Opinion
CIVIL ACTION FILE NO. 1:18-CV-367-TWT
2019-08-29
MT. HAWLEY INSURANCE COMPANY, Plaintiff, v. EAST PERIMETER POINTE APARTMENTS, LP, et al., Defendants.
Kim M. Jackson, William Randal Bryant, Bovis, Kyle, Burch & Medlin, LLC, Atlanta, GA, for Plaintiff. Christina Yousef, Robert Douglas Chesler, Anderson Kill & Olick, Newark, NJ, James J. Leonard, Barnes & Thornburg LLP, Atlanta, GA, for Defendant East Perimeter Pointe Apartments, LP. Matthew Bryan Weaver, Pro Hac Vice, Reed Smith, Miami, FL, Alexander D. Russo, Lawrence J. Bracken, II, Hunton Andrews Kurth LLP, Atlanta, GA, for Defendant Ventron Management, LLC. James Darren Summerville, Kurt G. Kastorf, Maxwell Kent Thelen, Angela R. Fox, The Summerville Firm, LLC, Atlanta, GA, for Defendants Miranda Wilder, Constance Irions, Adrian Johnson.
Kim M. Jackson, William Randal Bryant, Bovis, Kyle, Burch & Medlin, LLC, Atlanta, GA, for Plaintiff.
Christina Yousef, Robert Douglas Chesler, Anderson Kill & Olick, Newark, NJ, James J. Leonard, Barnes & Thornburg LLP, Atlanta, GA, for Defendant East Perimeter Pointe Apartments, LP.
Matthew Bryan Weaver, Pro Hac Vice, Reed Smith, Miami, FL, Alexander D. Russo, Lawrence J. Bracken, II, Hunton Andrews Kurth LLP, Atlanta, GA, for Defendant Ventron Management, LLC.
James Darren Summerville, Kurt G. Kastorf, Maxwell Kent Thelen, Angela R. Fox, The Summerville Firm, LLC, Atlanta, GA, for Defendants Miranda Wilder, Constance Irions, Adrian Johnson.
OPINION AND ORDER
THOMAS W. THRASH, JR., United States District Judge
This is a declaratory judgment action. It is before the Court on the Third Party Defendant Lexington Insurance Company's Motion for Summary Judgment [Doc. 91], the Defendant East Perimeter Pointe Apartments, LP's Motion for Summary Judgment [Doc. 93], the Plaintiff Mt. Hawley Insurance Company's Motion for Summary Judgment [Doc. 95], the Defendant Ventron Management, LLC's Motion for Partial Summary Judgment [Doc. 96], the Third Party Defendant Lexington Insurance Company's Motion for Leave to File Notice of Supplemental Authority [Doc. 119], and the Defendants East Perimeter Pointe Apartments, LP and Ventron Management, LLC's Joint Motion for Leave to File Joint Sur-Reply to Notice [Doc. 125]. For the reasons set forth below, the Third Party Defendant Lexington Insurance Company's Motion for Summary Judgment [Doc. 91] is GRANTED, the Defendant East Perimeter Pointe Apartments, LP's Motion for Summary Judgment [Doc. 93] is DENIED, the Plaintiff Mt. Hawley Insurance Company's Motion for Summary Judgment [Doc. 95] is GRANTED, the Defendant Ventron Management, LLC's Motion for Partial Summary Judgment [Doc. 96] is DENIED, the Third Party Defendant Lexington Insurance Company's Motion for Leave to File Notice of Supplemental Authority [Doc. 119] is DENIED as moot, and the Defendants East Perimeter Pointe Apartments, LP and Ventron Management, LLC's Joint Motion for Leave to File Joint Sur-Reply to Notice [Doc. 125] is DENIED as moot.
I. Background
This case arises out of an assault and murder at an apartment complex in Georgia. The Defendant East Perimeter Pointe Apartments, LP owns the East Perimeter apartment complex in Decatur, Georgia (the "Apartment Complex"). The Apartment Complex, formerly known as Crestview Apartments, is managed by the Defendant Ventron Management, LLC. Marcus Wilder lived in the Apartment Complex in December 2015. On December 26, 2015, Adrian Johnson was visiting Wilder at Wilder's apartment. During this visit, several assailants broke into the apartment unit and assaulted Johnson. That day, Wilder went to visit Johnson in the hospital after the assault, and when he returned to his apartment, one of the assailants was hiding in his closet. The assailant exited the closet and shot Wilder in the head with a handgun. Wilder died outside of his apartment unit.
Def. East Perimeter's Statement of Material Facts ¶ 1 [Doc. 93-1].
Id. ¶ 2.
Third Party Def. Lexington's Statement of Material Facts ¶ 1 [Doc. 91-1].
Id. ¶ 2.
Id.
Id. ¶ 3.
Id. ¶ 4.
Id. ¶ 5.
Two lawsuits were filed arising out of these events. Miranda Wilder, as Administratrix of the Estate of Marcus Wilder, and Constance Irions, as the natural mother and legal guardian of London McKenzie Wilder, filed a lawsuit (the "Wilder Lawsuit") against East Perimeter and Ventron in the State Court of DeKalb County on October 12, 2017, seeking to recover damages from the death of Wilder at the Apartment Complex. Adrian Johnson filed a lawsuit (the "Johnson Lawsuit") against East Perimeter and Ventron in the State Court of DeKalb County on December 4, 2017. The plaintiffs in both lawsuits allege that Ventron and East Perimeter were negligent in failing to maintain, inspect, secure, patrol, and manage the Apartment Complex.
Pl. Mt. Hawley's Statement of Material Facts ¶ 1 [Doc. 95-21].
Id. ¶ 4.
Id. ¶¶ 3, 6.
Both Ventron and East Perimeter had notice of the Wilder and Johnson incidents that occurred on December 26, 2015. East Perimeter and Ventron learned of the shooting of Wilder almost immediately. Ventron completed an "incident report form" on December 26, 2015, less than twelve hours after the shooting, describing the "Murder and Burglary" at Wilder's apartment. That same day, Lou Litvin, Ventron's Chief Operating Officer, sent an email with the subject "SHOOTING AT EPP" to Stephen Greenberg, the President of East Perimeter. This email discussed the murder of Wilder at the Apartment Complex.
Pl. Mt. Hawley's Statement of Material Facts ¶ 12.
Third Party Def. Lexington's Statement of Material Facts ¶ 37.
Id. ¶ 38.
[Doc. 95-5], at 2.
Id.
The Plaintiff Mt. Hawley Insurance Company issued a commercial general liability insurance policy (the "Mt. Hawley Policy") with a policy period of December 15, 2015 through December 15, 2016. The named insured of the Mt. Hawley Policy is listed as "Skinner Select, WCPP Risk Purchasing Group Inc." Skinner Select included various property owners throughout the country as members. The Mt. Hawley Policy contains a notice provision. This provision states that "[i]n the event of any occurrence that may result in a claim against this policy, the insured will immediately report such occurrence and cooperate fully with the following claim adjusting company: RLI ADJUSTING COMPANY." It also states that "[t]his condition is made part of the policy to which it is attached and remains in force beyond the policy expiration." The Mt. Hawley Policy also provides certain "Duties In The Event Of Occurrence, Claim Or Suit." This section provides that:
Pl. Mt. Hawley's Statement of Material Facts ¶ 28.
Id. ¶ 29.
Mt. Hawley Policy [Doc. 95-17], at 26.
Id.
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. To the extent possible, notice should include:
(1) How, when and where the "occurrence" or offense took place;
(2) The names and addresses of any injured persons and witnesses; and
(3) The nature and location of any injury or damage arising out of the "occurrence" or offense.
b. If a claim is made or "suit" is brought against any insured, you must:
(1) Immediately record the specifics of the claim or "suit" and the date received; and
(2) Notify us as soon as practicable.
You must see to it that we receive written notice of the claim or "suit" as soon as practicable.
c. You and any other involved insured must:
(1) Immediately send us copies of any demands, notices, summonses or
legal papers received in connection with the claim or "suit".
Id. at 18.
The Mt. Hawley Policy also provides that "[n]o person or organization has a right [t]o sue us on this Coverage Part unless all of its terms have been fully complied with." Mt. Hawley first received notice of the December 26, 2015 murder of Marcus Wilder on November 13, 2017, when it received a copy of the complaint in the Wilder Lawsuit. It first received notice of the December 26, 2015 assault of Adrian Johnson on December 6, 2017, when Ventron sent Mt. Hawley a copy of an incident report from this event. Mt. Hawley did not receive a copy of the January 8, 2016 letter sent by Miranda Wilder's attorney until it was served on Mt. Hawley during discovery in this action.
Id.
Pl. Mt. Hawley's Statement of Material Facts ¶ 40.
Id. ¶ 41.
Id. ¶¶ 42-43. East Perimeter contends that it never received this letter, and Ventron contends that it did not know of the existence of the Mt. Hawley Policy when it received this letter.
Lexington issued a commercial umbrella liability policy (the "Lexington Policy") to Skinner Select, WCPP Risk Purchasing Group, Inc., a California corporation. WCPP is a risk purchasing group, a mechanism used to insure multiple entities with different owners under a single insurance policy. The Lexington Policy provides that Lexington will pay sums in excess of the "Retained Amount" that the insured becomes legally obligated to pay. The Lexington Policy states that Lexington has the right and duty to defend against any suit against the Insured that seeks damages for "bodily injury" if the total applicable limits for the "scheduled underlying insurance" have been exhausted, or the damages sought would not be covered by the "scheduled underlying insurance." The Mt. Hawley Policy is listed as a "scheduled underlying insurance" in the Lexington Policy.
Lexington Policy, at 1 [Doc. 90-3].
Third Party Def. Lexington's Statement of Material Facts ¶ 18.
Id. ¶ 21.
Id. ¶ 22.
Id. ¶ 34.
Like the Mt. Hawley Policy, the Lexington Policy also contains a notice provision in a section titled "Duties in the Event of an Occurrence, Claim or Suit." It provides that:
Lexington Policy, at 21 [Doc. 90-3].
1. You must see to it that we are notified as soon as practicable of an "occurrence" that may result in a claim or "suit" under this policy. To the extent possible, notice should include:
a. How, when and where the "occurrence" took place;
b. The names and addresses of any injured persons and any witnesses; and
c. The nature and location of any injury or damage arising out of the "occurrence."
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 on the assumption that an "Insured" is liable for the damage claimed....
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";
b. Authorize us to obtain records and other information;
c. Cooperate with us in the investigation, settlement or defense of the claim or "suit"; and
d. Assist us, upon our request, in the enforcement of any right against any person or organization that may be liable to the "Insured" because of injury or damage to which this insurance may also apply.
Id.
The Lexington Policy also provides that no insured can sue Lexington under the policy "unless all of its terms have been fully complied with." Lexington did not receive notice of these lawsuits, or their underlying events, until February 20, 2018. This was more than two years after the shooting, four months after East Perimeter was served with the Wilder Lawsuit, and three months after Ventron was served with the Wilder Lawsuit. Now, each of the parties moves for summary judgment.
Id.
Third Party Def. Lexington's Statement of Material Facts ¶ 45.
Id.
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. The court should view the evidence and any inferences that may be drawn in the light most favorable to the nonmovant. The party seeking summary judgment must first identify grounds to show the absence of a genuine issue of material fact. The burden then shifts to the non-movant, who must go beyond the pleadings and present affirmative evidence to show that a genuine issue of material fact exists. "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."
Adickes v. S.H. Kress & Co. , 398 U.S. 144, 158-59, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970).
Celotex Corp. v. Catrett , 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 257, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
Walker v. Darby , 911 F.2d 1573, 1577 (11th Cir. 1990).
III. Discussion
Two main issues are in dispute. First, the parties disagree as to whether Georgia or California law should apply. Mt. Hawley and Lexington contend that Georgia law should apply, while Ventron, East Perimeter, Wilder, Irions, and Johnson contend that California law should apply. If California law applies, Mt. Hawley and Lexington must show that they, as insurers, were prejudiced by the insureds' failure to provide notice. Second, the parties dispute whether East Perimeter and Ventron have forfeited coverage under the insurance policies due to a failure to give timely notice. The Court discusses each of these in turn.
A. Choice of Law
The parties first dispute which state's laws should govern this case. Mt. Hawley and Lexington argue that Georgia law should apply. In contrast, Ventron, East Perimeter, Wilder, Irions, and Johnson contend that California law should apply. This case is before the Court based on diversity jurisdiction. The Court therefore looks to Georgia's choice of law requirements to determine the appropriate rules of decision. Under Georgia's lex loci contractus choice of law rule governing contracts, "an insurance policy is governed by the law of the state where the policy was issued and delivered to the named insured unless that other state's law is contrary to Georgia public policy." Under this approach, it is a close call as to which state's law would apply. East Perimeter and Ventron argue that the insurance policies were delivered to their insurance broker and agent, Skinner, in California. In contrast, Mt. Hawley contends that the insurance policies were delivered to R-T Specialty, an independent insurance broker, in Georgia.
Frank Briscoe Co., Inc. v. Ga. Sprinkler Co., Inc. , 713 F.2d 1500, 1503 (11th Cir. 1983) ("A federal court faced with the choice of law issue must look for its resolution to the choice of law rules of the forum state.").
Travelers Indemn. Co. of Conn. v. Paschal , No. 4:17-CV-00066-HLM, 2017 WL 8950392, at *5 (N.D. Ga. 2017) ).
See Def. East Perimeter's Mot. for Summ. J., at 14-16 [Doc. 93-2]; Def. Ventron's Mot. for Partial Summ. J., at 8-10 [Doc. 96-1].
However, there is an exception when the law of the foreign state is the common law. "[T]he application of another jurisdiction's laws is limited to statutes and decisions construing those statutes. When no statute is involved, Georgia courts apply the common law as developed in Georgia rather than foreign case law." This rule, sometimes referred to as the "presumption of identity" rule, reflects the formerly prevailing view "that there is one common law that can be properly discerned by wise judges, not multiple common laws by which judges make law for their various jurisdictions." While seemingly "anachronistic," Georgia courts apply this rule because the Georgia Supreme Court has concluded that it is not "bound by the interpretation of the common law" as made by foreign courts. Mt. Hawley and Lexington contend that, under this rule, Georgia law should apply because there is no California statute on point.
In re Tri-State Crematory Litig. , 215 F.R.D. 660, 677 (N.D. Ga. 2003) (internal quotations omitted). The Georgia Supreme Court has recently reaffirmed this exception. See Coon v. The Med. Ctr., Inc. , 300 Ga. 722, 729, 797 S.E.2d 828 (2017) ("In the absence of a statute, however, at least with respect to a state where the common law is in force, a Georgia court will apply the common law as expounded by the courts of Georgia.").
See, e.g., Shorewood Packaging Corp. v. Commercial Union Ins. Co. , 865 F. Supp. 1577, 1578-79 (N.D. Ga. 1994) ("Georgia's preference for its own common law over that of a foreign forum is commonly referred to as the ‘presumption of identity’ rule.").
Coon , 300 Ga. at 730, 797 S.E.2d 828.
Id. (internal quotations omitted).
Ventron and East Perimeter first contend that the presumption of identity theory does not apply to contract claims. But, they provide no authority for this distinction. In Coon , the Georgia Supreme Court applied the rule in the context of a tort claim. This does not mean, however, that the rule only applies to tort causes of action. In fact, the Coon court expressly stated that the traditional presumption of identity approach "is applied to contract as well as tort claims based on the common law." Georgia courts have repeatedly applied this rule to contract claims. Similarly, other federal courts in Georgia have applied this rule to insurance coverage disputes. There is also nothing in the reasoning for the rule that would limit its application to only tort claims. The common law governs certain areas of both tort and contract law, and Georgia will not defer to another state's interpretation of this common law, regardless of whether it is tort law, contract law, or another area of the law.
Id. at 733.
See, e.g., Motz v. Alropa Corp. , 192 Ga. 176, 15 S.E.2d 237 (1941) ("But where only some rule of the common law of England is involved, in determining rights governed by the law of another State where the common law prevails, the construction of the common law given by the courts of this State will control, in preference to the construction given by the court of the State of the contract.").
See Massachusetts Bay Ins. Co. v. Fort Benning Family Communities, LLC , No. 4:15-CV-75-CDL, 2017 WL 2129909, at *1 (M.D. Ga. May 15, 2017) (applying the presumption of identity rule embraced in Coon and concluding that Georgia law applied to insurance dispute); Travelers Indem. Co. of Conn. v. Douglasville Dev., LLC. , 2008 WL 4372004, at *3, *5 (N.D. Ga. Sept. 19, 2008) (noting that the court "must apply the common law as developed in Georgia rather than the foreign law of Florida," that "Georgia's presumption of identity doctrine states that Georgia courts will only apply foreign law in contravention to Georgia common law where there is a foreign statute on point" and concluding that there was "not a statute on point and that Georgia common law applies in this case to the issue of notice").
Ventron next cites cases where the Georgia Court of Appeals has applied foreign law to insurance and contract disputes. It argues that these cases demonstrate that the rule should not apply here. It also cites recent decisions by federal courts in this District applying the lex loci contractus rule to conclude that another state's law should govern. However, these cases do not address the presumption of identity rule and decline to apply it. Instead, the rule was not in dispute, and they do not mention it at all. Thus, while it is true that the courts in these cases may have applied foreign law to contract disputes, the Court is bound by the clear rule established by the Georgia Supreme Court, and followed by the Eleventh Circuit. When the presumption of identity rule has been in dispute, these courts have consistently concluded that the rule prevails and that Georgia court's interpretations of the common law should apply. In fact, the Eleventh Circuit recently approved of a district court's application of the presumption of identity rule. While it is true that Ventron cites Georgia Court of Appeals cases applying foreign law to insurance and contract disputes, this Court is bound by the clear rule established by the Georgia Supreme Court.
See Def. Ventron's Br. in Opp'n to Pl. Mt. Hawley's Mot. for Partial Summ. J. [Doc. 105], at 6.
See Renaissance Recovery Sols., LLC v. Monroe Guaranty Ins. Co. , 770 F. App'x 527, 528 (11th Cir. 2019).
See Def. Ventron's Br. in Opp'n to Pl. Mt. Hawley's Mot. for Partial Summ. J. [Doc. 105], at 6.
Ventron also puts much effort into arguing that Coon did not overrule or signal a departure by the Georgia Supreme Court from the lex loci contractus principle. Ventron is correct that Coon did not discard the theory of lex loci contractus. The rule of lex loci contractus still governs choice of law in contract cases. However, Coon explains that, when the result of this lex loci contractus analysis would lead to the application of the common law, Georgia courts do not apply a foreign state's interpretation of the common law. In contrast, if this analysis leads to the application of a foreign statute, then that foreign statute governs. The presumption of identity rule is an exception to these general choice of law principles. This was not a new rule either - Georgia courts have applied the presumption of identity rule for over one hundred years.
See Latine v. Clements , 3 Ga. 426, 430 (1847) ("I know of no statute law of Virginia which defines the faith and credit to which it is there entitled. The common law is there of force, and we are remitted to that to answer the last question.").
Ventron and East Perimeter next argue that the presumption of identity rule does not apply because there is a controlling California statute. First, East Perimeter argues that California's choice of law statute governs. However, this argument is circular. The choice of law analysis determines which state's substantive law controls. As a district court sitting in diversity, the Court must apply Georgia choice of law rules. This is not the type of foreign statute that Coon envisions. Second, Ventron argues that two California insurance statutes control. However, neither of these are on point. California Insurance Code § 551 provides that an insurer must give an insured twenty days to provide notice of a loss. California Insurance Code § 554 deals with waiver by the insured of a notice provision. Neither of these statutes addresses California's notice-prejudice rule. In fact, the Ninth Circuit has explained that the notice-prejudice rule arises under "California decisional law." Therefore, the common law governs.
Def. East Perimeter's Br. in Opp'n to Third Party Def. Lexington's Mot. for Summ. J., at 5 [Doc. 104].
Frank Briscoe Co., Inc. v. Ga. Sprinkler Co., Inc. , 713 F.2d 1500, 1503 (11th Cir. 1983).
Def. Ventron's Br. in Opp'n to Third Party Def. Lexington's Mot. for Summ. J., at 12 [Doc. 107].
Cal. Ins. Code § 551 ("Except in the case of life, marine, or fire insurance, notice of an accident, injury, or death may be given at any time within twenty days after the event, to the insurer under a policy against loss therefrom. In such a policy, no requirement of notice within a lesser period shall be valid.").
Cal. Ins. Code § 554 ("Delay in the presentation to an insurer of notice or proof of loss is waived, if caused by an act of his, or if he omits to make objection promptly and specifically upon that ground.").
Ins. Co. of State of Penn. v. Associated Int'l Ins. Co., 922 F.2d 516, 523 (9th Cir. 1990).
East Perimeter and Ventron next argue that the presumption of identity choice of law rule only applies to the original thirteen colonies. In Coon , the Georgia Supreme Court stated in a footnote that "[w]e have said that this approach will be followed if the other state was one of, or formed from the territory of one of, the original 13 colonies that inherited the common law of England." It deferred addressing this question, explaining that "[b]ecause Alabama was formed predominantly from the territory of Georgia, we need not address today whether the common law also may apply in other states." There is some foundation for this argument in Georgia caselaw. However, the Georgia Supreme Court has applied the presumption of identity rule when the foreign state in question was not one of the thirteen original colonies, or a state that was created from one of them. Moreover, there is no meaningful distinction between the common law of a state that was one of the thirteen original colonies, and the common law of other states. Such a distinction between the thirteen original colonies and other states is not supported by the reasoning behind the rule. Essentially, Georgia prefers its own interpretation of the common law over that of a foreign forum. There is no reason why this preference would apply to states that inherited the common law as the thirteen original colonies, and those states that have since adopted the common law. Either way, they are interpreting the "singular" common law, and Georgia prefers its own interpretation. This distinction is even more far-fetched when it is applied to states, such as Alabama, that were created from another state that was one of the thirteen original colonies. Finally, California adopted the English common law. There is no meaningful difference between states that inherited the English common law as a colony, and states that explicitly adopted the English common law by statute. Thus, the Court is not persuaded by this distinction.
Def. East Perimeter's Mot. for Summ. J., at 16 [Doc. 93-2].
Coon, 300 Ga. at 731 n.5, 797 S.E.2d 828.
Id.
Motz v. Alropa Corp., 192 Ga. 176, 176-77, 15 S.E.2d 237 (1941) (applying presumption of identity rule when foreign state was Florida).
Shorewood, 865 F. Supp. at 1578-79.
Cal. Civ. Code § 22.2 ("The common law of England, so far as it is not repugnant to or inconsistent with the Constitution of the United States, or the Constitution or laws of this State, is the rule of decision in all the courts of this State.").
In fact, in one Georgia case endorsing the limitation of this rule to the thirteen colonies, the court explained that this limitation would not apply if such a state had adopted the English common law by statute. See Arrington v. Hosemann , 224 Ga. 592, 593, 163 S.E.2d 722 (1968) ("But, since the State of Florida was not one of the original thirteen States and not carved out of one of them, but was a part of the Spanish possessions on this continent before becoming a part of the Union, it will not be presumed that the common law of England prevailed in that State. If it prevails there, it must be by virtue of some statutory provision of which this court cannot take judicial notice.").
East Perimeter also argues that the insurance policies have "overwhelming" contacts with California, and because of this, California law should apply. However, even if these contacts show that California has an interest in this dispute, the Georgia Supreme Court has clearly concluded that Georgia courts should not apply the common law as interpreted by foreign states' courts. No level of contacts with a foreign forum can overcome this rule. Even if the Court were persuaded that these contacts with California should warrant the application of California law, the Court is precluded from applying California's interpretation of the common law. Instead, under Georgia choice of law principles, it must apply the common law as interpreted by the courts of Georgia.
Def. East Perimeter's Mot. for Summ. J., at 12 [Doc. 93-2].
Finally, East Perimeter argues that the Court, in the interest of comity, should apply California law because California has a strong public policy against the forfeiture of insurance coverage due to late notice. However, it fails to cite cases supporting this. East Perimeter can point to no example where Georgia courts have applied California insurance law as a matter of comity. Furthermore, the presumption of identity rule presupposes this. In Coon, the Georgia Supreme Court explained that it will defer to another state's statutes, and judicial decisions interpreting those decisions, as a matter of comity. However, it explained that Georgia does not defer to another state's interpretation of the common law. Thus, even assuming comity were relevant to this analysis, the Georgia Supreme Court has already considered this concern and fashioned the presumption of identity rule around it. Thus, the Court still will not apply California's interpretation of the common law instead of Georgia's interpretation in the interest of comity.
Def. East Perimeter's Mot. for Summ. J., at 17 [Doc. 93-2].
B. Notice
Next, Mt. Hawley and Lexington argue that Ventron and East Perimeter's failure to provide timely notice precludes coverage under the Lexington Policy and the Mt. Hawley Policy. The Mt. Hawley Policy provides that "[i]n the event of any occurrence that may result in a claim against this policy, the insured will immediately report such occurrence and cooperate fully with ... claim adjusting company." Similarly, the Lexington Policy provides that "[y]ou must see to it that we are notified as soon as practicable of an ‘occurrence’ that may result in a claim or ‘suit’ under this policy." "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." "Under Georgia law, ‘when an insurance policy includes a notice requirement’ and ‘the insured unreasonably fails to timely comply with the ... requirement, the insurer is not obligated to provide a defense or coverage.’ " Unlike California law, Georgia law does not require an insurer to prove that it was prejudiced by an insured's breach of a notice provision if the notice provision is a condition precedent to recovery.
Mt. Hawley Policy, at 26 [Doc. 95-17].
Lexington Policy, at 24 [Doc. 90-3].
Plantation Pipeline Co. v. Royal Indem. Co. , 245 Ga. App. 23, 28, 537 S.E.2d 165 (2000).
Longleaf in Vinings Homeowners Ass'n, Inc. v. QBE Ins. Corp. , 646 F. App'x 823, 825 (11th Cir. 2016) (quoting Forshee v. Emp'rs Mut. Cas. Co. , 309 Ga. App. 621, 623, 711 S.E.2d 28 (2011) ).
N. River Ins. Co. v. Gibson Tech. Servs., Inc. , 116 F. Supp. 3d 1370, 1380 (N.D. Ga. 2014) ("[T]here is no requirement under Georgia law that North River show it was prejudiced by Gibson's failure to give timely notices.") (citing State Farm Fire & Cas. Co. v. LeBlanc , 494 F. App'x 17, 21 (11th Cir. 2012) ).
Lexington and Mt. Hawley argue that East Perimeter and Ventron failed to timely report the incidents, as required by the insurance policies. "To comply with an immediate notice requirement, an insured must give notice ‘with reasonable diligence and within a reasonable length of time in view of the attending circumstances of each particular case.’ " When an insured fails to comply with such a notice requirement, it bears the burden of showing justification for its delay in providing notice. The Court concludes that Ventron and East Perimeter did not comply with the notice provision of the insurance policies, and that their delays were unreasonable. "Georgia courts have held that a delay of as little as three months between the filing of a lawsuit and notice to the insurer is unreasonable as a matter of law." East Perimeter and Ventron failed to provide notice of the Wilder Lawsuit until November 13, 2017, almost two years after the incident. They also failed to provide notice of the Johnson Lawsuit until December 6, 2017. The Court concludes that these multi-year delays are unreasonable under Georgia law, absent a valid excuse.
Johnson & Bryan, Inc. v. Utica Mut. Ins. Co. , 741 F. App'x 722, 725 (11th Cir. 2018) (quoting Advocate Networks, LLC v. Hartford Fire Ins. Co. , 296 Ga. App. 338, 340, 674 S.E.2d 617 (2009) ).
Id. (citing Kay-Lex Co. v. Essex Ins. Co. , 286 Ga. App. 484, 487-88, 649 S.E.2d 602 (2007) ).
State Farm Fire & Cas. Co. v. LeBlanc, 494 F. App'x 17, 23 (11th Cir. 2012) (citing Diggs v. S. Ins. Co. , 172 Ga. App. 37, 321 S.E.2d 792 (1984) ); see also Protective Ins. Co. v. Johnson, 256 Ga. 713, 714, 352 S.E.2d 760 (1987) (finding 17-month delay in providing notice unreasonable as a matter of law); Bates v. Holyoke Mut. Ins. Co. in Salem, 253 Ga. 697, 324 S.E.2d 474 (1985) (finding 43-month delay unreasonable as a matter of law) Allstate Ins. Co. v. Walker , 254 Ga. App. 315, 316, 562 S.E.2d 267 (2002) (finding 11-month delay unreasonable as a matter of law).
Pl. Mt. Hawley's Statement of Material Facts ¶ 40 [Doc. 95-21].
Id. ¶ 41.
See LeBlanc , 494 F. App'x at 23.
Ventron argues that its delay in providing notice was justified because it was not aware of the existence of the insurance coverage. "Under Georgia law, an insurer cannot deny coverage for failure to provide timely notice of an accident if the insured's failure to provide such notice was justified." The question of whether an insured acted reasonably in failing to provide timely notice is generally a question of fact. "Nevertheless, the facts and circumstances of a particular case may render an insured's delay in giving notice of an occurrence to his insurer unjustified and unreasonable as a matter of law." Ventron argues that its delay was excused because it did not know of the existence of the insurance policies. However, Georgia law "requires more than just ignorance, or even misplaced confidence, to avoid the terms of a valid contract." The Court finds that Ventron's ignorance as to the existence of the insurance policies does not excuse its delay. Georgia courts have rejected similar excuses for failing to provide notice. None of the cases cited by Ventron in support of its argument are from Georgia courts. Thus, the Court concludes that Ventron's ignorance of the existence of the insurance policies is not sufficient to excuse its failure to provide timely notice. Since Ventron's delay in providing notice is unreasonable as a matter of law, and since this delay was not justified, Ventron is not entitled to coverage under the insurance policies.
Def. Ventron's Br. in Opp'n to Pl. Mt. Hawley's Mot. for Summ. J., at 18-19 [Doc. 105].
Payne v. State Farm Fire & Cas. Co. , No. 1:11-CV-309-AT, 2012 WL 13006060, at *16 (N.D. Ga. Aug. 28, 2012) (citing Forshee v. Employers Mut. Cas. Co. , 309 Ga. App. 621, 711 S.E.2d 28 (2011) ).
Id. (citing State Farm Fire & Cas. Co. v. Walnut Ave. Partners, LLC , 296 Ga. App. 648, 651, 675 S.E.2d 534 (2009) ).
Walnut Ave. Partners , 296 Ga. App. at 651, 675 S.E.2d 534.
Allstate Ins. Co. v. Walker , 254 Ga. App. 315, 316, 562 S.E.2d 267 (2002) (internal quotations omitted).
See Protective Ins. Co. v. Johnson , 256 Ga. 713, 352 S.E.2d 760 (1987) (concluding that the claimant's excuses, including that he "thought his employer had no insurance on the truck" did not excuse his delay in providing notice); Townsend v. Nat'l Union Fire Ins. Co. , 196 Ga. App. 789, 397 S.E.2d 61 (1990) (holding that the fact that the plaintiff "was not aware he might be entitled to the no-fault benefits" insufficient to excuse delay).
Walker , 254 Ga. App. at 316, 562 S.E.2d 267 (noting that ignorance or misplaced confidence is not sufficient to avoid the terms of a valid insurance contract, especially absent evidence of fraud or overreaching on the part of the insurer).
Next, East Perimeter argues that it did not violate the notice provision of the Lexington Policy since the Lexington Policy provides excess insurance coverage. Essentially, East Perimeter argues that it was under no obligation to provide notice until it subjectively knew that its exposure would subject it to liability in excess of the $1,000,000 limit on its other insurance policies. The Georgia Court of Appeals has stated that, in contrast to cases involving "personal injury protection under no-fault automobile policies that required notice to the insurer as soon as practicable after an event, " cases involving excess policies are different "where, as here, the notice obligation is triggered by the insured's assessment of the likelihood of the monetary amount of the property damage for which it may be liable exceeding the ‘ceiling’ of the primary policy." However, the Lexington Policy is distinct from the types of excess policies at issue in that case. Here, the Lexington Policy requires the insured to notify Lexington as soon as practicable of an "occurrence" that may result in a claim or suit under the policy. The policy does not contain a subjective component concerning the reasonable likelihood of the excess policy being implicated. In a similar case in this District, a court noted such a distinction and concluded that the insured breached the notice provision of the excess insurance policy. Thus, the Court concludes that East Perimeter was obligated under the Lexington Policy to provide notice of these events, and that it unreasonably failed to do so.
Def. East Perimeter's Br. in Opp'n to Third Party Def. Lexington's Mot. for Summ. J., at 17 [Doc. 104].
Id. at 14.
Lumbermens Mut. Cas. Co. v. Plantation Pipeline Co. , 214 Ga. App. 23, 25, 447 S.E.2d 89 (1994) (emphasis in original).
See N. River Ins. Co. v. Gibson Tech. Servs., Inc. , 116 F. Supp. 3d 1370, 1380 (N.D. Ga. 2014).
IV. Conclusion
For the reasons stated above, the Third Party Defendant Lexington Insurance Company's Motion for Summary Judgment [Doc. 91] is GRANTED, the Defendant East Perimeter Pointe Apartments, LP's Motion for Summary Judgment [Doc. 93] is DENIED, the Plaintiff Mt. Hawley Insurance Company's Motion for Summary Judgment [Doc. 95] is GRANTED, the Defendant Ventron Management, LLC's Motion for Partial Summary Judgment [Doc. 96] is DENIED, the Third Party Defendant Lexington Insurance Company's Motion for Leave to File Notice of Supplemental Authority [Doc. 119] is DENIED as moot, and the Defendants East Perimeter Pointe Apartments, LP and Ventron Management, LLC's Joint Motion for Leave to File Joint Sur-Reply to Notice [Doc. 125] is DENIED as moot.
SO ORDERED, this 29 day of August, 2019.