The Eleventh Circuit held that a finding of late notice as to the claims in an original complaint in an underlying action does not necessarily apply to claims asserted in an amended complaint in the same underlying action. State Farm Fire & Cas. Co. v. LeBlanc, 2012 WL 5199253 (11th Cir. Oct. 22, 2012) (unpublished opinion).
A trademark infringement lawsuit was filed against the policyholder. The policyholder waited approximately four months before notifying State Farm of the suit. Nonetheless, State Farm agreed to defend under a reservation of rights. Approximately two years later, when the underlying plaintiffs filed an amended complaint adding additional defendants and new causes of action, the policyholder provided immediate notice to State Farm. Following a jury verdict in the underlying suit, State Farm filed a declaratory judgment action seeking a ruling that it had no duty to defend or indemnify the policyholders under three policies. A Georgia district court granted summary judgment in favor of State Farm, finding that the policyholder breached the notice provisions in two of the policies and that the third policy did not cover the underlying occurrences. The Eleventh Circuit affirmed in part and reversed in part.
Applying Georgia law, the Eleventh Circuit ruled that the four-month delay in providing notice of the original complaint was untimely as a matter of law. The court reasoned that there was no legitimate explanation for the delay and that the question of prejudice to State Farm was irrelevant because the notice provision made timely notice a condition precedent to coverage. In particular, the court concluded that language stating that “you must see to it that we receive prompt written notice” and that “[w]e may not provide coverage if you refuse to provide adequate notice” sufficed to make prompt notice a condition precedent to coverage. As to the amended complaint, however, the Eleventh Circuit reversed the lower court’s entry of summary judgment as to late notice, explaining that a court must “separately analyze the timeliness of notice for each claim asserted.” In so ruling, the court declined to “adopt a blanket rule that if notice on an initial complaint is untimely, then notice on an amended version of that complaint is also untimely, even if the amended version alleges new and unforeseeable claims.”