Trust Yourself
Throughout one's life you will face obstacles, issues, and situations in which you need to resolve or find a way to overcome these challenges. In doing so, you must trust yourself, trust your knowledge, and trust your instincts. You must put stock within yourself and have the confidence to overcome any obstacles that you may endure. I had to remind myself of this self “trust” within the past year.
I have had the great pleasure of representing many policyholders over the last year who suffered damages due to last spring's wind and hail storms. Many of these clients are insured with Allstate and the policies that covered their properties were the Allstate “Deluxe Plus” policy, which contains Allstate's “Standard Fire Policy Endorsement”. As I began the process of filing suit on these cases, I read the “Deluxe Plus” policy and discovered that the “Suit Against Us” section of the policy stated: “Any suit or action must be brought within one year after the inception of loss or damage.” However, the “Standard Fire Policy Endorsement” to this policy stated, “No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within two years next after inception of the loss.”
Now, any one reading this language would assume that since the endorsement states clearly at the very top: “The following endorsement changes your policy”, the suit limitations period would be two-years. But not so fast! After filing suit I was slapped with motions to dismiss (“MTD”) on each case from Allstate's counsel. Allstate's MTDs claimed that the two-year suit limitations period contained in Allstate's Standard Fire Policy Endorsement only applied to the perils of fire and lightning—not wind or hail—and that the suit was barred based on the Georgia Supreme Court decision in White v. State Farm Fire & Cas. Co., 291 Ga. 306, 728 S.E.2d 685 (2012).
I found myself unable to reconcile Allstate's arguments with my interpretation of the language contained in Allstate's Standard Fire Policy Endorsement and decided to trust my instincts and pursue the matter further. So, I set out to ask some of my colleagues who have been filing suit in Georgia on these types of policies for many years what their opinion was. All of them said the same thing: “It's only a one-year suit limitations period.” Their responses left me perplexed because, in my opinion, the language was clear. I must have re-read the policy twenty (20) times. After each reading the same conclusion echoed louder and louder in my mind: “The endorsement changed the suit limitations period from one-year to two-years after the date of loss for ALL covered perils!”
The deadline to file my responses to Allstate's MTDs was fast approaching. I decided to reach out to the Georgia Department of Insurance to see if they could provide any insight on the issue. I was able to get the Georgia Standard Fire Policy that the state of Georgia mandates all insurance carriers use. This policy was prescribed by the Insurance Commissioner of Georgia pursuant to the mandate of Section 33-32-1 of the Georgia Insurance Code and under Chapter 120-2-19-0.20, Sections 120-2-19-.01-0.20 of the Ga. Comp. R. & Regs. R.
After reviewing Georgia's Standard Fire Policy, I was right back where I started – Allstate's endorsement changed the language of the policy. Faced with the deadline of answering Allstate's MTDs, I decided to trust myself and challenge Allstate's position that White v. State Farm Fire & Cas. Co. was controlling on this issue and, as a result, the Commissioner's Standard Fire Policy only pertains to fire losses.
I reviewed all of my clients closely, selected the best Plaintiff out of all of them, and decided to file a motion for a declaratory judgment (“Dec Action”) on the issue. In the rest of the firm's cases, I filed a response to Allstate's MTDs asking the Court to stay the proceedings until a higher court had ruled on my Dec Action in the other case. Allstate's attorney called me and said that, “I had brought the wrong type of action” by filing a motion for declaratory judgment. However, I trusted myself once again and knew that by bringing the Dec Action I would be able to ensure that the resulting judgment would become binding precedent on the lower courts. By doing this, Allstate would no longer be able to prevent policy holders from brining suit by bulldogging it's way over policyholders, public adjusters, and attorneys in the future.
My main argument was that the express language in the Standard Fire Policy Endorsement extended the suit limitations rights to two-years for all perils insured against by the policy because: (i) the unambiguous language requires such a result; or, in the alternative, (ii) if the language is ambiguous, the rules governing contract and insurance policy interpretation require that the suit limitation rights for all covered perils be extended two-years. The terms of the Endorsement when read in conjunction with the policy as a whole are clear and unambiguous because the terms at issue are only capable of one reasonable interpretation. Caswell V. Anderson, 241 Ga. App. 703, 527 S.E.2d 582 (2000). “Where the terms of an insurance policy . . . are unambiguous, a court is to look to the contract alone to ascertain the parties' intent.” Fireman's Fund Ins. Co. v. University of Georgia Athletic Ass'n. Inc., Ga/ App. 355, 356, 654 S.E.2d 207, 209 (2007).
The policyholders in these cases purchased and paid a higher premium for the “ Deluxe Plus Homeowners Policy,” which included numerous policy endorsements that provided additional coverage over and above the multi-line policy. The multi-line policy insured, inter alia, against direct loss by wind and hail. The first full sentence of the Endorsement as contained in the policy was virtually an exact copy of the Commissioner's Standard fire Policy as provided in Section 120-2-19-.01-0.20 of the Georgia Property Insurance Regulations with one very critical distinction: Allstate added language not contained in the Commissioner's Standard Fire Policy to include direct loss by any other peril insured against in the Policy. In relevant part, the Commissioner's Standard Fire Policy states that the insurer does insure . . . against all DIRECT LOSS BY FIRE, LIGHTINING AND BY REMOVAL . . .” whereas Allstate's Standard Fire Policy Endorsement states that the insurer “does insure . . . against all DIRECT LOSS BY FIRE, LIGHTING AND OTHER PERILS INSURED AGAINST IN THIS POLICY INCLUDING REMOVAL . . . .”
The Commissioner's Standard Fire Policy unambiguously indicates that the provisions only apply to direct lost by fire and lightning. Had Allstate used this exact language, there would have been no issue for the court to decide or a battle for us to fight. However, Allstate, on its own volition, altered the language of the Commissioner's Standard Fire Policy to expressly state that in addition to fire and lightning, it insured against all direct loss by other perils insured against in the policy – meaning all other covered perils in addition to fire and lightning. Eight little words changed the policy from a one-year suit limitations period to a two-year suit limitations period.
In one of the cases where I simply filed a response to Allstate's MTD, the Judge wrote: “Having considered the record and all applicable law, this Court finds that the Endorsement at issue unambiguously extends the limitation period for filing suit, which means that Plaintiff timely filed his complaint.” He continued by stating, “[a]ssuming for the sake of argument that there is any ambiguity, this Court strictly construes the contract against Allstate, the drafter, in favor of Plaintiff, the insuree. As such, this Court HEREBY DENIES defendant's motion to dismiss.”
The court went on to say: “In so holding, this Court simply construes the contract as written, without reference to Insurance Regulations and the Commissioner's authority to issue same, which are not relevant to this inquiry. Also, this Court was able to decide without the benefit of a declaratory judgment in an unrelated case in another court.” Allstate immediately withdrew all of its remaining MTDs.
Because of eight little words Allstate added to its Standard Fire Policy Endorsement, policyholders in George are able to bring suit against Allstate for damages caused by any covered peril, not just fire and lightning, up to two years after the incident. This is a huge victory for all policyholders in Georgia as many of them do not immediately find out that they have suffered damages until sometime later. Also, due to insurance carriers' common tactic of delaying the process by ignoring policyholders' phone calls, requests, and correspondence, it is easy for suit limitations period to approach. Insurance carriers' “Delay, Deny, Defend”[1] approach benefits them in the short amount of time Georgia allows for bringing suit. The court's declaration that the suit limitations period in Allstate's Deluxe Plus Policy is two years when it is paired with Allstate's Standard Fire Policy, greatly benefits the policyholders and public adjusters by providing them with an additional year or one hundred percent (100%) more time to file suit.
At the end of the day, the odds were stacked against me and all Allstate policyholders in the state of Georgia. However, I trusted myself, which led to my instincts telling me to fight this battle against Allstate by going up against this corporate giant and serving as a voice for the all to often voiceless policyholders. The simple act of trusting myself led to a positive outcome for all policyholders and representatives of the policyholders, including public adjusters. So if you find yourself in a similar position, trust your instincts and don't back down from the challenge of proving that you are right . . . that is exactly what the insurance companies are counting on.
If you have any questions regarding the article above or would like to discuss the topic in-depth, feel free to contact the firm. In addition, if you are interested in receiving copies of the motions filed with the Court or the Judge's ruling do not hesitate to contact The Huggins Law Firm.
Remington Huggins, Esq. The Huggins Law Firm (770) 913-6229
[1] See Jay M. Feinman, Delay, Deny, Defend: Why Insurance Companies Don't Pay Claims And What You Can Do About It (2010). Prof. Feinman coined the term “Delay, Deny, Defend” in his book, which is a must read in my opinion. Using Prof. Feinman's terminology, the issue discussed in this article is just another example of Allstate moving from “Good Hands” to “Boxing Gloves” in its daily interactions with policyholders. Luckily for our clients and Allstate policyholders in Georgia, our firm's right hook was stronger than Allstate's jab.