FIFTH DIVISION MERCIER, C. J., MCFADDEN, P. J., and RICKMAN, J.
NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. https://www.gaappeals.us/rules
June 18, 2024
In the Court of Appeals of Georgia A24A0477. GENERAL SECURITY INDEMNITY COMPANY OF ARIZONA v. GERALD JONES FORD, LLC.
MERCIER, Chief Judge.
Jerquavius Berry purchased a vehicle from Gerald Jones Ford, LLC, (“the
Dealership”), and within a week he got into a collision while fleeing police officers in
Virginia and the vehicle sustained a total loss. After Berry failed to pay the remainder
of the financed amount for the vehicle and General Security Indemnity Company of
Arizona (“General Security”) denied the Dealership’s insurance claim, the
Dealership filed the underlying lawsuit against General Security and Berry, seeking,
inter alia, a declaratory judgment regarding General Security’s insurance coverage.1
1 The Dealership initially filed suit against North American Risk Services, Inc., but later substituted General Security for North American by consent. The Dealership and General Security filed cross-motions for summary judgment, and
the trial court granted the Dealership’s motion and denied General Security’s
motion.2 General Security filed this appeal, which turns on whether a denied claim
renders an insurance policy “invalid.” For the following reasons, we find that it does
not and reverse the trial court.
“On appeal from the grant of summary judgment this Court conducts a de novo
review of the evidence to determine whether there is a genuine issue of material fact
and whether the undisputed facts, viewed in the light most favorable to the nonmoving
party, warrant judgment as a matter of law.” Auto-Owners Ins. Co. v. Neisler, 334 Ga.
App. 284, 284 n. 1 (779 SE2d 55) (2015) (citation and punctuation omitted); see also
OCGA § 9-11-56 (c). That being said, the facts are undisputed. Berry paid a $4,000
down payment and financed the remainder of the price, $23,408.52, in order to
purchase the vehicle from the Dealership on January 23, 2020. Exeter Finance LLC
(“Exeter”) approved the finance terms and purchased the note from the Dealership.
In order to purchase the vehicle, Berry presented evidence of an insurance policy with
Falls Lake National Insurance Company (“Falls Lake”) to the Dealership.
2 Berry is not a party to this appeal. 2 Three days after he purchased the vehicle, while fleeing police in Virginia,
Berry crashed the vehicle, causing a total loss. Berry was later found guilty of violating
Virginia Criminal Code § 46.2-817.
Exeter attempted to contact Berry in order to complete the loan validation
process, but Berry did not respond, and he failed to make his payments. Thereafter,
Exeter rejected the note and returned it to the Dealership.
The Dealership made a claim for the vehicle under Berry’s Falls Lake insurance
policy. The Falls Lake policy provided that claims for Berry’s property damage were
excluded from coverage “[w]hile [Berry] or anyone driving with [his] permission is
using [his] insured auto in an illegal trade or transportation or fleeing a law
enforcement agency.” As Berry was fleeing police when the vehicle sustained a total
loss, Falls Lake denied the claim.
Prior to selling Berry the automobile, the Dealership obtained an automobile
physical damage insurance policy from General Security. The Dealership submitted
a claim for Berry’s vehicle to General Security, but General Security denied the claim,
stating that the loss did not fall within the policy’s coverage.
3 Thereafter, the Dealership filed the underlying declaratory judgment action
against General Security. This appeal followed the grant of summary judgment to the
Dealership.
The Dealership’s insurance policy with General Security provided coverage for
insured vehicles until the vehicle was sold or leased by the Dealership. However, the
policy also contained a spot delivery extension, which provided
coverage for [the Dealership’s] financial interest in a covered vehicle sold by [the Dealership] and delivered to the purchaser, but for which [the Dealership] [has] not been fully paid, and where the purchaser provided [the Dealership] evidence of insurance prior to delivery, which proved to be invalid at the time of loss to the covered vehicle.3
(Emphasis in original). Here, there is no dispute that the Dealership sold the vehicle
to Berry, and before it provided delivery to Berry, he presented the Dealership with
evidence of insurance. Further, there is no dispute that the Dealership was not fully
paid. The only dispute at issue is whether Berry’s Falls Lake policy was invalid at the
time of the loss.
3 “Evidence of insurance” is defined in the General Security policy as: “a binder, policy, insurance certificate or other written documentation that has been issued by an authorized agent or representative of the insurance company covering such vehicle.” (Emphasis in original). 4 General Security argues that the trial court incorrectly interpreted the term
“invalid” in its insurance policy, and that the Falls Lake policy was valid, but merely
excluded coverage for the incident as Berry was fleeing police at the time of the crash.
In our interpretation of the insurance policy, we are reminded that “[a]n insurance
policy is simply a contract, the provisions of which should be construed as any other
type of contract.” American Empire Surplus Lines Ins. Co. v. Hathaway Dev. Co., 288
Ga. 749, 750 (707 SE2d 369) (2011) (citation and punctuation omitted). Construction
of a contract, and thus an insurance policy, is a question of law for the court. See id.
In our analysis, we undertake “a three-step process in the construction of the contract,
the first of which is to determine if the instrument’s language is clear and
unambiguous. If the language is unambiguous, the court simply enforces the contract
according to the terms, and looks to the contract alone for the meaning.” Id. (citation
and punctuation omitted). Further,
[w]ords generally bear their usual and common signification; but technical words, words of art, or words used in a particular trade or business will be construed, generally, to be used in reference to this peculiar meaning. The local usage or understanding of a word may be proved in order to arrive at the meaning intended by the parties[.]
5 OCGA § 13-2-2 (2).
Here, the General Security policy did not define the term “invalid.” When a
contract term is not expressly defined, we look to the usual and common meaning of
the term. Taylor Morrison Svcs. v. HDI-Gerling American Ins. Co., 293 Ga. 456, 465 (2)
(746 SE2d 587) (2013). In Holmes v. Clear Channel Outdoor, 298 Ga. App. 178 (679
SE2d 745) (2009), we looked to a dictionary for the meaning of the term “invalidate”
and found the definition: “to render of no force or effect.” Id. at 181 (1) (citing
Webster’s New International Dictionary, p. 1305 (2d ed. 1961))4. Similarly, Black’s
Law Dictionary defines “invalid contract” as “[a]n agreement that is either void or
voidable.” Black’s Law Dictionary (11th ed. 2019). While a dictionary is a useful tool
Free access — add to your briefcase to read the full text and ask questions with AI
FIFTH DIVISION MERCIER, C. J., MCFADDEN, P. J., and RICKMAN, J.
NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. https://www.gaappeals.us/rules
June 18, 2024
In the Court of Appeals of Georgia A24A0477. GENERAL SECURITY INDEMNITY COMPANY OF ARIZONA v. GERALD JONES FORD, LLC.
MERCIER, Chief Judge.
Jerquavius Berry purchased a vehicle from Gerald Jones Ford, LLC, (“the
Dealership”), and within a week he got into a collision while fleeing police officers in
Virginia and the vehicle sustained a total loss. After Berry failed to pay the remainder
of the financed amount for the vehicle and General Security Indemnity Company of
Arizona (“General Security”) denied the Dealership’s insurance claim, the
Dealership filed the underlying lawsuit against General Security and Berry, seeking,
inter alia, a declaratory judgment regarding General Security’s insurance coverage.1
1 The Dealership initially filed suit against North American Risk Services, Inc., but later substituted General Security for North American by consent. The Dealership and General Security filed cross-motions for summary judgment, and
the trial court granted the Dealership’s motion and denied General Security’s
motion.2 General Security filed this appeal, which turns on whether a denied claim
renders an insurance policy “invalid.” For the following reasons, we find that it does
not and reverse the trial court.
“On appeal from the grant of summary judgment this Court conducts a de novo
review of the evidence to determine whether there is a genuine issue of material fact
and whether the undisputed facts, viewed in the light most favorable to the nonmoving
party, warrant judgment as a matter of law.” Auto-Owners Ins. Co. v. Neisler, 334 Ga.
App. 284, 284 n. 1 (779 SE2d 55) (2015) (citation and punctuation omitted); see also
OCGA § 9-11-56 (c). That being said, the facts are undisputed. Berry paid a $4,000
down payment and financed the remainder of the price, $23,408.52, in order to
purchase the vehicle from the Dealership on January 23, 2020. Exeter Finance LLC
(“Exeter”) approved the finance terms and purchased the note from the Dealership.
In order to purchase the vehicle, Berry presented evidence of an insurance policy with
Falls Lake National Insurance Company (“Falls Lake”) to the Dealership.
2 Berry is not a party to this appeal. 2 Three days after he purchased the vehicle, while fleeing police in Virginia,
Berry crashed the vehicle, causing a total loss. Berry was later found guilty of violating
Virginia Criminal Code § 46.2-817.
Exeter attempted to contact Berry in order to complete the loan validation
process, but Berry did not respond, and he failed to make his payments. Thereafter,
Exeter rejected the note and returned it to the Dealership.
The Dealership made a claim for the vehicle under Berry’s Falls Lake insurance
policy. The Falls Lake policy provided that claims for Berry’s property damage were
excluded from coverage “[w]hile [Berry] or anyone driving with [his] permission is
using [his] insured auto in an illegal trade or transportation or fleeing a law
enforcement agency.” As Berry was fleeing police when the vehicle sustained a total
loss, Falls Lake denied the claim.
Prior to selling Berry the automobile, the Dealership obtained an automobile
physical damage insurance policy from General Security. The Dealership submitted
a claim for Berry’s vehicle to General Security, but General Security denied the claim,
stating that the loss did not fall within the policy’s coverage.
3 Thereafter, the Dealership filed the underlying declaratory judgment action
against General Security. This appeal followed the grant of summary judgment to the
Dealership.
The Dealership’s insurance policy with General Security provided coverage for
insured vehicles until the vehicle was sold or leased by the Dealership. However, the
policy also contained a spot delivery extension, which provided
coverage for [the Dealership’s] financial interest in a covered vehicle sold by [the Dealership] and delivered to the purchaser, but for which [the Dealership] [has] not been fully paid, and where the purchaser provided [the Dealership] evidence of insurance prior to delivery, which proved to be invalid at the time of loss to the covered vehicle.3
(Emphasis in original). Here, there is no dispute that the Dealership sold the vehicle
to Berry, and before it provided delivery to Berry, he presented the Dealership with
evidence of insurance. Further, there is no dispute that the Dealership was not fully
paid. The only dispute at issue is whether Berry’s Falls Lake policy was invalid at the
time of the loss.
3 “Evidence of insurance” is defined in the General Security policy as: “a binder, policy, insurance certificate or other written documentation that has been issued by an authorized agent or representative of the insurance company covering such vehicle.” (Emphasis in original). 4 General Security argues that the trial court incorrectly interpreted the term
“invalid” in its insurance policy, and that the Falls Lake policy was valid, but merely
excluded coverage for the incident as Berry was fleeing police at the time of the crash.
In our interpretation of the insurance policy, we are reminded that “[a]n insurance
policy is simply a contract, the provisions of which should be construed as any other
type of contract.” American Empire Surplus Lines Ins. Co. v. Hathaway Dev. Co., 288
Ga. 749, 750 (707 SE2d 369) (2011) (citation and punctuation omitted). Construction
of a contract, and thus an insurance policy, is a question of law for the court. See id.
In our analysis, we undertake “a three-step process in the construction of the contract,
the first of which is to determine if the instrument’s language is clear and
unambiguous. If the language is unambiguous, the court simply enforces the contract
according to the terms, and looks to the contract alone for the meaning.” Id. (citation
and punctuation omitted). Further,
[w]ords generally bear their usual and common signification; but technical words, words of art, or words used in a particular trade or business will be construed, generally, to be used in reference to this peculiar meaning. The local usage or understanding of a word may be proved in order to arrive at the meaning intended by the parties[.]
5 OCGA § 13-2-2 (2).
Here, the General Security policy did not define the term “invalid.” When a
contract term is not expressly defined, we look to the usual and common meaning of
the term. Taylor Morrison Svcs. v. HDI-Gerling American Ins. Co., 293 Ga. 456, 465 (2)
(746 SE2d 587) (2013). In Holmes v. Clear Channel Outdoor, 298 Ga. App. 178 (679
SE2d 745) (2009), we looked to a dictionary for the meaning of the term “invalidate”
and found the definition: “to render of no force or effect.” Id. at 181 (1) (citing
Webster’s New International Dictionary, p. 1305 (2d ed. 1961))4. Similarly, Black’s
Law Dictionary defines “invalid contract” as “[a]n agreement that is either void or
voidable.” Black’s Law Dictionary (11th ed. 2019). While a dictionary is a useful tool
for narrowing the range of meanings ordinarily attributed to a term, a dictionary does
not always provide a complete answer. Archer Western Contractors Ltd. v. Estate of
Pitts, 292 Ga. 219, 224 (2) (735 SE2d 772) (2012). In Holmes, we also looked at prior
decisions in which an insurance policy was rendered invalid, such as if an insured
makes misrepresentations in a policy application, or fails to properly notify the
4 Webster’s Dictionary defines invalid as “being without formation in fact or truth,” “lacking in effectiveness,” and “being without legal force or effect.” Webster’s Third New International Dictionary, p. 1188 (1981). 6 insurance company of a claim, or fails to cooperate with the insurance company in the
investigation of a claim. Id. at 182 (1). We found that a policy is invalid when coverage
“applies but becomes invalidated (and thus of no force or effect) through the actions
of the insured.” Id. at 181 (1).
As discussed by General Security in its appellate brief, the Falls Lake insurance
policy does not contain a coverage exclusion for fleeing police for a bodily or property
injury to others. Therefore, had Berry caused a bodily or property injury to another
while fleeing the police, that third party’s claim would not have been excluded and the
claim would have been paid. Berry’s act of fleeing the police did not invalidate his
Falls Lake insurance policy. Rather, the property damage to his own vehicle fell within
a policy exclusion, but the Falls Lake policy was of full force and effect at the time of
the occurrence. See Holmes, 298 Ga. App. at 181 (1) (“[c]overage is not invalidated;
it simply does not apply”).
“Under Georgia law, insurance companies are generally free to set the terms
of their policies as they see fit so long as they do not violate the law or judicially
cognizable public policy. Thus, a carrier may agree to insure against certain risks while
declining to insure against others.” Reed v. Auto-Owners Ins. Co, 284 Ga. 286, 287 (2)
7 (667 SE2d 90) (2008) (citations and punctuation omitted). Here, General Security set
the terms of its policy and did not extend coverage for spot delivery unless the
purchaser had an invalid insurance policy at the time of the loss. “Where the
contractual language unambiguously governs the factual scenario before the court, the
court’s job is simply to apply the terms of the contract as written, regardless of
whether doing so benefits the carrier or the insured.” Id. Here, the General Security
policy language unambiguously does not cover such claims unless the purchaser’s
insurance policy was invalid at the time of the loss. Berry’s policy with Falls Lake was
not invalid at the time of the loss, and therefore, the trial court erred by granting
summary judgment to the Dealership and denying summary judgment to General
Security. Accordingly, we reverse.
Judgment reversed. McFadden, P. J., and Rickman, J., concur.