A federal judge has put a freeze on an insurers' effort to dodge liability for a $30.4 million verdict until the Georgia Supreme Court rules whether the award—vacated earlier this year by the Court of Appeals—will even survive.

American Family Life Insurance had asked that the case be allowed to proceed, but Judge Richard Story of the U.S. District Court for the Northern District of Georgia ruled that allowing discovery to proceed when the specter of a new trial hangs over the proceedings would be “impermissibly prejudicial to the parties involved, not to mention the judge trying the case.”

The underlying case involves a 2012 wreck that seriously injured a woman's hand and arm. Plaintiff Luisa Mezquital was driving along a Forsyth County road when Almassud's Jeep Wrangler crossed the center line and hit her head-on.

The plaintiff, Luisa Mezquital, argued that the driver's Jeep was unsafe, and it was learned during discovery that the vehicle had been modified for off-road use. Those modifications are blamed in causing the crash.

The defendant, Abdulmohsen Almassud, blamed a garage that installed heavy-duty steering gear on the Jeep, which was added as a defendant. But a Fulton County jury awarded $30.4 million against Almassud in September 2016.

The following month, American Family filed a declaratory judgment action in federal court naming Almassud and Mezquital as defendants and asserting, among other things, that Almassud had falsely told its investigator he was not off-roading the vehicle prior to the wreck.

During the trial, Almassud testified he never engaged in “extreme” off-roading nor personally installed after-market parts on the Jeep, the insurer said.

Presented with screenshots of an off-roading website apparently showing Almassud doing just that, Almassud continued to deny it.

After conferring with the lawyers in chambers, State Court Judge Eric Richardson continued the case until the next day so Almassud could consult with a criminal lawyer “about the potential implications of his untruthful trial testimony,” the insurer's petition said.

The next day, Almassud “repeatedly invoked his rights under the Fifth Amendment to the United States Constitution, refusing to answer questions about the Internet website and photographs of the Jeep” or about his actions the day of the wreck, the petition said.

The petition said Almassud breached his insurance contract by failing to cooperate with American Family, and by fraudulently concealing information about the vehicle and wreck. The petition asked the court to declare that American Family is not responsible for the judgment.

In counterclaims, Almassud denied deceiving American Family or offering false testimony and accused the insurer of failing to properly investigate the wreck before refusing to tender his policy limits when first demanded.

Mezquital's counterclaims accused American Family of bad faith failure to settle within Almassud's policy limit when it had the chance.

In March, the Georgia Court of Appeals threw out the verdict, with Presiding Judge Christopher McFadden writing that the jury should have been instructed that Almassud's claims that he was unaware of the hazardous condition of his vehicle could be raised as a defense of negligence per se.

“Because the trial court erred in failing to instruct the jury on a substantial and vital issue presented by the pleadings and the evidence—the defendant's theory that his alleged negligence per se was unknowing and unintentional—we must reverse and remand for a new trial,” McFadden wrote for a panel including Judges Elizabeth Branch and Charlie Bethel.

The case has been appealed to the Georgia Georgia Supreme Court, which has not yet granted certiorari.

“In light of these developments in the state case—as well as a flood of motions crimping discovery and impeding forward progress—the court ordered the parties (along with their clients) to appear for a status conference” in June, Story wrote.

The conference included arguments on 10 pending motions, Story wrote, and during which he announced that he intended to stay discovery “until the underlying case is resolved.”

American Family moved to reverse that decision, but Story declined to do so.

“Weighing the competing interests, the court finds there is good cause to stay discovery here,” he wrote. “Indeed, many of the issues that have stymied discovery and the progression of this matter stem from the potential for a new trial in the underlying case.”

“To be sure, the brunt of discovery in this case concerns, as it must, the underlying matter. But [American Family] has gone further and specifically targeted communications and evidence regarding trial strategy that, although likely discoverable in this action, is certainly privileged in the underlying case.”

Story noted there are still issues remaining to be decided that might help narrow the case.

“Thus, the Court finds it is in the interest of comity and most equitable to all those involved to stay discovery until the court has had an opportunity to consider any potentially dispositive arguments supported by the current record or until a final resolution of the underlying case,” he said.

Ben Brodhead and Ashley Fournet of the Brodhead Law Group represent Mezquital.

Brodhead declined to discuss the federal action but said he was hopeful the state Supreme Court will accept the appeal of McFadden's ruling, which “turned Georgia law upside down.”

“We believe that ruling is so contrary to Georgia law and public policy that the Supreme Court will have to remedy it,” he said. “The Court of Appeals' ruling essentially eliminate negligence per se if a defendant claims it was unintentional.”

Almassud is represented in the federal action by Slappey & Sadd partners Jay Sadd and Rich Dolder Jr., who declined to comment.

American Family is represented by Ryan Burke, Jessica Pardi and Seslee Smith of Morris, Manning & Martin and Edward Ruff III, Heather Plunkett, Robert Chemers and Michael Turiello of Pretzel & Stouffer in Chicago, who also declined to comment.