Royal Capital Development, LLC v. Maryland Casualty Co.
291 Ga. 262
| Ga. | 2012Background
- Royal Capital owns an eight-story commercial building in Atlanta and insured it with Maryland Casualty in 2003.
- A nearby construction caused physical damage, leading Royal Capital to file a claim for repair costs and diminution in value due to stigma.
- Maryland Casualty paid $1,132,072.96 for repair costs but denied any diminution-in-value damages.
- District court granted summary judgment to Maryland Casualty, treating Mabry as inapplicable to real-property contracts.
- Eleventh Circuit certified whether Mabry applies to real-property insurance contracts and the Georgia measure-of-damages rule, prompting this Court’s decision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Mabry apply to real-property contracts? | Royal Capital relies on Mabry to require diminution in value. | Maryland Casualty argues Mabry is limited to automobile policies. | Yes; Mabry applies to this real-property policy. |
| Whether diminution in value damages may be recovered in addition to costs of repair. | Damages for diminished value are recoverable alongside repair costs. | Recovery limited to repair costs under standard policy terms. | Diminution in value may be recoverable alongside repair costs. |
| Whether Broadnax limits Mabry’s reach or creates a double-recovery issue. | Broadnax should not bar Mabry's application to this case. | Broadnax bars certain recoveries to avoid double recovery. | Broadnax disapproved to the extent inconsistent with Mabry. |
| Is sophistication of parties a basis to distinguish Mabry? | Sophistication should not distinguish insurance of real property from auto policies. | No distinction based on policy type or sophistication. | Mabry applies irrespective of policy type or sophistication. |
Key Cases Cited
- Mabry v. State Farm Mut. Auto. Ins. Co., 274 Ga. 498 (Ga. 2001) (measure of damages includes diminution in value; economics-based recovery)
- Empire Mills Co. v. Burrell Eng’g & Constr. Co., 18 Ga. App. 253 (Ga. App. 1916) (damages in real-property cases measured by value difference)
- Thurmond v. John/Thurmond & Assocs., 284 Ga. 469 (Ga. 2008) (damages may include both diminution in value and cost of repair)
- Redman Dev. Corp. v. Piedmont Heating &c., 128 Ga. App. 447 (Ga. App. 197) (diminution in value as element of damages in real-property actions)
- Lusk v. Georgia Northeastern R.R., 277 Ga. 245 (Ga. 2003) (one recovery rule; not precluding diminution in value where not double-recovering)
- Broadnax v. City of Atlanta, 285 Ga. App. 430 (Ga. App. 2007) (double-recovery concerns; disapproved to extent conflicting with Mabry)