Blissful Enters., Inc. v. Cincinnati Ins. Co.
| Decision Date | 30 September 2019 |
| Docket Number | Civil Action No. GLR-18-1221 |
| Citation | 421 F.Supp.3d 193 |
| Parties | BLISSFUL ENTERPRISES, INC., Plaintiff, v. CINCINNATI INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — District of Maryland |
Charles Thomas Brown, Silver and Brown PC, Fairfax, VA, for Plaintiff.
Bryant Steven Green, Craig David Roswell, Niles, Barton & Wilmer, LLP, Baltimore, MD, for Defendant.
THIS MATTER is before the Court on Defendant Cincinnati Insurance Company's ("Cincinnati") Motion for Summary Judgment (ECF No. 21) and Plaintiff Blissful Enterprises, Inc.'s ("Blissful") Opposition to Defendant's Motion for Summary Judgment and Cross-Motion for Summary Judgment ("Cross-Motion") (ECF No. 23). The Motions are ripe for disposition, and no hearing is necessary. See Local Rule 105.6 (D. Md. 2018). For the reasons outlined below, the Court will grant Cincinnati's Motion and deny Blissful's Motion.
Blissful owns and operates a hotel (the "Hotel") at 2112 Emmorton Park Road in Edgewood, Maryland (the "Property"). (Compl. ¶¶ 1, 11, ECF No. 2). Blissful insured the Property via a policy issued by Cincinnati (the "Policy"). .2 The Policy provides All Risk Coverage, or Open Peril coverage, that is, coverage for all risk of loss unless excluded by the Policy. (Id. ¶ 13). Blissful purchased additional coverage included in a Hotel Commercial Property Endorsement (the "Endorsement"). (Compl. ¶ 20; Policy at 82–102). The Property contains a storm water drainage system connected to the Hotel that "drains water from around the building, and water from off the roof of the building, through a system of pipes which feed into an underground pipe." (Id. ¶ 23).
On January 14, 2016,3 Blissful employees cleaning up leaves on the Property noticed what appeared to be a "sinkhole" next to the building. (Gregory Aff. ¶ 6, ECF No. 21-5; Def.'s Mot. Summ. J. ["Def.'s Mot."] Ex. 1(A) ["Cincinnati Claim Notes"] at 8, ECF No. 21-6).4 Blissful reported the incident (the "Loss") to Cincinnati, stating that underground pipes may be damaged. . On January 20, 2016, John Gregory, a Cincinnati Senior Claims Specialist, sent Blissful a Reservation of Rights letter and noted that, "if there are damages to underground pipes, drains, or flues, they must be physically attached to Covered Property for the policy to respond." (Gregory Aff. ¶ 8; Cincinnati Claim Notes at 8). Blissful retained William Baker to investigate the loss and attached to its insurance claim his February 3, 2016 letter, which stated that a "metal pipe has failed at the connection to the existing concrete manhole [which resulted in] a large amount of soil be[ing] displace[d] down the pipe, ... caus[ing] two small retaining walls to fail and to void soil from under concrete and stone inlet aprons located in a drainage swale." (Def.'s Mot. Ex 1(C) ["Baker Letter"], ECF No. 21-8). Baker referred to the loss as a "sinkhole." (Id. ). In a February 4, 2016 email, Gregory emailed a Blissful representative this statement: "based on the engineer's report and hotel site plan, we will provide coverage for the underground piping, however, as you are aware, the policy will not respond to filling the sinkhole itself." (Compl. ¶ 30; Cincinnati Claim Notes at 11). Blissful then submitted an estimate (the "Estimate") of the repair and restoration cost, $335,484.00, . Surprised by the repair cost, Cincinnati chose to inspect the loss and evaluate the proposal. (Gregory Aff. ¶ 16). Upon investigation, Cincinnati wrote to Baker, asking him to explain how the loss satisfied the Policy's definition of "sinkhole." (Cincinnati Claim Notes at 29–30). Baker could not confirm that it was, in fact, a sinkhole, so Cincinnati and Blissful each retained an expert, and the parties arranged a joint inspection of the Property for May 23, 2016. (Gregory Aff. ¶¶ 18–21). Following the inspection, Blissful's expert, Robert Najewicz, reported that "the bottom portion of the metal pipe was significantly corroded resulting in a loss in the structural integrity of the pipe that in turn appears to have contributed to the lateral deflection or shearing in the pipe and its subsequent collapse." (Def.'s Mot. Ex. 2 ["Najewicz Report"] at 2, ECF No. 21-12). Cincinnati's expert, August Domel, agreed that "[t]he hole has occurred because of a breach in the pipe where it connects to the manhole has resulted in soil movement," which "allowed for the soil in the area to enter the pipe and be transported away leaving a hole." (Def.'s Mot. Ex. 1(E) ["Domel Report"] at 4, ECF No. 21-10). Domel disputed Baker's sinkhole characterization because a sinkhole is "a ground depression caused by the dissolving of soft rocks naturally by groundwater circulating through them," whereas the Loss was related to pipe collapse. (Id. ). On August 1, 2016, having concluded the loss was not actually a sinkhole or otherwise covered, Cincinnati denied Blissful's claim. (Compl. ¶ 32; Gregory Aff. ¶ 25).
On or about March 23, 2018, Blissful sued Cincinnati in the Circuit Court for Harford County, Maryland. (Not. Removal at 1, ECF No. 1). In its two-count Complaint, Blissful alleges: breach of contract (Count I); and, in the alternative, promissory estoppel (Count II). Blissful alleges the underground pipe "collapsed due to decay hidden from view, and/or due to defective material or methods by which the pipe was installed, or due to breaking apart of the drain system." (Compl. ¶ 24). "Alternatively the area containing the underground pipe sustained sinkhole damage for which Cincinnati agreed coverage existed under the Policy." (Id. ¶ 25). Blissful alleges the Loss is covered by the Policy's Collapse Coverage Extension, (id. ¶¶ 17–19), or via the Endorsement's coverage for underground pipes, flues or drains, (id. ¶¶ 20–22).
On April 26, 2018, Cincinnati removed the case to this Court. (ECF No. 1). On December 11, 2018, Cincinnati filed its Motion for Summary Judgment. (ECF No. 21). On January 2, 2019, Blissful filed an Opposition and Cross-Motion for Summary Judgment. (ECF No. 23). On January 22, 2019, Cincinnati filed an Opposition to the Cross-Motion and Reply with respect to its Motion. (ECF No. 24). On January 31, 2019, Blissful filed a Reply. (ECF No. 25).
In reviewing a motion for summary judgment, the Court views the facts in a light most favorable to the nonmovant, drawing all justifiable inferences in that party's favor. Ricci v. DeStefano, 557 U.S. 557, 586, 129 S.Ct. 2658, 174 L.Ed.2d 490 (2009) ; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158–59, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970) ). Summary judgment is proper when the movant demonstrates, through "particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations ... admissions, interrogatory answers, or other materials," that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a), (c)(1)(A). Significantly, a party must be able to present the materials it cites in "a form that would be admissible in evidence," Fed.R.Civ.P. 56(c)(2), and supporting affidavits and declarations "must be made on personal knowledge" and "set out facts that would be admissible in evidence," Fed.R.Civ.P. 56(c)(4).
Once a motion for summary judgment is properly made and supported, the burden shifts to the nonmovant to identify evidence showing there is genuine dispute of material fact. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586–87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The nonmovant cannot create a genuine dispute of material fact "through mere speculation or the building of one inference upon another." Othentec Ltd. v. Phelan, 526 F.3d 135, 141 (4th Cir. 2008) (quoting Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985) ).
A "material fact" is one that might affect the outcome of a party's case. Anderson, 477 U.S. at 248, 106 S.Ct. 2505 ; see also JKC Holding Co. v. Wash. Sports Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001) (citing Hooven-Lewis v. Caldera, 249 F.3d 259, 265 (4th Cir. 2001) ). Whether a fact is considered to be "material" is determined by the substantive law, and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248, 106 S.Ct. 2505 ; accord Hooven-Lewis, 249 F.3d at 265. A "genuine" dispute concerning a "material" fact arises when the evidence is sufficient to allow a reasonable jury to return a verdict in the nonmoving party's favor.
Anderson, 477 U.S. at 248, 106 S.Ct. 2505. If the nonmovant has failed to make a sufficient showing on an essential element of her case where she has the burden of proof, "there can be ‘no genuine [dispute] as to any material fact,’ since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Celotex Corp. v. Catrett, 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
When the parties have filed cross-motions for summary judgment, the court must "review each motion separately on its own merits to ‘determine whether either of the parties deserves judgment as a matter of law.’ " Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003) (quoting Philip Morris Inc. v. Harshbarger, 122 F.3d 58, 62 n.4 (1st Cir. 1997) ). Moreover, "[w]hen considering each individual motion, the court must take care to ‘resolve all factual disputes and any competing, rational inferences in the light most favorable’ to the party opposing that motion." Id. (quoting Wightman v. Springfield...
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