Am. Prof'l Risk Servs., Inc. v. Gotham Ins. Co.

• Decision Date: 30 August 2013
• Docket Number: No. A13A1033.,A13A1033.
• Citation: 323 Ga.App. 776,748 S.E.2d 134
• Parties: AMERICAN PROFESSIONAL RISK SERVICES, INC. et al. v. GOTHAM INSURANCE COMPANY.
• Court: Georgia Court of Appeals

323 Ga.App. 776

748 S.E.2d 134

AMERICAN PROFESSIONAL RISK SERVICES, INC. et al.

v.GOTHAM INSURANCE COMPANY.

No. A13A1033.

Court of Appeals of Georgia.

Aug. 30, 2013.

William Davis Hewitt, Atlanta, for Appellant.

Jay William Pakchar, Atlanta, Rodrigo Garcia Jr., for Appellee.

MILLER, Judge.

American Professional Risk Services, Inc. and several of its employees (hereinafter collectively “AmPro”) filed suit in Fulton County against Gotham Insurance Company, Superior Roofing Company of Georgia, Inc., Atlas Group Enterprises, Inc. and Ron Herring for breach of contract, statutory and common law bad faith damages and declaratory judgment. In its suit, AmPro sought a determination that Gotham had a duty to defend AmPro in two underlying lawsuits arising from AmPro's role as administrator of the Roofing and Sheet Metal Contractors Association of Georgia Workers Compensation Trust Fund (the “Trust Fund”). The superior court subsequently dismissed the underlying lawsuits, and, finding that there was no longer any reason to determine whether Gotham had a duty to indemnify and defend AmPro in the underlying lawsuits, then dismissed this action against Gotham sua sponte. AmPro appeals, contending that the trial court erred in dismissing the complaint as moot, and the trial court erred in failing to rule that Gotham had a duty to defend and indemnify AmPro. For the reasons that follow, we vacate and remand.

“We review the trial court's ruling on a motion to dismiss under the de novo standard of review.” (Citations and punctuation omitted.) Durrah v. State Farm Fire & Cas. Co., 312 Ga.App. 49, 717 S.E.2d 554 (2011).

So viewed, the record shows that Gotham issued a professional liability insurance policy (hereinafter the “Policy”) to AmPro effective for one year beginning June 30, 2010. The Policy provided claims-made coverage for AmPro's professional services as a third-party administrator for workers' compensation benefit plans. The policy excluded coverage for claims or claim expenses based upon, due to or involving directly or indirectly, the insolvency or receivership of any self-funded or partially self-funded benefit plan.

On February 9, 2011, Superior Roofing and Herring brought suit in Fulton County against AmPro alleging breach of contract, negligence and negligent misrepresentation arising from AmPro's administration of the Trust Fund. That same day Atlas brought suit against AmPro in Fulton County raising identical claims. Less than one month later, the Superior Court of Fulton County placed the Trust Fund, whose members consisted of various roofing contractors including Superior Roofing and Atlas, under permanent receivership.¹

AmPro provided timely notice to Gotham of the claims made in the Superior Roofing and Atlas complaints (the “underlying suits”). Thereafter, Gotham sent a coverage denial letter notifying AmPro that, based on the exclusion for insolvent self-funded benefit plans, there was no coverage under the Policy for the claims alleged in the underlying suits.

AmPro responded to Gotham's coverage denial, contending that Gotham had a duty under Georgia law to defend the underlying suits. AmPro further contended that some of the underlying claims did not fit into the exclusion because those claims were not based upon or did not involve the insolvency of the Trust Fund. As a result of Gotham's denial of coverage, AmPro was forced to obtain attorneys to defend the underlying suits at its own expense.

AmPro subsequently filed this action against Gotham. Atlas and Superior Roofing moved to dismiss AmPro's complaint for improper venue and on the ground that there was no controversy ripe for declaratory judgment. AmPro and Gotham filed cross-motions for summary judgment on Gotham's duty to defend.

On September 18, 2012, the superior court entered a final order dismissing the underlying suits on the ground that the Insurance Commissioner, as permanent receiver of the Trust Fund, had exclusive standing to pursue the underlying claims. Thereafter, the...