Court of Appeals of Wisconsin

March 24, 2022, Decided; March 24, 2022, Filed

Appeal No. 2021AP188

Reporter

2022 Wisc. App. LEXIS 244 *; 2022 WL 872204

JESSICA MABIN, PLAINTIFF-APPELLANT, v. ARTISAN AND TRUCKERS CASUALTY COMPANY, DEFENDANT-RESPONDENT, TALGAT KONKARGAEV, DUET INSURANCE GROUP AND NATIONAL LIABILITY & FIRE INSURANCE COMPANY, DEFENDANTS, C A S TRANSPORT, INC. AND NATIONAL CONTINENTAL INSURANCE COMPANY, DEFENDANTS-THIRD-PARTY PLAINTIFFS, v. NOVA LINES, INC. AND NATIONAL CONTINENTAL INSURANCE COMPANY, THIRD-PARTY DEFENDANTS.

Notice: THIS OPINION IS SUBJECT TO FURTHER EDITING. IF PUBLISHED, THE OFFICIAL VERSION WILL APPEAR IN THE BOUND VOLUME OF THE OFFICIAL REPORTS.

 THIS OPINION WILL NOT BE PUBLISHED. SEE WIS. STAT. RULE 809.23(1)(B)(4).

Prior History:  [*1] APPEAL from an order of the circuit court for Dane County: STEPHEN E. EHLKE, Judge. Cir. Ct. No. 2018CV2424.

Disposition: Affirmed.

Core Terms

coverage, subparagraph, semi-truck, circuit court, insurer, endorsement, amend, time of an accident, proof of financial responsibility, uninsured motor vehicle, summary judgment, insurance policy, driver, terms, equitable estoppel, parties, liability policy, motion for leave, motor carrier, motor vehicle, undisputed, bodily injury liability, uninsured vehicle, bad faith, interstate, ambiguity, Trucking, financial responsibility law, asserts, qualify

Case Summary

Overview

HOLDINGS: [1]-Where an insured was injured when a semi-trailer truck rear-ended her car, and where the insured filed a personal injury suit against the driver of the semi-truck and its owner as well as against her own insurer based on an uninsured motorist (UM) provision in her policy, the trial court properly dismissed the insured’s UM claim against her insurer because the policy did not provide UM coverage under these circumstances since the semi-truck was not an uninsured vehicle under the policy’s terms; [2]-In particular, the semi-trailer truck that rear-ended the insured’s car had an endorsement that was not a policy of insurance, but rather demonstrated financial responsibility for the vehicle in compliance with federal law, but there was no evidence that a bodily injury liability bond or policy applied to the semi-truck at the time of the accident.

Outcome

Decision affirmed.

LexisNexis® Headnotes

Civil Procedure > … > Summary Judgment > Entitlement as Matter of Law > Appropriateness

Civil Procedure > Appeals > Summary Judgment Review > Standards of Review

Civil Procedure > Judgments > Summary Judgment > Entitlement as Matter of Law

Civil Procedure > … > Summary Judgment > Entitlement as Matter of Law > Legal Entitlement

Civil Procedure > … > Summary Judgment > Entitlement as Matter of Law > Genuine Disputes

 Entitlement as Matter of Law, Appropriateness

Appellate courts independently review a grant of summary judgment using the same methodology as the circuit court. Summary judgment is appropriate if there are no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. Wis. Stat. § 802.08(2) (2019-20).

Administrative Law > Judicial Review > Standards of Review > De Novo Standard of Review

Governments > Legislation > Interpretation

Civil Procedure > Appeals > Standards of Review > De Novo Review

Civil Procedure > Appeals > Standards of Review > Questions of Fact & Law

 Standards of Review, De Novo Standard of Review

The interpretation and application of statutes and regulations present issues of law that are generally subject to de novo review.

Civil Procedure > Appeals > Standards of Review > De Novo Review

Insurance Law > Claim, Contract & Practice Issues > Policy Interpretation > Judicial Review

Insurance Law > Claim, Contract & Practice Issues > Policy Interpretation > Question of Law

Civil Procedure > Appeals > Standards of Review > Questions of Fact & Law

 Standards of Review, De Novo Review

Interpretation of an insurance policy presents issues of law that appellate courts review independently from determinations of the circuit court.

Insurance Law > Claim, Contract & Practice Issues > Claims Made Policies > Coverage

 Claims Made Policies, Coverage

Under Wisconsin’s coverage methodology, a court first examines the terms in the insurance policy addressing coverage to determine whether the alleged damages are covered.

Insurance Law > … > Policy Interpretation > Ambiguous Terms > Construction Against Insurers

 Ambiguous Terms, Construction Against Insurers

Ambiguities in insurance policies are construed against the insurer. If there is no ambiguity in the language of an insurance policy, it is enforced as written, without resort to rules of construction or applicable principles of case law.

Insurance Law > Claim, Contract & Practice Issues > Policy Interpretation

 Claim, Contract & Practice Issues, Policy Interpretation

Courts must avoid determining that there is coverage for risks that the insurer did not contemplate or underwrite and for which it did not receive a premium.

Insurance Law > … > Coverage > Compulsory Coverage > Motor Carriers

Transportation Law > Carrier Duties & Liabilities > Freight Brokers & Forwarders

 Compulsory Coverage, Motor Carriers

Interstate motor carriers must comply with federal law governing their financial responsibilities, and one permissible way for them to do this is to maintain an endorsement attached to an insurance policy. 49 C.F.R. § 387.7(d). Federal law applies to the operation and effect of the specified endorsement.

Insurance Law > Claim, Contract & Practice Issues > Policy Interpretation > Entire Contract

Insurance Law > Claim, Contract & Practice Issues > Policy Interpretation > Ordinary & Usual Meanings

 Policy Interpretation, Entire Contract

One rule of insurance policy interpretation is that courts attempt to construe a given term so that it aligns with the common and ordinary meaning it would have in the mind of a lay person. But another rule is that absent ambiguity, a an insurance policy is enforced as written, without resort to rules of construction or applicable principles of case law.

Insurance Law > … > Coverage > Compulsory Coverage > Proof of Financial Responsibility

 Compulsory Coverage, Proof of Financial Responsibility

The purpose of Wisconsin’s financial responsibility law is to provide a method of compensating third parties for damages that may result from future accidents caused by the negligence of an operator with a poor driving record. Stated broadly, under this state law it is a condition of a license to operate a motor vehicle that the operator obtain a liability insurance policy for the protection of persons or property injured through operation of such vehicles.

Civil Procedure > Judicial Officers > Judges > Discretionary Powers

Civil Procedure > … > Pleadings > Amendment of Pleadings > Leave of Court

 Judges, Discretionary Powers

Leave to amend in civil actions shall be freely given at any stage of the action when justice so requires. Wis. Stat. § 802.09(1) (2019-20). A circuit court’s decision whether to allow an amendment to a complaint when the party does not have a right to amend under § 802.09(1) is a matter left to the discretion of the court. Appellate courts affirm a circuit court’s discretionary decision if it applies a correct legal standard to the facts in a reasonable manner.

Insurance Law > Claim, Contract & Practice Issues > Estoppel & Waiver > Burdens of Proof

Insurance Law > Claim, Contract & Practice Issues > Estoppel & Waiver > Policy Coverage Issues

Insurance Law > Claim, Contract & Practice Issues > Estoppel & Waiver > Equitable Estoppel

 Estoppel & Waiver, Burdens of Proof

A dispute over the existence of insurance coverage cannot be resolved based on application of the doctrine of equitable estoppel against the purported insurer. The general rule is well established that the doctrine of waiver or estoppel based upon the conduct or action of the insurer or its agent is not applicable to matters of coverage. Estoppel can neither create an insurance contract where none exists, nor enlarge existing coverage.

Insurance Law > Liability & Performance Standards > Bad Faith & Extracontractual Liability > Elements of Bad Faith

 Bad Faith & Extracontractual Liability, Elements of Bad Faith

A bad faith claim in the insurance context is a tort separate and apart from a breach of contract per se, giving rise to a separate claim for damages. A plaintiff must show: (1) the absence of a reasonable basis for denying policy benefits, and (2) the insurer’s knowledge or reckless disregard of the lack of a reasonable basis for denying the claim. The first element is objective and the second is subjective.

Judges: Before Blanchard, P.J., Fitzpatrick, and Kloppenburg, JJ.

Opinion

P1 PER CURIAM. A semi-trailer truck rear-ended Jessica Mabin’s car. Mabin filed this personal injury action against the driver of the semi-truck and its owner. She also sued various insurance companies. This included a claim against her own insurer, Artisan and Truckers Casualty Company (Artisan), based on an uninsured motorist (UM) provision in her Artisan auto policy. The circuit court dismissed Mabin’s UM claim against Artisan, concluding that, under the circumstances, the policy does not provide UM coverage. On appeal, Mabin argues that she is entitled to UM coverage because the semi-truck was an “uninsured vehicle,” as defined in the policy. Based on our conclusions that there is no ambiguity in the pertinent language of the policy and that the semi-truck is not an “uninsured vehicle,” we agree with Artisan that Mabin is not entitled to UM coverage.

P2 Separately, Mabin appeals circuit court decisions to deny her motions for leave to amend her complaint to add new claims against Artisan based on theories of [*2]  equitable estoppel and bad faith. We reject Mabin’s arguments on these topics.

P3 Accordingly, we affirm the challenged decisions of the circuit court and the dismissal of Mabin’s action against Artisan.

BACKGROUND

P4 The semi-truck rear-ended Mabin’s car in September 2015 in Dane County. Mabin filed this personal injury suit in the circuit court against the truck driver, who identified himself on the scene as Talgat Konkargaev, and CAS Transport, Inc. (CAS), the owner of the semi-truck. Mabin also named as defendants three insurance companies. She sued two of them—National Continental Insurance Company (National Continental) and National Liability & Fire Insurance Company (National Liability)—as alleged insurers of CAS or Konkargaev with potential exposure in this case. Mabin also sued Artisan, as pertinent here based on an Artisan policy held by Mabin that provided for UM coverage.¹

P5 We skip over, as irrelevant to this appeal, procedural history regarding: (1) a third-party complaint that CAS and National Continental filed against Nova Lines, Inc. (Nova) and; (2) decisions by the circuit court to grant motions for summary judgment in favor of CAS, National Continental, National Liability, [*3]  and Nova, dismissing each from this action. As established in a July 16, 2021 order of this court, the scope of this appeal is limited to the decisions of the circuit court granting Artisan’s motion for summary judgment based on the absence of UM coverage, dismissing Artisan from the case, and denying Mabin’s motions for leave to amend her complaint against Artisan based on theories of equitable estoppel and bad faith.²

P6 Mabin moved for partial summary judgment and for leave to amend her complaint as to Artisan, and followed this up with a “revised memorandum” to the circuit court on these same issues. Mabin made three arguments, each matching the arguments she now makes on appeal. We now briefly summarize them.

P7 First, Mabin argued that she is entitled to summary judgment in her favor because the semi-truck qualifies as “an uninsured motor vehicle as defined under” Mabin’s Artisan policy. Second, she argued that the circuit court should permit her to amend the complaint to add a claim of equitable estoppel against Artisan. Her theory was that, due to Artisan’s actions and inactions, it “is estopped from now claiming that there is no UM coverage” on the grounds that Artisan was then [*4]  asserting. Third, she argued that the court should permit her to amend the complaint to add a claim of bad faith against Artisan, “based upon its breach of its duty to [Mabin] to act in good faith.”

P8 Artisan moved for summary judgment seeking dismissal of all claims against it, advancing the same arguments it now makes on appeal. In pertinent part Artisan argued that the UM provisions in the policy do not apply here because Mabin “was not involved in an accident with an ‘uninsured motor vehicle.’” Regarding Mabin’s motions for leave to amend the complaint, Artisan contended that leave was not appropriate because any theories of estoppel or bad faith would fail on multiple grounds.

P9 After considering briefing and oral arguments of the parties, the circuit court denied Mabin’s motions for partial summary judgment and for leave to amend the complaint, and granted Artisan’s motion for summary judgment, dismissing it from the case. Mabin appeals.

DISCUSSION

P10 We first address the UM coverage issue and then turn to the circuit court’s denial of Mabin’s motions for leave to amend the complaint.

I. UM Coverage

A. Legal Standards

  the same methodology as the circuit court. Pertzsch v. Upper Oconomowoc Lake Ass’n, 2001 WI App 232, ¶7, 248 Wis. 2d 219, 635 N.W.2d 829. Summary judgment is appropriate if there are no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. Wis. Stat. § 802.08(2) (2019-20).³

P12 The interpretation and application of statutes and regulations present issues of law that are generally subject to de novo review. Wisconsin Power & Light Co. v. PSC, 2009 WI App 164, ¶18, 322 Wis.2d 501, 777 N.W.2d 106.

P13 Interpretation of an insurance policy presents issues of law that we review independently from determinations of the circuit court. Folkman v. Quamme, 2003 WI 116, ¶12, 264 Wis. 2d 617, 665 N.W.2d 857.

P14 Under Wisconsin’s coverage methodology, a court first examines the terms in the policy addressing coverage to determine whether the alleged damages are covered. American Family Mut. Ins. Co. v. American Girl, Inc., 2004 WI 2, P24, 268 Wis. 2d 16, 673 N.W.2d 65. In this case, we end with that first step, because we determine that there is no grant of coverage and the parties do not discuss any exclusions or exceptions to exclusions in the Artisan policy. See id. (addressing the potential for second or third steps in the methodology).

  Id., ¶13.

P16 Courts must avoid determining that there is coverage for risks that the insurer did not contemplate or underwrite and for which it did not receive a premium. American Family Mut. Ins. Co., 2004 WI 2, 268 Wis. 2d 16, ¶23, 673 N.W.2d 65.

B. Additional Background

P17 The following additional background is undisputed and pertinent to various arguments by the parties on the UM coverage issue. Some of it is also pertinent to the two other issues addressed below.

P18 At the time of the accident, the semi-truck had been leased by its owner, CAS, to Bright Trucking Company. Bright, in turn, had entered into a “Broker-Carrier Transportation Agreement” with Nova, under which Bright agreed to pick up and deliver a load of goods for a Nova customer using the semi-truck. Thus, the state of affairs when the semi-truck struck Mabin’s car was that Bright was the interstate motor carrier that operated the semi-truck, which was on lease from CAS and carrying a load for a customer of Nova.

P19 A state trooper responded to the accident scene, conducted an investigation that included taking photographs, and prepared a report that became available to the public. This evidence revealed that two signs were attached to the driver-side door of the semi-truck tractor: “LEASED TO NOVA [*7]  LINES” and “BRIGHT TRUCKING US DOT #2783363 WOODRIDGE, IL.”⁴

P20 At the time of the accident, CAS and Nova each had liability insurance policies with National Continental and Bright had a policy with National Liability. In order to distinguish between the two separate policies that two different entities had with the same insurer, we refer to the CAS policy as National Continental-CAS policy and the Nova policy as the National Continental-Nova policy.

P21 Mabin filed a liability claim with National Continental-CAS, which was denied. National Continental-CAS took the position that the driver “did not qualify as an insured” under the policy and that he “was not working for” CAS at the time of the accident. In contrast, Mabin did not pursue claims based on the National Continental-Nova policy or Bright’s National Liability policy.⁵

P22 Also at the time of the accident, Mabin had an Artisan auto insurance policy that includes UM coverage with limits of $500,000 per accident. Part III, paragraph (a), of the policy provides in pertinent part:

If you pay the premium for this coverage, we will pay for damages that an insured person is legally entitled to recover from the owner or operator [*8]  of an uninsured motor vehicle because of bodily injury:

1. sustained by an insured person;

2. caused by an accident; and

3. arising out of the ownership, maintenance, or use of an uninsured motor vehicle.

“Uninsured motor vehicle” is defined in paragraph (d) of Part III as follows:

“Uninsured motor vehicle” means a land motor vehicle or trailer of any type:

a. to which no bodily injury liability bond or policy applies at the time of the accident and the owner or operator has not furnished proof of financial responsibility for the future;

b. to which a bodily injury liability bond or policy applies at the time of the accident, but the bonding or insuring company:

(i) denies coverage; or

(ii) is or becomes insolvent.

c. that is an unidentified motor vehicle involved in a hit-and-run accident with an insured person; or

d. that is a phantom motor vehicle, if all of the following apply [listing three circumstances irrelevant to this appeal] ….

P23 We now explain briefly how one aspect of the UM provision in Mabin’s Artisan policy causes the parties to discuss federal financial responsibility statutes and regulations that govern interstate motor carriers. Central to some arguments is one phrase, emphasized [*9]  in the following, from subparagraph a. of paragraph III(d) of the Artisan policy: “‘Uninsured motor vehicle’ means a land motor vehicle … to which no bodily injury liability bond or policy applies at the time of the accident and the owner or operator has not furnished proof of financial responsibility for the future.” for Motor Carrier Policies of Insurance for Public Liability Under Sections 29 and 30 of the Motor Carrier Act of 1980,” and is referred to as an MCS-90 endorsement. See 49 C.F.R. § 387.7(d).

P24 In introducing the concept of the federal proof of financial responsibility law and the MCS-90 endorsement we make the following basic points. As the parties here agree, an MCS-90 endorsement is not a policy of insurance that provides coverage for a particular vehicle or set of vehicles. Instead, it demonstrates the financial responsibility of the particular interstate [*10]  motor carrier that is named in the insurance policy to which the endorsement is attached. See 49 C.F.R. §§ 387.5, 387.15; Canal Ins. Co. v. Distribution Servs., Inc., 320 F.3d 488, 490 (4th Cir. 2003) (“‘the primary purpose of the MCS-90 endorsement is to assure that injured members of the public are able to obtain judgment from negligent authorized interstate carriers,’” and it “creates a suretyship by the insurer to protect the public” (emphasis added; alteration and quoted source omitted)).

P25 It is undisputed that an MCS-90 endorsement was attached to the National Continental-CAS policy, to the National Continental-Nova policy, and to Bright’s National Liability policy.

P26 As discussed in more detail below, Mabin contends that she is entitled to coverage under the UM provision of the Artisan policy because National Continental-CAS’s denial of her claim caused the semi-truck to qualify as an “uninsured motor vehicle” under the Artisan policy.

C. Analysis

P27 We now explain why we reject Mabin’s arguments that the semi-truck fits a definition of an “uninsured motor vehicle” contained in the UM provision of the Artisan policy, based strictly on our construction of the pertinent policy terms.⁶ Based on that conclusion, we affirm the circuit court on the UM coverage issue.

P28 Subparagraphs a.-d. of paragraph (d) of Part III of the Artisan policy are stated in the disjunctive, and therefore Mabin would establish that the semi-truck was an “uninsured vehicle” if she could show that any subparagraph applies. The primary dispute between the parties involves subparagraph b. Mabin adds limited argument based on subparagraph a., but she makes no argument at all based on subparagraphs c. or d., as quoted more completely supra in ¶22. Given Mabin’s emphasis, we now address in turn subparagraphs b. and a., explaining why we conclude that neither provision applies here.

1. Subparagraph b.

P29 Subparagraph b. defines “[u]ninsured motor vehicle” using a two-part test. Each part must be met in order for a motor vehicle (here, the semi-truck) to be deemed “uninsured,” because the parts are separated by a conjunctive “but.” First, the vehicle must be one “to which a bodily injury liability bond or policy applies at the time of the accident.” Second, the bonding or insuring company must either deny coverage to the person claiming UM coverage, or else the company must be “insolvent” or become so. (Neither party suggests that company [*12]  insolvency is an issue in this case.)

P30 We agree with Artisan that the following aspect of undisputed evidence is dispositive in its favor under a proper interpretation of the terms of subparagraph b., which are not ambiguous. It is undisputed that neither the semi-truck nor its driver at the time of the accident is listed on any insurance policy held by any of the three interstate motor carriers that have been identified as having potential liability in the accident. Mabin acknowledges this undisputed fact in her briefing on appeal: “CAS Transport, Inc., Nova Lines, Inc., and Bright Trucking Company, Inc. each had their own insurance polic[ies], but neither the driver nor the semi was listed on any of the policies.” For this reason, Mabin cannot meet the first part of the two-part test in subparagraph b., because she lacks evidence that the semi-truck was one “to which a bodily injury liability bond or policy applies at the time of the accident.”

P31 It is true that Mabin was denied coverage by National Continental-CAS. She contends that this denial alone was sufficient to satisfy the subparagraph b. test. This is incorrect because, as Mabin concedes, the National Continental-CAS [*13]  policy did not apply to the semi-truck or to the driver. As Artisan argues, the mere fact of this denial did not transform the semi-truck into an “uninsured vehicle” under the terms of subparagraph b.

P32 Mabin argues that hers is a “basic,” “very typical” UM claim, because she was an “insured” “involved in a motor vehicle accident, the at-fault driver’s insurer denie[d] coverage for the accident, and the insured file[d] an uninsured motorist claim under its own policy.” But it is a false premise that in this case “the at-fault driver’s insurer denie[d] coverage.” Mabin is referring to denial of coverage by National Continental-CAS. We have just explained why National Continental-CAS is not “the at-fault driver’s insurer.” Further, as noted above, Mabin did not pursue claims based on either the National Continental-Nova policy or on Bright’s National Liability policy, and therefore there could have been no denial under either of those policies.

P33 Mabin argues that “a reasonable person in her position would understand,” based on the UM provision in the Artisan policy, “that the denial of liability coverage by [National Continental-CAS] triggered Ms. Mabin’s uninsured motorist coverage [*14]  under her policy.” Mabin is correct that ” to the pertinent terms in subparagraph b. would reach a different conclusion. Cieslewicz, 84 Wis. 2d at 98.

P34 At least at points in her briefing, Mabin seems to suggest an alternative argument that, even if the unambiguous terms of subparagraph b. dictate that there could be no UM coverage on the undisputed facts, the steps that she took (through counsel) to investigate the facts and consider the potential pursuit of claims in the wake of the accident should have been sufficient to trigger UM coverage because those were the actions of a reasonable insured. At least this would seem to be the implication of her many assertions about what information [*15]  was or was not readily available to her when she was making decisions about what claims to pursue. For example, she asserts (without providing a record citation) that, at some unidentified time, she “did not know about the MCS-90 endorsement[s]” attached to the liability policies of Bright and Nova “and did not know about Nova Lines, Inc. or the Bright Trucking Company.” However, we do not discern in any of these references to information that she claims to have lacked at various points a basis to conclude that UM coverage is available to her under subparagraph b., or under any other policy term referenced by the parties. Put differently, Mabin fails to identify evidence in the summary judgment materials related to the availability of information that could have any effect on the simple analysis we have just given explaining why, based on the undisputed facts and the unambiguous terms, subparagraph b. does not apply here to qualify the semi-truck as an “uninsured vehicle.”

P35 Mabin asserts that she should not have to “prove a negative” to qualify for UM coverage, but fails to explain this assertion in terms of policy language and we dismiss this as an undeveloped argument. See State [*16]  v. Pettit, 171 Wis. 2d 627, 646, 492 N.W.2d 633 (Ct. App. 1992) (appellate courts may decline to address undeveloped and inadequately briefed issues).

2. Subparagraph a.

P36 For the most part, Mabin relies on subparagraph b. Indeed, she states in her opening brief that her “argument is focused on” subparagraph b. However, she may intend to add one or more arguments relying on subparagraph a., related to the federal financial responsibility law referenced above.⁷ We now explain why we fail to discern a developed argument by Mabin that could render the semi-truck an “uninsured vehicle” under subparagraph a.

P37 “Uninsured motor vehicle” is defined in subparagraph a. by a different two-part test. Each part of the subparagraph a. test must be met, because the parts are separated by the conjunctive “and.” First, the vehicle must be one “to which no bodily injury liability bond or policy applies at the time of the accident.” Second, the “owner or operator” of the vehicle “has not furnished proof of financial responsibility for the future.”

P38 Mabin makes references to the second part of the subparagraph a. test. She asserts that the meaning of the phrase “has not furnished proof of financial responsibility for the [*17]  future” means that Artisan was required to provide Mabin “with proof of financial responsibility for the future.” To this assertion she adds that “only a lawyer would think that [the second part of the subparagraph a. refers to] the filing of a Form BMC 91X Certificate of Liability Insurance with the Federal Highway Administration,” meaning the filing of a form related to an MCS-90 endorsement. We assume without deciding that Mabin raises potential questions about how, precisely, proof of financial responsibility is to be “furnished” under the terms of the UM policy. However, until her reply brief, she does not develop a discernable argument based on the policy terms, as opposed to simply raising questions. In the reply brief she may intend to indicate that her point is that the reference in subparagraph a. to “proof of financial responsibility for the future,” is, in her words, “likely” a reference not to federal financial responsibility laws and the use of MCS-90 endorsements but instead to Wis. Stat. §§ 344.24 – 344.579. This is a generic citation to the many sections of Chapter 344 (“Vehicles — Financial Responsibility”), including subchapter III, which addresses aspects of “Proof Of Financial Responsibility [*18]  For the Future.”

operator with a poor driving record.” Cardinal v. Leader Nat. Ins. Co., 166 Wis. 2d 375, 390, 480 N.W.2d 1 (1992). Stated broadly, under this state law it is a condition of a license to operate a motor vehicle that the operator obtain a liability insurance policy for the protection of persons or property injured through operation of such vehicles. See Hechimovich v. Acuity, 2014 WI App 14, ¶¶6-8, 352 Wis. 2d 513, 842 N.W.2d 493; Wis. Stat. § 344.33 (defining required “motor vehicle liability policy”).

P40 With that background, Mabin does not develop an argument that the second part of the subparagraph a. test has been satisfied here by proof that the “owner or operator” of the semi-truck “has not furnished proof of financial responsibility for the future” because the “owner or operator” did not comply with Wisconsin’s financial responsibility law, as opposed to complying with the federal financial responsibility law. As would minimally be required for an argument along these or similar lines, she does not address in this context (or explain why she need not address) the uncontested facts that: (1) CAS, Bright, and Nova [*19]  all had liability policies (which was, after all, a necessary precondition to having MCS-90 endorsements, which are attached to liability policies); (2) Mabin made no claims against either of the potentially responsible motor carriers Bright or Nova. And stepping back, Mabin does not support her assertion that, contrary to the unambiguous terms of the policy that the furnishing of proof is to be made by the “owner-operator,” the furnishing of proof is to be made by Artisan to its insured.

II. Motions For Leave To Amend

P41 Mabin argues that the circuit court should have granted her motions for leave to amend her complaint to add claims against Artisan based on theories of equitable estoppel and bad faith.

P42 As pertinent here,   not erroneously exercise its discretion in determining that justice did not require amendment on either proposed theory.

A. Equitable Estoppel

P43 We need not summarize the law governing the doctrine of equitable estoppel or Mabin’s particular theory of equitable estoppel. This is because we resolve this issue based on Mabin’s concession to one of Artisan’s arguments, applying settled Wisconsin case law, which is dispositive on this issue. This case law establishes that   failure to respond in reply brief to argument made in response brief may be taken as concession). Based on this concession, the circuit court could not have erroneously exercised its discretion on this issue.

B. Bad Faith

er se,” giving rise to a separate claim for damages. Anderson v. Continental Ins. Co., 85 Wis. 2d 675, 686, 271 N.W.2d 368 (1978). A plaintiff must show: (1) the absence of a reasonable basis for denying policy benefits, and (2) the insurer’s knowledge or reckless disregard of the lack of a reasonable basis for denying the claim. Brethorst v. Allstate Prop. and Cas. Ins. Co., 2011 WI 41, ¶26, 334 Wis. 2d 23, 798 N.W.2d 467. The first element is objective and the second is subjective. Weiss v. United Fire and Cas. Co., 197 Wis. 2d 365, 377, 541 N.W.2d 753 (1995).

P45 We conclude that the circuit court did not erroneously exercise its discretion on this issue for the following reason. As Artisan notes, in denying the motion for leave to amend to add a bad faith claim, the circuit court made the basic point that “there is no basis for the UM coverage here,” and therefore a bad faith claim against Artisan would be “ill-founded in light of the fact [that] I have concluded there is no UM coverage.” That is, the circuit court concluded that, viewed in an objective manner, Mabin could not show the absence of a reasonable [*22]  basis for denying policy benefits, given the fact that there is no basis for coverage. Mabin fails to develop an argument (and provides no argument at all on this issue in her reply brief) that could provide a sufficient basis for this court to reverse the circuit court’s exercise of discretion on this issue, given our conclusion that the circuit court properly determined that there is no UM coverage under the policy.⁸ Mabin fails to persuade us that the circuit court failed to apply correct legal standards to the facts in a reasonable manner.

CONCLUSION

P46 For all of these reasons, we affirm the circuit court rulings denying Mabin’s request for a determination of UM coverage and her motions for leave to amend her complaint, and dismissing her action against Artisan.

By the Court.—Order affirmed.

This opinion will not be published. See Wis. Stat. Rule 809.23(1)(b)(5).

End of Document

---

¹ Mabin initially claimed that Artisan was an insurer of CAS, but she does not pursue that position in this appeal. She discusses Artisan exclusively in its role as her own insurer, and she seeks exclusively to establish a right to UM coverage under her Artisan policy.

² In this appeal, Mabin challenges aspects of the circuit court’s reasoning in dismissing National Continental on summary judgment, but this is improper argument under our prior order and accordingly we ignore those challenges.

³ All references to the Wisconsin Statutes are to the 2019-20 version unless otherwise noted.

⁴ Regarding the “DOT number” on one of these signs, federal regulations governing commercial motor vehicles establish the required contents and modes of display for “identification numbers issued by” the Federal Motor Carrier Safety Administration, to be “preceded by the letters ‘USDOT,’” including signage involving leased vehicles. See 49 C.F.R. § 390.21 (2020). All references to the Code of Federal Regulations are to the 2020 edition unless otherwise noted.

⁵ To clarify, Mabin initially sued National Liability based on a lapsed policy that National Liability had issued to CAS (entirely separate from the policy issued to Bright), but Mabin did not mention Bright in the operative complaint and she does not now assert that there is evidence that she ever pursued a claim based on Bright’s National Liability policy.

⁶ Given our dispositive interpretation of pertinent policy terms on the UM coverage issue, we need not and do not reach what Artisan may intend to present as a broader argument for affirming the circuit court. Artisan’s broader argument might be that, based on federal or state statutes and regulations, no one in Mabin’s position could possibly be entitled to UM coverage in any “trucking accident case that involves no less than three interstate motor carriers, each with a liability policy including an MCS-90 endorsement.” This includes the arguments made by each party about the significance and persuasive value of a California state court opinion. See Global Hawk [*11]  Ins. Co. v. Century-National Ins. Co., 203 Cal. App. 4th 1458, 138 Cal.Rptr.3d 363 (Cal. Ct. App. 2012) (holding that the liability insurer of an interstate motor carrier that rear-ended a garbage truck was required to reimburse a UM insurer of the owner of the garbage truck for benefits paid by the UM insurer based on the carrier’s MCS-90 endorsement). The facts in Global Hawk differ in numerous ways from the facts here and, at least so far as the current arguments of Artisan and Mabin suggest, the reasoning of the California court could be persuasive authority only regarding what Artisan may intend as the broader argument, which we do not reach.

⁷ Mabin’s subparagraph a. argument is arguably developed primarily in her reply brief, but we do not reject it on that basis. See Roy v. St. Lukes Med. Ctr., 2007 WI App 218, ¶30 n.6, 305 Wis. 2d 658, 741 N.W.2d 256 (appellants are not entitled as of right to raise arguments for the first time in reply briefs).

⁸ Before concluding, we note one fundamental shortcoming in Mabin’s appellate briefing. In multiple spots, Mabin’s counsel provides as record authority for a proposition a citation to a set of pages in the appellant’s appendix, without providing either a specific page or a record citation. Both are required. See Roy, 305 Wis. 2d 658, ¶10 n.1. We remind counsel for Mabin that judges and staff of this high volume court, as well as opposing counsel, are entitled to expect briefing by an attorney that follows the basic rules of appellate procedure.

United States District Court for the Southern District of Georgia, Savannah Division

March 31, 2022, Decided; March 31, 2022, Filed

CASE NO. CV419-231

Reporter

2022 U.S. Dist. LEXIS 60232 *

TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, Plaintiff, v. TT CLUB MUTUAL INSURANCE LTD., Defendant. TT CLUB MUTUAL INSURANCE LTD., Counterclaimant, v. TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, Counterclaim Defendant.

Core Terms

Attach, insured, coverage, underlying lawsuit, Settlement, provide coverage, pro-rata, parties, argues, endorsement, primary coverage, exhausted, primary policy, policies, Chassis, summary judgment, limits, escape clause, Non-Owned, clauses, excess clause, summary judgment motion, counterclaims, declaratory relief, defense costs, triggered, contends, cases, equal shares, defending

Counsel:  [*1] For Travelers Property Casualty Company of America, Plaintiff: Chandler L. Smith, McMickle, Kurey & Branch, LLP, Alpharetta, GA; Scott W. McMickle, LEAD ATTORNEY, McMickle, Kurey & Branch, LLP, Alpharetta, GA.

For TT Club Mutual Insurance Ltd., Defendant, Counter Claimant: Tyler Bryant Walker, LEAD ATTORNEY, Fields Howell, LLP, Atlanta, GA.

For Travelers Property Casualty Company of America, Counter Defendant: Chandler L. Smith, Scott W. McMickle, LEAD ATTORNEYS, McMickle, Kurey & Branch, LLP, Alpharetta, GA.

Judges: WILLIAM T. MOORE, JR., UNITED STATES DISTRICT JUDGE.

Opinion by: WILLIAM T. MOORE, JR.

Opinion

ORDER

Before the Court is Plaintiff/Counterclaim Defendant Travelers Property Casualty Company of America’s Motion for Summary Judgment (Doc. 25), and Defendant/Counterclaimant TT Club Mutual Insurance’s Motion for Summary Judgment (Doc. 30). Both motions have been opposed. (Docs. 31, 38) For the following reasons, both motions are GRANTED IN PART and DENIED IN PART.

BACKGROUND ¹

I. THE UNDERLYING LAWSUITS

This declaratory judgment action and the resulting counterclaims involve a priority of coverage dispute between two insurers regarding settlement payments made as a result of a serious motor vehicle accident. [*2]  (Doc. 25, Attach. 2 at ¶ 1; Doc. 31, Attach. 1 at 1.) The underlying accident occurred on May 19, 2015, when a Georgia Freightways employee fell asleep at the wheel of his tractor-trailer while driving along Interstate-16 in Pooler, Georgia, and crashed into several vehicles. (Doc. 30, Attach. 10 at ¶ 1; Doc. 39 at ¶ 1.) The collision killed five people and seriously injured a sixth. (Doc. 30, Attach. 10 at ¶ 2; Doc. 39 at ¶ 2.)

Six lawsuits (the “Underlying Lawsuits”) were filed in the State Court of Chatham County on behalf of the individuals killed or injured in the accident. (Doc. 30, Attach. 10 at ¶ 7; Doc. 39 at ¶ 7.) The Underlying Lawsuits initially included as defendants the truck driver; Georgia Freightways; and Great West Casualty Company (“Great West”), the motor carrier insurer for Georgia Freightways. (Doc. 30, Attach. 10 at ¶ 8; Doc. 39 at ¶ 8.) The plaintiffs in the Underlying Lawsuits later added CMA-CGM (America), LLC (“CMA”), a transportation and shipping company, as a defendant under the theory that CMA was liable for the accident because CMA had loaned or leased the intermodal container chassis involved in the accident to Georgia Freightways. (See, e.g., Doc. 30, [*3]  Attach. 1 at 75-76; Doc. 30, Attach. 10 at ¶¶ 5, 9 Doc. 39 at ¶¶ 5, 9.)

Great West initially defended CMA in the Underlying Lawsuits pursuant to a $1,000,000 policy issued by Great West to Georgia Freightways (“the Great West Policy”). (Doc. 25, Attach. 2 at 13; Doc. 31, Attach. 1 at ¶ 3; Doc. 30, Attach. 3 at 4.) In addition to the coverage provided by the Great West Policy, CMA was insured under three policies relevant to this action. Travelers issued two of the policies: a Travelers Marine General Liability policy, policy number ZOL-14R96169-14ND, with a $1,000,000 liability limit (the “MGL Policy”) and a Travelers Bumbershoot Policy, policy number ZOB-14R96157-14ND, with a $10,000,000 liability limit (the “Bumbershoot Policy”).² (Doc. 25, Attach. 2 at ¶ 6; Doc. 31, Attach. 1 at ¶ 6.) TT Club issued the third relevant policy, a TT Club policy, certificate number 93572/2014/001, with a $30,000,000 limit (“TT Club Policy”).³ (Doc. 25, Attach. 2 at ¶ 6; Doc. 31, Attach. 1 at ¶ 6.)

Due to the severity of the claims in the Underlying Lawsuits, TT Club agreed to participate with Great West in CMA’s defense, believing that the TT Club Policy would likely be reached if the Great West policy [*4]  were the only other coverage available to CMA. (Doc. 30, Attach. 10 at 1 23; Doc. 30, Attach. 3 at 4.) At the time, TT Club contends it believed that the Great West policy was the only other insurance available to CMA. (Doc. 30, Attach. 10 at ¶ 22; Doc. 39 at ¶ 22.) TT Club agreed to pay 45 percent of the legal costs incurred during CMA’s defense, with Great West paying the remaining 55 percent. (Doc. 30, Attach. 10 at ¶ 24; Doc. 39 at ¶ 24.)

On June 22, 2018, notice of the Underlying Lawsuits was tendered to Travelers for the defense and indemnity of CMA. (Doc. 30, Attach. 10 at ¶ 32; Doc. 39 at ¶ 32.) In response, Travelers

issued a reservation of rights letter to CMA. (Doc. 30, Attach. 10 at ¶ 33; Doc. 39 at ¶ 33.) Travelers’ letter acknowledged that the MGL Policy provided coverage for the Underlying Lawsuits under its Non-Owned and Hired Auto Endorsement but stated that the “coverage is solely excess of and does not contribute with any other insurance which may be applicable to the loss that is covered by the Endorsement.” (Doc. 1, Attach. 2 at 6.) Travelers also informed CMA that the “Bumbershoot Policy is excess over the Primary Non-Owned and Auto Coverage.” (Id.) Additionally, [*5]  Travelers requested that CMA’s assigned defense counsel include Travelers on their mailing list for all further updates on the Underlying Lawsuits. (Id. at 7.) Travelers maintained communications with CMA’s defense counsel through the pendency of the Underlying Lawsuits; however, Travelers did not formally participate in CMA’s defense and did not pay any of the defense costs incurred in CMA’s defense. (Doc. 30, Attach. 10 at ¶¶ 36-37, 48; Doc. 39 at ¶¶ 36-37, 48.)

On September 10, 2019, representatives for Travelers and TT Club attended a global mediation of the Underlying Lawsuits. (Doc. 30, Attach. 10 at I 38; Doc. 39 at ¶ 38.) The Underlying Lawsuits settled at mediation for $6,000,000 (the “Settlement”), with Great West paying the first $1,000,000.⁴ (Doc. 30, Attach. 10 at ¶ 39; Doc. 39 at ¶ 39.) TT Club and Travelers agreed to fund the remaining $5,000,000 in equal shares while reserving their respective rights to seek contribution from the other. (Doc. 30, Attach. 10 at ¶ 40; Doc. 39 at ¶ 40.)

II. PROCEDURAL HISTORY

On September 13, 2019, Travelers filed its Petition for Declaratory Judgment in this Court pursuant to 28 U.S.C. § 2201. (Doc. 1.) Travelers petitions the Court for a judgment declaring [*6]  that the TT Club Policy is primary and applicable before either of Travelers’ policies and that Travelers is entitled to contribution of any amounts paid towards the Settlement. (Id. at ¶ 28.) Alternatively, Travelers seeks a judgment declaring that the MGL Policy and TT Club Policy are co-primary and share funding of the Settlement on a pro-rata basis, with Travelers entitled to recover amounts paid to fund the Settlement in excess of the total applicable to the MGL Policy. (Id. at ¶ 29.) In response, TT Club brings counterclaims against Travelers for contribution and/or indemnity from Travelers for the amounts TT Club paid to fund the Settlement and the amounts TT Club paid in defense of CMA in the Underlying Lawsuits. (Doc. 12 at ¶¶ 28, 32.) Now, the parties have brought cross-motions for summary judgment on these claims. (Docs. 25, 30.)

STANDARD OF REVIEW

According to Federal Rule of Civil Procedure 56(a) “[a] party may move for summary judgment, identifying each claim or defense—or the part of each claim or defense—on which summary judgment is sought.” Such a motion must be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” [*7]  Fed. R. Civ. P. 56(a). The “purpose of summary judgment is to ‘pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial[.]’” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538 (1986) (quoting Fed. R. Civ. P. 56(e) advisory committee’s note to 1963 amendment). Summary judgment is appropriate when the nonmoving party “fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 2552, 91 L. Ed. 2d 265 (1986). The substantive law governing the action determines whether an element is material. DeLong Equip. Co. v. Wash. Mills Abrasive Co., 887 F.2d 1499, 1505 (11th Cir. 1989).

As the Supreme Court explained:

[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.

Celotex, 477 U.S. at 323, 106 S. Ct. at 2553 (quotation marks omitted). The burden then shifts to the nonmoving party to establish, by going beyond the pleadings, that there is a genuine issue concerning facts material to its case. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). The Court must review the evidence and all reasonable factual inferences arising from it [*8]  in the light most favorable to the nonmoving party. Matsushita, 475 U.S. at 587-88, 106 S. Ct. at 1356. However, the nonmoving party “must do more than simply show that there is some metaphysical doubt as to the material facts.” Id. at 586, 106 S. Ct. at 1356 (citations omitted). A mere “scintilla” of evidence or simply conclusory allegations will not suffice. See, e.g., Tidwell v. Carter Prods., 135 F.3d 1422, 1425 (11th Cir. 1998). Nevertheless, where a reasonable fact finder may “draw more than one inference from the facts, and that inference creates a genuine issue of material fact, then the court should refuse to grant summary judgment.” Barfield v. Brierton, 883 F.2d 923, 933-34 (11th Cir. 1989) (citing Samples v. City of Atlanta, 846 F.2d 1328, 1330 (11th Cir. 1988)).

When a court considers cross-motions for summary judgment, the standard of review “does not differ from the standard applied when one party files a motion, but simply requires a determination of whether either of the parties deserves judgment as a matter of law on the facts that are not disputed.” GEBAM, Inc. v. Inv. Realty Series I, LLC, 15 F. Supp. 3d 1311, 1315-16 (N.D. Ga. 2013) (citing Am. Bankers Ins. Grp. v. United States, 408 F.3d 1328, 1331 (11th Cir. 2005)); see also United States v. Oakley, 744 F.2d 1553, 1555 (11th Cir. 1984) (per curiam) (“Cross-motions for summary judgment will not, in themselves, warrant the court in granting summary judgment unless one of the parties is entitled to judgment as a matter of law on facts that are not genuinely disputed.” (quotation omitted)).

ANALYSIS

The parties advance several arguments in support of their respective motions for summary judgment. [*9]  In its motion for summary judgment on its petition and TT Club’s counterclaims, Travelers argues that the Bumbershoot Policy is a “true umbrella” policy and, therefore, is not reached because the MGL Policy and the TT Club Policy, which are both primary policies, are not exhausted by the Settlement payout. (Doc. 25, Attach. 1 at 13.) Travelers also argues that the Non-Owned Endorsement in the MGL Policy provides true excess coverage, rather than primary coverage with an “other insurance” clause. (Id. at 14-15.) Since the TT Club Policy provides primary coverage to CMA through its Third-Party Clause and Chassis Clause, Travelers argues the MGL Policy is not reached as the Settlement amount is within the limits of the TT Club Policy. (Id. at 16-19.) Alternatively, if the Court finds the policies are co-primary, Travelers argues that the MGL Policy and the TT Club Policy would contribute to the Settlement on a pro-rata basis proportional to their relative policy limits. (Id. at 19-21.) Lastly, Travelers argues that TT Club is not entitled to reimbursement for costs of providing defense to CMA because the services were provided on a voluntary basis. (Id. at 22-24.)

In opposition to Travelers’ motion for [*10]  summary judgment, TT Club argues that Travelers lacks standing to seek declaratory relief because it has already contributed to the Settlement. (Doc. 31 at 8.) Then, in support of its motion for summary judgment on its counterclaims, TT Club argues that the MGL Policy and the Bumbershoot Policy provide an $11,000,000 tower of coverage that must be fully exhausted before the TT Club Policy is reached. (Doc. 30, Attach. 11 at 7-8.) TT Club contends that the Bumbershoot Policy is triggered as soon as the MGL Policy is exhausted and does not require exhaustion of the TT Club Policy. (Id. at 9.) Relying on English law, TT Club contends that the MGL Policy provides coverage for the Settlement before the TT Club Policy due to “escape clauses” contained in the TT Club Policy. (Id. at 10-12.) TT Club also argues that the MGL Policy applies first under Georgia law because it contains a pro-rata sharing clause absent from the TT Club Policy; provides coverage that more specifically insures the risk that occurred in the Underlying Lawsuits; and insured the truck as a hired/non-owned auto, triggering the “insurance follows the car” rule. (Id. at 13-16.) Finally, TT Club argues that Travelers had [*11]  an obligation to defend the claims against CMA as their primary insurer and TT Club should be entitled to recoup the costs it incurred defending CMA or, at the very least, be entitled to contribution from Travelers as an equitable matter. (Id. at 17-20.)

Having described the parties’ arguments in a general manner, the Court will now explain its rulings on the parties’ cross-motions for summary judgment. In its analysis, the Court’s answers four distinct questions: first, whether the Court has jurisdiction over Travelers’ petition for declaratory relief; second, how Georgia’s choice of law principles affect which state’s law governs this diversity action; third, what is the priority of coverage between the parties’ insurance policies; and fourth, whether TT Club is entitled to contribution for the costs it incurred defending CMA in the Underlying Lawsuits.

I. WHETHER THE COURT HAS JURISDICTION OVER TRAVELERS’ PETITION FOR DECLARATORY RELIEF

As a threshold matter, the Court must address TT Club’s argument that Travelers lacked standing to pursue declaratory relief in this case. (Doc. 31 at 8); see Lewis v. Governor of Alabama, 944 F.3d 1287, 1296 (11th Cir. 2019) (“Because standing to sue implicates jurisdiction, a court must satisfy itself that the plaintiff [*12]  has standing before proceeding to consider the merits of her claim, no matter how weighty or interesting.”). In opposing Travelers’ motion for summary judgment, TT Club argues that an insurer who has already paid out a claim under its policy lacks standing to pursue a declaration that another insurer should have paid the claim because such relief concerns only past events. (Doc. 31 at 8.) Specifically, TT Club argues that Travelers lacks standing to seek declaratory relief based on its partial payment of the Settlement, which is an injury that has already occurred. (Id.)

“Article III of the United States Constitution limits the jurisdiction of federal courts to ‘Cases’ and ‘Controversies,’ U.S. Const. Art. III, § 2, and ‘the core component of standing is an essential and unchanging part of the case-or-controversy requirement of Article III[.]’” Hollywood Mobile Ests. Ltd. v. Seminole Tribe of Fla., 641 F.3d 1259, 1264-65 (11th Cir. 2011) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560, 112 S. Ct. 2130, 2136, 119 L. Ed. 2d 351 (1992)). “In the absence of standing, a court is not free to opine in an advisory capacity about the merits of a plaintiff’s claims, and the court is powerless to continue[.]” CAMP Legal Def. Fund, Inc. v. City of Atlanta, 451 F.3d 1257, 1269 (11th Cir. 2006) (citations and internal quotation marks omitted). “In order to demonstrate that a case or controversy exists to meet the Article III standing requirement when a plaintiff is seeking injunctive or declaratory relief, a plaintiff must allege facts [*13]  from which it appears there is a substantial likelihood that he will suffer injury in the future.” Malowney v. Fed. Collection Deposit Grp., 193 F.3d 1342, 1346 (11th Cir. 1999) (citations omitted). “Injury in the past, however, does not support a finding of an Article III case or controversy when the only relief sought is a declaratory judgment.” Id. at 1348 (citing Emory v. Peeler, 756 F.2d 1547, 1552 (11th Cir. 1985).

Although not addressed by either party, mootness is also a threshold question which implicates the Court’s jurisdiction. See Coral Springs St. Sys., Inc. v. City of Sunrise, 371 F.3d 1320, 1327 (11th Cir. 2004). Mootness has sometimes been described as “the doctrine of standing in a time frame. The requisite personal interest that must exist at the commencement of litigation (standing) must continue throughout its existence (mootness).” J.M. v. Crittendon, 337 F.R.D. 434, 451 (N.D. Ga. 2019) (quoting United States Parole Comm’n v. Geraghty, 445 U.S. 388, 397, 100 S. Ct. 1202, 1209, 63 L. Ed. 2d 479 (1980)). In other words, the standing inquiry asks whether an Article III controversy existed at the outset of litigation, whereas the mootness inquiry asks whether that controversy has been maintained throughout the litigation. See Dunn v. Dunn, 148 F. Supp. 3d 1329, 1334 (M.D. Ala. 2015) (citations omitted).

It is clear in this case that Travelers seeks only declaratory relief in its petition.⁵ (Doc. 1 at 11-13.) At least one other district court in this circuit has held that declaratory relief concerning the priority of co-insurers’ policies is unavailable if the co-insurers have already paid out the underlying [*14]  claim because such relief “concerns only past events, not future injury.” See Hous. Enter. Ins. Co. v. AmTrust Ins. Co. of Kan., 212 F. Supp. 3d 1330, 1338 (N.D. Ga. 2016) (citations omitted). Travelers cites one case in which a court decided a declaratory judgment action where the co-insurers had previously agreed to payout a settlement claim equally, reserving their right to bring their coverage dispute in later litigation. (Doc. 37 at 3-4 (citing Encompass Prop. & Cas. Co. v. Travelers Indem. Co. of Am., No. 1:15-Cv-03564-LMM, 2016 U.S. Dist. LEXIS 192936, 2016 WL 9455013, at *2-3 (N.D. Ga. Dec. 9, 2016).) The court in Encompass, however, makes no mention of standing or mootness in its order resolving the insurers’ summary judgment motions. See AmTrust, 212 F. Supp. 3d at 1338 (rejecting reliance on case in which court “ruled upon declaratory judgment claims even when the insurance loss occurred in the past and was already paid[]” because it did “not analyze the standing ramifications of that decision”). Travelers tries to evade the jurisdictional issue by arguing that it filed its petition for declaratory judgment prior to funding the Settlement. (Doc. 4-5.) The Eleventh Circuit has addressed this exact situation and held that an insurer who waited until after filing its complaint to pay the underlying claim may have had standing “during the brief period following the filing of its complaint[,]” but its declaratory judgment claim became moot as soon as the insurer paid [*15]  the settlement. Twin City Fire Ins. Co. v. Hartman, Simons & Wood, LLP, 609 F. App’x 972, 979 (11th Cir. 2015) (per curiam). Accordingly, even though Travelers likely had standing to bring its petition for declaratory judgment, Travelers’ claim was rendered moot as soon as it made payments towards the Settlement. Id.

Because the Court lacks jurisdiction over Travelers’ petition, Travelers’ motion (Doc. 25) is DENIED IN PART to the extent it seeks summary judgment on its petition. Likewise, TT Club’s motion (Doc. 30) is GRANTED IN PART to the extent it seeks summary judgment on Travelers’ claims for declaratory relief. The Court notes that this decision, while required by constitutional limits on jurisdiction, is of little practical significance because the Court still retains jurisdiction over TT Club’s counterclaims. See Pushko v. Klebener, No. 3:05-cv-211-J-25HTS, 2007 U.S. Dist. LEXIS 103290, 2007 WL 8971901, at *4 (M.D. Fla. June 12, 2007) (“Where an independent jurisdictional basis exists for the counterclaims, this Court may properly exercise jurisdiction over the remaining counterclaims.” (citing Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992)). Resolution of TT Club’s counterclaims for contribution will require the Court to make the same determinations regarding priority of coverage and entitlement to recoupment of attorney’s fees that would have been necessary to resolve Travelers’ petition for declaratory relief. [*16]  See Twin City, 609 F. App’x at 979.

II. CHOICE OF LAW

Having addressed the jurisdictional issues, the Court must determine the law that governs this dispute. Because the Court is exercising diversity jurisdiction over TT Club’s counterclaims (Doc. 12 at 7), the Court applies the substantive law of the state in which it sits. Nova Cas. Co. v. OneBeacon Am. Ins. Co., 603 F. App’x. 898, 900 (11th Cir. 2015) (citing Fioretti v. Mass. Gen. Life Ins. Co., 53 F.3d 1228, 1235 (11th Cir. 1995)). “A state’s substantive law includes its conflict-of-law rules.” Renaissance Recovery Sols., LLC v. Monroe Guar. Ins. Co. No. CV 1:14-102, 2017 U.S. Dist. LEXIS 147521, 2017 WL 4018861, at *10 (S.D. Ga. Sept. 12, 2007) (citing Nova Cas. Co., 603 F. App’x at 900). Accordingly, the Court must apply Georgia choice of law principles to determine which state law should govern this dispute. Id. (citation omitted).

To decide which state law applies to the interpretation of a contract, if the “contract contains no choice of law provision, Georgia applies the rule of lex loci contractus.” Lima Delta Co. v. Glob. RI-022 Aerospace, Inc., 338 Ga. App. 40, 45, 789 S.E.2d 230, 235 (2016) (quotation omitted). Under this rule, “the validity, nature, construction, and interpretation of a contract are governed by the substantive law of the state where the contract was made.” Garland v. Advanced Med. Fund, L.P. II, 86 F. Supp. 2d 1195 (quotation and citation omitted). However, Georgia courts also adhere to a unique caveat to their choice of law rules, the presumption of identity rule. Under this rule, application of a foreign state’s laws is limited to a foreign state’s statutes or cases interpreting statutes. Frank Briscoe Co. v. Ga. Sprinkler Co., 713 F.2d 1500, 1503 (11th Cir. 1983) (first citing White v. Borders, 104 Ga. App. 746, 747, 123 S.E.2d 170, 172-73 (1961); and then [*17]  citing Budget Rent-A-Car Corp. of Am. v. Fein, 342 F.2d 509, 514-15 (5th Cir. 1965)⁶. Where no foreign statute is involved, Georgia courts will apply Georgia common law rather than foreign common law. Id. (citations omitted); see also Renaissance, 2017 U.S. Dist. LEXIS 147521, 2017 WL 4018861, at *12 (collecting cases applying the presumption of identity rule).

In this case, the parties agree that the MGL Policy and the Bumbershoot Policy are governed by Georgia law because no statute of Virginia, where the contracts were made, applies in this case. (Doc. 25, Attach. 1 12; Doc. 30, Attach. 11 at 6.) The parties also appear to agree that Georgia rules govern TT Club’s equitable right to reimbursement for defense costs, as they cite only Georgia case law on these issues.⁷ (See, e.g., Doc. 25, Attach. 1 at 22; Doc. 31 at 21.) Yet, TT Club argues that the terms of the TT Club Policy should be interpreted using English law due to a choice of law provision contained in the policy. (Doc. 31 at 9; Doc. 41 at 6-7.) TT Club argues that the presumption of identity rule is merely an exception to the lex loci contractus rule, which does not apply to contracts that contain a choice of law provision. (Doc. 41 at 6-7.)

TT Club is correct that “in the absence of contrary public policy, [Georgia] courts normally will enforce a contractual [*18]  choice of law provision, as the parties by contract may stipulate that the laws of another jurisdiction will govern the transaction.” Nationwide Logistics, Inc. v. Condor Transp., 270 Ga. App. 277, 280, 606 S.E.2d 319, 322 (2004) (citation omitted) (emphasis added). Travelers, however, was not a party to the TT Club Policy and did not stipulate to the choice of law provision. The Court has found no case in which a Georgia court has bound an insurer to a choice of law provision in a contract that their insured signed with another insurer. This comports with the general rule that “a party who does not sign a contract is not bound to the terms of the contract.” Elite Storage Sols., LLC v. Sig Sys., Inc., No. 1:19-cv-03430-SDG, 2020 U.S. Dist. LEXIS 256131, 2020 WL 10056403, at *3 (N.D. Ga. Mar. 20, 2020); see also Roberson v. Seaspan Corp., 521 F. Supp. 3d 1325, 1334 (S.D. Ga. 2021) (“A choice of law clause . . . is a contractual right that cannot ordinarily be invoked by or against a party who did not sign the contract in which the provision appears.” (quoting Cooper v. Meridian Yachts, Ltd., 575 F.3d 1151, 1169 (11th Cir. 2009))). A non-signatory can only be bound to such a provision in limited circumstances, Roberson, 521 F. Supp. 3d at 1334, and TT Club has not argued that any of these circumstances are present in this case. As a result, the choice of law provision, by itself, does not mandate that the Court use English law to interpret the TT Club Policy or resolve the parties’ priority dispute.

Furthermore, contrary to TT Club’s arguments, the Court finds no support in Georgia law for [*19]  the proposition that the presumption of identity rule only applies as an exception to the rule of lex loc contractus and, therefore, should not apply when there is a contract contains a choice-of-law provision. (Doc. 41 at 6-7.) Georgia courts have utilized the rule in contract cases, Calhoun v. Cullum’s Lumber Mill, Inc., 247 Ga. App. 859, 862-64, 545 S.E.2d 41, 44-46 (2001), and tort cases, White, 104 Ga. App. at 747, 123 S.E.2d at 172-73, indicating the rule is not a limited exception but a general rule that Georgia courts will not apply the law of a foreign state unless a foreign statute governs the dispute in question.⁸ Accordingly, because Travelers is not bound by the choice-of-law provision and TT Club has identified no English statute that controls the dispute in this case, the presumption of identity rule applies and compels the Court’s conclusion that Georgia common law governs the entirety of this action.

III. PRIORITY OF COVERAGE

Having determined that Georgia law governs this case, the Court will now explain certain principles of Georgia law that are helpful to understanding the parties’ arguments regarding the priority of coverage between their respective insurance policies. In Georgia, “insurance is a matter of contract, and the parties to an insurance policy are bound by its plain and unambiguous terms.” [*20]  Richards v. Hanover Ins. Co., 250 Ga. 613, 614, 299 S.E.2d 561, 563 (1983) (citation omitted). “Under Georgia law, ‘[a]n insurance contract is governed by the ordinary rules of construction and should be construed to ascertain the intention of the parties. In discovering the intent of the parties, the whole instrument should be considered together, along with the surrounding circumstances.’” Am. Cas. Co. of Reading v. MAG Mut. Ins. Co., 185 F. App’x 921, 925 (11th Cir. 2006) (per curiam) (quoting Progressive Preferred Ins. Co. v. Brown, 261 Ga. 837, 838, 413 S.E.2d 430, 431 (1992)). “[T]he interpretation of an insurance policy . . . is a question of law for the court to decide.” Id.

Insurance contracts are often categorized as providing one of two levels of coverage: primary or excess. Renaissance, 2017 U.S. Dist. LEXIS 147521, 2017 WL 4018861, at *14. While “[p]rimary insurance covers an initial level of liability[,] [e]xcess insurance (also known as umbrella insurance) covers losses that exceed an initial level of liability.” Id. In many cases, insurance policies will be written with the intention of providing primary coverage but will include “other insurance” provisions which seek to avoid or limit liability if the insured is covered by another policy. See Renaissance, 2017 U.S. Dist. LEXIS 147521, 2017 WL 4018861, at *14; St. Paul Fire & Marine Ins. Co. v. Valley Forge Ins. Co., No. 1:06-CV-2074-JOF, 2009 U.S. Dist. LEXIS 23663, 2009 WL 789612, at *4 (N.D. Ga. Mar. 23, 2009) (“[T]he insurer may use an excess clause to avoid double payment when the insured has other insurance.”). “‘[O]ther insurance’ clauses come in three forms: ‘excess’ clauses, ‘pro-rata’ clauses, and ‘escape’ clauses.” Renaissance, 2017 U.S. Dist. LEXIS 147521, 2017 WL 4018861, at *14; Am. Cas., 185 F. App’x at 924 n.2.

Excess [*21]  clauses allow a primary policy to avoid double payment when the insured has other insurance. They do not make the policy an excess policy, but merely provide that an insurer will pay a loss only after other available primary insurance is exhausted. Pro rata clauses, on the other hand, merely allow insurers to lessen their liabilities when the insured has other insurance. A pro rata clause provides that the insurer will pay its share of the loss in the proportion its policy limits relates to the aggregate liability coverage available. Finally, escape clauses allow insurers to escape liability altogether. They provide[] that an insurer is absolved of all liability where other coverage is available.

Renaissance, 2017 U.S. Dist. LEXIS 147521, 2017 WL 4018861, at *14 (internal quotation marks and citations omitted).

In contrast to primary policies, even ones containing “other insurance” clauses, “[a] ‘true excess’ or ‘umbrella’ policy is not intended to provide primary coverage and ‘expressly provides nothing but excess coverage over and above certain primary coverage.’” St. Paul Fire, 2009 U.S. Dist. LEXIS 23663, 2009 WL 789612, at *4 (quoting Am. Cas., 185 F. App’x at 927). Therefore, umbrella policies “are regarded as true excess over and above any type of primary coverage, excess provisions arising in regular policies in any manner, or escape [*22]  clauses.” Atkinson v. Atkinson, 254 Ga. 70, 77, 326 S.E.2d 206, 214 (1985) (quotation omitted).

In this case, it is undisputed that the Great West policy provided the first level of primary coverage to CMA for the underlying lawsuits. Since the Great West policy has been fully exhausted, the question is which of the parties’ policies is first obligated to pay the remainder of the Settlement. To answer this question, the Court will examine the language of the parties’ policies to determine what level of coverage each policy provides and whether the policies contain “other insurance” clauses that affect this priority dispute.

A. The MGL Policy

Travelers’ MGL Policy provided coverage to CMA from June 4, 2014, through June 5, 2015. (Doc. 25, Attach. 2 at ¶ 14; Doc. 31, Attach. 1 at ¶ 14.) Notwithstanding their dispute about priority of coverage, the Parties agree that the MGL Policy provided coverage for the underlying lawsuits under an endorsement for “Non-Owned and Hired Auto Liability” (the “Non-Owned Endorsement”). (Doc. 25, Attach. 2 at ¶ 16; Doc. 31, Attach. 1 at ¶ 16; Doc. 12, Attach. 1 at 51.) The MGL Policy contains the following relevant clauses:

COVERAGE:

In consideration of an Additional Premium of [redacted], it is hereby mutually understood [*23]  and agreed that coverage under this policy shall be extended to cover the Named Insured’s legal liability for “bodily injury” or “property damage” caused by an “accident” resulting from the use of a “non-owned auto” or “hired auto”.

However, this endorsement provides coverage only on an excess basis, after any applicable primary coverage has been exhausted.

* * *

LIMITS:

A separate Limit of Liability of $1,000,000 applies to all claims resulting from a single “accident” or series of “accidents” arising out of the same event, including claims, costs, fees and expenses. Additionally, coverage provided under this endorsement is subject to the applicable General Aggregate Limit of Liability set forth in General Conditions Clause 7. This coverage is solely excess of, and not contributing with, any other insurance which may be applicable to a loss covered in this endorsement.

DEDUCTIBLE:

This coverage is subject to the deductible, terms and conditions of the policy to which this endorsement is attached.

(Doc. 12, Attach. 1 at 51.) Under a “General Conditions” section, the MGL Policy contains the following pro-rata clauses:

14. OTHER INSURANCE

The insurance afforded by this policy is primary insurance, [*24]  except when stated to apply in excess of or contingent upon the absence of other insurance . . . .

* * *

When both this insurance and other insurance apply to the loss on the same basis, whether primary, excess or contingent, this Company shall not be liable under this policy for a greater proportion of the loss than that stated in the applicable contribution provision below:

(1) Contribution by Equal Shares:

If all such valid and other insurance provides for contribution by equal shares, this Company shall not be liable for a greater proportion of such loss than would be payable if each insurer contributes an equal share until the share of each insurer equals the lowest applicable limit of liability under any one policy or the full amount of the loss is paid, and with respect to any amount of loss not so paid the remaining insurers then continue to contribute equal shares of the remaining amount of the loss until each such insurer has paid its limit in full or the full amount of the loss is paid.

(2) Contribution by Limit:

If any such other insurance does not provide for contribution by equal shares, this Company shall not be liable for a greater proportion of such loss than the applicable [*25]  limit of liability under this policy for such loss bears to the total applicable limit of liability of all valid and collectible insurance against such loss.

(Doc. 25, Attach. 2 at ¶ 15; Doc. 31, Attach. 1 at ¶ 15; Doc. 12, Attach. 1 at 22.)

Travelers concedes that the MGL Policy was written to provide primary coverage but contends that the Non-Owned Endorsement expressly stated that it “provides coverage only on an excess basis,” and therefore, should be treated as a “true excess” policy rather than a primary policy with an “other insurance” clause. (Doc. 25, Attach. 1 at 14-15.) In making this argument, Travelers relies on a case from the Northern District of Georgia, Phoenix Insurance Co. v. Nationwide Property and Casualty Insurance Co., No. 1:12-cv-00660-JOF, 2013 U.S. Dist. LEXIS 198161, 2013 WL 11975142 (N.D. Ga. Apr. 22, 2013). (Doc. 25, Attach. 1 at 15.) Phoenix involved a coverage dispute arising from a golf cart accident at a country club. 2013 U.S. Dist. LEXIS 198161, 2013 WL 11975142, at *1. The plaintiff insured the country club, and the defendant insured the driver of the golf cart. Id. The plaintiff’s insurance policy provided coverage to the country club under an endorsement that stated that coverage arising from the use of a golfcart “is excess over any other insurance, whether primary, excess, contingent or on any other basis that provides coverage to the user of the [golfcart].” Id. The [*26]  court in Phoenix reasoned that because the endorsement did not provide primary coverage for golf cart accidents under any circumstance, it should be treated as providing “true excess” coverage not triggered until the exhaustion of any applicable primary insurance. 2013 U.S. Dist. LEXIS 198161, [WL] at *3-4.

Decisions of the Eleventh Circuit and the Supreme Court of Georgia cast doubt on extending Phoenix’s reasoning to the facts of this case. In American Casualty Co. of Reading v. MAG Mutual Insurance Co., the Eleventh Circuit considered whether an endorsement containing an excess clause similar to the one in the Non-Owned Endorsement constituted “true excess” coverage. 185 F. App’x at 923, 926-27. The Eleventh Circuit rejected the defendant’s arguments that the policy’s excess clause showed that it “never intended to act as a primary insurer” with respect to coverage under the relevant endorsement. Id. at 926-27 (finding endorsement did not constitute “true excess” coverage despite clause stating that “[i]nsurance under this coverage is excess of and payable only after all other valid insurance . . . .”). The Eleventh Circuit noted that, notwithstanding the excess clause, the endorsement was not “written like umbrella or ‘true’ excess coverage, which expressly provides [*27]  nothing but excess coverage over and above certain primary coverage.” Id. (citations omitted). Similarly, in Atkinson v. Atkinson, the Supreme Court of Georgia held that a primary policy did not become a true excess policy by virtue of a provision that stated the policy only provided excess coverage in the event of an accident involving a non-owned vehicle. 254 Ga. at 76-77, 326 S.E.2d at 213-14. The Georgia Supreme Court found that the policy in question was “written to provide primary coverage” and “[o]nly when it [was] called upon where a vehicle not owned by the insured [was] involved [did] it become excess.” Id. at 77, 326 S.E.2d at 214.

The court in Phoenix distinguished its policy from the one in American Casualty, reasoning that its policy only provided coverage for golf cart use on an “excess basis,” and was, therefore, materially different from the coverage in American Casualty that began as primary coverage but became excess under certain conditions. 2013 U.S. Dist. LEXIS 198161, 2013 WL 11975142, at *3. The court in Phoenix was also explicit that its case did not involve “the owner/non-owner distinctions in automobile insurance” that influenced the Georgia Supreme Court’s decision in Atkinson. Id. (citing Atkinson, 254 Ga. at 77, 326 S.E.2d at 213-214). Even assuming, without deciding, that the court in Phoenix correctly distinguished itself from American Casualty, the Court [*28]  is not persuaded that the same distinctions exist in the MGL Policy. As stated in the General Conditions section, the MGL Policy provides “primary insurance, except when stated to apply in excess of or contingent upon the absence of other insurance.” (Doc. 12, Attach. 1 at 22.) The Non-Owned Endorsement is also not written like a “true excess” policy which requires the existence of a primary policy as a condition of coverage; rather, it is “a primary policy that seeks to become excess in the event of other insurance.” Am. Cas., 185 F. App’x at 926; see also Encompass, 2016 U.S. Dist. LEXIS 192936, 2016 WL 9455013, at *3 (concluding policy was primary because it “did not require the purchase of a primary policy as a condition for coverage.”) Further, the excess clause in the MGL Policy is triggered by the same owner/non-owner distinction that the Georgia Supreme Court considered in Atkinson. Atkinson, 254 Ga. at 77, 326 S.E.2d at 214. Accordingly, the Court declines to extend the reasoning of Phoenix to the facts in this case and finds that the MGL Policy is a primary policy that contains an excess clause.

B. The Bumbershoot Policy

Travelers’ Bumbershoot Policy also provided coverage to CMA for the June 4, 2014, through June 5, 2015, policy period. (Doc. 25, Attach. 2 at ¶ 19; Doc. 31, Attach. 1 at ¶ 19.) The parties agree [*29]  that the Bumbershoot Policy is an umbrella or “true excess” policy and provides coverage in excess of the MGL Policy, up to a limit of $10,000,000, subject to a $25,000 self-insured retention. (Doc. 25, Attach. 2 at ¶ 20; Doc. 31, Attach. 1 at ¶ 20; Doc. 12, Attach. 4 at 17.) When triggered, the Bumbershoot Policy will pay the “Ultimate Net Loss” which is defined in the policy.

The terms Ultimate Net Loss, means the total which the Insured becomes obligated to pay by reason of matters set out in Section I. Insuring Agreement, A.. Coverage, . . . excluding any part of such expenses for which the Insured is covered by other valid and collectible insurance.

(Doc. 12, Attach. 3 at 30.) Because the Bumbershoot policy clearly provides umbrella coverage, it will be “regarded as true excess over and above any type of primary coverage, excess provisions arising in regular policies in any manner, or escape clauses.” Atkinson, 254 Ga. at 77, 326 S.E.2d at 214 (citation omitted).

C. The TT Club Policy

Lastly, the TT Club Policy provided coverage to CMA for the January 1, 2014, through September 30, 2015, policy period. The TT Club Policy provides coverage up to a $30,000,000 limit per accident. (Doc. 25, Attach. 2 at ¶ 7; Doc. 31, Attach. [*30]  1 at ¶ 7.) Travelers contends that the TT Club Policy provides coverage for the underlying lawsuits pursuant to both its North American Chassis Liability Clause (the “Chassis Clause”) and its Third-Party Liabilities Clause (the “Third-Party Clause”). (Doc. 25, Attach. 2 at ¶ 7.) TT Club contends that the Chassis Clause is the only coverage provision applicable to the Underlying Lawsuits. (Doc. 31, Attach. 1 at ¶ 7.)

The relevant portions of the Chassis Clause and the Third-Party Clause are appended below:

NORTH AMERICAN CHASSIS AND LIABILITY CLAUSE

1 You are insured for:

The following liabilities arising out of an accident in USA/Canada and involving a chassis or trailer for use on public roads which you own or lease

* * *

1.2 Your non-contractual liability for:

1.1.1 Physical loss/damage of third party property

1.1.2 Death Injury or illness of any third party

* * *

3 Scope of Insurance

3.1 You are only insured to the extent that liabilities are not insured under other insurances available to you and other parties besides the domestic policy.

* * *

3.3 This insurance:

3.3.1 does not insure other parties

3.3.2 is in excess of any sums recoverable from other parties (or their insurers)

3.3.3 is not automobile or excess automobile liability insurance.

3.4 Other [*31]  parties means parties other than you involved in the accident, and any owner, lessor, lessee, operator or user of the chassis/trailer (or motor vehicle towing it).

S2 THIRD PARTY LIABILITIES CLAUSE

1 You are insured for:

Your liability:

1.1 For physical loss/damage of third party property

1.2 For death, injury or illness of any third party

* * *

2 You are not insured under this Clause for liabilities:

* * *

2.5 arising from ownership, lease or operation by you/your employee of a road vehicle which is required to be licensed

2.6 arising from an accident in USA/Canada involving your [owned/leased] chassis/trailer for use on public roads.

(Doc. 20, Attach. 1 at 6-7, 16-17.) Coverage under the TT Club Policy is also subject to the following “Double Insurance” clause:

12 Double Insurance

If you are insured by us and another insurer for the same risk, we will exclude any claim to the extent that it is recoverable from the other insurer or would be recoverable except for a double insurance exclusion[.]

(Id. at 37.)

The Court agrees with TT Club that the only provision of the TT Club Policy that provides a basis of coverage for the underlying accidents is the Chassis Clause. (Doc. 31 at 13-14.) The Third-Party Clause explicitly states [*32]  that the clause does not provide coverage for claims “arising from an accident in USA/Canada involving your* [owned/leased] chassis/trailer for use on public roads.” (Doc. 20, Attach. 1 at 17.) Presumably because the Third-Party Clause does not include its own specific “other insurance” clause, Travelers argues that TT Club waived the right to limit its coverage to the Chassis Clause by failing to issue a reservation of rights letter to CMA. (Doc. 25, Attach. 1 at 6, 17.) As TT Club points out, the Georgia Supreme Court has held that the notice requirement imposed on insurers seeking to deny coverage to their insured is inapplicable to disputes between insurers. Nat’l Union Fire Ins. Co. v. Am. Motorists Ins. Co., 269 Ga. 768, 769-770, 504 S.E.2d 673, 674-75 (1998) (finding imposing notice requirement in such a circumstance would be against public policy because it would encourage insurers to delay defending their insured until they had investigated any potential claim for subrogation). Accordingly, the Court finds that TT Club did not waive the right to argue that the TT Club Policy only provided coverage under the Chassis Clause.

The parties both agree that paragraph 3.1 of the Chassis Clause is an “escape clause,” which seeks to absolve TT Club of liability in the event of other insurance. (Doc. 31 at 16; Doc. 38 [*33]  at 13.) Additionally, the Double Insurance clause in the General Qualifications section is another “escape clause” that applies to the entire policy. (Doc. 30, Attach. 11 at 11.) Accordingly, the Court finds that the TT Club Policy is a primary policy subject to escape clauses.

D. Reconciling The Competing Policies

Based on the foregoing, the Court finds that the priority dispute in this case is between an umbrella policy, the Bumbershoot Policy, and two primary policies containing “other insurance” clauses, the MGL Policy and the TT Club Policy. TT Club argues that the Bumbershoot Policy, despite being an umbrella policy, can be triggered prior to the exhaustion of the TT Club Policy based on a theory of vertical exhaustion. (Doc. 31 at 10-11.) However, TT Club concedes that, at the very least, the Bumbershoot Policy is not triggered until the MGL Policy is exhausted. (Id. at 10.) Because the Bumbershoot Policy is not affected unless the MGL Policy is exhausted, the Court will first consider the priority of coverage between the MGL Policy and the TT Club Policy. See also U.S. Fire Ins. Co. v. Cap. Ford Truck Sales, Inc., 257 Ga. 77, 81, 355 S.E.2d 428, 431 (1987) (“Excess or secondary coverage is coverage whereby, under the terms of the policy, liability attaches only after [*34]  a predetermined amount of primary coverage has been exhausted.”).

When a party is covered by two primary policies for the same occurrence, Georgia courts will use multiple tools to determine which policy must be exhausted first. Some of these methods of analysis are not relevant to facts of this case. See, e.g., Encompass, 2016 U.S. Dist. LEXIS 192936, 2016 WL 9455013, at *4 (finding the “more closely identified with” test applies only in the context of uninsured motorist coverage (citing Progressive Classic Ins. Co. v. Nationwide Mut. Fire Ins. Co., 294 Ga. App. 787, 790, 670 S.E.2d 497, 499 (2008)). In their briefs, the parties have made arguments concerning three tests or rules for resolving priority disputes, the “specific versus general coverage” test, the “insurance follows the car” rule, and the “irreconcilable rule.” The Court will address these issues in order.

TT Club contends that under “specific versus general” test, the MGL Policy, which specifically covered automobile liability, should be considered primary over the TT Club Policy, which only tangentially provided coverage for the accident under its Chassis Clause. (Doc. 30, Attach. 11 at 15-16.) In other words, TT Club argues that because the MGL Policy more specifically covered the risk that occurred, an auto accident, it should be required to exhaust first. The “specific versus general” is [*35]  an antiquated and often disregarded rule that arose in Hartford Steam Boiler Inspection & Insurance Co. v. Cochran Oil Mill & Ginnery Co., 26 Ga. App. 288, 105 S.E. 856 (1921). See S. Home. Ins. Co. v. Willoughby, 124 Ga. App. 162, 164, 182 S.E.2d 910, 913 (1971). Subsequent courts have sought to “confine Hartford to its facts[,]” recognizing “that principles of equity under Georgia law favor pro-rata sharing of losses among primary insurers.” AmTrust, 212 F. Supp. 3d at 1342. The Court finds this approach appropriate in this case, where, as Travelers notes, it is not clear that the policies differ widely in terms of the coverage they were intended to provide under the relevant endorsements. (Doc. 38 at 20-21.)

Likewise, the “insurance follows the car” rule also has no bearing on this matter. This rule stands for the simple proposition “that when two policies cover a car accident, and both have an ‘other insurance’ clause, lit is usually held that the policy issued to the owner of the vehicle is the primary policy.’” Encompass, 2016 U.S. Dist. LEXIS 192936, 2016 WL 9455013, at *4 (quotation omitted). TT Club, relying on Georgia court cases, contends that this rule also dictates that applicable non-owned auto insurance, in this case the MGL Policy, becomes primary after exhaustion of the policy issued to the car owner regardless of any other primary coverage that is available. (Doc. 30, Attach. 11 at 14.) As Travelers highlights, the cases TT Club cites simply affirm the general rule [*36]  that the car owner’s policy will be primary in the event of a car accident but say nothing about the priority of coverage between multiple remaining primary policies. (Doc. 38 at 9); see, e.g., Ga. Mut. Ins. Co. v. Rollins, 209 Ga. App. 744, 747, 434 S.E.2d 581, 584 (1993). As a result, the Court does not find that this rule is helpful to resolve the dispute in this case.

Lastly, the parties dispute how the “other insurance” clauses in their respective policies affect the priority of coverage. Travelers contends that under Georgia law the “excess clause” in the MGL Policy and the “escape clauses” in the TT Club Policy cannot be reconciled and cancel each other out. (Doc. 38 at 18.) TT Club avers that the “escape clauses” preclude the TT Club Policy from being considered “other applicable” insurance within the meaning of the “excess clauses” and, therefore, the MGL Policy should provide primary coverage without the “excess clauses” being triggered. (Doc. 30, Attach. 11 at 12.) On this issue, the Court sides with Travelers.

When “two insurance policies covering the same risk both contain ‘other insurance’ clauses that cannot be reconciled, those clauses cancel each other out and the insurers share in liability pro-rata.” Am. Cas., 185 F. App’x at 925 (citations omitted). At least one Georgia [*37]  court has applied this rule, also known as the “irreconcilable rule,” with equal force in a case where one policy contained an “excess clause” and the other contained an “escape clause.” Willoughby, 124 Ga. App. at 166, 182 S.E.2d at 914 (“As the excess and escape clauses here are logically irreconcilable, they cancel one another out and have no more effect than as if they were never written.”) In this case, the Court finds the “excess clause” in the MGL Policy and the “escape clause” in the TT Club Policy to be mutually repugnant, as both clauses seek “to shift primary liability to the ‘other insurance,’ that is, the other policy.” Am. Cas., 185 F. App’x at 927. The Court cannot enforce the meaning of one policy without distorting the meaning of the other.⁹ Thus, the Court finds that the excess and escape clauses are irreconcilable and that the MGL Policy and the TT Club Policy are appropriately treated as co-primary insurers who should share liability towards the Settlement amount. Willoughby, 124 Ga. App. at 166-67, 182 S.E.2d at 914.

TT Club argues that even if the MGL Policy and the TT Club Policy are deemed co-primary, their contribution to the Settlement should be split on a “50-50” or nominally equal basis. (Doc. 31 at 19.) The Court finds no support in Georgia case law for this proposition. As stated previously, [*38]  when competing primary policies both contain “other insurance” clauses that cannot be reconciled, the rule is that “insurers share in liability pro-rata.” Am. Cas., 185 F. App’x at 926; see also Willoughby, 124 Ga. App. at 165-66, 182 S.E.2d at 913-14 (explaining preference for pro-rata contribution). Although in some cases this leads to contribution by equal shares, see, e.g., Am. Cas., 185 F. App’x at 928 (policies provided identical $1 million coverage limits), “the majority view is that the loss should be shared by the various insurers pro-rata in the proportion that their respective policy limits bear to the entire loss.” Stephen Plitt et al., Couch on Insurance § 217: 11 (3d ed. 2021). Following the majority views also accords with the MGL Policy’s pro-rata clause. The pro-rata clause expressly states that when “other insurance does not provide for contribution by equal shares,” contribution by limits applies. (Doc. 12, Attach. 1 at 22.) The fact that TT Club’s policy is silent on the issue of sharing only bolsters the Court’s view that the MGL Policy’s pro-rata provision should have effect, as it is not irreconcilable with any provision in the TT Club Policy and can be applied as written. See Bradshaw v. St. Paul Fire & Marine Ins. Co., 226 F. Supp. 569, 576-77 (N.D. Ga. 1964) (applying pro-rata contribution by limits where only one policy contained pro-rata clause after [*39]  deeming both policies’ excess clauses mutually repugnant).

TT Club argues that sharing by limits is unfair in this case because it would result in TT Club bearing liability on a 30:1 ratio. (Doc. 31 at 20.) Although this ratio may appear unfair on the surface, it is based on the applicable policy limits that each insurer negotiated with their insured and presumably received fair compensation for providing. Under TT Club’s proposed method of sharing liability 50:50, Travelers would be required to pay 100 percent of the MGL Policy’s liability limit, while TT Club would be required to pay little more than 8 percent of its bargained for policy limit. The Court does not find TT Club’s proposed method to be any more equitable than requiring the insurers to bear the loss in proportion to the liability limits they contracted to provide their insured.

Because the Court is not persuaded that it should deviate from the pro-rata contribution by limits set forth in the MGL Policy, the Court finds that Travelers and TT Club are liable for the Settlement amount on a 1:30 ratio in accordance with the respective policy limits of the MGL Policy and the TT Club Policy. Based on the Court’s calculations, [*40]  Travelers was responsible for $161,290.32 of the $5,000,000 settlement amount, and TT Club was liable for the remaining $4,838,709.68. Travelers funded $2,500,000 of the Settlement. Therefore, Travelers is entitled to $2,338,709.68 in contribution from TT Club. As a result, Travelers’ motion for summary judgment (Doc. 25) is GRANTED IN PART on TT Club’s counterclaims for contribution for payments made towards the Settlement. TT Club’s motion for summary judgment (Doc. 30) is DENIED IN PART for the same reason.¹⁰

IV. COSTS OF DEFENDING CMA IN THE UNDERLYING LAWSUITS

The last issue for the Court to consider is whether TT Club is entitled to contribution for the defense costs it incurred defending CMA in the underlying lawsuits. TT Club argues that Travelers had an obligation to defend CMA in the underlying action and, therefore, Travelers should be required to reimburse TT Club for costs of defense as an equitable matter (Doc. 30, Attach. 11 at 20.) Conversely, Travelers argues that TT Club defended CMA on a voluntary basis, because Great West was the primary insurer, and the “voluntary payment” doctrine precludes TT Club’s claims for contribution. (Doc. 25, Attach. 1 at 22.) The Court finds [*41]  that Travelers had an obligation to defend CMA in the underlying lawsuit, and TT Club is entitled to contribution for its defense costs on a pro-rata basis.

Travelers is correct that an excess insurer normally has no obligation to provide defense for its insured until underlying primary insurance has been exhausted. (Doc. 38 at 24 (citing Wellons, Inc. v. Lexington Ins. Co., 931 F. Supp. 2d 1228, 1244 (N.D. Ga. 2013).) However, the Georgia Court of Appeals has held that a primary insurer does have an obligation to defend its insured even if its policy contained an excess provision that would make its coverage excess over other insurance issued to a third party but available to the insured. Nat’l Sur. Corp. v. Dunaway, 100 Ga. App. 842, 842-43, 112 S.E.2d 331 (1959) (citations omitted). The cases on which Travelers relies involve true excess policies rather than primary policies containing other insurance provisions. See Wellons, 931 F. Supp. 2d at 1245 (“The Umbrella Policy was not triggered, and defendant had no duty to defend or speak to coverage.” (emphasis added)). Both the MGL Policy and the TT Club Policy provided coverage to CMA on a primary basis and therefore both insurers owed a duty to defend CMA in the Underlying Lawsuits.

The Court agrees with the court in St. Paul Fire that a primary insurer who undertakes defense of a mutual insured has a right to seek contribution [*42]  for defense costs against a co-primary insurer who has refused to participate in the insured’s defense. St. Paul Fire, 2009 U.S. Dist. LEXIS 23663, 2009 WL 789612, at *10. The Court also finds that the pro-rata sharing by limits utilized to determine the allocation of the Settlement amount applies equally to the costs of defense. Id. (examining language of policies’ pro-rata provisions to determine allocation of defense costs). Accordingly, the Court finds that Travelers and TT Club are responsible for the costs of defense on a 1:30 ratio respectively. TT Club asserts that the total defense costs that should be allocated among the insurers amounts to $405,247.49. (Doc. 31 at 21.) Because Travelers does not object to this calculation, the Court finds that Travelers is responsible for $13,072.50 of this amount. The $13,072.50 will be subtracted from the amount that Travelers is entitled to recoup from TT Club for its overpayment towards the Settlement.

CONCLUSION

Based on the foregoing, Travelers’ motion for summary judgment (Doc. 25) is GRANTED IN PART and DENIED IN PART, and TT Club’s motion for summary judgment (Doc. 30) is GRANTED IN PART and DENIED IN PART. As a result, Travelers’ Petition for Declaratory Relief (Doc. 1) is DISMISSED AS MOOT. Travelers [*43]  is GRANTED summary judgment on TT Club’s contribution claims for payments made towards the Settlement, and Travelers is entitled to contribution of $2,338,709.68 from TT Club for amounts it overpaid towards the Settlement. TT Club is GRANTED summary judgment on its contribution claims for its costs of defending CMA in the underlying lawsuits, and TT Club is entitled to contribution of $13,072.50 for Travelers’ pro-rata share of the defense costs. Accordingly, Travelers is entitled to judgment in the amount of $2,325,637.18, which is the amount Travelers is entitled to for its funding of the Settlement less the amount TT Club is entitled to for defense costs. Fed. R. Civ. P. 54(c) (“[F]inal judgment should grant the relief to which each party is entitled, even if the party has not demanded that relief in its pleadings.”) The Clerk of Court is DIRECTED to enter JUDGMENT in accordance with this order and to CLOSE this case.

SO ORDERED this 31st day day of March 2022.

/s/ William T. Moore, Jr.

WILLIAM T. MOORE, JR.

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF GEORGIA

End of Document

---

¹ The relevant facts are taken principally from the parties’ respective statements of undisputed material facts (Doc. 25, Attach. 2; Doc. 30, Attach. 10), and the responses thereto (Doc. 31, Attach. 1; Doc. 39). Pursuant to Federal Rule of Civil Procedure 56(e) and Southern District of Georgia Local Rule 56.1, all material facts not controverted by specific citation to the record are deemed admitted, unless otherwise inappropriate. Where the parties offer conflicting accounts of the events in question, this Court draws all inferences and reviews all evidence in the light most favorable to the nonmoving party. See Hamilton v. Southland Christian Sch., Inc., 680 F.3d 1316, 1318 (11th Cir. 2012) (citing Moton v. Cowart, 631 F.3d 1337, 1341 (11th Cir. 2011)).

² An XL Catlin Master Policy, policy number FR00008439LI15A, provided CMA with an additional €50,000,000 in coverage, which applied as excess coverage for the two Travelers Policies. (Doc. 30, Attach. 10 at ¶ 31; Doc. 39 at ¶ 31; Doc. 30, Attach. 3 at 115-116.) Neither party contends that this policy is reached irrespective of the priority of coverage between the relevant policies.

³ The TT Club Policy was issued to CMA’s parent company, CMA CGM SA, but it is undisputed that CMA is entitled to coverage under the TT Club Policy as a joint assured. (Doc. 30, Attach. 10 at ¶¶ 15-16; Doc. 39 at ¶¶ 15-16.)

⁴ The parties dispute in their briefs whether it was proper for TT Club to disclose the settlement amount due to a confidentiality provision in the General Release and Agreement. (Doc. 39 at ¶ 39.) The Court notes that the General Release and Agreement expressly allows disclosure of its terms “in connection with discovery or other aspects of litigation,” or if required “by a court of competent jurisdiction[.]” (Doc. 30, Attach. 1 at 143.) Because it would be impossible for the Court to explain its ruling without discussing the settlement amount, the Court finds the disclosure was appropriate.

⁵ Travelers contends that it “specifically seeks contribution and/or indemnity from TT Club[,]” citing to paragraph 27 of the petition for declaratory judgment. (Doc. 37 at 5.) In paragraph 27, Travelers simply states that it is “entitled to contribution and/or indemnity from TT Club” but makes no request for monetary relief. (Doc. 1 at ¶ 27.) In contrast, in paragraphs 28 and 29, Travelers clearly requests “that the Court enter judgment declaring” that it is entitled to contribution. (Doc. 1 at ¶¶ 28, 29 (emphasis added).) The Court declines to read claims for relief into Travelers’ petition, when Travelers, which is represented by counsel, failed to make those claims or move to amend its petition.

⁶ In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the Eleventh Circuit adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to October 1, 1981.

⁷ The Court notes that the contribution claims in this case are actually equitable disputes, not contractual disputes, because neither party had a contractual obligation to the other to pay certain amounts towards the Settlement. See Renaissance, 2017 U.S. Dist. LEXIS 147521, 2017 WL 4018861, at *12 (“The only reason this contribution action involves a contract is because the equitable distribution of a common burden requires examining the obligations to which the litigants contractually bound themselves.”).

⁸ The Court is aware that the district court in Renaissance refers to the rule as an “exception to lex loci contractus[.]” 2017 U.S. Dist. LEXIS 147521, 2017 WL 4018861, at *14. While the rule does apply as an exception in contract cases, Georgia case law clearly demonstrates that the rule is not limited to those circumstances.

⁹ TT Club argues that the clauses can be reconciled because its policy did not trigger the MGL Policy’s “excess clause” as the “escape clauses” precluded the TT Club from constituting other applicable insurance. (Doc. 31, Attach. 11 at 12.) TT Club’s logic rests on its conclusory assumption that the MGL Policy, despite its “excess clause,” did constitute “other insurance” giving effect to the “escape clause” in the TT Club Policy. However, one could just as easily argue that the “excess clause” in the MGL Policy prevented it from being “other insurance” that triggered the “escape clauses” in the TT Club Policy. The circular nature of these arguments demonstrates the difficulty in reconciling these clauses and has been aptly compared to the problem of “deciding which came first, the hen or the egg.” Willoughby, 124 Ga. App. at 165, 182 S.E.2d at 913 (quotation omitted).

¹⁰ Because the Settlement is fully paid before the MGL Policy is exhausted, the Court need not consider TT Club’s arguments that the Bumbershoot Policy could apply prior to full exhaustion of the TT Club Policy.