United States District Court, S.D. Georgia, Augusta Division
RENAISSANCE RECOVERY SOLUTIONS, LLC, UNITED STATES FIRE INSURANCE COMPANY, and INTERSTATE FIRE AND CASUALTY COMPANY, Plaintiffs,
MONROE GUARANTY INSURANCE COMPANY and FCCI INSURANCE COMPANY, Defendants.
RANDAL HALL CHIEF JUDGE.
the Court last visited this case a little over a year ago, it
left unresolved several issues necessary to a final decision.
These issues included (1) whether Georgia or Michigan law
applied to the insurance policies in dispute, and (2) under
the applicable state law, which insurer (s) bear(s) the
responsibility for paying the nearly $2, 5 million of
disputed insurance obligations. With the Court's
permission, the parties each filed summary judgment motions
addressing these issues. After reviewing the briefs, the
Court finds that Georgia law governs the insurance contracts
in dispute and Plaintiffs and Defendants each bear some
responsibility for paying the disputed coverage expenses.
Thus, the Court GRANTS IN PART and
DENIES IN PART the pending
motions for summary judgment. (Docs. 70 & 7 6.)
2009, Michael Brown killed William Jacobs while attempting to
repossess a truck owned by Jacob's business partner,
Joseph Clements. The incident sparked two lawsuits in the
Superior Court of Columbia County, Georgia: Clements
and Jacobs. Each suit named the same four
defendants: Nuvell National Auto Finance, LLC
("Nuvell") (the repossessing lender); Renaissance
Recovery Solutions, LLC ("RRS") (the company Nuvell
contracted with to conduct the repossession); Renovo
Services, LLC ("Renovo") (the company RRS
subcontracted with to perform the repossession); and Michael
Brown (the repossession man Renovo contracted with to
physically obtain the car). In Clements, Mrs.
Clements, who witnessed the incident alongside her husband,
brought suit individually and on behalf of her deceased
husband. Clements settled for $450, 000. In
Jacobs, Mrs. Jacobs brought suit individually and on
behalf of her deceased husband. All four defendants admitted
to liability prior to trial, and a jury awarded damages of
$2.5 million. The Superior Court entered judgment against all
four defendants jointly and severally.
the Jacobs case was proceeding, however, a dispute
arose concerning insurance coverage. United States Fire
Insurance Company ("U.S. Fire") and Interstate
First and Casualty Company ("Interstate") -
Plaintiffs in this litigation - insured all four tortfeasors
in the Jacobs and Clements cases: Brown,
Nuvell, Renovo, and RRS. Monroe Guaranty Insurance Company
("Monroe") and FCCI Insurance Company
("FCCI") -Defendants in this litigation - insured
only two of the tortfeasors in the Jacobs and
Clements cases: RRS (directly) and Nuvell (through
an indemnification agreement between Nuvell and RRS) . Monroe
and FCCI declined to provide coverage to RRS during the
Jacobs litigation. In response, RRS filed a
third-party complaint against Monroe in Jacobs
claiming Monroe was contractually obligated to defend it and
that Monroe's refusal to defend constituted bad faith.
prior to trial, the state trial court severed the third-party
complaint from the Jacobs case. Once severed, the
trial court entered summary judgment against RRS on the
issues of coverage and bad faith. On appeal, the Georgia
Court of Appeals reversed and held that Monroe had to provide
coverage to RRS.
remand, the trial court allowed RRS to add FCCI as an
additional third-party defendant. It also allowed RRS to join
U.S. Fire and Interstate as third-party plaintiffs. Monroe
then removed the action to this Court invoking diversity
issue in this case is a dispute over which insurers are
responsible for paying the costs of the judgment arising out
of the Jacobs litigation. Plaintiffs paid for both
the defense of all four tortfeasors as well as the damages
entered against them. Defendants refused to take any part in
the litigation concerning their insured parties and claim
they had no responsibility to pay for any portion of the
this Court denied in part and granted in part various
portions of two motions for summary judgment filed by
Plaintiffs. (Doc. 65.) In that Order, the Court made several
rulings: (1) the FCCI policy covered RRS (and thus Nuvell);
(2) the state court verdict finding all tortfeasors jointly
and severally liable could not be disturbed even if it was
entered in contravention of Georgia's apportionment
statute; (3) Plaintiffs were entitled to statutory interest
under M.C.L. § 500.2006; and (4) Plaintiffs are not
entitled to attorneys' fees under Georgia law. The Court
also noted several unresolved questions: (1) What state's
law governed the U.S. Fire and Interstate policies delivered
to tortfeaser Renovo? (2) What state's law applies to
resolve the issues of priority and allocation presented by
the multiple policies and insureds? and (3) How does the
applicable state law resolve the issues of priority and
response to this Court's order, the parties filed dueling
summary judgment motions. Having reviewed the parties'
briefs, the Court now resolves the remaining disputes. The
central question before the Court being: Do Defendants owe
any money to Plaintiffs, and, if so, how much?
Standard of Review
judgment is appropriate only if "there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law." Fed.R.Civ.P. 56(a). Facts
are "material" if they could affect the outcome of
the suit under the governing substantive law, and a dispute
is genuine "if the evidence is such that a reasonable
jury could return a verdict for the non-moving party."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). The Court must view factual disputes in the light
most favorable to the non-moving party, Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986), and must draw "all justifiable inferences in
[the non-moving party's] favor." United States
v. Four Parcels of Real Prop., 941 F.2d 1428, 1437 (11th
Cir. 1991) (en banc) (internal punctuation and citations
omitted). The Court should not weigh the evidence or
determine credibility. Anderson, 477 U.S. at 255.
moving party has the initial burden of showing the Court, by
reference to materials on file, the basis for the motion.
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Because the standard for summary judgment mirrors that of a
directed verdict, the initial burden of proof required by
either party depends on who carries the burden of proof at
trial. Id. at 323. When the movant does not carry
the burden of proof at trial, it may satisfy its initial
burden in one of two ways - by negating an essential element
of the non-movant's case or by showing that there is no
evidence to prove a fact necessary to the non-movant's
case. See Clark v. Coats & Clark, Inc., 929 F.2d
604, 606-08 (11th Cir. 1991) (explaining Adickes v. S.H.
Kress & Co., 398 U.S. 144 (1970) and Celotex
Corp. v. Catrett, 477 U.S. 317 (1986)). The movant
cannot meet its initial burden by merely declaring that the
non-moving party cannot meet its burden at trial.
Clark, 929 F.2d at 608.
and only if - the movant carries its initial burden, the
non-movant must "demonstrate that there is indeed a
material issue of fact that precludes summary judgment."
Id. When the non-movant bears the burden of proof at
trial, the non-movant must tailor its response to the method
by which the movant I carried its initial
burden. If the movant presented evidence affirmatively
negating a material fact, the non-movant "must respond
with evidence sufficient to withstand a directed verdict
motion at trial on the material fact sought to be
negated." Fitzpatrick, 2 F.3d at 1116. If the
movant shows an absence of evidence on a material fact, the
non-movant must either show that the record contains evidence
that was "overlooked or ignored" by the movant or
"come forward with additional evidence sufficient to
withstand a directed verdict motion at trial based on the
alleged evidentiary deficiency." Id. at 1117.
The non- movant cannot carry its burden by relying on the
pleadings or by repeating conclusory allegations contained in
the complaint. See Morris v. Ross, 663 F.2d 1032,
1033-34 (11th Cir. 1981). Rather, the non-movant must respond
with affidavits or as otherwise provided by Federal Rule of
Civil Procedure 56.
action, the Clerk of the Court gave each opposing party
notice of the motions for summary judgment and informed them
of the summary judgment rules, the right to file affidavits
or other materials in opposition, and the consequences of
default. (Docs. 75, 77.) Therefore, the notice requirements
of Griffith v. Wainwright, 772 F.2d 822, 825 (11th
Cir. 1985) (per curiam), are satisfied. The time for filing
materials in opposition has expired, and the motions are now
ripe for consideration.
Court divides this opinion into two sections. In the first
section, the Court addresses Defendants' argument that
the Court must allocate the $2.5 million of damages among
RRS, Nuvell, Renovo, and Brown as the insured tortfeasors
before it allocates responsibility for payment among U.S.
Fire, Monroe, Interstate, and FCCI as the insurers. In the
second section, the Court explains which state's law
governs the dispute between Plaintiffs and Defendants as
insurers and determines who owes whom and in what amount.
parties have arrived at an impasse on the fundamental
character and goal of the present action. Plaintiffs view
this action as only the allocation of a fixed amount of
damages between co-insurers. Defendants, on the other hand,
view this action as the allocation of damages among four
tortfeasors (Nuvell, Brown, Renovo, and RRS) which will then
determine the fixed amount of damages to be allocated between
four co-insurers (Plaintiffs and Defendants).
aim to distinguish between the amount of money owed by their
insured and the amount of money owed to their insured.
Because Defendants insured only two of the tortfeasors in the
underlying litigation, while Plaintiffs insured all four,
Defendants argue that apportioning damages between the
tortfeasors could drastically alter the amount of damages
they are obligated to pay as insurers. Thus, before the Court
I i allocates coverage expenses between Plaintiffs and
Defendants as co-insurers of RRS and Nuvell, Defendants ask
this Court to first determine the size of the coverage
expenses incurred by RRS and Nuvell by apportioning damages
between RRS, Nuvell, Renovo, and Brown. The Court declines
joint and several verdict issued by the state trial court in
Jacobs requires this Court to assume that each
tortfeaser is equally liable for the entire judgment assessed
against them. See Eidson v. Maddox, 24 S.E.2d 895,
897-98 (Ga. 1943)(noting that once a joint and several
verdict is entered, regardless of any differing degrees of
negligence, the defendants are "equally liable to the
plaintiffs and equally bound to discharge the several
judgments'7) . All tortfeasors in this case have the
ability, thanks to insurance, to satisfy the judgment against
them. Thus, each tortfeaser should theoretically pay 25% of
the $2.5 million judgment. Because the only tortfeasors
insured by Defendants were Nuvell and RRS, Defendants would
pay, at most, 50% of the judgment. But, if the Court were,
after reviewing the evidence and holding an evidentiary
hearing, to allocate liability between the tortfeasors such
that each tortfeaser was liable for its share of fault in
causing the accident, the result might look much different.
For example, Brown, being the tortfeaser most closely related
to the harm, might be assigned 85% of the fault, with the
remaining 15% of the fault distributed equally among the
three remaining torfeasors. Under this apportionment, Nuvell
and RRS would be liable for only 10% of the total judgment.
Therefore, their insurers, Defendants, would only be
responsible for covering, at most, 10% of the judgment. The
result: a sizeable savings by Defendants.
law, however, does not allow this Court to apportion
liability between RRS, Nuvell, Renovo, and Brown. The Court
is left then only to apportion coverage expenses between
Monroe, U.S. Fire, Interstate, and FCCI as the insurers of
RRS, Nuvell, Renovo, and Brown. The Court will now explain
why that is so.
Defendants ask the Court to apportion damages between RRS,
Nuvell, Renovo, and Brown, they are asking the Court to
sustain a contribution action. Contribution is "the
right of one who has discharged a common liability or burden
to recover of another also liable the aliquot portion which
he ought to pay or bear." Eidson, 24 S.E.2d at
897; see Arrow Exterminators, Inc. v. Zurich Am. Ins.
Co., 136 F.Supp.2d 1340, 1352 (N.D.Ga. 2001) .
Contribution is a remedial action, thus it is governed by
Georgia law. Allstate Ins. Co. v. Duncan, 462 S.E.2d
638, 640 (Ga.Ct.App. 1995). Under Georgia law, however,
Defendants have no right to seek a contribution action
between RRS, Nuvell, Renovo, and Brown.
have no right to seek contribution because the Georgia
General Assembly largely, if not entirely, abolished such a
right when it mandated that triers of fact apportion
liability and damages among multiple tortfeasors at the trial
stage of litigation. In 2005, the Georgia General Assembly
enacted comprehensive tort reform by passing Senate Bill 3.
Thomas A. Eaton, Who Owes How Much? Developments in
Apportionment and Joint and Several Liability Under Q.C.G.A.
§ 51-12-33, 64 Mercer L. Rev. 15, 18 (2012) . A
primary goal of S.B. 3 was eliminating joint and several
liability. Emily Ruth Boness, The Effect (Or Noneffect)
of the 2005 Amendments to O.C.G.A. Sections 51-12-31 and
51-12-33 on Joint Liability in Georgia, 44 Ga. L. Rev.
215, 229 (2009). To accomplish this goal, S.B. 3 revised
§ 51-12-33 of the Georgia Code. Id. Prior to
S.B. 3, § 51-12-33 merely allowed juries to
apportion fault and damages among multiple tortfeasors:
Where an action is brought against more than one person for
injury to person or property and the plaintiff is himself to
some degree responsible for the injury or damages claimed,
the trier of fact, in its determination of the total amount
of damages to be awarded, if any, may apportion its
award of damages among the persons who are liable and whose
degree of fault is greater than that of the injured party
according to the degree of fault of each person. Damages, if
apportioned by the trier of fact as provided in this Code
section, shall be the liability of each person against whom
they are awarded, shall not be a joint liablity among the
persons liable, and shall not be subject to any right of
(emphasis added). After S.B. 3, however, § 51-12-33
required juries to apportion fault and damages among
(a) Where an action is brought against one or more persons
for injury to person or property and the plaintiff is to some
degree responsible for the injury or damages claimed, the
trier of fact, in its determination of the total amount of
damages to be awarded, if any, shall determine the percentage
of fault of the plaintiff and the judge shall reduce the
amount of damages otherwise awarded to the plaintiff in
proportion to his or her percentage of fault.
(b) Where an action is brought against more than one persons
for injury to person or property, the trier of fact, in its
determination of the total amount of damages to be awarded,
if any, shall after a reduction of damages pursuant to
subsection (a) of this Code section, if any, apportion its
award of damages among the persons who are liable according
to the percentage of fault of each person. Damages
apportioned by the trier of fact as provided in this Code
section shall be the liability of each person against whom