Court Opinion

ID: 9569390
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:13:25.933174+00
Date Added: 2024-06-11T11:53:10.975968
License: Public Domain

MILLER, Chief Judge,
dissenting.
The record is rife with material questions of fact regarding whether Plaintiffs’ claims should be foreclosed by a duty to read their insurance policies. Plaintiffs, moreover, have otherwise presented sufficient evidence to proceed to a jury trial on their negligence claims against Willis. Accordingly, I must respectfully dissent.
1.1 disagree with the majority’s conclusion that the duty to read *188bars Plaintiffs’ negligence claims, as a matter of law, especially in light of the fact that Plaintiffs did not possess the Four Seasons policy before the Excelsior action was filed.
As we stated in Canales v. Wilson Southland Ins. Agency, 261 Ga. App. 529, 530 (1) (583 SE2d 203) (2003), “[generally, an insured is obligated to examine an insurance policy and to reject it if it does not furnish the desired coverage.” (Footnote omitted.) We went on to articulate two exceptions to the insured’s general duty to read its insurance policy, stating that the duty
does not apply when (1) the agent has held himself out as an expert and the insured has reasonably relied on the agent’s expertise to identify and procure the correct type or amount of insurance or (2) the evidence reflects a special relationship of trust or other unusual circumstances which would have prevented or excused the insured of his duty to exercise ordinary diligence.
(Punctuation and footnote omitted.) Id. at 530-531 (1). The record here raises material factual questions regarding the application of the exceptions.
(a) Reliance on Willis as expert. Willis admits in its answer that it possesses “special knowledge and expertise in certain aspects of insurance.” Evidence in the record demonstrates that, while the parties hotly dispute whether Plaintiffs provided Willis with the information it needed to give sound advice (such as the Four Seasons acquisition agreement), Willis undertook to provide advice to Plaintiffs about how to structure their D&O program. For example, following the parties’ initial conference call regarding procurement of insurance relative to the change in control of Healthfield, Willis’ Glenn Dockery sent an email to several Willis representatives stating:
[T]here are several issues which need to be addressed in connection with [Four Seasons’] acquisition of [Health-field]. First, if [Four Seasons] only acquired the assets of Healthfield there would not be, based upon the minimal amount of information we have been provided to date, any need for Four Seasons to purchase D&O insurance with prior acts coverage. Secondly, if Four Seasons assumed both the assets and liabilities of Healthfield, there is a definite need to purchase D&O insurance with full prior acts coverage retroactive to the date of incorporation of Healthfield. There are two alternatives in this regard. The current Healthfield D&O policy can be converted into runoff (often*189times referred to as extended discovery, tail, etc.) for a term of up to seven years. The other alternative is to include prior acts coverage for the predecessor company under the Four Seasons D&O policy. The former approach is preferred for a number of obvious reasons. . . .
Willis forwarded Dockery’s email to Plaintiffs. The record also shows that Willis indicated its expertise by sending Plaintiffs various articles Dockery had written regarding D&O coverage.
Windley testified that Plaintiffs engaged Willis “to provide D&O coverage for Four Seasons, and to determine how best to assure that the directors and officers of Four Seasons and Health-field would have ‘seamless’ D&O coverage, without gaps, that would not be impacted” by the Healthfield acquisition. There is at least some evidence that Willis was aware that Plaintiffs’ relationship with the minority shareholders who commenced the Excelsior action was “strained.”
I disagree with Willis that Plaintiffs cannot establish reliance on its expertise given their failure to follow Willis’ final coverage recommendation. While Windley testified that Plaintiffs, for business reasons, chose to purchase three rather than the recommended seven years of tail coverage2 under the Healthfield Holdings policy, such testimony demonstrates that Plaintiffs departed from. Willis’ recommendation as to duration of coverage, not type. Willis contends that Windley’s deposition testimony also shows that Willis ultimately recommended that Plaintiffs purchase tail coverage under the Healthfield Holdings policy and prior acts coverage under the Four Seasons policy. In his deposition, Windley agreed with Willis’ counsel that during the parties’ final conference call on April 19, 2001, Willis had “also [recommendjed . . . that Four Seasons purchase prior acts coverage.” In light of Dockery’s March 26, 2001 e-mail, however, it is unclear whether Windley was indicating that Willis recommended prior acts coverage in addition to or as an alternative to tail coverage. In addition, Willis does not cite to testimony by its own representatives that its final recommendation included prior acts coverage. Willis’ correspondence with Plaintiffs following the parties’ final conference call does not indicate that Willis recommended prior acts coverage.3 In short, fact issues exist regarding the nature of and Plaintiffs’ reliance on Willis’ final *190coverage recommendation.
Under Georgia law, however, even if an insured relies on an agent’s or broker’s expertise, the duty to read still may bar a claim to the extent that an “examination of the policy would have made it readily apparent that the coverage requested was not issued.” (Citation, punctuation and footnote omitted.) Heard v. Sexton, 243 Ga. App. 462, 463 (532 SE2d 156) (2000); accord Traina Enterprises v. Cord & Wilburn, Inc. Ins. Agency, 289 Ga. App. 833, 837 (2) (658 SE2d 460) (2008). I do not think that the lack of coverage for the Excelsior action would have been “readily apparent” to Plaintiffs by reading the Healthfield Holdings policy, the only policy Plaintiffs had before the Excelsior action was filed.
The insured versus insured exclusion contained in Section 4 (i) of the Healthfield Holdings policy, as amended by Endorsement 16, provides:
The insurer shall not be liable to make any payment for Loss in connection with a Claim made against an insured: ...
(i) which is brought by any Insured or by the Company; or which is brought by any security holder of the Company, whether directly or derivatively, unless such security holder’s Claim is instigated and continued totally independent of, and totally without solicitation of, or assistance of, or active participation of, or intervention of, any Insured; . . .
Willis does not explain why the application of this exclusion should have been clear.4 The fact that this exclusion requires reference to the body of the policy and a detailed endorsement undercuts the argument that it is readily apparent. The major shareholder exclusion, contained in Endorsement 6 to the Healthfield Holdings policy, states:
It is hereby understood and agreed that the Insurer shall not be liable for any Loss in connection with any Claim(s) made against any Insured(s) which are brought by any *191individual(s) or entity(ies) that own or control (whether beneficially, directly or indirectly) 5% or more of the outstanding voting stock (hereinafter “Major Shareholder”);...
Given the placement of a semicolon after the term “Major Shareholder,” the provision is not entirely clear as to the entity or entities in which a “Major Shareholder” owns or controls 5 percent or more of the voting stock.
Even if these exclusions, standing alone, were clear, I do not think that their ramifications under the circumstances here were readily apparent in that Plaintiffs also would have needed to review and consider the exclusions in conjunction with the tail coverage endorsement to the Healthfield Holdings policy and the prior acts exclusion to the Four Seasons policy, which they did not yet possess.5 The tail coverage endorsement extended coverage under the Health-field Holdings policy for claims against insureds based on wrongful acts occurring prior to March 9, 2001. (the date Four Seasons acquired Healthfield) and discovered within a three-year period thereafter. The prior acts exclusion in the Four Seasons policy excluded coverage for claims based on wrongful acts occurring prior to March 9, 2001. The policy scheme put in place contemplated that coverage under the Four Seasons policy would pick up where coverage under the Healthfield Holdings policy left off.6 Because of the insured versus insured and major shareholder exclusions, the continuity in coverage Plaintiffs claim they expected with respect to claims such as those in the Excelsior action did not materialize. We are not prepared to say the interplay of these policy provisions was readily apparent.
(b) Special relationship of trust. As to the second Canales exception, fact issues exist as to whether Willis and Plaintiffs had a special relationship of trust in that Willis acted as Plaintiffs’ agent and fiduciary. “Independent agents or brokers are generally considered the agent of the insured, not the insurer.” (Citation omitted.) Kirby v. Northwestern Nat. Cas. Co., 213 Ga. App. 673, 678 (2) (445 SE2d 791) (1994). Although a number of these facts are disputed heavily, the record contains some evidence that Plaintiffs twice retained Willis to assist them in procuring D & O coverage, enjoyed *192a close relationship with Willis and shared business and financial information with Willis so that Willis could recommend coverage. Further, at least with respect to the initial placement of the Health-field Holdings policy, Willis sought quotes from various insurers. Such facts could support a conclusion that Willis acted as Plaintiffs’ agent and fiduciary. See Pope v. Mercury Indent. Co. &c., 297 Ga. App. 535, 540-541 (3) (677 SE2d 693) (2009); European Bakers, Ltd. v. Holman, 177 Ga. App. 172, 174-175 (2) (338 SE2d 702) (1985).7
Decided July 15, 2009
Greenberg Traurig, Jonathan K. Waldrop, Michael J. King, for appellants.
Epstein, Becker & Green, Kenneth G. Menendez, Jeffery R. Saxby, for appellee.
2.1 also would find that Plaintiffs, via their expert’s affidavit and otherwise, have presented sufficient evidence to proceed on their negligence claims. While I do not dispute the deficiency of record evidence showing that Willis could have obtained a different policy for Healthfield Holdings initially in 2000,1 believe that issues of fact exist as to whether Willis was negligent in 2001 in failing to discuss these exclusions with Plaintiffs or to recommend measures to alleviate the coverage deficiencies, for example, purchasing prior acts coverage.
For the reasons set forth above, I would reverse the trial court’s order granting Willis’ motions for summary judgment.
I am authorized to state that Judge Barnes and Judge Ellington join in this dissent.

 Tail coverage would allow the insureds under the Healthfield Holdings policy to seek coverage for claims arising from wrongful acts occurring prior to the change in control of Healthfield but discovered during a certain “discovery period” thereafter.

 Willis representatives claimed that they learned for the first time during the parties’ final conference call that Four Seasons had assumed $40,000,000 in Healthfield’s liabilities. Windley, however, testified that Plaintiffs had informed Willis about Four Seasons’ assumption *190of liability previously. While Willis argues that its final coverage recommendation changed after it learned about the assumption of liabilities, it is notable that none of the Willis representatives ever explained how.

 At Windley’s deposition, Willis’ counsel attempted to elicit an admission from Windley that he understood Section 4 (i) to exclude coverage for claims “by an insured of the company against another insured of the company.” Plaintiffs’ response to Willis’ statement of undisputed facts indicates that, in fact, ÁIG claimed that the exclusion applied because a former Healthfield officer and director was aiding the prosecution of the Excelsior action. If Willis does not understand why the insured versus insured exclusion applies, I am unwilling to conclude that its meaning should have been readily apparent to Plaintiffs.

 While the record shows that Plaintiffs knew that the Four Seasons policy would have a prior acts exclusion, Willis never established that Plaintiffs understood the specific terms or effect of that exclusion. For example, Plaintiffs’ outside counsel testified that a prior acts exclusion was “part of this insurance nomenclature. I don’t know that I know the difference between prior acts or tail or run-off or the various things.” The binder for the Four Seasons policy Plaintiffs received indicated that the policy would contain a prior acts exclusion but did not contain or explain the exclusion’s terms.

 Both policies also provided coverage for Healthfield and Windley.

 Atlanta Women’s Club v. Washburne, 207 Ga. App. 3, 4-5 (427 SE2d 18) (1992), holds that even when an agent or broker upon whose expertise and insured relies acts as the insured’s fiduciary, the insured retains a duty to ascertain “readily apparent” coverage deficiencies. Even so, as discussed, the coverage deficiency here was not readily apparent.