BREWTON v. LIBERTY MUTUAL HOLDING COMPANY INC et al
ORDER GRANTING in part and DENYING in part 51 Motion for Summary Judgment. Brewton's failure to assess claim is DISMISSED with prejudice, but Brewton is not judicially estopped from bringing her failure to pay claim against First Liberty. Ordered by US DISTRICT JUDGE MARC THOMAS TREADWELL on 11/21/2017. (tlh)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
CHANDRA H. BREWTON,
THE FIRST LIBERTY INSURANCE
CIVIL ACTION NO. 5:14-CV-436(MTT)
Defendant, First Liberty Insurance Corporation, has moved for summary
judgment. Doc. 51. First Liberty argues that (1) Brewton is judicially estopped from
bringing her claims because she failed to disclose her claim during her bankruptcy case,
and (2) First Liberty in fact assessed whether the value of Brewton’s home was
diminished and thus Brewton’s “failure to assess” claim fails as a matter of law. Id. at 1.
As discussed below, First Liberty’s motion (Doc. 51) is GRANTED in part and DENIED
in part. Summary judgment is granted for First Liberty on Brewton’s failure to assess
claim, but Brewton is not judicially estopped from pursuing her “failure to pay” claim.
This case is one of several putative class actions filed in this Court against
insurers who, the plaintiffs allege, take the position that their homeowner’s insurance
policies do not provide coverage for the diminished value of property damaged as the
result of a loss that is otherwise covered by their policies. Basically, the plaintiffs, who
are all represented by the same lawyers, want their insurers to accept what they
contend has been clearly established by the Georgia Supreme Court—when the value
of a home has decreased as the result of a covered loss even though the home has
been fully repaired, the insurer must compensate the insured for that diminished value.1
The plaintiffs in these putative class actions claim that insurers have failed to assess
their homes for diminished value and have failed to pay for diminished value.
Diminished value, also called diminution of value or stigma damages, has a very
specific meaning. “In [some] cases, notwithstanding remedial measures undertaken by
the injured party, there remains a diminution in value of the property, and an award of
only the costs of remedying the defects will not fully compensate the injured party.”
John Thurmond & Assocs., Inc. v. Kennedy, 284 Ga. 469, 471 n.2, 668 S.E.2d 666, 669
n.2 (2008) (citation omitted). In particular, the underlying cause of a loss can stigmatize
a property, resulting in “a negative public perception or fear that damage to property
could create future problems.” Doc. 53-7 at 2 (First Liberty’s Georgia Diminution in
Value Frequently Asked Questions). “Even though the property has been restored to its
pre-loss condition in terms of appearance and function, the property carries an
intangible taint or ‘stigma’ due to the nature of the loss.” Id. Thus, if a policy covers
diminished value, adjusters must determine whether the insured property, as a result of
stigma, is worth less even though it has been repaired. State Farm Mut. Auto. Ins. Co.
v. Mabry, the seminal diminished value case, involved automobile insurance policies,
and automobiles provide a well-known example of diminished value as the result of
stigma. 274 Ga. 498, 556 S.E.2d 114 (2001). Typically, the repair of a wrecked car
fixes it. But there is a common perception that a wrecked car loses value
See State Farm Mut. Auto. Ins. Co. v. Mabry, 274 Ga. 498, 508, 556 S.E.2d 114, 122-23 (2001) (holding
that when “loss” is not defined in an automobile insurance policy, diminished value is an element of an
insured’s “loss” and thus insurers must assess damaged property for diminished value); Royal Capital
Dev. LLC v. Maryland Cas. Co., 291 Ga. 262, 267, 728 S.E.2d 234, 238 (2012) (holding that “loss” has a
similar meaning, when not otherwise defined, in insurance policies covering real property).
notwithstanding complete repairs. Thus, when a CARFAX report, for example, reveals
that a car has been damaged in an accident, the value of the car in the eye of a
potential purchaser decreases even though the car has been repaired.
It is helpful to discuss what has happened in the first of these putative class
actions, Thompson v. State Farm Fire and Casualty Insurance Company. In
Thompson, the Court granted in part and denied in part the plaintiffs’ motion for class
certification under Federal Rule of Civil Procedure 23(b)(3) or 23(c)(4). No. 5:14-cv-32,
Doc. 78 at 1 (Mar. 9, 2016). Specifically, the Court, applying Mabry, certified a class of
State Farm policyholders to assert:
A breach of contract claim against State Farm based on its
failure to assess for diminished value.
Id. at 27-28. The plaintiffs also requested certification of a claim for “failure to pay” for
diminished value, but the Court found that “the absence of predominance precludes
certification of the . . . failure to pay claim . . . .” Id. at 18.
Subsequently, the Court ruled on several competing motions for summary
judgment, finding that, as a matter of law, (1) State Farm’s standard form policies
covered diminished value, (2) State Farm breached its duty to assess for diminished
value, and (3) the plaintiffs were not entitled to recover monetary damages for that
breach; rather, the remedy for breach of the duty to assess, pursuant to Mabry, was
equitable. Thompson, No. 5:14-cv-32, Doc. 161 at 3-4 (Aug. 31, 2017).2
Here, Brewton’s complaint and amended complaints are “cookie cutter”
complaints—that is, they are essentially identical to the complaints filed by her lawyers
That order also addressed other motions, but the two motions described above are the ones relevant to
First Liberty’s motion.
against other insurers that claim their policies do not cover diminished value.3
Specifically, Brewton alleges that her policy covers diminished value, an allegation First
Liberty denied in its answer, and then alleges that First Liberty failed to assess her
property to see whether its value had decreased. See generally Docs. 49 ¶¶ 28, 42; 50
¶¶ 28, 42. Thus, Brewton alleges First Liberty breached the policy. Doc. 49 ¶ 31.
In its motion for summary judgment, First Liberty argues that Brewton is judicially
estopped from bringing this claim because she failed to disclose this claim in her
bankruptcy case and thus took inconsistent positions under oath in a manner calculated
to make a mockery of the judicial system. Doc. 51-1 at 1. In the alternative, First
Liberty argues that partial summary judgment is appropriate on Brewton’s failure to
assess claim because First Liberty did assess Brewton’s property for diminished value.
Summary Judgment Standard
A court shall grant summary judgment “if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). “A factual dispute is genuine only if ‘a reasonable
jury could return a verdict for the nonmoving party.’” Info. Sys. & Networks Corp. v. City
See Doc. 59 at 12-13, Transcript of April 25, 2017 Phone Conference at 12:24-13:1 (Court: “But tell me,
is not your Complaint here just a cookie cutter of all your other complaints?” Counsel for Plaintiff: “The
Complaint is the same, yes.”); compare, e.g., Doc. 49 ¶ 31 (“By failing to account for diminution in value
as an element of loss and by failing to pay its insured the diminution in value of its property, Defendant
breached the Policy, including the covenant of good faith and fair dealing inherent therein.”), with Long v.
State Farm Fire and Cas. Co., No. 5:17-cv-28, Doc. 21 ¶ 38 (“By failing to account for diminution in value
as an element of loss and by failing to pay its insured the diminution in value of its property, Defendant
breached the Policy, including the covenant of good faith and fair dealing inherent therein.”), with
Thompson v. State Farm Fire and Cas. Co., No. 5:14-cv-32, Doc. 6 ¶ 18 (“By failing to account for
diminution in value as an element of loss and by failing to pay its insureds the diminution in value of their
property, State Farm breached the Policy, including the covenant of good faith and fair dealing inherent
of Atlanta, 281 F.3d 1220, 1224 (11th Cir. 2002) (quoting United States v. Four Parcels
of Real Prop., 941 F.2d 1428, 1437 (11th Cir. 1991)); see also Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). The burden rests with the moving party to prove
that no genuine issue of material fact exists. Id. (citation omitted). The party may
support its assertion that a fact is undisputed by “citing to particular parts of materials in
the record, including depositions, documents, electronically stored information, affidavits
or declarations, stipulations (including those made for purposes of the motion only),
admissions, interrogatory answers, or other materials.” Fed. R. Civ. P. 56(c)(1)(A).
If the moving party makes this showing, “the burden shifts to the non-moving
party to rebut that showing by producing . . . relevant and admissible evidence beyond
the pleadings.” Josendis v. Wall to Wall Residence Repairs, Inc., 662 F.3d 1292, 1315
(11th Cir. 2011) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)). The nonmoving party does not satisfy its burden “if the rebuttal evidence ‘is merely colorable, or
is not significantly probative’ of a disputed fact.” Id. (quoting Anderson, 477 U.S. at 24950). Further, where a party fails to address another party’s assertion of fact as required
by Federal Rule of Civil Procedure 56(c), the Court may consider the fact undisputed for
purposes of the motion. Fed. R. Civ. P. 56(e)(2). However, “[c]redibility determinations,
the weighing of the evidence, and the drawing of legitimate inferences from the facts are
jury functions, not those of a judge . . . . The evidence of the non-movant is to be
believed, and all justifiable inferences are to be drawn in his favor.” Anderson, 477 U.S.
at 255 (citation omitted).
First Liberty argues that Plaintiff is judicially estopped from bringing this action
because she failed to disclose her claims against First Liberty in her bankruptcy case.
Doc. 51-1 at 6. Judicial estoppel is an equitable doctrine that prevents a party from
“asserting a claim in a legal proceeding that is inconsistent with a claim taken by that
party in a previous proceeding.” Robinson v. Tyson Foods, Inc., 595 F.3d 1269, 1273
(11th Cir. 2010) (internal quotation marks and citation omitted). Because the Court is
hearing this case through its diversity jurisdiction, the Court applies Georgia law to
substantive issues, and Eleventh Circuit precedent appears to dictate that “the
application of the doctrine of judicial estoppel is governed by state law” in diversity
cases. Original Appalachian Artworks, Inc. v. S. Diamond Assocs., Inc., 44 F.3d 925,
930 (11th Cir. 1995) (citations omitted). But Georgia courts follow Eleventh Circuit
precedent in applying judicial estoppel when, like here, the plaintiff’s alleged
inconsistent position under oath was an omission of a claim in a federal bankruptcy
proceeding. See, e.g., Jowers v. Arthur, 245 Ga. App. 68, 69, 537 S.E.2d 200, 201
(2000) (“Since 1994 we have followed the federal doctrine of judicial estoppel.”)
(citations omitted); see also Southmark Corp. v. Trotter, Smith & Jacobs, 212 Ga. App.
454, 455, 442 S.E.2d 265, 266 (1994) (“We apply federal law in order to give the proper
effect to the judgment of the bankruptcy court sitting in Texas which ruled upon
plaintiff’s bankruptcy case.”); see also Thompson v. Quarles, 392 B.R. 517, 526 n.10
(S.D. Ga. Bankr. 2008) (noting and describing as “peculiar” the fact that “a state court
would apply a federal procedural doctrine at all, or that it would apply a federal
substantive doctrine to a state law claim,” while the Eleventh Circuit would apply state
law to the same issue in diversity cases).4 Given all that, the Court turns to Eleventh
Circuit precedent, with one significant exception.
The Eleventh Circuit has articulated a two-part test for establishing the bar of
judicial estoppel: “[f]irst, it must be shown that the allegedly inconsistent positions were
made under oath in a prior proceeding. Second, such inconsistencies must be shown
to have been calculated to make a mockery of the judicial system.” Burnes v. Pemco
Aeroplex, Inc., 291 F.3d 1282, 1285 (11th Cir. 2002) (internal quotations and citation
omitted), overruled in part by Slater v. U.S. Steel Corp., 871 F.3d 1174 (11th Cir. 2017);
see Richards v. D.R. Horton, Inc., 320 Ga. App. 771, 779, 740 S.E.2d 732, 738 (2013)
(applying this test to bankruptcy judicial estoppel in a Georgia state law case); see also
IBF Participating Income Fund v. Dillard-Winecoff, LLC, 275 Ga. 765, 766, 573 S.E.2d
58, 59-60 (2002) (noting (1) Georgia courts’ “striv[ing] to apply the ‘federal’ doctrine of
judicial estoppel, and (2) criticism for “failing to reflect accurately the state of federal
‘judicial estoppel’ law,” and finding that the Georgia courts’ approach adequately
comports with the equitable process set out in three factors by the United States
Supreme Court in New Hampshire v. Maine, 532 U.S. 742 (2001)). The Burnes
questions are not exhaustive, and “courts must always give due consideration to the
circumstances of the particular case.” Robinson, 595 F.3d at 1273 (citation omitted).
Brewton argues that judicial estoppel is inappropriate, primarily because her
bankruptcy repayment plan obligated her to pay back “100% of the debt owed to any
In any event, the Eleventh Circuit’s and Georgia courts’ approaches largely match, and where Georgia
law appears to differ from federal law on bankruptcy judicial estoppel, it does so in ways that limit rather
than expand the application of judicial estoppel. See Tuten v. Target Corp., 2014 WL 6908866, at *2
(S.D. Ga.) (“Georgia follows the federal doctrine of judicial estoppel, except when it does not: not every
aspect of federal judicial estoppel is followed by the Georgia courts . . . . Under Georgia law, a plaintiff
may amend an erroneous bankruptcy schedule to avoid judicial estoppel.”). “Thus, where a party has
successfully amended its bankruptcy petition, judicial estoppel will not operate to bar a future claim” under
Georgia law. Ussery v. Allstate Fire and Cas. Ins. Co., 150 F. Supp. 3d 1329, 1340 (M.D. Ga. 2015).
creditor who had submitted a proof of a claim.” Doc. 53 at 23. In her affidavit, she
testifies (1) “[a]t no time during the pendency of [her] bankruptcy did [she] seek to have
the amount [she] was to pay [her] creditors reduced to an amount less than 100%,” and
(2) she “completed the payment plan within the time allotted and [she] paid 100% of the
debt owed to every creditor who submitted a proof of claim.” Doc. 53-18 at ¶¶ 26-27.
First Liberty, however, finds it significant that the bankruptcy trustee’s final report stated
$2,123 in “[a]mount of unsecured claims discharged without payment,” making it
“unclear . . . whether [Brewton] actually repaid 100% of her debts.” Docs. 53-17 at 2; 54
Also, after First Liberty filed its motion, Brewton moved to re-open her bankruptcy
case to disclose her claim. Doc. 53 at 21. The bankruptcy court granted the motion
and gave her ten days to amend her petition. Docs. 58; 58-1. This is significant
because, under Georgia law, a party “can avoid the application of judicial estoppel
simply by filing a motion to amend the debtor’s bankruptcy petition or a motion to
reopen the debtor’s bankruptcy case to declare the omitted claim or cause of action.”
Rowan v. George H. Green Oil, Inc., 257 Ga. App. 774, 776, 572 S.E.2d 338, 339
(2002) (citations omitted); see also Tuten v. Target Corp., 2014 WL 6908866, at *3
(S.D. Ga.) (“Georgia permits a plaintiff to escape judicial estoppel via amendment.
Therefore, a federal court sitting in diversity must do the same.”).
Notwithstanding Brewton’s intent to repay her creditors in full, First Liberty argues
that Brewton’s mere “concealment of the claims pending in this lawsuit with the
expectation of monetary recovery is sufficient evidence of a motive” for the Court to infer
intent to make a mockery of judicial proceedings. Doc. 51-1 at 9 (citations omitted).
Although it is difficult to see how Brewton stood to benefit from her failure to disclose
her claims against First Liberty, which in turn makes it difficult to ascribe any ill motive to
her, based upon Eleventh Circuit precedent at the time, First Liberty had a plausible
argument that the Court could “infer from [Brewton]’s nondisclosure alone that she
intended to manipulate the judicial process.” See Slater v. U.S. Steel Corp., 871 F.3d
1174 (11th Cir. 2017) (stating Eleventh Circuit precedent).
But as the parties were briefing the issue, the Eleventh Circuit had pending for en
banc review Slater v. United States Steel Corporation. In its en banc decision, the
Eleventh Circuit clarified, to Brewton’s benefit, the standard for bankruptcy judicial
estoppel. In Slater, the Eleventh Circuit held:
[W]hen determining whether a plaintiff who failed to disclose
a civil lawsuit in bankruptcy filings intended to make a
mockery of the judicial system, a district court should
consider all the facts and circumstances of the case . . . .
[V]oluntariness alone does not necessarily establish a
calculated attempt to undermine the judicial process. We
therefore overrule the portions of [Eleventh Circuit
precedent] that permit a district court to infer intent to misuse
the courts without considering the individual plaintiff and the
circumstances surrounding the nondisclosure.
871 F.3d at 1176-77. The Eleventh Circuit continued:
When the plaintiff’s inconsistent statement comes in the form
of an omission in bankruptcy disclosures, the court may
consider such factors as the plaintiff’s level of sophistication,
whether and under what circumstances the plaintiff corrected
the disclosures, whether the plaintiff told his bankruptcy
attorney about the civil claims before filing the bankruptcy
disclosures, whether the trustee or creditors were aware of
the civil lawsuit or claims before the plaintiff amended the
disclosures, whether the plaintiff identified other lawsuits to
which he was party, and any findings or actions by the
bankruptcy court after the omission was discovered.
Id. at 1185. The Eleventh Circuit also noted that its list was not exhaustive. See id. at
1185 n.9. Courts must consider all of the facts and circumstances of a case because
“[a]s an equitable doctrine, judicial estoppel should apply only when the plaintiff’s
conduct is egregious enough that the situation demands equitable intervention.” Id. at
1187 (internal punctuation and quotation marks and citation omitted).
Responding to Slater, First Liberty argues that Brewton’s claim is still judicially
estopped because “[i]n essence, the Slater decision stands for [the] narrow premise that
the district court should not necessarily view all omissions as an attempt to mislead the
court and should instead conduct an individual review of circumstances to determine the
appropriateness of judicial estoppel.” Doc. 56 at 3 (citation omitted). Thus, First Liberty
argues, Brewton “remains judicially estopped from pursuing her claims against First
Liberty, and First Liberty is entitled to judgment as a matter of law.” Id. at 2.
The Court disagrees. The evidence, considered as a whole, simply does not
support the inference, much less establish as a matter of law, that Brewton’s actions
were “calculated to make a mockery of the judicial system.” Burnes, 291 F.3d at 1285.
On the contrary, Brewton’s nondisclosure appears to have been inadvertent, and, given
her intent to repay her creditors in full, the Court easily finds that First Liberty has not
established as a matter of law that Brewton is judicially estopped from pursuing her
claims. Moreover, Brewton has amended or will soon amend her bankruptcy petition to
list her First Liberty claims, and “[c]onsequently, under Georgia law, [Brewton] can no
longer be said to have taken a position in this proceeding that is inconsistent with the
position taken in [her] bankruptcy proceeding.” Ussery v. Allstate Fire and Cas. Co.,
150 F.Supp.3d 1329, 1340 (M.D. Ga. 2015) (citation omitted).
- 10 -
Accordingly, First Liberty has not established as a matter of law that Brewton is
judicially estopped from pursuing her claims.
First Liberty’s Assessment for Diminished Value
When Brewton filed this lawsuit, her lawyers assumed they were suing yet
another insurance company that stubbornly refused to acknowledge that its
homeowner’s policies covered diminished value. But, as her lawyers only eventually
learned, they were wrong. To its credit, First Liberty had recognized that the Georgia
Supreme Court meant what it said in Mabry and Royal Capital—casualty policies cover
diminished value. Accordingly, First Liberty instituted a four-step procedure for its
adjusters to use to determine whether diminished value existed. First Liberty’s
adjusters were charged with: (1) verifying that Royal Capital applies to the claim by
determining whether the claim was a first-party real property claim in Georgia, (2)
deciding whether diminished value could exist by looking for certain “unusual”
circumstances in which diminished value “could apply” even with full repairs, (3)
determining whether repairs returned the property to its pre-loss value, and (4)
communicating that diminished value was considered but not found to the insured and
noting the decision in the claim file. Docs. 51-1 at 3-4; 51-10 at 2-3.
In Step 3, the adjuster must “consult with examining” if the adjuster determines
that it is possible repairs failed to return the property to its pre-loss value. At that point,
diminished value is investigated and handled by “a whole other department.” Doc. 51-6
at 8:3-4. If necessary, claims personnel can retain an appraiser “to assist in the
valuation of the property.” Doc. 51-10 at 3.
- 11 -
When Brewton filed her insurance claim with First Liberty, First Liberty did not
dispute that Brewton’s policy covered diminished value; accordingly, a First Liberty
adjuster assessed her loss, approved payment for repairs, and concluded that the value
of her home had not decreased. See Doc. 51-6 at 6:19-23, 21:2-27:10 (First Liberty’s
adjuster of Brewton’s claim, testifying that he inspected Brewton’s home twice,
considered diminished value, and concluded that Brewton’s home had not suffered
All of this meant that the factual underpinnings of Brewton’s complaint had
collapsed. First Liberty, unlike the other insurers sued by Brewton’s lawyers, had
acknowledged that its policies covered diminished value, and it had assessed Brewton’s
home to see if its value had decreased.
It is not clear when Brewton’s lawyers learned of their mistake. They reasonably
could have expected that First Liberty’s answer would have alerted them to the fact that
they were way off course. But First Liberty chose, for reasons unknown, not to disclose
in its answer that unlike the other insurers sued by Brewton’s lawyers, it had done the
right thing after Royal Capital; it had acknowledged its policies covered diminished
value and had assessed claims accordingly. For example, First Liberty denied
Brewton’s allegation that her policy covered diminished value. Doc. 36 at 5 (“Paragraph
42 contains legal conclusions to which no response is required. To the extent that a
response is required, First Liberty denies the allegations in paragraph 42.”).
Nor did Brewton’s lawyers learn of their mistake when the lawyers convened their
discovery conference on April 18, 2016 and drafted their proposed scheduling order.
The scheduling order prepared by the lawyers and adopted by the Court reveals that
- 12 -
Brewton’s lawyers still thought that First Liberty maintained that its policy did not cover
diminished value and thus had not assessed for diminished value. See Doc. 35 at 1
(describing as the nature of the case a claim that First Liberty “failed to assess and pay
for damages for diminution in value”). Thus, the scheduling order makes no mention of
the significant fact that, unlike other insurers, First Liberty had acknowledged coverage
for diminished value.
The earliest evidence in the record of when Brewton’s lawyers learned that their
claim was “fundamentally” flawed is found in an April 3, 2017 letter attached to First
Liberty’s motion for summary judgment. Doc. 51-1. In this letter, First Liberty’s counsel
informed Brewton’s lawyers that discovery “has presented two fundamental problems
with Ms. Brewton’s claims.” Id. at 2. One was her failure to disclose her claim in her
bankruptcy case—which, as discussed, was not much of a problem after the en banc
decision in Slater. Id. But the other problem was indeed fundamental—First Liberty,
the letter asserts, had in fact assessed Brewton’s home for diminished value when it
adjusted her claim. Id. at 2, 4. That is, First Liberty did not dispute that its policy
covered diminished value, and it did not fail to assess for diminished value. Id. In short,
this was not a Mabry/Royal Capital case. It was just a simple, garden variety dispute
over the value of a fully-covered claim. That meant Brewton’s failure to assess claim
was patently without merit, and thus, as the letter puts it, “Brewton cannot in good faith
continue to pursue her claim for breach of contract based on the ‘failure to assess.’” Id.
at 4. The letter advised Brewton’s lawyers that First Liberty would move for summary
judgment if Brewton did not agree to dismiss her case within ten days of counsel’s
letter. Id. Brewton apparently did not so agree, and thus First Liberty filed this motion.
- 13 -
But Brewton’s lawyers were unfazed by the collapse of their failure to assess
claim. They maintain in their response to First Liberty’s motion for summary judgment
(but not by way of an amended complaint) that their failure to assess claim is now a
failure to properly assess claim. Doc. 53 at 14-17. Thus, as is routine in garden variety
disputes between an insurer and its insured over the value of a claim, Brewton attacks
First Liberty’s assessment of the value of her loss. She argues that First Liberty’s
operating procedure “does not provide any direction to adjusters on how to determine
whether the property might be less desirable in the marketplace due to stigma.” Doc.
53 at 8. Given First Liberty’s procedures for assessing for diminished value, this
argument seems a little overstated, but it is a fair point for Brewton to make in her
garden variety claim that First Liberty failed to pay her enough for her loss.
Brewton also contends that First Liberty’s assessment was inadequate because
the adjuster was not adequately educated or trained and the adjuster “determined that
[her] home had not incurred any [diminished value] after the second visit even though
the repairs had not been completed and the ‘dry out’ was in process.” Doc. 53 at 18.
This too is a fair argument, and, like any other insured who has sued her insurer
because she disagrees with the insurer’s valuation of her claim, Brewton can make this
argument as she tries to convince a jury that she should get more than what First
Liberty is willing to pay.
Brewton also argues that “the only acceptable manner to determine if diminished
value exists is to perform an independent real estate diminished value appraisal.” Doc.
- 14 -
53 at 14-15 (quoting Affidavit of D. Scott Murphy, SRA, Doc. 53-19 at ¶¶ 11-12).5
Convincing a jury that insurers must always hire an independent appraiser to assess
diminished value likely will be a challenge. It may be better for Brewton to argue that,
based on the facts of her case, First Liberty should have hired an independent appraiser
to assess her home for diminished value—an argument she could buttress with First
Liberty’s own procedures that contemplate retaining independent appraisers in
particular cases. But, again, these are all arguments Brewton can make in her garden
variety dispute over the value of her claim.
The Court’s repeated description of Brewton’s claim as a “garden variety” dispute
over the value of her loss has been intentional. It is to emphasize that Brewton’s claim
is not a Mabry/Royal Capital claim. Nothing in Georgia law supports Brewton’s new and
un-pleaded theory that an insured can bring a stand-alone claim for the failure to
properly assess a covered loss. Again, insureds have long had a remedy when they
think their insurer has undervalued their claims—they file a lawsuit claiming that they
should get more than what their insurers want to pay. Mabry afforded an insured
another remedy in a very narrow situation. When an insurer improperly denies
coverage for diminished value and thus refuses to assess for diminished value, the
insured may be entitled to an equitable remedy, i.e., an order directing the insurer to
assess for diminished value. Mabry did not give the “insured the right to insist on any
particular claims handling procedure,” but rather “merely required that [insurers] handle
The idea that insurers must hire an independent appraiser in every property damage claim would be
surprising to the Court, but for the fact that the Court heard, and rejected, this argument in Thompson.
No. 5:14-cv-32, Doc. 161 (Aug. 31, 2017). There, the plaintiffs contended that they could recover as
damages the cost of hiring an independent appraiser, which the plaintiffs estimated to be $2,500. Id. at
27. The Court concluded that the plaintiffs were not entitled to damages; rather, pursuant to Mabry, they
were entitled to injunctive relief—specifically, an order directing State Farm to assess the plaintiffs’
property for diminished value. Id. Because Brewton got an assessment, albeit an inadequate one in her
view, she is not entitled to such injunctive relief.
- 15 -
all elements of loss in each claim” by “develop[ing] an appropriate methodology for
making such evaluations.” Mabry, 274 Ga. at 509-10, 556 S.E.2d at 123-24. Mabry
does not create a distinct cause of action against an insurer for botching an assessment
of a covered loss. And there was no reason for the court in Mabry to create such a
remedy; as discussed above, one already exists.
Accordingly, the Court tentatively GRANTS First Liberty’s motion for summary
judgment on Brewton’s failure to assess claim. Tentatively, only because Brewton
suggests—half-heartedly, it seems to the Court—that perhaps further discovery could
yield evidence that would defeat First Liberty’s motion. See Doc. 53 at 24 (arguing
skeletally that Brewton “was still conducting discovery to gather additional evidence
relevant to Defendant’s argument that it has assessed [her] property for [diminished
value]”). The Court does not see how that could be possible, but it will afford Brewton’s
lawyers an opportunity to make their case. The Court will convene a conference to
discuss that issue and the remaining issues in the case.
For the reasons discussed above, the Defendants’ motion is GRANTED in part
and DENIED in part. Brewton’s failure to assess claim is DISMISSED with prejudice,
but Brewton is not judicially estopped from bringing her failure to pay claim against First
SO ORDERED, this 21st day of November, 2017.
S/ Marc T. Treadwell
MARC T. TREADWELL, JUDGE
UNITED STATES DISTRICT COURT
- 16 -
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?