Opinion
CASE NO.: 7:18-CV-00126 (WLS)
09-26-2019
COLONY INSURANCE COMPANY, Plaintiff/Counter-Defendant, v. ALL CITIES ENTERPRISES, INC., Defendant/Counter-Plaintiff. All Cities Enterprises, Inc., Third-Party Plaintiff, v. Georgia Insurance Brokerage, Inc. and Siuprem, Inc., Third-Party Defendants.
David Pettinato, Tampa, FL, Eric Philip Benedict, Clyde & Co. US LLP, Atlanta, GA, Philip W. Savrin, Matthew Brandon Howard, Atlanta, GA, for Third-Party Plaintiff. Donald B. Brown, William R. Story, Atlanta, GA, for Third-Party Defendants.
David Pettinato, Tampa, FL, Eric Philip Benedict, Clyde & Co. US LLP, Atlanta, GA, Philip W. Savrin, Matthew Brandon Howard, Atlanta, GA, for Third-Party Plaintiff.
Donald B. Brown, William R. Story, Atlanta, GA, for Third-Party Defendants.
ORDER
W. LOUIS SANDS, SR. JUDGE
Before the Court is Plaintiff Colony Insurance Company's Motion for Summary Judgment. (Doc. 64.) For the following reasons, Plaintiff's Motion for Summary Judgment is GRANTED .
I. PROCEDURAL HISTORY
Plaintiff Colony Insurance Company ("Colony") brought this action on August 15, 2018 seeking a declaratory judgment that it has no legal obligation to cover Defendant All Cities Enterprises, Inc.'s ("All Cities") losses and requesting a jury trial to resolve all triable issues. (Doc. 1.) All Cities counterclaimed against Colony asserting claims of breach of contract and bad faith damages. (Doc. 10 at 12-15.) All Cities also filed a Third-Party Complaint against Georgia Insurance Brokerage, Inc. ("GIB") for negligence (id. at 15-29) and a Third-Party Complaint against Siuprem, Inc. for negligence (id. at 29-43.) The Parties have since filed several other motions, some of which remain pending. (Docs. 44, 49, 75, 106, 117, 118, 132, 140, 141, 148.)
Pursuant to a joint proposed order filed by Colony and All Cities, All Cities' claim for attorney's fees and expenses was stricken. See Doc. 30.
On April 5, 2019, Colony filed a Motion for Summary Judgment arguing that it is entitled to a conclusive presumption that it is not liable for All Cities' losses. (Doc. 64.) After receiving an extension (Doc. 94), All Cities timely responded on July 1, 2019. (Doc. 112.) After receiving an extension, Colony timely replied. (Doc. 130.) Accordingly, Colony's Motion for Summary Judgment (Doc. 64) is ripe for review. See M.D. Ga. L.R. 7.3.1(A).
II. SUMMARY JUDGMENT STANDARD
A. Federal Rule of Civil Procedure 56
"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." Chow v. Chak Yam Chau , 555 F. App'x 842, 846 (11th Cir. 2014) (citing 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) (quoting 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, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). "It is ‘genuine’ if the record taken as a whole could lead a rational trier of fact to find for the non-moving 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, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ).
The movant bears the initial burden of showing, by citing to the record, that there is no genuine issue of material fact. See Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Barreto v. Davie Marketplace, LLC , 331 F. App'x 672, 673 (11th Cir. 2009). The movant can meet that burden by presenting evidence showing there is no dispute of material fact, or by demonstrating 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, 106 S.Ct. 2548. 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, 106 S.Ct. 2548. To avoid summary judgment, the nonmoving party must " ‘do more than simply show that there is some metaphysical doubt as to the material facts.’ " Matsushita , 475 U.S. at 586, 106 S.Ct. 1348 (citations omitted). Instead, the non-movant must point to record evidence 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."); Ray Capital Inc. v. M/V Newlead Castellano, IMO No. 9686338 , No. CV 416-093, 2017 WL 4079082, at *7 n. 19, 2017 U.S. Dist. LEXIS 148435, at *21 n. 19 (S.D. Ga. Sep. 13, 2017) ("A party contesting summary judgment has a responsibility to highlight which factual averments are in conflict as well as what record evidence there is to confirm the dispute.... [A] district court is not required to scour the record looking for factual disputes.") (citation omitted). 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).
On a motion for summary judgment, the Court must view all evidence and factual inferences drawn therefrom in the light most favorable to the nonmoving party and determine whether that evidence could reasonably sustain a jury verdict. See Matsushita , 475 U.S. at 587-88, 106 S.Ct. 1348 ; Allen , 121 F.3d at 646. However, the Court must grant summary judgment if there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c).
A. Local Rule 56
Local Rule 56 requires the following:
The respondent to a motion for summary judgment shall attach to the response a separate and concise statement of material facts, numbered separately,
to which the respondent contends there exists a genuine issue to be tried. Response shall be made to each of the movant's numbered material facts. All material facts contained in the moving party's statement which are not specifically controverted by the respondent in respondent's statement shall be deemed to have been admitted, unless otherwise inappropriate.
M.D. Ga. L.R. 56. Here, Colony properly filed a summary judgment motion with a statement of undisputed facts, as required by the Federal Rules of Civil Procedure and the Local Rules of this Court. See Docs. 64 & 64-1. All Cities thereafter filed its own statement of undisputed and disputed facts, which responded to Colony's statement of material facts. (Doc. 112-1.) Defendants then filed a reply thereto. (Doc. 130-1.) Having established the applicable standards, the Court will proceed to the facts.
III. RELEVANT FACTUAL BACKGROUND
The following facts are derived from Colony's Complaint (Doc. 1); All Cities' Answer and Counter Complaint (Doc. 10); Colony's Statement of undisputed material facts (Doc. 64-1); All Cities' statement of undisputed and disputed material facts (Doc. 112-1); Colony's reply thereto (Doc. 130-1); 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 a light most favorable to All Cities as the nonmoving party. See Fed. R. Civ. P. 56 ; Matsushita , 475 U.S. at 587-88, 106 S.Ct. 1348.
All Cities is the owner of commercial property located at 2375 US Highway 84 West in Valdosta, GA ("the Property"). (Doc. 112-1 at 1.) All Cities requested that GIB seek and procure insurance coverage for the Property. Id. at 20. Burns & Wilcox ("B&W") provided All Cities with a quote for coverage from Colony. Id. GIB also forwarded All Cities an insurance quote listing payment options. Id. All Cities chose the installment plan and, consistent with that option, remitted a check for $1,511 (30% of the premium) payable to GIB. Id. at 21; Doc. 64-1 at 10-12.
GIB prepared All Cities' application for insurance coverage listing All Cities' mailing address as 11877 Vernon Ave., West Covina, CA 91790. (Docs. 112-1 at 21; 10-3 at 14.) All Cities' actual mailing address is 11877 Vernon Ave. in Chino, CA (not West Covina). (Doc. 112-1 at 22.) B&W sent GIB an insurance binder listing Colony Insurance Company as the insurance carrier and All Cities as the insured with the incorrect mailing address in West Covina. (Doc. 64-1 at 17.) The binder indicated that coverage would be effective December 6, 2017 to December 6, 2018. Id. Thereafter, on December 8, 2017, GIB completed an Insurance Premium Finance Agreement reflecting All Cities' down payment of $1,511 with a remainder of $3,556.92 being financed by Siuprem, Inc., a premium finance company. (Doc. 112-1 at 23.) All Cities contends that GIB executed this agreement unilaterally without the knowledge or consent of All Cities and that it did not authorize GIB to finance the premium with Siuprem. Id. at 23-24.
Thereafter, Siuprem sent notices, including payment notices and invoices, to All Cities by United States Mail at the "West Covina" address that had been provided to it by GIB. Id. at 24; Doc. 64-1 at 24-31. One such notice stated that All Cities has "appointed Siuprem, Inc., attorney-in-fact, with full power and authority to cancel the above policy and collect any unearned premiums and/or dividends due." (Doc. 112-1 at 25.) On January 8, 2018, Siuprem sent All Cities a 10 Day Notice of Intent to Cancel All Cities' insurance policy. (Doc. 10-9.) On January 19, 2018, Siuprem sent All Cities a Notice of Cancellation stating that the policy was being cancelled effective January 21, 2018 with a balance due of $3,805.26. (Doc. 10-10; Doc. 64-1 at 33.) Siuprem sent the cancellation notice to Colony despite knowledge that its notices to All Cities had been returned as undeliverable by the Postal Service. (Doc. 112-1 at 26.) Colony endorsed the policy as cancelled effective January 21, 2018. (Doc. 1-5.) On February 2, 2018, there was an accidental and/or fortuitous fire loss at the Property that resulted in a total loss. (Doc. 112-1 at 26; Doc. 64-1 at 36; Doc. 130-1 at 2.) Colony denied coverage to All Cities on the basis that the policy was cancelled effective January 21, 2018, prior to the fire. (Doc. 112-1 at 27.)
IV. DISCUSSION
A. Conclusive Presumption
Under Georgia law, "[w]hen a premium finance agreement contains a power of attorney enabling the premium finance company to cancel any insurance contract or contracts listed in the agreement," "[n]ot less than ten days' written notice shall be delivered to the insured or sent by electronic means or mailed to the insured at his or her address shown in the agreement of the intent of the premium finance company to cancel the insurance contract unless the default is cured within such ten-day period." O.C.G.A. § 33-22-13(a) - (b). "After expiration of such ten-day period, the premium finance company may thereafter in the name of the insured cancel such insurance contract or contracts by mailing or delivering to the insurer a notice of cancellation; and the insurance contract shall be canceled as if the notice of cancellation had been submitted by the insured...." O.C.G.A. § 33-22-13(c)(1). "The receipt of the notice of cancellation ... by the insurer shall create a conclusive presumption that the premium finance company has fully complied with all the requirements of this Code section, that the insurer is entitled to rely on such presumption, and that the cancellation of the insurance contract or contracts is concurred in and authorized by the insured." Id. § 33-22-13(c)(2). "No liability of any nature whatsoever shall be imposed upon the insurer as a result of the failure by the insured to receive the notice of the action taken required by paragraph (1) of this subsection or as a result of the failure of the insurance premium finance company to comply with any of the requirements of this Code section." Id.
Colony argues that it is entitled to this conclusive presumption regardless of GIB's actions or Siuprem's errors in sending the notices to All Cities. (Doc. 64.) All Cities contends, however, that the conclusive presumption does not apply because both GIB and Siuprem acted without All Cities' authority and that the notices sent by Siuprem did not comply with Georgia law. (Doc. 112.)
Prior to 1995, Georgia required that the insurance company prove "strict compliance with the cancellation provisions" and that "any ambiguities of the notice be resolved in favor of the insured." Ga. Mut. Ins. Co. v. Gardner , 205 Ga. App. 458, 461-62, 422 S.E.2d 324 (1992) ; Clark v. Superior Ins. Co. , 209 Ga. App. 290, 291, 433 S.E.2d 394 (1993). Indeed, summary judgment was not granted to insurance companies where they had not shown the premium finance company's full compliance with § 33-22-13. See, e.g., Clark , 209 Ga. App. at 291, 433 S.E.2d 394 ("Since proper notice of intent to cancel was not given to the agency, ... [s]ummary judgment was improperly granted in favor of the insurer."); Gardner , 205 Ga. App. at 461-62, 422 S.E.2d 324 ("[S]ince proper notice was not given of the intent to cancel, ... the trial court correctly granted summary judgment in favor of the [insured]"). But in 1995, the Georgia legislature added the conclusive presumption subsection, O.C.G.A. § 33-22-13(c)(2), thereby foreclosing any question as to whether liability can be imposed on an insurance company that has received a notice of cancellation from a premium finance company that purports to have a power of attorney to effect cancellation. The Code is clear that "[n]o liability of any nature whatsoever" can be imposed on the insurance company. O.C.G.A. § 33-22-13(c)(2).
All Cities contends that Siuprem's Insurance Premium Finance Agreement (the "Agreement") was signed electronically by GIB who did not have a power of attorney nor any other permission to sign on All Cities' behalf. (Doc. 112 at 3-4, 12-13.) All Cities further argues that the Agreement required "IF THE INSURED IS A CORPORATION, OR PARTNERSHIP, AN AUTHORIZED OFFICER OR GENERAL PARTNER MUST SIGN." (Doc. 112 at 3) (citing 10-6 at 2.) Thus, All Cities argues that the Agreement is not valid because GIB did not comply with its terms. Colony replies that the statute requires only that the agreement be signed "by or on behalf of the insured," and that GIB signed it on behalf of All Cities. (Doc. 130 at 5) (citing O.C.G.A. § 33-22-8(a)(1) ). For purposes of whether it should be held liable, Colony is not wrong. The Georgia Code unambiguously provides that "[t]he receipt of the notice of cancellation ... by the insurer shall create a conclusive presumption that the cancellation of the insurance contract or contracts is concurred in and authorized by the insured." O.C.G.A. § 33-22-13(c)(2). Thus, the statute insulates Colony even though GIB may have exceeded All Cities' authority. Furthermore, if the Agreement is invalid because it was never authorized by All Cities, then All Cities did not pay the premium to effect an insurance policy with Colony, and liability still does not attach to Colony to cover the damage to the Property. Ray Capital Inc. v. M/V Newlead Castellano, IMO No. 9686338 , No. CV 416-093, 2017 WL 4079082, at *7 n.19, 2017 U.S. Dist. LEXIS 148435, at *21 n.19 (S.D. Ga. Sep. 13, 2017) ("A party contesting summary judgment has a responsibility to highlight ... what record evidence there is to confirm the [factual] dispute.")
All Cities also makes arguments that because proper notice was not sent to the mortgagee pursuant to § 33-22-13(d), that the insurance policy remains in effect. (Doc. 112 at 7, 19.) Again, All Cities is incorrect. Colony has asserted that no mortgagee was listed on the Policy or in the application for insurance, such that it could not have notified a mortgagee. (Doc. 130 at 19.) Moreover, All Cities "has no real standing to argue that its contract should not be terminated until the mortgagee has received notice." Mass. Bay Ins. Co. v. Photographic Assistance Corp. , 732 F. Supp. 1572, 1577 (N.D. Ga. 1990) ("The mortgagee is the entity being harmed and the mortgagee has a remedy against the insurer."); Bouboulis v. Scottsdale Ins. Co. , 860 F. Supp. 2d 1364, 1375 n.11 (N.D. Ga. 2012) ("[T]he defaulting insured (Metro) has no standing to argue that its contract should not be terminated until after a third party has received notice."). All Cities' remaining arguments are also meritless. Not only is Colony not relying "solely" on the first page of the Agreement to support its argument for summary judgment (the operative document is the Notice of Cancellation), but All Cities has already included in the record the entire Agreement (Doc. 10-6). (Doc. 112 at 14.) Furthermore, the Court does not find that the relevant documents are hearsay at this time because Colony has plausibly explained that they are not offered for their truth but for their effect on Colony. (Doc. 130 at 5 n. 3.)
The Court "is not limited to those pieces of evidence the parties have singled out for attention." Ezzard v. Eatonton-Putnam Water & Sewer Auth. , No. 5:11-CV-505 (CAR), 2013 WL 5438604, at *1, 2013 U.S. Dist. LEXIS 139012, at *3 (M.D. Ga. Sep. 27, 2013).
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No Parties have cited, and the Court is not aware of, any Georgia case law interpreting or applying the conclusive presumption subsection, O.C.G.A. § 33-22-13(c)(2). The only apparent cases to have addressed the presumption are in the Eleventh Circuit, which have each found that summary judgment should be granted to the insurer. See, e.g., Kolencik v. Stratford Ins. Co. , 195 F. App'x 855, 857 (11th Cir. 2006) ("[R]egardless of whether Yarbrough was in default at the time Stratford [Insurance Company] received the notice, the premium finance statute insulates Stratford from liability."); Pepper v. Covington Specialty Ins. Co. , 262 F. Supp. 3d 1376 (N.D. Ga. 2017) (granting summary judgment to insurance company because "regardless of whether a policy was canceled properly or not, the die is cast, so to speak").
Thus, for the above-stated reasons, the Court must conclude here that notwithstanding any actions taken by GIB or Siuprem that may have led to the Policy being wrongfully cancelled, "[n]o liability of any nature whatsoever shall be imposed" on Colony. O.C.G.A. § 33-22-13(c)(2). Colony's Motion for Summary Judgment (Doc. 64) is GRANTED on Colony's Complaint against All Cities and on All Cities' Counter-Complaint against Colony. Colony has no legal obligation to cover All Cities' losses arising from the fire on February 2, 2018.
Having granted Colony's Motion for Summary Judgment, the Court hereby DENIES AS MOOT All Cities' Motions to Compel from Colony (Docs. 44, 75, 117) and Colony's Motion to Strike (Doc. 118) and Motion to File a Surreply Brief (Doc. 153).
V. CONCLUSION
For the foregoing reasons, Colony's Motion for Summary Judgment (Doc. 64) is GRANTED on Colony's Complaint against All Cities and on All Cities' Counter-Complaint against Colony. All Cities' Motions to Compel from Colony (Docs. 44, 75, 117) and Colony's Motion to Strike (Doc. 118) and Motion to File a Surreply Brief (Doc. 153) are DENIED AS MOOT . All Cities' third-party claims against GIB remain.
SO ORDERED , this 26th day of September 2019.