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Georgia Court Rules Insurer May Sue For Breach of Cooperation Provision, Rejecting Foreign Authority


Setting new precedent, the Northern District of Georgia recently ruled that an insurer may bring a breach of contract action seeking damages against an insured who allegedly breached a cooperation provision in an insurance policy.

In Am. Fam. Ins. Co. v. Almassud, No. 1:16-CV-4023 (N.D. Ga. May 17, 2021), the insurer alleged that the insured breached the cooperation clause in his policy by concealing material information and by testifying untruthfully and pleading the Fifth Amendment in the underlying case. On the basis of these allegations, the insurer asserted a typical breach of contract claim and sought damages. The insured moved to dismiss the claim, relying on Texas authority that a non-cooperation clause acts as a condition precedent only, and while a breach thereof relieves the insurer of liability, it does not entitle the insurer to a claim for damages.

The Northern District rejected the insured’s motion, noting that under Georgia law “an insured’s failure to cooperate with the insurer in the investigation of a claim, without a valid excuse, may constitute a breach of the insurance contract, precluding any recovery by the insured.” Almassud, ECF Dkt. No. 379, p. 11 (citing Roberts v. State Farm Fire & Cas. Co., 479 F. App’x 223, 226 (11th Cir. 2012)). Ultimately, the court “decline[d] to apply the law of Texas instead of Georgia’s” and allowed the insurer to proceed with its claim for damages.  Id.

As recognized by this ruling, cooperation provisions are likely independently actionable for damages in Georgia. Notably, this ruling could have important implications on the viability of claims for damages for the breach of other, similar provisions of insurance policies.

Seslee Smith and Ryan Burke represent the insurer in Almassud.If you have questions about the court’s opinion in that case or if you would like assistance evaluating your potential claims, please reach out to them or a member of the MMM Litigation group.