Court Opinion

ID: 4775419
Source: CourtListenerOpinion
Date Created: 2021-08-18 14:00:38.610084+00
Date Added: 2024-06-11T08:09:30.874621
License: Public Domain

USCA11 Case: 20-13745        Date Filed: 08/18/2021   Page: 1 of 14

                                                           [DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT
                          ________________________

                                 No. 20-13745
                             Non-Argument Calendar
                           ________________________

                    D.C. Docket No. 4:19-cv-00045-RSB-CLR

HAL JENKINS,
Individually and as Administrator of the Estate of April Jenkins,

                                                   Plaintiff-Counter Defendant-
                                                   Appellant,

                                       versus

CLJ HEALTHCARE, LLC,
d.b.a. Opulence Aesthetic Medicine,

                                                  Counter Defendant-Appellee,

OWNERS INSURANCE COMPANY,

                                                   Defendant-Counter Claimant-
                                                   Appellee.
         USCA11 Case: 20-13745       Date Filed: 08/18/2021   Page: 2 of 14

                           ________________________

                   Appeal from the United States District Court
                      for the Southern District of Georgia
                         ________________________

                                 (August 18, 2021)

Before JORDAN, GRANT, and LUCK, Circuit Judges.

PER CURIAM:

      Hal Jenkins appeals the district court’s summary judgment for Owners

Insurance Company in this garnishment action. Jenkins argues that the district court

erred by concluding that there was no genuine dispute that the insured, CLJ

Healthcare, LLC, didn’t give notice of the death of one of its liposuction patients,

and the medical malpractice lawsuit against the company, as required under the

insurance policy. We affirm.

        FACTUAL BACKGROUND AND PROCEDURAL HISTORY

      On February 19, 2013, Dr. Nedra Dodds performed liposuction surgery on

April Jenkins, Hal Jenkins’s daughter, at CLJ Healthcare’s medical center. During

the operation, April “suddenly went rigid” and exhibited symptoms consistent with

a seizure. Dr. Dodds was unable to give April atropine to address this emergency

because the medical “crash cart” wasn’t properly stocked, and the employee

Dr. Dodds instructed to call 911 took twenty-nine minutes to place the call. April

was transported to the hospital where, tragically, attempts to resuscitate her failed

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and she was pronounced dead. The medical examiner concluded that April died of

“natural” causes “as a result of . . . pulmonary fat emboli,” which “are a known

complication of liposuction” procedures.

      At the time of April’s death, CLJ Healthcare held an insurance policy from

Owners Insurance that it had obtained through D. Ward Insurance Services, Inc., an

independent insurance agency. The cover letter from Owners Insurance to CLJ

Healthcare included the following statement: “Feel free to contact your independent

[insurance] agent with questions you may have about any of your insurance needs.”

The policy also included a notice provision providing that CLJ Healthcare “must see

to it that [Owners Insurance is] notified promptly of an ‘occurrence’ that may result

in a claim”; in the event of a claim or lawsuit, the insured “must see to it that [Owners

Insurance] receive[s] prompt written notice of the claim or ‘suit’”; and “[n]o one

may bring a legal action against [Owners Insurance] under this insurance unless

[t]here has been full compliance with all of the terms of this insurance.”

      John Marshall, CLJ Healthcare’s office manager, called the independent agent

and told him about April’s death in “late February of 2013,” “several weeks” after it

happened. The independent agent told Marshall that the Owners Insurance policy

didn’t provide insurance for medical malpractice claims.

       In August 2013, Hal Jenkins sued CLJ Healthcare and Dr. Dodds for the

wrongful death of his daughter. Jenkins alleged that Dr. Dodds was professionally

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negligent in piercing his daughter’s liver during the surgery, operating without

nurses in the room, and not calling 911 sooner. Dr. Dodds told her attorney that she

had an insurance policy through Owners Insurance, but there is no record of her

counsel contacting Owners Insurance about the claim and lawsuit until April 2014,

when her counsel forwarded Jenkins’s demand letter to D. Ward, the independent

insurance agency, who in turn forwarded it to Owners Insurance.

      In September 2014, Owners Insurance sent CLJ Healthcare a letter stating that

the insurance policy didn’t provide coverage for any claims related to the incident

because CLJ Healthcare had failed to provide Owners Insurance with timely notice

of April’s death or the lawsuit. Owners Insurance also told CLJ Healthcare that the

policy didn’t cover claims for bodily injury “due to [the] rendering or failure to

render any professional service, including medical services.”

      In November 2014, Jenkins filed an amended complaint in his lawsuit against

CLJ Healthcare, adding a claim for “non-professional negligence” because of the

delay in calling 911. Counsel for Jenkins sent a copy of this amended complaint to

Owners Insurance in June 2015. Owners Insurance replied with a letter reiterating

that the policy didn’t provide coverage for Jenkins’s claim.

      Jenkins eventually obtained a default judgment in Georgia state court against

CLJ Healthcare for $60,000,000. To collect on the judgment, Jenkins filed a

garnishment action against Owners Insurance in state court, which Owners

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Insurance removed to federal court. Owners Insurance then moved for summary

judgment, arguing that its policy didn’t afford coverage to the claim because CLJ

Healthcare had failed to promptly provide notice of April’s death and the lawsuit.

Owners Insurance also argued that its policy with CLJ Healthcare excluded from

coverage any claim for bodily injury due to the rendering or failure to render a

professional service.

      The district court granted summary judgment for Owners Insurance. The

district court concluded that CLJ Healthcare had failed to the comply with the

policy’s notice provision and Owners Insurance was therefore “not obligated to pay

under the policy.” “Under Georgia law,” the district court explained, “[i]ndependent

insurance agents” like D. Ward “are generally considered the agent of the insured,

not the insurer.”   The district court reasoned that because D. Ward was CLJ

Healthcare’s agent rather than Owners Insurance’s, the policy’s notification

provision wasn’t satisfied when CLJ Healthcare told D. Ward about April’s death in

February 2013. Thus, the district court concluded that Owners Insurance wasn’t

notified of April’s death until April 2014, which was “more than a year after [her]

death and eight months after [Jenkins] filed his wrongful death action, even though

the policy required ‘prompt’ notice of each event.” The district court concluded that

this delay was unreasonable and unexcused, entitling Owners Insurance to summary

judgment. The district court also concluded that Jenkins’s garnishment action failed

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because the Owners Insurance policy excluded from coverage any claim for bodily

injury due to the rendering or failure to render a professional service.

       Jenkins appeals from the district court’s summary judgment for Owners

Insurance. 1

                                 STANDARD OF REVIEW

       “An insurance policy is a contract and therefore interpretation of the language

in such a policy constitutes a ruling on a question of law, which is . . . subject to de

novo review.” EmbroidMe.com, Inc. v. Travelers Prop. Cas. Co. of Am., 845 F.3d

1099, 1105 (11th Cir. 2017). Summary judgment is proper if, with all reasonable

inferences made in favor of the opposing party, “the movant shows that there is no

genuine dispute as to any material fact and the movant is entitled to judgment as a

       1
           We issued a jurisdictional question to the parties, asking whether this lawsuit is a “direct
action against the insurer,” and if it was, whether Owners Insurance would be deemed to be a
citizen of every state in which the insured, CLJ Healthcare, is a citizen. See 28 U.S.C. § 1332(c)(1)
(“[I]n any direct action against the insurer of a policy or contract of liability insurance, whether
incorporated or unincorporated, to which action the insured is not joined as a party-defendant, such
insurer shall be deemed a citizen of . . . every State and foreign state of which the insured is a
citizen . . . .”). The parties both agree that this lawsuit is not a direct action against the insurer
because Jenkins had to first obtain a judgment in state court against CLJ Healthcare before
proceeding with this garnishment action against Owners Insurance. We agree. Under Georgia
law, a garnishment action requires the plaintiff to first obtain a “money judgment” in Georgia state
court. See O.C.G.A. § 18-4-2(b). Jenkins couldn’t have “skip[ped] suing [CLJ Healthcare] and
sue[d] directly [its] insurance carrier.” Kong v. Allied Prof’l Ins. Co., 750 F.3d 1295, 1300–01
(11th Cir. 2014) (citation and quotation marks omitted). Because this case isn’t a direct action
against Owners Insurance, we conclude that CLJ Healthcare’s Georgia citizenship doesn’t defeat
diversity jurisdiction. See id. at 1300 (explaining that “courts have uniformly defined the term
direct action to refer to those cases in which a party suffering injuries or damage for which another
is legally responsible is entitled to bring suit against the other’s liability insurer without joining
the insured or first obtaining a judgment against him.” (citation and quotation marks omitted)).
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matter of law.” See Pennington v. City of Huntsville, 261 F.3d 1262, 1265 (11th

Cir. 2001); Fed. R. Civ. P. 56(a).

                                     DISCUSSION

      Jenkins argues that the district court erred in granting summary judgment for

Owners Insurance because CLJ Healthcare gave prompt notice of April’s death and

the lawsuit. Jenkins also argues that, even if it didn’t give prompt notice of April’s

death and the lawsuit, CLJ Healthcare was justified in giving late notice. We reject

both arguments.

      “In Georgia, insurance is a matter of contract, and the parties to an insurance

policy are bound by its plain and unambiguous terms.” Old Republic Union Ins. Co.

v. Floyd Beasley & Sons, Inc., 551 S.E.2d 388, 390 (Ga. Ct. App. 2001) (cleaned

up). When an insurance policy requires as a coverage condition that the insured

provide the insurer with notice of a probable claim and a lawsuit, “no action will lie

against the insurer unless the insured has fully complied with the terms” of the notice

provision. See Progressive Mountain Ins. Co. v. Bishop, 790 S.E.2d 91, 122 (Ga.

Ct. App. 2016). “[T]he issue of whether notice is timely and meets the policy

provisions is usually a question of fact for the jury. Unexcused significant delay,

however, may be unreasonable as a matter of law.” Advocate Networks, LLC v.

Hartford Fire Ins. Co., 674 S.E.2d 617, 619 (Ga. Ct. App. 2009) (cleaned up).

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      Jenkins doesn’t dispute that the notice provision in the insurance policy was

a condition precedent to coverage. He instead argues that CLJ Healthcare satisfied

the policy’s notice requirement on three different occasions.

       First, Jenkins argues that Owners Insurance received timely notice of April’s

death in February 2013 when CLJ Healthcare’s office manager told the independent

agent about it. Under Georgia law, “[i]ndependent insurance agents or brokers are

generally considered the agent of the insured, not the insurer.” European Bakers,

Ltd. v. Holman, 338 S.E.2d 702, 704 (Ga. Ct. App. 1985). But an insurer can place

an independent insurance agent “in a position of apparent authority such that one

might be justified in assuming that the agent had authority to receive notice of an

occurrence or claim.” Kay-Lex Co. v. Essex Ins. Co., 649 S.E.2d 602, 607 (Ga. Ct.

App. 2007). Jenkins argues that Owners Insurance put D. Ward in a position of

apparent authority.

      We disagree. “[N]either the language of the policy nor anything stamped

upon the face of the policy gave apparent authority to [D. Ward] to receive the notice

required to be given to [Owners Insurance].” See id. (quotation omitted). The policy

provided that “[y]ou must see to it that we are notified promptly of an ‘occurrence’

that may result in a claim.” The policy also provided that “[i]f a claim is made or

‘suit’ is brought against any insured, you must see to it that we receive prompt

written notice of the claim or ‘suit.’” Elsewhere, the policy defined “you” to refer

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to the insured—CLJ Healthcare—and defined “we” to refer to “the [c]ompany

providing this insurance”—Owners Insurance. Thus, the policy expressly required

CLJ Healthcare to give notice directly to Owners Insurance. Nothing in the policy

authorized CLJ Healthcare to give notice to Owners Insurance through D. Ward or

any other third party.

          Jenkins argues that a question of fact existed as to apparent agency because

Owners Insurance’s cover letter to the policy told CLJ Healthcare “to contact [its]

independent [insurance] agent”—D. Ward—“with questions [it] may have about

any of [its] insurance needs.” But Owners Insurance inviting CLJ Healthcare to run

questions about its “insurance needs” by D. Ward didn’t change the plain language

of the policy requiring that notice of a claim go to Owners Insurance. Critically, the

cover letter was clear that D. Ward was CLJ Healthcare’s agent rather than Owners

Insurance’s. Thus, Jenkins failed to create a genuine issue of fact that D. Ward was

“in a position of apparent authority such that [CLJ Healthcare] might be justified in

assuming that [D. Ward] had authority to receive notice of an occurrence or claim.”

See id.

      Second, Jenkins argues that Owners Insurance received notice of the lawsuit

in March 2014 when D. Ward forwarded the policy to CLJ Healthcare’s office

manager. This was sufficient proof of notice to clear the summary judgment hurdle,

Jenkins maintains, because it created “a jury inference that [CLJ Healthcare’s office

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         USCA11 Case: 20-13745       Date Filed: 08/18/2021    Page: 10 of 14

manager] requested the policy from Owners Insurance because the suit had been

filed.” But valid notice under the policy required CLJ Healthcare to “[i]mmediately

send” Owners Insurance copies of all legal papers related to the suit. CLJ Healthcare

receiving a copy of the insurance policy from its independent insurance agent says

nothing about whether Owners Insurance received prompt notice of the lawsuit as

required by the policy. No reasonable jury could infer that CLJ Healthcare provided

notice of the lawsuit to Owners Insurance—along with copies of all legal papers

related to the lawsuit—just because D. Ward sent CLJ Healthcare a copy of the

policy. That’s just speculation, and “[s]peculation does not create a genuine issue

of fact; instead, it creates a false issue, the demolition of which is a primary goal of

summary judgment.” See Cordoba v. Dillard’s, Inc., 419 F.3d 1169, 1181 (11th Cir.

2005) (citation omitted).

      Even if we could infer that Owners Insurance had notice in March 2014, as a

matter of Georgia law that wasn’t prompt notice. Jenkins sued in August 2013, and

a delay of seven months is untimely notice of a lawsuit as a matter of law. See

Advocate Networks, 674 S.E.2d at 619 (holding that four-month delay in giving

notice of a lawsuit was unreasonable as a matter of law); Caldwell v. State Farm Fire

& Cas. Ins. Co., 385 S.E.2d 97, 99–100 (Ga. Ct. App. 1989) (affirming summary

judgment where notice was given six months after the incident); Bituminous Cas.

Corp. v. J.B. Forrest & Sons, Inc., 209 S.E.2d 6, 8–9 (Ga. Ct. App. 1974) (holding

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that four-month delay in providing notice of an occurrence was not prompt notice as

a matter of law).

      And third, Jenkins argues that Owners Insurance received notice of the lawsuit

in June 2015 when Jenkins’s counsel sent it an amended copy of the complaint

against CLJ Healthcare. Relying on Lumbermens Mutual Casualty Co. v. Plantation

Pipeline Co., 447 S.E.2d 89 (Ga. Ct. App. 1994), Jenkins argues that this was timely

notice because the Owners Insurance policy was an excess policy which impacts

“the reasonableness and timeliness of the notice.” But the policy’s notice provision

required the insured—CLJ Healthcare—to provide Owners Insurance with written

notice of suit. The notice provision wasn’t satisfied by correspondence from

Jenkins, the party suing the insured. See Hays v. Ga. Farm Bureau Mut. Ins. Co.,

722 S.E.2d 923, 925 (Ga. Ct. App. 2012) (explaining that, under Georgia law, parties

to an insurance policy are bound by its plain and unambiguous terms).

      Even if notice from Jenkins could satisfy the notice requirement, the policy

language doesn’t excuse delaying prompt notice until the insurance policy was

triggered. Consider Lumbermens, the case that Jenkins relies on. The plaintiff in

that case had an excess insurance policy with the defendant insurer along with two

additional policies with two other insurance companies. Id. at 90. The Lumbermens

excess policy provided that “[w]henever it appears that an occurrence is likely to

involve indemnity under this policy, written notice thereof shall be given to the

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company or any of its authorized agents as soon as practicable.” Id. at 90–91

(emphasis added). One of the insured’s pipelines leaked in 1975 but the excess

insurer wasn’t notified until 1990. Id. at 90. The excess insurer argued that because

it should have received notice “as soon as the leak was discovered,” the plaintiff’s

claim was untimely. Id. at 91. The Lumbermens court affirmed the summary

judgment for the plaintiff because “no basis existed for finding that the [excess]

policy would become ‘involved’” until 1990.           Id.   The state appellate court

distinguished cases (like ours) involving personal injury policies “that required

notice to the insurer as soon as practicable after an event,” because those cases didn’t

“involve[] an excess policy” where “the notice obligation [was] triggered by the

insured’s assessment” that the amount of property damage it may be liable for

exceeded the “ceiling” of the primary insurance policy. Id.

      Unlike the Lumbermens policy, the notice provision in the Owners Insurance

policy wasn’t triggered by CLJ Healthcare’s belief that its liability in an incident

would exceed its coverage from its other insurance policies. Rather, CLJ Healthcare

was required to “promptly” provide notice to Owners Insurance “in the event of [an]

occurrence” or if “a claim was made or ‘suit’ [was] brought” against the insured.

Because the Owners Insurance policy “required notice to the insurer as soon as

practicable after an event,” Lumbermens doesn’t support Jenkins’s claim that CLJ

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Healthcare timely provided notice of April’s death and the lawsuit to Owners

Insurance. See id.

      As a fallback argument, Jenkins argues that CLJ Healthcare was justified in

providing late notice of April’s death and the lawsuit to Owners Insurance. Late

notice was justified, Jenkins argues, because: (1) the independent agent told CLJ

Healthcare that the policy didn’t provide coverage for medical malpractice claims;

(2) there was no evidence that the independent agent explained to CLJ Healthcare

that it was required to give notice directly to Owners Insurance or that the policy

covered simple negligence; and (3) CLJ Healthcare’s attorneys didn’t explain to it

that the policy could provide coverage for Jenkins’s claim.

      None of Jenkins’s reasons are valid grounds for late notice. The law “requires

more than just ignorance, or even misplaced confidence, to avoid the terms of a valid

contract.” Allstate Ins. Co. v. Walker, 562 S.E.2d 267, 268 (Ga. Ct. App. 2002)

(quoting Protective Ins. Co. v. Johnson, 352 S.E.2d 760, 761 (Ga. 1987)). Thus,

CLJ Healthcare’s “ignorance of the terms of a valid insurance contract” doesn’t

justify late notice. See Townsend v. Nat’l Union Fire Ins. Co., 397 S.E.2d 61, 62–

63 (Ga. Ct. App. 1990) (holding that late notice was “inexcusable” where the insured

“was not aware he might be entitled to the no-fault benefits”). And, the failure of its

agents to give accurate advice about whether the policy might provide coverage also

doesn’t excuse the untimely notice. See Silva v. Liberty Mut. Fire. Ins. Co., 808

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S.E.2d 886, 889 (Ga. Ct. App. 2017) (holding that late notice was unjustified where

the insured’s “only excuse for her delay in notifying [the insurer] was that her

counsel was unaware that [she] would need to utilize” additional coverage).

       In sum, CLJ Healthcare didn’t promptly notify Owners Insurance of April’s

death or the lawsuit, as required by the unambiguous terms of the policy, and there

was no valid excuse for the delay. The district court therefore didn’t err in granting

summary judgment for Owners Insurance.2

       AFFIRMED.

       2
          Because we conclude that CLJ Healthcare didn’t provide timely notice of the occurrence
or suit, we need not address the district court’s other conclusion that Owners Insurance was entitled
to summary judgment because the insurance policy excluded coverage for injuries “due to
rendering or [the] failure to render any professional service.”
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