Boiardi v. Freestate
| Decision Date | 25 September 2013 |
| Docket Number | Civil Action No. ELH-11-01676 |
| Parties | MAUREEN HOWARD BOIARDI, Plaintiff, v. MARK FREESTATE, et al., Defendants. |
| Court | U.S. District Court — District of Maryland |
Maureen Boiardi, plaintiff, suffered extensive damage to her house ("House") in Queenstown, Maryland due to a fire in February 2009. At the time of the fire, the contents of the House were not insured. As a result, Boiardi filed suit against defendant Mark Freestate and the company for which he worked, defendant Avon-Dixon Agency, LLC ("Avon-Dixon"), alleging various claims under Maryland law arising from defendants' failure to secure an insurance policy on the House. See Am. Compl. (ECF 47). In particular, Boiardi asserts a claim of negligence as to both defendants (Count I). And, as to Freestate, Boiardi asserts causes of action for breach of fiduciary duty (Count II); negligent misrepresentation (Count III); intentional misrepresentation (Count IV); and fraud or deceit (Count V). Id.1 She seeks compensatory relief and, with regardto Counts I, II, and III, she also seeks damages for "pain and suffering." See Am. Compl. ¶¶ 18, 24, 29.
At the conclusion of discovery, defendants moved for summary judgment ("Motion" or "Mot.," ECF 53), supported by a Memorandum ("Memo," ECF 53) and exhibits. Plaintiff opposes the Motion ("Opposition" or "Opp.," ECF 55), supported by exhibits,2 and defendants have replied ("Reply," ECF 57). No hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons that follow, I will grant the Motion in part and deny it in part.
Plaintiff and her late husband, Mario Boiardi, were long-time clients of Freestate. See Deposition of Mark Freestate ("Freestate Dep.," ECF 56-1) at 26; Deposition of Maureen Boiardi ("Boiardi Dep. 1," ECF 56-1) at 53-54.4 The Boiardis purchased a home in Queenstown, Maryland in July 2000, Memo at 2; Opp. at 2, which was insured under a policy issued by Chubb Insurance Company ("Chubb"), see Boiardi Dep. 2 at 16, and procured byFreestate.5 See Freestate Dep. at 64, 67-68, 79. The Boiardis paid their annual premiums to Chubb through 2007. See id. After Mr. Boiardi passed away on November 24, 2007, plaintiff continued to pay the mortgage on the House. Boiardi Dep. 1 at 45.
Plaintiff claims that in the summer of 2008, she made a "$7,000 payment to Chubb by phone." Boiardi Dep. 2 at 16-17. However, Chubb never received payment from plaintiff, id. at 17, and on August 20, 2008, Chubb cancelled the policy for nonpayment. Opp. at 2; Memo at 2.
On September 19, 2008, Washington Mutual Bank ("WAMU"), the mortgagee on the House, sent a letter to Mr. Boiardi, at the address for the House, stating that it had not received notice of renewal of insurance coverage.6 Opp. at 2; Memo at 2. Then, on November 9, 2008, WAMU sent a package to the House ("November Package") that included a notice of the same date ("Notification"), advising that WAMU had ordered lender-placed insurance coverage on the house. See Notification, Opp. Ex. 3 (ECF 56-1) at 1-2. The lender-placed policy, which was secured through American Security Insurance Company, had an annual premium of $10,798,which WAMU billed to an escrow account established for the mortgage loan. Id. at 1-3. The Notification explained: "Washington Mutual requires the maintenance of a hazard insurance policy to protect our mutual interest in your property." Id. at 1. It also said that the lender-placed policy will "have significantly higher premiums than standard insurance premiums because our carrier has issued the policy without the benefit of normal underwriting guidelines . . . [and] does not provide any coverage for loss or damage to personal property, loss from theft or injury to persons or property for which you may be liable, or loss due to earthquake or flood." Id.
Plaintiff claims that she did not see the November Package until she returned from England on or about January 8, 2009. See Boiardi Dep. 1 at 49. Upon learning that her Chubb policy had lapsed, plaintiff called Freestate, see id. at 45-46, who had served as the Boiardis' insurance broker for several years and had become "good friends" with both plaintiff and her late husband. Freestate Dep. at 27, 78. Freestate attempted to calm plaintiff and, according to plaintiff, said: "I know what's happened, send me the documents and I will take care of this." Boiardi Dep. 1 at 46. Freestate denies making this precise statement. He concedes that he told plaintiff to send him the package, but claims he said: "I will look at it and I will see what we can do." Memo at 3 n.4. However, for purposes of this Motion, Freestate does not dispute plaintiff's version of the conversation. Id. Plaintiff sent the November Package to Freestate on or around January 9, 2009. See Boiardi Dep. 1 at 48-49.
At some point after Freestate received the November Package, he placed it on the desk of Jaye Clough, the Customer Service Representative responsible for the Boiardi account.7 Freestate Dep. at 80-83. According to Freestate, Clough was more experienced than he at securing personal lines of insurance, as Freestate was "primarily a commercial lines guy." Id. at 66, 83; Undisputed Facts ¶ 1. Freestate did not leave instructions with the November Package, but Clough contacted Freestate after she found it on her desk. Deposition of Jaye Clough ("Clough Dep.") at 33-34. Freestate asked Clough to find a new insurance policy for plaintiff. Id.; Undisputed Facts ¶ 2.
In the insurance industry, houses and communities are assigned ratings based on their access to fire protection services. See Deposition of plaintiff's expert, David Charon ("Charon Dep.") at 49. The House was rated Protection Class 10 ("PC-10"), which is the "worst" rating a house can receive. Id.; Undisputed Facts ¶ 4. Additionally, according to Clough and defense expert John Darlington,8 obtaining an insurance policy for a home is more difficult after a homeowner's previous policy is cancelled for nonpayment and a lender places a forced insurance policy on the house. See Clough Dep. at 44; Deposition of John Darlington ("Darlington Dep.") at 104-5.
Clough contacted two insurance providers about coverage for the House. Undisputed Facts ¶ 5. The first, All Risks, is a non-standard insurance carrier that generally is willing to insure risks that standard carriers will not. Id. All Risks declined to provide coverage on the House. Id. Clough also requested a quote through the website of American International Group("AIG") and contacted AIG employee Michael Reid. Id. ¶ 6; Clough Dep. 36-38. Reid initially declined to offer coverage because of the house's PC-10 rating. Undisputed Facts ¶ 6. But, on January 23, 2009, he indicated that AIG would consider writing the policy and sent Clough a proposal. Id.; AIG Proposal, Memo Ex. E at 1-4. At the time, however, "AIG did not know that Mrs. Boiardi's policy had been terminated for non-payment and she had a force placed policy." Undisputed Facts ¶ 7. Darlington opined at his deposition that AIG would have declined to insure the House once it learned about the previous cancellation of coverage for non-payment. Darlington Dep. at 105. Charon, on the other hand, could not provide an opinion "to a reasonable degree of certainty, as to whether or not insurance coverage could be secured" for the House. Charon Dep. at 63. In any event, Clough did not follow up with Reid (or plaintiff) about the proposal. See Clough Dep. 50-51. However, Reid emailed Clough on January 29, 2009, to ask if she had "any updates" for him. See Reid Email, Opp. Ex 8 at 1. Clough did not respond to the email. See Clough Dep. at 51.
On February 5, 2009, a fire broke out in plaintiff's garage and caused extensive damage to the House and its contents. See Boiardi Dep. 1 at 85-86; Opp. at 3; Memo at 3. That morning, Clough learned about the fire "when someone called to report" it. Clough Dep. at 52. At the time of the fire, Freestate was on vacation. Freestate Dep. at 98. The next day, Clough sent emails to Avon-Dixon CEO Terry Mead and to Avon-Dixon Claims Manager Ivory Buck. Opp. Exs. 9-10, ECF 56-1. In her email to Mead, Clough stated:
I thought I'd better contact you right away—Mark is not in town and MRS Boiardi had a terrible fire last night according to her neighbor—We had mrs boiardi insured through Chubb and she did not pay her renewal and they would not reinstate the policy—she has had forced placed insurance through her mtgee Washington Mutual—and I have been working with AIG since late January to seeabout getting it insured, but had not gotten it secured!! It is a huge loss—I feel at fault because I had not gotten her place insured—HELP, PLEASE!!
Opp. Ex. 9, ECF 56-1 (). Clough's email to Buck was to the same effect. See Opp. Ex. 10, ECF 56-1.
On February 23, 2009, Reid—apparently unaware of the fire—again emailed Clough to follow up on the proposal he had sent on January 23, 2009. Opp. Ex. 11, ECF 56-1. This time, Clough responded:
I'm sorry, Michael—I should have gotten back to you sooner! Mrs Boiardi had a fire at her house 2/4th (I believe)—newspaper said it did 100,000 worth of damage to her attached garage and room above garage and 200,000 in content damage (she had two cars in garage)—so I have left it alone. I felt terrible that we hadn't firmed up the coverage, but am happy that AIG didn't have the loss as well. It was an electrical fire according to the fire marshall.
Id. ().
On October 5, 2009, WAMU sent a check to the House in the amount of $445,086.40. Memo at 5; Opp. at 4. The check, issued by American Security Insurance Company, represented payment for the loss covered by the lender-placed policy obtained by WAMU. Memo at 5; Opp. at 4.9 According to plaintiff, the check represented payment only for the structural damage to the House, but did not constitute payment for the plaintiff's loss of personal...
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