                                             FILED:   January 4, 2013


                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT
                         ________________

                           No. 11-2328
                         ________________


IFCO SYSTEMS NORTH AMERICA, Inc., a Delaware Corporation,

                Plaintiff - Appellant,

           v.

AMERICAN HOME ASSURANCE COMPANY, A subsidiary of American
International Group, Inc. (AIG); a New York Corporation,

                Defendant – Appellee.



                             O R D E R



           The Court amends its order filed January 3, 2013, as

follows:

           On page 3, line 3 of text – the word "Right" is

replaced with the word "Rite."


                                         For the Court – By Direction



                                               /s/ Patricia S. Connor
                                                        Clerk
                              UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT


                              No. 11-2328



IFCO SYSTEMS NORTH AMERICA, Inc., a Delaware Corporation,

                  Plaintiff - Appellant,

          v.

AMERICAN HOME ASSURANCE COMPANY, A subsidiary of American
International Group, Inc. (AIG); a New York Corporation,

                  Defendant – Appellee.



Appeal from the United States District Court for the District of
Maryland, at Baltimore.    William M. Nickerson, Senior District
Judge. (1:09-cv-02874-WMN)


Submitted:     November 27, 2012            Decided:   January 3, 2013


Before TRAXLER, Chief Judge, FLOYD, and THACKER, Circuit Judges.


Unpublished Order of Certification to the Supreme Court of
Georgia. Judge Thacker directed the entry of the order with the
concurrences of Chief Judge Traxler and Judge Floyd.


Joseph   F.  Cunningham,   Joshua  M.   Hoffman,  CUNNINGHAM   &
ASSOCIATES, PLC, Arlington, Virginia; Eric L. Routman, LAW
OFFICES OF ERIC L. ROUTMAN, Northbrook, Illinois, for Appellant.
Paul Smolinsky, JACKSON & CAMPBELL, PC, Washington, D.C., for
Appellee.
                                    ORDER


           Appellant       IFCO    Systems    North     America      (“IFCO”)

challenges the district court’s grant of summary judgment to

Appellee American Home Assurance Company (“American Home”) and

the district court’s subsequent denial of IFCO’s motion to alter

or amend judgment.         Because the determinative issue in this

appeal   hinges   on   a   novel   question   of   Georgia   state   law,   we

certify the following question to the Supreme Court of Georgia:

    In a negligent hiring and supervision action against
    an insured-employer, does the intentional conduct of
    an employee of the insured constitute a covered
    “occurrence” where the governing insurance policy
    covers the employer and its employees, defines an
    “occurrence”   as   an  “accident,”  and   contains   a
    “separation   of   insureds”  clause   providing   that
    coverage applies “to each named insured as though it
    was the only named insured”?



                                   I.

                                   A.

           IFCO provides inventory and pallet management services

to retail customers.        Given the nature of its business, IFCO’s

employees are sometimes required to enter the property of IFCO

customers.    This case emerges from a dispute in which an IFCO

customer, Rite Aid Pharmacy of Maryland (“Rite Aid”), alleged




                                        2
that IFCO employees stole approximately $1.6 million worth of

goods from a Rite Aid warehouse.

              Rite        Aid first sought to          recover the value of the

allegedly stolen property directly from IFCO in October 2008.

Soon thereafter, IFCO notified its insurer, American Home, of

this       claim    and     requested      coverage.           American   Home     denied

coverage in May 2009.               Rite Aid ultimately filed suit against

IFCO in May 2010 (“the underlying lawsuit”).                         In the underlying

lawsuit, Rite Aid asserted the following causes of action: (1)

negligent      hiring,         training,    supervision,         and   retention;     (2)

contract indemnification; (3) trover and conversion; (4) common

law indemnification; (5) negligence; and (6) breach of contract.

All of these causes of action are predicated on the alleged

theft by IFCO’s employees.1

              In response, IFCO filed the present lawsuit against

American       Home       in   October     2009    seeking       a   declaration     that

American Home had a duty to defend and indemnify IFCO.                                 In

December       2010,        American     Home     filed    a    motion    for    summary

judgment, arguing that it had neither a duty to defend nor

indemnify          IFCO    under   Georgia      law.      American     Home’s    primary

contention was that the alleged thefts by IFCO’s employees were


       1
        IFCO and Rite Aid eventually settled                           the   underlying
lawsuit with no contribution from American Home.


                                             3
intentional          acts       and,    accordingly,         could   not   constitute     a

covered           “accident.”           The    district      court     agreed,    granting

American Home’s motion on June 23, 2011.                             IFCO then filed a

motion to alter or amend judgment pursuant to Fed. R. Civ. P.

59(e), which the district court denied on November 4, 2011.

IFCO then timely filed this appeal on December 2, 2011.



                                              B.

                  The insurance policy at issue here is a commercial

general liability policy issued to IFCO by American Home (“the

Policy”).          The Policy provides, in pertinent part, that American

Home       must    “pay    those       sums   that     the   insured    becomes     legally

obligated to pay as damages because of . . . ‘property damage’

to which this insurance applies.”                        J.A. 165.2        The insurance

applies to all property damage caused by an “occurrence.”                                Id.

An occurrence, in turn, is defined as “an accident, including

continuous          or    repeated       exposure      to    substantially       the    same

general conditions.”                   J.A. 177.       The Policy also contains a

clause       under        the    heading       “Separation      of     Insureds,”      which

provides:

       Except with respect to the Limits of Insurance, and
       any rights or duties specifically assigned in this

       2
       Citations to the “J.A.” refer to the Joint Appendix filed
by the parties in this appeal.


                                                   4
       Coverage Part to the first Named Insured, this
       insurance applies: (a) As if each Named Insured were
       the only Named Insured; and (b) Separately to each
       insured against whom claim is made or “suit” is
       brought.

J.A. 175.



                                           C.

            Georgia law governs this dispute.                      Under Georgia law,

“whether    an    insurer    has    a     duty    to    defend        depends     upon   the

language of the policy as compared with the allegations of the

complaint.”       Hoover v. Maxum Indem. Co., 730 S.E.2d 413, 418

(Ga. June 18, 2012).          An insurer will only be relieved of the

duty   to   defend    when    the       allegations           of   the    complaint      are

unambiguously      excluded        from    coverage           under      the     applicable

policy.     See JNJ Found. Specialists, Inc. v. D.R. Horton, Inc.,

717 S.E.2d 219, 223 (Ga. 2011).                 Because the existence of a duty

to defend is determined on the basis of the allegations in the

complaint, “the issue is not whether the insured is actually

liable to the plaintiffs in the underlying action; the issue is

whether a claim has been asserted which falls within the policy

coverage    and     which    the        insurer        has    a    duty     to    defend.”

Bituminous Cas. Corp. v. N. Ins. Co. of New York, 548 S.E.2d

495, 497 (Ga. 2001) (quoting Penn-America Ins. Co. v. Disabled

American    Veterans,   481    S.E.2d           850,    852    (Ga.      App.    Ct.   1997)

(emphasis in original)).

                                            5
             Further, where a complaint alleges multiple claims, an

insurer’s     obligation       to    defend    one   claim      in   the   complaint

triggers an obligation to defend the remaining claims.                      See HDI-

Gerling America Ins. Co. v. Morrison Homes, Inc., --- F.3d ----,

2012 WL 5834882, *3 (11th Cir. 2012) (applying Georgia law); see

also City of Atlanta v. St. Paul Fire & Marine Ins. Co., 498

S.E.2d 782, 784 (Ga. App. Ct. 1998) (citing Great Am. Ins. Co.

v. McKemie, 259 S.E.2d 39 (Ga. 1979)) (“[W]here the complaint

filed against the insured does not assert any claims upon which

there would be insurance coverage, the insurer is justified in

refusing to defend the insured's lawsuit.”) (emphasis added).



                                         D.

             In    its    order     granting    American       Home’s    motion   for

summary judgment, the district court held that American Home did

not   have    a    duty   to   defend    because       the   factual     allegations

driving      the   underlying       lawsuit     were     all    premised    on    the

intentional conduct of IFCO’s employees.                 Accordingly, the court

held there was no set of facts under which the alleged conduct

could constitute an “accident.”                See IFCO Sys. N. Am., Inc. v.

Am. Home Assur. Co., 797 F. Supp. 2d 660, 668 (D. Md. 2011).

             In support of this holding, the district court cited

several cases from the Georgia Court of Appeals.                        The district

court was of the view that these cases stand for the proposition

                                          6
that         an   employee’s      intentional        conduct     may   not    constitute    a

covered           “accident”      even    if   the   employer     did   not    foresee     or

intend the employee’s tortious conduct.                          IFCO, 797 F. Supp. 2d

at 664-65 (citing O’Dell v. St. Paul Fire & Marine Ins. Co., 478

S.E.2d 418 (Ga. Ct. App. 1996) (insurer did not have a duty to

defend an insured corporation against sexual harassment claims

brought           against    the     corporation         based    on    the    conduct     of

corporation employees); Presidential Hotel v. Canal Ins. Co.,

373 S.E.2d 671 (Ga. Ct. App. 1988) (same)).3

                    Subsequently, in its order denying IFCO’s motion to

alter/amend            judgment,         the   district     court       rejected     IFCO’s

argument that American Empire Surplus Lines Insurance Company v.

Hathaway Development Company, Inc., 707 S.E.2d 369 (Ga. 2011)

(“Hathaway”) stands for the proposition that intentional acts

may be deemed “accidents” for purposes of determining coverage

by   a       commercial     general       liability      policy    under      Georgia    law.

IFCO,         797    F.   Supp.    2d     at   669-70.      In    Hathaway,     a   general


         3
       In so holding, the district court distinguished Crook v.
Georgia Farm Bureau Mutual Insurance., 428 S.E.2d 802 (Ga. Ct.
App. 1993). There, the court held that an insurer had a duty to
defend an action against insured homeowners brought by the
parents of a young boy who committed suicide in the insured’s
home.   The district court found this case inapposite because,
unlike O’Dell and Presidential Hotel, “[t]here is no theory of
law under which the Crook plaintiff’s son’s actions could be
imputed to the defendant homeowner.”  IFCO, 797 F. Supp. 2d at
665.


                                                 7
contractor,     Hathaway          Development         Corp.    (“HDC”),     sought       to

recover     damages     from       a   plumber        for     the    plumber’s        faulty

workmanship.         When default judgment was entered for HDC, HDC

sought to recover from the plumber’s insurer.

             As here, the policy at issue in Hathaway covered only

property    damage     arising         from   “occurrences.”            Likewise,       the

Hathaway policy also defined “occurrences” as “accidents.”                               In

that case,     the     insurer argued that, because the plumber had

performed the allegedly faulty work intentionally, the insured’s

conduct could not be deemed “accidental.”                      The Supreme Court of

Georgia     rejected       this    argument,        noting,     “a    deliberate       act,

performed negligently, is an accident if the effect is not the

intended or expected result; that is, the result would have been

different    had     the     deliberate       act     been    performed     correctly.”

Hathaway,    707     S.E.2d       at    372       (quoting    Lamar    Homes     v.    Mid-

Continent Cas. Co., 242 S.W.3d 1, 16 (Tex. 2007)).

             Here,     the     district           court     distinguished       Hathaway,

noting “the ‘intentional’ acts in Hathaway refer to negligent

acts deliberately done, as opposed to intentional tortious acts

. . . .”      IFCO, 797 F. Supp. 2d. at 670.                        Thus, the district

court concluded, “Hathaway is properly limited to the context of

deliberate acts that result in faulty workmanship.”                       Id.




                                              8
                                            II.

                                            A.

            It is appropriate for this court to certify a question

of state law to the state’s highest tribunal “when [we are]

required    to     address    a     novel    issue   of     local   law     which   is

determinative in the case before [us].”                    Grattan v. Bd. of Sch.

Commissioners of Baltimore City, 805 F.2d 1160, 1164 (4th Cir.

1986) (citing Lehman Bros. v. Schein, 416 U.S. 386 (1974)).

            Because this case is governed by Georgia law, we must

look to the applicable Georgia statutes to determine how to

proceed.    The Supreme Court of Georgia is authorized to receive

certified       questions    from    federal      courts    pursuant   to    Code   of

Georgia § 15-2-9(a).         That statute provides:

    The Supreme Court of this state, by rule of court, may
    provide that when it shall appear to the Supreme Court
    of the United States, to any circuit court of appeals
    or district court of the United States, or to the
    Court of Appeals or the District Court of the District
    of Columbia that there are involved in any proceeding
    before it questions of the laws of this state which
    are determinative of the case and there are no clear
    controlling precedents in the decisions of the Supreme
    Court of this state, such federal court may certify
    the questions of the laws of this state to the Supreme
    Court of this state for answers to the questions of
    state law, which certificate the Supreme Court of this
    state may answer by written opinion.4

            4
            In accordance with this statute, Supreme Court of
Georgia Rule 46 provides:

     When it shall appear to the Supreme Court of the
     United States, or to any District Court or Circuit
(Continued)
                                             9
                                       B.

           Here,   there    is    no   clear    controlling      precedent    from

Georgia appellate decisions.           Accordingly, certification to the

Supreme Court of Georgia is proper.

           First, we have found no controlling authority from the

Supreme Court of Georgia          on this       particular     question.      IFCO

contends Hathaway is on point.           It is not.          The district court

properly   noted   that    the    holding      in   Hathaway    is   confined    to

faulty workmanship cases.         See also Capital City Ins. Co., Inc.

v. Forks Timber Co., Inc., No. CV 511-039, 2012 WL 3757555 (S.D.

Ga. Aug. 28, 2012) (“Without some indication to the contrary—

either in the text of Hathaway or from the Georgia courts—this

Court reads Hathaway as limited to faulty workmanship cases.”).

Hathaway    considered      whether         defective        construction     work

deliberately   performed         constitutes        an     “accident”    under   a

substantially similar insurance policy.                  This is a fundamentally

different question than the one posed here, which                       requires a



    Court of Appeals of the United States, or to any state
    appellate court, that there are involved in any
    proceeding before it questions or propositions of the
    laws of this State which are determinative of said
    cause and there are no clear controlling precedents in
    the appellate court decisions of this State, such
    court may certify such questions or propositions of
    the laws of Georgia to this Court for instructions.


                                       10
determination of whether the intentionally tortious conduct of

an insured’s employees constitutes a covered “accident.”

            Second, none of the intermediate appellate court cases

cited by the district court are directly on point.                While each

case involved a coverage dispute, none of the cases involved a

situation where the court was asked to determine whether an

employee’s intentional conduct can be treated as an “accident”

in a subsequent negligence action against the employer.                    See

IFCO, 797 F. Supp. 2d at 664-65.

            Moreover,    the   cases      cited   below     are   inapposite

inasmuch as none of them dealt with a separation of insured’s

clause.    This is significant as this provision may require us to

approach     the    question   of      coverage    solely     from    IFCO’s

perspective.       Given this approach, we may conclude the thefts

were “accidents” because IFCO neither intended nor reasonably

could     have   foreseen   that    its     employees     would   engage   in

intentionally tortious conduct.5          See Hathaway, 707 S.E.2d at 371


     5
        American Home contends we should not consider the
separation of insureds argument because it was not raised until
IFCO’s Rule 59(e) motion.    This is inaccurate, as IFCO raised
this argument in response to American Home’s motion for summary
judgment.   Moreover, even if IFCO had not previously made this
specific argument, we could properly consider it because the
issue of whether coverage exists under the Policy is properly
before this court.    See Kamen v. Kemper Fin. Servs., 500 U.S.
90, 99 (1991) (“When an issue or claim is properly before the
court, the court is not limited to the particular legal theories
advanced by the parties, but rather retains the independent
(Continued)
                                     11
(“Although the policy does not define ‘accident,’ under Georgia

law, that term means an event which takes place without one's

foresight or expectation or design.”) (citations omitted).

           Third, even if we were to conclude that                 the cases

cited    below   are   on   point,    they    reach    different    results.

Specifically,    Presidential   Hotel       and   O’Dell   both   found   that

there was no coverage for the underlying intentional conduct

while Crook reached the opposite conclusion.6

           Accordingly, a question must be certified.



                                     III.
           Pursuant to Code of Georgia § 15-2-9(a) and Supreme

Court of Georgia Rule 46, we hereby ORDER that: (1) the question

stated above be certified to the Supreme Court of Georgia for

answer; (2) the Clerk of this Court forward to the Supreme Court

of Georgia, under the seal of this Court, a copy of this ORDER,

together with the original copies of the record before this

Court to the extent requested by the Supreme Court of Georgia;




power to identify and apply the proper construction of governing
law.”)
     6
       This divergence caused the Eleventh Circuit to remark,
“there   is  some   difficulty  in   reconciling the different
approaches taken in Crook and Presidential Hotel.”         SCI
Liquidating Corp. v. Hartford Fire Ins. Co., 181 F.3d 1210,
1216-17 (11th Cir. 1999) (applying Georgia law).


                                      12
and (3) the Clerk of this Court fulfill any request for all or

part of the record simply upon notification from the Clerk of

Court of the Supreme Court of Georgia.

           In certifying the above question, we note that our

phrasing   should   not   restrict   the   Supreme   Court   of   Georgia’s

consideration of this issue.         As the Eleventh Circuit recently

reiterated when certifying a similar question to the Supreme

Court of Georgia:

    [T]he particular phrasing used in the certified
    question is not to restrict the Supreme Court’s
    consideration of the problems involved and the issues
    as the Supreme Court perceives them to be in its
    analysis of the record certified in this case.     The
    latitude extends to the Supreme Court’s restatement of
    the issue or issues and the manner in which the
    answers are given, whether as a comprehensive whole or
    in subordinate or even contingent parts.

HDI-Gerling, 2012 WL 5834882, at *6 (quoting Swire Pac.

Holdings v. Zurich Ins. Co., 284 F.3d 1228, 1234 (11th Cir.

2002)).



                                                      QUESTION CERTIFIED




                                     13
