MILLER, P. J., ANDREWS and BROWN, JJ.
Miller, Presiding Judge.
four related appeals stem from a lawsuit filed by Hale Haven
Properties, LLC, against Auto-Owners Insurance Company, Bank
of America, N.A., and Regions Bank, Inc. (Bank of America and
Regions Bank are collectively, the "Bank
Appellants"), to recover payment on an insurance claim
for damage to commercial property.
first two cases, A18A0132 and A18A0134, Auto-Owners appeals
from the trial court's denial of its motion for summary
judgment on Hale Haven's claims for breach of contract,
reformation, enforcement of the check, bad faith, and
attorney fees, and Hale Haven cross-appeals from the trial
court's denial of its summary judgment motion against
Auto-Owners. As it pertains to Auto-Owners' appeal, we
conclude that although genuine issues of material fact remain
on Hale Haven's reformation claim, Hale Haven cannot show
that Auto-Owners breached the insurance policy as written,
Hale Haven's enforcement-of-the-check claim was untimely,
and Hale Haven's claims for bad faith damages and
attorney fees fail as a matter of law. Thus, the trial court
correctly denied summary judgment on the reformation claim
but erred in denying summary judgment in Auto-Owners'
favor on the remaining claims. We also conclude that the
trial court correctly denied Hale Haven's motion for
summary judgment because a jury issue exists regarding
whether Hale Haven was negligent in its alleged failure to
obtain and read the insurance policy, so as to prejudice
next two appeals, A18A0133 and A18A0147, the Bank Appellants
appeal from the trial court's denial of their motions for
summary judgment against Auto-Owners and Hale Haven,
respectively, and Hale Haven cross-appeals from the trial
court's denial of its summary judgment motion against the
Bank Appellants. Regarding the Bank Appellants' appeal
against Auto-Owners, we vacate the trial court's denial
of summary judgment and remand for consideration of whether
Auto-Owners' cross-claim was time-barred. As to the Bank
Appellants' appeal against Hale Haven, we conclude that
the trial court properly denied summary judgment because a
jury issue exists regarding the Bank Appellants'
commercial reasonableness in accepting and paying on the
insurance check. We also determine that the trial court
properly denied summary judgment on Hale Haven's
cross-appeal against the Bank Appellants because the Bank
Appellants are not foreclosed from asserting the defense of
we affirm in part, reverse in part, vacate in part, and
remand for further proceedings consistent with this opinion.
appeal from a grant of summary judgment, this Court conducts
a de novo review of the record, construing the evidence and
all inferences therefrom most favorably to the nonmoving
party." (Citation omitted.) American Mfg. Mut. Ins.
Co. v. E A Technical Svcs., Inc., 270 Ga.App. 883 (608
S.E.2d 275) (2004).
viewed, the record shows that Hale Haven sold a shopping
center to VPS Enterprises, LLC in 2010, while maintaining a
mortgagee interest in the property. As part of the sale, Hale
Haven and VPS entered into a security agreement, which
required VPS to maintain insurance coverage on the property.
The security agreement also provided that in the event of a
"loss under any such policy of insurance, " Hale
Haven was authorized to apply the insurance proceeds to the
mortgage debt on the property, which was $3, 000, 000 at the
time of the sale.
2011, an agent for VPS, Dennis Pack, procured insurance
coverage for the property from Auto-Owners, and asked for
Hale Haven to be named as the mortgagee on the policy. The
policy application provided for both property coverage and
general liability coverage, and, on the application, Hale
Haven was named as a mortgagee for both types of coverage. An
underwriter with Auto-Owners approved this application.
However, when the formal one-year insurance policy was
issued, Hale Haven was only listed as a mortgagee on the
general liability section and not the property coverage
section. This same insurance policy was automatically renewed
2013, VPS made a property insurance claim to Auto-Owners,
stemming from damage after a hailstorm. On the
"proof of loss" form, Hale Haven was listed as
having an interest in the property. In November 2013,
Auto-Owners issued a check as payment on the claim to
"VPS ENTERPRISES LLC AND HALE HAVEN PROPERTIES LLC,
" in the amount of $465, 346.96, and Auto-Owners gave
that check to Pack. Auto-Owners added Hale Haven to the check
because it had conducted a title search on the property and
learned that Hale Haven was a mortgagee.
November 25, 2013, Pack formed a limited liability company
named "vps enterprises and hale haven properties llc,
" and on the company's articles of organization, he
was listed as the sole registered agent and organizer for the
company. An IRS employer identification number was assigned
to the company, and the company was also issued a certificate
of organization from the State of Georgia.
next day, Pack presented these business documents at a
Regions Bank branch and he opened a business account named
"VPS ENTERPRISES AND HALE HAVEN." Pack deposited
the insurance check into this new account, but because he did
not endorse the check, Auto-Owners requested that Regions
Bank rescind the deposit. Regions Bank complied, and
Auto-Owners reissued the check in the same amount, again
making it payable to "VPS ENTERPRISES LLC AND HALE HAVEN
PROPERTIES LLC." In depositing this new check, Pack
signed his name on the reverse and printed, "VPS
ENTERPRISES LLC HALE HAVEN PROPERTIES LLC." Bank of
America, with whom Auto-Owners had its account, was the
drawee (or payor) bank. After the funds were deposited by
Bank of America into the Regions Bank account Pack had
opened, he wired $450, 000 to an international checking
account and he appears to have later left the country.
Haven only became aware that the property had been damaged
when a roofing contractor sought payment for repairs that had
been performed on the property. When Hale Haven visited and
inspected the property, it found the repairs to be incomplete
and contacted Auto-Owners. Auto-Owners, however, informed
Hale Haven that it had already issued full payment on a hail
damage claim made by VPS, that Hale Haven was named on the
check, and that Auto-Owners was not responsible for any
improper signature on that check. VPS ultimately defaulted on
its mortgage payments for the property, and Hale Haven
repurchased it at foreclosure for $1, 200, 000, and then
resold it at a loss for approximately $800, 000.
receiving no payments from the insurance claim, Hale Haven
filed suit in Fulton County State Court in June 2014,
alleging breach of contract against Auto-Owners and
conversion against Bank of America. Hale Haven dismissed this
state court case without prejudice in September 2015. Then,
less than five months later, Hale Haven filed a renewal
action in the Fulton County Superior Court, pursuant to OCGA
§ 9-2-61. In addition to its initial breach-of-contract
claim against Auto-Owners, Hale Haven requested reformation
of the insurance policy, and added claims for enforcement of
the check under OCGA § 11-3-309; bad faith damages and
attorney fees under OCGA § 33-4-6 for a refusal to pay
the insurance claim; and attorney fees under OCGA §
13-6-11 for stubborn litigiousness. Hale Haven also added
Regions Bank to the lawsuit, suing them for conversion of the
check. Auto-Owners then filed a cross-claim against the Bank
Appellants, arguing that they "failed to comply with
commercially reasonable and necessary steps" before
approving payment on the check.
and the Bank Appellants moved for summary judgment on all the
claims filed against them. Hale Haven also filed a motion for
partial summary judgment on its conversion claim against the
Bank Appellants and on its claim that Auto-Owners was
obligated to pay Hale Haven the amount of the insurance
proceeds. After a hearing, the trial court denied all the
parties' summary judgment motions, and these appeals
threshold question for each of Hale Haven's claims
against Auto-Owners is whether they were timely under the
renewal statute in conjunction with the two-year limitation
period in the insurance policy.
OCGA § 9-2-61 (a) permits a plaintiff to dismiss and
recommence a suit within the original applicable period of
limitation or within six months after the dismissal,
whichever is later. If the statute of limitation has not run,
the plaintiff may add new parties and new claims to the
refiled action; however, if the statute of limitation has
expired, the plaintiff is limited to suing the same
defendants under the same theories of recovery. The new
petition must be substantially the same as the original as to
the essential parties. The renewal statute may not be used to
suspend the running of the statute of limitation as to
defendants different from those originally sued.
(Citations and punctuation omitted.) Ward v. Dodson,
256 Ga.App. 660, 661 (569 S.E.2d 554) (2002). The insurance
policy provides: "No one may bring a legal action
against us under this [Commercial Property] Coverage part
unless . . . [t]he action is brought within 2 years after the
date on which the direct physical loss or damage
Hale Haven's original action was timely filed in state
court in June 2014, well within the two-year limitation
period provided in the insurance policy. Because this instant
case was filed within six months after Hale Haven dismissed
its initial lawsuit - the time frame in the renewal statute -
the limitation period in the insurance policy does not
provide a time-bar to any claims properly brought in the
renewal action. Blue Ridge Ins. Co. v. Maddox, 185
Ga.App. 153 (1) (363 S.E.2d 595) (1987). The timeliness of
each claim against Auto-Owners under the renewal statute will
be discussed in turn.
Auto-Owners argues that the trial court erred in denying its
summary judgment motion against Hale Haven because (1) Hale
Haven's renewal action was untimely filed after the
two-year limitation period in the insurance policy; and (2)
Hale Haven's claims for breach of contract, reformation,
enforcement of the check, bad faith, and attorney fees all
fail as a matter of law. Although we conclude that the
reformation claim was properly brought in the renewal action,
and genuine issues of material fact remain as to this claim,
the trial court erred in its denial of summary judgment as to
all of Hale Haven's remaining claims against Auto-Owners.
Breach of the Insurance Policy
contends that it did not breach the insurance policy as
written and that Hale Haven is not entitled to reformation of
the insurance policy as a matter of law. Although we
determine that Hale Haven cannot demonstrate that Auto-Owners
committed a breach on the insurance policy as written, there
are genuine issues of material fact regarding whether the
policy should be reformed to name Hale Haven as an additional
insured mortgagee on the property coverage part of the
Breach of contract on the policy as written
outset, we note that this claim is substantially the same as
the breach-of-contract claim asserted in the original state
court complaint, and no timeliness issue arises here under
the renewal statute. Soley v. Dodson, 256 Ga.App.
770, 772 (569 S.E.2d 870) (2002) ("To suspend the
running of the statute of limitation in a renewal action, the
cause of action must be substantially the same as in the
original action.") (citation and footnote omitted).
of an insurance policy is governed by the ordinary rules of
contract construction, and when the terms of a written
contract are clear and unambiguous, the court is to look to
the contract alone to find the parties'
intent." (Citation omitted; emphasis supplied.) Ins.
Co. of Pennsylvania v. APAC-Southeast, Inc., 297 Ga.App.
553, 557 (677 S.E.2d 734) (2009); Infinity Gen. Ins. Co.
v. Litton, 308 Ga.App. 497, 500 (2) (707 S.E.2d 885)
(2011). "Where the contractual language is explicit and
unambiguous, the court's job is simply to apply the terms
of the contract as written, regardless of whether doing so
benefits the carrier or the insured." (Citations
omitted.) Georgia Farm Bureau Mut. Ins. Co. v.
Smith, 298 Ga. 716, 719 (784 S.E.2d 422) (2016).
"The proper construction of a contract, and whether the
contract is ambiguous, are questions of law for the court to
decide." (Citation omitted.) APAC-Southeast,
supra, 297 Ga.App. at 557.
text of the insurance policy is neither unclear nor
ambiguous. The property coverage section provides,
"SECURED INTERESTED PARTIES: None." Indeed, Hale
Haven is not named anywhere in this section of the
policy. Hale Haven's reliance on the testimony of the
insurance agent and an underwriter regarding their
interpretation of the policy is unavailing; when we are
presented with clear and unambiguous contract terms, "we
enforce [those] terms as written and do not look elsewhere to
assist in the contract's interpretation." (Citation
omitted.) Donchi, Inc. v. Robdol, LLC, 283 Ga.App.
161, 166 (2) (640 S.E.2d 719) (2007). Therefore, as a matter
of law, Hale Haven does not show that Auto-Owners breached a
contractual obligation with regard to the property loss at
issue, based on the policy as written.
under our Supreme Court precedent, the reformation claim was
timely. In Birmingham Fire Ins. Co. of Pa. v. Commercial
Transp., Inc. 224 Ga. 203 (160 S.E.2d 898)
(1968), the insured sued its carrier on the insurance policy
within the policy's 12-month limitation period, dismissed
the action, and then brought a renewal action for reformation
less than six-months later. Noting that the appellee
"was seeking to recover for the same loss under the same
policy, " id. at 204 (1), the Court deemed the renewal
action timely under the renewal statute, even though the
12-month limitation period in the policy had since elapsed.
Id. Therefore, we similarly conclude that Hale
Haven's reformation claim was properly brought in its
found the claim timely, we now determine whether a jury issue
exists as to reformation that would have precluded summary
judgment to Auto-Owners.
A petition for reformation of a written contract will lie
where by mistake of the scrivener and by oversight of the
parties, the writing does not embody or fully express the
real contract of the parties. The cause of the defect is
immaterial so long as the mistake is common to both parties
to the transaction.
(Citation omitted.) E A Technical Svcs., Inc.,
supra, 270 Ga.App. at 885 (1).
insurance application, Hale Haven was explicitly named as a
mortgagee for purposes of property coverage. One of the
underwriters noted on the application, "O.K. to issue
per App[lication], " and Auto-Owners approved the
application. A "processor" in the underwriting
department transcribed the information from the application
into Auto-Owners' system. On the "Evidence of
Commercial Property Insurance" document issued by the
insurance agent, Hale Haven was listed as the mortgagee under
the property coverage portion of the policy, and there is no
evidence that Auto-Owners later determined that Hale Haven
was not to be named on both sections of the policy. Further,
the insurance agent testified that the issued policy is
required to conform with the application. Both the
insurance agent and an underwriter with Auto-Owners explained
that a party named as a mortgagee under the general liability
section of the policy would also have to be listed as a
mortgagee on the property coverage section. Lastly, no party
contends that the coverage terms had changed for the year
that the hail damage occurred.
this evidence in the light most favorable to Hale Haven as
the non-movant, we discern genuine issues of material fact as