FILED

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

AUGUST 21, 2008

THOMAS K. KAHN

CLERK

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

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No. 08-12206

Non-Argument Calendar

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D. C. Docket No. 06-00154-CV-WLS-1

H. PACE BURT, JR., 

Plaintiff-Appellant, 

versus 

GREAT NORTHERN INSURANCE COMPANY, 

Defendant-Appellee. 

________________________

Appeal from the United States District Court

for the Middle District of Georgia

_________________________

(August 21, 2008)

Before MARCUS, WILSON and PRYOR, Circuit Judges.

PER CURIAM:

H. Pace Burt, Jr. appeals the summary judgment in favor of Great Northern
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Insurance Company and against Burt’s complaint of bad faith. The district court

concluded that Burt was not legally responsible for damages sought by Deborah

and Michael Draper and was not covered under the homeowner policy issued by

Great Northern Insurance. We affirm.

I. BACKGROUND

Burt and Mark Harris agreed to purchase, renovate, and resell a house in

Atlanta, Georgia. Burt did not make a personal investment in the venture. Burt

and his family invested funds they had accumulated in several business accounts,

including the Hotel Trust, a real estate investment entity, to purchase the house. 

The family businesses and Harris were to share any profit on the resale of the

house. Harris was given a power of attorney that he used to purchase the house

and make renovations.

Deborah and Michael Draper purchased the house. Harris transferred title to

the Drapers as attorney-in-fact on behalf of Albany Lime & Cement Company, the

Burt Company, Burt Development Company, H. Pace Burt, Jr. as Trustee of the

Hotel Trust, and Hilliard P. Burt. After the purchase, the Drapers discovered

several construction defects and sued all the parties listed on the warranty deed,

including Burt in his capacity as Trustee of the Hotel Trust.

Burt submitted a claim to Great Northern Insurance and requested that the
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company defend him in the lawsuit. Great Northern Insurance had issued a

homeowners policy to Burt for his home at 702 River Chase Lane in Albany,

Georgia. The policies provided liability coverage for “damages for which [Burt]

[was] legally responsible.”

In response to questions from Great Northern Insurance, Burt stated that he

acted as Trustee of the Hotel Trust to invest in the purchase of the Atlanta house. 

Burt stated that he “derived no income from the sale of the property, however he

received his small undivided interest from the proceeds of the sale.” Burt also

stated that the owners of the Hotel Trust had a “commercial general liability policy

which covered all real estate they owned.” The commercial insurer had “verbally

agreed to provide a defense” for the Draper lawsuit pending its investigation.

Great Northern Insurance denied Burt coverage. The company determined

that the damages sought by the Drapers were economic in nature and did not

qualify as personal, bodily, or property damage as defined in Burt’s homeowners

policy. The company also determined that four exclusions listed in Burt’s

insurance policy precluded coverage: intentional acts; business pursuits,

investment or other for-profit activities; the performance of or failure to perform

professional services; and oral or written business contracts.

Burt, in his role as Trustee of the Hotel Trust, and the other defendants
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settled the lawsuit and agreed to pay the Drapers damages of $250,000. Burt

signed the settlement agreement in his capacity as Trustee of the Hotel Trust. The

settlement was paid by the personal insurance carrier for Hilliard P. Burt Sr., Pace

Burt, Inc., and Burt & Burt, P.A. 

Burt filed a complaint in a Georgia court that alleged that Great Northern

Insurance had refused, in bad faith, to defend and indemnify him. Burt sought

reimbursement for $100,000 that he allegedly contributed to the settlement. Burt

alleged that he agreed to divide equally any profits and losses with Harris and the

family businesses and, after settlement of the lawsuit, borrowed $100,000 from

Pace Burt, Inc. to reimburse the other investors.

Great Northern Insurance removed the action to federal court. After

discovery, Great Northern Insurance moved for summary judgment. Great

Northern Insurance argued that Burt did not incur personal liability from the

Draper lawsuit and the policy excluded coverage for the incident.

The district court granted summary judgment in favor of Great Northern

Insurance. The district court concluded that there was no genuine issue of material

fact that Burt acted as Trustee for the Hotel Trust and, under a state statute, could

not be held personally liable for the damages incurred by the Drapers. See Ga.

Code Ann. § 53-12-199. Because the Great Northern policy restricted coverage to
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incidents for which Burt was “legally responsible,” the district court concluded that

Great Northern Insurance did not act in bad faith by refusing to defend or

reimburse Burt for the settlement.

II. STANDARD OF REVIEW

We review a summary judgment de novo and view the evidence in the light

most favorable to the nonmoving party. Twin City Fire Ins. Co. v. Ohio Cas. Ins.

Co., 480 F.3d 1254, 1258 (11th Cir. 2007). Summary judgment should be entered

when there is no genuine issue of material fact and the moving party is entitled to

judgment as a matter of law. Fed. R. Civ. P. 56(c).

III. DISCUSSION

Under Georgia law, which the parties agree applies, the duty of an insurer to

defend is different from the obligation to indemnify. Pac. Employers Ins. Co. v.

Cesnik, 219 F.3d 1328, 1330 (11th Cir. 2000) (citing Elan Pharm. Research Corp.

v. Employers Ins. of Wausau, 144 F.3d 1372, 1375 (11th Cir.1998)). Although an

insurer need not indemnify the insured for a liability he incurs outside the terms of

the policy, an insurer must provide a defense for a liability that might fall within

the policy. Id. The duty to defend “turns on the language of the insurance contract

and the allegations of the complaint asserted against the insured.” City of Atlanta

v. St. Paul Fire & Marine Ins. Co., 231 Ga. App. 206, 207, 498 S.E.2d 782, 784
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(1998) (citing Canal Indem. Co. v. Chastain, 228 Ga. App. 255, 256, 491 S.E.2d

474, 475 (1997)). If the complaint does not assert a claim covered by the insurance

policy, the insurer may refuse to defend the insured. Id. (citing Leader Nat. Ins.

Co. v. Smith, 177 Ga. App. 267, 274, 339 S.E.2d 321, 327 (1985)).

Great Northern Insurance did not have a duty to defend Burt. Great

Northern Insurance issued to Burt a homeowners policy with coverage for

incidents for which he was “legally responsible.” The complaint filed by the

Drapers named Burt as a defendant in his role as Trustee for the Hotel Trust; the

Drapers never even attempted to hold Burt personally liable for their loss. Under

state law, Burt did not become liable as a trustee unless he dealt with the Drapers in

a personal capacity. See Ga. Code Ann. § 53-12-199 (a trustee is not personally

liable unless the trustee “expresses an intention to be personally bound” by a

warrant made to convey property or “fails to reveal [his] representative capacity”

in a contract, and is completely protected against actions brought against the trust). 

The real estate was conveyed to the Drapers by Harris acting as attorney-in-fact for

Burt in his role as Trustee for the Hotel Trust, and Burt does not allege he had any

interaction with the Drapers that would create any personal liability under state

law. Because Great Northern Insurance never had a duty to defend Burt, it could

not have a duty to reimburse Burt for the settlement he allegedly paid.
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IV. CONCLUSION

The summary judgment in favor of Great Northern Insurance is

AFFIRMED.