Boardman Petroleum, Inc. v. Federated Mut. Ins. Co.
Citation: 28 ELR 21009
No. 96-9270, 135 F.3d 750/(11th Cir., 02/19/1998)
The court holds that Georgia law applies to consolidated cases involving environment-related insurance claims arising from an insured's ownership and operation of two gas stations in South Carolina. The insurer filed an action in a South Carolina federal court for a declaratory judgment that no coverage existed under the insured's policy provisions. The insured sued separately for breach of contract and declaratory relief in a Georgia federal court. The cases were consolidated in Georgia. The court first holds that the balancing of interests analysis is the appropriate way to determine which state's law applies. The court next holds that it disagrees with the district court's conclusion that South Carolina's interests in having its laws apply to the consolidated cases outweigh Georgia's interests. Although Georgia does not have an applicable choice-of-law statute, Georgia case law has continually expressed Georgia's policy concerns in protecting the interest of its insured residents, even when the property damage for which coverage is sought occurred in another state. Further, some Georgia courts have suggested that performance under a general liability policy is the payment of claims; under this theory, the contracts at issue contemplated performance in Georgia, as the payments would be made to the insured's home office in Georgia. In addition, the policies issued to the insured have to be submitted for review and approval by the Georgia Insurance Commissioner's office. The insurer was under no similar obligation in South Carolina. No evidence of South Carolina's interests tips the balance. The primary policy consideration behind the enactment of South Carolina's choice-of-law statute is the protection of the rights of South Carolina citizen insureds. Here the insured is a Georgia corporation, the policies were delivered to its home office in Georgia, and performance will take place in Georgia. Although the property is located in South Carolina, the insured, and not the insurer, bears the responsibility of supervising the remediation of these sites. Thus, the location of the property alone is not a heavy weight in favor of the application of South Carolina law considering the strong interests Georgia has in having its law applied in these cases. The court, therefore, vacates the judgment in the insurer's favor and remands with instruction to grant summary judgment in the insured's favor on the choice-of-law issue.
Counsel for Plaintiff
R. Perry Sentell III
Kilpatrick & Stockton
1400 First Union Bank Bldg., Augusta GA 30903
Counsel for Defendant
Meagher & Geer
4200 Multifoods Tower
33 S. 6th St., Minneapolis MN 55402
Before Hatchett and Edmondson, JJ.