Brazell Holdings, LLC v. United Statesi Ins. Servs. Nat'l, Inc.

• Court: U.S. District Court — Southern District of Georgia
• Writing for the Court: HON. LISA GODBEY WOOD, JUDGE
• Citation: Brazell Holdings, LLC v. United Statesi Ins. Servs. Nat'l, Inc., 378 F.Supp.3d 1253 (S.D. Ga. 2019)
• Decision Date: 20 March 2019
• Docket Number: No. 2:18-cv-055,2:18-cv-055
• Parties: BRAZELL HOLDINGS, LLC, Plaintiff, v. USI INSURANCE SERVICES NATIONAL, INC., Defendant.

378 F.Supp.3d 1253

BRAZELL HOLDINGS, LLC, Plaintiff,

v.USI INSURANCE SERVICES NATIONAL, INC., Defendant.

No. 2:18-cv-055

United States District Court, S.D. Georgia, Brunswick Division.

Signed March 20, 2019

ORDER

HON. LISA GODBEY WOOD, JUDGE

Before the Court is Defendant USI Insurance Services National, Inc.'s Converted Motion for Summary Judgment. Dkt. No. 8. The Motion has been fully briefed and is ripe for review. For the reasons set forth below, Defendant's Motion is GRANTED .¹

BACKGROUND

This case involves an insurance policy requested by Plaintiff Brazell Holdings, LLC, and obtained with the help of Defendant USI Insurance Services National, Inc.² as an insurance broker. Plaintiff is the owner of nine Subway Restaurants. Dkt. No. 12 ¶ 6.³ As a part of its franchise agreement, Plaintiff is required to maintain insurance on each of its nine restaurants. Id. ¶ 7. The agreement also requires that such insurance satisfy certain "Gold Standard Insurance Program Requirements," such as sufficient personal property and construction or buildout coverage. Id. ¶ 8. As such, franchise owners are generally required to purchase "Gold Standard Insurance" through a "Gold Standard Broker." Id.; Dkt. No. 34-1 at 5. Defendant is listed as, and holds itself out as, a "Gold Standard Broker." Dkt. No. 12 ¶ 9. To participate in this program, a Subway franchisee would complete a "Gold Standard Application" to three participating brokers. Dkt. No. 33-1 ¶ 5.

In August of 2017, an employee of Plaintiff, Katrina Bell, contacted Defendant for an insurance quote. Dkt. No. 33-2. To obtain this quote, Plaintiff submitted its "Gold Standard Application" that listed detailed information about each of its nine Subway stores and requested certain types of insurance coverage. Id. at 4-11.⁴ In the application, Plaintiff requested wind coverage for all nine locations. Id. Furthermore, in the application Plaintiff listed its restaurant located at 2903 Glynn Avenue, Brunswick, GA 31520 as "Store #3" and its restaurant located at 5008 New Jesup Highway as "Store #4." Id. The application also listed each restaurant's "Subway. Store #" as a four or five-digit number in each of the nine store's columns in the spreadsheet-formatted application—10623 for the Glynn Avenue location and 14691 for the New Jesup Highway location. Id. Plaintiff alleged in the Complaint that the store location numbers such as "Store #3" and "Store #4" reflected the numbers that Plaintiff used internally to refer to the stores, and Plaintiff used these numbers continuously since those stores came under Plaintiff's ownership. Id. ¶ 13.⁵ Using the information provided by Plaintiff in the "Gold Standard Application," Defendant prepared and submitted, on Plaintiff's behalf, a "Commercial Insurance Application" to Nationwide Insurance ("Nationwide"). Id. ¶ 14-15; Dkt. No. 20-2.

On page four of the Commercial Insurance Application, under a section entitled "Addresses," in an unnumbered list, Defendant listed the nine addresses in the same order as the store locations listed on the Gold Standard Application completed by Plaintiff. Dkt. No. 20-2 at 4. However, beginning on page eight of the application, under the section entitled "Schedule" in which the application listed the specific details and coverage requests for the different store locations, Defendant renumbered the nine store locations as follows: "Location 1-1," "Location 2-1," etc. Id. at 8-24; Dkt. No 12 ¶ 19. As a result, the Glynn Avenue location was listed as "Location 4-1" and the New Jesup Highway location was listed as "Location 5-1," instead of "Store #3" and "Store #4" as listed in the Gold Standard Application. Dkt. No. 20-2 at 14, 16; Dkt. No. 33-2 at 4-12. Additionally, on page 27 of the Commercial Insurance Application, under the section entitled "Additional Interests," the Glynn Avenue location was listed as "Premise 4," and the New Jesup Highway location was listed as "Premise 5." Id. at 27. At that time, Plaintiff was unaware that Defendant changed the location numbers from the Gold Standard Application to the Commercial Insurance Application. Dkt. No. 12 ¶¶ 19-20.

On August 11, 2017, Defendant's account manager, Virginia Dalton, emailed an insurance quote from Nationwide to Plaintiff. Dkt. No. 12 ¶ 17. The email summarized the coverage in the quote stating that "[l]ocations 1,2,3,5,6,7, 8 have a 5% wind/hail deductible, Location 4 Wind is excluded and the last location has no wind deductible." Dkt. No. 8-2 at 2; Dkt. No. 33-5. The email also included a copy of the Nationwide quote, the "Commercial Insurance Proposal," stating that "[w]e are pleased to provide the attached Businessowners Quote." Id. at 1-3. Page nine of the quote listed "Location 4-1" as the Glynn Avenue location and described that location's coverage. Dkt. No. 33-5 at 18. Under the description of coverage for Location 4-1, the Glynn Avenue location, the quote listed a "Windstorm or Hail Exclusion." Id. at 19. Despite the actual wording of the quote received by Plaintiff showing Location 4-1 to be the Glynn Avenue location, Plaintiff alleges that it interpreted "Location 4 Wind is excluded" in the email to mean that wind coverage would be excluded only for the New Jesup Highway restaurant, instead of the Glynn Avenue location as stated in the policy quote. Dkt. No. 12 ¶ 18. Plaintiff further alleges that because it was unaware that Defendant renumbered the Glynn Avenue store as "Location 4-1" in the "Schedule" section of the application and the quote, it was also unaware that the Nationwide policy excluded wind coverage for that restaurant instead of the New Jesup Highway Location. Id. ¶ 19-20; Dkt. No. 34-1 ¶¶ 9-10.

About thirty minutes after receiving the insurance quote, Ms. Bell emailed Ms. Dalton stating that "I'm not showing contamination covered under the quote you sent me. Can you point me in the right direction to find it?" Dkt. No. 33-6 at 2. Ms. Dalton responded stating that "Food Contamination is included in the Plus Endorsement (see attachment 1). On the Proposal see Page 3," and she attached the specific page of the policy that included contamination coverage to the email. Id. Later that afternoon, Ms. Dalton sent a revised quote explaining that "[b]ecause #51234 [i.e. Location 9-1 in the policy quote] was included in the wind claim, Nationwide has revised the quote to apply 5% wind deductible to this location. Premium is revised to $ 12,056." Dkt. No. 33-8. This second quote was otherwise identical to the first quote in regard to the location numbers and the wind coverage exclusion for the Glynn Avenue location—Location 4-1. Dkt. No. 33-7 at 19-20.

On August 28, 2017, Ms. Bell emailed Ms. Dalton asking that Ms. Dalton "go ahead and bind coverage on the Nationwide quote today, please," and Ms. Dalton responded that she would "bind coverage today and have the certificates prepared and sent out as soon as possible." Dkt. No. 33-8 at 2-3. Less than two weeks after Plaintiff purchased the policy and Defendant bound coverage, Hurricane Irma caused significant damage to the Glynn Avenue Subway restaurant. Dkt. No. 12 ¶ 22. At the time that the hurricane struck, Plaintiff had not yet received a copy of the insurance policy. Id. ¶ 23; Dkt. No. 34-1 ¶ 6. After timely notifying Nationwide of the loss caused by the hurricane, Plaintiff was informed that the wind exclusion applied to the Glynn Avenue location rather than the Jesup Highway location. Id. ¶ 24. As a result, Nationwide denied Plaintiff's claim for damages to the Glynn Avenue restaurant. Id.; Dkt. No. 33-1 ¶ 36.

Plaintiff subsequently brought causes of action against Defendant for breach of fiduciary duty, breach of contract, and negligent misrepresentation for allegedly changing the store location numbers in the insurance application such that Plaintiff was unaware that the policy did not cover wind damage to the Glynn Avenue Subway location when it purchased the policy and when Hurricane Irma damaged the restaurant. Dkt. No. 12. Defendant filed a Motion to Dismiss on July 10, 2018, pursuant to Fed. R. Civ. P. 12(b) (6) arguing that Plaintiff has failed to state a claim upon which relief can be granted. Dkt. No. 8. On January 29, 2019, the Court converted Defendant's Motion to Dismiss to a Motion for Summary Judgment to allow the parties to supplement the record with additional evidence and briefing. Dkt. No. 29. The Court will now address all of the parties briefs and evidence as part of the Motion for Summary Judgment.

LEGAL STANDARD

Summary judgment is required where "the movant shows 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). A fact is "material" if it "might affect the outcome of the suit under the governing law." FindWhat Inv'r Grp. v. FindWhat.com, 658 F.3d 1282, 1307 (11th Cir. 2011) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). A dispute is "genuine" if the "evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. In making this determination, the court is to view all of the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor. Johnson v. Booker T. Washington Broad. Serv., Inc., 234 F.3d 501, 507 (11th Cir. 2000).

The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The movant must show the court that there is an absence of evidence to support the nonmoving party's case. Id. at 325, 106 S.Ct. 2548. If the moving party discharges this burden, the burden shifts to the nonmovant to go beyond the pleadings and present affirmative evidence to show that a genuine issue of fact does exist. Anderson, 477 U.S. at 257, 106 S.Ct. 2505.

The nonmovant may satisfy this burden in two ways. First, the...