Brown v. Great Northern Insurance Co. et al
Filing
67
ORDER: Defendants Motion for Summary Judgment 17 is GRANTED in part and DENIED in part. It is GRANTED as to all claims except for breach of contract. Plaintiffs Motion to Defer Ruling on Summary Judgment 18 , Plaintiffs Cross Motion for Summary J udgment 23 , and Plaintiffs Supplement to Cross Motion for Summary Judgment 40 are DENIED. Defendant and SunTrusts Motions to Quash [43, 47, 55] are GRANTED without prejudice. Therefore, Defendants Motion to Alter Order Granting Plaintiffs Request for Depositions 38 is DENIED as moot. In addition, the Clerk is DIRECTED to remove Louis Levensons Petition for Attorneys Lien 59 as a pending motion. Finally, consistent with the Courts September 12, 2014 Order 64 granting an extension of tim e for discovery after ruling on the above motions, the parties shall confer to agree on a proposed scheduling order. If the parties cannot agree, they shall advise the Court that a scheduling conference is necessary. Signed by Judge Richard W. Story on 03/02/15. (sk)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
GAINESVILLE DIVISION
WILLIAM BOBBY BROWN
Plaintiff,
v.
GREAT NORTHERN
INSURANCE CO.,
Defendant.
:
:
:
:
:
:
:
:
:
:
CIVIL ACTION NO.
2:14-CV-00015-RWS
ORDER
This case comes before the Court on Defendant’s Motion for Summary
Judgment [17], Plaintiff’s Motion to Defer Ruling on Summary Judgment [18],
Plaintiff’s Cross Motion for Summary Judgment [23], Defendant’s Motion to
Alter Order Granting Plaintiff’s Request for Depositions [38], Plaintiff’s
Supplement to Cross Motion for Summary Judgment [40], Defendant and
SunTrust’s Motions to Quash [43, 47, 55], and Louis Levenson’s Petition for
Attorney’s Lien [59]. After reviewing the record, the Court enters the following
Order.
Background
I.
AO 72A
(Rev.8/82)
Factual Background
This action arises out of Plaintiff’s eviction from his home and
subsequent insurance claim to recover damages to personal property destroyed
in the course of the eviction. Defendant denied coverage, and this action
followed.
At the time of his eviction, Plaintiff William Bobby Brown had a policy
of insurance issued by Defendant Great Northern Insurance Company, effective
March 16, 2012, through March 16, 2013, providing coverage for property
located at 9140 Ivyshaw Drive, Gainesville, Georgia. (Pl.’s Statement of
Material Facts (“SMF”), Dkt. [23-1] ¶ 1.) SunTrust Bank, Plaintiff’s
mortgagee, foreclosed on the property on August 6, 2012. (Id. ¶ 4.)
Apparently, during the foreclosure proceedings, counsel for SunTrust
represented that SunTrust would not attempt to take possession of the property
because of environmental issues that would prevent a subsequent sale or
transfer of the property. (Id. ¶ 12.)
In any event, SunTrust initiated a dispossessory proceeding on September
14, 2012, in the Forsyth County Magistrate Court by filing a petition for writ of
possession. (Id. ¶ 5.) The magistrate court held a hearing on the petition on
October 2, 2012, at which SunTrust and Plaintiff agreed to a consent order
2
AO 72A
(Rev.8/82)
(“Consent Order”) that the magistrate judge signed and entered. (Id. ¶¶ 6-7;
Consent Order, Dkt. [1-2].) The form the magistrate judge used was labeled
“JUDGMENT” and stated, “ORDERED and ADJUDGED that a WRIT OF
POSSESSION (shall) (shall not) be issued:” followed by numerous options the
judge could select by checking boxes and filling in blanks according to how he
or she decided to rule. For example, beside option “a.” the judge could check a
box for a writ of possession to be issued “Instanter.” In this case, the judge
checked a box stating that SunTrust had a consent judgment against “William
Bobby Brown & All others.” Below that line, the Consent Order stated, “A writ
of possession shall issue in favor of [SunTrust] on October 31, 2012 at 11:59
p.m. [Brown] shall be entitled to remain in possession of the Subject Property
until said date/time.” Plaintiff argues that the order itself did not constitute a
writ of possession, while Defendant believes that it did.
October 31, 2012 passed without Plaintiff leaving the premises. Plaintiff
states he remained in possession of the property because he was under the
impression from SunTrust’s earlier representations that they would not seek
possession of the property. (Pl.’s SMF, Dkt. [23-1] ¶ 12.) Plaintiff also stresses
3
AO 72A
(Rev.8/82)
that he was never served a writ of possession and thus did not have time to
remove his personal property before the eviction happened. (Id. ¶ 14.)
On December 18, 2012, this Court dismissed claims Plaintiff brought in
an earlier suit against SunTrust for fraudulent inducement, negligence, and
intentional infliction of emotional distress, among others. See Brown v.
SunTrust Mortg., Inc., No. 2:12-cv-00120-RWS, Dkt. [43]. The Court
dismissed the last defendant in that action and closed the case on January 11,
2013, and SunTrust proceeded to evict Plaintiff from the premises on January
16, 2013. (Pl.’s SMF, Dkt. [23-1] ¶ 14.) The Forsyth County Sheriff’s Office
and employees of a company called Primo Cleanup evicted Plaintiff from the
property, removed all his personal property, and placed it in the yard. (Id.)
Plaintiff alleges that Primo Cleanup destroyed furniture with chainsaws and
deliberately threw items out of windows. (Id. ¶ 17.) Defendants contend that
records of the Forsyth County Sheriff’s Office dispute this assertion. (Def.’s
Resp. to Pl.’s SMF, Dkt. [26] ¶ 17.) Plaintiff states he did not have time to
remove all his personal property, and that he could not go back to his home
because he was not allowed to return to the gated neighborhood. (Pl.’s SMF,
4
AO 72A
(Rev.8/82)
Dkt. [23-1] ¶¶ 18-19.) The items left out in the yard were damaged by rain that
evening. (Id. ¶ 16.)
Plaintiff filed an insurance claim with Defendant on January 28, 2013,
seeking damages under his insurance policy for the personal items that were
damaged, destroyed, stolen, or lost during the eviction. (Id. ¶ 21.) On June 14,
2013, Defendant determined there was no coverage under the “Neglect” and
“Confiscation” exclusions of the policy. (Id. ¶ 22.) The Neglect Exclusion
provides: “Neglect. We do not cover any loss caused by your failure to use all
reasonable means to protect property before, at, or after the time of a loss.” (Id.
¶ 23; Policy, Dkt. [1-5] at 36.) The policy also states: “The words ‘caused by’
mean any loss that is contributed to, made worse by, or in any way results from
that peril.” (Policy, Dkt. [1-5] at 33.) The Confiscation Exclusion provides:
We do not cover any loss caused by the confiscation, destruction,
or seizure of property by or under the order of any government or
public authority. But if the confiscation, destruction or seizure of
property was ordered by any government or public authority to
prevent the spread of fire, we do provide coverage if the loss
caused by fire would be covered under this part of your policy.
(Id. at 35.)
5
AO 72A
(Rev.8/82)
Plaintiff challenged Defendant’s denial of coverage, but after Defendant
declined to change its position in a December 18, 2013 letter, Plaintiff filed this
action on January 15, 2014. (Pl.’s SMF, Dkt. [23-1] ¶¶ 25-26.) Plaintiff also
filed a related wrongful-foreclosure suit against SunTrust Bank, which this
Court dismissed on September 30, 2014. See Brown v. SunTrust Bank, No.
2:14-cv-00014-RWS, Dkt. [39]. In this action, Plaintiff brings claims against
Defendant for breach of contract and bad faith.
II.
Procedural Background
Defendant moved for summary judgment on April 14, 2014, arguing that
Plaintiff was negligent in failing to remove his personal property from his home
before being evicted pursuant to a writ of possession. The next day, Plaintiff
responded with a motion to defer ruling on Defendant’s motion for summary
judgment, arguing that he needed time to engage in discovery regarding the writ
of possession, which Plaintiff argues was never issued. (See Mot. to Defer
Ruling, Dkt. [18] at 5.) In an affidavit attached to Plaintiff’s motion, Plaintiff’s
counsel also argued that discovery could uncover facts showing that Defendant
refused the insurance claim in bad faith or that Plaintiff had no opportunity to
6
AO 72A
(Rev.8/82)
take necessary steps to protect his property before the January 16, 2013
eviction. (See Levenson Aff., Dkt. [18-2] ¶ 5.)
On May 5, 2014, Plaintiff filed a cross motion for summary judgment
and response in opposition to Defendant’s motion for summary judgment. (See
Cross Mot. for Summ. J., Dkt. [23].) Discovery continued while those motions
were pending, and the Court granted Plaintiff’s request to issue subpoenas for
depositions. (See June 4, 2014 Order, Dkt. [36].) Defendant then filed a
motion to alter the Court’s order, asserting that two individuals Plaintiff wished
to subpoena could not offer any testimony relevant to the claims in this case
because they were engineering or environmental consultants who knew about
the environmental problems associated with Plaintiff’s property but did not
know anything about the insurance contract or the eviction. (See Mot. to Alter
Order, Dkt. [38].) Within a few days, Plaintiff issued several subpoenas, and
Defendant and SunTrust filed three motions to quash. Defendant also filed a
motion for direction regarding the conduct of depositions, expressing concern
that Plaintiff, who at this time was proceeding pro se, was being represented by
non-lawyer Ron Mayhew, Plaintiff’s power of attorney. (See Def.’s Mot. for
Direction, Dkt. [39].) Because it appeared that Mr. Mayhew had drafted filings
7
AO 72A
(Rev.8/82)
on behalf of Plaintiff and because Mr. Mayhew is not an attorney, the Court
granted Defendant’s motion and entered an order enjoining Mr. Mayhew from
conducting or legally participating in the depositions of any parties or witnesses
in this matter. (See June 25, 2014 Order, Dkt. [48].) In addition, because
Plaintiff noticed more depositions before the motions to quash became ripe, the
Court stayed the taking of depositions so Plaintiff would have an opportunity to
file responses. (See June 30, 2014 Order, Dkt. [57].)
Finally, on July 11, 2014, Plaintiff’s former counsel filed a Petition for
Attorney’s Lien [59], arguing that Plaintiff terminated him without cause after
he performed substantial work in the case, including both seeking and opposing
summary judgment. Since October 10, 2014, Plaintiff has been represented by
new counsel. With this background and procedural posture in mind, the Court
turns to the pending motions.
Discussion
I.
Motions for Summary Judgment
A.
Legal Standard
Federal Rule of Civil Procedure 56 requires that summary judgment be
granted “if the movant shows that there is no genuine dispute as to any material
8
AO 72A
(Rev.8/82)
fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV. P.
56(a). “The moving party bears ‘the initial responsibility of informing the . . .
court of the basis for its motion, and identifying those portions of the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, which it believes demonstrate the absence of a genuine issue
of material fact.’ ” Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1259
(11th Cir. 2004) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)
(internal quotations omitted)). Where the moving party makes such a showing,
the burden shifts to the non-movant, who must go beyond the pleadings and
present affirmative evidence to show that a genuine issue of material fact does
exist. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986).
The applicable substantive law identifies which facts are material. Id. at
248. A fact is not material if a dispute over that fact will not affect the outcome
of the suit under the governing law. Id. An issue is genuine when the evidence
is such that a reasonable jury could return a verdict for the non-moving party.
Id. at 249-50.
Finally, in resolving a motion for summary judgment, the court must
view all evidence and draw all reasonable inferences in the light most favorable
9
AO 72A
(Rev.8/82)
to the non-moving party. Patton v. Triad Guar. Ins. Corp., 277 F.3d 1294, 1296
(11th Cir. 2002). But, the court is bound only to draw those inferences which
are reasonable. “Where the record taken as a whole could not lead a rational
trier of fact to find for the non-moving party, there is no genuine issue for trial.”
Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997) (quoting
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).
“If the evidence is merely colorable, or is not significantly probative, summary
judgment may be granted.” Anderson, 477 U.S. at 249-50 (internal citations
omitted); see also Matsushita, 475 U.S. at 586 (once the moving party has met
its burden under Rule 56(a), the nonmoving party “must do more than simply
show there is some metaphysical doubt as to the material facts”).
B.
Analysis
Plaintiff’s breach of contract claim is based on Defendant’s wrongful
denial of insurance coverage. Defendant’s defense is that the Neglect and
Confiscation Exclusions of the insurance policy apply. The majority of the
parties’ arguments center around whether SunTrust had a valid writ of
possession in the first place. Defendant argues that it did, and because Plaintiff
“was aware that his personal property could be removed by eviction on or after
10
AO 72A
(Rev.8/82)
October 31, 2012,” he “had a duty to reasonably protect his property by moving
it prior to that date.” (Def.’s Br., Dkt. [17-1] at 16.) Because he did not,
Defendant argues that the Neglect Exclusion applies. Moreover, because
Plaintiff’s loss occurred as a result of the eviction, Defendant asserts that the
Confiscation Exclusion applies.
For his part, Plaintiff argues that SunTrust did not have a valid writ of
possession at the time he was evicted. He argues SunTrust needed to obtain
another document in addition to the October 2 Consent Order. Because there
was no writ of possession, Plaintiff argues the eviction was unlawful and the
Confiscation Exclusion is inapplicable. Moreover, he argues that the Neglect
Exclusion does not apply because he “had no reason to believe that such loss
would occur before it occurred, was unable to prevent the loss during its
occurrence, and was prevented from mitigating his loss after the Eviction.”
(Pl.’s Br., Dkt. [23-2] at 20.)
Before addressing the motions for summary judgment, the Court notes
that Plaintiff filed a Motion to Defer Ruling on Defendant’s Motion for
Summary Judgment [18] in which he asserts that he must be allowed the
opportunity for more discovery on these issues. For the reasons discussed
11
AO 72A
(Rev.8/82)
below, and because Plaintiff filed a response in opposition to Defendant’s
motion for summary judgment, (see Dkt. [23-2]) the Court finds it unnecessary
to defer ruling on Defendant’s motion. Accordingly, Plaintiff’s Motion to
Defer Ruling on Defendant’s Motion for Summary Judgment [18] is DENIED.
On the merits of the summary judgment motions, the Court first
addresses the writ-of-possession issue before examining whether the Neglect or
Confiscation Exclusions apply. The Court will then turn to Plaintiff’s bad faith
claim and related issues.
1.
Writ of Possession
“Where former owners of real property remain in possession after a
foreclosure sale, they become tenants at sufferance.” Steed v. Fed. Nat’l Mortg.
Corp., 689 S.E.2d 843, 848 (Ga. Ct. App. 2009) (citation, internal quotation
marks, and emphasis omitted). “The exclusive method whereby a landlord may
evict a tenant is through a properly instituted dispossessory action filed
pursuant to O.C.G.A. § 44-7-50 et seq.” Id. “After instituting a dispossessory
action and obtaining a writ of possession, the landlord is authorized to evict the
tenant, but the landlord must ‘plac[e] the tenant’s property on some portion of
the landlord’s property or on other specific property designated by the landlord
12
AO 72A
(Rev.8/82)
and approved by the executing officer.’ ” Ikomoni v. Exec. Asset Mgmt., LLC,
709 S.E.2d 282, 286 (Ga. Ct. App. 2011).
Defendant argues that the language in the Consent Order indicates that
the intent of the magistrate judge “was for the Consent Order to act as both a
final judgment on SunTrust’s Petition for Writ of Possession as well as the Writ
of Possession itself, which was to self-execute on the date and time certain, as
agreed to by the parties.” (Def.’s Br., Dkt. [17-1] at 11.) Thus, Defendant
argues that the issuance of a separate document as a writ of possession would
constitute a useless act. (Id. at 12.)
Plaintiff responds that Georgia law requires a writ of possession in order
to perform an eviction. Plaintiff does not dispute that he and SunTrust entered
into a Consent Order, but he does argue that the Consent Order cannot
“function as both the judgment and as the execution arm for the Forsyth County
Sheriff to enforce the judgment.” (Pl.’s Br., Dkt. [23-2] at 13.) In other words,
Plaintiff asserts that upon obtaining a dispossessory judgment, a party must then
obtain a writ of possession to enforce that judgment. Moreover, he disagrees
that the Consent Order was self-executing, citing O.C.G.A. § 9-13-3, which
states that “[e]very execution shall follow the judgment upon which it issued
13
AO 72A
(Rev.8/82)
and shall describe the parties thereto as described in the judgment.”
Furthermore, Plaintiff cites O.C.G.A. § 9-13-10, which requires that
“executions shall be issued by the clerk of the court in which judgment is
obtained, shall bear teste in the name of the judge of such court, shall bear date
from the time of their issuing, [and] shall be directed ‘To all and singular the
sheriffs of this state and their lawful deputies.’ ”
In further support of his legal arguments, Plaintiff attaches certified
copies of other magistrate court orders in dispossessory proceedings using the
same form the magistrate judge used in this case. (See Dkt. [23-6].) Plaintiff
explains that “judgments in other cases have been provided with what appears
to be a barcode sticker that states ‘Writ of Possession Issued’ to recognize that
the judgment had resulted in a Writ of Possession being issued.” (Pl.’s Br., Dkt.
[23-2] at 16.) There is no barcode sticker stating that a writ of possession had
been issued in this case, however. (See Consent Order, Dkt. [1-2].) Plaintiff
has also produced an affidavit from Fulton County Marshal Antonio Johnson,
whose office is responsible for executing writs of possession. (See Johnson
Aff., Dkt. [23-5] ¶ 3.) In his affidavit, Johnson states that “after a Plaintiff
obtains a judgment in the Dispossessory Court pursuant to O.C.G.A. § 44-7-55,
14
AO 72A
(Rev.8/82)
the Plaintiff applies for a Writ of Possession with the Clerk’s office entitling
them to have our deputies assist them in recovering possession of the real
property at issue.” (Id. ¶ 4.) After the clerk processes the writ of possession, it
is sent to the Marshal’s Department for execution. (Id. ¶ 5.) Plaintiff argues
that SunTrust did not apply for a writ of possession with the clerk’s office, and
thus the Forsyth County Sheriff was not ordered to be on Plaintiff’s property.1
(Pl.’s Br., Dkt. [23-2] at 17.)
Defendant next argues that Title 9, Chapter 13's procedural requirements
are inapplicable to dispossessory proceedings to the extent that the statutes
governing dispossessory proceedings differ. (Def.’s Reply, Dkt. [25] at 4.)
Thus, Defendant contends that O.C.G.A. § 9-13-3's provision that “execution
shall follow the judgment” is inapplicable. (Id. at 6.) Instead, under O.C.G.A.
§ 44-7-50 et seq. governing dispossessory proceedings, Defendants argue “there
is no statutory requirement that a Writ of Possession must follow the judgment
and therefore cannot be issued simultaneously.” (Id.)
1
Furthermore, according to Plaintiff, “how the Sheriff of Forsyth County got to
the property on January 16, 2013 and who ordered or requested them to be there is
still something of a mystery not yet uncovered by discovery.” (Pl.’s Br., Dkt. [23-2]
at 17.)
15
AO 72A
(Rev.8/82)
After reviewing the parties’ briefs and exhibits, the Court cannot
conclude as a matter of law that Plaintiff was evicted pursuant to a valid writ of
possession. While Defendant insists that the magistrate court’s language that
“[a] writ of possession shall issue in favor of [SunTrust] on October 31, 2012 at
11:59 p.m.” meant that the Consent Order was both a judgment and writ of
possession, the Consent Order’s language, Georgia law, and copies of other
dispossessory judgments indicate otherwise.
First, it is not clear from the language of the Consent Order that it is
intended to function as both a judgment and writ of possession. The order bears
the heading “JUDGMENT.” Even though it states that a writ of possession
shall issue on a certain date, it does not state that the order itself constitutes an
execution or writ of possession.
Second, Georgia law contemplates a writ of possession separate from a
judgment. According to O.C.G.A. § 44-7-55, “If, on the trial of the case, the
judgment is against the tenant, judgment shall be entered against the tenant for
all rents due and for any other claim relating to the dispute.” O.C.G.A. § 44-755(a). In the next sentence, contemplating a separate step, the statute reads,
“The court shall issue a writ of possession, both of execution for the judgment
16
AO 72A
(Rev.8/82)
amount and a writ to be effective at the expiration of seven days after the date
such judgment was entered.” Id. The statute also defines a writ of possession
as “a writ issued to recover the possession of land or other property and such
writ shall not contain restrictions, responsibilities, or conditions upon the
landlord in order to be placed in full possession of the land or other property.”2
O.C.G.A. § 44-7-49. A more natural reading and understanding of a writ of
possession is thus a separate execution of the judgment entered by the
2
Plaintiff filed a Supplement to Plaintiff’s Cross Motion for Summary
Judgment [40] pro se on June 17, 2014, after the motions for summary judgment were
submitted to the Court and after Plaintiff noticed termination of his attorney. Plaintiff
argues in the supplement that his previous counsel did not include an argument related
to the writ of possession in response to Defendant’s motion for summary judgment.
Plaintiff contends that under O.C.G.A. § 44-7-49, a writ of possession “shall not
contain restrictions, responsibilities, or conditions upon the landlord in order to be
placed in full possession of the land or other property.” O.C.G.A. § 44-7-49. Plaintiff
argues that the Consent Order was not a writ of possession because it allowed Plaintiff
to remain in possession of the property until October 31, 2012, and thus placed a
restriction or condition on SunTrust’s possession of the property.
Defendant objects to Plaintiff’s motion, arguing that the filing fails to comply
with both Local Rule 7.1(B), which permits the filing of responsive briefs within 21
days of service of the motion for summary judgment, and Local Rule 56.1(A), which
states that “the parties shall not be permitted to file supplemental briefs and materials,
with the exception of a reply by the movant, except upon order of the court.” LR
56.1(A), NDGa. Defendant further objects that the supplement was submitted by
Plaintiff’s power of attorney and should thus not be considered. Finally, Defendant
states that the Consent Order does not place a restriction on a writ of possession as
contemplated under O.C.G.A. § 44-7-49. The Court agrees, and for all these reasons,
Plaintiff’s Supplement to Cross Motion for Summary Judgment [40] is DENIED.
17
AO 72A
(Rev.8/82)
magistrate court. See also BLACK’S LAW DICTIONARY 1610 (6th ed. 1990)
(defining writ of possession as “[w]rit of execution employed to enforce a
judgment to recover the possession of land. It commands the sheriff to enter the
land and give possession of it to the person entitled under the judgment”).
Finally, Plaintiff’s exhibits of other magistrate court judgments illustrate
that a writ of possession is issued after judgment, at which point a barcode label
stating “Writ of Possession Issued” is affixed to the order. These orders are
identical in format to the one in this case. Below the “JUDGMENT” heading,
the orders read, “ORDERED and ADJUDGED that a WRIT OF POSSESSION
(shall) (shall not) be issued:” followed by the list of options described in the
Background section. In the first example Plaintiff attaches, the judge marked
the box next to the word “Instanter,” and the order bears a barcode label
showing a writ of possession was issued. (See Order, Dkt. [23-6] at 2.) On the
other hand, the Consent Order in this case lacks such a label. So, given the
identical format of both orders, Defendant’s acknowledgment that SunTrust did
not obtain a separate writ of possession from the clerk, and the absence of a
label on the order stating that a writ of possession had been issued, Defendant
18
AO 72A
(Rev.8/82)
fails to show as a matter of law that SunTrust obtained a valid writ of
possession before evicting Plaintiff.
2.
Neglect Exclusion
Although the parties strenuously argue over whether SunTrust had a valid
writ of possession, the fundamental basis for Defendant’s denial of Plaintiff’s
insurance claim is the application of exclusions in the insurance policy.
Defendant first cites the Neglect Exclusion, stating that Plaintiff had a duty to
reasonably protect his property by moving it before October 31, 2012, the date
identified in the Consent Order. Because “Plaintiff failed to undertake any
reasonable means to protect his personal property from the dangers inherent in
the Eviction,” Defendant argues that Plaintiff abandoned his personal property,
and thus the Neglect Exclusion applies. (Def.’s Br., Dkt. [17-1] at 16.) See
also O.C.G.A. § 44-7-55(c) (stating that a writ of possession “shall authorize
the removal of the tenant or his personal property,” “that the landlord shall not
be a bailee of such personal property and shall owe no duty to the tenant
regarding such property,” and “such property shall be regarded as abandoned”
after execution of the writ).
19
AO 72A
(Rev.8/82)
Plaintiff argues that the Neglect Exclusion does not bar his claim because
he “had no reason to believe that such loss would occur before it occurred, was
unable to prevent the loss during its occurrence, and was prevented from
mitigating his loss after the Eviction.” (Pl.’s Br., Dkt. [23-2] at 20.) As
explained above, Plaintiff disputes that SunTrust evicted him pursuant to a writ
of possession. But Defendant further argues that even if SunTrust did not have
a writ of possession, “Plaintiff was not only aware that his property could be
removed from his home on or after October 31, 2012, but he agreed to it in a
binding consent order.” (Def.’s Br., Dkt. [17-1] at 17.) According to
Defendant, “The Consent Order evidences that Plaintiff was on notice that the
Eviction would occur after the date specified in the Consent Order,” so his
failure to remove his belongings constituted a “failure to use all reasonable
means to protect property before, at, or after the time of a loss.” (Id.)
The Court finds that there is a jury question regarding whether Plaintiff
failed to take reasonable means to protect his personal belongings before he was
evicted. If SunTrust lacked a valid writ of possession, Plaintiff was not on
notice of an imminent eviction. While Defendant insists that Plaintiff should
have moved out on October 31, 2012—with or without a writ of
20
AO 72A
(Rev.8/82)
possession—Defendant cites no case law showing that a neglect exclusion
applies if a policyholder fails to do so. Furthermore, Plaintiff was not evicted
until January 16, 2013, undermining Defendant’s argument that Plaintiff should
have known that an eviction was imminent after October 31, 2012.3 Thus, even
if the Consent Order acted as both a judgment and writ of possession, the Court
could not say as a matter of law that Plaintiff failed to take any reasonable steps
to protect his personal property. Without any clear authority on the issue, the
Court finds that the issue of Plaintiff’s reasonableness is best reserved for a
jury.
3.
Confiscation Exclusion
Defendant next argues that Plaintiff’s personal property was destroyed as
a result of an order by a government authority and is thus excluded under the
Confiscation Exclusion. The Confiscation Exclusion provides: “We do not
cover any loss caused by the confiscation, destruction, or seizure of property by
3
Plaintiff argues that he had a reasonable belief based on a conversation with
SunTrust’s counsel in the foreclosure proceedings that SunTrust would not take the
property because it had some environmental problems. (See Pl.’s Br., Dkt. [23-2] at
20.) Defendant argues that it was unreasonable for Plaintiff to rely on statements
foreclosure counsel made before Plaintiff agreed to the Consent Order, and that in any
event these statements are hearsay. (See Def.’s Resp., Dkt. [25] at 12.) The Court
does not rely on Plaintiff’s argument in finding a material factual dispute, however.
21
AO 72A
(Rev.8/82)
or under the order of any government or public authority.” (Def.’s SMF, Dkt.
[17-2] ¶ 16.) Because Defendant has failed to show as a matter of law that
SunTrust evicted Plaintiff pursuant to a valid writ of possession, Defendant is
unable to show that Plaintiff’s property was destroyed under an order of a
government authority. Accordingly, Defendant is not entitled to summary
judgment based on the Confiscation Exclusion, either.
4.
Other Issues
In addition to the breach of contract claim, Plaintiff brings a claim of bad
faith under O.C.G.A. § 33-4-6, which provides:
In the event of a loss which is covered by a policy of insurance and
the refusal of the insurer to pay the same within 60 days after a
demand has been made by the holder of the policy and a finding
has been made that such refusal was in bad faith, the insurer shall
be liable to pay such holder, in addition to the loss, not more than
50 percent of the liability of the insurer . . . and all reasonable
attorney’s fees for the prosecution of the action against the insurer.
O.C.G.A. § 33-4-6(a). “As the statute imposes a penalty, it is strictly
construed.” Primerica Life Ins. Co. v. Humfleet, 458 S.E.2d 908, 910 (Ga. Ct.
App. 1995).
Defendant argues that Plaintiff failed to demand payment sixty days
before filing suit and that its coverage analysis was made in good faith. (See
22
AO 72A
(Rev.8/82)
Def.’s Br., Dkt. [17-1] at 20.) Defendant points out that Plaintiff demanded
payment under O.C.G.A. § 33-4-6 on November 30, 2013, but filed suit on
January 15, 2014, less than 60 days later. (See Demand Letter, Dkt. [17-3].)
Plaintiff does not deny that he filed suit before the 60-day period passed. (See
Pl.’s Br., Dkt. [23-2] at 21.) Instead, he argues that the purpose of the statute
was accomplished because Defendant had an opportunity to decide whether to
pay the demand but declined to cover Plaintiff’s loss in a December 18, 2013
letter. (See id. at 21-22; Pl.’s SMF, Dkt. [23-1] ¶ 26.) Although “the purpose
of the statute’s demand requirement is to adequately notify an insurer that it is
facing a bad faith claim so that it may make a decision about whether to pay,
deny, or further investigate the claim,” the statute provides that the insurance
company may make that decision “within the 60-day deadline.” Primerica, 458
S.E.2d at 910. And because the statute is strictly construed, the Court finds that
an individual may only seek bad faith penalties once 60 days have passed
without an insurer paying a covered loss, even if an insurer purports to deny
coverage before the expiration of the deadline. Because Plaintiff filed suit less
than 60 days after making his demand, he is not entitled to bad faith penalties
under O.C.G.A. § 33-4-6.
23
AO 72A
(Rev.8/82)
Even if Plaintiff had waited 60 days to file his claim, the Court finds that
bad faith penalties are not warranted. “Penalties for bad faith are not authorized
where the insurance company has any reasonable ground to contest the claim
and where there is a disputed question of fact.” Assurance Co. of Am. v. BBB
Serv. Co., 576 S.E.2d 38, 41 (Ga. Ct. App. 2002) (quoting Moon v. Mercury
Ins. Co. of Ga., 559 S.E.2d 532, 534-35 (Ga. Ct. App. 2002)). Because the
Court finds that there is a factual dispute in this case, Defendant had a
reasonable ground to contest coverage, and thus penalties for bad faith are not
authorized.
Finally, Defendant argues that any extracontractual claims against it are
barred under Georgia law. Noting that Plaintiff seeks punitive damages,
attorney’s fees and expenses, and damages for intentional or negligent infliction
of emotional distress, Defendant argues that an insured’s damages related to the
insurer’s conduct in handling a claim is limited to penalties under O.C.G.A. §
33-4-6. (See Def.’s Br., Dkt. [17-1] at 22.) Plaintiff does not respond to
Defendant’s argument, and thus it is treated as unopposed. See LR 7.1B,
NDGa. Indeed, under Georgia law “[t]he penalties contained in O.C.G.A. § 334-6 are the exclusive remedies for an insurer’s bad faith refusal to pay insurance
24
AO 72A
(Rev.8/82)
proceeds.” Howell v. S. Heritage Ins. Co., 448 S.E.2d 275, 276 (Ga. Ct. App.
1994); see also Parsells v. Orkin Exterminating Co., 322 S.E.2d 91, 93 (Ga. Ct.
App. 1984) (“Generally, punitive damages are not recoverable for breach of
contract, even though the breach may be in bad faith.”). Moreover, a “mere
breach of a valid contract amounting to no more than a failure to perform in
accordance with its terms does not constitute a tort or authorize the aggrieved
party” to pursue a tort action, even if the alleged breach caused great hardship.
Tate v. Aetna Cas. & Sur. Co., 253 S.E.2d 775, 777 (Ga. Ct. App. 1979)
(quoting Mauldin v. Sheffer, 150 S.E.2d 150, 153 (Ga. Ct. App. 1966)). Here,
Plaintiff’s claim arises solely from Defendant’s alleged breach of a contractual
duty to cover his insurance claim. Therefore, Plaintiff may not recover punitive
damages, attorney’s fees, or damages for emotional distress.
In sum, the Court finds that there is a jury question with respect to
whether Plaintiff “fail[ed] to use all reasonable means to protect property
before, at, or after the time of a loss” under the Neglect Exclusion. (See Policy,
Dkt. [1-5] at 36.) In addition, there is a factual dispute about the existence of a
valid writ of possession, and so the Court cannot resolve whether the
Confiscation Exclusion applies. As a result of these disputes, however,
25
AO 72A
(Rev.8/82)
Defendant is entitled to summary judgment on Plaintiff’s bad faith claim under
O.C.G.A. § 33-34-6 based on Defendant’s denial of coverage. Furthermore,
Defendant is entitled to summary judgment on Plaintiff’s demand for punitive
damages, attorney’s fees, and damages for emotional distress.
II.
Motion to Alter Order [38] and Motions to Quash [43, 47, 55]
The next set of motions arises from Plaintiff’s issuance of subpoenas to
several witnesses. After the Court granted Plaintiff’s motion for subpoenas,
Defendant filed a motion asking the Court to prohibit Plaintiff from taking
depositions of Zach Handach and Dave Centofanti because they have no
knowledge of the events giving rise to this litigation. (Mot. to Alter Order
Granting Pl.’s Request for Depos., Dkt. [38].) After Plaintiff issued his
subpoenas, Defendant filed motions to quash the subpoenas of Handach and
Centofanti, and SunTrust filed a motion to quash the subpoena of its foreclosure
counsel, Monica Gilroy.
Defendant and SunTrust assert in their motions to quash that Mr.
Mayhew, Plaintiff’s power of attorney, issued the subpoenas, which are
therefore invalid. In response, Plaintiff argues, “Mr. Mayhew is empowered as
my Power of Attorney and he is to protect my interests, which he is doing by
26
AO 72A
(Rev.8/82)
acting on my behalf and conducting certain legal functions on my behalf as
authorized in the Georgia Durable Power of Attorney, which I cannot do
because of my disabilities.” (Pl.’s Resp. to Mots. to Quash, Dkt. [58] ¶ 6.)
Plaintiff further insists that Mr. Mayhew does not represent him as an attorney,
but that Plaintiff is a pro se litigant with Mr. Mayhew acting as his power of
attorney. (Id. ¶ 1.)
Under 28 U.S.C. § 1654, “In all courts of the United States the parties
may plead and conduct their own cases personally or by counsel as, by the rules
of such courts, respectively, are permitted to manage and conduct causes
therein.” “By its own terms § 1654 requires those persons who seek to
represent themselves in federal courts to do so ‘personally,’ thereby foreclosing
on the possibility that such representation could occur by proxy.” Jacox v.
Dep’t of Defense, No. 5:06-cv-184 (HL), 2007 WL 118102, at *1 (M.D. Ga.
Jan. 10, 2007). Under Georgia law, it is unlawful for any person other than a
licensed attorney “[t]o render legal services of any kind in actions or
proceedings of any nature.” O.C.G.A. § 15-19-51(a)(6). Consequently, “[t]he
existence of a power of attorney does not authorize a non-lawyer to conduct
legal proceedings on behalf of a pro se litigant where the law otherwise requires
27
AO 72A
(Rev.8/82)
that such proceedings be conducted by a licensed attorney.” Jacox, 2007 WL
118102, at *1.
In this case, Plaintiff acknowledges that Mr. Mayhew has been
conducting certain legal functions on his behalf. Moreover, the request for
subpoenas and the subpoenas themselves appear to have been issued by Mr.
Mayhew. The pro se filings by Plaintiff each bear Mr. Mayhew’s name and
contact information at the bottom. (See, e.g., Mot. for Subpoenas, Dkt. [35] at
4.) The Handach and Gilroy subpoenas each list Mr. Mayhew as issuing the
subpoena as Plaintiff’s power of attorney. (See Handach Subpoena, Dkt. [42];
Gilroy Subpoena, Dkt. [47-2].) And, while the Centofanti subpoena does not
list Mr. Mayhew as Plaintiff’s power of attorney, the subpoena does include the
same contact information Mr. Mayhew provides for himself on other filings.
For these reasons, the Court finds that Mr. Mayhew issued subpoenas on behalf
of Plaintiff even though Mr. Mayhew is not an attorney. Further, because
Plaintiff is again represented by counsel, who can seek subpoenas or argue the
relevance of the witnesses on Plaintiff’s behalf, the Court declines to rule on the
merits of the subpoenas at this time. Therefore, the Court GRANTS without
28
AO 72A
(Rev.8/82)
prejudice the motions to quash [43, 47, 55] and DENIES as moot Defendant’s
Motion to Alter Order [38].
III.
Petition for Attorney’s Lien [59]
On July 11, 2014, Plaintiff’s former counsel, Louis Levenson, filed a
Petition for Attorney’s Lien [59] under O.C.G.A. § 15-19-14. “If an attorney at
law files his assertion claiming a lien on property recovered in an action
instituted by him, within 30 days after a recovery of the same, his lien shall bind
all persons.” O.C.G.A. § 15-19-14(d). So, while the filing was designated as a
pending motion, the notice claiming a lien was sufficient, and the Court need
not make a ruling on Mr. Levenson’s lien. See Lipton v. Warner, Mayoue, &
Bates, P.C., 492 S.E.2d 281, 283 (Ga. Ct. App. 1997) (“An attorney lien arises
upon the attorney’s employment and is perfected at the time of the ultimate
recovery of the judgment by the client.”).
Conclusion
For the foregoing reasons, Defendant’s Motion for Summary Judgment
[17] is GRANTED in part and DENIED in part. It is GRANTED as to all
claims except for breach of contract. Plaintiff’s Motion to Defer Ruling on
Summary Judgment [18], Plaintiff’s Cross Motion for Summary Judgment [23],
29
AO 72A
(Rev.8/82)
and Plaintiff’s Supplement to Cross Motion for Summary Judgment [40] are
DENIED.
Defendant and SunTrust’s Motions to Quash [43, 47, 55] are GRANTED
without prejudice. Therefore, Defendant’s Motion to Alter Order Granting
Plaintiff’s Request for Depositions [38] is DENIED as moot.
In addition, the Clerk is DIRECTED to remove Louis Levenson’s
Petition for Attorney’s Lien [59] as a pending motion.
Finally, consistent with the Court’s September 12, 2014 Order [64]
granting an extension of time for discovery after ruling on the above motions,
the parties shall confer to agree on a proposed scheduling order. If the parties
cannot agree, they shall advise the Court that a scheduling conference is
necessary.
SO ORDERED, this 2nd day of March, 2015.
_______________________________
RICHARD W. STORY
UNITED STATES DISTRICT JUDGE
30
AO 72A
(Rev.8/82)
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?