UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

ATLAS INSURANCE COMPANY,
Plaintiff-Appellee,

v.
                                                                   No. 95-2404
WILLIAM CHAPMAN; CHAPMAN
LUMBER COMPANY, INCORPORATED,
Defendants-Appellants.

Appeal from the United States District Court
for the Eastern District of Virginia, at Norfolk.
J. Calvitt Clarke, Jr., Senior District Judge.
(CA-95-74-2)

Argued: June 3, 1996

Decided: July 23, 1996

Before WILKINSON, Chief Judge, and NIEMEYER and
HAMILTON, Circuit Judges.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: Kenneth Hicks Lambert, Jr., WILLIAMS, KELLY &
GREER, P.C., Norfolk, Virginia, for Appellants. Charles Garrison
Meyer, III, MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P.,
Richmond, Virginia, for Appellee. ON BRIEF: Christopher R.
Papile, WILLIAMS, KELLY & GREER, P.C., Norfolk, Virginia, for
Appellants.

_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Appellants in this case, Chapman Lumber and its owner William
Chapman, waited for more than four months after an accident
occurred to notify the liability insurer, Atlas Insurance Company.
Atlas denied coverage because the delay violated the contract provi-
sion requiring notification "as soon as possible" after an accident.
William Chapman and the Chapman Lumber Company appeal the
district court's grant of summary judgment in favor of Atlas Insur-
ance. Because appellants delayed inexcusably in notifying Atlas of
the accident, we affirm the judgment of the district court.

I.

On October 28, 1993, at the Chapman Lumber Company yard, a
large timber beam fell from a front loader onto J.D. Barnes. Barnes
had been hired by William Chapman--his friend and the owner of
Chapman Lumber--to do some carpentry work on a small building
that was being moved to a new location in the mill yard. The sixteen-
foot beam broke Barnes' leg and fractured his lower back. Barnes was
taken by ambulance to the hospital, where he stayed for one week.

William Chapman, who was not at the lumber yard at the time of
the accident, was notified immediately. He instructed his secretary to
tell the hospital that Chapman Lumber would pay Barnes' medical
bills. Chapman's secretary also passed this message on to Barnes as
he was being loaded into the ambulance. Chapman Lumber subse-
quently paid more than $14,000 for Barnes' medical bills.

On March 3, 1994, Chapman received a letter from Barnes' attor-
ney signalling Barnes' intent to bring a personal injury claim against
Chapman Lumber. At this point, 126 days after the accident, Chap-
man first called and wrote Atlas to give notice of the accident. Atlas

                    2
began an immediate investigation. On May 6, 1994, Atlas notified
Chapman of its decision not to cover Barnes' claim because of Chap-
man's delay in notification and the company's voluntary payment of
Barnes' medical expenses without Atlas' knowledge or consent.

In October 1994, Barnes' attorney mailed another letter to Atlas
and Chapman demanding $300,000. Atlas then filed a declaratory
judgment action to determine its obligations under the policy. The
district court ruled in favor of Atlas' summary judgment motion
releasing it from any liability.

II.

The insurance contract between Atlas and Chapman Lumber
requires that Chapman Lumber give notice to Atlas"as soon as practi-
cable after an `occurrence' or offense which may result in a claim."
William Chapman knew on October 28, the day of the accident, that
Barnes had been seriously injured while working at Chapman Lumber
and had been taken to the hospital by ambulance. Chapman knew on
that day and in the weeks to follow that Barnes was incurring, and
Chapman Lumber paying, significant medical costs. Yet Chapman
notified Atlas 126 days after the fact.

Chapman Lumber had no legitimate justification for its four month
delay in notification. When asked why he didn't notify Atlas on the
day of the accident, Chapman replied that "[t]here was no reason--a
physical reason to prohibit me from doing it." The only explanation
that Chapman offered was that he and Barnes had known each other
for years, and while he felt an obligation to reimburse Barnes for
medical expenses, it never occurred to him that Barnes would seek
additional damages. This justification may have had some plausibility
if offered by an unsophisticated private individual. But Chapman
Lumber is a business enterprise, presumably familiar with standard
contract provisions like the one at issue in this case. Its failure to
notify Atlas cannot properly be excused.

These undisputed facts establish a material breach of contract by
Chapman and Chapman Lumber, releasing Atlas from any obligation
it might otherwise have to cover the Barnes accident. This conclusion
holds true regardless of whether Atlas was prejudiced by the delay,

                    3
as prejudice is only one of several factors which may be considered
when determining whether a breach was material. State Farm Fire
and Casualty Co. v. Scott, 372 S.E.2d 383, 385 (Va. 1988);
Nationwide Mut. Ins. Co. v. Gentry, 117 S.E.2d 76, 81 (Va. 1960).
Here, the unjustified 126 day delay sufficiently established a substan-
tial and material breach.

III.

For the foregoing reasons, we affirm the judgment of the district
court.

AFFIRMED

                    4
