A 58-month delay killed a $10 million umbrella claim, even when notice came from the victim's lawyer.
In a decision filed January 7, the Eleventh Circuit Court of Appeals sided with Nationwide Mutual Insurance Company in a coverage dispute that hinged on a straightforward but critical question facing insurers every day – how long is too long when it comes to reporting a claim?
The case, A.B. v. Barrow, involved David Barrow, who had an umbrella liability policy with Nationwide that covered invasion of privacy claims. The underlying conduct occurred in 2013, but nobody told Nationwide about the incident until November 2018, nearly five years later.
The notice came not from Barrow himself but from the victim's attorney, who discovered the policy while pursuing collection efforts in a separate fraudulent transfer action. The victim, identified in court documents as A.B., had filed an invasion of privacy lawsuit against Barrow in February 2018. During discovery in the fraudulent transfer case, counsel for Barrow's wife mentioned he thought Barrow was insured by Nationwide. A.B.'s attorney then served a subpoena on Nationwide in November 2018, requesting production of the policies.
The state court eventually held a bench trial on the invasion of privacy claims in April 2022 and awarded A.B. $4 million in compensatory damages and $6 million in punitive damages, for a total verdict of $10 million.
Under Alabama's Direct Action Statute, A.B. could go after Barrow's insurance coverage directly to satisfy her judgment. After Barrow failed to pay, she sued Nationwide and Barrow in July 2022. But she ran into Nationwide's policy language requiring that "you or someone on your behalf" must notify the company "as soon as reasonably possible" of any occurrence that might trigger coverage.
The appeals court had to sort through two related questions. First, could the victim's lawyer count as "someone on your behalf" for purposes of the notice requirement? Second, even if the answer was yes, was the notice timely?
On the first question, the court said yes. Drawing on dictionary definitions and Alabama case law, the judges found that "on behalf of" has evolved to mean acting in someone's interest or for their benefit, not just as their formal agent or representative. The court noted that the victim's attorney was attempting to satisfy a condition precedent that would increase Barrow's chances of obtaining coverage, which qualified as acting in his interest.
But that is where A.B.'s argument ran out of road.
Alabama law is unforgiving when it comes to late notice. The state's courts look at just two things: how long the delay was and whether there was a good reason for it. Even a five-month delay requires an explanation, according to Alabama Supreme Court precedent.
Here, the delay stretched nearly five years from the 2013 occurrence to the November 2018 notice. And Barrow, who received the policy in October 2013 and was presumed to know its terms, offered no excuse for why he never reported the incident to Nationwide.
The victim's attorney argued that the clock should start when A.B. learned about the policy's existence in late 2018, not when the incident occurred in 2013. The appeals court disagreed. While A.B. herself could not have reported something she did not know about, the policy's obligation ran to Barrow. Anyone acting "on his behalf" was bound by the same timeline.
Circuit Judge Lagoa, writing for the panel, explained that the policy set a single deadline that applied equally whether Barrow gave notice himself or someone else did it for him. Allowing the victim's lawyer to reset the clock would effectively create two different deadlines under the same policy language – one for the insured and another for third parties. The policy does not work that way, the court said.
The decision drew heavily on two earlier Alabama cases with similar fact patterns. In both, injured parties tried to trigger coverage by notifying the insurer themselves after the policyholder failed to do so. The Alabama Supreme Court allowed the injured parties to provide notice but held them to the same timeliness standards that applied to the insured.
The reasoning is straightforward: under Alabama's Direct Action Statute, an injured party steps into the shoes of the insured. That means accepting the same obligations the policyholder had under the contract, including timely notice.
Nationwide had actually started defending Barrow after learning of the lawsuit, retaining counsel in July 2019 who represented him through depositions and trial. But the insurer later argued it had no duty to cover the judgment because of the late notice. The district court agreed and granted summary judgment to Nationwide. The appeals panel affirmed that decision.
For insurers, the case offers a reminder that notice provisions remain enforceable even when coverage questions arise years after an incident. The decision also clarifies that while direct action statutes give injured parties a path to insurance proceeds, those statutes do not excuse or extend the notice deadlines written into policies.
A.B. also argued that the lower court improperly included background details about Barrow's criminal conduct when issuing its ruling. The appeals court dismissed that concern, finding that the coverage analysis rested entirely on the policy language and Alabama law, with the background facts serving only to provide context.
The decision underscores a basic principle in insurance coverage disputes: policy deadlines mean something, and absent a valid excuse, courts will enforce them.
