The car had been purchased in California and was used exclusively by Jenna Newstrom in California.

After the accident, Jenna Newstrom settled her claims against the other driver for his insurance policy limits and signed a general release of her claims against him arising from the accident. She then made a claim for UM benefits from Owners and sent Owners a letter demanding binding UM motorist arbitration under California law.

Owners declined to participate in the arbitration.

The Newstroms brought a declaratory judgment action in Georgia, seeking declarations that Owners had to provide UM coverage under the policy for their claims and that Owners has a duty to participate in the California arbitration procedure.

Owners counterclaimed, seeking declarations that Jenna Newstrom had fully released her claims against the other driver and, therefore, under Georgia law, none of the Newstroms was entitled to recovery under the UM policy.

The trial court granted summary judgment to Owners and denied summary judgment to the Newstroms, who appealed. They argued that the outcome of the case depended on whether Georgia or California law applied, because the two states had different rules regarding the effect of a general release to a tortfeasor on a claimant's ability to pursue UM benefits, and because California required arbitration of disputes about UM coverage.

The Owners Policy

The Owners policy provided that Owners would:

pay compensatory damages . . . any person is legally entitled to recover from the owner or operator of an uninsured automobile because of bodily injury sustained by an injured person while occupying an automobile which is covered by . . . the policy. 

The policy's declarations page indicated that the car's:

territory 

was Hall County, Georgia, and that the car was:

driven to work or school more than 3 miles but less than 15 miles by a 51 year old driver

, apparently referring to Cheryl Newstrom.

The Appellate Court's Decision

The appellate court affirmed.

In its decision, the appellate court decided that Georgia law governed the case.

It reasoned that the parties disputed (1) the effect of a general release on the Newstroms' ability to recover UM benefits and (2) the method of resolving that dispute. According to the appellate court, these questions concerned what the Newstroms had to do to recover from their own UM carrier, Owners, and involved “procedural and remedial matters governed by Georgia law,” the law of the forum in which the Newstroms had brought their action.

Then, applying Georgia law, the appellate court decided that the trial court had properly granted summary judgment to Owners and denied summary judgment to the Newstroms.

It explained that, in Georgia, a claimant who settled with a tortfeasor had to execute a limited release pursuant to OCGA § 33-24-41.1 to preserve the claimant's pending claim for UM motorist benefits against his or her own insurance carrier.

A claimant who executed a general release of the tortfeasor could not recover UM benefits, because UM claims were “derivative in nature, requiring the injured party to establish the legal liability of the uninsured or underinsured motorist, which he [or she] cannot do if he [or she] has released that motorist from liability.”

Accordingly, the appellate court concluded, because Jenna Newstrom had executed a general release of her claims against the other driver in the accident, Owners was entitled to a declaration that the Newstroms could not recover under the policy.

The case is Newstrom v. Auto-Owners Ins. Co., No. A17A0954 (Ga. Ct.App. Oct. 30, 2017).