Failure to Give Notice on a Georgia Uninsured Motorist Insurance Policy

In an earlier post about Mercury Insurance’s Motion for Summary Judgment claiming that their insured had failed to give timely notice within 60 days of a catastrophic crash, I promised I would post the briefs and so here they are. Hope they are helpful. The names have been altered for privacy reasons.


Movant’s Brief:

IN THE STATE COURT OF GWINNETT COUNTY STATE OF GEORGIA
LULU doe, *
*
Plaintiff, *
*
v. * CIVILACTIONFILENO.

* 123
HELGA L Smith, *
*
Defendant. *
AMERICAN MERCURY INSURANCE COMPANY’S BRIEF IN SUPPORT OF SUMMARY JUDGMENT
COMES NOW American Mercury Insurance Company (hereinafter referred to as “Mercury”), served as a purported uninsured/underinsured (“UM”) carrier in this action, by and through undersigned counsel, and submits its Brief in Support of Summary Judgment as follows:

FACTS
This matter arises out of a motor vehicle accident between Plaintiff and Defendant on March 28, 2011. Plaintiff claims to have suffered injuries in said accident and seeks to recover a judgment against Defendant for the same. Mercury has been served as a purported UM carrier and Plaintiff is seeking to hold Mercury liable to satisfy all or a portion of any judgment which might be rendered against Defendant in this matter.

At the time of the subject accident, Plaintiff was a front seat passenger in a vehicle owned and operated by a third party, and Plaintiff was not occupying a vehicle insured by Mercury. Plaintiff’s policy with Mercury at the time of said accident, No. 1001 03 001051567, included $25,000.00 in UM coverage pursuant to O.C.G.A. § 33-7-ll(b)(l)(D)(ii)(l). That policy specifically provides, “For uninsured motorist coverage to apply, every accident involving an
[1]
uninsured or underinsured motor vehicle must be reported to [Mercury] no later than (60) sixty days after the accident becomes known to the insured/’
Plaintiff, however, did not report the subject accident within the sixty (60) days following the same. Instead, Plaintiff waited until July 21, 2011, a full eighty-five (85) days following the loss, to give Mercury notice that he had been involved in the subject accident. Mercury is moving for summary judgment in good faith, and not for the purposes of delay, because the sixty (60) day notice requirement is a condition precedent to claiming UM coverage under the subject policy, and Plaintiff failed to abide by such requirement, thus barring any UM coverage under the subject policy for the accident at issue here.

ARGUMENT AND CITATION OF AUTHORITY I. Standard of Review
To obtain a grant of summary judgment, the moving party must demonstrate there is an absence of evidence to support at least one essential element of the non-moving party’s case. Garmon v. Warehouse Grocers Food Store. 207 Ga.App. 89, 91 (1993). A defendant may discharge this burden by establishing though affidavits and deposition testimony that there is an absence of evidence to support the plaintiff’s claim. Lau’s Corp. v. Haskins, 261 Ga. 491 (1991).

To prevail on summary judgment, the defendant is required to demonstrate that no genuine issue of material fact exists and the undisputed facts, when viewed in a light most favorable to the plaintiff, require judgment for the defendant as a matter of law. id. A defendant who pierces the plaintiffs pleadings by demonstrating that an essential element is
[2]
lacking, is entitled to summary judgment, despite any remaining issues of fact with respect to
other potential elements. Black v. Georgia S & F.R. Co.. 202 Ga.App. 805 (1992).

Under Georgia law, when a motion for summary judgment is made and supported, an
adverse party may not rest upon the mere allegations of his pleadings. See, e.g. Buddy’s
Appliance Center. Inc. v. Amana Refrigeration. Inc.. 151 Ga.App. 268 (1979); Hawk v.

DaimlerChrvsler Services N. Am.. LLC. 275 Ga.App. 712 (2005). The Georgia Code specifically
requires more:

When a motion for summary judgment is made and supported as provided in this Code section, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this Code section, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.

O.C.G.A. § 9-ll-56(e). Instead the adverse party “must point to specific evidence giving rise to
a triable issue/’ Lau’s Corp.. 261 Ga. at 491. This is because allegations of negligence without
factual support are insufficient to survive a motion for summary judgment. See, e.g. McGaulev
v. Pigglv-Wigglv Southern. Inc. 170 Ga.App. 851 (1984).

II. Plaintiffs late notice to Mercury bars any UM coverage under the policy.

In this case, although Plaintiff claims to have notified Mercury of the subject accident
within the sixty (60) days following the same as required by the clear and unambiguous terms
of Mercury’s policy, the evidence before this honorable Court clearly and unambiguously
disproves such claims. “An insurance policy is simply a contract, the provisions of which should
be construed as any other type of contract. The construction of an unambiguous contract is a
question of law for the court.” Lankford v. State Farm Mut. Auto. Ins. Co.. 307 Ga.App. 12,13
(2010). “It is well established that a notice provision expressly made a condition precedent to
[3]
coverage is valid and must be complied with, absent a showing of justification.” Lankford, 307
Ga.App. at 14. “Where an insured has not demonstrated justification for failure to give notice according to the terms of the policy, then the insurer is not obligated to provide … coverage.”

In the instant case Plaintiffs policy with Mercury expressly provides, “For uninsured
motorist coverage to apply, every accident involving an uninsured or underinsured motor
vehicle must be reported to us no later than (60) sixty days after the accident becomes known
to the insured.” “The natural, obvious meaning of this language is that [Plaintiff’s learning of]
the occurrence of the accident or loss triggers the requirement to provide notice.” Manzi v.

Cotton States Mut. Ins. Co.. 243 Ga.App. 277, 280 (2000). “Indeed, the purpose of a notice
provision is not simply to inform the insurer that a claim is being made under the policy, but to
notify the insurer of the occurrence of a potentially covered event.” Id. As was the case in
Manzi.

“the condition precedent in this case requires 60 days notice after the covered event. It is immaterial to enforcement of this condition precedent that the insured thought those other drivers were the cause of the collision and would be liable for his damages and theirs. The language of this policy is unambiguous. It unambiguously requires that notice of the covered event and its particulars be received by [Mercury] within 60 days of the event, as a condition precedent to coverage of the event. This requirement upon [Plaintiff] is not dependent on the existence of any insurance held by any other parties; and [Plaintiffs] beliefs or misunderstandings about who was liable for this collision did not relieve him of the plain duty to which he agreed and induced [Mercury] to issue this policy.”

243 Ga.App. at 279 (internal punctuation omitted); Cotton States Mut. Ins. Co. v. Hipps. 224
Ga.App. 756, 756-757 (1997). The clear and unambiguous terms of Plaintiffs policy with
Mercury mandates that if any UM coverage is to apply to any claim, Plaintiff must notify
Mercury of any loss within sixty (60) days of Plaintiff learning of its occurrence. Clearly, since
[4]
Plaintiff was personally involved in the subject loss, he was required to notify Mercury of the same not later than May 27, 2011. The evidence before the Court clearly and unambiguously shows that he did not do so, and Plaintiff has presented no evidence which might justify his failure to abide by the clear and unambiguous terms of his policy. As such, Plaintiffs failure to notify Mercury of the subject accident within sixty (60) days after he first learned of its occurrence – March 28, 2011 – bars any recovery against Mercury under Policy No. 1001 03 001051567. Because Plaintiffs failure to satisfy a mandatory condition precedent under the clear and unambiguous terms of his policy bars any recovery against Mercury, Mercury is entitled to judgment as a matter of law.

CONCLUSION
For the reasons set forth above, and because no issue of material fact exists for determination by a jury, it is axiomatic that summary judgment for Defendant should be granted.

This _ of January 2013.

Here is our response Brief:

IN THE STATE COURT OF GWINNETT COUNTY
STATE OF GEORGIA
LULU doe )

)

Plaintiff, )

)

v. ) Civil Action File Number
)

HELGA L. Smith )

)

Defendant. )

PLAINTIFF’S RESPONSE TO MERCURY INSURANCE’S
MOTION FOR PARTIAL SUMMARY JUDGMENT
COMES NOW, Plaintiff and hereby responds to Defendant Mercury Insurance’s Motion for Partial Summary Judgment as follows:

The Court should deny Mercury’s Motion for Summary Judgment for four reasons:

1) The Plaintiff testified that he gave oral notice to Mercury insurance over the phone within the 3-4 weeks following the collision which satisfies Mercury’s 60 day notice provision. The testimony and credibility of the Plaintiff is an issue which the jury must consider and therefore summary judgment on the issue of notice is not proper;
2) Mercury’s assertion that their policy requires notice within 60 days of any accident is erroneous. Mercury’s policy instead requires that the insured give notice to Mercury within 60 of learning that an accident was caused by an underinsured vehicle such as the one driven by the Defendant. The Plaintiff gave notice within 60 days of finding out that the tortfeasor only had $50,000 in liability coverage and he is therefore in compliance with the notice requirement with the contract;
3) Any delay in giving notice was legally justified due to the Plaintiff’s egregious injuries;
4) Mercury’s policy language does not establish a condition precedent to coverage and is merely a contract requirement. Accordingly, the Movant must show material prejudice flowing from the delay in giving notice.

For these reasons as are more thoroughly explained below, this Court should deny the Movant’s attempt to deny coverage to their own customer based on their contention that a hospitalized customer should have known to call his own insurance company even though the Mercury vehicle was not involved in the crash.

Statement of Facts
Plaintiff was a passenger in a stationary vehicle on March 28, 2011 when he was struck by a vehicle driven by Defendant Helga Smith. The impact obliterated the vehicle Plaintiff occupied and he was severely injured and incurred over $400,000 in medical bills with injuries that included multiple pelvic fractures and internal bleeding. His injuries required hospitalization from March 28, 2011 until May 11, 2011. He was released from North Fulton Hospital on May 11, 2011 in a wheelchair and did not walk without assistance for months. He was on narcotic pain medications through the end of August 2011. (Plaintiff’s Affidavit)

Mercury issued a policy of uninsured/underinsured motorist insurance to the Plaintiff and it provided for $25,000 in underinsured motorist benefits to the Plaintiff at the time of the crash. (Movant’s Brief at 1) The vehicle in which the Plaintiff was seated was not owned by the driver, Yonas Woldelassie; it was owned by Woldelassie’s brother, a party unknown to the plaintiff. Plaintiff’s personal automobile, which was insured by Mercury, was not involved in the collision. The Plaintiff learned on or about June 6 that the Smith vehicle only had a $50,000 liability policy. (Plaintiff’s Affidavit)

Plaintiff and Movant agree that written notice from Plaintiff’s counsel was provided on July 21, 2011. Plaintiff testified that he gave verbal notice to the company within 60 days of the collision. (Deposition of Plaintff 147:4-151:19, 162:23-164:20) Mercury admits in its Brief that it was notified within 85 days of the crash. (Movant’s Brief p.2)

The Movant points to no prejudice caused by the difference between an alleged required notice date of May 27, 2011 and the actual notice date of July 21, 2011. There is no evidence before the Court that witnesses, evidence or vehicles disappeared during that time and the crash was thoroughly investigated by the other insurers involved in the collision, State Farm and Farm Bureau.

Argument & Citation of Authority
The issue before the Court is whether there are no issues of fact from which a jury could find the Plaintiff complied with the requirements of his underinsured motorist insurance policy.

The Court must deny Mercury’s Motion for Summary Judgment and find that there is a jury issue as to whether the Plaintiff was in compliance with the contract and is entitled to the coverage he paid for. Additionally, if the Court agrees that the notice on July 21, 2011 was timely under the policy language, the Court should find that notice was timely as a matter of law.

1. Plaintiff Testified that He Gave Verbal Notice within 3 to 4 Weeks of the Accident
As Movant admits, the Plaintiff testified that he gave verbal notice to the insurance company within 3-4 weeks of the crash. This testimony creates an issue of fact from which a jury could decide that the notice provision was complied with. Accordingly, the case is not subject to summary adjudication.

2. The Mercury Insurance Policy’s 60 Day Notice Provision is Only Triggered When the Customer Obtains Actual Knowledge that the Accident was with an Underinsured Vehicle; Not Within 60 Days of any Accident
Mercury argues that their policy language requires notice from the customer within 60 days of any accident. Mercury misstates its own policy language when it claims in its Brief that the policy “mandates that if any UM coverage is to apply to any claim, Plaintiff must notify Mercury of any loss within sixty(60) days of Plaintiff learning of its occurrence.” (Movant’s Brief p.4) The Mercury policy does not say “any loss.” It says:

“For uninsured/underinsured motorist coverage to apply, every accident involving an uninsured or underinsured motor vehicle must be reported to us no later than (60) sixty days after the accident became known to the insured.” (See Exhibit B to Movants Motion policy booklet p.4)

Under the plain language of the sentence, “the accident” refers to the definition found earlier in the sentence “every accident involving…an underinsured motor vehicle.” In other words, if the insured is not in a crash with an uninsured or underinsured motor vehicle, the requirement is not triggered. There are two requirements for the clock to start ticking:

1. There is an accident with an underinsured vehicle; and
2. The insured obtains actual knowledge that the vehicle was underinsured.

Here, the insured obtained actual knowledge that the vehicle was only insured for $50,000 in a crash involving almost $400,000 in medical bills on or about June 6, 2011. (Plaintiff’s Affidavit 2,6) Mercury admits they received Notice on July 21, 2011. (Movant’s Brief p.2) Ergo, the notice requirement was complied with.

Mercury cites to a series of appellate cases where the insurance contracts written by other companies specified that notice was a condition precedent to coverage after any accident. Unfortunately for Mercury, their contract is not worded that way. [1]
Ambiguity to Be Strictly Construed Against the Drafter and In Favor of Coverage
At best, Mercury’s policy language is ambiguous and therefore the court should construe it in favor of enforcing the coverage that was paid for.

Ambiguities in an insurance contract are to be construed against the drafter, the insurance company. But where the policy language is ambiguous, “such ambiguities must be strictly construed against the insurer as the drafter of the document.” (Citation omitted.) Yeomans, 274 Ga.App. at 743(1)(a), 618 S.E.2d 673. “An ambiguity is duplicity, indistinctness, [or] an uncertainty of meaning or expression, and a word or phrase is ambiguous when it is of uncertain meaning and may be fairly understood in more ways than one.” (Citations and punctuation omitted.) Allstate Ins. Co. v. Grayes, 216 Ga.App. 419, 422(3), 454 S.E.2d 616 (1995). “Where a term of a policy of insurance is susceptible to two or more constructions, even when such multiple constructions are all logical and reasonable, such term is ambiguous and will be strictly construed against the insurer as the drafter and in favor of the insured.” *6 (Citations omitted.) Ga. Farm, etc., Ins. Co. v. Meyers, 249 Ga.App. 322, 324, 548 S.E.2d 67 (2001).

Federated Mut. Ins. Co. v. Ownbey Enterprises, 278 Ga.App. 1, 6 (2006)

There is no appellate case interpreting policy language similar to the Mercury policy. Given that ambiguities are to be construed in favor of preserving the insurance coverage that the insured paid for, the Plaintiff should prevail.

Movant’s Citations are Factually Distinct as None Involve Policy Language Specifically Requiring Knowledge of Collision with Underinsured Vehicles.

The Movant cites the Lankford v. State Farm, 307 Ga. App. 12 (2010) as supporting its Motion, but Lankford is distinguishable because in Lankford, State Farm issued a policy of insurance with language stating the following:

“the insured “must give us or one of our agents written notice of the accident or loss as soon as reasonably possible.” Lankford at 14. It also provided that “there is no right of action against [State Farm] until all of the terms of this policy have been met.” Lankford at 14.

In Lankford, the insured did not provide written notice until almost 2 years after the crash. Lankford tried to argue that it was inferred that the notice clock started ticking upon his subjective discovery that he would be underinsured. The Court said they would not infer that requirement into the contract where it was not so stated.

Lankford is distinguishable because this case involves a contract where Mercury explicitly made the discovery of an accident with an underinsured tortfeasor the starting gun for the time limit. The Mercury contract states that the 60 days begins to run when the insured learns that the vehicle was underinsured.

Manzi v. Cotton States Ins. Co. 243 Ga. App. 277 (2000) is also distinguishable. The the insurance in that case stated:

Section IV of the insurance policy, entitled “DUTIES AFTER AN ACCIDENT OR LOSS,” provides in relevant part as follows:

We must be notified promptly, but in no event later than 60 days, of how, when and where the accident or loss happened. Notice should also include the names and addresses of any injured persons and of any witnesses. Receipt of such notice by the company or any of its authorized agents shall be a condition precedent to the existence of any coverage under this policy and of the company’s obligation to defend any claim under this policy. This notice provision is applicable to all claims under the policy, including uninsured motorist claims”(emphasis added) Manzi at 277
As in Lankford, the policy in Manzi requires notice after any accident, not after an accident involving an uninsured vehicle. Manzi is therefore not applicable either.

Movant writes in its Brief, “(t)he clear and unambiguous terms of the Plaintiff’s policy with Mercury mandates that if any UM coverage is to apply to any claim, Plaintiff must notify Mercury of any loss…” That misstatement of the contract language is the issue. The insured gave notice to Mercury within 60 days of learning that the tortfeasor vehicle was underinsured and is therefore in compliance.

3. Any Delay was Medically Justified
It is well established in Georgia that justification can excuse performance. The cases cited by the Movant recognize the justification exception to enforcement of even a condition precedent to coverage. “It is well established that a notice provision expressly made a condition precedent to coverage is valid and must be complied with, absent a showing of justification.” (emphasis added) Lankford at 14 citing Federated Mut. Ins. Co. v. Ownbey Enterprises, 278 Ga. App. 1, 3 (2006)

In discussions of insurance notice provisions, the Courts have held that whether the excuse of justification is sufficient is not subject to summary adjudication and remains a jury issue.

Allstate argues that the trial court erred in denying its motion for summary judgment because as a matter of law the Walkers’ notice of the incident came too late. “[Q]uestions [about] the adequacy of the notice and the merit of appellees’ claim of justification are ones of fact which must be resolved by a jury as they are not susceptible to being summarily adjudicated as a matter of law.” State Farm &c. Ins. Co. v. Sloan, 150 Ga.App. 464, 466(2), 258 S.E.2d 146 (1979). The jury generally determines whether the excuse or justification was sufficient and whether the insured acted diligently in giving the notice, “according to the nature and circumstances of each individual case.” (Punctuation omitted.) Plantation Pipeline Co. v. Royal Indem. Co., 245 Ga.App. 23, 25(1), 537 S.E.2d 165 (2000).

Allstate Ins. Co. v. Walker 254 Ga. App. 315, 316 (2002)

Justification for a failure to perform alleged duties under a contract can come in many forms. In the context of analyzing compliance with notice provisions in car insurance for injuries, it would be hard to imagine a situation where the parties to the contract did not take into account the fact that the insured might be so injured that they could not comply with notice provisions.

In the instant case, the insured was hospitalized from March 28, 2011 until May 11, 2011 whereupon he was released in a wheelchair with heavy pain medication all the way through August. The Movant insists that Plaintiff had to give notice by May 26, 2011under the contract. What could be a better justification than physical injuries of the type contemplated by the contract: bodily injury caused by an underinsured driver?

Finally, it should be noted that the Court of Appeals has never approved destroying insurance coverage for an injured consumer where the insured gave notice within three and a half months of a crash. All of the cases presented by the Movant involve delays of 10 months or more. The concept of justification is rooted in contractual expectations. It defies logic that a contract for bodily injury insurance would not contemplate medical incapacity as justifying a delay in performance. In light of no demonstrated prejudice to the insurer, the jury must consider whether the delay was justified.

4) The Mercury Policy Does Not Create a Condition Precedent to Coverage
Movant’s Motion argues that the notice provision creates a condition precedent to coverage rather than simply being a contract requirement. This is a critical distinction because unless a notice provision is a condition precedent, the insurer must show material prejudice to void coverage. In the cases cited by the Movant, the insurance policies either literally state that notice is a condition precedent or there is a general provision in the policy requiring compliance with policy terms for coverage on pain of forfeiture. Mercury’s policy language meets neither of those requirements and the Mercury notice provision is therefore not a condition precedent to coverage, but rather a general contract requirement where the Movant must demonstrate material prejudice to deny coverage. If the insurer means to create a contractual “death penalty” it must tell the insured in no uncertain terms.

Conditions precedent to coverage are distinct from contract requirements in that the breach of the second variety requires a showing of material prejudice. This was well explained in Allstate v. Gregory 134 Ga. App. 461 (1975). “Where a policy requires some act to be performed but does not also stipulate that failure to do so will void the contract, the contract, although breached, is not forfeited.” Allstate at 463. When the policy does not expressly state that coverage shall be forfeited, it is incumbent upon the insurer to show prejudice from the delay in notice.

In order to create a condition precedent to coverage, the policy must:

1. Clearly state that the notice provision must be complied with before coverage applies; and
2. Clearly state that breach of the condition forfeits insurance coverage under the policy.

In the absence of both elements, the notice requirement is a simple contract requirement.

The starting point of the analysis is whether the Mercury Contract informs the insured what his contractual duties are in an unambiguous fashion. Mercury’s contract does not have a “Duties” section. Instead there is a section entitled “What to Do in Case of An Auto Accident” Mercury’s Contract at p. 3. Plaintiff is not being ticky tacky when arguing that such a title is deceiving. The import of words like “shall” and “must” and “duty” are well established in contract law. Trying to hide a core contract duty under such an ambiguous phrase is misleading. Beneath that section heading is a notice requirement that is apparently meant to apply to liability claims and it is the next sentence that Mercury is contending creates a condition precedent to coverage that is deadly to the consumer.

In Manzi and Lankford, the insurers drafted their contracts in a way that made it clear what the duties were. Manzi listed the duties under a section appropriately entitled “Duties after an Accident or Loss” Manzi at 277. Cotton States policy literally states that the failure to comply is a “condition precedent to the existence of any insurance coverage.” Manzi at 278.

In Lankford, Plaintiffs first notice to State Farm was a lawsuit almost two years after the crash. The State Farm policy stated that the insured “must give us or one of our agents written notice of the accident or loss as soon as reasonably possible.” Lankford at 13. It goes on to state in no uncertain terms that “(t)here is no right of action against State Farm until all the terms of the policy have been met.” Lankford at 14. The Lankford Court goes on to note that “notice became a condition precedent to coverage under general provision that compliance with policy terms was required for coverage.” Lankford at 14.

In Federated, the section was likewise entitled “Duties in The Event of Occurrence, Offense, Claim or Suit” Federated at 1.

Case law establishes that the policy must state unequivocally that notice is a duty under the contract and that failure to comply can result in policy forfeiture
Mercury fails to make the duty clear and fails to state that failure to give notice will result in a forfeiture of coverage. Because the Mercury policy is ambiguous at best and misleading at worst, the Court should find that the notice requirement is a simple contract requirement and that a jury should decide if the insurer was prejudiced by the delay.

Conclusion
For all of the above reasons, it is clear that there are multiple jury issues to be decided on the way to determining whether Plaintiff is entitled to the underinsured motorist coverage he paid for. It would be reversible error to grant the Motion for Summary Judgment on the Claims against Mercury. Finally, if the Court agrees that the notice requirement is ambiguous and can be interpreted as the Plaintiff contends as starting upon the date of notice, the Court should find that Notice was timely under the Contract.

This the day of February 2013.

Respectfully Submitted,
THE SIMON LAW FIRM PC
__________________________
Christopher M. Simon
Georgia Bar No. 646922