Jоhnny and Elizabeth Forshee own and operate a Chevron service station and convenience store in Dade County. In November 2007, a woman fell upon the premises of Forshee Chevron, and two years later, she filed a lawsuit against the Forshees for injuries that she sustained as a result of the fall. The Forshees tendered the defense of this lawsuit to their insurer, Employers Mutual Casualty Company, which provided a defense under a reservation of rights. The Forshees gave Employers Mutual no notice of the fall until after they were sued in November 2009.
While the personal injury lawsuit was pending, Employers Mutuаl brought this lawsuit for declaratory relief against the For-shees, alleging that they failed to timely notify Employers Mutual of the fall and that, for this reason, it owed them no defense or coverage in connection with the personal injury lawsuit. Following a bench trial, the trial court entered a declarаtory judgment in
The material facts in this case appear to be mostly undisputed, but to the extent they are disputed, we view the evidence adduced at trial in the light mоst favorable to the judgment below. 1 On November 23, 2007, a woman and her male companion drove to Forshee Chevron, parked away from the gas pumps, and walked from their car toward the entrance of the convenience store. Before reaching the entrance, the womаn fell to the ground, landing on her front side. Neither the clerk at the convenience store nor Mr. Forshee, who was in the rear of the store, saw the woman fall.
Mr. Forshee, however, saw the woman on the ground, and he went outside and asked if she was hurt or needed medical assistance. Mr. Forshee helped the woman back to her feet, and she and her companion began to walk back to their car. Mr. Forshee testified that, as he walked with the couple toward their car, either the woman or her companion mentioned something about a drink, so he returned to the convenience store and got a fountain drink for the woman. By the time Mr. Forshee returned to the parking lot with the drink, the woman was seated in a car, and she refused his offer to call for medical assistance, telling him instead that she intended to go home. At some point, the woman may have mentioned to Mr. Forshee that her arm hurt. The couple then left the premises, never having entered the convenience store.
Neither Mr. Forshee nor the clerk had ever seen the woman or her companion before the day of the fall. They did not know the name of the woman or her companion, аnd they did not have any information — such as a license plate number — that might have allowed them to identify the couple. The Forshees did not see, speak with, or hear anything about the woman or her companion for nearly two years after the fall.
Then, in November 2009, the woman filed a lawsuit for injuries that she sustained as a result of her fall — only days before the statute of limitation expired — and the Forshees were served with the complaint and summons. Attached to the complaint were copies of medical records showing that, on the day she fell at Forshee Chevron, the woman was treated for a broken arm at a hospital in Alabama. The Forshees immediately sent a copy of the complaint to their insurance agent, who forwarded it to Employers Mutual. It is undisputed that, before they sent a copy of the complaint to Employers Mutual through their agent, the Forsheеs had given Employers Mutual no notice of the fall.
The Forshees asked Employers Mutual to defend against the personal injury lawsuit pursuant to the terms of a commercial general liability policy, which covers certain claims against the Forshees arising between July 6, 2007 and July 6, 2008. This policy insures the Forshees against liability for claims of bodily injury or property damage resulting from an “occurrence,” which the policy defines broadly as “an accident.” The policy requires the insured to promptly notify Employers Mutual of an occurrence that may give rise to a covered claim:
2. Duties In The Event of Occurrence, Offense, Claim Or Suit
a. You must see to it that we are notified as soon as practicable of an “occurrence” or an offense that may result in a claim. To the extent possible, notice should include:
(1) How, when and where the “occurrence” or offense tоok place;
(2) The names and addresses of any injured persons or witnesses; and
(3) The nature and location of any injury or damage arising out of the “occurrence” or offense.
The issue in this case is whether the Forshees gave timely notice to Employers Mutual of the occurrence on which the personal injury lawsuit is based, the woman falling on the premises of Forshee Chevron in November 2007.
The trial court held that giving no notice of the fall until two years after it occurred and only after the Forshees were sued was unreasonable and, accordingly, entered a declarаtory judgment that Employers Mutual owes the Forshees no defense or coverage in connection with the personal injury lawsuit. In its order, the trial court acknowledged that the Forshees did not know the identity of the woman who fell until after she filed a lawsuit and had no means of ascertaining her identity. But the triаl court focused on the severity of the injury that the woman sustained and concluded that an incident resulting in such a severe injury requires a prompt report to the insurer: “[T]he woman who fell, and who is the plaintiff in the underlying lawsuit, broke her arm and was admitted to the hospital on the date she fell. The incident wаs sufficiently significant so that [the Forshees] should have reported whatever they could have reported to EMC.” There is no indication in the order, however, that the trial court considered what the Forshees knew, or reasonably should have known, about the existence or severity of the injury that thе woman sustained before they were served with her lawsuit in November 2009. The Forshees now appeal from the declaratory judgment entered below.
It is settled under Georgia law that, when an insurance policy includes a notice requirement as a condition precedent to coverage, and when the insured unreasonably fails to timely comply with the notice requirement, the insurer is not obligated to provide a defense or coverage. See
Federated Mut. Ins. Co. v. Ownbey Enterprises,
As we have explained before, “it is the nature and circumstances of ‘the accident’ or ‘the incident’ and the immediate conclusions an ordinarily prudent and reasonablе person would draw therefrom that determine whether an insured has reasonably justified his decision not to notify the insurer.”
Miller,
In this case, the trial court focused primarily upon the severity
of the injury — how severe it turned out to be, not how severe the Forshees knew or should have known it to be — when it determined that the failure to give notice to Employers Mutual for approximately two years and until a lawsuit was filed was unreasonable. To support this determination, the trial court cited cases in which this Court — and in one case, a federal district court — held that delays ranging from eight to twenty-four months were unreasonable as a matter of law. In each of these cases, however, it appears that the existence of a serious injury or loss was actually known to — or, at least, reasonably should have been apparent to — the insured, such that a reasonаble person in the position of the insured would have concluded that the event causing the injury could form the basis for a claim, long before notice was given to the insurer. See
Kay-Lex Co. v. Essex Ins. Co.,
In this case, we think that the trial court failed to eliminate the distorting effects of hindsight when it based its reasonableness determination on how severe the injury turned out to be, rather than how severe it would have appeared to a reasonable person in the
position of the Forshees. The evidence shows that the relevant occurrence was a fall in a parking lot. The victim refused all offers of medical assistance,
The reasonableness of the failure of the Forshees to give notice sooner to Employers Mutual must be assessed from the perspective of a reasonable person in the circumstances in which the Forshees found themselves, not that of an omniscient being having the benefit of full and accurate information that emerged only later and the benefit of hindsight. About whether the Forshees acted unreasonably, we decide nothing, and nothing in our opinion should be understood to suggest that the evidence in this case compels any particular answer to that question. The reasonableness of their conduct is something for the trial court, not this Court, to assess and determine in the first instance, applying the appropriate legal standard. But because it appears that the trial court applied the wrong legal standard when it viewed the evidence through the distorting lens of hindsight, we must vacate the judgment below and remand for further proceedings consistent with this opinion.
Judgment vacated and case remanded.
Notes
On an appeal from a bench trial, we review the factual findings of the trial court for clear error, we review its conclusions of law de novo,
Gooch v. Tudor,
Both this Court and our Supreme Court have warned bеfore about the distorting effects of hindsight in other contexts in which an objective standard of reasonableness applies. We think these warnings are equally applicable here. Cf.
Johnson v. State,