Nat'l Cas. Co. v. Ga. Sch. Bds. Ass'n-Risk Mgmt. Fund
Decision Date | 02 June 2017 |
Docket Number | 1:16–cv–691–WSD |
Citation | 261 F.Supp.3d 1316 |
Parties | NATIONAL CASUALTY COMPANY, Plaintiff, v. GEORGIA SCHOOL BOARDS ASSOCIATION–RISK MANAGEMENT FUND, Defendant. |
Court | U.S. District Court — Northern District of Georgia |
Jay Russell Sever, Pro Hac Vice, Katie Myers, Phelps Dunbar, New Orleans, LA, Michael J. Rust, David Christopher Sawyer, Gray Rust St. Amand Moffett & Brieske, LLP, Atlanta, GA, for Plaintiff.
Thomas Kearney Wingfield, Carey Michael Johnson, The Johnson Insurance Law Group, LLC, Atlanta, GA, for Defendant.
This matter is before the Court on Defendant Georgia School Boards–Risk Management Fund's ("Risk Fund") Motion for Partial Summary Judgment [22], and Plaintiff National Casualty Company's ("National") Motion for Summary Judgment [23].
This is a dispute between an insurance company and a risk management agency. National and Risk Fund provide overlapping liability coverage to members of a professional association. National's insurance policies require National to provide primary coverage unless coverage is available from another source. If other coverage is available, National's coverage is only excess. Risk Fund's coverage agreements contain a similar provision, under which Risk Fund's coverage is excess if other insurance covering the same risk is in place. These apparently conflicting provisions came to a head when several individuals incurred liabilities covered by both parties. Each party contends that the other has primary coverage obligations for the liabilities claimed, and that its own coverage obligations are excess. The Court is required to determine the extent of the parties' coverage obligations in light of the competing provisions.
National is an insurance company. (Defendant's Statement of Material Facts [22.2] ("DSMF") ¶ 1). The Professional Association of Georgia Educators ("PAGE") is a professional association of teachers and administrators. (DSMF ¶ 2). National issued insurance policies to PAGE for the July 1, 2012, to July 1, 2013, and July 1, 2013, to July 1, 2014, periods (together, the "Policies"). (DSMF ¶¶ 3–4). The Policies provide the following liability coverage to PAGE members:
(DSMF ¶¶ 5–6).
The Policies contain a provision limiting coverage for liabilities covered by "other insurance" (National's "Other Coverage Provision"):
(DSMF ¶ 7).
Risk Fund is a risk management agency created under O.C.G.A. §§ 20–2–2001 et seq. (DSMF ¶¶ 16–17). It is an association formed by boards of education to share their liability risks. ( O.C.G.A. § 20–2–2001(6) ; DSMF ¶ 17). Risk Fund's members include Columbia County Schools, Douglas County School District, Muscogee County School District, and McIntosh County Board of Education. (DSMF ¶¶ 20–23). Risk Fund "is not an insurance company or an insurer" under Georgia insurance law. O.C.G.A. § 20–2–2004.
Risk Fund's risk-sharing arrangement is set out in coverage agreements entered into by Risk Fund and its members (the "Coverage Agreements"). (DSMF ¶ 18). Under the Coverage Agreements, Risk Fund provides liability coverage to members and their employees, including PAGE members.1 The coverage periods are July 1, 2012, to July 1, 2013, and July 1, 2013, to July 1, 2014. (DSMF ¶¶ 18, 20–23). Risk Fund's coverage includes liability coverage for personal injury, bodily injury, property damage, negligent acts, wrongful acts, and sexual abuse. (See [5.1]–[5.4] ). Risk Fund is required to "pay [amounts a] Member becomes legally obligated to pay as damages" and to "defend ... Member[s] against any ‘suit’ seeking those damages." (See, e.g., [5.3] at 30; see generally [5.1]–[5.4] ). Risk Fund's members are jointly and severally liable "for all legal obligations" arising under the Coverage Agreements. (DSMF ¶¶ 18–19; O.C.G.A. § 20–2–2009 ).
The Coverage Agreements contain a provision limiting coverage where insurance is available from another source (Risk Fund's "Other Coverage Provision"):
(DSMF ¶¶ 25, 27).2
From 2014 to 2016, several lawsuits were filed against PAGE members covered under National's Policies and Risk Fund's Coverage Agreements (the "Covered Individuals"). (See DSMF ¶¶ 28–32). In June 2014, for example, an elementary school student filed a negligence action against his school principal, a PAGE member and employee of Columbia County School District. ( [5.7]; DSMF ¶ 29). The student alleged that, as a result of the principal's negligence, he fell from a playground ladder and injured himself. ( [5.7] ¶¶ 13, 17). In September 2015, a high school student filed a negligence action against her chemistry teacher, a PAGE member and employee of Douglas County School District. ( [5.8]; DSMF ¶ 28). The student alleged that, as a result of the teacher's negligence, she was burned during a chemistry experiment. ( [5.8] ¶¶ 5–23). Similar lawsuits have been filed against other PAGE members employed by Risk Fund's members, including employees of Columbia County School District, Muscogee County School District, and McIntosh County School District. (DSMF ¶¶ 30–32).
National refused to defend or indemnify these Covered Individuals until Risk Fund's coverage, under the Coverage Agreements, was exhausted. (See DSMF ¶¶ 33–38). National claims the Other Coverage Provision in the Policies makes National only an excess insurer. Risk Fund contends that National is the primary insurer and that Risk Fund is only required to provide excess coverage. Faced with National's refusal to provide primary coverage, Risk Fund defended, indemnified and paid settlement amounts on behalf of the Covered Individuals, pending resolution of this action. (See DSMF ¶¶ 33–38).
On March 3, 2016, National filed its Complaint for Declaratory Judgment [1] and, on April 28, 2016, it filed its Amended Complaint for Declaratory Judgment [4] ("Amended Complaint"). The Amended Complaint seeks a declaration that Risk Fund has "the primary duty to defend and indemnify" Covered Individuals against whom suits have been filed. (Compl. at 9–10).
On May 20, 2016, Risk Fund filed its Counterclaim for Breach of Contract, Contribution, Unjust Enrichment and Declaratory Judgment [5]. Count 1 asserts a breach of contract claim, alleging that National violated the Policies by refusing to defend or indemnify the Covered Individuals. ( [5] ¶ 101). Count 2 asserts a claim for unjust enrichment and equitable contribution, alleging that National was unjustly enriched by Risk Fund's defense and indemnification of Covered Individuals, and that Risk Fund is equitably entitled to contribution from National for amounts paid by Risk Fund. ( [5] ¶¶ 108–109). Count 3 seeks a declaratory judgment that National is the primary insurer of PAGE members covered under the Policies and the Coverage Agreements or, in the alternative, that National and Risk Fund must share, pro rata, defense and indemnity obligations. ( [5] at 39). Count 4 seeks attorney's fees, under O.C.G.A. § 13–6–11, on the grounds that National acted in bad faith, was stubbornly litigious, or caused Risk Fund unnecessary trouble and expense. ( [5] at 40).
On September 16, 2016, National filed its Motion for Summary Judgment on its claim for declaratory relief and on Risk Fund's counterclaim for declaratory relief. Risk Fund also filed its Motion for Partial Summary Judgment, requesting a declaration that (1) "coverage owed to jointly covered persons under [National's Policies] is primary to coverage provided under" Risk Fund's Coverage Agreements, or (2) the parties "must share coverage owed to jointly covered individuals on a pro rata basis." ( [22] at 1–2).
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