Cincinnati Ins. Co. v. Centennial Elementary Sch. PTA, Inc.

• Decision Date: 23 March 2020
• Docket Number: Civil Action No. 1:18-cv-00334-SDG
• Parties: CINCINNATI INSURANCE COMPANY, Plaintiff, v. CENTENNIAL ELEMENTARY SCHOOL PTA, INC. and GAINESVILLE CITY SCHOOL DISTRICT, Defendants.
• Court: U.S. District Court — Northern District of Georgia

CINCINNATI INSURANCE COMPANY, Plaintiff, v. CENTENNIAL ELEMENTARY SCHOOL PTA, INC.and GAINESVILLE CITY SCHOOL DISTRICT, Defendants.

Civil Action No. 1:18-cv-00334-SDG

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION

March 23, 2020

ORDER

This matter is before the Court on Defendant Gainesville City School District's ("District") motion for summary judgment [ECF 58] and Defendant Centennial Elementary School PTA, Inc.'s ("PTA") motion for summary judgment [ECF 59]. For the following reasons, the District's motion is GRANTED and the PTA's motion is GRANTED IN PART and DENIED IN PART.

I. BACKGROUND

Unless otherwise noted, the following facts are not disputed by the parties or are supported by undisputed evidence in the record. On May 19, 2011, Booster Enterprises, Inc. entered into an agreement with "Centennial Arts Academy, a[n] elementary school" ("Centennial Arts Academy" or "School") entitled the "Boosterthon Fun Run Contract" ("Contract" or "Boosterthon Contract").¹ Neither the District nor the PTA are named parties to the Contract.² The Contract was signed by Chris Carneal (as "president") on behalf of Booster and Angela Brand and Misty Clayton (as "president" and "president pro-tem," respectively) on behalf of Centennial Arts Academy.³ Neither Brand nor Clayton were employed by the School or District.⁴ Rather, both served as officers of the PTA.⁵ Both Brand and Clayton testified that they were instructed to sign the Contract by Charlene Williams, the School's principal.⁶

Throughout the Contract, Centennial Arts Academy is listed and referred to as the "Client."⁷ The School, however, is not a legal entity and cannot execute contracts on its own behalf.⁸ Brand testified that she wrote in "Centennial ArtsAcademy" as the "Client" in the Contract.⁹ The listed contact for the "Client"—Natalie Kempker—was not employed by the School or District, but served as the PTA's fundraising chair.¹⁰

Pursuant to the Contract, Booster agreed to "conduct a Boosterthon Fun Run"—an event "whereby students of educational institutions raise funds to sponsor their participation in exercise based event[s]" at Centennial Arts Academy.¹¹ Booster's responsibilities included, but were not limited to, "supplying all prizes, advertising, promotion, organization, and refreshments necessary or appropriate . . . to conduct a Boosterthon Fun Run."¹² The "Client" agreed to "make available to Booster, its personnel and agents, any and all school grounds and facilities" and "arrange for the volunteers."¹³ The Contract also required the "Client" to "determine the physical condition, health, and fitness of its students and other participants," as well as "obtain legally enforceable liabilitywaivers and releases from each and every participant, and attendee to, the Boosterthon Fun Run."¹⁴ The Contract contained merger and indemnity clauses.¹⁵

The Boosterthon Fun Run was held inside the Centennial Arts Academy gymnasium on February 2, 2012.¹⁶ During the event, Deborah Taylor—a staff member at Centennial Arts Academy—was injured.¹⁷ On May 24, 2013, Taylor and her husband filed a lawsuit in the State Court of Fulton County, asserting a single negligence claim against Booster to recover damages for Taylor's injuries (the "Taylor Litigation").¹⁸ Booster was contractually insured by Cincinnati Insurance Company ("Cincinnati") through a separate agreement.¹⁹ On June 14, 2015, Cincinnati settled the Taylor Litigation on behalf of Booster for $6.9 million.²⁰

On January 23, 2018, Cincinnati initiated this action against the District and PTA, seeking to recover the funds it expended to settle the Taylor Litigation.²¹Cincinnati asserts four claims against the District: indemnification (Count I); breach of contract (Count II); contribution (Count III); and, punitive damages and attorney's fees (Count VI).²² Cincinnati asserts those same four claims against the PTA, as well as two additional claims it styles as "alternative count[s]," for the violation of agency law (Count IV) and negligent misrepresentation (Count V).²³ On May 17, 2018, Cincinnati filed the operative Second Amended Complaint.²⁴ Jurisdiction is based on diversity of citizenship.

On March 4, 2019, the District and PTA both filed motions for summary judgment, seeking the dismissal of all counts against each defendant, respectively.²⁵ On March 25, 2019, Cincinnati responded to both motions.²⁶ On April 8, 2019, the District and PTA filed separate replies.²⁷

II. LEGAL STANDARD

Summary judgment is appropriate when "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" only if it can affect the outcome of the lawsuit under the governing legal principles. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is "genuine . . . if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.

A party seeking summary judgment has the burden of informing the district court of the basis for its motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If a movant meets its burden, the party opposing summary judgment must present evidence showing either (1) a genuine issue of material fact or (2) that the movant is not entitled to judgment as a matter of law. Id. at 324.

In determining whether a genuine issue of material fact exists, the evidence is viewed in the light most favorable to the party opposing summary judgment, "and all justifiable inferences are to be drawn" in favor of that party. Anderson, 477 U.S. at 255. See also Herzog v. Castle Rock Entm't, 193 F.3d 1241, 1246 (11th Cir. 1999). "Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions," and cannot be made by the district court. Anderson, 477 U.S. at 255. See also Graham v. State Farm Mut. Ins. Co., 193 F.3d 1274, 1282 (11th Cir. 1999). Summary judgment for the moving party is proper "[w]here the record taken as a whole could not lead arational trier of fact to find for the non-moving party." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

III. CHOICE OF LAW

"In diversity cases, the choice-of-law rules of the forum state determine what law governs." Interface Kanner, LLC v. JPMorgan Chase Bank, N.A., 704 F.3d 927, 932 (11th Cir. 2013). "Pursuant to Georgia law, contractual choice-of-law provisions will be enforced unless application of the chosen law would be contrary to the public policy or prejudicial to the interests of this state." Nat'l Freight, Inc. v. Consol. Container Co., LP, 166 F. Supp. 3d 1320, 1326 (N.D. Ga. 2015) (quoting CS-Lakeview at Gwinnett, Inc. v. Simon Prop. Grp., Inc., 283 Ga. 426, 428 (2008)).

Paragraph 15 of the Boosterthon Contract states: "This Agreement will be construed and enforced according to the laws of the State of Georgia . . . without giving effect to any conflicts of law rule or principle that might require the application of the laws of another jurisdiction."²⁸ The parties do not dispute the applicability of Georgia law and neither has suggested that such an application would violate public policy or be prejudicial to the interests of any state.Accordingly, the choice of law provision is valid and Georgia law applies to this dispute.

IV. THE DISTRICT'S MOTION FOR SUMMARY JUDGMENT

a. Cincinnati's Claims for Contribution and Indemnity Against the District Are Barred by Sovereign Immunity (Counts I and III).

"Sovereign immunity is a threshold issue that the trial court is required to address before reaching the merits of any other argument." State Dep't of Corr. v. Developers Sur. & Indem. Co., 324 Ga. App. 371, 374 (2013) (internal punctuation omitted). Under the Georgia Constitution, "sovereign immunity extends to a county-wide school district." Bomia v. Ben Hill Cty. Sch. Dist., 320 Ga. App. 423, 424 (2013) (citing Coffee Cty. Sch. Dist. v. Snipes, 216 Ga. App. 293, 294 (1995) ("Like the counties within which they are created, such school districts are political subdivisions of the state entitled to the sovereign immunity extended to the state."). See also S.W. v. Clayton Cty. Pub. Sch., 185 F. Supp. 3d 1366, 1380 (N.D. Ga. 2016) ("A school district is a political subdivision of the State of Georgia and can avail itself of sovereign immunity."). The parties agree that the District "isa charter school system" and "a political subdivision of the State of Georgia."²⁹ As such, the District is protected by sovereign immunity.

A school district may, nonetheless, waive its sovereign immunity. See McDaniel v. Fulton Cty. Sch. Dist., 233 F. Supp. 2d 1364, 1387 (N.D. Ga. 2002) ("Sovereign immunity applies equally to public school districts in Georgia, unless such immunity is waived."). Sovereign immunity can only be waived "by an Act of the [Georgia] General Assembly which specifically provides that sovereign immunity is thereby waived and the extent of the waiver." Id. (citing Welborn v. DeKalb Cty. Sch. Dist., 227 Ga. App. 377, 379 (1997)). See also GA. CONST. ART. I, § 2, ¶ IX. A plaintiff seeking to prove the "waiver of sovereign immunity bear[s] the burden of establishing the waiver." Bowen v. Telfair Cty. Sch. Dist., No. cv 618-112, 2019 WL 4463315, at *4 (S.D. Ga. Sept. 17, 2019) (citing Bd. of Regents of Univ. Sys. of Ga. v. Daniels, 264 Ga. 328, 328 (1994)). See also Georgia Dep't of Cmty. Health v. Data Inquiry, LLC, 313 Ga. App. 683, 685 (2012) ("It is axiomatic that the party seeking to benefit from the waiver of sovereign immunity bears the burden of proving such waiver.") (internal punctuation omitted).

For contribution and indemnity claims, the Georgia Supreme Court has held that the Georgia Torts Claim Act ("GTCA") "waives the State's sovereign immunity for such claims so long as the activity of ...