Progressive Premier Insurance Company of Illinois v. Gibbs et al
Filing
35
OPINION and ORDER denying 33 Defendant Tiarra Poindexter's Motion for Oral Argument and granting 28 Plaintiff's Motion for Summary Judgment. Signed by Judge Thomas W. Thrash, Jr. on 4/18/2016. (bdb)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
PROGRESSIVE PREMIER
INSURANCE COMPANY OF
ILLINOIS,
Plaintiff,
v.
CIVIL ACTION FILE
NO. 1:15-CV-2662-TWT
DARA GIBBS, et al.,
Defendants.
OPINION AND ORDER
This is a declaratory judgment action regarding insurance coverage. It is before
the Court on the Plaintiff’s Motion for Summary Judgment [Doc. 28] and the
Defendant Tiarra Poindexter’s Motion for Oral Argument [Doc. 33]. For the reasons
stated below, the Plaintiff’s Motion for Summary Judgment is GRANTED and the
Defendant’s Motion for Oral Argument is DENIED.
I. Background
On May 29, 2015, Cory Gibbs was driving a 2008 Nissan Maxima on
Gardenwalk Boulevard near its intersection with Upper Riverdale Road in Clayton
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County, Georgia.1 Dara Gibbs owned the Nissan Maxima.2 While driving the vehicle,
Mr. Gibbs was involved in an accident with Defendants Lemon, Buford, Smith,
Washington, and Valeriano-Campos, who all claim to have suffered bodily injuries.3
On May 5, 2015, Dara Gibbs submitted an online application for insurance to
the Plaintiff, Progressive Premier Insurance Company of Illinois.4 The application
package included an Electronic Funds Transfer Authorization that allowed the
Plaintiff to deduct policy premium payments directly from the listed bank account.5
When the Plaintiff submitted the initial premium amount to the listed financial
institution for payment, however, the transaction was declined.6 Ms. Gibbs admits that
she has no proof that payment was ever made to the Plaintiff and that she was not the
account holder for the listed bank account.7 The Plaintiff never received any premium
payments whatsoever.8 The Plaintiff brings this declaratory judgment action against
1
Pl.’s Statement of Facts ¶ 1.
2
Id. ¶ 2.
3
Id. ¶ 3.
4
Id. ¶ 4.
5
Id. ¶ 5.
6
Id. ¶ 6.
7
Id. ¶¶ 7-8.
8
Id. ¶ 9.
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Dara and Cory Gibbs, as well as the other drivers involved in the collision, seeking
a declaration that no coverage is afforded to Dara or Cory Gibbs for the motor vehicle
collision on May 29, 2015. The Plaintiff moves for summary judgment on that claim.
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.9 The court should view the
evidence and any inferences that may be drawn in the light most favorable to the
nonmovant.10 The party seeking summary judgment must first identify grounds to
show the absence of a genuine issue of material fact.11 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.12 “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.”13
9
FED. R. CIV. P. 56(a).
10
Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970).
11
Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).
12
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986).
13
Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990).
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III. Discussion
The Plaintiff argues that no contract for insurance ever existed and therefore
requests a declaration that no coverage must be provided. “[F]ailure of consideration,
if proved, is sufficient to defeat an action on contract.”14 The Georgia Court of
Appeals has held that unless the record establishes that the parties intended for mere
tender of a check to constitute payment, there is a total failure of consideration when
a check is dishonored, which renders a contract null and void.15 Here, the parties
clearly did not intend that mere tender of a check would constitute payment.
Specifically, the application for insurance read “[i]f I make my initial payment by
electronic funds transfer, check, draft, or other remittance, the coverage afforded
under this policy is conditioned on payment to the Company by the financial
institution.”16 Ms. Gibbs does not dispute that her electronic funds transfer was
returned.17 She additionally admits that she did not pay Progressive via any other
means.18 When Progressive submitted the electronic funds transfer, it was declined,
14
McDuffie v. Criterion Cas. Co., 214 Ga. App. 818, 821 (1994).
15
Id.
16
Pl.’s Mot. for Summ. J., Ex. 3, p. 62.
17
Gibbs Dep. at 32.
18
Id. at 33.
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and Progressive never received any other form of payment.19 Because no payment was
ever received, there was a total failure of consideration for the policy. As a result, no
contract ever existed, so Ms. Gibbs was never insured by the Plaintiff.
The Defendants make several arguments as to why this Court should enforce
the insurance contract despite its lack of consideration. First, the Defendants argue
that the Plaintiff failed to meet the cancellation requirements of O.C.G.A. § 33-24-44.
Contrary to the Defendants’ arguments, however, that code section specifically notes
that it does not apply “in any case where a binder or contract of insurance is void ab
initio for failure of consideration.”20 Because the contract here is void for failure of
consideration, the cancellation requirements do not apply. Second, the Defendants
argue that public policy concerns of universal insurance coverage should trump the
lack of consideration and require the contract to be enforced. This Court finds no
policy concerns here that would require it to enforce a contract that is void for lack of
consideration. The Plaintiff’s motion for summary judgment should be granted.
Because the Court is able to decide this matter on the papers, the motion for oral
argument should be denied.
IV. Conclusion
19
Henry Aff. ¶¶ 4-5.
20
O.C.G.A. § 33-24-44(d.1).
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For the reasons stated above, the Plaintiff’s Motion for Summary Judgment
[Doc. 28] is GRANTED and the Defendant Tiarra Poindexter’s Motion for Oral
Argument [Doc. 33] is DENIED.
SO ORDERED, this 18 day of April, 2016.
/s/Thomas W. Thrash
THOMAS W. THRASH, JR.
United States District Judge
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