Opinion
40439.
DECIDED JANUARY 15, 1964.
Action on insurance policy. Douglas City Court. Before Judge Waldroup.
M. L. Preston, George E. Maddox, for plaintiff in error.
Arthur C. Farrar, contra.
1. Where in an action on a policy of fire insurance the evidence authorized the finding that the loss sustained by the plaintiff insured exceeded the combined coverage under the policy sued upon and a policy issued by another company, the existence of the other insurance would not preclude recovery of the full amount of the policy sued upon under the pro rata clause of said policy; and the release of the other company by the insured upon settlement of his claim under the policy issued by that company would not relieve the defendant insurer from payment of its obligation to the insured.
2. Under the provisions of the Act of 1962 (Ga. L. 1962, p. 712; Code Ann. § 56-1206) which amended the Act of 1960 (Ga. L. 1960, pp. 289, 502) the amount of attorney's fees recoverable because of the bad faith of the insurer is for the determination of the trial jury, subject to conditions specified in said Act.
DECIDED JANUARY 15, 1964.
L. R. Smith filed suit against the Newark Insurance Company on a policy of fire insurance which, according to the allegations of the petition, insured a "one story frame approved tenant one family dwelling" owned by the plaintiff against loss by fire in the amount of $1,000. The petition alleged that the value of said premises at the time of the loss was $4,000 and that the same had been totally destroyed by fire. Damages were sought in the amount of $1,000 plus the statutory penalty and attorney's fees for bad faith.
The defendant insurance company in its plea and answer admitted the execution and issuance of the policy covering the premises in question and that said policy was in full force and effect at the time of the loss. The defendant company alleged by way of defense in its plea and answer that the premises in question had also been covered by a fire insurance policy, Policy No. 50-69-62, in the amount of $1,500 issued by the Utica Fire Insurance Company of Utica, New York; that said loss had been reported to the Utica Fire Insurance Company; that an agreement for damages in the amount of $1,425.64 had been reached with the Utica Company by the plaintiff; and that said company had taken a proof of loss from the plaintiff for said sum and had paid to the plaintiff by check the sum of $1,425.64 in complete satisfaction under its policy for the loss occasioned by the plaintiff as a result of said fire on the date alleged in the plaintiff's petition.
The defendant company further alleged that the policy of insurance sued upon contained the following provision:
"Pro rata liability. This company shall not be liable for a greater proportion of any loss than the amount hereby insured shall bear to the whole insurance covering the property against the peril involved, whether collectible or not."
It was contended by the defendant company in its plea and answer that the company acting under the above stated provisions of the policy had paid to the Utica Fire Insurance Company its pro rata share of the loss paid by the Utica Fire Insurance Company to the plaintiff, and had thus been relieved of any liability to the plaintiff in this action.
The jury returned a verdict for the plaintiff in the amount of $1,250 and the defendant filed a motion for judgment notwithstanding the verdict and in the alternative a motion for new trial which was amended by the addition of one special ground. These motions were denied and the exception is to said judgments.
1. The liability of the defendant insurance company under the pro rata clause of the policy sued upon was limited to the proportion of the loss which the amount insured by it bore to the whole amount of insurance on the property. This fact would not, however, preclude recovery against the defendant insurance company in the full amount of coverage afforded by the policy in question since the evidence adduced on the trial of this case in behalf of the plaintiff insured authorized the finding that the loss sustained by him was greater than the total amount of combined coverage under the policies of both the defendant insurer and the Utica Fire Insurance Company.
Under these circumstances, where the amount of the loss exceeded the amount recoverable under the combined policies, the fact that other insurance existed would not preclude recovery of the full amount of the policy sued upon, Niagara Falls Ins. Co. v. Johnson, 231 Ky. 426 ( 21 S.W.2d 794); and the release of the Utica Fire Insurance Company by the plaintiff upon settlement of his claim under the policy issued by that company would not relieve the defendant company from payment of its proportionate share of the loss under the pro rata clause of its policy which in this case constituted the total amount of coverage of said policy. 46 CJS 150, Insurance, § 1206; Rallis v. Conn. Fire Ins. Co., 46 NM 77 ( 120 P.2d 736).
It is only where the loss sustained by the insured has been completely satisfied under policies of insurance with other companies that the question of the discharge of the non-participating insurer's obligation to the insured may arise, as in Williamsburg City Fire Ins. Co. v. Gwinn, 88 Ga. 65 ( 13 S.E. 837) and Norwich Union Fire Ins. Society v. Wellhouse, 113 Ga. 970 (1) ( 39 S.E. 397); and not, such as here, where the finding was authorized that the loss sustained by the plaintiff insured exceeded the combined coverage of all policies of insurance and had not been completely satisfied by any prior settlement with another company. The trial court did not err therefore in denying the defendant's motion for judgment notwithstanding the verdict and the general grounds of its motion for new trial.
2. While the Act of 1960 (Ga. L. 1960, pp. 289, 502) originally provided that the amount of attorney's fees recoverable because of the bad faith of the insurer "shall be determined by the trial court," said provision was changed by an amendment to the Act, approved March 7, 1962 (Ga. L. 1962, p. 712; Code Ann. § 56-1206) which provided that said attorney's fees "shall be determined by the trial jury." Accordingly, the sole special ground of the amended motion for new trial which was predicated upon the contention that the question of attorney's fees was for the court and not the jury under the provision of the Act of 1960, supra, is without merit.
Judgment affirmed. Nichols, P. J., and Frankum, J., concur.