Opinion
CV 2:18-102
2019-06-25
BLB CONSTRUCTION, INC., d/b/a B&B Custom Hardscapes, Plaintiff, v. AUTO-OWNERS INSURANCE COMPANY, Defendant.
ORDER
HON. LISA GODBEY WOOD, JUDGE
Before the Court is Defendant Auto-Owner's Insurance Company's Motion for Summary Judgment. Dkt. No. 41. The Motion has been fully briefed and is ripe for review. For the reasons that follow, the Motion is GRANTED in part and DENIED in part.
BACKGROUND
Plaintiff BLB Construction, Inc. ("BLB") was hired to perform subcontractor work by Golden Isles Custom Homes, LLC ("Golden Isles") on a residential construction project at 107 E. 30th St., Sea Island, Georgia (the "Project"). Dkt. No. 45-1 ¶ 1. The residence was owned by Thomas and Alison Halloran. Dkt. No. 42-1 at 27. Plaintiff was hired "to install the stone around the pool and on the porches, as well as the driveway." Dkt. No. 42-1 at 5. In or around April 2013, Plaintiff began its work on the Project when it poured a sub-slab underneath the pool deck. Dkt. No. 45-1 ¶ 3. In or around September 2013, Plaintiff completed its substantive work on the Project. Id. ¶ 4. In or around December 2013, Plaintiff was called back to the Project to perform certain repairs concerning its work. Id. ¶ 5.
Defendant Auto-Owners issued a Tailored Protection insurance policy (the "Policy") to Plaintiff that covered the period during which Plaintiff performed work on the Project. Dkt. No. 45-1 ¶ 20. Section IV of the Policy is titled "Commercial General Liability Conditions" and provides in relevant part:
2. Duties In The Event Of Occurrence, Offense, Claim Or Suit
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 any claim is made or "suit" is brought against any insured, you must:
(1) Immediately record the specifics of any 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 any claim or "suit" as soon as practicable.
c. You and any other involved insured must:
(1) Immediately send us copies of any correspondence, demands, notices, summonses or papers in connection with any claim or "suit";
(2) Authorize us to obtain records and other information;
(3) Cooperate with us in the investigation or settlement of any claim or defense of any "suit"; and
(4) Assist us, upon our request, in the enforcement of any right against any person or organization which may be liable to the insured because of injury or damage to which this insurance may also apply.
d. No insured will, except at that insured's own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent.
3. Legal Action Against Us
No person or organization has a right under this Coverage Part:
a. To join us as a party or otherwise bring us into a "suit" asking for damages from an insured; or
b. To sue us on this Coverage Part unless all of its terms have been fully complied with.
A person or organization may sue us to recover on an agreed settlement or on a final judgement against an insured obtained after an actual trial; but we will not be liable for damages that are not payable under the terms of this Coverage Part or that are in excess of the applicable limit of insurance. An agreed settlement means a settlement and release of liability signed by us, the insured and the claimant or the claimant's legal representative.
Dkt. No. 45-1 ¶ 21. The Policy also defines "Occurrence" as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." Dkt. No. 41-4 at 49. The Policy does not define "offense" or "offense which may result in a claim." See id. at 4-69.
More than three years after Plaintiff completed its work on the Project, Brandon Baily, the President and founder of BLB, received a letter dated April 5, 2017, from Jeffrey P. Lutz, the attorney for the Hallorans. Dkt. No. 45-2 ¶¶ 1, 6; Dkt. No. 41-3 at 3. The letter addressed to Baily states:
[T]he Hallorans request that you provide evidence of your insurance coverages, pursuant to O.C.G.A. § 33-3-28, for each and every policy and/or insurer providing liability or casualty insurance coverage which is or may be liable to pay all or a part of any claim related to the defects described in their claim letter.... You should also be advised that your failure to notify your carrier of this demand, and the notice of claim asserted herein, may jeopardize your rights and entitlements to the protections afforded by these policies.
Dkt. No. 41-3 at 3. Attached to that letter was another letter (the "Right to Repair Letter") that Lutz had sent to Bradley Brumbach, an agent of Golden Isles, dkt. no. 41-3 at 4-6, who had been responsible for getting BLB involved with the Project. Dkt. No. 42-1 at 5. The Right to Repair Letter states: "This letter shall serve ... (1) to provide you notice of several defects existing at [the Project] which require immediate repair and replacement, [and] (2) to allow you to place your carrier on notice of the Hallorans' claim and to submit to the Hallorans copies of your current insurance policies[.]" Dkt. No. 41-3 at 4. The Right to Repair Letter then identifies alleged defects in construction "with respect to the second-floor, rear balconies and decks; roof and chimneys; terrace doors; and pool decking/hardscape, as noted throughout the attached report." Id. The Right to Repair letter also states that "the pool decking continues to erode, deteriorate, crack and crumble, requiring replacement." Id. at 5.
As the Right to Repair Letter mentions, it attaches a report identifying and describing the alleged defects. Id. at 7-14. The report contains photographs of the alleged defects, two of which are of stone work. Id. at 15-17. Under the section titled "Exterior Pool Deck Observations," the report lists the following defects: "voids between the earth and the stone"; "[t]he stone is deteriorating, cracking and crumbling"; "[m]aterials are not sustainable for intended application and environment"; and "[h]omeowner reported that the stone was installed with a glossy finish, and now has a developed and dully chalky finish[.]" Id. at 10.
After receiving the letter (along with the Right to Repair Letter and attached report), Baily called Lutz and asked Lutz about the letter and its attachments. Dkt. No. 45-2 ¶ 7. Lutz declared that during this conversation, "Mr. Baily asked me if he was being sued and I informed him that the Hallorans did not have any intention to file suit against him or his company, but that a lawsuit was being prepared and filed against Brad Brumbach and Valarie Zeh, and their respective companies." Dkt. No. 45-3 ¶ 4. Indeed, Lutz—on behalf of the Hallorans—filed a lawsuit in May 2017 (the "Underlying Suit") against many entities and individuals involved with the Project, but neither BLB nor Baily were named as defendants. See id. ¶ 6. Lutz further declared on May 2, 2019, that "[t]o this date, the Hallorans have not performed or caused to be performed any repairs to the stone work at their property, which is the only work of BLB at issue in the [Underlying Suit]." Id. ¶ 8. Finally, Baily declared that the "defects involving exterior hardscaping materials" identified in the Right to Repair letter involved "hardscaping materials [that] were chosen and supplied by subcontractor [sic] other than BLB." Dkt. No. 45-2 ¶ 6.
On December 29, 2017, Golden Isles filed an Amended Third-Party Complaint in the Underlying Suit and named BLB as a Third-Party Defendant. Dkt. No. 41-2 ¶ 14. On January 9, 2018, BLB was served with the summons and the Amended Third-Party Complaint. Dkt. No. 42-1 at 9-10; Dkt. No. 45-2 ¶ 2. Baily declared that on January 12, 2018, he called Russell Thomas of Clyde Aldridge Insurance, which was the agency that sold BLB the Policy. Dkt. No. 45-2 ¶ 3. Baily declared that during that call he provided notice of the Underlying Suit and requested a copy of any applicable insurance policy because he "did not know which policy would be applicable, did not have a copy, did not know the name of the insurance carrier, and did not know whether the policy would provide coverage." Id. Baily further declared that he called Clyde Aldridge Insurance on February 1, 2018, February 6, 2018, and March 22, 2018, in order to obtain a copy of any applicable insurance policy. Id. ¶ 4. Baily finally declared that prior to being served with the Amended Third-Party Complaint of the Underlying Lawsuit, he "had no reason to believe that BLB would be named as a party in any lawsuit." Id. ¶ 5.
Joe Gregors, a senior claims representative for Defendant, declared that Plaintiff failed to notify Defendant of the Underlying Suit until April 19, 2018, and that Plaintiff did not send Defendant "copies of any correspondence, demands, notices, summonses or papers in connection with the Underlying Lawsuit until April 19, 2018." Dkt. No. 41-4 at 1-2, 3. Defendant has provided a letter dated April 17, 2018, from Plaintiff's lawyer to Russell Thomas at Clyde Aldridge Insurance Agency. Dkt. No. 42-1 at 57. The letter purports to attach the Complaint and the Amended Third-Party Complaint against BLB from the Underlying Suit. Id.
Because Defendant denied coverage to Plaintiff in the Underlying Suit, Plaintiff brought this action seeking a declaratory judgment that Defendant must provide coverage to Plaintiff with respect to the Underlying Suit. Plaintiff is also seeking damages for breach of the Policy and bad faith denial of coverage, claims which arise under Georgia law.
LEGAL STANDARD
Summary judgment is required where "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A fact is "material" if it "might affect the outcome of the suit under the governing law." FindWhat Inv'r Grp. v. FindWhat.com, 658 F.3d 1282, 1307 (11th Cir. 2011) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). A dispute is "genuine" if the "evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. In making this determination, the Court is to view all of the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor. Johnson v. Booker T. Washington Broad. Serv., Inc., 234 F.3d 501, 507 (11th Cir. 2000).
The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The movant must show the court that there is an absence of evidence to support the nonmoving party's case. Id. at 325, 106 S.Ct. 2548. If the moving party discharges this burden, the burden shifts to the nonmovant to go beyond the pleadings and present affirmative evidence to show that a genuine issue of fact does exist. Anderson, 477 U.S. at 257, 106 S.Ct. 2505.
The nonmovant may satisfy this burden in two ways. First, the nonmovant "may show that the record in fact contains supporting evidence, sufficient to withstand a directed verdict motion, which was ‘overlooked or ignored’ by the moving party, who has thus failed to meet the initial burden of showing an absence of evidence." Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1116 (11th Cir. 1993) (quoting Celotex Corp., 477 U.S. at 332, 106 S.Ct. 2548 (Brennan, J., dissenting)). Second, the nonmovant "may come forward with additional evidence sufficient to withstand a directed verdict motion at trial based on the alleged evidentiary deficiency." Id. at 1117. Where the nonmovant instead attempts to carry this burden with nothing more "than a repetition of his conclusional allegations, summary judgment for the [movant is] not only proper but required." Morris v. Ross, 663 F.2d 1032, 1033-34 (11th Cir. 1981) (citing Fed. R. Civ. P. 56(e) ).
DISCUSSION
Plaintiff seeks a declaration that it is entitled to coverage and a defense from Defendant in the Underlying Suit, that Defendant breached a contract, i.e., the Policy, and that Defendant has acted in bad faith by denying coverage within the meaning of O.C.G.A. § 33-4-6. Defendant argues that all three claims fail because Plaintiff did not satisfy two conditions precedent under the Policy such that no coverage is afforded to Plaintiff for any claim related to the Underlying Suit.
I. Whether Plaintiff Timely Notified Defendant
As an initial matter, "[i]nsurance is a matter of contract and contract law rules and interpretations apply." Rothell v. Cont'l Cas. Co., 198 Ga.App. 545, 402 S.E.2d 283, 284 (1991). Thus, the words used in the policy must be given their "ordinary meaning." Macon-Bibb Cty. Hosp. Auth. v. Cont'l Ins. Co., 196 Ga.App. 399, 396 S.E.2d 50, 51 (1990). While "[t]he hallmark of contract construction is to ascertain the intention of the parties," "when the terms of a written contract are clear and unambiguous, the court is to look to the contract alone to find the parties' intent." Park 'N Go of Ga., Inc. v. U.S. Fid. & Guar. Co., 266 Ga. 787, 471 S.E.2d 500, 503 (1996).
The basis of Defendant's Motion is that Plaintiff "failed to comply with either of the notice conditions precedent to coverage set forth in its Policy," such that Plaintiff is not owed coverage on any claim stemming from the Underlying Suit. First, Defendant contends that "the Policy sets forth distinct clear and unambiguous conditions which must be met in order for coverage to be triggered." Dkt. No. 41-1 at 10. Second, Defendant argues that the two notice provisions at issue are conditions precedent to coverage that "must be performed before the contract becomes absolute and obligatory on the other party." Id. (quoting KHD Deutz of Am. Corp. v. Utica Mut. Ins. Co., Inc., 220 Ga.App. 194, 469 S.E.2d 336, 338 (1996) ). Finally, Defendant argues that because the two notice provisions are "clear and unambiguous" and conditions precedent, and because Plaintiff satisfied neither provision, Defendant had no obligation to perform under the Policy and its denial of coverage was thus permissible.
A. The First Notice Provision
The first provision Defendant alleges Plaintiff did not satisfy stated that Plaintiff "must see to it that [Defendant is] notified as soon as practicable of an ‘occurrence’ or an offense which may result in a claim." Dkt. No. 41-4 at 44. Defendant argues that the letter and the Right to Repair Letter sent on April 5, 2017, constituted notice of an " ‘occurrence’ or an offense which may result in a claim" and thus triggered Plaintiff's duty to notify Defendant "as soon as practicable." Defendant argues that because Plaintiff did not notify Defendant of the Underlying Suit or the April 5 letters until over one year later, on April 19, 2018, that Plaintiff did not satisfy the notice provision as a matter of law. Plaintiff argues that any delay was not unreasonable as a matter of law.
Under Georgia law, "an insured is not required to foresee every possible claim, no matter how remote, that might arise from an event and give notice of it to his insurer. Instead, the law only requires an insured to act reasonably under the circumstances." Forshee v. Employers Mut. Cas. Co., 309 Ga.App. 621, 711 S.E.2d 28, 31 (2011) (internal quotation marks and citations omitted). As a result, "if a reasonable and ordinarily prudent person would conclude that an event forms no basis for a possible claim, the failure of the insured to give notice of the event is justified and no bar to coverage." Id. (citation omitted). "In most cases ... the reasonableness of a failure to give notice is a question for the finder of fact." Id. When determining the reasonableness of a failure to give notice, "[r]elevant circumstances include the nature of the event, the extent to which it would appear to a reasonable person in the circumstances of the insured that injuries or property damage resulted from the event, and the apparent severity of any such injuries or damage." Id.
Plaintiff's delay in notifying Defendant of the Underlying Suit and the April 5 letters (and their contents) is not unreasonable as a matter of law. First, Lutz, the author of the April 5 letters and the attorney for the Hallorans in the Underlying Suit, declared that he told Baily, shortly after Baily received the April 5 letters, that the Hallorans had no intention of suing Baily or BLB. Second, Baily declared that he understood from reviewing the Right to Repair Letter and the attached report that the "defects involving exterior hardscaping materials used in the work that [BLB] performed" involved "hardscaping materials [that] were chosen and supplied by subcontractor [sic] other than BLB." Dkt. No. 45-2 ¶ 6. One could reasonably infer that the identified defects regarding the exterior hardscaping involved materials selected by a different subcontractor, not BLB. Indeed, Lutz declared on May 2, 2019 that "[t]o this date, the Hallorans have not performed or caused to be performed any repairs to the stone work at their property, which is the only work of BLB at issue in the [Underlying Suit]." Id. ¶ 8. Thus, given Lutz's assurance that Lutz and the Hallorans had no intention of suing Baily or BLB, along with the reasonable inference that BLB's work was not identified as defective in the Right to Repair Letter or the attached report, a reasonable jury could find that Plaintiff acted reasonably when it decided not to notify Defendant of the April 5 letters. A reasonable jury could conclude based on this record that BLB had no reason to believe it caused property damage or performed defective work and thus, that BLB had no reason to believe a claim would be filed against it. Finally, a reasonable jury could conclude that since BLB reasonably determined that there was no basis for a claim against it, BLB was not required to notify Defendant of the April 5 letters or those letters' contents. See Forshee, 711 S.E.2d at 31 (citation omitted) ("[I]f a reasonable and ordinarily prudent person would conclude that an event forms no basis for a possible claim, the failure of the insured to give notice of the event is justified and no bar to coverage."). Thus, for these reasons, Defendant has not satisfied its burden of showing that Plaintiff's decision to wait until April 19, 2018, to notify Defendant of the Underlying Suit or the April 5 letters was, as a matter of law, unreasonable such that it violated the first notice provision.
These facts distinguish this case from Auto Owners Insurance Co. v. Sapp, et al., dkt. no. 51-1, a case relied upon by Defendant. In Sapp, the insured "clearly believed that [the injured] deserved to be compensated," id. at 7, but the insured determined that it was unlikely that the injured person would file suit. Here, a jury could find that Plaintiff reasonably determined that it caused no damage such that there was no basis for suit against it. The Court also notes that Sapp is only persuasive authority.
B. The Second Notice Provision
The second notice provision at issue states in relevant part:
b. If any claim is made or ‘suit’ is brought against any insured, you must:
(1) Immediately record the specifics of any 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 any. claim or ‘suit’ as soon as practicable.
c. You and any other involved insured must:
(1) Immediately send us copies of any correspondence, demands, notices, summonses or papers in connection with any claim or ‘suit’[.]
Dkt. No. 41-4 at 44. Defendant argues that this provision constitutes a condition precedent to coverage and that Plaintiff did not satisfy this condition because Plaintiff was served with the summons and Amended Third-Party Complaint of the Underlying Suit on January 8, 2018, but did not send a copy of these documents to Defendant until April 19, 2018. Defendant contends that not only did Plaintiff fail to "[i]mmediately send" Defendant "copies of any ... summonses or papers in connection with and claim or ‘suit,’ " id., but also that such delay was unreasonable under Georgia law. On the other hand, Plaintiff asserts that a genuine issue of material fact exists as to the reasonableness of Plaintiff's delay.
The Court determines, as an initial matter, that subsections (b) and (c) of the Second Notice Provision are separate requirements that operate in tandem. First, after an insured becomes aware that a "suit" has been brought against it, the insured must "[i]mmediately record the specifics of ... [the] ‘suit’ and the date received." Dkt. No. 41-4 at 44. Then, the insured must notify the insurer of the suit "as soon as practicable" and in writing. Id. After this notification has been made, subsection (c) comes into play and requires the insured to "[i]mmediately send [the insurer] copies of any correspondence, demands, notices, summonses or papers in connection with [the] claim or ‘suit’[.]" Id.
Indeed, the Georgia Court of Appeals has addressed this same issue regarding a policy with the exact language. The entire discussion on this issue is relatively brief and is reproduced in its entirety:
Paragraph 2 of the policies unambiguously requires that the insured give [the insurer] prompt notice of an "Event of Occurrence, Offense, Claim or Suit" in two instances. Subparagraphs b(1) and (2) thereof required that [the insured] give [the insurer] notice "as soon as practicable" after "record[ing] the specifics of the claim or ‘suit’ and the date received[.]" Subparagraph c(1) required that [the insured] "[i ]mmediately send us copies of any demands, notices, summonses, or legal papers received in connection with the claim or ‘suit.’ " (Emphasis supplied.) Plainly, the first provision contemplates the insured's responsibility to promptly make a record as to the particulars of a claim or suit and give notice thereof as soon as practicable to [the insurer]. The second such provision requires that the insured send [the insurer] any legal papers received in connection with a claim or suit immediately. "[I]f an insurance contract is capable of being construed two ways, it will be construed against the insurance company and in favor of the insured." Granite State [v. Nord Bitumi U.S., Inc., 262 Ga. 502, 504, 422 S.E.2d 191 (1992) ]. This is not such a case because no ambiguity exists.
Advocate Networks, LLC v. Hartford Fire Ins. Co., 296 Ga.App. 338, 674 S.E.2d 617, 620 (2009) (internal citation omitted). Thus, Georgia law is settled on this question of contract interpretation, and this Court is bound by Advocate Networks (and the clear and unambiguous language of the Policy). See CSX Transp., Inc. v. Trism Specialized Carriers, Inc., 182 F.3d 788, 791 (11th Cir. 1999) ("Without some persuasive indication that the state's highest court would rule otherwise, we are bound to apply the law as decided by the Georgia Court of Appeals."). In accordance with Advocate Networks, Plaintiff was required to notify BLB of the Underlying Suit in writing "as soon as practicable," and, after doing so, Plaintiff had a continuing obligation to immediately send copies of any legal papers it received in connection with the Underlying Suit.
Turning to the merits, Plaintiff argues that it met the requirements outlined in Advocate Networks, i.e., that a reasonable jury could find that its nearly three-month delay in providing Defendant with written notice of the Underlying Suit was "as soon as practicable" and thus satisfied the notice provision. "Issues about the adequacy of notice or the merit of an insured's alleged justification are generally ones of fact, but in a particular case a court may rule on them as a matter of law." OneBeacon Am. Ins. Co. v. Catholic Diocese of Savannah, 477 F. App'x 665, 671 (11th Cir. 2012) (applying Georgia law). "The time limitations in policies of insurance requiring a report of incident ‘as soon as practicable’ are subject to a factual determination. The questions of the sufficiency of the excuse offered, and the diligence of the beneficiary in giving the notice after the removal of the disability, are generally questions of fact, to be determined by the jury, according to the nature and circumstances of each individual case." Norfolk & Dedham Mut. Fire Ins. Co. v. Cumbaa, 128 Ga.App. 196, 196 S.E.2d 167, 170 (1973) (internal quotations and citation omitted). "Whether reasonableness can be decided as a matter of law, or whether it should remain in the province of the jury, depends on two factors: the sufficiency of the excuse, and the insured's diligence after any disability has been removed." Lathem v. Sentry Ins., 845 F.2d 914, 918 (11th Cir. 1988) (applying Georgia law). Further, "[t]he insured has the burden of showing justification for a delay in providing notice." OneBeacon Am. Ins., 477 F. App'x at 670 (citing Kay-Lex Co. v. Essex Ins. Co., 286 Ga.App. 484, 649 S.E.2d 602, 606 (2007) ).
Plaintiff's justifications for its three-plus month delay are that it did not have a copy of the Policy, that "BLB's insurance agent apparently had some trouble obtaining a copy of the policy," and that BLB then "had to determine whether the Policy might provide coverage." Dkt. No. 45 at 21. Plaintiff also argues that its providing notice of the Underlying Suit to its insurance agent constitutes notice to Defendant. Id. at 22. Plaintiff's justifications are not sufficient to excuse its delay in notifying Defendant in writing of the Underlying Suit; Plaintiff's notifying its insurance agent of the Underlying Suit, however, might. The Court will address Plaintiff's justifications first.
Georgia law holds that, without more, ignorance of the terms of an insurance policy is not sufficient to justify failure to abide by those terms. "The law requires more than just ignorance, or even misplaced confidence, to avoid the terms of a valid contract." Protective Ins. Co. v. Johnson, 256 Ga. 713, 352 S.E.2d 760, 761 (1987) (alterations in original) (quoting Int'l Indem. Co. v. Smith, 178 Ga.App. 4, 342 S.E.2d 4, 5 (1986) ) (holding that insured was barred from collecting benefits from insurer because ignorance, in the absence of evidence of fraud or overreaching by the insurer or its agents, was not enough to avoid the terms of the contract). Here, Plaintiff's failure to retain/inability to find a copy of the Policy and resulting ignorance of the Policy's terms, without more, "provides no excuse for [its] failure to comply with the notice provisions of the subject insurance policy." Int'l Indem. Co., 342 S.E.2d at 5. There is, however, more.
Plaintiff's justification that it had to first determine whether the Policy provided coverage before it sent Defendant copies of the summons and Amended Third-Party Complaint does not excuse its failure to send Defendant said documents. In Geico Indemnity Company v. Smith, the Georgia Court of Appeals rejected a similar argument. 338 Ga.App. 455, 788 S.E.2d 150 (2016). There, the insured failed to notify her insurer "[a]s soon as possible after an accident," as required by the applicable insurance policy. Plaintiff's nearly six-month delay in notification was held to be unreasonable as a matter of law. The Geico court also found that the plaintiff's delay was not excused by her attorney's initial assessment that the policy did not provide coverage. (The attorney later concluded that the policy did provide coverage and notified the insurance company.) The Geico court reasoned that the insured's "beliefs or misunderstandings about [coverage] did not relieve [her] of the plain duty to which [she] agreed and induced [GEICO] to issue this policy." Id. (quoting Cotton States Mut. Ins. Co. v. Hipps, 224 Ga.App. 756, 481 S.E.2d 876, 878 (1997) ). Similarly, Plaintiff's delay in notifying Defendant in writing because Plaintiff was waiting on its attorney to determine whether coverage existed does not relieve Plaintiff of its duty to notify Defendant of the Underlying Suit in writing as soon as practicable.
Plaintiff's justifications for its delay in notifying Defendant in writing of the Underlying Suit do not prevail. Nevertheless, the Court still finds a genuine issue of material fact exists as to whether Plaintiff notified Defendant as soon as practicable via Plaintiff's notifying its insurance agent of the Underlying Suit.
Baily declares that he called his insurance agent a few days after being served with the Amended Third-Party Complaint. Baily further declared that he contacted the agent two more times in February. The content of those conversations is, however, unclear. It is reasonable to infer that Baily told his insurance agent as early as January 12, 2018-three days after being served-that BLB had been served with an Amended Third-Party Complaint. While Baily testified that he called the agent to get a copy of the Policy, Baily never testified that he only asked for the Policy. It is reasonable to infer, as the Court must at this stage, that Baily also told the agent the reason he was requesting the policy: because BLB had been sued. As Defendant's counsel stated at oral argument: "if an insured properly provided notice to the agent [,] Auto-Owners would accept that." Dkt. No. 59 at 18. Here, whether Plaintiff provided such notice to the agent is a factual issue. A reasonable jury could find that Plaintiff provided its agent, and thus Defendant, with oral notice of the lawsuit as early as January 12, 2018. The jury could further find that even if Plaintiff took nearly three months to notify Defendant in writing, Plaintiff's oral notification and continual contact with its agent, in conjunction with its later written notice, was sufficient to satisfy the as-soon-as-practicable requirement. Thus, for these reasons, the Court cannot find as a matter of law that Plaintiff's written notice was not as soon as practicable. Accordingly, Defendant's Motion with respect to Plaintiff's declaratory judgment claim is due to be DENIED.
Defendant stated at oral argument that "the agent has specifically disavowed" that he was provided notice on his phone calls with Baily in January, February, and March 2019, but any such disavowal is not in the record.
II. As a Matter of Law Defendant did not Act in Bad Faith
A reasonable jury could find that Plaintiff violated either the first or second notice provision or both; thus, a reasonable jury could also find that Plaintiff is not covered under the Policy with respect to the Underlying Suit. A reasonable jury could further find that Plaintiff acted unreasonably, and thus that its violations of the provision(s) were not excused. Because whether Plaintiff satisfied either notice provision is a close question, Defendant's decision to deny coverage does not constitute bad faith within the meaning of O.C.G.A. § 33-4-6 as a matter of law. "Bad faith is shown by evidence that under the terms of the policy under which the demand is made and under the facts surrounding the response to that demand, the insurer had no ‘good cause’ for resisting and delaying payment." Lawyers Title Ins. Corp. v. Griffin, 302 Ga.App. 726, 691 S.E.2d 633, 637 (2010) (quoting Ga. Int'l Life Ins. Co. v. Harden, 158 Ga.App. 450, 280 S.E.2d 863, 866 (1981) ). Bad faith has also been defined as "any frivolous and unfounded refusal in law or in fact to comply with the demand of the policyholder to pay according to the terms of the policy." S. Gen. Ins. Co. v. Kent, 187 Ga.App. 496, 370 S.E.2d 663, 665 (1988) (citation omitted). A jury could not reasonably find that Defendant's denial of Plaintiff's claim lacked good cause or was frivolous and unfounded. Accordingly, Defendant's Motion for Summary Judgment with respect to Plaintiff's bad faith claim is due to be GRANTED.
CONCLUSION
For the reasons provided above, Defendant's Motion for Summary Judgment is DENIED with respect to Plaintiff's declaratory judgment claim, Count I of the Complaint, and Plaintiff's breach of contract claim, Count II of the Complaint. Defendant's Motion for Summary Judgment is GRANTED with respect to Plaintiff's Bad Faith claim, Count III of the Complaint.
SO ORDERED, this 25th day of June, 2019.