Government Employees Insurance v. Hardin

On Defendant’s Motion for Rehearing.

Hall, Judge.

The defendant contends that the evidence presented at the trial showed that its refusal to pay the amount claimed by the plaintiff was not frivolous and unfounded; but that the disparity between the defendant’s offer, based on a reputable estimate of the cost of repairing the plaintiff’s automobile, and the plaintiff’s claim, approximately twice that amount, shows on the contrary that the defendant had reasonable and probable cause for refusing to pay the claim. This argument overlooks the evidence of the plaintiff’s demand that the defendant itself repair and restore the automobile to its condition before the accident. The defendant, according to its own undisputed evidence, was not willing to undertake to repair because of the statement in the demand that plaintiff would not consider the claim satisfied unless the repairs made by the defendant restored the automobile to its former condition. But this demand was in accordance with the provision of the policy limiting the company’s liability to the actual cash value of the property or the cost to repair or replace the property with other of like kind and quality. It may be true that if the defendant had made repairs and thereafter the plaintiff had unreasonably claimed that the automobile was not restored to its former condition, the defendant’s refusal to pay at that time could not be said to be in bad faith. This, however, was not the state of facts at the time of the defendant’s refusal. The defendant relies on Royal Ins. Co. v. Cohen, 105 Ga. App. 746 (125 SE2d 709), in which this court held that the evidence showed that the insurer’s refusal to pay was justified on the basis of the facts appearing to it at the time of the refusal and, therefore, did not authorize a finding of bad faith. In the present case we cannot say that the evidence as a matter of law showed that the defendant’s refusal of the plaintiff’s demand to repair the automobile and restore it to its former condition was justified on the basis of the facts appearing to the defendant at the time of the refusal.

Rehearing denied.

Carlisle, P. J., and Bell, J., concur.