United States District Court, N.D. Georgia, Atlanta Division
RICHARD W. STORY, District Judge.
This case comes before the Court on Motion for Summary Judgment Filed by Plaintiff Nationwide Real Estate Investment, LLC ("Plaintiff's MSJ") , Atrium 5 Limited's Motion for Summary Judgment ("Defendant's MSJ") , and Atrium 5 Limited's Motion to Strike Paragraph 8 of Affidavit of Elzie D. Speir, III ("Defendant's Motion to Strike") . After reviewing the record, the Court enters the following Order.
I. Factual Summary
This case arises out of a dispute over payment on an insurance policy. Except where otherwise indicated, the following facts are undisputed.
Nationwide Real Estate Investment, LLC, ("Nationwide") is a Georgia corporation that buys and sells vacant residential properties. (Statement of Material Facts as to Which There are No Genuine Issues to be Tried in Support of Plaintiff's MSJ ("Pl.'s SOMF"), Dkt. [43-1] ¶¶ 1-2.) Nationwide is owned by Larry Brewer and his wife. (Atrium 5 Ltd.'s Statement of Material Facts for Which There is no Genuine Issue to be Tried ("Def.'s SOMF), Dkt. [44-2] ¶5.)
In or around January 2011, Nationwide obtained insurance coverage from Atrium 5 Limited ("Atrium") for its investment properties under Policy/Certificate Number ATR/R/136686. (Id. ¶16.) That policy was underwritten by Burns & Wilcox on behalf of Atrium, through AUGold, Atrium's proprietary web-based underwriting platform. (Def.'s SOMF, Dkt. [44-2] ¶21.)
On or around March 24, 2011, a Schedule of Locations, which included a vacant dwelling acquired by Nationwide on March 27, 2011 located at 3388 Boulder Park Drive, Atlanta, Georgia 30331 (the "Boulder Park Property"), became part of Policy ATR/R/136686. (Pl.'s SOMF, Dkt. [43-1] ¶¶3, 17.) On April 4, 2011 at 4:19 p.m., Elzie D. "Eddie" Speir III of Associates Group, Inc. Insurance Agency, acting as insurance agent for Nationwide, wrote to Burns & Wilcox via email asking that a renewal Policy/Certificate for Policy ATR/R/136686 be issued effective April 5, 2011 at 12:01 a.m. (Speir Aff., Dkt. [43-9] ¶8.) In Mr. Speir's email, he writes: "Issue renewal effective 12:01 AM on 04/05/2011 based on your 02/24/11 proposal. Confirm issuance by providing a binde [sic] and/or policy number. Advise if you need any additional information." (Ex. C to Aff. of Don Malcolm, Dkt. [53-1] at 15.)
On April 5, 2011 at 10:21 a.m., Amanda Snipes of Burns & Wilcox responded via email asking that Mr. Speir complete and submit the Vacant Dwelling Applications on Burns & Wilcox-specific forms. (Speir Aff., Dkt. [43-9] ¶8.) In that email, Ms. Snipes writes: "Thank you for your bind request. Please send the following applications so we can release your binder." (Ex. C to Aff. of Don Malcolm, Dkt. [53-1] at 15.) Ms. Snipes then lists the properties for which Burns & Wilcox requests an application, including the Boulder Park Property. (Id.) The email from Ms. Snipes contains a disclaimer that reads: "IMPORTANT: Please be advised that coverage cannot be considered bound until confirmed by the carrier via written notice. Thank you!!" (Id.)
Mr. Speir completed the forms, including the Vacant Dwelling Application [53-1], as requested by Burns & Wilcox and submitted them later in the day on April 5, 2011. (Speir Aff., Dkt. [43-9] ¶9.) On those forms, he represented that the Property was built in 1999, that the utilities at the Property were "on, " and that the Applicant had never declared personal bankruptcy. (Defs.' SOMF, Dkt. [44-2] ¶¶11-15; Ex. A to Aff. of Don Malcolm, Dkt. [53-1] at 10.) Policy/Certificate No. ATR/R/1444494 (the "Policy") was issued with a retroactive effective date of April 5, 2011 at 12:01 a.m. (Ex. 1 to Am. Compl., Dkt. [13-1].)
Also on April 5, 2011, a fire occurred at the Property. (Defs.' SOMF, Dkt. [44-2] ¶17; Pl.'s SOMF, Dkt. [43-1] ¶10.) The fire was called in to the Atlanta Fire Department at 6:04 a.m. (Defs.' SOMF, Dkt. [44-2] ¶17.) The Atlanta Fire Department arrived at the Property at 6:19 a.m. and cleared the scene at 7:05 a.m. (Pl.'s SOMF, Dkt. [43-1] ¶11.) Atrium, through its managing agent Burns & Wilcox, assigned insurance adjuster Christopher Nichols to investigate the cause and origin of the fire. (Pl.'s SOMF, Dkt. [43-1] ¶22.) Mr. Nichols determined that the fire caused a total loss to the Property. (Id. ¶¶22-23.) Plaintiff claims that the amount of insurance payable under Georgia's Valued Policy Law, O.C.G.A. §33-32-5, is $100, 000 and sought payment under the Policy. (Id. ¶25.)
On February 29, 2012, Atrium rescinded the Policy, refunding the policy premium on April 29, 2012. (Def.'s SOMF, Dkt. [44-2] ¶¶20, 39). In its letter to Plaintiff rescinding the Policy, Defendant through its counsel enumerated three alleged material misrepresentations that warranted recission under Georgia law: (1) that the Property was built in 1999; (2) that the utilities to the Property were "on"; and (3) that the applicant had never declared personal bankruptcy. (Ex. 3 to Am. Compl., Dkt. [13-3] at 3.) Defendant claimed that had it known that the Property had been built in 1950, that Georgia Power had not provided service to the Property since 2009, and that Larry Brewer had declared personal bankruptcy, it would not have issued the Policy. (Id.)
Plaintiff filed suit against Certain Underwriters at Lloyd's London Subscribing to Certificate Number ATR/R/1444494 on March 29, 2013, seeking a declaratory judgment that its claim resulting from the fire loss at the Property is "a covered loss under the subject policy and that Nationwide is entitled to the recovery of insurance proceeds." (Compl., Dkt.  ¶9.) Plaintiff amended its complaint on August 22, 2013 to name Atrium 5 Limited as the sole Defendant. (First Am. Compl., Dkt. .) Defendant answered asserting affirmative defenses. (Atrium 5 Ltd.'s Answer & Aff. Defenses to Pl.'s First Am. Compl., Dkt. .) Both parties now move for summary judgment. Plaintiff seeks a declaration that Atrium owes Nationwide the sum of $100, 000 as insurance proceeds to indemnify Nationwide for the fire loss suffered on the Property. (Pl.'s MSJ, Dkt.  at 3.) Defendant seeks summary judgment on grounds that it owes no duty to Plaintiff because it properly rescinded the Policy based on the misrepresentations in Plaintiff's application. (Def.'s MSJ, Dkt.  at 1.)
II. The Parties' Arguments
Plaintiff raises, among other arguments, the following in support of its motion for summary judgment on its claim for proceeds under the Policy. First and foremost, Plaintiff argues that the Policy was bound as of 12:01 a.m. on April 5, 2011. (Pl.'s MSJ, Dkt.  ¶5.) Thus, Plaintiff contends, because the Policy was in effect prior to its submission of the additional information in the Vacant Dwelling Applications to Burns & Wilcox, Defendant could not have relied on Plaintiff's representations on those forms. (Id.) In further support of this argument, Plaintiff points out that the Policy (No. ATR/R/144494) was a renewal of an earlier policy (No. ATR/R/136686) and as such, Defendant had already assumed the risk. (Id. ¶3.)
Second, Plaintiff argues that even if the policy was not bound until after Burns & Wilcox received the Vacant Dwelling Application, Defendant's defense of misrepresentation must fail because "either the misrepresentations of fact were not misrepresentations at all, but if there were any misrepresentations, they were not material' under O.C.G.A. §33-24-7(b)." (Pl.'s Br. in Opp'n to Def.'s MSJ, Dkt.  at 3.) Specifically, Plaintiff contends that the improvements to the Property completed in 2011 would have led Burns & Wilcox to accept the risk even though the Property was constructed in approximately 1950. Plaintiff also argues that Nationwide, not Mr. Brewer, was the relevant applicant for purposes of reporting earlier bankruptcies. Moreover, Plaintiff contends that the utilities to the Property simply needed to be "turned on" by the utility companies. (Dkt.  at 13.)
Defendant contends, on the other hand, that the insurance application contained several misrepresentations, rendering the Policy void ab initio and entitling Defendants to rescission under O.C.G.A. §33-24-7(b). (See generally Def.'s MSJ Br., Dkt. [44-1]; Def.'s Resp. in Opp'n to Pl.'s MSJ, Dkt. .) To this end, Defendant argues that it relied on the Vacant Dwelling Application submitted by Plaintiff on the afternoon of April 5, 2011 and that the Policy was only retroactively bound to be effective as of 12:01 a.m. on April 5. (Def.'s Reply Br. in Supp. of Def.'s MSJ, Dkt.  at 3.) Further, Defendant argues that even though the Policy renewed an earlier policy, Defendant had not previously accepted the risk because the Property at issue was added to the earlier policy by endorsement. (Id.) Accordingly, Defendant argues, the Policy was issued based on the following misrepresentations made in the Vacant Dwelling Application as of April 5, 2011: "Year Built: 1999;" "9. Are Utilities On or Off? ON;" "12. Applicant Ever Declared Personal Bankruptcy? NO." (Ex. A to Def.'s Resp. in Opp'n to Pl.'s MSJ, Dkt. [53-1].) On the basis of these purported misrepresentations, Defendant claims the Policy is subject to rescission, and thus seeks judgment as a matter of law on Plaintiff's claims.
I. Atrium 5 Limited's Motion to Strike Paragraph 8 of Affidavit of Elzie D. Speir, III 
As an initial matter, Defendant moves to strike Paragraph 8 of the Affidavit of Elzie D. Speir, III in Support of Plaintiff's Motion for Summary Judgment (the "Speir Affadavit") [43-9] pursuant to Federal Rule of Civil Procedure 56(c). (Def.'s Mot. to Strike, Dkt.  at 3.) Defendant argues that Mr. Speir lacks personal knowledge of the subject matter in Paragraph 8, and instead impermissibly grounds his affidavit in "speculation and supposition." (Id. at 2.) Defendant particularly objects to the language: "This communication indicated to me that per my April 4, 2011 request, the policy had been bound as of 12:01 ...