                                                                    [DO NOT PUBLISH]



                      IN THE UNITED STATES COURT OF APPEALS

                                   FOR THE ELEVENTH CIRCUIT           FILED
                                    ________________________ U.S. COURT OF APPEALS
                                                                     ELEVENTH CIRCUIT
                                                                       MARCH 14, 2012
                                            No. 11-12188
                                      ________________________           JOHN LEY
                                                                          CLERK

                                D.C. Docket No. 1:08-cv-03220-GET



PHL VARIABLE INSURANCE COMPANY,

llllllllllllllllllllllllllllllllllllllll                         Plaintiff - Appellant,

                                                versus


THE FAYE KEITH JOLLY IRREVOCABLE
LIFE INSURANCE TRUST,
through its trustee Kenneth E. Shapiro, Esq.,

llllllllllllllllllllllllllllllllllllllll                         Defendant - Appellee.

                                     ________________________

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

                                           (March 14, 2012)
Before BARKETT, HULL, Circuit Judges, and HINKLE,* District Judge.

PER CURIAM:

       PHL Variable Insurance Company (“PHL”) appeals the denial of its motion

for summary judgment and the grant of summary judgment in favor of the Faye

Keith Jolly Trust (“the Trust”).1 PHL sued both Jolly and the Trust for negligent

misrepresentation of Jolly’s assets on the insurance application for a $10 million

life insurance policy.2 PHL sought rescission of the insurance contract and

retention of the insurance premiums paid by the Trust under the contract. Jolly

defaulted on PHL’s claims against him, and on the basis of the default, the district

court rescinded the insurance policy, but denied PHL’s claims for damages and to

retain the paid premiums, which the district court held in the registry of the court

pending the outcome of PHL’s appeal.3


       *
         Honorable Robert L. Hinkle, United States District Judge for the Northern District of
Florida, sitting by designation.
       1
         We review cross-motions for summary judgment de novo, viewing the facts in the light
most favorable to the non-moving party on each motion. Am. Bankers. Ins. Group v. United
States, 408 F.3d 1328, 1331 (11th Cir. 2005). Because “[s]tate law governs a diversity action
concerning the interpretation of an insurance contract,” and the PHL insurance policy is governed
by Georgia law, we must apply Georgia law in interpreting PHL’s insurance contract. Fernandez
v. Bankers Nat’l Life Ins. Co., 906 F.2d 559, 564 (11th Cir. 1990).
       2
           Faye Keith Jolly is not involved in this appeal.
       3
          PHL seeks return of the premiums amounting to $484,843, the commissions PHL paid
to the insurance broker who sold the policy, and the attorneys’ fees PHL paid in the course of this
litigation.

                                                   2
       PHL first claims that by signing the application, the Trustee, Kenneth

Shapiro, falsely stated on behalf of the Trust (1) that he had reviewed the

application before signing it, and (2) that the statements in the application

regarding Jolly’s assets were “those of the proposed insured.” The provision upon

which PHL relies reads as follows:

       I have reviewed this application, and the statements made herein are
       those of the proposed insured and all such statements made by the
       proposed insured in Part I or and in Part II of this application are full,
       complete, and true to the best knowledge and belief of the
       undersigned and have been correctly recorded.

PHL claims that Shapiro admitted he had never reviewed the sections of the

application displaying Jolly’s income and assets, however, that was not Shapiro’s

testimony. At most, Shapiro testified in deposition that his general practice was to

read and rely on the information presented in an insurance application, and

testified that he believed that he did so in this case. Similarly, although PHL

claims that Shapiro lacked any basis for affirming that Jolly had made the

statements in the application, Shapiro specifically testified that he had seen Jolly’s

signature on the application before Shapiro signed it himself.4 PHL has not met its

burden of showing that Shapiro failed to read the document.


       4
         Shapiro testified that he may not have “noticed” or “focused on” the representation of
Jolly’s net worth when he signed the insurance application, but that statement does not constitute
an admission that he never reviewed the application at all.

                                                3
       PHL also argues that, by signing the loan application saying that its contents

were “full, complete, and true to [my] best knowledge and belief,” Shapiro falsely

stated that the Trust had knowledge of the extent of Jolly’s assets. For support,

PHL cites Georgia cases holding that a declaration made “to the best of my

knowledge and belief” in an insurance application may be false when the applicant

relies on information provided by someone with no knowledge of the truth of the

matter represented, such as the insurer’s agent, or when the applicant makes the

declaration despite knowing that it is actually false. See White v. Am. Family Life

Assurance Co., 643 S.E.2d 298, 300-301 (Ga. Ct. App. 2007); Jennings v. Life

Ins. Co. of Ga., 441 S.E.2d 479, 480-81 (Ga. Ct. App. 1994); James, Hereford, &

McClelland, Inc. v. Powell, 402 S.E.2d 348, 351 (Ga. Ct. App. 1991).5

       However, none of these cases apply to the facts of this case because PHL

has submitted no evidence that Shapiro failed to read the application or that

Shapiro knew that Jolly’s statements were false. Thus, Georgia law does not

support PHL’s contention here.


       5
         We adopted a different interpretation of a “best of knowledge and belief” clause in
insurance contracts in two other cases, however, neither of these cases were decided under
Georgia law, which differs on this question. See Hauser v. Life Gen. Sec. Ins. Co., 56 F.3d 1330,
1333-34 (11th Cir. 1995) (applying federal common law with reference to Florida law); William
Penn Life Ins. Co. v. Sands, 912 F.2d 1359, 1361 (11th Cir. 1990) (applying Florida law); see
also 1 Harnett & Lesnick, The Law of Life and Health Insurance § 4.06 (Matthew Bender, Rev.
Ed.) (noting divergence between Georgia’s interpretation of “best of knowledge and belief”
clauses and other courts’ interpretations).

                                               4
      Even if the Trust made no misrepresentations, PHL nonetheless argues that

it is equitably entitled to retain the policy premiums because the default judgment

against Jolly established that the insurance policy was obtained by fraud.

However, Georgia law provides no support for this proposition. Georgia law

generally requires an insurer seeking to rescind an insurance contract to return any

premiums paid under the contract, even where the insured person originally

obtained the policy by fraud. See Weems v. Am. Nat’l Ins. Co., 29 S.E.2d 500,

502 (Ga. 1944); see also Ga. Code § 13-4-60; Corbitt v. Harris, 354 S.E.2d 637,

639 (Ga. Ct. App. 1987) (“[O]ne cannot in equity seek to rescind a contract . . . on

the ground of fraud, and at the same time retain the benefits derived from that

contract.”), overruled on other grounds by 405 S.E.2d 474 (Ga. 1991).

      Although there may be some exceptions to this general rule, none apply

here. Although PHL has obtained a default judgment against Jolly on its fraud

claim, its claims of negligent misrepresentation and conspiracy against the Trust

have been dismissed. Accordingly, the Trust does not owe PHL anything, as the

Trust did not commit any fraud or other wrong that harmed PHL. The district

court did not err in denying PHL’s equitable retention claim.

      AFFIRMED




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