Shan Hsu, et al. v. Safeco Insurance Company of Indiana

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 15-14674
Non-Argument Calendar
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D.C. Docket No. 1:14-cv-02460-TWT
SHAN HSU,
CHAO CHING WU,
Plaintiffs-Appellants,
versus
SAFECO INSURANCE COMPANY OF INDIANA,
Defendant-Appellee.
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Appeal from the United States District Court
for the Northern District of Georgia
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(July 5, 2016)
Before WILSON, ROSENBAUM and ANDERSON, Circuit Judges.
PER CURIAM:
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Plaintiffs-Appellants Shan Hsu and Chao Ching Wu (“Plaintiffs”) appeal
from the district court’s grant of summary judgment to Defendant-Appellee Safeco
Insurance Company of Indiana (“the Insurance Company”) in their action seeking
to recover on a homeowner’s insurance policy (“the Policy”) issued by the
Insurance Company. The district court held that Plaintiffs were barred from
recovery because there was no genuine issue of material fact that Plaintiffs failed
to comply with the provisions of the Policy before filing suit. Specifically, the
district court held that Plaintiffs were not entitled to recover because they failed to
cooperate with the insurer in the investigation and resolution of the claim as
required by the Policy because Plaintiffs failed to produce certain federal income
tax returns requested by the Insurance Company.
On appeal, Plaintiffs do not challenge the district court’s finding that the
Policy authorizes the Insurance Company to request, and requires the insureds to
provide, “records and documents we request and permit us to make copies,” and
that compliance with such was a precondition to suit. Plaintiffs also do not
challenge the district court’s finding that they failed to fully comply with the
Insurance Company’s request to produce “income tax returns dating back to 2009,
including all worksheets and schedules.” Instead, Plaintiffs argue that it was error
for the district court to grant summary judgment because there is a genuine issue of
fact as to whether they acted in “good faith” in producing tax returns in their
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possession and authorizing the Insurance Company to obtain the tax returns
directly from the Internal Revenue Service (“IRS”) and whether the insurance
company failed to act with “diligence and good faith” in procuring the requested
documents.1
This Court reviews a district court’s grant of summary judgment de novo.
Summary judgment is appropriate when the pleadings, depositions, and affidavits
submitted by the parties show no genuine issue of material fact exists and that the
movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a).
Under Georgia law, an insurer may require its insured to abide by the terms
of his policy and cooperate with the insurer's investigation as a precondition to
recovery. Diamonds & Denims, Inc. v. First of Ga. Ins. Co., 417 S.E.2d 440, 441–
42 (Ga. Ct. App. 1992). Where the insured is required to produce documents and
those documents are unavailable, the insured has a duty to “cooperate with the
insurer to obtain or reconstruct the information needed from other available
sources.” Id. at 442. The Georgia Supreme Court has held that an insured's failure
“to provide any material information called for under . . . the policy” constitutes a
1 Plaintiffs also argue for the first time on appeal that the requested documents were not
“material” to their claim. Because Plaintiffs did not raise this issue before the district court, it is
abandoned. See Access Now, Inc. v. S.W. Airlines Co., 385 F.3d 1324 (11th Cir. 2004) (“This
Court has repeatedly held that an issue not raised in the district court and raised for the first time
in an appeal will not be considered by this Court.”).
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breach of contract. Halcome v. Cincinnati Ins. Co., 334 S.E.2d 155, 157 (Ga. 1985)
(emphasis in original).
Plaintiffs rely on the Georgia Court of Appeals’ decision in Diamonds &
Denims for the proposition that where an insured “cooperates to some degree or
provides an explanation for its noncompliance” or where “the insure[r] fail[s] to
act with diligence and good faith in securing the necessary information,” summary
judgment in favor of the insurer is inappropriate. 417 S.E.2d at 442. In that case,
the plaintiff, a silk plant and flower supply company, made a claim under its
commercial property and liability insurance policy after its warehouse was
destroyed by fire. The insurance company made broad general requests for “books
and records” per the policy requirement but did not specify any particular
documents to be produced. Id. The insured explained that all of its documents were
destroyed in the fire but during the course of depositions offered to provide
alternative documentation. The insurance company, however, made no attempt to
follow up on this offer and procure those documents, and “no evidence showed
that the insurer followed up these generalized statements with specific requests,
sought releases from appellant in order to obtain records from other sources, or
otherwise pursued the matter further.” Id. In light of the evidence of the insured's
good faith, the Georgia Court of Appeals held that summary judgment in favor of
the insurer was inappropriate because “questions of fact remain concerning
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appellant's compliance with the policy prerequisites and appellee's diligence in
obtaining the needed information.” Id.
The Insurance Company responds that the facts in the instant case are much
closer to Allstate Insurance Company v. Hamler, 545 S.E.2d 12 (Ga. Ct. App.
2001). Hamler was a breach of contract action brought by an insured homeowner
against her insurer for property that was allegedly stolen from the insured’s home.
In that case, the insured provided certain documents to the insurer but failed or
refused to provide specific other documents requested by the insurance company,
including federal income tax returns, during the insurance company’s investigation
of her claim. The insured then sued for breach of contract. The Georgia Court of
Appeals rejected the insured’s proffered defense based on Diamonds & Denims
that “because she provided some documentation requested by Allstate, a fact
question exists as to whether she complied with the policy terms.” Id. at 15.
Instead, the court held that the insurance company was entitled to summary
judgment because the insured “refused to provide information . . . despite a lengthy
and detailed request by Allstate.” Id.
We agree with the Insurance Company. This case is readily distinguishable
from Diamonds & Denims and much closer to Hamler. As in Hamler and unlike in
Diamonds & Denims, the Insurance Company in the instant case requested specific
documents: all income tax returns dating back to 2009, including all worksheets
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and schedules. The insureds failed to provide all of the requested documents,
explaining that their tax information had been stolen by a former accountant.
Instead, in early March 2014, the insured provided the Insurance Company with a
written authorization to retrieve the tax returns directly from the IRS. The
Insurance Company attempted to retrieve the records from the IRS, but the
documents were apparently mailed to the Plaintiffs. As in Hamler, and unlike in
Diamonds & Denims, the Insurance Company then diligently pursued the matter
and the insureds failed to cooperate. On May 19, 2014, the Insurance Company
sent a follow-up letter to Plaintiffs, explaining that the IRS had sent the documents
directly to the Plaintiffs and requesting Plaintiffs to forward the documents to the
Insurance Company. Plaintiffs failed to respond. On June 22, 2014, the Insurance
Company sent a second follow-up letter requesting Plaintiffs to forward the
requested documents to the Insurance Company. Plaintiffs again failed to respond.
Plaintiffs offer no excuse or explanation for this failure to respond to the Insurance
Company’s requests. Plaintiffs subsequently filed suit on June 30, 2014.
We agree with the district court that there is no genuine issue of material fact
as to whether Plaintiffs breached the contract of insurance. Therefore, upon review
of the record and consideration of the parties’ briefs, we affirm the district court’s
grant of summary judgment to the Insurance Company.
AFFIRMED.
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