National Casualty Company v. Georgia School Board Association, Inc.

Filing 30

OPINION AND ORDER denying Plaintiff's Motion for Summary Judgment 23 and granting Defendant's Motion for Partial Summary Judgment 22 . Signed by Judge William S. Duffey, Jr on 6/2/17. (ddm)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
NATIONAL CASUALTY
COMPANY,
Plaintiff,
v.

1:16-cv-691-WSD

GEORGIA SCHOOL BOARDS
ASSOCIATION-RISK
MANAGEMENT FUND,
Defendant.

OPINION AND ORDER
This matter is before the Court on Defendant Georgia School Boards-Risk
Management Fund’s (“Risk Fund”) Motion for Partial Summary Judgment [22],
and Plaintiff National Casualty Company’s (“National”) Motion for Summary
Judgment [23].
I.

BACKGROUND
A.

Introduction

This is a dispute between an insurance company and a risk management
agency. National and Risk Fund provide overlapping liability coverage to
members of a professional association. National’s insurance policies require
National to provide primary coverage unless coverage is available from another

source. If other coverage is available, National’s coverage is only excess.
Risk Fund’s coverage agreements contain a similar provision, under which
Risk Fund’s coverage is excess if other insurance covering the same risk is in
place. These apparently conflicting provisions came to a head when several
individuals incurred liabilities covered by both parties. Each party contends that
the other has primary coverage obligations for the liabilities claimed, and that its
own coverage obligations are excess. The Court is required to determine the extent
of the parties’ coverage obligations in light of the competing provisions.
B.

National’s Coverage

National is an insurance company. (Defendant’s Statement of Material Facts
[22.2] (“DSMF”) ¶ 1). The Professional Association of Georgia Educators
(“PAGE”) is a professional association of teachers and administrators. (DSMF
¶ 2). National issued insurance policies to PAGE for the July 1, 2012, to
July 1, 2013, and July 1, 2013, to July 1, 2014, periods (together, the “Policies”).
(DSMF ¶¶ 3-4). The Policies provide the following liability coverage to PAGE
members:
Coverage A—Liability Coverage
The Company will pay on behalf of the insured all sums which the
insured shall become obligated to pay by reason of liability imposed
by law or for monetary damages resulting from any CLAIM made
against the insured arising out of an OCCURRENCE in the course of
2

the activities of the insured in his/her professional capacity and caused
by any acts or omissions of the insured or any other person for whose
acts the insured is legally liable. The Company shall defend any suit
seeking monetary damages which are payable under the terms of the
policy, even if such suit be groundless, false or fraudulent; but the
Company may make such investigation, negotiation and settlement of
any CLAIM or suit as it may deem expedient.
(DSMF ¶¶ 5-6).
The Policies contain a provision limiting coverage for liabilities covered by
“other insurance” (National’s “Other Coverage Provision”):
Other Insurance
This policy is specifically excess if the insured has other insurance of
any kind whatsoever, whether primary or excess, or if the insured is
entitled to defense or indemnification from any other source
whatsoever, including by way of example only, such sources as state
statutory entitlements or provisions. Other insurance includes, but is
not limited to, insurance policies, state pools, and programs of
self-insurance, purchased or established by or on behalf of any
EDUCATIONAL UNIT, to insure against CLAIMS arising from
activities of the EDUCATIONAL UNIT or its employees, regardless
of whether or not the policy or program provides primary, excess,
umbrella or contingent coverage.
In addition, Coverage A [Liability Coverage] is specifically excess
over coverage provided by any EDUCATIONAL UNIT’S or school
board’s errors and omissions or general liability policies, purchased
by the insured’s employer or former employers, or self-insurance
program or state pools, whether collectible or not, and it is specifically
excess over coverage provided by any policy of insurance which
purports to be excess to a policy issued to the insured.
(DSMF ¶ 7).
3

C.

Risk Fund’s Coverage

Risk Fund is a risk management agency created under O.C.G.A. § 20-2-2001
et seq. (DSMF ¶¶ 16-17). It is an association formed by boards of education to
share their liability risks. (O.C.G.A. § 20-2-2001(6); DSMF ¶ 17). Risk Fund’s
members include Columbia County Schools, Douglas County School District,
Muscogee County School District, and McIntosh County Board of Education.
(DSMF ¶¶ 20-23). Risk Fund “is not an insurance company or an insurer” under
Georgia insurance law. O.C.G.A. § 20-2-2004.
Risk Fund’s risk-sharing arrangement is set out in coverage agreements
entered into by Risk Fund and its members (the “Coverage Agreements”). (DSMF
¶ 18). Under the Coverage Agreements, Risk Fund provides liability coverage to
members and their employees, including PAGE members.1 The coverage periods
are July 1, 2012, to July 1, 2013, and July 1, 2013, to July 1, 2014. (DSMF ¶¶ 18,
20-23). Risk Fund’s coverage includes liability coverage for personal injury,
bodily injury, property damage, negligent acts, wrongful acts, and sexual abuse.
(See [5.1]-[5.4]). Risk Fund is required to “pay [amounts a] Member becomes
legally obligated to pay as damages” and to “defend . . . Member[s] against any
1

The Coverage Agreements define the boards of education and their
employees, acting within the scope of their employment, as “members.” (See, e.g.,
[5.2] at 14).
4

‘suit’ seeking those damages.” (See, e.g., [5.3] at 30; see generally [5.1]-[5.4]).
Risk Fund’s members are jointly and severally liable “for all legal obligations”
arising under the Coverage Agreements. (DSMF ¶¶ 18-19; O.C.G.A. § 20-22009).
The Coverage Agreements contain a provision limiting coverage where
insurance is available from another source (Risk Fund’s “Other Coverage
Provision”):
4. Insurance.
If valid and collectible insurance is available to the Member for a loss
covered by [Risk Fund] under any coverage parts within this
Coverage Document, the obligations of [Risk Fund] are excess over
the available and collectible insurance.
(DSMF ¶¶ 25, 27).2
D.

Individuals Covered by Both National and Risk Fund

From 2014 to 2016, several lawsuits were filed against PAGE members
covered under National’s Policies and Risk Fund’s Coverage Agreements (the
“Covered Individuals”). (See DSMF ¶¶ 28-32). In June 2014, for example, an
elementary school student filed a negligence action against his school principal, a
2

This version of Risk Fund’s Other Coverage Provision appears in the
Coverage Agreement for July 1, 2012, to July 1, 2013. The version of the Other
Coverage Provision in the Coverage Agreements for July 1, 2013, to July 1, 2014,
omits the word “parts” but otherwise is identical.
5

PAGE member and employee of Columbia County School District. ([5.7]; DSMF
¶ 29). The student alleged that, as a result of the principal’s negligence, he fell
from a playground ladder and injured himself. ([5.7] ¶¶ 13, 17). In
September 2015, a high school student filed a negligence action against her
chemistry teacher, a PAGE member and employee of Douglas County School
District. ([5.8]; DSMF ¶ 28). The student alleged that, as a result of the teacher’s
negligence, she was burned during a chemistry experiment. ([5.8] ¶¶ 5-23).
Similar lawsuits have been filed against other PAGE members employed by
Risk Fund’s members, including employees of Columbia County School District,
Muscogee County School District, and McIntosh County School District. (DSMF
¶¶ 30-32).
National refused to defend or indemnify these Covered Individuals until
Risk Fund’s coverage, under the Coverage Agreements, was exhausted. (See
DSMF ¶¶ 33-38). National claims the Other Coverage Provision in the Policies
makes National only an excess insurer. Risk Fund contends that National is the
primary insurer and that Risk Fund is only required to provide excess coverage.
Faced with National’s refusal to provide primary coverage, Risk Fund defended,
indemnified and paid settlement amounts on behalf of the Covered Individuals,
pending resolution of this action. (See DSMF ¶¶ 33-38).
6

E.

Procedural History

On March 3, 2016, National filed its Complaint for Declaratory
Judgment [1] and, on April 28, 2016, it filed its Amended Complaint for
Declaratory Judgment [4] (“Amended Complaint”). The Amended Complaint
seeks a declaration that Risk Fund has “the primary duty to defend and indemnify”
Covered Individuals against whom suits have been filed. (Compl. at 9-10).
On May 20, 2016, Risk Fund filed its Counterclaim for Breach of Contract,
Contribution, Unjust Enrichment and Declaratory Judgment [5]. Count 1 asserts a
breach of contract claim, alleging that National violated the Policies by refusing to
defend or indemnify the Covered Individuals. ([5] ¶ 101). Count 2 asserts a claim
for unjust enrichment and equitable contribution, alleging that National was
unjustly enriched by Risk Fund’s defense and indemnification of Covered
Individuals, and that Risk Fund is equitably entitled to contribution from National
for amounts paid by Risk Fund. ([5] ¶¶ 108-109). Count 3 seeks a declaratory
judgment that National is the primary insurer of PAGE members covered under the
Policies and the Coverage Agreements or, in the alternative, that National and
Risk Fund must share, pro rata, defense and indemnity obligations. ([5] at 39).
Count 4 seeks attorney’s fees, under O.C.G.A. § 13-6-11, on the grounds that

7

National acted in bad faith, was stubbornly litigious, or caused Risk Fund
unnecessary trouble and expense. ([5] at 40).
On September 16, 2016, National filed its Motion for Summary Judgment
on its claim for declaratory relief and on Risk Fund’s counterclaim for declaratory
relief. Risk Fund also filed its Motion for Partial Summary Judgment, requesting a
declaration that (1) “coverage owed to jointly covered persons under
[National’s Policies] is primary to coverage provided under” Risk Fund’s
Coverage Agreements, or (2) the parties “must share coverage owed to jointly
covered individuals on a pro rata basis.” ([22] at 1-2).
II.

LEGAL PRINCIPLES
A.

Legal Standard for Summary Judgment

“Summary judgment is appropriate where 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 moving party is entitled to judgment as a matter
of law.” Ahmed v. Air France-KLM, 165 F. Supp. 3d 1302, 1309 (N.D. Ga.
2016); see Fed. R. Civ. P. 56. “An issue of fact is material if it ‘might affect the
outcome of the suit under the governing law.’” W. Grp. Nurseries, Inc. v. Ergas,
167 F.3d 1354, 1360 (11th Cir. 1999) (quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986)). “An issue of fact is genuine ‘if the evidence is such
8

that a reasonable jury could return a verdict for the nonmoving party.’” Id. at 1361
(quoting Anderson, 477 U.S. at 248).
The party seeking summary judgment “bears the initial responsibility of
informing the district court of the basis for its motion, and identifying [materials]
which it believes demonstrate the absence of a genuine issue of material fact.”
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “The movant[] can meet this
burden by presenting evidence showing there is no dispute of material fact, or by
showing 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.”
Graham v. State Farm Mut. Ins. Co., 193 F.3d 1274, 1281-82 (11th Cir. 1999).
The moving party need not “support its motion with affidavits or other similar
materials negating the opponent’s claim.” Celotex, 477 U.S. at 323. Once the
moving party has met its initial burden, the nonmoving party must demonstrate that
summary judgment is inappropriate by designating specific facts showing a
genuine issue for trial. Graham, 193 F.3d at 1282. The nonmoving party “need
not present evidence in a form necessary for admission at trial; however, he may
not merely rest on his pleadings.” Id. “[T]he mere existence of some alleged
factual dispute between the parties will not defeat an otherwise properly supported

9

motion for summary judgment; the requirement is that there be no genuine issue of
material fact.” Anderson, 477 U.S. at 247-48.
“If the evidence presented by the non-moving party is merely colorable, or is
not significantly probative, summary judgment may be granted.” Apcoa,
Inc. v. Fid. Nat. Bank, 906 F.2d 610, 611 (11th Cir. 1990) (internal quotation
marks omitted) (quoting Anderson, 477 U.S. at 250). The party opposing
summary judgment “must do more than simply show that there is some
metaphysical doubt as to the material facts . . . . Where the record taken as a whole
could not lead a rational trier of fact to find for the nonmoving party, there is no
genuine issue for trial.” Scott v. Harris, 550 U.S. 372, 380 (2007) (internal
quotation marks omitted) (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith
Radio Corp., 475 U.S. 574, 586-87 (1986)); cf. Miller v. Kenworth of Dothan, Inc.,
277 F.3d 1269, 1275 (11th Cir. 2002) (a party is entitled to summary judgment if
“the facts and inferences point overwhelmingly in favor of the moving party, such
that reasonable people could not arrive at a contrary verdict” (quoting
Combs v. Plantation Patterns, 106 F.3d 1519, 1526 (11th Cir. 1997) (internal
quotation marks omitted))).
“At the summary judgment stage, facts must be viewed in the light most
favorable to the nonmoving party only if there is a ‘genuine’ dispute as to those
10

facts.” Scott, 550 U.S. at 380. “When opposing parties tell two different stories,
one of which is blatantly contradicted by the record, so that no reasonable jury
could believe it, a court should not adopt that version of the facts for purposes of
ruling on a motion for summary judgment.” Id. “[C]redibility determinations, the
weighing of evidence, and the drawing of inferences from the facts are the function
of the jury.” Graham, 193 F.3d at 1282. “The nonmovant need not be given the
benefit of every inference but only of every reasonable inference.” Id.
Rule 56(c) mandates the entry of summary judgment, after adequate
time for discovery and upon motion, against a party who fails to make
a showing sufficient to establish the existence of an element essential
to that party’s case, and on which that party will bear the burden of
proof at trial. In such a situation, there can be “no genuine issue as to
any material fact,” since a complete failure of proof concerning an
essential element of the nonmoving party’s case necessarily renders
all other facts immaterial.
Celotex, 477 U.S. at 322-23; see Freeman v. JPMorgan Chase Bank N.A.,
-- Fed. App’x --, 2017 WL 128002, at *4 (11th Cir. Jan. 13, 2017) (same);
Herzog v. Castle Rock Entm’t, 193 F.3d 1241, 1247 (11th Cir. 1999) (“If the
non-movant in a summary judgment action fails to adduce evidence which would
be sufficient, when viewed in a light most favorable to the non-movant, to support
a jury finding for the non-movant, summary judgment may be granted.”).

11

B.

Insurance Contract Interpretation under Georgia Law

“Insurance in Georgia is a matter of contract and the parties to the contract
of insurance are bound by its plain and unambiguous terms.” Hurst v. Grange Mut.
Cas. Co., 470 S.E.2d 659, 663 (Ga. 1996); see Yeomans & Assoc. Agency,
Inc. v. Bowen Tree Surgeons, Inc., 618 S.E.2d 673, 677 (Ga. Ct. App. 2005)
(“[A]n insurance policy is simply a contract, the provisions of which should be
construed as any other type of contract.”).
When language in the insurance policy “is explicit and unambiguous, the
court’s job is simply to apply the terms of the contract as written, regardless of
whether doing so benefits the carrier or the insured.” Georgia Farm Bureau Mut.
Ins. Co. v. Smith, 784 S.E.2d 422, 424 (Ga. 2016); see Donaldson v. Pilot Life Ins.
Co., 341 S.E.2d 279, 280 (Ga. Ct. App. 1986) (“Where the language fixing the
extent of coverage is unambiguous, . . . and but one reasonable construction is
possible, this court must enforce the contract as written.”). “[T]he plain meaning
of the terms must be given full effect without straining to extend coverage where
none was contracted or intended.” State Farm Fire & Cas. Co. v. Bauman, 723
S.E.2d 1, 3 (Ga. Ct. App. 2012). “[A]n insurance company is free to fix the terms
of its policies as it sees fit, so long as such terms are not contrary to law.”
Henning v. Cont’l Cas. Co., 254 F.3d 1291, 1295 (11th Cir. 2001) (internal
12

quotation marks omitted) (quoting Cont’l Cas. Co. v. H.S.I. Fin. Servs., Inc., 466
S.E.2d 4, 6 (Ga. 1996)).
If the terms of the policy are ambiguous, “the statutory rules of contract
construction [are] applied.” Pomerance v. Berkshire Life Ins. Co. of Am., 654
S.E.2d 638, 640 (Ga. Ct. App. 2007). Ambiguities in the policy are “strictly
construed against the insurer as the drafter of the document.” Federated Mut. Ins.
Co. v. Ownbey Enterprises, Inc., 627 S.E.2d 917, 921 (Ga. App. Ct. 2006); see
Giddens v. Equitable Life Assur. Soc. of U.S., 445 F.3d 1286, 1297 (11th Cir.
2006) (“[W]hen a policy is ambiguous, or is capable of two reasonable
interpretations, it is construed in the light most favorable to the insured and against
the insurer.”). “[A] word or a phrase is ambiguous when it is of uncertain meaning
and may be fairly understood in more ways than one.” Ownbey Enterprises, 627
S.E.2d at 921 (citation and internal quotation marks omitted); see Bogard v. InterState Assur. Co., 589 S.E.2d 317, 318 (Ga. Ct. App. 2003) (“Under Georgia law,
an insurance contract is considered ambiguous only if its terms are susceptible to
two or more reasonable interpretations.”).
“[T]he interpretation of an insurance policy, including the determination and
resolution of ambiguities, is a question of law for the court to decide.” Giddens,

13

445 F.3d at 1297 (citing O.C.G.A. § 13-2-1); see Pomerance, 654 S.E.2d at 640
(“The proper construction of a contract is a question of law for a court to decide.”).
III.

DISCUSSION
The dispute here requires the Court to interpret apparently conflicting

provisions in National’s Policies and Risk Fund’s Coverage Agreements. National
argues its Other Coverage Provision requires it to provide excess, rather
than primary, coverage to the Covered Individuals because “other insurance” is
available under Risk Fund’s Coverage Agreements. Risk Fund argues its own
Other Coverage Provision requires it to provide only excess coverage because
“valid and collectible” insurance exists under National’s Policies. That is, each
party claims the other is required to provide primary coverage to the Covered
Individuals, and that its own coverage obligations are excess. The question here is
how to reconcile the parties’ competing interpretations.
A.

Whether National’s Other Coverage Provision Applies to Risk Fund’s
Coverage

National’s Other Coverage Provision states:
Other Insurance
This policy is specifically excess if the insured has other insurance of
any kind whatsoever, whether primary or excess, or if the insured is
entitled to defense or indemnification from any other source
whatsoever, including by way of example only, such sources as state
statutory entitlements or provisions. Other insurance includes, but is
14

not limited to, insurance policies, state pools, and programs of
self-insurance, purchased or established by or on behalf of any
EDUCATIONAL UNIT, to insure against CLAIMS arising from
activities of the EDUCATIONAL UNIT or its employees, regardless
of whether or not the policy or program provides primary, excess,
umbrella or contingent coverage.
In addition, Coverage A [Liability Coverage] is specifically excess
over coverage provided by any EDUCATIONAL UNIT’S or school
board’s errors and omissions or general liability policies, purchased
by the insured’s employer or former employers, or self-insurance
program or state pools, whether collectible or not, and it is specifically
excess over coverage provided by any policy of insurance which
purports to be excess to a policy issued to the insured.
(DSMF ¶ 7).
Risk Fund contends its coverage is not “other insurance” within the meaning
of National’s Other Coverage Provision because, under Georgia law and the terms
of the Coverage Agreements, Risk Fund is not an insurer and does not provide
“insurance” coverage.3 National argues Risk Fund’s coverage falls within
National’s Other Coverage Provision because (1) the provision expressly applies to
coverage provided by “state pools” and “programs of self-insurance,” and (2) the
provision is triggered when “the insured is entitled to defense or indemnification
from” any source other than insurance. (DSMF ¶ 7).
3

Georgia law provides that Risk Fund “is not an insurance company or an
insurer under” Georgia’s insurance code, and each Coverage Agreement states
“This Coverage Document is not an insurance contract.” O.C.G.A. § 20-2-2004;
([5.1]-[5.4]).
15

National’s Other Coverage Provision states that coverage “is specifically
excess over coverage provided by any EDUCATIONAL UNIT’S or school
board’s . . . self-insurance program or state pools . . . .” (DSMF ¶ 7). It is
undisputed that Risk Fund is an “association formed by boards of education” to
develop and administer a “group self-insurance fund[],” which is a “pool of public
moneys established . . . from contributions of [Risk Fund’s] members in order to
pool the risks of general liability.” O.C.G.A. §§ 20-2-2001(5)-(6). Risk Fund thus
provides coverage through a “self-insurance program or state pool[],” and
Risk Fund’s coverage falls within National’s Other Coverage Provision. (DSMF
¶ 7).
Even if Risk Fund did not provide coverage through a “self-insurance
program or state pool,” its coverage otherwise falls within National’s Other
Coverage Provision. The provision states that “[t]his policy is specifically excess
if the insured has other insurance of any kind whatsoever, whether primary or
excess, or if the insured is entitled to defense or indemnification from any other
source whatsoever, including by way of example only, such sources as state
statutory entitlements or provisions.” (DSMF ¶ 7 (emphasis added)). The policy
terms plainly encompass both insurance and non-insurance sources of
indemnification or defense. Even accepting Risk Fund’s argument that its
16

coverage does not constitute “insurance,” Risk Fund provides coverage
“entitl[ing] [its members] to defense or indemnification.” This brings Risk Fund’s
coverage within National’s Other Coverage Provision. That the provision is
entitled “Other Insurance” does not change this result, because the body of the
provision unambiguously applies to coverage from sources other than commercial
insurance. See In re G-I Holdings, Inc., 755 F.3d 195, 203 (3d Cir. 2014) (“The
title of a section cannot contradict or rewrite the plain language of the contractual
provisions within that section.”); Lumenate Techs., LP v. Baker, No. 1:14-cv-125,
2014 WL 1664476, at *3 (S.D. Ohio Apr. 25, 2014) (“Section headings in a
contract are not binding provisions, they merely guide the reader to certain
provisions.”); 17A Am. Jur. 2d Contracts § 372 (2d ed. May 2017 Update)
(“Although courts may consider the title of a contract provision or section to
interpret a contract, the greater weight must be given to the operative contractual
clauses of the agreement.”).
B.

Reconciliation of National’s Other Coverage Provision with
Risk Fund’s Other Coverage Provision

The Court next considers how to reconcile National’s Other Coverage
Provision with Risk Fund’s Other Coverage Provision. Both provisions purport to
limit coverage where coverage is available from another source. “Georgia caselaw
indicates that, when two insurance policies covering the same risk both contain
17

‘other insurance’ clauses that cannot be reconciled, those clauses cancel each other
out and the insurers share in liability pro rata.” The Am. Cas. Co. of
Reading v. MAG Mut. Ins. Co., 185 F. App’x 921, 925 (11th Cir. 2006). “Excess
provisions are irreconcilable, regardless of how they are written, if both policies in
question provide that if there be other insurance, each shall be responsible only for
excess over any other valid and collectible insurance.” St. Paul Fire & Marine Ins.
Co. v. Valley Forge Ins. Co., No. 1:06-cv-2074, 2009 WL 789612, at *4 (N.D. Ga.
Mar. 23, 2009); see State Farm Fire & Cas. Co. v. Holton, 205 S.E.2d 872, 874
(Ga. Ct. App. 1974) (“Where . . . both insurers attempt to limit their liability to
excess coverage ‘if there is other insurance,’ then the clauses are irreconcilable,
cancel each other out, and the liability is to be divided equally between them.”).
National’s Other Coverage Provision states:
Other Insurance
This policy is specifically excess if the insured has other insurance of
any kind whatsoever, whether primary or excess, or if the insured is
entitled to defense or indemnification from any other source
whatsoever, including by way of example only, such sources as state
statutory entitlements or provisions. Other insurance includes, but is
not limited to, insurance policies, state pools, and programs of
self-insurance, purchased or established by or on behalf of any
EDUCATIONAL UNIT, to insure against CLAIMS arising from
activities of the EDUCATIONAL UNIT or its employees, regardless
of whether or not the policy or program provides primary, excess,
umbrella or contingent coverage.
18

In addition, Coverage A [Liability Coverage] is specifically excess
over coverage provided by any EDUCATIONAL UNIT’S or school
board’s errors and omissions or general liability policies, purchased
by the insured’s employer or former employers, or self-insurance
program or state pools, whether collectible or not, and it is specifically
excess over coverage provided by any policy of insurance which
purports to be excess to a policy issued to the insured.
(DSMF ¶ 7). Risk Fund’s Other Coverage Provision states:
Insurance.
If valid and collectible insurance is available to the Member for a loss
covered by [Risk Fund] under any coverage parts within this
Coverage Document, the obligations of [Risk Fund] are excess over
the available and collectible insurance.
(DSMF ¶¶ 25, 27).
“Each [of these] excess clause[s] plainly attempts, in the circumstances of
the instant case, to shift primary liability to the ‘other insurance,’ that is, the other
policy. . . . Thus, the excess clauses cancel each other out, and pro rata distribution
of liability is warranted.” MAG Mut. Ins. Co., 185 F. App’x at 927; see, e.g.,
Allied Prop. & Cas. Ins. Co. v. Bed Bath & Beyond, Inc., No. 1:12-cv-01265,
2014 WL 1292456, at *10 (N.D. Ga. Mar. 31, 2014) (“[B]oth policies are primary
unless other insurance applies, in which case both are excess. It follows that the
clauses are irreconcilable. Therefore, the parties must share with Defendants, on a
pro rata basis, any covered cost of defending [the insured] that was incurred before
the exhaustion of the policy limits.” (internal citations omitted)).
19

This conclusion is consistent with cases applying Georgia law to similar
provisions in disputes over which insurer is responsible for providing coverage.
In Philadelphia Indem. Ins. Co. v. First Multiple Listing Servs., Inc., 173 F. Supp.
3d 1314 (N.D. Ga. 2016), the court considered two competing “other insurance”
provisions. The first stated: “If the Insured has any other insurance for Claims
covered hereunder, the insurance provided by this Policy shall be excess over such
other insurance, regardless of whether such other insurance is collectible or
designated as primary or excess.” Id. at 1322. The second provision stated:
“Insurance as is provided by this policy shall apply only as excess over any other
valid and collectible insurance available to any insured . . . .” Id. at 1323.
The court concluded the provisions were irreconcilable: “Since the Other
Insurance provisions in the two policies each purport to be excess over other
insurance, the provisions cannot be reconciled and cancel each other out. As such,
[the two insurance companies] share in liability pro rata.” Id.; see also Valley
Forge Ins. Co., 2009 WL 789612, at *5-7 (requiring a pro rata distribution of
liability where (1) one policy stated: “This insurance is excess over any of the
other insurance, whether primary, excess, contingent or any other basis,” and
(2) the second policy stated: “If there is any other valid and collectible insurance

20

for injury or damage covered by this agreement, . . . we’ll apply this agreement as
excess insurance over any part of any other insurance which provides [coverage]”).
The reasoning in these cases is sound and applies here. The Court finds that
Risk Fund is entitled to summary judgment on its request for a declaration that
National’s Other Coverage Provision is irreconcilable with Risk Fund’s Other
Coverage Provision, and that the parties “must share defense and indemnity
coverage on a pro rata basis.” ([22.1] at 23). Risk Fund’s Motion for Partial
Summary Judgment is granted, and National’s Motion for Summary Judgment is
denied.4
4

National argues its Other Coverage Provision trumps Risk Fund’s Other
Coverage Provision, because the former is a “super excess” clause—in that it
“expressly provides that coverage . . . is excess to other available coverage whether
that coverage is primary, excess or contingent”—and the latter is only a “simple
excess” clause, “meaning it generally states that the coverage will be excess to
other available insurance.” ([26] at 13). This distinction has not been recognized
in Georgia, is inconsistent with cases applying Georgia law, and finds limited
support in cases from other jurisdictions. See Home Ins. Co. v. St. Paul Fire &
Marine Ins. Co., 229 F.3d 56, 61 (1st Cir. 2000) (stating that “most courts” reject
the theory that “the primary insurer [is] the one whose ‘other insurance’ clause [is]
more general in scope, favoring instead the doctrine of mutual repugnancy, under
which two insurers’ excess clauses are thought to cancel each other out”); ([28] at
8-10 (collecting cases)). National’s approach encourages “an exercise in
meaningless semantics,” State Farm Fire & Cas. Co. v. LiMauro, 482 N.E.2d 13
(N.Y. Ct. App. 1985), and risks igniting a “draftsmanship battle by which insurers
seek to ‘outspecific’ one another in an attempt to shift the primary burden of a loss
on to the other insurer involved,” State Farm Mut. Auto. Ins. Co. v. U. S. Fid. &
Guar. Co., 490 F.2d 407, 411 (4th Cir. 1974).
21

IV.

CONCLUSION
For the foregoing reasons,
IT IS HEREBY ORDERED that Plaintiff’s Motion for Summary

Judgment [23] is DENIED.
IT IS FURTHER ORDERED that Defendant’s Motion for Partial
Summary Judgment [22] is GRANTED.

SO ORDERED this 2nd day of June, 2017.

22