Court Opinion

ID: 183653
Source: CourtListenerOpinion
Date Created: 2011-01-26 18:15:40+00
Date Added: 2024-06-11T17:26:04.506357
License: Public Domain

[DO NOT PUBLISH]

                        IN THE UNITED STATES COURT OF APPEALS

                               FOR THE ELEVENTH CIRCUIT
                                ________________________           FILED
                                                          U.S. COURT OF APPEALS
                                       No. 10-10863         ELEVENTH CIRCUIT
                                 ________________________       JAN 26, 2011
                                                                 JOHN LEY
                                                                  CLERK
                             D.C. Docket No. 1:08-cv-01745-ODE

ASPHALT REFINING & TECHNOLOGY COMPANY, LLC,

lllllllllllllllllllll                                             Plaintiff - Appellant,

                                           versus

UNDERWRITERS AT LLOYD'S LONDON,

lllllllllllllllllllll                                             Defendant - Appellee.

                                ________________________

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

                                      (January 26, 2011)

Before WILSON and PRYOR, Circuit Judges, and BUCKLEW,* District Judge.

PER CURIAM:

         Asphalt Refining & Technology Company, LLC (“Asphalt”), appeals a

         *
         Honorable Susan C. Bucklew, United States District Judge for the Middle District of
Florida, sitting by designation.
series of orders entered by the district court in favor of its property insurance

carrier, Underwriters at Lloyd’s London (“Lloyd’s”). For the following reasons,

we affirm.

                                           I.

       Asphalt, a manufacturer and marketer of asphalt for paving and roofing,

began operating in 2005 and is located on the former site of an oil refinery.

Asphalt had various tanks and equipment on its property that were previously used

as part of the oil refinery, and Asphalt refurbished sixteen of them for its own use.

      On December 1, 2006, after some negotiations between the parties’ brokers,

Asphalt and Lloyd’s entered into an insurance binder. On December 13, 2006, an

explosion and fire caused damage to certain tanks, buildings, and equipment on

Asphalt’s property. The next day Lloyd’s issued an insurance policy covering

Asphalt’s property, with an effective date of December 1, 2006, the date of the

binder. Although the issuance of the policy post-dates the loss, insurance binders

“include all the usual terms of the policy as to which the binder was given . . . .”

O.C.G.A § 33-24-33. The parties agree the effective date of the policy was

December 1, 2006, and the fire was a “Covered Cause of Loss” as the term is

defined in the policy. The policy contained a coinsurance penalty clause. Lloyd’s

applied the coinsurance penalty clause and refused to pay Asphalt’s claim under the

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policy in full.

       The core of the parties’ dispute is whether Asphalt’s coverage for “Tanks &

Equipment” was meant to apply to all tanks on Asphalt’s property or to only the

sixteen tanks in use. If only the sixteen refurbished tanks were insured, a

completely different, and far smaller, coinsurance penalty would apply.

       The parties filed cross motions for partial summary judgment. The district

court reviewed a great deal of evidence submitted by Asphalt but ultimately

concluded that the term “tanks” is unambiguous and granted summary judgment in

favor of Lloyd’s, holding that “Lloyd’s was contracted to insure all of the tanks on

Asphalt’s property at the time of the fire.” Therefore, the district court ruled that

any evidence submitted by Asphalt to show the parties intended 16 tanks to be

covered constituted inadmissable parol evidence and could not be used to modify

the contract. Asphalt appeals, arguing that summary judgment for Lloyd’s was

inappropriate because the term “tanks” is ambiguous. Asphalt also makes two

other arguments; neither is meritorious, and we address them briefly below.

                                          II.

       We review a grant or denial of summary judgment de novo, construing the

evidence in the light most favorable to the nonmovant. Westchester Specialty Ins.

Servs., Inc. v. U.S. Fire Ins. Co., 119 F.3d 1505, 1509 (11th Cir. 1997). Summary

                                           3
judgment is proper when there is no genuine issue of material fact and the movant

is entitled to a judgment as a matter of law. See Fed. R. Civ. P. 56(a).

      Because we have diversity jurisdiction over this case, see 28 U.S.C. §

1332(a), we must apply Georgia law in construing the insurance contract. Erie

R.R. Co. v. Tompkins, 304 U.S. 64, 79 (1938); Am. Family Life Assurance Co. v.

U.S. Fire Co., 885 F.2d 826, 830 (11th Cir. 1989) (“Under Georgia choice-of-law

rules, interpretation of insurance contracts is governed by the law of the place of

making.”). Under Georgia law, an insurance policy is governed by the ordinary

rules of contract construction. Boardman Petroleum v. Federated Mut. Ins. Co.,

498 S.E.2d 492, 494 (Ga. Ct. App. 1998). Absent ambiguity, construction of a

written contract is a question of law for the trial court. Wilbanks v. Mai, 501
S.E.2d 513, 514 (Ga. Ct. App. 1998).

                                         III.

      Asphalt contends that summary judgment for Lloyd’s was inappropriate

because the “summary judgment evidence, at the least, creates ambiguity and a

question of fact regarding the intention of the parties concerning which ‘tanks’

were intended to be insured by the insurance contract.” We disagree.

      “Ambiguity” in a contract is defined as duplicity, indistinctness, or

uncertainty of meaning or expression. Taylor v. Estes, 70 S.E.2d 82, 84 (Ga. Ct.

                                          4
Ohio App. 1952) (citing another source). Where a term or phrase of an insurance

contract is “susceptible of two or more constructions, even when the multiple

constructions are all logical and reasonable, it is ambiguous . . . .” Hurst v.

Grange Mut. Cas. Co., 470 S.E.2d 659, 663 (Ga. 1996). “Under Georgia rules of

contract interpretation, words in a contract generally bear their usual and common

meaning.” Claussen v. Aetna Cas. & Sur. Co., 380 S.E.2d 686, 687–88 (Ga. 1989)

(citing O.C.G.A. § 13-3-2 (2)).

      An insurance binder is not a mere offer but is itself a contract of insurance,

temporary in nature, “intended to take the place of an ordinary policy until the

same can be issued.” Jourdan v. First Nat’l Ins. Co., 416 S.E.2d 162, 162 (Ga. Ct.

App. 1992) (internal quotation marks omitted) (citing and quoting another source).

While “the hallmark of contract construction is to ascertain the intention of the

parties,” where “the terms of a written contract are clear and unambiguous, the

court is to look to the contract alone to [determine] the parties’ intent.” Park ‘N

Go v. U.S. Fid. & Guar. Co., 471 S.E.2d 500, 503 (Ga. 1996).

      The meaning of the term “tanks” is plain and obvious. Neither the binder

nor the signed insurance application contain any qualifying language specifying

how many tanks, or which tanks, were insured. Both of these documents—the

binder and signed insurance application—specified that coverage was for “Tanks

                                           5
& Equipment.” It would be impossible to construe the written term “tanks” as

meaning only “sixteen tanks” without resorting to parol evidence. But parol

evidence is inadmissible to create an ambiguity where none exists. Perrett v.

Dollard, 338 S.E.2d 56, 57 (Ga. Ct. App. 1985). The district court found there is

only one reasonable interpretation of the term “tanks,” and on de novo review,

considering the evidence in the light most favorable to Asphalt, we agree.

                                         IV.

      Asphalt next argues that the district court abused its discretion by denying

Asphalt’s motion to amend its complaint to add a claim for equitable reformation

of the insurance contract. We disagree because Asphalt moved to amend more

than one year after the deadline for filing amendments set by the court in its

scheduling order, well after the close of discovery, and after the court granted

Lloyd’s motion for partial summary judgment. See Lowe’s Home Ctrs., Inc. v.

Olin Corp., 313 F.3d 1307, 1315 (11th Cir. 2002) (“[I]t is not an abuse of

discretion for a district court to deny a motion for leave to amend following the

close of discovery, past the deadline for amendments and past the deadline for

filing dispositive motions.”). Moreover, Asphalt failed to demonstrate “good

cause” to amend the scheduling order as required by Fed. R. Civ. P. 16(b)(4)

because it was aware of the predicate facts supporting equitable reformation long

                                          6
before the deadline for amendments. See S. Grouts & Mortars, Inc. v. 3M Co.,

575 F.3d 1235, 1241 n.3 (11th Cir. 2009) (per curiam) (noting that the “good

cause standard precludes modification unless the schedule cannot be met despite

the diligence of the party seeking the extension”) (internal quotations omitted).

                                         V.

      Finally, Asphalt contends that the district court abused its discretion by

refusing to let it change its theory of recovery. Through pleadings and discovery,

Asphalt proceeded under a replacement-cost theory. Then, three days before trial,

Asphalt altered its argument to that of an actual-cash-value theory. Lloyd’s filed a

pretrial motion to bar Asphalt from asserting an actual-cash-value theory of

recovery at trial, which the court granted. Asphalt presented no excuse for its

tardiness in identifying this alternate theory, and allowing Asphalt to change its

theory of recovery would have prejudiced Lloyd’s. Thus, the district court did not

abuse its discretion in granting Lloyd’s motion.

                                         VI.

      For the forgoing reasons, we affirm.

      AFFIRMED.

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