with blocks to be checked for acceptance or rejection. The Flewellen application bore handwritten check marks in these blocks, which could reasonably be argued as indicative of greater input by the applicant/insured, and hence a clearer expression of intent to reject optional coverage. The present form bears typewritten "X's" in each rejection box. The defective Flewellen form stated at the top "Offer to Purchase Additional Coverage." Appellant's form bears no such language indicating that the applicant is being given an offer which must be accepted or rejected.
Ga. Mut. Ins. Co., 174 Ga. App. 734 (331 SE2d 78) (1985)
, the application (see Appendix III) bore language explaining the options and notifying the applicant of the import of his elections. The applicant signed the document acknowledging that he understood the optional coverages. Additional uninsured motorist insurance was checked as accepted and the other three were checked as rejected.
Our legislature's acknowledgment of the need for a clear and knowing acceptance or rejection of such coverage is reinforced by its enactment of the amendment to OCGA 33-34-5
(b), effective January 25, 1983, which reads, "Each initial application for a new policy of motor vehicle liability insurance sold in this state after November 1, 1982, shall contain a statement in boldface type signed by the applicant indicating that the optional coverages listed in subsection (a) of this Code section have been explained to the applicant."
Much has been litigated and written in the attempt to delineate a just and viable standard by which to assess whether or not an insured has been given the opportunity to make an informed choice to accept or reject optional PIP coverage. To this end, our Supreme Court has expanded the bright line parameters of Flewellen. The doctrine of substantial compliance hopefully can accomplish this difficult task by allowing rational leeway in assessing policies long ago written from the clearer but potentially unjust vantage point of hindsight; if utilized well it should provide the desired opportunity for the insured while not asking the pragmatically impossible from the insurer.
In order for a document to be in substantial compliance with OCGA 33-34-5
(b) in its pre-November 1, 1982 version, the form on its face should show the prospective insured, as a reasonable man or woman, the offered coverages and the action needed to accept or reject with such clarity so as not to require speculation as to whether there was a knowing election. In other words, does the form show that the applicant, as an ordinary reasonable man or woman, understood what was being offered and what choices he or she was making? If the answer to this question is "yes," and there is no evidence produced that the insured is other than the ordinary reasonable person, this should end the matter. If the answer is "no," it can be said as a matter of law that the form is defective by failing to substantially comply with the legislature's mandate.
Under our analysis, appellant's form does not provide the insured the mandatory degree of clear import concerning the right to accept or reject optional PIP benefits. See Tolison, supra. To hold the present application within the standard of substantial compliance would be to blur any guidelines we attempt to give insurers. We cannot say that the form Vernon Sermons signed shows that he understood that he had four optional coverages, what they were, and that he rejected each one. That being the purpose of the form to record this understanding and election, it falls short.
The trial court made no error in finding appellant's application to be fatally defective as a matter of law.
2. Our decision in Division 1 renders it unnecessary to address appellant's remaining enumerations of error.
Flewellen form appears at 164 Ga. App. 893
Van Dyke form appears at 164 Ga. App. 894
Jones form appears at 164 Ga. App. 895
Nalley form appears at 251 Ga. 724-725
Nixon form appears at 251 Ga. 724-725
Nixon form appears at 175 Ga. App. 460, Appendix II.
Douglas form, discussed in Douglas v. Jefferson-Pilot Fire & Casualty Co., appears at 175 Ga. App. 459, Appendix I.