Archive for October, 2010

Mere Negotiation for Settlement Does Not Waive Insurer’s Contractual Limitation Defense

The Georgia Court of Appeals recently held that an insurer’s settlement negotiations with its insured did not amount to a waiver of its contractual limitation defense. Stone Mountain Collision Center v. General Cas. Co. of Wisconsin, 2010 WL 3516748 (Ga.App. 2010).

The insured purchased a commercial policy providing that any action against the insurer must be “brought within 2 years after the date on which the direct physical loss or damage occurred.” On January 16, 2006, the insured notified the insurer that it had suffered a loss by theft in November 2005. On November 17, 2006, the insurer offered to settle the claim at the actual cash value of $75,577.85, upon receipt of a proof of loss, and informed the insurer that if it replaced the goods within 180 days as provided by the policy, it may be able to claim some or all of an additional $17,533.97, which would be held by the insurer. Over the next year, the insurer extended the same offer several times, which the insured rejected with various counteroffers. When the insurer failed to respond to the latest rejection, the insured filed suit for breach of the policy on July 23, 2008. The trial court granted summary judgment to the insurer on the grounds that the complaint was barred by the two-year limitation period contained in the policy.

On appeal, the insured argued that the insurer waived the limitation period by continuing settlement negotiations. Generally, an insurer cannot take advantage of a limitation provision where, by its acts in negotiating toward settlement, it has led the insured to believe that it will be paid without filing suit. However, mere negotiation for settlement, unsuccessfully accomplished, is not the type of conduct designed to lull the insured into a false sense of security so as to constitute waiver of the limitation defense.

The last written communication between the parties occurred on May 17, 2007, when the insurer gave the insured an additional 30 days to purchase replacement goods. The insured argued that the fact that the claims adjuster sent letters extending the offer after the limitation period created a jury question as to whether waiver occurred. However, a claims adjuster is not authorized to waive a contractual limitation period without express authority from the insurer. The record contained no other evidence of negotiations between the parties before the limitation period expired from which the insured could infer that the insurer had agreed to extend the limitation period. Furthermore, there is no evidence of an affirmative promise or other act waiving the limitation or an actual or constructive fraud leading the insured to believe the limitation period would be enlarged. Therefore, the negotiations that occurred did not induce the insured into believing that it would not have to file suit within two years as provided by the policy.

For more information, please contact Denny Brown at (404) 633-9230.

Experience Alone is Insufficient to Establish Foundation for Expert Testimony

The Supreme Court of Georgia recently held that an expert witness’s experience alone was not sufficient to provide foundation for his expert opinions. HNTB Georgia, Inc. v. Hamilton-King, 287 Ga. 691 (2010).

Following an accident during which the plaintiff was struck by a van in a bridge construction zone on a darkened interstate, the plaintiff brought a negligence action against the designer of the bridge-widening project and the general contractor. The plaintiff’s expert opined that the defendants failed to include shoulders in their traffic control plan and failed to install proper lighting in the construction zone.

Prior to trial, the defendants filed motions to exclude the expert’s opinions, arguing that he lacked the necessary education and experience to testify about construction design standards and that his testimony was unreliable. After the trial court granted defendants’ motions, the Court of Appeals reversed, concluding that the trial court abused its discretion by excluding Thomas’ testimony based on its too “rigid” application of Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993), a case identifying certain factors in determining the reliability of expert testimony. Defendants appealed to the Supreme Court of Georgia.

The Georgia Supreme Court found that although the engineer was qualified as an expert, plaintiff failed to provide any indication of the principles and methods employed by the engineer in reaching his conclusions. The trial court specifically noted the engineer’s failure to cite any treatise or authority supporting his belief that the construction design plan was inadequate. The court also noted the absence of any testing which indicated evidence of similar accidents on interstates. The engineer conceded that his conclusions were based entirely on his “engineering judgment.” He had never before designed, reviewed, or evaluated a construction plan for a similar construction project and had never been qualified as an expert in any case involving bridge construction design. He could not cite a single instance in his years of experience where a construction plan called for shoulders or lighting during the construction period. He also conceded that neither the Manual on Uniform Traffic Control Devices nor the standards of the American Association of State Highway and Transportation Officials required shoulders or lighting on the subject bridge.

In reversing the Court of Appeals, the Supreme Court held that experience, standing alone, does not render all expert opinions reliable. Regardless of an expert’s experience and qualifications, the proffering party bears the burden of presenting evidence of reliability.

For more information, please contact Denny Brown at (404) 633-9230.


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