Bond v. Liberty Ins. Corportation
| Decision Date | 24 July 2017 |
| Docket Number | No. 2:15–cv–04236–NKL,2:15–cv–04236–NKL |
| Citation | 272 F.Supp.3d 1112 |
| Parties | David BOND and Rebecca Bond, individually and on behalf of others similarly situated, Plaintiffs, v. LIBERTY INSURANCE CORPORATION, Defendant. |
| Court | U.S. District Court — Western District of Missouri |
David L. Steelman, Steelman, Gaunt & Horsefield, Rolla, MO, Derrick L. Morton, Douglas A. Terry, Nelson Terry Morton DeWitt Paruolo & Wood, Edmond, OK, Thomas H. Hearne, Hearne & Pivac, Springfield, MO, for Plaintiffs.
Bruce A. Moothart, Deena Bein Jenab, Seyferth Blumenthal & Harris LLC, Kansas City, MO, for Defendant.
Pending before the Court are the cross motions for summary judgment of Plaintiffs David and Rebecca Bond and Defendant Liberty Insurance Corporation. [Docs. 72 and 74]. The motions are granted in part and denied in part.
Plaintiffs David and Rebecca Bond purchased a LibertyGuard Deluxe Homeowners Insurance Policy, Form HO 00 03 (Edition 04 09), from Defendant Liberty Insurance Corporation ("Liberty"). The Bonds' policy includes an endorsement for wind and hail damage. In April 2014, the Bonds' home was damaged by hail, and they submitted a claim to Liberty for coverage of that hail damage.
When a homeowner sustains damage to a dwelling or other structure covered by a LibertyGuard Deluxe Homeowners Policy, the claim is handled and paid in two phases: (1) the actual cash value ("ACV") phase and (2) the replacement cost value ("RCV") phase. After the policyowner makes his or her claim, an adjustor goes to the location of the insured property to ascertain the damage. [Doc. 75–3, p. 141–45 (Depo. of Ricky Summerlin) ]. The adjustor then uses a program called "Xactimate" to put a dollar figure on the amount of the damage. Id. The amount that Xactimate totals is the estimated amount to repair or replace the damage for a dwelling or other structure loss. [Doc. 79, p. 13 of 29]. After this amount is calculated, the adjustor inputs factors for depreciation, and the amount of depreciation is subtracted from the replacement cost to arrive at the ACV. [Doc. 75–3, p. 145–46].
Following this calculation, the policyowner is paid the ACV of the loss, minus the deductible. No further payment on the claim is made unless the insured decides to repair or replace the damage to the property. Id. at p. 155–56. The insured is not required to undertake this repair. Id. at p. 148–50. Nor is the insured required to come back and submit a replacement cost claim for payment of the withheld depreciation. Id. at p. 150–51. Instead, the insured may take the ACV payment in satisfaction of their claim to do with whatever he or she chooses. Id. at p. 148–50. To recover the RCV, the insured must repair or replace the damage and submit proof of the repairs to Liberty. Id. at p. 155–56.
In April 2014, the Bonds' home suffered hail damage, and they submitted a claim for coverage. This claim constituted a loss that was covered under the terms of the policy. Liberty inspected the Bonds' home and paid the Bonds the ACV minus a $1,522 deductible. On April 29, 2016, the Bonds filed a putative class action against Liberty alleging that Liberty unlawfully applied a deductible to the ACV payment for their hail damage claim.
On May 26, 2016, the Court granted the Bonds' unopposed motion to bifurcate the class certification proceedings into separate Rule 23(b)(2) and (b)(3) phases. See [Doc. 36].
On May 1, 2017, the Court certified a Rule 23(b)(2) class divided into injunctive and declaratory relief subclasses and appointed the Bonds as class representatives:
[Doc. 66].
The class members' policies contain three relevant sections: the Declarations, the base policy language, and the endorsements. These sections work together to define the parameters of their coverage. The Declarations set out the limits on recovery under the policy, list the endorsements included in the policy, and note the deductibles that may be assessed under the policy. The base policy language contains the standard terms of the policy. The endorsements are additions to the policy which customize the coverage and terms of the base policy language to create the specific coverage purchased by the policyowner. The terms of the endorsements control over conflicting provisions in the base policy language or Declarations. Grable v. Atlantic Cas. Ins. Co. , 280 S.W.3d 104, 108 (Mo. Ct. App. 2009).
The Bonds' and class members' base policy form HO 00 03 (Edition 04 09) includes, among others, the following: Section I—Property Coverages; Section I—Perils Insured Against; Section I—Exclusions; and Section I—Conditions. The base policy's coverage provision states:
The base policy's loss settlement provisions for Coverages A, B, and C are included within Section I—Conditions, as follows:
[Doc. 73–1, p. 14–16 of 44 (Bond Policy) ].
The Bonds' and some class members' insurance policies include a Home Protector Plus Endorsement. If certain conditions are met,3 the Home Protector Plus Endorsement has a slightly different loss settlement provision, as follows:
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Richelson v. Liberty Ins. Corp.
...Policy Declarations: "Losses covered under Section 1 are subject to a deductible of: $1,000." Plaintiff relies on Bond v. Liberty Ins. Corp., 272 F.Supp.3d 1112 (W.D.Mo. 2017). As plaintiff notes, the Bond court looked to the policy language of the "loss settlement" provision and concluded ......
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Richelson v. Liberty Ins. Corp.
...the ACV deductible language byincorporating language not found in that part of the agreement. Those cases are Bond v. Liberty Ins. Corp., 272 F. Supp. 3d 1112 (W.D. Mo. 2017), and Lafollette v. Liberty Mut. Fire Ins. Co., 139 F. Supp. 3d 1017 (W.D. Mo. 2015). The contracts at issue in those......