UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

ATLAS INSURANCE COMPANY,

Plaintiff-Appellee,

v.

No. 95-2404

WILLIAM CHAPMAN; CHAPMAN

LUMBER COMPANY, INCORPORATED,

Defendants-Appellants.

Appeal from the United States District Court

for the Eastern District of Virginia, at Norfolk.

J. Calvitt Clarke, Jr., Senior District Judge.

(CA-95-74-2)

Argued: June 3, 1996

Decided: July 23, 1996

Before WILKINSON, Chief Judge, and NIEMEYER and

HAMILTON, Circuit Judges.

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Affirmed by unpublished per curiam opinion.

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COUNSEL

ARGUED: Kenneth Hicks Lambert, Jr., WILLIAMS, KELLY &

GREER, P.C., Norfolk, Virginia, for Appellants. Charles Garrison

Meyer, III, MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P.,

Richmond, Virginia, for Appellee. ON BRIEF: Christopher R.

Papile, WILLIAMS, KELLY & GREER, P.C., Norfolk, Virginia, for

Appellants.

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Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

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OPINION

PER CURIAM:

Appellants in this case, Chapman Lumber and its owner William

Chapman, waited for more than four months after an accident

occurred to notify the liability insurer, Atlas Insurance Company.

Atlas denied coverage because the delay violated the contract provision requiring notification "as soon as possible" after an accident.

William Chapman and the Chapman Lumber Company appeal the

district court's grant of summary judgment in favor of Atlas Insurance. Because appellants delayed inexcusably in notifying Atlas of

the accident, we affirm the judgment of the district court.

I.

On October 28, 1993, at the Chapman Lumber Company yard, a

large timber beam fell from a front loader onto J.D. Barnes. Barnes

had been hired by William Chapman--his friend and the owner of

Chapman Lumber--to do some carpentry work on a small building

that was being moved to a new location in the mill yard. The sixteenfoot beam broke Barnes' leg and fractured his lower back. Barnes was

taken by ambulance to the hospital, where he stayed for one week.

William Chapman, who was not at the lumber yard at the time of

the accident, was notified immediately. He instructed his secretary to

tell the hospital that Chapman Lumber would pay Barnes' medical

bills. Chapman's secretary also passed this message on to Barnes as

he was being loaded into the ambulance. Chapman Lumber subsequently paid more than $14,000 for Barnes' medical bills.

On March 3, 1994, Chapman received a letter from Barnes' attorney signalling Barnes' intent to bring a personal injury claim against

Chapman Lumber. At this point, 126 days after the accident, Chapman first called and wrote Atlas to give notice of the accident. Atlas

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began an immediate investigation. On May 6, 1994, Atlas notified

Chapman of its decision not to cover Barnes' claim because of Chapman's delay in notification and the company's voluntary payment of

Barnes' medical expenses without Atlas' knowledge or consent.

In October 1994, Barnes' attorney mailed another letter to Atlas

and Chapman demanding $300,000. Atlas then filed a declaratory

judgment action to determine its obligations under the policy. The

district court ruled in favor of Atlas' summary judgment motion

releasing it from any liability.

II.

The insurance contract between Atlas and Chapman Lumber

requires that Chapman Lumber give notice to Atlas"as soon as practicable after an `occurrence' or offense which may result in a claim."

William Chapman knew on October 28, the day of the accident, that

Barnes had been seriously injured while working at Chapman Lumber

and had been taken to the hospital by ambulance. Chapman knew on

that day and in the weeks to follow that Barnes was incurring, and

Chapman Lumber paying, significant medical costs. Yet Chapman

notified Atlas 126 days after the fact.

Chapman Lumber had no legitimate justification for its four month

delay in notification. When asked why he didn't notify Atlas on the

day of the accident, Chapman replied that "[t]here was no reason--a

physical reason to prohibit me from doing it." The only explanation

that Chapman offered was that he and Barnes had known each other

for years, and while he felt an obligation to reimburse Barnes for

medical expenses, it never occurred to him that Barnes would seek

additional damages. This justification may have had some plausibility

if offered by an unsophisticated private individual. But Chapman

Lumber is a business enterprise, presumably familiar with standard

contract provisions like the one at issue in this case. Its failure to

notify Atlas cannot properly be excused.

These undisputed facts establish a material breach of contract by

Chapman and Chapman Lumber, releasing Atlas from any obligation

it might otherwise have to cover the Barnes accident. This conclusion

holds true regardless of whether Atlas was prejudiced by the delay,

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as prejudice is only one of several factors which may be considered

when determining whether a breach was material. State Farm Fire

and Casualty Co. v. Scott, 372 S.E.2d 383, 385 (Va. 1988);

Nationwide Mut. Ins. Co. v. Gentry, 117 S.E.2d 76, 81 (Va. 1960).

Here, the unjustified 126 day delay sufficiently established a substantial and material breach.

III.

For the foregoing reasons, we affirm the judgment of the district

court.

AFFIRMED

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