Safeco Insurance v. Parrish

McMurray, Judge. Safeco Insurance Co. insured property of Russ and Maxine H. Parrish for damages resulting from fire loss. The dwelling was used as rental property and the premises were left partially destroyed by fire. Proof of loss was thereafter submitted by the owners, claiming it would cost approximately $39,000 to repair the premises, and they demanded payment of the face amount of the policy, $30,000. The insurer rejected the proof of loss, contending that all items damaged by the fire could be repaired by a contractor who had furnished the insurer an agreed contract price in the amount of $20,805.41, and that the company was ready and willing to settle based on the estimate of $20,805.41, less $951.61 for depreciation. This offer was rejected. Thereafter the owners sued the insurer in the [545] amount of $30,000, which was the maximum coverage, together with 25% penalty and reasonable attorney fees. The case came on for trial and the jury returned a verdict for the plaintiff in the principal amount of $28,000 for repairs and replacement and further found the defendant in bad faith and recommended a penalty of $4,000 plus attorney fees of $1,500. The judgment followed the verdict. Defendant paid the $28,000 actual damages and filed a motion for new trial challenging the jury verdict as to bad faith, penalties and attorney fees. Motion for new trial was denied and defendant appeals. Held: All of the enumerations of error relate to the question of whether or not there is any evidence of bad faith so as to authorize the findings of the jury. The insurance contract specifically covered up to $250 per month for the loss of rental value, yet the defendant insurance company did not offer anything for rent. Defendant also deducted from its written offer $951.61 for depreciation, although the contract did not provide for a depreciation deduction, which it unjustifiably sought to be deducted from the estimate of repairs. The repair estimate attached to a letter offer to plaintiff of $19,853.80 was based upon a repair estimate of a construction company in the amount of $20,805. However, the repair estimate shows a considerably higher amount for the actual repairs, and some of the items shown thereon do not meet the original construction of the dwelling in regard to substituted items. For instance, it eliminates plaster and substitutes sheet rock. Nor did the defendant ever pay any funds into court and more than a year from the date of the proof of loss as to the fire to the date of trial would result in considerable lost interest on the amount of damages. The award of $28,000 by the jury has not been contested and is within $2,000 of the actual amount claimed by the plaintiff under the policy limits. The above evidence shows clearly that the jury was authorized to make an award of bad faith and attorney fees. See Reserve Life Ins. Co. v. Ayers, 217 Ga. 206 (2) (121 SE2d 649); U. S. F. & G. Co. v. Evans, 223 Ga. 789 (158 SE2d 243); Watertown Fire Ins. Co. v. Grehan, 74 Ga. 642, 657; Metropolitan Life Ins. Co. v. Lathan, 11 Ga. App. 6, 9 (47 SE2d 596); Jackson v. [546] Motors Ins. Corp., 97 Ga. App. 658 (104 SE2d 253); North British &c. Ins. Co. v. Mercer, 90 Ga. App. 143, 145 (82 SE2d 41); Lumbermen’s Underwriting Alliance v. First Nat. Bank &c. Co., 100 Ga. App. 217, 228 (110 SE2d 782). Argued September 8, 1976 Decided October 4, 1976 Rehearing denied November 24, 1976. Dennis, Corry, Webb, Carlock & Williams, Dennis J. Webb, Douglas Dennis, H. James Winkler, for appellant. Hatcher, Meyerson, Oxford & Irvin, Stanley P. Meyerson, for appellees. Judgment affirmed. Marshall and Smith, JJ., concur.