Court Opinion

ID: 9576850
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:29:18.541723+00
Date Added: 2024-06-11T13:19:28.290871
License: Public Domain

Beasley, Judge,
dissenting.
I respectfully dissent because the trial court was correct. I would adopt its order explaining the reasons for the grant of summary judgment to State Farm and the denial of summary judgment to plaintiff Parks. Considering the undisputed facts, there is an absence of evidence to support at least one essential element of the nonmoving party’s case, the test for summary judgment articulated in Lau’s Corp. v. Haskins, 261 Ga. 491 (405 SE2d 474) (1991).
There never was a binder, and the mistake in the letters (there were two identical letters, one for each property) did not inadvertently create a binder nunc pro tunc to cover the property damage that occurred after Parks’ check for premiums had been returned to him and he had been told State Farm would not provide coverage.
Parks, an experienced businessman, realized one day that the insurance on two of his four rental properties had lapsed for nonpayment of premiums several months earlier. He went to insurance agent Ray and provided the required information for the agent to complete application forms for new insurance with State Farm, which had previously provided coverage, and he signed the applications.
He understood the provision on the forms which stated: “I understand that coverage is not provided until this application is approved by State Farm’s underwriting department.” In fact, a handwritten “x” is marked in the box “not provided . . .” as opposed to the box “provided by this application,” right above his signature confirming that all the statements in the “application” are true. He also read and signed for each property a “Rental Dwelling Binder Receipt” that was not signed by an agent and that stated: “This Binder is not valid unless signed by a State Farm agent.” The receipts contained in addi*31tion the same statement acknowledging there would be no coverage until the underwriting department approved.
Parks left a check at Ray’s office even though Ray did not request any money at that time. The check was for $500, an amount Parks wrote although the proposed base premiums subject to revision were shown on the applications to be $206 and $198. He testified that when he left, he “assumed” he had coverage because, on earlier occasions, agents just phoned and got approval for a binder from other insurers. He did not see Ray do so on this occasion, and he did not testify that Ray told him he had coverage or a binder. In response to a question, he testified only that he did not recall Ray telling him that the policies would have to be approved by the underwriting department and thought he would have remembered if he did. He was aware that he was in difficulty with State Farm, as it had cancelled his insurance before. Ray testified in affidavit that he “informed Mr. Parks that the underwriting department would have to provide approval before any coverage could be provided.”
State Farm’s underwriting department did not approve the application. State Farm did not “admit that Ray retained the check” but merely that Parks submitted an. application “together with a check.” Ray returned the unnegotiated check to him at his place of business. Ray told him that State Farm “wouldn’t be able to write” a policy. Parks understood that he did not have coverage, so he called another agent, who promised to get a binder with another company the next day, which he did. That insurance, with third-party defendant Southern General Insurance Company, covered the two properties at the time of the subsequent tornado damage, and Parks was paid $31,000 for one and $32,000 for the other. The “current market value” of the two properties was shown on the State Farm applications as $34,000 and $32,000, respectively.2
Several weeks after payment by Southern General, Parks received from State Farm two identical letters, one on each rental property. They each contained two errors. One was the sentence “For your continued protection, we urge you to secure other insurance to prevent any lapse in coverage.” Parks knew his previous policies had lapsed before he went to Ray to apply for new insurance, so he did not have continuous coverage on the properties. The second was the sentence “The coverage provided under this application and binder is *32cancelled effective April 08, 1993.” Parks knew he had no binder; he had signed two documents making that clear, and Ray had told him he had no coverage when he returned his check.
Parks was surprised when he received the letters, because he did not believe he had coverage with State Farm. If he had thought so, he said, he would have made the Southern General policy commence on the date the State Farm coverage ended. He took the letters to the Southern General agent and never filed a proof of loss claim with State Farm. Instead, thereafter he signed two purported loan receipts for Southern General, and this suit was filed two and one-half years later.
Parks, who is knowledgeable about the value of real property, testified that he does not seek any more than what Southern General already paid him, which was the policy limit on one house and the negotiated sum of $31,000 on the other house. The suit is in actuality between two insurance companies, one which never wrote policies on the property after earlier ones lapsed and one which did.
There is no evidence whatsoever that a binder with State Farm existed at the time of the loss. Parks knew there was none, knew his application had been rejected, and had taken steps to obtain and did obtain other insurance. As recognized by the trial court, a binder is a contract for temporary insurance, which requires a meeting of the minds. OCGA § 33-24-33 (a); McDuffie v. Criterion Cas. Co., 214 Ga. App. 818, 819-820 (449 SE2d 133) (1994); Peterson v. Liberty Mut. Ins. Co., 188 Ga. App. 420, 423 (373 SE2d 515) (1988). Here the meeting of the minds when the tornado struck is exhibited by the application and receipt documents, the return of the check, the accepted statement that there was no coverage, and the acquisition of other coverage. Both Parks and State Farm understood that there was no binder or other expression of coverage by State Farm at that time. There had been only an application, an offer to purchase insurance which was rejected by the insurance company.
Parks’ assumption when he left Ray’s office the day he made the application cannot surmount the documents he signed clearly stating otherwise. OCGA § 24-6-1 provides: “[p]arol contemporaneous evidence is generally inadmissible to contradict or vary the terms of a valid written instrument.” Even in contracts, OCGA § 13-2-4 provides: “The intention of the parties may differ among themselves. In such case, the meaning placed on the contract by one party and known to be thus understood by the other party at the time shall be held as the true meaning.” A contract cannot be created by one party’s unilateral assumption which directly contravenes what is written and signed in an application. Parks was bound to what he signed. Matin v. Servisco, 172 Ga. App. 418 (1) (323 SE2d 278) (1984).
The tendering of a check which Parks intended to cover premi*33ums made no difference. “ ‘[A]n application for insurance, even with the concurrent prepayment of premiums, creates no binding contract of insurance until the insurer manifests its acceptance.’ ” (Citations omitted.) Karp v. Western Life Ins. Co., 182 Ga. App. 693, 694 (356 SE2d 893) (1987). There was not a single manifestation of acceptance, not even a shadowy semblance. Just as in Karp and Peterson, there was no meeting of the minds creating a binder at the time the application was made, much less at the pivotal time, liability-wise, which is the time of the loss, which occurred after the check had been returned and Parks was informed the company refused to approve the application. Parks, when deposed, testified that he never paid any money to State Farm for these policies after his check was returned and that he never received a written policy from State Farm in this connection.
Decided February 11, 1998
Reconsideration denied March 10, 1998.
Jenkins & Nelson, Frank E. Jenkins III, Peter R. Olson, for appellant.
Magruder & Sumner, J. Clinton Sumner, Jr., Clay M. White, for appellee.
As the trial court ruled with respect to the later-received letters, a jury could draw only the conclusion that the statement in the letters targeted by Parks after the fact was a mistake, as the underwriter testified without contradiction. It was the type of letter sent when there is a binding application, which the documents show did not exist. And never did Parks rely to his detriment on any communication or any action or any inaction by State Farm or its agent with respect to coverage.
Summary judgment to State Farm was proper.
I am authorized to state that Chief Judge Andrews and Presiding Judge Birdsong join in this dissent.

 The case was originally filed in state court, then removed to federal court, but remanded back to state court on plaintiff’s motion for the stated reason that the amount in controversy did not exceed $50,000. In the amended complaint, Parks seeks from State Farm “an amount to be determined by interpretation and reconciliation of the ‘other insurance’ provisions” of the Southern General and State Farm policies. It is not clear what “policy” of State Farm is meant, as none was issued. State Farm filed a third-party claim against Southern General, apparently for an amount less than $50,000.