Summary
reversing imposition of bad faith penalty and attorney's fees even though insurer made substantially lower offer, based on repair estimate, than that demanded by insured and awarded by jury
Summary of this case from Winningham v. Centennial Ins. Co.Opinion
41838.
ARGUED MARCH 9, 1966.
DECIDED APRIL 5, 1966.
Action on insurance policy. Chattooga Superior Court. Before Judge Coker.
Fullbright Duffey, Harl C. Duffey, Jr., for appellant.
Archibald A. Farrar, for appellee.
1. Where the verdict in a suit on an insurance policy is for substantially less than the amount claimed in the proof of loss and less than the amount demanded in the petition, no recovery for damages and attorney's fees is authorized. Southern Mut. Ins. Co. v. Turnley, 100 Ga. 296 ( 27 S.E. 975); Love v. National Liberty Ins. Co., 157 Ga. 259, 271 ( 121 S.E. 648); Queen Ins. Co. v. Peters, 10 Ga. App. 289 (4) ( 73 S.E. 536); Atlanta Life Ins. Co. v. Jackson, 34 Ga. App. 555 (6) ( 130 S.E. 378); Twin City Fire Ins. Co. v. Wright, 46 Ga. App. 537, 548 ( 167 S.E. 891); Firemen's Ins. Co. v. Larsen, 52 Ga. App. 140, 142 ( 182 S.E. 677); Simonton Constr. Co. v. Pope, 95 Ga. App. 211, 217 ( 97 S.E.2d 590); reversed on other grounds in 213 Ga. 360 ( 99 S.E.2d 216); Crump v. Ojay Spread Co., 87 Ga. App. 250, 252 ( 73 S.E.2d 331); Royal Ins. Co. v. Cohen, 105 Ga. App. 746 (3) ( 125 S.E.2d 709). Under these decisions the verdict is substantially less where the proof of loss was for $2,350, suit was brought to recover $1,400 and the verdict returned was for $1,000. Cf. First Nat. Ins. Co. of America v. Thain, 110 Ga. App. 603 ( 139 S.E.2d 447).
2. Where, after unsuccessful negotiations to settle the claim the insurer requested the insured to appoint an appraiser and before any appraiser was appointed learned from the insured that he had disposed of the car, but the insured declined to inform the insurer as to whom he had sold the car or where it might be found for the purpose of having an appraisal made, the insurer was under no duty to proceed further with the proposed appraisal. This is particularly true where, upon discovering the location of the car it appeared that repairs had already been made and it was not in the same condition so that appraisers might make an intelligent appraisal of the loss, for the law does not require the doing of a vain or useless thing. Irvin v. Locke, 200 Ga. 675, 679 ( 38 S.E.2d 289); Johnson v. State, 215 Ga. 839 (5) ( 114 S.E.2d 35). Moreover, the question of bad faith or of good faith must be determined upon the case as made at the trial. Interstate Life Acc. Ins. Co. v. Williamson, 220 Ga. 323 ( 138 S.E.2d 668).
3. Where the insurer disagreed with the insured as to the amount of his damage, offering to pay a sum which, in the light of the facts available to it and of proposals from reputable people engaged in the repairing of automobiles, it deemed to be fair and reasonable as damages for the loss sustained and the insured declined the offer, insisting upon the payment of a sum substantially in excess of the amount offered, the matter thus reaching a stalemate, a recovery of damages and attorney's fees because of delay in making settlement was not authorized.
Where there is a reasonable basis for so doing, an insurer is entitled to maintain and defend its position as to the amount of its liability without the imposition of penalty and attorney's fees, even if doing so results in considerable delay in bringing the matter to a conclusion. "Any rule or principle which would deny to the company the right of full and free litigation" on the question of its liability or of the amount thereof, is wrong. Travelers Ins. Co. v. Sheppard, 85 Ga. 751, 815 ( 12 S.E. 18). To authorize imposition of the penalty and attorney's fees it must appear that the basis of the company's position as to the amount of liability was frivolous and unfounded, and that does not appear here. Life Ins. Co. of Ga. v. Burke, 219 Ga. 214, 219 ( 132 S.E.2d 737); Royal Ins. Co. v. Cohen, 105 Ga. App. 746 (3), supra.
Judgment affirmed, with direction that the award of damages and attorney's fees be written off. As to the taxing of costs see Royal Ins. Co. v. Cohen, 105 Ga. App. 746 (6), supra. Bell, P. J., and Jordan, J., concur.
ARGUED MARCH 9, 1966 — DECIDED APRIL 5, 1966.
F. H. Boney purchased a new Dodge automobile June 23, 1963, paying therefor $2,400, and insured it with Georgia Farm Bureau Mutual Insurance Company. It turned over while being driven July 28, 1963, and Boney filed a proof of loss shortly thereafter, dated July 29, claiming $2,350 ($2,400 less $50 deductible). The company adjuster and claims representative entered into negotiations with him immediately and continued for some two months or more until it was apparent that a stalemate had been reached between them. In connection with the negotiations the insurer procured a proposal from the Dodge dealer at Rome to make all repairs, using new parts for replacing damaged ones, for restoring the car to its former condition, for $695, the dealer agreeing to "guarantee" the job. A similar proposal was obtained from the Pontiac dealer for $700, and a third proposal was obtained from an independent garage for $1,200. Mr. Boney secured statements from others engaged in automobile repairs, the dealer from whom he had purchased in Centerville, Alabama, and the Chevrolet dealer at Summerville, to the effect that the damage was not repairable.
Basing its conclusion on the proposals received that it was repairable, the insurer offered (a) to have the repairs made by the Dodge or the Pontiac dealer, and if unseen damage should appear to have that repaired also, or (b) to pay Mr. Boney the sum of $800. Mr. Boney refused both offers, insisting for some time upon replacement of the car with a new one, and later offering to settle the loss for $1,200. Thus a stalemate was reached, and on September 25 the company wrote to Boney asking that he appoint an appraiser for an appraisal under policy provisions. Boney then informed the adjuster that he had disposed of the car, but declined to say to whom or where it could be located. However, on October 17 Mr. Boney notified the company that he had appointed A. A. Farrar (his attorney) as his appraiser. Finally the adjuster was able to locate the car in the hands of a doctor who had purchased and repaired it, and then informed Mr. Boney that in view of this development it would be useless to attempt an appraisal and the company would go no further with it. The offer of $800 was renewed, and declined.
After written demand for $1,400, this suit followed, but several months later, seeking recovery of $1,400 actual damage, 25 percent penalty and $1,000 attorney's fees. A verdict was returned for $1,000 actual damage, $100 penalty and $300 attorney's fees. The amount of the attorney's fees was raised by the court, upon plaintiff's motion, to $750 under Code Ann. § 56-1206. An amended motion for new trial was overruled and plaintiff appeals, but in this court abandoned general grounds and all others save those dealing with the award of penalty and attorney's fees.