New Hampshire Insurance Company v. The City of Thomson et al, No. 1:2015cv00154 - Document 26 (S.D. Ga. 2016)
Court Description: ORDER denying 15 Motion for Judgment on the Pleadings; denying 16 Cross Motion for Judgment on the Pleadings. Additionally, the Court lifts the discovery stay and directs the parties to file an updated Rule 26(f) report within two weeks from this Order. Signed by Judge J. Randal Hall on 07/19/2016. (thb)
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New Hampshire Insurance Company v. The City of Thomson et al IN THE UNITED STATES SOUTHERN Doc. 26 DISTRICT DISTRICT AUGUSTA NEW HAMPSHIRE INSURANCE OF COURT FOR THE GEORGIA DIVISION * COMPANY, * * Plaintiff, v. * THE CITY OF THOMSON and CITY * OF THOMSON GAS DEPARTMENT, l:15-cv-154 * * Defendants. ORDER Presently pending for before judgment pleadings on the reformation and Defendants' the Court on is its Plaintiff's claim for motion contract cross-motion for partial judgment on the pleadings on their counterclaim for breach of contract. For the reasons discussed below, the Court DENIES both motions. I. This issued case by Hampshire") concerns Plaintiff BACKGROUND commercial umbrella New Hampshire liability insurance Insurance Company ("New to Defendants City of Thomson and City of Thomson Gas Department (collectively, "the City") covering January 2009 through January 2016. Doc. 15 1; Answer, (Petition for Reformation of Contract, Doc. 7 5 1.) This insurance-coverage dispute arose because the City is a defendant in six state-court Dockets.Justia.com tort actions and the plaintiffs in those actions demanded the insurance provided for in the 2013-2014 Umbrella Policy SI 16; Answer 1 16; "Umbrella Policy," Doc. 1, Ex. C.).1 also requested and legal (Compl. SI 18; Answer 1 18.) Hampshire. request, indemnification New Hampshire filed this case defense (Compl. The City from New Soon after the City's seeking reformation of all seven umbrella policies issued between 2009 and 2016. Although New Hampshire's petition seeks reformation of all seven umbrella policies, the Complaint only addresses the City's renewal 2013-2014 Before application January 4, for 2013, the City umbrella coverage completed an in detail. application for "primary and excess insurance for its operation of a natural gas distribution system . . . ." Application, Doc. 1, Ex. (Compl. A.) In M its 5,9; Answer, application, 11 5, the 9; City identified the insured business as "a natural gas utility owned by [the City], selling gas to residential, commercial and industrial customers" and requested quotes for general liability (Compl. 1 10; Answer 1 10; Application, and umbrella coverage. Doc. 1, Ex. A. at 2, 10.) 1 "Because exhibits court can Rule attached consider 10(c) thereto those and incorporates into materials referred documents in deciding the a to, Rule pleadings the all district 12(c) motion without converting it into a Rule 56 summary judgment motion." 5C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1371 (3d ed.). In response Insurance to the application, Company issued a commercial (the "Primary Policy") Primary City's Policy, Doc. from to the City. January effective 1, Ex. 4, general The liability policy Primary through National 1 11; Answer 1 11; (Compl. B.) 2013, Illinois January Policy was 2014, had 4, limits of $1 million per occurrence and $2 million in aggregate, and contained "an express provision limiting the coverage of the policy to to the natural premises gas and operations distribution." incidental (Compl. H 11-12; and necessary Answer 15 11- 12; see Primary Policy at 3.) As for umbrella renewal application, liability policy 4, 2013, coverage, after receiving the New Hampshire issued a commercial umbrella (the "Umbrella Policy") through January 4, Umbrella Policy, Doc. 1, 2014. Ex. C.) effective from January 1 (Compl. 13; Answer 1 1 Answer Unlike the coverage 13; Primary to maintenance Umbrella Policy, occurrences or use of Policy, Doc. the Umbrella "arising premises 13; The Umbrella Policy contains (Compl. 1 limits of $4 million per occurrence and in aggregate. 13; City's and 1, Ex. Policy does out of the operations necessary to natural gas distribution." C. at not 2.) limit ownership, incidental and (Compl. 1 14; Answer 1 14.) New Hampshire Contract" in answered and this filed Court its on counterclaimed "Petition September on for 21, November Reformation 2015, 9, and the 2015. of City New Hamprshire's petition seeks to reform the insurance policies to add language limiting coverage to the same circumstances as the Primary Policies. In its counterclaim, the City seeks damages and other suitable relief for New Hampshire's alleged breach of the duty (Answer, to indemnify Part III, 1 the (Doc. under the Umbrella Policy. 13.) On January 5, 2016, pleadings. City New Hampshire moved for judgment on the 15.) Soon after, the City cross-moved for partial judgment on the pleadings on its counterclaim for breach of the Umbrella Policy. (Doc. 16.) Both motions are now ripe adjudication. II. ''After delay Fed. the trial—a R. Civ. when no LEGAL STANDARD pleadings party may P. 12(c). are move closed—but for "Judgment issues of material early judgment on fact exist, the on enough the pleadings not to pleadings." is proper and the moving party is entitled to judgment as a matter of law based on the substance of the pleadings and any judicially noticed facts." v. Dist. 1255 Attorney's (11th Cir. Office for Escambia Cty., 592 Cunningham F.3d 1237, 2010). III. DISCUSSION A. New Hampshire's Motion for Judgment on the Pleadings New Hampshire seeks equitable reformation of the Umbrella Policy on the grounds of mutual mistake. In Georgia, "[a] mistake, either of law or fact, is cognizable in equity and affords a remedy therein by reformation of the instrument so to make it express the proper cause being made 410 S.E.2d 763, in equity arising is Ct. App. of 1991). unintentional ignorance, confidence." intention the parties, on . . . ." Brannen v. Gulf Life Ins. (Ga. some from reformation, 764 true O.C.G.A. act surprise, § omission imposition, To the mistake "must be mutual, a Co., "A mistake relievable or 23-2-21(a). as or or be error, misplaced relievable by or else mistake on the part of one to the contract and fraud on the part of the other." Brannen, 410 S.E.2d at 764. "The cause of the defect is immaterial so long as the mistake is common to both parties to the transaction." Ct. App. 2015) evidence as Bank of Am. v. Cuneo, (quotation omitted). well as other 770 S.E.2d 48, contemporaneous caution, and the evidence unequivocal, and decisive." O.C.G.A. § 23-2-21(c) exercised with clear, the parties' unequivocal, LLC, to the mutual 755 S.E.2d of the [must] be exercised mistake must be clear, Id. at 224 (quotation omitted); see ("The power to relieve mistakes caution; and (citation omitted). "However, the power to relieve mistakes with documents First Chatham Bank v. Liberty Capital, 219, 223-24 (Ga. Ct. App. 2014) (Ga. Parties may introduce parol subsequent conduct of the parties to prove intent. 53 justify it, the evidence shall be shall and decisive as to the mistake."). be "Thus, the burden on the party attempting to prove mutual mistake is a heavy one." Id. (quotation omitted). Plaintiff policies to state definitions, policies, maintains that conditions and that that the "it was intended policies followed and exclusions the coverage 2.) that "Where mistake, it parties." Frame S.E.2d 585, 586 is of course, v. be Hunter, (Ga. Ct. App. sought on the no umbrella same terms, liability than the Unsurprisingly, shared New Hampshire's reformation it must, would the the general (Compl. 1 2.) general liability policies." City denies of for broader the (Answer 1 intent. the ground of mutual be proved to be the mistake of both Maclean, 1999). is for judgment on the pleadings, Exley & Dunn, P.C., 511 Because the present motion the Court must find no mutual mistake existed because the City denies sharing New Hampshire's intent to limit coverage. Besides its denial, is contained in the the City's only manifestation of intent renewal application. As mentioned above, the renewal application specifies that the insured business is a natural gas utility. nothing inherent in (Application, Doc. including 1, a business Ex. A. at 10.) description But suggests the City only sought umbrella coverage "incidental and necessary to natural gas distribution." Further, the application says nothing about limiting the Umbrella Policy to the exact terms of the Primary Policy. Most the importantly, 2013-14 "remarks" Umbrella field that at least Policy, "[t]his on the the City's Application Application application is states for the in for the renewal of Umbrella Policy # XX=XX=XXXXXX with New Hampshire Insurance Co." (Application indicates its at 20.) intention Umbrella Policy, limiting most If to anything, follow the the same City's terms application as the 2012-13 which New Hampshire admits did not contain any language. favorable to attached documents (Compl. the 1 20.) non-moving Accordingly, party, the in the light pleadings and indicate that the City possessed a different intent than New Hampshire, and the mistake was unilateral on New Hampshire's part. Finally, the Court notes the absence of detailed allegations and documentation addressing the other six umbrella policies shows, that the New Hampshire original and seeks renewal relevant evidence of the parties' Umbrella Hampshire, Policy is to reform. applications intent. understandably As of the may above contain Although the 2013-14 greater concern to New the Court will not exercise its equitable authority to reform the other six insurance policies absent more evidence of the parties' intent. to relieve mistakes See O.C.G.A. § 23-2-21(c) shall be exercised with caution; ("The power to justify it, the evidence shall be clear, unequivocal, and decisive as to the mistake."). In summary, whether any mistake fact that requires evidence of the of the agreement. find that the occurred is parties' Because the Court cannot, alleged mistake was mutual, Hampshire's motion for judgment on policy Hampshire's constituted negligence a intent at a matter of law, the Court DENIES New The briefing including whether the counteroffer, caused the the time as the pleadings. for this motion addressed other arguments, issued a question of whether mistake, and New whether "umbrella" coverage signals a different intent than "excess" in insurance policies. arguments, and the The Court parties are takes free to no position raise them on at those summary judgment. B. The City's Cross-motion for Judgment on the Pleadings In its motion City argues that for partial judgment on the pleadings, the judgment is proper on the issue of breach of contract while the question of damages will remain. The Court finds, however, that the mistake issue precludes granting partial judgment on the pleadings in the City's favor. By implication, New Hampshire has indicated its intent to assert mistake See as a O.C.G.A. defense § to 13-5-3 the ("If City's the breach-of-contract consideration upon claim. which a contract is based was given as a result of a mutual mistake of fact or of law, the contract cannot be enforced.") As discussed above, the parties' mistake is a fact-intensive inquiry into intent when they entered into the seven umbrella policies. The City's intent when renewing the 2013-14 umbrella policy is just as disputed Hampshire's Court on claim DENIES the the City's for counterclaim equitable City's as reformation. motion for partial it is for New Accordingly, the judgment the on pleadings. IV. As discussed above, for judgment on the motion for Additionally, partial CONCLUSION the Court DENIES New Hampshire's motion pleadings judgment (Doc. on 15) the and the City's (Doc. pleadings the Court LIFTS the discovery stay cross- (Doc. 22) 16) . and DIRECTS the parties to file an updated Rule 26(f) report within two weeks from this Order. ORDER ENTERED at Augusta, Georgia, this _/9^ day of July, 2016. HONORTtBCE J. RANDAL HAL] united/states DISTRICT JUDGE CRN DISTRICT OF GEORGIA
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