2. Background and Procedural History
The Policy and the Losses
First Solar was constructing a 1,038-acre solar-power plant. Its master builders risk policy covered the period from August 24, 2017, through August 24, 2020, and insured against all risks of direct physical loss or damage to covered property, subject to the policy’s terms.
Five heavy-rain events damaged solar arrays, access roads, fences, grading, and other construction works. The relevant dates were December 13, 2019; February 5, 2020; February 13, 2020; March 3, 2020; and April 18, 2020.
The policy covered both water damage and flood damage, but imposed different deductibles. Its definition of water damage excluded damage otherwise defined as flood. The relevant flood definition included temporary inundation of normally dry land resulting from the “unusual and rapid accumulation or runoff of surface waters from any source.”
Zurich’s Initial Adjustment and Subsequent Reversal
Zurich’s adjuster, Scott Klaben, inspected the project, recorded losses as water damage, and answered “No” when the claims system asked whether the February 5 event resulted from flood. He also told a claims manager that the first three events each carried a $100,000 deductible. First Solar’s broker testified that Klaben repeatedly said the claims would be treated as water damage.
In June 2020, Zurich issued three $200,000 advance payments for the first three events. It did not reserve a right to change its determination or apply another deductible before making those payments.
An August 4, 2020 status report first raised the possibility that the losses were flood losses and attempted to reserve Zurich’s rights. Zurich continued adjusting the claims, but its outside counsel ultimately advised First Solar in March 2021 that the $2.5 million flood deductible applied separately to each event. Because Zurich’s assessment placed every event’s damages below that amount, Zurich concluded that nothing further was payable.
The District Court Proceedings
The district court held that the flood deductible applied under the contract, but that Zurich had waived it for all five events. It rejected First Solar’s request to reform the policy and ruled that the policy’s suit-against-the-company provision did not make the action untimely.
A five-day trial followed on damages alone. The court denied Zurich’s motion to strike the testimony of First Solar’s damages witness, Ted Garrett, and the jury returned a verdict for First Solar. Zurich appealed. First Solar conditionally cross-appealed the rulings establishing that, absent waiver, the higher flood deductible governed.
4. Analysis and Precedents Cited
A. The Decision Is a Federal Prediction of Georgia Law
The court identified two related questions of first impression under Georgia law: whether this deductible limited coverage or merely payment, and whether it could therefore be waived.
Turner v. Wells, 879 F.3d 1254 (11th Cir. 2018), supplied the governing method. When the Supreme Court of Georgia has not decided an issue, a federal court must predict its answer. Intermediate appellate decisions generally guide that prediction unless persuasive evidence indicates that the state’s highest court would decide differently.
This matters to the decision’s authority. The opinion is a published Eleventh Circuit interpretation of Georgia law, not a decision by Georgia’s own highest court. Its reasoning rests on existing Georgia contract and waiver principles rather than a free-standing federal insurance rule.
B. Coverage and Payment Are Different Questions
Zurich argued that waiving the deductible would create coverage for losses that the policy did not otherwise cover. The court rejected that premise after examining the policy’s language and organization.
Under Taylor Morrison Servs., Inc. v. HDI-Gerling Am. Ins. Co., 746 S.E.2d 587 (Ga. 2013), clear insurance provisions receive their plain meaning. Here, the coverage section insured physical loss or damage and separately identified exclusions. It did not make coverage depend on a loss exceeding the deductible.
The deductible appeared elsewhere, under “Application of Deductibles,” within the policy’s rates and rating conditions. Its operative language required subtraction of the deductible from each claim and limited Zurich’s liability to the remaining amount of “insured loss or damage.” The court treated “insured” as significant: the loss was already insured before the payment calculation occurred.
Both text and structure therefore supported the same conclusion. The deductible calculated Zurich’s financial obligation for a covered loss; it did not determine whether the underlying peril was insured.
Pilot Life Ins. Co. v. Morgan, 94 S.E.2d 765 (Ga. Ct. App. 1956), reinforced this approach by prohibiting courts from adding words to insurance contracts to create or avoid liability. Zurich’s interpretation would effectively have added a coverage threshold that the policy did not state.
The court also relied on the insurance treatise New Appleman on Insurance Law Library Edition, which describes a deductible as the portion of a covered loss retained by the insured. Love v. Money Tree, Inc., 614 S.E.2d 47 (Ga. 2005), was cited because the Supreme Court of Georgia had recognized Appleman as a leading insurance treatise. Its role was supporting, not independently dispositive.
C. The Controlling Waiver Principle: Benefits May Be Relinquished, but Excluded Risks Cannot Be Added
Sargent v. Allstate Insurance Co., 303 S.E.2d 43 (Ga. Ct. App. 1983), provided the central substantive precedent. It recognizes two complementary rules:
- An insurer may waive policy provisions, conditions, or limitations inserted for its benefit.
- Implied waiver and estoppel cannot bring an uninsured or expressly excluded risk within policy coverage.
The distinction resolved Zurich’s principal objection. Flood was an insured risk. Waiving the flood deductible therefore would not add a new peril or remove an exclusion. It would relinquish a payment limitation protecting Zurich.
The holding does not permit waiver to transform excluded damage into insured damage. The opinion contrasted the covered flood losses with the policy’s exclusion for fungus. Nor does it establish that every provision called a deductible necessarily has the same legal function. The court reached its conclusion through this policy’s wording and structure.
D. Why Waiver Was Established for the First Three Events
Kennestone Hosp. v. Hopson, 538 S.E.2d 742 (Ga. 2000), defines waiver as voluntary relinquishment of a known right. It can arise expressly or through decisive, unequivocal conduct reasonably indicating an intention to waive.
The relevant conduct here was cumulative. Zurich knew its policy’s competing definitions and deductibles; its adjuster investigated the losses; its records and communications consistently selected the lower deductible; and it then made unconditional payments on that basis.
C&M Enters. of Ga., LLC v. Williams, 816 S.E.2d 44 (Ga. Ct. App. 2018), explains why the court could resolve the issue without another jury determination. Although waiver usually presents a factual question, it becomes a legal question when the essential facts and circumstances are clearly established.
Those circumstances were undisputed for the first three events. Zurich offered no affirmative evidence explaining its change of position or otherwise creating a reasonable factual dispute about its conduct. Klaben had not been deposed, and Zurich had relied principally on the legal argument that deductibles could not be waived.
The court did not treat the absence of Klaben’s deposition as an independent basis for liability. Rather, it illustrated the evidentiary gap in Zurich’s response to First Solar’s supported summary-judgment motion.
E. A Later Reservation Could Not Undo an Existing Waiver
Zurich relied on its August status report and First Solar’s understanding of that report. But the court concluded that waiver had occurred, at the latest, when Zurich issued the June payments without reserving its rights.
Again applying Sargent v. Allstate Insurance Co., the court held that a subsequent reservation was ineffective to undo a completed waiver. Once the insurer had relinquished the relevant policy condition, it could not reclaim it simply by announcing a different position.
This timing point is central to the opinion. The problem was not merely that Zurich’s final interpretation differed from its initial interpretation. Zurich had acted on the initial determination through unconditional payments before attempting to preserve its alternative position.
Zurich also argued that Klaben lacked authority to waive the deductible. The court did not decide that argument on its merits. Under United States v. Oakley, 744 F.2d 1553 (11th Cir. 1984), an argument raised for the first time in a reply brief is not properly before the reviewing court. The opinion therefore should not be read as separately resolving the scope of adjusters’ authority in every insurance relationship.
F. Waiver Must Be Established for the Particular Events at Issue
The last two events required a different result. Zurich had made no advance payments for those claims before the August report, and the specific adjustment decisions establishing waiver as a matter of law concerned the first three events.
First Solar argued that Zurich’s treatment of those earlier losses established waiver across all five claims. The court found that inference insufficiently conclusive for summary judgment. A jury could consider the broader course of conduct, but the record did not compel a finding of waiver for the March and April events.
This was not a holding that payment is always necessary to prove waiver. Implied waiver may arise from conduct. The narrower conclusion was that the evidence concerning these two events did not eliminate a genuine factual dispute.
The distinction also explains the limited remand. The appellate court did not reopen the established awards for the first three events or direct judgment for Zurich on the final two. It left the latter events for further proceedings on waiver.
G. A Guarantee Against a Time Bar Is Not an Express Filing Deadline
The policy stated that an action “will not be barred if commenced” within twelve months after the occurrence became known to the insured, unless applicable law required a longer period. Zurich sought to read this as a prohibition against actions filed outside that period.
The court distinguished Encompass Insurance Co. of America v. Friedman, 682 S.E.2d 694 (Ga. 2009). The clause there expressly stated that “no action” could be brought unless commenced within the specified period. That prohibitory language made the contractual limitation enforceable. Zurich’s clause contained no equivalent prohibition.
The distinction is logical as well as textual: promising that a suit will not be barred when a condition is satisfied does not necessarily mean the suit will be barred when the condition is not satisfied. Accepting Zurich’s argument would have required adding the missing converse.
Pilot Life Ins. Co. v. Morgan again supplied the prohibition against rewriting the policy. Wilkinson v. Ga. Farm Bureau Mut. Ins. Co., 833 S.E.2d 579 (Ga. Ct. App. 2019), supplied an alternative rationale: if Zurich’s proposed interpretation created ambiguity, the applicable construction principles favored the insured. Those principles include construing ambiguity against the insurer-drafter, strictly construing coverage exclusions, and respecting the insured’s reasonable expectations where possible.
The court characterized the clause as a delayed-discovery protection benefiting the insured, potentially permitting suit within twelve months after discovery even when the occurrence was previously unknown. The important limit is that this particular clause did not itself impose Zurich’s asserted contractual time bar; the opinion did not declare all contractual suit limitations unenforceable.
H. The Cross-Appeal: Why the Higher Deductible Otherwise Applied
The Master Policy and Project Certificate Must Be Read Together
First Solar argued that the project’s physical location justified a lower flood-level deductible. But the master policy’s schedule merely listed deductibles for different flood levels. The project certificate selected the deductible applicable to this project, expressly identifying $2.5 million.
Cherokee Credit Life Ins. Co. v. Baker, 168 S.E.2d 171 (Ga. Ct. App. 1969), supported reading the policy and certificate as interlocking parts of one contract. The general schedule could not be read in isolation from the project-specific selection.
Peaches Land Tr. v. Lumpkin Cnty. Sch. Bd., 648 S.E.2d 464 (Ga. Ct. App. 2007), permits extrinsic evidence to determine intent where a contract is ambiguous. First Solar had not established the necessary ambiguity, so external flood-location evidence could not displace the certificate’s clear term through ordinary interpretation.
Reformation Requires Proof of a Shared Mistake
Occidental Fire & Cas. of N.C. v. Goodman, 793 S.E.2d 606 (Ga. Ct. App. 2016), defines reformation as an equitable remedy correcting a writing that fails to express the parties’ true intention because of matters such as fraud, accident, or mistake.
Under CS-Lakeview at Gwinnett, Inc. v. Simon Prop. Grp., Inc., 659 S.E.2d 359 (Ga. Ct. App. 2008), mutual mistake must be the mistake of both parties. Applying Georgia Code § 23-2-21, the evidence must be clear, unequivocal, and decisive. First Chatham Bank v. Liberty Cap., LLC, 755 S.E.2d 219 (Ga. Ct. App. 2014), quoting Hall v. Hall, 693 S.E.2d 624 (Ga. Ct. App. 2010), emphasized the heavy burden involved.
The evidence showed that Zurich’s underwriter deliberately assessed the entire site and selected flood level 1 because part of the site fell within it. The broker and risk manager confirmed the communicated understanding. That record did not demonstrate a shared intention to adopt a lower deductible that the written certificate mistakenly failed to capture.
The Events Satisfied the Policy’s Flood Definition
First Solar also disputed whether the accumulation was “rapid” and “unusual.” Alea London Ltd. v. Lee, 649 S.E.2d 542 (Ga. Ct. App. 2007), supported using dictionaries to establish the ordinary meaning of undefined policy terms. The court applied “rapid” in its ordinary sense of quick, swift, or fast, without requiring numerical velocity or flow-rate measurements.
Selective Way Ins. Co. v. Lit. Tech, Inc., 606 S.E.2d 68 (Ga. Ct. App. 2004), supported treating water derived from rainfall as surface water. The record sufficiently established rapid accumulation during each event.
For “unusual,” the court focused on the accumulation affecting normally dry land, rather than merely how frequently substantial rainstorms occurred. Because the site was undisputedly normally dry, the court concluded that the rapid accumulation was unusual in this setting. This is an application of the particular definition and record, not a universal determination that every recurring rainstorm constitutes a flood.
I. Procedural Precedents and Their Influence
The court’s procedural authorities explain both why the first three events could be resolved as a matter of law and why the final two could not.
- Cambridge Christian Sch., Inc., v. Fla. High Sch. Athletic Ass'n, 115 F.4th 1266 (11th Cir. 2024), required de novo review of cross-motions for summary judgment, viewing the evidence favorably to the nonmovant on each motion.
- Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256 (11th Cir. 2004), quoting Celotex Corp. v. Catrett, 477 U.S. 317 (1986), placed the initial responsibility on the movant to identify the basis and record support for summary judgment.
- Porter v. Ray, 461 F.3d 1315 (11th Cir. 2006), explained the opposing party’s obligation to produce affirmative evidence once the initial showing has been made.
- Fitzpatrick v. City of Atlanta, 2 F.3d 1112 (11th Cir. 1993), also explained that no responsive evidentiary showing is necessary when the movant fails its initial burden. This was particularly important for the final two events: First Solar’s own showing was insufficient.
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986), defined a genuine dispute by whether a reasonable jury could find for the nonmoving party.
- Jones v. UPS Ground Freight, 683 F.3d 1283 (11th Cir. 2012), prohibited resolving disputed factual issues at summary judgment.
- Am. Cas. Co. of Reading v. Etowah Bank, 288 F.3d 1282 (11th Cir. 2002), supported application of Georgia substantive law in this diversity case and de novo review of insurance-contract interpretation.
- MONY Life Ins. Co. v. Perez, 146 F.4th 1018 (11th Cir. 2025), established abuse-of-discretion review for the refusal to impose Rule 37 sanctions.
J. The Sanctions Ruling Turned on the Disclosure Record
Zurich sought to strike Garrett’s damages testimony, alleging inadequate disclosure of his project-management role and documents stored in First Solar’s project information management system, PIMS.
The record undermined the asserted surprise. Garrett appeared in First Solar’s initial disclosures and the pretrial witness list. A deposition taken almost two years before trial identified him as project manager. Documents Zurich introduced or produced also referred to PIMS and its use for project documentation.
Because Zurich did not identify information that had actually gone undisclosed, the appellate court found no abuse of discretion. Although First Solar also argued that Zurich’s objection was late and inconsistent with its pretrial position on damages, the opinion’s stated basis was the absence of an established disclosure failure.