U.S. Fidelity v. Park 'N Go of GA , 92 F.3d 1561 ( 1996 )

United States Court of Appeals,
Eleventh Circuit.
No. 94-8989.
UNITED STATES FIDELITY & GUARANTY COMPANY, Plaintiff-Appellee,
v.
PARK 'N GO OF GA., INC., Defendant-Appellant.
Oct. 10, 1995.
Appeal from the United States District Court for the Northern
District of Georgia. (No. 1:93-cv-1541-JEC), Julie E. Carnes,
Judge.
Before HATCHETT and EDMONDSON, Circuit Judges, and GIBSON*, Senior
Circuit Judge.
PER CURIAM:
Park "N Go appeals the district court's grant of summary
judgment in favor of United States Fidelity & Guaranty in this
declaratory judgment action. Because resolution of this case
involves questions of Georgia law which are dispositive but
unanswered by the precedent of the Supreme Court of Georgia, we
defer our decision in this case pending certification of the
following question to the Supreme Court of Georgia pursuant to GA.
CONST. art. VI, § 6, para. 4, O.C.G.A. § 15-2-9, and Rule 37 of the
Supreme Court of Georgia. See Polston v. Boomershine Pontiac-GMC
Truck, Inc., 952 F.2d 1304 (11th Cir.1992). We submit the
following facts and analysis for consideration by the Supreme Court
of Georgia.
CERTIFICATION FROM THE UNITED STATES COURT OF APPEALS FOR THE
ELEVENTH CIRCUIT TO THE SUPREME COURT OF GEORGIA PURSUANT TO
ARTICLE VI SECTION VI PARAGRAPH IV OF THE GEORGIA
*
Honorable John R. Gibson, Senior U.S. Circuit Judge for the
Eighth Circuit, sitting by designation.
CONSTITUTION.
TO THE SUPREME COURT OF GEORGIA AND THE HONORABLE JUSTICES
THEREOF.
STYLE OF THE CASE
The case is styled this way: Park "N Go of Georgia, Inc.,
Appellant, versus United States Fidelity and Guaranty Company,
Appellee, Case No. 94-8989, filed in the United States Court of
Appeals for the Eleventh Circuit, on appeal from the United States
District Court for the Northern District of Georgia.
FACTS
Park "N Go of Georgia, Inc., is a Georgia corporation that
operates a parking/shuttle service near Atlanta Hartsfield
International Airport. The parking facility consists of a 13-acre
parking lot surrounded by a fence six or seven feet high. An
office building and entrance and exit gates are located at the
front of the lot. Park "N Go operates with a limited staff and
without a security system or security personnel.
To enter the parking facility, a customer drives his vehicle
up to a ticket machine located at the entrance gate and takes a
bar-coded ticket stamped with the date and time of entry. The
customer then drives into the parking lot, finds a parking space,
parks and locks his vehicle, and takes the keys with him. An
airport shuttle takes the customer to the appropriate airport
terminal. No other way exists for a customer lawfully to enter the
Park "N Go lot.
Upon returning, a Park "N Go shuttle transports the customer
from the terminal to the place where his vehicle is parked. To
leave the parking facility, the customer drives his vehicle up to
a cashier's window located next to the exit lane, presents the
bar-coded ticket, and pays the amount calculated by a fee computer.
This contact is normally the only interaction a customer has with
a Park "N Go employee. The customer then exits the facility. No
other way exists for a customer lawfully to leave the Park "N Go
lot.
In 1991, Park "N Go contracted with United States Fidelity &
Guaranty Co. ("USF & G") to insure Park "N Go's business. USF & G
issued Policy No. 1MP1334231140 effective until November 1992. The
policy included several kinds of coverage. Portions of the policy
at issue in this case include: (1) the Garage Coverage
Part—Liability Coverage with a liability limit of $1 million, (2)
the Garage Coverage Part—Garage Keepers Coverage with a liability
limit of $250,000, and (3) the Commercial General Liability
Coverage with a liability limit of $1 million.
While this policy was in effect, torrential rains fell in the
Atlanta metropolitan area, and the Park "N Go parking lot was
flooded. Over 200 automobiles parked in the lot were damaged. A
group of Park "N Go's patrons filed in the state court in Fulton
County, Georgia, a class action suit against Park "N Go, alleging
that a bailment relationship existed, alleging that Park "N Go was
negligent, and seeking to recover for damages to their vehicles
caused by the flooding.
USF & G then filed in the United States District Court a
declaratory judgment action against Park "N Go on the insurer's
obligations under the insurance policy. Park "N Go answered the
complaint, disputing USF & G's interpretation of the contract. USF
& G then moved for summary judgment, asserting that its obligation
was limited to $250,000 as stated in the Garage Keepers Coverage
portion of the policy, instead of the $1 million limit provided in
the Garage Liability Coverage and the Commercial General Liability
Coverage portions of the policy.
The district court granted USF & G's Motion for Summary
Judgment. The court concluded that "because the autos parked and
damaged in defendant's lot were necessarily in the "care' of
defendant, that provision of the policy excluding from coverage
personal property in the "care, custody or control' of the insured
applies." The district court noted that Georgia law is unclear on
the issue of bailment and unclear on whether a disclaimer on the
ticket to park is valid; but the court still concluded that a
bailment relationship existed between Park "N Go and its patrons
and concluded that "the mere existence of a printed disclaimer on
the parking ticket does not operate to rebut the statutory
presumption of a bailment relationship between the defendant and
its patrons."
ARGUMENTS PRESENTED
A. Whether a Bailment Relationship Existed:
Park 'N Go argues that the Garage Liability and Commercial
Liability Coverage provisions of the policy cover the damages
caused to its patrons' vehicles as a result of the flooding, and
Park 'N Go says that the exclusion from those provisions for
vehicles within Park 'N Go's "care, custody or control" does not
apply because those vehicles were not within Park 'N Go's "care,
custody or control," particularly considering that no bailment
relationship existed.
In concluding that the vehicles were in Park 'N Go's "care,
custody or control," the district court considered (1) the specific
terms of the insurance policy and (2) Georgia law on the issues of
bailment and disclaimer. First, the court noted that the Garage
Keepers portion of the policy provided coverage for covered autos
left in the insured's care while the insured is " "attending,
servicing, repairing, parking or storing it in [its] garage
operations.' " From this, the district court concluded that,
whenever the insured is parking or storing an auto, the auto
necessarily is in the care of the insured, and the "care" component
of the "care, custody or control" exclusion is met.
Second, the district court concluded that if the terms of the
contract itself did not sufficiently define the terms, Georgia law
of bailment would apply to give meaning to the phrase "care,
custody or control." The court noted that, although the law of
bailment is not absolutely clear on the question, Georgia statutory
law provides that "[t]he relationship of the owner of an automobile
and the owner of the garage in which the automobile is stored is
that of bailor and bailee." See O.C.G.A. § 44-12-77 (1982).
The district court rejected Park 'N Go's argument that its
parking facility was not sufficiently similar to an enclosed garage
for the statutory presumption of a bailment relationship created by
section 44-12-17 to apply. Instead, the court noted that nothing
in the language of the statute indicated that a distinction should
be made between parking structures and parking lots and that the
cases decided under the statute did not distinguish between parking
facilities that are buildings and those which are enclosed lots.
See generally, Goodyear Clearwater Mills v. Wheeler, 77 Ga.App.
570, 49 S.E.2d 184 (1948). The district court therefore, concluded
that Park 'N Go was a bailee and again concluded that the vehicles
parked in the lot were in Park 'N Go's care, custody, or control.
Park 'N Go argues that section 44-12-17 applies only to
"garages" and is inapplicable to a parking facility where a patron
self-parks in an open setting. Park 'N Go also asserts that it
made no representation about the standard of care it would provide
for the vehicles parked in its lot, that it provided no security
system or personnel, and that it had no control over the vehicles
because the vehicles were locked, and the keys were in the custody
and control of the owners. Park 'N Go contends that, because the
law of Georgia is unsettled on this issue, the question should be
certified to the Georgia Supreme Court for resolution.
USF & G responds that nothing is ambiguous in the exclusion
for property in the "care, custody or control" of the insured and
that the phrase must be given the plain and ordinary meaning of the
terms used. USF & G contends that Park 'N Go exercised care,
custody, or control over the vehicles parked in its facility by
limiting access to them with a six to seven feet high fence that
enclosed the facility and by requiring that those who attempted to
leave the facility present a ticket and pay a parking fee or fill
out a lost ticket form and provide further identification and proof
of ownership of the vehicle.
While it may possibly be true that the phrase "care, custody
or control" itself presents no ambiguity in definition, whether the
relationship between Park 'N Go and its patrons falls within that
definition—which might be, as the district court noted, synonymous
with the concept of bailment as it has been developed in the
Georgia state courts—does appear not to have been settled by
presently existing Georgia law. The state law on the issue of
bailment involved in this case is unclear. We agree that it would
be best for the Supreme Court of Georgia to first address the
questions of whether or not a bailment relationship existed and to
what extent, if any, the law of bailment determines whether the
$250,000 limit applies.
B. Whether the Disclaimer is Valid:
Again arguing that it was no bailee and that the pertinent
vehicles were not in its care, custody, or control, Park 'N Go says
that, even if section 44-12-77 does apply to open lots, Park 'N Go
preempted any presumption of bailment created in section 44-12-77
by including a disclaimer on the back of the ticket to park given
to each customer.1
The district court rejected this disclaimer argument, writing
that, "although the Georgia cases are not in agreement as to
whether such disclaimers are valid, the trend is to uphold the
disclaimer only when there is evidence that the bailor was aware of
it." The district court found that no evidence existed that the
disclaimer on the back of the parking ticket was brought to the
attention of the patrons, either upon entering or leaving the
1
The disclaimer on the back of the ticket sets out these
words: "This ticket must be presented to the cashier on leaving
the parking area. Charges are for use of parking space only.
This company assumes no responsibility for loss through fire,
theft, collision or otherwise to the car or contents."
parking facility. The district court concluded, therefore, that
"the mere existence of a printed disclaimer on the parking ticket
does not rebut the statutory presumption of a bailment relationship
between [Park 'N Go] and its patrons."
Georgia law is also unclear on this issue, and we leave for
consideration by the Supreme Court of Georgia the questions of
whether the disclaimer was valid to remove from Park 'N Go's "care,
custody or control" vehicles that otherwise might be considered to
have been within Park 'N Go's "care, custody or control."
C. Contractual Interpretation and Intention of the Parties:
Park 'N Go argues that, even if the vehicles parked in the lot
were in Park 'N Go's "care, custody or control" as the terms are
understood in their ordinary usage or because a bailment
relationship existed and defines the phrase, the "care, custody or
control" exclusion does not apply. Park 'N Go says that, despite
the plain language of the contract, application of the plain
language would achieve a result contrary to the intention of the
parties in entering into the insurance contract. Park 'N Go
contends that, because all of its business (of which USF & G was
aware) consisted of operating the airport parking facility,
exclusion from liability coverage of all vehicles in Park 'N Go's
care, custody, or control would nullify the liability coverage (for
which Park 'N Go paid) on all vehicles parked in its lot and render
meaningless the liability provisions of the policy.
In Georgia, insurance policies are governed by ordinary rules
of contract construction. Chicago Title Ins. Co. v. Citizens & S.
Natl. Bank, 821 F. Supp. 1492, 1494 (N.D.Ga.1993). The rules of
contract interpretation are statutory, and construction of a
contract is a question of law for the court. See O.C.G.A. §§ 13-2-
1 through 13-2-4. Georgia law places much importance upon the
intent of the parties in entering into a contract. Section 13-2-3
of the Georgia Code provides:
The cardinal rule of construction is to ascertain the
intention of the parties. If that intention is clear and it
contravenes no rule of law and sufficient words are used to
arrive at the intention, it shall be enforced irrespective of
all technical and arbitrary rules of construction.
O.C.G.A. § 13-2-3.2 The district court noted that resolution of an
insurance contract dispute ultimately concerns the intention of the
parties; but the district court, in fact, did not expressly
2
Section 13-2-2 sets forth nine general rules for contract
interpretation. The district court cited two rules in its
analysis of the meaning of the terms "care, custody or control:"
The construction which will uphold a contract in whole
and in every part is to be preferred, and the whole
contract should be looked to in arriving at the
construction of any part.
and
If the construction is doubtful, that which goes most
strongly against the party executing the instrument or
undertaking the obligation is generally preferred.
We note two others that may be relevant in this case:
Words generally bear their usual and common
significance; but technical words, words or art, or
words used in a particular trade or business will be
construed, generally, to be used in reference to this
particular meaning. The local usage or understanding
of a word may be proved in order to arrive at the
meaning intended by the parties.
The rules of grammatical construction usually govern,
but to effectuate the intention they may be
disregarded; sentences and words may be transposed,
and conjunctions substituted for each other. In
extreme cases of ambiguity, where the instrument as it
stands is without meaning, words may be supplied.
consider the intentions of the parties when they entered into the
insurance agreement.3
Some Georgia courts have held that, to determine the intention
of the parties, the court shall take all of the terms of the
contract together and consider them in the light of surrounding
circumstances. See Paul v. Paul, 235 Ga. 382, 219 S.E.2d 736
(1975). In Paul, the court explained: "That construction [is]
favored which gives meaning and effect to all of the terms of the
contract over that which nullifies and renders meaningless a part
of the language therein contained." Id. 219 S.E.2d at 739. Where
the intention of the parties at the time of executing the agreement
is clear, it should be enforced, even though the parties disagree
about its meaning at the time of litigation. Id. 219 S.E.2d at
738. Still, other courts have held that, "where the terms of a
written contract are clear and unambiguous, the court will look to
the contract alone to find the intention of the parties." See
Health Service Centers, Inc. v. Boddy, 257 Ga. 378, 359 S.E.2d 659,
661 (1987).4
3
The district court seemingly considered the parties' intent
only as it related to the relevancy of the disclaimer on the back
of the parking ticket. The district court concluded:
Unless the parties here had an understanding concerning
the legal effect of the wording of parking tickets
given to defendant's patrons—matters for which no
evidence has been presented to the Court—it seems
somewhat strained to conclude that this case, between
an insurance carrier and its insured over construction
of a contractual term, turns on such fine, and
sometimes inconsistent, legal distinctions as have been
made in the context of litigation between bailors and
bailees.
4
These cases are not necessarily inconsistent, but we leave
that issue for resolution by the Georgia courts.
The Supreme Court of Georgia recently has held that the court
must look to " "the substantial purpose which must be supposed to
have influenced the minds of the parties, rather than at the
details of making such purpose effectual.' " Friedman v. Friedman,
259 Ga. 530, 384 S.E.2d 641, 643 (1989) (citing Illges v. Dexter,
77 Ga. 36, 39-49 (1886)). In USF & G v. Gillis, 164 Ga.App. 278,
296 S.E.2d 253 (1982), for example, Georgia's intermediate
appellate court held that it was logically inconsistent to argue
that the parties intended that an exclusion would govern and that,
as a result, no liability insurance coverage existed on a truck
involved in an accident where "[a]pplied literally, the exclusion
provision would preclude coverage of the truck under any and all
circumstances," although the truck was the only covered auto listed
on the policy. Id. 296 S.E.2d at 256. In a similar way, the Fifth
Circuit has held that under a business liability policy, " "the
parties are assumed to have in contemplation the nature and
character of the business and to have foreseen the usual course and
manner of conducting it.' " Travelers Indemnity Company v. Nix,
644 F.2d 1130 (5th Cir.1981) (citations omitted) (applying
Louisiana law).
In cases of doubt, all here agree that the contract shall be
construed most strongly against the party who prepared it. Paul,
219 S.E.2d at 739 (citations omitted). In addition, exceptions,
limitations, and exclusions to insurance agreements require "a
narrow construction on the theory that the insurer, having
affirmatively expressed coverage through broad premises assumes a
duty to define any limitations on that coverage in clear and
explicit terms." See Alley v. Great American Ins. Co., 160 Ga.App.
597, 287 S.E.2d 613 (1981). Any exclusion sought to be invoked by
the insurer is to be liberally construed against the insurer unless
it is clear and unequivocal. See First Georgia Ins. Co., v.
Goodrum, 187 Ga.App. 314, 370 S.E.2d 162, 163 (1988). Where the
intentions of the parties differ, Georgia law requires that "the
meaning placed on the contract by one party and known to be thus
understood by the other party at the time shall be held as the true
meaning." O.C.G.A. § 13-2-4.
So, Park 'N Go argues that to determine the parties' intent,
the court must consider the relationship of the parties, the type
and purpose of the contract involved, and which party drafted the
contract, instead of merely concentrating on the terms of a
particular provision. Park 'N Go contends that it fully and
accurately described to USF & G its business before entering into
the insurance contract and that USF & G's agent personally saw the
business enterprise and advised Park 'N Go about what kinds and
what amounts of coverage Park 'N Go needed to protect its business
enterprise fully. Park 'N Go claims that it relied on USF & G's
advice and purchased broad liability coverage for the sole purpose
of protecting its business, which is entirely the operation of a
parking facility.
Park 'N Go points out that the policy designated as covered
under the $1 million Garage Liability Coverage "any auto," which
Park 'N Go assumed included any vehicles parked in its lot. Having
expressed this broad coverage, Park 'N Go claims that USF & G did
not define the limitations in clear and explicit terms and that the
exclusion should be narrowly construed. Park 'N Go argues that to
hold otherwise renders the liability provisions meaningless and
means that the very coverage Park 'N Go sought (and everyone knew
was most needed) is not provided by the pertinent policy. In
reply, USF & G contends that the words of the contract are clear
and unambiguous and that the court need consider only the terms of
the contract to find the parties' intent.5
Case law in Georgia tends to support Park 'N Go's position
that the intention of the parties—determined by giving due
consideration to the nature of the insured's business and to the
purpose for which the insurance is obtained—is paramount to the
actual language of the contract that attempts to effectuate that
intention. But other case law in Georgia tends to support USF &
G's position that, where the terms of the contract are clear and
unambiguous, the court need consider only the contract to find the
intention of the parties.6 Although USF & G correctly observes
that Park "N Go does receive some insurance coverage even under the
exclusion, the issue would not seem to turn upon whether Park 'N Go
receives some insurance or none at all, but upon whether the
parties intended that Park 'N Go's more comprehensive liability
insurance would be limited in those circumstances. Because Georgia
state law on the issue of contract interpretation involved in this
case is unsettled, we certify to the Supreme Court of Georgia the
5
USF & G, it appears, offers no other evidence of its intent
in entering into the contract.
6
Park 'N Go argues that the exclusion is unclear and
ambiguous while USF & G maintains that the terms are clear and
unambiguous. We make no determination about whether the terms or
the contract itself is clear and unambiguous.
question of whether the "care, custody or control" exclusion in the
Garage Keepers Coverage portion of the insurance contract applies
and limits Park 'N Go's insurance coverage to $250,000.00.
QUESTION TO BE CERTIFIED
Does the "care, custody or control" exclusion in the Garage
Keepers Coverage portion of the insurance contract apply and limit
Park 'N Go's insurance coverage to $250,000.00?
In the course of deciding this question, the Georgia Supreme
Court may choose to discuss these questions:
A. Are the terms "care, custody or control" defined by the law
of bailment?
B. Does section 44-12-17 apply to the kind of parking facility
Park 'N Go operated and create a statutory presumption of
a bailment relationship?
C. Is the disclaimer on the back of Park 'N Go's ticket valid,
and if so, what legal effect does it have in
interpretation of the insurance agreement between Park 'N
Go and USF & G?
D. Does the exclusion apply where its application, given the
nature of the insured's business, seems to render
meaningless the liability provisions in the contract?
Nothing in this certification, including our statement of the
question to be certified, is meant to limit the scope of inquiry by
the Supreme Court of Georgia. See Polston, 952 F.2d at 1310-11.
The entire record in the case, together with copies of the briefs
of the parties, is transmitted herewith.
QUESTION CERTIFIED.