Plantation Pipe Line Co. v. Stonewall Insurance
335 Ga. App. 302
| Ga. Ct. App. | 2016Background
- Plantation Pipeline discovered a turbine-fuel leak in 1976, repaired it, and paid the landowner; contamination was later rediscovered in April 2007 during maintenance.
- Plantation investigated and incurred remediation and defense costs in 2007–2008 and notified primary and some excess carriers in Feb 2008, estimating total costs would exceed $2 million.
- Stonewall had issued a $1,000,000 excess umbrella policy covering Nov 30, 1975–Nov 30, 1976; Plantation did not locate Stonewall’s policy until it was found in Hunton & Williams’ archives in Feb 2010.
- Plantation gave written notice to Stonewall on April 8, 2010 (over two years after Plantation concluded its exposure likely exceeded underlying limits); Stonewall denied coverage for untimely notice.
- Plantation and Stonewall filed cross-motions for summary judgment on whether Plantation complied with the policy’s prompt-written-notice requirement; trial court granted Stonewall’s motion and denied Plantation’s.
- The court of appeals affirmed that notice to Stonewall was untimely as a matter of law but reversed the grant of summary judgment to Stonewall because the policy did not expressly make prompt notice a condition precedent and Stonewall failed on summary judgment to prove prejudice as a matter of law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of notice to excess carrier | Notice April 8, 2010 was reasonably prompt because Plantation only became fairly certain of need for excess coverage in early Mar 2010 and only located Stonewall’s policy in Feb 2010 | Notice was untimely; Plantation knew by Feb 2008 losses would likely exceed underlying limits and should have notified excess carriers then | Court: Notice to Stonewall was untimely as a matter of law (Plantation delayed >2 years after determining exposure exceeded underlying limits) |
| Excuse based on inability to locate policy sooner | Reasonable diligence in reconstructing coverage should excuse delay until missing policy is found | Lack of policy location is not a sufficient excuse where insured had long-standing awareness of excess layers and could have discovered policy earlier | Court: Plantation’s inability to locate Stonewall earlier did not create a factual dispute; delay not reasonably prompt as matter of law |
| Whether policy’s notice clause is a condition precedent to coverage | Even if late, clause is not expressly a condition precedent, so forfeiture requires insurer prejudice | Clause should be treated as condition precedent (or insurer need not show prejudice) | Court: Clause is not expressly a condition precedent; trial court erred in treating it as such |
| Whether Stonewall established prejudice from delayed notice sufficient for summary judgment | Plantation: Stonewall must show particularized prejudice and failed to do so on summary judgment | Stonewall: delay deprived it of timely investigation and opportunity to participate in remedy selection; prejudice presumed or shown | Court: On the record Stonewall did not prove prejudice as a matter of law; reversal of summary judgment for Stonewall and denial of Plantation’s SJ affirmed |
Key Cases Cited
- Cowart v. Widener, 287 Ga. 622 (Ga. 2010) (summary-judgment de novo review and viewing evidence in favor of nonmovant)
- Lumbermens Mut. Cas. Co. v. Plantation Pipeline Co., 214 Ga. App. 23 (Ga. Ct. App. 1994) (notice to excess carrier triggered when exposure likely to exceed underlying limits)
- Plantation Pipeline Co. v. Royal Indem. Co., 245 Ga. App. 23 (Ga. Ct. App. 2000) (distinguishing excess-carrier notice trigger from primary-carrier trigger)
- Resource Life Ins. Co. v. Buckner, 304 Ga. App. 719 (Ga. Ct. App. 2010) (notice provision is a condition precedent only if policy expressly so states)
- Eells v. State Farm Mut. Auto. Ins. Co., 324 Ga. App. 901 (Ga. Ct. App. 2013) (when notice is an express condition precedent, insurer need not show prejudice)