             Case: 12-11125    Date Filed: 12/06/2012   Page: 1 of 16

                                                             [DO NOT PUBLISH]


               IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT

                          ________________________

                                No. 12-11125
                            Non-Argument Calendar
                          ________________________

                      D. C. Docket No. 1:10-cv-01641-SCJ


GEORGE MATTHEWS,
NINA MATTHEWS,
                                                          Plaintiffs-Appellants,

                                      versus

STATE FARM FIRE AND CASUALTY COMPANY,

                                                          Defendant-Appellee.

                          ________________________

                   Appeal from the United States District Court
                      for the Northern District of Georgia
                        _________________________
                              (December 6, 2012)

Before CARNES, BARKETT and HULL, Circuit Judges.

PER CURIAM:

      In this diversity jurisdiction case, Plaintiffs George and Nina Matthews,

proceeding pro se, appeal the district court’s order granting summary judgment to
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Defendant State Farm Fire and Casualty Company (“State Farm”) on Plaintiffs’

breach of contract and bad faith claims. Upon careful review of the record and

consideration of the parties’ briefs, we affirm.

                                I. BACKGROUND

      Plaintiffs George and Nina Matthews insured their Georgia home with

Defendant State Farm. On May 1, 2009, two large oak trees fell upon Plaintiffs’

home causing damage. The trees fell in Plaintiffs’ backyard and made contact with

the rear deck and scraped against the rear exterior two-story wall of the home.

      Plaintiffs filed an insurance claim with State Farm. No one contests that the

May 2009 loss was a covered loss under the policy. Rather, the dispute here

concerns the scope of the damages caused by the trees and the loss amount.

      To determine what damages the trees caused, three engineers inspected

Plaintiffs’ home: (1) Philip Chapski, retained by State Farm; (2) Bill Creeden,

retained by Plaintiffs; and (3) Pete Craig, who became involved after Plaintiffs

contacted the Georgia Office of Insurance and Safety Fire Commissioner

(“Georgia’s DOI”).

A.    Engineer Chapski’s Report

      Chapski’s engineering report was prepared on June 10, 2009. In sum,

Chapski observed damage to a portion of the rear deck’s handrail but found no

structural damage to either the main residence or the deck. Plaintiffs notified State


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Farm that they rejected Chapski’s report, because, inter alia, the report failed to

acknowledge obvious damage to the home.

B.    Engineer Creeden’s Report

      Plaintiffs retained their own engineer, Creeden, to evaluate the damage.

Creeden submitted his engineering report to Plaintiffs on June 22, 2009.

      Generally, Creeden determined that the scope of damages caused by the

trees was greater than that found by Chapski. In his report, Creeden concluded that

not only was the rear deck’s handrail damaged but that the tree impact forced the

rear deck inward against the home, displacing the kitchen cabinets and causing

damage to some of the home’s rear walls. As one example, Creeden found that the

tree impact pushed the rear two-story wall of the great room inward by about one

inch. Creeden’s report described damage caused by the trees in these areas of

Plaintiffs’ home: the rear deck, the great room, the kitchen, the breakfast area, the

basement, the master bedroom, and the bedroom in the left rear area of the home.

      But Creeden also concluded that the damage was “not structurally

significant, in that the damage [did] not place any elements at risk of structural

failure” and the necessary repairs would be “primarily cosmetic.” To repair the

damage, Creeden recommended, among other things, removing and replacing

sheetrock and base and shoe moldings, pushing or pulling the walls straight,

beating back displaced wall studs, resetting the kitchen cabinets, adjusting


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displaced doors, and repairing or replacing damaged siding and a damaged gutter

on the home’s exterior. To repair the two-story wall of the great room, Creeden

recommended pushing or pulling the wall straight and installing steel straps to hold

the wall in position.

      State Farm agreed to pay for the scope of work described by Creeden’s

engineering report. State Farm’s adjuster, Van Westmoreland, prepared a June 29,

2009 estimate which calculated the cost to make Creeden’s recommended repairs

as $14,702.01.

      Based on Westmoreland’s estimate, State Farm sent Plaintiffs a check for

$11,002.01. This represented the net difference between Westmoreland’s estimate

($14,702.01), the $1,000 deductible, and a $2,700 advance issued to Plaintiffs by

State Farm to cover the cost of removing the fallen trees. State Farm also paid

Plaintiffs $1,979 to cover the damage to their personal property associated with the

tree collapse and to reimburse them for the cost of their engineer Creeden’s

services.

      Plaintiffs still disagreed and refused to cash any checks. Plaintiffs lodged

complaints with Georgia’s DOI. In an effort to resolve the dispute, Georgia’s DOI

asked a third engineer, Craig, to inspect the home independently. Georgia’s DOI

required State Farm to pick up the cost. Plaintiffs were able to point out to Craig

all the damages they claimed were caused by the trees.


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C.    Engineer Craig’s Report

      Craig issued his engineering report to Georgia’s DOI on August 29, 2009.

Craig outlined the scope of the damages that, in his professional opinion, was

associated with the trees’ impact to the home. Craig concluded that there was no

structural damage to the house caused by the falling trees, with the exception of

possible minor damage to the two-story rear wall of the great room of the home.

      As part of his report, Craig reviewed both prior engineering reports.

Notably, the scope of damages outlined in Craig’s report was less than that

outlined in Creeden’s report. Craig noted that Creeden similarly concluded that

there was no significant structural damage to the home. In Craig’s opinion, what

Creeden had recommended was a structural reinforcement rather than repair of the

two-story great room wall. And Craig disagreed with Creeden’s conclusion that

the damage to the interior walls resulted from the tree impact. However, Craig

concurred with Creeden’s recommendation to reinforce the two-story great room

wall, “as a reasonable and prudent precaution.”

      Adjuster Westmoreland prepared a revised estimate based on Craig’s report,

concluding that the full cost of repairs for the May 2009 tree loss was $8,558.85.

      Despite the revised lower estimate using Craig’s more limited scope of

damages, State Farm issued Plaintiffs yet another check for $11,002.01 based on

Plaintiffs’ Creeden report. Thus, State Farm twice sent checks to Plaintiffs to pay


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the scope of repairs outlined in Plaintiffs’ own engineer’s report.

D.     Repair Estimates by Contractors McCune and Lockhart

       Plaintiffs still argued the scope of the tree damages and resulting repair costs

exceeded State Farm’s payments. Plaintiffs obtained cost estimates from licensed

contractors James Michael McCune of AAA Restoration and Jerry Lockhart of

LMS Construction.

       The McCune estimate totaled $187,030.69. McCune, however, testified that

his estimate was based on all the items Plaintiffs wanted to have included in the

estimate, and it was not limited to repairs that were necessary as a result of the tree

damage. 1 McCune’s estimate was also not based on any engineering report.

McCune is not an engineer, and he did not offer any testimony as to what was the

scope of damages caused by the tree loss. McCune just estimated what Plaintiffs

said was damaged and what they wanted repaired. When asked to prepare a

revised estimate based upon Craig’s engineering report, McCune refused to do so

and has had no further involvement in the case.

       As for the Lockhart estimate, that report lists repair items that total

$184,018.62 in costs. Lockhart’s estimate also includes repair items beyond the

scope of damages identified in any engineering report, such as repairs in the dining


       1
        Plaintiffs dispute this and say they did not instruct McCune in this way. Whether
McCune was instructed in this way or not, it remains that McCune affirmatively testified that his
estimate included more work than that resulting from the tree damage.

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room, the foyer, a bathroom, and the office. In any event Lockhart did not appear

for his deposition, and Plaintiffs have not submitted an affidavit from Lockhart.

As a result, there is no testimony as to Lockhart’s training and experience or upon

what information he based his estimate. The record contains only Lockhart’s

written estimate he gave Plaintiffs, and thus Lockhart’s statements in the report,

without any testimony by Lockhart, are classic inadmissible hearsay.

E.    September 21, 2009 Water Damage

      On September 21, 2009, Plaintiffs made a water damage report to State

Farm, claiming it was additional damage associated with the May 2009 tree loss.

In a September 25, 2009 letter, State Farm acknowledged that Plaintiffs had

“asserted a new claim for water damage” and stated that it would need to complete

a visual inspection. State Farm inspected Plaintiffs’ property and determined the

September 21, 2009 water damage was unrelated to the May 1, 2009 tree loss. In

April 2010, State Farm told Plaintiffs that they must file a new claim for the

September 21, 2009 incident in order to be considered for payment.

F.    March 10, 2010 Water Damage

      On March 10, 2010, Plaintiffs reported more and different water damage,

this time from a leak in their study. State Farm inspected the property, determined

it was unrelated to the tree damage but that it was a covered loss under the policy,

and tendered $5,702.76 to repair the leak.


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G.    Plaintiffs’ Lawsuit

      On April 13, 2010, Plaintiffs filed this lawsuit against State Farm in state

court, alleging that State Farm breached the insurance contract and acted in bad

faith. State Farm removed the suit to federal court pursuant to 28 U.S.C. § 1332.

After discovery, State Farm filed a motion for summary judgment, arguing that

there was no genuine issue as to any material fact.

      The district court granted summary judgment to State Farm on the breach of

contract claims, concluding that, inter alia, State Farm had shown an absence of

evidence to support Plaintiffs’ contention that the damages from the May 2009 tree

loss exceeded State Farm’s payments, which were based on Plaintiffs’ own

engineer Creeden’s report.

      The district court distinguished between what damages were caused by the

trees and the cost to repair those identified tree damages. First, the district court

concluded that Plaintiffs had no expert that would testify that the damages caused

by the trees exceeded the scope of the damages outlined in Plaintiffs’ own engineer

Creeden’s report. The district court rejected Plaintiffs’ argument that an expert

was unnecessary on causation, agreeing with State Farm that the cause of damage

to Plaintiffs’ home is a matter appropriate for expert testimony. Second,

considering the cost to repair the tree damages, the district court agreed with

Plaintiffs that an expert witness was unnecessary to testify to the repair costs. But


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the district court concluded that Plaintiffs also lacked any evidence that the repair

costs exceeded State Farm’s payments. It determined that the Lockhart repair

estimate amounted to inadmissible hearsay and the McCune repair estimate was

not confined to repairs necessary as a result of the tree loss. The district court

concluded that without any evidence to show that the tree damages or repair costs

exceeded State Farm’s payments, a jury could not find that State Farm breached

the insurance contract.

      The district court also granted summary judgment to State Farm on

Plaintiffs’ bad faith claim, concluding that State Farm had reasonable grounds to

contest Plaintiffs’ claims and thus did not act in bad faith. The judgment ordered

that Plaintiffs “take nothing” and that State Farm “recover [its] costs of this

action.”

                           II. STANDARD OF REVIEW

      We review a district court’s order granting summary judgment de novo,

“viewing all the evidence, and drawing all reasonable inferences, in favor of the

non-moving party.” Vessels v. Atlanta Indep. Sch. Sys., 408 F.3d 763, 767 (11th

Cir. 2005). Summary judgment is appropriate when there is no genuine issue of

any material fact and the moving party is entitled to judgment as a matter of law.

Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548,

2552 (1986). Where the nonmoving party has failed “to establish the existence of


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an element essential to that party’s case, and on which that party will bear the

burden of proof at trial,” no genuine issue of material fact exists. Celotex Corp.,

477 U.S. at 322-23, 106 S. Ct. at 2552. A mere scintilla of evidence in support of

the non-movant is insufficient to defeat a motion for summary judgment.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S. Ct. 2505, 2512 (1986).

Rather, the plaintiff must present “evidence on which the jury could reasonably

find for the plaintiff.” Id.

                                      III. DISCUSSION

A.     Breach of Contract Claims

       On appeal, Plaintiffs first argue that disputed facts precluded summary

judgment on their breach of contract claims for losses sustained as a result of the

May 2009 tree damage and the September 2009 water damage.

       The elements for a breach of contract claim in Georgia are (1) a breach of a

contract (2) resulting in damages to (3) “the party who has the right to complain

about the contract being broken.” Kuritzky v. Emory Univ., 669 S.E.2d 179, 181

(Ga. App. 2008).2 In the insurance context, “[t]he burden of proof [is] upon the

plaintiff to prove that he ha[s] sustained a loss covered by the policy.” Chix v. Ga.

Farm Bureau Ins. Co., 258 S.E.2d 208, 209 (Ga. App. 1979) (quoting Reserve Life


       2
        Federal courts sitting in diversity apply state substantive law and federal procedural law.
Esfeld v. Costa Crociere, S.P.A., 289 F.3d 1300, 1306 (11th Cir. 2002). Accordingly, we apply
Georgia state law to Plaintiffs’ breach of contract claims.

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Ins. Co. v. Davis, 164 S.E.2d 132, 133 (Ga. 1968)). The party suing for damages

also “has the burden of proof of showing the amount of loss in a manner in which

the jury . . . can calculate the amount of the loss with a reasonable degree of

certainty. An allowance for damages cannot be based on guess work.” Big

Builder, Inc. v. Evans, 191 S.E.2d 290, 291 (Ga. App. 1972).

      The district court correctly granted summary judgment in favor of State

Farm, as Plaintiffs have not presented any evidence sufficient to raise a genuine

issue of material fact on their breach of contract claims.

      First, as to their claim that State Farm underpaid the May 2009 tree loss,

State Farm has paid for the scope of repair work that the three engineering reports

identified as caused by the tree loss. In fact, State Farm paid for the scope of work

in Plaintiffs’ Creeden report even though the scope of work in the independent

engineer Craig’s report was less.

      Plaintiffs rely on the McCune and Lockhart estimates, but these estimates do

not create fact issues. While McCune testified and authenticated his estimate, he

also testified that his estimate (1) was not based on any engineering report and (2)

encompassed repairs beyond the scope of the tree damage.

      As for the Lockhart estimate, the only evidence in the record is the written

estimate itself. Lockhart did not appear for his deposition and Plaintiffs have

submitted no affidavit from Lockhart. Without more, the written estimate is


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inadmissible hearsay. See Fed. R. Evid. 802. But even if we were to consider it,

the Lockhart estimate does not help Plaintiffs. Lockhart’s estimate does not

identify on what information it was based and it does not tie the repairs to the tree

damage. Indeed, much like McCune’s estimate, the estimate includes more repairs

than those necessary to repair the tree damage. For example, the Lockhart estimate

includes replacing the flooring in the dining room, the family room, the kitchen,

the office, and the living room, and replacing the hardwood stairs. None of the

engineering reports indicated that the tree loss caused floor damage or necessitated

floor replacements.

      In sum, Plaintiffs have no evidence and no expert testimony to substantiate a

claim that either the scope of damages caused by the fallen trees or the cost to

repair those damages exceeded what State Farm paid them. Accordingly, State

Farm was entitled to summary judgment on this claim.

      Second, Plaintiffs argue that State Farm breached the insurance contract by

not paying for the September 21, 2009 water damage claim. In support of

summary judgment, State Farm presented the affidavit of its adjuster, Van

Westmoreland, who stated he inspected the damage and found it unrelated to the

May 2009 tree loss. In an April 8, 2010 letter to Plaintiffs, State Farm specifically

instructed Plaintiffs on how to file a new claim and proof of loss for the September

21, 2009 incident. According to State Farm, Plaintiffs simply never filed a


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separate claim.

       In opposition to summary judgment, Plaintiffs only point to State Farm’s

September 25, 2009 letter acknowledging that Plaintiffs had “asserted a new claim

for water damage.” But that same letter, as recounted above, stated that a visual

inspection must be performed in order to determine if the loss is covered under the

policy or related to a previous loss. That visual inspection was later performed;

State Farm determined the September 21, 2009 water damage was not related to

the May 1, 2009 tree loss and instructed Plaintiffs on how to file a new claim and

proof of loss. Plaintiffs never took the necessary step of filing a new claim for the

September 21, 2009 water damage. 3

       In sum, Plaintiffs have no evidence showing that this September 2009 loss

was related to the covered May 2009 tree loss, that State Farm’s instruction

regarding how to file a new claim was in conflict with the claim process dictated

by the insurance policy, that Plaintiffs complied with that instruction and opened a

separate claim, or that this was even a covered loss. In the absence of such

evidence, Plaintiffs have not met their burden of showing breach for failure to pay

the September 21, 2009 loss. Accordingly, summary judgment was appropriate.

B.     Bad Faith Claim

       Plaintiffs next argue that the district court erred in granting summary

       3
       As also recounted above, Plaintiffs did file a new claim for the March 2010 water
damage which State Farm paid.

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judgment on their bad faith claim, as State Farm acted in bad faith in underpaying

for the May 2009 tree loss and in refusing to pay for the September 2009 water

damage claim.

      To establish a claim of bad faith on the part of the insurer under Georgia’s

bad-faith statute, “the insured must prove two conditions: (1) that a demand for

payment was lodged against the insurer at least 60 days prior to filing suit and

(2) that the insurer’s failure to pay was motivated by bad faith.” Primerica Life

Ins. Co. v. Humfleet, 458 S.E.2d 908, 910 (Ga. App. 1995); Ga. Code Ann.

§ 33-4-6. “A refusal to pay in bad faith means a frivolous and unfounded denial of

liability. If there are any reasonable grounds for an insurer to contest the claim,

there is no bad faith.” Swyters v. Motorola Emps. Credit Union, 535 S.E.2d 508,

510 (Ga. App. 2000) (emphasis added) (quoting Canal Ins. Co. v. Savannah Bank

& Trust Co., 352 S.E.2d 835, 839 (Ga. App. 1987)).

      In this case, Plaintiffs have not shown the district court erred in granting

summary judgment to State Farm on Plaintiffs’ bad faith claim. As described

above, Plaintiffs’ request for additional payment on the May 2009 loss was based

on estimates for repairs which exceeded the scope of the tree damages, and there is

no indication in this record that Plaintiffs properly asserted a new claim for the

September 2009 loss. Accordingly, State Farm had reasonable grounds to contest

the claims.


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C.     The Award of Costs to State Farm4

       Finally, Plaintiffs argue that the district court erred in awarding costs to State

Farm. Plaintiffs contend that so long as their lawsuit was based on a “bona fide

controversy,” State Farm is not entitled to costs for defending it.

       Federal Rule of Civil Procedure 54(d) provides that a court should award

costs to a prevailing party “[u]nless a federal statute, these rules, or a court order

provides otherwise.” Fed. R. Civ. P. 54(d)(1). We have explained that Rule 54(d)

creates a presumption in favor of awarding costs to a prevailing party. Chapman v.

AI Transp., 229 F.3d 1012, 1038 (11th Cir. 2000) (en banc). In order “[t]o defeat

the presumption and deny full costs, a district court must have and state a sound

basis for doing so.” Id. at 1039.

       Here, we cannot say Plaintiffs have shown that the district court abused its

discretion in awarding costs to State Farm as the prevailing party. Further, the

district court’s order that Plaintiffs “take nothing” was proper, as they failed to

prove that they were entitled to any relief. 5

       For the foregoing reasons, the district court’s order is


       4
        We review a district court’s decision to award costs for an abuse of discretion. Mathews
v. Crosby, 480 F.3d 1265, 1276 (11th Cir. 2007).

       5
         Plaintiffs argue that the district court’s “take nothing” statement meant the district court
set aside the earlier payment amounts of $11,012.01 for the May 2009 loss and $5,702.76 for the
March 2010 loss. The district court’s order did no such thing. Rather, it is undisputed that State
Farm already tendered checks in these amounts to Plaintiffs and that Plaintiffs received them.

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AFFIRMED.




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