Source: https://law.justia.com/cases/georgia/court-of-appeals/1990/a90a1162-0.html
Timestamp: 2020-01-22 17:38:25
Document Index: 529822694

Matched Legal Cases: ['§ 51', '§ 51', '§ 51', '§ 51', '§ 51', '§ 13']

Carter v. Allstate Ins. Co. :: 1990 :: Court of Appeals of Georgia Decisions :: Georgia Case Law :: Georgia Law :: US Law :: Justia
Justia › US Law › Case Law › Georgia Case Law › Court of Appeals of Georgia Decisions › 1990 › Carter v. Allstate Ins. Co.
Carter v. Allstate Ins. Co.
197 Ga. App. 738 (1990)
399 S.E.2d 500
A90A1162, A90A1163.
Rehearing Denied November 27, 1990.
In January of 1988, after discussing the matter with Mr. Carter, Mr. Howell contacted Ms. Morris to ask whether Allstate was planning to send out an adjuster to handle the structural damage portion of the Carters' claim. Ms. Morris answered this question in the negative and informed Mr. Howell that he would be authorized to commence the repair work forthwith if the Carters wanted him to. Mr. Howell subsequently received authorization from the Carters to proceed; *739 however, he did not actually undertake the work himself but instead subcontracted the job to his son, Ken, who was also in the construction business. At the direction of Allstate, Mr. Howell submitted both his preliminary estimates of the repair costs and his actual bills for the work itself directly to Allstate.
Mr. Carter thereafter consulted an expert in the removal of asbestos contamination, who informed him that much of the interior of the home would have to be stripped and its furnishings, particularly those containing fabric or electrical wiring, destroyed. On March 5, the Carters moved into a trailer, and the decontamination work commenced. Following the completion of this work, Cope Brothers Construction Company returned to the home, repaired the physical damage caused by the decontamination procedures, and installed or caused to be installed replacement carpeting, fixtures, and appliances. The Carters then submitted to Allstate an itemized list of all the expenditures *740 they had incurred in ridding the home of the asbestos contamination.
Cross-motions for summary judgment were filed in both the state and the federal actions; and on September 12, 1989, the federal district court entered an order denying the motions. While concluding as a matter of law that no master-servant relationship had existed between Allstate and the Howells so as to render Allstate vicariously liable for their alleged negligence, the district court ruled that Allstate might nevertheless be considered liable for the contamination damage on the theory that it had breached "a contractual duty to see that the repairs to the Carter home were done with due care." In reaching this conclusion, the district court relied on OCGA § 51-2-5 (3), under which an employer may be considered liable for the negligence of an independent contractor "[i]f the wrongful act is the violation of a duty imposed by express contract upon the employer. . . ." The district court determined that if in fact Allstate undertook to repair the structural damage to the home caused by the fire, as opposed to merely paying the Carters for the damage, then in so doing it assumed "a contractual duty to see that the repairs were properly completed, *741 [with the result that] the independent contractor rule would not relieve [it] of vicariously (sic) liability."
A month after the district court entered its ruling, the superior court ruled on the parties' cross-motions for summary judgment in the present action. While adopting the statement of facts set forth in the district court's order and agreeing with the district court's conclusion that no master-servant relationship had existed between Allstate and the Howells, the superior court took issue with that court's conclusion "that OCGA § 51-2-5 (3) applies to the facts of this case so as to possibly hold the employer, Allstate, liable for the negligent acts of the independent contractor Howell." In this regard, the court was persuaded by cases such as Faubion v. Piedmont Engineering &c. Corp., 178 Ga. App. 256 (2) (342 SE2d 718) (1986), and Fields v. B & B Pipeline Co., 147 Ga. App. 875 (250 SE2d 582) (1978), that the contractual duty referred to in § 51-2-5 (3) must be expressly imposed by the contract and that the mere breach by an independent contractor of an implied contractual duty to perform his work in a skillful, diligent and workmanlike manner would not support the imposition of vicarious liability against the employer. The superior court accordingly granted Allstate's motion for summary judgment with respect to the tort claims asserted in the complaint. However, notwithstanding its conclusion that OCGA § 51-2-5 (3) was inapplicable to the case, the superior court agreed with the district court that Allstate could nevertheless be held liable for the asbestos contamination damage under a breach of contract theory, concluding that if it undertook to repair the original fire damage to the home and then discharged that undertaking in such a manner as to damage the plaintiffs, "then [it] would be liable in damages for breach of contract notwithstanding an independent contractor did the work." Allstate has appealed from the latter portion of the superior court's order, while the plaintiffs have cross-appealed from the former. Held:
1. As it is apparent without dispute from the record that Allstate did not retain or exercise any right of control over the time, manner or method of performance of the Howells' work, we hold that the trial court was correct in its conclusion that Allstate could not be held vicariously liable for the Howells' alleged negligence under the doctrine of respondeat superior. Accordingly, we affirm the grant of Allstate's motion for summary judgment with respect to the tort claims asserted in Count 1 of the complaint. Accord Caruso v. Aetna Cas. &c. Co., 181 Ga. App. 829 (354 SE2d 18) (1987). See generally OCGA §§ 51-2-4; 51-2-5 (5).
2. Although there is no basis upon which Allstate could be held vicariously liable to the Carters in tort for the Howells' alleged negligence, we also agree with the trial court that a fact issue nevertheless remains as to whether, having undertaken to repair the original fire *742 damage to their home, it breached a contractual obligation to perform those repairs (or to see to it that they were performed) in a skillful and workmanlike manner. Allstate was entitled under the terms of the policy either to pay the Carters for the fire damage or to repair the damage itself; and in the event it chose the latter option rather than the former, it necessarily assumed a duty to restore the home to a habitable condition. As the evidence of record in the present case does not conclusively negate the Carters' contention that it was Allstate rather than they who retained Billy Howell to repair the structural damage caused by the fire, we conclude that a factual dispute exists as to which of these two options Allstate chose to exercise. Compare Owens v. Svc. Fire Ins. Co., 90 Ga. App. 553 (83 SE2d 249) (1954) (holding that a release executed by an insured, acknowledging the correctness of an automobile repair estimate and directing his insurer to pay the amount of estimate, less the deductible, over to the repair company in satisfaction of the insurer's obligations under the policy, operated to relieve the insurer of any further responsibility in the matter). Accordingly, we hold that the trial court properly denied Allstate's motion for summary judgment with respect to the breach of warranty claim contained in Count 2 of the complaint.
3. Allstate contends that it has no liability to the Carters for the loss at issue in this case because the policy expressly excluded coverage *743 for contamination damage. Inasmuch as this issue was not addressed by the trial court, we will not address it in this appeal. We note, however, that the claim for policy benefits set forth in the Carters' complaint relates only to their personal property losses caused by the asbestos contamination. Their claim against Allstate for the damage to their home is predicated not on the theory that it qualifies as a covered loss under the policy but on the theory that, having undertaken to effect certain repairs to their home for the purpose of discharging an admitted policy obligation arising from the fire, it failed to complete those repairs in a diligent and workmanlike manner.
4. It is apparent from the record that there is a bona fide controversy between the parties as to whether Billy Howell was employed by the Carters or by Allstate. Accordingly, there being no suggestion of any bad faith on the part of Allstate in connection with this matter, we hold that the trial court erred in denying Allstate's motion for summary judgment with respect to the plaintiffs' claim for litigation expenses based on bad faith and stubborn litigiousness. Accord Backus Cadillac-Pontiac v. Brown, 185 Ga. App. 746 (1) (365 SE2d 540) (1988); Nestle' Co. v. J. H. Ewing & Sons, 153 Ga. App. 328 (4) (265 SE2d 61) (1980). See generally OCGA § 13-6-11.
Judgment affirmed in part and reversed in part. Birdsong and Cooper, JJ., concur.
On motion for rehearing, Allstate insists that our holding in the present case cannot be reconciled with Caruso v. Aetna Cas. &c. Co., 181 Ga. App. 829 (354 SE2d 18) (1987). In Caruso, the contractor categorically denied that there had been any contract between it and the insurer, and the only evidence offered by the insured to the contrary consisted of his own testimony that the insurer's claims adjuster had recommended the contractor to him and that "when [the contractor's president] contacted him and indicated that [the insurer] had authorized him to repair the roof, he understood that [the insurer] had hired [the contractor] for the job." Id. at 830. Of course, the insured's understanding *744 in that case that the contractor had been hired by the insurer did not constitute evidence to that effect. Such evidence does, however, exist in the present case, in the form of the contractor's undisputed testimony that Allstate had instructed him to proceed with the job subject to the Carters' approval and to submit his repair estimates and bills directly to Allstate rather than to the Carters. While we recognize that the court stated in Caruso that the breach of contract theory of recovery asserted against the insurer by the insured had been "eviscerated by the fact that [the insurer was] not liable for the negligence of the independent contractor," id. this statement must be considered mere dictum in light of the undisputed evidence that the insurer did not in fact have any contractual relationship with the contractor.
Allstate also questions on motion for rehearing how it could "be expected to comply with its policy contract and see to it that the repairs are performed in a skillful and workmanlike manner yet exercise no control over the time, manner and method or (sic) the performance of the work." It is obviously possible to monitor an independent contractor's performance without transforming him into an employee. "`[M]erely taking steps to see that the contractor carries out his agreement, by supervision of the intermediate results obtained, or reserving the right of dismissal on grounds of incompetence, is not such interference and assumption of control as will render the employer liable. [Cits.]'" Slater v. Canal Wood Corp. of Augusta, 178 Ga. App. 877, 881 (345 SE2d 71) (1986). See also State of Ga. v. Goolsby, 191 Ga. App. 161, 163 (381 SE2d 299) (1989).