Opinion ID: 4555655
Heading Depth: 2
Heading Rank: 2

Heading: Georgia law governs this action

Text: Second, the Renaissance Entities contend that the district court erred in holding that Georgia law, rather than California law, governs their insurance policy. The answer to this argument determines whether to apply California’s “noticeprejudice rule.” Under California’s notice-prejudice rule, an insurer must demonstrate that a policyholder’s delay in giving notice significantly hindered its ability to investigate and resolve a claim under the policy. Pitzer Coll. v. Indian Harbor Ins. Co., 447 P.3d 669, 674 (Cal. 2019). In contrast, Georgia law does not require a showing of prejudice when an insurance contract requires notice as a condition precedent to coverage. Se. Express Sys., Inc. v. S. Guar. Ins. Co. of Ga., 482 S.E.2d 433, 436 (Ga. Ct. App. 1997). In cases under our diversity jurisdiction, we apply the choice-of-law rules of the forum state. Boardman Petroleum, Inc. v. Federated Mut. Ins. Co., 135 F.3d 750, 752 (11th Cir. 1998) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941)). When a contract is at issue, Georgia courts generally apply the law of the state where the parties made the contract. Gen. Tel. Co. of Se. v. Trimm, 311 S.E.2d 460, 461 (Ga. 1984). But if the contract specifies that performance is to occur in 15 Case: 19-11733 Date Filed: 08/14/2020 Page: 16 of 20 another state, then that state’s laws will apply. Id. An insurance contract is deemed “made” in the state where it was delivered. Pink v. A.A.A. Highway Express, 13 S.E.2d 337, 344 (Ga. 1941). However, these rules are subject to an exception: Georgia courts do not apply other states’ common law. Frank Briscoe Co., Inc. v. Ga. Sprinkler Co., Inc., 713 F.2d 1500, 1503 (11th Cir. 1983). Instead, they apply only the statutory law of other states, which includes case law interpreting those statutes. Id. Here, the Renaissance Entities assert several reasons why California law should govern. Citing our decision in Boardman Petroleum, Inc. v. Federated Mutual Insurance Co., 135 F.3d 750, they argue that California has greater interests in having its law control this dispute, that the policy was delivered to their address in California, and that the policy anticipated performance in California. They also contend that Georgia’s bar on applying the common law of another jurisdiction did not preclude the district court from applying the notice-prejudice rule. We need not address all these arguments because on the last point, we disagree. And that renders the other contentions moot.2 2 Nevertheless, we note that our decision in Boardman Petroleum, Inc. v. Federated Mutual Insurance Co., 135 F.3d 750, does not govern the choice-of-law question in this case. In Boardman, we faced consolidated cases originally filed in the district courts of different states, whose choice-of-law rules would each apply the state’s own substantive law. Boardman, 135 F.3d at 753. Therefore, we adopted a “balancing of interests” analysis to resolve the conflict among the competing choice-of-law rules. See id. Here, however, we follow only Georgia’s choice-of-law principles. See Klaxon, 313 U.S. at 496. Those principles do not involve a balancing of interests. 16 Case: 19-11733 Date Filed: 08/14/2020 Page: 17 of 20 The Renaissance Entities have identified no California statute that creates California’s notice-prejudice rule. Rather, the Renaissance Entities cite a host of statutes that merely regulate the insurance industry in California. See, e.g., Cal. Ins. Code § 680 (“An insurer shall not transact any class of insurance which is not authorized by its charter.”). They also cite California statutes that govern contract interpretation in general. But the choice-of-law inquiry under Georgia law is not whether any statute exists that bears on the contract before the court; it is whether a particular rule of decision comes from the statutes or from the common law of another jurisdiction. See Coon v. Med. Ctr., Inc., 797 S.E.2d 828, 833–34 (Ga. 2017). And on that count, the notice-prejudice rule is purely a product of California common law, see Ins. Co. of State of Pa. v. Associated Int’l Ins. Co., 922 F.2d 516, 523 (9th Cir. 1990) (describing the rule as one of “California decisional law”), meaning that it is subject to Georgia’s choice-of-law rules that decline to apply the common law of other jurisdictions. The Renaissance Entities try to avoid this result by pointing to a California statute that provides that insurers waive their objections to a policyholder’s delay in providing notice when they do not promptly reserve their rights. Cal. Ins. Code § 554. But this provision is not the source of the notice-prejudice rule. Objecting to deficient notice is not the same as being prejudiced by it. And the Renaissance Entities do not argue on appeal that Nationwide failed to object to improper notice. 17 Case: 19-11733 Date Filed: 08/14/2020 Page: 18 of 20 Nor do the California Supreme Court’s decisions applying the notice-prejudice rule interpret or cite this statute. See, e.g., Campbell v. Allstate Ins. Co., 384 P.2d 155, 156 (Cal. 1963). As a result, Georgia courts would not apply the notice-prejudice rule even if California statutes otherwise governed these policies. See Coon, 797 S.E.2d at 833–34.3 We therefore apply Georgia law here. C. The Renaissance Entities failed to provide proper notice to Nationwide as required by the policies Finally, the Renaissance Entities argue that the district court erred in holding that they did not adequately notify Nationwide of a potential claim, in accordance with the requirements of the policy. Although the Renaissance Entities first notified Nationwide of the attack on Evans over twenty-two months after it occurred, they contend that this delay was not unreasonable as a matter of law. We disagree. Under Georgia law, clauses requiring timely notice to an insurer are valid as conditions precedent to coverage. Richmond v. Ga. Farm Bureau Mut. Ins. Co., 231 S.E.2d 245, 250 (Ga. Ct. App. 1976). The policy behind this rule is to 3 In their reply brief, the Renaissance Entities argue that Georgia’s exclusion of other jurisdictions’ common law is limited to states that were formed from the original thirteen colonies. The Georgia Supreme Court declined to address this issue in its recent decision on the exception. See Coon, 797 S.E.2d at 834 n.5. As the Renaissance Entities did not raise this argument in their opening brief, we do not consider it here. See United States v. Oakley, 744 F.2d 1553, 1556 (11th Cir. 1984) (“Arguments raised for the first time in a reply brief are not properly before the reviewing court.”). Even so, we observe that the Georgia Supreme Court has applied the exclusion to the common law of a state that was not one of the original thirteen colonies (or a state created from one)—Florida. See Motz v. Alropa Corp., 15 S.E.2d 237, 238 (Ga. 1941). 18 Case: 19-11733 Date Filed: 08/14/2020 Page: 19 of 20 allow insurers an early opportunity to investigate potential claims, prepare for litigation, and evaluate settlement. Se. Express Sys., 482 S.E.2d at 436. Although it is generally a jury’s role to decide whether a policyholder has provided adequate notice, Georgia courts have held that prolonged periods of unjustified delay are unreasonable as a matter of law. E.g., Allstate Ins. Co. v. Walker, 562 S.E.2d 267, 268 (Ga. Ct. App. 2002). The Renaissance Entities argue that their delay was legally justified because, following Braitanbaum’s good-faith investigation, they believed they bore no responsibility for the attack. But “misplaced confidence” does not excuse late notice to an insurer under Georgia law. Protective Ins. Co. v. Johnson, 352 S.E.2d 760, 761 (Ga. 1987) (citation omitted). For this reason, Georgia courts have approved of granting summary judgment to insurers following even shorter periods of delay. See, e.g., id. (seventeen months). Under the circumstances of this case, the Renaissance Entities’ twenty-twomonth delay in providing notice to Nationwide was unreasonable as a matter of law. In reaching this conclusion, we have considered “the nature of the event, the extent to which it would appear to a reasonable person in the circumstances of the [Renaissance Entities] that injuries or property damage resulted from the event, and the apparent severity of any such injuries” to Evans. Forshee v. Emps. Mut. Cas. Co., 711 S.E.2d 28, 31 (Ga. Ct. App. 2011) (citing cases). Here, Braitanbaum 19 Case: 19-11733 Date Filed: 08/14/2020 Page: 20 of 20 considered Evans to be a “team member,” even though the Renaissance Entities did not employ her. His investigation indicates that the Renaissance Entities fully understood the seriousness of the attack on her. And Braitanbaum has admitted that he communicated with the broker for his workers’ compensation insurance because he was concerned about liability. Thus, based on the information available to the Renaissance Entities immediately after the incident, we conclude that their actions were unreasonable as a matter of law.