Allstate Ins. Co. v. Sutton

• Court: Georgia Court of Appeals
• Writing for the Court: Phipps
• Citation: Allstate Ins. Co. v. Sutton, 290 Ga. App. 154, 658 S.E.2d 909 (Ga. App. 2008)
• Decision Date: 07 March 2008
• Docket Number: No. A07A2145.,No. A07A2146.,No. A07A2147.,A07A2145.,A07A2146.,A07A2147.
• Parties: ALLSTATE INSURANCE COMPANY v. SUTTON et al. PJ Services, Inc. v. Sutton et al. Sutton et al. v. Allstate Insurance Company et al.

290 Ga. App. 154

658 S.E.2d 909

290 Ga.App. 154

ALLSTATE INSURANCE COMPANY v. SUTTON et al.

PJ Services, Inc. v. Sutton et al.

Sutton et al. v. Allstate Insurance Company et al.

No. A07A2145.

No. A07A2146.

No. A07A2147.

Court of Appeals of Georgia.

March 7, 2008.

Webb, Zschunke, Neary & Dikeman, William E. Zschunke, Melissa C. Patton, Atlanta, for Allstate Insurance Company, et al.

Knight & Green, Donald K. Knight, Jr., for Sutton et al.

Magill & Atkinson, David M. Atkinson, Jonathan A. Barash, for PJ Services, Inc.

PHIPPS, Judge.

These appeals arise from a dispute between homeowner Sharon Sutton on behalf of herself and her minor daughter, Sutton's homeowners insurance company, Allstate Insurance Company, and PJ Services, Inc., a company that performed repairs and remediation work after a plumbing leak in Sutton's house. We granted interlocutory review to Allstate and PJ Services to consider whether the trial court erred in denying motions for summary judgment brought by all parties, in denying a motion to strike documents brought by PJ Services, and in granting in part and denying in part a motion brought by Sutton under OCGA § 9-11-12. Sutton cross-appealed. For the reasons set forth below, we affirm in part and reverse in part.

We review the grant or denial of a motion for summary judgment de novo, viewing the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.¹

A defendant demonstrates entitlement to summary judgment by showing that the record lacks evidence sufficient to create a jury issue on at least one essential element of the plaintiff's case. The defendant does not need to affirmatively disprove the plaintiff's case, but may prevail simply by pointing to the lack of evidence. If the defendant does so, the plaintiff cannot rest on his pleadings, but must point to specific evidence that gives rise to a triable issue of fact.²

The record shows that the plumbing leak occurred on February 6, 2002 and affected several rooms in Sutton's house. Sutton informed Allstate of the leak. Later that day, a representative of PJ Services arrived and set up equipment to dry the house. On February 14, PJ Services removed the equipment, telling Sutton that the floors were "absolutely dry." Allstate referred a contractor, who called Sutton to discuss repairs to her floor, but Sutton wanted to obtain bids from other contractors. Her efforts to find a contractor and schedule the repairs were hampered by her work schedule, which limited when she could meet prospective contractors and have the repairs performed.

During the spring of 2002, Sutton began to suspect that there was mold in her house. She asked representatives of Allstate and PJ Services about a spot in her bedroom and about an odor in the house that she thought indicated the presence of mold. They informed her that there was no sign of mold. But Allstate arranged for an expert to inspect the house, who, after doing so, told Sutton that she found no indication of mold. The expert, however, later issued for Allstate a written report advising mold remediation.

In June 2002, a contractor obtained by Allstate began repairs on the house and, upon pulling up the floor, discovered water and mold in one of the areas affected by the February leak. Sutton and her family immediately moved out of the house. PJ Services began mold remediation work, but Allstate subsequently instructed PJ Services to stop working and PJ Services performed no further work on the house.

Meanwhile, on more than one occasion in the summer of 2002, Sutton threatened suit against Allstate. In August 2002, Allstate informed Sutton that, before further repairs and remediation could occur, she needed to repair a crawl space and another active leak in the house. Sutton disputed her responsibility for any other leak and the need for these repairs. She also contacted the state insurance commissioner and, in the fall of 2002, met with the insurance commissioner, representatives of Allstate and PJ Services, and an environmental expert to attempt to resolve her dispute with Allstate. The parties, however, never reached a resolution and the insurance commissioner ultimately closed its filed on the matter.

On September 23, 2003, Sutton brought an action against Allstate and PJ Services. She subsequently voluntarily dismissed the action and filed the instant renewal action. Sutton charged Allstate with: breach of contract, breach of an implied duty of good faith and fair dealing, bad faith refusal to pay a claim, unfair trade practices, stubborn litigiousness supporting attorney fees, negligence, and fraud. Sutton charged PJ Services with: breach of contract, breach of an implied duty of good faith and fair dealing, stubborn litigiousness, negligence, and fraud. She asserted various damages, including physical injury and injury to real and personal property.

The trial court granted in part and denied in part Allstate's motion for summary judgment, and Allstate appeals the partial denial in Case No. A07A2145.³ The court denied PJ Services' motion for summary judgment and motion to strike documents, and PJ Services appeals these denials in Case No. A07A2146. The court granted in part and denied in part Sutton's motion to determine defenses and denied her motion for summary judgment, and Sutton appeals the denials in Case No. A07A2147.⁴

Case No. A07A2145

1. Allstate argues that a one-year limitation provision in Sutton's insurance policy prohibits her action against it, and that the trial court erred in finding a jury question concerning whether the limitation provision should apply in this case. The policy pertinently provides: "No suit or action may be brought against us unless there has been full compliance with all policy terms. Any suit or action must be brought within one year after the inception of loss or damage." Sutton brought the action against Allstate more than one year after the inception of loss or damage. The trial court, however, found a question of fact concerning whether Allstate had waived the policy limitation provision through its settlement negotiations with Sutton, relying on Nee v. State Farm Fire, etc. Co.⁵

In Nee, we reversed a grant of summary judgment to an insurer even though the homeowner had not filed suit within 12 months of his loss, as his policy required. In so doing, we held:

It is a universal rule that, where the insurer, by its acts in negotiating for a settlement, has led the policyholder to believe that he will be paid without suit, the insurer cannot take advantage of a provision in the policy which requires the action to be brought in a certain time.... If the facts show that negotiations for a settlement have led the insured to believe that the claim would be paid by the insurer without a suit, this will constitute a waiver of the time requirement, and the insurer cannot take advantage thereof in a suit to recover the loss.⁶

The facts in Nee gave rise to a jury question about whether continuing settlement negotiations led the policyholder to believe that the limitation provision was waived.⁷

But settlement negotiations do not always give rise to a jury question on whether the policyholder was led to believe that he need not file suit, even if they continue throughout the policy's limitation period.⁸ "[M]ere negotiation for settlement, unsuccessfully accomplished, is not that type of conduct designed to lull the claimant into a false sense of security so as to constitute a waiver of the limitation defense."⁹ And where "inconclusive settlement negotiations were explicitly conditioned on the policy terms," the policyholder cannot create a jury issue by claiming a belief that the insurer would waive the contractual limitation provision.¹⁰

Here, Allstate explicitly conditioned its settlement negotiations with Sutton on the policy terms. In a July 16, 2002 letter, Allstate informed Sutton that it reserved "all rights and defenses" that it had under its policy with Sutton and stated:

We further notify you that any activity on our part by way of investigation, damage determination, or emergency advance payments to you, does not constitute a waiver of our rights.

Allstate further advised Sutton in this letter that it would avail itself of all applicable policy defenses. We find "no showing in this record of any affirmative statement or other act by [Allstate] that would lead [Sutton] to believe that the insurer would waive the contractual limitation."¹¹

There is no merit in Sutton's argument that the policy's one-year limitation provision is ambiguous. In numerous cases we have held that contractual limitation provisions such as the one here are valid and enforceable.¹²

Accordingly, we reverse the trial court's judgment denying in part Allstate's motion for summary judgment.

2. In light of our holding in Division 1, we need not consider Allstate's remaining claims of error.

Case No. A07A2146

3. PJ Services contends that the trial court erred in denying its motion for summary judgment on Sutton's negligence claim. The essential elements of a negligence action are: (1) a legal duty; (2) a breach of this duty; (3) an injury; and (4) a causal connection between the breach and the injury.¹³ Questions of negligence generally are for the jury, and may be resolved on summary judgment "only where the evidence is plain, palpable and undisputable."¹⁴ For the reasons explained below, we affirm the trial court's denial of summary judgment on Sutton's claim for property damages arising from PJ Service's alleged negligence, but we reverse the denial of summary judgment on her claim for personal injuries resulting from the alleged negligence.

(a) PJ Services argues that it owed Sutton no duty of care. But it is undisputed that PJ Services undertook to perform work at Sutton's house, and Georgia law "imposes an obligation upon everyone who attempts to do anything, even gratuitously, for...