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                               http://www.gaappeals.us/rules


                                                                 November 20, 2015




In the Court of Appeals of Georgia
 A15A0874. KING-MORROW v.                      AMERICAN            FAMILY
     INSURANCE COMPANY.

      MILLER, Judge.

      Almost two years after Melissa King-Morrow was involved in an auto accident,

she sued the other driver and perfected service on her uninsured motorist carrier,

American Family Insurance Company (“AFIC”). AFIC filed a motion for summary

judgment on the ground that King-Morrow failed to timely notify it of the accident.

The trial court granted AFIC’s motion. King-Morrow appeals, contending that the

trial court erred in granting summary judgment to AFIC. For the reasons that follow,

we agree and therefore reverse.

            On appeal from the grant of summary judgment this Court
      conducts a de novo review of the evidence to determine whether there
      is a genuine issue of material fact and whether the undisputed facts,
      viewed in the light most favorable to the nonmoving party, warrant
      judgment as a matter of law.


(Citations and punctuation omitted.) Campbell v. The Landings Assn., Inc., 289 Ga.

617, 618 (713 SE2d 860) (2011).

      The undisputed facts show that King-Morrow was in an accident on December

28, 2011. At the time of the accident, King-Morrow lived with her daughter, who had

an uninsured motorist policy with AFIC. The policy covered relatives living in the

policy holder’s household, including King-Morrow. AFIC did not learn of the

accident until December 4, 2013, when King-Morrow filed the instant suit and served

AFIC. AFIC answered and disclaimed liability. In its motion for summary judgment,

AFIC conceded that King-Morrow qualified as an insured under the policy, but

asserted that she failed to comply with the required conditions precedent because she

did not promptly notify AFIC of the accident.

      On appeal, King-Morrow contends that the trial court erred in granting

summary judgment to AFIC because the policy did not require her to give AFIC

notice of the accident. We agree.

             Under Georgia law, insurance companies are generally free to set
      the terms of their policies as they see fit so long as they do not violate
      the law or judicially cognizable public policy. . . . In construing an

                                          2
      insurance policy, we begin, as with any contract, with the text of the
      contract itself. One of the most well-established rules of contract
      construction is that the contract must be construed as a whole, and the
      whole contract should be looked to in arriving at the construction of any
      part.


(Citation omitted.) Wade v. Allstate Fire and Cas. Co., 324 Ga. App. 491, 492-493

(751 SE2d 153) (2013).

      “The policy’s terms are also construed as reasonably understood by an

insured.” (Punctuation and footnote omitted.) Murphy v. Ticor Title Ins. Co., 316 Ga.

App. 97, 100 (1) (729 SE2d 21) (2012). Moreover, in construing an insurance policy,

the test is what a reasonable person in the position of the insured would understand

the words to mean, not what the insurer intended the words to mean. See id.

      Finally, when faced with a conflict over a policy’s coverage, a trial court must

first determine, as a matter of law, whether the relevant policy language is ambiguous.

Murphy, supra, 316 Ga. App. at 100 (1).

      A policy which is susceptible to two reasonable meanings is not
      ambiguous if the trial court can resolve the conflicting interpretations by
      applying the rules of contract construction. Where a term of a policy of
      insurance is susceptible to two or more reasonable constructions, and the
      resulting ambiguity cannot be resolved, the term will be strictly
      construed against the insurer as the drafter and in favor of the insured.

                                          3
(Footnote omitted.) Id.

      “[A] notice provision expressly made a condition precedent to coverage is valid

and must be complied with, absent a showing of justification.” (Citation omitted.)

Eells v. State Farm Mut. Automobile Ins. Co., 324 Ga. App. 901, 903 (1) (a) (752

SE2d 70) (2013). In the instant case, the policy provides that, “[w]e may not be sued

unless all the terms of this policy are complied with” and “[i]f we are prejudiced by

a failure to comply with the following duties,” including the notice provision set forth

below, “then we have no duty to provide coverage under this policy.” Thus, the policy

sets forth a notice provision that is a condition precedent. See Eells, supra, 324 Ga.

App. at 903 (1) (a).

      The relevant notice provision of the policy provides, if “you” have an accident

or loss, “A. Notify us[.] Tell us promptly. Give time, place, and details. Include names

and addresses of injured persons and witnesses.” The term “you” is defined only as

the policy holder and the policy holder’s spouse. The subsequent provision of the

policy provides: “B. Other Duties[.] 1. Each person claiming any coverage of this

policy must also . . . cooperate with us and assist us in any matter concerning a claim

or suit.” This provision also sets forth additional duties that apply to each person

claiming coverage. The policy requires that any person claiming coverage under the

                                           4
policy promptly send AFIC any legal papers received related to a claim or suit and

that any person insured under the policy inform AFIC of any settlement offers. None

of these other provisions, however, requires a person claiming coverage under the

policy to promptly notify AFIC of the accident or loss.1

      AFIC argues that the accident-notice provision applies to “each person

claiming any coverage” because the subsequent “Other Duties” provision applies to

“[e]ach person claiming any coverage.” In its order granting summary judgment, the

trial court acknowledged that the policy definition of “you” did not include King-

Morrow, but nonetheless accepted AFIC’s argument that the “Other Duties” section

of the policy required King-Morrow to give prompt notice of the accident.

      Contrary to the dissent, the accident notice provision is susceptible to two

reasonable constructions. Under the first construction, given the policy’s limited

definition of “you,” a person would understand that definition to require only policy

      1
         Although neither the trial court nor either party appears to have considered
the addendum to the accident-notice provision of the policy, we note that it states:
“The requirement for giving notice of a claim, if not satisfied by the insured within
30 days of the accident, may be satisfied by an injured third party[.]” This provision
provides an alternate means of notice, but does not expand or change the definition
of “you.” Moreover, to the extent that this provision is ambiguous as to whether the
insured is required to give notice of a claim, given the limited definition of “you,” it
must be strictly construed against AFIC as the drafter and in favor of King-Morrow
as the insured. See Wade, supra, 324 Ga. App. at 493.

                                           5
holders and their spouses to give prompt notice of an accident. See Murphy, supra,

316 Ga. App. at 100 (1). Since King-Morrow is the policy holder’s mother, she was

not required to give notice under this construction.

      Under the second construction, relied on by the trial court and urged by the

dissent, each person claiming coverage is also implicitly required to give prompt

notice of the accident because the policy explicitly imposes other duties — aside from

prompt notification — on each person claiming coverage. Under this construction,

King-Morrow would have been required to give notice. Given the tenets of

construction, however, we cannot broaden the application of the accident-notice

provision to apply to anyone making a claim under the policy, as the dissent argues

that we should do. See Murphy, supra, 316 Ga. App. at 100 (1).

      As the insurer, AFIC is free to draft a policy that explicitly requires anyone

claiming coverage to notify it promptly of an accident. Compare Royer v. Murphy,

277 Ga. App. 150 (625 SE2d 544) (2006) (policy required the insured or any person

claiming coverage under the policy to notify the insurer of accident). Very likely,

AFIC intended its notice provision to apply to anyone claiming coverage; AFIC,

however, failed to draft a policy that clearly requires anyone claiming coverage to

give timely notice. Moreover,

                                          6
      the test is not what the insurer intended its words to mean, but what a
      reasonable person in the position of the insured would understand them
      to mean. The policy should be read as a layman would read it and not as
      it might be analyzed by an insurance expert or an attorney.


(Citation omitted.) Ace American Ins. Co. v. Truitt Brothers, Inc., 288 Ga. App. 806,

807(655 SE2d 683) (2007).

      Since King-Morrow would have reasonably understood the notice-provision

to not apply to her and, at best, there is an ambiguity as to whether the notice-

provision applies to people making claims under the policy who are neither policy

holders nor their spouses, the trial court erred in granting summary judgment to AFIC

on the ground that King-Morrow failed to comply with the conditions precedent by

giving timely notice.2

      Judgment reversed. Barnes, P. J., Ellington, P. J., and Branch, J., concur.

Dillard, J., and Ray, J., concur in judgment only. Andrews, P. J., dissents.




      2
      Given our holding above, we need not address King-Morrow’s remaining
arguments.

                                          7
 A15A0874. KING-MORROW                v.   AMERICAN         FAMILY
 INSURANCE COMPANY.

      ANDREWS, Presiding Judge, dissenting.

      Because there doesn’t appear to be an ambiguity in AFIC’s policy except for

the one fashioned by the majority opinion, I respectfully dissent.

      I agree with the general proposition cited by the majority, i.e., where an

insurance policy term is susceptible to two reasonable constructions and any resulting

ambiguity cannot be resolved, the term is to be strictly construed against the insurer

as drafter of the policy. Wade v. Allstate Fire and Cas. Co., 324 Ga. App. 491, 492-93

(751 SE2d 153) (2013). But I think the only reasonable construction of AFIC’s policy

here is that anyone claiming coverage under the policy must give timely notice of the

loss, so as to afford AFIC a meaningful opportunity to investigate the claim.

      The pertinent provisions in AFIC’s policy declare:

      IF YOU HAVE AN ACCIDENT OR LOSS
         If we are prejudiced by a failure to comply with the following duties,
         then we have no duty to provide coverage under this policy. A. Notify
         Us Tell us promptly. Give time, place, and details. Include names and
         addresses of injured persons and witnesses. B. Other Duties        Each
         person claiming any coverage of this policy must also: a. cooperate with
         us and assist us in any matter concerning a claim or suit.


         Even the majority opinion finds the “B. Other Duties” section to apply to the

appellant in this case, as she is a person claiming coverage under the policy. But

being bound by “other duties” presupposes being bound by a first duty or duties, in

which case that means the appellant was also obligated to give AFIC prompt notice

of loss under the “Notify Us” section of the policy so AFIC could investigate the

claim.

         The policy section “DEFINITIONS USED THROUGHOUT THIS POLICY,”

in which “you and your” is defined as the policyholder and spouse, immediately

precedes the actual liability and property damage coverage sections of the policy. The

“Definitions” section defines terms that specifically appear throughout “Part I-

Liability Coverage,” and “Part II-Car Damage Coverages.” So I take the “Definitions”

section as an aid to understanding the coverages set forth in Part I and Part II, and not

as a limitation on the general notice of loss requirements.



                                            2
      In short, I do not believe it is a reasonable construction to hold that only the

policyholder and/or spouse is obligated to notify the insurer of a claimed loss under

the policy. So even if some ambiguity exists here, there is only one reasonable

construction: anyone claiming a loss under the policy must promptly notify the

insurer so as to afford it a meaningful opportunity to investigate.

      In some cases, there may be some wiggle room in determining what constitutes

“promptly,” but I think it’s safe to say waiting over 23 months to notify the insurer

is not prompt. For the above reasons, I would affirm the trial court’s grant of

summary judgment for AFIC.




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