GROUP RESOURCES, INC.
CITY OF WAYCROSS et al.
MCFADDEN, P. J., BRANCH and BETHEL, JJ.
appeal arises out of a breach of contract claim brought by
Group Resources, Inc. against the City of Waycross and Raphel
Maddox (collectively "City
Defendants"). Group Resources and the City Defendants
filed cross-motions for summary judgment on the issue of
whether the fraudulent misrepresentation claims asserted
against Group Resources in a separate lawsuit relieved the
City Defendants of their obligation to indemnify Group
Resources under an Administrative Services Agreement
("Agreement"). We answer in the affirmative and
find that the trial court was authorized to grant summary
judgment in favor of the City Defendants.
judgment is proper when there is no genuine issue of material
fact and the movant is entitled to judgment as a matter of
law. A de novo standard of review applies to an appeal from a
grant of summary judgment, and we view the evidence, and all
reasonable conclusions and inferences drawn from it, in the
light most favorable to the non-movant."
BBL-McCarthy, LLC v. Baldwin Paving Co., 285 Ga.App.
494, 494-95 (646 S.E.2d 682) (2007) (citations omitted).
facts of this case are undisputed. In 2012, Group Resources
contracted with the City Defendants to act as the third-party
administrator for the City of Waycross's employee health
benefit plan (the "Plan"). Per the terms of the
Agreement, Group Resources acted as the Plan's
administrative services agent and was responsible for
verifying eligibility, authorizing coverage, handling claims,
and processing payments for the City of Waycross's
employees and their eligible dependents under the plan.
indemnification provision of the Agreement pertinent to the
issues on appeal reads:
The Plan Administrator and the [City Defendants] agree to
indemnify and hold harmless [Group Resources] from and
against any claim, action, cause of action, loss (including
the loss of a PPO discount due to the Plan
Administrator's failure to timely fund benefit payments),
liability, cost, expense, fee, damage, tax, or penalty
(including reasonable attorney and accountant fees) which may
be made or imposed by any employee or dependant or any other
person or persons (including any governmental authority or
service provider to the Plan) resulting from, or in
connection with, the operation of the Plan (whether before,
during, or following the term of this Agreement) or any
action or inaction by [Group Resources], unless such
claim, action, cause of action, liability, loss, cost,
expense, fee, damage, tax or penalty results from [Group
Resources's] willful misconduct or fraud...
2013, a hospital sued Group Resources in a Florida federal
court, claiming that Group Resources underpaid charges owed
to the hospital for services rendered to a patient covered by
the Plan. The hospital alleged, inter alia, that
Group Resources fraudulently misrepresented the amount the
hospital would be reimbursed for a patient who was covered by
the Plan and had received treatment at the hospital.
the pendency of that suit, Group Resources sent two letters
to the City Defendants demanding indemnification from any
losses incurred as a result of the pending litigation. Group
Resources also filed a motion to add the City Defendants to
the lawsuit, which was denied. After a year and a half of
litigation in Florida, Group Resources negotiated a
settlement with the hospital prior to the start of trial.
Resources filed the action giving rise to this appeal against
the City Defendants alleging, inter alia, breach of
contract for its failure to indemnify it in the Florida
lawsuit, and seeking reimbursement for litigation costs and
settlement. After a hearing on cross-motions for summary
judgment, the trial court issued an order summarily granting
the City Defendants' motion and denying Group
Resources's motion, meaning that the City Defendants did
not have to indemnify Group Resources for its costs and
expenses incurred in the Florida lawsuit. This appeal
Group Resources argues that the trial court misinterpreted
the terms of the indemnity provision in the Agreement.
Specifically, in order to trigger the exclusionary clause of
the indemnity provision, Group Resources contends that it
must have actually acted with willful misconduct or
fraudulently, and that a mere allegation of such conduct is
insufficient. We disagree because the term "claim,
" as it appears in the Agreement, does not require an
adjudication on the merits of a willful misconduct or fraud
claim in order to trigger the exclusionary clause.
the indemnity clause is a contractual provision, its
interpretation is a question of law, and we therefore review
the trial court's ruling on this issue de novo.
Firmani v. Dar-Court Builders, LLC, 339 Ga.App. 413,
425 (4) (793 S.E.2d 596) (2016). "The cardinal rule of
construction is to ascertain the intention of the parties.
The language which the parties have used will be looked to
for the purpose of finding that intention, which once
ascertained will prevail over all other considerations, in
determining the nature of the agreement." Serv.
Merch. Co. v. Hunter Fan Co., 274 Ga.App. 290, 292 (1)
(617 S.E.2d 235) (2005) (footnotes and punctuation omitted).
"No construction is required or even permitted when the
language employed by the parties in the contract is plain,
unambiguous, and capable of only one reasonable
interpretation." Freund v. Warren, 320 Ga.App.
765, 768-69 (1) (740 S.E.2d 727) (2013) (citation omitted).
Moreover, "the words of a contract of indemnification
must be construed strictly against the indemnitee."
Svc. Merch. Co., 274 Ga.App. at 292 (1) (footnotes
these principles in mind, we are unpersuaded by Group
Resources's contention that the indemnification provision
of the Agreement is ambiguous or that it did not intend for
the term "claim" to include allegations of fraud
but rather required proof of fraud before the City Defendants
could avoid its obligation to indemnify. The indemnification
provision expressly releases the City Defendants from any
obligation to indemnify Group Resources for any "claim,
action, cause of action, [or] liability" resulting from
Group Resources's willful misconduct or fraud. Notably,
the indemnification provision is bereft of any definition for
the term "claim" that requires an adjudication,
judgment, or showing of proof on a claim for fraud.
construing the term according to its plain meaning,
"claim" is commonly understood as "[a]
statement that something yet to be proved is true."
Black's Law Dictionary (10th ed. 2014). It is clear from
the plain language of the indemnification provision that
allegations such as those in the Florida lawsuit fall into
this definition of a claim and that the exclusionary language