Georgia Appellate Court Holds Trial Court Erred In Granting Summary Judgment Where Genuine Issue Of Material Fact Existed As To The Appraisal Award

A Georgia appellate court held that a trial court erred in granting summary judgment where a genuine issue of material fact remained as to whether diminution in value was assessed during the appraisal process and was accounted for in the appraisal award. Woodrum, et al. v. Ga. Farm Bureau Mut. Ins. Co., Case No. A21A0320 (Ga. Ct. App., Jul. 28, 2021).

The insureds filed a claim after a tree fell and damaged their property. After the parties failed to agree on the amount of loss, the insurer invoked the appraisal clause of the property policy and paid the appraisal award. Subsequently, the insureds sued for breach of contract and breach of an implied duty of good faith and fair dealing. The insureds demanded compensation for diminution of value of their property, alleging that the fallen tree caused a crack in the foundation of the property and, thus, diminished the value of the property. The trial court nevertheless granted summary judgment to the insurer. 

The Court of Appeals reversed, noting that the claim was supported by an affidavit of the insured’s contractor, who claimed the diminution was approximately 25% of the property value. The appraisal award did not indicate that it included damages for diminution in value and merely stated Replacement Cost Value and Actual Cash Value figures with respect to damages. The court held that while there is no requirement that an appraisal award be itemized by coverage, it could not presume that diminution in value was included in the award. Therefore, the question of whether diminution was included in the appraisal award was a genuine issue of material fact properly before the trial court, making the grant of summary judgment error.