Unique Auto Sales, LLC v. Dunwody Ins. Agency

369 Ga.App. 50

891 S.E.2d 534

UNIQUE AUTO SALES, LLC et al. v. DUNWODY INSURANCE AGENCY et al.

A23A0697

Court of Appeals of Georgia.

August 9, 2023

Review Denied August 23, 2023

Reuben Allen Akin, Charles Madden Cork III, for Appellant.

Matthew Glenn Moffett, Atlanta, Ernest Wayne Satterfield, Thomas Michael Haswell, Atlanta, for Appellee.

DOYLE, Presiding Judge.

This is the second time this case has come before us. In the first appeal, Unique Auto Sales, LLC and its owner/operator, Justin Campbell, appealed the summary judgment entered against them and in favor of Dunwody Insurance Agency and its agent, Thomas McEachern. This Court reversed the trial court's ruling because there was no record evidence of the complete insurance policy at issue to authorize the trial court's determination that a policy exclusion was "readily apparent." Unique Auto Sales v. Dunwody Ins. Agency , 348 Ga. App. 656, 660-661, 824 S.E.2d 578 (2019) (physical precedent only). Following remand, the trial court again granted summary judgment to the insurance agency and agent, and Unique Auto Sales and Campbell appeal this ruling. For the reasons that follow, we affirm.

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law[.]" OCGA § 9-11-56 (c). "In our de novo review of the grant of a motion for summary judgment, we must view the evidence, and all reasonable inferences drawn therefrom, in the light most favorable to the nonmovant." Unique Auto Sales , 348 Ga. App. at 657, 824 S.E.2d 578 (citation and punctuation omitted).

So viewed, we recite the facts as stated in our prior opinion:

Unique Auto Sales is a wholesaler of used automobiles. It buys used vehicles from various sources, then shops for business purchasers of those vehicles, then delivers the vehicles — typically, on a "consignment" basis — to those purchasers at their designated locations. With respect to the size of the enterprise, during 2017, Unique Auto Sales was selling as many as 600 vehicles per month. Campbell was operating Unique Auto Sales out of his Georgia residence, but almost none of the business's vehicles were stored at that location.

For about five years, Unique Auto Sales delivered vehicles to High Line Motors, located in South Carolina and owned by Michael Alexon. During those years, Unique Auto Sales would consign vehicles to the South Carolina enterprise and receive payments after that company executed sales. Then in 2015, the South Carolina company ceased paying Unique Auto Sales for vehicles that had been delivered to its designated South Carolina location. Seven of those vehicles were never recovered, and Unique Auto Sales calculated a loss of approximately $230,000.

To recoup its loss, Unique Auto Sales filed a claim with its insurance company, Utica National Insurance Group. The insurance company denied the claim. In a letter to Campbell dated November 18, 2015, Utica National Insurance Group set out certain policy provisions, including an exclusion that the insurance company would not pay for:

"Loss" to any covered "auto" displayed or stored at any location not shown in Item Three of the Declarations if the "loss" occurs more than 45 days after your use of the location begins.

It is undisputed that "Item Three of the Declarations" listed only Campbell's Georgia residence. ...

In this lawsuit, Unique Auto Sales and Campbell (collectively, the "Automobile Plaintiffs") sought to recoup the loss from the insurance agency and its agent who procured the insurance policy — Dunwody Insurance Agency and Thomas McEachern (collectively, "Insurance Defendants"). The Automobile Plaintiffs alleged that the Insurance Defendants knew Unique Auto Sales’ business model; that in about 2012, the Insurance Defendants secured an insurance policy for Unique Auto Sales from Utica National Insurance Group; that the policy remained in effect at the time of the claimed loss; that the Insurance Defendants had repeatedly assured the Automobile Plaintiffs that the coverage provided by the policy was appropriate for Unique Auto Sales; that the Automobile Plaintiffs relied on those assurances; that the insurance policy procured by the Insurance Defendants provided Unique Auto Sales with virtually no coverage; and that the Automobile Plaintiffs had consequently suffered a loss of nearly $230,000. The Automobile Plaintiffs thus sought to recover damages from the Insurance Defendants under theories of negligence and breach of contract.

During discovery, Campbell recounted that he had procured the policy at issue in 2012, and had renewed coverage through 2016. He admitted that he had read the entirety of neither the initial policy nor any renewal documentation. He asserted, however, that the insurance agency and its agent were experts, and so he relied on the instruction and expertise of McEachern (the insurance agent) who repeatedly assured him that Unique Auto Sales was adequately covered.

Unique Auto Sales , 348 Ga. App. at 657-658, 824 S.E.2d 578.

Following remand, the Insurance Defendants filed a second renewed motion for summary judgment and provided complete copies of the insurance renewal policies, with all declarations and documents included. ¹ These renewal policies, which were identical, incorporated a "Supplemental Declarations" page listing the forms and endorsements applying to the coverage, including Garage Coverage Form CA0005. This form advised insureds that "[v]arious provisions of this policy restrict coverage" and instructed insureds to "[r]ead the entire policy carefully to determine rights, duties and what is and is not covered." Section IV (B) of the form lists " Exclusions " in bold type. And subpart (5) (b) of that Section unambiguously indicates: "We will not pay for ... ‘Loss’ to any covered ‘auto’ displayed or stored at any location not shown in Item Three of the Declarations if the ‘loss’ occurs more than 45 days after your use of the location begins." The Automobile Plaintiffs admitted that they had been delivering vehicles to High Line Motors in South Carolina for over five years, yet Item Three of the Declarations points to "LOCATIONS WHERE YOU CONDUCT GARAGE OPERATIONS - See SCHEDULE A[,]" and Schedule A lists one address: 8824 Estes Road, Campbell's home office in Georgia.

Following a hearing, the trial court granted the Insurance Defendants’ motion for summary judgment, noting that all insurance forms were now included in the record and that the court was able to assess the relevant exclusion within its context in the policy as a whole. The trial court concluded that "it would have been readily apparent" from the insurance policy that losses occurring to vehicles housed in South Carolina beyond 45 days after the Automobile Plaintiffs started using that location were not covered because the policy "specifically excludes coverage for vehicles garaged at unlisted addresses," and no address was listed except Unique Auto Sales's place of business in Georgia. The Automobile Plaintiffs appeal this ruling.

1. In related enumerations of error, the Automobile Plaintiffs assert that they had no duty to "examine minutely" the policy and that the policy exclusion for losses they incurred in South Carolina was not "readily apparent." Pretermitting whether the Automobile Plaintiffs’ reliance on the Insurance Defendants’ expertise relieved them of the duty to minutely examine the policy, it did not relieve them of their responsibility to examine the policy for readily apparent exclusions. See MacIntyre & Edwards v. Rich , 267 Ga. App. 78, 81-82 (1), 599 S.E.2d 15 (2004) (although an insured who relies on an agent who holds himself out as an expert is relieved of the responsibility to "minutely" examine the policy, the insured still has a duty to read the policy for readily apparent policy changes). Here, the Automobile Plaintiffs stipulated that they did not read the policy, and we agree with the trial court that the exclusion at issue in this appeal was readily apparent and bars coverage.

Under Georgia law, "an insured has a legal duty to examine his contract, observe what coverage it provided to him, and, if the coverage was not correct, either reject the policy as written when tendered or renegotiate his contract with the insurer." Assaf v. Cincinnati Ins. Co. , 327 Ga. App. 475, 481 (1) (c), 759 S.E.2d 557 (2014) (citation and punctuation omitted). Accordingly, "an insurance agent who procures insurance, but fails to obtain all of the requested coverage, is insulated from liability if the insured does not read the policy." Unique Auto Sales , 348 Ga. App. at 659, 824 S.E.2d 578 (citation and punctuation omitted). However, an exception to this general rule exists "when the agent has held himself out as an expert and the insured has reasonably relied on the agent's expertise to identify and procure the correct amount or type of insurance, unless an examination of the policy would have made it readily apparent that the coverage requested was not issued." ² Id. (citation and punctuation omitted). This expertise exception "only relieves the insured of the responsibility to minutely examine the policy." Cottingham & Butler v. Belu , 332 Ga. App. 684, 688 (2), 774 S.E.2d 747 (2015) (citation and punctuation omitted). It does not relieve the insured of his responsibility to examine the policy for readily apparent exclusions. Id. ; Rich , 267 Ga. App. at 81-82 (1), 599 S.E.2d 15. In other words, "if examination of the policy would have made it readily apparent that the insured did not get the coverage he requested, the duty to read will still bar a lawsuit against the agent even if the insured relied upon the agent's expertise." Belu , 332 Ga. App. at 688 (2), 774 S.E.2d 747 (citation and punctuation omitted).

A...