[DO NOT PUBLISH]

In the

United States Court of Appeals

For the Eleventh Circuit

____________________

No. 22-13649

____________________

EARL D. BARRS, 

Plaintiff-Appellee, 

versus

AUTO-OWNERS INSURANCE COMPANY, 

Defendant-Appellant.

____________________

Appeal from the United States District Court

for the Middle District of Georgia

D.C. Docket No. 5:19-cv-00494-TES

____________________

Before ROSENBAUM, NEWSOM, and MARCUS, Circuit Judges.

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PER CURIAM:

This insurance-coverage dispute arises out of a construction 

project gone awry. The plaintiff in this action, Earl Barrs, originally 

sued AAA General Contractors, Inc., which he had hired to complete the construction work. That suit alleged several negligence-, 

contract-, and warranty-related claims against AAA; resulted in a 

consent judgment in Barrs’s favor; and assigned to Barrs any coverage claims that AAA might have against its insurer, Auto-Owners 

Insurance Company. In the follow-on action that underlies this appeal, Barrs sued Auto Owners, claiming that AAA’s policy covered 

the damage that AAA’s misconduct had caused his property. 

After undertaking a choice-of-law analysis, the district court 

applied Georgia law and awarded summary judgment to Barrs. 

Auto-Owners appealed, raising three issues. First, it contends that 

the damages that Barrs claims aren’t covered by its policy. Second, 

it argues that it has no duty to indemnify Barrs because the consent 

judgment in the underlying suit wasn’t allocated between claims 

for which the policy might provide coverage and those for which 

it doesn’t. And finally, it asserts that Barrs admitted that no coverage exists for the consent judgment. 

After careful review of the parties’ arguments, and with the 

benefit of oral argument, we affirm.1

1 We review a district court’s grant of summary judgment de novo and its 

factual findings for clear error. See Levinson v. Reliance Standard Life Ins. Co., 

245 F.3d 1321, 1325 (11th Cir. 2001). Summary judgment is appropriate when 

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I

Earl Barrs contracted with AAA General Contractors to deconstruct a building on Barrs’s property.2 AAA, in turn, hired Z &

H Enterprises, LLC, which was solely owned by Zachary Hood 

(collectively, “Hood”), to oversee the deconstruction. 

During the course of the project, Barrs noticed that work 

wasn’t being completed and that materials were missing. As it 

turned out, Hood had stolen those missing materials. Barrs ultimately terminated his contract with AAA, claiming that its negligence allowed the theft and delayed the project. Barrs then notified 

Auto-Owners, as AAA’s insurer, that he would file suit against AAA

for breach of contract and negligence. 

AAA’s insurance policy with Auto-Owners was issued and 

delivered to AAA in Alabama. In relevant part, the policy provides 

coverage for “property damage” caused by an “occurrence.” AutoOwners Policy (Doc. 26-3) at 125, 140. The policy excludes certain 

items from coverage, including for (1) property damage “expected 

or intended from the standpoint of the insured,” (2) property damage incurred to “[p]ersonal property in the care, custody, or control 

of, or over which physical control is being exercised for any purpose by any insured,” and (3) damage “arising out of . . . [a] delay 

the record submitted by the parties shows that no genuine issue of material 

fact exists and the movant is entitled to judgment as a matter of law. Fed. R. 

Civ. P. 56(a). 

2 These facts were undisputed in the district court and taken as established for 

summary judgment purposes.

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or failure by [the insured] or anyone acting on [the insured’s] behalf 

to perform a contract or agreement in accordance with its terms.” 

Id. at 126, 129. The policy defines “insured” as the named insured 

and any employees acting within the scope of employment or performing duties related to the conduct of the insured’s business. Id. 

at 134. 

Auto-Owners conducted its own investigation and sent a letter to AAA declaring that it would not defend AAA in any dispute 

between AAA and Barrs because coverage did not exist under the 

policy. Barrs then filed suit against AAA to recover damages for 

AAA’s alleged negligent acts regarding the deconstruction project. 

See Barrs v. AAA Gen. Contractors, Inc., No. 5:17-CV-335-MTT (M.D. 

Ga. 2018). The complaint in that lawsuit alleged six theories of liability against AAA: (1) negligent deconstruction, (2) vicarious liability/respondeat superior, (3) negligent hiring and retention, (4) negligent supervision, (5) breach of contract, and (6) breach of warranty. 

Barrs and AAA ultimately entered into a settlement agreement in which AAA admitted liability in the amount of $557,500.00 

to claims of negligent deconstruction (Count I), negligent hiring 

and retention (Count III), and negligent supervision (Count VI). A 

consent judgment was entered against AAA that closely tracked the 

settlement agreement but did not indicate which portions of the 

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damages award was attributed to which claims.

3

 The agreement 

also assigned Barrs any and all of AAA’s right to claim coverage and 

to recover available funds under Auto-Owners’ policy. 

Barrs then filed this suit against Auto-Owners to enforce any

insurance claim that he had been assigned under the agreement. 

Auto-Owners removed to federal court. Following cross-motions 

for summary judgment on the coverage issues, the district court 

issued an order that granted in part and denied in part the motions. 

The district court concluded that Georgia law applied to the dispute and that the unallocated consent judgment consisted of both 

covered and non-covered claims. It found that Auto-Owners’ policy provided coverage for Barrs’s claims of negligent hiring, retention, and supervision to the extent that he sought damages for stolen lumber and materials. But the district court also concluded that 

the policy didn’t cover the portion of the consent judgment premised on faulty workmanship or improper deconstruction. 

Following this determination, Auto-Owners filed its second 

motion for summary judgment as to whether it owed any indemnification to Barrs in conjunction with the damages forming the 

basis of the consent judgment, which the district court denied. 

3 This type of agreement is known in our circuit as a Coblentz agreement, 

named for the former-Fifth Circuit case Coblentz v. American Surety Co. of New 

York, 416 F.2d 1059 (5th Cir. 1969). That case held that if a liability insurer is 

informed of an action against its insured, but declines to defend the insured, 

the insurer may be held to a consent judgment entered in that action absent 

fraud or collusion. Id. at 1063.

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The district court then issued a show-cause order as to why 

it should not proceed to enter final summary judgment in favor of 

Barrs. Following responses to the show-cause order, the district 

court entered a final order granting summary judgment to Barrs in 

the amount of $557,500. On that same day, the district court entered final judgment on this order. 

This is Auto-Owners’ appeal. Auto-Owners raises three 

challenges: First, it contends that the damages Barrs claims aren’t 

covered by its policy. Second, it argues that it has no duty to indemnify Barrs against the consent judgment because the judgment 

is not allocated between covered and uncovered claims. And finally, it asserts that Barrs admitted that no coverage exists for the 

consent judgment. We first address a threshold choice-of-law issue. We then turn to Auto-Owners’ three merits arguments. 

II

This case is in federal court by virtue of diversity jurisdiction. 

We must therefore decide, as a threshold matter, which law to apply before reaching the merits. In diversity cases, a federal court 

applies “the law of the forum in which it sits.” LaTorre v. Conn. Mut. 

Life Ins. Co., 38 F.3d 538, 540 (11th Cir. 1994). The case was filed in 

Georgia, so Georgia’s choice-of-law rules apply. Frank Briscoe Co. 

v. Ga. Sprinkler Co., 713 F.2d 1500, 1503 (11th Cir. 1983) (“A federal 

court faced with [a] choice of law issue must look for its resolution 

[in] the choice of law rules of the forum state.”). 

In Georgia, the doctrine of lex loci contractus—meaning the 

law of the place in which the contract was made—governs contract 

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disputes, including those involving insurance policies. Gen. Tel. Co. 

of the Se. v. Trimm, 311 S.E.2d 460, 461–62 (Ga. 1984). Under Georgia law, a contract is deemed to have been “made” in the state 

“where the last act essential to the completion of the contract was 

done.” Id. For insurance contracts, Georgia law dictates that it is 

“made” where the contract is delivered. See Pink v. A.A.A. Highway 

Express, Inc., 13 S.E.2d 337, 334 (Ga. 1941). Both parties agree that 

the insurance policy was delivered to AAA in Alabama. 

But that’s not the end of our analysis—there’s an exception 

to the lex loci contractus rule. Georgia courts will consider a foreign 

state’s law only when it involves statutes or judicial decisions. See 

Coon v. Med. Ctr., Inc., 797 S.E.2d 828, 833–34 (Ga. 2017). Where 

the law in question is another state’s common law, Georgia privileges its own common law. Id. Because neither party contends

that an Alabama statute or judicial decision interpreting such a statute is at play here, we apply Georgia’s common law.

III

Having determined that Georgia law applies, we must now 

consider the three merits issues raised on appeal: Whether (1)

Auto-Owners’ policy covers the damages for the material Hood 

stole from Barrs; (2) Auto-Owners has a duty to indemnify Barrs 

even though the consent judgment is not allocated between claims; 

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and (3) Barrs admitted that the consent judgment did not cover his 

claims. 

A

Auto-Owners first contends that its policy doesn’t cover the 

cost of the materials that Hood stole from Barrs. We disagree. 

The policy offers coverage for damages that result from 

“property damage” caused by an “occurrence.” Auto-Owners Policy at 125. The policy defines “occurrence” as an “accident.” Id. at 

140. Though the policy does not itself define “accident,” Georgia 

common law indicates that “[i]n an insurance policy, an accident is

an unexpected happening rather than one occurring through intention or design.” Rucker v. Columbia Nat’l Ins. Co., 705 S.E.2d 270, 

273 (Ga. Ct. App. 2010).

We determine whether something was an accident by viewing the event from the standpoint of the insured. Id. at 273–74.

Georgia courts have determined that negligent acts count as “accidents” for purposes of insurance coverage. See Hathaway Dev. Co. 

v. Am. Empire Surplus Lines Ins. Co., 686 S.E.2d 855, 860–61 (Ga. Ct. 

App. 2009). 

Auto-Owners’ policy excludes certain items from coverage, 

so that even if an event counts as an “occurrence” that causes 

“property damage,” it may still be excluded from coverage based 

on the terms of the policy. “An insurer seeking to defeat a claim 

based on a policy exclusion has the burden of proving that the exclusion is applicable, and the absence of evidence does not prove 

the exclusion applies.” Id. at 861. Insurance-policy exclusions are 

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“narrowly and strictly construed against the insurer and [forgivingly] construed in favor of the insured to afford coverage.” AutoOwners Ins. Co. v. Neisler, 779 S.E.2d 55, 59 (Ga. Ct. App. 2015) (alteration in original; citation and quotation marks omitted). 

AAA admitted liability for negligent hiring, retention, and 

supervision—all of which, Barrs asserts, and Auto-Owners doesn’t 

dispute—qualify as “occurrences” under the policy. But AutoOwners points to three possible exclusions. None bars coverage. 

Exclusion (a). This provision excludes from coverage 

“‘property damage’ expected or intended from the standpoint of 

the insured.” Auto-Owners Policy at 126. Auto-Owners argues 

that Hood was AAA’s employee, and therefore was an “insured” 

according to the terms of the policy. But we needn’t resolve 

whether Hood was AAA’s employee, independent contractor, or 

neither. Even assuming, for the sake of argument, that he was 

AAA’s employee, this exclusion still would not bar coverage. According to the terms of the policy, an employee is an insured, “but 

only for acts within the scope of [his] employment . . . or while performing duties related to the conduct of . . . business.” Id. at 134. 

Auto-Owners offers no support for an argument that Hood was 

acting within the scope of his purported employment; indeed, it 

doesn’t even respond to Barrs’s counter-argument in its reply brief. 

We agree with Barrs that Hood, even if employed by AAA, was not 

acting within the “scope of [his] employment or . . . performing duties” related to it when he stole materials from AAA. 

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Auto-Owners alternatively argues that Barrs’s derivative 

claims of negligent hiring and retention are excluded from coverage because those claims “would not exist but for the intentional 

theft of his personal property by Hood and its failure to perform its 

work in a workmanlike manner.” It points to a few Georgia cases 

as support, but each case is distinguishable. In Continental Casualty

Co. v. H.S.I. Financial Services, Inc., 466 S.E.2d 4, 6 (Ga. 1996), the 

express terms of the insurance policy excluded coverage for claims 

that “ar[ose] out of” certain intentional conduct. No such language 

appears in the Auto-Owners policy. Similarly, in Jefferson Insurance 

Co. of New York v. Dunn, 496 S.E.2d 696, 697 (Ga. 1998), the insurance policy specifically barred coverage for claims for injuries

“caused by” an assault and battery, thus excluding an assault and 

battery by the insured’s employee. No such specific carveout exists 

here. 

Exclusion j(5). This provision excludes coverage for “property damage” to “[p]ersonal property in the care, custody or control of, or over which physical control is being exercised for any 

purpose by any insured[.]” Auto-Owners Policy at 128–29. AutoOwners argues that this exclusion bars coverage here because AAA 

admits that Hood was its agent and therefore was “in possession 

and control of . . . Barrs’[s] property” when the property was converted. Again, we needn’t decide whether or not Hood was AAA’s 

agent or employee. Assuming, for the sake of argument, that Hood 

was AAA’s employee, he wasn’t acting within the scope of his employment—as just explained—and therefore wasn’t an “insured” 

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for the purposes of the policy. Therefore, this exclusion does not 

foreclose coverage. 

Exclusion (m). This exclusion bars coverage for property 

damage to “impaired property” or “property that has not been 

physically injured, arising out of . . . [a] delay or failure by [AAA] or 

anyone acting on [AAA’s] behalf to perform a contract or agreement in accordance with its terms.” Id. at 129. Auto-Owners contends that Barrs’s judgment damages are excluded because AAA 

contracted with Hood to stack and bind salvageable wood for 

Barrs’s sole use, and because Hood breached that contract when he 

stole the wood and other materials. Therefore, Auto-Owners says, 

the property damages arise from a delay or failure by AAA or 

AAA’s agent to perform a contract or agreement in accordance 

with its terms—not from a covered “occurrence.” But as the district court correctly held, Barrs’s claim does not “arise out of” a 

breach of contract—rather, he complains that AAA’s negligence allowed Hood to steal Barrs’s materials. Therefore, this exclusion 

does not apply. 

Because the policy covers occurrences and no exclusion bars 

coverage here, we affirm the district court’s holding that the policy 

covers Barrs’s claims. 

B

Auto-Owners next disclaims any duty to indemnify Barrs because the consent judgment was not allocated between covered 

and non-covered claims. The district court disagreed and held that 

Auto-Owners had a duty to provide recovery to Barrs. Because 

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we’ve found nothing in Georgia law that prevents the enforcement 

of an unallocated consent judgment, we agree with the district 

court and affirm on this issue as well. 

The district court held that “[w]hen an insurance company 

refuses to defend its insured, without any reservation of rights, and 

its insured secures a judgment (without fraud or collusion), an insurance company must pay the entire judgment.” It determined 

that the consent judgment here was enforceable because (1) it complied with the procedures established in Coblentz v. American Surety 

Company of New York, 416 F.2d 1059 (5th Cir. 1969); (2) Georgia 

common law didn’t appear to allow an insurer a second bite at the 

apple when it chose not to participate in the underlying lawsuit; 

and (3) Barrs’s declaration attested that the $557,500 settlement 

was less than the value of the stolen lumber, so even if the consent 

judgment wasn’t properly allocated, the recovery was reasonable. 

We agree that the consent judgment was crafted and executed in compliance with Coblentz. To be sure, although Georgia 

law estops an insurer from contesting its insured’s liability when it 

refuses to participate in the underlying lawsuit, it doesn’t necessarily prevent an insurer from later contesting coverage. See, e.g.,

Southern Guar. Ins. Co. v. Dowse, 605 S.E.2d 27, 28 (Ga. 2004); Aetna 

Cas. & Sur. Co. v. Empire Fire & Marine Ins. Co., 442 S.E.2d 778, 783 

(Ga. Ct. App. 1994). Even so, we affirm because we’ve been 

pointed to nothing in Georgia law that clearly prevents the 

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enforcement of unallocated consent judgments.4 To hold that unallocated consent judgments are unenforceable would be to shift 

the burden to the insured and would require meddling in Georgia 

law to a degree that we think would be imprudent. See Salinero v. 

Johnson & Johnson, 995 F.3d 959, 969 (11th Cir. 2021) (observing that 

“a federal court sitting in diversity must proceed with caution in 

making pronouncements about state law” (quotation marks omitted)). 

C

Finally, Auto-Owners argues for the first time on appeal that 

Barrs judicially admitted that the consent judgment was not covered in his Statement of Material Facts in Support of his Opposition 

to Auto-Owners’ second summary-judgment motion. There, 

Barrs stated in a section about the “determination of damages” that 

Auto-Owners is liable “for the damages Barrs incurred as a result 

of [AAA’s] admitted negligence as set forth above” and that “[t]he 

Parties agree that these damages concern damage to wood and 

4 In its opening brief, Auto-Owners cited to a Georgia case that requires attorneys’ fees for bad faith to be allocated between successful and unsuccessful 

claims. See Monterrey Mexican Rest. of Wise, Inc. v. Leon, 638 S.E.2d 879, 892

(Ga. Ct. App. 2006), overruled on other grounds by Temple v. Hillegass, 810 S.E.2d 

625 (Ga. Ct. App. 2018). No such case exists in the settlement-award context, 

nor does the reasoning about attorneys’ fees necessarily extend to it. 

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brick during the deconstruction process which resulted because of 

[AAA’s] negligence as set forth above.” 

Auto-Owners contends that this statement means that Barrs 

admitted that his judgment award is based solely on defective work 

(which is not covered under the policy) rather than AAA’s negligence (which, as already explained, is covered). Basically, AutoOwners wants us to read this sentence as saying that any damage 

happened during and due to the deconstruction process and not because of Hood’s theft. 

We decline to adopt this strained reading of the text. Barrs’s 

argument is that Hood was able to steal materials because of AAA’s 

negligence during the time frame of the deconstruction process. 

Therefore, Barrs’s admission is about the time frame in which the 

relevant actions took place—namely, Hood’s theft and AAA’s negligence in allowing him to steal materials—not an admission that 

there was faulty workmanship in the deconstruction process itself. 

AFFIRMED. 

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