Court Opinion

ID: 9839965
Source: CourtListenerOpinion
Date Created: 2023-09-14 19:01:14.459858+00
Date Added: 2024-06-11T09:42:45.580109
License: Public Domain

USCA11 Case: 22-13779    Document: 23-1     Date Filed: 09/14/2023    Page: 1 of 8

                                                  [DO NOT PUBLISH]
                                   In the
                United States Court of Appeals
                        For the Eleventh Circuit

                          ____________________

                                No. 22-13779
                          Non-Argument Calendar
                          ____________________

       NATIONAL CASUALTY COMPANY,
                                 Plaintiﬀ-Counter Defendant-Appellant,
       versus
       GEORGIA SCHOOL BOARD                 ASSOCIATION         –    RISK
       MANAGEMENT FUND,

                                Defendant-Counter Claimant-Appellee.

                          ____________________

                 Appeal from the United States District Court
                    for the Northern District of Georgia
                    D.C. Docket No. 1:16-cv-00691-LMM
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       2                     Opinion of the Court                22-13779

                           ____________________

       Before LUCK, LAGOA, and BRASHER, Circuit Judges.
       PER CURIAM:
              This case is about the apportionment of liability between
       National Casualty Company and the Georgia School Board Associ-
       ation – Risk Management Fund, both of which insure Georgia pub-
       lic school employees. Both parties’ insurance contracts include
       clauses asserting that when an educator is covered by “other insur-
       ance,” they’ll only provide “excess” coverage. Applying Georgia
       law, the district court found these clauses irreconcilable and di-
       rected the parties to provide coverage on a pro rata basis. We af-
       ﬁrm.
           FACTUAL BACKGROUND AND PROCEDURAL HISTORY
              National Casualty is an insurance company that provides
       policies to the Professional Association of Georgia Educators. The
       Fund is an agency created by Georgia statute that enables boards
       of education to share liability risk.
              Several Georgia educators, who were insured by both Na-
       tional Casualty and the Fund, were sued. National Casualty and
       the Fund disagreed about who bore the primary duty to defend and
       indemnify them. The dispute arose from National Casualty’s and
       the Fund’s dueling “other insurance” clauses. National Casualty’s
       clause stated:
              This policy is speciﬁcally excess if the insured has
              other insurance of any kind whatsoever, whether
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       22-13779               Opinion of the Court                        3

             primary or excess, or if the insured is entitled to de-
             fense or indemniﬁcation from any other source what-
             soever, including by way of example only, such
             sources as state statutory entitlements or provisions.
             Other insurance includes, but is not limited to, insur-
             ance policies, state pools, and programs of self-insur-
             ance, purchased or established by or on behalf of any
             EDUCATIONAL UNIT, to insure against CLAIMS
             arising from activities of the EDUCATIONAL UNIT
             or its employees, regardless of whether or not the pol-
             icy or program provides primary, excess, umbrella[,]
             or contingent coverage.
             In addition, [Liability Coverage] is speciﬁcally excess
             over coverage provided by any EDUCATIONAL
             UNIT’S or school board’s errors and omissions or
             general liability policies, purchased by the insured’s
             employer or former employers, or self-insurance pro-
             gram or state pools, whether collectible or not, and it
             is speciﬁcally excess over coverage provided by any
             policy of insurance which purports to be excess to a
             policy issued to the insured.
       The Fund’s clause was shorter. It provided: “If valid and collectible
       insurance is available to the Member for a loss covered by [the
       Fund] under any coverage parts within this Coverage Document,
       the obligations of [the Fund] are excess over the available and col-
       lectible insurance.”
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       4                     Opinion of the Court                22-13779

              National Casualty sued for a declaratory judgment that the
       Fund had “the primary duty to defend and indemnify” the educa-
       tors. The Fund counterclaimed. The Fund sought its own declar-
       atory judgment that National Casualty was at least responsible for
       covering a pro rata share of the educators’ defense and indemnity
       costs. The Fund brought two other counterclaims to recover the
       amounts it had paid to defend and indemnify the educators: a
       breach of contract and legal contribution claim and an unjust en-
       richment and equitable contribution claim.
               National Casualty moved for summary judgment on its
       claim for declaratory judgment, and the Fund cross-moved for par-
       tial summary judgment on its claim for declaratory judgment. The
       district court denied National Casualty’s motion and granted the
       Fund’s motion. The district court concluded that the parties’ con-
       ﬂicting “other insurance” clauses couldn’t be reconciled. So the
       district court applied a Georgia rule that when two insurance poli-
       cies covering the same risk are irreconcilable, the insurers must
       share defense and indemnity costs on a pro rata basis.
              Both parties moved for reconsideration, and the district
       court certiﬁed to the Supreme Court of Georgia whether the irrec-
       oncilable-clauses rule applied to an entity “entrusted with public
       funds,” like the Fund. The Supreme Court of Georgia answered
       that “no law or public policy” prohibited application of the irrec-
       oncilable-clauses rule simply because the Fund was a creature of
       statute and not a commercial insurance company. Nat’l Cas. Co. v.
       Ga. Sch. Bds. Ass’n-Risk Mgmt. Fund, 818 S.E.2d 250, 255–56 (Ga.
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       22-13779               Opinion of the Court                       5

       2018). With the answer from the Georgia Supreme Court, the dis-
       trict court declined to reconsider its partial summary judgment or-
       der.
               The parties then filed a joint notice of stipulated facts in
       which the Fund stipulated to the dismissal of its attorney’s fee
       counterclaim and both parties withdrew their jury trial demand
       and requested that the district court enter final judgment. The par-
       ties said they had “reached a compromise agreement as to how de-
       fense costs and indemnity obligations” would be shared pro rata to
       comply with the district court’s partial summary judgment order.
       They stipulated to the facts necessary to calculate damages and
       agreed that National Casualty’s pro rata share “to date” for actions
       related to mutually covered individuals totaled $481,231.84, along
       with $99,037.51 in prejudgment interest. The parties also reserved
       their appeal rights.
              The district court entered ﬁnal judgment consistent with the
       parties’ stipulated facts. The judgment explained that—pursuant
       to the partial summary judgment order and the ensuing stipula-
       tions—the Fund was awarded the stipulated amounts and future
       defense and indemnity expenses were to be apportioned equally.
              National Casualty appeals the partial summary judgment or-
       der.
                          STANDARD OF REVIEW
              We review an order granting summary judgment de novo.
       Amy v. Carnival Corp., 961 F.3d 1303, 1308 (11th Cir. 2020).
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       6                       Opinion of the Court                  22-13779

                                   DISCUSSION
               The irreconcilable-clauses rule has a long pedigree in Geor-
       gia, starting with State Farm Fire & Casualty Co. v. Holton, 205 S.E.2d
       872 (Ga. Ct. App. 1974). There, the Court of Appeals of Georgia
       held that when “both insurers attempt to limit their liability to ex-
       cess coverage ‘if there is other insurance,’ then the clauses are ir-
       reconcilable, cancel each other out, and the liability is to be divided
       equally.” Id. at 874 (citing S. Home Ins. v. Willoughby, 182 S.E.2d 910,
       914 (Ga. Ct. App. 1971)); accord Fund, 818 S.E.2d at 253; Carolina
       Cas. Ins. v. Underwriters Ins., 569 F.2d 304, 315 (5th Cir. 1978).
              National Casualty contends that the district court erred in
       finding that, under Holton, the parties’ “other insurance” clauses
       canceled each other out and the parties must split defense and in-
       demnity costs pro rata. National Casualty argues the irreconcila-
       ble-clauses rule doesn’t apply to this case for two reasons.
               First, National Casualty stresses that the Fund’s “other insur-
       ance” clause states that “[i]f valid and collectible insurance is avail-
       able . . . , the obligations of [the Fund] are excess over the available
       and collectible insurance.” Based on this language, National Casu-
       alty argues that the Fund’s “other insurance” clause wasn’t trig-
       gered because National Casualty’s policies are neither available nor
       collectible.
              The policy language at issue in Holton demonstrates that this
       argument falls short. There, State Farm and General Accident had
       issued insurance contracts, both including “other insurance”
       clauses. Holton, 205 S.E.2d at 873. State Farm’s “other insurance”
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       22-13779                Opinion of the Court                           7

       clause—like the Fund’s clause in our case—stated that its coverage
       was “excess insurance over any other valid and collectible insurance
       available.” Id. at 874 (emphasis added, quotation omitted). In con-
       trast, General Accident’s “other insurance” clause simply provided
       that “if there was any other insurance available,” then its policy ap-
       plied “only as excess insurance.” Id. General Accident’s clause, un-
       like State Farm’s, didn’t include any language that the other insur-
       ance policy had to be “collectible.” See id. Despite this diﬀerence,
       the Holton court found the two policies’ “other insurance” clauses
       “absolutely antithetical” and ruled they must “be disregarded” in
       favor of “pro rata coverage.” Id. at 874–75.
               So too here. Although General Accident’s “other insurance”
       clause in Holton may be shorter than National Casualty’s clause in
       our case, they’re functionally the same in that neither requires that
       the “other insurance” be “collectible.” Moreover, also like General
       Accident’s clause, National Casualty’s clause is excess to “any”
       other insurance available, be it “primary, excess, umbrella[,] or con-
       tingent.” Even so, National Casualty’s policies are “collectible” and
       “available” because they’d pay if liability exceeded what the other
       insurance covered. Because National Casualty’s policies are “col-
       lectible” and “available,” the Fund’s “other insurance” clause kicks
       in to provide excess coverage. In this clash of irreconcilable “other
       insurance” clauses, Georgia law doesn’t allow National Casualty’s
       clause to supersede the Fund’s clause. Instead, Holton dictates that
       liability is divided on a pro rata basis, which it describes as “the only
       equitable answer.” Id. at 875.
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       8                       Opinion of the Court                 22-13779

              Second, National Casualty argues that, unlike the Fund’s
       more general clause, its more speciﬁc clause is “super excess” be-
       cause it expressly provides that its coverage is excess to any other
       coverage—even if that other coverage is itself excess.
             The Georgia court rejected a similar argument in Holton.
       There, the Holton court explained that there’s
              a growing tendency in the entire picture to reject the
              circular reasoning, more prevalent in an earlier day,
              whereby the restrictive clause of one policy will be
              given prior eﬀect, or one of two policies aﬀording
              coverage upon diﬀerent hypotheses will be deemed
              “speciﬁc” and therefore, to constitute “primary” in-
              surance. This rejection has been strongest in cases
              where the conﬂict has been between like “other insur-
              ance” clauses.
       205 S.E.2d at 874–75. National Casualty advocates for a rule—
       where a more speciﬁc “other insurance” clause governs a more
       general “other insurance” clause—that’s contrary to Georgia law,
       and the law of most other states. See, e.g., Home Ins. v. St. Paul Fire
       & Marine Ins., 229 F.3d 56, 61 (1st Cir. 2000) (“[M]ost courts came
       to reject” the rule that “considered the primary insurer to be the
       one whose ‘other insurance” clause was more general in scope.”).
       The district court didn’t err in rejecting it.
              AFFIRMED.