ATLANTIC SPECIALTY INSURANCE COMPANY v. CITY OF COLLEGE PARK

Three members of a family, Dorothy Wright and her grandchildren, were killed when a stolen car being chased by College Park police officers crashed into their vehicle. Their relatives sued the city, which had a $5,000,000 insurance policy but also raised sovereign immunity, a legal shield that normally protects governments from lawsuits. Georgia law automatically waives that shield up to $700,000 for this kind of claim, and can waive more if the city bought insurance covering the excess. The trial court and the Court of Appeals of Georgia both said the city's purchase of a $5 million policy waived immunity up to that full amount. The Supreme Court of Georgia disagreed. It found that special policy language, called immunity endorsements, said the insurer would not pay damages unless sovereign immunity did not apply. Because that immunity still applies above $700,000, the policy never actually covered the extra amount, so the higher limit does not waive immunity. The court reversed the Court of Appeals.

Buying commercial liability insurance above the $700,000 statutory waiver amount only increases a local government's sovereign immunity waiver to the extent the policy actually covers the claim; because the City's policy contained endorsements excluding coverage whenever sovereign immunity applies, it did not waive immunity above $700,000 for this wrongful death claim.

The ruling limits how much the family can recover from the city over the deaths, capping city liability at $700,000 for this type of claim. It also confirms that Georgia cities and insurers can use similar endorsements to avoid expanding sovereign immunity waivers just by buying larger insurance policies.

Judgment of the Court of Appeals reversed

1. The court explained that Georgia's Constitution gives municipalities sovereign immunity that only the General Assembly can waive, and that a 2002 law (O.C.G.A. § 36-92-2) created an automatic waiver of that immunity up to $700,000 for deaths caused by negligent use of a covered government vehicle, regardless of insurance.
2. The same law lets a city increase that waiver further if it buys commercial liability insurance above $700,000, but the court held this only matters to the extent the insurance policy actually covers the specific claim, just as before the 2002 law, because insurance policies are contracts that only pay for the risks they specifically agree to cover.
3. Applying that rule to the City's policy, the court read the 'immunity endorsements,' special contract language stating the insurer has no duty to pay unless sovereign and governmental immunity defenses do not apply, and found they excluded coverage for any claim where immunity still applied above $700,000.
4. Because sovereign immunity still barred the family's claim above the automatic $700,000 waiver, the policy's higher dollar limits never covered that portion of the claim, so the purchase of a larger policy did not further waive the City's immunity.
5. The court found the Court of Appeals of Georgia had wrongly treated the case as different from its own earlier decision in Gatto v. City of Statesboro, which involved an identical Atlantic insurance endorsement and reached the opposite, correct conclusion that such endorsements prevent any waiver beyond what the policy actually covers.

• sovereign immunity waiver
• police chase crash
• wrongful death
• insurance policy limits
• College Park