Fuller v. Mercury Insurance Company of Georgia

Filing 159

ORDER granting in part and denying in part 144 Motion for Summary Judgment.The amount due in restitution is therefore reserved to the jury. As a result,Mercurys motion for summary judgment on its counterclaim is granted as to liability,but denied as to damages. Signed by Judge Thomas W. Thrash, Jr on 1/27/2017. (ss)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
SONYA FULLER, et al.,
Plaintiffs,
v.

CIVIL ACTION FILE
NO. 1:13-CV-1914-TWT

MERCURY INSURANCE
COMPANY OF GEORGIA,
Defendant.

OPINION AND ORDER

This is an action to recover on a homeowner’s insurance policy. It is before the
Court on the Defendant Mercury Insurance Company of Georgia’s Motion for
Summary Judgment [Doc. 144]. For the reasons stated below, the Defendant’s Motion
for Summary Judgment [Doc. 144] is GRANTED in part and DENIED in part.
I. Background
The original Plaintiff, Sonya Fuller, owns real property at 648 Reed Road
Southeast, Smyrna, Georgia (the “Property”).1 The Defendant Mercury Insurance
Company of Georgia issued a homeowners insurance policy (the “Policy”) to Fuller,

1

Def.’s Statement of Material Facts ¶ 2.

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which became effective on February 26, 2011 and expired on February 26, 2012.2 The
Policy provides coverage to Fuller for both the real and personal property located at
the Property, but also has several limitations, conditions, and exclusions.3 In
particular, the Policy contains an “intentional loss” exclusion, which provides in part,
that Mercury does not insure for any “Intentional Loss, meaning any loss arising out
of any act committed: (a) by or at the direction of any Insured; and (b) with the intent
to cause a loss.”4 The Policy also contains a “concealment or fraud” provision, which
provides that the Policy “will be cancelled and any unpaid claims denied if an Insured
has, before or after a loss: (a) intentionally concealed or misrepresented any material
fact or circumstance; or (b) made false statements or engaged in fraudulent conduct
relating to [the Policy].”5
On December 18, 2011, the Property was damaged by fire, and Fuller submitted
a claim to Mercury under the Policy.6 While it was investigating the claim, Mercury

2

Id. at ¶ 1.

3

Id. at ¶ 2.

4

Id. at ¶ 3.

5

Id. at ¶ 4.

6

Id. at ¶¶ 6-7.

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paid Fuller an advance on her claim, although the amount paid is in dispute.7 When
its investigation was completed, Mercury determined that the fire was intentionally
caused by Fuller or someone else at her direction for the purpose of defrauding
Mercury, and that Fuller had misrepresented and concealed material facts during the
claims process.8 Fuller, for her part, denies these claims. Consequently, Mercury
denied Fuller’s claim on November 13, 2012.9
Fuller eventually filed suit in Fulton County, Georgia against Mercury seeking
the full amount of damages to the Property, which Mercury thereafter removed to this
Court.10 Mercury also filed a counterclaim against Fuller seeking to recover the
$20,791.00 advance Mercury alleges it had paid.11 On September 5, 2013, Fuller was
indicted in the Superior Court of Cobb County, Georgia on charges in connection with
the fire.12 On January 7, 2015, Fuller pleaded guilty under North Carolina v. Alford13
to insurance fraud and was sentenced as a first offender under Georgia’s First
7

Id. at ¶ 8. See also Pl.’s Resp. to Def.’s Mot. for Summ. J. at 3.

8

Def.’s Statement of Material Facts ¶ 9.

9

Id.

10

Id. at ¶ 13.

11

Id. at ¶ 14.

12

Id. at ¶ 15.

13

400 U.S. 25 (1970).

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Offender Act.14 Mercury now moves for summary judgment on both Fuller’s claim
and its counterclaim for unjust enrichment.
II. Legal Standard
Summary judgment is appropriate only when the pleadings, depositions, and
affidavits submitted by the parties show no genuine issue of material fact exists and
that the movant is entitled to judgment as a matter of law.15 The court should view the
evidence and any inferences that may be drawn in the light most favorable to the
nonmovant.16 The party seeking summary judgment must first identify grounds to
show the absence of a genuine issue of material fact.17 The burden then shifts to the
nonmovant, who must go beyond the pleadings and present affirmative evidence to
show that a genuine issue of material fact does exist.18 “A mere ‘scintilla’ of evidence
supporting the opposing party’s position will not suffice; there must be a sufficient
showing that the jury could reasonably find for that party.”19

14

Def.’s Statement of Material Facts ¶ 16.

15

FED. R. CIV. P. 56(a).

16

Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970).

17

Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).

18

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986).

19

Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990).

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III. Discussion
A. Fuller’s Claim to Recover Insurance Proceeds
Mercury argues that Fuller’s Alford plea of guilty in the criminal case against
her is prima facie evidence that she intentionally set the fire which damaged her home,
thereby cancelling her policy under either the “intentional loss” or “concealment or
fraud” provisions of the Policy. Fuller, meanwhile, argues that because she did not
admit to the facts underlying her guilty plea, her Alford plea is not conclusive
evidence of intent. In Georgia, insurance fraud, which is the only crime Fuller pleaded
guilty to, is defined in relevant part as:
Any natural person who knowingly or willfully: (1) Makes or aids in the
making of any false or fraudulent statement or representation of any
material fact or thing ... (B) in the filing of a claim ... for the purpose of
procuring or attempting to procure the payment of any false or fraudulent
claim or other benefit by an insurer.20
Because both intent and fraud are requisite elements of the crime, there is no doubt
that committing the crime of insurance fraud would cancel the Policy under the
“concealment or fraud” provision.
The only question remaining, therefore, is whether Fuller’s Alford plea is
conclusive evidence of guilt. On this, Georgia courts and the Eleventh Circuit have
been abundantly clear. An Alford plea is the same as a guilty plea, and can be used as

20

O.C.G.A. § 33-1-9.

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evidence in subsequent civil proceedings. In Blohm v. Commissioner of Internal
Revenue,21 the Eleventh Circuit denied that an Alford plea was analogous to a plea of
nolo contendere, clearly stating that, “it is the voluntary plea of guilt itself, with its
intrinsic admission of each element of the crime, that triggers the collateral
consequences attending that plea. Those consequences may not be avoided by an
assertion of innocence.”22 As long as the plea was voluntary and had a sufficient
factual basis, “the collateral consequences flowing from an Alford plea are the same
as those flowing from an ordinary plea of guilt.”
Georgia courts have come to the same conclusion. In Harden v. State Farm,23
the Court of Appeals of Georgia held, in a case acutely analogous to this case, that an
insurance company did not have to provide coverage to a policyholder because of a
clause that excluded from coverage certain acts that were caused willfully and
maliciously. In that case, the policyholder’s husband had pleaded guilty under Alford
to sexual abuse of a child. The child’s mother sued the policyholder and her husband,
and the policyholder tendered the defense of the suit to their homeowner’s insurance
carrier, State Farm. The Court of Appeals upheld State Farm’s denial of the tender,

21

994 F.2d 1542 (11th Cir. 1993).

22

Id. at 1554.

23

Harden v. State Farm Fire & Cas. Co., 269 Ga. App. 732 (2004).

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stating that “the collateral consequences flowing from an Alford plea are the same as
those flowing from an ordinary plea of guilt. Accordingly...an Alford plea of
guilt...was sufficient to establish a prima facie case that State Farm had no duty under
the terms of the policy to provide coverage.”24
It is abundantly clear that an Alford plea is no different than any other guilty
plea. Alford pleas require a sufficient factual basis before a court is allowed to accept
them, just like a normal guilty plea. Compare this with a plea of nolo contendere,
which has no such requirement. In this case, Fuller has not alleged that her Alford plea
was defective for lack of a sufficient factual basis; the plea is therefore prima facie
evidence of an intentional act that would cancel her insurance contract. Fuller has
failed to rebut this evidence in any meaningful way. Therefore, under the terms of the
insurance contract, Fuller’s fraudulent conduct cancels the Policy, and Mercury is not
required to cover Fuller’s claim.

24

Id. at 734 (internal quotations and citations omitted).

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B. Mercury’s Unjust Enrichment Counterclaim
Mercury also moves for summary judgment on its unjust enrichment
counterclaim, seeking to recover the $20,791.00 it alleges it paid Fuller in advance of
her claim. Fuller admits that Mercury paid her an advance on her claim, but disputes
the amount and provides evidence that most of the advanced funds were paid to third
parties. Both parties focus almost all of their briefing on the Alford plea issue,
however, and neither spends any time on Mercury’s unjust enrichment claim.
Mercury’s claim is essentially one for money had and received.25 “To establish
a claim for money had and received a plaintiff must show (1) that a party has received
money justly belonging to the plaintiff; and (2) that the plaintiff has made a demand
for repayment which was refused.”26 There is no doubt that Fuller received money
which rightly belongs to the Plaintiff. The entirety of the funds she received as an
advance from Mercury were based upon her own fraud. It is equally clear that demand
would be futile in this instance, as Fuller has filed suit claiming that she is not only
entitled to the advance she has already received, but also to the entire value of the

25

Money had and received is “merely one form” of an unjust enrichment
claim. See McCaughey v. Bank of America, N.A., 279 Fed. Appx. 794, 797 (11th Cir.
2008) (internal citation omitted).
26

Securities & Exch. Comm'n v. Price, No. 1:12-CV-2296-TCB, 2015 WL
11198937, at *6 (N.D. Ga. Mar. 31, 2015) (citing City of Atlanta v. Hotels.com, 710
S.E.2d 766, 770 (Ga. 2011)).
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Policy. One who believes he is entitled to the whole cake is not about to give up the
slice he has already eaten. On the other hand, it is not clear from the record exactly
how much Fuller actually received, and both parties dispute the amount Mercury paid
out. The amount due in restitution is therefore reserved to the jury. As a result,
Mercury’s motion for summary judgment on its counterclaim is granted as to liability,
but denied as to damages.
IV. Conclusion
For the foregoing reasons, the Defendant Mercury Insurance Company of
Georgia’s Motion for Summary Judgment [Doc. 144] is GRANTED in part and
DENIED in part.
SO ORDERED, this 27 day of January, 2017.

/s/Thomas W. Thrash
THOMAS W. THRASH, JR.
United States District Judge

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