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Baumgartner v. State Farm Fire and Casualty Co.

United States District Court, N.D. Georgia, Atlanta Division

March 21, 2017

REBECCA T. BAUMGARTNER, Plaintiff,
v.
STATE FARM FIRE AND CASUALTY COMPANY, Defendant.

          ORDER

          RICHARD W. STORY, United States District Judge

         This case comes before the Court on Defendant State Farm Fire and Casualty Company's Motion for Summary Judgment, or, in the Alternative, Motion to Dismiss [33]. After reviewing the record, the Court enters the following Order.

         Background

         This is an insurance dispute between Plaintiff Rebecca T. Baumgartner and Defendant State Farm Fire and Casualty Company (“State Farm”). On March 8, 2014, Ms. Baumgartner notified State Farm of an alleged wind and hail loss at property located at 6900 Brookside Drive, Roswell, Georgia (“Property”). (Def.'s Statement of Undisputed Mat. Facts (“Def.'s SMF”), Dkt. [33-2] ¶ 1.) Ms. Baumgartner alleged that the property suffered roof and interior structural damage from wind and hail damage that occurred over a year earlier, on March 18, 2013. (Id. ¶ 2.) At the time of the alleged loss, the Property was covered under Homeowners Policy Number 11-GP-7111-4 (“Policy”), which was issued to Ms. Baumgartner. (Id. ¶ 3.)

         After an investigation, State Farm determined that the cost to repair the damage to the Property was $13, 536.27. (Bond Aff., Dkt. [33-3] ¶ 7; Baumgartner Aff., Dkt. [39-1] ¶ 11.)[1] Ms. Baumgartner's Policy contains a $2, 000 deductible. (Def.'s SMF, Dkt. [33-2] ¶ 5.) After deducting depreciation ($7, 415.77) and Ms. Baumgartner's deductible, State Farm issued an actual cash value payment of $4, 147.50 to its only named insured, Ms. Baumgartner, for the claimed loss. (Id. ¶ 6.)

         Ms. Baumgartner disagreed with State Farm's determination and filed suit against State Farm on April 30, 2015, for damages to the Property.[2] (Id. ¶ 7.) She sets forth two counts: breach of contract and bad faith. (Compl., Dkt. [1-1] ¶¶ 30-50.) Ms. Baumgartner alleges that the Property suffered $100, 307.56 in roof damage and interior damage to the walls, floors, and ceilings. (Def.'s SMF, Dkt. [33-2] ¶ 8.) She does not allege, however, that she suffered any damage to her personal property or furnishings. (Id. ¶ 9.) She filed this suit in her individual name only. (Id. ¶ 10.)

         During discovery, Ms. Baumgartner testified that the legal owner of the Property is the “Hugh Lee Baumgartner Trust” (“Trust”). (Id. ¶ 11.) Wesley Hargrave serves as Trustee of the Trust. (Id. ¶ 12.) Ms. Baumgartner does not make any mortgage or rental payments to the Trust related to her use of the Property. (Id. ¶ 14.) And the Trust handles maintenance and major repairs on the Property. (Baumgartner Dep., Dkt. [34] at 8:15-23; Baumgartner Aff., Dkt. [39-1] ¶ 7.)[3] Ms. Baumgartner is listed as the only named insured on the Policy's Declarations page. (Def.'s SMF, Dkt. [33-2] ¶ 15.) State Farm was not aware that Ms. Baumgartner was not the owner of the Property until after Ms. Baumgartner filed suit and her deposition was taken. (Bond Aff., Dkt. [33-3] ¶ 9.)

         Ms. Baumgartner's expert, Eduard Badiu, learned that the Property was owned by the Trust prior to or on January 26, 2015, after searching the county's appraiser's records. (Id. ¶ 18.) Mr. Badiu referenced the Trustee, Mr. Hargrave, in his report dated January 26, 2015. (Id. ¶ 19.) He then provided his report to Ms. Baumgartner's consultants. (Id. ¶ 20.) Still, Ms. Baumgartner did not disclose that the Trust and Mr. Hargrave, in his capacity as Trustee, had an interest in the outcome of this litigation in the Joint Preliminary Report. (Id. ¶ 17.) She also did not submit a Certificate of Interested Persons. (Id.)

         The Policy contains an Insurable Interest provision, in “SECTION I - CONDITIONS, ” which says the following:

1. Insurable Interest and Limit of Liability. Even if more than one person has an insurable interest in the property covered, we shall not be liable:
a. to the insured for an amount greater than the insured's interest; or b. for more than the applicable limit of liability.

(Id. ¶ 21; Policy, Dkt. [33-5] at 36.)

         On October 27, 2015, State Farm filed a Motion for Leave to Amend its Answer [21]. The Court granted that motion on November 23, 2015. State Farm then filed its Amended Answer on November 23, 2015, asserting two new defenses: (1) Ms. Baumgartner has no insurable interest in the Property; and (2) Ms. Baumgartner is not the real party in interest. (Def.'s Am. Answer, Dkt. [25].) As of the date of this ...


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