Georgia Farm Bureau Mutual Insurance Company v. Brown

Court of Appeals of Georgia, No. A89A0461, decided June 27, 1989; rehearing denied July 27, 1989 (McMurray, Presiding Judge, for the court; Carley, C. J., and Beasley, J., concurring). Counsel of record were McKenzie & McPhail, John B. McPhail, Robert T. Ross and Pat Huddleston II for the appellant carrier, and Milton Harrison for the appellee. The complete opinion appears below. Our text comes from the Caselaw Access Project (case.law), Harvard Law School’s open archive of published U.S. case law, which supplies the opinion as printed in the official reporter at 192 Ga. App. 504. Here is the complete accounting of what we removed and repaired. The reporter’s head matter is only the docket number, the caption, and the parallel-cite line “(385 SE2d 87)”; the caption and a court-and-date line are reprinted above the opinion, and the parallel-cite line is dropped. The archive sets the reporter’s page-foot block — the “Decided June 27, 1989” and “Rehearing denied July 27, 1989” lines and the two counsel listings — down inside the opinion, between Division 3 and Division 4; that block has been lifted out and summarized in this paragraph instead. Four repairs were made to the remaining text: the judge’s name line was set in bold; a stray period printed between “Charlie Max Brown” and “(plaintiff)” in the first paragraph was removed; the scan’s run-together dates “February 3,1986, through February 3,1987” were spaced as “February 3, 1986, through February 3, 1987”; and in Division 2 the scan’s “ [permission [was] granted was set as “[p]ermission [was] granted, the bracketed-letter form the reporter uses. Three things we deliberately did NOT change, so you are not surprised by them: the concurrence line prints as “Carley, C. J., and Beasley J., concur.” without the comma after Beasley; the opinion’s phrase “plaintiff’s creditor’s from reaching the insured property” carries the apostrophe as printed; and the long quotation of OCGA § 33-32-5 (a) in Division 3 has no closing quotation mark before “(Emphasis supplied.)” in the source. Nothing else was touched. No word of the court’s has been changed, condensed, reordered, or paraphrased.

The full opinion

GEORGIA FARM BUREAU MUTUAL INSURANCE COMPANY v. BROWN.

Court of Appeals of Georgia. No. A89A0461. Decided June 27, 1989. Rehearing denied July 27, 1989.

McMurray, Presiding Judge.

Charlie Max Brown (plaintiff) brought an action against Georgia Farm Bureau Mutual Insurance Company (“Georgia Farm Bureau”), seeking to recover for the loss of a house that was allegedly destroyed by fire and allegedly covered under a “farmowners policy” of insurance, issued to plaintiff by Georgia Farm Bureau. Georgia Farm Bureau answered and admitted that it insured a dwelling house located “at Route #3, Eastman, [Dodge County,] Georgia” and that this house was damaged by fire on March 28, 1986, but denied that the property was totally destroyed by fire and denied that plaintiff owned the house at the time of the fire. The case was tried before a jury and the evidence revealed the following:

Plaintiff resided in an “old house” that was owned by his grandparents and was situated on a 30-acre parcel of land in Dodge County, Georgia. After plaintiff’s grandparents died, he inherited the 30-acre tract of land and, in December 1985, plaintiff moved with his wife and stepdaughter to a house which was formerly occupied by his grandparents and is located next to the “old house.”

On February 3, 1986, plaintiff renewed a Georgia Farm Bureau “farmowners policy” of insurance which had covered the “old house” since before plaintiff’s grandparents’ deaths. The policy was made effective from February 3, 1986, through February 3, 1987. On February 19, 1986, plaintiff executed a warranty deed in favor of his half-brother, Joseph M. Hobbs, conveying 29 acres of the land plaintiff inherited from his grandparents. (This purported transfer included the “old house” which plaintiff formerly occupied.) The deed was filed for record in the Superior Court of Dodge County on the same day it was executed. On March 7, 1986, Hobbs executed a deed, re-conveying the land to plaintiff. On March 28, 1986, the “old house” was destroyed by fire. Plaintiff filed a claim with Georgia Farm Bureau for the loss and, after an investigation, Georgia Farm Bureau denied coverage under its policy.

At the close of the evidence, the parties filed opposing motions for directed verdict. These motions were denied and the jury later returned a verdict in plaintiff’s favor for the policy limits, $24,000. Georgia Farm Bureau’s motion for judgment notwithstanding the verdict was denied; this appeal followed and, in four enumerations of error, Georgia Farm Bureau contends the trial court erred in denying its motion for judgment notwithstanding the verdict.

“The standard for granting a directed verdict or a judgment notwithstanding the verdict are the same. Where there is no conflict in the evidence as to any material issue, and the evidence introduced, with all reasonable deductions therefrom, shall demand a particular verdict, such verdict shall be directed. OCGA § 9-11-50 (Code Ann. § 81A-150). In reviewing grant of a directed verdict or a judgment notwithstanding the verdict, we must decide whether all the evidence demanded it, or whether there was some evidence supporting the verdict of the jury. Bryant v. Colvin, 160 Ga. App. 442 (287 SE2d 238) (1981). A judgment notwithstanding the verdict is improperly granted in the face of conflicting evidence, and an appellate court must view the evidence in the light most favorable to the party who secured the jury verdict.” Pendley v. Pendley, 251 Ga. 30 (1), 31 (302 SE2d 554). It is from this perspective that we view the evidence upon consideration of Georgia Farm Bureau’s enumerations of error. Held:

1. In its enumerations of error, Georgia Farm Bureau contends the “trial court erred in denying Georgia Farm Bureau’s motion for judgment notwithstanding the verdict because the insurance contract provided no coverage as a matter of law, and because plaintiff failed to prove damages or an insurable interest necessary for recovery in this case. More specifically, the contract was null and void due to a change in interest, title or possession in the premises. Further, the contract was suspended at the time of the fire because plaintiff left the premises unoccupied for over sixty consecutive days before the incident. In addition, plaintiff failed to carry his burden to prove damages or that he had an insurable interest, absolute prerequisites to recovery under the law.”

The evidence authorized a finding that plaintiff conveyed the insured property to Hobbs in an attempt to protect the property from his creditors. Further, plaintiff testified that he consulted with an attorney to perfect this transaction; that the attorney was to prepare two warranty deeds, one conveying the insured property from plaintiff to Hobbs and another conveying the insured property from Hobbs to plaintiff and that these instruments were to be executed in a simultaneous transaction. Plaintiff also testified that when he executed the deed conveying the insured property to Hobbs the deed of reconveyance was not available and that it was not executed by Hobbs until March 1986. Plaintiff went on to explain that he never intended to transfer ownership of the property to Hobbs and, plaintiff’s other testimony indicated that he never relinquished possession or control of the property to Hobbs. In fact, Hobbs testified that plaintiff owned the insured property on the date of the fire and that he never considered himself to be the owner of the property.

“A provision in a policy of fire insurance which declared that ‘This entire policy … shall be void … if any change … takes place in the interest, title, or possession of the subject of insurance …, was not violated, so as to void the policy, by the execution of a deed by the insured purporting to convey the property to another, where the grantee, as a part of the same transaction, reconveyed the property to the insured; it appearing from uncontradicted evidence that neither party intended to enter a contract of sale and purchase, the possession remaining with the insured, and the whole transaction being merely a sham and device to prevent the institution of a proceeding for alimony on the part of the wife of the insured.” Home Ins. Co. of N. Y. v. Johnson, 181 Ga. 139 (182 SE 41).

In the case sub judice, the evidence authorized a finding that plaintiff executed the warranty deed for the insured property to Hobbs contemplating Hobbs’ immediate reconveyance of the property to plaintiff; that Hobbs did reconvey the property to plaintiff before the fire; that neither party intended to enter into a contract for the sale and purchase of the insured property; that plaintiff remained in control and possession of the insured property and that the whole transaction was merely a sham and a device to prevent plaintiff’s creditor’s from reaching the insured property. Under these circumstances, we find that plaintiff’s execution of the warranty deed in favor of Hobbs was not a completed sale which triggered the change of title or interest provision of the policy. Home Ins. Co. of N. Y. v. Johnson, 181 Ga. 139, 142, supra. See 4A Appleman, Ins. Law & Practice 332, 336, § 2742. Consequently, the trial court did not err in denying Georgia Farm Bureau’s motion for judgment notwithstanding the verdict on this ground.

2. Next, Georgia Farm Bureau contends “[p]laintiff’s claim under the [insurance] contract is barred because the premises were unoccupied for over sixty consecutive days before the fire.”

The insurance contract provided, under a section entitled “Conditions suspending or restricting insurance,” that, “[u]nless otherwise provided in writing added hereto[,] this Company shall not be liable for loss occurring … while a described building, whether intended for occupancy by owner or tenant, is vacant or unoccupied for a period of sixty consecutive days … .” This provision was broadened in a section of the policy entitled, “Vacancy and Unoccupancy,” wherein “[p]ermission [was] granted for the farm dwelling(s) covered under Coverage A to remain … unoccupied for not more than 120 consecutive days … .”

The evidence relative to these provisions of the policy authorized findings that the insured property remained “unoccupied” for more than 60 consecutive days before the fire, but not more than 120 consecutive days before the fire. “ ‘Thus we have a situation where one provision of the policy excludes liability and another accepts liability. Every written provision of an insurance contract must be given its apparent meaning and effect. (Cit.) (The provisions currently under consideration) are repugnant to one another. When that occurs in an insurance contract, the provision most favorable to the insured will be applied. (Cit.)’ Welch v. Gulf Ins. Co., 126 Ga. App. 115, 117 (190 SE2d 101) (1972). Accord Cotton States Mut. Ins. Co. v. Crosby, 149 Ga. App. 450 (254 SE2d 485) (1979), rev’d on other grounds, 244 Ga. 456 (260 SE2d 860) (1979).” United States Fire Ins. v. Hilde, 172 Ga. App. 161, 163 (2), 164 (322 SE2d 285).

In the case sub judice, the provision most favorable to plaintiff allows an insured dwelling to remain “unoccupied” for at least 120 consecutive days before coverage is suspended. Consequently, since the evidence authorized a finding that the insured property was not “unoccupied” for more than 120 consecutive days before the fire, plaintiff is not “barred” from pressing his claim. See United States Fire Ins. Co. v. Hilde, 172 Ga. App. 161, 163 (2), supra.

3. Georgia Farm Bureau further contends that plaintiff failed to prove that the insured house was “wholly destroyed by fire,” thus justifying recovery for the policy limits under OCGA § 33-32-5 (a). This Code section provides in pertinent part as follows: “Whenever any policy of insurance is issued to a natural person or persons insuring a specifically described one or two family residential building or structure located in this state against loss by fire and the building or structure is wholly destroyed by fire without fraudulent or criminal fault on the part of the insured or one acting in his behalf, the amount of insurance set forth in the policy relative to the building or structure shall be taken conclusively to be the value of the property, except to the extent of any depreciation in value occurring between the date of the policy or its renewal and the loss … (Emphasis supplied.) Plaintiff’s evidence showing that it would cost more to repair the house than to replace it and photographs submitted into evidence by Georgia Farm Bureau showing that the house was substantially gutted by the fire was sufficient to authorize the jury’s finding that the house was “wholly destroyed by fire” as contemplated by the above statute. See Allstate Ins. Co. v. Baugh, 173 Ga. App. 615, 617 (3) (327 SE2d 576).

4. Lastly, Georgia Farm Bureau contends plaintiff failed to prove that he had an insurable interest in the property at the time of the fire as is required by OCGA § 33-24-4 (b). This contention is without merit.

The evidence shows that plaintiff acquired title to the insured house before it was destroyed by fire and, as was held in Division 1 of this opinion, plaintiff never transferred his interest in the property. See Home Ins. Co. of N. Y. v. Johnson, 181 Ga. 139, supra.

Judgment affirmed.

Carley, C. J., and Beasley J., concur.

What it decided

An “old house” on a 30-acre Dodge County tract burned on March 28, 1986. It had been insured under a Georgia Farm Bureau farmowners policy since before the owner’s grandparents died; Charlie Max Brown inherited the land, renewed the policy on February 3, 1986, and by then had moved next door into his grandparents’ former house. Five weeks after the renewal he deeded 29 acres — including the old house — to his half-brother, and the half-brother deeded it back three weeks before the fire. The carrier denied the claim. A jury awarded the policy limits, $24,000, and the Court of Appeals affirmed on all four grounds the carrier raised.

Division 1 — the deed and the reconveyance did not void the policy. The carrier invoked the clause voiding the policy on “a change in interest, title or possession.” The evidence, taken in the light most favorable to the verdict, showed Brown deeded the land to shield it from creditors, expected a simultaneous reconveyance that was not ready in time, never intended to transfer ownership, never gave up possession or control, and got the property back before the fire; the half-brother himself testified that Brown owned it on the date of the loss and that he had never considered himself the owner. Following Home Ins. Co. of N. Y. v. Johnson, the court held there was “not a completed sale which triggered the change of title or interest provision of the policy.”

Division 2 — when two vacancy clauses disagree, the policyholder’s clause wins. One section suspended coverage while the building was “vacant or unoccupied for a period of sixty consecutive days.” Another, headed “Vacancy and Unoccupancy,” granted permission for the dwelling “to remain … unoccupied for not more than 120 consecutive days.” The house had been unoccupied for more than 60 days but not more than 120. Quoting United States Fire Ins. v. Hilde, the court applied the rule for clauses that fight each other: they “are repugnant to one another. When that occurs in an insurance contract, the provision most favorable to the insured will be applied.” The 120-day permission governed, and the claim was not barred.

Division 3 — the valued policy statute and “wholly destroyed.” This is the division the case is cited for. Georgia’s valued policy statute, OCGA § 33-32-5 (a), as the court quoted it, provides that when a policy is issued to a natural person insuring a specifically described one- or two-family residential building in this state against loss by fire, “and the building or structure is wholly destroyed by fire without fraudulent or criminal fault on the part of the insured or one acting in his behalf, the amount of insurance set forth in the policy relative to the building or structure shall be taken conclusively to be the value of the property, except to the extent of any depreciation in value occurring between the date of the policy or its renewal and the loss.”

The carrier argued the house had not been “wholly destroyed.” The court’s answer is one sentence long and worth reading closely: “Plaintiff’s evidence showing that it would cost more to repair the house than to replace it and photographs submitted into evidence by Georgia Farm Bureau showing that the house was substantially gutted by the fire was sufficient to authorize the jury’s finding that the house was ‘wholly destroyed by fire’ as contemplated by the above statute.”

Two facts inside that sentence do the work. The comparison was repair cost against replacement cost, not repair cost against market value. And the photographs that established the house was “substantially gutted” were the carrier’s own exhibits.

Division 4 — insurable interest. Because Brown had title before the fire and, per Division 1, never transferred his interest, the challenge under OCGA § 33-24-4 (b) failed.

What it did NOT decide

The research lead behind this page described Brown as ending “the ‘prove what your burned house was worth’ fight for total fire losses.” That claims more than the opinion delivers. Here is the honest perimeter.

• This is a sufficiency ruling, not a definition. The court held the evidence “was sufficient to authorize the jury’s finding.” It did not define “wholly destroyed,” did not adopt a test, and did not hold that a repair-costs-more-than-replacement showing is either always enough or always required. A different jury on this evidence could have gone the other way, and the appeal would have failed just as certainly.
• It did not remove the fight — it moved it. The carrier here contested “wholly destroyed” and lost on the evidence. That question stays open in every total-fire case, which is exactly why the photographs and the repair-versus-replace comparison mattered.
• The statute is not unconditional, and the opinion prints the conditions. As quoted, it applies only to a policy issued to a natural person or persons, insuring a specifically described one- or two-family residential building or structure, located in this state, against loss by fire, wholly destroyed by fire, without fraudulent or criminal fault by the insured or someone acting on the insured’s behalf. It says nothing about contents, other structures, commercial buildings, or losses from wind, hail, water or any other peril.
• The statute’s depreciation exception was never litigated. The text the court quoted makes the policy amount conclusive “except to the extent of any depreciation in value occurring between the date of the policy or its renewal and the loss.” No party raised it, and the court said nothing about how it works. “Conclusively” in this statute has an exception attached to it.
• We have not verified the statute’s current text on this page. What appears above is OCGA § 33-32-5 (a) as the Court of Appeals quoted it in 1989. We do not have a Reading Room page for that statute yet, and we do not quote statutes from memory. Read the current official code before you rely on any wording here.
• It did not bless the deed transaction. The court described the conveyance as “merely a sham and a device to prevent plaintiff’s creditor’s from reaching the insured property,” and used that characterization for one narrow purpose: deciding there had been no completed sale for policy purposes. Nothing in this opinion says such a transfer is lawful or effective against creditors. Do not read a coverage holding as advice about anything else.
• It did not hold that vacancy clauses are unenforceable. Division 2 turned on the fact that this policy contained two clauses that contradicted each other. A single, clear vacancy or unoccupancy provision presents a different question. Compare Hill v. Nationwide (1994), where the court refused to read an occupancy requirement into a policy that had none.

Why it matters to policyholders

The valued policy statute reverses the usual argument. In an ordinary property loss, the carrier’s number and the policyholder’s number fight it out over what the property was worth. Where OCGA § 33-32-5 (a) applies — a natural person, a specifically described one- or two-family home in Georgia, wholly destroyed by fire, no fraud or criminal fault — the amount of insurance on the declarations page is taken conclusively to be the value of the property, subject to the depreciation exception in the statute’s own text. That is why the “wholly destroyed” question becomes the whole ballgame, and why Brown is the case to have in hand.

“Wholly destroyed” is not “reduced to ash.” A house that is substantially gutted, where repair would cost more than replacement, can support the finding. If your carrier is treating a burned-out shell as a repairable partial loss, this decision is the answer to that framing.

Build the two proofs Brown approved. First, a repair estimate and a replacement estimate, so the comparison is on the record as numbers rather than adjectives. Second, photographs — many, dated, room by room, before anything is disturbed. In this case the decisive photographs came out of the carrier’s file. Request the carrier’s photographs and inspection reports; a claim file often contains the best evidence of how bad it really was.

Read the whole policy, including the sections that give you permission. The carrier in Brown pointed at a 60-day unoccupancy suspension and lost because a different section of the same policy granted 120 days. Base forms restrict; endorsements and “permission granted” sections broaden. When two provisions cannot both be true, Georgia applies the one more favorable to the insured — the same instinct that runs through American Strategic v. Helm and Nationwide v. Kim.

And know what this rule does not reach. The valued policy statute settles the value of the dwelling. It does not settle contents, additional living expenses, debris removal, other structures, or anything about a non-fire peril. Those are proved the ordinary way — which is what Braner v. Southern Trust is for on contents, and American Casualty v. Parks-Chambers on what actual cash value means. If code upgrades drive the rebuild cost past the limit, that is a separate coverage question altogether: see Georgia Farm Bureau v. Croft (2013).

A public adjuster documents the destruction, builds the repair and replacement estimates that a “wholly destroyed” finding rests on, prices the contents and additional living expenses, and negotiates the claim. Suing on the policy, and any bad-faith penalty claim, is attorney work — we refer that out.

More Georgia decisions on the shelf are in the Georgia reading room.

Now you know the rule. Enforcing it against a carrier is a different job — and it's ours. A free, confidential case review by a licensed public adjuster takes three taps.

See if my case qualifies