Premier Eye Care Assocs., P.C. v. Mag Mut. Ins. Co.

• Decision Date: 05 June 2020
• Docket Number: A20A0373
• Parties: PREMIER EYE CARE ASSOCIATES, P.C. v. MAG MUTUAL INSURANCE COMPANY.
• Court: Georgia Court of Appeals

355 Ga.App. 620

844 S.E.2d 282

PREMIER EYE CARE ASSOCIATES, P.C.

v.MAG MUTUAL INSURANCE COMPANY.

A20A0373

Court of Appeals of Georgia.

June 5, 2020

Reconsideration Denied June 19, 2020

Stites & Harbison, R. Daniel Douglass ; W. Bryant Green III, Semra A. Kebede, for appellant.

Litchfield Cavo, Jay M. Barber, Janis H. Spillers, for appellee.

Dillard, Presiding Judge.

Premier Eye Care Associates, P.C., appeals the trial court's dismissal of its action against MAG Mutual Insurance Company for nonpayment of claims on an insurance policy issued by MAG to Premier. Specifically, Premier argues that the trial court erred by (1) failing to apply the correct legal standard in considering a motion to dismiss; (2) granting the motion to dismiss based on a contractual time limitation in the insurance policy; and (3) allowing MAG to enforce a contractual forfeiture provision when it was in breach of the policy. For the reasons set forth infra , we affirm.

Viewed in the light most favorable to Premier,¹ the record shows that Premier is a professional corporation solely owned by an ophthalmologic surgeon, Linda Szekeresh. On May 8, 2013, in connection with the operation of Szekeresh's medical office, Premier purchased the MAG insurance policy at issue. Subsequently, on the evening of September 19, 2013, Premier's medical office suffered catastrophic flood damage due to thousands of gallons of water mixed with liquefied grease that poured into it from the suite above, which was occupied by a pizza restaurant called Blue Jeans Pizza. Within hours of discovering the flood, Premier contacted MAG to file a claim under its policy.

In the days that followed, Szekeresh, on behalf of Premier, began regularly communicating with MAG representatives to obtain proceeds under the policy to cover the catastrophic losses it suffered due to the flood. And on November 8, 2013, Premier started sending formal written demands to MAG for sums allegedly owed but unpaid under the policy, beginning with a demand for $127,450. A few days later, MAG made an initial payment to Premier of $126,924 for the loss of personal property. Then, on November 25, 2013, MAG made the following additional payments to Premier: (1) $73,076 for the remaining coverage available for loss of personal property; (2) $2,575 as reimbursement for computer expenses; and (3) $18,910.68 as an initial payment of coverage for lost business income. Finally, in February 2014, MAG paid Premier $21,353.46 for remediation expenses and $42,755.62 for additional lost business income.

Thereafter, MAG withheld any additional payments for months in an effort to extract a release from Premier of any remaining claims. Indeed, according to Premier, MAG refused to pay an amount it admittedly knew was due from calculations done by its own expert until November 2014, when it paid Premier $118,949 for a business-interruption claim. And while the medical office did not reopen until October 5, 2014, this payment only covered the business-interruption claim through February 28, 2014.

Notwithstanding the foregoing, Premier was dissatisfied with the payments it received from MAG. And between November 2013, shortly after the flooding incident, and February 2015, it sent several letters to MAG, complaining that MAG failed to fully satisfy its demands under the policy. And in its final letter, dated February 10, 2015, Premier provided the statutorily required 60-day notice under OCGA § 33-4-6² for bringing a bad-faith claim against MAG. In doing so, Premier advised that this letter was the final notice to MAG of its various claims, and after detailing them, Premier contended that the remaining amount MAG owed under the policy was no less than $362,239.79.

Nevertheless, in an effort to reach a settlement, Premier requested that MAG mediate the claim, and MAG agreed to do so. The mediation occurred on January 28, 2015, but it was ultimately unsuccessful. According to Premier, "[d]uring the time frame of January 2015, [it] learned for the first time that MAG had determined as early as February 2014 that it would not pay any additional business[-]interruption coverage based upon a frivolous and unfounded reading of the [p]olicy."

On February 10, 2017, approximately two years after the failed negotiation and over three years after the flooding damage occurred, Premier filed suit against MAG to recover amounts it believed to be due under the policy, but the action was voluntarily dismissed without prejudice on July 27, 2018. Then, on October 30, 2018, Premier filed the instant renewal action as provided for in OCGA § 9-2-61,³ asserting breach-of-contract and bad-faith claims, and requesting attorney fees and litigation expenses. MAG answered the complaint, denying most of its allegations and asserting several affirmative defenses. On December 5, 2018, MAG filed a motion to dismiss the complaint or for a judgment on the pleadings, arguing that the complaint was time-barred by the two-year limitation period provided for under the terms of the insurance policy. In its response, Premier argued that MAG waived the time-limitation provision because it implicitly admitted liability under the policy and engaged in mediation with Premier within months of the two-year deadline. Premier also contended that MAG could not enforce the two-year time limitation because it breached the contract and acted in bad faith. Premier attached an affidavit from its attorney, detailing much of the factual background set forth supra , as well as providing information regarding a separate pending lawsuit in which MAG sued Blue Jeans Pizza to recoup payments it made to Premier under the policy.

Ultimately, the trial court granted MAG's motion to dismiss but denied its request for attorney fees. The court found that the two-year limitation period in the insurance policy was enforceable and that MAG had not waived enforcement of the provision. This appeal by Premier follows.

The factual and procedural background material to this case is largely undisputed.

But in ruling on a motion to dismiss, the trial court must "accept as true all well-[pleaded] material allegations in the complaint and must resolve any doubts in favor of the plaintiff."⁴ As our Supreme Court has explained,

[i]f, on motion to dismiss for failure to state a claim, the trial court elects to consider matters outside of the pleadings, the motion shall be treated as one for summary judgment and disposed of as provided in Code Section 9-11-56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by that [C]ode section.⁵

Here, in ruling on MAG's motion to dismiss, the trial court considered matters outside the pleadings, including exhibits attached to Premier's response to MAG's motion to dismiss. And in doing so, the court effectively converted the motion to dismiss into one for summary judgment.⁶

Under OCGA § 9-11-56 (c), a motion for summary judgment "shall be served at least 30 days before the time fixed for the hearing." Thus, when a trial court converts a motion to dismiss for failure to state a claim into one for summary judgment, "the party opposing the motion may, if he so desires, have 30 days’ notice in which to prepare evidence in opposition."⁷

To comply with this procedure, the trial court had the burden of informing Premier that it would consider exhibits outside the record, and that, "as the consequence, [it] would have no less than 30 days within which to submit [its] own evidence in response to their motion for summary judgment."⁸ But the 30-day notice can "be waived if it [is] not desired."⁹ Furthermore, the trial court is not required to give the party opposing the motion "an opportunity to obtain evidence or materials if the opposing party has already had notice that such would be required."¹⁰ Indeed, when evidence is submitted by a party responding to a motion to dismiss for failure to state a claim, there is "no indication of prejudice due to the trial court's failure to give notice of the actual nature of the pending action."¹¹ And here, given that Premier responded to MAG's motion, attached its own exhibits, and specifically addressed the time-limitation issue, "[it] waived any formal notice from the trial court that it would consider the motion to dismiss as one for summary judgment."¹² As a result, we construe the trial court's order as one granting summary judgment to MAG.

To that end, in considering the grant or denial of a motion for summary judgment, we review the evidence de novo , and "all reasonable conclusions and inferences drawn from the evidence are construed in the light most favorable to the nonmovant."¹³ Summary judgment is appropriate, then, when "the moving party can show that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law."¹⁴ And a defendant meets this burden when "the court is shown that the documents, affidavits, depositions[,] and other evidence in the record reveal that there is no evidence sufficient to create a jury issue on at least one essential element of the plaintiff's case."¹⁵ Lastly, if the moving party satisfies this burden, "the nonmoving party cannot rest on its pleadings, but must point to specific evidence giving rise to a triable issue."¹⁶ With these guiding principles in mind, we turn to Premier's specific claims of error.

1. Premier argues that the trial court applied the wrong standard of review for considering a motion to dismiss or a judgment on the pleadings. We disagree.

Premier complains that MAG's motion to dismiss the complaint was based on the time-limitation provision in its insurance policy, but the complaint was not focused on that issue because it was not raised until MAG's answer and motion to dismiss. But as discussed supra , the trial court effectively converted the motion to dismiss into one for summary judgment, and Premier acquiesced to that decision by filing a response to the motion to...