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Final Copy 291 Ga. 306

S12Q0631. WHITE v. STATE FARM FIRE AND CASUALTY COMPANY.

MELTON, Justice. In this case involving the interpretation and legality of a statute of limitations provision in an insurance contract, the United States Court of Appeals for the Eleventh Circuit certified the following two questions to this Court: (1) Did the Georgia Insurance Commissioner act within his legal authority when he promulgated Ga. Comp. R. & Regs. 120-220-.02, such that a multiple-line insurance policy providing first-party insurance coverage for theft-related property damage must be reformed to conform with the two-year limitation period provided for in Georgia's Standard Fire Policy, Ga. Comp. R. & Regs. 120-2-19-.01? (2) Is this action barred by the Policy's one-year limitation period? For the reasons set forth below, we find that: (1) the Georgia Insurance Commissioner did not act within his legal authority and (2) this action is barred by the one-year limitation period in his insurance policy. As presented by the Eleventh Circuit and revealed in the record, the facts of this case show that Ricardo White, a Georgia resident, purchased a

homeowner's insurance policy from State Farm Fire and Casualty Company. The insurance policy was a first-party insurance contract that provided multiple-line coverage, including coverage for loss or damage caused by both fire and theft. The policy also contained a limitation provision stating that a lawsuit against State Farm must be brought "within one year of the date of loss or damage." After his home was burglarized in January 2008, within the period of coverage, White filed a claim for the loss of more than $135,000 in personal property. State Farm denied the claim based on its determination that White misrepresented material information in filing his claim. Waiting more than one year after his date of loss, White filed a June 2009 complaint against State Farm in state court alleging claims for breach of contract, bad faith, and fraud. State Farm removed the complaint to federal court based on diversity of citizenship and filed a Federal Rule 56 motion for summary judgment arguing, in part, that White's claims were barred by the policy's one-year limitation period. White countered that the policy's one-year limitation period violated Georgia law. White relied on the following Georgia regulation, effective to all insurance policies issued on or after June 2006: No property . . . insurance policy providing first party insurance

coverage for loss or damage to any type of real or personal property shall contain a contractual limitation requiring commencement of a suit or action within a specified period of time less favorable to the insured than that specified in the "Standard Fire Policy" promulgated by the Commissioner in Chapter 120-2-19-.01 of these Rules and Regulations. Ga. Comp. R. & Regs. r. 120-2-20-.02. Georgia's "Standard Fire Policy" provides, in pertinent part, that suit for recovery of a claim must be commenced within two years of the date of the loss. Ga. Comp. R. & Regs. r. 120-2-19-.01. In response to White's contentions, State Farm argued that the Commissioner, under the Georgia Constitution, lacked the constitutional authority to promulgate Rule 120-2-20-.02, making it unenforceable. On June 15, 2010, the district court issued an order concluding that State Farm failed to demonstrate that the policy in fact contained a one-year limitation period. As a result, the court denied the insurer summary judgment on White's breach of contract claim. The court did, however, grant the insurer summary judgment on White's bad faith and fraud claims on other grounds. State Farm filed a motion for reconsideration, showing that it had mistakenly submitted an incomplete copy of the policy and resubmitted a copy that included the one-year limitation period. On August 16, 2010, the district court granted State Farm's motion for reconsideration. The district court ruled

that the policy's one-year limitation period violated Georgia law as it applied to fire coverage. Relying on the Georgia Court of Appeals's decision in Fireman's Fund Ins. Co. v. Dean, 212 Ga. App. 262, 265 (1) (441 SE2d 436) (1994), the court reformed the policy to conform with Georgia's Standard Fire Policy and, thus, extended the limitations period for fire coverage to two years. The district court further found, however, that the policy's one-year limitation period was still valid as it applied to coverage for theft-related damage. See OCGA

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