McGowan v. Progressive Preferred Ins. Co.
| Decision Date | 30 October 2006 |
| Docket Number | No. S05G2086.,S05G2086. |
| Citation | 281 Ga. 169,637 S.E.2d 27 |
| Parties | McGOWAN et al. v. PROGRESSIVE PREFERRED INSURANCE COMPANY et al. |
| Court | Georgia Supreme Court |
James E. Butler, Jr., Dustin Thomas Brown, Joel O. Wooten, Butler Wooten & Fryhofer, Columbus, Jason Lance Crawford, James Clay Fuller, Daugherty Crawford Fuller & Brown, L.L.P., Columbus, Columbus, Jonathan H. Waller, Campbell Waller & Poer, Birmingham, AL, Gary Oman Bruce, Columbus, for Appellants.
John Aubrey Chandler, Thomas M. Byrne, Teresa Wynn Roseborough, Kristin Beth Wilhelm, William D. Barwick, Thomas William Curvin, Jeremy U. Littlefield, Sutherland, Asbill & Brennan, L.L.P., Atlanta; John Lloyd Watkins, McKenna Long Aldridge, L.L.P., Atlanta; Mark Mester, Julie D. Bailey, Paula W. Render, Kenneth G. Schuler, Latham & Watkins, Chicago, IL; Patrick E. Gibbs, Latham & Watkins, Menlo Parks, CA; John Stephen Berry, McKenna Long & Aldridge, L.L.P., Atlanta; Alan William Loeffler, Herbert D. Shellhouse, Wesley Bloomfield Tailor, Troutman Sanders, L.L.P., Atlanta; Tony G. Powers, Kimberly Lillian Myers, Rogers & Hardin, L.L.P., Atlanta, for Appellees.
These consolidated appeals arise out of a common claim that Progressive Preferred Insurance Company, State Farm Mutual Insurance Company, and Atlanta Casualty Company, conspired with CCC Information Services, Inc. (CCC), a company that provides total-loss valuations to the insurance companies, to intentionally undervalue automobile property damage claims.1 Mary Walker was involved in a car accident in which her vehicle was totaled, and she filed a lawsuit against State Farm and CCC, alleging, among other things, breach of contract, fraudulent concealment, fraud in the inducement, and violations of the Georgia Racketeer Influenced and Corrupt Organizations Act (RICO) in connection with the alleged conspiracy between State Farm and CCC to deliberately undervalue her total-loss claim.
While Walker's case was pending, the trial court ordered the enforcement of an appraisal provision in her State Farm insurance contract. The court-ordered enforcement of the appraisal provision resulted in a total-loss valuation that was greater than the amount that had initially been determined by State Farm. State Farm paid the higher valuation determined from the appraisal process, and the trial court dismissed Walker's fraud, breach-of-contract, and RICO claims, finding that these issues were rendered moot in light of the appraisal process and the resulting higher payment for the value of Walker's vehicle. The Court of Appeals affirmed (see McGowan v. Progressive Preferred Ins. Co., 274 Ga.App. 483, 618 S.E.2d 139 (2005)), and we granted certiorari to determine whether the Court of Appeals correctly held that invocation of the appraisal clause in this case mooted Walker's fraud, breach-of-contract, and RICO claims. For the reasons set forth below, we reverse.
In reviewing the grant of a motion to dismiss, an appellate court must construe the pleadings in the light most favorable to the appellant with all doubts resolved in the appellant's favor. Alford v. Public Svc. Comm., 262 Ga. 386, n. 2, 418 S.E.2d 13 (1992). A motion to dismiss should only be granted if the allegations of the complaint, construed most favorably to the plaintiff, disclose with certainty that the plaintiff would not be entitled to relief under any state of provable facts. Cooper v. Unified Govt. of Athens-Clarke County, 275 Ga. 433(2), 569 S.E.2d 855 (2002). Therefore, we must assume for purposes of this appeal that, as alleged in Walker's complaint, State Farm deliberately conspired with CCC to undervalue total-loss claims under its insurance policies so that it could avoid making proper actual cash value payments to its insureds. With this in mind, we turn to the appraisal clause at issue. The clause states,
[i]f the [vehicle] owner and [State Farm] cannot agree on the actual cash value [of the vehicle at the time of the loss], either party may demand an appraisal as described below. . . . Appraisal under item 1 above shall be conducted according to the following procedure. Each party shall select an appraiser. These two shall select a third appraiser. The written decision of any two appraisers shall be binding. The cost of the appraiser shall be paid by the party who hired him or her. The cost of the third appraiser and other appraisal expenses shall be shared equally by both parties.
By its own language, the appraisal clause provides a method by which the insurer and the insured can make a final determination regarding the actual cash value of a totaled car when there is a dispute as to the car's value. The clause does not purport to provide a means of addressing broader issues such as an insurer's potential liability to an insured for claims made in a lawsuit. "[T]he appraisal process does not determine questions of liability." McGowan, supra, 274 Ga. App. at 487(1), 618 S.E.2d 139. In its opinion, the Court of Appeals relied on Southern General Ins. Co. v. Kent, 187 Ga.App. 496, 370 S.E.2d 663 (1988) and Eberhardt v. Ga. Farm Bureau Mut. Ins. Co., 223 Ga.App. 478, 477 S.E.2d 907 (1996), to reach the conclusion that State Farm was shielded from potential legal liability for fraud and other claims because such claims were rendered moot by invocation of the appraisal clause in the insurance contract. See McGowan, supra, 274 Ga.App. at 489(2), 618 S.E.2d 139. Kent and Eberhardt, however, do not support this result.
In Kent, the plaintiffs sued their insurance company for its alleged bad faith refusal to pay them $13,900 that they believed that they were owed, despite the fact that an agreed-to appraisal process revealed the actual amount of the plaintiffs' loss to be $3,099.72. 187 Ga.App. at 496, 370 S.E.2d 663. The jury awarded the plaintiffs, among other things, damages that were greater than the amount set by the appraisal process. Id. The Court of Appeals reversed the jury award, reasoning that, absent fraud in the appraisal process, the parties were bound by the results of the appraisal process with respect to the amount of the loss, and that application of the appraisal clause rendered any argument concerning value moot. Id. at 498(1), 370 S.E.2d 663.
As the Kent court correctly recognized, a claim for fraud during the appraisal process...
To continue reading
Request your trial
-
Infinite Energy Inc. v. Pardue
...overruled to the extent that they conflict with our ruling. Judgment reversed. 1. (Citation omitted.) McGowan v. Progressive Preferred Ins. Co., 281 Ga. 169, 170, 637 S.E.2d 27 (2006). 2. (Footnote omitted.) Anderson v. Flake, 267 Ga. 498, 501(2), 480 S.E.2d 10 (1997). Accord Scouten v. Ame......
-
Res. Life Ins. Co. v. Buckner
...v. Progressive Preferred Ins. Co., 274 Ga.App. 483, 496, 618 S.E.2d 139 (2005), rev'd on other grounds, McGowan v. Progressive Preferred Ins. Co., 281 Ga. 169, 637 S.E.2d 27 (2006). 18. Leader Nat. Ins. Co. v. Smith, 177 Ga.App. 267, 275(1), 339 S.E.2d 321 (1985). 19. Village Auto Ins. Co. ......
-
Bryant v. Progressive Mountain Ins. Co.
...exclusive avenue for recovery for that allegedly wrongful conduct." (Id. ).In response, Plaintiff cites McGowan v. Progressive Ins. Co. , 281 Ga. 169, 637 S.E.2d 27 (2006), in which the Georgia Supreme Court allowed a plaintiff's claim for fraud against an insurer to go forward. (Doc. 5 at ......
-
Ewing v. City of Atlanta, S06A1988.
...because the trial court ruled against his ground for holding the city liable on his damages claim. 2. McGowan v. Progressive Preferred Ins. Co., 281 Ga. 169, 170, 637 S.E.2d 27 (2006) (citations 3. Allen v. Yost, 281 Ga. 102, 103, 636 S.E.2d 517 (2006), quoting Anderson v. Flake, 267 Ga. 49......
-
ACV And RCV: Are Courts Respecting The Difference?
...insured can make a final determination regarding the actual cash value' of property damages. McGowan v. Progressive Preferred Ins. Co., 281 Ga. 169, 171 (2006). Generally, the appraisal clause is invoked after the insurer issues the upfront ACV payment to the policyholder. Recently, we have......
-
ACV And RCV: Are Courts Respecting The Difference?
...insured can make a final determination regarding the actual cash value' of property damages. McGowan v. Progressive Preferred Ins. Co., 281 Ga. 169, 171 (2006). Generally, the appraisal clause is invoked after the insurer issues the upfront ACV payment to the policyholder. Recently, we have......
-
Legal Ethics - Patrick Emery Longan
...at 32-33; In re Calugar, 281 Ga. at 509-10, 640 S.E.2d at 32. 4. In re Williams, 281 Ga. at 558, 640 S.E.2d at 293; In re Goldberg, 281 Ga. at 169, 635 S.E.2d at 751; In re Wallace, 281 Ga. at 7, 635 S.E.2d at 706-07. 5. In re Kaufman, 281 Ga. at 58, 635 S.E.2d at 751; In re Strickland, 281......
-
Insurance - Stephen M. Schatz, Stephen L. Cotter, and Bradley S. Wolff
...LLC v. Baldwin Paving Co., 285 Ga. App. 494, 498-99, 646 S.E.2d 682, 686 (2007). 7. McGowan v. Progressive Preferred Ins. Co., 281 Ga. 169, 170, 637 S.E.2d 27, 28 (2006). 8. 281 Ga. 169, 637 S.E.2d 27 (2006). 9. O.C.G.A. Sec. 16-14-1 to -15 (2007). 10. McGowan, 281 Ga. at 172, 637 S.E.2d at......
-
Trial Practice and Procedure - Kate S. Cook, Alan J. Hamilton, Brandon L. Peak, and John C. Morrison Iii
...Cotten, 280 Ga. App. at 283, 633 S.E.2d at 657). 126. 282 Ga. 764, 639 S.E.2d 494 (2006). 127. Id. at 794, 639 S.E.2d at 521. 128. 281 Ga. 169, 637 S.E.2d 27 (2006). 129. Id. at 172, 637 S.E.2d at 29. 130. Id. at 169-70, 637 S.E.2d at 27-28. 131. Id. at 170, 637 S.E.2d at 27-28. 132. Id., 6......