Opinion
Civil Action No. 2:22-cv-233-RWS
2023-10-17
TRAVELERS PROPERTY CASUALTY INSURANCE COMPANY, Plaintiff, v. Arielle MOUTON, Defendants.
David Marlow Atkinson, Swift Currie McGhee & Hiers, LLP, Atlanta, GA, Noah Alexander Caldwell, Maynard Nexsen PC, New York, NY, for Plaintiff. Cynthia Matthews Daley, Jonathan R. Brockman, P.C., Carollton, GA, for Defendants.
David Marlow Atkinson, Swift Currie McGhee & Hiers, LLP, Atlanta, GA, Noah Alexander Caldwell, Maynard Nexsen PC, New York, NY, for Plaintiff.
Cynthia Matthews Daley, Jonathan R. Brockman, P.C., Carollton, GA, for Defendants.
ORDER
RICHARD W. STORY, United States District Judge
This case comes before the Court on Plaintiff Travelers Property Casualty Insurance Company's ("Travelers") Motion for Summary Judgment [Dkt. 20]. After reviewing the record, the Court enters the following Order.
BACKGROUND
I. Factual Background
This case stems from an insurance coverage dispute over whether Travelers is obligated to provide insurance coverage to its insured, Defendant Arielle Mouton ("Ms. Mouton"), pursuant to a policy that Travelers issued to Ms. Mouton's mother, Stephanie Shivers ("Ms. Shivers").
On October 3, 2020, Ms. Mouton was using a crosswalk in Statesboro, Georgia, when she was struck by a vehicle driven by Tyler Patrick Brown ("Mr. Brown"). [Dkt. 20-3, Pl.'s Statement of Undisputed Facts, at ¶ 1; Dkt. 24-20, Def.'s Resp. to Pl.'s Statement of Undisputed Facts, at ¶ 1]. Ms. Mouton contends that the accident was caused by Mr. Brown's negligence and that she suffered personal injuries as a result. [Dkt. 20-3, at ¶ 2; Dkt. 24-20, at ¶ 2]. Accordingly, Ms. Mouton filed suit against Mr. Brown in the State Court of Fulton County, Georgia, seeking to recover for her injuries. [Dkt. 1-1, Pl.'s Compl.].
At the time of the accident, Ms. Shivers was insured by Travelers under an automobile policy ("the Policy"). [Dkt. 20-3, at ¶ 3; Dkt. 24-20, at ¶ 3]. The Policy provides uninsured motorist ("UM") coverage with an applicable policy limit of $250,000 for each person covered by the Policy (and up to $500,000 for each accident), subject to the terms and conditions therein. [Dkt. 1-2, Travelers Policy, at 22-24]. The Policy's UM provision allows "resident relatives" of the policy holder, like Ms. Mouton, to qualify for coverage. [Id. at 22]. The Policy also includes medical payments ("MedPay") coverage, which offers benefits for reasonable medical expenses for injuries sustained
by an insured. [Id. at 20-21]. Both UM and MedPay coverage are subject to the condition that Travelers "be notified promptly of how, when, and where the accident or loss happened." [Id. at 11].
Shortly after the accident, Ms. Mouton discussed making an auto insurance claim with her father for the first time. [Dkt. 20-3, at ¶ 19; Dkt. 24-20, at ¶ 19]. Her father later assured her that he would "get it figured out," presumably under his auto insurance policy. [Dkt. 21-1, Mouton Dep., at 30:17]. Ms. Mouton also notified Ms. Shivers about the accident, but the pair did not discuss making a claim under Ms. Shivers' policy because Ms. Mouton was "under the impression that [her] dad was going to handle it on his." [Dkt. 20-3, at ¶ 21; Dkt. 24-20, at ¶ 21]. Ms. Mouton's parents had been divorced since she was a toddler and have had a "very acrimonious relationship" since. [Dkt. 24, at 2]. They refuse to communicate with one another. [Id. at 2-3]. As a result, Ms. Mouton depended on her father and her attorney to manage her UM claim. [Dkt. 20-3, at ¶ 22; Dkt. 24-20, at ¶ 22].
On November 12, 2020, over a month after the initial accident, Ms. Mouton discovered that Mr. Brown's insurance was limited to the legally minimum liability limits of $25,000. [Dkt. 20-3, at ¶ 24; Dkt. 24-20, at ¶ 24]. Thereafter, on December 6, 2020, Ms. Mouton sent a letter of representation to Mid-Century Insurance Company ("Mid-Century"), which she believed to be her father's auto insurance carrier. [Dkt. 20-3, at ¶ 25; Dkt. 24-20, at ¶ 25]. Mid-Century did not respond until August 2021, nearly ten months after the original accident, after Ms. Mouton sent a follow-up letter. [Dkt. 20-3, at ¶¶ 27, 30; Dkt. 24-20, at ¶¶ 27, 30]. At that time, Mid-Century informed Ms. Mouton that it did not have any active insurance policy with her father. [Dkt. 20-3, at ¶ 31; Dkt. 24-20, at ¶ 31]. Later that month, Ms. Mouton requested updated insurance information from both her mother and father. [Dkt. 21-5, at 5].
Finally, on August 26, 2021, Ms. Mouton sent a letter of representation to Travelers. [Dkt. 20-3, at ¶ 35; Dkt. 24-20, at ¶ 35]. A few weeks later, on September 13, 2021, Mouton asserted a claim for uninsured motorist benefits pursuant to the Policy, demanding that Travelers pay its $250,000 limit for the injuries she sustained because of the October 3, 2020, accident. [Dkt. 20-3, at ¶ 7; Dkt. 24-20, at ¶ 7].
On January 21, 2022, Travelers sent a letter to Ms. Mouton, notifying her that it was investigating her claim. [Dkt. 20-3, at ¶ 38; Dkt. 24-20, at ¶ 38]. The letter contained a purported reservation of rights and also explained that Ms. Mouton's "failure to provide prompt notice of this claim may result in denial of coverage." [Dkt. 24-12, Jan. Letter]. At this point, Travelers did not pay any benefits. A little over three weeks later, on February 14, 2022, Travelers sent another letter, this time denying Ms. Mouton's claim outright. [Dkt. 20-3, at ¶ 40; Dkt. 24-20, at ¶ 40]. This letter contained another purported reservation of rights, and provided that Ms. Mouton's claim was denied because she failed to timely notify Travelers of her accident. [Dkt. 24-13, Feb. Letter].
However, just two days after the February letter was sent, Ms. Mouton made a demand for MedPay benefits under the Policy. [Dkt. 20-3, at ¶ 42; Dkt. 24-20, at ¶ 42]. Travelers processed Ms. Mouton's MedPay benefits two days later. [Dkt. 20-3, at ¶ 44; Dkt. 24-20, at ¶ 44]. Furthermore, the agent that denied Ms. Mouton's UM claim, Shaishav Patel, was allegedly the same agent that approved of, or at least permitted, her MedPay claim. [Dkt. 24, 12-13; Dkt. 24-13, Feb. Letter; Dkt. 24-15, MedPay E-Mail]. II. Procedural History
On November 29, 2022, Travelers filed this action against Ms. Mouton, seeking a declaration that it is not obligated to provide coverage to Ms. Mouton for failure to comply with the Policy's timely notice provision. [Dkt. 1]. Ms. Mouton thereafter filed her answer, as well as counterclaims for breach of contract, bad faith failure to pay, and attorney's fees. [Dkt. 5]. Travelers moved to dismiss Ms. Mouton's counterclaims. [Dkt. 10]. The Court granted that motion and dismissed Ms. Mouton's counterclaims without prejudice. [Dkt. 15].
On July 31, 2023, Travelers filed the instant Motion for Summary Judgment. [Dkt. 20]. Ms. Mouton filed a response in opposition to Travelers' Motion, [Dkt. 24], and Travelers filed a reply in support of its Motion. [Dkt. 27].
DISCUSSION
I. Legal Standard
The standard for summary judgment is well-established. Federal Rule of Civil Procedure 56 requires that summary judgment be granted "if 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. "The moving party bears 'the initial responsibility of informing the ... court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.'" Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1259 (11th Cir. 2004) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2553, 1 L.Ed.2d 265 (1986)). Where the moving party makes such a showing, the burden shifts to the non-movant, who must go beyond the pleadings and present affirmative evidence to show that a genuine issue of material fact does exist. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
The applicable substantive law identifies which facts are material. Id. at 248, 106 S.Ct. 2505. A fact is not material if a dispute over that fact will not affect the outcome of the case under governing law. Id. An issue is genuine when the evidence is such that a reasonable jury could return a verdict in favor of the non-moving party. Id. at 249-50, 106 S.Ct. 2505.
In resolving a motion for summary judgment, courts will "consider the record and draw all reasonable inferences in the light most favorable to the non-moving party." Blue v. Lopez, 901 F.3d 1352, 1357 (11th Cir. 2018). But courts are bound only to draw those inferences which are reasonable. "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505 (citations omitted); see also Matsushita, 475 U.S. at 586, 106 S.Ct. 1348 (once the moving party has met its burden under Rule 56(c), the nonmoving party "must do more than simply show there is some metaphysical doubt as to the material facts").
II. Analysis
Travelers argues it is entitled to summary judgment because Ms. Mouton failed to satisfy a condition precedent to coverage. [Dkt. 20-1, at 2]. More specifically, Travelers contends Ms. Mouton failed to
comply with the Policy's timely notice condition because she reported the October 3, 2020, accident on August 26, 2021—nearly eleven months after it occurred. [Id.]. Further, Travelers claims that Ms. Mouton's offered justifications for her delay are unreasonable as a matter of law, thereby entitling Travelers to judgment. [Id. at 11]. In arriving at this conclusion, Travelers maintains that it has not waived compliance with the timely notice condition. [Id. at 19-20].
Ms. Mouton opposes Travelers' Motion, arguing the Policy's timely notice condition does not apply to her, and that Travelers implicitly waived the condition by paying Ms. Mouton's claim for MedPay benefits after denying her claim. [Dkt. 24, at 9-14]. Alternatively, Ms. Mouton contends that whether she timely notified Travelers of the accident and the reasonableness of her delay are questions of fact for the jury to resolve. [Id. at 14-17].
Generally, in Georgia, "a notice provision in an insurance contract that is expressly made a condition precedent to coverage is valid and must be complied with, absent a showing of justification." 105 R.R. St., LLC v. Great Lakes Reinsurance (UK) SE, 2016 WL 9454412, at *2 (N.D. Ga. Dec. 21, 2016) (citation omitted). If an insured party "has not demonstrated justification for failure to give notice per the terms of the policy, then the insurer is not obligated to provide either a defense or coverage." Id. (citation omitted).
Thus, the following questions are presented: (1) whether the timely notice provision applies to Ms. Mouton; if so, (2) whether Travelers waived the provision; and if there was no waiver, (3) whether Ms. Mouton complied with the provision.
However, for reasons mentioned later, the Court need not address whether Ms. Mouton complied with the timely notice provision of the Policy.
A. Whether the Timely Notice Provision Applies to Ms. Mouton
Ms. Mouton contends that the timely notice provision does not apply to her as a matter of contract interpretation. [Id. at 9-11]. She argues that, under the plain language of the Policy, the timely notice provision only applies to the "named insured" or resident-spouse, but not to a "resident relative" like herself. [Id.]. Ms. Mouton further contends 'that she is an "injured third party" for purposes of the notice provision, and that, therefore, she is effectively free from any time constraint. [Id. at 10-11]. Travelers disagrees, contending that Ms. Mouton's misreading of the Policy is "contrary to the language of the insurance contract." [Dkt. 27, at 2-5].
"[I]nsurance in Georgia is a matter of contract, and ... such contract disputes are well suited for adjudication by summary judgment because construction of a contract is ordinarily a matter of law for the court." Goldeagle Ventures, LLC v. Covington Specialty Ins. Co., 349 Ga. App. 446, 448, 825 S.E.2d 881 (2019) (citation omitted). "Under Georgia law, courts interpret contracts in three steps: first, the court determines whether the contract language is clear and unambiguous." Tims v. LGE Cmty. Credit Union, 935 F.3d 1228, 1237 (11th Cir. 2019) (citation omitted). "If the language is clear, the court applies its plain meaning; if it is unclear, the court proceeds to step two." Id. (citation omitted). "At step two, the court attempts to resolve the ambiguity using Georgia's canons of contract construction." Id. (citation omitted). "If the ambiguity cannot be resolved using the canons, then the court proceeds to step three, where the parties' intent becomes a question of fact for the jury." Id. (citation omitted). "The cardinal rule of construction is to ascertain the intention of the parties." Id. (citation omitted). "A contract is ambiguous when it leaves the intent of the parties in question—i.e., that intent is uncertain, unclear, or is open to various interpretations." Id. (citation omitted). On the other hand, "[a] contract is unambiguous when, after examining the contract as a whole and affording its words their plain meaning, the contract is capable of only one reasonable interpretation." Id. (citation omitted).
With these principles in mind, the Court now turns to the relevant provision of the Policy, "Duties After an Accident or Loss." That provision states:
Duties After an Accident or Loss
We have no duty to provide coverage under this policy unless there has been full compliance with the following duties:
A. We must be notified promptly of how, when and where the accident or loss happened. Notice should also include the names and addresses of any injured persons and of any witnesses. The requirement for giving notice of an accident or loss, if not satisfied by the insured within 30 days of the date of the accident, may be satisfied by an injured third party who, as the result of such accident, has a claim against the insured. However, notice of a claim by an injured third party to an insurer shall be accomplished by mail.
[Dkt. 1-2, Travelers Policy, at 11].
The plain and unambiguous meaning of the "Duties" provision is that timely notice is a condition precedent to any claim for coverage under the Policy. Nowhere in the timely notice provision does it limit or circumscribe the class of obligated parties. It never uses the term "named insured," or the words "you" or "your," which are defined. Rather, it speaks broadly by requiring any person seeking coverage to comply with the obligations therein. Ms. Mouton is a person seeking coverage under the Policy, and accordingly, the timely notice provision applies to her.
Ms. Mouton makes two arguments to the contrary. First, she contends that the timely notice provision does not apply to "resident relatives" like her. She emphasizes that the general provisions portion of the Policy houses both the "Duties" section, which contains the notice condition, and the "General Definitions" section, which defines "You" and "your" as the "named insured" or "resident-spouse." Reading these two sections together, Ms. Mouton somehow concludes that the "Duties" section only applies to the "named insured" or "resident-spouse," but not to "resident relatives" like herself. But Ms. Mouton mistakenly conflates the two sections. The "General Definitions" section merely defines "You" and "your" as the "named insured" or "resident-spouse," but does not otherwise limit the applicability of the "Duties" section.
Second, Ms. Mouton contends that because she is not an "insured" under the "General Provisions" section, she must be an "injured third party" under the "Duties" section. But again, Ms. Mouton misreads the Policy. The "Duties" section that Ms. Mouton relies on mentions an "injured third party who, as the result of such accident, has a claim against the insured." [Id.]. But, as the Policy explicitly reveals, an "injured third party" is a party who "has a claim against the insured." [Id.]. Here, Ms. Mouton does not have a claim against the insured because she is the insured. Therefore, she cannot be an "injured third party" as understood in the "Duties" section. Because a plain and unambiguous reading of the "Duties" provision reveals that it applies to any person seeking coverage, Ms. Mouton is required to comply with the obligations therein. Accordingly, the Court finds that the timely notice condition applies to Ms. Mouton. The Court will now address whether Travelers waived the condition.
B. Waiver of the Timely Notice Condition
Ms. Mouton argues that Travelers has waived the timely notice requirement because it paid out her claim for MedPay benefits with full knowledge of her alleged failure to provide timely notice. [Dkt. 24, at 11-14]. She emphasizes that Travelers' January 12, 2022, reservation of rights letter does not protect it from waiver because Travelers' subsequent denial of Ms. Mouton's claim "supersede[d]" any reservation of rights that it may have issued. [Id. at 12]. Travelers rejects this argument, instead contending that it had issued two separate reservation of rights letters, and that these letters protect it from waiver because the letters were issued before paying Ms. Mouton's MedPay claim. [Dkt. 27, at 6]. Travelers maintains this is so, despite its later denial of Ms. Mouton's claim. [Id.]. The Court will address the parties' arguments by analyzing: (1) whether Travelers' reservation of rights letters were legally sufficient, and accordingly, (2) the effect of Traveler's MedPay payments.
1. Travelers' Reservation of Rights Letters
Under Georgia law, "[a] reservation of rights is a term of art in insurance vernacular and is designed to allow an insurer to provide a defense to its insured while still preserving the option of litigation and ultimately denying coverage." Hoover v. Maxum Indem. Co., 291 Ga. 402, 405, 730 S.E.2d 413 (2012) (emphasis added) (citation omitted). "At a minimum, the reservation of rights must fairly inform the insured that, notwithstanding [the insurer's] defense of the action, it disclaims liability and does not waive the defenses available to it against the insured." Id. (alteration in original) (citation omitted). "That notice cannot be only a 'statement of future intent....'" World Harvest Church, Inc. v. GuideOne Mut. Ins. Co., 287 Ga. 149, 152, 695 S.E.2d 6 (2010). "Thus, a reservation of rights is only available to an insurer who undertakes a defense while questions remain about the validity of the coverage." Hoover, 291 Ga. at 405, 730 S.E.2d 413 (emphasis added).
Ultimately then, "an insurer has three options when faced with a claim of coverage. It can (1) 'defend the claim, thereby waiving its policy defenses and claims of non-coverage'; (2) 'deny coverage and refuse to defend, leaving policy defenses open for future litigation'; or (3) 'defend under a reservation of rights.'" Century Cmtys. of Ga., LLC v. Selective Way Ins. Co., 2019 WL 7491504, at *3 (N.D. Ga. Oct. 25, 2019) (emphasis added) (quoting Hoover, 291 Ga. at 404-05, 730 S.E.2d 413), aff'd, 2023 WL 2237303 (11th Cir. Feb. 27, 2023). "An insurer cannot both deny a claim outright and attempt to reserve the right to assert a different defense in the future." Hoover, 291 Ga. at 405, 730 S.E.2d 413.
At the outset, the Court notes that there is some uncertainty surrounding an insurer's use of reservations of rights in the first-party context, as is the case here. As the Georgia Supreme Court stated in Hoover, "a reservation of rights is only available to an insurer who undertakes a defense...." Id. A literal reading of Hoover suggests that reservations of rights are only available in the third-party context,
where an insurer must consider undertaking a defense of its insured from a pending lawsuit. On the other hand, a more general reading of Hoover suggests that reservations of rights are also permissible in the first-party context, where an insurer is merely considering whether its insured is entitled to any benefits. This is because paying benefits in the first-party context is analogous to undertaking a defense in the third-party context.
Here, Travelers is not faced with an impending lawsuit against its insured, and therefore cannot undertake a defense. Travelers itself has acknowledged as much. [Dkt. 27, 4-5]. Accordingly, a literal reading of Hoover would mean that Travelers cannot use a reservation of rights. On the other hand, a more general reading of Hoover would mean that Travelers could use a reservation of rights, so long as it paid benefits—an action analogous to undertaking a defense.
The Court could not identify any Georgia case conclusively addressing the applicability of reservations of rights in both first-and third-party contexts. Some cases suggest that Hoover, and therefore a reservation of rights, is inappropriate in the first-party context. See, e.g, Silverman v. Unum Life Ins. Co. of Am., 2016 WL 6211728, at *4 (N.D. Ga. July 12, 2016) (finding Hoover inapplicable where there was no pending third-party lawsuit that the insurer needed to consider defending); see also Joseph v. Nw. Mut. Life Ins. Co., 2015 WL 1309648, at *8 (M.D. Ga. Mar. 24, 2015) (finding that a reservation of rights is "not warranted"). Other cases suggest that reservations of rights are commonplace in the first-party context. See, e.g, Cable Broadband & Telecomm., LLC v. Depositors Ins. Co., 2018 WL 10647207, at *21 (N.D. Ga. Feb. 28, 2018) (finding insurer's payments of benefits under reservation of rights proper); Provident Life & Accident Ins. Co. v. Futch, 2008 WL 11348995, at *3 (S.D. Ga. Aug. 5, 2008) (acknowledging the insurer's continued payments to its insured under a reservation of rights); Mass. Mut. Life Ins. Co. v. Woodall, 304 F. Supp. 2d 1364, 1381-82 (S.D. Ga. 2003) (acknowledging that "rights-reservation letters" are commonly used in the first-party context to deny benefits "without facing the risk of a bad-faith penalty").
Ultimately, the Court does not find it necessary to answer this question. This is because Travelers has never issued a proper reservation of rights under either interpretation of Hoover. The undisputed facts reveal that Travelers sent two letters, each containing an alleged reservation of rights—one on January 21, 2022, and another on February 14, 2022. [Dkt. 20-3, at ¶¶ 38-41; Dkt. 24-20, at ¶¶ 38-41].
The January letter provides that "Travelers is currently investigating this loss under a Reservation of Rights given the late notice of the claim." [Dkt. 24-12, at 2]. However, this is an improper way to assert a reservation of rights. First, a reservation of rights during an investigation is unnecessary because the act of investigating a claim does not constitute waiver. O.C.G.A. § 33-24-40(3); see also Hoover, 291 Ga. at 406, 730 S.E.2d 413 ("In Brazil[ v. Government Employees Ins. Co., 199 Ga.App. 343, 404 S.E.2d 807 (1991)], the court held that a reservation of rights was unnecessary during the brief period where the insured was trying to determine whether it would defend ... or deny coverage."); R&G Invs. & Holdings, LLC v. Am. Family Ins. Co., 337 Ga. App. 588, 599, 787 S.E.2d 765 (2016) ("[A]ny insurer who merely proceeds to investigate a claim with knowledge of facts which might otherwise constitute a defense to coverage is not estopped from thereafter setting up the defense."). Second, nowhere in the January
letter does it state that Travelers is undertaking a defense or otherwise paying benefits, which is required to properly raise a reservation of rights. For these reasons, the January letter cannot constitute a valid reservation of rights.
Next, the February letter notified Ms. Mouton that Travelers had denied her claim outright. [Dkt. 24-13, at 2]. More specifically, the letter states, "we must respectfully deny any payment of this claim for uninsured/underinsured motorist for failing to notify Travelers promptly of this loss." [Id.]. The letter also contained a purported reservation of rights. [Id.]. Just like the January letter, the February letter is devoid of any indication that Travelers was presently undertaking a defense or otherwise paying benefits. But more importantly, Georgia law is clear—"an insurer cannot both deny a claim and reserve its right to assert other defenses later." Am. Safety Indem. Co. v. Sto Corp., 342 Ga. App. 263, 268, 802 S.E.2d 448 (2017) (citing Hoover, 291 Ga. at 405, 730 S.E.2d 413). To be sure, even if Travelers had issued a proper reservation of rights prior to its denial of Ms. Mouton's claim, the Court fails to see how such a reservation would remain effective post-denial. Id. ("[U]nder Hoover, [the insurer] cannot both deny the claims and assert a reservation of rights, and we fail to see how a previous reservation of rights issued while [the insurer] was still investigating the claims would remain effective post-denial."). For these reasons, the February letter cannot constitute a valid reservation of rights.
Thus, under either interpretation of Hoover, Travelers has failed to assert a valid reservation of rights. Under a literal reading of Hoover, where reservations of rights are inapplicable here, Travelers' letters purporting to raise such a reservation is clearly immaterial. On the other hand, under a more general reading of Hoover, where reservations of right are applicable here, Travelers has still failed to raise a valid reservation. This is because neither the January nor February letter contains any statement of present intent indicating that Travelers was undertaking a defense or paying benefits, and because the February letter attempted to improperly raise a reservation of rights while denying a claim. Accordingly, the Court finds that Travelers has never issued a proper reservation of rights.
Having found Travelers' purported reservations of rights improper, the Court will now address Travelers' payment of Ms. Mouton's MedPay claim on the issue of waiver.
2. Travelers' MedPay Payments
Under Georgia law, "[a]n insurer may waive any provision in an insurance policy inserted for its benefit, and may waive any condition or limitation in the policy upon which it could otherwise rely." Sargent v. Allstate Ins. Co., 165 Ga. App. 863, 865, 303 S.E.2d 43 (1983) (alteration in original) (citations omitted). "Examples of conditions and limitations that may be waived include[] ... conditions requiring timely written notice...." Id. (citations omitted). "[C]onditions may be expressly waived, or waived by conduct inconsistent with an intention to enforce strict compliance with the condition...." Id. (alteration in original) (citations omitted). For example, "payment by the insurer with knowledge of the pertinent circumstances giving it a policy defense waives its right to rely thereon...." Id. at 866, 303 S.E.2d 43 (citation omitted). "Courts strictly construe provisions of the contract that benefit the insurer and find even 'small circumstances' show waiver by the insurance company." Hoover, 291 Ga. at 407, 730 S.E.2d 413. Once a condition is
waived, it cannot be reclaimed. Sargent, 165 Ga. App. at 867, 303 S.E.2d 43.
Here, the undisputed facts reveal that Travelers paid Ms. Mouton's MedPay benefits with full knowledge of her alleged failure to comply with the timely notice provision of the Policy. Ms. Mouton first contacted Travelers regarding her accident on August 26, 2021. [Dkt. 20-3, at ¶ 35; Dkt. 24-20, at ¶ 35]. In its January 21, 2022, letter, Travelers responded by notifying Ms. Mouton that her "failure to provide prompt notice ... may result in a denial of coverage." [Dkt. 20-3, at ¶ 38; Dkt. 24-20, at ¶ 38]. Just three weeks later, Travelers in its February 14, 2022, letter outright denied Ms. Mouton's claim, citing her late notice as grounds for denial. [Dkt. 20-3, at ¶ 40; Dkt. 24-20, at ¶ 40]. At this point, Travelers had full knowledge of the pertinent circumstances giving it a policy defense against covering Ms. Mouton. However, on February 16, just two days after Travelers' denial of Ms. Mouton's claim, Ms. Mouton made a demand for MedPay benefits under the Policy. [Dkt. 20-3, at ¶ 42; Dkt. 24-20, at ¶ 42]. On February 18, just four days after its denial of Ms. Mouton's claim, Travelers processed her claim for MedPay benefits. [Dkt. 20-3, at ¶ 43; Dkt. 24-20, at ¶ 43].
The MedPay portion of the Policy is subject to the same timely notice condition as the UM portion of the Policy. [Dkt. 1-2, Travelers Policy, at 11]. And the timely notice condition is a condition imposed for the benefit of Travelers and is therefore subject to waiver. Thus, by paying Ms. Mouton her MedPay benefits despite being aware of her alleged failure to timely notify it of the accident, Travelers took an action inconsistent with its intent to strictly enforce the notice condition. Accordingly, the Court finds that Travelers has waived its right to rely on the timely notice condition.
Travelers contends that Sargent is inapposite here because, unlike in Sargent, Travelers has provided a reservation of rights prior to paying out Ms. Mouton's MedPay claims. However, as the Court discussed previously, Travelers has never issued a proper reservation of rights.
Accordingly, the Court concludes that Travelers has waived its timely notice requirement as to the Policy it issued to Ms. Mouton. Therefore, the Court need not discuss whether Ms. Mouton has timely notified Travelers of her accident, nor whether her excuse is unreasonable as a matter of law.
CONCLUSION
For the foregoing reasons, Plaintiff Travelers' Motion for Summary Judgment [Dkt. 20] is DENIED.
SO ORDERED this 17th day of October, 2023.