A federal appeals court upheld a lower court ruling in favor of an R-T Specialty LLC unit Monday and dismissed litigation filed by an event party rental company for failing to settle a case prior to trial, stating a coverage decision must await a final ruling in the underlying litigation.

The case involved a teen who was severely injured during an event at a Georgia high school, according to the ruling by 11th U.S. Circuit Court of Appeals in Atlanta in Game Truck Georgia, LLC v. Atlantic Specialty Insurance Co.

Game Truck was hired to provide equipment for a May 2016 event at Campbell High School in Smyrna, Georgia, that included gear for “bubble soccer,” an activity in which participants wear large, inflatable balls around their upper bodies while moving their legs freely, according to Monday’s ruling in Game Truck Georgia, LLC v. Atlantic Specialty Insurance Co.

Salvador Reyes Quezada, who used the bubble soccer equipment, collided with another participant and suffered serious injuries to his brain and forehead, the ruling said. He remained in a coma for several days and permanently lost his sense of taste and smell, the ruling said. 

Game Truck had been issued a policy by R-T Specialty unit Atlantic Specialty that covered bodily injury with a $1 million per-occurrence limit, according to the ruling. It undertook Game Truck’s defense in litigation in state court filed by Mr. Reyes’ behalf. 

The insurer rejected settlement offers for $750,000 and $1 million, while Atlantic Specialty’s $250,000 settlement offer was rejected by the plaintiff. 

A jury found Game Truck was 93% at fault for damages, which totaled $5 million. The court entered judgment for Mr. Reyes for $4.65 million, $92,996 in prejudgment interest and post-judgment interest at an 8.25% rate, and ruled that Game Truck was also liable for Mr. Reyes’ attorneys fees and costs.

Game Truck asked for a reduction of the verdict or, alternatively, a new trial, while Atlantic Specialty also planned to appeal the trial court’s judgment. 

As a result of the judgment, Game Truck lost its franchise rights and has gone out of business. It filed suit against Atlantic Specialty for bad faith for its failure to settle the case, attorneys fees and punitive damages.

The U.S. District Court in Atlanta granted Atlantic Specialty’s motion to dismiss the case, holding it was “not ripe” because post-trial motions remained pending, and because Atlantic Specialty planned to appeal when the state trial court issued its final judgment.

A unanimous three-judge appeals court upheld the lower court’s ruling. “Because the Supreme Court of Georgia has interpreted the language of Game Truck’s policy as requiring a final judgment or settlement prior to bringing suit, we affirm,” the ruling said.

It said in a comparable case, the Georgia Supreme Court held “the insurance contract barred the failure-to-settle claim under the circumstances.”

“In this case, Game Truck’s policy, under the heading ‘Legal Action against us,’ includes a nearly identical ‘no action’ clause,” it said.

“We need not - and do not - express a view as to whether the terms of this insurance contract” or the Georgia Supreme Court ruling “would permit Game Truck to bring suit against Atlantic Specialty if the Reyes appeal concludes without a final judgment or a judgment in excess of policy limits,” the appeals panel said, in affirming the lower court’s ruling.

Attorneys in the case and R-T did not respond to requests for comment.