AUTO OWNERS INSURANCE COMPANY v. SAPP et al
ORDER granting 29 Motion for Summary Judgment. Ordered by US DISTRICT JUDGE LESLIE J ABRAMS on 3/10/2017. (bcl)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
AUTO OWNERS INSURANCE CO.,
BARBARA SAPP; BAINBRIDGEDECATUR COUNTY KEEP
AMERICA BEAUTIFUL, INC.; and
DECATUR COUNTY, GEORGIA,
CASE NO.: 1:15-CV-90 (LJA)
Before the Court is Plaintiff’s Motion for Summary Judgment (Doc. 29). For the
following reasons, Plaintiff’s Motion is GRANTED.
Plaintiff Auto-Owners Insurance Co. (“Auto-Owners”) seeks declaratory judgment
that Defendant Bainbridge-Decatur County Keep America Beautiful, Inc. (“KAB”) is not
entitled to coverage under the general commercial liability policy Plaintiff issued to KAB
(“the Policy”) for an accident suffered by Defendant Barbara Sapp because KAB failed to
comply with the Policy’s notice provision. (Doc. 29-1, pp. 13-14).
At the commencement of this action, KAB was a non-profit corporation in Decatur
County, Georgia that oversaw the operation of recycling centers. (Doc. 41-2, ¶ 1). The Policy
The relevant facts are derived from the Amended Complaint (Doc. 21), Defendants’ Answers to the Amended
Complaint (Docs. 32-1; 35-3), Plaintiff’s Statement of Undisputed Facts (Doc. 29-2), Defendants’ Responses to
Plaintiff’s Statement of Undisputed Facts (Docs. 40-1; 41-2), and the record in this case. Where relevant, the factual
summary also contains undisputed and disputed facts derived from the pleadings, the discovery and disclosure materials
on file, and any affidavits, all of which are construed in the light most favorable to Defendants as the nonmoving parties.
See Fed. R. Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
had an effective policy period of October 21, 2013 to October 24, 2014. Id. at ¶ 11. On May
15, 2014, Sapp fell, sustaining both bodily injuries and property damage to her vehicle, at the
Climax, Georgia recycling center maintained by KAB and Defendant Decatur County,
Georgia. Id. at ¶ 2.
On November 13, 2015, Sapp filed a lawsuit in the Superior Court of Decatur
County, alleging that KAB and Decatur County, Georgia are liable for the damages she
incurred as a result of her fall at the recycling center (“the underlying lawsuit”). Id. at ¶ 10.
KAB seeks a defense and indemnity under the Policy for the claims asserted by Sapp in the
underlying lawsuit. Id. at ¶ 12. Decatur County does not seek a defense or indemnity under
the Policy for the claims asserted by Sapp in the underlying lawsuit and denies that it has an
interest, financial or otherwise, with respect to the outcome of this action. Id. at 13.
In pertinent part, the Policy states that the insured party “must see to it that [Plaintiff
is] notified as soon as practicable of an ‘occurrence’ or an offense which may result in a
claim.” (Doc. 1-4, p. 23, Sec. IV, ¶ 2(a)). “Occurrence” is defined as “an accident, including
continuous or repeated exposure to substantially the same general harmful conditions.” Id. at
p. 28, Sec. V, ¶ 14. The Policy also states that “[n]o person or organization has a right” to
“join us as a party or otherwise bring us into a ‘suit’ asking for damages from an insured” or
“to sue us on this Coverage Part unless all of its terms have been fully complied with.” Id. at
p. 23, Sec. IV, ¶ 3.
At the time of the incident, Suzanne Brandt served as the Executive Director of KAB
and was employed full time with Decatur County as the Director of Environmental Services.
Id. at ¶ 4. According to Brandt, she was informed of Sapp’s fall within one day of the
accident. (Doc. 48, at 44:7-21; 45:20-46:4). Brandt does not recall if she advised the KAB
board about the accident, but she did not notify Plaintiff because she did not believe Sapp
intended to file a claim against KAB. Id. at 50:4-8; 90:2-7. Instead, Brandt spoke directly to
Sapp. Brandt testified that she communicated multiple times with Sapp regarding her injuries
and submitted requests to the Decatur County Board of Commissioners to reimburse Sapp
for her medical bills and the damage to her vehicle. Id. at 51:16-52:16; 62:14-25.
On September 18, 2014, Sapp sent a demand letter to KAB indicating her intent to
sue. (Doc. 43-1, at p. 50). KAB gave Plaintiff notice of Sapp’s fall on September 22, 2014,
four months after the accident. (Doc. 41-2, ¶ 17).
On June 3, 2015, Plaintiff commenced this action against Defendants. (Doc. 1).
Plaintiff moved for Summary Judgment on August 26, 2016. (Doc. 29). Three days later, on
August 29, 2016, Plaintiff moved for entry of default against Defendants Sapp and KAB.
(Docs. 30, 31). On October 14, 2016, Defendant Decatur County entered a stipulation that it
was not seeking a defense or indemnification from Plaintiff and that it would be bound by
any and all judgments entered by the Court. (Doc. 38). On January 10, 2017, the Court
denied Plaintiff’s Motions for Entry of Default (Docs. 30, 31) and ordered Defendants Sapp
and KAB to respond to Plaintiff’s Motion for Summary Judgment. (Doc. 39). Defendants
Sapp and KAB responded on January 31, 2017, and Plaintiff replied on February 14, 2017
(Doc. 47). As such, Plaintiff’s Motion is now ripe for review. See M.D. Ga. L.R. 7.3.1(a).
SUMMARY JUDGMENT STANDARD
Federal Rule of Civil Procedure 56 allows a party to move for summary judgment
when the party contends no genuine issue of material fact remains and the party is entitled to
judgment as a matter of law. “Summary judgment is appropriate if the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, show there is no genuine issue as to any material fact and that the moving party is
entitled to judgment as a matter of law.” Maddox v. Stephens, 727 F.3d 1109, 1118 (11th Cir.
2013). “A genuine issue of material fact does not exist unless there is sufficient evidence
favoring the nonmoving party for a reasonable jury to return a verdict in its favor.” Grimes v.
Miami Dade Cnty., 552 F. App’x 902, 904 (11th Cir. 2014) citing Chapman v. AI Transp., 229
F.3d 1012, 1023 (11th Cir. 2000). “An issue of fact is ‘material’ if it is a legal element of the
claim under the applicable substantive law which might affect the outcome of the case.”
Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997) citing Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). “It is ‘genuine’ if the record taken as a whole could lead a rational
trier of fact to find for the nonmoving party.” Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994,
998 (11th Cir. 1992) citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
The movant bears the initial burden of showing, by reference to the record, that there
is no genuine issue of material fact. See Celotex, 477 U.S. at 323 (1986); Barreto v. Davie
Marketplace, LLC, 331 F. App’x 672, 673 (11th Cir. 2009). The movant can meet this burden
by presenting evidence showing there is no genuine dispute of material fact, or by
demonstrating to the district court that the nonmoving party has failed to present evidence
in support of some element of its case on which it bears the ultimate burden of proof. See
Celotex, 477 U.S. at 322-24.
Once the movant has met its burden, the nonmoving party is required “to go beyond
the pleadings” and identify “specific facts showing that there is a genuine issue for trial.” Id.
at 324. To avoid summary judgment, the nonmoving party “must do more than summarily
deny the allegations or show that there is some metaphysical doubt as to the material facts.”
Matsuhita, 475 U.S. at 586 (citations and internal quotations omitted). Instead, the
nonmovant must point to evidence in the record that would be admissible at trial. See Jones v.
UPS Ground Freight, 683 F.3d 1283, 1294 (11th Cir. 2012) quoting Macuba v. Deboer, 193 F.3d
1316, 1322 (11th Cir. 1999) (noting that hearsay may be considered on a motion for
summary judgment only if it “could be reduced to admissible evidence at trial or reduced to
admissible form”). Such evidence may include affidavits or declarations that are based on
personal knowledge of the affiant or declarant. See Fed. R. Civ. P. 56(c)(4).
Existence of Condition Precedent
As a threshold matter, the Court must determine whether the Policy’s notice
provision is a condition precedent to coverage. If the notice provision was “expressly made
condition precedent to coverage,” KAB must “demonstrate justification for failure to
comply,” regardless of whether Plaintiff was harmed by the delay. Progressive Mountain
Insurance Company v. Bishop, 338 Ga. App. 115, 117 (2016). If the notice provision was “not
expressly made a condition precedent to coverage,” then “failure to comply with the notice
provision will result in a forfeiture of coverage only if the insurer demonstrates that it was
prejudiced by the insured’s failure.” Plantation Pipe Line Co. v. Stonewall Ins. Co., 335 Ga. App.
302, 311 (2015).
Georgia courts have a policy of “constru[ing] insurance policies to provide coverage,
so as to advance the benefits intended to be accomplished by such policies.” Progressive, 338
Ga. App. at 117.
“In keeping with the desire of the law to avoid forfeitures of coverage, the general
rule is that a notice provisions in an insurance policy is only considered a condition
precedent to coverage if ‘it expressly states that a failure to provide such notice will
result in a forfeiture of the insured’s rights or uses language which otherwise clearly
expresses the intention that the notice provision be treated as a condition
precedent.’” Plantation, 335 Ga. App. at 312 (quoting Resource Life Ins. Co. v. Buckner,
304 Ga. App. 719, 727 (2010)).
“A general provision that no action will lie against the insurer unless the insured has fully
complied with the terms of the policy will suffice to create a condition precedent.” Progressive,
338 Ga. App. at 118. The Policy at issue in this case requires KAB to notify Plaintiff of an
“occurrence” “as soon as practicable” and states that “no person or organization has a
right…to join us as a party or otherwise bring us into a ‘suit’ asking for damages from an
insured…or to sue us…unless all of [the Policy’s] terms have been fully complied with.”
(Doc. 1-4, p. 23, Sec. IV, ¶¶ 2(a), 3). The language of the Policy is sufficient to create a
condition precedent to coverage. See Progressive, 338 Ga. App. at 118) (finding a condition
precedent when insurance policy stated that “[Insurer] may not be sued unless there is full
compliance with all the terms of this policy”).
Compliance with Condition Precedent
Having determined that the notice provision was a condition precedent to coverage,
the Court now addresses the question of whether KAB notified Plaintiff of Sapp’s fall “as
soon as practicable.” Whether or not an insured’s notice is timely is “an inherently factspecific question of the kind we leave for juries to answer.” Id. at 122. “An insured may be
able to present justification for delay in giving notice, and whether that justification was
sufficient is generally a fact-based inquiry for a jury.” Id. at 119. “Nevertheless, the facts and
circumstances of a particular case may render an insured’s delay in giving notice of an
occurrence to his insurer unjustified and unreasonable as a matter of law.” State Farm Fire and
Casualty Co. v. Walnut Avenue Partners, LLC, 296 Ga. App. 648, 651 (2009); see also Advocate
Networks, LLC v. Hartford Fire Ins. Co., 296 Ga. App. 338, 340 (2009). “An insured bears the
burden of establishing a justification for the delay.” Longleaf in Vinings Homeowners Association,
Inc., 646 F.App’x 823, 825 (11th Cir. 2016).
“In cases in which a policy’s notice provision gives no specific time frame, there is no
bright-line rule on how much delay is too much.” Progressive, 338 Ga. App. at 119. Georgia
courts have found delays as long eleven months to present questions of justification to a
jury, see Progressive, 338 Ga. App. at 119 (collecting cases), and delays as short as four months
to be unreasonable as a matter of law. See Bituminous Cas. Corp. v. J.B. Forest & Sons, Inc., 132
Ga. App. 714, 717 (1974). Under Georgia law, “an insured is not justified in failing to give
notice by the belief that an insurance policy does not cover an occurrence.” State Farm, 296
Ga. App. at 653; see also Advocate Networks, 296 Ga. App. at 340 (“A defendant  cannot
avoid the requirement of prompt notice by claiming that it believed it was not liable.”) An
insured is not, however, “required to foresee every possible claim that might arise from an
incident.” Id. Regardless of the length of delay, courts find that a delay is unreasonable as a
matter of law when the insured fails to provide a justification altogether. See Bituminous, 132
Ga. App. at 717 (holding that four month delay was unreasonable as a matter of law when
insured failed to “attempt to show anything that prevented his acting promptly”); Illinois
Union Ins. Co. v. Sierra Contracting Corp., 744 F.Supp.2d 1349, 1352 (N.D. Ga. 2010) (finding
delay unreasonable as a matter of law “where Defendants have not offered even one
justification for the delay”).
There was a four month delay between May 15, 2014, when Sapp fell, and September
22, 2014, when KAB notified Plaintiff of the incident. Plaintiff argues that, because Brandt
was the Executive Director of KAB and was aware of Sapp’s fall, the delay is unreasonable
as a matter of law. KAB contends that the delay is justified because, although Brandt knew
about Sapp’s fall, neither Brandt, nor the Board of KAB, foresaw a claim against KAB until
receiving Sapp’s demand letter in September, 2014. KAB’s justification is unreasonable as a
matter of law. Brandt clearly believed that Sapp deserved to be compensated for her medical
bills and the damage to her vehicles as she submitted requests to Decatur County for those
injuries. Despite this, she decided that Sapp would not file suit against KAB. The basis of
this belief is unclear. Regardless, belief that the insured will not be held liable for the
underlying incident is not sufficient to justify delay notice to the insurer. See Lankford v. State
Farm Mut. Auto. Ins. Co., 307 Ga. App. 12, 16 (2010); Advocate Networks, 296 Ga. App. at 340.
Similarly, KAB’s argument that Brandt was acting on the advice of the county
attorney and county commissioners does not justify KAB’s failure to notify Plaintiff. “The
law requires more than just ignorance, or even misplaced confidence, to avoid the terms of a
valid contract.” Allstate Ins. Co. v. Walker, 254 Ga. App. 315, 316, 562 S.E.2d 267, 268 (2002);
See also Geico Indem. Co. v. Smith, 338 Ga. App. 455, 456–57, 7 (2016) (“[E]nforcement of the
notice requirement of the policy was not dependent on the attorney's beliefs, incorrect or
otherwise, regarding coverage.”). In the absence of a valid justification for the four month
delay in notice, KAB has violated the condition precedent as a matter of law. See Advocate
Networks, 296 Ga. App. at 340 (“Because [Insured] provides no other reasonable explanation
for the four-month delay at issue, the evidence establishes, as a matter of law, that it violated
the [notice] provision.”). Accordingly, Plaintiff’s Motion for Summary Judgment is
For the foregoing reasons, Plaintiff’s Motion for Summary Judgment (Doc. 29) is
SO ORDERED, this 10th day of
/s/ Leslie J. Abrams
LESLIE J. ABRAMS, JUDGE
UNITED STATES DISTRICT COURT
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