Opinion
1:20-CV-02160-ELR
2021-08-12
Richard CURRIE, Plaintiff, v. AUTO-INSURANCE COMPANY, Defendant.
William Maxwell Compton, Morgan & Morgan, Savannah, GA, for Plaintiff. Christine H. L. Russell, Mark Thomas Dietrichs, Swift Currie McGhee and Hiers, LLP, Atlanta, GA, for Defendant.
William Maxwell Compton, Morgan & Morgan, Savannah, GA, for Plaintiff.
Christine H. L. Russell, Mark Thomas Dietrichs, Swift Currie McGhee and Hiers, LLP, Atlanta, GA, for Defendant.
ORDER
Eleanor L. Ross, United States District Judge
There are several matters pending before the Court. The Court sets out its rulings and conclusions below.
I. Background
All facts noted herein are undisputed unless otherwise indicated.
This case stems from a former homeowner's claim for insurance benefits related to the destruction of his personal property in a fire. See generally Compl. [Doc. 1-3]. On September 9, 2014, Plaintiff Richard Currie and his wife, Jill Currie, obtained homeowners insurance coverage (policy no. 49-682-838-01, or "the Policy") from Defendant Auto-Owners Insurance Company ("Auto-Owners") through the McGarity Insurance Agency for their home, located at 212 Timber Lane, Stockbridge, Georgia 30281 ("the Property"). See Defendant's "Statement of Material Undisputed Facts" ¶¶ 1–3 ("Def.’s SOMF") [Doc. 38-2]. From 2015 through 2019, Defendant renewed the Policy to the Curries, and Defendant's internal records show the renewed Policy information was mailed to the Property each year. See id. ¶¶ 4–5. At all relevant times, Wells Fargo was the mortgagee identified on the Policy, and Plaintiff and Jill Currie paid the Policy premiums as part of their mortgage payment. See id. ¶¶ 6–7.
In pertinent part, the Policy states:
SECTION I – PROPERTY PROTECTION
...
3. EXCLUSIONS
a. Coverage A – Dwelling, Coverage B – Other Structures and Coverage C – Personal Property
We do not cover loss to covered property caused directly or indirectly by any of the following, whether or not any other cause or event contributes concurrently or in any sequence to the loss:
...
(6) Failure of any insured to use all reasonable means to protect covered property at and after the time of loss or when the covered property is endangered.
...
6. CONDITIONS
a. INSURABLE INTEREST
Subject to the applicable limit of insurance, we will not pay more than the insurable interest the insured has in the covered property at the time of loss.
b. HOW LOSSES ARE SETTLED
Loss to covered property will be settled as follows:
...
(4) An insured may choose to ... accept an actual cash value settlement which will include a deduction for depreciation. If so, that insured shall have the right to make a further claim ... provided we are notified of the intent to repair or replace the damaged covered property within 180 days after the initial actual cash value payment. However, to receive additional payment you must:
(a) complete repair or replacement of the damaged covered property within two years after the date of loss[ ] ...
...
f. OUR PAYMENT OF LOSS
We will adjust any loss with you , and pay you .... We will pay within 60 days after we receive your proof of loss and all other requested documents and the amount of loss is finally determined by an agreement between you and us , a court judgment or an appraisal award.
g. SUIT AGAINST US
We may not be sued unless there is full compliance with all the terms of this policy. Suit must be brought within two years after the loss or damage occurs.
...
WHAT TO DO IN CASE OF LOSS
1. PROPERTY
If a covered loss occurs, the insured must:
a. give us or our agency immediate notice ...
b. protect the property from further damage or loss ... and keep records of the cost.
c. make an inventory of all damaged and destroyed property; show in detail quantities, costs, actual cash value and amount of loss claimed; attach to the inventory all available bills, receipts and related documents that substantiate the figures in the inventory.
d. send to us , within 60 days after you notify us or our agency of the loss, a proof of loss signed and sworn to by the insured , including:
(1) the time and cause of loss;
(2) the interest of insureds and all others in the property;
(3) actual cash value and amount of loss to the property;
...
(6) changes in the title, use, occupancy or possession of the property;
...
See id. ¶ 9; [see also Doc. 7 at 42–55].
In 2017, a tree fell on the deck and above-ground pool located on the Property. See Def.’s SOMF ¶ 11. Thus, on June 20, 2017, Plaintiff filed a property damage claim with Defendant pursuant to the Policy for the damage caused by the tree. See id. On June 21, 2017, Auto-Owners’ claim representative Myles Liggin spoke with Plaintiff over the phone about the claim, and on June 27, 2017, Liggin inspected the Property while Plaintiff was present. See id. ¶¶ 13–14. Additionally, Plaintiff used the email address raintreetv@bellsouth.net to send two (2) emails (dated July 11, 2017 and July 19, 2017) to Liggin about his claim. See id. ¶¶ 20–22; [see also Doc. 30-4 at 22, 24]. As a result of this claim, Defendant issued three (3) checks payable to Plaintiff and Jill Currie: (1) a check for $1,950.00, dated June 30, 2017; (2) a check for $3,226.77, dated July 12, 2017; and (3) a check for $4,723.50, dated July 21, 2017. See Def.’s SOMF ¶¶ 15, 23, 28. However, Jill Currie had no knowledge that Plaintiff submitted a claim in 2017 because earlier that year, on March 9, 2017, Jill Currie separated from Plaintiff and she moved away from the Property. See id. ¶¶ 10, 33.
Plaintiff admits he filed a property damage claim and received these three (3) checks, but claims he thought the checks came from "American Family Insurance" (a different insurance company) and not Auto-Owners. See Dep. of Richard Currie 74:2–77:14 ("Currie Dep.") [Doc. 39-1].
On August 9, 2018, Defendant renewed the Policy for the September 15, 2018 to September 14, 2019 term, and Defendant's internal records show that the Policy renewal was mailed to Plaintiff's address. See id. ¶ 39. However, on October 2, 2018, the Property was foreclosed upon and Plaintiff lost his ownership interest in the Property. See id. ¶ 40. Following the foreclosure, Plaintiff continued to reside at the Property. See Pl.’s Resp. to Def.’s Statement of Material Facts ¶ 41 ("Pl.’s Resp. to Def.’s SOMF") [Doc. 45-1]. During this time, on October 18, 2018, Plaintiff and Jill Currie's divorce was finalized. See Def.’s SOMF ¶ 44.
On November 20, 2018, a fire occurred at the Property. See id. ¶ 45. The extent of the fire was such that Plaintiff had to cease residing at the Property. See id. ¶¶ 41, 54, 62. Captain Dale Hutchinson of the Henry County Fire Department "classified the cause [of the fire] as undetermined and was unable to rule out human action or misuse of electrical appliances." See id. ¶ 49 (internal quotation marks omitted). Additionally, the Henry County Fire Department created an Investigative Fire Report (or the "Fire Report") which documented their findings of the incident. [See Doc. 35-1]. In a section titled "Estimated Dollar Losses and Values," the Fire Report estimated the total value of the personal property lost in the fire to be $5,000.00. [See id. at 5]. As noted above, at the time of the fire, the Property was insured by the Policy. See Def.’s SOMF ¶ 47.
After the fire, Plaintiff returned to the Property to recover two (2) deer heads but did not recover any other personal property. See id. ¶ 54. Plaintiff also did not cover the Property with any tarp, did not hire anyone to cover the Property with any tarp, did not remove any other items from the Property or place them in storage, and did not hire anyone to clean or remove any of his remaining personal property he left there. See id. ¶ 56.
Plaintiff states there is a genuine dispute of material fact as to whether any of his personal property could have been preserved or salvaged after the fire. See Pl.’s Resp. to Def.’s SOMF ¶ 56.
Subsequently, Plaintiff contacted Wells Fargo to inquire about the status of insurance coverage on the Property at the time of the fire. See Pl.’s SOMF ¶ 5. However, Plaintiff states the Wells Fargo representative erroneously told him that there was no insurance coverage for the Property in effect at the time of the fire. See id. ¶ 6; [see also Doc. 44 ¶¶ 4–5]. Additionally, Plaintiff contends that although he had successfully filed an insurance claim with Defendant Auto-Owners in 2017 regarding the fallen tree, he "was in such a distraught state of mind following the [f]ire that he could not recall the name of the insurance company with whom he had [previously] filed a claim" (a fact which Defendant disputes). See Pl.’s SOMF ¶ 9; see also Def.’s Response to Pl.’s Statement of Material Facts. ¶ 9 ("Def.’s Resp. to Pl.’s SOMF") [Doc. 47]. Further, Plaintiff alleges that at the time of the fire, he was experiencing substance abuse issues which affected his memory (a contention Defendant also disputes). See Pl.’s SOMF ¶ 10; see also Def.’s Resp. to Pl.’s SOMF ¶ 10.
Plaintiff does not provide the exact date or how closely this conversation occurred to the date of the fire. See Pl.’s SOMF ¶ 5. Defendant does not dispute that Plaintiff claims to have contacted Wells Fargo after the fire, but argues any subsequent statements that Plaintiff claims the Wells Fargo representative told him lack proper foundation and constitute inadmissible hearsay. [See Doc. 46 at 4–8].
Defendant disputes this allegation and claims any mention of Plaintiff's conversation with the unnamed Wells Fargo representative is inadmissible hearsay. [See Docs. 46, 52].
On September 26, 2019, Defendant issued a cancellation notice on the Policy and mailed it to the Property. See Def.’s SOMF ¶ 61. Plaintiff received the cancellation notice after it was forwarded to his new address. See id. ¶ 62. According to Plaintiff, he only became aware that there might have been insurance coverage on the Property at the time of the fire when he received the cancellation notice (which Defendant disputes). See Pl.’s SOMF ¶¶ 7, 14; see also Def.’s Resp. to Pl.’s SOMF ¶ 7.
On October 10, 2019, Plaintiff called McGarity Insurance Agency (or "the agency") to submit a claim to Auto-Owners. See Def.’s SOMF ¶ 63. During that phone call, Plaintiff told the agency that he "waited so long to call due to not hearing back from the fire department." See id. ¶ 64. Ultimately, Plaintiff filed an insurance claim with Defendant on October 15, 2019 (hereinafter, the "Claim"), eleven (11) months after the fire occurred. See id. ¶ 65. In the Claim, Plaintiff informed Defendant he was only seeking payment for his personal property damages which resulted from the fire. See id. ¶ 66. In response, Defendant sent a request for proof of loss and a reservation of rights letter to Plaintiff. See id. ¶ 76.
Thereafter, Defendant assigned Spencer Scruggs as its internal adjuster for the Claim. See Pl.’s SOMF ¶ 15. As part of the claim adjustment process, Defendant also retained Independent Adjustor Ray Payne to conduct a site visit of the Property and take photos. See Def.’s Resp to Pl.’s SOMF ¶ 19. Additionally, Defendant hired Fire Investigator David Adams to ascertain the origin and cause of the fire. See Def.’s SOMF ¶ 68. During his investigation, Adams spoke with Captain Hutchinson of the of the Henry County Fire Department, reached out to Wells Fargo (as the mortgagee for the Property) and Bill Dodd (the fire investigator hired by Wells Fargo), and attempted to interview various witnesses. See Def.’s Resp. to Pl.’s SOMF ¶¶ 21–24. Ultimately, Adams was unable to ascertain the cause of the fire "due to the extent of the fire damage, the time that had passed, the fact that the Property had been left unsecure for nearly a year, and the secured Property's undocumented changes over an eleventh month period, including potential theft." See Def.’s SOMF ¶ 70 (internal citations omitted).
After conducting its investigation, on November 25, 2019, Defendant informed Plaintiff via letter that the Claim was denied because of his failure to comply with the "immediate notice" provision in the Policy (or the "notice provision"), among other reasons. See id. ¶ 71. Thereafter, on February 14, 2020, Plaintiff sent a demand letter to Defendant threating to file suit and seek bad faith penalties pursuant to O.C.G.A. § 33-4-6 if Defendant failed to pay the Claim pursuant to the terms of the Policy. See id. ¶ 72. Plaintiff submitted a proof of loss that sought $140,700.00 (the Policy's personal property coverage limit) based on an inventory prepared by public adjuster Murdock & McLaughlin Advisory Group, LLC. See id. ¶¶ 74, 87. On February 28, 2020, Defendant mailed a response letter to Plaintiff, whereby it stood by its prior position and refused to pay the Claim. See id. ¶ 75. After multiple back-and-forth communications with no resolution, Plaintiff initiated this case. See id. ¶¶ 75–77, 89.
II. Procedural History
On April 15, 2020, Plaintiff filed his Complaint in the State Court of Henry County, Georgia, bringing three (3) claims: Count I—Breach of Contract; Count II—Bad Faith (pursuant to O.C.G.A. § 33-4-6 ); and Count III—Recovery of Interest Upon Damages (pursuant to O.C.G.A. § 13-6-13 ). See generally Compl. Thereafter, on May 20, 2020, Defendant timely removed the action to this Court. See Notice of Removal [Doc. 1]. On February 18, 2021, Defendant filed its "Motion for Summary Judgment." [See Doc. 38]. Additionally, on March 25, 2021, Defendant filed its "Motion to Strike Plaintiff's Affidavit," (hereinafter, "Notice of Objection") requesting the Court strike certain statements in the Affidavit that Plaintiff filed in conjunction with his response to Defendant's motion for summary judgment. [See Docs. 46, 49]. Having been fully briefed, these matters are now ripe for the Court's review.
As a preliminary matter, the Court begins by addressing Defendant's Notice of Objection to Plaintiff's Affidavit. [See Docs. 46, 49, 52]. By its Notice of Objection, Defendant moves to strike paragraphs 3, 4, 5, 6, 7, 8, 9, and 10 of Plaintiff's Affidavit [Doc. 44] submitted with his response in opposition to Defendant's motion for summary judgment. [See Doc. 46]. According to Defendant, these paragraphs in Plaintiff's Affidavit are improper because they (1) constitute inadmissible hearsay, (2) set forth improper legal conclusions, or (3) contradict Plaintiff's prior testimony. [See Doc. 49 at 4–11]. Further, Defendant accuses Plaintiff of attempting to use his Affidavit to "create a last-minute dispute of fact[.]" [See Doc. 52 at 2]. Plaintiff opposes Defendant's Notice of Objection and disputes Defendant's characterizations of his Affidavit. [See Doc. 48]. Upon review, the Court finds that the statements contained in Plaintiff's Affidavit do not alter the Court's analysis in determining summary judgment. Accordingly, the Court denies Defendant's Notice of Objection. [Docs. 46, 49].
III. Legal Standard
The Court first sets out the relevant legal standard. The Court may grant summary judgment only if the record shows "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." See FED. R. CIV. P. 56(a). A factual dispute is genuine if there is sufficient evidence for a reasonable jury to return a verdict in favor of the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A factual dispute is material if resolving the factual issue might change the suit's outcome under the governing law. See id. The motion should be granted only if no rational fact finder could return a verdict in favor of the non-moving party. See id. at 249, 106 S.Ct. 2505.
When ruling on the motion, the Court must view all the evidence in the record in the light most favorable to the non-moving party and resolve all factual disputes in the non-moving party's favor. See Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000). The moving party need not positively disprove the opponent's case; rather, the moving party must establish the lack of evidentiary support for the non-moving party's position. See Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the moving party meets this initial burden, in order to survive summary judgment, the non-moving party must then present competent evidence beyond the pleadings to show that there is a genuine issue for trial. See id. at 324–26, 106 S.Ct. 2548. The essential question is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." See Anderson, 477 U.S. at 251–52, 106 S.Ct. 2505.
IV. Discussion
Having laid out the relevant legal standard, the Court now turns to Defendant's motion for summary judgment. By its motion, Defendant contends it is entitled to summary judgment for three (3) reasons. First, Defendant claims it is entitled to summary judgment for Plaintiff's Count I (Breach of Contract) because Plaintiff violated the Policy's condition precedent to provide "immediate notice" of claims or losses, without sufficient legal justification for his delay. [See Doc. 38-1 at 13–15]. Next, with respect to Count II (Bad Faith), Defendant asserts that Plaintiff's bad faith claim fails as a matter of law because Defendant had a reasonable, non-frivolous reason for rejecting Plaintiff's Claim. [See id. at 22–24]. Lastly, Defendant argues summary judgment is warranted on Plaintiff's Count III (Recovery of Interest Upon Damages) because Plaintiff fails to provide sufficient evidence to prove his damages. [See id. at 21–22]. The Court addresses each argument in turn.
A. Count I—Breach of Contract
The Court first examines whether summary judgment in favor of Defendant is proper on Plaintiff's Count I—Breach of Contract. As noted above, Defendant argues that summary judgment is proper on Count I because Plaintiff breached a condition precedent to coverage as a matter of law by failing to provide immediate notice of the Claim pursuant to the notice provision of the Policy. [See id. at 13].
As relevant here, pursuant to Georgia law, "notice provisions expressly made [as] conditions precedent to coverage are valid and must be complied with unless there is a showing of justification." See OneBeacon Am. Ins. Co. v. Catholic Diocese of Savannah, 477 F. App'x 665, 670 (11th Cir. 2012). In other words, "when an insurance policy includes a notice requirement as a condition precedent to coverage, and when the insured unreasonably fails to timely comply with the notice requirement, the insurer is not obligated to provide a defense or coverage." See Forshee v. Emp'rs Mut. Cas. Co., 309 Ga.App. 621, 711 S.E.2d 28, 31 (2011) (internal citation omitted). "Issues about the adequacy of notice or the merit of an insured's alleged justification are generally ones of fact, but in [ ] particular case[s] a court may rule on them as a matter of law." Catholic Diocese of Savannah, 477 F. App'x at 671. "The insured has the burden of showing justification for a delay in providing notice." Id. at 670.
Accordingly, to determine whether Defendant is entitled to summary judgment on Count I, the Court must determine (1) if the Policy's notice requirement was a condition precedent; (2) if so, whether Plaintiff complied with the notice requirement; and (3) if not, whether Plaintiff's noncompliance was justified. See id. The Court addresses these questions in turn.
1. Condition precedent
The Court begins by determining whether the Policy's notice requirement was a condition precedent. The Policy at issue includes the following notice requirement: "[i]f a covered loss occurs, the insured must ... give us or our agency immediate notice[.]" See Def.’s SOMF ¶ 9; [see also Doc. 7 at 54]. Upon review, this requirement acts as a condition precedent to coverage because it appears under the heading "WHAT TO DO IN CASE OF LOSS ." See Def.’s SOMF ¶ 9; see also State Farm Fire & Cas. Co. v. LeBlanc, 494 F. App'x 17, 21 (11th Cir. 2012) ("the notice provisions appear under sections entitled, ‘General Conditions,’ and a subsection entitled, ‘Duties in the Event of ... Claim or Suit.’ This language clearly expresses the intention that the notice provisions be treated as conditions precedent to coverage"). Thus, having determined the notice requirement is a condition precedent, the Court proceeds to the second inquiry.
2. Compliance with notice requirement
Because the notice provision in the Policy is a condition precedent, to avoid summary judgment, Plaintiff must "show that he complied with the notice provision or demonstrate justification for failing to do so." See Progressive Mt. Ins. Co. v. Bishop, 338 Ga.App. 115, 790 S.E.2d 91, 95 (2016). Here, Plaintiff does not dispute that he filed his Claim approximately eleven (11) months after the fire occurred; however, Plaintiff maintains that his "delay in reporting the Claim was not unreasonable as a matter of law." [See Doc. 45 at 10]. Specifically, Plaintiff maintains his delay in submitting the Claim to Defendant was justified because he was unsure about whether he had any insurance coverage for the Property following foreclosure, and he "was in such a distraught state of mind following the [f]ire that he could not recall the name of the insurance company[.]" [See id. at 4]. Accordingly, the Court proceeds to examine whether Plaintiff "demonstrate[s] justification for failing to" provide Defendant with notice of the damage to the Property prior to filing his Claim on October 15, 2019. See Bishop, 790 S.E.2d at 95.
3. Justification
Here, Plaintiff insists that "[c]ontrary to Defendant's contention, Plaintiff's delay in reporting the Claim was not unreasonable as a matter of law." [See Doc. 45 at 10]. Specifically, Plaintiff contends that his eleven (11)-month delay in reporting his Claim was justified for three (3) reasons. First, he claims that it was reasonable for him to believe that there was no insurance on his Property because an unnamed Wells Fargo representative told him so. [See id. at 13–15]. Second, Plaintiff asserts that he "was in such a distraught state of mind following the [f]ire that he could not recall the name of the insurance company[.]" [See id. at 4]. He further maintains that because he lost all his documents in the fire, he could not ascertain the identity of his insurance company or insurance agency. [See id. at 15].
To support his argument that an eleven (11) month delay was not unreasonable as a matter of law, Plaintiff primarily relies on the Eleventh Circuit's opinion in Grand Reserve of Columbus, LLC v. Prop.-Owners Ins. Co., 721 F. App'x 886 (11th Cir. 2018). [See id. at 10–13]. However, the Court finds that the facts in Grand Reserve are distinguishable from the case at hand. In Grand Reserve, the insured plaintiff submitted a claim to the defendant insurance company ten (10) months after a wind and hailstorm caused damage to its roof. See 721 F. App'x at 889. Importantly, the insured in Grand Reserve did not become aware of the need for repairs to the roof for which it sought insurance coverage until "months after the storm" that caused the damage. See id. at 889–90. Citing to Bishop, 790 S.E.2d at 94, the Eleventh Circuit explained that, in light of the facts presented by the record, "the question of whether the ten-month delay was reasonable was one for the jury to decide." See Grand Reserve, 721 F. App'x at 890. However, in this case, Plaintiff learned about the damage caused by the fire on the same day the fire occurred. See Currie Dep. at 103:19–20. Thus, unlike the plaintiff in Grand Reserve, Plaintiff was on immediate notice of the damage to his Property, rather than only becoming aware of the need for repairs months later, and the Court finds his reliance on Grand Reserve misplaced. See Grand Reserve, 721 F. App'x at 889–90.
Finally, Plaintiff contends that "the totality of the circumstances existing after the [f]ire reasonably justify [his] inability to report the Claim[.]" [See id. ] For example, Plaintiff claims his then-recent divorce and estrangement from his children impacted his mental health. [See id. at 16]. He further contends that "he was also dealing with substance abuse issues which affected his memory." [See id. ] Given these circumstances, Plaintiff contends that genuine issues of material fact exist as to the reasonableness of his actions, and thus, the Court should deny Defendant's motion for summary judgment. [See id. ]
The Court disagrees. Although Plaintiff had immediate knowledge of the damage to the Property and his personal property contained therein on the date of the fire, he waited eleven (11) months to file his Claim. See Def.’s SOMF ¶ 65. Several courts applying Georgia law have repeatedly held that similar (and even shorter) delays were unreasonable as a matter of law. See e.g., Cureton v. State Farm Fire & Cas. Co., 994 F. Supp. 2d 1336, 1339 (M.D. Ga. 2014) (finding a six (6)-month delay in giving notice unreasonable as a matter of law); Auto Owners Ins. Co. v. Sapp, 1:15-CV-90 (LJA), 2017 WL 957361, at *2, *4 (M.D. Ga. Mar. 10, 2017) (finding a four (4)-month delay in giving notice to insurance company of a claim was unreasonable as a matter of law in the absence of a valid justification); Advoc. Networks, LLC v. Hartford Fire Ins. Co., 296 Ga.App. 338, 674 S.E.2d 617, 619 (2009) (finding a four (4)-month delay in notice to an insurance company was unreasonable as a matter of law and insured failed to provide a reasonable explanation for the delay).
Thus, Plaintiff's delay in submitting his Claim is unreasonable unless he provides sufficient justification for his delay. See Forshee, 711 S.E.2d at 31. For the reasons stated below, the Court finds that pursuant to Georgia law, Plaintiff's proffered reasons do not justify his delay in waiting eleven (11) months after the fire damaged the Property to file his Claim. The Court addresses each of Plaintiff's justifications in turn.
First, Plaintiff's reliance on the Wells Fargo representative's representations do not justify his delay. Plaintiff claims that shortly after the fire, he called Wells Fargo to determine the status of homeowners insurance coverage for the Property. [See Doc. 44 ¶ 4]. Plaintiff was apparently told by the Wells Fargo representative that there was no insurance coverage on the Property. [See id. ¶ 5]. Accordingly, Plaintiff claims that his eleven (11) month delay was justified because he was misinformed about the existence of coverage, and "[i]t was reasonable for [him] to believe what Wells Fargo told him[.]" [See Doc. 45 at 14]. To support this contention, Plaintiff relies on Lathem v. Sentry Ins., 845 F.2d 914 (11th Cir. 1988). [See id. at 12]. However, the Court finds Plaintiff's reliance on Lathem to be misguided. In Lathem, the insured's son waited six (6) years before submitting a claim after his father's insurance agent told his father that there was no coverage for the injuries his son sustained in a car accident. See 845 F.2d at 918. Based on this conversation and because the son diligently pursued his claims, the Eleventh Circuit found the reasonableness of the delay was a question of fact for the jury to decide. See id.
Here, unlike in Lathem, Plaintiff's conversation was not with a representative of his insurance company (Defendant Auto-Owner), but with a Wells Fargo representative, who was not an agent of his insurer. [See Doc. 44 ¶ 4]; see also Lathem, 845 F.2d at 918. "The law requires more than just ignorance, or even misplaced confidence, to avoid the terms of a valid contract." See Protective Ins. Co. v. Johnson, 256 Ga. 713, 352 S.E.2d 760, 761 (1987) ; see also N. River Ins. Co. v. Gibson Tech. Servs., Inc., 116 F. Supp. 3d 1370, 1378 (N.D. Ga. 2014) ("ignorance is no defense"). Specifically, Georgia law requires the insured to exercise "reasonable diligence." See Bramley v. Nationwide Affinity Ins. Co. of Am., 345 Ga.App. 624, 814 S.E.2d 770, 773–74 (2018) ("The term immediately in an insurance policy has been construed in many cases to mean with reasonable diligence and within a reasonable length of time in view of attending circumstances of each particular case.") (internal citation and quotation marks omitted).
Here, aside from that one (1) phone call with an un-identified Wells Fargo representative, there is no evidence in the record that Plaintiff took any other actions to ascertain the identity of his insurer or the status of the Property's insurance coverage. See generally Def.’s SOMF; see also Pl.’s SOMF. The Court finds this lack of diligence particularly troubling because the Policy at issue had been renewed multiple times and Plaintiff had previously submitted a claim to Defendant in 2017, the year before the fire at issue. See Martin v. Chasteen, 354 Ga.App. 518, 841 S.E.2d 157, 160 (2020) ("Insured persons under an insurance policy are presumed to know its conditions if they intend to rely upon its benefits, or else they must find out those conditions. That is particularly true when, as in this case, the policy in issue is a renewal policy. ") (emphasis added). Accordingly, the Court finds that as a matter of law, Plaintiff's first reason does not justify his delay in filing the Claim.
Second, pursuant to Georgia law, Plaintiff's assertions that he "forgot" his insurer's identity and did not have physical possession of his Policy due to the fire do not justify his delay. In fact, Georgia law clearly requires that "an insured without a copy of the policy must make an effort to ascertain the policy's terms." See Wells Fargo Home Mortg., Inc. v. Allstate Ins. Co., 199 F. App'x 912, 915 (11th Cir. 2006). Accordingly, an insured's "failure to ascertain the policy's terms bars recovery[.]" See Martin, 841 S.E.2d at 160 ; see also Lankford v. State Farm Mut. Auto. Ins. Co., 307 Ga.App. 12, 703 S.E.2d 436, 440 (2010) ("ignorance of [an insured's] right to submit a claim under the policy [does] not provide an excuse for the delay"). Thus, the Court finds that this second reason does not justify Plaintiff's delay pursuant to Georgia law. Finally, Plaintiff offers a "totality of the circumstances" argument to justify his delay. Specifically, Plaintiff contends his delay was justified in part because he was "dealing with" the effects of his divorce, the aftermath of a foreclosure, and struggling with substances abuse issues. [See Doc. 45 at 15–16]. Although the Court is sympathetic to the challenges Plaintiff was facing during the time period at issue, he fails to cite (nor does the Court locate) any binding precedent to support an argument that such circumstances justify his delay. [See id. ]
In addition, Plaintiff relies on Standard Guar. Ins. Co. v. Carswell, 192 Ga.App. 103, 384 S.E.2d 213 (1989), and Newberry v. Cotton States Mut. Ins. Co., 242 Ga.App. 784, 531 S.E.2d 362 (2000), to support his contention that his lack of knowledge about the existence of his insurance coverage presents a question of fact for the jury to decide. [See Doc. 46 at 12–13]. However, the Court disagrees. In Carswell, the insured did not lack knowledge about the existence of coverage, but rather lacked knowledge as to whether a covered accident or loss occurred. See Carswell, 384 S.E.2d at 215. Similarly, in Newberry, the insured did not lack knowledge about the existence of his insurance coverage but about whether a certain loss was covered by his insurance plan. See Newberry, 531 S.E.2d at 363–64. Here, unlike the insureds in Carswell and Newberry —who both lacked knowledge of the loss triggering their duties to provide notice of their claims—Plaintiff had actual knowledge of the loss (the fire), which triggered his duty to provide notice. See Currie Dep. at 103:19–20. Thus, the Court finds both cases are also distinguishable from the matter at hand.
For the reasons explained above, Plaintiff does not offer sufficient justification for his delay. Pursuant to Georgia law, "[w]here an insured has not demonstrated justification for failure to give notice according to the terms of the policy, then the insurer is not obligated to provide either a defense or coverage." See Hyde v. State Farm Mut. Auto. Ins. Co., 356 Ga.App. 533, 848 S.E.2d 145, 148 (2020) (internal citation omitted). Accordingly, the Court finds that summary judgment in favor of Defendant is appropriate and grants Defendant's motion with respect to Count I.
Because Plaintiff failed to comply with the notice conditions of the Policy, no coverage exists for the Claim. See Hyde, 848 S.E.2d at 148. Thus, the Court need not address the Parties’ arguments regarding whether Plaintiff has sufficiently proven his personal property damages. [See Docs. 38-1 at 21–22; 45 at 17–18].
B. Count II—Bad Faith ( O.C.G.A. § 33-4-6 )
Next, the Court turns to address Plaintiff's Count II–Bad Faith (pursuant to O.C.G.A. § 33-4-6 ). By this claim, Plaintiff asserts that Defendant "unreasonably and frivolously refused to provide payment to the Plaintiff for the damage to his personal property caused by the Loss as required by the Policy." See Compl. ¶ 25. Plaintiff also contends that Defendant failed to properly or fully investigate the Claim, and thus, he is entitled to bad-faith damages pursuant to O.C.G.A. § 33-4-6. [See Doc. 45 at 21–24]. However, Defendant argues because its denial of Plaintiff's Claim was neither frivolous nor unfounded, it is entitled to summary judgment. [See Doc. 38-1 at 22–24]. Upon review, the Court agrees with Defendant and finds that summary judgment on this claim is warranted.
To prevail on a claim for an insurer's bad faith under OCGA § 33-4-6, the insured must prove: (1) that the claim is covered under the policy, (2) that a demand for payment was made against the insurer within 60 days prior to filing suit, and (3) that the insurer's failure to pay was motivated by bad faith.
BayRock Mortg. Corp. v. Chi. Title Ins. Co., 286 Ga.App. 18, 648 S.E.2d 433, 435 (2007). "Bad faith ... means any frivolous and unfounded refusal in law or in fact to comply with the demand of the policyholder to pay according to the terms of the policy." Progressive Cas. Ins. Co. v. Avery, 165 Ga.App. 703, 302 S.E.2d 605, 606 (1983) (internal quotation marks and citation omitted).
"[W]hen there is no evidence of unfounded reason for the nonpayment, or if the issue of liability is close, the court should disallow imposition of bad faith penalties." King v. Atlanta Cas. Ins. Co., 279 Ga.App. 554, 631 S.E.2d 786, 788 (2006). Put differently, "where the insurer is justified in litigating the issue it cannot, as a matter of law, be liable for the statutory penalty for bad faith[.]" See Ware v. Nationwide Mut. Ins. Co., 140 Ga.App. 660, 231 S.E.2d 556, 558 (1976) ; see also Trias v. State Farm Fire & Cas. Co., No. 1:18-CV-00986, 2020 WL 3399915, at *12 (N.D. Ga. Mar. 16, 2020) ("But penalties for bad faith and attorneys’ fees are not authorized where the insurer had any reasonable ground to contest the claim.").
Here, the evidence shows Defendant had reasonable, nonfrivolous grounds to deny Plaintiff's insurance Claim. Plaintiff submitted his Claim eleven (11) months after the fire and argues his delay was based on his lack of knowledge about the identity of the insurer, even though he had a had submitted a different insurance claim with Defendant in 2017. See Def.’s SOMF ¶¶ 11, 65. Additionally, Defendant had mailed renewal notices to the Property for years, from 2015 through 2019. See id. ¶¶ 4–5. Thus, on November 25, 2019, Defendant sent Plaintiff a letter, informing him the Claim was denied for his failure to comply with the "immediate notice" provision in the Policy. See id. ¶¶ 9, 68–71; [see also Doc. 42-2 at 50]. Based on this undisputed evidence, the Court finds that Defendant's reason for its denial was nonfrivolous.
In response, Plaintiff argues that Defendant's investigation of his claim was so deficient as to preclude summary judgment because "the sole purpose of Defendant's investigation was to procure information to support a denial of the Claim on late notice grounds." [See Doc. 45 at 22–23]. The Court disagrees. Here, Defendant conducted a thorough investigation of the fire by retaining the services of Fire Investigator Adams and Independent Adjuster Ray Payne. See Def.’s SOMF ¶¶ 68–70; Def.’s Resp to Pl.’s SOMF ¶¶ 17–24. Adams personally contacted the Henry County Fire Department as a part of his investigation and spoke with Captain Hutchinson about the fire. See Def.’s SOMF ¶¶ 68–69. He also reached out to Wells Fargo (the mortgagee for the Property), Bill Dodd (the fire investigator hired by the mortgage company), and attempted to interview various witnesses. See Def.’s Resp. to Pl.’s SOMF ¶¶ 21–24. Finally, after Plaintiff notified Defendant of the Claim, Payne conducted a site visit of the Property and took photos. See id. ¶ 19. The examinations conducted by Adams and Payne show that Defendant's investigation of the Claim was not deficient, and thus, Plaintiff's second argument in support of his claim for bad faith also fails. Accordingly, the Court grants Defendant's motion for summary judgment with respect to Count II.
C. Count III—Recovery of Interest Upon Damages ( O.C.G.A. § 13-6-13 )
Finally, the Court addresses Plaintiff's Count III—Recovery of Interest Upon Damages. In its entirety, O.C.G.A. § 13-6-13 states: "In all cases where an amount ascertained would be the damages at the time of the breach, it may be increased by the addition of legal interest from that time until the recovery." This code section applies to unliquidated damages in breach of contract actions. See Copeland v. Home Grown Music, Inc., 358 Ga.App. 743, 856 S.E.2d 325, 334 (2021). Because the Court finds that summary judgment in favor of Defendant is proper for Count I (Breach of Contract), Plaintiff's Count III also fails. See Elliott v. Specialized Loan Servicing, LLC, No. 1:16-CV-4804-TWT-JKL, 2019 WL 1198760, at *22 n.42 (N.D. Ga. Jan. 30, 2019) (finding that because summary judgment on plaintiff's breach of contract claim was granted, her claim for O.C.G.A § 13-6-13 failed). Thus, the Court grants Defendant's motion for summary judgment on Count III.
V. Conclusion
For the reasons stated above, the Court GRANTS Defendant's "Motion for Summary Judgment" [Doc. 38] and DENIES Defendant's "Motion to Strike Plaintiff's Affidavit." [Docs. 46, 49].
SO ORDERED , this 12th day of August, 2021.