Sentry Insurance a Mutual Company v. Ironshore Specialty Insurance Company
Filing
36
ORDER DENYING Defendant's 23 Motion for Summary Judgment and GRANTING Plaintiff's 24 Motion for Summary Judgment. Signed by Judge Thomas W. Thrash, Jr. on 6/30/16. (jkl)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
SENTRY INSURANCE A MUTUAL
COMPANY,
Plaintiff,
v.
CIVIL ACTION FILE
NO. 1:15-CV-93-TWT
IRONSHORE SPECIALTY
INSURANCE COMPANY,
Defendant.
OPINION AND ORDER
This is an insurance coverage dispute. It is before the Court on the Plaintiff
Sentry Insurance A Mutual Company’s Motion for Summary Judgment [Doc. 24] and
the Defendant Ironshore Specialty Insurance Company’s Motion for Summary
Judgment [Doc. 23]. For the reasons set forth below, the Plaintiff’s Motion for
Summary Judgment [Doc. 24] is GRANTED, and the Defendant’s Motion for
Summary Judgment [Doc. 23] is DENIED.
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
I. Background
This case arises out of a fatal accident that occurred on Airport Loop Road in
Fulton County, Georgia on December 4, 2010.1 Levon Alls was driving his tractortrailer truck around 7 a.m. when, while attempting to merge onto Interstate 285, he
collided with another vehicle.2 After the collision, Alls stopped his truck, turned on
his four-way flashers, and exited the truck to observe any damage to it.3 While the
truck was still on the road, Martha Edins struck the rear of Alls’s tractor-trailer.4 Edins
died instantly upon impact.5
At the time of the accident, Alls was driving in the course and scope of his
employment with Stafford Transport, Inc. (“Stafford”).6 Both Alls and Stafford are
insured by the Plaintiff Sentry Insurance A Mutual Company (“Sentry”), and each
policy provides $1 million in coverage per accident.7 Stafford gave timely notice of
1
Pl.’s Statement of Facts ¶¶ 1-2.
2
Id.
3
Id. ¶ 2.
4
Def.’s Statement of Facts ¶ 18.
5
Id. ¶19.
6
Id. ¶ 14.
7
Id. ¶¶ 1-2, 5-6.
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-2-
the occurrence to Sentry.8 Stafford is also insured through a commercial umbrella
liability policy issued by the Defendant Ironshore Speciality Insurance Company
(“Ironshore”).9 The Ironshore policy provides $4 million of coverage beyond the
coverage provided by Sentry.10 On December 7, 2010, Stafford notified Ironshore
about the accident, and, seven days later, Ironshore’s third-party claims administrator,
York Risk Services Group, Inc. (“York”), acknowledged receiving the notification.11
York, however, concluded that liability against the insured appeared remote and
closed its file.12 On January 14, 2011, Stafford provided a second notice to Ironshore,
which was titled “General Liability Notice of Occurrence/Claim.”13 Ironshore
responded, stating it had assigned a claim number and appointed an adjuster, but it did
not provide further information.14
8
Id. ¶ 20.
9
Id. ¶ 8
10
Id. ¶ 9.
11
Pl.’s Statement of Facts ¶¶ 11-12.
12
Id. ¶ 15.
13
Id. ¶ 21.
14
Id. ¶¶ 24-25.
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-3-
On May 5, 2011, a wrongful death suit on behalf of Edins was filed against Alls
and Stafford.15 Sentry received notice of the service, but Ironshore was not notified.16
For defense counsel, Sentry retained attorney Gary Lovell, Jr., who conducted the
initial investigation and valuation of the Edins action.17 On January 20, 2011, Lovell
advised Sentry that “liability seems questionable,” and he estimated that damages
would be between $400,000 and $500,000, assuming Stafford and Alls were held
liable.18 Then, on January 26, 2011, Lovell stated there was a 60-70% chance of
convincing a jury that Edins was 50% or more negligent, meaning Alls and Stafford
would not be held liable.19 “If Edins prevailed on liability, Lovell estimated the verdict
could be in the range of $500,000 to $750,000, and suggested setting reserves in that
range.”20
William Dinges eventually replaced Lovell as Stafford and Alls’s defense
attorney.21 Dinges also stated he believed Edins was at least 50% liable for the
15
Def.’s Statement of Facts ¶ 39.
16
Id. ¶¶ 39, 54.
17
Pl.’s Statement of Facts ¶ 30.
18
Id. ¶ 31.
19
Id. ¶ 32.
20
Id.
21
Id. ¶ 33.
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-4-
accident, and he assessed a reasonable settlement amount of $750,000.22 On or around
February 23, 2013, Dinges stated that there was “a significant potential for a high jury
verdict,” but he reiterated that he still believed Edins’s actions indicated “a significant
degree of negligence.”23 Then, on or around May 10, 2013, Dinges stated that a
plaintiff’s verdict could exceed $1 million, depending on the composition of the jury.24
None of the defense attorneys, however, ever valued the claim at over $2 million – the
attachment point for the Ironshore policy. Moreover, according to Brian Negrette –
the Chief Operating Officer of Stafford’s parent company – Stafford agreed with
Lovell’s and Dinges’s evaluations of the case.25
The parties engaged in multiple settlement discussions. In November 2013, the
plaintiff made a $2 million settlement demand; the defendants countered with a
$500,000 offer.26 Then, in May 2014, the plaintiff made a high/low offer of $2
million/$500,000, and the defendants countered with a high/low offer of $1
million/$75,000.27 On May 13, 2014, the plaintiff proposed a high/low offer of $2
22
Id. ¶¶ 35-36.
23
Def.’s Mot. for Summ. J., Ex. L ¶ 29.
24
Id. ¶ 31.
25
Negrette Aff. ¶¶ 4, 6.
26
Def.’s Statement of Facts ¶ 45.
27
Id. ¶ 48.
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-5-
million/$500,000, with an alternative lump sum demand of $1.75 million.28 The
defendants rejected this offer and responded with a high/low offer of $2
million/$250,000 and an alternative lump sum offer of $600,000.29 The plaintiff
rejected the defendants’ counteroffer and did not make another settlement offer.30
The case then went to trial. On May 22, 2014, the jury returned a verdict of
$4,018,000, which was reduced by a 25% apportionment of fault against Edins.31 This
resulted in a net verdict of $3,013,500.32 One day after the trial, Dinges noted in his
trial report that “he was shocked by the amount of the verdict,” and that the verdict
was “way beyond our evaluation of this case.”33 On May 29, 2014, Stafford notified
Ironshore for the first time about the lawsuit.34 Two days after notifying Ironshore,
Sentry told the defense counsel that it needed legal research regarding “late notice”
28
Id. ¶ 49.
29
Id.
30
Pl.’s Statement of Facts ¶ 50.
31
Id. ¶ 53
32
Id.
33
Id. ¶ 54.
34
Def.’s Statement of Facts ¶ 51.
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-6-
to an insurance carrier.35 Sentry contends that this communication occurred prior to
it learning that Stafford had provided notice of the accident.36
Ironshore took the position that it did not owe Stafford coverage for the Edins
suit because Stafford did not provide timely notice of the lawsuit. As a result, Sentry
and Ironshore agreed to jointly fund the $1,013,500 portion of the judgment exceeding
the Sentry policy limits, with both insurers retaining the right to seek reimbursement
of the portion it paid from the other insurer.37 On January 12, 2015, Sentry brought
suit against Ironshore, seeking reimbursement of the $506,705 it paid in excess of its
policy limits.38 Both parties now move for summary judgment.
II. Legal Standard
Summary judgment is appropriate only when the pleadings, depositions, and
affidavits submitted by the parties show no genuine issue of material fact exists and
that the movant is entitled to judgment as a matter of law.39 The court should view the
evidence and any inferences that may be drawn in the light most favorable to the
35
Id. ¶ 55.
36
Pl.’s Statement of Additional Material Facts ¶ 33.
37
Def.’s Statement of Facts ¶¶ 63-64.
38
Pl.’s Statement of Facts ¶ 63.
39
FED. R. CIV. P. 56(a).
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-7-
nonmovant.40 The party seeking summary judgment must first identify grounds to
show the absence of a genuine issue of material fact.41 The burden then shifts to the
nonmovant, who must go beyond the pleadings and present affirmative evidence to
show that a genuine issue of material fact does exist.42 “A mere ‘scintilla’ of evidence
supporting the opposing party’s position will not suffice; there must be a sufficient
showing that the jury could reasonably find for that party.”43
III. Discussion
Sentry moves for summary judgment, claiming that Ironshore – as Stafford’s
excess insurer – is responsible for the portion of the underlying settlement that falls
within its policy limits. Ironshore also moves for summary judgment. It initially
argues that because Sentry made a bad faith or negligent refusal to settle the
underlying lawsuit, Sentry should be responsible for the excess judgment.44 “An
40
Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970).
41
Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).
42
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986).
43
Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990).
44
It should be noted that “Georgia courts have upheld the right of an excess
insurer to bring suit against a primary insurer based on a negligent or bad faith refusal
to settle.” See Great Am. Ins. Co. v. International Ins. Co., 753 F. Supp. 357, 363
(M.D. Ga. 1990) (citing Home Ins. Co. v. North River Ins. Co., 192 Ga. App. 551
(1989)).
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-8-
insurer may be liable for the excess judgment entered against its insured based on the
insurer’s bad faith or negligent refusal to settle a personal claim within the policy
limits.”45 “Judged by the standard of the ordinarily prudent insurer, the insurer is
negligent in failing to settle if the ordinarily prudent insurer would consider choosing
to try the case created an unreasonable risk.”46 An insurer acts in bad faith if its
“decision not to settle the case was arbitrary and capricious.”47
The Court finds that Ironshore has failed to demonstrate by a preponderance of
the evidence that Sentry acted negligently or in bad faith when it refused to settle the
underlying claim. It is undisputed that none of the defense attorneys in the Edins
action valued the case beyond the Sentry policy limits. For example, Lovell stated that
Alls’s liability seemed questionable and estimated the damages to be in the range of
$500,000 to $750,000, assuming Stafford and Alls were held liable.48 Dinges
predicated a reasonable settlement value of $750,000 and stated that a verdict in
45
Kingsley v. State Farm Mut. Auto. Ins. Co., 353 F. Supp. 2d 1242, 1247
(N.D. Ga. 2005) (quoting Cotton States Mut. Ins. Co. v. Brightman, 276 Ga. 683
(2003)).
46
Cotton States, 276 Ga. at 685.
47
Great Am., 753 F. Supp. at 363.
48
See Pl.’s Statement of Facts ¶ 31.
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-9-
excess of $2 million appeared extremely unlikely.49 Thus, Sentry did not have
“knowledge of clear liability and special damages exceeding the policy limits.”50
The parties also engaged in multiple settlement discussions prior to trial.51 For
example, the plaintiff made a high/low offer of $2 million/$500,000, and the
defendants countered with a high/low offer of $1 million/$75,000.52 The plaintiff then
made a high/low proposal “of $500,000/$2,000,000 . . . and an alternative lump sum
demand of $1,750,000.”53 The defense rejected this offer and made “a high/low of
$250,000/$2 million or, alternatively, a $600,000 offer,”54 but it was rejected by the
plaintiff. Thus, the defense took part in meaningful settlement negotiations and was
willing to modify its initial counteroffer.55 In total, this evidence indicates that Sentry
acted reasonably when determining whether to settle the lawsuit.
49
Id. ¶¶ 37-38.
50
See Cotton States, 276 Ga. at 685.
51
Pl.’s Statement of Facts ¶ 46.
52
Def.’s Statement of Facts ¶ 48.
53
Id. ¶ 49.
54
Pl.’s Statement of Facts ¶ 50.
55
See Great Am. Ins. Co. v. International Ins. Co., 753 F. Supp. 357, 364
(M.D. Ga. 1990) (holding that the primary insurer acted unreasonably when it, “in
absolute disregard of the opinion of the attorney it hired, . . . never modified, altered,
or adjusted it initial determination of liability and never undertook serious settlement
negotiations” (emphasis in original)).
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-10-
Ironshore, on the other hand, fails to put forth evidence that indicates Sentry
acted unreasonably or did not consider the interests of the insured. Rather, it argues
“that if a primary carrier rejects a settlement offer within its policy limits believing
that there is no excess insurance, the risk of an excess verdict remains with that
primary carrier.”56 But Sentry’s lack of knowledge does not excuse Ironshore from
demonstrating by a preponderance of the evidence that Sentry acted unreasonably.57
Consequently, the Court rejects Ironshore’s claim that Sentry made a bad faith or
negligent refusal to settle the underlying lawsuit.
Next, Ironshore argues that Stafford failed to provide timely notice of the Edins
lawsuit, making Sentry liable for the excess judgment. “Whether notice is timely is
ordinarily a question of fact for the jury to determine.”58 “However, courts may rule
on this question as a matter of law if under all the facts and circumstances, it can be
determined that the insured’s delay in providing notice to the insurance company was
56
Reply Br. in Supp. of Def.’s Mot. for Summ. J., at 6.
57
See Great Am. Ins. Co., 753 F. Supp. at 363 (noting that the excess
insurer must “prove by a preponderance of the evidence that [the primary insurer]
failed to use that degree of care which is exercised by an ordinary prudent insurer”).
58
Evanston Ins. Co. v. Stonewall Surplus Lines Ins. Co., 111 F.3d 852, 860
(11th Cir. 1997).
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-11-
unjustified and unreasonable.”59 “Compliance with a prompt notice provision acts as
a condition precedent to coverage under the policy.”60 “The Eleventh Circuit,
interpreting an excess coverage contract, has held that a four-month delay between the
lawsuit and the date of notice was unreasonable under Georgia law, absent a valid
excuse.”61
Here, the liability policy issued to Stafford provides:
2.
If a claim is made or Suit is brought against any Insured which is
reasonably likely to involve this Policy, you must notify us in writing
as soon as practicable.
3.
You and any other involved Insured must:
a.
immediately send us copies of any demands, notices,
summonses or legal papers received in connection with the
claim or Suit;62
Ironshore contends that Stafford did not comply with either notice provision. First, it
argues that paragraph three of the notice provision operates independently of
paragraph two. According to Ironshore, this means the insured is required to send
59
Plantation Pipe Line Co. v. Continental Cas. Co., No. 1:03-CV-2811WBH, 2006 WL 6106248, at *15 (N.D. Ga. Sept. 25, 2006) (citing Richmond v.
Georgia Farm Bureau Mut. Ins. Co., 140 Ga. App. 215, 220-21 (1976)).
60
South Carolina Ins. Co. v. Coody, 957 F. Supp. 234, 237 (M.D. Ga.
1997).
61
North River Ins. Co. v. Gibson Tech. Servs., Inc., 116 F. Supp. 3d 1370,
1378 (N.D. Ga. 2014) (emphasis omitted).
62
Def.’s Mot. for Summ. J., Ex. C (emphasis in original).
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-12-
copies of demands, notices, summonses, or legal papers for every claim or suit
brought against it.63 But paragraph three states that an insured must only provide
copies for “the claim or Suit.”64 This phrase clearly refers back to paragraph two and
thus limits the insured’s duty to provide copies of claims or suits that are reasonably
likely to involve the Ironshore policy. If Ironshore wished to require copies of legal
papers for all claims or suits, it could have used the term “any” or “all” to modify
“claim or suit,” but it did not.65 Consequently, its argument is without merit.
Next, Ironshore argues that if Stafford’s notice on January 14, 2011 is notice
of a claim under the policy, then Stafford was required under paragraph three to send
copies of the Edins complaint.66 In response, Sentry contends that Stafford was not
required to send copies of the Edins complaint because the claim was not reasonably
63
See Def.’s Br. in Opp’n to Pl.’s Mot. for Summ. J., at 10.
64
Def.’s Mot. for Summ. J., Ex. C (emphasis added).
65
See Evanston Ins. Co. v. Stonewall Surplus Lines Ins. Co., 111 F.3d 852,
860 (11th Cir. 1997) (holding that if the insurer intended to require notice of all
claims, then “the policy would simply require notice of all claims against the
insured”); Briggs & Stratton Corp. v. Royal Globe Ins. Co., 64 F. Supp. 2d 1346, 1354
(M.D. Ga. 1999) (holding that because the policy required notice “whenever either a
claim is made or a suit is brought against the insured,” the policy required notice of
all claims).
66
See Def.’s Br. in Opp’n to Pl.’s Mot. for Summ. J., at 12.
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-13-
likely to involve the Ironshore policy.67 In support of its argument, Sentry points to
Evanston Ins. Co. v. Stonewall Surplus Lines Ins. Co.68 There, the Eleventh Circuit
addressed an excess insurance policy that provided: “[Insured] shall immediately give
to [insurer] written notice . . . of an occurrence, claim or suit which is reasonably
likely to involve [insurer] under this policy.”69 The Evanston case involved an auto
accident that resulted in a fatality.70 The insured had immediately notified the primary
insurer of the occurrence and lawsuit but waited until the first day of trial to notify
Evanston, an excess insurer.71 The defense attorneys valued the case at less than $3.5
million, but the jury returned a verdict totaling $23.5 million.72 Evanston contended
that it was not liable for the excess verdict because the insured’s notice was
untimely.73
The Eleventh Circuit disagreed. It held that because the insured exercised due
diligence and relied on the advice of its competent attorneys when it made its
67
See Pl.’s Mot. for Summ. J., at 18.
68
111 F.3d 852 (11th Cir. 1997).
69
Id. at 860.
70
Id. at 854.
71
Id. at 854, 856.
72
Id. at 857.
73
Id. at 860.
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-14-
evaluation of the case, the insured’s failure to give earlier notice was reasonable as a
matter of law.74 The Court noted that the word “likely” “means probable not merely
possible.”75 And the phrase “reasonably likely” “clearly contemplates that the insured
is not required to give notice every time there is a claim against it.”76 Thus, “[w]hen
notice is required is, necessarily, a question of judgment,” and “[t]his standard
requires the insured to base its judgment regarding the amount of the claim against it
upon sound reasons.”77 The Court emphasized that the policy language does not
protect the excess insurer “against a judgment that was not ‘reasonably likely’ but
which, nonetheless, materializes.”78
Sentry contends that, like the plaintiff in Evanston, Stafford acted due diligently
and followed the advice of its attorneys when determining the value of the claim. The
Court agrees. Three days after the accident, Stafford reported the occurrence to
Ironshore.79 Ironshore’s third-party claims administrator, York, acknowledged the
74
Id. at 862.
75
Id. at 860 (quoting Lumbermens Mut. Cas. Co. v. Plantation Pipeline Co.,
214 Ga. App. 23, 25 (1994)).
76
Id.
77
Id.
78
Id.
79
See Pl.’s Statement of Facts ¶ 11.
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-15-
occurrence but concluded that liability was doubtful and closed the file.80 Although
the parties dispute whether the second notice was duplicative of the first notice or was
notice of an actual claim, it is undisputed that Ironshore acknowledged receiving the
second notice and kept the file closed.81 Sentry retained competent counsel for
Stafford and Alls. None of the defense attorneys involved in the representation
predicated the verdict would reach $2 million.82 Moreover, the attorneys concluded
that the defendants’ liability seemed questionable. Lovell stated “there was a 60-70%
chance of convincing a jury Edins was 50% or more negligent in causing the
accident.”83 Dinges predicted that liability would be equal for each party, meaning
that, under Georgia law, the plaintiff could not recover.84 In sum, this evidence
demonstrates that Stafford reasonably believed that its liability would not exceed $2
million.85
80
Id. ¶ 15.
81
Id. ¶ 24.
82
Id. ¶¶ 31-39.
83
Id. ¶ 32.
84
Id. ¶ 35; see Fathallah Aff., Ex. 2 (noting on three separate occasions that
each party’s liability appeared to be equal).
85
Cf. North River Ins. Co. v. Gibson Technical Services, Inc., 116 F. Supp.
3d 1370, 1380 (N.D. Ga. 2014) (holding that because the insured disregarded
counsel’s advice that the claim potentially exceeded the primary insurance policy and
that it should notify the excess insurer, the insured’s justifications for its delay in
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-16-
In response, Ironshore contends that because the defense attorneys and Sentry
“never determined what was ‘reasonably likely’ respecting the Ironshore policy during
the Edins suit,” Sentry cannot claim that Stafford relied on Sentry’s or the defense
attorneys’ advice.86 But the pertinent question is not whether Sentry and the defense
attorneys specifically evaluated the Ironshore policy;87 it is whether Stafford, based
on the defense attorneys’ and the insurer’s evaluation of the underlying case,
reasonably believed that the verdict would not exceed the Sentry policy limits.88
Ironshore then argues that the defense attorneys and Sentry did value the underlying
action in excess of $1 million. It cites to two letters sent to Alls warning that the
verdict could exceed $1 million and a quote from a defense attorney warning that the
verdict could exceed $1 million.89 While this evidence may indicate a verdict
exceeding $1 million was probable, it does not make a verdict exceeding $2 million
probable.
notifying the excess insurer were unreasonable).
86
Def.’s Br. in Opp’n to Pl.’s Mot. for Summ. J., at 17.
87
See Evanston Ins. Co. v. Stonewall Surplus Lines Ins. Co., 111 F.3d 852,
855-56 (11th Cir. 1997) (noting that the defense attorneys were not aware prior to trial
of the excess insurance policy at issue).
88
Id. at 862.
89
Def.’s Br. in Opp’n to Pl.’s Mot. for Summ. J., at 18.
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-17-
Next, Ironshore argues that several facts surrounding the accident made Alls’s
liability more probable, most notably that Alls was criminally charged with vehicular
homicide.90 To be sure, these facts do increase the possibility that Stafford and Alls
would be held liable, but that does not mean that Stafford’s evaluation of its liability
was unreasonable. “We do not ask whether [Stafford’s] evaluation of the case was
‘correct’ or ‘mistaken’ but whether, at the time, it was based upon reason.”91 And –
as previously discussed – both the defense attorneys and Sentry evaluated Edins’s
liability at least 50% and never valued the case beyond the Sentry policy limits.92
Finally, in the alternative, Ironshore asserts an argument with respect to the
“Commercial Automobile Liability Limitation Endorsement” in the Stafford policy.93
The endorsement specifically excludes coverage for automobile liability, but the
90
Id. at 19.
91
Evanston, 111 F.3d at 862.
92
Ironshore also cites to Southern General Insurance Co. v. Holt, arguing
that it is more analogous to the present case than Evanston. But Holt concerned
whether an insurance company was guilty of bad faith or negligence in refusing to
settle an underlying lawsuit. 262 Ga. 267, 276 (1992). Moreover, in Holt, the
insured’s liability was clear, and the claims manager testified that the underlying claim
was “a policy limits case.” Id.
93
Def.’s Mot. for Summ. J., at 23.
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-18-
exclusion does not apply if the primary insurance policy provides automobile liability
coverage.94 The endorsement then states:
Coverage under this policy for such Automobile Liability Bodily Injury
or Property Damage will follow the terms, definitions, conditions and
exclusions of Scheduled Underlying Insurance, subject to the . . . terms,
definitions, conditions and exclusions of this policy. Provided, however,
that coverage provided by this policy will be no broader than the
coverage provided by Scheduled Underlying Insurance.95
Based on this paragraph, Ironshore contends that its policy follows the Sentry policy’s
notice provision. Specifically, Ironshore argues that “[b]ecause the Ironshore Policy
expressly provides that it affords no broader coverage than the Sentry Policy in the
context of automobile liability, the Ironshore Policy follows this more stringent notice
provision of the Sentry Policy, and Ironshore too must receive immediate notice of a
suit.”96
The Court disagrees. As Sentry correctly points out, there is a more reasonable
interpretation of the endorsement: the “no broader” clause is used to ensure that if the
primary insurer does not provide coverage for a particular automobile accident, the
94
See id., Ex. C.
95
Id., Ex. C.
96
Id. at 24.
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-19-
excess insurer will not have to defend or indemnify the insured for that accident.97
Here, Sentry has provided coverage for the automobile accident, and, therefore,
coverage under the Ironshore policy is still subject to the terms and conditions of the
Ironshore policy. In addition, Ironshore’s interpretation would require the insured to
“compare every term and condition in the myriad underlying policies to the terms and
conditions of its excess policy, determine which is the ‘most stringent,’ and then
adhere to those terms and conditions.”98 This is burdensome and creates uncertainty
for the insured. Accordingly, the Court concludes that Ironshore’s argument regarding
the endorsement is without merit.
IV. Conclusion
For these reasons, the Court GRANTS the Plaintiff Sentry Insurance A Mutual
Company’s Motion for Summary Judgment [Doc. 24] and DENIES the Defendant
Ironshore Specialty Insurance Company’s Motion for Summary Judgment [Doc. 23].
97
Even if Ironshore’s interpretation of the endorsement was reasonable,
“[w]hen the language of an insurance [policy] is ambiguous and subject to more than
one reasonable construction, the policy must be construed in the light most favorable
to the insured, which provides him with coverage.” Western Pac. Mut. Ins. Co. v.
Davies, 267 Ga. App. 675, 680 (2004).
98
Pl.’s Br. in Opp’n to Def.’s Mot. for Summ. J., at 22.
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-20-
SO ORDERED, this 30 day of June, 2016.
/s/Thomas W. Thrash
THOMAS W. THRASH, JR.
United States District Judge
T:\ORDERS\15\Sentry Insurance\msjtwt.wpd
-21-
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?