[DO NOT PUBLISH] IN THE UN ITED STATES COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

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W ILLIAMS SERVI CE GROUP, LLC, as su cces so r to W il li am s Se rv ic e Gro up , Inc ., ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll l l Pl ai nt iff - Co un te r Defen da nt- ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll App el le e - Cro ss App el la nt , ve rs us NATIONAL UNION FIRE INSURANCE COM PANY OF PITTSBURGH, ILLINOIS NATIONAL INSURANCE COMPANY, BIRM INGHAM FIRE INSURANCE COMPANY, INSURANCE COM PANY OF THE STATE OF PENNSYLVANIA, ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll Defen da nt s - C ou nt er Cl ai m an ts - ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll App el la nt s - C ro ss App el le es , Ch art is Pro pe rty Casu al ty Com pa ny, ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll Co un te r Cl ai m an t.

Case: 11-14999 Date Filed: 10/23/2012 Page: 1 of 11__ __ __ __ __ __ __ __ __ __ __ __ App eal s fr om

th e Uni te d S ta te s Di st ric t Co urt forth e North ernDis tri ctof Ge or gi a

__ __ __ __ __ __ __ __ __ __ __ __ (Oct ob er 2 3, 2 01 2) Befo re TJ OFLAT, CARNES, andJORDAN, Ci rcu itJu dg es . PER CURI AM: Thi s i ns ur an ce d is pu te ari se s o utof t he bre ak do wn o f a co m pl ic at ed co nt ractua l re la ti on sh ip be twee n Wil li am s Se rv ic e Gro up , LLC andfou r in su rers : Nati on al Uni on Fir e In su ran ce Co m pa ny of Pi tt sb ur gh , Ill in oi s Nat io na l In su ran ce Co m pa ny, Birm in gh am

Fir e In su ran ce Co m

pa ny, andIns ur an ce Co m pa ny of th e St at e o f Pen ns y lv an ia . W il li am s s ue d the in su rers inGeor gi a st at e co urt al le gi ng th atth ey owe i t m or e th an$5 00 ,00 0. Th e in su rers rem ov edth e cas e to fed eral di st ric t co urt an d c ou nt ercl ai m ed , all eg in g t ha t Will ia m s o wes th em ov er $ 2 m il li on . Afte r di sc ov ery, W il li am s an d t he in su rers fil edcro ss m ot io ns forsu m m ary jud gm en t. The di st ric t co urt en te reda fi na l o rd er g ran ti ng inpa rt a ndde nyin g i n pa rt e achpa rty’ s m ot io n. The pa rti es cro ss -ap pe al di ffer en t p art s o f th e d is tri ct co urt’s o rd er.

2

Case: 11-14999 Date Filed: 10/23/2012 Page: 2 of 11I.

Bet ween19 90 an d 1 99 7, Will ia m s an d t he in su rers en te redin to at l eas t fo rty-fiv e o ccu rren ce-b as edwork ers ’ co m pe ns at io n a ndge ne ral li ab il it y in su ran ce po li ci es , whi chwe co ll ect iv el y refe r to as t he pro gr am

ag reem en ts . The po li ci es pr ov id edth atth e in su rers wou ldin it ia ll y pay th e en ti re co stof r es ol vi ng an y cl ai m s ag ai ns t Will ia m s. Will ia m s was th enres po ns ib le forrei m bu rs in g t he in su rers for

a se lf- in su redret en ti on , whi chis si mil ar t o ade du ct ib le , andforth e adm in is tra ti ve co st s o f in ve st ig at in g a ndde fen di ng cla im s. The pro gr am ag reem en ts requi redth e in su rers to bi ll W il li am s m on th ly for an y am ou nt s tha t W il li am s o wedth em . The ag reem en ts als o re qu ire d Wil li am s t o s ecu re i ts pa ym en t o bl ig at io ns by giv in g t he in su rers a le tt er o f cre di t. The in su rers cu rren tl y ho ldtwo cle an , irre vo cab le let te rs of c red itfro m W il li am s. One o f

1 th os e le tt ers is for$1 m il li on , andth e o th er i s fo r $1 .2 m il li on . Neithe r le tt er h as ex pi red . In19 95 , W il li am s an d t he in su rers en te redin to a bu y ou t ag reem en t tha t ou tl in edwhatth ei r ob li ga ti on s wo ul d b e g oi ng forwardforan y cla im s m ad e und er th e 1 99 0– 19 95 po li ci es . W il li am s p ai d t he in su rers $3 .8 m il li on , andth e in su rers To draw on a cle an letter

of cr edit, the bene ficiar

y needs only

to present the le tter to the 1 issuing bank. N o other doc umentation is require d. McCormac k v. Citi bank, N.A., 100 F .3d 532, 537–38 (8th Cir. 1996). 3

Case: 11-14999 Date Filed: 10/23/2012 Page: 3 of 11pr om is edto pa y up to $4 .2 m il li on forcla im s m ad e ag ai ns t tho se po li ci es . The in su rers ’ pa ym en ts reac he d t ha t cap i n F eb ru ary 19 99 , andth ey ha ve no w pai d $1 ,85 0,5 72 ov er the cap . W il li am s h as no t re im bu rs edth em

forth os e p aym en ts , no r ha s i t re im

bu rs edth em

for$1 66 ,66 2 i n a dm in is tra ti ve co st s t ha t the in su rers in cu rredun de r th e 1 99 6– 19 97 po li ci es . The in su rers di d n otsen d Wil li am s m on th ly bil ls as t he pro gr am ag reem en ts requi red . It was no t u nt il Decem be r 11 , 20 09 , aft er Will ia m s fi le d thi s l aws ui t, th atW il li am s re cei ve d abi ll forpa ym en ts m ad e o ve r th e b uyou t ag reem en t’s $ 4.2 m il li on cap an d the rei m

bu rs ab le adm in is tra ti ve co st s t ha t h adaccrue d u nd er the 19 96 –1 99 7 p ol ic ie s. W il li am s s ue d t he in su rers inGeor gi a supe rio r co urt i n M arch20 09 , se ek in g: (1) a de cl arat ory jud gm en t tha t the in su rers owe i t $ 54 8,4 71 in ov erp aym en ts th atW il li am s m ad e und er the 19 96 –1 99 7 p ol ic ie s; (2) da m ag es for a cl ai m forreco up m en t; (3) da m ag es forth e in su rers ’ ne gl ig en t h an dl in g o f a cl ai m ; an d (4 ) a t em

po rary restrai ni ng ord er t o p rev en t the in su rers fro m dra win g on th e le tt ers of c red it . The s up eri or co urt g ran te d t he tem

po rary restrai ni ng ord er. The in su rers th enrem ov edth e cas e to fed eral di stric t co urt, an d tha t co urt l ift ed th e te m po rary restrai ni ng ord er. The in su rers co un te rcl ai m edforbre achof co nt ract , see ki ng a de cl arat io n t ha t: (1) W il li am s o wes th e in su rers $1 ,85 0,5 72 for 4 Case: 11-14999 Date Filed: 10/23/2012 Page: 4 of 11cl ai m s p ai d o ve r th e $ 4.2 m il li oncap inth e 1 99 5 b uyou t ag reem en t an d $ 16 6,6 62

fo r rei m bu rs ab le adm in is tra ti ve co st s i nc urredun de r th e 1 99 6– 19 97 po li ci es (a to ta l o f $2 ,01 7,2 34 ), an d (2 ) th e in su rers m ay dra w on th e le tt ers of c red itto reco ve r th aten ti re am ou nt . The d is tri ctco urt g ran te d i n p artan d d en ie d i n p art bo th m ot io ns forsu m

m ary jud gm en t, awar di ng th e in su rers $5 30 ,08 8 fo r unpa id rei m bu rs em en ts withi n s ix y ears of t he da te th atth e p art ie s ag reedto to ll th e st atut e o f li m it at io ns , bu t h ol di ng th atth e in su rers ’ cl ai m s fo r unpa id rei m bu rs em en ts be fo re tha t d at e are ti m e-b arre d a ndth atth e in su rers m ay no t dr aw on th e le tt ers of c red itto reco ve r th os e am ou nt s. II. W e rev ie w de n ov o adi st ric t co urt’s s umm ary jud gm en t o rd er, v ie win g t he ev id en ce an d drawi ng all in fere nc es infav orof the no nm ov in g p arty . Chapt er 7 Tr. v. Gat e Gou rm et , Inc ., 68 3 F .3d12 49 , 12 54 (11 th Cir . 20 12 ). Summ ary jud gm en t i s ap pr op ria te on ly if th ere i s n o g enui ne is su e o f m at eri al factan d t he m ov in g p arty

is en ti tl edto jud gm en t as a m at te r of law. Fed . R. Civ . P. 56 (a). A. W e b eg in by addres si ng th e two is su es th atW il li am s ra is es init s ap pe al . Fi rs t, Will ia m s co nt en ds th atth e in su rers waiv edth ei r ri gh t t o c ol le cton th e am ou nt s Will ia m s o wes be cau se th ey fai le d t o s en d i t m on th ly bil ls as t he pro gr am 5 Case: 11-14999 Date Filed: 10/23/2012 Page: 5 of 11ag reem en ts requi red . This arg um en t i ts el f fai ls be cau se th e p ro gr am ag reem en ts co nt ai n ano nwa iv er cl au se st at in g t ha t a “ fai lu re . . . to en fo rce a ny andall of t he pr ov is io ns of t hi s Ag reem en t o r to in si stup onst ric t co m pl ia nc e b y

th e o th er p arty sh al l n otbe co ns tru edas awaiv er o f an y rig ht s o r pr iv il eg es of t he pa rti es .” Und er tha t cl au se , th e in su rers di d n otwaiv e th ei r ri gh t t o c ol le ctam ou nt s o wed un de r th e p ro gr am

ag reem en ts by fail in g t o e nf or ce the ir r ig htto rei m

bu rs em en t each m on th by sen di ng a m on th ly bil l. Seco nd , W il li am s co nt en ds th atth e in su rers ’ fai lure t o s en d i t m on th ly bil ls was a m at eri al bre ach th atex cu se d Wil li am s’ per fo rm an ce u nd er the pro gr am ag reem en ts . W il li am s re li es onBu rn ha m v. Co on ey , 59 3 S .E.2d70 1 (Ga . Ct. Ap p. 20 04 ). In t ha t ca se , th e co nt ractbe twee n a n a tt orne y an d h is cli en t re qu ire d t he at to rn ey to bi ll th e cl ie ntm on th ly, whi chth e at to rn ey fai le d t o d o. Id . at 7 04 . The co urt n ot edth atth ere was ev id en ce i n t he reco rdth atth e cl ie ntha d t ol d h is at to rn ey th athe want edto li m itth e co stof t he li ti ga ti on , hadrep eat ed ly requ es te d bi ll s i n a n a tt em

ptto do so , andm ig htha ve en de d the li ti ga ti on ha d h e kno wn the am ou ntof t he att orne y ’s fees th athe was i nc urrin g. Id . For t ho se reas on s, the co urt h el d t ha t a ju ry

reas on ab ly cou ldfin d t ha t the att orne y ’s fai lure t o s en d t he cl ie ntm on th ly bil ls was am at eri al bre ach th atex cu se d the cli en t’s o bl ig at io n t o pa y th e at to rn ey . Id. Will ia m s ar gu es th at , as i n the Bu rn ha m cas e, th ere i s a ju ry 6 Case: 11-14999 Date Filed: 10/23/2012 Page: 6 of 11qu es ti on he re ab ou t wh ethe r th e in su rers ’ fai lu re t o s en d m on th ly bil ls is a m at eri al

br each . W il li am s’ rel ia nc e o n B urnh am is m is pl aced . There is no ev id en ce tha t W il li am s as ke d fo r bi ll s fr om th e in su rers so th atitco ul d m on it oran d m an ag e it s ex pe ns es . Nor i s t he re ev id en ce tha t Will iam s wo ul d h av e, orev enco ul d h av e, en de d i ts rel at io ns hi p wi th th e in su rers if t he y ha d s en t m on th ly bil ls . See Gen eral St eel , Inc . v. Del taBu il di ng Sy s., In c., 67 6 S .E.2d45 1, 4 54 , 45 5 n .16 (Ga. Ct . App . 20 09 ) (h ol di ng th aton e p arty ’s fai lu re t o s en d m on th ly bil ls as r equi redby a co nt ractwas n ota m at eri al bre ach an d d is ti ng ui sh in g B urnh am be cau se init ,

“ th ere was ev id en ce tha t [t he ] cl ie ntrep eat ed ly ask ed[th e] lawy er fo r bi ll in g st at em en ts du rin g t he pe nd en cy of t he li ti ga ti on , bu t was no t p ro vi de d wi th an y ; th at[th e] cli en t d is co ve reddurin g t he li ti ga ti onth atth e ta rg etde fen dantwas jud gm en t p ro of

; tha t [t he ] cl ie ntth eref

or e to ld[th e] lawy er tha t h e d idno t wan t t o sp en d alo t o f m on ey

on th e su it ; an d t ha t [t he ] cl ie ntwou ldor m ig htha ve withd rawnfro m

th e li ti ga ti on , hadhe be enbi ll edpe rio di cal ly”). Here, th e in su rers ’ ob li ga ti on to sen d m on th ly bil ls to W il li am s was m erel y in ci de nt al to th e

“ m ai n p ur po se ” o f th e p ro gr am

ag reem en ts —n am el y , pro vi di ng in su ran ce co ve rag e to W il li am s. See id . at 4 55 . Thei r fai lu re t o s en d t ho se bi ll s was no t a m at eri al bre ach th atex cu se s Will ia m s’ rei m bu rs em en t o bl ig at io n. Se e id . 7 Case: 11-14999 Date Filed: 10/23/2012 Page: 7 of 11W il li am s al so arg ue s t ha t the in su rers ’ ob li ga ti on to sen d m on th ly bil ls is a

co nd it io n p rece de ntto it s p aym en t o bl ig at io n u nd er the pro gr am ag reem en ts . Not hi ng inth e p ro gr am

ag reem en ts supp orts th atarg um en t. The pro gr am ag reem en ts do no t u se lan gu ag e su chas “ on ly if” o r “ if” or “ on co nd it io n t ha t” or

“pr ov id edth at ” o r an y

othe r wor ds in di cat in g t ha t the parti es in te nd eda co nd it io n pr eced en t. See id . at 4 54 . Und er Geo rg ialaw, co nd it io ns pre ced en t ar e di sf av or edan d aco nt ractua l p ro vi si on is in te rp ret edas aco nd it io n p rece de nton ly if i t i s cl ear t ha t the pa rti es in te nd editto op erat e th atway . See i d. at45 4; Fu lt on Cn ty. v. Co ll um

Pro ps ., Inc ., 38 8 S .E.2d91 6, 9 18 (Ga. Ct . App . 19 89 ); s ee al so Ga. Co de Ann . § 4 4- 6- 41 . Becau se th e p ro gr am ag reem en ts do no t i nd ic at e th at th e p art ie s i nt en de d t he m on th ly bil li ng requi rem en t t o b e a co nd it io n p rece de ntto W il li am s’ rei m

bu rs em en t o bl ig at io n, we wi ll no t treatitas o ne . B. W e n ow turn t o t he is su e th atth e in su rers ha ve rai se d i n t he ir c ro ss -ap pe al . The di st ric t co urt co nc lu de d tha t the in su rers ’ “ rig htto dra w on th e le tt ers of c red it ari se s fr om

th e [p ]rog ram

[a]gree m en ts , no t the let te rs of c red itth em se lv es ,” an d be cau se anact io n t o e nf

or ce the pro gr am

ag reem en ts is ti m e-b arre d u nd er the st atut e o f li m it at io ns , th e st atut e o f li m it at io ns pre ve nt s t he in su rers fro m dra win g on th e le tt ers of c red it . The i ns ur ers co nt en d t ha t the st atut e o f li mit at io ns do es 8 Case: 11-14999 Date Filed: 10/23/2012 Page: 8 of 11no t b ar the m fro m dra win g o n t he let te rs of c red it . W e ag ree. The in su rers ’ rig htto dra w on th e le tt ers of c red itis no t d ep en de nton th ei r ab il it y to su cces sf

ul ly brin g abre ach of c on tra ctact io n und er the pro gr am ag reem en ts . By

th ei r te rm s, the let te rs of c red itare cl ean an d u nc on di ti on al —the in su rers ’ rig htto dra w on th em is in de pe nd en t o f th e p ro gr am ag reem en ts . See Dib rel l Br os . Int ’l S.A. v. Ban ca Naz io na le Del Lav or o, 3 8 F .3d15 71 , 15 78 –7 9 (1 1t h C ir. 1 99 4) (ap pl y in g Geo rg ialaw) (“ [T]he [b an k’s] ob li ga ti on to th e [in su rers un de r a l et te r of cred it ] is in de pe nd en t o f pe rfo rm an ce und er the rel at ed co nt ract s. Th e [b an k] m

us t h on orth e en ga ge m en t t o p ay up on pre se nt at io n o f th e pr op er d oc um en ts reg ard le ss of t he [in su rers ’] pe rfo rm an ce o n t he un de rlyin g co nt ract . . . . [T] he [ba nk ] is pri m ari ly liab le an d c an no t as se rt d efen se s av ai labl e to [W il li am s] th atari se fro m a br each of t he un de rlyin g c on tra ct .”); see als o McC orm ackv. Ci ti ba nk , N.A., 10 0 F .3d53 2, 5 37 (8t h C ir. 1 99 6) (ex pl ai ni ng th at to dra w on a cl ean let te r of cred it , th e h ol de r “ m

us t m erel y

de m an d p aym en t; no do cu m en ta ti on . . . is requi red ”). The pl ai n l an gu ag e o f Geo rg ia ’s st atut e o f li mit at io ns in di cat es th atitdo es no t af fectth e ab il ity

of t he in su rers to dra w on th e le tt ers of c red it . It s ta te s, “ All act io ns up on si m

pl e co nt ract s i n wri ti ng sh al l b e b ro ug htwithi n s ix y ears aft er the sa m e b eco m e due an d p ay ab le .” Ga. Co de Ann . § 9 -3 -2 4 (e m ph as is ad de d) . As 9 Case: 11-14999 Date Filed: 10/23/2012 Page: 9 of 11writ te n, the st atut e o pe rat es to bar on ly j ud ic ia l re m ed ie s— itdo es no t af fectth e pa rti es ’ subs ta nt iv e ri gh ts or b ar n on -jud ic ia l re m ed ie s. See Mart in ’s Land in g Fo un d., In c. v. Lan di ng Lake Ass oc s., 7 07 F.2d13 29 , 13 31 (11 th Cir . 19 83 ) (“ In Geo rg ia , st atut es of l im it at io ns ba r th e rem edy so ug htby the pl ai nt iff

, no t the subs ta nt iv e ri gh t.”) ; Di xi e Co ns tr. C o. o f Ga. v. Will ia m s, 9 8 S .E.2d58 2, 5 83 (Ga. Ct . App . 19 57 ) (“ St atut es of l im it at io n l oo k o nl y to rem edy

an d n otto subs ta nt iv e rig ht s. . . .”). Drawin g o n alet te r of cred itis no t an“ act io n” withi n t he m ean in g o f th e Geo rg iast atut e o f li m it at io ns . It i s a n on -jud ic ia l re m edy . For t ha t re as on , th e st atut e o f li m it at io ns do es no t b ar the in su rers fro m dra win g o n the let te rs of cred it . The d is tri ctco urt erredinco nc lu di ng th atitdo es . IV. W e aff irm th e d is tri ctco urt’s s umm ary jud gm en t o rd er i ns of ar as it co nc lu de d t ha t the in su rers di d n otwaiv e th ei r ri gh t t o c ol le ctth e am ou nt s W il li am s o wes an d i ns of

ar as itco nc lu de d t ha t the in su rers ’ fai lu re t o b il l W il li am s m on th ly doe s n otex cu se W il li am s’ rei m bu rs em en t o bl ig at io ns un de r th e pr og ram ag reem en ts . Howev er, we v acat e th e d is tri ctco urt’s o rd er t o t he ex te nt th atitco nc lu de d t ha t Geo rg ia ’s st atut e o f li mit at io ns foract io ns to reco ve r on a writ te n c on tra ctba rs th e in su rers fro m dra win g o n t he let te rs of c red it . The ca se is

10 Case: 11-14999 Date Filed: 10/23/2012 Page: 10 of 11rem an de d fo r pr oc eed in gs co ns is te ntwith thi s o pi ni on . 2

AFFIRMED I N PART, VAC ATED I N PART, AND REMANDED.

Wil liams’ briefs to this Court argue that the pa rties enter ed into a “c ollatera l agree ment” 2 that allows the insurer s to draw on the le tters of c redit for only those debts ac cruingunder the 1996–1997 policies. I f that is true, then the insurers would br eac h the collater al agree ment by draw ing on the letters of c redit to satisfy Wil liams’ $1,850,572 debt for pa y ments of claims under the 1990–1995 policies beyond the buyout agree ment’s $4.2 million cap. Be cause the district court did not addre ss this i ssue in its summ ary judgme nt order, w e do not dec ide it here and instead le ave it for

the district court to dec ide in the first instance on rema nd. 11 Case: 11-14999 Date Filed: 10/23/2012 Page: 11 of 11