Baumgartner v. State Farm Fire & Cas. Co.
| Decision Date | 21 March 2017 |
| Docket Number | CIVIL ACTION NO. 1:15–CV–1993–RWS |
| Citation | 244 F.Supp.3d 1361 |
| Parties | Rebecca T. BAUMGARTNER, Plaintiff, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant. |
| Court | U.S. District Court — Northern District of Georgia |
Ellaretha Jones Coleman, E. Jones & Associates, LLC, Atlanta, GA, for Plaintiff.
Marcus Dean, Mark Thomas Dietrichs, Swift, Currie, McGhee & Hiers, LLP, Atlanta, GA, for Defendant.
This case comes before the Court on Defendant State Farm Fire and Casualty Company's Motion for Summary Judgment, or, in the Alternative, Motion to Dismiss [33]. After reviewing the record, the Court enters the following Order.
This is an insurance dispute between Plaintiff Rebecca T. Baumgartner and Defendant State Farm Fire and Casualty Company ("State Farm"). On March 8, 2014, Ms. Baumgartner notified State Farm of an alleged wind and hail loss at property located at 6900 Brookside Drive, Roswell, Georgia ("Property"). (Def.'s Statement of Undisputed Mat. Facts ("Def.'s SMF"), Dkt. [33–2] ¶ 1.) Ms. Baumgartner alleged that the property suffered roof and interior structural damage from wind and hail damage that occurred over a year earlier, on March 18, 2013. (Id. ¶ 2.) At the time of the alleged loss, the Property was covered under Homeowners Policy Number 11–GP–7111–4 ("Policy"), which was issued to Ms. Baumgartner. (Id. ¶ 3.)
After an investigation, State Farm determined that the cost to repair the damage to the Property was $13,536.27. (Bond Aff., Dkt. [33–3] ¶ 7; Baumgartner Aff., Dkt. [39–1] ¶ 11.)1 Ms. Baumgartner's Policy contains a $2,000 deductible. (Def.'s SMF, Dkt. [33–2] ¶ 5.) After deducting depreciation ($7,415.77) and Ms. Baumgartner's deductible, State Farm issued an actual cash value payment of $4,147.50 to its only named insured, Ms. Baumgartner, for the claimed loss. (Id. ¶ 6.)
Ms. Baumgartner disagreed with State Farm's determination and filed suit against State Farm on April 30, 2015, for damages to the Property.2 (Id. ¶ 7.) She sets forth two counts: breach of contract and bad faith. (Compl., Dkt. [1–1] ¶¶ 30–50.) Ms. Baumgartner alleges that the Property suffered $100,307.56 in roof damage and interior damage to the walls, floors, and ceilings. (Def.'s SMF, Dkt. [33–2] ¶ 8.) She does not allege, however, that she suffered any damage to her personal property or furnishings. (Id. ¶ 9.) She filed this suit in her individual name only. (Id. ¶ 10.)
During discovery, Ms. Baumgartner testified that the legal owner of the Property is the "Hugh Lee Baumgartner Trust" ("Trust"). (Id. ¶ 11.) Wesley Hargrave serves as Trustee of the Trust. (Id. ¶ 12.) Ms. Baumgartner does not make any mortgage or rental payments to the Trust related to her use of the Property. (Id. ¶ 14.) And the Trust handles maintenance and major repairs on the Property. (Baumgartner Dep., Dkt. [34] at 8:15–23; Baumgartner Aff., Dkt. [39–1] ¶ 7.)3 Ms. Baumgartner is listed as the only named insured on the Policy's Declarations page. (Def.'s SMF, Dkt. [33–2] ¶ 15.) State Farm was not aware that Ms. Baumgartner was not the owner of the Property until after Ms. Baumgartner filed suit and her deposition was taken. (Bond Aff., Dkt. [33–3] ¶ 9.)
Ms. Baumgartner's expert, Eduard Badiu, learned that the Property was owned by the Trust prior to or on January 26, 2015, after searching the county's appraiser's records. (Id. ¶ 18.) Mr. Badiu referenced the Trustee, Mr. Hargrave, in his report dated January 26, 2015. (Id. ¶ 19.) He then provided his report to Ms. Baumgartner's consultants. (Id. ¶ 20.) Still, Ms. Baumgartner did not disclose that the Trust and Mr. Hargrave, in his capacity as Trustee, had an interest in the outcome of this litigation in the Joint Preliminary Report. (Id. ¶ 17.) She also did not submit a Certificate of Interested Persons. (Id. )
The Policy contains an Insurable Interest provision, in "SECTION I—CONDITIONS," which says the following:
(Id. ¶ 21; Policy, Dkt. [33–5] at 36.)
On October 27, 2015, State Farm filed a Motion for Leave to Amend its Answer [21]. The Court granted that motion on November 23, 2015. State Farm then filed its Amended Answer on November 23, 2015, asserting two new defenses: (1) Ms. Baumgartner has no insurable interest in the Property; and (2) Ms. Baumgartner is not the real party in interest. (Def.'s Am. Answer, Dkt. [25].) As of the date of this Order, Ms. Baumgartner has not joined or substituted the Trust or Mr. Hargrave, as Trustee, into this litigation.
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 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, 106 S.Ct. 2548, 91 L.Ed.2d 265 (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, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
The applicable substantive law identifies which facts are material. Id. at 248, 106 S.Ct. 2505. 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, 106 S.Ct. 2505.
In resolving a motion for summary judgment, the court must view all evidence and draw all reasonable inferences in the light most favorable 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, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson , 477 U.S. at 249–50, 106 S.Ct. 2505 (internal citations omitted); see also Matsushita , 475 U.S. at 586, 106 S.Ct. 1348 ().
State Farm's motion contains alternative arguments. First, State Farm argues that it is entitled to summary judgment because Ms. Baumgartner does not have an insurable interest in the Property. Alternatively, State Farm argues that this case must be dismissed under Federal Rule of Civil Procedure ("Rule") 17 because Ms. Baumgartner is not the real party in interest. The Court will address those arguments in turn.
State Farm argues that Ms. Baumgartner cannot maintain her claims because she lacks an insurable interest in the Property. Indeed, under Georgia law, claimants must have an insurable interest in property to recover for a claimed loss. See O.C.G.A. § 33–24–4(b) (). An "insurable interest" means "any actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment." O.C.G.A. § 33–24–4(a). "The test of insurable interest in property is whether the insured has such a right, title, or interest therein, or relation thereto, that he will be benefitted by its preservation and continued existence, or suffer a direct pecuniary loss from its destruction or injury by the peril insured against." Splish Splash Waterslides, Inc. v. Cherokee Ins. Co. , 167 Ga.App. 589, 307 S.E.2d 107, 109 (1983).
While "[t]itle is not the sole test for determining an insurable interest," Integon Gen. Ins. Corp. v. Gibson , 226 Ga.App. 152, 485 S.E.2d 576, 578 (1997), "the insured must have some lawful interest in property before [she] can have an insurable interest in the property. Conex Freight Sys., Inc. v. Ga. Ins. Insolvency Pool , 254 Ga.App. 92, 561 S.E.2d 221, 225 (2002). Thus, mere possession of property is not enough to create an insurable interest. Muhammad v. Allstate Ins. Co. , 313 Ga.App. 531, 722 S.E.2d 136, 139 (2012).
State Farm argues that Ms. Baumgartner lacks an insurable interest in the Property because she does not own the Property, makes no rent or mortgage payments on the Property, and does not bear the financial cost of replacing or fixing damages to the Property. In short, she is "simply a possessor of the property" with no pecuniary interest in its continued preservation. (Def.'s Br. in Supp. of Mot. for Summ J. ("Def.'s Br."), Dkt. [33–1] at 9.)
Ms. Baumgartner counters with two arguments for why she has an insurable interest in the Property. First, citing Sapp v....
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