Colonial Life & Acc. Ins. Co. v. McClain

Decision Date07 March 1979
Docket NumberNo. 34383,34383
Citation243 Ga. 263,253 S.E.2d 745
CourtGeorgia Supreme Court
PartiesCOLONIAL LIFE & ACCIDENT INSURANCE COMPANY v. McCLAIN.

Patton & Hoyt, Wade C. Hoyt, III, Rome, for appellant.

Frank H. Jones, Rome, James I. Parker, Cedartown, for appellee.

UNDERCOFLER, Presiding Justice.

The Court of Appeals, by certified question, asks for instructions on the proper standard for reviewing a judgment against an insurer for damages and attorney fees for bad faith in refusing to pay a claim. Code Ann. § 56-1206. Such judgment is not authorized if an insurer had reasonable and probable cause for making a defense to the claim. Interstate Life etc. Ins. Co. v. Williamson, 220 Ga. 323, 138 S.E.2d 668 (1964).

However, in some cases, the Court of Appeals has reviewed such judgments upon the sufficiency of the evidence to support the verdict. See Poe v. Founders Life etc. Co., 145 Ga.App. 757, 760(3), 245 S.E.2d 166 (1978); Bituminous Casualty Corp. v. Mowery, 145 Ga.App. 45, 244 S.E.2d 573 (1978); Key Life Ins. Co. v. Mitchell, 129 Ga.App. 192, 198 S.E.2d 919 (1973); Old Equity Life Ins. Co. v. Barnard, 120 Ga.App. 596, 171 S.E.2d 636 (1969); Hartford Fire Ins. Co. v. Lewis, 112 Ga.App. 1, 143 S.E.2d 556 (1965).

In other cases the Court of Appeals has reviewed such judgments under a rule which states that a finding of bad faith is not authorized if the evidence would have supported a verdict in accordance with the contentions of the defendant. The Court of Appeals questions this latter rule because as it states, "Since a verdict is authorized whenever there is 'any evidence' to support it, the effect of these decisions is to equate the defense standard of Williamson with the any evidence rule." See United States Fire Ins. Co. v. Tuck, 115 Ga.App. 562, 573(2), 155 S.E.2d 431 (1967); U. S. Fidelity etc. Co. v. Biddy Lumber Co., 114 Ga.App. 358, 151 S.E.2d 466 (1966); St. Paul Fire & Marine Ins. Co. v. Postell, 113 Ga.App. 862, 149 S.E.2d 864 (1966); First National Ins. Co. v. Thain, 110 Ga.App. 603, 139 S.E.2d 447 (1964).

1. The Court of Appeals asks: "Has the Court of Appeals in some cases improperly construed the 'reasonable and probable cause for making it' standard enunciated in Interstate Life & Accident Ins. Co., 220 Ga. 323, 138 S.E.2d 668 (1964) as being equivalent to the 'any evidence' rule?"

The rule in Williamson appeared originally in Travelers Ins. Co. v. Sheppard, 85 Ga. 751, 765, 12 S.E. 18 (1890) as follows, "A defence going far enough to show reasonable and probable cause for making it, would vindicate the good faith of the company as effectually as would a complete defence to the action. On the other hand, any defence not manifesting such reasonable and probable cause, would expose the company to the imputation of bad faith and to the assessment of damages therefor under section 2850 of the code."

The standard for reviewing any judgment is whether the evidence is sufficient to support the verdict. Under the rule announced in Williamson and Sheppard the insurer's defense must be evaluated because if there was "reasonable and probable cause to make it" an award for damages and attorney fees for bad faith is not authorized. Not every defense bars a finding of bad faith. It is a defense which raises a reasonable question of law or a reasonable issue of fact even though not accepted by the trial court or jury.

This is the intention of the statute authorizing damages and attorney fees against insurers for refusing to pay promptly which we...

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54 cases
  • Worsham v. Provident Companies, Inc.
    • United States
    • U.S. District Court — Northern District of Georgia
    • July 29, 2002
    ...an IME in support of its denial of a claim, the issue of bad faith penalties may be for the jury.8 See Colonial Life & Acc. Ins. Co. v. McClain, 253 S.E.2d 745, 746, 243 Ga. 263 (1979) (finding of bad faith is barred where "a defense raises a reasonable question of law or a reasonable issue......
  • Ussery v. Allstate Fire & Cas. Ins. Co.
    • United States
    • U.S. District Court — Middle District of Georgia
    • December 14, 2015
    ...fact even though not accepted by the trial court or jury.” Winningham , 708 F.2d at 659 (quoting Colonial Life & Accident Insurance Co. v. McClain , 243 Ga. 263, 253 S.E.2d 745, 746 (1979) ); see also Moon v. Mercury Ins. Co. of Georgia , 253 Ga.App. 506, 559 S.E.2d 532, 534–35 (2002) ( “Pe......
  • American Family Life Assur. Co. of Columbus, Ga. v. U.S. Fire Co.
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • October 10, 1989
    ...the insurer." Hendley v. American National Fire Insurance Co., 842 F.2d 267, 269 (1988) (quoting Colonial Life and Accident Insurance Co. v. McClain, 243 Ga. 263, 253 S.E.2d 745, 746 (1979)). a. Missouri Defendants had a reasonable argument that Missouri law should control the interpretatio......
  • Am. Safety Indem. Co. v. STO Corp.
    • United States
    • Georgia Court of Appeals
    • June 30, 2017
    ...entitled to summary judgment on the issue of bad faith penalties under OCGA § 33–4–6. Id., quoting Colonial Life & Acc. Ins. Co. v. McClain , 243 Ga. 263, 265 (1), 253 S.E.2d 745 (1979). See Certain Underwriters at Lloyd's of London v. Rucker Constr. , 285 Ga. App. 844, 850 (3), 648 S.E.2d ......
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1 books & journal articles
  • A Georgia Practitioner's Guide to Construction Performance Bond Claims - Cheryl S. Kniffen
    • United States
    • Mercer University School of Law Mercer Law Reviews No. 60-2, January 2009
    • Invalid date
    ...interpreting Sec. 33-4-6 are instructive in the suretyship context. See, e.g., Columbus Fire, 166 Ga. App. at 510, 304 S.E.2d at 473. 78. 243 Ga. 263, 253 S.E.2d 745 (1979). 79. Id. at 265, 253 S.E.2d at 746. 80. Id. 81. Congress Re-Ins. Corp. v. Archer-Western Contractors, Ltd., 226 Ga. Ap......

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