[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 10-10734 MAY 12, 2011
________________________ JOHN LEY
CLERK
D.C. Docket No. 1:08-cv-01576-TCB
GERALDINE RUTLAND,
lllllllllllllllllllll Plaintiff-Appellant-Counter-Defendant,
versus
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
llllllllllllllllllll Defendant-Appellee-Counter-Claimant.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(May 12, 2011)
Before DUBINA, Chief Judge, EDMONDSON and WILSON, Circuit Judges.
PER CURIAM:
Geraldine Rutland appeals the district court’s grant of summary judgment in
favor of State Farm Mutual Automobile Insurance Company (“State Farm”) on her
breach-of-contract claim. The main question is whether State Farm was required
to cover a car accident that occurred during a lapse in Rutland’s insurance
coverage; that lapse resulted from her failure to pay the required premiums. After
careful consideration of the briefs and review of the record on appeal, and having
heard oral argument in the matter, we conclude that Rutland has failed to create a
genuine issue of material fact. Thus, we affirm the district court’s order granting
summary judgment.
I. BACKGROUND
As of June 2003, Rutland had an active automobile insurance policy with
State Farm. On June 27, 2003, State Farm attempted to debit $286.51 from
Rutland’s checking account per their prior arrangement for payment of premiums.
On June 30, 2003, Rutland’s bank informed State Farm that they would not honor
the debit because Rutland’s account was overdrawn.
State Farm sent a certified letter to Rutland on July 7, 2003, bringing to her
attention the unpaid premium. The letter informed Rutland that if the premium
was not paid by July 20, 2003, her automobile coverage would be canceled. Not
having received her payment by the specified date, State Farm canceled Rutland’s
insurance policy.
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On July 31, 2003, Rutland was driving while intoxicated and crashed into
another car, seriously injuring an adult and two minor children. Rutland attempted
to report the car accident to her State Farm agent, John Davis, on August 1, 2003.
Shirley Davis, an employee in Mr. Davis’s office, informed Rutland that her
insurance coverage had been terminated on July 20, 2003, due to non-payment of
premiums. According to Rutland, Ms. Davis told her that if she paid the past-due
amount of $286.51, her insurance coverage would be reinstated and State Farm
would provide retroactive coverage for the crash. Ms. Davis has denied making
any representation to Rutland that she would receive retroactive coverage, and Mr.
Davis has since stated that no employee in his office would ever make an offer of
retroactive coverage.
Rutland mailed a check for $286.51 to State Farm on August 4, 2003, and
her insurance coverage was reinstated on August 5, 2003. Rutland claims that she
spoke with Ms. Davis once again after paying the past-due amount and that Ms.
Davis assured her that she would receive retroactive coverage for the car accident.
State Farm sent Rutland a letter on August 28, 2003, to inform her that it would
not provide retroactive coverage for her crash. The letter asked Rutland to provide
State Farm with any further information that they should consider in regard to the
denial of insurance coverage. State Farm then updated Rutland’s billing statement
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in September 2003 to reflect that her late payment was credited toward her
account.
The victims of the car accident filed three civil actions against Rutland on
May 25, 2005. State Farm did not defend Rutland, and she was unable to hire an
attorney. The state court entered a default judgment against Rutland in the amount
of $15,750,000. Rutland filed suit against State Farm on March 26, 2008, alleging
that State Farm acted in bad faith by failing to defend her in the civil actions.
State Farm moved for summary judgment and to exclude the affidavit of Jeniffer
Ebert.1 Rutland moved for partial summary judgment and to exclude the
testimony of Frank Edward Jenkins III.2 The district court granted State Farm’s
motion to exclude and motion for summary judgment. The district court also
denied Rutland’s motion for summary judgment and motion to exclude as moot.
II. STANDARD OF REVIEW
We review a district court’s grant of summary judgment de novo, viewing
the record and drawing all inferences in favor of the non-moving party. Martin v.
1
Rutland attempted to introduce the affidavit of Ms. Ebert as proof that State Farm in the
past had provided retroactive coverage for events that occurred while the insured’s policy was
canceled for non-payment of premiums.
2
State Farm offered the testimony of Mr. Jenkins with regard to the issue of whether
Rutland took the proper steps to notify State Farm of the May 25, 2005 lawsuits filed by the
victims of Rutland’s car accident.
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Brevard County Pub. Sch., 543 F.3d 1261, 1265 (11th Cir. 2008) (per curiam)
(citations omitted). Summary judgment is proper “if the pleadings, the discovery
and disclosure materials on file, and any affidavits show that there is no genuine
issue as to any material fact and that the movant is entitled to judgment as a matter
of law.” Fed. R. Civ. P. 56(c)(2). “A party moving for summary judgment has the
burden of showing that there is no genuine issue of fact.” Eberhardt v. Waters,
901 F.2d 1578, 1580 (11th Cir. 1990) (quotation omitted).
III. DISCUSSION
Because Rutland failed to pay her premium on June 27, 2003, she was not
covered by a written insurance policy on July 31, 2003, the date of her crash.
State Farm sent a certified letter to Rutland informing her of the problem of non-
payment and providing her with sufficient notice that the policy would be
cancelled if the premium was not paid by July 20, 2003. Upon Rutland’s failure to
pay her premium on time, State Farm followed the proper procedure under
Georgia law for cancellation of an insurance policy. See O.C.G.A. § 33-24-44(d)
(ten-day notice is sufficient when a policy is cancelled for non-payment of
premiums). State Farm had no duty to defend Rutland in any civil action arising
from the July 31 car accident “since this was subsequent to the date coverage was
cancelled due to nonpayment of premium.” Buffington v. State Auto. Mut. Ins.
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Co., 384 S.E.2d 873, 874 (Ga. Ct. App. 1989).
Rutland, however, contends that despite the lack of a written insurance
policy, State Farm had a duty to defend her in the 2005 lawsuit. First, Rutland
argues that State Farm’s August 5 acceptance of her late premium payment,
combined with what Rutland views as an untimely and improper refund of the late
payment, created a material issue as to whether State Farm waived its defense of
lack of payment. Second, Rutland argues that Ms. Davis issued an oral binder for
retroactive coverage when she advised Rutland to send in her past-due premium
payment. Third, Rutland argues that there is a genuine issue of material fact
concerning promissory estoppel. Finally, she argues that the district court abused
its discretion by excluding an affidavit from Jennifer Ebert.
A. State Farm Did Not Waive Cancellation of Rutland’s Policy by Accepting a
Late Premium Payment on August 5, 2003
Rutland relies on Clark v. United Ins. Co. of Am., 404 S.E.2d 149, 152 (Ga.
Ct. App. 1991), for the proposition that a genuine issue was raised as to whether
State Farm’s non-payment defense was waived upon its acceptance of Rutland’s
late premium payment. There, the court stated that “[i]f an insurance company
receives, accepts, and retains past-due premiums which are paid subsequent to the
due date and expiration of the grace period, it renews the contract and waives the
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forfeiture for non-payments provided the acceptance is unconditional and the facts
are known.” Id. at 152. Although similar, the facts here are distinguishable from
Clark.
In Clark, the insurance company never refunded the claimant’s late
payments. Id. at 153. Here, on the other hand, State Farm sent Rutland a letter on
August 28 informing her they would not cover her crash and refunded the late
payment in her September 2003 billing statement. State Farm offered the refund
over four years before Rutland filed suit against State Farm. Rutland stresses the
fact that State Farm held onto her late payment for “at least six weeks.” However,
six weeks was not unreasonably long because State Farm needed first to determine
that Rutland’s payment was improperly tendered. State Farm did not “retain” a
past-due premium as was the case in Clark; thus, we conclude that State Farm did
not waive its defense of non-payment.
Clark is also distinguishable from the facts of this case; there, the insurance
company often accepted late premium payments after the passing of the grace
period. Id. Rutland has not provided any evidence that State Farm had engaged in
a regular practice of receiving late payments from her.
Rutland also finds issue with the way in which State Farm calculated the
refund and the time it took State Farm to issue her refund. Neither of these
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arguments raises a genuine issue of material fact: First, if Rutland believes that
State Farm did not provide a complete refund for the period in which her coverage
was canceled, she can file a separate lawsuit to collect this amount. This Court
will not, however, find that State Farm “retained” a past-due premium on the basis
of Rutland’s speculation that State Farm may have incorrectly calculated the
refund. Rutland has offered nothing more than conjecture that State Farm’s
calculations of the refund may have been in error; such unsupported and
speculative contentions fall short of creating a genuine issue of material fact.
Second, Rutland cites O.C.G.A. § 33-24-44(c)(1) in support of her assertion that
State Farm’s refund was late. However, this subsection of the statute sets forth the
appropriate procedures for refunding paid premiums once a policy is canceled in
its entirety, not refunds from past-due payments. Thus, Rutland’s argument based
on § 33-24-44(c)(1) has no merit.
B. Ms. Davis’s Representations to Rutland Did Not Create an Oral Binder
Between Rutland and State Farm
State Farm, Ms. Davis, and Mr. Davis all dispute Rutland’s claim that Ms.
Davis told Rutland that State Farm would provide retroactive coverage for her
crash. However, at the summary judgment stage we must construe all facts in
favor of the nonmovant, Rutland; thus, we will proceed under the assumption that
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Ms. Davis twice represented to Rutland that State Farm would provide retroactive
coverage.
“The principal shall be bound by all the acts of his agent within the scope of
his authority . . . .” O.C.G.A. § 10-6-51. “The principal is also bound when the
agent lacks express authority but is possessed of apparent authority.” Home
Materials, Inc. v. Auto Owners Ins. Co., 300 S.E.2d 139, 141 (Ga. 1983). For the
following reasons, we conclude that Ms. Davis did not have the actual or apparent
authority to bind State Farm to retroactive coverage of Rutland’s crash.
State Farm does not give its agents the express authority to offer retroactive
coverage: Ms. Davis and Mr. Davis both testified that they understood State
Farm’s policy to be that an agent does not have the authority to offer retroactive
coverage. Furthermore, the merger clause in Rutland’s original insurance policy
stated that “this policy contains all of the agreements between you and us or any of
our agents,” and that policy did not contain any provisions allowing for retroactive
coverage.
“‘Apparent authority’ is not predicated on whatever a third party chooses to
think an agent has the right to do, or even upon what the agent says he can do, but
must be based on acts of the principal which have led the third party to believe
reasonably the agent had such authority.” Thompson v. Gen. Motors Acceptance
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Corp., 389 S.E.2d 20, 21–22 (Ga. Ct. App. 1989) (quotation marks omitted). A
reasonable person speaking with an employee of an insurance company should not
believe that the employee has the authority to provide retroactive coverage,
because the mere idea of retroactive insurance coverage defies common sense. An
insurance policy is a “contract which is an integral part of a plan for distributing
individual losses whereby one undertakes to indemnify another or to pay a
specified amount or benefits upon determinable contingencies.” O.C.G.A. § 33-1-
2(2). Coverage for an event that has already occurred contravenes the very
definition of insurance.
Finally, the fact that Rutland sent in a late payment after Ms. Davis
allegedly told her that State Farm would provide retroactive coverage carries no
significance. The late payment does not necessarily demonstrate that Rutland
believed Ms. Davis had the authority to provide retroactive coverage; and even if
Rutland did sincerely believe so, such a belief cannot be said to be reasonable.
C. Rutland Has Not Established a Genuine Issue of Material Fact Concerning
Promissory Estoppel
“A promise which the promisor should reasonably expect to induce action
or forbearance on the part of the promisee or a third person and which does induce
such action or forbearance is binding if injustice can be avoided only by
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enforcement of the promise.” O.C.G.A. § 13-3-44(a). Rutland argues that,
because of Ms. Davis’s representations that State Farm would provide retroactive
coverage, she renewed her policy with State Farm rather than entering into a new
insurance contract with another company at a lower rate.
Rutland’s promissory-estoppel argument misses the mark. The
representations made by Ms. Davis occurred after Rutland’s car accident and after
Rutland’s policy had been canceled for non-payment. Even assuming arguendo
that Ms. Davis’s representations resulted in higher premiums for Rutland, this has
nothing to do with State Farm’s refusal to cover Rutland’s crash. If Rutland
wishes to file suit against State Farm for the difference in insurance premiums, she
is free to do so. However, such a theory cannot establish a basis for Rutland to
recover damages in relation to State Farm’s refusal to cover her car accident.
D. The District Court Did Not Abuse Its Discretion in Excluding Jennifer
Ebert’s Affidavit
“We review evidentiary rulings made by the district court for abuse of
discretion and will reverse the district court’s decision only in cases where
substantial prejudice exists.” Hall v. United Ins. Co. of Am., 367 F.3d 1255, 1259
(11th Cir. 2004) (citation omitted).
Rutland attempted to introduce Jennifer Ebert’s affidavit to prove that State
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Farm has issued retroactive coverage in other instances. Ms. Ebert’s affidavit
stated that she had been in an accident, was informed that her policy had been
canceled for non-payment, was told to send the late payment, and State Farm
provided coverage for the accident that occurred during the period when her
policy was canceled.
The district court found that Ms. Ebert’s affidavit lacked certain facts that
made it impossible for the court to determine its probative value. First, the
affidavit did not state whether it was Ms. Ebert or her bank who was at fault for
the non-payment of premiums. Second, the affidavit did not state whether State
Farm followed the proper notice procedures for cancellation of a policy. Thus, the
district court could not determine whether Ms. Ebert’s experience with State Farm
was in any way relevant to the facts of Rutland’s case. Moreover, Rutland failed
to file Ebert’s affidavit on time.
We find that the district court did not abuse its discretion in excluding the
affidavit. First, the district court acted well within its discretion in determining
that the affidavit lacked probative value. Second, Rutland was not substantially
prejudiced by the exclusion of this affidavit—Ms. Davis still lacked the authority
to promise retroactive coverage. This is true regardless of whether State Farm
provided Ms. Ebert with coverage for a separate event. Further, Rutland was not
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aware of Ms. Ebert’s experience when she sent in her late payments; she cannot
now contend that Ms. Ebert’s experience led her to a reasonable belief that Ms.
Davis had the apparent authority to offer retroactive coverage.
IV. CONCLUSION
We find that State Farm properly canceled Rutland’s insurance coverage
during the time period in which Rutland had her car accident; it did not waive its
cancellation through acceptance of her late payment. Second, Ms. Davis did not
have the actual or apparent authority to engage in an oral binder with Rutland for
retroactive coverage of the crash. Third, Rutland has not established a plausible
theory of promissory estoppel on which she can recover. And finally, the district
court did not abuse its discretion by excluding Jennifer Ebert’s affidavit. The
district court properly granted State Farm’s motion for summary judgment; thus,
Rutland’s motion for partial summary judgment was properly denied.
AFFIRMED.
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