Homesite and Thompson initially were unable to agree on the amount of reimbursement Homesite would provide to Ms. Thompson for tree and debris removal.

Throughout this process, Ms. Thompson made a number of complaints to and about Homesite regarding the handling of her claims. Specifically, she filed a formal complaint with the Georgia insurance commissioner regarding her dealings with Homesite to which Homesite and the insurance commissioner responded. She also sent a number of messages to representatives of Homesite between May 3 and May 18, 2011, inquiring about, and criticizing, the handling of her claims.

After receiving a request for documentation of the cost of the tree and debris removal from a representative of Homesite on June 6, 2011, Ms. Thompson provided Homesite with documentation of the expenses she had incurred to remove the trees and other debris on June 9, 2011.

Homesite acknowledged receipt of those documents the same day.

Homesite did not dispute the amounts submitted by Ms. Thompson for reimbursement or make any argument that her claims were not covered by her insurance policy.

Homesite made a payment on the reimbursement claim in the amount of $1,800.00 on October 6, 2011.

In a letter dated October 12, 2011, Ms. Thompson's counsel demanded payment of the reimbursement for Ms. Thompson's tree and debris removal expenses. In that letter, Ms. Thompson's counsel threatened to file a bad faith claim against Homesite pursuant to OCGA § 33-4-6, Georgia's bad faith statute, if it did not properly reimburse Ms. Thompson for the tree and debris removal expenses.

Homesite and Ms. Thompson also were unable to agree on the total value of Ms. Thompson's losses arising from the damage to her home, and, through the same October 12, 2011 letter, Ms. Thompson notified Homesite that she did not agree with the estimate stated in the adjuster's report.

Pursuant to Ms. Thompson's insurance policy, she and Homesite entered into an appraisal process with respect to the value of the damage to her home. Appraisers hired by Ms. Thompson and Homesite both submitted competing estimates to a third party umpire. The umpire awarded Ms. Thompson a net amount of $49,713.69. This award reflected Ms. Thompson's total loss of $50,713.69 (as determined by the umpire) less the $1,000 deductible in her policy.

Homesite issued a payment to Ms. Thompson on May 11, 2012 in the amount of $47,101.36 as payment for the umpire's award. That amount was equal to the gross appraisal award ($50,713.69) minus the amount of the previous payment it had made to Ms. Thompson based on the adjuster's report ($1,812.33) and the amount Homesite had paid her in reimbursement for tree and debris removal ($1,800), totaling $3,612.33.

Homesite never made any additional payment to Ms. Thompson, and it contended that the umpire's award was meant to address all covered losses under Ms. Thompson's insurance policy, including the expenses she incurred for tree and debris removal. Homesite further contended that offset of amounts previously paid under the policy, including for tree and debris removal, against the umpire's total award had been proper.

Ms. Thompson sued Homesite on May 19, 2015, claiming that Homesite had unreasonably delayed reimbursing her for the tree and debris removal expenses and that it had underpaid on the umpire's award, subjecting Homesite to liability under Section 33-4-6. She also brought claims for breach of contract and for attorney's fees.

Homesite moved for summary judgment on each claim brought by Ms. Thompson.

The trial court granted Homesite's motion with respect to Ms. Thompson's bad faith claim, and the dispute reached the Georgia court of appeals.

Georgia Law

OCGA § 33-4-6(a) provides that:

In the event of a loss which is covered by a policy of insurance and the refusal of the insurer to pay the same within 60 days after a demand has been made by the holder of the policy and a finding has been made that such refusal was in bad faith, the insurer shall be liable to pay such holder, in addition to the loss, not more than 50 percent of the liability of the insurer for the loss or $5,000.00, whichever is greater, and all reasonable attorney's fees for the prosecution of the action against the insurer.

The Appellate Court's Decision

The appellate court affirmed the trial court's decision in favor of Homesite on Ms. Thompson's bad faith claim.

In its decision, the appellate court found that Ms. Thompson's communications with Homesite with respect to her tree and debris removal expenses had not satisfied the pre-suit demand requirement.

In particular, the appellate court rejected Ms. Thompson's contention that Homesite should have known that she was considering filing a bad faith claim and, therefore, that she had satisfied the statutory pre-suit demand requirement, because, (i) on more than one occasion, she stated to representatives of Homesite that she was not happy with Homesite's handling of her claim, and (ii) she also filed a complaint with the Georgia insurance commissioner, which prompted a response from Homesite.

In the appellate court's view, Ms. Thompson's communications with Homesite prior to October 6, 2011 "failed to alert Homesite that she planned to bring legal action if her claim was not paid." The appellate court noted that the only communication she had with Homesite in which potential litigation was threatened was the October 12, 2011 letter sent by her counsel. The threat of litigation pertained only to Homesite's alleged failure at the time to reimburse Ms. Thompson for tree and debris removal expenses, the appellate court said. The appellate court pointed out, however, that Homesite had made payment to Ms. Thompson for those expenses in the amount of $1,800 on October 6, 2011; therefore, Homesite already had satisfied the specific demand made by Ms. Thompson.

The appellate court found no evidence of any further demand by Ms. Thompson for reimbursement of those expenses, accompanied by a threat to invoke Section 33-4-6. There also was no evidence that Ms. Thompson had threatened to invoke Section 33-4-6 in demanding any remaining portions of her claim with Homesite, according to the appellate court.

Therefore, it affirmed the trial court's grant of summary judgment in favor of Homesite on Ms. Thompson's bad faith claim.

The case is Thompson v. Homesite Ins. Co., Nos. A17A1938, A17A1940 (Ga. Ct.App. March 14, 2018).