Court Opinion

ID: 9847372
Source: CourtListenerOpinion
Date Created: 2023-09-24 03:58:36.20644+00
Date Added: 2024-06-11T09:17:08.354643
License: Public Domain

ANDREWS, Presiding Judge,
dissenting.
The University of Georgia Athletic Association, Inc. (UGAA) filed a declaratory judgment action seeking a ruling that a liability insurance policy issued to UGAA by Fireman’s Fund Insurance Company provided coverage on a claim brought against the UGAA by a former University of Georgia football player, Decory Bryant. Bryant sued the *365UGAA claiming that it breached a legal duty owed to him to procure binding coverage on a Lloyd’s of London disability insurance policy for his benefit that would have provided him with $500,000 of insurance coverage as a result of a disabling bodily injury he suffered while playing football for the University. Specifically, Bryant’s complaint alleged that, after he was declared eligible for the National Football League draft, he qualified for the Exceptional Student-Athlete Disability Insurance Program, which was coordinated by the UGAA. Bryant alleged that he informed the UGAA that he wanted the disability insurance; that after the UGAA obtained a premium quote on his behalf, he informed the UGAA that his parents would pay the quoted premium; and that the UGAA breached fiduciary and contractual duties and was negligent when it subsequently failed to act in a timely manner prior to his injury to submit the required “Request to Place Coverage” form to the insurance agent in order to procure a disability insurance binder for $500,000 of coverage.
Fireman’s Fund refused to provide coverage or a defense on this claim on the basis of two exclusions from coverage contained in its policy. The first policy provision excluded coverage “for loss in connection with any claim . . . [alleging, based upon or attributable to, arising out of, in consequence of, or in any way related to any [bjodily [i]njury....” The policy defines “Bodily Injury” as including “sickness, injury, disease or death of any person.” The second policy provision excluded coverage “for loss in connection with any claim... [a]lleging, based upon or attributable to, arising out of, in consequence of or in any way related to the Insured’s failure to effect or maintain insurance.” Because both provisions unambiguously excluded coverage, the trial court erred by granting the UGAA’s motion for summary judgment and declaring that the Fireman’s Fund policy provided coverage on the claim.14
Insurance coverage is a matter of contract between the insurer and the insured, and this Court “will not strain to extend coverage where none was contracted or intended.” (Citation omitted.) Jefferson Ins. Co. &c. v. Dunn, 269 Ga. 213, 216 (496 SE2d 696) (1998). Unambiguous terms excluding coverage in an insurance policy require no construction, and so long as such terms are not contrary to law, “the plain meaning of such terms must be given full effect, regardless of whether they might be beneficial to the insurer or detrimental to the insured.” (Footnote omitted.) Continental Cas. Co. v. H. S. I. Financial Svcs., 266 Ga. 260, 262 (466 SE2d 4) (1996).
*366In determining the scope of an insurance provision excluding coverage for a claim “arising out of’ certain events or causes, Georgia law recognizes the broad scope of this exclusion by applying the “but for” test traditionally used to determine cause-in-fact for tort claims. Continental Cas. Co., 266 Ga. at 262; John Crane, Inc. v. Jones, 278 Ga. 747, 750 (604 SE2d 822) (2004). The Fireman’s Fund policy unambiguously excluded coverage on claims for loss “arising out of... [b]odily [i]njury.” Cotton States Mut. Ins. Co. v. Crosby, 244 Ga. 456 (260 SE2d 860) (1979) (finding a provision excluding coverage for damages arising from bodily injury to be unambiguous). Under the “but for” test, Bryant’s claim against the UGAAfor loss of disability insurance benefits arose out of the asserted bodily injury and was excluded from coverage, because “but for” a disabling bodily injury suffered by Bryant, there could be no claim for the benefits. Continental Cas. Co., 266 Ga. at 262; Dunn, 269 Ga. at 216. The broad scope of this exclusion is not limited by the allegations in Bryant’s complaint that the loss of insurance benefits was caused by the UGAA’s negligence or its breach of fiduciary and contractual obligations in failing to obtain binding insurance coverage. Since the exclusion of coverage for claims “arising out of . . . [bjodily [ijnjury” is focused solely on the genesis of those claims under the “but for” test, coverage is excluded regardless of whether the UGAA’s negligence or other alleged failures were proximate causes of the claimed loss. Continental Cas. Co., 266 Ga. at 262; Dunn, 269 Ga. at 216.
The decision in Cotton States, 244 Ga. 456, relied upon by the majority, does not require a different result. In that case, the school district’s insurance policy excluded coverage “for any damages, direct or consequential, arising from bodily injury ... of any person. . . .” (Punctuation omitted.) Id. The parent of a child who suffered bodily injury by being raped at school sued the school district for damages resulting from the rape alleging that school officials negligently permitted conditions to exist at the school that allowed the rape to occur. In a separate count of the complaint, the parent also sought damages based on allegations that, after the rape occurred, school officials unlawfully detained the child for a period of time. The Supreme Court held that the bodily injury exclusion excluded coverage for the claim that school officials negligently permitted the rape to occur, because the bodily injury suffered by the child gave rise to that claim and “no right of recovery would exist at all had the bodily injury not originally occurred.” Id. at 457. As to the claim for unlawful detention which occurred after the rape, the Supreme Court held that “[t]he damages sought by the [child] for her unlawful detention by the defendant school officials are not damages arising from bodily injury, and are not excluded from coverage....” Id. at 458. The decision does *367not set forth any factual allegations regarding the unlawful detention, so there was no factual basis for the Supreme Court to conclude that the unlawful detention claim arose out of the bodily injury or that it could not have occurred “but for” the bodily injury. On the facts presented, the Supreme Court holding stands for the proposition that the unlawful detention claim did not arise out of the bodily injury because the child “could have alleged unlawful detention or have been detained regardless of the rape.” Southeastern Fire Ins. Co. v. Heard, 626 FSupp. 476, 481, n. 13 (N.D. Ga. 1985) (construing the holding in Cotton States, 244 Ga. at 458).
The Fireman’s Fund policy also excluded coverage “for loss in connection with any claim . . . [ajlleging, based upon or attributable to, arising out of, in consequence of or in any way related to the Insured’s failure to effect or maintain insurance.” Bryant’s complaint against the UGAA seeking recovery for loss of the disability insurance benefits alleged that the UGAA breached a legal duty to submit the “Request to Place Coverage” form in order to “procure” the $500,000 disability insurance coverage binder for his benefit. An insurer can carry its burden of proving the applicability of a coverage exclusion by reference to the allegations in the underlying complaint against the insured, and thereby shift the burden to the insured to produce evidence creating a factual issue over whether the exclusion is applicable. First Specialty Ins. Corp. v. Flowers, 284 Ga. App. 543, 544 (644 SE2d 453) (2007). Fireman’s Fund contends that its policy provision excluding coverage for the insured’s failure to “effect” insurance unambiguously excluded coverage for loss based on Bryant’s allegation that the UGAA breached a duty to “procure” binding disability insurance coverage for his benefit. In response, the UGAA argues that the exclusion is ambiguous because it is not clear whether it would apply in the context of Bryant’s claim. The UGAA points out that this is not a claim that it failed to purchase or maintain insurance for itself or its employees; that the UGAA was not an insurance company, broker, or agent acting to purchase or maintain insurance for Bryant, and that under the bylaws of the National Collegiate Athletic Association, the UGAA was incapable of “effecting and maintaining” disability coverage for Bryant.
The Fireman’s Fund policy excluded coverage for loss based on the UGAA’s “failure to effect or maintain insurance,” not a failure to “effect and maintain” insurance. At issue is whether the provision excluded coverage for the UGAA’s alleged breach of a duty to “effect” insurance that would have provided Bryant with insurance benefits. Bryant does not claim that the UGAA failed to maintain or pay for disability insurance on his behalf. Rather, the allegation in his complaint was that the UGAA failed to “procure” a disability insurance binder providing coverage for him prior to his bodily injury *368because it failed to submit a form showing he requested the coverage at the quoted premium.
Decided November 9, 2007
Blasingame, Burch, Garrard & Ashley, Matthew A. Moseley, Thomas F. Hollingsworth III, M. Steven Heath, for appellant.
The existence or nonexistence of an ambiguity in the insurance contract is a question of law for the courts. Avion Systems v. Thompson, 286 Ga. App. 847, 849-850 (650 SE2d 349) (2007). I find no ambiguity in the policy provision excluding coverage for the “failure to effect . . . insurance.” The term “effect” is not defined in the insurance policy, and “[ujnless otherwise defined in the contract, terms in an insurance policy are given their ordinary and customary meaning.” (Footnote omitted.) Stagl v. Assurance Co. of America, 245 Ga. App. 8, 10 (539 SE2d 173) (2000). The American Heritage Dictionary (3rd ed.) defines “effect” used as a verb to mean: “To bring into existence ... [t]o produce as a result... [t]o bring about....” The same dictionary defines the verb “procure” as used in Bryant’s complaint to mean: “To get by special effort; obtain or acquire ... [t]o bring about; effect. . . .” The policy provision excluding coverage for UGAA’s “failure to effect... insurance” plainly excludes coverage on Bryant’s claim regardless of whether the claim is characterized as the UGAA’s failure to procure, effect, or obtain the disability insurance for Bryant. Moreover, nothing in the Fireman’s Fund policy supports the UGAA’s suggestion that the exclusion for “failure to effect . . . insurance” applies only to insurance the UGAA allegedly failed to effect for itself or its employees, but not to insurance the UGAA allegedly failed to effect for Bryant. “[A] word or phrase is ambiguous only when it is of uncertain meaning, and may be fairly understood in more ways than one ... [so that it] involves a choice between two or more constructions of the contract.” (Citation and punctuation omitted.) Western Pacific Mut. Ins. Co. v. Davies, 267 Ga. App. 675, 680 (601 SE2d 363) (2004). This is not an ambiguous exclusion involving a choice between two or more constructions, but simply an unqualified one which excludes coverage regardless of the type of insurance or for whom the insurance allegedly should have been effected. See Mgmt. Specialists v. Northfield Ins. Co., 117 P3d 32, 36 (Colo. App. 2004) (unqualified exclusion for failure to maintain insurance included multiple situations and was not ambiguous because it did not distinguish between types of insurance or for whom it was to be maintained).
For these reasons, I respectfully dissent.
I am authorized to state that Presiding Judge Blackburn and Judge Mikell join in this dissent.
*369Thurbert E. Baker, Attorney General, G. Michael Banick, Assistant Attorney General, Forrester & Brim, Weymon H. Forrester, James E. Brim III, Carlock, Copeland, Semler & Stair, Thomas S. Carlock, Boyd B. Newton, J. Hue Henry, for appellee.

 The trial court also erred by denying the motion by Fireman’s Fund seeking dismissal of the declaratory judgment action on the basis that the claim was expressly excluded from coverage under the policy.