TLS&S Attorneys Mark Wolfe and Brian Bassett Obtain Summary Judgment in Coverage Dispute Involving Waiver and Estoppel
November 21, 2011

TLS&S Mark Wolfe and Brian Bassett obtained summary judgment on behalf of their client, Max Specialty Insurance Company, in a case styled National Trust Insurance Company v. Max Specialty Insurance Company pending in the Superior Court of Fulton County, Georgia. National Trust filed suit against Max Specialty arguing that Max Specialty owed primary coverage to National Trust's named insured, American Painting, in connection with property damage claims asserted against American Painting resulting from construction defects. American Painting qualified as an additional insured under the Max Specialty policy for the property damage claims. National Trust settled the property damage claims for approximately $430,000 and sought full reimbursement from Max Specialty for those payments, and further sought recovery for Max Specialty's bad faith conduct in adjusting the claims. Max Specialty denied any coverage obligations to American Painting based on a Height Limitation exclusion in the Max Specialty policy. National Trust submitted that even if the Height Limitation exclusion applied to bar coverage for the property damage claims, Max Specialty should be estopped from raising the policy exclusion by virtue of its conduct in adjusting the property damage claims and negotiating potential settlements with the underlying claimants.

TLS&S filed a Motion for Summary Judgment on behalf of Max Specialty arguing that there was no genuine issue of material fact that the Height Limitation exclusion applied to bar coverage to American Painting, and further asserted that Georgia law did not allow an insurer, such as Max Specialty, to waive its ability to rely on policy exclusions by adjusting pre-suit claims. TLS&S argued that the facts pertaining to Max Specialty's adjustment of the claims and Max Specialty's promises of coverage were irrelevant under Georgia law, and could not function as a waiver of policy exclusions.

The Superior Court of Fulton County granted Max Specialty's Motion in all respects. The court agreed that the Height Limitation exclusion was unambiguous and clearly applied to preclude coverage for the claims asserted against American Painting. Further, the court held that pursuant to Georgia law, Max Specialty could not be estopped from raising policy exclusions through its conduct in adjusting a pre-suit claim against an insured. Consequently, the court ruled that National Trust was not entitled to recovery from Max Specialty for any costs incurred in indemnifying American Painting, and National Trust was also not permitted to recover any amounts for their claims of bad faith against Max Specialty.