Brit UW Limited et al v. Hallister Property Development, LLC et al
Filing
74
ORDER AND OPINION granting 52 Plaintiffs' Motion for Summary Judgment. Signed by Judge Julie E. Carnes on 3/13/14. (ddm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
BRIT UW LIMITED and HISCOX
DEDICATED CORPORATE MEMBER
LIMITED,
Plaintiffs,
CIVIL ACTION NO.
v.
1:11-CV-4396-JEC
HALLISTER PROPERTY DEVELOPMENT,
LLC and DAVID BAERWALDE,
Defendants.
ORDER & OPINION
This case is before the Court on plaintiffs’ Motion for Summary
Judgment [52].
The Court has reviewed the record and the arguments
of the parties and, for the reasons set out below, concludes that
plaintiffs’ Motion [52] should be GRANTED.
BACKGROUND
I.
Overview
The facts underlying this case are not in dispute.
In November
2009, defendant Baerwalde was paralyzed after being thrown from a
horse he was sitting on.
The accident occurred at the Goat Farm, an
Atlanta-area living and workspace community for artists. (Compl. [1]
at 6.)
Baerwalde sued several parties in connection with accident,
including
his
co-defendant
in
Development, LLC (“Hallister”).
AO 72A
(Rev.8/82)
this
action,
(Id. at Ex. B.)
Hallister
Property
At the time of the
accident, Hallister was covered by an insurance policy (the “Policy”)
that was issued by plaintiffs.
(Id. at 9.)
When Baerwalde filed
suit, Hallister sought coverage under the Policy.
Plaintiffs
subsequently
filed
this
(Id.)
complaint,
seeking
a
declaratory judgment that they have no duty to defend or indemnify
Hallister in the Baerwalde action.
(Id. at 1.)
According to
plaintiffs, the Policy does not provide coverage for Baerwalde’s
accident because (1)the Policy was limited to Hallister’s operations
as a “General Contractor” and (2) Hallister failed to provide timely
notice of the accident.
Br.”) [52] at 2-3.)
(Pls.’ Br. in Supp. of Summ. J. (“Pls.’
Alternatively, plaintiffs argue that the Policy
should be rescinded because of Hallister’s material representations
during the application process.
II.
(Id.)
The Policy
The Policy provides coverage to Hallister for the period of
February 12, 2009 to February 12, 2010.
(Policy [52] at Ex. C.)
It
contains a notice clause, which provides:
Section IV-Commercial General Liability Conditions
2.
Duties In The Event Of Occurrence, Offense, Claim or
Suit
a.
You must see to it that we are notified as soon
as practicable of an “occurrence” or an offense
which may result in a claim.
(Id. at 33.)
The term “occurrence” is defined by the Policy as “an
accident, including continuous or repeated exposure to substantially
the same general harmful conditions.”
2
AO 72A
(Rev.8/82)
(Id. at 37.)
The
Policy
also
contains
a
“Classification
Limitation
Endorsement” that states:
Coverage under this policy is specifically limited to those
operations described by the classification(s) in the
Commercial General Liability Coverage. This policy does
not apply to any operation not specifically listed in the
Commercial General Liability Coverage or endorsed hereon.
(Id.
at 59.)
The “Commercial General Liability Coverage Part
Declarations” of the Policy list the following two codes with
accompanying descriptions:
Code:
91580
CONTRACTORS-EXECUTIVE
SUPERVISORS OR EXECUTIVE
SUPERINTENDENTS INCLUDING
PRODUCTS/COMPLETED
OPERATIONS
91583
(Id. at 12.)
Classification:
CONTRACTORS-SUBCONTRACTED
WORK-IN CONNECTION WITH
BUILDING CONSTRUCTION,
RECONSTRUCTION, REPAIR OR
ERECTION-ONE OR TWO
FAMILY DWELLINGS
The Policy does not further define any of the key words
found in the codes or the accompanying descriptive language.
III. Hallister’s Activities at the Goat Farm
Hallister is a limited liability corporation with two members,
Christopher Melhouse and Anthony Harper.
(Melhouse Dep. [48] at
124.) In April 2008, Hallister signed an agreement (the “Agreement”)
with the owners of the Goat Farm permitting Hallister to possess and
develop the property.
(Agreement [52] at Ex. H.)
3
AO 72A
(Rev.8/82)
The Agreement was
intended to help Hallister determine the feasability of converting
the Goat Farm property into apartment buildings with some commercial
retail space.
(Melhouse Dep. [48] at 15-16 & 97-98.)
Once in possession of the property, Hallister began to build
artist studios.
(Harper Dep. [47] at 105-06.)
Hallister planned to
rent out the studios in order to create the necessary cash flow to
qualify for a loan, and then complete its purchase and commercial
development of the property.
(Id.)
When this more expansive plan
was derailed by the recession, Hallister decided to maintain the
property as an artist community.
(Melhouse Dep. [48] at 100-102.)
At his deposition, Hallister member Harper admitted to “managing
the property” on behalf of Hallister.
(Harper Dep. [47] at 89.)
According to Harper, Hallister’s management activities included
“collecting rent” and “leasing [the] property out.”1
(Id.)
His
fellow Hallister member, Melhouse, disavowed the characterization of
Hallister as a “property manager” but he admitted that Hallister took
responsibility for addressing issues with tenant live/work spaces
that
arose
after
Hallister’s
involvement
(Melhouse Dep. [48] at 108-109.)
with
the
property.
Although there was no formal
agreement, Goat Farm’s owner apparently took responsibility for
1
Melhouse testified that rent was not collected for Hallister’s
gain during this time period and that Hallister did not maintain on
office on site but the owners of Goat Farm did. (Melhouse Dep. [48]
at 108.) According to Melhouse, tenants dropped their rent checks in
a box in the owner’s office and the owner came in every month to pick
up the checks. (Id.)
4
AO 72A
(Rev.8/82)
problems that preexisted Hallister’s presence at there. (Id. at 108110.) The owner employed two on-site maintenance workers to complete
these repairs.
IV.
(Id. at 109-110, 124.)
The Accident and Underlying Lawsuit
The Goat Farm derives its name from the fact that the property
contains an animal pen with several pygmy goats, a turkey, and a
sheep dog.
(Id. at 41-42.)
Shortly before the accident, Goat Farm
tenant Christina Dolan asked Harper whether she could temporarily
board a horse at the Goat Farm while a more permanent home was
secured.
(Harper Dep. [47] at 13-14.)
Harper agreed, believing the
horse could serve as a novelty item like the other animals in the
pen.
(Id. at 15.)
Ms. Dolan and her daughter were responsible for
preparing the pen for the horse.
(Id.)
Baerwalde’s accident took place on the same day that Ms. Dolan
brought the horse to the Goat Farm.
(Baerwalde Dep. [59] at 35-36.)
Sometime after Dolan brought the horse onto the property, she offered
to allow Baerwalde to sit on the horse.
(Id.)
Melhouse was present
at the time, and he helped Baerwalde mount the horse.
(Id. at 131.)
Although Baerwalde intended only to sit and not ride on the animal,
the horse immediately took off, bucked and threw Baerwalde off its
back.
(Id. at 25.)
Baerwalde collided with an old flagpole
middle of the pen and broke his back.
in the
(Id.)
After the accident, Harper and Melhouse visited Baerwalde in the
hospital and modified his studio to make it wheelchair accessible.
5
AO 72A
(Rev.8/82)
(Baerwalde Dep. [59] at 126-27, 129-30.)
The parties did not have
any substantive discussions about Hallister’s potential liability for
Baerwalde’s injuries, but Melhouse admits that at some point after
the accident, Baerwalde mentioned the issue of a lawsuit “but just in
passing.” (Melhouse Dep. [65] at 60.) Also during this time period,
Baerwalde told Harper that he believed in the mission of the Goat
Farm and would not do anything to jeopardize that. (Harper Dep. [47]
at 23.)
On September 30, 2011, defendant Baerwalde filed suit in Fulton
County State Court against Hallister, Christina Dolan, and the owners
of the Goat Farm.
(Baerwalde Compl. [52] at Ex. H.)
The complaint
generally alleges that the facilities where defendants boarded the
horse “were not adequately equipped to handle horses or horse
riding.”
(Id. at ¶ 24.)
The complaint only specifically names
Hallister once, when it alleges that Hallister and the owners of the
property “negligently designed, developed, prepared, and addressed
[the pen area] prior to permitting horse riding activities.”
(Id.)
After receiving notice of the Baerwalde complaint, Hallister
requested a defense and indemnity from plaintiffs pursuant to the
Policy.
(Pls.’ Mot. for Summ. J. [52] at Ex. I.)
The underwriters
of the Policy offered to provide Hallister a defense subject to a
reservation of rights.
(Id. at Ex. J.)
When Hallister rejected
their offer, plaintiffs filed this action to determine their rights
and obligations to Hallister under the Policy.
6
AO 72A
(Rev.8/82)
(Pls.’ Br. [52] at
10.)
DISCUSSION
I.
Summary Judgment Standard
Summary
judgment
is
appropriate
when
the
“pleadings,
the
discovery and disclosure materials on file, and any affidavits show
that there is no genuine issue as to any material fact and that the
movant is entitled to a judgment as a matter of law."
56(c).
A fact’s materiality is determined by the controlling
substantive law.
(1986).
FED. R. CIV. P.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
An issue is genuine when the evidence is such that a
reasonable jury could return a verdict for the nonmovant.
Id. at
249-50.
Summary judgment is not properly viewed as a device that the
trial court may, in its discretion, implement in lieu of a trial on
the merits. Instead, Rule 56 of the Federal Rules of Civil Procedure
mandates the entry of summary judgment against a party who fails to
make a showing sufficient to establish the existence of every element
essential to that party’s case on which that party will bear the
burden of proof at trial.
322 (1986).
Celotex Corp. v. Catrett, 477 U.S. 317,
In such a situation, there can be “‘no genuine issue as
to any material fact,’” as “a complete failure of proof concerning an
essential element of the non-moving party’s case necessarily renders
all other facts immaterial.”
Id. at 322-23 (quoting FED. R. CIV. P.
56(c)).
7
AO 72A
(Rev.8/82)
The movant bears the initial responsibility of asserting the
basis for his motion.
Id. at 323.
However, the movant is not
required to negate his opponent’s claim.
The movant may discharge
his burden by “‘showing’--that is, pointing out to the district
court--that there is an absence of evidence to support the non-moving
party’s case.”
Id. at 325.
After the movant has carried his burden,
the non-moving party is required to “go beyond the pleadings” and
present competent evidence designating “‘specific facts showing that
there is a genuine issue for trial.’”
Id. at 324.
In ruling on a motion for summary judgment, the Court must view
the evidence and factual inferences in a light most favorable to the
non-moving party.
(11th Cir. 1988).
Samples v. City of Atlanta, 846 F.2d 1328, 1330
However, “the mere existence of some alleged
factual dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment.”
Anderson, 477 U.S.
at 247-48 (1986). The requirement is that there be no “genuine issue
of material fact.”
Id.
II. Classification Limitation Endorsement
A.
Under
Legal Standard
Georgia
law,
an
insurance
policy
is
interpreted
in
accordance with the same rules that are applicable to other types of
contracts.
SawHorse, Inc. v. S. Guar. Ins. Co. of Georgia, 269 Ga.
App. 493, 494-95 (2004).
The parties to an insurance contract are
bound by its plain and unambiguous terms.
8
AO 72A
(Rev.8/82)
Id.
at 494.
Any
ambiguities in a policy are construed against the insurer, as the
drafter of the contract.
267
Ga.
App.
370,
Id.
371-72
See also Pilz v. Monticello Ins. Co.,
(2004)(“Under
the
rules
of
contract
construction, the policy is construed against [the insurer] as the
drafter of the policy”).
However, if the policy is not ambiguous,
the Court must apply its terms as written.
SawHorse, 269 Ga. App. at
495.
An
insurer’s
duty
to
defend
an
insured
in
a
lawsuit
is
determined by comparing the allegations of the complaint against the
insured with the provisions of the policy.
Auto-Owners Ins. Co. v.
State Farm Fire & Cas. Co., 297 Ga. App. 751, 754 (2009).
If the
complaint asserts a claim that is potentially covered by the policy,
the insurer has a duty to defend the insured in the lawsuit.
Id.
Only if the complaint unambiguously excludes coverage is the insurer
excused of its duty to defend.
Id.
See also Penn-Am. Ins. Co. v.
Disabled Am. Veterans, Inc., 268 Ga. 564, 565 (1997)(explaining that
an insurer has a duty to defend unless the factual allegations in the
complaint show that there is no coverage under the policy).
B.
Coverage Limitations
Applying Georgia law, the Court agrees with plaintiffs that the
Policy
does
not
cover
Baerwalde’s
accident.
The
Policy’s
Classification Limitation Endorsement (“Limitation Endorsement” or
“Endorsement”)
described
by
expressly
the
limits
classification(s)
9
AO 72A
(Rev.8/82)
coverage
in
to
the
“those
operations
Commercial
General
Liability
Coverage.”
(Policy
[52]
at
59.)
The
referenced
classifications, which are listed in the Commercial General Liability
(“Declarations”)
Coverage
Part
Declarations,
both
relate
to
“building construction, reconstruction, repair or erection” of “one
or two family dwellings.”
covers
“Contractors
-
(Id. at 12.)
Subcontracted
Specifically, code 91583
Work
-
In
Connection
with
Building Construction, Reconstruction, Repair or Erection - One or
Two Family Dwellings.”
(Id.)
Executive
or
Supervisors
Code 91580 covers
Executive
“Contractors -
Superintendents
Including
Products/Completed Operations.” (Id.) These codes are in accordance
with the Policy’s immediately preceding business description of
Hallister as a “General Contractor.”
(Id.)
The Court is unpersuaded by Baerwalde’s argument that the
Limitation Endorsement is somehow ambiguous because the Policy uses
the term “Commercial General Liability” on both the Declarations page
and as the title to various generic provisions of the Policy.
(Baerwalde Resp. [58] at 16.) According to Baerwalde, the appearance
of the term in two different places causes confusion about where to
locate the limiting classifications and essentially renders the
Endorsement
void.
(Id.
at
16-17.)
However,
the
Endorsement
specifies that the Policy is limited by the “classification(s) in the
Commercial General Liability Coverage.”
(Policy [52] at 59.)
The
Declarations page is the only section of the Policy that contains any
classifications.
(Id. at 12.)
The Court thus finds that the
10
AO 72A
(Rev.8/82)
Endorsement
is
sufficiently
specific
about
where
the
limiting
classifications can be found.
Furthermore, it is readily apparent that Baerwalde’s claims
against Hallister do not come within any reasonable interpretation of
the limiting classifications.
(Baerwalde Compl. [52] at Ex. H.)
Baerwalde seeks to impose liability on Hallister based on its
maintenance of the goat pen and control over the social and/or
recreational activities taking place on the Goat Farm at the time of
the accident.
(Id. at ¶ 24.)
Specifically, Baerwalde contends that
Hallister was negligent in failing to (1) determine Baerwalde’s
ability to ride and safely manage the horse and (2) keep or make the
premises safe for horse-riding.
(Id.)
These actions are not in any
way related to general or subcontracting in connection with the
construction of dwellings at the Goat Farm.
Given the clear import of the Policy language, the Court rejects
Hallister’s
argument
that
the
terms
“supervisors”
or
“superintendents,” as used in code 91580, encompasses Hallister’s
role as a property manager at the Goat Farm.
at 9-11.)
(Hallister Resp. [62]
Hallister’s construction of the Policy language is flawed
because it defines the terms “supervisors” and “superintendents”
without any reference to the immediately preceding and qualifying
term “contractor.”
Essentially, Hallister is requesting that the
Court expand the bounds of the Policy by defining “supervisors” and
“superintendents” in isolation, and without consideration of the
11
AO 72A
(Rev.8/82)
surrounding terms in the Policy.
Georgia contract law.
That approach conflicts with
See Auto-Owners Ins. Co., 297 Ga. App. at 754
(when construing an insurance policy, the court “must consider it as
a whole, give effect to each provision, and interpret each provision
to harmonize with each other”).
The Court likewise rejects Baerwalde’s suggestion to follow the
approach
taken
in
an
allegedly
analogous
case,
United
States
Underwriters Ins. Co. v. United Pac. Assoc., LLC, 2006 WL 1329756
(E.D.N.Y.
2006)(Bianco, J.).
Citing Judge Bianco’s decision in
United Pacific, Baerwalde argues that plaintiffs can be liable for
Hallister’s “property managing” activities as long as Hallister was
also acting as a general contractor.
19.)
(Baerwalde Resp. [58] at 18-
As plaintiffs point out, such an approach would eviscerate the
terms of the Limitation Endorsement and potentially require coverage
for all sorts of activities that are expressly excluded by the
Policy.
In fact, the rule in United Pacific is less expansive than
Baerwalde suggests.
contained
a
descriptors
The insurance policy at issue in United Pacific
classification
for
“Carpentry”
limitation
and
with
accompanying
“Carpentry-Interior.”
Pacific, 2006 WL 1329756 at *3-4.
code
United
The underlying lawsuit alleged
injury resulting from the insured’s removal of snow from the sidewalk
in front of the building they were working on.
denied
the
insurer’s
summary
judgment
12
AO 72A
(Rev.8/82)
Id.
motion
Judge Bianco
based
on
the
classification limitation, finding that issues of fact remained about
whether the snow removal on the date of the accident was in support
of the covered carpentry operations.
Id. at *5.
Notably, there was
evidence in United Pacific that workers regularly removed snow in
front of the building so they could access it for interior work.
Id.
at *1.
Baerwalde does not claim that Hallister’s alleged negligence was
related to or in support of its construction activities, so the rule
of United Pacific does not apply.
Indeed, this case is more akin to
two cases that were distinguished by Judge Bianco in United Pacific.
In Ruiz v. State Wide Insulation and Constr. Corp., 703 N.Y.S.2d 257
(N.Y. App. Div. 2000), the court found that coverage was precluded by
a classification limitation for “painting” where the injured party
was hurt while repairing a roof.
And in Mount Vernon Fire Ins. Co.
v. Chios Constr. Corp., 1996 WL 15668 (S.D.N.Y. 1996)(Sotomayor, J.),
then-Judge
Sotomayor
found
that
coverage
was
precluded
by
a
classification limitation for “Carpentry-Interior” because, although
carpentry tasks were being performed on-site, the work at issue was
not “remotely related to interior carpentry.”
The same is true in
this case.
Just as in Chios, Baerwalde’s claims are excluded from the
Policy’s coverage by the clear and unambiguous language of the
Endorsement.
As the Policy does not cover the type of activity that
Hallister was engaged in at the time of the Baerwalde accident,
13
AO 72A
(Rev.8/82)
plaintiffs are entitled to a declaratory judgment in this action.
Accordingly, plaintiffs’ motion for summary judgment [52] is GRANTED.
III. Notice
Even assuming coverage under the Policy is available, plaintiffs
still are entitled to summary judgment.
As indicated above, the
Policy requires as a condition of coverage that the insured give
notice to its insurer “as soon as practicable of an ‘occurrence’ or
an offense which may result in a claim.”
(Policy [52] at Ex. C, 33.)
Failure to comply with such a notice provision bars coverage under
Georgia law.
See Eells v. State Farm Mut. Auto. Ins. Co., 752 S.E.
2d 70, 72 (Ga. App. 2013)(“It is well established that a notice
provision expressly made a condition precedent to coverage is valid
and must be complied with, absent a showing of justification.”).
While the “as soon as practicable” language affords some leeway as to
timing, it is generally recognized that a two year delay in providing
notice “is unreasonable delay as a matter of law.”
Lankford v. State
Farm Mut. Auto. Ins. Co., 307 Ga. App. 12, 15 (2010).
See also
Protective Ins. Co. v. Johnson, 256 Ga. 713 (1987)(17-month delay)
and Kay-Lex Co. v. Essex Ins. Co., 286 Ga. App. 484 (2007)(12-month
delay).
Hallister’s principal Melhouse witnessed Baerwalde’s accident.
(Baerwalde Dep. [59] at 131.)
It is therefore undisputed that
Hallister learned of the accident as soon as it occurred in November,
2009. (Baerwalde’s Resp. [58] at 19.)
14
AO 72A
(Rev.8/82)
Yet, Hallister did not notify
plaintiffs of the accident until Baerwalde filed the underlying
complaint in September, 2011.
I.)
(Pls.’ Mot. for Summ. J. [52] at Ex.
In the absence of a justifiable or legally sufficient excuse,
Hallister’s two-year delay in providing notice bars coverage under
the Policy.
In
an
Lankford, 307 Ga. App. at 15.
attempt
to
justify
the
delay,
affidavits from Harper and Melhouse.2
Hallister
submits
Both Harper and Melhouse
explain that they did not notify plaintiffs of the Baerwalde accident
because they did not believe Hallister was liable for Baerwalde’s
injuries.
5-7.)
(Harper Aff. [64] at ¶¶ 5-7 and Melhouse Aff. [63] at ¶¶
Specifically, Harper and Melhouse state that:
(1) Hallister
did not encourage or tell Baerwalde that it was safe to ride the
horse, (2) Hallister did not own the horse, and (3) the dangers of
the goat pen were “open and obvious.”
(Harper Aff. [64] at ¶¶ 5-8
and Melhouse Aff. [63] at ¶¶ 5-8.)
Assuming
the
above
statements
are
true,
they
are
legally
insufficient to excuse Hallister’s delay in providing notice.
The
Policy expressly requires notice of any occurrence that “may result
in a claim.”
(Policy [52] at 33.)
Its plain language thus precludes
an insured from withholding notice based on its unilateral assessment
2
Plaintiffs request that the Court disregard these affidavits
as contrary to prior deposition testimony. (Pls.’ Reply [65] at 9.)
This circuit “require[s] a court to find some inherent inconsistency
between an affidavit and a [prior] deposition before disregarding the
affidavit.” Rollins v. TechSouth, Inc., 833 F.2d 1525, 1530 (11th
Cir. 1987). There is no “inherent inconsistency” here. The Court
will thus consider the affidavit testimony.
15
AO 72A
(Rev.8/82)
of the liability issues arising from an occurrence.
See Richmond v.
Georgia
App.
Farm
Bureau
(1976)(“Justification
Mut.
for
Ins.
Co.,
140
failure
to
give
Ga.
notice
as
215,
soon
220
as
practicable . . . may not include the insured’s conclusion ‘that he
was free of fault and that there was no liability to the other
party.’”) (quoting Bituminous Cas. Corp. v. J.B. Forrest & Sons,
Inc., 132 Ga. App. 714, 717 (1974)). Indeed, the insured’s potential
liability “‘is the very issue which the company must have reasonable
opportunity to investigate with promptness, and which requires a
prompt notice of the occurrence.’” Id.
See also Ill. Union Ins. Co.
v. NRI Constr. Inc., 846 F. Supp. 2d 1366, 1371-72 (N.D. Ga.
2012)(Forrester, J.)(noting the investigatory purpose of prompt
notice provisions).3
Harper also attests that he did not expect Baerwalde to file a
claim because of Baerwalde’s statement that he “believed in the Goat
Farm’s mission” and would not do anything to “jeopardize” the Goat
Farm.
(Harper Aff. [64] at ¶ 9.)
This explanation is similarly
deficient in that it relies on Harper’s independent assessment of
Hallister’s likely liability in the case. Again, the Policy mandates
that an insured give notice of any occurrence that “may result in a
claim.”
(Policy [52] at 33.)
Harper’s assumption that Baerwalde
would not bring a claim is insufficient under the plain language of
3
Baerwalde, Harper and Melhouse were all unable to fully
respond to certain deposition questions because they could not
remember when conversations or specific events occurred.
16
AO 72A
(Rev.8/82)
the contract, and under settled Georgia law, to excuse Hallister’s
two-year delay in providing notice to plaintiffs.
Richmond, 140 Ga.
App. at 220.
Moreover, Melhouse admits that he was always aware of the
possibility
of
litigation
(Melhouse Dep. [65] at 60.)
arising
from
Baerwalde’s
accident.
When discussing Hallister’s response to
the accident, Melhouse mentioned that he wanted to help Baerwalde
because it would be “[v]ery difficult to be able to say, look, I’m
not going to do anything nice for you, our friendship ends now
because the potential of a lawsuit is there.”
added).
(Id. at 126)(emphasis
Even viewing this testimony in the light most favorable to
defendants,
it
is
clear
that
Hallister’s
principals,
like
any
reasonable people, were aware of the potential for liability arising
from the Baerwalde accident as soon as the accident occurred.
Finally, the Court rejects Hallister’s argument that plaintiffs
should be required to come forth with affirmative evidence of
prejudice caused by the delay.
(Hallister Resp. [62] at 16.)
argument is simply a misstatement of the law.
This
Georgia law does not
require an insurer to show prejudice in order to avail itself of a
notice provision. See Canadyne-Georgia Corp. v. Cont’l Ins. Co., 999
F.2d 1547, 1557 (11th Cir. 1993)(Georgia law does not require an
insurer
to
demonstrate
prejudice
to
avail
itself
of
a
notice
requirement).
In sum, Hallister’s two-year delay in notifying plaintiffs of
17
AO 72A
(Rev.8/82)
the Baerwalde accident is unreasonable as a matter of law. Hallister
has not provided any legally sufficient justification for the delay.
Hallister’s failure to comply with the notice provision therefore
precludes coverage under the Policy.
For this additional reason,
plaintiffs’ motion for summary judgment [52] is GRANTED.4
IV.
Punitive Damages Provision
Plaintiffs also seek a declaratory judgment that the Policy’s
punitive
damages
exclusion
(Pls.’ Br. [52] at 23.)
cover
punitive
bars
coverage
for
punitive
Defendants agree that the Policy does not
damages.
(Baerwalde’s
Hallister’s Resp. [62] at 7.)
Resp.
[58]
at
25
and
Its language clearly excludes claims
“of or indemnification for punitive or exemplary damages.”
[52] at 19.)
damages.
(Policy
Accordingly, the Court specifically GRANTS plaintiffs’
motion [52] with respect to punitive damages.
CONCLUSION
For the foregoing reasons, the Court GRANTS plaintiffs’ Motion
for Summary Judgment [52].
SO ORDERED, this 13th day of March, 2014.
/s/ Julie E. Carnes
JULIE E. CARNES
CHIEF UNITED STATES DISTRICT JUDGE
4
As the Court has ruled in favor of plaintiffs on the coverage
issue, it is unnecessary to consider whether the Policy is void as a
result of Hallister’s misrepresentations in applying for it.
18
AO 72A
(Rev.8/82)
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