Wiedeman v. Canal Ins. Co., 1:15-cv-4182-WSD

Decision Date02 June 2017
Docket Number1:15-cv-4182-WSD
CourtUnited States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Northern District of Georgia

This matter is before the Court on Defendant Auto-Owners Insurance Company's ("Auto-Owners") Motion for Summary Judgment [176].

A. Facts

This action arises from an August 8, 2014, collision (the "Collision") between Plaintiff Gregory Wiedeman ("Plaintiff") and Defendant Walter Patrick Dorn, IV, an employee of Defendant H&F Transfer, Inc. ("H&F"). (Auto-Owners' Statement of Undisputed Facts [176.2] ("ASMF") ¶ 1; Pl.'s Resp. [190.1] ("R-ASMF") ¶ 1). Auto-Owners had issued an insurance policy to H&F (the "Policy"). (ASMF ¶ 4; R-ASMF ¶ 4). Plaintiff seeks to recover against Auto-Owners for alleged damages arising from the Collision. (ASMF ¶ 5; R-ASMF ¶ 5). Auto-Owners claims it did not receive prompt notice of the Collision, as required under the Policy, and thus there is no coverage under the Policy for the damages Plaintiff seeks. Plaintiff argues that Auto-Owners failed to timely raise its notice defense, and that Auto-Owners thus waived the defense.

The Policy states "[y]ou and any person seeking coverage under this policy must notify us promptly as to how, when and where the accident happened." (ASMF ¶ 6; R-ASMF ¶ 6). The Policy also states that "[n]o legal action may be brought against us until there has been full compliance with all terms of this policy." (ASMF ¶ 7; R-ASMF ¶ 7). Auto-Owners claims it first received notice of the Collision on October 27, 2015. (ASMF ¶ 8). Plaintiff contends Auto-Owners received notice shortly after the Collision. Plaintiff presents evidence that, on August 18, 2014, ten days after the accident, attorney Daniel Floyd sent two separate letters to Auto-Owners' insureds, H&F and its driver Dorn, respectively, stating that he had been retained by Auto-Owners to represent them with respect to the potential claims asserted by Plaintiff. On the same day, Floyd sent a retention letter to a consultant, John Bethea, also stating that he had been retained byAuto-Owners to represent H&F and Dorn. In an October 2014 email to its insurance agency, H&F's president Tyler Fairey stated that "Auto-Owners has, as you know, been compiling info in the event of a lawsuit . . . ."1 (Pl.'s Statement of Material Facts [190.1] ("PSMF") ¶ 9-11). Auto-Owners claims Floyd's references to Auto-Owners in his letters were scrivener's errors, as Floyd stated in a sworn declaration. (Resp. to PSMF [207.1] ("R-PSMF") ¶¶ 9-10). Auto-Owners claims Fairey's email "was simply repeating the erroneous reference to Auto-Owners that was inadvertently made by Floyd." (R-PSMF ¶ 11).

B. Procedural History

On December 31, 2015, Auto-Owners filed its Initial Disclosures. The Initial Disclosures stated:

Provide a detailed factual basis for the defense or defenses and any counterclaims or crossclaims asserted by defendant in the responsive pleading.
According to Co-Defendants H&F Transfer and Dorn, the accident at issue was caused by Plaintiff. Further, Auto-Owners did not insure any Co-Defendant. The policy issued by Auto-Owners which is the subject of this action was canceled prior to the accident. Auto-Owners has no liability to Plaintiff or Defendants for an accident which occurred outside of the policy period, and cannot be subject to direct action.
In further response, Auto-Owners states that discovery in this matter has not yet begun. Auto-Owners hereby reserves all of its defenses, and will fully explore the factual basis of all possible defenses raised when discovery commences.

([11] at 2-3). Auto-Owners did not supplement its Initial Disclosures.

On March 11, 2016, Auto-Owners filed its Answer [39]. The Answer sets forth several defenses, including that (i) it did not provide insurance coverage to H&F on the date of the Collision; (ii) Plaintiff is not entitled to maintain a direct action against Auto-Owners; and (iii) it did not owe a duty to Plaintiff. (See Answer at 1-4). Auto-Owners did not include in its Answer any reference to the notice provision or a lack of notice regarding the Collision.

On May 2, 2016, Auto-Owners filed its first Motion for Summary Judgment [61] ("First Motion for Summary Judgment"), arguing that it cancelled its Policy with H&F prior to the date of the Collision, and therefore it cannot be held liable for any of Plaintiff's damages. On December 21, 2016, the Court issued its Order [217] denying Auto-Owners' First Motion for Summary Judgment. The Courtfound there was an issue of fact as to whether H&F or Auto-Owners filed the necessary forms to cancel the Policy.

On August 30, 2016—the day before discovery closed in this matter—Auto-Owners stated in a joint submission to the Court that "Auto-Owners first received notice of the accident on October 27, 2015—nearly 15 months after it occurred, after Plaintiff filed this litigation, and after any conduct on which Plaintiff relies took place." ([207.1]).

On September 22, 2016, Auto-Owners filed the instant Motion for Summary Judgment, arguing that there is no dispute that Auto-Owners did not receive prompt notice of the Collision, pursuant to the notice requirement in the Policy, and thus there is no coverage under the Policy for the damages Plaintiff seeks.

Plaintiff argues that Auto-Owners waived its notice defense by failing to timely raise it. Plaintiff contends that there is a disputed issue of material fact regarding Auto-Owners' knowledge of the Collision, and that Auto-Owners fails to show any prejudice as a result of the purported late notice. Plaintiff also argues that Georgia's direct action statute, O.C.G.A. § 40-2-140, bars the notice provision of the Policy.

A. Legal Standard

Summary judgment is appropriate where the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56. The party seeking summary judgment bears the burden of demonstrating the absence of a genuine dispute as to any material fact. Herzog v. Castle Rock Entm't, 193 F.3d 1241, 1246 (11th Cir. 1999). Once the moving party has met this burden, the nonmoving party must demonstrate that summary judgment is inappropriate by designating specific facts showing a genuine issue for trial. Graham v. State Farm Mut. Ins. Co., 193 F.3d 1274, 1282 (11th Cir. 1999). The nonmoving party "need not present evidence in a form necessary for admission at trial; however, he may not merely rest on his pleadings." Id.

"At the summary judgment stage, facts must be viewed in the light most favorable to the nonmoving party only if there is a 'genuine' dispute as to those facts." Scott v. Harris, 550 U.S. 372, 380 (2007). Where the record tells two different stories, one blatantly contradicted by the evidence, the Court is not required to adopt that version of the facts when ruling on summary judgment. Id."[C]redibility determinations, the weighing of evidence, and the drawing of inferences from the facts are the function of the jury . . . ." Graham, 193 F.3d at 1282. "If the record presents factual issues, the court must not decide them; it must deny the motion and proceed to trial." Herzog, 193 F.3d at 1246. The party opposing summary judgment "'must do more than simply show that there is some metaphysical doubt as to the material facts . . . . Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.'" Scott, 550 U.S. at 380 (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)). A party is entitled to summary judgment if "the facts and inferences point overwhelmingly in favor of the moving party, such that reasonable people could not arrive at a contrary verdict." Miller v. Kenworth of Dothan, Inc., 277 F.3d 1269, 1275 (11th Cir. 2002) (quotations omitted).

B. Analysis
1. Whether Auto-Owners Waived its Notice Defense

Auto-Owners contends that the Policy does not cover Plaintiff, because it did not receive prompt notice of the Collision as required by the Policy. Plaintiff argues that Auto-Owners' Motion should be denied because it failed to raise this defense in its answer, initial disclosures, or discovery responses.

Rule 8(c) of the Federal Rules of Civil Procedure requires that a responsive pleading must set forth certain enumerated affirmative defenses as well as "any avoidance or affirmative defense." Fed. R. Civ. P. 8(c). "A party's failure to raise an affirmative defense in the pleadings typically results in a waiver of that defense." Lee v. Univ. Underwriters Ins. Co., 642 F. App'x 969, 973 (11th Cir. 2016) (citing Proctor v. Fluor Enters., Inc., 494 F.3d 1337, 1350 (11th Cir. 2007)). "In diversity actions, state law determines whether a particular defense is an 'avoidance or affirmative defense' under Rule 8(c)." Id. at 973-74. "However, federal law dictates the manner and time in which defenses are raised and when waiver occurs." Id. at 974 (internal quotation marks omitted).

Where, as here, the jurisdiction of the Court rests on the diversity of the parties, the Court must apply the choice of law principles of the forum state to determine the appropriate substantive law to apply. See Erie R.R. Co. v. Tompkins, 304 U.S. 78 (1938). Under Georgia's choice of law rules, insurance contracts are governed by the law of the state where the contract was made. See Lima Delta Co. v. Global RI-022 Aerospace, Inc., 789 S.E.2d 230, 235 (Ga. Ct. App. 2016). "An insurance contract is constructively made at the place where the contract is delivered." Id. (internal quotation marks omitted). The Policy was issued to...

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