                                                            [DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT           FILED
                         ________________________ U.S. COURT OF APPEALS
                                                            ELEVENTH CIRCUIT
                                                              AUGUST 29, 2011
                                No. 10-11904
                                                                JOHN LEY
                          ________________________
                                                                 CLERK

                      D.C. Docket No. 1:07-cv-01460-HTW

GEORGIA-PACIFIC LLC,
f.k.a. Georgia-Pacific Corporation,

                                                        Plaintiff-Appellant,

                                      versus

UNITED STATES FIDELITY & GUARANTY COMPANY,

                                                        Defendant-Appellee.

                          ________________________

                   Appeal from the United States District Court
                      for the Northern District of Georgia
                         ________________________
                               (August 29, 2011)

Before EDMONDSON, MARTIN and COX, Circuit Judges.

PER CURIAM:

      The Plaintiff, Georgia-Pacific, LLC (“Georgia-Pacific”) appeals the entry of

summary judgment in favor of the Defendant, United States Fidelity & Guaranty

Company (“USF&G”). Georgia-Pacific filed this action seeking a declaratory
judgment requiring USF&G to undertake the defense of Georgia-Pacific in three

Mississippi lawsuits under general commercial liability policies issued by USF&G.

Georgia-Pacific’s Complaint also seeks damages, alleging that USF&G wrongly

failed to defend the lawsuits and wrongfully failed to reimburse Georgia-Pacific for

costs of defense.

       The district court granted USF&G summary judgment, holding that at this stage

of the litigation USF&G was not obligated to defend Georgia-Pacific and not

obligated to reimburse Georgia-Pacific for defense costs it had incurred. The court

also held that there was no coverage under the policies for the claims alleged in the

Mississippi lawsuits.

       Georgia-Pacific presents two arguments on appeal. First, it argues that the

district court did not properly construe provisions of the policy that address the

insurer’s duty to defend and duty to reimburse the insured for defense costs. Second,

it argues that the district court erred in holding that there was no coverage under the

policies for the claims alleged in the Mississippi lawsuits. We address each argument

in turn.

       The two unusual commercial liability policies at issue are materially identical

for the purposes of the issues presented by this case. They contain a Self-Funded

Retention Endorsement (the “Retention Endorsement”) equivalent to a deductible of

                                          2
$2.5 million per “incident,” which modifies the Commercial General Liability

Coverage Form. The district court viewed the Retention Endorsement as clear and

unambiguous. (Dkt. 36 at 9.) We do too. And, Georgia law is clear: “Construction

of an insurance policy is governed by the ordinary rules of contract construction, and

when the terms of a written contract are clear and unambiguous, the court is to look

to the contract alone to find the parties’ intent.” BB&-McCarthy, LLC v. Baldwin

Paving Co., 646 S.E.2d 682, 685 (Ga. Ct. App. 2007) (quotation and citation

omitted.) The Retention Endorsement acknowledges USF&G’s right and duty to

defend covered claims, but delegates that duty to Georgia-Pacific. And, as the district

court properly concluded, under the Retention Endorsement USF&G has no

obligation to indemnify Georgia-Pacific for any litigation expenses until such time

as Georgia-Pacific’s obligation to pay damages exceeds the $2.5 million self-funded

retention. (No obligation to pay damages had been determined while this case was

pending in the district court.) These conclusions are dispositive. The district court’s

well-reasoned opinion supports these conclusions. (Dkt. 36.)

      Georgia-Pacific contends that the district court violated basic rules of contract

construction and failed to follow the basic principles of Georgia law on the

construction of insurance contracts. These arguments are meritless. The Retention

Endorsement in these policies is atypical. No similar provisions are found in the

                                          3
Georgia decisions that Georgia-Pacific cites. Georgia-Pacific argues that the district

court’s interpretation of the Retention Endorsement is “illogical and unjust.”

(Appellant Br. at 22.) We view the district court’s interpretation as neither illogical

nor unjust. There are reasons why a company like Georgia-Pacific would seek

coverage of this kind. Two reasons are readily apparent. First, the duty to defend

was delegated to Georgia-Pacific, giving it the right to direct the defense of the

Mississippi lawsuits, including the right to select defense attorneys. Second, the $2.5

million self-funded retention surely resulted in a premium substantially less than the

premium that would have been payable without the self-funded retention. But,

whether logical or illogical, just or unjust, this is the contract the parties made.

      We turn now to Georgia-Pacific’s second argument: that the district court

erred in holding that there was no coverage under the policies for the claims alleged

in the Mississippi lawsuits.

      Georgia-Pacific did not assert in its Complaint, or at any time during the

pendancy of this case, that it had become obligated to pay damages in any of the three

Mississippi lawsuits. The district court nevertheless proceeded “in order to complete

the record” (Dkt. 36 at 16) to a determination as to whether the Mississippi lawsuits

alleged claims covered by the policies, concluding that none of them did. We need

not make this determination at this time. While there is no jurisdictional bar to

                                           4
deciding this issue, prudential considerations suggest it is premature to decide this

question at this time. We have already concluded that USF&G has no obligation to

indemnify Georgia-Pacific for defense costs. Furthermore, no obligation to pay

damages has been fixed; we do not know what claims, if any, will be successful; and

a loss in excess of $2.5 million is purely speculative. We therefore amend the order

of the district court to eliminate that part of the district court’s order that appears

under the heading “Underlying Complaints do not Implicate any Coverage under the

Policies.” (Dkt. 36 at 16-18.) The district court’s judgment, as amended, is affirmed.

       JUDGMENT AS AMENDED AFFIRMED.1




       1
         We concluded that the Complaint in this diversity case included an insufficient allegation
of Georgia-Pacific’s citizenship, and we invited the filing of a motion for leave to amend to correct
the deficient allegations. Georgia-Pacific has now filed an unopposed motion for leave to amend
which sufficiently alleges diversity jurisdiction. The motion in GRANTED.

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