Lee v. Mercury Ins. Co. of Ga., A17A0624

CourtUnited States Court of Appeals (Georgia)
Writing for the CourtSelf, Judge.
Citation343 Ga.App. 729,808 S.E.2d 116
Docket NumberA17A0624
Decision Date03 November 2017
Parties LEE v. MERCURY INSURANCE COMPANY OF GEORGIA et al.

343 Ga.App. 729
808 S.E.2d 116

LEE
v.
MERCURY INSURANCE COMPANY OF GEORGIA et al.

A17A0624

Court of Appeals of Georgia.

November 3, 2017


808 S.E.2d 120

Toby Kei Leana Morgan, Atlanta, for Appellant.

Frank Edward Jenkins III, Erik John Pirozzi, Cartersville, for Appellee.

Self, Judge.

343 Ga.App. 729

Ronald Lee appeals from the trial court's order granting Mercury Insurance Company of Georgia's ("Mercury") motion for summary judgment and denying his cross-motion for summary judgment on the issue of insurance coverage following a house fire. Lee contends that the trial court erred by concluding that the policy did not provide coverage as a matter of law, asserting that the trial court should have instead concluded that he was entitled to summary judgment in his favor for breach of the insurance contract and the right to recover bad faith damages under OCGA § 33-4-6.1 He also asserts that genuine issues of material fact exist regarding Mercury's claim that it is entitled to void the policy based upon alleged misrepresentations in his application for insurance. Finally, he argues that the trial court erred in denying his motion to strike the affidavit of Mercury's director of underwriting, as well as

808 S.E.2d 121

denying his motion to compel production of Mercury's claim file.

For the reasons explained below, we reverse the trial court's grant of summary judgment in favor of Mercury with regard to all issues other than bad faith, grant Lee's motion for summary judgment on the issue of coverage under the policy, and affirm the trial court's denial of Lee's motion to strike and motion to compel. Based upon our conclusion that genuine issues of material fact exist with regard to whether Mercury is entitled to void the policy, Lee cannot yet obtain a recovery under the policy.

"On appeal, we review the grant or denial of summary judgment de novo, construing the evidence and all inferences in a light most favorable to the nonmoving party." (Citation and punctuation omitted.) Seki v. Groupon, Inc., 333 Ga. App. 319, 775 S.E.2d 776 (2015). So viewed, the record shows that Lee lived with his wife in South Carolina, but traveled frequently as a senior project manager for a company constructing public housing developments. He typically traveled during the week and was home in South Carolina on the weekends. He explained that most projects would take 10-12 months to complete.

In 2007, Lee frequently traveled between two projects: one in Winder, Georgia, and the other in Crestview, Florida. During this

343 Ga.App. 730

time, Lee's childhood friend, Jim Constable, faced significant financial difficulties because he was caring for his wife, who suffered from a long-term terminal illness, and unable to work. To help his friend, Lee agreed to purchase Constable's home at 7066 Dalmatia Drive in Riverdale, Georgia, pay the mortgage payments, and allow Constable's family to continue living there for free. This arrangement "gave [Lee] a place to stop, plus it helps [Constable] and his family, and [Lee didn't] have to rent motel rooms." Lee explained that he "was traveling constantly, flying through Atlanta. And I'd just stop in there ... and then go catch another flight the next day."

In December 2007, Lee purchased the Riverdale house from Constable, and Constable's family continued living on the property. It is undisputed that Constable paid no rent. As part of their arrangement, Constable gave Lee all of the furniture in the bedroom, living room, kitchen, and dining room. Lee wanted the option to rent the house in the event Constable's money problems deteriorated to the point where he had to move out and live with other family members. When Lee first took out the loan in 2007, he stayed at the Riverdale house so many nights each week, his mortgage company considered it his primary residence. Later, he stayed there "maybe one night a week, every other week, or something."

In 2010, Lee made a claim with a different insurance carrier for hail damage to the Riverdale house. After telling Constable that this carrier planned to increase his premiums as a result of the claim, Constable stated that his friend, Lawrence Arnold, was an insurance agent who could obtain insurance for the house. In his deposition, Lee explained that he talked with Arnold over the telephone to provide him with the information required to complete the application. Because he was not there to sign the application, Lee asked if Constable could sign his name, and Arnold replied, "yes, that's fine." According to Lee, Arnold knew that he would not be living there full-time; Lee told him that he would "be stopping in ... because I travel." Lee also testified that Arnold never asked him if he would be living there, because Arnold "knew [Constable] was living there" based upon Arnold's friendship with Constable.

All of the answers in Lee's application for insurance were typed, consistent with Lee's testimony that he did not personally complete the application. In one section of the application, the directions state, "Check all that apply," and an "X" is typed in the boxes beside "Primary" and "Occupied by Named Insured"; the boxes beside "Secondary" and "Additional Residence for Insured" are left blank. This section does not include a box identifying the property as rental property. Another section of the policy directs that all residents of the household be listed, including unrelated individuals. Lee's name,

343 Ga.App. 731

followed by the abbreviation "IN," along with his friend, Jim Constable, and Constable's two children, followed by the abbreviation

808 S.E.2d 122

"OR," meaning "other" are typed into a column titled "Rel. to Ins."

On May 5, 2012, the property was destroyed by an accidental fire in which Constable died and one of his daughters suffered serious injuries. After receiving a letter denying his claim for coverage under the policy in December 2012, Lee filed a complaint against Mercury and Arnold alleging various theories of recovery. He later dismissed his claim against Arnold with prejudice.

During discovery, Lee filed a motion to compel Mercury to produce documents in its claim file. Mercury responded that it had already produced many of the requested documents, as well as a privilege log detailing its attorney-client privilege and work product objections to Lee's remaining requests. The trial court held a hearing, inspected the documents in camera, and then granted Lee's motion in part, but denied it as to documents it determined were protected by attorney-client privilege and the work product doctrine.

Following the completion of discovery, Mercury filed a motion for summary judgment in its favor based upon (1) the misrepresentation in the policy application that the Riverdale house was Lee's primary residence and (2) Lee's failure to reside at the Riverdale house as required by the terms of the policy. Lee filed a response, a cross motion for summary judgment, and a motion to strike the affidavit of Mercury's director of underwriting, which Mercury filed in support of its motion for summary judgment. Lee asserted that he was entitled to summary judgment in his favor on the issue of coverage under the terms of the policy and Mercury's bad faith. Following a hearing, the trial court granted Mercury's motion for summary judgment and denied both Lee's cross-motion for summary judgment and his motion to strike.

1. Coverage Under the Policy. Lee asserts that the trial court should have granted summary judgment in his favor "as there is sufficient evidence in the record to support a finding of breach of contract."2 In his view, the policy provisions expressly cover the loss

343 Ga.App. 732

of the Riverdale house due to fire, and this home qualified for coverage under the policy terms. We agree.

Under Georgia law,

[i]t is well settled that insurance policies, even when ambiguous, are to be construed by the court, and no jury question is presented unless an ambiguity remains after application of the applicable rules of contract construction. Because insurance policies are contracts of adhesion, drawn by the legal draftsman of the insurer, they are to be construed as reasonably understood by an insured.

(Citation and punctuation omitted.) First Financial Ins. Co. v. American Sandblasting Co., 223 Ga. App. 232 (1), 477 S.E.2d 390 (1996). "The policy should be read as a layman would read it and not as it might be analyzed by an insurance expert or an attorney." Cincinnati Ins. Co. v. Davis, 153 Ga. App. 291, 295, 265 S.E.2d 102 (1980). "The insurer, in preparing the language of its policy, has the burden of using language that is clear and precise." Ga. Farm Bureau Mut. Ins. Co. v. Meyers, 249 Ga. App. 322, 324, 548 S.E.2d 67 (2001). "The test is not what the

808 S.E.2d 123

insurer intended its words to mean, but what a reasonable person in the position of the insured would understand them to mean." (Citation and...

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8 practice notes
  • Gould v. Hous. Auth. of Augusta, A17A0902
    • United States
    • United States Court of Appeals (Georgia)
    • November 3, 2017
    ...to be quasi-judicial could a party to the hearing under any circumstance later decide that the hearing officer's decision was non-binding.808 S.E.2d 116The majority adopts the position that because the hearing officer was required to make factual determinations based on the preponderance of......
  • Am. Family Ins. Co. v. Almassud, Civil Action No. 1:16-CV-4023-RWS
    • United States
    • United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Northern District of Georgia
    • February 17, 2021
    ...Co., 802 S.E.2d at 455 (waiver when insurer denied coverage for claim at issue but covered others); Lee v. Mercury Ins. Co. of Georgia, 343 Ga.App. 729, 808 S.E.2d 116, 132 (2017) (fact question on waiver when insurer renewed policy 522 F.Supp.3d 1277 after learning about misrepresentations......
  • JPMorgan Chase Bank, N.A. v. Cronan, A20A0378
    • United States
    • United States Court of Appeals (Georgia)
    • June 18, 2020
    ...court could conclude that she had personal knowledge of Chase's general business practices. Compare Lee v. Mercury Ins. Co. of Georgia , 343 Ga. App. 729, 750 (6), 808 S.E.2d 116 (2017) (holding that affidavit showing that affiant was familiar with the company's underwriting policies and pr......
  • Auto-Owners Ins. Co. v. Xytex Tissue Servs., LLC, CV 118-031
    • United States
    • United States District Courts. 11th Circuit. United States District Court (Southern District of Georgia)
    • September 16, 2019
    ...the authority to bind coverage for the insurance company, issues of fact exist as to dual agency. See Lee v. Mercury Ins. Co. of Ga., 343 Ga.App. 729, 808 S.E.2d 116, 130 (2017) (finding insurance agent may have the power to bind the insurer when, among other things, the agent signed polici......
  • Request a trial to view additional results
8 cases
  • Gould v. Hous. Auth. of Augusta, A17A0902
    • United States
    • United States Court of Appeals (Georgia)
    • November 3, 2017
    ...to be quasi-judicial could a party to the hearing under any circumstance later decide that the hearing officer's decision was non-binding.808 S.E.2d 116The majority adopts the position that because the hearing officer was required to make factual determinations based on the preponderance of......
  • Am. Family Ins. Co. v. Almassud, Civil Action No. 1:16-CV-4023-RWS
    • United States
    • United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Northern District of Georgia
    • February 17, 2021
    ...Co., 802 S.E.2d at 455 (waiver when insurer denied coverage for claim at issue but covered others); Lee v. Mercury Ins. Co. of Georgia, 343 Ga.App. 729, 808 S.E.2d 116, 132 (2017) (fact question on waiver when insurer renewed policy 522 F.Supp.3d 1277 after learning about misrepresentations......
  • JPMorgan Chase Bank, N.A. v. Cronan, A20A0378
    • United States
    • United States Court of Appeals (Georgia)
    • June 18, 2020
    ...court could conclude that she had personal knowledge of Chase's general business practices. Compare Lee v. Mercury Ins. Co. of Georgia , 343 Ga. App. 729, 750 (6), 808 S.E.2d 116 (2017) (holding that affidavit showing that affiant was familiar with the company's underwriting policies and pr......
  • Auto-Owners Ins. Co. v. Xytex Tissue Servs., LLC, CV 118-031
    • United States
    • United States District Courts. 11th Circuit. United States District Court (Southern District of Georgia)
    • September 16, 2019
    ...the authority to bind coverage for the insurance company, issues of fact exist as to dual agency. See Lee v. Mercury Ins. Co. of Ga., 343 Ga.App. 729, 808 S.E.2d 116, 130 (2017) (finding insurance agent may have the power to bind the insurer when, among other things, the agent signed polici......
  • Request a trial to view additional results

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