Harborside of Dayton Ltd. Partnership v. Safety Natl. Cas. Corp.

[Cite as Harborside of Dayton Ltd. Partnership v. Safety Natl. Cas. Corp., 

.]




                               IN THE COURT OF APPEALS OF OHIO
                                  SECOND APPELLATE DISTRICT
                                     MONTGOMERY COUNTY

 HARBORSIDE OF DAYTON LIMITED                            :
 PARTNERSHIP et al.                                      :
                                                         :    C.A. No. 29621
       Appellants                                        :
                                                         :    Trial Court Case No. 2019 CV 05584
 v.                                                      :
                                                         :    (Civil Appeal from Common Pleas
 SAFETY NATIONAL CASUALTY                                :    Court)
 CORPORATION et al.                                      :
                                                         :
       Appellees

                                                 ...........

                                                 OPINION

                                    Rendered on December 15, 2023

                                                 ...........

QUINTIN F. LINDSMITH, JENNIFER G. COOPER & ANDREW ROACH, Attorneys for
Appellee

MARK J. KESSLER, LAWRENCE BLUESTONE, & LAUREN GERSHUNY, Attorneys for
Appellant

                                               .............

LEWIS, J.

        {¶ 1} Plaintiffs-Appellants          Harborside        of     Dayton       Limited    Partnership

(“Harborside”), Sun Healthcare Group, Inc. (“Sun”), and Genesis Healthcare LLC

(“Genesis”) (collectively, “the Plaintiffs”) appeal from an order of the Montgomery County
                                                                                         -2-


Common Pleas Court granting summary judgment to Defendant-Appellee Broadspire

Services, Inc. (“BSI”). For the following reasons, we will affirm the judgment of the trial

court.



   I.       Facts and Course of Proceedings

         {¶ 2} This appeal involves the handling of a worker’s compensation claim by self-

insured employers, their third-party administrators, and their excess insurance carrier. In

2006, Harborside operated a long-term care facility in Dayton known as Forest View Care

and Rehabilitation Center. A.C.W. was hired by Harborside as a director of nursing.1

On August 8, 2006, A.C.W. was injured when she tripped and fell at Harborside’s facility

while in the scope of her employment. A.C.W. filed a workers’ compensation claim and

was granted temporary disability benefits.

         {¶ 3} At the time A.C.W. was injured, Harborside had a contract with Corvel, a

third-party administrator, to assist it with handling its workers’ compensation claims. As

a self-insured employer, Harborside had procured an excess insurance policy with Safety

National Casualty Corporation (“Safety National”), which was in effect for the period

during which A.C.W. was injured. The insurance policy provided that Safety National

would be obligated to pay for the costs of a workers’ compensation claim that exceeded

Harborside’s self-insured retention (“SIR”) amount of $500,000 and Harborside would be

responsible for paying any costs up to $500,000. Further, Harborside was required to

provide prompt notice of a claim to Safety National when the claim had exceeded or was



1 To protect the privacy of the injured employee, we will use initials rather than her name.
                                                                                        -3-


likely to exceed 50% of the SIR (i.e., $250,000) or when the injured employee’s disability

exceeded one year in duration or appeared reasonably likely to exceed one year in

duration.

      {¶ 4} In October 2006, Sun acquired Harborside. At that time, Sun was insured

under an excess policy issued by a subsidiary of AIG for the policy term of April 1, 1998

through December 31, 2009. The SIR amount under the AIG policy was $1,000,000.

Therefore, under the AIG policy, Sun would be responsible for paying the first $1,000,000

on any claim covered by the excess policy, and AIG would take over financial

responsibility for any amounts exceeding that threshold.

      {¶ 5} The cost of A.C.W.’s claim increased over time as A.C.W.’s condition

worsened. For example, A.C.W. was granted an allowable condition of a lumbar strain

with sciatica on December 15, 2006, was granted temporary total benefits effective March

6, 2007, and underwent a neurosurgery evaluation in February 2009. As of February

2009, the total amount paid on A.C.W.’s claim was $126,523, and there was the possibility

that future spinal surgery would be necessary.

      {¶ 6} Corvel initially provided information to Safety National about the A.C.W. claim

and its increasing costs. But Safety National typically did not set up its own claim file

until the costs of the claim reached at least one-half the SIR amount under the excess

policy. On June 1, 2009, BSI took over for Corvel as the third-party administrator for

Sun’s workers’ compensation claims, including A.C.W.’s claim.           Angela Love, an

employee of Safety National during the relevant period, stated that Safety National

received the last loss-run report from Corvel in March 2009 but did not reach out to Corvel
                                                                                          -4-


again for further information on the A.C.W. claim until September 2011. At that time,

Safety National first became aware of the change in Sun’s third-party administrators from

Corvel to BSI. According to Janice Burnap, the Director of Risk and Insurance Services

for Sun (and later, Genesis), it was Sun’s responsibility to notify Safety National about

any change in Sun’s third-party administrator.

       {¶ 7} The amount of A.C.W.’s claim continued to grow, and attempts to settle the

claim proved unsuccessful. By October 2010, the A.C.W. claim exceeded 50% of the

$500,000 SIR under the Safety National excess insurance policy. Just a year later, on

October 6, 2011, the incurred amount on the A.C.W. claim exceeded $500,000.

       {¶ 8} On February 17, 2012, Maggie Smith, Senior Claims Analyst for Safety

National, sent a letter to BSI asking it to complete and return an attached first report form

relating to A.C.W. The letter noted that “[a] review of the most recent 2012 workers’

compensation loss experience report” for the A.C.W. claim showed that the claim needed

to be reported to Safety National, because the total incurred “exceeded 50% of the Self-

Insured Retention Level.” According to the letter, “the total incurred shown is $521,177

the S.I.R. is $500,000.” On April 2, 2012, Linda Mullans, an employee of Safety National,

sent an email to Vicky Hardie at BSI requesting the first report update. Hardie emailed

the first report and supporting documentation to Linda Mullans on April 6, 2012.

       {¶ 9} Maggie Smith, on behalf of Safety National, then authored an August 30,

2012 Reservation of Rights (“ROR”) letter addressed to Hardie at BSI. In the letter,

Smith acknowledged receipt of the initial report relating to the A.C.W. claim. Smith then

referred to the language in the excess insurance policy. Smith explained, in part:
                                                                                         -5-


             The file should have been reported to us previously based on the fact

      the lost time exceeded one year and the total incurred exceeded 50% of the

      self insured retention. The late report is in violation of Section I of the

      Insurance Agreement.

             Failure to report the claim to Safety National on a timely basis also

      denied us the opportunity to participate in the defense of this claim, which

      is provided under Section J of the Insurance Agreement.

             The claimant underwent surgery in November of 2010.             Per the

      information received it appears her surgery was not litigated. * * * This is

      a potential violation of Section K of the Insurance Agreement.

             * * * Failure to reasonable [sic] attempt to settle this claim is another

      potential violation of Section K of the Insurance Agreement.

             Lastly, Section U states, in part, that full compliance by the Employer

      with all terms of this agreement is a condition precedent to the Corporation’s

      liability hereunder. As noted above there are violations to this agreement,

      which in turn would be a violation of this section of the agreement.

      {¶ 10} Smith then concluded her letter with the following reservation of rights

language:

             Safety National is accepting notice of this loss subject to a full

      Reservation of Rights under the Insurance Agreement.            We will need

      additional information from you in order to determine whether we will

      provide coverage for this claim, but there shall be no waiver of our rights by
                                                                                        -6-


      our continued investigation. We also acknowledge that the Harborside

      Healthcare Corporation does not waive any of its rights under the

      Agreement. We also wish to reserve our right to amend this reservation

      based on new information revealed during the course of our investigation.

      In regard to our investigation, please provide us with a complete copy of

      your file, file notes, and anything else you believe is pertinent to the

      coverage issues cited in this letter that may not have already been sent.

      Upon receipt and review of all file materials, we will contact you regarding

      our position concerning coverage of this claim.

      {¶ 11} Despite Safety National’s communications to BSI identifying itself as the

excess carrier for the A.C.W. claim, Kelly Dickens, the sole employee in BSI’s Excess

Reimbursement Department, ultimately identified AIG as the excess insurer that was

responsible for covering the A.C.W. claim. In a February 8, 2012 email, Vicky Hardie

asked Dickens whether she had any contact information for the excess insurer. Hardie

stated that the claim needed to be reported and the carrier was a subsidiary of AIG. Later

that day, Dickens sent a response email to Hardie and carbon copied Janice Burnap, an

employee of Sun, on the email. Dickens stated “Hi Vicky, I do not show that this claim

has any excess coverage. I could not find coverage for this * * * claim out of the State

of Ohio. The below policy only shows coverage for claims in the state of Washington.

Please see the below print screens.” The email then contained screen shots presumably

from BSI’s claims system. Dickens then concluded the email by stating: “Again I only

show coverage for the state of WA, not Ohio. And this claim does not have any location
                                                                                       -7-


codes tied to the excess policy. Therefore there is no excess I can offer. I am carbon

copying Janice Burnap, just in case she may have any conflicting information.” On

October 8, 2012, Dickens sent another email to Hardie and carbon copied Burnap. She

stated, in part: “As stated previously, I do not show this claim has any excess coverage.

I had carbon copied the client [Burnap] and there was no dispute to the information that I

presented. I will carbon copy again for extra measure.” Burnap did not respond to

either of these two emails, despite being copied on both.

      {¶ 12} On November 8, 2012, Dickens sent an email to Shannon Etter, an

employee of BSI, related to the excess insurance coverage for the A.C.W. claim.

Dickens also copied three employees of BSI and Burnap on this email. Dickens stated,

“Hi Shannon, I had incorrectly advised Vicky that I could find no excess coverage for

these claims. After checking again, I did locate. For [the A.C.W. claim], please see the

excess coverage below.”      Dickens then listed an AIG policy that had an SIR of

$1,000,000. She also provided Etter with the contact information for the insurer so that

notice of the claim could be sent to AIG. Burnap again did not reply to the November 8,

2012 email despite being copied. Sun merged with Genesis shortly thereafter. Burnap

was retained as an employee by Genesis after the merger.

      {¶ 13} As the cost of the A.C.W. claim continued to grow, there remained confusion

internally at BSI regarding which excess insurer was responsible for the A.C.W. claim.

Dickens believed AIG was the correct excess insurer in spite of the fact that Safety

National had stated the claim was covered by a Safety National excess insurance policy

and sent an ROR letter to BSI regarding the A.C.W. claim. Due to BSI’s belief that AIG
                                                                                        -8-


was the correct insurer, BSI provided only minimal information about the A.C.W. claim to

Safety National over the next several years and apparently did not immediately respond

to the ROR letter or forward the letter to its client, Sun (or later, Genesis).

       {¶ 14} On June 18, 2015, Maggie Smith of Safety National sent an email to Hardie

at BSI attaching the August 2012 ROR letter. In the email, Smith stated, in part: “Per

our conversation, attached is the Reservation of Rights that we issued in August 2012.

Should you have any questions, please contact me.” In a September 21, 2015 email to

Hardie, Smith stated “I am following up on our Reservation of Rights letter that we sent

on May 23, 2012. Per our telephone conversation on June 18, 2015 you advised that

AIG was the excess carrier however we also have a policy that covers the date of the

injury. I am trying to obtain an update regarding this file. Can you please provide the

same for our review?” On January 14, 2016, Smith again emailed Hardie, stating “I am

following up on my email of 9/21/15. Can you please respond?”

       {¶ 15} AIG’s actions during this time added to the confusion. AIG, presumably

based on its excess insurance policy with Sun that covered Sun’s claims at the time

A.C.W. was injured, initially acted as if it would accept financial responsibility for the

A.C.W. claim once it hit the $1,000,000 SIR amount. But as time wore on and the claim

moved closer to that threshold, it started to become clear that AIG was not going to accept

financial responsibility for the A.C.W. claim.

       {¶ 16} In August and September 2018, there were several emails sent to and from

Denis Cassidy, the Workers’ Compensation Manager at Genesis. He reached out to

Burnap for assistance in determining whether AIG or Safety National was responsible for
                                                                                         -9-


paying the excess amounts on the A.C.W. claim. On August 27, 2018, Burnap sent an

email to Cassidy to let him know that she had reviewed “Harborside Summaries of

Insurance,” which made it clear that the Safety National policy applied to the A.C.W. claim.

Further, she stated that there “is no way [AIG’s] coverage would have applied.” Several

of the Plaintiffs’ current and former employees later testified that Burnap would have been

the best person to contact at Sun, and later Genesis, to determine which company was

the correct excess insurer for the A.C.W. claim. Further, in her November 30, 2021

deposition, Burnap testified that if anyone from BSI had directly contacted her for that

information back in 2012, she would have stated that Safety National was the correct

excess insurance carrier for the A.C.W. claim. When asked at her deposition about Kelly

Dickens’ emails in the 2012 timeframe relating to which company was the proper excess

insurance carrier, Burnap explained that she would not have responded to such emails

because she was only carbon copied on them rather than being the person to whom the

emails were directly addressed.

       {¶ 17} Ultimately, on April 9, 2018, BSI submitted an excess reimbursement

request to Safety National on behalf of Genesis relating to the A.C.W. claim. At that time,

the amount of the request was $803,073.49. On April 30, 2019, Smith sent a letter to

Hardie at BSI stating that Safety National was “exercising our rights reserved in our letter

to you dated August 30, 2012 to deny this claim for coverage” under the policy. Smith

pointed out that Harborside had failed “to comply with a number of conditions precedent

set forth in the Policy.” The letter explained, in part:

              Despite repeated requests for information regarding this employee
                                                                                           -10-


       thereafter, we never received any response from you until June 2015 when

       in a telephone conversation, we were advised this matter was being

       reported to AIG. Thereafter, we again repeatedly requested information

       about this claim, to no avail. On or about April 9, 2018, we received a

       Request for Reimbursement in the amount of $803,073.49. Subsequently,

       we were provided with some documentation from you which included file

       notes and some Industrial Commission and court filings relating to [the

       A.C.W.] claim. From our review of the information submitted to us, it is

       clear that Harborside has breached a number of material conditions in the

       Policy such that we must deny this claim[.]

       {¶ 18} Smith explained that the prompt notice requirements of Section I of the

policy between Harborside and Safety National had not been satisfied. Although the

claim had exceeded 50% of the self-insured retention by October 2010, no notice of the

claim was reported at that time in violation of Section I(a). Further, Smith stated that the

failure to report the claim until more than five years after the injury violated Section I(c),

which required prompt notice to Safety National of any disability claim where it appeared

reasonably likely that the disability would exceed one year in duration. Smith reiterated

much of what was stated in the 2012 ROR letter. Smith also noted that the failure to

settle the matter within the SIR amount, the failure to inform Safety National of the

settlement consideration, and the decision to break off settlement discussions with the

employee and her counsel violated Sections J and K of the policy.

       {¶ 19} Smith concluded the April 30, 2019 denial letter as follows:
                                                                                         -11-


              Based upon the foregoing, and as described in the Reservation of

       Rights letter, [Safety National] is under no duty to provide coverage to

       Harborside Healthcare under the Policy. However, without prejudice to its

       rights to deny coverage for the [A.C.W.] claims (and without waiving our

       right to raise additional grounds to deny coverage which may be discovered

       on further investigation), we are amicable to possible compromise of this

       matter.

       {¶ 20} In her October 14, 2021 deposition, Smith testified that the late reporting of

the A.C.W. claim was what triggered Safety National’s decision to issue an ROR letter.

Further, based on when Safety National received the first report from BSI, she likely would

have recommended a denial of the Plaintiffs’ excess claim even if Plaintiffs and BSI had

followed up promptly with the requested information. Olie Jolstad, the expert hired by

BSI, and Nancy Cavey, the expert hired by Safety National, both agreed with Smith that

it was clear the claim was going to be denied once the ROR letter was sent in 2012.

       {¶ 21} On November 25, 2019, the Plaintiffs commenced an action in the

Montgomery County Court of Common Pleas against Safety National and BSI, alleging

that Safety National had breached its insurance contract and its duty of good faith and

fair dealing with Harborside and that BSI had breached its services contract with Sun,

breached its contract with third-party beneficiaries Harborside and Genesis, and

committed negligence with respect to Sun, Harborside, and Genesis. Safety National

and BSI filed answers to the complaint.

       {¶ 22} Several depositions were taken by the parties and expert reports were
                                                                                        -12-


exchanged. On July 19, 2022, BSI filed a motion for summary judgment seeking the

dismissal of all the Plaintiffs’ claims. On that same day, the Plaintiffs filed their own

motion for summary judgment.       On August 10, 2022, the Plaintiffs filed a notice of

dismissal with prejudice of all claims by and between them and Safety National.

      {¶ 23} On September 21, 2022, the trial court granted BSI’s motion for summary

judgment and overruled the Plaintiffs’ motion for summary judgment. The Plaintiffs filed

a timely appeal.

      {¶ 24} All four of the Plaintiffs’ assignments of error relate to the trial court’s

decision to grant summary judgment to BSI. Appellate review of a trial court's ruling on

a summary judgment motion is de novo. Schroeder v. Henness, 2d Dist. Miami No.

2012-CA-18, 

. De novo review “ ‘means that this court uses the

same standard that the trial court should have used, and we examine the evidence to

determine whether as a matter of law genuine issues exist for trial.’ ” Riverside v. State,

, 

, ¶ 21 (2d Dist.), quoting Brewer v. Cleveland City Schools

Bd. of Edn., 

, 

 (8th Dist.1997). On such

review, we do not grant deference to the trial court's determinations. Powell v. Rion,

, 

, ¶ 6 (2d Dist.).

      {¶ 25} Pursuant to Civ.R. 56(C), summary judgment is proper when (1) there is no

genuine issue as to any material fact, (2) the moving party is entitled to judgment as a

matter of law, and (3) reasonable minds, after construing the evidence most strongly in

favor of the nonmoving party, can only conclude adversely to that party. Zivich v. Mentor

Soccer Club, Inc., 

, 

 (1998). The moving
                                                                                        -13-


party carries the initial burden of affirmatively demonstrating that no genuine issue of

material fact remains to be litigated. Dresher v. Burt, 

, 

 (1996). To this end, the movant must be able to point to evidentiary materials of the

type listed in Civ.R. 56(C) that a court is to consider in rendering summary judgment. 

.

         {¶ 26} Once the moving party satisfies its burden, the nonmoving party may not

rest upon the mere allegations or denials of its pleadings. 

. Rather, the burden

then shifts to the nonmoving party to respond, with affidavits or as otherwise permitted by

Civ.R. 56, setting forth specific facts that show that there is a genuine issue of material

fact for trial. 

 Throughout, the evidence must be construed in favor of the nonmoving

party. 

         {¶ 27} The trial court applied Georgia law when ruling on the substantive claims

brought by the Plaintiffs, because the contracts between the Plaintiffs and BSI provided

that Georgia law would apply. We also will look to Georgia law when reviewing the trial

court’s finding that the Plaintiffs’ claims failed as a matter of law.



   II.      The Plaintiffs Did Not File Their Lawsuit Within One Year of When Their Claims

            Accrued Under Georgia Law

         {¶ 28} The Plaintiffs’ first assignment of error states:

                THE TRIAL COURT ERRED IN FINDING THAT APPELLANTS’

         CLAIMS “ACCRUED” AS A MATTER OF GEORGIA LAW IN 2018,

         BECAUSE       APPELLANTS        COULD      NOT     HAVE     SUCCESSFULLY
                                                                                           -14-


       MAINTAINED AN ACTION AGAINST BROADSPIRE UNTIL 2019, WHEN

       SAFETY NATIONAL CASUALTY CORPORATION (“SNCC”) DENIED

       COVERAGE FOR THE ACW CLAIM.

       {¶ 29} The service contracts between the Plaintiffs and BSI provided that any

action by the Plaintiffs against BSI arising out of the contract between them “must be

commenced within one (1) year from the date on which any right, claim, demand or cause

of action shall first accrue.” The trial court noted that “Georgia law is well settled that a

cause of action for breach of contract begins to accrue at the time of the alleged breach,

not the time the damage results or is discovered.” Summary Judgment Decision (Sep.

21, 2022), p. 12-13, citing Hamburger v. PFM Capital Mgt., Inc., 

,

 (2007), and Mobley v. Murray Cty., 

, 

(1934). The trial court then pointed out that the Plaintiffs had alleged that BSI breached

the Agreement as early as 2010, when the A.C.W. claim amount reached 50% of the SIR,

and as late as December 19, 2016, when BSI failed to update the claim file or inform the

Plaintiffs of inquiries by Safety National.    The trial court concluded that the alleged

“breaches occurred well before November 25, 2018. Therefore, these claims for breach

of contract, negligence, and breach of the duty of good faith and fair dealing are in fact

barred by the contractual period of limitations set forth in the Agreements.” Summary

Judgment Decision, p. 13.

       {¶ 30} The Plaintiffs contend that the trial court erred when it found that their claims

had accrued when BSI breached the service contracts. According to the Plaintiffs, their

claims did not accrue until the date upon which they could have successfully maintained
                                                                                          -15-


their action, which was April 30, 2019, the date on which Safety National sent its denial

letter. Since the Plaintiffs filed their action only seven months after receiving the denial

letter, “the trial court’s statute of limitations decision was error and should be reversed.”

Appellants’ Brief, p. 18.

       {¶ 31} BSI responds that the record establishes that the Plaintiffs’ “claim accrued

at the latest when [Safety National] refused to reimburse them for the Claim based on the

RoR letter and Appellants knew they could not provide any information to alter [Safety

National’s] position. A letter reiterating a previously-stated basis for denial of coverage

is unnecessary for the claim to accrue.” Appellee’s Brief, p. 16.

       {¶ 32} Under 

, an action for breach of a written contract

must be brought within six years of the breach. Godwin v. Mizpah Farms, LLLP, 

, 

 (2014), citing Hamburger, 

, 

.     However, “it is well settled that limitation clauses reducing the time

permitted to assert claims from six years to one year are enforceable.” Carrier Corp. v.

Rollins, Inc., 

, 

 (2012), fn.7, citing Southern Telecom

v. Level 3 Communications, 

, 

 (2008). Therefore,

our review in this assignment of error will focus on whether the trial court erred in finding

that the Plaintiffs’ causes of action accrued more than one year prior to when they filed

suit against BSI.

       {¶ 33} Under Georgia law, “ ‘when the question is raised as to whether an action

is barred by a statute of limitations, the true test to determine when the cause of action

accrued is to ascertain the time when the plaintiff could first have maintained his action
                                                                                           -16-


to a successful result.’ ” Wallace v. Bock, 

, 

 (2005),

quoting U-Haul Co. of W. Ga. v. Abreu & Robeson, Inc., 

, 

 (1981). On a contract claim, the statute of limitations begins to run at the time of its

alleged breach. 

 citing Dolanson Co. v. C & S Natl. Bank, 

, 

 (1978). “ ‘The discovery rule is not applicable to a cause of action based on

breach of contract; with respect to a breach of contract claim, the statute of limitation runs

from the time the contract is broken rather than from the time the actual damage results

or is ascertained.’ ” 

, citing 

.

       {¶ 34} Harborside and Sun were aware of the A.C.W. claim and the excess

insurance policy with Safety National before Sun hired BSI to assist in its claims handling.

Corvel, the administrator Harborside used before Sun hired BSI, sent updates to Safety

National about A.C.W.’s claim. Consequently, at the time BSI was hired by Sun, both

Safety National and Sun should have been aware that Safety National was the correct

excess insurer for the A.C.W. claim. In early 2012, Safety National reached out to BSI

after finding out that BSI had replaced Corvel as Sun’s third-party administrator.

Confusion then ensued within BSI, especially with Kelly Dickens, as to whether Safety

National or AIG was responsible for excess insurance on the A.C.W. claim. Dickens sent

at least three emails in 2012 that made it clear that (1) BSI did not know that Safety

National was the correct insurer and (2) BSI was not proceeding forward as if Safety

National was the correct insurer.      Dickens copied Burnap of Sun on those emails.

Burnap never corrected Dickens’ mistaken belief as to the correct excess insurer. At a

minimum, by 2012, Sun was on notice that BSI had breached its duties under the services
                                                                                           -17-


contract with Sun by dealing with the wrong insurer about the A.C.W. claim. Further,

Sun should have been aware of the terms of the excess insurance policy with Safety

National as part of its acquisition of Harborside. Sun knew that failure to timely report

claims to Safety National would lead to a denial of a claim. A few years later in August

and September 2018, there were internal emails within Genesis that made it clear that it

was worried that a mistake had been made by BSI misidentifying AIG as the correct

excess insurer for the A.C.W. claim. Employees of Genesis were worried that its claim

for reimbursement to Safety National would be denied because of the late reporting of the

claim and the failure to adequately respond to Safety National’s previous requests for

more information, including those contained in Safety Nationals’ ROR letter. In short,

Genesis knew of BSI’s alleged breach of its services contract and the fact that damages

had resulted therefrom more than one year before the Plaintiffs commenced their action

against BSI. Therefore, the Plaintiffs did not commence their suit against BSI within the

requisite one year provided for in the service contracts between the Plaintiffs and BSI.

          {¶ 35} The trial court did not err in finding that the Plaintiffs failed to commence

their action against BSI within one year of when their claims accrued.              The first

assignment of error is overruled.



   III.      The Trial Court Did Not Err in Concluding the Plaintiffs Could Not Recover

             Damages from BSI Related to Safety National’s Denial of the Excess Claim

          {¶ 36} The Plaintiffs’ second and third assignments of error are interrelated and

will be addressed together. These two assignments of error state:
                                                                                         -18-


              THE TRIAL COURT ERRED IN ITS INTERPRETATION OF

       BROADSPIRE’S OBLIGATIONS UNDER § 2.1(d) OF THE SERVICES

       AGREEMENT TO “ASSIST” APPELLANTS IN REPORTING TO EXCESS

       CARRIERS BY IGNORING THE PLAIN MEANING OF “ASSIST,” AS

       INFORMED BY THE COMMON LAW UNDERSTANDING OF THE DUTY

       OF AGENTS TO PROVIDE COMPLETE INFORMATION TO THEIR

       PRINCIPALS.

              THE TRIAL COURT IMPROPERLY RESOLVED DISPUTED

       FACTUAL      ISSUES     IN   GRANTING       SUMMARY        JUDGMENT          ON

       APPELLANT’S CLAIMS THAT BROADSPIRE BREACHED SECTIONS

       2.1(d) AND (e) OF THE SERVICES AGREEMENT.

       {¶ 37} The trial court found that “[e]ven if Plaintiffs could prove any of [BSI’s]

actions or inactions were in breach of the Agreements, they cannot prove that the

breaches caused the denial of the claim by [Safety National].” Summary Judgment

Decision, p. 9. The trial court provided the following reasoning for its finding:

              Plaintiffs have alleged that [BSI] breached the Agreements when it

       failed to report the claim to [Safety National] either when it appeared

       reasonably likely that the A.C.W. claim would exceed one year in duration,

       which would have been in 2008 or at the latest when the A.C.W. claim

       amount reached $250,000, 50% of the SIR, which occurred in 2010. The

       language of these sections of the Agreements is clear and unambiguous.

       [BSI] specifically disclaimed any liability in reporting claims to the excess
                                                                                   -19-


carrier. Therefore, [BSI] did not breach any of the Agreements by failing to

report the claim to the excess carrier. That duty fell solely on Plaintiffs as

also exhibited by the Policy. The Policy and the Agreements are clear that

it was Harborside’s/Sun’s duty to report the claim to [Safety National].

Plaintiffs have not presented any evidence to prove otherwise.

       ***

       Plaintiffs claim that [BSI] failed to assist them in reporting to [Safety

National] by failing to respond to the RoR letter and subsequent inquiries

from [Safety National] and by failing to notify Plaintiffs of the RoR and

communications from [Safety National]. The Agreements are clear in that

the duty to assist Plaintiffs was limited specifically to “provide loss runs,

status reports, access to their claim system and adherence to claim

specifications for reserve advisories and settlement consultation.”

Plaintiffs have not alleged or pointed to any evidence to show that [BSI]

breached any of those duties. * * * Further, even if they had breached

any of those obligations, the following sentence of Section 2.1(d) states that

[BSI’s] assistance is not a substitute for Plaintiff’s contractual obligation to

report claims to their excess carrier. Therefore, Plaintiffs are not able to

show that such alleged breaches caused their damage, i.e. the refusal of

the claim by [Safety National] because that duty fell solely on them.

       Plaintiffs also allege that [BSI] failed to adequately maintain its claim

file as required by Section 2.1(e) of the 2008 and 2010 agreements and
                                                                                            -20-


       2.1(f) of the 2013 Agreement. There is a question of fact regarding [BSI’s]

       maintenance of their claim file. The parties do not dispute that Plaintiffs

       had access to the claim file. Further, Plaintiffs admit that the claim notes

       reference [Safety National] at least three times as those notes came directly

       from CorVel’s claim notes which they admit referenced both AIG and [Safety

       National]. There is a question of fact as to whether [BSI] received the RoR

       in 2012. There is also a question as to whether they updated the claim

       notes with all of the follow-up communication from [Safety National] after

       receiving the RoR. However, Plaintiffs have failed to present any evidence

       to show they were damaged as a result of that breach. Plaintiffs have not

       pointed to any evidence which would prove that had [BSI] maintained the

       claim file, seemingly updating it with the RoR and any communication

       received from [Safety National], that the claim would not have been denied.

Id. at 7-8.

       {¶ 38} The Plaintiffs contend that the trial court erred in concluding “that [BSI’s]

obligations were limited to ‘providing loss runs, status reports, access to our claim system

and adherence to claim specifications for reserve advisories and settlement consultation’

and that Appellants were expressly responsible to report claims to the excess carrier.”

Appellants’ Brief, p. 18, citing Section 2.1(d) of the Service Agreement and Summary

Judgment Decision, p. 8. According to the Plaintiffs, the trial court’s narrow interpretation

of the services contract with BSI ignored the fact that “[BSI’s] role in assisting the client in

reporting of excess carriers was principally one of providing information” and “[t]he facts
                                                                                            -21-


of this case exemplify the rationale for an agent’s duty to share information.” Id. at 20.

       {¶ 39} Further, the Plaintiffs argue that the trial court improperly resolved factual

disputes in granting summary judgment to BSI. First, the Plaintiffs contend that the trial

court misconstrued Janice Burnap’s testimony and “what steps she did or could have

taken is a matter of credibility for the jury, not something that the trial court could resolve

on summary judgment.” Id. at 21-22. Second, the Plaintiffs believe that the trial court

improperly ignored conflicting evidence on the issue of whether Safety National still would

have denied the claim if BSI had responded to Safety National’s requests before 2018.

According to the Plaintiffs, “[c]ontrary to her testimony in litigation, Maggie Smith did not

recommend immediate denial of coverage; rather, she indicated that [Safety National]

would want a formal response to the ROR and indicated that she would undertake a

detailed review of the file to determine if [Safety National] would accept coverage.” Id.

at 23. The Plaintiffs contend “[a]t a minimum, the contradiction between Ms. Smith’s

testimony in litigation and her actions, creates a credibility dispute, which, once again,

should not be resolved on summary judgment.” Id. at 23-24. “Further, [BSI’s] own

expert, Mr. Jolstad, testified that it is rare for excess carriers to deny coverage and that

excess carriers frequently accept claims reported later than would have been the case if

the ACW claim was reported in 2012.” Id. at 24, citing Deposition of O. Jolstad, p. 122-

124.

       {¶ 40} The construction, interpretation, and legal effect of a contract is an issue of

law, which is subject to de novo review. Natl. Hills Exchange, LLC v. Thompson, 

, 

 (2013). “ ‘The normal rules of contract construction
                                                                                          -22-


apply, and absent ambiguity that cannot be resolved by applying the rules of contract

construction, the contract remains a question of law.’ ”           

 quoting Huckaby v.

Cheatham, 

, 

 (2005).

       {¶ 41} “Under Georgia law, a contract is unambiguous when it is capable of only

one reasonable interpretation, and, if there is no ambiguity, the contract is enforced

according to its plain terms.” In re Estate of Boyd, 

, 

 (2017), citing Freund v. Warren, 

, 

 (2013).

“When determining the meaning of the words used in a contract, the words will ‘generally

bear their usual and common meaning and the usual and common meaning of a word

may be supplied by common dictionaries.’ ”           

 citing Global Ship Sys., LLC v.

Continental Cas. Co., 

, 

 (2008).

       {¶ 42} Section 2.1(d) of Exhibit 1 of the first services contract in the record between

Sun and BSI stated “[BSI] shall not be responsible for reporting to or placing any specific

excess insurer(s) on notice of any Claim(s) that is/are or may be required to be reported

or noticed to Client’s excess insurer(s).” Section 2.1(d) of Exhibit 1 of the 2010 and 2013

service contracts governing the relationship between the Plaintiffs and BSI are identical

to each other and state:

              [BSI] agrees to assist Client with reporting to its excess carrier(s) by

       providing loss runs, status reports, access to our claim system and

       adherence to claim specifications for reserve advisories and settlement

       consultation. [BSI’s] reporting is to assist Client with meeting its excess

       reporting obligations and therefore does not substitute nor eliminate Client’s
                                                                                         -23-


       contractual obligation to report claims to the excess carrier(s). As excess

       claim reporting is Client’s contractual obligation, [BSI] will not assume any

       liability for this reporting obligation.

       {¶ 43} The plain language of the contracts between the Plaintiffs and BSI

recognizes that the Plaintiffs had the contractual obligation to report claims to the excess

carrier and that BSI would not assume any liability for the Plaintiffs’ reporting obligation

to the excess insurance carrier.

       {¶ 44} Indeed, the insurance policy between the Plaintiffs and Safety National

made it clear that the Plaintiffs were the responsible party for providing prompt notice to

Safety National. For example, Section I of the Policy titled “Prompt Reporting of Claims”

provided, in part:

              As soon as the EMPLOYER becomes aware, the EMPLOYER must

       provide prompt notice to the CORPORATION of: (a) any claim or action

       commenced against the EMPLOYER which exceeds, or is likely to exceed,

       fifty percent (50%) of the Self-Insured Retention Per Occurrence specified

       in Item 7 of the Declarations; * * * (c) any disability claim whether or not

       contested by the EMPLOYER, where it appears reasonably likely that such

       disability will exceed one year in duration, or where such disability actually

       exceeds one year in duration.

       ***

              Failure to render prompt notice of any claim in a manner sufficient to

       the    CORPORATION           by    the     EMPLOYER,   or    its   designated
                                                                                       -24-


      representative(s), may result in the disclaimer of coverage for the particular

      claim.    To constitute prompt, sufficient notice, the EMPLOYER must

      provide complete information as to the details of the injury, disease, or

      death.

      {¶ 45} The contract between Safety National and the Plaintiffs imposes additional

duties on the Plaintiffs. For example, Section J of the Policy discussed the importance

of attempting to settle workers’ compensation claims and keeping Safety National

informed so that it could investigate and participate in defending against the workers’

compensation claims. That Section provided:

               The EMPLOYER shall investigate and settle or defend all claims and

      shall conduct the defense and appeal of all actions, suits, and proceedings

      commenced against it. The EMPLOYER shall forward promptly to the

      CORPORATION copies of any pleadings or reports as may be requested.

      The CORPORATION shall not be obligated to assume charge of the

      investigation, defense, appeal or settlement of any claim, suit, or proceeding

      brought against the EMPLOYER, but the CORPORATION shall be given

      the opportunity to investigate, defend, or participate with the EMPLOYER in

      the investigation and defense of any claim, if, in the opinion of the

      CORPORATION, its liability under this Agreement might be involved.

      {¶ 46} Section K of the Policy further provided:

               The EMPLOYER shall use diligence, prudence, and good faith in the

      investigation, defense, and settlement of all such claims and shall not
                                                                                         -25-


       unreasonably refuse to settle any claim which, in the exercise of sound

       judgment with respect to the entire claim, should be settled, provided,

       however, that the EMPLOYER shall not make any payment or agree to any

       settlement for any sum which would involve the limits of the

       CORPORATION’s liability hereunder without the approval of the

       CORPORATION.          The EMPLOYER’s failure to exercise diligence,

       prudence, and goof faith may result in the disclaimer of coverage for the

       particular claim.

       {¶ 47} The ROR letter from Maggie Smith at Safety National to Hardie at BSI cited

all these contractual provisions between Safety National and the Plaintiffs.         Smith

testified at her deposition that Safety National likely would have denied coverage on the

claim even if BSI or the Plaintiffs had done a better job going forward of providing the

information requested in her ROR letter. This is because at the time the ROR letter was

sent, the Plaintiffs had already breached their contractual obligations with Safety National

by failing to timely report the A.C.W. claim.

       {¶ 48} The record before us is replete with evidence of confusion internally at BSI

about who was the proper excess insurance carrier for the A.C.W. claim. Mistakes were

made in real-time that caused the wrong insurer to be identified for several years. And

BSI was not the only one who made mistakes. BSI was under the impression that AIG

was the correct excess insurance carrier. This made some sense given that AIG was

Sun’s excess insurance carrier during the time when A.C.W. was injured and filed her

claim. But, apparently, Sun’s acquisition of Harborside did not affect the fact that Safety
                                                                                           -26-


National, rather than AIG, was financially responsible as the excess insurer for the A.C.W.

claim.

         {¶ 49} AIG did not help in alleviating the confusion. Indeed, for several years, AIG

gave BSI and Genesis the impression that it would accept responsibility for the A.C.W.

claim once the claims amount exceeded the $1,000,000 SIR contained in the AIG

insurance policy. BSI made some attempts to clear up the confusion by carbon copying

Janice Burnap of Sun (and later, Genesis) on some emails about who was the proper

excess insurance carrier regarding the A.C.W. claim. Burnap testified that she did not

respond to or pay attention to the emails because she was only copied on them.

Interestingly, she testified that if she had been contacted directly about the matter, she

would have checked her records and confirmed that Safety National was the correct

excess insurance carrier for the A.C.W. claim. This highlights the fact that BSI ultimately

had to rely on the information it received from its client (i.e., the Plaintiffs) when it came

to determining who the proper excess carrier was.

         {¶ 50} Safety National did not handle things well either. Safety National was most

aware throughout this claims saga of its responsibility to pay on the A.C.W. claim as the

correct excess insurance carrier.      While it contacted BSI in 2012 to request some

information on the status of A.C.W.’s claim, it is odd that Safety National would not directly

contact its actual insured, the Plaintiffs, when it was not getting the answers or information

it wanted from BSI, a company with whom Safety National had no contractual relationship,

or from Corvel, the previous third-party administrator. While it may be typical within the

excess insurance industry to deal on a daily basis with the third-party administrator rather
                                                                                            -27-


than the insured when seeking information about a claim, the current situation ceased

being a typical situation once Safety National did not receive an immediate response to

its ROR letter or its repeated requests for additional information, especially when the

denial of coverage for such a significant claim may be devastating to a self-insured

employer. Further, multiple witnesses testified that it was not typical in the industry for

an insurer to not send a copy of an ROR letter directly to its insured. The employees of

Safety National were unable to provide a good explanation for their decision not to send

a copy directly to the insured (i.e., the Plaintiffs) other than citing an internal practice at

Safety National.

         {¶ 51} In short, there is plenty of blame to go around regarding who helped create

this excess insurance morass. And there are plenty of factual disputes as to who knew

exactly what when and what should have been known when. But the existence of the

disclaimer of liability in the contract between BSI and the Plaintiffs made those factual

issues immaterial to the Plaintiffs’ claims against BSI. All the damages sought in the

Plaintiffs’ complaint ultimately flowed from Safety National’s denial of coverage, which

was due to the failure to timely report the excess insurance claim to Safety National. As

such, the contractual disclaimer that BSI would not assume any liability for the Plaintiffs’

reporting obligation required this dispute to be resolved in BSI’s favor as a matter of law.

         {¶ 52} The trial court did not err in granting summary judgment to BSI on the

breach of contract claim. The second and third assignments of error are overruled.



   IV.      The Trial Court Properly Dismissed the Plaintiffs’ Remaining Claims that were
                                                                                      -28-


          Contingent on Sun’s Success on Its Breach of Contract Claim Against BSI

      {¶ 53} The Plaintiffs’ fourth assignment of error states:

             THE TRIAL COURT ERRED IN DISMISSING THE THIRD-PARTY

      BENEFICIARY BREACH OF CONTRACT CLAIMS OF GENESIS AND

      HARBORSIDE AND APPELLANTS’ CLAIM FOR BREACH OF THE

      COVENANT OF GOOD FAITH AND FAIR DEALING ON THE SAME

      GROUNDS.

      {¶ 54} The trial court stated that under Georgia law there “is no independent cause

of action for violation of a duty of good faith and fair dealing in the performance of a

contract apart from breach of an express term of the contract.” Summary Judgment

Decision, p. 10. Therefore, the trial granted summary judgment to BSI on the breach of

good faith and fair dealing claim based on its finding that BSI was entitled to summary

judgment on the breach of contract claims.

      {¶ 55} According to the Plaintiffs, the trial court’s grant of summary judgment on

their claim for breach of the covenant of good faith and fair dealing and the third-party

beneficiary breach of contract claims should be reversed, because it was based on the

flawed finding that BSI was entitled to summary judgment on the breach of contract claim.

The Plaintiffs contend that “[a]lthough there is no ‘independent’ claim for breach of

covenant of good dealing under Georgia law, genuine issues of material fact regarding

the underlying breach of contract claim preclude dismissal of the good faith and fair

dealing claim on summary judgment as well.” Appellants’ Brief, p. 24, citing Layer v.

Clipper Petroleum, Inc., 

, 

 (2012).         Further, the
                                                                                           -29-


Plaintiffs note that BSI did not dispute that Genesis and Harborside were third-party

beneficiaries to the service contract between BSI and Sun.

         {¶ 56} As the trial court correctly explained, “[t]here is no independent cause of

action for violation of a duty of good faith and fair dealing in the performance of a contract

‘apart from breach of an express term of the contract.’ ” Bankston v. RES-GA Twelve,

LLC, 

, 

 (2015), quoting Morrell v. Wellstar Health

Sys., Inc., 

, 

 (2006). As discussed above in our resolution

of the second and third assignments of error, the trial court did not err in granting summary

judgment to BSI on Sun’s breach of contract claim. Consequently, the claim for breach

of the duty of good faith and fair dealing under the contract was also properly dismissed,

since there is no such independent cause of action apart from the breach of contract

claim.

         {¶ 57} The fourth assignment of error is overruled.



   V.       Conclusion

         {¶ 58} Having overruled all of Plaintiffs’-Appellants’ assignments of errors, the

judgment of the trial court will be affirmed.

                                      .............



EPLEY, J. and HUFFMAN, J., concur.