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National Casualty Co. v. Georgia School Boards Association-Risk Management Fund

United States District Court, N.D. Georgia, Atlanta Division

June 2, 2017




         This matter is before the Court on Defendant Georgia School Boards-Risk Management Fund's (“Risk Fund”) Motion for Partial Summary Judgment [22], and Plaintiff National Casualty Company's (“National”) Motion for Summary Judgment [23].

         I. BACKGROUND

         A. Introduction

         This is a dispute between an insurance company and a risk management agency. National and Risk Fund provide overlapping liability coverage to members of a professional association. National's insurance policies require National to provide primary coverage unless coverage is available from another source. If other coverage is available, National's coverage is only excess. Risk Fund's coverage agreements contain a similar provision, under which Risk Fund's coverage is excess if other insurance covering the same risk is in place. These apparently conflicting provisions came to a head when several individuals incurred liabilities covered by both parties. Each party contends that the other has primary coverage obligations for the liabilities claimed, and that its own coverage obligations are excess. The Court is required to determine the extent of the parties' coverage obligations in light of the competing provisions.

         B. National's Coverage

         National is an insurance company. (Defendant's Statement of Material Facts [22.2] (“DSMF”) ¶ 1). The Professional Association of Georgia Educators (“PAGE”) is a professional association of teachers and administrators. (DSMF ¶ 2). National issued insurance policies to PAGE for the July 1, 2012, to July 1, 2013, and July 1, 2013, to July 1, 2014, periods (together, the “Policies”). (DSMF ¶¶ 3-4). The Policies provide the following liability coverage to PAGE members:

Coverage A-Liability Coverage
The Company will pay on behalf of the insured all sums which the insured shall become obligated to pay by reason of liability imposed by law or for monetary damages resulting from any CLAIM made against the insured arising out of an OCCURRENCE in the course of the activities of the insured in his/her professional capacity and caused by any acts or omissions of the insured or any other person for whose acts the insured is legally liable. The Company shall defend any suit seeking monetary damages which are payable under the terms of the policy, even if such suit be groundless, false or fraudulent; but the Company may make such investigation, negotiation and settlement of any CLAIM or suit as it may deem expedient.

(DSMF ¶¶ 5-6).

         The Policies contain a provision limiting coverage for liabilities covered by “other insurance” (National's “Other Coverage Provision”):

Other Insurance
This policy is specifically excess if the insured has other insurance of any kind whatsoever, whether primary or excess, or if the insured is entitled to defense or indemnification from any other source whatsoever, including by way of example only, such sources as state statutory entitlements or provisions. Other insurance includes, but is not limited to, insurance policies, state pools, and programs of self-insurance, purchased or established by or on behalf of any EDUCATIONAL UNIT, to insure against CLAIMS arising from activities of the EDUCATIONAL UNIT or its employees, regardless of whether or not the policy or program provides primary, excess, umbrella or contingent coverage.
In addition, Coverage A [Liability Coverage] is specifically excess over coverage provided by any EDUCATIONAL UNIT'S or school board's errors and omissions or general liability policies, purchased by the insured's employer or former employers, or self-insurance program or state pools, whether collectible or not, and it is specifically excess over coverage provided by any policy of insurance which purports to be excess to a policy issued to the insured.

(DSMF ¶ 7).

         C. Risk Fund's Coverage

         Risk Fund is a risk management agency created under O.C.G.A. § 20-2-2001 et seq. (DSMF ¶¶ 16-17). It is an association formed by boards of education to share their liability risks. (O.C.G.A. § 20-2-2001(6); DSMF ¶ 17). Risk Fund's members include Columbia County Schools, Douglas County School District, Muscogee County School District, and McIntosh County Board of Education. (DSMF ¶¶ 20-23). Risk Fund “is not an insurance company or an insurer” under Georgia insurance law. O.C.G.A. § 20-2-2004.

         Risk Fund's risk-sharing arrangement is set out in coverage agreements entered into by Risk Fund and its members (the “Coverage Agreements”). (DSMF ¶ 18). Under the Coverage Agreements, Risk Fund provides liability coverage to members and their employees, including PAGE members.[1] The coverage periods are July 1, 2012, to July 1, 2013, and July 1, 2013, to July 1, 2014. (DSMF ¶¶ 18, 20-23). Risk Fund's coverage includes liability coverage for personal injury, bodily injury, property damage, negligent acts, wrongful acts, and sexual abuse. (See [5.1]-[5.4]). Risk Fund is required to “pay [amounts a] Member becomes legally obligated to pay as damages” and to “defend . . . Member[s] against any ‘suit' seeking those damages.” (See, e.g., [5.3] at 30; see generally [5.1]-[5.4]). Risk Fund's members are jointly and severally liable “for all legal obligations” arising under the Coverage Agreements. (DSMF ¶¶ 18-19; O.C.G.A. § 20-2-2009).

         The Coverage Agreements contain a provision limiting coverage where insurance is available from another source (Risk Fund's “Other Coverage Provision”):

         4. Insurance.

If valid and collectible insurance is available to the Member for a loss covered by [Risk Fund] under any coverage parts within this Coverage Document, the obligations of [Risk Fund] are ...

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