GREENWOOD CEMETERY, INC. v. TRAVELERS INDEMNITY COMPANY., 238 Ga. 313, 232 S.E.2.d 910
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Certiorari to the Court of Appeals of Georgia -- 139 Ga. App. 222 (228 SE2d 139) (1976)., Judgment reversed. All the Justices concur, except Jordan and Hill, JJ., who dissent.
Summary
Certiorari to the Court of Appeals of Georgia -- 139 Ga. App. 222 (228 SE2d 139) (1976)., Judgment reversed. All the Justices concur, except Jordan and Hill, JJ., who dissent.
Text
Powell, Goldstein, Frazer & Murphy, Frank Love, Jr., Scott M. Hobby, for appellee.Hurt, Richardson, Garner & Todd, W. Seaborn Jones, Paul M. Talmadge, Jr., for appellant.
This is a policy case, insurance and public, here on certiorari. Travelers Indemnity Co. v. Greenwood Cemetery,
In 1937, Greenwood sold a cemetery lot to C. G. Bozeman by deed permitting erection of a marker not to exceed 2' x 1' x 1'. A provision in the sales contract giving the cemetery the right to include reasonable regulations was not incorporated in the deed.
In July 1969 Travelers issued a comprehensive general liability policy to Greenwood. Its standard coverage clause [1] was amended as follows: "With respect to any professional malpractice, error or mistake in the practice of the named insured's operations as a cemetery the policy is amended to read as follows: The coverages are replaced by the following:
"Coverage A--To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages. (1) For bodily injury, sickness, disease or death including mental anguish. (2) For injury to or destruction of property of others which is not in the care, custody or control of the insured. Because of any professional malpractice, error or mistake in the embalming handling, disposition, burial disinterment or removal of any deceased human body or any conduct or any memorial service by the insured, even though no deceased human body actually be present, or because of any injury to destruction or interference with the right of burial of a deceased human body.
"Coverage B--To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to or destruction of urns, caskets, linings or fittings, casket cases, crypts, mausoleums of other facilities for the care of burial of a deceased human body, belonging to burying or caring for a deceased human body." (Sic.)
Mr. Bozeman died. A dispute arose as to the size of the marker which could be placed upon his grave. His widow and son had a marker conforming to the deed erected. The marker was larger than that allowed by the cemetery's regulations and Greenwood removed it. Suit was filed by the Bozemans against the cemetery praying for $3,000 damages for mental anguish and damage to their peace, feelings and happiness, as well as $25,000 punitive damages.
Travelers undertook defense of the suit but notified the cemetery that its policy did not cover punitive damages. The jury returned a verdict in favor of the Bozemans for $1,500 damages to their peace and happiness and $10,000 punitive damages. After notice to the cemetery and payment of the $1,500, Travelers withdrew from participation in the litigation.
The cemetery negotiated with the Bozemans so as to reduce the punitive damage award to $5,000, paid it, and filed this suit against Travelers in July 1974.
Travelers moved for summary judgment on May 16, 1975, [2] and the cemetery moved for summary judgment in August 1975. The trial court granted the cemetery's motion and denied Travelers'. The Court of Appeals reversed.
In Westview Cemetery v. Blanchard,
"[C]ourts cannot declare agreements or acts authorized by statute to be contrary to public policy." 17 AmJur2d 538, Contracts, 177. As stated in Board of Lights &c. v. Dobbs,
Thus, we have at least two distinct situations, as follows: (1) Where the insured himself acts wilfully, intentionally, maliciously or fraudulently, it should be against public policy to allow him to pass responsibility for punitive damages on to his insurer. See Judge Gewin's specially concurring opinion in McNulty, supra, 307 F2d at 443, 445. (2) On the other hand, where an insured employer is found to be liable for punitive damages by reason of vicarious liability and where the employer was otherwise free from fault, public policy should not prohibit coverage of punitive damages by insurance protecting the employer. The same would be true of family purpose car cases and certain suits against auto leasing companies if punitive damages are recoverable in such cases. See, for example, Concord General Mut. Ins. Co. v. Hills, 345 FSupp. 1090 (1972); Universal Ind. Ins. Co. v. Tenery, 96 Colo. 10 (39 P2d 776) (1934).
In the case before us the insured is a corporation which can act only through employees and agents. In this respect, the insured here is analogous to the employer in situation numbered two above in that it was not the personal action of this insured which caused the damage. On the other hand, it is not entirely clear that the corporation was free from fault or that it should be entitled to pass punitive damages on to its insurance carrier. For example, the record shows that the corporation was put on notice of the Bozemans' contentions and that the corporation removed the marker after being notified not to remove it.
There being issues of fact (e.g., the fault, if any, of the corporation) and law (e.g., the insurer's duty, if any, to defend a suit for punitive damages) which are unresolved, in my view this case should be remanded for further proceedings.
1976
Notes:
1. The standard coverage clause read as follows: "The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of Coverage A, bodily injury or Coverage B, property damage, to which this insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent. . ."
2. This court decided Westview Cemetery v. Blanchard,
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