Brit UW Ltd. v. Atwood Props.
| Docket Number | CIVIL 1:21-cv-313-HSO-BWR |
| Decision Date | 31 July 2023 |
| Parties | BRIT UW LIMITED PLAINTIFF/ COUNTER-DEFENDANT v. ATWOOD PROPERTIES, LLC DEFENDANT/ COUNTERCLAIMANT v. IAS CLAIM SERVICES COUNTER-DEFENDANT |
| Court | U.S. District Court — Southern District of Mississippi |
BEFORE THE COURT are Plaintiff Brit UW Limited's Motion [74] for Summary Judgment; Defendant Atwood Properties, LLC's Motion [82] for Partial Summary Judgment on the Issue of Notice;[1] and Plaintiff Brit UW Limited's Motion [84] to Strike the Declaration [80-3] of John Rosetti, which Defendant Atwood Properties, LLC submitted in support of its Response [80] to Plaintiff's Motion [74] for Summary Judgment.
After consideration of the record in this case and relevant legal authority, the Court finds that Plaintiff Brit UW Limited's Motion [84] to Strike should be granted, that its Motion [74] for Summary Judgment should be denied, and that Defendant Atwood Properties, LLC's Motion [82] for Partial Summary Judgment should be denied.
Defendant/Counterclaimant Atwood Properties, LLC (“Atwood” or “Assured”), owns real estate holdings consisting of “over thirty-five (35) doors located in the Gulfport, Mississippi area,” including both “single residential units” and “multi-residential units.” Decl. [80-2] at 1 (Declaration of Mark Pettit “Pete” Atwood, Jr.). On or about December 17, 2019, Atwood purchased a real estate owned asset protection insurance policy (the “Policy”) for its real estate portfolio through the Lloyd's of London insurance market. See id.; Policy [1-1]. Plaintiff Brit UW Limited (“Plaintiff” or “Brit”) was a subscriber to the Policy. See Compl. [1]; Policy [1-1].
The Policy “cover[ed] all property and/or interest at risk as of 12:01 AM (Standard Time at place of issuance) on 12/17/2019 and continue[d] in force until 12:01 AM (Standard Time at place of issuance) on 12/17/2020.” Policy [1-1] at 10. According to Brit, the Policy “provides coverage for [Atwood's] real estate portfolio as reported on a monthly basis, albeit on separate properties through a list of the properties.” Mem. [75] at 7. Under the Policy, Atwood “is required to report to Underwriters, on or before the tenth (10th) day of each month, a complete transaction report including the full replacement cost of each property to be insured,” and a premium is calculated and paid each month. Id. (emphasis removed). Atwood's Memorandum explains that this allows “the flexibility to add and delete properties as they are bought and sold,” and the Policy premium “could be adjusted on a month-to-month basis as Atwood LLC reported properties that were added or deleted.” Mem. [83] at 7-8.
In order to advise of loss or damage to property, the Policy contained a notice provision which stated as follows:
Policy [1-1] at 21 (emphasis in original).
During the Policy period, on October 28 and 29, 2020, Hurricane Zeta struck the Gulfport, Mississippi, area causing heavy rains, storm surge, and strong winds, resulting in damages to Atwood's properties. See Decl. [80-2] at 1-2. Atwood's managing member and president, Pete Atwood (“Mr. Atwood”), purportedly began to visit its insured properties immediately after the storm “to make an assessment of the most visibly damaged locations.” Id. at 2. According to Mr. Atwood, beginning on or around November 2, 2020, he and his contractor Chuck Vance (“Mr. Vance”), “continually reported damage” to the properties to Atwood's insurance agent Betz Rosetti & Associates (“Betz Rosetti”) to the extent they were able to access them because of downed trees and power lines, and Betz Rosetti began reporting claims to the insurer prior to November 11, 2020. Id.
Brit assigned the formal claims handling process to IAS Claim Services (“IAS”), which in turn hired field adjuster Lucas McCoy (“Mr. McCoy”). Id. Mr. McCoy allegedly took weeks to conduct initial inspections of some of Atwood's properties, and as he did so, Mr. Atwood believed that Mr. McCoy's repair cost estimates were very low. See id. Mr. Atwood asked Mr. Vance to review Mr. McCoy's inspection reports, and Mr. Vance determined that the property damage was “grossly undervalued.” Id. Mr. Vance requested that Mr. McCoy reinspect the properties, and he accompanied Mr. McCoy during those visits. Id. According to Mr. Atwood, “[u]pon reinspection, the estimated damage calculations increased and Atwood LLC received supplemental actual cash value (‘ACV') payments for some previously-inspected properties.” Id.
Id. at 3. Mr. Atwood has identified six properties as examples of losses that were “resolved with IAS and the Lloyd's underwriters in this manner and well after the thirty (30) day Policy reporting period.” Id. However, when a different insured in the area submitted a large number of property damage claims to IAS all at once, this purportedly threw “a red flag triggering IAS to investigate those claims further,” and IAS stopped processing and payment of Atwood's claims. Id. at 4.
On October 6, 2021, Brit filed a Complaint [1] against Atwood in this Court seeking a declaration regarding its coverage obligations for damages Atwood's properties sustained during Hurricane Zeta. See Compl. [1]. Brit alleges that Atwood submitted seven timely property damage claims in compliance with the Policy's 30-day notice provision, and also a number of other, untimely ones. See Id. at 10-11. Specifically, Brit asserts that Atwood “reported - and continues to report - claims more than 30 days after the date of loss in breach of the Policy's conditions.” Id. at 12. The Complaint seeks declarations that Atwood failed to comply with the Policy's notice provision, that Brit has been prejudiced by Atwood's failure to comply, that Brit owes no obligation to Atwood, and that Atwood's “material breach of the Policy warrants a denial of coverage for any claims late reported after November 27, 2020, or more than 30 days following the October 28, 2020 date of loss.” Id. at 14.
Atwood filed an Answer [11] to the Complaint [1], followed by an Amended Answer and a Counterclaim [18] against Brit, which added IAS Claims Services (“IAS”) as a Counter-Defendant.[2] See Am. Countercl. [18]. Atwood advances claims against Brit for bad faith breach of contract, breach of the duty of good faith and fair dealing, equitable estoppel, and respondeat superior, see id. at 8-10, and claims against IAS for “grossly negligent adjusting of claim” and “grossly negligent misrepresentation,” id. at 10-13. Atwood also raised a “respondeat superior” claim against IAS, Id. at 13-14, which the Court dismissed upon IAS's Motion [59] because it is not an independent cause of action, see Order [124] at 12.
Brit has now filed a Motion [74] for Summary Judgment on its main declaratory judgment claim “on the limited issue of whether Brit's policy provides coverage for claims reported by the Defendant/ Counter-Plaintiff more than thirty (30) days after Hurricane Zeta, the reported date of loss.” Mot. [74] at 1. Brit asks that “the Court grant summary judgment that Atwood is not entitled to coverage and policy proceeds for any claim made more than 30 days after the date of loss or damage to any specific property insured.” Id. at 2.
Atwood has filed its own Motion [83] for Partial Summary Judgment on the Issue of Notice. See Mot. [83]. Atwood argues that, under the circumstances of this case, it is “entitled to partial summary judgment and an order from this Court finding that the 30 day notice provision is a condition that Brit could waive, and/or that Brit could be estopped to assert, and/or that would require Brit to prove prejudice due to any delay.” Id. at 2.
Summary judgment is appropriate “if 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 genuine issue of material fact exists if the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Pioneer Expl., L.L.C. v. Steadfast Ins. Co., 767 F.3d 503, 511 (5th Cir. 2014) (quotation omitted).
“Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Nat'l Liab. & Fire Ins Co. v. Riata Cattle Co., Inc., 55 F.4th 1041, 1043 (5th Cir. 2022) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). When a movant also carries the burden of proof at trial, such as...
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