              Case: 16-13420       Date Filed: 02/13/2018   Page: 1 of 9


                                                               [DO NOT PUBLISH]



               IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT
                          ________________________

                                No. 16-13420
                          ________________________

                       D.C. Docket No. 1:15-cv-01085-SCJ



GOVERNMENT EMPLOYEES INSURANCE COMPANY,

                                                    Plaintiff - Appellee,

versus

JANIS C. GORDON,
Administration of the Estates of
Robert Alan Myles, et al.,

                                                    Defendants,

HANNA MERCER,
ANN MERCER,
Administrator of the Estate of Robert Alan Myles,

                                                    Defendants - Appellants.

                          ________________________

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

                               (February 13, 2018)
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Before TJOFLAT and JORDAN, Circuit Judges, and STEELE, * District Judge.

PER CURIAM:

       GEICO brought this declaratory judgment action against Hanna Mercer,

seeking a determination of its obligations under an umbrella policy it issued to

Robert Myles. That GEICO umbrella policy, with respect to a motor vehicle,

requires that the vehicle be “insured by a primary auto policy.” The district court

relied upon the umbrella policy’s definition of “primary insurance” to determine

that the rental vehicle Mr. Myles was driving (and Ms. Mercer was a passenger in)

was not “insured by a primary auto policy” at the time of their accident. Following

a review of the record, and with the benefit of oral argument, we conclude that the

district court’s reliance on the definition of “primary insurance” to determine the

meaning of “primary auto policy” was error. We therefore reverse the district

court’s grant of summary judgment in favor of GEICO.

                                              I

       Because we write for the parties, we assume their familiarity with the

procedural and factual background, and set out only what is necessary to explain

our decision.



*
  Honorable John E. Steele, United States District Judge for the Middle District of Florida,
sitting by designation.


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       In December of 2013, Ms. Mercer was a passenger in a Suzuki automobile

driven by Mr. Myles. The vehicle, rented in Costa Rica, was involved in a tragic

accident there, killing Mr. Myles and severely injuring Ms. Mercer. Mr. Myles

had purchased insurance for the rented Suzuki from Qualitas Compania de

Seguros, S.A., a Costa Rican insurance company. He also held an umbrella policy

issued by GEICO.

       The parties dispute whether Mr. Myles was an “insured” under the GEICO

umbrella policy at the time of the accident in the rented Suzuki. According to the

umbrella policy, as amended, “insured” means:

       (a) You and your spouse if a resident of your household. With respect
           to a motor vehicle, such person is an insured only if the motor
           vehicle meets the definition of auto in this policy and is insured by
           a primary auto policy. 1

A-32. The parties agree that the Suzuki automobile rented by Mr. Myles is an

“auto” as defined in the umbrella policy. The question, then, is whether the Suzuki

automobile was “insured by a primary auto policy.”

       GEICO contends that it was not because the Qualitas policy was not

“primary insurance” as defined in the umbrella policy. According to the umbrella

policy “primary insurance” means, among other things, “insurance . . . which is

payable on behalf of an insured for liability for personal injury or property


1
 The umbrella policy uses bold and italics for certain defined terms. We have matched the
umbrella policy’s typeface when quoting it in this opinion as it is helpful to our analysis.
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damage.” The district court accepted GEICO’s argument and ruled that, because

Ms. Mercer could not show that Qualitas’ policy provided coverage, Mr. Myles

was not an “insured” under the umbrella policy at the time of the accident.

      Ms. Mercer, on the other hand, contends that the Qualitas policy Mr. Myles

purchased for the Suzuki is “a primary auto policy” and therefore sufficient to

make Mr. Myles an insured under the umbrella policy. There is no doubt that the

Suzuki was listed as an insured vehicle in the Qualitas policy.

                                           II

      Under Georgia law, we must “first consider the ordinary and legal meaning

of the words employed in the insurance contract. An insurance policy should be

read as a layman would read it.” St. Paul Mercury Ins. Co. v. FDIC, 774 F.3d 702,

708 (11th Cir. 2014) (quotation omitted). “[W]hen the plain words of a contract

are fairly susceptible to more than one meaning,” the contract is ambiguous and we

“apply the rules of contract construction to resolve the ambiguity.” Id. These rules

of construction include looking at “the whole contract . . . in arriving at the

construction of any part” and construing ambiguities “against the drafter of the

contract (i.e. the insurer), and in favor of the insured.” Id.

                                           A

      The GEICO umbrella policy provides that, to be an “insured,” the vehicle

must be “insured by a primary auto policy.” The term “primary auto policy” is not


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defined in the umbrella policy. The umbrella policy provides that undefined terms

will have the definition given to them in “your primary insurance policy,” but the

term “primary auto policy” is not defined in the Qualitas policy. Left undefined,

the term “primary auto policy” is ambiguous. See St. Paul Mercury Ins. Co., 774

F.3d at 709 (“There is a low threshold for establishing ambiguity in an insurance

policy. ‘Ambiguity in an insurance contract is duplicity, indistinctiveness,

uncertainty of meaning of expression, and words or phrases which cause

uncertainty of meaning and may be fairly construed in more than one way.’”)

(quoting Ga. Farm Bureau Mut. Ins. Co. v. Meyers, 548 S.E.2d 67, 69 (Ga. Ct.

App. 2001)).

       We conclude that the district court improperly relied upon the defined term

“primary insurance” to provide the definition for the similar, but undefined, term

“primary auto policy.” Throughout the umbrella policy, defined terms (including

“primary insurance”) are marked in bold and italics. “[P]rimary auto policy” is

not.   Moreover, the defined term “primary insurance” is not included in the

relevant definition of “insured.” See GEICO Umbrella Policy, Part I, § 7(a). Yet,

it does appear in several other locations including in the definition of “damages”

found on the same page as the definition of “insured.” In fact, where GEICO

wished to limit its coverage to only items covered by “primary insurance,” it

appears to have done so. See GEICO Umbrella Policy, Part III, § 5 (excluding


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coverage of “Business pursuits or business property of an insured unless covered

by primary insurance described in the declarations…”). We presume that GEICO

used the defined term “primary insurance” when it wanted to and that the use of

“primary auto policy” therefore signifies something different. See Ins. Co. of

Pennsylvania v. APAC-Se., Inc., 677 S.E.2d 734, 739 (Ga. Ct. App. 2009) (“Thus,

if the parties wanted to limit additional insured coverage to policies specifically

required under the Subcontract, they clearly knew how to do so. Put another way,

the parties would not have used two different terms in short sequence within the

same paragraph to mean the exact same thing. In order to give effect to all of the

contractual terms, ‘all policies’ thus must be construed as greater in scope than

‘required insurance’ under the Subcontract.”); Tyson v. McPhail Properties, Inc.,

478 S.E.2d 467, 472 (Ga. Ct. App. 1996) (resolving ambiguity in insurance

contract under rule of construction that contract “would not have used two

different terms in two sequential paragraphs to describe the same thing”).

      Examining the umbrella policy as a whole, as we must, we conclude that the

interpretation of “primary auto policy” as something different than “primary

insurance” is “the construction which will uphold a contract in whole and in every

part.” Duckworth v. Allianz Life Ins. Co. of N. Am., 706 F.3d 1338, 1342 (11th Cir.

2013). The “Limits of Liability” section of the policy contemplates a situation

where there may be no primary insurance available. For example, “if primary


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insurance is not in force at the time of loss . . . [GEICO would] pay only those

damages which exceed the liability limits in Item V. of the declarations.” GEICO

would pay damages that exceed the retained limit if “an occurrence results in

personal injury or property damage, and . . . is not covered under the terms and

conditions of your primary insurance, but . . . is covered by this policy.” And

GEICO would “pay only those damages which exceed the liability limits” “if a

primary insurer does not pay because of . . . an insured’s failure to comply with a

provision of primary insurance.”2

         Under the district court’s and GEICO’s reading—which substitutes “primary

insurance” for “insured by a primary auto policy”—there does not appear to be a

situation where one could be an “insured” (and therefore needing primary

insurance coverage) while not having primary insurance “in force at the time of

loss.”     Reading “primary auto policy” as something different than “primary

insurance” allows us to follow the “cardinal rule of construction that a contract

should be construed in a manner that gives effect to all of the contractual terms.”

Ins. Co. of Pennsylvania, 677 S.E.2d at 739. See also Schafer Properties v. Tara

State Bank, 469 S.E.2d 743, 746 (Ga. Ct. App. 1996) (requiring contracts to be




2
  This provision also casts doubt on GEICO’s argument and the district court’s decision that
Qualitas must be obligated to pay (i.e. insurance is “payable”) in order for Mr. Myles to be
considered an “insured.”
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construed in a way that “gives meaning and effect to all the terms of the contract

over that which nullifies and renders meaningless a part of the document”).

                                         B

      The district court apparently borrowed the definition of the related term

“primary insurance” (i.e., that coverage was “payable”) to determine whether the

Suzuki was “insured by a primary auto policy,” thereby requiring Ms. Mercer to

show that Qualitas would provide coverage for the accident. As noted, we do not

think the district court should have equated those terms. The umbrella policy

explains that undefined terms “will follow the definitions of your primary

insurance policy,” but, in this case, the Qualitas policy does not define “primary

auto policy.” We are left to figure out the meaning of the term “primary auto

policy,” which is undefined by the relevant policies and subject to more than one

reasonable construction. The district court’s resolution of this ambiguity in favor

of GEICO’s proposed construction and against providing insurance was contrary to

Georgia law. See Western Pacific Mut. Ins. Co. v. Davies, 601 S.E.2d 363 (Ga. Ct.

App. 2004) (“Under the applicable rules of contract construction, when the

language of an insurance contract is ambiguous and subject to more than one

reasonable construction, the policy must be construed in the light most favorable to

the insured, which provides him with coverage.”) (alterations omitted). See also

St. Paul Mercury Ins. Co., 774 F.3d at 709.


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      Looking to the “usual and common signification,” OCGA § 13–2–2(2), of

the term “primary auto policy,” we note that a “primary policy” is defined as one

that “provides the first layer of coverage and attaches immediately upon the

happening of an occurrence or when a claim is made.” 1-1 New Appleman on

Insurance Law § 1.06 (2017).        See also Couch on Insurance § 6:35 (2017)

(explaining that a “primary policy” is “[t]he first to kick in” and “covers any loss

over a small deductible, has a relatively small maximum coverage, and requires

relatively high premiums”).      Although the definition of “primary insurance”

provided in the umbrella policy may be relevant evidence regarding the definition

of the term “primary auto policy,” placing sole reliance on it was error.

                                         III

      The summary judgment in favor of GEICO is reversed, and the case is

remanded to the district court to re-evaluate the parties’ summary judgment

motions (and any other submissions the district court wishes to consider) in light of

this opinion.

      REVERSED AND REMANDED.




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