Opinion ID: 4552152
Heading Depth: 2
Heading Rank: 4

Heading: AEGIS Formally Denies Coverage

Text: 3 Originally, Roberson filed suit in Fulton County Superior Court in February 2017, but her complaint was never properly served on ECI. As a result, the complaint was dismissed in May 2017 for failure to prosecute. The same day the Fulton County lawsuit was dismissed, Roberson filed the above-discussed lawsuit in DeKalb County State Court. Despite Roberson’s failure to perfect service, ECI learned of the February 2017 Fulton County lawsuit and notified AEGIS on March 9, 2017. 4 The Policy states that it “does not apply to any Claim based upon, arising out of, directly or indirectly, or in any way involving . . . the gaining in fact of any personal profit or advantage to which the Insured is not legally entitled, or out of any disputes involving the Insured’s fees or charges.” AEGIS has since abandoned this basis for denying coverage. 7 Case: 19-11114 Date Filed: 07/30/2020 Page: 8 of 32 About a month later, on May 3, 2017, AEGIS, again through its claims manager, sent a formal follow-up letter that acknowledged receipt of the claim and asserted that “this matter does not fall within the coverage of the Policy,” and that “[n]either a duty to defend nor a duty to pay damages exists.” After quoting relevant portions of the Policy, AEGIS’s May 3 letter identified two broad grounds for the denial of coverage. First, the letter reiterated that Roberson’s allegations concerned “the gaining in fact of personal profit or advantage to which the Insured is not legally entitled, as well as a dispute regarding ECI’s fee.” Next, and as particularly relevant here, AEGIS’s May 3 letter asserted that several of Roberson’s “[i]tems of relief” were explicitly excluded from the Policy’s definition of “Loss.” Specifically, the letter pointed to Roberson’s requests for (1) class certification; (2) equitable relief to prevent future statutory violations; and (3) damages in the amount of three times the unlawfully withheld security deposit. The letter stated the first two items were excluded under subsection (d) of the Policy’s definition of “Loss,” while the third was excluded under subsection (c). 5 5 AEGIS’s May 3 letter also noted that “Roberson alleges that ECI’s actions were intentional,” which would implicate the Policy’s provision excluding from coverage any “intentional wrongdoing, fraud, dishonesty, criminal or malicious acts by the Insured.” However, the letter further acknowledged that, under the terms of the Policy, that exclusion provision would only apply “[t]o the extent such intentional conduct is established via judgment or other final adjudication.” In other words, that provision would not provide a basis for refusing to defend in the first instance, though it might preclude indemnity down the road. 8 Case: 19-11114 Date Filed: 07/30/2020 Page: 9 of 32 Notably, AEGIS did not, in its May 3 letter, invoke subsection (a) of the Policy’s definition of “Loss,” which excludes “any disgorgement, return, withdrawal, restitution or reduction of any sums which are or were in the possession or control of any Insured.” However, the letter purported to reserve its “right to raise additional coverage issues should the need arise in the future.”