This story is reprinted with permission from FC&S Legal, the industry’s only comprehensive digital resource designed for insurance coverage law professionals. Visit the website to subscribe. The U.S. Court of Appeals for the Eleventh Circuit has reversed a decision by the U.S. District Court for the Northern District of Georgia, suggesting that there may be coverage under an umbrella policy issued in the United States for an automobile accident that occurred in Costa Rica. The Case In December 2013, Hanna Mercer was a passenger in a Suzuki automobile driven by Robert Myles. The vehicle, rented in Costa Rica, was involved in an accident there, killing Mr. Myles and severely injuring Ms. Mercer. Mr. Myles had purchased insurance for the rented Suzuki from Qualitas Compania de Seguros, S.A., a Costa Rican insurance company. He also held an umbrella policy issued by GEICO. GEICO brought a declaratory judgment action against Ms. Mercer, seeking a determination of its obligations under the umbrella policy. GEICO contended that there was no coverage under its umbrella policy, reasoning that the Suzuki was not “insured by a primary auto policy” within the meaning of its umbrella policy because the Qualitas policy was not “primary insurance” as defined in the umbrella policy. Ms. Mercer, on the other hand, contended that the Qualitas policy Mr. Myles had purchased for the Suzuki was “a primary auto policy” and, therefore, was sufficient to make Mr. Myles an insured under the umbrella policy. The district court accepted GEICO’s argument and ruled that, because Ms. Mercer could not show that Qualitas’ policy provided coverage, Mr. Myles was not an “insured” under the umbrella policy at the time of the accident. In particular, the district court relied on the umbrella policy’s definition of “primary insurance” to determine that the rental vehicle Mr. Myles was driving (and in which Ms. Mercer was a passenger) had not been “insured by a primary auto policy” at the time of the accident. Accordingly, the district court granted summary judgment in favor of GEICO. Ms. Mercer appealed to the Eleventh Circuit. The GEICO Umbrella Policy According to the umbrella policy, insured meant: (a) You and your spouse if a resident of your household. With respect to a motor vehicle, such person is an insured only if the motor vehicle meets the definition of auto in this policy and is insured by a primary auto policy. The umbrella policy also provided that: primary insurance meant: insurance . . . which is payable on behalf of an insured for liability for personal injury or property damage. The Eleventh Circuit’s Decision The circuit court reversed. In its decision, the circuit court explained that the GEICO umbrella policy provided that, to be an “insured,” the vehicle had to be “insured by a primary auto policy.” However, the circuit court noted, the term “primary auto policy” was not defined in the GEICO umbrella policy. The Eleventh Circuit pointed out that the umbrella policy provided that undefined terms had the definition given to them in “your primary insurance policy,” but the term “primary auto policy” also was not defined in the Qualitas policy. Left undefined, the circuit court ruled, the term “primary auto policy” was ambiguous. The Eleventh Circuit then held that the district court had improperly relied on the term “primary insurance” as defined in the GEICO umbrella policy to provide the definition for “the similar, but undefined,” term “primary auto policy.” The circuit court concluded that the district court should not have equated “primary insurance” with “insured by a primary auto policy,” thereby requiring Ms. Mercer to show that Qualitas would provide coverage for the accident, and that the district court should not have resolved the ambiguity in the definition of “primary auto policy” in favor of GEICO. It then remanded the case to the district court to re-evaluate the parties’ summary judgment motions. The case is Government Employees Ins. Co. v. Gordon, No. 16-13420 (11th Cir. Feb. 13, 2018). Attorneys involved include: For GOVERNMENT EMPLOYEES INSURANCE COMPANY, Plaintiff - Appellee: Mary Katz, Frances L. Clay, Chambless Higdon Richardson Katz & Griggs, LLP, MACON, GA. For HANNA MERCER, Defendant - Appellant: Lloyd N. Bell, Michael K. Watson, Bell Law Firm, ATLANTA, GA. For ANN HERRERA, Administrator of the Estate of Robert Alan Myles, Defendant - Appellant: Susan J. Levy, Levy & Pruett, DECATUR, GA. Steven A. Meyerowitz, Esq., is the Director of FC&S Legal, the Editor-in-Chief of the Insurance Coverage Law Report, and the Founder and President of Meyerowitz Communications Inc. As FC&S Legal Director, Mr. Meyerowitz, a member of the team that conceptualized FC&S Legal, provides daily analysis and commentary on the most significant insurance coverage law decisions from courts across the country and news regarding legislative and regulatory developments. A graduate of Harvard Law School, Mr. Meyerowitz was an attorney at a prominent Wall Street law firm before founding Meyerowitz Communications Inc., a law firm marketing communications consulting company.