                                                            [DO NOT PUBLISH]


               IN THE UNITED STATES COURT OF APPEALS
                                                                      FILED
                        FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
                          ________________________ ELEVENTH CIRCUIT
                                                                MAR 12, 2009
                                No. 08-10969                  THOMAS K. KAHN
                          ________________________                CLERK


                     D. C. Docket No. 06-01258-CV-CAP-1

IRIS NORWOOD JOHNSTON,
Executrix of the Will of Richard H. Johnston,

                                                                  Plaintiff-Appellee
                                                                   Cross-Appellant,

                                      versus

COMPANION PROPERTY & CASUALTY INSURANCE COMPANY,

                                                             Defendant-Appellant
                                                                 Cross-Appellee.


                          ________________________

                  Appeals from the United States District Court
                      for the Northern District of Georgia
                        _________________________

                                (March 12, 2009)

Before MARCUS, KRAVITCH and ANDERSON, Circuit Judges.

PER CURIAM:

      This case involves an insurance dispute between the late Richard H.
Johnston1 and Companion Property & Casualty Insurance Company

(“Companion”). Following a trial, the jury returned a verdict against Companion

and in favor of Johnston, awarding $117,551.30 for breach of contract, plus a bad

faith penalty and attorney’s fees. The district court vacated the award of a bad

faith penalty and attorney’s fees, but left undisturbed the jury’s verdict and award

for breach of contract. Companion appeals the breach of contract verdict, arguing

that the district court gave an improper jury instruction, the insurance policy did

not cover the roof collapse, and damages were not adequately proven. Johnston

cross-appeals, arguing that the district court erred in vacating the bad faith penalty

and attorney’s fees. For the reasons set forth below, we affirm.

                                           I. Facts

       The insured property at issue in this appeal is a flat-roofed commercial

building located in College Park, Georgia, that houses offices, a laundromat, and a

warehouse. The warehouse portion of the building is seventy-nine feet long and

contains a small staircase leading to a twenty-four-foot long mezzanine. The

mezzanine is located in the front portion of the warehouse and is used for storing

boxes of documents. Following a period of heavy rain, on June 15, 2004,

Johnston’s son discovered that a portion of the warehouse’s roof had collapsed. At


       1
       Johnston died during the pendency of this appeal and the executrix of his will, Iris
Norwood Johnston, was substituted as a party.

                                                2
the time of the collapse, the building was insured with Companion. The insurance

policy states, in relevant portion:

      We will pay for direct physical loss or damage to Covered Property,
      caused by collapse of a building or any part of a building . . . if the
      collapse is caused by one or more of the following:
            ...
            b. Decay that is hidden from view, unless the presence of such
            decay is known to an insured prior to the collapse . . .

      Johnston filed an insurance claim with Companion and retained a contractor,

Sherman Neal Brown, to evaluate the damage and suggest repairs. Brown

recommended that temporary repairs be conducted to prevent further damage to the

warehouse’s structure and contents. At Johnston’s request, Brown made $20,619

in temporary repairs.2 Johnston submitted a copy of the invoice for these repairs to

Companion.

      Companion retained an engineer, David Hildebrand, who examined the

warehouse, took pictures of the damage, spoke with Brown, and reported his

findings to Companion. Based on Hildebrand’s investigation, Companion sent a

letter to Johnston on September 1, 2004, denying the entire claim on the grounds

that the collapse was not covered under the insurance policy.

      Johnston sent a demand letter on November 30, 2004, indicating that if

Companion did not pay for all necessary repairs within sixty days, he would bring

      2
          As of the date of trial, permanent repairs still had not been conducted.

                                                  3
suit seeking damages under the contract, as well as a bad faith penalty and

attorney’s fees.3 Companion did not respond and the instant suit was filed in

Georgia state court on April 12, 2006. Companion thereafter removed the action to

federal court based on diversity of citizenship. See 28 U.S.C. § 1332.

       The case was tried before a jury in September 2007. Four witnesses

testified: (1) Richard Johnston, plaintiff; (2) Neal Brown, plaintiff’s contractor; (3)

Robert Clein, plaintiff’s expert; and (4) David Hildebrand, defendant’s expert. The

witnesses agreed that the damage to the warehouse was caused by a collapse and

that the collapse was at least partially the result of decay to the warehouse’s roof

trusses.4 The parties’ primary dispute was whether the decay to the roof trusses

was “hidden from view.” If the decay that caused the collapse was not “hidden

from view,” Johnston was precluded from recovering under the policy.

       At the close of Johnston’s case, Companion moved for a directed verdict on

the grounds that Johnston failed to prove: (1) that the decay was “hidden from

view”; (2) his damages; and (3) that Companion acted in bad faith. This motion

was denied. At the close of the defense, Companion brought a motion for

       3
         Georgia law requires that as a prerequisite to a claim for bad faith damages, the insured
must make a demand for payment at least sixty days prior to commencing suit against the
insurer. O.C.G.A. § 33-4-6(a).
       4
          At trial, the lawyers and witnesses sometimes referred to the decayed portions of the
ceiling as “roof trusses” and other times as “roof joists.” For the sake of consistency, we will
refer to the decayed wood collectively as “roof trusses.”

                                                 4
judgment as a matter of law on all three grounds, which was also denied.

      The jury returned a verdict in Johnston’s favor on September 12, 2007,

awarding $117,551.30 for breach of contract, $11,755 as a bad faith penalty, and

$40,000 in attorney’s fees. Companion thereafter renewed its motion for judgment

as a matter of law on the same three grounds as before, as well on the ground that

the district court erred by charging the jury on ambiguity and contract construction.

Companion argued that, in the alternative, it was entitled to a new trial on those

grounds. On January 30, 2008, the district court entered an order granting

Companion’s motion for judgment as a matter of law on the bad faith claim,

vacating the jury verdicts as to both the bad faith penalty and attorney’s fees. The

district court denied the motions for a new trial and judgment as a matter of law on

the breach of contract claim. Both parties now appeal.

                                   II. Discussion

A. Jury charge

      Companion argues that it is entitled to a new trial because the district court

committed reversible error by instructing the jury on ambiguity and principles of

contract construction.

      1. Standard of review

      We review the district court’s denial of a motion for new trial for abuse of



                                          5
discretion. Bianchi v. Roadway Express, Inc., 441 F.3d 1278, 1282 (11th Cir.

2006). We review jury instructions to determine “whether the jury charges,

considered as a whole, sufficiently instructed the jury so that the jurors understood

the issues and were not misled. If jury instructions accurately reflect the law, the

trial judge is given wide discretion as to the style and wording employed in the

instruction.” Johnson v. Barnes & Noble Booksellers, Inc., 437 F.3d 1112, 1115

(11th Cir. 2006) (citations and quotations omitted). We will only grant a new trial

based on inadequate jury instructions in cases in which “the instructions did not

accurately reflect the law in such a way that we are left with a substantial and

ineradicable doubt as to whether the jury was properly guided in its deliberations.”

Cleveland v. Home Shopping Network, Inc., 369 F.3d 1189, 1196 (11th Cir. 2004)

(citation and quotations omitted). This court reviews the jury instructions de novo

to determine whether they misstate the law or mislead the jury to the detriment of

the objecting party. Tran v. Toyota Motor Corp., 420 F.3d 1310, 1313 (11th Cir.

2005). Jury instructions must, however, be considered as a whole and are subject

to harmless error analysis. Cistola v. Daniel, 598 S.E.2d 535, 540 (Ga. Ct. App.

2004).

         2. Merits

         Companion argues that the district court improperly charged the jury by



                                           6
giving the following jury instructions: (1) the ambiguity charge – “[t]he plaintiff

contends that the language, hidden from view, . . . is ambiguous . . .”; and (2) the

contract construction charge – “[i]nsurance policies are to be construed in favor of

the insured and against the insurance company where the policy language is

ambiguous and the insurer has been the drafter of the contract.” Companion argues

that under Georgia law, a court should not charge a jury on principles of ambiguity

and contract construction unless the court has already found that a contractual term

is ambiguous. Companion argues that because the district court made no such

finding, it erred by instructing the jury on how to interpret ambiguous contractual

terms.5

       “The construction of a contract is a question of law for the court. Where any

matter of fact is involved, the jury should find the fact.” O.C.G.A. § 13-2-1.6

Where a contract is unambiguous, it is “improper for the court to give the jury any

instruction with regard to the manner in which the contract should be construed.”



       5
          Companion objected to the district court’s ambiguity charge at the charge conference,
but did not object to the contract construction charge. “We review alleged errors in jury
instructions only for plain error where the aggrieved party failed to raise an objection prior to
jury deliberations.” Wilbur v. Corr. Servs. Corp., 393 F.3d 1192, 1203 n.6 (11th Cir. 2004); see
Fed. R. Civ. P. 51(c)(1). In any event, the standard of review is immaterial because even if we
were to review the contract construction charge de novo, we would still conclude that the district
court did not commit error that warrants reversal.
       6
         In the instant case, subject matter jurisdiction is based on diversity of citizenship, so
state substantive law applies. See McMahan v. Toto, 256 F.3d 1120, 1131 (11th Cir. 2001).

                                                  7
Transamerica Ins. Co. v. Thrift-Mart, Inc., 285 S.E.2d 566, 571 (Ga. Ct. App.

1981) (quotations and citation omitted). Georgia law requires that before

submitting a contract construction charge to a jury, the trial court should conduct

the following inquiry:

      First, if no ambiguity appears, the trial court enforces the contract
      according to its terms irrespective of all technical or arbitrary rules of
      construction. Thus, where the terms of the contract are clear and
      unambiguous, the court looks only to the contract to find the parties’
      intent. Second, if the potential for ambiguity appears, the existence or
      non-existence of an ambiguity is itself a question of law for the court,
      unless an ambiguity remains even after the court has applied the
      pertinent rules of contract construction. Finally, issues of contract
      construction will be submitted to the jury only when there appears to
      be an ambiguity in the contract which cannot be resolved by the
      court’s application of the statutory rules of construction.

Ga. Ass’n of Educators, Inc. v. Paragon Prod., Inc., 520 S.E.2d 37, 39 (Ga. Ct.

App. 1999). Failure to properly apply this test can constitute reversible error. See

Travelers Ins. Co. v. Blakey, 342 S.E.2d 308 (Ga. 1986).

       The district court did not find an ambiguity in the contract, as required

under step one of the test enunciated in Georgia Association of Educators. In fact,

during the charge conference the district court expressly stated that “hidden from

view,” as used in the contract, “isn’t ambiguous to me.” It was therefore improper

for the district court to instruct the jury on how to interpret an ambiguous

contractual term.



                                           8
      This error, however, is harmless when construed in light of the charge as a

whole. Shortly after the ambiguity and contract construction charges, the district

court told the jury that decay is not “hidden from view” if it is “exposed and open

to plain sight.” The court further explained that simple “failure of an insured to

observe decay” does not render otherwise exposed decay “hidden from view.”

Because the court defined “hidden from view,” the jury would have understood

that despite the previous contract construction charge, it was not authorized to

apply its own meaning to this term. Given this charge, the jury could not have

believed that it was authorized to alter the interpretation of this term. The errors in

the jury charge are therefore harmless in light of subsequent portions of the jury

instructions.

      Because the errors in the charge were harmless, the district court did not

abuse its discretion by denying the motion for a new trial based on the jury

instructions.

B. Breach of contract claim

      Companion argues that it is entitled to judgment as a matter of law, or in the

alternative a new trial, on the breach of contract claim because there was

insufficient evidence to support the jury’s verdict and damages award.




                                           9
       1. Standard of review

       We review de novo a district court’s denial of a motion for judgment as a

matter of law. Goldsmith v. Bagby Elevator Co., Inc., 513 F.3d 1261, 1275 (11th

Cir. 2008). “We will reverse only if the facts and inferences point overwhelmingly

in favor of one party, such that reasonable people could not arrive at a contrary

verdict. We consider all the evidence, and the inferences drawn therefrom, in the

light most favorable to the nonmoving party.” Id. (quotations and citations

omitted); see Fed. R. Civ. P. 50(a)(1).7

       2. “Hidden from view”

       Companion concedes that Johnston was subjectively unaware of the decay,

but argues that all of the witnesses, including Johnston and his expert,

acknowledged that the decay was apparent and visible from inside the warehouse.

Companion argues that if Johnston “took the time to look,” he would have seen the

decay. As such, it contends that Johnston failed to prove that the decay on the

building was “hidden from view,” as required for coverage under the insurance

policy.

       Under Georgia law, “[w]ords in an insurance contract must be given their


       7
         We review the denial of a motion for a new trial for abuse of discretion. Bianchi, 441
F.3d at 1282. We need not separately review this issue under the more lenient standard because
we conclude that there is sufficient evidence to support the jury’s verdict under the more
stringent de novo standard.

                                               10
usual, ordinary, and common meaning.” Bold Corp., Inc. v. Nat’l Union Fire Ins.

Co. of Pittsburgh, Pa., 454 S.E.2d 582, 584 (Ga. Ct. App. 1995). In its ordinary

usage, something is considered “hidden” if it is “out of sight.” Webster’s Third

New International Dictionary 1065 (1986).

      After viewing the evidence in the light most favorable to the verdict, we

conclude that there was sufficient evidence for the jury to conclude that the decay

was “hidden from view.” The evidence presented at trial established that the

warehouse was dimly lit, containing only a few fluorescent fixtures. The decayed

roof trusses were located approximately sixteen feet above the warehouse’s floor.

Johnston, Brown, and Clein all testified that when standing underneath the

mezzanine, view of the decayed trusses was obscured by a beam and boxes stacked

on top of the mezzanine. Companion’s expert, Hildebrand, agreed that “[i]f one

were standing underneath the mezzanine, you could not see the decay on the roof

structure.” The witnesses only viewed the decayed trusses after the collapse. The

witnesses therefore could not speak definitively as to how apparent the decay was

prior to the collapse.

      Companion has not met the weighty burden of showing that “reasonable

people could not arrive at a contrary verdict.” Goldsmith, 513 F.3d at 1275. A

reasonable jury could have found that the poor lighting, the beam, and the boxes



                                         11
stacked on the mezzanine rendered the decay “out of sight,” and thus “hidden from

view.”

      We therefore conclude that the district court did not err in denying the

motions for judgment as a matter of law and a new trial on the grounds that the

decay was not “hidden from view.”

      3. Damages

      The jury awarded Johnston a total of $117,551.30 on the breach of contract

claim, which encompassed both the actual cost of temporary repairs and the

estimated cost of future repairs. Companion does not challenge the award of

$20,619 for the temporary repairs conducted by Brown, but argues that the jury

was not provided with sufficient evidence from which it could assess the cost of

future repairs.

      At trial, Johnston presented Brown’s February 2006 estimate for permanent

repairs, which totaled $96,982.30. Brown testified that the estimate was accurate

when given, but admitted that those figures had become outdated and that the

present cost of repair was likely higher. Companion argues that because this figure

was outdated and no other witnesses testified as to the present cost of repairs, the

jury should not have been permitted to include the cost of permanent repairs in its

jury verdict.



                                          12
       “It is axiomatic that damages cannot be left to speculation, conjecture, or

guess-work and must be proven with reasonable certainty.” Kroger Co. v. U.S.

Foodservice of Atlanta, Inc., 607 S.E.2d 177, 181 (Ga. Ct. App. 2004). When

considering the costs of repair, the plaintiff is only entitled to those expenses

“which would have been incurred had the repairs been undertaken upon the

discovery of the damage . . . not the cost of repairs as incurred [at a later date.]”

Getz Services, Inc. v. Perloe, 327 S.E.2d 761, 765 (Ga. Ct. App. 1985).

       Companion’s argument is flawed because the award should be based on the

cost of repairs at the time of discovery of the damage. It is of no consequence that

the actual cost of repair may have changed by the time of trial.8 The jury’s verdict

did not exceed Brown’s estimate. We therefore conclude that the district court did

not err in finding the jury’s award of damages was supported by sufficient

evidence.

C. Bad faith penalty and attorney’s fees

       Johnston cross-appeals, arguing that the district court erred in granting

Companion’s motion for judgment as a matter of law on the bad faith verdict. In



       8
          The collapse occurred in 2004, but Brown did not prepare an estimate for permanent
repairs until 2006. Companion, however, has not argued that the 2006 estimate inaccurately
reflects the 2004 cost of repairs. We therefore will not consider this issue. See Doe v. Dekalb
County Sch. Dist., 145 F.3d 1441, 1445 n.4 (11th Cir. 1998) (issues not raised in a party’s brief
are considered abandoned).

                                                13
the alternative, Johnston argues that even if judgment as a matter of law was

appropriate, the district court erred in vacating the attorney’s fees award.

       1. Standard of review

       We review a district court’s order granting a motion for judgment as a matter

of law de novo. Rossbach v. City of Miami, 371 F.3d 1354, 1356 (11th Cir. 2004).

       2. Bad faith

       Johnston argues that the district court erred in vacating the award of a bad

faith penalty. He asserts that Companion’s initial denial of his claim was in bad

faith because the damage to the warehouse was clearly within the parameters of the

policy, Companion failed to investigate the claim in a timely manner, Companion

implied to Johnston and Brown that the damage would be covered under the

policy, and that in reliance on Companion’s implication that the damages would be

covered, Brown engaged in temporary repairs that resulted in spoliation of

evidence.

       Most of the facts that Johnston points to are irrelevant to proving a claim for

bad faith failure to pay. Under Georgia law, a court may impose a bad faith

penalty against an insurer and require it to pay the insured’s attorney’s fees in the

following situation:9


       9
       Johnston argues that Companion engaged in what he refers to as both “normal” and
“abnormal” bad faith. “Abnormal” bad faith is a creature of Alabama caselaw, see In re

                                            14
       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 . . .

O.C.G.A. § 33-4-6. “To prevail on a claim for an insurer’s bad faith under

O.C.G.A. § 33-4-6, the insured must prove: (1) that the claim is covered under the

policy, (2) that a demand for payment was made against the insurer within 60 days

prior to filing suit, and (3) that the insurer’s failure to pay was motivated by bad

faith.” Lavoi Corp., Inc. v. Nat’l Fire Ins. of Hartford, 666 S.E.2d 387, 391 (Ga.

Ct. App. 2008). These requirements are strictly construed. BayRock Mortgage

Corp. v. Chi. Title Ins. Co., 648 S.E.2d 433, 435 (Ga. Ct. App. 2007). “The

insured bears the burden of proving bad faith, which is defined as any frivolous

and unfounded refusal in law or in fact to comply with the demand of the

policyholder to pay according to the terms of the policy.” Ga. Farm Bureau Mut.

Ins. Co. v. Williams, 597 S.E.2d 430, 432 (Ga. Ct. App. 2004). A penalty for bad

faith is not permissible “where the insurance company has any reasonable ground

to contest the claim and where there is a disputed question of fact.” S. Fire & Cas.

Ins. Co. v. Nw. Ga. Bank, 434 S.E.2d 729, 730 (Ga. Ct. App. 1993) (quotation


Simmons v. Cong. Life Ins. Co. & Insurers Admin. Corp., 791 So.2d 371, 379 (Ala. 2000), and
has not been recognized by any Georgia courts. We therefore will only examine the facts in
light of what Johnston refers to as “normal” bad faith, which is recognized under Georgia law.

                                              15
omitted).

      In the present case, the first two elements of a § 33-4-6 bad faith claim were

satisfied because the jury found that the insurance claim was covered under the

policy and it is undisputed that Johnston sent a demand, to which Companion did

not respond within 60 days. We agree with the district court, however, that

Johnston failed to prove the third element of a bad faith claim. Companion had a

legitimate, although ultimately unsuccessful, challenge to Johnston’s claim.

Johnston argues that he was deceived by Companion as to the purpose of its

investigation, but he does not allege that Companion’s subsequent denial of

payment was done in bad faith, as required for a bad faith claim under Georgia

law. See Ga. Farm Bureau Mut. Ins. Co., 597 S.E.2d at 432.

      We conclude that the evidence does not support the jury’s conclusion that

Companion engaged in a bad faith failure to pay. Although the jury ultimately

found that the decay was not “hidden from view,” Companion’s theory at trial was

not so unreasonable as to be considered “frivolous and unfounded.” Because

Companion’s reason for denying coverage was not so unbelievable as to sink

below the minimal threshold of “any reasonable ground to contest the claim,”

S. Fire & Cas. Ins. Co., 434 S.E.2d at 730 (emphasis added), the district court did

not err in granting judgment as a matter of law on the bad faith claim.



                                         16
      3. Attorney’s fees

      Having concluded that the district court did not err in granting judgment as a

matter of law on the bad faith penalty, Johnston may not collect attorney’s fees

under O.C.G.A. § 33-4-6 because that statute only applies to cases in which the

insurer acted in bad faith. Johnston argues, however, that he was also entitled to

attorney’s fees under O.C.G.A. § 13-6-11.

      O.C.G.A. § 13-6-11 allows the jury to award attorney’s fees “where the

plaintiff has specially pleaded and has made prayer therefor and where the

defendant has acted in bad faith, has been stubbornly litigious, or has caused the

plaintiff unnecessary trouble and expense.” Georgia courts have explicitly stated

that in cases where a plaintiff alleges that an insurer engaged in bad faith by

refusing to pay a claim, an action “for attorney fees and expenses of litigation

under OCGA § 13-6-11 is not authorized.” Howell v. Southern Heritage Ins. Co.,

448 S.E.2d 275, 276 (Ga. Ct. App. 1994).

      Johnston is precluded under Georgia law from availing himself of O.C.G.A.

§ 13-6-11 because “[t]he penalties contained in OCGA § 33-4-6 are the exclusive

remedies for an insurer’s bad faith refusal to pay insurance proceeds.” Id. The

district court therefore did not err in vacating the jury’s attorney’s fees award.




                                           17
                            III. Conclusion

For the reasons set forth, the judgment of the district court is affirmed.

AFFIRMED.




                                   18
