In re Ambassador Insurance Company (Bestwall LLC, Appellant)

NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal
revision before publication in the Vermont Reports. Readers are requested to notify the Reporter
of Decisions by email at: JUD.Reporter@vermont.gov or by mail at: Vermont Supreme Court, 109
State Street, Montpelier, Vermont 05609-0801, of any errors in order that corrections may be made
before this opinion goes to press.

2022 VT 11

No. 2021-081

In re Ambassador Insurance Company Supreme Court
(Bestwall LLC, Appellant)
On Appeal from
Superior Court, Washington Unit,
Civil Division

November Term, 2021

Helen M. Toor, J.

Andre D. Bouffard of Downs Rachlin Martin PLLC, Burlington, for Appellant.

Jacqueline A. Hughes, Montpelier, Jay Lavroff of Lindabury, McCormick, Estabrook &
Cooper, P.C., Westfield, New Jersey, and Jennifer Rood, Assistant General Counsel and
Special Assistant Attorney General, Department of Financial Regulation, Montpelier, for
Appellee.

PRESENT: Reiber, C.J., Eaton, Carroll and Cohen, JJ., and Dooley, J. (Ret.),
Specially Assigned

¶ 1. REIBER, C.J. In this interlocutory appeal, we consider whether Vermont or

Georgia law applies to a coverage dispute between claimant Bestwall LLC and insurer

Ambassador Insurance Company. Bestwall contends that the trial court erred in concluding that

Vermont law applies following the special master’s prediction that Georgia courts would adopt the

same loss-allocation method as Vermont. But because Georgia law is unsettled on this issue, we

conclude that there is no conflict with Vermont law and accordingly, Vermont law applies. We

therefore affirm the trial court’s grant of partial summary judgment to Ambassador.

¶ 2. The following material facts are undisputed. Bestwall Gypsum Company produced

and sold products containing asbestos since its incorporation in 1956. Georgia Pacific Corporation
(GP) acquired Bestwall Gypsum in 1965 and assumed Bestwall Gypsum’s liabilities. GP

continued selling products containing asbestos until 1977. In 1982, GP moved its headquarters to

Atlanta, Georgia.

¶ 3. From 1965 to 1986, GP maintained commercial general liability insurance through

various insurers. GP’s insurance program included multiple layers of primary and excess coverage

in several of those years.

¶ 4. Ambassador Insurance Company was one insurer who covered GP during part of

this period. Ambassador was incorporated in Vermont in 1965 and had an office in Berlin,

Vermont. Ambassador was also licensed in New Hampshire, Arizona, and Nevada, and had

offices in several states, including New Jersey. Ambassador was not licensed to sell insurance in

Georgia, where GP was headquartered, but acted as a surplus-lines insurer.

¶ 5. In 1983, GP negotiated and entered into the excess liability policy at issue through

Ambassador’s Georgia-based surplus-lines broker. The policy was purchased and delivered in

Georgia. Under the policy, Ambassador agreed to provide up to $10 million as a portion of GP’s

total excess liability coverage of $75 million. The policy promised to indemnify GP for the

“Ultimate Net Loss which [GP] shall become legally obligated to pay in excess” of the limits of

underlying policies “resulting from an occurrence or occurrences” covered by those policies. In

other words, GP’s losses needed to exhaust the $100 million that GP had in underlying coverage

to trigger Ambassador’s excess coverage. The policy stated that Ambassador’s coverage followed

that of the underlying policies, and at least one underlying policy limited coverage to bodily injury

“which occurs during the policy period.” Although the policy was written to be effective from

April 1, 1983, to April 1, 1984, GP cancelled the policy on May 15, 1983, after it decided to replace

its entire insurance program. Ultimately, the policy was in effect for forty-four days, for which

Ambassador collected a net premium of $605.

2
¶ 6. In November 1983, Ambassador was placed into receivership due to its “hazardous

financial condition.” In re Ambassador Ins. Co., 2015 VT 4, ¶ 2, 198 Vt. 341, 114 A.3d 492

(quotation omitted). In 1987, the Vermont superior court ordered Ambassador into liquidation and

appointed as liquidator the Commissioner of the Vermont Department of Banking and Insurance

(now the Vermont Department of Financial Regulation). See id. ¶¶ 2 n.1, 5 & n.3. The court order

authorized the liquidator to determine claims filed by Ambassador’s insureds in the liquidation

proceeding, and provided that if the liquidator denied a claim, the claimant could seek review in

Vermont superior court. The order further provided that the court could appoint a master to hear

the disputed claim under Vermont Rule of Civil Procedure 53.

¶ 7. Since the early 1980s, GP has faced many lawsuits across the country alleging

personal injury and death resulting from exposure to GP’s asbestos-containing products. GP has

incurred approximately $2.9 billion in losses. GP’s insurers have covered approximately $850

million of GP’s losses. In 2017, GP was restructured, and Bestwall LLC acquired its asbestos

liabilities.1

¶ 8. Bestwall filed a claim with the liquidator for coverage under the Ambassador

policy, and the liquidator denied the claim. Bestwall appealed that denial to the Vermont superior

court. In accordance with the liquidation order, the court appointed a special master to hear the

claim. The special master divided the proceedings into two tracks: the first to determine threshold

legal questions, including choice of law and the method of loss allocation, and the second to

allocate loss under the applicable law.

¶ 9. Bestwall and Ambassador filed cross-motions for partial summary judgment on the

track one issues. In relevant part, Bestwall argued that New Jersey law should apply as New Jersey

was the state where Ambassador’s main office was located at the time it issued the policy.

Alternatively, Bestwall argued that Georgia law could apply as the state of Bestwall’s

1
Hereinafter, this opinion refers to the company as “Bestwall” for consistency.
3
incorporation and where its headquarters were located when the policy was issued. Ambassador

argued that Vermont law applied.

¶ 10. The special master issued a report granting partial summary judgment to

Ambassador. The special master rejected Bestwall’s argument that New Jersey law should apply

and reasoned that either Vermont or Georgia law could apply to the claim. He then considered

whether Georgia law conflicted with Vermont law regarding allocation of loss. He explained that

while Vermont law clearly applies pro-rata (or time-on-the-risk) allocation, no appellate court in

Georgia had considered this issue. After considering a Georgia state trial court decision and federal

district court decision adopting the pro-rata method under Georgia law, the special master

predicted that Georgia courts would adopt the pro-rata method. Because Georgia law did not

conflict with Vermont law, he concluded that Vermont law applied. He further noted that even if

the laws conflicted, Vermont law would still apply under a choice-of-law analysis, given

Vermont’s interest in Ambassador’s liquidation and the clarity in Vermont’s allocation law.

Applying Vermont law, the special master determined that Bestwall’s losses would be allocated

under the pro-rata method.

¶ 11. Bestwall filed an objection to the special master’s report with the superior court.

The court rejected Bestwall’s arguments and adopted the special master’s ruling. See V.R.C.P.

53(e)(2) (providing that after party objects to master’s report, court may adopt it or may modify or

reject it wholly or partially).

¶ 12. Bestwall then moved for interlocutory appeal. Bestwall explained that because the

Ambassador policy was in place for a short period of time, if Bestwall’s losses were allocated to

the policy by time under the pro-rata method, the loss would not exceed the underlying coverage

necessary to trigger Ambassador’s policy and Bestwall’s claim would fail. The court granted

Bestwall’s motion for interlocutory appeal. See V.R.A.P. 5(b)(1) (requiring court to allow appeal

from interlocutory ruling that involves “controlling question of law about which there exists

4
substantial ground for difference of opinion” and where “immediate appeal may materially

advance” end of lawsuit).

¶ 13. On appeal, Bestwall argues that the trial court erred by concluding that Vermont

law applied to this claim. Bestwall contends that choice-of-law principles support application of

Georgia law and urges us to predict that the Supreme Court of Georgia would reject pro-rata

allocation and instead adopt all-sums allocation under the terms of this policy. Bestwall

emphasizes that if pro-rata allocation applies, its claim will be denied; it maintains that Georgia

law would not support this outcome where the policy language does not specifically require pro-

rata allocation. Bestwall also suggests that applying Vermont law could run afoul of the Due

Process Clause of the Fourteenth Amendment to the U.S. Constitution. In its reply brief, Bestwall

clarifies that we should reach the choice-of-law analysis because, in the face of unsettled law in

Georgia, this Court should presume that Georgia law conflicts with Vermont law.

¶ 14. We review grants of summary judgment without deference, using the same standard

as the superior court. Brillman v. New Eng. Guar. Ins. Co., 2020 VT 16, ¶ 6, 211 Vt. 550, 228

A.3d 636. “We will affirm summary judgment if there are no genuine issues of material fact and

the moving party is entitled to judgment as a matter of law.” Id. (quotation omitted); see V.R.C.P.

56(a). The parties do not dispute the material facts; they disagree about the law governing this

dispute. Determining which state’s law governs this claim is a question of law, which we review

without deference. See Miller v. White, 167 Vt. 45, 47-48, 702 A.2d 392, 393 (1997). Courts

apply the choice-of-law rules of the forum state in determining which jurisdiction’s substantive

law applies to the issue at hand. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 488 (1941).

Accordingly, we apply Vermont’s choice-of-law rules.

¶ 15. This Court has adopted the analysis set forth in the Restatement (Second) of

Conflict of Laws to resolve choice-of-law issues in contract cases. McKinnon v. F.H. Morgan &

Co., 170 Vt. 422, 423, 750 A.2d 1026, 1028 (2000). The Restatement essentially asks us to

5
consider several factors to determine which state has the most significant relationship to the

insurance contract. See Martineau v. Guertin, 170 Vt. 415, 417, 751 A.2d 776, 778 (2000)

(explaining that Restatement approach allows courts to “weigh the most significant factors in any

given case” and directs us to apply specific sections of Restatement depending on legal issue); see

also Restatement (Second) of Conflict of Laws, § 6 (1971) (listing general choice-of-law

principles); id. § 188 (listing contract principles); id. § 193 (listing insurance contract principles).

¶ 16. Bestwall argues that the Restatement factors strongly favor application of Georgia

law—so strongly that the special master erred by “even consider[ing] whether Vermont’s law

conflicts with Georgia’s on the issue of allocation.” But this argument misunderstands the choice-

of-law inquiry. Before analyzing the issue under the factors set forth in the Restatement, we must

first consider whether Georgia law actually conflicts with Vermont law. See Havill v. Woodstock

Soapstone Co., 172 Vt. 625, 627, 783 A.2d 423, 427 (2001) (mem.) (establishing that where no

conflict exists, Vermont courts avoid choice-of-law analysis and apply forum law); see also Cont’l

Ins. Co. v. Honeywell Int’l, Inc., 188 A.3d 297, 311 (N.J. 2018) (“The first step in a conflicts

analysis is to decide whether there is an actual conflict between the laws of the states with interests

in the litigation.”).

¶ 17. The law of another jurisdiction, or foreign law, “is a question of fact and must be

proved as such.” Gen. Acceptance Corp. v. Lyons, 125 Vt. 332, 335, 215 A.2d 513, 515 (1965)

(quotation omitted). The proponent of foreign law—here, Bestwall—bears the burden of

demonstrating that foreign law conflicts with Vermont law. Id. (explaining that in absence of

showing of conflict, Court presumes foreign law to be same as Vermont law); see also Pioneer

Credit Corp. v. Carden, 127 Vt. 229, 234, 245 A.2d 891, 894 (1968) (providing that where

proponent failed to prove conflict, trial court could apply Vermont law under assumption that it

was same as foreign law “so long as [assumption] is reasonable and does not impose oppressive

consequences”).

6
¶ 18. We conclude that no conflict exists. Under Vermont law, pro-rata allocation would

apply to this insurance policy, but no Georgia appellate court has squarely addressed this question.

We thus must consider whether Vermont courts should assume that a conflict exists in

circumstances where foreign law is unsettled. We conclude that in the face of unsettled law,

Bestwall must show with reasonable certainty that Georgia law plainly and materially conflicts

with Vermont law. Although Bestwall has set forth the Georgia law that exists, Bestwall has not

pointed us to a precedential state decision or other clearly established law determining how

Georgia courts allocate loss in the same or similar circumstances. Without such proof, Bestwall

has not shown, nor can it show with reasonable certainty, that Georgia courts would reject pro-rata

allocation and instead apply all-sums allocation. For the reasons set forth in greater detail below,

we conclude that Vermont law applies.

I.

¶ 19. Before trying to identify whether there is settled law of Georgia and Vermont

regarding the allocation of loss under multiple insurance policies, it is helpful to summarize the

insurance concepts at play. Occurrence-based policies cover losses that occur during the policy

period. Bradford Oil Co., v. Stonington Ins. Co., 2011 VT 108, ¶ 7, 190 Vt. 330, 54 A.3d 983.

When loss results from “environmental contamination that is continuous or progressively

deteriorating through successive policy periods,” such as exposure to asbestos that manifests as

bodily injury at a later time, many courts apply a “continuous-trigger” theory to determine whether

the exposure triggers coverage. Towns v. N. Sec. Ins. Co., 2008 VT 98, ¶ 25, 184 Vt. 322, 964

A.2d 1150. Under this theory, exposure that occurred during the policy period triggers coverage,

regardless of when the damage was discovered. Id. ¶ 28. The parties do not dispute that the

continuous-trigger theory applies here to trigger coverage. This means that the Ambassador policy

potentially covers all claims made against Bestwall for injury from asbestos exposure first

7
occurring before or during the time that the policy was effective, April 1 to May 15, 1983, but not

manifested until the policy was in effect or later.

¶ 20. After determining the appropriate trigger of coverage, the next step is to decide how

to allocate the insured’s losses across the triggered years of coverage. There are two general

approaches. The first is all-sums allocation, also known as joint-and-several liability. Under this

approach, all triggered policies are responsible for the entire loss and must provide coverage up to

the policy limit, so long as the occurrence took place in part during the policy period. Id. ¶ 33. If

the all-sums approach applied here, Ambassador could be liable to pay out the policy limit of $10

million. The second is pro-rata or time-on-the-risk allocation. Under this approach, courts allocate

a portion of the loss to each insurer based on the proportion of time that the insurer covered the

risk relative to the total time of triggered coverage. Id. If the pro-rata approach applied here,

Bestwall’s total losses would be allocated to Ambassador based on the forty-four-day period that

the policy was in place. Despite Bestwall’s $2.9 billion in losses, the policy was in place for such

a short period of time that Bestwall contends that the allocated loss would not trigger

Ambassador’s policy.2

¶ 21. Vermont law is settled on this issue. Under Vermont law, the court would apply

the pro-rata method to allocate Bestwall’s loss under the Ambassador policy. In Towns, this Court

adopted the pro-rata method to allocate loss under occurrence-based policy language in a

homeowners’ insurance policy that limited coverage to damages occurring “during the policy

period.” Id. ¶¶ 34-38. We reasoned that where a continuous trigger applies to damage occurring

over a long period of time, it is appropriate to allocate liability to each insurer “proportionate to

the damage suffered during its policy’s term” when the policy contained language “limiting

coverage to damages occurring during the policy term.” Id. ¶ 34. Otherwise, the insurer could be

2
While Bestwall concedes this point on appeal, the trial court has yet to apply the selected
allocation method and determine whether coverage exists.
8
liable for losses that occurred outside the policy period, rendering the policy language meaningless.

In Bradford Oil, we extended this holding to similar language in a commercial general-liability

policy. 2011 VT 108, ¶¶ 10-13. Here, the Ambassador excess-liability policy follows the form of

underlying policies and at least one of the underlying policies was occurrence-based, meaning that

it limited coverage to bodily injury “which occurs during the policy period.” Thus, as the special

master concluded, pro-rata allocation applies to this policy under Towns and Bradford Oil.

¶ 22. The Supreme Court of Georgia, however, has not yet decided this issue. Nor has

the Court of Appeals of Georgia issued a decision on this issue which we might follow in the

absence of a decision from the state’s highest court. See Stoner v. N.Y. Life Ins. Co., 311 U.S.

464, 467 (1940) (explaining that where federal court exercises diversity jurisdiction, court “must

follow the decisions of intermediate state courts in the absence of convincing evidence that the

highest court of the state would decide differently”); Moscov v. Mut. Life Ins. Co. of N.Y., 56

N.E.2d 399, 404-05 (Ill. 1944) (explaining that Illinois courts must accept decision of intermediate

appellate court as stating law of jurisdiction “in the absence of any conflicting decision by another

appellate court of coordinate jurisdiction . . . or by its highest court of review”).

¶ 23. The parties direct us to several trial court decisions confronting this issue under

Georgia law. In two cases, Georgia superior courts determined that the pro-rata method was

appropriate under the plain language of occurrence-based policies which limited coverage to risks

occurring “during the policy period.” Nat’l Serv. Indus., Inc. v. Md. Cas. Co., No. E22907 (Ga.

Super. Ct. Feb. 21, 2001); Nat’l Serv. Indus. v. St. Paul Guardian Ins. Co., No. 2004-cv-83960,

2005 WL 5958768 (Ga. Super. Ct. June 7, 2005). It is axiomatic, however, that orders of the

Superior Court of Georgia do not bind the Georgia appellate courts. Cf. Etkind v. Suarez, 519

S.E.2d 210, 215 (Ga. 1999) (explaining that Supreme Court of Georgia decision “constitutes

controlling authority” and must be followed by Court and all lower courts unless overruled or law

9
changed by legislature); Harvey v. J.H. Harvey Co., 568 S.E.2d 553, 558 (Ga. Ct. App. 2002)

(recognizing that Court of Appeals of Georgia is “bound by the precedent of the Supreme Court”).

¶ 24. Two federal district courts have also confronted this issue under Georgia law. In

Liberty Mutual Insurance Co. v. Fairbanks Co., the Southern District of New York reasoned that

“well established principles of contract interpretation support applying a pro rata approach” where

the plain language of the policy covered loss occurring “during the policy period.” 170 F. Supp. 3d

634, 651 (S.D.N.Y. 2016) (quotation omitted). The Northern District of Georgia, however,

reached the opposite conclusion in ACE American Insurance Co. v. Exide Technologies Inc., 1:16-

cv-1600-MHC, 2017 WL 11629194, *11 (N.D. Ga. Sept. 20, 2017). There, the court concluded

that absent explicit language mandating pro-rata allocation, policy language limiting coverage to

risks during the policy period did not require this allocation under Georgia law. Id. While these

cases apply relevant principles of Georgia law, they do not establish precedential state law. Federal

courts sitting in diversity jurisdiction apply substantive state law under Erie Railroad Co. v.

Tompkins, 304 U.S. 64 (1938), and “[w]here the substantive law of the forum state is uncertain or

ambiguous, the job of the federal courts is to carefully predict how the highest court of the forum

state would resolve the ambiguity.” Travelers Ins. Co. v. 633 Third Assocs., 14 F.3d 114, 119 (2d

Cir. 1994). However, “[s]uch a predictive judgment is not, in fact, state law; it is an ‘Erie guess’

as to what state law would be.” Bridgeview Health Care Ctr., Ltd. v. State Farm Fire & Cas. Co.,

2014 IL 116389, ¶ 16, 10 N.E.3d 902 (quotation omitted). As such, orders of federal district courts

applying state law do not bind state courts. See U.S. Fid. & Guar. Co. v. Kelley, 205 S.E.2d 38,

39 (Ga. Ct. App. 1974) (“[D]ecisions of the United States District Court are not binding on us”).

¶ 25. As the two federal district courts noted, Georgia appellate courts have yet to rule

on this issue. See Liberty Mut. Ins. Co., 170 F. Supp. 3d at 650 (“Georgia appellate courts have

not yet addressed the issue of allocation of liability in a progressive injury case.”); ACE Am. Ins.

Co., 2017 WL 11629194, *11 (noting that under Georgia law, “the question of how a judgment

10
should be allocated among various insurers—which has divided courts elsewhere—remains

unsettled”). Indeed, the fact that the Northern District of Georgia reached a conflicting conclusion

on loss allocation from the Superior Court of Georgia and the Southern District of New York

supports our observation that this issue is unsettled under Georgia law. Bestwall points to no new

Georgia authority directly addressing this issue since those cases were decided. In short, Georgia

law remains unsettled on the issue of allocation.

II.

¶ 26. In the face of uncertain law, Bestwall argues that we should presume that a conflict

exists, pointing to Havill v. Woodstock Soapstone Co.3 In Havill, we compared the laws of

Vermont and New Hampshire and determined that the laws did not conflict. 172 Vt. at 627-28,

783 A.2d at 427-28. Bestwall argues that under Havill, this Court will conclude that no conflict

exists only where foreign law is the same as forum law, so applying foreign law would result in

the same outcome. Thus, in Bestwall’s view, we should presume a conflict exists where the law

is unsettled as we cannot conclude that Vermont law is the same as Georgia law. However, Havill

did not address a situation where foreign law is unsettled.

¶ 27. Some courts have adopted the approach that Bestwall proposes. As Bestwall notes,

some federal courts assume that a conflict exists when confronted with unsettled state law or when

a “potential” conflict exists. See, e.g., In re Thelan LLP, 736 F.3d 213, 219 (2d Cir. 2013) (noting

that where state law is unresolved, court “assume[s] there to be a conflict” and proceeds to apply

choice-of-law principles); Med. Graphics Corp. v. Hartford Fire Ins. Co., 171 F.R.D. 254, 260 (D.

3
In the proceedings below, Bestwall argued that the court was obligated to predict how
the Supreme Court of Georgia would decide this issue before it could determine whether a conflict
exists. The special master agreed and predicted that Georgia courts would adopt the pro-rata
method. To the extent that Bestwall pursues this argument on appeal, we disagree that we are
obligated to make a prediction before determining whether a conflict exists on comparison of state
law. While we acknowledge the authority of state courts to predict the law of another jurisdiction
in appropriate situations, we decline to do so here. As our discussion below illustrates, many
federal and state courts resolve conflict-of-law issues involving uncertain law without prediction.
Infra, ¶¶ 27-28.
11
Minn. 1997) (explaining that where foreign law is uncertain, “there is a potential of actual conflict,

and [the court] must engage in a choice of law analysis.” (quotation omitted)). Likewise, the

Supreme Court of Connecticut explained that where one state lacked controlling appellate

precedent on an issue, “the trial court should have addressed the conflict of laws issue to determine

which state’s law to apply.” Dugan v. Mobile Med. Testing Servs., Inc., 830 A.2d 752, 758 (Conn.

2003).

¶ 28. Other states, however, require evidence of controlling precedent and require the

proponent of foreign law to affirmatively show that it differs from forum law. Under this approach,

unsettled law does not create an actual conflict. For example, Washington State requires the

proponent of foreign law to present “sufficient proof to establish with reasonable certainty the

substance of the foreign principles of law.” B.C. Ministry of Health v. Homewood, 970 P.2d 381,

384 (Wash. Ct. App. 1999) (quotation omitted). Absent foreign law established with reasonable

certainty, Washington courts apply forum law. Id. A federal district court in Washington applied

this standard to a similar choice-of-law dispute between Washington law, which applied the all-

sums allocation method, and British Columbia law, which was unsettled. Teck Metals, Ltd. v.

Certain Underwriters at Lloyds’, 735 F. Supp. 2d 1231, 1234 (E.D. Wash. 2010). The insurer

pointed to a decision of the British Columbia Court of Appeals that seemed to support pro-rata

allocation in one circumstance; the insured countered that the case was factually distinguishable

and the issue remained unsettled. The court concluded that the insurer failed to prove with

reasonable certainty that an actual conflict existed. Id. at 1239. Similarly, the Supreme Court of

Illinois has explained that the “mere possibility of a conflict of laws” does not create an actual

conflict and concluded that the “choice-of-law determination is required only when the moving

party has established an actual conflict between state laws.” Bridgeview Health Care Ctr., 2014

IL 116389, ¶ 25; see also Ferrell v. Allstate Ins. Co., 2008-NMSC-042, ¶¶ 1, 37, 188 P.2d 1156

(holding that, under New Mexico law, standard for determining actual conflict in context of class-

12
action certification is “more than a mere hypothetical conflict or uncertainty based on the lack of

foreign appellate precedent;” proponent must show that laws of relevant states “actually conflict

through clearly established, plainly contradictory law” such that “material conflict” exists).

¶ 29. Considering these competing approaches, we conclude that to demonstrate an

actual conflict with Vermont law, the proponent must present proof of precedential foreign law

that shows with reasonable certainty a plain and material conflict with forum law. This standard

aligns with our cases placing the burden of proof on the proponent of foreign law. See Lyons, 125

Vt. at 335, 215 A.2d at 515-16; Carden, 127 Vt. at 234, 245 A.2d at 894. A contrary holding would

essentially flip the burden; if the proponent could rely on uncertainty to show a potential conflict,

the standard would require the opponent of foreign law to disprove a hypothetical or potential

conflict. See Ferrell, 2008-NMSC-042, ¶¶ 35-36. As the Supreme Court of Illinois recognized,

“[t]here is always a ‘potential’ for differences to arise on state-law questions” and the “ ‘potential’

conflict standard would appear to create substantial uncertainty in deciding what law to apply.”

Bridgewater Health Care Ctr., 2014 IL 116389, ¶ 25.

III.

¶ 30. When applied to this case, Bestwall has not met its burden to show with reasonable

certainty that Georgia law conflicts with Vermont law. Unlike Lyons and Carden, this is not a

case where Bestwall has failed to argue that foreign law should apply or set forth its principles.

See Lyons, 125 Vt. at 335, 215 A.2d at 516 (applying Vermont law where plaintiff failed to plead

or prove foreign law); Carden, 127 Vt. at 234, 245 A.2d at 894 (same). By contrast, Bestwall has

set forth specific claims regarding Georgia law. Relying on this body of law, Bestwall argues that

the Supreme Court of Georgia will reject policy interpretations that result in the denial of coverage

unless expressly required by the policy language, and therefore all-sums allocation is closer to the

Georgia law it cites in this case.

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¶ 31. In support of its argument, Bestwall first contends that Georgia has a “public policy

of complete compensation” requiring that courts construe insurance policies in favor of coverage

unless the policy clearly dictates otherwise, citing Davis v. Kaiser Found. Health Plan of Ga., Inc.,

521 S.E.2d 815, 816 (Ga. 1999). However, the complete-compensation policy is not a broad

principle of insurance contract construction but instead involves subrogation or reimbursement,

issues that do not apply here. See Duncan v. Integon Gen. Ins. Corp., 482 S.E.2d 325, 326 (Ga.

1997). Bestwall also argues that Georgia courts read insurance policies “in accordance with the

reasonable expectations of the insured where possible,” Boardman Petroleum Inc. v. Federated

Mut. Ins. Co., 498 S.E.2d 492, 494 (Ga. 1998) (quotation omitted), and construe ambiguities

“strictly against the insurer/drafter and in favor of the insured,” Ga. Farm Bureau Mut. Ins. Co. v.

Smith, 784 S.E.2d 422, 425 (Ga. 2016). These general principles mirror the law in Vermont. See

Hardwick Recycling & Salvage, Inc. v. Acadia Ins. Co., 2004 VT 124, ¶ 23, 177 Vt. 421, 869 A.2d

82 (“[W]e construe insurance policies in favor of the insured, in accordance with the insured’s

reasonable expectations for coverage based on the policy language.”); N. Sec. Ins. Co. v. Doherty,

2009 VT 27, ¶ 8, 186 Vt. 598, 987 A.2d 253 (mem.) (noting that ambiguities are “construed in

favor of coverage” to protect insured).

¶ 32. Bestwall next turns to two decisions by the Georgia Court of Appeals, neither of

which squarely address loss allocation. First, Bestwall argues that the Georgia Court of Appeals

“criticized and rejected the pure time-on-risk approach” and “essentially employed” the all-sums

method in Columbia Casualty Co. v. Plantation Pipeline Co., 790 S.E.2d 645 (Ga. Ct. App. 2016).

Contrary to Bestwall’s characterization, the court did not essentially employ the all-sums method,

nor did it criticize or reject the pro-rata approach. The court concluded that the plain language of

the policy, which did not limit coverage to damage occurring during the policy period, obviated

the need to determine how to allocate loss between multiple insurers, and in its discussion of the

insurer’s argument, merely cited in a footnote a commentator who criticized the pro-rata approach.

14
Id. at 649 & n.9. Moreover, Ambassador’s policy is limited to damage occurring during the policy

period and is therefore distinguishable from the policy at issue in Columbia Casualty.4 Second,

Bestwall points to National Union Fire Insurance of Pittsburgh, PA v. Scapa Dryer Fabrics, Inc.,

819 S.E.2d 920 (Ga. Ct. App. 2018), a case involving ambiguity in a non-cumulation clause of an

insurance policy. While the court indicated in a footnote that the parties conceded that a

continuous trigger applied, the court did not discuss allocation of liability. Id. at 924 n.8.5

¶ 33. Finally, Bestwall points to ACE American Insurance, in which the Northern District

of Georgia applied all-sums allocation under Georgia law. 2017 WL 11629194. As discussed

above, this case does not establish Georgia law and further, its conclusion directly conflicts with

the conclusion of other trial courts which have addressed this question under Georgia law. Supra,

¶¶ 23-25

¶ 34. In sum, Bestwall points to general rules of Georgia insurance-policy interpretation

that are inapplicable or mirror the law in Vermont, two Georgia appellate cases that do not address

allocation (one of which is non-precedential), and a federal district court case that conflicts with

the reasoning of other trial court cases applying Georgia law. Without a precedential state decision

or other clearly established state law that expressly determines the proper method of loss allocation

under the same or even similar circumstances, Bestwall has not met its burden to show that Georgia

law plainly and materially conflicts with Vermont law. Because we conclude there is no actual

conflict, we need not conduct a choice-of-law analysis and affirm the trial court’s decision to apply

4
Aside from the merits, Columbia Casualty is not precedential. Under Georgia court rules,
one judge on the panel concurred in judgment only and therefore the opinion is “physical precedent
only,” meaning that it is “citable as persuasive, but not binding, authority.” Ga. Ct. App. R.
33.2(a)(2). The rule was amended to provide that, effective August 1, 2020, “a published opinion
in which a majority of the judges fully concur in the rationale and judgment of the decision is
binding precedent.” Ga. Ct. App. R. 33.2(a)(1).
5
The special master’s report concluded that Scapa “implicitly recognized” pro-rata
allocation as applicable. Because the Georgia Court of Appeals did not determine an allocation
method in this case, we cannot conclude that Scapa supports either method.
15
Vermont law to this matter. See Havill, 172 Vt. at 625, 783 A.2d at 427 (establishing that where

no conflict exists, forum law applies). The trial court properly granted summary judgment to

Ambassador on this basis.

IV.

¶ 35. Finally, to the extent that Bestwall argues that the Due Process Clause of the

Fourteenth Amendment to the U.S. Constitution prohibits application of Vermont law to this

dispute, we conclude this argument lacks merit. “[F]or a State’s substantive law to be selected in

a constitutionally permissible manner, that State must have a significant contact or significant

aggregation of contacts, creating state interests, such that its choice of law is neither arbitrary nor

fundamentally unfair.” Allstate Ins. Co. v. Hague, 449 U.S. 302, 312-13 (1981) (plurality opinion).

The contacts relevant to the due-process question may overlap with the factors considered in a

choice-of-law inquiry, but the analyses differ. Hague imposes a threshold inquiry to determine

whether it is constitutional to apply the forum state’s law, distinct from the choice-of-law inquiry

which requires a balancing of multiple states’ interests. See AT & T Mobility LLC v. AU

Optronics Corp., 707 F.3d 1106, 1113 (9th Cir. 2013) (differentiating between due-process

analysis and choice-of-law analysis). Further, Hague does not set a demanding threshold. The

U.S. Supreme Court has recognized that this test imposes only “modest restrictions on the

application of forum law.” Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 818 (1985); see also

Sullivan v. Oracle Corp., 662 F.3d 1265, 1271 (9th Cir. 2011) (“A state court is rarely forbidden

by the Constitution to apply its own state’s law.”).

¶ 36. In Hague, the Court upheld the application of Minnesota law to a dispute involving

insurance coverage under a policy purchased and delivered in Wisconsin for a car accident that

occurred in Wisconsin. The plurality reasoned that three contacts with Minnesota, unconnected to

the car accident, sufficed to apply forum law: the decedent commuted to and worked in Minnesota;

the insurance company did business in Minnesota; and the decedent’s wife, who brought the

16
lawsuit, became a Minnesota resident before filing suit. Hague, 449 U.S. at 313-320. The Court

distinguished these contacts from an insignificant or attenuated contact, such as nominal residence

in the forum state. Id. at 310-12.

¶ 37. Following this reasoning, we cannot agree that applying Vermont law to this

dispute violates Bestwall’s due-process rights. Ambassador was incorporated in Vermont and

maintained an office here, which the policy identified as Ambassador’s home office. Ambassador

has been in liquidation in Vermont for decades, under the supervision of the Vermont courts and

the Vermont Department of Financial Regulation. The order governing Ambassador’s liquidation

required Bestwall to pursue its claim in Vermont superior court. As the special master recognized,

Vermont has an interest “in regulating domestic insurers,” as well as carrying out the goal of the

liquidation order to evaluate claims in a manner that “assure[s] an equitable distribution of the

most funds possible for covered losses.” See also In re Liquidation of Integrity Ins. Co., 49 A.3d

428, 435 (N.J. Super. Ct. App. Div. 2012) (reasoning that insurer’s liquidation was relevant to

choice-of-law analysis as “the context in which the [coverage claim had] arisen” and concluding

that liquidation would “inform but not overwhelm [choice-of-law] analysis”).6 Accordingly,

Vermont has “a significant aggregation of contacts with the parties and the occurrence, creating

state interests, such that application of its law was neither arbitrary nor fundamentally unfair.”

Hague, 449 U.S. at 320.

Affirmed.

FOR THE COURT:

Chief Justice

6
Because we need not determine which state’s law applies under the Restatement, we do
not consider the extent to which an insurer’s liquidation weighs into that analysis.
17