United States District Court, N.D. Georgia, Atlanta Division
RICHARD W. STORY UNITED STATES DISTRICT JUDGE
2012, Defendant Abdulmohsen Almassud was driving near
Cumming, Georgia, when his Jeep veered into oncoming traffic
and struck a vehicle driven by Luisa Cruz Mezquital. As a
result, Cruz's hand was severely injured. She filed a
state court personal injury suit against Almassud, which went
to trial and resulted in a jury verdict exceeding $30
million. The Georgia Court of Appeals has since overturned
that verdict, however, and the case is en route to being
re-tried. In the meantime, American Family Insurance Company
(“AmFam”), the company that insured
Almassud's Jeep, filed this declaratory judgment action
seeking clarity about its obligations to Almassud in the
underlying case. Broadly, AmFam alleges that Almassud's
policy is void or rescindable because he failed to cooperate
with AmFam in defending the underlying case and provided
AmFam with false and incomplete information during the
application process. Presently before the Court are three
motions for summary judgment: two filed by Almassud [265
& 267] and one by AmFam . Also before the Court is
AmFam's Motion for Sanctions against Almassud .
After reviewing the record, the Court enters the following
Abdulmohsen Almassud owns a 1995 Jeep Wrangler that has been
modified. The Jeep, for instance, has an after-market lift
kit, winch, larger-than-stock tires, and a rebuilt axle.
Nearly a decade ago, AmFam sold a policy to Almassud for his
Jeep. It provided up to $100, 000 in liability insurance per
person for bodily injuries.
the application process, an AmFam agent took information from
Almassud. Among other things, the application asked how the
Jeep would be used. Out of the available options, Almassud
selected “to/from work.” Almassud also responded
“no” to a question asking whether the Jeep
“is customized or altered including alternate
fuel.” AmFam's agent ultimately signed the
application, recommending that AmFam issue coverage. In doing
so, the agent certified, “I personally have seen the
vehicle and recommend it.”
parties disagree over whether Almassud, himself, ever signed
the application. But either way, AmFam issued the policy, and
it took effect on September 20, 2009.
years later, Almassud was involved in an accident. According
to Almassud, the Jeep's steering failed, causing it to
veer across the center line and into oncoming traffic. The
Jeep struck a vehicle driven by Defendant Luisa Cruz
Mezquital. The accident left Almassud's Jeep totaled and
Cruz severely injured.
promptly reported the incident to AmFam. Then, AmFam took
possession of the Jeep to inspect it and assess the damage.
AmFam initially valued the damage to the Jeep at $6, 029.14.
But after Almassud submitted receipts for aftermarket items
that had been installed, AmFam increased the value.
also concluded that Almassud was not responsible for the
accident. Instead, AmFam suspected that fault lay with
Oh's Auto Center, where Almassud had the steering kit in
his Jeep replaced eight days before the accident. Unbeknownst
to AmFam, however-and supposedly key to its analysis-
Almassud had also taken the Jeep to Sears Auto Center two
hours after he left Oh's. And at Sears, Almassud had an
alignment performed, as well as a “complete steering,
suspension evaluation.” The parties dispute certain
details surrounding AmFam's investigation of the accident
but agree on the general progression of things. The day after
the accident, Almassud gave a recorded statement. AmFam asked
Almassud what the “purpose of [his] trip” was and
where he was “going” to and “coming
from.” Almassud responded, “We went to the
mountains and we were coming back.” AmFam also asked
Almassud whether “any recent repair work” had
been done to the vehicle. Almassud said “yes, ”
then explained that he had the steering kit and the drag
links “replaced at a shop” and said he would
provide those receipts to AmFam. Finally, AmFam gave Almassud
an opportunity to state anything not already discussed.
Almassud, in response, mentioned that a tow truck driver at
the accident scene noticed a pin missing from the steering
column, which the driver believed let a bolt come loose and
caused Almassud to lose control of the Jeep. AmFam later had
an engineer examine the Jeep who agreed with this theory,
noting he was “confident that the steering draft coming
loose from pitman arm was not a result of the accident but is
what caused the insured to loose [sic] steering.” Based
on its investigation, AmFam concluded that it was Oh's
installation of the steering kit that caused the accident,
not Almassud. AmFam therefore rejected three demands for
policy limits from Cruz. As a result, Cruz filed suit against
Almassud in the State Court of Fulton County.
to the insurance policy, AmFam retained an attorney, Jim
Taylor, to defend Almassud. As is common, AmFam also had its
own lawyers involved. Early in the litigation, the firm
representing AmFam asked Almassud for “Any maintenance
records and documents showing any
customizations/modifications done on the Jeep.”
Almassud responded with a lengthy email that included
receipts for parts he had purchased for the Jeep as far back
as November 2008.
discovery was underway in the underlying litigation. Of note,
in one interrogatory, Cruz asked Almassud, “When did
you make the last inspection of the [Jeep]?” Almassud
responded that he last inspected the Jeep on October 13,
2012, after Oh's performed the steering kit installation.
In another interrogatory, Cruz inquired about Almassud's
activities leading up to the accident. Almassud said he went
to Blairsville “to go off-roading.” Some months
later, Almassud sat for a deposition, and Cruz's counsel
followed up on these responses. As for the inspection,
Almassud explained that he personally looked at Oh's work
and “didn't see anything obvious, ” just that
the parts were installed and greased but “that's
[as] far as [he] went.” Cruz's counsel also asked
what Almassud meant when he said he had gone
“off-roading.” Almassud testified, among other
things, that the terrain he had driven on was “just
unpaved” and that he did not have any pictures of the
the underlying case went to trial. During her case-in-chief,
Cruz called Almassud for purposes of cross-examination.
Cruz's counsel elicited testimony from Almassud about his
off-roading activities, and his answers largely tracked those
from his deposition. Cruz's counsel, however, proceeded
to introduce a number of documents in an attempt to impeach
Almassud. Those documents showed that Almassud had, in fact,
used the Jeep to drive on more rugged terrains than he
the exchange, the trial judge took up the issue outside the
jury's presence, and Cruz's counsel accused Almassud
of perjury. Ultimately, the judge adjourned the proceedings
for the day to allow Almassud to consult a criminal attorney.
According to Almassud, both his lawyer, Jim Taylor, and
AmFam's lawyer represented criminal defendants.
following day, Almassud re-took the stand. But he refused to
answer Cruz's questions, instead pleading the Fifth. Also
that day, AmFam gave Almassud a letter advising him that
AmFam would continue to provide a defense “subject to a
full and complete reservation of rights.” According to
the letter, AmFam was prejudiced because Almassud had
“failed to cooperate” in its investigation and
the case went to the jury. The jury determined that Almassud
was 100% liable for the accident and awarded Cruz $30, 485,
judgment was entered in Cruz's favor, Almassud's
counsel filed a motion for new trial. The trial court heard
argument on that motion on December 21, 2016 and denied it.
As a result, Almassud appealed the verdict.
AmFam brought this declaratory judgment action seeking a
determination of its obligation to provide coverage to its
insured, Almassud, for the underlying case. AmFam alleges
that Almassud's coverage is void due to his failure to
cooperate with AmFam in the defense of the underlying case
and for providing AmFam with false and incomplete
information. In the alternative, AmFam seeks to rescind
Almassud's policy to minimum limits based on purported
misrepresentations he made during the application and renewal
processes. Cruz and Almassud each filed counterclaims against
AmFam asserting claims for bad faith failure to settle, among
other things. On March 15, 2017, the Court entered an Order
 dismissing, without prejudice, Almassud's failure to
settle claim as premature lacking a final and non-appealable
March 15, 2018, the Court of Appeals of Georgia issued an
opinion in the underlying case finding that “the trial
court erred in failing to instruct the jury on a substantial
and vital issue presented by the pleadings and the evidence .
. . .” Almassud v. Mezquital, 811 S.E.2d 110,
111 (Ga.Ct.App. 2018), reconsideration denied (Mar.
28, 2018). Cruz then appealed, but the Supreme Court of
Georgia denied certiorari. The underlying case is therefore
set to be re-tried.
while, this case was progressing and producing a flood of
discovery-related issues, as well as allegations of
professional misconduct. Because of these hindrances and the
posture of the state court action, the Court elected to stay
discovery until “the parties have briefed and the Court
has considered any potentially dispositive arguments
supported by the current record or until a final resolution
of the underlying case.” Accepting the Court's
invitation, both Almassud and AmFam have moved for summary
judgment. AmFam has also filed a motion for sanctions against
I. Motions for Summary Judgment
Almassud contends-in two separate motions for summary
judgment-that AmFam's declaratory judgment claim and
rescission claim fail as a matter of law. AmFam, meanwhile,
moves for summary judgment only on its declaratory judgment
claim, focusing on Almassud's alleged failure to
cooperate in the underlying suit. The Court lays out the
applicable legal standard before considering the parties'
motions on the merits.
Rule of Civil Procedure 56 requires that summary judgment be
granted “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” “The moving party
bears ‘the initial responsibility of informing the . .
. court of the basis for its motion, and identifying those
portions of the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, which it believes demonstrate the absence
of a genuine issue of material fact.'” Hickson
Corp. v. N. Crossarm Co., 357 F.3d 1256, 1259 (11th Cir.
2004) (quoting Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986)). Where the moving party makes such a
showing, the burden shifts to the non-movant, who must go
beyond the pleadings and present affirmative evidence to show
that a genuine issue of material fact does exist.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257
applicable substantive law identifies which facts are
material. Id. at 248. A fact is not material if a
dispute over that fact will not affect the outcome of the
suit under the governing law. Id. An issue is
genuine when the evidence is such that a reasonable jury
could return a verdict for the non-moving party. Id.
resolving a motion for summary judgment, the court must view
all evidence and draw all reasonable inferences in the light
most favorable to the non-moving party. Patton v. Triad
Guar. Ins. Corp., 277 F.3d 1294, 1296 (11th Cir. 2002).
But, the court is bound only to draw those inferences that
are reasonable. “Where the record taken as a whole
could not lead a rational trier of fact to find for the
non-moving party, there is no genuine issue for trial.”
Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th
Cir. 1997) (quoting Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986)). “If the
evidence is merely colorable, or is not significantly
probative, summary judgment may be granted.”
Anderson, 477 U.S. at 249-50 (internal citations
omitted); see also Matsushita, 475 U.S. at 586 (once
the moving party has met its burden under Rule 56(a), the
nonmoving party “must do more than simply show there is
some metaphysical doubt as to the material facts”).
Count I - ...