Ron D. Beal, P.A. v. Hartford Fire Insurance Company
| Decision Date | 13 July 2021 |
| Docket Number | 20-14854 |
| Parties | RON D. BEAL, P.A., Plaintiff-Appellant, v. HARTFORD FIRE INSURANCE COMPANY, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
DO NOT PUBLISH
Appeal from the United States District Court for the Northern District of Georgia D.C. Docket No. 1:20-cv-01447-MHC
Before MARTIN, BRANCH, and LUCK, Circuit Judges.
Ron D Beal, P.A., appeals the district court's order dismissing its breach of contract claim. Because the district court correctly concluded that Beal's claim was barred by the statute of limitations, we affirm.
In 2006, Beal represented a subcontractor in a dispute with a general contractor bonded by Hartford Fire Insurance Company. The subcontractor settled with the contractor and Hartford. In the settlement agreement, Hartford agreed that it would "not contest that [the subcontractor was] entitled to recover attorney fees," while "reserv[ing] the right to challenge the amount of attorney fees based on the [s]ubcontract and Kansas law," and that the Kansas state court would "determine the amount of the [f]ees and [c]osts." The settlement agreement also provided that it would be "governed by and construed in accordance with the laws of the State of Kansas, without regard to conflicts or choice of law principles."
In November 2011, the state court held a three-day evidentiary hearing on the subcontractor's motion for attorney's fees. On December 2, 2011, Hartford submitted its proposed findings of fact and conclusions of law, which said that "[b]ecause the statutory bond issued by Hartford did not include attorney's fees, the [c]ourt should award $-0- in attorney's fees against Hartford." On April 4, 2014 [1] the state court ordered the contractor to pay the subcontractor "attorney fees, costs[, ] and expenses in the amount of $378, 622.10, less" an amount that was to be determined at a later hearing, but found that Hartford did not owe the subcontractor any attorney's fees. The subcontractor appealed, and the Kansas court of appeals affirmed.
In May 2014, the subcontractor filed for bankruptcy and its claim against Hartford was assigned to Beal in December 2017. On April 3, 2020, Beal sued Hartford in the Northern District of Georgia for breach of contract. Beal alleged that Hartford breached the settlement agreement on December 2, 2011 when it submitted its proposed findings of fact and conclusions of law asking the state court to find that it did not owe any attorney's fees to the subcontractor.
Hartford moved to dismiss Beal's complaint because the breach of contract claim was barred by the statute of limitations and Beal was collaterally estopped from taking a different position on the attorney's fees than the state court. Beal moved for summary judgment. The district court granted Hartford's motion to dismiss and denied Beal's motion for summary judgment as moot. The district court concluded that Georgia's six-year statute of limitations applied and began to run on December 2, 2011 when Hartford filed its proposed findings of fact and conclusions of law arguing that it did not owe attorney's fees. Beal filed its breach of contract claim on April 3, 2020, more than eight years later. The district court also concluded that Beal's claim was barred by collateral estoppel because the state court necessarily decided that Hartford did not violate the settlement agreement when it "urg[ed] the Kansas court not to award . . . fees against it."
We review de novo a district court's order granting a motion to dismiss for failure to state a claim. Cisneros v Petland, Inc., 972 F.3d 1204, 1210 (11th Cir. 2020). We "accept the factual allegations in the complaint as true and construe them in the light most favorable to the plaintiff." Id. A complaint must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v Twombly, 550 U.S. 544, 570 (2007). We review de novo a district court's order denying summary judgment. Circuitronix, LLC v. Kinwong Elec. (Hong Kong) Co. Ltd., 993 F.3d 1299, 1303 (11th Cir. 2021). We also review de novo "the district court's application of a statute of limitations," Berman v. Blount Parrish & Co., Inc., 525 F.3d 1057, 1058 (11th Cir. 2008), and "whether the doctrine of collateral estoppel [was] available," CSX Transp., Inc. v. Gen. Mills, Inc., 846 F.3d 1333, 1336 (11th Cir. 2017).
Beal argues that the district court erred in concluding that its breach of contract claim was barred by the statute of limitations and collateral estoppel. Beal contends that the district court should have granted summary judgment in its favor and awarded prejudgment interest. Because the district court correctly determined that Beal's claim was barred by the statute of limitations, we do not need to address the other issues.
As a preliminary matter, we must decide whether the Georgia or Kansas statute of limitations applies. While the settlement agreement between Hartford and the subcontractor said that Kansas law applied, "unless the parties expressly agree to apply the statute of limitations of another state, general choice of law provisions in contracts incorporate only substantive law and do not displace the procedural law of the forum state." W. Video Collectors, L.P. v Mercantile Bank of Kansas, 935 P.2d 237, 239 (Kan.Ct.App. 1997). "A federal court sitting in diversity will apply the conflict-of-laws rules of the forum state." Grupo Televisa, S.A. v. Telemundo Commc'ns Grp., Inc., 485 F.3d 1233, 1240 (11th Cir. 2007). Georgia, the forum state here, follows "the rule of lex fori" that "procedural or remedial questions are governed by the law of the forum, the state in which the action is brought." Lloyd v. Prudential Sec Inc., 438 S.E.2d 703, 704 (Ga.Ct.App. 1993). Statutes of limitations "look only to the remedy and so are procedural." Id. Thus, we apply Georgia's statute of limitations. The parties agree that the Georgia statute of limitations applies.
The parties also agree that this case boils down to one "key" issue: whether Georgia's six-year statute of limitations began to run on April 4, 2014, when the state court entered the order denying Beal attorney's fees from Hartford, or on December 2, 2011, when Hartford allegedly breached the settlement agreement.[2] We conclude, as the district court did, that the statute of limitations began to run on December 2, 2011 and, therefore, Beal's breach of contract claim-filed April 3, 2020-was filed long after the statute of limitations period expired.
Under Georgia law, "the true test to determine when the cause of action accrued is to ascertain the time when the plaintiff could first have maintained his action to a successful result." Wallace v. Bock, 620 S.E.2d 820, 823 (Ga. 2005). For "a contract claim, the statute of limitations begins to run at the time of its alleged breach." Id.; see also Houghton v. Sacor Fin., Inc., 786 S.E.2d 903, 906 (Ga.Ct.App. 2016) ("an action for breach of a written contract must be brought within six years of the breach"). In its complaint, Beal alleged that Hartford "materially breach[ed]" the settlement agreement on "December 2, 2011" when Hartford submitted its proposed findings of fact and conclusions of law to the state court. And, on appeal, Beal maintains that the breach occurred on December 2, 2011. Therefore, the statute of limitations began to run on December 2, 2011-the date of the alleged breach-and Beal's breach of contract claim, filed more than six years after that date, was barred.
Beal argues that the statute of limitations could not have started to run before it was allegedly damaged on April 4, 2014, when the state court "ruled for Hartford instead of ruling for [Beal], thereby resulting in [Beal] losing a collectable judgment against Hartford." But Georgia courts have rejected Beal's argument, consistently holding that "the statute of limitation[s] runs from the time the contract is broken rather than from the time the actual damage results or is ascertained." Hamburger v. PFM Capital Mgmt., Inc., 649 S.E.2d 779, 782 (Ga.Ct.App. 2007); see also Shelnutt v. Mayor of Savannah, 826 S.E.2d 379, 384 (Ga.Ct.App. 2019) (); Owen v. Mobley Constr. Co., Inc., 320 S.E.2d 255, 256 (Ga.Ct.App. 1984) .
Beal suggests that those courts have it wrong and contends that the statute of limitations does not begin to run until a breach of contract claim is "due and payable" because the statute says that "[a]ll actions upon simple contracts in writing shall be brought within six years after the same become due and payable." Ga. Code Ann. § 9-3-24 (1996). But the Georgia Supreme Court has made clear that "due and payable" refers to the contractual obligation, not the damages resulting from a breach of contract action. See Wallace, 620 S.E.2d at 821-24.
In Wallace, the plaintiffs purchased a house from a builder and scheduled a closing date. 620 S.E.2d at 821. At the closing, the plaintiffs noted that the house still needed some work, but they agreed to close and give the builder eleven days to finish working on the house. Id. The work was never completed. Id. Six years and a day after the closing date, the plaintiffs sued for breach of contract. Id. at 822. The court explained that a "suit alleging breach of a construction contract must be brought within six years after the same becomes due and payable" and that "the statute of...
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