Following the fracture of an underground gas pipeline owned and operated by Atmos Energy Corporation, a subsequent fire and explosion damaged a building owned by Woodcraft by Macdonald, Inc. d/b/a Coachcraft. Coachcraft’s insurer, Georgia Casualty and Surety Co. Georgia Casualty, paid Coachcraft $1,675,169 under two policies and then pursued its own subrogation rights against Atmos in federal court where Coachcraft and its owner, Brad MacDonald collectively “Coachcraft”, intervened as plaintiffs. After more than two years of discovery and preparation for trial, Georgia Casualty decided to settle its claims against Atmos for $950,000. Coachcraft filed an objection to the settlement, arguing Georgia Casualty was prohibited from settling its subrogation claims until Coachcraft was “made whole.” The federal court denied the objection. In lieu of continuing its own federal case, Coachcraft also settled its claims against Atmos for $125,000.
Following the settlements, Coachcraft demanded Georgia Casualty pay, from its settlement, the remaining amount it claimed was necessary to make it whole from the damage to its building $179,130.59. Georgia Casualty refused the demand, and Coachcraft brought the instant litigation in superior court asserting breach of the insurance policy and bad faith refusal to ensure that it was made whole. The trial court denied Georgia Casualty’s motion for summary judgment on the breach of contract claim, but granted summary judgment on the bad faith claim. On interlocutory appeal, the Court of Appeals found that summary judgment for Georgia Casualty was warranted on both the breach of contract and bad faith claims. In ruling on the breach of contract claim, the court held that the “made whole” doctrine did not require Georgia Casualty to demonstrate that Coachcraft had been fully compensated prior to exercising its subrogation rights under the insurance policy. Accordingly, the Court of Appeals reversed the trial court’s ruling on the breach of contract claim and affirmed its ruling on the bad faith claim. Ga. Cas. & Sur. Co. v. Woodcraft by MacDonald, Inc., 315 Ga. App. 331 726 SE2d 793 2012. This Court granted Coachcraft’s petition for certiorari to determine whether the Court of Appeals erred when it reversed the trial court’s denial of summary judgment to Georgia Casualty on the breach of contract claim. For the reasons that follow, we affirm.
