An Overview of Georgia Law

A motor common or contact carrier engaged in both interstate and intrastate commerce is nonetheless subject to state statutory provisions governing motor common and contract carriers when the carrier's operations are performed in Georgia O.C.G.A.§ 46-7-36. The term "carrier" is defined by statute to mean "a person who undertakes the transporting of goods or passengers for compensation" O.C.G.A. § 46-1-1(1) (emphasis added). The statutory definitions of motor common carrier and motor contract carrier both pertain to the business of transporting persons or property for hire over the public highways of Georgia. National Union Fire Ins. Co. v. Sorrow, 202 Ga. App. 517, 518, 414 S.E. 2d 731 (1992), citing former O.C.G.A. § 46-1-1(7)(A) and (B), which are presently codified as O.C.G.A. §46-1-1(9)(A) and (B), Ga. Laws 1996, p. 950, effective April 15, 1996. "For hire" is defined by statute as "an activity wherein for compensation a motor vehicle and driver are furnished to a person by another person . . ." O.C.G.A.§ 46-1-1(6). This statutory definition is expressly adopted in Rule 3-1.5 of the Transportation Rules of the Georgia Public Service Commission. When a motor vehicle is used exclusively by an entity to transport its own products and is not held out for hire to the public or hired for the transportation of goods or passengers, such vehicle does not qualify as a motor common carrier or a motor contract carrier. National Union Fire Ins. Co. v. Sorrow, 202 Ga. App. 517, 518, 414 S. E. 2d 731 (1992).

By statute, in 1931, the Georgia Legislature authorized the Public Service Commission "to adopt such rules and orders as it may deem necessary in the enforcement of [ the motor common carrier and motor contract carrier articles]" and "[s]uch rules and orders . . . shall have the same dignity and standing as if such rules and orders were specifically provided in [the motor common carrier and motor contract carrier article]." Pursuant to this enabling legislation, the Georgia Public Service Commission promulgated rules and regulations governing the operation of motor common carriers and motor contract carriers in Georgia. Effective July 1, 2001, the responsibilities of enforcing and administering these rules and regulations were transferred to the Department of Motor Vehicle Safety. These rules and regulation are virtually identical to those previously promulgated by the Interstate Commerce Commission. These rules establish that a lessee such as assumes complete legal responsibility for leased trucks, must inspect them for safety hazards and must insure them.

the independent contractor concept is eliminated from business arrangements between owner/operators and motor carriers regulated by the Department of Motor Vehicle Safety (formerly the Georgia Public Service Commission). Reliance Ins. Co. v. Bridges, 168 Ga. App. 874, 878(1) 311 S.E. 2d 193 (183) Thus, when examining vicarious liability issues regarding motor carriers for hire, ICC rules and regulations control in Georgia and under established case authority eliminate the concept of an "independent" owner operator. In such circumstances a lease agreement must be employed (regardless of the nature of the business arrangement) and the motor carrier lessee becomes fully responsible for the use of the leased trucks. Nationwide v. Holbrooks, supra.; Judy v. Tri-State Motors Transit Co., 844 F. 2d 1946, 1502, (11th Cir. 1988) ( interpreting Georgia law). This is the same as federal law.

A motor common carrier may not operate in Georgia without obtaining from the PSC a certificate of public convenience and necessity ( OCGA § 46-7-3), and a certificate is not issued unless the applicant gives and maintains bond, with adequate security "for the protection of the public against injuries proximately caused by the negligence of such motor carrier, its servants, or its agents." OCGA § 46-7-12 (a). (Emphasis Supplied)¹ In lieu of bond, the certificate holder may file a policy of indemnity insurance which is approved by the commission and substantially conforms to all the statutory provisions relating to bonds (§ 46-7-12 (c)), or the commission may permit a motor common carrier to self-insure. O.C.G.A. § 46-7-12(d). Whatever means the common carrier chooses to evidence its potential financial responsibility to the motoring public, the bond, insurance, or self-insured plan "is a direct and primary obligation" to any person who sustains actionable injury or loss as a result of the negligence of the common carrier or its agents. Great American Indemnity Co. v. Vickers, 183 Ga. 233, 236, 188 S.E. 24 (1936). Stated another way, the purpose of the insurance "is not for the benefit of the insured [motor common carrier] but for the sole benefit of those who may have a cause of action for damages for the negligence of the motor carrier, "making the insurance policy" in the nature of a substitute surety bond [which] creates liability in the insurer regardless of the insured's breach of the conditions of the policy. [Cit.]" Progressive Cas. Ins. Co. v. Bryant, 205 Ga. App. 164, 165, 421 S.E. 2d 329 (1992).

Because of the provisions of O.C.G.A. § 46-7-12, Georgia law is unique. Under the provisions of O.C.G.A. § 46-7-12, a plaintiff suffering from injury may, at his election, join either a driver/agent, the carrier and/or the insurance carrier for the carrier to a lawsuit or any one of such parties may be sued alone and thereby bind an insurance company for payment of the eventual judgments. Spicer v. American Home Assurance Company, 292 F. Supp. 27 (N.D. Ga. 1967, aff'd 402 F. 2d 988 5th Cir. 1968). O.C.G.A. § 46-7-12 is not pre-empted by federal law. Watkins v. H. O. Croley Granary, 555 F. Supp. 458 (N.D. Ga. 1982). Thus, because of the existence of O.C.G.A. § 46-7-12, in Georgia, unlike other jurisdictions, it is not necessary that a plaintiff obtain a judgment against the named insured of a motor carrier. Because O.C.G.A. § 46-7-12 gives the plaintiff the right to sue either a driver/agent, the carrier and/or the insurance carrier separately or jointly at his sole election, under the provisions of the Georgia direct action statute, a judgment against any of these shall be binding against the insurance carrier as a matter of law. See Spicer v. American Home Assurance Company, supra. The requirements of Georgia law regarding public filings, proof of coverage, proof of cancellation, etc. are valid even in cases involving interstate carriers. Williams v. Southern Drayage, Inc., 213 Ga. App. 895, 446 S.E. 2d 758 (1994).

¹This emphasis is important because the required surety bond arises out of the negligent acts of the motor carrier, its servants or its agents.