{"id":886992,"date":"2016-02-10T11:35:47","date_gmt":"2016-02-10T18:35:47","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=886992"},"modified":"2016-02-10T11:35:47","modified_gmt":"2016-02-10T18:35:47","slug":"claim-of-future-injury-not-basis-for-declaratory-relief","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/claim-of-future-injury-not-basis-for-declaratory-relief\/","title":{"rendered":"Claim of Future Injury Not Basis For Declaratory Relief"},"content":{"rendered":"

Barry Zalma | Zalma on Insurance | February 5, 2016<\/p>\n

When the Supreme Court of the state of Georgia decided State Farm Mutual Automobile Insurance Co. v. Mabry<\/em>, 274 Ga. 498, 556 S.E.2d 114 (Ga. 11\/28\/2001) it opened the door to litigation against insurers who determined actual cash value<\/a> losses by determining full replacement cost and then deducting physical depreciation without consideration for the diminished value of an automobile that had been in an accident and repaired.<\/p>\n

Since Mabry<\/em> courts in Georgia and across the country are faced with claims for both the cost of repair plus diminished value. In Brewton v. Liberty Mutual Holding Company, Inc<\/em>., Slip Copy,\u00a0 United States District Court, M.D. Georgia 2016 WL 224124 (01\/19\/2016) a homeowners insured attempted to create a class action out of future failure of her insurer to pay her for diminished value.<\/p>\n

BACKGROUND<\/strong><\/p>\n

In this putative class action, Plaintiff Chandra H. Brewton seeks relief on behalf of herself and others similarly situated for the Defendants\u2019 alleged refusal to assess and pay damages for diminution in value<\/a> when claims are made under their homeowners insurance policies. Brewton\u2019s home suffered water damage which allegedly resulted in the diminution of the fair market value of the home. Brewton alleges she \u201ctimely reported a claim for direct physical loss to her home resulting from water damage,\u201d but \u201c[i]n violation of Georgia law and in breach of their insurance contract\u201d with Brewton, the Defendants failed to assess and pay damages for diminution in the value of Brewton\u2019s property.<\/p>\n

In Count 2, Brewton asks the Court to \u201cissue a declaratory judgment that Liberty Mutual is obligated under the homeowners insurance policies to assess insured properties for and pay diminished value when policyholders present first-party physical damage claims arising from direct physical losses to their insured properties, which are covered events.\u201d<\/p>\n

Though Brewton has not yet moved for class certification, she envisions two classes: (1) the \u201cPolicyholder Class\u201d comprised of \u201c[a]ll persons currently insured under homeowners insurance policies issued by Liberty Mutual that provide coverage for property located in the State of Georgia,\u201d and (2) the \u201cCovered Loss Class\u201d comprised of \u201c[a]ll persons formerly or currently insured under homeowners insurance policies issued by First Liberty that provide coverage for property located in the State of Georgia\u201d who presented claims within the past six years for loss resulting from water damage for which damages for diminution in value were not paid.<\/p>\n

DISCUSSION<\/strong><\/p>\n

First Liberty raises three arguments in support of its motion to dismiss Count 2: (1) to the extent the claim is based on First Liberty\u2019s prior denial of Brewton\u2019s claim, it should be dismissed because Brewton has an adequate remedy at law; (2) to the extent the claim is based on her \u201congoing relationship\u201d with First Liberty, the claim should be dismissed because she has failed to allege an imminent threat of future harm; and (3) Brewton \u201cmay not rely on the alleged threat of harm to absent class members to sustain her declaratory judgment.<\/p>\n

First Liberty\u2019s first argument relies on the assumption that Brewton seeks declaratory relief regarding the denial of her claim for diminution in value<\/a>. However, in her response brief, Brewton clarifies that she \u201cseeks a declaration to define the parties\u2019 future rights and obligations,\u201d whereas the breach of contract claim seeks recovery of damages \u201cincurred in the past.\u201d Similarly, Brewton states that \u201cshe does not \u2026 rely on an alleged threat of harm to her fellow policyholder class members to confer standing.\u201d The question is whether Brewton\u2019s declaratory judgment claim presents an actual controversy.The Declaratory Judgment Act, \u201cechoing the \u2018case or controversy\u2019 requirement of Article III of the Constitution, provides that a declaratory judgment may only be issued in the case of an \u2018actual controversy.\u2019<\/p>\n

The controversy may not be conjectural, hypothetical, or contingent; it must be real and immediate, and create a definite, rather than speculative threat of future injury. There must be a substantial likelihood that the plaintiff will suffer future injury: a \u201cperhaps\u201d or \u201cmaybe\u201d chance is not enough.<\/p>\n

First Liberty contends Brewton \u201chas not sufficiently pled that her alleged injury will continue or will be repeated in the future. On this point, Brewton alleges that \u201cthere exists an actual controversy as to the responsibilities of the parties under the homeowners insurance policies issued by Liberty Mutual to Plaintiff and the members of the Policyholder and Covered Loss Classes\u201d and that she \u201cand other current insureds have an ongoing relationship with Defendants.\u201d<\/p>\n

As stated by the Eleventh Circuit, \u201c[t]he remote possibility that a future injury may happen is not sufficient to satisfy the \u201cactual controversy\u201d requirement for declaratory judgments. A plaintiff must allege facts to establish a reasonable expectation that the injury she has suffered will continue or will be repeated in the future. Because Brewton\u2019s injury is contingent upon her home suffering damage, the practical likelihood that the contingency will occur and that the controversy is a real one is decisive in determining whether an actual controversy exists.\u201d<\/p>\n

Although it is possible…<\/p>\n

To finish reading this article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Barry Zalma | Zalma on Insurance | February 5, 2016 When the Supreme Court of the state of Georgia decided State Farm Mutual Automobile Insurance Co. v. Mabry, 274 Ga. 498, 556 S.E.2d 114 (Ga. 11\/28\/2001) it opened the door to litigation against insurers who determined actual cash value losses by determining full replacement cost… Continue reading Claim of Future Injury Not Basis For Declaratory Relief<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[4,3],"tags":[24,9077,304,11,496],"class_list":["post-886992","post","type-post","status-publish","format-standard","hentry","category-construction-defects","category-insurance-claims","tag-construction-defect","tag-declaratory-relief","tag-diminution-of-value","tag-insurance-claim","tag-water-damage","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nClaim of Future Injury Not Basis For Declaratory Relief - 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