Filed: Aug. 12, 2010
Latest Update: Feb. 21, 2020
Summary: [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ FILED U.S. COURT OF APPEALS No. 10-10734 ELEVENTH CIRCUIT Non-Argument Calendar AUGUST 12, 2010 _ JOHN LEY CLERK D.C. Docket No. 1:08-cv-01576-TCB GERALDINE RUTLAND, lllllllllllllllllllll Plaintiff-Appellant-Counter-Defendant, versus STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, llllllllllllllllllll Defendant-Appellee-Counter-Claimant. _ Appeal from the United States District Court for the Northern District of Ge
Summary: [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ FILED U.S. COURT OF APPEALS No. 10-10734 ELEVENTH CIRCUIT Non-Argument Calendar AUGUST 12, 2010 _ JOHN LEY CLERK D.C. Docket No. 1:08-cv-01576-TCB GERALDINE RUTLAND, lllllllllllllllllllll Plaintiff-Appellant-Counter-Defendant, versus STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, llllllllllllllllllll Defendant-Appellee-Counter-Claimant. _ Appeal from the United States District Court for the Northern District of Geo..
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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 10-10734 ELEVENTH CIRCUIT
Non-Argument Calendar AUGUST 12, 2010
________________________ JOHN LEY
CLERK
D.C. Docket No. 1:08-cv-01576-TCB
GERALDINE RUTLAND,
lllllllllllllllllllll Plaintiff-Appellant-Counter-Defendant,
versus
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
llllllllllllllllllll Defendant-Appellee-Counter-Claimant.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(August 12, 2010)
Before HULL, WILSON and MARTIN, Circuit Judges.
PER CURIAM:
Geraldine Rutland appeals the district court’s grant of summary judgment to
State Farm Mutual Automobile Insurance Company on her claim that State Farm
breached their insurance contract. Essentially, Rutland is arguing that State Farm
is required to provide coverage for a crash that occurred during a lapse in
Rutland’s insurance coverage due to nonpayment of premiums. We find that there
is no genuine issue of material fact present in Rutland’s claim and affirm the
summary judgment order of the district court.
I. BACKGROUND
State Farm provided automobile insurance coverage to Rutland and in June
2003 the insurance policy was active. Rutland had previously agreed to allow
State Farm to directly debit Rutland’s checking account each month for payment
of the insurance premiums. On June 27, 2003, State Farm attempted to debit
$286.51 from Rutland’s checking account for payment of the premiums on all five
of Rutland’s insurance policies. On June 30, 2003, Rutland’s bank informed State
Farm that they would not honor the debit because Rutland’s account was
overdrawn.
State Farm sent a certified letter to Rutland on July 7, 2003 informing her
that the premium on her insurance policy had not been paid. The letter went on to
inform Rutland that if the premium was not paid by July 20, 2003 her insurance
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policy would be canceled. State Farm canceled Rutland’s insurance coverage on
July 20, 2003 when the premium had not been paid.
On July 31, 2003, Rutland was driving intoxicated and crashed into another
car, seriously injuring an adult and two minor children. Rutland reported the crash
to her State Farm agent, John Davis, on August 1, 2003. Shirley Davis, an
employee in the agent’s office, informed Rutland that her premiums had not been
paid and therefore her insurance coverage had been terminated on July 20, 2003.
According to Rutland’s version of events, Ms. Davis instructed Rutland that if she
paid the past due amount, $286.51, her insurance coverage would be reinstated
and that State Farm would provide retroactive coverage for the crash. Ms. Davis
has denied making any representation to Rutland that she would receive
retroactive coverage and John Davis has stated that the employees in his office
would never make an offer of retroactive coverage.
Rutland mailed a check for $286.51 to State Farm on August 4, 2003 and
her insurance coverage was reinstated on August 5, 2003. Rutland claims that she
spoke with Ms. Davis once again after paying the past due amount and Ms. Davis
assured her that she would receive retroactive coverage for the crash. State Farm
then sent a letter to Rutland on August 28, 2003 to inform Rutland that they would
not provide insurance coverage for her July 31 crash because of the cancellation
3
due to non-payment. The letter asked Rutland to provide State Farm with any
further information that they should consider in regard to the denial of insurance
coverage. State Farm then credited Rutland’s account on her September 2003
billing statement for the late payment Rutland tendered for the period that her
coverage was cancelled.
The victims of Rutland’s crash filed three civil actions against her on May
25, 2005. State Farm did not defend Rutland and Rutland was unable to pay an
attorney. The state court entered a default judgment against Rutland in the amount
of $15,750,000. Rutland filed suit against State Farm on March 26, 2008 alleging
State Farm acted in bad faith by failing to defend her in the civil action arising
from her crash. State Farm moved for summary judgment and to exclude the
affidavit of Jeniffer Ebert.1 Rutland moved for partial summary judgment and to
exclude the testimony of Frank Edward Jenkins III.2 The district court granted
State Farm’s motion to exclude and motion for summary judgment. The district
court also denied Rutland’s motion for summary judgment and motion to exclude
1
Rutland attempted to introduce the affidavit of Ms. Ebert as proof that State Farm in that
past had provided retroactive coverage for events that occurred while the insured’s policy was
cancelled for non-payment of premiums.
2
State Farm offered the testimony of Mr. Jenkins in regards to the issue of whether
Rutland took the proper steps to notify State Farm of the May 25, 2005 lawsuits filed by the
victims of Rutland’s crash.
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as moot.
II. STANDARD OF REVIEW
We review a district court’s grant of summary judgment de novo, viewing
the record and drawing all inferences in favor of the non-moving party. Martin v.
Brevard County Pub. Sch., 543 F.3d 1261, 1265 (11th Cir. 2008) (per curiam)
(citations omitted). Summary judgment is proper “if the pleadings, the discovery
and disclosure materials on file, and any affidavits show that there is no genuine
issue as to any material fact and that the movant is entitled to judgment as a matter
of law.” Fed. R. Civ. P. 56(c)(2). “A party moving for summary judgment has the
burden of showing that there is no genuine issue of fact.” Eberhardt v. Waters,
901 F.2d 1578, 1580 (11th Cir. 1990) (quotation omitted).
III. DISCUSSION
Rutland was not covered by a written insurance policy on July 31, 2003, the
date of her crash. Rutland failed to pay her premium on June 27, 2003. State
Farm sent a certified letter to Rutland informing her of the payment problems and
noticing her that the policy would be cancelled if the premium was not paid by
July 20, 2003. Upon Rutland’s failure to pay her premiums, State Farm followed
the proper procedure under Georgia law for cancellation of an insurance policy.
See O.C.G.A. § 33-24-44(d) (ten-day notice is sufficient when a policy is
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cancelled for non-payment of premiums). State Farm had no duty, under the
original written policy, to defend Rutland in any civil action arising from the July
31, 2003 crash “since this was subsequent to the date coverage was cancelled due
to nonpayment of premium.” Buffington v. State Auto. Mut. Ins. Co., 384 S.E.2d
873, 874 (Ga. Ct. App. 1989).
Rutland, however, contends that despite the lack of a written insurance
policy, State Farm had a duty to defend her in the May 25, 2005 lawsuit. First,
Rutland argues that State Farm’s August 5, 2003 acceptance of her late premium
payment, combined with what Rutland views as an untimely and improper refund
of the late payment, created a material issue as to whether State Farm waived its
defense of lack of payment. Second, Rutland argues that Ms. Davis issued an oral
binder for retroactive coverage when she advised Rutland to send in her past due
premium payment. Third, Rutland argues that there is a genuine issue concerning
promissory estoppel. Rutland also argues that the district court abused its
discretion in excluding an affidavit from her witness, Jennifer Ebert.
A. State Farm Did Not Waive Cancellation of Rutland’s Policy by Accepting a
Late Premium Payment on August 5, 2003
“If an insurance company receives, accepts, and retains past-due premiums
which are paid subsequent to the due date and expiration of the grace period, it
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renews the contract and waives the forfeiture for non-payments provided the
acceptance is unconditional and the facts are known.” Clark v. United Ins. Co. of
Am., 404 S.E.2d 149, 152 (Ga. Ct. App. 1991). Rutland relies on Clark for the
proposition that a genuine issue was raised as to whether State Farm’s non-
payment defense was waived upon its acceptance of Rutland’s late premium
payment. While similar, the facts in the present case are distinguishable from
Clark.
State Farm provided Rutland with a refund for the amount she tendered as a
late payment for the cancellation period. State Farm sent Rutland a letter on
August 28, 2003 informing her they would not cover her crash and then refunded
the late payment on her September 2003 statement. In Clark, the insurance
company did not refund the late payments. Id. at 153. State Farm, however,
refunded Rutland’s late payment within weeks of determining that Rutland’s
policy had been cancelled during the time of the crash. State Farm’s refund
occurred over four years prior to Rutland filing suit against State Farm. Rutland
stresses the fact that State Farm held onto her late payment for “at least six
weeks.” However, State Farm did in fact refund the late payment and we do not
believe that six weeks is an unreasonable period of time for a company to
determine that a payment tendered to it was improper and due to be refunded.
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Therefore, State Farm did not “retain” a past-due premium as was the case in
Clark and thus, State Farm did not waive its defense of non-payment.
Clark is also distinguishable from Rutland’s experience because in Clark
there was a pattern of late payments after the grace period. Id. The insurance
company in Clark would often accept late premium payments after the insurance
had expired upon the passing of the grace period. Rutland has not provided any
evidence that late payments after the grace period was a regular practice in her
dealings with State Farm.
Rutland also finds issue with the way in which State Farm calculated the
refund and the time it took State Farm to refund the money. Neither of these
arguments raise a genuine issue of material fact that will save this case from
summary judgment. First, if Rutland believes that State Farm did not provide a
complete refund for the cancellation period, then Rutland can file a separate
lawsuit to collect this amount. We will not, however, find that State Farm
“retained” a past-due premium on the basis of Rutland’s speculation that State
Farm may have incorrectly calculated the refund. Rutland has offered nothing
more than conjecture and speculation that State Farm’s calculations of the refund
may have been in error, and this falls short of establishing a genuine issue of
material fact. Second, Rutland cites O.C.G.A. § 33-24-44(c)(1) in support of her
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assertion that State Farm’s refund was late. This part of the Georgia Code deals
with refunds upon cancellation of a policy, not refunds from past-due payments for
a period during which the policy was cancelled. This subsection of the Georgia
Code has no applicability to the facts at hand.
B. Ms. Davis’s Representations to Rutland Did Not Create an Oral Binder
Between Rutland and State Farm
State Farm, Ms. Davis, and Mr. Davis all dispute Rutland’s claim that Ms.
Davis told Rutland that State Farm would provide retroactive coverage for her
crash. However, at the summary judgment stage we must take all facts in favor of
the nonmovant, Rutland, and so we will proceed under the assumption that Ms.
Davis did in fact represent to Rutland, twice, that State Farm would provide
retroactive coverage.
“The principal shall be bound by all the acts of his agent within the scope of
his authority . . . .” O.C.G.A. § 10-6-51. “The principal is also bound when the
agent lacks express authority but is possessed of apparent authority.” Home
Materials, Inc. v. Auto Owners Ins. Co., 300 S.E.2d 139, 141 (Ga.1983). Ms.
Davis did not have the actual or apparent authority to bind State Farm to
retroactive coverage of Rutland’s crash.
State Farm does not give its agents the express authority to offer retroactive
9
coverage. Ms. Davis and Mr. Davis both testified that they understood State
Farm’s policy to be that an agent did not have the authority to offer retroactive
coverage. Furthermore, the merger clause in Rutland’s original insurance policy
stated that “this policy contains all of the agreements between you and us or any of
our agents.” Doc. 21-3 at 6. The policy did not contain any provisions allowing
for retroactive coverage.
“‘Apparent authority’ is not predicated on whatever a third party chooses to
think an agent has the right to do, or even upon what the agent says he can do, but
must be based on acts of the principal which have led the third party to believe
reasonably the agent had such authority.” Thompson v. Gen. Motors Acceptance
Corp., 389 S.E.2d 20, 21–22 (Ga. Ct. App. 1989) (quotation omitted). The mere
idea of retroactive insurance coverage defies common sense. According to
O.C.G.A. § 33-1-2(2) insurance is a “contract which is an integral part of a plan
for distributing individual losses whereby one undertakes to indemnify another or
to pay a specified amount or benefits upon determinable contingencies.”
Coverage for an event that has already occurred contravenes the very definition of
insurance. A reasonable person speaking with any insurance agent would not
reasonably believe that an insurance agent has the authority to provide retroactive
coverage.
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The fact that Rutland sent in a late payment after Ms. Davis allegedly told
her that State Farm would provide retroactive coverage is of no issue. The late
payment does not necessarily evidence a belief on Rutland’s part that Ms. Davis
had the authority to provide retroactive coverage. Even if Rutland truly believed
Ms. Davis had the authority to provide retroactive coverage, it was not a
reasonable belief.
C. Rutland Has Not Established a Genuine Issue Concerning Promissory
Estoppel
“A promise which the promisor should reasonably expect to induce action
or forebearance on the part of the promisee or a third person and which does
induce such action or forebearance is binding if injustice can be avoided only by
enforcement of the promise.” O.C.G.A. § 13-3-44(a). Rutland argues that because
of Ms. Davis’s representations that State Farm would provide retroactive coverage
she renewed her policy with State Farm rather than entering into a new insurance
contract with another company at a lower rate.
Rutland’s theory of promissory estoppel misses the mark. The
representations made by Ms. Davis occurred after Rutland’s crash and after
Rutland’s policy had been cancelled for non-payment. Even if Ms. Davis’s
representations did cost Rutland a higher insurance premium, this has nothing to
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do with State Farm’s refusal to cover her crash. At the very most, Rutland’s
reliance on Ms. Davis’s promise of retroactive coverage has cost her the difference
in insurance premiums. If Rutland wishes to file suit against State Farm for this
difference in insurance premiums she is free to do so. However, this theory of
detrimental reliance cannot provide Rutland with a basis to recover damages in
relation to State Farm’s refusal to cover her crash.
D. The District Court Did Not Abuse Its Discretion in Excluding Jennifer
Ebert’s Affidavit
“We review evidentiary rulings made by the district court for abuse of
discretion and will reverse the district court’s decision only in cases where
substantial prejudice exists.” Hall v. United Ins. Co. of Am., 367 F.3d 1255, 1259
(11th Cir. 2004) (citation omitted).
Rutland attempted to introduce Jennifer Ebert’s affidavit as an example of
State Farm providing retroactive coverage. Ms. Ebert’s affidavit stated that she
had been in an accident, was informed that her policy had been cancelled for non-
payment, that she was to send in the late payment, and finally that State Farm
provided coverage for the accident that occurred during the period when her
policy was cancelled.
The district court found that Ms. Ebert’s affidavit lacked certain facts that
12
made it impossible for the court to determine its probative value. First, the
affidavit did not state whether it was Ms. Ebert or her bank who was at fault for
the non-payment of premiums. Second, the affidavit did not state whether State
Farm followed the proper notice procedures for cancellation of a policy. The
district court could not determine whether Ms. Ebert’s experience had any
relevance to Rutland’s case. Furthermore, the affidavit was untimely filed.
We find that the district court did not abuse its discretion in excluding the
affidavit. First, the district court was well within its discretion in determining that
the affidavit lacked probative value. Second, Rutland was not substantially
prejudiced by the exclusion of this affidavit. Ms. Davis still lacked the actual
authority to authorize retroactive coverage, even if State Farm had previously
provided Ms. Ebert with coverage in a factually indistinguishable event. Further,
Rutland was not aware of Ms. Ebert’s experience when she sent in her late
payments, thus she cannot claim that Ms. Ebert’s experience led her to a
reasonable belief that Ms. Davis had the apparent authority to offer retroactive
coverage.
IV. CONCLUSION
We find that State Farm properly cancelled Rutland’s insurance coverage
during the period of time that she crashed her car into the victims’ car. Further,
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Ms. Davis did not have the actual or apparent authority to engage in an oral binder
with Rutland for retroactive coverage of the crash. Rutland has not established a
plausible theory of promissory estoppel on which she can recover. And finally,
the district court did not abuse its discretion by excluding Jennifer Ebert’s
affidavit. The district court properly granted State Farm’s motion for summary
judgment and thus, Rutland’s motion for partial summary judgment was also
properly denied as moot.
AFFIRMED.
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