Eleventh Circuit Enforces Notice Requirement In Liability Policy

The U.S. Eleventh Circuit Court of Appeals recently held an insurer properly denied coverage to an owner and property management company sued following a murder at an apartment complex due to the insured’s unreasonable delay in providing notice. Mt. Hawley Ins. Co. v. E. Perimeter Pointe Apartments, No. 19-13824, 2021 U.S. App. LEXIS 15932 (11th Cir. May 27, 2021).

Two lawsuits were filed by the estate of the deceased and a surviving claimant for negligent security following a shooting at an apartment complex owned and managed by the insureds. The insured was on immediate notice of the shooting and received a letter from the attorney hired to represent the claimants thirteen days following the incident. Nearly two years passed before the insured notified its insurer of the incident. The policy included an endorsement requiring “immediate” notice of any occurrence that could result in a claim, as well as standard conditional language requiring notice of an occurrence “as soon as practicable.” The insurer sought declaratory judgment that the insureds failed to satisfy the notice requirements of their policies. The insureds crossed-moved for summary judgment on the basis that California law applied. The district court granted summary judgment in favor of the insurer. The insureds appealed.

Applying Georgia law, the Eleventh Circuit affirmed, concluding that no obligation exists for insurance companies to defend if the insured unreasonably failed to comply with notice requirements in a policy. The insureds argued their delay of notice was justified because they were unaware of the existence of coverage as they were not named insureds under the policy. The court rejected this argument finding the nature of owning and managing a property, coupled with the seriousness of a murder on such property, required more than simple ignorance to prevent a bar to coverage.