Federal appeals court says Greenbrier to pay out holes-in-one payments, not insurer

By Kyla Asbury | Dec 21, 2017

CHARLESTON – The U.S. State Court of Appeals for the Fourth Circuit issued an opinion on Dec. 20 stating that Gov. Jim Justice’s company is on the hook for two holes-in-one payments to spectators during the 2015 Greenbrier Classic golf tournament, because the policy requirements weren’t met.

The appeals court ruled that Justice’s company was to pay the $192,400 cash payout, not the insurer—as its insurance policy did not provide that coverage.

During the tournament, Justice promised if a golfer made a hole-in-one on the 18th green, fans seated in the grandstands would receive $100; if a second hole-in-one was made, spectators would receive $500 and if a third was made, they would receive $1,000.

“During the tournament, two golfers hit a hole-in-one on the designated hole, and Old White paid approximately $200,000 to fans as a result,” the appeals court said. “It is undisputed that the holes-in-one were made from a distance of 137 yards. Plaintiffs sought a declaratory judgment that the insurance policy provided no coverage because…Old White failed to comply with the minimum yardage requirement.”

The district court granted summary judgment and Old White appeals and the appeals court affirmed.

Old White Charities is controlled by Justice and bought insurance on the change of payouts, but the policy required a minimum distance of 170 yards for the insurers to cover the jackpot.

“Old White failed to show a genuine issue of material fact as to whether it was entitled to coverage under the terms of the policies,” the appeals court opinion states.

The final policies and policy binder received by Bankers Insurance, Old White’s agent, “unambiguously state that the designated hole had to be at least 170 yards from the tee, and Bankers bound coverage by submitting payment on behalf of Old White days after receiving the binder.”

“Old White cannot prevail even if the terms of the application are interpreted to supersede those of the final policies, as Old White also did not satisfy the application’s unambiguous 150-yard minimum term,” the opinion states. “Further, the application’s addendum does not contradict the 150-yard minimum term, as the addendum does not mention minimum yardage.”

“We conclude that, even assuming that each Appellee owed Old White a duty, Old White failed to put forth sufficient evidence of negligence on the part of HCC, Underwriters, or All Risks,” the opinion states.

All Risks adequately kept Bankers informed of policy negotiations regarding a minimum yardage term, and neither All Risks nor HCC were informed that Old White could not agree to a minimum yardage term.

“We conclude that Old White’s negligence claims are without merit because Old White failed to show that Appellees acted negligently,” the opinion states.

U.S. Court of Appeals for the Fourth Circuit case number: 17-1180

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