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• Assignment of Benefits

Posted on: November 20, 2018

An assignment of benefits takes a lot of the hassle out of paying third parties to whom you might owe money after an accident or another event that triggers your insurance coverage.  Without an assignment of benefits for your health insurance, for example, your insurance company would pay you and then you would have to pay your medical care provider. 

In many cases, the insurance company can get discounts with the health care provider for your care, which means that an assignment of benefits is helpful for everyone in that situation.  The insurance company doesn’t have to pay as much, and you don’t have to deal with making sure all of your doctor bills get paid (except for co-pays or coinsurance). 

Assigning Benefits in Georgia

Consider another example of assigning benefits in Georgia .  Imagine that your house suffers wind damage after a storm.  You notify your insurance company of the loss, and they come out to provide a quote for the work that needs to be done.  Then, you line up a contractor to come work on your house.  The contractor will sometimes have you sign a document that allows him to contact your insurance company directly for payment, which means that you don’t have to pay the contractor out of your own pocket to get reimbursed, and you don’t have to wait to get a check from the insurance company to start work.  An assignment of benefits also gives the contractor the right to sue your insurance carrier (instead of you) if it doesn’t pay as well.

An insurance contract will state whether its benefits are assignable.  In most cases, they are, but not always.  Generally, as long as the loss takes place before the assignment, the assignment will be valid.  But, if you try to assign benefits before suffering the damage, it might not be valid.  For instance, if you know that a storm is coming, and you tell your friend, who is a contractor, that he can have the insurance benefits from the damage to your house as long as he comes over and fixes it right away, you might have some legal problems. 

In those circumstances, the insurance company may have needed to give prior approval before you give away the benefits to your insurance policy.  They have less control over how much the bill might be under these circumstances.  It’s best to just wait until after the damage has occurred to make any promises regarding your insurance proceeds. 

Do you want to learn more about assignment of benefits?

Assignment of benefits comes up most often in the health insurance context in personal injury cases.  Is someone requesting that you sign an assignment of benefits?  If so, you might want to have the team at John Foy & Associates review it before you make any decisions.  We can examine the document with you as part of our case evaluation process.  Fill out the form to your right or call us at 404-400-4000 to get your FREE consultation today.

No one should ever give a recorded statement to an insurance company, even their own insurance company, without consulting an attorney first.

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The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.

The Georgia Guide to Property Insurance Claims: Deadlines, Laws, and FAQs

Like most states, Georgia has an expansive list of laws, rules, and deadlines that are applicable to homeowner’s and commercial property insurance claims.  To make it easier to understand how these laws apply to property owners and the professionals who support them, we break down what you need to know to get your Georgia claim filed right, moving fast, and paid fully.

Prove Your Loss

Get your check, georgia property claim faqs.

Homeowners, businesses, and professionals will encounter all kinds of paperwork, process, and claims-related questions when confronted with the possibility of filing an insurance claim in Georgia.  Here are some of the common questions you may encounter, with answers written by experts, like experienced attorneys, adjusters, and other insurance professionals.

Making Your Claim -- Frequently Asked Questions

The first step in your property insurance claim is to notify your insurer about your losses. Not only is doing this the only way to get your claim moving, it’s one of your duties of a loss under your insurance policy.

Is there a statutory deadline in Georgia to file a property insurance claim?

No, but you should still notify your insurance company about a loss promptly or immediately after it occurs .

Some states,  like Florida , have laws that set specific deadlines for filing property insurance claims (for example, one year from the date of loss).  Georgia is not one of those states, so the deadline in Georgia to notify your insurer about a loss is determined by your insurance policy, not state law. This first notice of loss typically starts the claim process, so very often notifying your insurance company about a loss is the same thing as “filing a claim.”

For fire claims in Georgia, your insurance policy probably requires you to give your insurance company “immediate written notice” of the loss. See Georgia’s standard fire policy .  For types of losses other than fire, your policy may require “immediate” or “prompt” written notice of the loss. What counts as “immediate” or “prompt” depends on the specific circumstances of your claim.

Regardless of these requirements , it’s in your best interest to file a claim as soon as possible (more on that below).

When should I file a property insurance claim in Georgia?

As soon as possible .

Regardless of when your policy requires you to notify your insurer about a loss, it’s in your best interest to give that notice and file a claim as soon as you can.

More specifically, unless you’re confident that the cost of your losses will be less than your deductible, you should immediately notify your insurance company about your loss .  The longer you wait to file your claim, the longer it will take to resolve your claim.  Waiting too long to file your claim could also degrade or compromise important evidence about your claim.

Besides giving notice, what else do I have to do for my insurance claim in Georgia?

You have specific duties after a loss, and in Georgia (like elsewhere) you can find the list of those duties in your insurance policy .  It’s essential that you comply with these duties, so follow each of them to a T.  The exact language used to describe these duties varies from policy to policy.

For an *example* of what you might see in your policy, here are the duties after a loss stated in a State Farm homeowner’s insurance policy for a Georgia property:

“ Your Duties After Loss . After a loss to which this insurance may apply, you must cooperate with us in the investigation of the claim and also see that the following duties are performed: a. give immediate notice to us or our agent … b. protect the property from further damage or loss … c. prepare an inventory of damaged or stolen personal property: (1) showing in detail the quantity, description, age, replacement cost, and amount of loss; and (2) attaching all bills, receipts, and related documents that substantiate the figures in the inventory ; d. as often as we reasonably require: (1) exhibit the damaged property; (2) provide us with any requested records and documents and allow us to make copies; (3) while not in the presence of any other insured: (a) give statements; and (b) submit to examinations under oath ; and (4) produce employees, members of the insured’s household, or others for examination under oath to the extent it is within the insured’s power to do so; and e. submit to us, within 60 days after the loss, your signed, sworn proof of loss that forth, to the best of your knowledge and belief: (1) the time and cause of loss; (2) interest of the insured and all others in the property involved and all encumbrances on the property; (3) other insurance that may cover the loss; (4) changes in title or occupancy of the property during the term of this policy; (5) specifications of any damaged structure and detailed estimate for repair of the damage; (6) an inventory of damaged or stolen personal property, described in 2.c; (7) receipts for additional living expenses incurred and records supporting the fair rental value loss; and (8) evidence or affidavit supporting a claim under SECTION I – ADDITIONAL COVERAGES, Credit Card, Bank Fund Transfer Card, Forgery, and Counterfeit Money coverage, stating the amount and cause of loss.”

From Raymond v. State Farm Fire & Cas. Co. , 614 F. Supp. 3d 1303, 1308 (N.D. Ga. 2022).

Proving Your Loss - Frequently Asked Questions

After you’ve notified your insurance company and started your claim, you need to prove your losses to your insurance company. Proving that your property suffered losses and that those losses are covered under your insurance policy is at the heart of an insurance claim. As a result, it’s also the most difficult stage in the claims process and where policyholders most often make mistakes. Fortunately, Georgia laws do provide you with basic protections at this stage under the Georgia Insurance Code. Read more to understand how.

When is the deadline in Georgia to file a Proof of Loss?

It depends on the terms of your policy, but usually within sixty (60) days of the loss.  For fire losses, Georgia usually law requires you to send your insurer a proof of loss within sixty (60) days of the loss, unless your insurance company extends this deadline in writing.

For types of loss other than fire, Georgia law doesn’t impose any specific deadline on policyholders to file a proof of loss.  But your policy probably does.  When reviewing your policy to determine your deadline for submitting a proof of loss, consider these four questions:

Does the policy set a deadline to submit my proof of loss? (It usually does.)

If my policy does set a deadline, does the deadline automatically apply for all claims, or does it apply only if my insurance company specifically requests that I submit a proof of loss?

If my policy does set a deadline, how long is the deadline? (It’s usually 60 days, but sometimes it is 30 or 90 days)

If my policy does set a deadline, when is the start date for the deadline — the date of loss or the date when my insurance company requests me to submit a proof of loss?

Once you’ve answered these questions, you should have a much better understanding of your deadline to submit a proof of loss.

Rules and Regulations of the State of Georgia 120-2-19  (for fire losses only)

What is a “Proof of Loss?”

You will hear the term “Proof of Loss” a lot, and see it in your insurance policy. Do not be intimidated! This simply means that you must satisfactorily demonstrate to the insurance company that you sustained the loss you sustained, and the value of that loss.

There are some best practices for this — which includes filling out a “proof of loss form” and getting it notarized. This form and the act of notarizing it enables you to explain your losses “under oath,” which elevates your proof to the insurance company.

A proof of loss is a powerful tool for moving claims forward, but it’s not always necessary in Georgia.  In other words, while you should prepare a robust Proof of Loss document, the requirement can be quite thin in the long run. In some instances, that is as simple as allowing a claims adjuster or other agent from the insurance company on your property.

Does Georgia permit an assignment of benefits (AOB) for my claim?

If you were to look just at Georgia statutes, you would find Georgia Code § 33-24-17 , which states, “A policy may be assignable or not assignable, as provided by its terms.”  In other words, under this statute, if your policy allows assignment, you can do it, and if it doesn’t allow assignment, you can’t do it.

But more than a hundred years ago, the Georgia supreme court held that an insurance policy cannot prevent a policyholder from assigning post-loss benefits , and any terms in a policy attempting to do so are null and void.  See Santiago v. Safeway Ins. Co. , 196 Ga. App. 480 (1990) ( citing Georgia Co-Op. Fire Assn. v. Borchardt & Co. , 123 Ga. 181, 183-184 (1905)).  (For a very long time, Florida had the same rule, but recently the Florida legislature overturned it , and effectively banned AOBs for policies issued after 2022 .)  So for now, you’re free to enter an AOB in Georgia if that’s what you want to do .

New to AOBs?  No problem.  Check out our handy primer on assignments of benefits . It explains what they are, what they do, and offers pros and cons depending on your situation.

If I need help proving my losses in Georgia, can I hire a public adjuster?

Public adjusters are licensed insurance adjusters who work for policyholders instead of insurance companies.  Not all claims need a public adjuster.  But if your loss is complex or your claim has gone sideways, you might want to consider whether a public adjuster — or PA– would help.  PAs do cost money, usually a percentage of the insurance payments they recover for you.  And as you would for any other professional, it’s *essential* to do your homework before hiring a PA.  You should start by confirming with the Georgia Insurance Commission’s website that the PA is properly licensed.  But don’t stop there — read reviews and talk with references before signing a contract.

For a closer look at public adjusting in Georgia, check out our Georgia Guide to Public Adjusting .

Getting Your Check -- Frequently Asked Questions

Getting reimbursed for your losses — it’s the reason you pay premiums.  Here are answer to frequently asked questions as this last, critical stage in your insurance claim.

How long will it take to get paid after filing a claim?

Typically 60 days after you’ve submitted a satisfactory proof of loss to your insurer and reached an agreement on payment with your insurer.

For instance, under the form fire policy in Georgia , insurers can take up to sixty (60) days after receiving both (1) your proof of loss and (2) the value of the loss is either agreed upon between you and the insurance company or an appraisal award has been finalized.

The requirement that you reach agreement on payment or have an appraisal finalized can be frustrating.  But it’s worth noting that if you’ve submitted a rock-solid proof of loss, and the insurer denies it for more than sixty days without any good reason, the insurer’s denial might constitute bad faith under Georgia insurance law .  So 60 days is a reasonable expectation for uncontroversial claims.

What happens if insurance offers me an amount I disagree with? How does arbitration work?

In case you and your insurance company fail to agree as to the actual value or the amount of loss, then, on the written demand of either, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within twenty days of such demand. The appraisers shall select a competent and disinterested umpire; and failing for fifteen days to agree upon such umpire, then, on request of you or your insurance, such umpire shall be selected by a judge of a court of record in the state in which the property covered is located. The appraisers shall then appraise the loss, stating separately actual cash value and loss to each item; and, failing to agree, shall submit their differences, only, to the umpire. An award in writing, so itemized, of any two when filed with this Company shall determine the amount of actual cash value and loss. Each appraiser shall be paid by the party selecting him and the expenses of appraisal and umpire shall be paid by the parties equally.

What are the requirements for proving insurance bad faith in Georgia?

To prevail on a claim for insurance bad faith in Georgia, an insured must prove three basic elements :

(1) Coverage : The policy actually covers the claim at issue.

(2) 60-day Demand Notice : The insurer must fail to pay on the claim within 60 days of the insured making a final demand for payment.

(3) Bad faith : The insurer’s failure to pay was motivated by bad faith. Bad faith means a “frivolous and unfounded refusal to pay a claim.”  Bad faith is not easy to prove; an insurer will usually not be found to have acted in bad faith if it has any reasonable ground to contest the claim.

Georgia Statute § 33-4-6 ; Taylor v. Gov’t Emps. Ins. Co. , 830 S.E.2d 235, 237 (2019).  Under Georgia law, each of these requirements is “strictly construed,” Am. Reliable Ins. Co. v. Lancaster , 849 S.E.2d 697, 702 (2020), meaning that failing to fully and clearly meet any of these requirements will likely defeat a claim of bad faith.

What is the statute of limitations in Georgia to sue on an insurance claim?

In most claims, the deadline to sue for breach of an insurance contract is spelled out in the terms of your insurance policy .  Often these policies set the limitation period as low as 1 year or 2 years from when you knew or should have know about the loss.

Although the general limitation period in Georgia for breach of contract (including insurance contracts) is six years, Georgia Code § 9-3-24 , Georgia courts have held that insurance policies can shorten that period. Through these decisions, the courts have enforced limitations periods in insurance policies that are as short as one year.  See White v. State Farm , 728 S.E.2d 685 (Ga. 2012).

There are exceptions, but they’re narrow.  For instance, a court might not enforce a limitation period if it would “work a forfeiture of the policy benefit.”  This exception, however, is very fact-specific.  Another exception is fire claims, where by statute the limitation period cannot be less than two years from the date of loss. Georgia Code § 33-32-1 (a) ; White v. State Farm .  But most property claims aren’t fire claims.  So the best bet for calculating the statute of limitations is to take the limitation period in your policy at face value.

Georgia Statutes and Regulations that Impact Your Insurance Claim

Georgia has a large collection of laws applicable to the insurance claims process for homeowners. Here is a selection of relevant statutes that will help you with the process, all housed within either the Georgia Insurance Code (Title XXXIII (33) of Georgia Statutes) or the Rules & Regulations of the State of Georgia (Rule 120-2 (Rules of Commissioner of Insurance) ).

Georgia Code § 33-32-1 — Standard fire policy.

(a) No policy of fire insurance covering property located in this state shall be made, issued, or delivered unless it conforms as to all provisions and the sequence of the standard or uniform form prescribed by the Commissioner, except that, with regard to multiple line coverage providing other kinds of insurance combined with fire insurance, this Code section shall not apply if the policy contains, with respect to the fire portion of the policy, language at least as favorable to the insured as the applicable portions of the standard fire policy and such multiple line policy has been approved by the Commissioner.

(b) The Commissioner shall file and maintain on file in his office a true copy of the standard fire policy designated as such and bearing the Commissioner’s authenticating certificate and signature and the date of filing. The standard fire insurance policy shall not be required for casualty insurance, marine and transportation insurance, or insurance on growing crops. Insurers issuing the standard fire insurance policy are authorized to affix to or include in such policy a written statement that the policy does not cover loss or damage caused by nuclear reaction or nuclear radiation or radioactive contamination, whether directly or indirectly resulting from an insured peril under the policy; provided, however, that nothing contained in this Code section shall be construed to prohibit the attachment to any such policy of an endorsement or endorsements specifically assuming loss or damage caused by nuclear reaction or nuclear radiation or radioactive contamination.

Georgia Code § 33-32-1

Georgia Rules & Regulations 120-2-19-.01 — Standard Fire Policy

Georgia Rules & Regulations Rule 120-2-19-0.01

Georgia Code § 33-24-46 — Cancellation or nonrenewal of certain property insurance policies.

(a) This Code section shall apply only to policies of insurance against direct loss to residential real property and the contents thereof, as defined and limited in standard fire policies insuring natural persons as the named insured.

(b) As used in this Code section, the term:

(1) “Claim against a policy” means a contact with an insurer by the insured under the policy or an affected third party for the express purpose of seeking payment of proceeds under the terms of the policy in question. A report of loss or a question relating to coverage shall not independently establish a claim against a policy nor be considered as a claim under Article 2 of Chapter 6 of this title.

(2) “Nonrenewal” or “nonrenewed” means a refusal by an insurer or an affiliate of an insurer to renew. Failure of an insured to pay the premium as required of the insured for renewal, a change in policy terms, or a reduction in coverage after the insurer has manifested a willingness to renew by delivering a renewal policy, renewal certificate, or other evidence of renewal to the named insured or his or her representative or has offered to issue a renewal policy, certificate, or other evidence of renewal or has manifested such intention by any other means shall not be construed to be a nonrenewal.

(3) “Policies” means a policy insuring a natural person as named insured against direct loss to residential real property and the contents thereof, as defined and limited in standard fire policies as approved by the Commissioner.

(4) “Reduction in coverage” means a change made by the insurer which results in a removal of coverage, diminution in scope or less coverage, or the addition of an exclusion. Reduction in coverage shall not include any change, reduction, or elimination of coverage made at the request of the insured. The correction of typographical or scrivener’s errors or the application of mandated legislative changes shall not be considered a reduction in coverage.

(5) “Renewal” means issuance and delivery by an insurer or an affiliate of such insurer of a policy superseding at the end of the policy period a policy previously issued and delivered by the same insurer or issuance and delivery of a certificate or notice extending the term of a policy beyond its policy period or term or the extension of the term of a policy beyond its policy period or term pursuant to a provision for extending the policy by payment of a continuation premium. Any policy with a policy period or term of less than six months shall, for the purposes of this Code section, be considered to have successive policy periods ending each six months following its original date of issue and, regardless of its wording, any interim termination by its terms or by refusal to accept premiums shall be a cancellation subject to this Code section. Any policy written for a term longer than one year or any policy with no fixed expiration date shall be considered as if written for successive policy periods or terms of one year and any termination by an insurer effective on an anniversary date of such policy shall be deemed a refusal to renew.

(1) No notice of cancellation of a policy as to which this Code section applies shall be effective unless mailed or delivered as prescribed in Code Section 33-24-44. The insurer shall provide the reason or reasons for such cancellation as required by Chapter 39 of this title.

(2) After coverage under a policy to which this Code section applies has been in effect more than 60 days or after the effective date of a renewal policy to which this Code section applies, a notice of cancellation may be issued only for one or more of the following reasons:

(A) Nonpayment of premium;

(B) Discovery of fraud, concealment of material fact, or material misrepresentation made by or with the knowledge of the insured in obtaining the policy, continuing the policy, or presenting a claim under the policy;

(C) The occurrence of a change in the risk which substantially increases any hazard the policy insures against; or

(D) The insured violates any of the material terms or conditions of the policy.

(1) No insurer shall refuse to renew a policy to which this Code section applies unless a written notice of nonrenewal is mailed or delivered in person to the named insured. Such notice stating the time when nonrenewal will be effective, which shall not be less than 30 days from the date of mailing or delivery of such notice of nonrenewal or such longer period as may be provided in the contract or by statute, shall be delivered as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of the insured and of the lienholder, where applicable, and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service. The insurer shall provide the reason or reasons for nonrenewal as required by Chapter 39 of this title.

(2) An insurer shall provide a written notice of a reduction in coverage to the named insured no less than 30 days prior to the effective date of the proposed reduction in coverage; provided that such notice shall be in a separate document with the words “NOTICE OF REDUCTION IN COVERAGE” written in all capital letters in at least 12 point type. Such notice shall be delivered as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of the insured and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service.

(e) When a policy is canceled other than for nonpayment of premium or in the event of a refusal to renew or continue a policy, the insurer shall notify the named insured of his possible eligibility for insurance through the Georgia Fair Access to Insurance Requirements Plan. The notice shall accompany or be included in the notice of cancellation or the notice of intent not to renew or not to continue the policy and shall state that such notice availability of the Georgia Fair Access to Insurance Requirements Plan is given pursuant to this Code section. Included in the notice shall be the address by which the Georgia Fair Access to Insurance Requirements Plan might be contacted in order to determine eligibility.

(f) There shall be no liability on the part of and no cause of action of any nature shall arise against the Commissioner or his employees or against any insurer, its authorized representatives, its agents, its employees, or any firm, person, or corporation furnishing to the insurer information as to reasons for cancellation or nonrenewal for any statement made by any of them and in written notice of cancellation or nonrenewal or in any other communication, oral or written, specifying the reasons for cancellation or nonrenewal or providing information pertaining thereto or for statements made or evidence submitted at any formal or informal hearing conducted in connection therewith.

(g) Return of unearned premium, if any, due to cancellations as to which this Code section applies shall be processed in accordance with Code Section 33-24-44.

(h) Notice to the insured shall not be required by this Code section when a policy is canceled by an insurance premium finance company under a power of attorney contained in an insurance premium finance agreement if notification of the existence of the premium finance agreement has been given to the insurer in accordance with the provisions of Chapter 22 of this title. However, the insurer shall comply with the provisions of subsection (d) of Code Section 33-22-13 pertaining to notice to a governmental agency, mortgagee, or other third party. Such notice shall be delivered as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of such governmental agency, mortgagee, or other third party and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service.

(i) Cancellation by the insured shall be accomplished as provided in Code Section 33-24-44.1.

(j) No notice refusing the renewal of a policy issued for delivery in this state shall be mailed or delivered by an insurer or its agent duly authorized to effect such notice of nonrenewal for the following reasons:

(1) Lack of, lack of potential for, or failure to agree to a writing of supporting insurance business; (2) A change in the insurer’s eligibility rules or underwriting rules, provided that this paragraph shall not apply to a change in such rules if the change applies uniformly within a specific class or territory and such change has been approved by the Commissioner under subsection (k) of this Code section; and (3) Two or fewer claims against the policy within the preceding 36 month period if such claims are not attributable to the negligent or intentional acts of the insured or of persons residing at the insured premises.

(k) If the insurer demonstrates to the satisfaction of the Commissioner that renewal would violate the provisions of this title or would be hazardous to its policyholders or the public, paragraph (2) of subsection (j) shall not apply.

(1) If the insurer complies with subsection (d) of this Code section, no claim or action may be maintained with respect to a policy which is not renewed unless the named insured files a written notice with the insurer before the time at which nonrenewal becomes effective. The notice shall specify the manner in which the failure to renew is alleged to be unlawful under this subsection. In any subsequent action asserting a violation of subsection (c), (j), or (k) of this Code section, no violation may be alleged other than the specific allegations contained in the notice filed by the named insured.

(2) In addition to other requirements, a notice of nonrenewal shall contain the provisions of paragraph (1) of this subsection in substantially the form which follows: “NOTICE Code Section 33-24-46 of the Official Code of Georgia Annotated provides that this insurer must, upon request, furnish you with the reasons for the failure to renew this policy. If you wish to assert that the nonrenewal is unlawful, you must file a written notice with this insurer before the time at which the nonrenewal becomes effective. The notice must specify the manner in which the failure to renew is alleged to be unlawful. If you do not file the written notice, you may not later assert a claim or action against this insurer based upon an unlawful nonrenewal.”

(1) Notwithstanding subsection (j) of this Code section, the termination of an agency relationship shall be valid as a reason for a failure to renew a policy. In such case, if the named insured wishes to retain the policy with the particular insurer, the insured shall locate another agent of the insurer and apply for the policy with another agent of the insurer before the time at which the nonrenewal becomes effective. Upon receipt of the application, the insurer shall treat the application as a renewal and not as an original writing. Nothing in this paragraph shall abridge or supersede contractual rights of the terminated agency or the insurer, provided that these contractual rights do not adversely affect the privilege of the named insured to apply for renewal through another agent of the insurer.

(2) A notice of nonrenewal based upon the termination of an agency relationship shall contain the provisions of paragraph (1) of this subsection, in substantially the form which follows: “NOTICE Your policy has not been renewed because your present agent no longer represents this insurer. You have the option of procuring coverage through your present agent or retaining this policy by applying through another agent of this insurer. Code Section 33-24-46 of the Official Code of Georgia Annotated provides that if you will locate another agent of the insurer and apply for this policy before the time at which the nonrenewal becomes effective, this insurer will treat the application as a renewal and not as an application for a new policy.”

Georgia Code § 33-24-46

Georgia Code § 33-24-17 — Assignment of policies.

A policy may be assignable or not assignable, as provided by its terms. . . . Any assignment shall entitle the insurer to deal with the assignee as the owner or pledgee of the policy in accordance with the terms of the assignment until the insurer has received at its home office written notice of termination of the assignment or pledge or written notice by or on behalf of some other person claiming some interest in the policy in conflict with the assignment.

Georgia Code § 33-24-17

Georgia Code § 33-32-3 — Privilege of rebuilding or reinstating property sustaining loss or damage.

The privilege of rebuilding or reinstating property sustaining loss or damage shall not exist unless it is reserved in the policy.

Georgia Code § 33-32-3

Georgia Code § 33-32-4 — Refund of premium payments where insured sustaining total loss of property receives less than maximum amount payable under policy.

In the event of a total loss of property, if an insurer shall pay to the insured an amount less than the maximum amount authorized to be paid under an insurance policy covering the property, the insurer shall refund to the insured the difference between the amount of premiums actually paid for the insurance policy and the amount of premiums which would have been charged for a property insurance policy having a maximum amount payable equal to the amount actually paid by the insurer to the insured.

Georgia Code § 33-32-4

Georgia Code § 33-32-5 — Amount of insurance in certain fire policies deemed conclusive as to value of property covered.

(a) Whenever any policy of insurance is issued to a natural person or persons or to any legal entity wholly owned by a natural person or persons insuring a specifically described one or two family residential building or structure located in this state against loss by fire and the building or structure is wholly destroyed by fire without fraudulent or criminal fault on the part of the insured or one acting in his or her behalf, the amount of insurance set forth in the policy relative to the building or structure shall be taken conclusively to be the value of the property, except to the extent of any depreciation in value occurring between the date of the policy or its renewal and the loss, provided that, if loss occurs within 30 days of the original effective date of the policy, the insured shall be entitled to the actual loss sustained not exceeding the sum insured. Nothing in this Code section shall be construed as prohibiting the use of coinsurance or as preventing the insurer from repairing or replacing damaged property at its own expense without contribution on the part of the insured.

(b) Subsection (a) of this Code section shall not apply where:

(1) The building or structure is not wholly destroyed by fire;

(2) Insurance policies are issued or renewed by more than one company insuring the same building or structure against fire and the existence of the additional insurance is not disclosed by the insured to all insurers issuing policies;

(3) Two or more buildings or structures are insured under a blanket form for a single amount of insurance; or

(4) The completed value of a building or structure is insured under a builders’ risk policy.

Georgia Code § 33-32-5

Georgia Code § 33-6-3 — Unfair methods of competition or unfair and deceptive acts or practices prohibited.

No person shall engage in this state in any trade practice which is defined in this article as or determined pursuant to this article to be an unfair method of competition or an unfair or deceptive act or practice in the business of insurance.

Georgia Code § 33-6-3

Georgia Code § 33-6-4 — Enumeration of unfair methods of competition and unfair or deceptive acts or practices; penalty.

(b) The following acts or practices are deemed unfair methods of competition and unfair and deceptive acts or practices in the business of insurance:

(1) Making, publishing, disseminating, circulating, or placing before the public or causing directly or indirectly to be made, published, disseminated, circulated, or placed before the public in a newspaper, magazine, or other publication or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station or in any other way an advertisement, announcement, or statement containing any assertion, representation, or statement with respect to the business of insurance or with respect to any person in the conduct of his insurance business, which statement, assertion, or representation is untrue, deceptive, or misleading;

(2) Making, issuing, circulating, or causing to be made, issued, or circulated any estimate, illustration, circular, or statement misrepresenting the terms of any policy issued or to be issued, the benefits or advantages promised thereby, or the dividends or share of the surplus to be received thereon; making any false or misleading statement as to the dividends or share of surplus previously paid on similar policies; making any misleading representation or any misrepresentation as to the financial condition of any insurer, as to the legal reserve system upon which any life insurer operates; using any name or title of any policy or class of policies misrepresenting the true nature thereof; or making any misrepresentation to any policyholder insured in any company for the purpose of inducing or tending to induce the policyholder to lapse, forfeit, or surrender his insurance.

(iii) Making or permitting any unfair discrimination in the issuance, renewal, or cancellation of any policy or contract of insurance against direct loss to residential property and the contents thereof, in the amount of premium, policy fees, or rates charged for the policies or contracts when the discrimination is based solely upon the age or geographical location of the property within a rated fire district without regard to objective loss experience relating thereto.

(iv) (I)Unfair discrimination prohibited by the provisions of this subparagraph includes discrimination based on race, color, and national or ethnic origin. In addition, in connection with any kind of insurance, it shall be an unfair and deceptive act or practice to refuse to insure or to refuse to continue to insure an individual; to limit the amount, extent, or kind of coverage available to an individual; or to charge an individual a different rate for the same coverage because of the race, color, or national or ethnic origin of that individual. The prohibitions of this division are in addition to and supplement any and all other provisions of Georgia law prohibiting such discrimination which were previously enacted and currently exist, or which may be enacted subsequently, and shall not be a limitation on such other provisions of law.

Georgia Code § 33-6-4

Georgia Code § 33-6-5 — Other unfair methods of competition and unfair and deceptive acts or practices.

In addition to Code Section 33-6-4, violations of the following provisions also are defined as unfair methods of competition and unfair and deceptive acts or practices in the business of insurance:

(8) No insurance company shall cancel, modify coverage, refuse to issue, or refuse to renew any property or casualty insurance policy solely because the applicant or insured or any employee of either is mentally or physically impaired . . . ; provided, further, that this paragraph shall not be interpreted to modify any other provision of this title relating to the cancellation, modification, issuance, or renewal of any insurance policy or contract;

Georgia Code § 33-6-5

Georgia Code § 33-6-6 — Power of Commissioner as to investigation of unfair or deceptive acts or practices generally.

(a) The Commissioner shall have the power to examine and investigate into the affairs of every person engaged in the business of insurance in this state in order to determine whether the person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice prohibited by this chapter.

(b) In addition to any other authority granted to the Commissioner by this title and in addition to those reports required by Code Section 33-3-21, the Commissioner may require persons engaged in the business of insurance in this state to file reports by postal ZIP Code, where appropriate, or in any other format to enable the Commissioner to determine readily if such person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice prohibited by this article.

Georgia Code § 33-6-6

Georgia Code § 33-6-7 — Conduct of hearings by Commissioner; rights of person being investigated; powers of Commissioner; service of process.

(a) Whenever the Commissioner shall have reason to believe that any person has been engaged or is engaging in this state in any unfair method of competition or any unfair or deceptive act or practice, whether or not defined in Code Sections 33-6-4 and 33-6-5, and have reason to believe that a proceeding by the Commissioner in respect to such unfair method of competition or such unfair or deceptive act or practice would be in the public interest, he shall issue and serve upon the person a statement of the charges in that respect and a notice of a hearing on the charges to be held at a time and place fixed in the notice, which time shall not be less than 15 days after the date of the service of the notice.

(b) At the time and place fixed for the hearing, the person shall have an opportunity to be heard and to show cause why an order requiring the person to cease and to desist from the acts, methods, or practices so complained of should not be made by the Commissioner. Upon good cause shown, the Commissioner shall permit any person to intervene, appear, and be heard at the hearing by counsel or in person.

(c) Nothing contained in this article shall require the observance at the hearing of formal rules of pleading or evidence.

(d) The Commissioner at the hearing may administer oaths, examine and cross-examine witnesses, receive oral and documentary evidence, subpoena and compel the attendance of witnesses, and require the production of books, papers, records, correspondence, or other documents which he deems relevant to the inquiry. The Commissioner at the hearing may and, upon request of any party, shall cause to be made a record of all the evidence and all the proceedings had at the hearing. In case of a refusal of any person to comply with any subpoena issued under this Code section or to testify with respect to any matter concerning which he may be lawfully interrogated, the Superior Court of Fulton County or the superior court of the county where the party resides, on application of the Commissioner, may issue an order requiring the person to comply with the subpoena and to testify; and any failure to obey any order of the court may be punished by the court as a contempt thereof.

(e) Statements of charges, notices, orders, and other processes of the Commissioner under this article may be served by anyone duly authorized by the Commissioner either in the manner provided by law for service of process in civil actions or by registering or certifying and mailing a copy of the statement, notice, order, or other process to the person affected by it at the person’s residence or principal office or place of business. The verified return by the person so serving the statement, notice, order, or other process, which return sets forth the manner of the service, shall be proof of the same; and the return post card receipt for the statement, notice, order, or other process, which receipt is registered or certified and mailed as provided in this Code section, shall be proof of the service of the same.

Georgia Code § 33-6-7

Georgia Code § 33-6-8 — Issuance of cease and desist orders; issuance of orders providing for other relief; change in orders; date on which orders appealable.

(a) If, after the hearing provided for in Code Section 33-6-7, the Commissioner shall determine that the person charged has engaged in an unfair method of competition or an unfair or deceptive act or practice, he shall reduce his findings to writing and shall issue and cause to be served upon the person charged with the violation a copy of the findings and an order requiring such person to cease and desist from engaging in the method of competition, act, or practice; and, if the act or practice is a violation of Code Sections 33-6-4 and 33-6-5, the Commissioner may at his discretion order any one or more of the following:

(1) Payment of a monetary penalty of not more than $1,000.00 for each and every act or violation, unless the person knew or reasonably should have known he was in violation of this article, in which case the penalty shall be not more than $5,000.00 for each and every act or violation;

(2) Suspension or revocation of the person’s license, if he knew or reasonably should have known he was in violation of this article; or

(3) Any other relief as is reasonable and appropriate.

(b) The Commissioner may, at any time before the serving of a copy of the petition for review filed in the Superior Court of Fulton County upon him or her, as provided for in Code Section 33-6-11, or after the expiration of the time allowed by law for the serving of the petition for review, if no petition for review has been thus served, amend or set aside in whole or in part any order issued by the Commissioner under this Code section whenever in the Commissioner’s opinion the facts and circumstances surrounding the case have so changed as to require the action or if the public interest shall so require. No change of an order in a manner unfavorable to the person charged or to the parties at interest shall be made except after notice and opportunity for hearing. The date of the Commissioner’s last order shall be the point of time from which it may be reviewed by appeal.

Georgia Code § 33-6-8

Georgia Code § 33-6-9 — Penalties for violations of cease and desist orders.

After notice and hearing and upon order of the Commissioner, any person who violates a cease and desist order under Code Section 33-6-8, while the order is in effect may, at the discretion of the Commissioner, be subject to any one or more of the following:

(1) A monetary penalty of not more than $10,000.00 for each and every act or violation;

(2) Suspension or revocation of such person’s license; or

Georgia Code § 33-6-9

Georgia Code § 33-6-32 — Definitions.

As used in [Georgia Code §§ 33-6-30 through 33-6-37], the term:

(1) “Insured” means the party named on a policy or certificate or as defined in the contract as the person with legal rights to the benefits provided by such policy or certificate.

(2) “Person” means an individual, corporation, association, partnership, reciprocal exchange, interinsurer, Lloyd’s insurer, fraternal benefit society, and any other legal entity engaged in the business of insurance, including but not limited to agents, brokers, counselors, and adjusters.

(3) “Policy” or “certificate” means any contract of insurance; indemnity; medical, health, or hospital service; or annuity issued by an insurer. “Policy” or “certificate” shall not mean contracts for workers’ compensation, fidelity, or surety insurance.

Georgia Code §33-6-32

Georgia Code § 33-6-33 — When claims settlement practice improper.

It is an improper claims settlement practice for any domestic, foreign, or alien insurer transacting business in Georgia to commit any act provided in Code Section 33-6-34 if such act:

(1) Is committed flagrantly and in conscious disregard of this title or any rule or regulation promulgated pursuant to this title; or

(2) Has been committed with such frequency so as to indicate a general business practice to engage in such conduct.

Georgia Code § 33-6-33

Georgia Code § 33-6-34 — Unfair claims settlement practices.

Any of the following acts of an insurer when committed as provided in Code Section 33-6-33 shall constitute an unfair claims settlement practice:

1) Knowingly misrepresenting to claimants and insureds relevant facts or policy provisions relating to coverages at issue;

(2) Failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its policies;

(3) Failing to adopt and implement procedures for the prompt investigation and settlement of claims arising under its policies;

(4) Not attempting in good faith to effectuate prompt, fair, and equitable settlement of claims submitted in which liability has become reasonably clear;

(5) Compelling insureds or beneficiaries to institute suits to recover amounts due under its policies by offering substantially less than the amounts ultimately recovered in suits brought by them;

(6) Refusing to pay claims without conducting a reasonable investigation;

(7) When requested by the insured in writing, failing to affirm or deny coverage of claims within a reasonable time after having completed its investigation related to such claim or claims;

(8) When requested by the insured in writing, making claims payments to an insured or beneficiary without indicating the coverage under which each payment is being made;

(9) Unreasonably delaying the investigation or payment of claims by requiring both a formal proof of loss and subsequent verification that would result in duplication of information and verification appearing in the formal proof of loss form; provided, however, this paragraph shall not preclude an insurer from obtaining sworn statements if permitted under the policy;

(10) When requested by the insured in writing, failing in the case of claims denial or offers of compromise settlement to provide promptly a reasonable and accurate explanation of the basis for such actions. In the case of claims denials, such denials shall be in writing;

(11) Failing to provide forms necessary to file claims within 15 calendar days of a request with reasonable explanations regarding their use;

(12) Failing to adopt and implement reasonable standards to assure that the repairs of a repairer owned by the insurer are performed in a workmanlike manner;

(13) Indicating to a first-party claimant on a payment, draft check, or accompanying letter that said payment is final or a release of any claim unless the policy limit has been paid or there has been a compromise settlement agreed to by the first-party claimant and the insurer as to coverage and amount payable under the contract;

(14) Issuing checks or drafts in partial settlement of a loss or claim under a specific coverage which contain language which releases the insurer or its insured from its total liability;

(15) Failure to comply with any insurer requirement in Chapter 20E of this title, the “Surprise Billing Consumer Protection Act,” including:

(A) The failure to designate whether the healthcare plan is subject to the exclusive jurisdiction of the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001, et seq.;

(B) The failure to directly pay the provider or facility within 15 working days for electronic claims or 30 calendar days for paper claims any moneys due under Code Section 33-20E-4 or 33-20E-5; or

(C) The failure to pay a resolution organization as required under Code Section 33-20E-16; and

(16) Failure to comply with any insurer requirement relating to emergency services or care in Article 4 of Chapter 11 of Title 31, Article 1 of Chapter 20A of this title, Chapter 20E of this title, Chapter 21A of this title, Code Section 33-24-59.27, and Chapter 30 of this title.

Georgia Code § 33-6-34

Georgia Code § 33-6-35 — Notice of hearing; hearing procedures; cease and desist orders; penalties; judicial review; intervenors.

(a) Whenever the Commissioner has reason to believe that any person has engaged or is engaging in this state in any unfair claims settlement practice and has reason to believe that a proceeding with respect to such unfair claims settlement practice would be in the public interest, the Commissioner shall serve upon such person a statement of the charges in that respect and a notice of hearing in the same manner as provided in Code Section 33-6-7.

(b) The provisions of Code Sections 33-6-7 through 33-6-11, relating to hearings, cease and desist orders, penalties, judicial review, intervenors, and other matters in connection with violations of Article 1 of this chapter shall be applicable to violations of [Georgia Code §§ 33-6-30 through 33-6-37].

Georgia Code § 33-6-35

Georgia Code § 33-6-37 — Private cause of action not created or implied.

Nothing contained in [Georgia Code §§ 33-6-30 through 33-6-37] shall be construed to create or imply a private cause of action for a violation of this article.

Georgia Code § 33-4-6 — Liability of insurer for damages and attorney’s fees; notice to Commissioner and consumers’ insurance advocate. [ Bad Faith ]

(a) 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 action for bad faith shall not be abated by payment after the 60 day period nor shall the testimony or opinion of an expert witness be the sole basis for a summary judgment or directed verdict on the issue of bad faith. The amount of any reasonable attorney’s fees shall be determined by the trial jury and shall be included in any judgment which is rendered in the action; provided, however, that the attorney’s fees shall be fixed on the basis of competent expert evidence as to the reasonable value of the services based on the time spent and legal and factual issues involved in accordance with prevailing fees in the locality where the action is pending; provided, further, that the trial court shall have the discretion, if it finds the jury verdict fixing attorney’s fees to be greatly excessive or inadequate, to review and amend the portion of the verdict fixing attorney’s fees without the necessity of disapproving the entire verdict. The limitations contained in this Code section in reference to the amount of attorney’s fees are not controlling as to the fees which may be agreed upon by the plaintiff and the plaintiff’s attorney for the services of the attorney in the action against the insurer.

(b) In any action brought pursuant to subsection (a) of this Code section, and within 20 days of bringing such action, the plaintiff shall, in addition to service of process in accordance with Code Section 9-11-4, mail to the Commissioner of Insurance a copy of the demand and complaint by first-class mail. Failure to comply with this subsection may be cured by delivering same.

Georgia Code § 33-4-6

Georgia Code § 33-24-8 — Admissibility in evidence of applications in actions between insurer and insured.

As to kinds of insurance other than life insurance, no application for insurance signed by or on behalf of the insured shall be admissible in evidence in any action between the insured and the insurer arising out of the policy applied for if the insurer, at expiration of 30 days after receipt by the insurer of written demand by or on behalf of the insured for a copy of the application, has failed to furnish to the insured a copy of the application reproduced by any legible means.

Georgia Code §33-24-8

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Assignment of Benefits, Part 5: Georgia

At the request of another one of our readers, this week we are going to take a look at Assignment of Benefits (“AOBs”) in Georgia and how they are handled there.

In Georgia, the contract is king and its terms will be upheld. “It is axiomatic that parties are bound by the terms of their insurance contracts. [] Contractual limitations are valid and will be enforced by the courts. [] Most significantly, Georgia law expressly provides that insurers may limit the assignability of rights under polices through the use of non-assignability clauses.” 1

The statute governing non-assignability clauses is Georgia is Ga. Code Ann., § 33-24-17, and it states as follows:

A policy may be assignable or not assignable, as provided by its terms. Subject to its terms relating to assignability, any life or accident and sickness policy issued under the terms of which the beneficiary may be changed upon the sole request of the policy owner may be assigned either by pledge or by transfer of title by an assignment executed by the policy owner alone and delivered to the insurer, whether or not the pledgee or assignee is the insurer. Any assignment shall entitle the insurer to deal with the assignee as the owner or pledgee of the policy in accordance with the terms of the assignment until the insurer has received at its home office written notice of termination of the assignment or pledge or written notice by or on behalf of some other person claiming some interest in the policy in conflict with the assignment.

However, as we have seen in some other states, so long as the assignment takes place after a loss, the claim can be assigned without the consent of the insurer. Back in 1905, the Supreme Court of Georgia addressed this issue and held:

The assignment of a fire insurance policy without the consent of the insurer, after a loss has occurred thereunder, does not render the policy void, but the assignee has the right to bring an action thereon. Such assignment is valid without the consent of the insurer, although the written transfer of the policy purports, by its terms, to be subject to the consent of the insurer. . . . An assignment of a fire insurance policy, after a loss has occurred, does not violate a provision against assignment. 2

Georgia law also provides to the assignee, the right to bring suit against the carrier. Georgia Code § 44-12-22, states, “all choses in action arising upon contract may be assigned so as to vest the title in the assignee. . . .” Further, Georgia Code § 44-12-24, notes that, “a right of action is assignable if it involves, directly or indirectly, a right of property,” but does not permit assignment of actions for, “personal torts, for legal malpractice, or for injuries arising from fraud to the assignor.”

If you have any specific questions on AOBs or would like to see your state come up sooner, please comment below, or send me an email at [email protected] .

As always, I’ll leave you with a (mildly) related tune, here’s Georgia’s own R.E.M. with one of their many hits, It’s the End of the World as We Know It (And I Feel Fine) :

Assignment of Rights Against an Insurer in Georgia

Insurance coverage can be challenging in personal injury cases. While car accident coverage is often relatively straightforward, coverage for other claims such as claims for intentional conduct or premises liability can be complicated. Although a judgment may be obtained, it doesn’t mean very much if the defendant’s insurer refuses to defend a valid claim. One way this issue is sometimes handled is for a defendant to assign its rights against an insurer to a plaintiff. A  recent case arose from a dispute about whether shooting damages were covered by insurance. A man was shot with a gun in a nightclub parking lot. He filed a lawsuit against the business that operated the nightclub. He claimed he was shot by or at the direction of an employee that was acting in the course and scope of the business. The business asked its insurer to give a defense based on the policy. Unfortunately, the policy expressly excluded bodily injury claims that arose from assault or battery, unless they were committed by employees who were trying to protect a person or property. The insurer denied coverage and the business did not answer discovery. Khan got a default judgment and was awarded more than $2 million in damages. In order to settle, the business assigned its insurance coverage claims to the plaintiff. The business had claims based on the insurers’ failure to defend the premises liability lawsuit or to provide coverage. The plaintiff filed suit against the insurer, asserting a breach of its contractual duty to defend. The insurer filed a motion to dismiss, and the plaintiff moved for partial summary judgment on the issue of the insurer failing to defend the business in the premises liability suit. The trial court granted partial summary judgment on the issue of failure to defend. The insurer appealed. The appellate court affirmed the rulings. When the case was sent back to the lower court, it was transferred. The parties filed cross-motions for partial summary judgment, and the trial court granted the insurer’s motion finding there was no bad faith. The trial court found that the default judgment in the premises liability case did not prevent the defendant from contesting the motives or identity of the shooter. It also found that the insurer’s failure to defend did not mean it owed liability beyond the policy limits, which was the amount of the assault and battery exclusion of $100,000. The plaintiff appealed, arguing among other things that the default judgment in the prior premises liability case precluded the insurer from challenging both the shooter’s motive and his identity. The appellate court disagreed. It explained that the refusal to defend the business in the premises liability case did not mean that the insurer had waived its right to contest the plaintiff’s claim that the insurance policy provided coverage for the underlying claim. It explained that the issue of whether a claim is covered is separate from the legal consequences of an insurer’s failure to indemnify or defend. The policy at issue expressly excluded assault and battery except in limited circumstances. For the plaintiff’s injuries to be covered, he had to prove the shooting was committed by a business employee who was trying to protect people or property. The court explained that an insurer can contest coverage by proving the shooting was not committed by a business employee trying to protect people or property. The default judgment established that the shooter was a business employee because the complaint included that allegation. However, the specific identity of the employee wasn’t alleged in the complaint. Neither were the shooter’s motives. The appellate court did agree that the trial court erred in ruling damages could not exceed the $100,000 coverage limit. The plaintiff in this case was not suing for breach of duty to defend, but as an assignee of the insured. Where an insurer fails to offer a defense, it can be liable to the insured beyond the policy limits to the full amount of the judgment. If you are hurt or a loved one is killed due to negligence or an intentional act, you may be able to recover compensation for your losses. It is important to retain a personal injury attorney who understands not only how to take a case to trial, but also understands the potential insurance issues. Experienced Atlanta personal injury attorney Terrence R. Bethune can evaluate your case and fight for any compensation you may deserve. Contact us at 404-875-7800 or via our  online form . More Blog Posts What is an Ante-Litem Notice in Georgia?  February 28, 2014 Proximate Cause in Georgia Car Accidents , February 13, 2014 Tandem Driving Theory of Liability in Georgia Car Accidents , February 4, 2014  

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Bad Faith: Assignemnts, Consent Judgments, & Dowse Settlements

ASSIGNMENTS, CONSENT JUDGMENTS AND DOWSE SETTLEMENTS

Many lawsuits involving an insurer’s bad-faith failure to settle are brought by the claimant and not by the insured. Others are brought by both the claimant and the insured. Because a third-party claimant that lacks privity with the insurance company generally has no cause of action against the insurer for claims handling, a claimant who prosecutes a bad-faith claim generally does so by taking an assignment from the insured. Because liability policies have clauses forbidding the insured from assigning claims or settling claims without the insurer’s consent, such assignments can only be accomplished in certain situations.

The classic situation was presented in Southern Guaranty Ins. Co. v. Dowse. In that case, the claimant brought a lawsuit against a contractor who was insured under a commercial general liability policy. The insurer denied coverage and refused to defend. The claimant and insured entered into a settlement agreement, under which the insured withdrew its answer and allowed a default judgment to be rendered against it. The settlement agreement also provided that the claimant would not seek to enforce the judgment against the insured’s personal assets, but would limit its recovery to any amounts due under the insurance policy. The matter went to trial on damages.

Damages were awarded against the insured, and the claimant initiated a garnishment action directly against the contractor’s insurance company.The insurer argued that because the insured faced no liability under the settlement agreement, there was no indemnity obligation for the insurer to undertake. The insurer also argued that it was relieved of liability because the insured had breached policy provisions barring settlement without the insurer’s consent. The Supreme Court of Georgia rejected both defenses, holding that an insurer that refuses to defend based upon a belief that a claim against its insured is excluded from a policy’s scope of coverage “[does] so at its peril, and if the insurer guesses wrong, it must bear the consequences, legal or otherwise, of its breach of contract.” The Court continued as follows:

In Georgia, an insurer that denies coverage and refuses to defend an action against its insured, when it could have done so with a reservation of its rights as to coverage, waives the provisions of the policy against a settlement by the insured and becomes bound to pay the amount of any settlement within a policy’s limits made in good faith, plus expenses and attorneys’ fees.

Similarly, an insurer who denies coverage waives the provisions (common in most liability policies) barring coverage when the insured has made “voluntary payment” to the claimant. Furthermore, if an insurer refuses to defend a third-party action against its insured after timely notice, the insurer is bound to the issues adjudicated in the underlying suit against its insured.103 If the insurer is then sued for the refusal to defend or failure to pay a judgment entered against the insured, the insurer may not relitigate issues that form the basis for the judgment entered against its insured.

Trinity Outdoor, LLC. v. Central Mut. Ins. Co.

However, an insurer’s refusal to defend does not waive its right to contest whether the insurance policy provides coverage for the underlying claim. The insured may not unilaterally settle a lawsuit, however, if the insurer is defending the insured in the lawsuit but refuses to settle the lawsuit within policy limits. In Trinity Outdoor, LLC. v. Central Mut. Ins. Co., a billboard fell while it was being installed on Trinity’s property, killing two persons. Investigations ultimately determined that the manufacturer of the billboard was primarily at fault, though liability for Trinity could not be ruled out. A wrongful death action against Trinity and the manufacturer ensued, and Trinity’s insurer provided Trinity a defense. A mediation among all parties provided an opportunity to settle the liability against Trinity for less than its $2 million policy limits. The insurer attended the mediation and refused the opportunity to settle. Trinity, fearing a judgment in excess of policy limits, agreed to and paid the settlement. Trinity then sued its insurer, alleging, inter alia, negligent failure to settle and seeking indemnification for the settlement amount. The insurer defended itself by arguing that Trinity had breached the provision in the insurance policy barring insureds from making a “voluntary payment” without the insurer’s prior consent. The Supreme Court of Georgia agreed, holding that “an action for negligent or bad faith failure to settle a case requires that a judgment be entered against an insured in excess of the policy limits before the action can be asserted.” The court distinguished Dowse, in which the insured was “wholly abandon[ed]”, reasoning that Trinity’s insurer provided a defense and had not breached its duties so as to release Trinity from its duties as an insured. Accordingly, Trinity had no cause of action for bad faith as a matter of law.

Handling Assignment of Benefit (“AOB”) Claims in the Wake of Hurricanes Irma and Harvey

Overview | Blog Posts | First-Party Coverage | Timothy Engelbrecht , T. Nicholas Goanos , L. Andrew Watson | Related | Print | Share

Timothy Engelbrecht

Partner | First-Party Coverage , Extra-Contractual 813-281-1900 [email protected]

T. Nicholas Goanos

Partner | Extra-Contractual , Arson & Fraud , Casualty Defense Litigation , Third-Party Coverage , First-Party Coverage 704-940-9811  [email protected]

L. Andrew Watson

Partner | First-Party Coverage , Extra-Contractual , Casualty Defense Litigation , Arson & Fraud , Third-Party Coverage 704-543-2321 [email protected]

September 12, 2017

Hurricanes Irma and Harvey have damaged large areas of Florida, Texas, and Louisiana, as well as brought heavy rain and wind to Georgia, North Carolina, and South Carolina. As insurers handle thousands of property damage claims in these areas, they will undoubtedly be presented with claims that have been assigned from insureds to damage-repair contractors. These are often referred to as assignments of benefits or “AOB” claims. This article explains briefly what an AOB claim is, how Florida, Texas, Louisiana, Georgia, North Carolina, and South Carolina address AOB claims, and the best practices for handling AOB claims.

WHAT IS AN AOB CLAIM?

The classic example of an AOB claim is the following: an insured suffers property damage and hires a repair contractor to repair that damage. The repair contractor requires the insured to execute a written document, usually entitled “Assignment of Insurance Benefits”, which says something to the effect of “for and in consideration of the contractor’s agreement to protect the property from further damage and/or make repairs, the insured assigns his/her/its insurance benefits to the contractor.” The contractor thereafter makes a claim directly to the insurer using the AOB.

HOW DOES FLORIDA, TEXAS, LOUISIANA, GEORGIA, NORTH CAROLINA, AND SOUTH CAROLINA ADDRESS AOB CLAIMS?

Florida  has allowed AOB claims for over 100 years. Sec. First Ins. Co. v. State, Office of Ins. Regulation , 177 So. 3d 627, 628 (Fla. 1st DCA 2015). Post-loss property damage claims are freely assignable in Florida regardless of whether the insurer consents or not.   Start to Finish Restoration, LLC v. Homeowners Choice Prop. & Cas. Ins. Co. , 192 So. 3d 1275, 1276 (Fla. 2d DCA 2016). An insurance policy that has a “non-assignment” clause only bars the assignment of the entire insurance policy, not an assignment of a post-loss insurance claim. Bioscience West, Inc. v. Gulfstream Prop. & Cas. Ins. Co. , 185 So. 3d 638, 640-41 (Fla. 2d DCA 2016). 

Texas  has adopted the opposite approach to AOBs. The general rule in Texas is that an insured cannot assign an insurance claim if the insurance policy has a non-assignment clause. ARM Props. Mgmt. Group v. RSUI Indem . Co., 642 F.Supp.2d 592, 609-10 (W.D. Tex. 2009) relying on  Tex. Farmers Ins. Co. v. Gerdes , 880 S.W. 2d 215, 218 (Tex. App. 1994). This is true even if the non-assignment clause is general and broadly worded.

Louisiana  takes a hybrid approach to AOBs. Louisiana allows an insurer to place a clause in an insurance policy that prohibits post-loss assignments.   In re Katrina Canal Breaches Litig ., 63 So. 3d 955, 962-63 (La. 2011). However, in order for such a clause to be enforceable, the clause must clearly and unambiguously express that it applies to post-loss assignments.   Id . The general and a broadly worded non-assignment clause that has traditionally appeared in most insurance policies is not sufficient. Id. 

Georgia , much like many of the States above and across the Country, permits AOBs.  See Santiago v. Safeway Ins. Co. , 196 Ga. App. 480, 481, 396 S.E.2d 506, 608 (App. Ct. 1990). Unlike North Carolina and South Carolina, which are discussed below, an assignee in Georgia may pursue his own extra-contractual claim only after first establishing a breach of the insurance policy.  Southern Gen. Ins. Co. v. Holt , 262 Ga. 267, 416 S.E.2d 274, 276-77 (1992). Further, before pursuing an extra-contractual claim, an assignee (or insured) in Georgia must provide the insurer an opportunity to “cure” the alleged “bad faith”. See  Ga. Code Ann. § 33-4-6.

Lastly,  North Carolina  and  South Carolina  also allow AOBs. In upholding the validity of an assignment, courts in these States have ruled not only that assignments of benefits are indeed valid, but also, that they are governed by each State’s general contract law. See e.g., Alaimo Family Chiropractic v. Allstate Ins. Co. , 155 N.C. App. 194, 197, 574 S.E.2d 496, 498 (App. Ct. 2002);  Gray v. State Farm Auto. Ins. Co. , 327 S.C. 646, 491 S.E.2d 272 (App. Ct. 1997). The “rubber” meets the proverbial “road”, though, when an extra-contractual claim is alleged. In North Carolina and South Carolina, a plaintiff may assert an extra-contractual claim, even if the insurer has not breached the insurance policy. See  Tadlock Painting Co. v. Maryland Cas. Co. , 322 S.C. 498, 473 S.E.2d 52 (1996);  Kielbania v. Indian Harbor Ins. Co., 2012 WL 3957926 (M.D.N.C. 2012). However, an assignee is limited in the sense that it may pursue only his own extra-contractual claim, and not the assignors.  Horton v. New S. Ins. Co. , 122 N.C. App. 265, 268, 468 S.E.2d 856, 858 (1996);  Davis v. Liberty Mut. Ins. Co. , 2015 WL 6163243, at *4 (D.S.C. 2015).

WHAT ARE THE BEST PRACTICES FOR HANDLING AN AOB CLAIM?

First, as noted above, an adjuster needs to know if the state law where the AOB claim is being made allows for AOB claims. 

Second, assuming the state allows for AOB claims, the adjuster needs to carefully read what the actual AOB document says. They are not all the same. Some AOBs assign the entire claim. Other AOBs only assign part of the claim. For example, imagine an insured’s property is damaged by water. The insured needs the water extracted and the structure rebuilt. An AOB might assign both the water extraction and the rebuild claim to a single contractor. Or, the insured might execute one AOB to a water extraction contractor and a separate AOB to a different rebuild contractor. Or, an insured might execute an AOB to a water extraction contractor and the insured will retain the remaining rights to make the rebuild claim. If the AOB is unclear what – exactly – is being assigned, it is important for the adjuster to speak with the insured and the contractor to ensure everyone is on the same page.

Third, the adjuster should speak to the insured to gather information necessary to understand and adjust the assigned claim. In Florida, an adjuster likely cannot require a contractor to perform the insurance policy’s post-loss conditions of giving documents, executing a sworn statement in proof of loss, or appearing for an examination under oath. Shaw v. State Farm Fire & Cas. Co.,  37 So. 3d 329, 332-33 (Fla. 5th DCA 2010) disapproved on other grounds in  Nunez v. Geico Gen. Ins. Co. , 117 So. 3d 388 (Fla. 2013). However, the insured is still responsible for fulfilling those conditions even with regard to the assigned claim. Id. The insured’s failure to do so may bar the assigned claim. Id. 

Fourth, assuming payment will be made on the assigned claim, the adjuster should determine who will be listed on the settlement check. If there is a valid AOB, it may be improper to list the insured on the settlement check since the insured’s rights have been assigned to the contractor. Many AOBs will state that only the contractor be listed on the settlement check. However, it is good for an adjuster to confirm with the insured that the insured understands that he/she/it will not be listed on the settlement check. It is also important for the adjuster to correctly determine if a mortgagee needs to be listed on the settlement check. Situations vary depending on the nature of the work that the contractor is doing (damage prevention versus repair) and whether the work has been completed or is still to be done. The adjuster should discuss the situation with the insured, the contractor, and the mortgagee if the adjuster is at all unsure if the mortgagee needs to be on the settlement check.

Fifth, an adjuster should know whether an assigned claim can be resolved using the insurance policy’s appraisal provision. Appraisal can be an inexpensive and expedient way to resolve a claim. In Florida, an insurer usually can require a contractor with an assigned claim to go to appraisal if the insurance policy provides for the mandatory appraisal upon request.  Certified Priority Restoration v. State Farm Florida Ins. Co ., 191 So. 3d 961, 962 (Fla. 4th DCA 2016).

Insurers will continue to be presented with AOB claims in the wake of Hurricanes Irma and Harvey. We have been helping insurers and adjusters navigate the unique issues associated with AOB claims for many years. Please contact us if you have any questions or need assistance.

For any further questions, please contact Timothy Engelbrecht, T. Nicholas Goanos, or L. Andrew Watson.

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2020 Georgia Code Title 44 - Property Chapter 14 - Mortgages, Conveyances to Secure Debt, and Liens Article 3 - Conveyances to Secure Debt and Bills of Sale Part 1 - In General § 44-14-60. Deed to Secure Debt as Absolute Deed; Necessity of Bond of Title or to Reconvey

Whenever any person in this state conveys any real property by deed to secure any debt to any person loaning or advancing the grantor any money or to secure any other debt and takes a bond for title back to the grantor upon the payment of the debt or debts or in like manner conveys any personal property by bill of sale and takes an obligation binding the person to whom the property is conveyed to reconvey the property upon the payment of the debt or debts, the conveyance of real or personal property shall pass the title of the property to the grantee until the debt or debts which the conveyance was made to secure shall be fully paid. Such conveyance shall be held by the courts to be an absolute conveyance, with the right reserved by the grantor to have the property reconveyed to him upon the payment of the debt or debts intended to be secured agreeably to the terms of the contract, and shall not be held to be a mortgage. No bond for title or to reconvey shall be necessary where the deed shows upon its face that it is given to secure a debt.

(Ga. L. 1871-72, p. 44, § 1; Ga. L. 1872, p. 47, § 1; Code 1873, § 1969; Code 1882, § 1969; Ga. L. 1884-85, p. 57, § 1; Civil Code 1895, § 2771; Civil Code 1910, § 3306; Ga. L. 1924, p. 56, § 1; Code 1933, § 67-1301.)

- For article comparing rights of grantees holding deeds to secure debts against a bankrupt debtor to those rights of the mortgagee and lienor, see 10 Ga. B.J. 5 (1947). For comment on Chase v. Endsley, 165 Ga. 292, 140 S.E. 876 (1927), see 1 Ga. L. Rev. No. 3 p. 49 (1927). For comment on Hertz Driv-Ur-Self Stations, Inc. v. Arnold, 85 Ga. App. 175, 68 S.E.2d 182 (1952), holding that where a lender takes a bill of sale on personal property to secure debt but authorizes borrower to sell property upon certain conditions, a purchaser without knowledge of the conditions takes free of lender's lien, see 14 Ga. B.J. 472 (1952). For comment on Manchester Motors, Inc. v. Farmers & Merchants Bank, 91 Ga. App. 811, 87 S.E.2d 342 (1955), see 18 Ga. B.J. 82 (1955). For comment on Ruff v. Lee, 230 Ga. 426, 197 S.E.2d 376 (1973), see 8 Ga. L. Rev. 264 (1973).

General Consideration

Form and Requisites

Determining Nature of Instrument

Rights of Grantor

Rights of Grantee

Transfer or Assignment

Foreclosure

Constitutionality.

- O.C.G.A. § 44-14-60 is constitutional, and a foreclosure pursuant to it does not violate procedural due process rights. National Community Bldrs., Inc. v. Citizens & S. Nat'l Bank, 232 Ga. 594, 207 S.E.2d 510 (1974).

- The rights of a creditor whose debt is secured by deed from the debtor are fixed by a statute, which, while declaring that such conveyances pass the title to the vendee, evidently intended them to be treated as mere liens, except as between the contracting parties, when the right of third persons only are to be affected. A deed executed under the provisions of O.C.G.A. § 44-14-60 is absolute in the sense that nothing can intervene to prevent the creditor from collecting the debt if the property really belonged to the vendor and is sufficient for that purpose, and in the sense that the vendor is entitled, upon payment of the debt to have title reconveyed to the vendor. But while deeds executed under that section are expressly declared not to be mortgages, it is plain that the legislature, by declaring that they pass absolute title, intended to create a lien of high dignity. Dixon v. Bond, 18 Ga. App. 45, 88 S.E. 825 (1916).

A purchase-money security deed operates as an absolute conveyance of title until the secured indebtedness is fully paid. It generally takes precedence over simultaneous or prior liens against the purchaser, but not prior liens against the property. Connolly v. State, 199 Ga. App. 887, 406 S.E.2d 222 (1991).

- See In re Lookout Mt. Hotel Co., 50 F.2d 421 (N.D. Ga.), rev'd on other grounds sub nom. Bryan v. Speakman, 53 F.2d 463 (5th Cir. 1931), cert. denied, 285 U.S. 539, 52 S. Ct. 312, 76 L. Ed. 932 (1932).

- Because legal title remains in the grantee until satisfaction of the terms of a security deed, all subsequent conveyances of the real property remain subject to the security deed, unless the grantee releases the property by conveyance or contractually subordinates grantee's rights. Rhodes v. Anchor Rode Condominium Homeowner's Ass'n, 270 Ga. 139, 508 S.E.2d 648 (1998).

- Under O.C.G.A. § 44-14-60, the situation is the same as that which would arise if a vendor made a deed to the vendee and then took a mortgage back to secure the indebtedness. Guin v. Hilton & Dodge Lumber Co., 6 Ga. App. 484, 65 S.E. 330 (1909).

- Generally in Georgia the mortgage passes no title to lands; yet landed securities made in a particular way by O.C.G.A. § 44-14-60, which were once held to be equitable mortgages, do pass title now. Thomas v. Morrisett, 76 Ga. 384 (1886).

- O.C.G.A. § 44-14-60 cannot be construed as operating, on the mere payment of the debt, to divest the title which, by a bill of sale as provided by O.C.G.A. § 44-14-60, has passed from the vendor to the vendee, with the right reserved in the vendor to a reconveyance of the title to vendor on the vendee's payment of the debt, but must necessarily be construed as giving to the vendee only the right to retain the title as security for the debt until the debt is paid, and as operating to terminate this right and to cast on the vendee the obligation, after the debt has been paid, to reconvey the property to the vendor. Grady v. T.I. Harris, Inc., 41 Ga. App. 111, 151 S.E. 829 (1930).

- A security deed is automatically released and satisfied by full payment of the secured indebtedness, and title passes by operation of law back to the grantor or to those claiming under the grantor; the title which thus revests upon payment is in no way affected by liens, encumbrances, or rights which would otherwise attach by virtue of title having been vested in the grantee. Commercial Bank v. Stafford, 149 Ga. App. 736, 256 S.E.2d 69 (1979).

- A bill of sale of personalty to secure a debt stands on the same footing as a deed to realty to secure a debt. The status of each is provided for in O.C.G.A. § 44-14-60. Merchants' & Mechanics' Bank v. Beard, 162 Ga. 446, 134 S.E. 107 (1926).

- Grantee of security deed is not entitled to receive entire proceeds of condemnation award for partial, involuntary taking of property conveyed by the security deed, inasmuch as both grantor and grantee have an interest in property conveyed by security deed, and hence a right to compensation upon condemnation. Harwell v. Georgia Power Co., 250 Ga. 435, 298 S.E.2d 498 (1983).

- Open-end or "dragnet" clauses regarding future advances in deeds to secure debt are valid and enforceable. Tedesco v. CDC Fed. Credit Union, 167 Ga. App. 337, 306 S.E.2d 397 (1983).

A deed to secure debt with an "open-end" clause is not cancelled immediately upon payment of the initial debt. Tedesco v. CDC Fed. Credit Union, 167 Ga. App. 337, 306 S.E.2d 397 (1983).

- Where debtor executed several deeds to secure debt on the 1,357 acres of farmland, since the tobacco allotment on the acres would pass to the lender if that acreage was sold to the lender, unless specifically reserved, it necessarily follows that debtor's interest in the allotment was conveyed to the lender by virtue of the deeds to secure debt. In re Flanders, 45 Bankr. 222 (Bankr. M.D. Ga. 1984).

The expression "personal property," as used in O.C.G.A. § 44-14-60 includes choses in action as well as visible, tangible personal property. Garrard v. Milledgeville Banking Co., 168 Ga. 339, 147 S.E. 766 (1929).

- The plain language of O.C.G.A. § 44-14-60, although not clear, seems to establish that a deed to secure debt is not limited solely to securing debts of the grantor but may secure the debt of another. In re Am. Ventures, Inc., 340 F. Supp. 279 (N.D. Ga. 1971), aff'd, 457 F.2d 974 (5th Cir. 1972).

- Where a bill of sale on an ordinary stock of merchandise is executed merely to secure a debt, the bill of sale will attach to after-acquired portions of the stock as in case of mortgages, whether or not the bill of sale makes express reference to such after-acquired property. Merchants' & Mechanics' Bank v. Beard, 162 Ga. 446, 134 S.E. 107 (1926).

- A security deed executed to convey cultivated farm land as security for debt, does not ordinarily comprehend crops matured or unmatured on the land. Penn Mut. Life Ins. Co. v. Larsen, 178 Ga. 255, 173 S.E. 125 (1934).

- While the language in O.C.G.A. § 44-2-1 "every deed conveying lands," standing alone, is broad enough to embrace security deeds, it is not applicable to security deeds. Randall v. Hamilton, 156 Ga. 661, 119 S.E. 595 (1923).

- Payment in full of the debt renders the trust deed functus officio, and ipso facto extinguishes the power of sale. Thurman v. Lee, 181 Ga. 408, 182 S.E. 609 (1935).

- By virtue of O.C.G.A. § 44-14-60 the sale of land under a fi. fa. against the holder of an equity therein, who has conveyed the legal title to another to secure a debt, and while the legal title is thus held, is void. Dickenson v. Williams, 151 Ga. 71, 105 S.E. 841 (1921).

- A mere general agency to conduct the business of farming will not include the power to execute a security deed. Hargrove v. Armour Fertilizer Works, 31 Ga. App. 465, 120 S.E. 800 (1923).

- Where separate deeds executed under O.C.G.A. § 44-14-60 securing separate promissory notes, but by collateral contract the debtor agrees that each deed shall operate as security for the note described in the other, title to all the realty described in both notes passes, as between the debtor and the creditor, to the creditor, and the security is effectual against other creditors who obtain no lien. Johnson v. Gordon, 102 Ga. 350, 30 S.E. 507 (1897).

Wife may be creditor of her husband and may take from him a deed to land to secure the debt under O.C.G.A. § 44-14-60. Turner v. Woodward, 133 Ga. 467, 66 S.E. 160 (1909).

- A stipulation in an insurance policy that change of title or possession will render the policy void, does not cover a change effected by taking a security deed under O.C.G.A. § 44-14-60. Nussbaum v. Northern Ins. Co., 37 F. 524 (S.D. Ga. 1889).

Where a policy of insurance covering a building on the premises is issued, containing a condition that the policy shall be void if the property should be sold, or the title or possession of the property, or any part thereof, transferred or changed, the holder of the policy conveys under O.C.G.A. § 44-14-60 the property insured, the policy is thereby rendered void. Phoenix Ins. Co. v. Asberry, 95 Ga. 792, 22 S.E. 717 (1895).

- After Chapter 7 debtor executed a note to a lender and also executed a security deed to a grantee, as the lender's nominee, to secure the debt, the Chapter 7 trustee could not avoid the deed because the note and deed were executed together and remained linked via language in the documents that contemplated the agency relationship formed by the designation of the grantee as nominee. Drake v. Citizens Bank (In re Corley), 447 Bankr. 375 (Bankr. S.D. Ga. 2011).

- In this state, in matters of taxation, the law looks to the substantial, beneficial ownership of property conveyed under O.C.G.A. § 44-14-60, rather than to the shadowy, technical ownership of the legal title. Central of Ga. Ry. v. Wright, 124 Ga. 630, 53 S.E. 207 (1906), rev'd on other grounds, 207 U.S. 127, 28 S. Ct. 47, 52 L. Ed. 134 (1907).

- Where a grantee who had previously paid tax executions on property purchases the property after exercising the power of sale in a security deed, any claim for money for the tax executions is merged into the grantee's legal title. Branch v. Grubb, 177 Ga. 663, 170 S.E. 799 (1933).

- In the absence of an attack on a properly witnessed and recorded bill of sale placing upon a party the burden of proving its execution, it was not error to admit the bill of sale without proof of its execution. Watkins v. Muse, 78 Ga. App. 17, 50 S.E.2d 90 (1948).

- In an action to remove a cloud from title, the trial court properly granted summary judgment to a bank and cancelled a recorded deed in favor of a holder, as: (1) the holder could no longer claim any legal title to the subject property once the underlying debt thereto was paid; (2) no evidence of valid renewal or extension of the note existed; and (3) the holder lacked standing to challenge any foreclosure on the debt. Northwest Carpets, Inc. v. First Nat'l Bank, 280 Ga. 535, 630 S.E.2d 407 (2006).

- In a breach of contract and bad faith refusal to pay claim under a policy of lender's title insurance, the court reversed the judgment in favor of the insured and held that the issued date for the purpose of measuring any loss by the insured was the date the insured foreclosed on the subject property, not the date the bank closed on the subject loan. Old Republic Nat'l Title Ins. Co. v. RM Kids, LLC, 337 Ga. App. 638, 788 S.E.2d 542 (2016), cert. denied, No. S16C1843, 2017 Ga. LEXIS 117 (Ga. 2017).

Cited in Tufts v. Little, 56 Ga. 139 (1876); Roland v. Coleman & Co., 76 Ga. 652 (1886); Brice v. Lane, 90 Ga. 294, 15 S.E. 823 (1892); Arrowood v. McKee, 119 Ga. 623, 46 S.E. 871 (1904); Hubert v. Merchants' Bank, 137 Ga. 70, 72 S.E. 505 (1911); McCord v. Hill, 10 Ga. App. 254, 73 S.E. 559 (1912); Wood v. Dozier, 142 Ga. 538, 83 S.E. 133 (1914); Beckcom v. Small, 152 Ga. 149, 108 S.E. 542 (1921); Scott v. Paisley, 158 Ga. 876, 124 S.E. 726 (1924); First Nat'l Bank v. State Mut. Life Ins. Co., 163 Ga. 718, 137 S.E. 53, 51 A.L.R. 1524 (1927); Tarver v. Beneficial Loan Soc'y, 39 Ga. App. 646, 148 S.E. 288 (1929); A.J. Evans Mktg. Agency v. Federated Fruit & Vegetable Growers, Inc., 170 Ga. 30, 152 S.E. 49 (1930); Phoenix Mut. Life Ins. Co. v. Bank of Kestler, 170 Ga. 734, 154 S.E. 247 (1930); Investor's Syndicate v. Thompson, 172 Ga. 203, 158 S.E. 20 (1931); Merchants' & Citizens' Bank v. Bogle, 174 Ga. 612, 163 S.E. 489 (1932); A.J. Evans Mktg. Agency, Inc. v. Federated Growers' Credit Corp., 175 Ga. 294, 165 S.E. 114 (1932); Jones v. Kaplan, 48 Ga. App. 118, 172 S.E. 110 (1933); Piedmont Agrl. Credit Corp. v. Northeastern Banking Co., 51 Ga. App. 571, 181 S.E. 84 (1935); First Nat'l Bank v. Southern Cotton Oil Co., 78 F.2d 339 (5th Cir. 1935); Hicks v. Morris, 183 Ga. 116, 187 S.E. 639 (1936); Bull v. Johnson, 63 Ga. App. 750, 12 S.E.2d 96 (1940); A.O. Blackmar Co. v. NCR Co., 64 Ga. App. 739, 14 S.E.2d 153 (1941); Farmers Fertilizer Co. v. Carter, 83 Ga. App. 274, 63 S.E.2d 245 (1951); Carrollton Prod. Credit Ass'n v. Allen, 93 Ga. App. 150, 91 S.E.2d 93 (1955); Charles S. Martin Distrib. Co. v. First State Bank, 114 Ga. App. 693, 152 S.E.2d 599 (1966); Murray v. Johnson, 222 Ga. 788, 152 S.E.2d 739 (1966); Fourth Nat'l Bank v. Grant, 231 Ga. 692, 203 S.E.2d 517 (1974); Porter v. Mid-State Homes, Inc., 133 Ga. App. 706, 213 S.E.2d 10 (1975); Fourth Nat'l Bank v. Grant, 135 Ga. App. 798, 219 S.E.2d 12 (1975); National Bank & Trust Co. v. Grant, 237 Ga. 337, 227 S.E.2d 372 (1976); Tobler v. Yoder & Frey Auctioneers, Inc., 462 F. Supp. 788 (S.D. Ga. 1978); Peacock v. Owens, 244 Ga. 203, 259 S.E.2d 458 (1979); In re Wilder, 22 Bankr. 294 (Bankr. M.D. Ga. 1982); Cravey v. L'Eggs Prods., Inc., 100 Bankr. 119 (Bankr. S.D. Ga. 1989); McCarter v. Bankers Trust Co., 247 Ga. App. 129, 543 S.E.2d 755 (2000); Stearns Bank, N.A. v. Mullins, 333 Ga. App. 369, 776 S.E.2d 485 (2015).

Instrument cannot be of two natures.

- The parties cannot by an agreement make an instrument both retaining title and not retaining title; nor can they by such agreement make a summary statutory proceeding applicable by law to one character of instruments applicable by agreement to another. Wynn & Robinson v. Tyner, 139 Ga. 765, 78 S.E. 185 (1913).

- Where a security deed conveys a certain lease from the lessor to the grantor in such deed, which deed fully describes the lease and the leased premises and contains this provision: "including also all the machinery, equipment, stock in trade and all other assets" of the grantor, the description of such personal property is sufficient. Bennett v. Green, 156 Ga. 572, 119 S.E. 620 (1923).

- It is not necessary that a deed to secure debt shall specify the amount of the indebtedness that it is given to secure. Troup Co. v. Speer, 23 Ga. App. 750, 99 S.E. 541, cert. denied, 23 Ga. App. 813 (1919).

- The trial court, having found a debt to have been forgiven upon a decedent's death, did not err in ordering the decedent's administrator to cancel a deed to secure debt. The litigation did not give notice to the public that the deed had been cancelled; under O.C.G.A. §§ 44-14-3(b) and44-14-60, a grantee of a security deed had the duty to cancel the deed of record when the obligation was satisfied. Mize v. Woodall, 291 Ga. App. 349, 662 S.E.2d 178 (2008).

- A deed executed by a borrower under O.C.G.A. § 44-14-60 to secure a debt infected with usury, and purporting not only to convey title to the lender, but also to confer upon the latter a power of sale, is void. Pottle v. Lowe, 99 Ga. 576, 27 S.E. 145, 59 Am. St. R. 246 (1896). See also McLaren v. Clark, 80 Ga. 423, 7 S.E. 230 (1888); Liles v. Bank of Camden County, 151 Ga. 483, 107 S.E. 490 (1921).

Under the Federal Farm Loan Act of 1916, as amended (former 12 U.S.C. §§ 771, 781, now repealed), a Federal Land Bank has authority and "jurisdiction" to lend money to members of national farm loan associations on security of mortgages on farm lands within its district, and it may in the State of Georgia take as security a deed to secure debt instead of a mortgage, and one who has obtained a loan from such a bank, and others holding under that person, will be estopped to deny the bank's authority. Smith v. Federal Land Bank, 56 Ga. App. 526, 193 S.E. 257 (1937).

Mortgage and deed to secure debt distinguished.

- A deed to secure a debt is not the same as a mortgage. Such a deed conveys title; a mortgage is only a lien. Cole v. Cates, 110 Ga. App. 820, 140 S.E.2d 36 (1964).

- If the title becomes divested from the vendee upon the mere payment of the debt, the instrument created is only a mortgage, and is not a bill of sale to secure a debt and an instrument passing title as provided under O.C.G.A. § 44-14-60. Grady v. T.I. Harris, Inc., 41 Ga. App. 111, 151 S.E. 829 (1930).

A bill of sale to secure debt conveys an outright legal title, as distinguished from a mortgage lien, so as to place such legal title beyond the reach of any lien, statutory or otherwise, in the absence of a recording act treating such as an equitable mortgage. Manchester Motors, Inc. v. F & M Bank, 91 Ga. App. 811, 87 S.E.2d 342 (1955).

Security deeds and trust deeds distinguished. See In re Lookout Mt. Hotel Co., 50 F.2d 421 (N.D. Ga.), rev'd on other grounds sub nom. Bryan v. Speakman, 53 F.2d 463 (5th Cir. 1931), cert. denied, 285 U.S. 539, 52 S. Ct. 312, 76 L. Ed. 932 (1932).

- A bill of sale transferring title to a discount company of certain household furniture of the plaintiff as collateral security for a loan is not a mere pledge, but legal title is in the creditor subject to the right of the debtor to a reconveyance upon the debtor's payment of the debt in compliance with the terms of the contract. Jones v. Brown, 108 Ga. App. 776, 134 S.E.2d 440 (1963).

- A deed absolute on its face and accompanied with possession of property by defendant, could not, under the state of the pleadings, be proved by parol to be only a mortgage given for the purpose of securing a debt. Mitchell v. Fullington, 83 Ga. 301, 9 S.E. 1083 (1889).

- The creation of a trust for the purpose of paying a note is the same in effect as the insertion of a defeasance clause in the instrument; and this being true, such instrument is a mortgage, and not a bill of sale. Ward v. Lord, 100 Ga. 407, 28 S.E. 446 (1897).

- An instrument in the usual form of a security deed under O.C.G.A. § 44-14-60, but containing a clause providing that should the grantor "faithfully perform and keep all the covenants and agreements herein set out, this conveyance shall cease, determine, and be void," is a mortgage, and not a deed. Massillon Engine & Thresher Co. v. Burnett, 19 Ga. App. 487, 91 S.E. 786 (1917).

O.C.G.A. § 44-14-60 not exclusive for conveyance of absolute title to a creditor to secure a debt. Roland v. Coleman & Co., 76 Ga. 652 (1886); Ward v. Lord, 100 Ga. 407, 28 S.E. 446 (1897).

- A failure to comply strictly with the provisions of O.C.G.A. § 44-14-60 does not necessarily make a conveyance given to secure a debt a mortgage. Williamson v. Orient Ins. Co., 100 Ga. 791, 28 S.E. 914 (1897).

- If a deed is not made under O.C.G.A. § 44-14-60, but is made for the purpose of securing a debt, it would be what was known before the passage of the Act embodied in O.C.G.A. § 44-14-60, as an equitable mortgage, conveying the title of the land with the equitable right of redemption. Mitchell v. Fullington, 83 Ga. 301, 9 S.E. 1083 (1889).

- Where a written instrument which purports to be a bill of sale passing the title as security for a debt contains a defeasance clause, the instrument is a mortgage, and the title, which under the language of the instrument purports to pass, does not pass to the vendee. Grady v. T.I. Harris, Inc., 41 Ga. App. 111, 151 S.E. 829 (1930); Personal Fin. Co. v. Bailie, 43 Ga. App. 245, 158 S.E. 436 (1931).

- Where an instrument was described as "this mortgage," it was the intention of the parties that the instrument be construed to be a mortgage. Massillon Engine & Thresher Co. v. Burnett, 19 Ga. App. 487, 91 S.E. 786 (1917).

- A bill of sale of personalty to secure the payment of a debt, which recites that "this is a deed conveying title, and a bond to reconvey is this day given," is not a mortgage, but a conveyance under O.C.G.A. § 44-14-60. Watts v. Wight Inv. Co., 25 Ga. App. 291, 103 S.E. 184 (1920).

- An instrument otherwise in the form of a security deed is not a mortgage merely because it recites that it was given to secure an endorser upon a described note. The relationship of the parties does not make it a mortgage, nor is such recital a defeasance clause whereby the instrument should be treated as a mortgage and not as a security deed. Richey v. First Nat'l Bank, 180 Ga. 751, 180 S.E. 740 (1935).

- Where a warranty deed to secure a debt contains no defeasance clause, and no bond to reconvey is executed contemporaneously therewith - the grantee being given the power to sell the land at public outcry upon default in the payment of the debt - it is not necessary that title be again placed in the grantor in order to bring the property to sale. Penn Mut. Life Ins. Co. v. Donalson, 177 Ga. 84, 169 S.E. 337 (1933).

- A conveyance of real property, which recites that it is given for the purpose of indemnifying the grantee against loss resulting from an outstanding "mortgage" upon other property which the same grantor had conveyed to the same grantee, which contains no habendum clause and which provides that when the mortgage referred to is paid, "then this deed shall be null and void," and which further provides that when this mortgage is paid "this deed shall become null and void and cancelled on the record and surrendered to" the grantor, is not a security deed passing title to the grantee, but is a mortgage only. Camp v. Teal, 44 Ga. App. 829, 163 S.E. 233 (1932).

- Where an instrument was denominated a bill of sale for personalty and was given to secure a debt, as provided in O.C.G.A. § 44-14-60, yet where it contained a stipulation that the title to the personalty was put into the vendee until the debt was paid in full, this stipulation, by its terms, terminated the title to the vendee on the payment of the debt, and, when the debt was paid, the title reverted to the vendor; the instrument, therefore, was a mortgage only, and created only a lien upon the personalty, and passed no title thereto. Hix v. Williams, 42 Ga. App. 143, 155 S.E. 355 (1930).

Because a security deed did not specify a fixed period for repayment or state that the security interest was perpetual under O.C.G.A. § 44-14-80(a), title to the property reverted to the grantor after seven years and the grantee's security interest in the property was lost. Vineville Capital Group, LLC v. McCook, 329 Ga. App. 790, 766 S.E.2d 156 (2014).

- Where the holder of a promissory note, secured by an instrument purporting to be a deed, obtains a judgment thereon, stating in the holder's declaration that the instrument is a deed, the holder will not afterwards be heard to allege that the instrument is a mortgage and not a deed passing title. McCandless v. Yorkshire Guarantee & Sec. Corp., 101 Ga. 180, 28 S.E. 663 (1897).

- Under O.C.G.A. § 44-14-60 a bill of sale of personalty to secure a debt, although it contains a clause to reconvey the property upon the payment of the debt, is not a mortgage, but is an absolute conveyance of the property, and passes title to the same until the debt is fully paid. Hill v. Marshall, 18 Ga. App. 652, 90 S.E. 175 (1916).

Where an instrument recited that, whereas, the subscriber bargained, sold, transferred, and conveyed to C. all the stock of goods in a certain store, etc., that delivery was dispensed with, and that the goods were to remain in the subscriber's possession until default in the payment of the note and interest, during which time the subscriber was to be a bailee for hire, and on default was to deliver the property to C., it was a deed to secure a debt under O.C.G.A. § 44-14-60, and not a chattel mortgage. In re Caldwell, 178 F. 377 (S.D. Ga. 1910).

In general.

- While deeds to secure debt do pass title to the property by which the debt is secured, such a deed does not divest the grantor in such deed of all the grantor's rights and interest in the property. Barnard v. Barnard, 91 Ga. App. 502, 86 S.E.2d 533 (1955).

- The grantor in a deed under O.C.G.A. § 44-14-60 retains the right of possession and the right of redemption by payment of the debt, and consequently an equitable estate in the land which may be assigned or subjected to payment of grantor's debts. Citizens Bank v. Taylor, 155 Ga. 416, 117 S.E. 247 (1923); Uvalda Naval Stores Co. v. Cullen, 165 Ga. 115, 139 S.E. 810 (1927); Citizens & S. Bank v. Realty Sav. & Trust Co., 167 Ga. 170, 144 S.E. 893 (1928); Federal Land Bank v. St. Clair Lumber Co., 58 Ga. App. 532, 199 S.E. 337 (1938); Bell v. Allied Fin. Co., 215 Ga. 631, 112 S.E.2d 609 (1960).

- O.C.G.A. § 44-14-60 contemplates that the grantor might remain in possession of the property. Tift & Co. v. Dunn, 80 Ga. 14, 5 S.E. 256 (1887).

- Where one executes a security deed and remains in possession of the land described in the deed, that person's possession is under the grantee in the security deed and is not adverse to the title, and neither prescription nor the statute of limitations is available as a defense to an action in ejectment founded on the security deed. Thomas v. Stedham, 208 Ga. 603, 68 S.E.2d 560 (1952).

- When one has borrowed a sum of money and conveyed land to the lender as security for the payment of the debt, and received from the grantee a bond conditioned to reconvey on the payment of the debt, the interest pertaining to such land which the grantor thereafter possesses, until the debt is paid, is the right to redeem. Williams & Bessinger v. Foy Mfg. Co., 111 Ga. 856, 36 S.E. 927 (1900).

- The right to redeem is an equitable estate in the land, and may be sold and conveyed, subject to the paramount right of the original grantee to have all of the land appropriated to the payment of grantee's debt. Williams & Bessinger v. Foy Mfg. Co., 111 Ga. 856, 36 S.E. 927 (1900).

- To redeem land, held by absolute legal title as security for a debt under O.C.G.A. § 44-14-60, the debt must be paid or tendered; and, generally, a tender will be effective, though delayed till after the creditor has recovered possession of the premises by action. Broach v. Barfield, 57 Ga. 601 (1876).

- A security deed leaves the grantor no interest in land which can be subjected to levy and sale by a creditor whose judgment was obtained after the deed was executed. Shumate v. McLendon, 120 Ga. 396, 48 S.E. 10 (1904); Bennett Lumber Co. v. Martin, 132 Ga. 491, 64 S.E. 484 (1909); Penn Mut. Life Ins. Co. v. Donalson, 177 Ga. 84, 169 S.E. 337 (1933); Dean v. Andrews, 236 Ga. 643, 225 S.E.2d 38 (1976).

- A security deed to land conveys the legal title to the vendee, and the rights of the vendee cannot be affected by subsequent acts of conveyance by the vendor to third parties. But the vendor has such an equitable interest in the premises conveyed as that the vendor may create a valid second security deed, or lien, subject to the paramount right of the original grantee to have all the land appropriated to the payment of grantee's debt. Cook v. Georgia Fertilizer & Oil Co., 154 Ga. 41, 113 S.E. 145 (1922).

- Before a borrower who has executed a deed under O.C.G.A. § 44-14-60 can have affirmative equitable relief, such as injunction to prevent exercise of the power of sale by the grantee in such security deed, the borrower must pay or tender to such grantee the principal and lawful interest due. Liles v. Bank of Camden County, 151 Ga. 483, 107 S.E. 490 (1921).

- An absolute deed, though made as a security for a debt, passes title under O.C.G.A. § 44-14-60, and a judgment subsequently rendered against the grantor, has no lien on the land which can be enforced by levy and sale until the title can become reinvested by redemption. Groves v. Williams, 69 Ga. 614 (1882).

- A sale under the powers contained in a deed to secure debt divests the grantor of all title, and right of equity of redemption, to the lands described in the deed. Cummings v. Johnson, 218 Ga. 559, 129 S.E.2d 762 (1963).

- Title by virtue of a deed under O.C.G.A. § 44-14-60 was not divested by the subsequent voluntary bankruptcy of the grantor, and grantor's consequent discharge from all debts. Broach v. Barfield, 57 Ga. 601 (1876); Thomas v. Stedham, 208 Ga. 603, 68 S.E.2d 560 (1952).

- Title under O.C.G.A. § 44-14-60 was not divested by the bankrupt causing the land to be set apart in bankruptcy as the bankrupt's homestead exemption. Broach v. Barfield, 57 Ga. 601 (1876).

- A conveyance to secure a debt, made under O.C.G.A. § 44-14-60, passes title, and defeats all right to homestead in the land covered by such a deed. Isaacs v. Tinley, 58 Ga. 457 (1877). See also, Johnson v. Griffin Banking & Trust Co., 55 Ga. 691 (1876); Christopher v. Williams, 59 Ga. 779 (1877); Kirby v. Reese, 69 Ga. 452 (1882); Morgan v. Community Loan & Inv. Co., 195 Ga. 675, 25 S.E.2d 413 (1943).

- The right to contest the validity of a security deed on the ground that the notes secured by the deed contain usury is personal to the maker of the security deed, the maker's representatives and privies. A stranger in interest will not be heard in an attack on a title claimed to be void for usury. Dickenson v. Williams, 151 Ga. 71, 105 S.E. 841 (1921).

- Where the leasehold of the plaintiff is under one who, by making a security deed to a creditor under O.C.G.A. § 44-14-60, has divested himself of the legal title, and the plaintiff has no more than a mere possession of the land upon which the trespass is alleged to have been committed, plaintiff cannot maintain an action for damages to the realty. Flowers Lumber Co. v. Bush, 18 Ga. App. 269, 89 S.E. 344 (1916).

- The interest which a grantee takes under a deed executed under this law is not absolute in its broadest sense, but is restricted to holding title as security for the debt. For that purpose it places legal title out of the grantor, but on payment of the debt the right of the grantee to hold it ceases. It is a species of security effective from the date of the instrument when duly recorded, and is enforceable against the property by levy and sale under proceedings elsewhere provided for in the Code. Harvard v. Davis, 145 Ga. 580, 89 S.E. 740 (1916); Trust Co. v. Mobley, 40 Ga. App. 468, 150 S.E. 169 (1929).

- One holding a deed to secure debt under O.C.G.A. § 44-14-60 has the option of pursuing the statutory method of suing on the indebtedness, obtaining a judgment, executing a quitclaim deed to the debtor and filing the same for record for purposes of levy, and having the land sold under the judgment or the security deed may be foreclosed as an equitable mortgage. Ryals v. Lindsay, 176 Ga. 7, 167 S.E. 284 (1932).

- The holder of a subsisting security deed has the legal title to the property, and such title may be levied on as the holder's property to satisfy an execution against the holder. Parrott v. Baker, 82 Ga. 364, 9 S.E. 1068 (1889); Richey v. First Nat'l Bank, 180 Ga. 751, 180 S.E. 740 (1935).

A grantee has standing to enforce restrictive covenants against an outsider, and there is no need for the grantee to show actual benefit or injury to enforce this right. Turner Adv. Co. v. Garcia, 252 Ga. 101, 311 S.E.2d 466, cert. denied, 469 U.S. 824, 105 S. Ct. 101, 83 L. Ed. 2d 46 (1984).

- Unlike a mortgagee, who acquires only a lien, the grantee, or holder of a security deed in Georgia acquires the fee simple title to the property, subject to the right of the grantor, who is known as the equity owner, to reacquire the fee simple title upon satisfying the terms of the security deed. Sayers v. Forsyth Bldg. Corp., 417 F.2d 65 (5th Cir. 1969).

- The grantee in a bill of sale, given for the purpose of securing a present, past or future indebtedness, has an interest in the pledged property which will support an action of trover against any one who wrongfully converts the same to the grantee's use, and in a proceeding instituted for that purpose the grantee may elect to take a money verdict, and in such a case where an election to take a money verdict is made, the measure of damages is either the highest proved value of the pledged property between the date of conversion and the trial, or the value of the property at the time of conversion, with interest or hire thereon; but subject, however, to the condition that under neither choice can a recovery be had for more than the amount of the debt for which the property stands as security. Rose City Foods, Inc. v. Bank of Thomas County, 207 Ga. 477, 62 S.E.2d 145 (1950).

- While a bill of sale to secure debt will support an action in trover it is necessary to allege in the petition a default by the maker giving the holder the right of possession, and in the absence of such an allegation, the petition is subject to general demurrer. American Nat'l Bank & Trust Co. v. Davis, 104 Ga. App. 586, 122 S.E.2d 477 (1961).

- A deed to secure a debt passes the legal title under O.C.G.A. § 44-14-60 and will authorize a recovery in ejectment. Dykes v. McVay, 67 Ga. 502 (1881); Todd v. Morgan, 215 Ga. 220, 109 S.E.2d 803 (1959).

- The vendee in a security deed, after the debt matures, can bring ejectment against the vendor upon the title put in the vendee by such deed. Carswell v. Hartridge, 55 Ga. 412 (1875); Biggers v. Bird, 55 Ga. 650 (1876); Dykes v. McVay, 67 Ga. 502 (1881); Bennett v. Green, 156 Ga. 572, 119 S.E. 620 (1923).

- A deed under O.C.G.A. § 44-14-60 passing title to the grantee therein named, for the purpose of securing a debt, can, after the maturity of the debt, be set up as outstanding title to defeat an action of ejectment brought by one claiming under the grantor, if the possession of the defendant is connected with such title. Ashley v. Cook, 109 Ga. 653, 35 S.E. 89 (1900).

- The creditor may institute action thereon and may pray for and obtain a special judgment subjecting the property described in the deed to the payment of the debt. Jewell v. Walker, 109 Ga. 241, 34 S.E. 337 (1899).

- Where creditor has collateral, mortgage, or other form of security upon property of the debtor, failure to accept a lawful tender discharges the lien which was intended to secure payment. Thurman v. Lee, 181 Ga. 408, 182 S.E. 609 (1935).

- In order for a creditor to levy an execution upon property covered by a valid bill of sale made to secure a debt under O.C.G.A. § 44-14-60, the creditor must first redeem the property by paying off in full the security debt, and a levy made without a compliance with such condition precedent is void. Bank of La Grange v. Rutland, 27 Ga. App. 442, 108 S.E. 821 (1921), later appeal, 29 Ga. App. 478, 116 S.E. 49 (1923).

- Where furnace was a chattel attached to the realty of the grantee in the security deed as an "irremovable fixture," and where, after the execution of the security deed, it is detached and carried away by the grantor in said deed, an action will lie for its recovery and the fact that it was subsequently attached to the realty of the grantor in another county and this realty was sold to an innocent purchaser does not deprive the innocent owner of the property merely because some other person may be innocent or ignorant of the plaintiff's ownership. Burpee v. Athens Prod. Credit Ass'n, 65 Ga. App. 102, 15 S.E.2d 526 (1941).

- A deed under O.C.G.A. § 44-14-60 passes the title to the land and the timber growing thereon to the vendee. G. H. Ponder & Co. v. Mutual Benefit Life Ins. Co., 165 Ga. 366, 140 S.E. 761 (1927); Federal Land Bank v. St. Clair Lumber Co., 58 Ga. App. 532, 199 S.E. 337 (1938).

- A duly filed and recorded deed to secure debt is notice of all the rights which the grantee has thereunder. Cummings v. Johnson, 218 Ga. 559, 129 S.E.2d 762 (1963).

- Where a large body of land divided by a county line was conveyed as a whole to secure a debt, with bond for reconveyance, the creditor, after obtaining judgment, could have the entire tract levied on and sold in either county, neither being the county of the residence of the defendant in execution. Cade v. Larned, 99 Ga. 588, 27 S.E. 166 (1896).

- An unrecorded bill of sale to secure debt is uniformly superior to any lien arising by operation of law. Manchester Motors, Inc. v. F & M Bank, 91 Ga. App. 811, 87 S.E.2d 342 (1955).

- Where the owner of property incumbered it with a security deed and a contractor's lien, and thereafter leased a portion of it to a third person for a term of years, the holders of the liens will be compelled to sell such property in such a manner as not capriciously, unnecessarily, and unjustly to interfere with such leasehold interest. Western Union Tel. Co. v. Brown & Randolph Co., 154 Ga. 229, 114 S.E. 36 (1922).

- Where title to real estate is conveyed by a duly recorded deed to secure a debt under O.C.G.A. § 44-14-60, and the grantee takes the deed and advances the money loaned, without notice and before the record of the materialman's lien upon the property, the title thus acquired is superior to such lien. Bennett Lumber Co. v. Martin, 132 Ga. 491, 64 S.E. 484 (1909); Milner v. Wellhouse, 148 Ga. 275, 96 S.E. 566 (1918); Guaranty Inv. & Loan Co. v. Athens Eng'g Co., 152 Ga. 596, 110 S.E. 873 (1922); Rivers v. Williams Bros. Lumber Co., 174 Ga. 262, 162 S.E. 699 (1932).

- A security deed under O.C.G.A. § 44-14-60 is such a conveyance of title as will defeat laborers' liens upon the property embraced therein, if their creation was junior to this instrument, or if such deed was taken bona fide by the grantee and without notice of such liens. Bennett v. Green, 156 Ga. 572, 119 S.E. 620 (1923).

- When property has been conveyed by a grantor to secure a debt, and the grantee in the security deed reduces debt to judgment and files a quitclaim deed for the purpose of levy and sale, and the property is sold by the sheriff under the levy of the execution issued on such judgment, the lessee from the grantor under a lease junior to the security deed can at law be dispossessed by the sheriff for the purpose of placing in possession the purchaser of the property at such sale; and this may be done notwithstanding the fact that the lease is older than the judgment, when it is junior to the security deed. Mattlage v. Mulherin's Sons & Co., 106 Ga. 834, 32 S.E. 940 (1899).

- The title acquired under a deed under O.C.G.A. § 44-14-60 is superior to the right to a year's support, or dower, though such right to a year's support and dower are superior to the lien of a mortgage. When a judgment has been obtained on any indebtedness secured by the deed, before the property can be levied upon and sold, there must be a reconveyance by the grantee to the grantor. Bennett Lumber Co. v. Martin, 132 Ga. 491, 64 S.E. 484 (1909).

- Where the plaintiff in fi. fa. has filed a deed under O.C.G.A. § 44-14-60 for the purpose of having the land levied upon which had been conveyed to plaintiff by plaintiff's debtor as security for the debt, the sheriff, though the fi. fa. issued from a justice's court, may make the levy without making a search for personal property or making an entry upon the fi. fa. that no such property can be found. Bennett v. McConnell, 88 Ga. 177, 14 S.E. 208 (1891).

A fi. fa. issued upon a judgment rendered for a debt secured by a deed made under O.C.G.A. § 44-14-60 cannot be levied upon the realty conveyed as security until after the creditor has executed, filed, and had recorded a deed reconveying the property to the debtor; and a sale by the sheriff to the creditor, the levy having been made after the execution of such deed, but before it was either filed or recorded, is utterly void. National Bank v. Danforth, 80 Ga. 55, 7 S.E. 546 (1887).

- Where a creditor, whose debt was secured by a conveyance of land under O.C.G.A. § 44-14-60, obtained judgment, reconveyed the land to the debtor, and subsequently acquiesced in a sale of the land under an execution in favor of another creditor, and claimed the proceeds of such sale in the sheriff's hands, the lien of the secured creditor attached to such proceeds, and the purchaser at the sheriff's sale acquired an unencumbered title. Marshall v. Hodgkins, 99 Ga. 592, 27 S.E. 748 (1896).

- While it is the better practice, it is not essential, in suits upon notes secured by deed under O.C.G.A. § 44-14-60, to specify or declare a lien on the face of the pleadings or the judgment therein, in order to sell the land under execution by filing a deed reconveying the land, and to subject it to the special contract lien. The proof of the special lien may be made aliunde the face of the judgment or the pleadings on the note sued. Spradlin v. Kramer, 146 Ga. 396, 91 S.E. 409 (1917).

- The court does not err in awarding money to a judgment creditor, upon a levy, where it does not appear that the defendant repaid any of the money borrowed, or that the lender conveyed back the land and filed the deed in the clerk's office. Osborne v. Hill, 91 Ga. 137, 16 S.E. 965 (1893).

- The surety cannot sustain a claim to the property where it is levied on as that of the principal under an execution against the principal in favor of another creditor. Bank of Trion v. Parker, 43 Ga. App. 686, 160 S.E. 128 (1931).

- Trial court erred by granting summary judgment to a judgment lienholder because the lienholder did not establish as a matter of law that the lienholder had any legal or equitable interest in the property at any time after a quitclaim deed was executed; because the record did not establish that the lienholder had any ownership interest in the property upon which the right to seize assets could attach, the trial court erred in finding that the lienholder held a judgment lien against the property. Wells Fargo Bank, N.A. v. Twenty Six Properties, LLC, 325 Ga. App. 662, 754 S.E.2d 630 (2014).

Rights of transferee.

- A transferee of the grantee named in the security deed occupies the position of such grantee as against the grantor and those claiming under the grantor. Gilliard v. Johnston & Miller, 161 Ga. 17, 129 S.E. 434 (1925).

Assignee of a security deed has legal title to the property, subject to the right of the grantor to have the realty reconveyed to the grantor upon payment of the debt. Regante v. Reliable-Triple Cee of N.J., Inc., 251 Ga. 629, 308 S.E.2d 372 (1983); Leathers v. McClain, 255 Ga. 378, 338 S.E.2d 666 (1986).

- While an assignment of a promissory note, or other evidence of indebtedness, secured by a deed to land executed under the provisions of O.C.G.A. § 44-14-60, does not pass to the assignee a legal title to the land itself, such assignee has an equitable interest in the security effectuated by the deed. Van Pelt v. Hurt, 97 Ga. 660, 25 S.E. 489 (1896).

- Where the transferee of the debt secured by a deed reduces the same to judgment, all that is essential to the enforcement of a special lien in the transferee's favor is the rendition of a general judgment thereon, the conveyance by the vendee in the security deed to the defendant of the lands embraced therein, and proof aliunde that such judgment was rendered upon the secured debt. Lively v. Oberdorfer, 216 Ga. 673, 119 S.E.2d 27 (1961).

- Because a debtor filed a second bankruptcy petition for the express purpose of delaying and frustrating the legitimate efforts of a secured creditor to enforce its right of foreclosure, the debtor was found to have not acted in good faith under 11 U.S.C. § 362(g); thus, cause existed to annul or lift the automatic stay pursuant to 11 U.S.C. § 362(d). GRP Fin. Servs. Corp. v. Olsen (In re Olsen), Bankr. (Bankr. N.D. Ga. Jan. 8, 2007).

- While the transfer of negotiable promissory notes secured by an absolute conveyance of land made under O.C.G.A. § 44-14-60, although the transfer be made by endorsement of the payee without recourse upon the payee, will not discharge the land from the incumbrance placed upon it by the deed, yet a mere written transfer, endorsed upon the deed, of the deed itself and the rights of the grantee therein (the payee of the note) will not pass title to the land out of the grantee and into the endorsee of the notes, as to enable the latter to convey the land back to the debtor who executed the deed to secure the notes. Henry v. McAllister, 93 Ga. 667, 20 S.E. 66 (1894).

- The transfer of a negotiable promissory note secured by a deed under the provisions of O.C.G.A. § 44-14-60 although the transfer be made by endorsement of the payee on the note without recourse upon the payee, will not discharge the land from the encumbrance placed upon it by the deed. Henry v. McAllister, 93 Ga. 667, 20 S.E. 66 (1894); Milner v. Wellhouse, 148 Ga. 275, 96 S.E. 566 (1918).

Where a deed was given under the provisions of O.C.G.A. § 44-14-60 to secure the payment of a promissory note, and the original payee afterwards transferred the note without recourse, at the same time conveying to the assignee the title to the land described in the security deed, the latter was entitled to all the rights of the original payee of the note, and all the remedies for enforcing the same. Hunt v. New England Mtg. Sec. Co., 92 Ga. 720, 19 S.E. 27 (1893); Henry v. McAllister, 93 Ga. 667, 20 S.E. 66 (1894); Gillispie v. Hunt, 145 Ga. 490, 89 S.E. 519 (1916).

Where a vendor of land takes notes for the purchase money, securing their payment by reservation of title personally, which notes the vendor afterwards transfers without recourse and without any transfer of the reserve title to a third party, this operates as a payment of the purchase money, the vendee's equity becomes complete, and the vendor ceases to hold any interest in the land. Cade v. Jenkins, 88 Ga. 791, 15 S.E. 292 (1892); Henry v. McAllister, 93 Ga. 667, 20 S.E. 66 (1894).

Where transferee accepts bond as security for an additional loan subject to that specified in the loan deed, the transferee acquires such an equitable interest in the land as will entitle the transferee on sale of the property under the loan deed to a sufficient amount of the proceeds after discharge of the debt secured by the loan deed to satisfy the transferee's debt; and the transferee's right will attach from the time the transferee receives the transfer, and be superior to a subsequent materialman's lien. Guaranty Inv. & Loan Co. v. Athens Eng'g Co., 152 Ga. 596, 110 S.E. 873 (1922).

Subsequent incumbrance of same property by grantor, whether by security deed or mortgage executed by the grantor named in the prior security deed while the grantor retains an equitable estate in the land, will operate upon that equitable estate. Citizens' Bank v. Taylor, 155 Ga. 416, 117 S.E. 247 (1923).

Equitable foreclosure.

- Where security deed, executed subsequent to two deeds to secure debt, was made to secure an indebtedness represented by a promissory note, and on its face recited the debt and the purpose to secure it, the creditor could foreclose the deed as an equitable mortgage, although the grantor therein had been discharged as a bankrupt from the payment of debts. Pusser v. A. J. Thompson & Co., 132 Ga. 280, 64 S.E. 75, 22 L.R.A. (n.s.) 571 (1909); Smith v. Farmers' Bank, 165 Ga. 470, 141 S.E. 203 (1928).

A deed to secure debt may be foreclosed as an equitable mortgage. Lively v. Oberdorfer, 216 Ga. 673, 119 S.E.2d 27 (1961).

- Where a deed under seal was made conveying title in order to secure an indebtedness represented by a promissory note, under O.C.G.A. § 44-14-60, and on its face it recited the debt and the purpose to secure it, although suit on the note became barred by the statute of limitations, the creditor could foreclose the deed as an equitable mortgage within 20 years from its execution. Pusser v. A. J. Thompson & Co., 132 Ga. 280, 64 S.E. 75, 22 L.R.A. (n.s.) 571 (1909).

- A conveyance made under O.C.G.A. § 44-14-60 to secure a debt, and which is void as title on account of usury, cannot be foreclosed as an equitable mortgage. Broach v. Smith, 75 Ga. 159 (1885).

- A deed to real estate, given to secure a debt, may be foreclosed by the grantee as a mortgage, notwithstanding a provision therein that it is to be construed as a deed passing title, and not as a mortgage, such provision being one for the benefit of the grantee, which the grantee may waive at the grantee's election. Merrihew v. Fort, 98 F. 899 (N.D. Ga. 1899).

A deed absolute in form, given as security for a loan of money, and executed contemporaneously with the debtor's notes and with a bond to reconvey, given by the grantee, all in accordance with the provisions of O.C.G.A. § 44-14-60 et seq., may be foreclosed as a mortgage, by an action in equity in a federal court, notwithstanding that these provisions give a special remedy at law; for the equity jurisdiction of the federal courts cannot be limited by state legislation. Ray v. Tatum, 72 F. 112 (5th Cir. 1896).

The fact that the holder of a conveyance brings action to foreclose the same as a mortgage in a federal court does not change its character to that of a plain mortgage, which is only a security and passes no title, so as to let in the claim of the widow of the grantor to an allowance for support out of the property, but such an allowance made in proceedings to which the grantee was not a party can apply only to the grantor's equity of redemption. British & Am. Mtg. Co. v. Worrill, 168 F. 120 (N.D. Ga. 1909).

- Trial court erred in ruling that a bank's claims against borrowers and guarantors for breach of promissory notes were barred as improper deficiency actions under O.C.G.A. § 44-14-161(a) due to the bank's failure to seek confirmation after the foreclosure auctions because although the bank conducted and bid at foreclosure auctions of the real property that secured the notes, the transfer of a borrower's right of possession and the borrower's equity of redemption to the bank as the foreclosure sale purchaser never occurred; three days after the foreclosure auctions, the bank notified the borrowers that the bank rescinded any actions taken with respect to foreclosure and that the foreclosures were not and would not be consummated, and by definition, the confirmation procedure had no application when there had been no foreclosure sale. Legacy Cmtys. Group, Inc. v. Branch Banking & Trust Co., 310 Ga. App. 466, 713 S.E.2d 670 (2011), aff'd in part, rev'd in part, 290 Ga. 724, 723 S.E.2d 674, vacated in part, 316 Ga. App. 496, 729 S.E.2d 612 (2012).

OPINIONS OF THE ATTORNEY GENERAL

Grantor retains equitable rights.

- Despite the strong language of O.C.G.A. § 44-14-60, the grantor in a security deed retains certain equitable rights in the land. 1972 Op. Att'y Gen. No. U72-105.

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Kickoff time, TV assignment for Saturday's Georgia football showdown with Ole Miss now set

The kickoff time and TV assignment for the top 10 matchup between Georgia football and Ole Miss Saturday is now set.

The SEC announced on Sunday afternoon that the game will have a 7 p.m. kickoff and be shown on ESPN.

CBS had used a six-day option to make a decision after Saturday’s games.

More: Georgia football goes from one test to another. Ole Miss is next with the GameDay treatment

More: Jamon Dumas-Johnson injury: How costly will Georgia football linebacker's absence be?

CBS also announced that Georgia's Nov. 18 game at Tennessee will be shown on CBS at 3:30 p.m.

CFP No. 2 ranked Georgia beat No. 12 Missouri 30-21 , overcoming a 13-10 third quarter deficit and getting two second half interceptions to improve to 9-0 and 6-0 in the SEC.

No. 10 Ole Miss got by Texas A&M 38-35 for its fifth straight since losing to Alabama 24-10 on Sept. 23. The Rebels are 8-1 and 5-1 in the SEC.

This will be the fourth home night game of the season for Georgia which played a 6 p.m. game against UT Martin, 7:30 p.m. against UAB and 7 p.m. against Kentucky.

FAC Number: 2023-06 Effective Date: 11/06/2023

Subpart 32.8 - Assignment of Claims

32.800 scope of subpart..

This subpart prescribes policies and procedures for the assignment of claims under the Assignment of Claims Act of1940, as amended, ( 31 U.S.C.3727 , 41 U.S.C.6305 ) (hereafter referred to as "the Act").

32.801 Definitions.

Designated agency , as used in this subpart, means any department or agency of the executive branch of the United States Government (see 32.803 (d)).

No-setoff commitment , as used in this subpart, means a contractual undertaking that, to the extent permitted by the Act, payments by the designated agency to the assignee under an assignment of claims will not be reduced to liquidate the indebtedness of the contractor to the Government.

32.802 Conditions.

Under the Assignment of Claims Act, a contractor may assign moneys due or to become due under a contract if all the following conditions are met:

(a) The contract specifies payments aggregating $1,000 or more.

(b) The assignment is made to a bank, trust company, or other financing institution, including any Federal lending agency.

(c) The contract does not prohibit the assignment.

(d) Unless otherwise expressly permitted in the contract, the assignment-

(1) Covers all unpaid amounts payable under the contract;

(2) Is made only to one party, except that any assignment may be made to one party as agent or trustee for two or more parties participating in the financing of the contract; and

(3) Is not subject to further assignment.

(e) The assignee sends a written notice of assignment together with a true copy of the assignment instrument to the-

(1) Contracting officer or the agency head ;

(2) Surety on any bond applicable to the contract; and

(3) Disbursing officer designated in the contract to make payment.

32.803 Policies.

(a) Any assignment of claims that has been made under the Act to any type of financing institution listed in 32.802 (b) may thereafter be further assigned and reassigned to any such institution if the conditions in 32.802 (d) and (e) continue to be met.

(b) A contract may prohibit the assignment of claims if the agency determines the prohibition to be in the Government’s interest.

(c) Under a requirements or indefinite quantity type contract that authorizes ordering and payment by multiple Government activities, amounts due for individual orders for $1,000 or more may be assigned.

(d) Any contract of a designated agency (see FAR 32.801 ), except a contract under which full payment has been made, may include a no-setoff commitment only when a determination of need is made by the head of the agency , in accordance with the Presidential delegation of authority dated October 3,1995, and after such determination has been published in the Federal Register. The Presidential delegation makes such determinations of need subject to further guidance issued by the Office of Federal Procurement Policy. The following guidance has been provided:

Use of the no-setoff provision may be appropriate to facilitate the national defense ; in the event of a national emergency or natural disaster; or when the use of the no-setoff provision may facilitate private financing of contract performance. However, in the event an offeror is significantly indebted to the United States , the contracting officer should consider whether the inclusion of the no-setoff commitment in a particular contract is in the best interests of the United States . In such an event, the contracting officer should consult with the Government officer(s) responsible for collecting the debt(s).

(e) When an assigned contract does not include a no-setoff commitment , the Government may apply against payments to the assignee any liability of the contractor to the Government arising independently of the assigned contract if the liability existed at the time notice of the assignment was received even though that liability had not yet matured so as to be due and payable.

32.804 Extent of assignee’s protection.

(a) No payments made by the Government to the assignee under any contract assigned in accordance with the Act may be recovered on account of any liability of the contractor to the Government. This immunity of the assignee is effective whether the contractor’s liability arises from or independently of the assigned contract.

(b) Except as provided in paragraph (c) of this section, the inclusion of a no-setoff commitment in an assigned contract entitles the assignee to receive contract payments free of reduction or setoff for-

(1) Any liability of the contractor to the Government arising independently of the contract; and

(2) Any of the following liabilities of the contractor to the Government arising from the assigned contract:

(i) Renegotiation under any statute or contract clause .

(ii) Fines.

(iii) Penalties, exclusive of amounts that may be collected or withheld from the contractor under, or for failure to comply with, the terms of the contract.

(iv) Taxes or social security contributions.

(v) Withholding or nonwithholding of taxes or social security contributions.

(c) In some circumstances, a setoff may be appropriate even though the assigned contract includes a no-setoff commitment ; e.g.-

(1) When the assignee has neither made a loan under the assignment nor made a commitment to do so; or

(2) To the extent that the amount due on the contract exceeds the amount of any loans made or expected to be made under a firm commitment for financing.

32.805 Procedure.

(a) Assignments.

(1) Assignments by corporations shall be-

(i) Executed by an authorized representative;

(ii) Attested by the secretary or the assistant secretary of the corporation; and

(iii) Impressed with the corporate seal or accompanied by a true copy of the resolution of the corporation’s board of directors authorizing the signing representative to execute the assignment.

(2) Assignments by a partnership may be signed by one partner, if the assignment is accompanied by adequate evidence that the signer is a general partner of the partnership and is authorized to execute assignments on behalf of the partner-ship.

(3) Assignments by an individual shall be signed by that individual and the signature acknowledged before a notary public or other person authorized to administer oaths.

(b) Filing. The assignee shall forward to each party specified in 32.802 (e) an original and three copies of the notice of assignment, together with one true copy of the instrument of assignment. The true copy shall be a certified duplicate or photostat copy of the original assignment.

(c) Format for notice of assignment. The following is a suggested format for use by an assignee in providing the notice of assignment required by 32.802 (e).

Notice of Assignment

To: ___________ [ Address to one of the parties specified in 32.802 (e) ].

This has reference to Contract No. __________ dated ______, entered into between ______ [ Contractor’s name and address ] and ______ [ Government agency, name of office, and address ], for ________ [ Describe nature of the contract ].

Moneys due or to become due under the contract described above have been assigned to the undersigned under the provisions of the Assignment of Claims Act of1940, as amended, ( 31 U.S.C.3727 , 41 U.S.C.6305 ).

A true copy of the instrument of assignment executed by the Contractor on ___________ [ Date ], is attached to the original notice.

Payments due or to become due under this contract should be made to the undersigned assignee.

Please return to the undersigned the three enclosed copies of this notice with appropriate notations showing the date and hour of receipt, and signed by the person acknowledging receipt on behalf of the addressee.

Very truly yours,

__________________________________________________ [ Name of Assignee ]

By _______________________________________________ [ Signature of Signing Officer ]

__________________________________________________ [ Titleof Signing Officer ]

__________________________________________________ [ Address of Assignee ]

Acknowledgement

Receipt is acknowledged of the above notice and of a copy of the instrument of assignment. They were received ____(a.m.) (p.m.) on ______, 20___.

__________________________________________________ [ Signature ]

__________________________________________________ [ Title ]

__________________________________________________ On behalf of

__________________________________________________ [ Name of Addressee of this Notice ]

(d) Examination by the Government. In examining and processing notices of assignment and before acknowledging their receipt, contracting officers should assure that the following conditions and any additional conditions specified in agency regulations, have been met:

(1) The contract has been properly approved and executed.

(2) The contract is one under which claims may be assigned.

(3) The assignment covers only money due or to become due under the contract.

(4) The assignee is registered separately in the System for Award Management unless one of the exceptions in 4.1102 applies.

(e) Release of assignment.

(1) A release of an assignment is required whenever-

(i) There has been a further assignment or reassignment under the Act; or

(ii) The contractor wishes to reestablish its right to receive further payments after the contractor’s obligations to the assignee have been satisfied and a balance remains due under the contract.

(2) The assignee, under a further assignment or reassignment, in order to establish a right to receive payment from the Government, must file with the addressees listed in 32.802 (e) a-

(i) Written notice of release of the contractor by the assigning financing institution;

(ii) Copy of the release instrument;

(iii) Written notice of the further assignment or reassignment; and

(iv) Copy of the further assignment or reassignment instrument.

(3) If the assignee releases the contractor from an assignment of claims under a contract, the contractor, in order to establish a right to receive payment of the balance due under the contract, must file a written notice of release together with a true copy of the release of assignment instrument with the addressees noted in 32.802 (e).

(4) The addressee of a notice of release of assignment or the official acting on behalf of that addressee shall acknowledge receipt of the notice.

32.806 Contract clauses.

(1) The contracting officer shall insert the clause at 52.232-23 , Assignment of Claims , in solicitations and contracts expected to exceed the micro-purchase threshold , unless the contract will prohibit the assignment of claims (see 32.803 (b)). The use of the clause is not required for purchase orders . However, the clause may be used in purchase orders expected to exceed the micro-purchase threshold , that are accepted in writing by the contractor, if such use is consistent with agency policies and regulations.

(2) If a no-setoff commitment has been authorized (see 32.803 (d)), the contracting officer shall use the clause with its AlternateI.

(b) The contracting officer shall insert the clause at 52.232-24 , Prohibition of Assignment of Claims , in solicitations and contracts for which a determination has been made under agency regulations that the prohibition of assignment of claims is in the Government’s interest.

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https://www.wsj.com/us-news/law/trump-lawyer-jenna-ellis-pleads-guilty-in-georgia-racketeering-case-2134c82

Plea Deals With Trump’s Lawyers to Shape Georgia Election Case

‘i failed to do my due diligence,’ says the former president’s third legal adviser to take a plea deal.

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(8 minutes)

Trump and 18 co-conspirators, including eight lawyers, were charged with participating in a criminal enterprise to subvert Joe Biden ’s victory. A trial date hasn’t been scheduled, but a flurry of commitments to cooperate obtained by Fulton County District Attorney Fani Willis shows she is homing in on those who gave Trump legal advice in the months after the election.

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