The issue here is whether the question of good or bad faith should have been submitted to a jury. In construing § 56-3406b, this court has held, citing Bituminous Cas. Corp. v. Mowery, 145 Ga. App. 45 (2) ( 244 S.E.2d 573), that "ordinarily, the determination of `good or bad faith of the insurer is for the jury.'" Miller v. Spicer, 147 Ga. App. 759 (3) ( 250 S.E.2d 492).
e, although erroneous, was not unreasonable, and court should have granted insurer's motion for summary judgment on issue of good faith); Insurance Company of North America v. Smith, 183 Ga. App. 266, 358 S.E.2d 658 (1987) (correct proposition of law is that an insurer has no liability for bad faith penalties if it can be said as a matter of law that insurer had a reasonable defense to denial of benefits); Whitlock v. United States Fidelity Guaranty Co., 579 F. Supp. 293 (N.D.Ga. 1984) (court granted defendant insurer's motion for summary judgment on issue of good or bad faith finding insurer's argument, while unpersuasive, not unreasonable or frivolous); Russell v. Dairyland Ins. Co., 580 F. Supp. 726 (N.D.Ga. 1984) (court granted defendant insurer's motion for summary judgment on issue of good or bad faith finding insurer's reliance on court decisions a reasonable and probable cause for contesting liability). In Matthews, the Georgia Court of Appeals explained its prior holding in Bituminous Casualty Corp. v. Mowery, 145 Ga. App. 45, 244 S.E.2d 573 (1978), in which the court had stated that "[t]he question of good or bad faith of the insurer is for the jury." Mowery, 145 Ga. App. at 53, 244 S.E.2d at 579.
Lack of good faith could be found when insurer says a pedestrian is not included within the term "an insured" and the policy itself defines "insured" to include a pedestrian. See Bituminous Cas. Corp. v. Mowery, 145 Ga. App. 45, 49 (2) ( 244 S.E.2d 573) (1978). Reliance on the Insurance Commissioner's approval of the policy format or on his rules and regulations do not necessarily make it a "closely contested" question, because the policy provision must yield as a matter of law to statutes which provide otherwise.
The mere fact that a proposition with respect to an insurance policy is a first impression issue does not, per se, vindicate the good faith of the company. See Bituminous Cas. Corp. v. Mowery, 145 Ga. App. 45, 50 ( 244 S.E.2d 573). A defense going far enough to show reasonable and probable cause for making it would vindicate the good faith of the insurer as would a complete defense to the action.
See id.; accord Brown v. Seaboard Lumber Supply Co., 221 Ga. 35, 142 S.E.2d 842, 845 (1965) ("no `bad faith' exists where there is a doubtful question of law involved"); State Farm Mutual Auto. Ins. Co. v. Harper, 125 Ga. App. 696, 188 S.E.2d 813, 817 (1972) ("`[B]ad faith means a frivolous and unfounded denial of liability'. . . . Where questions of law . . . have not been decided by the courts of Georgia and are not of easy solution, then a finding of . . . bad faith . . . [is] not authorized."). In view of Collins, Shipes's reliance on earlier Georgia cases which suggested that good faith is always a question for the jury is unavailing. See, e.g., Binns v. MARTA, 250 Ga. 847, 301 S.E.2d 877, 878 (1983); Bituminous Casualty Corp. v. Mowery, 145 Ga. App. 45, 244 S.E.2d 573, 579 (1978). In this case, there are no disputed factual issues regarding Shipes's entitlement to PIP benefits.
The test under these statutory provisions is one of good faith of the insurer; the burden of proving such good faith is on the insurer. Bituminous Casualty Corporation v. Mowery, 145 Ga. App. 45, 244 S.E.2d 573 (1978). There is no bad faith where a doubtful question of law is involved.
While issues concerning application of the collateral source rule to contract cases arise less frequently, this Court has repeatedly applied this principle in breach of contract actions. See Mallory v. Daniel Lumber Co., [Inc.], 191 Ga. App. 234, 235 (1) ( 381 S.E.2d 406) [(1989)]; Insurance Co. of N. A. v. Fowler, 148 Ga. App. 509, 511 (2) ( 251 S.E.2d 594) [(1978)]; Bituminous Cas. Corp. v. Mowery, 145 Ga. App. 45, 52 ( 244 S.E.2d 573) [(1978)]; Peoples Bank of LaGrange v. Ga. Bank c. Co., 126 Ga. App. 768, 771-772 (1) ( 191 S.E.2d 876) [(1972)].Roberts v. Amalgamated Transit Union, 205 Ga. App. 594, 595 (1) ( 423 S.E.2d 16) (1992).
A showing of reasonable or probable cause for not paying the claim on time would be such a showing of good faith. See Bituminous Cas. Corp. v. Mowery, 145 Ga. App. 45 ( 244 S.E.2d 573) (1978). We conclude that a finder of fact is authorized, though not required, to find that mere mental oversight in failing to pay a claim in a timely manner is not acting in good faith.
However, in some cases, the Court of Appeals has reviewed such judgments upon the sufficiency of the evidence to support the verdict. See Poe v. Founders Life c. Co., 145 Ga. App. 757, 760 (3) ( 245 S.E.2d 166) (1978); Bituminous Casualty Corp. v. Mowery, 145 Ga. App. 45 ( 244 S.E.2d 573) (1978); Key Life Ins. Co. v. Mitchell, 129 Ga. App. 192 ( 198 S.E.2d 919) (1973); Old Equity Life Ins. Co. v. Barnard, 120 Ga. App. 596 ( 171 S.E.2d 636) (1969); Hartford Fire Ins. Co. v. Lewis, 112 Ga. App. 1 ( 143 S.E.2d 556) (1965). In other cases the Court of Appeals has reviewed such judgments under a rule which states that a finding of bad faith is not authorized if the evidence would have supported a verdict in accordance with the contentions of the defendant.
Rather, the question of good or bad faith of the insurer is ordinarily for the jury. Bituminous Cos. Corp. v. Mowery, 145 Ga. App. 45, 53 (2) ( 244 SE2d 573) (1978). For this reason, the trial court did not err in denying Great American's motion.