Woodcraft ex rel. MacDonald, Inc. v. Georgia Casualty & Surety Co.
293 Ga. 9
Ga.2013Background
- Atmos Energy pipeline fracture caused a fire and building damage to Coachcraft’s building; Georgia Casualty paid $1,675,169 under two policies and pursued subrogation in federal court; Coachcraft intervened in the subrogation action; Georgia Casualty settled with Atmos for $950,000 and Coachcraft settled separately for $125,000; Coachcraft sought the remaining amount from Georgia Casualty to be made whole; trial court denied breach-of-contract summary judgment but granted bad-faith summary judgment; Court of Appeals reversed on breach but affirmed bad faith; Georgia Supreme Court affirmed, holding the made-whole doctrine does not apply to commercial property insurance with subrogation rights under OCGA § 33-7-6; the decision preserved insurer’s right to subrogation without needing full compensation of the insured beforehand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the made-whole doctrine applies to commercial property insurance with subrogation rights | Coachcraft argues made-whole required full compensation before subrogation | Georgia Casualty contends no made-whole requirement under OCGA § 33-7-6 | Made-whole does not apply |
| Whether the absence of a made-whole provision in OCGA § 33-7-6 constrains subrogation rights | Coachcraft relies on subrogation rights being limited until made whole | Casualty argues legislature omitted made-whole by design | Legislature did not include made-whole provision; court cannot create one |
| Whether the trial court erred in ruling on breach of contract and bad faith based on subrogation settlement facts | Coachcraft sought additional funds to be made whole | Casualty argues no breach given contract terms and subrogation rights | Court affirms State's decision on breach not required; made-whole rule not applicable |
Key Cases Cited
- Richards v. Hanover Ins. Co., 250 Ga. 613, 299 S.E.2d 561 (Ga. 1983) (made-whole doctrine not applicable to property policy subrogation)
- Carter v. Banks, 254 Ga. 550, 330 S.E.2d 866 (Ga. 1985) (subrogation rights in property claims recognized)
- Duncan v. Integon Gen. Ins. Corp., 267 Ga. 646, 482 S.E.2d 325 (Ga. 1997) (made-whole applied to personal injury benefits, not property)
- Ga. Elec. Membership Corp. v. Hi-Ranger, Inc., 275 Ga. 197, 563 S.E.2d 841 (Ga. 2002) (subrogation rights under workers’ compensation context)
- Commonwealth Investment Co. v. Frye, 219 Ga. 498, 134 S.E.2d 39 (Ga. 1963) (legislature determines public policy on substantive rights)
- Ford Motor Co. v. Carter, 239 Ga. 657, 238 S.E.2d 361 (Ga. 1977) (courts cannot enlarge rights not clearly included in statutes)