Pursuant to the appraisal process, an award was issued and agreed to by the Woodrums' appraiser and the appointed umpire. Georgia Farm Bureau paid the amount of the award to the Woodrums.

The Woodrums subsequently sued Georgia Farm Bureau, seeking compensation for diminution in value. Their complaint included counts for breach of contract and breach of an implied duty of good faith and fair dealing. The breach of contract claim was based on allegations that the fallen tree had caused a crack in the slab foundation of the house, that the value of the house had been diminished by the cracked foundation, that the diminished value was a covered loss under the policy that was not included in the appraisal award, and that Georgia Farm Bureau had failed to pay for that diminished value.

In support of their claim, the Woodrums filed the affidavit of George Hall, the contractor who had repaired the Woodrums' house and who opined that the value of the house had been diminished by the crack in the foundation. During a subsequent deposition, Mr. Hall gave his opinion that the house had lost 25 percent of its value due to the cracked foundation.

Georgia Farm Bureau moved to exclude Mr. Hall as an expert witness, and it moved for summary judgment.

The trial court granted the motion to exclude Mr. Hall's testimony as an expert regarding the diminution in value of the Woodrums' property. In that same order, the trial court also excluded Mr. Hall's testimony as a lay witness giving an opinion as to value.

In addition, the trial court granted the insurance company's motion for summary judgment on both of the Woodrums' claims.

The Woodrums appealed, challenging the trial court's exclusion of Mr. Hall's testimony as to value.

Georgia Law

OCGA § 24-7-702(b) provides:

If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education may testify thereto in the form of an opinion or otherwise, if: (1) The testimony is based upon sufficient facts or data; (2) The testimony is the product of reliable principles and methods; and (3) The witness has applied the principles and methods reliably to the facts of the case which have been or will be admitted into evidence before the trier of fact.

OCGA § 24-7-701 provides:

(a) If the witness is not testifying as an expert, the witness's testimony in the form of opinions or inferences shall be limited to those opinions or inferences which are: (1) Rationally based on the perception of the witness; (2) Helpful to a clear understanding of the witness's testimony or the determination of a fact in issue; and (3) Not based on scientific, technical, or other specialized knowledge within the scope of Code Section 24-7-702.

(b) Direct testimony as to market value is in the nature of opinion evidence. A witness need not be an expert or dealer in an article or property to testify as to its value if he or she has had an opportunity to form a reasoned opinion.

The Appellate Court's Decision

The appellate court reversed, ruling that although the trial court had not erred in excluding Mr. Hall's testimony as an expert, it had erred in excluding his testimony as a lay witness.

In its decision, the appellate court first pointed out that the Woodrums were not required to present expert testimony as to value because direct testimony as to market value was “in the nature of opinion evidence” and one “need not be an expert” but could testify as to market value if he or she “had an opportunity for forming an opinion.”

With respect to the admissibility of proposed expert testimony, the appellate court explained that a trial court must consider whether the methodology by which the expert had reached his or her conclusions was “sufficiently reliable.”

Here, the appellate court noted, Mr. Hall's affidavit did not describe a methodology by which he had reached his conclusions and, at his deposition, when asked to explain how he had determined the amount of the value diminution, he said that he had made the determination based on his experience.

Under these circumstances, the appellate court ruled, the trial court had not abused its discretion in excluding Mr. Hall from giving expert testimony on the issue of value.

The appellate court, however, reached a different result with respect to Mr. Hall's ability to give law witness opinion testimony.

According to the appellate court, Mr. Hall had an opportunity to form a reasoned opinion as to the amount the Woodrums' house had diminished in value.

The appellate court explained that, in his affidavit, Mr. Hall averred that he was a licensed contractor; that he was experienced in home building and remodeling and had constructed and repaired many homes during his career; that he was familiar with the costs of construction and the valuation of homes based on his professional experience; that he performed the repair of the Woodrums' house; that the house suffered massive structural damage due to the fallen tree; that he witnessed the damage to the slab foundation, which had a crack running from one edge to the other where the tree had fallen; that the crack affected structural integrity of the home because the slab foundation would never be as strong as it was before the crack; that he remained concerned about the crack reopening due to future expanding and contracting of repairs made to the crack; that the structural damage to a house's foundation caused the loss of value; that a purchaser would expect to pay less for a home with a cracked slab foundation; and that the ability to use certain materials on top of the compromised foundation was limited, which caused further loss of value.

The appellate court added that, at his deposition, Mr. Hall had testified that he had experience inspecting houses for structural integrity and giving opinions as to value; that he had the knowledge and experience to know what a house was worth by inspecting it; that he had helped build an addition to the Woodrums' house; that the tree that fell on the house was massive and basically cut the house in half; that the cracked foundation was shown in certain photographs; that he performed repairs to the house; and that his opinion as to the diminished value was based on his experience.

The appellate court then ruled that the evidence demonstrated that Mr. Hall was qualified to give an opinion as a lay witness as to the amount the foundation damage diminished the value of the property.

It concluded that Mr. Hall had an opportunity to form a reasoned opinion as to the value of the house and, therefore, that the trial court had erred in excluding his lay witness opinion testimony as to the value of the property and damages to the property, and in granting summary judgment on the Woodrums' claims.

The case is Woodrum v. Georgia Farm Bureau Mutual Ins. Co., No. A18A0596 (Ga. Ct.App. June 27, 2018).