United States District Court, M.D. Georgia, Columbus Division
LARRY RELF, on behalf of himself and all others similarly situated, Plaintiff,
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, J.D. POWER & ASSOCIATES, and MITCHELL INTERNATIONAL, INC., Defendants.
D. LAND CHIEF U.S. DISTRICT COURT JUDGE.
Larry Relf wrecked his 2006 Pontiac Torrent, he was insured
with State Farm Mutual Automobile Insurance Company.
Determining that the car was a total loss, State Farm sent
Larry a check in the amount of $5, 848.22, which it concluded
was the actual cash value of the Pontiac less Larry's
deductible. Larry accepted. Almost four years later, a lawyer
apparently convinced Larry that he had been paid $298.77 less
than he was legally entitled to under his insurance contract
with State Farm. Larry (and his lawyers) now claim that many
other State Farm insureds have been similarly cheated, and
they have filed this class action seeking justice (and of
course dollars) for these people. But Larry waited too long
to file his claim against State Farm, and thus that claim
must be dismissed.
it was clear that Larry's claim against State Farm was
futile due to untimeliness when Larry first filed his action
in this Court and thus no reasonable expectation existed that
the proposed class would be certified, subject matter
jurisdiction cannot be based upon 28 U.S.C. §
1332(d)(2). With no other basis for federal subject matter
jurisdiction, the claims against the other Defendants in this
action, J.D. Power Associates and Mitchell International,
Inc., must also be dismissed. Accordingly, this action is
dismissed in its entirety.
Plaintiff's Claims Against State Farm are Untimely and
Otherwise Fail to State a Claim
alleges that State Farm breached the insurance policy by
failing to pay the actual cash value of his vehicle. The
policy, which the parties acknowledge is part of the
pleadings for purposes of the pending motion to dismiss,
clearly requires that “legal action may only be brought
against [State Farm] regarding . . . Physical Damage
Coverages if the legal action relating to these coverages is
brought against us within one year immediately
following the date of the accident or loss.”
State Farm Mot. to Dismiss Ex. A, Policy 37, ECF No. 18-2.
Plaintiff's date of loss was December 14, 2014. Compl.
¶ 49, ECF No. 1. Plaintiff did not file this action
until nearly four years later, on December 12, 2018.
argues that the one-year limitation period does not apply to
his claim because the policy also stated, “If any
provisions of this policy are in conflict with the statutes
of Georgia, they are amended to conform to these
statutes.” Policy 36. Plaintiff argues that based on
this provision, Georgia's six-year statute of limitations
for actions upon simple contracts applies. See
O.C.G.A. § 9-3-24. In support of this argument,
Plaintiff relies on Queen Tufting Co. v. Fireman's
Fund Insurance Co., 239 S.E.2d 27 (Ga. 1977) and Dr.
Roger Abbott, Inc. v. State Farm Fire & Cas. Co.,
No. 1:15-CV-00201-LMM, 2016 WL 4592172 (N.D.Ga. Jan. 5,
2016). Both cases are distinguishable on the facts. In
Queen Tufting Co., the contract stated, “No
suit or action on this policy for the recovery of any claim
shall be sustainable in any Court of law or equity unless . .
. commenced within twelve (12) months next after the
happening of the loss, unless a longer period of time is
provided by applicable statute.” Queen Tufting
Co., 239 S.E.2d at 28 (emphasis added). And in Dr.
Roger Abbott, Inc., the policy stated, “No one may
bring legal action against us under this insurance unless . .
. the action is brought within two years after the date on
which the accidental direct physical loss occurred. But
if the law of the state in which this policy is issued allows
more than two years to bring legal action against us, that
longer period of time will apply.” 2016 WL
4592172, at *2 (emphasis added). Thus, these cases establish
that where certain amendatory language is contained in a
limitations clause itself, then the longer statutory
limitations period governs. But the State Farm policy at
issue here does not contain such language.
Georgia courts have rejected arguments like Plaintiff's
when the contract does not contain amendatory language that
explicitly refers to statutes of limitation. If a contract
contains a limitations clause and a separate amendatory
clause that does not explicitly refer to the statute of
limitations, then the contract's limitation period is
generally enforceable. For example, in Gravely v.
Southern Trust Insurance Co., 258 S.E.2d 753 (Ga.Ct.App.
1979), the Georgia Court of Appeals concluded that a
twelve-month limitation period was enforceable and not in
conflict with Georgia's six-year statute of limitations
for contract claims. The contract in Gravely had a
general “conformity with statute” clause similar
to the one in Plaintiff's State Farm policy, but it
lacked the “special language” of the contract in
Queen Tufting Co., so the general “conformity
with statute” clause did not extend the statute of
limitations. 258 S.E.2d at 754; see also Nicholson v.
Nationwide Mut. Fire Ins. Co., 517 F.Supp. 1046, 1050
(N.D.Ga. 1981) (following Gravely and concluding
that a twelve-month limitation period was enforceable despite
general “conforming language”). The Court finds
that Gravely controls. Therefore, the one-year
limitation set forth in the policy applies.
argues that even if the one-year limitation period applies,
there is a fact question on whether State Farm waived it or
is estopped from asserting it, so this issue should be
deferred until the summary judgment stage. “An insurer
can be held to have waived a limitation period when its
investigations, negotiations, or assurances up to and past
the period of limitation led the insured to believe the
limitation would not apply.” Gilbert v. S. Tr. Ins.
Co., 555 S.E.2d 69, 72 (Ga.Ct.App. 2001) (quoting
Cotton States Mut. Ins. Co. v. Walker, 500 S.E.2d
587, 590 (Ga.Ct.App. 1998)) (finding that there was evidence
from which a jury could conclude that an insurance company
waived strict compliance with the insured's time limit
for designating an appraiser). For example, if an insurer
admits liability and “continually discusse[s] the loss
with its insured with a view toward negotiation and
settlement without the intervention of a suit, ” then
there is a fact question on whether this conduct
“lulled the insured into” believing that the
insurer waived the policy's limitation period.
Auto-Owners Ins. Co. v. Ogden, 569 S.E.2d 833, 835
(Ga. 2002); accord Brown Transp. Corp. v. James, 257
S.E.2d 242, 243 (Ga. 1979) (“[W]here an employee relies
on the statements of his employer or the insurance carrier,
who are in a position of authority, that he will be taken
care of, that all is well and he needn't worry, it is
going too far then to allow them to raise as a bar to his
claim the employee's failure to file within one
year.”); Giles v. Nationwide Mut. Fire Ins.
Co., 405 S.E.2d 112, 114 (Ga.Ct.App. 1991) (“If
the insurer makes direct promises to pay or if settlement
negotiations have lead [sic] the insured to believe that the
claim will be paid without litigation, the time requirement
is waived.”). “But, ‘mere negotiation for
settlement, unsuccessfully accomplished, is not that type of
conduct designed to lull the claimant into a false sense of
security so as to constitute' a waiver of the limitation
defense.” Ga. Farm Bureau Mut. Ins. Co. v.
Pawlowski, 643 S.E.2d 239, 241 (Ga.Ct.App. 2007)
(quoting Giles, 405 S.E.2d at 114) (concluding that
the insurance company's investigation of the
insureds' claim and its offer to settle that was rejected
as insufficient did not suggest that the insurance company
“tried to trick the [insureds] into believing that it
intended to enlarge the one-year limitation period”).
relies on Thompson v. State Farm Fire & Casualty
Co., 264 F.Supp.3d 1302 (M.D. Ga. 2017) (Treadwell, J.).
In that case, the insureds had a homeowners insurance policy
that covered diminished value. Though the insurer was
contractually obligated to adjust all losses with the
insureds and though the insurer “communicated to its
insureds what was purported to be a full disclosure of their
coverage, ” the insurer “omitted any mention of
diminished value.” Id. at 1321. Judge
Treadwell concluded that there was evidence to suggest that
the insurer “systematically hid from its insureds their
rights . . . to recover compensation for the diminished value
of their damaged property.” Id. at 1321-22.
Judge Treadwell further found that based on this conduct, a
jury could conclude that the insurer had waived the one-year
limitation by representing that it intended to pay the claim
without suit even though it did not actually intend to pay
the entire claim.
however, Plaintiff makes no specific factual allegations that
he abstained from filing suit during the one-year limitation
period based on conduct by State Farm. Plaintiff does allege
that State Farm used a “statistically invalid”
total loss valuation methodology to determine the value of
his loss, that State Farm underpaid his total loss claim by
using a “statistically invalid downward condition
adjustment, ” and that State Farm concealed from him
that its total loss valuations were “statistically
invalid and unlawful.” Compl. ¶¶ 42, 51-52.
But these factual allegations do not plausibly suggest that
State Farm's conduct during its adjustment of
Plaintiff's claim amounted to a waiver of its right to
rely upon the one-year limitation in the policy. Unlike in
Thompson, there is no plausible allegation that
State Farm hid from Relf the right to recover a component of
his covered claim. State Farm did not conceal its evaluation.
Plaintiff's Total Loss Report disclosed that the $298.77
condition adjustment was made because the condition of
Plaintiff's vehicle scored 2.81 compared to a 3.02 for a
typical vehicle. Compl. Ex. B, Total Loss Report 3, ECF No.
1-6. The report further explained that the condition of the
vehicle's seats and tires were found to be
“fair” and not “good.” Id.
at 4. Therefore, Plaintiff knew State Farm's stated
reasons for making the downward condition adjustment, and he
knew how State Farm claimed to have arrived at the
“market value” and “settlement
value.” Furthermore, if Plaintiff disagreed with this
evaluation, he had an opportunity to challenge it under the
policy terms. See Policy 23 (“The owner of the
covered vehicle and [State Farm] must agree upon the
actual cash value of the covered vehicle. If there
is disagreement as to the actual cash value of the
covered vehicle, then the disagreement will be
resolved by appraisal upon written request of the owner or
[State Farm.]”). In summary, because the factual
allegations in Plaintiff's complaint establish that his
breach of contract claim against State Farm is untimely, that
claim must be dismissed.
if Plaintiff's breach of contract claim fails as a matter
of law, his bad faith claim likewise fails. But even if his
breach of contract claim was timely, his bad faith claim
would still fail. Plaintiff concedes that “he did not
allege the requisite 60-day notice to State Farm required by
O.C.G.A. § 33-4-6, and, as that procedural hurdle is
strictly construed by Georgia courts, he does not oppose the
dismissal of the bad faith claim.” Pl.'s Resp. to
State Farm's Mot. to Dismiss 2 n.1, ECF No. 27.
Plaintiff's bad faith claim against State Farm is thus
Plaintiff's civil conspiracy claim against State Farm may
survive a timeliness challenge, it is fundamentally flawed.
The basis for that claim is the alleged tortious interference
with the contract between Plaintiff and State Farm.
See Pl.'s Resp. to State Farm's Mot. to
Dismiss 18, ECF No. 27. Under Georgia law, “[t]ortious
interference with a business relationship is a cause of
action for which proof of a civil conspiracy will expand
liability among all co-conspirators.” Metro Atlanta
Task Force for the Homeless, Inc. v. Ichthus Cmty. Tr.,
780 S.E.2d 311, 318 (Ga. 2015). But, to be liable for
tortious interference with a contract, “one must be a
stranger to the business relationship giving rise to and
underpinning the contract.” Cook Pecan Co. v.
McDaniel, 810 S.E.2d 186, 190 (Ga.Ct.App. 2018);
accord Icthus Cmty. Tr., 780 S.E.2d at 321 (noting
that the first element of a tortious interference claim is
that “the defendant is a stranger to the business
relationship”). State Farm was not a stranger to its
insurance contract with Plaintiff. Therefore, it could not
tortiously interfere with the contract or conspire to do so.
Mabra v. SF, Inc., 728 S.E.2d 737, 741
(Ga.Ct.App. 2012) (concluding that conspiracy claim based on
tortious interference failed because there was no
“basis in law for the underlying tortious interference
claims”). Accordingly, Plaintiff's civil conspiracy
claim against State Farm must be dismissed. See Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)
(requiring that a complaint contain must contain
“enough facts to state a claim to relief that is
plausible on its face”).
on the foregoing, the Court grants State Farm's motion to
dismiss all of Plaintiff's claims against it.
Plaintiff's Claims Against J.D. Power and Mitchell Must
Be Dismissed for ...