Newberry v. Cotton States Mut. Ins. Co.

Plaintiff was not justified in believing that the attorney representing his insurer at his sworn statement was also his attorney.

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Cotton States Insurance Company was granted summary judgment on this declaratory judgment action against its insured, Labron Newberry. Newberry appeals on two grounds, that counsel for Cotton States should have been disqualified because an attorney-client relationship existed with Newberry, and that summary judgment was improper because issues of fact remain as to whether Newberry’s notice to Cotton States was timely.

In December of 1996 Newberry and his wife attended a social function in Mississippi sponsored by her employer. During the party, Newberry became involved in a physical altercation with another guest which led to the underlying lawsuit. In November of 1997 the guest filed an intentional tort claim naming Newberry as a defendant and served him with a copy of the complaint. It was not until after receipt of service that Newberry contacted a lawyer, who told him to notify his homeowner’s insurance carrier, Cotton States, about the incident and the claim. Newberry’s policy required him to provide Cotton States notice of an occurrence “as soon as practicable.” On December 15, 1997, seventeen days after he received service of the complaint, Newberry first notified Cotton States. Cotton States then hired counsel in Mississippi to represent Newberry in the underlying lawsuit. Cotton States also hired attorneys in Georgia to take sworn statements from Newberry and his wife in connection with its investigation concerning coverage for the claim. Prior to giving his sworn statement, Newberry signed a document entitled Bilateral Reservation of Rights and Nonwaiver Agreement acknowledging that Cotton States was conducting an investigation to determine whether coverage was afforded to him and authorizing Cotton States to undertake such an investigation without waiving its right to disclaim coverage. In its declaratory judgment action Cotton States relied on information given in these statements and moved for summary judgment. The trial court granted the motion and Newberry appeals.

Newberry v. Cotton States Mut. Ins. Co.

Plaintiff was not justified in believing that the attorney representing his insurer at his sworn statement was also his attorney.

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