Buente v. Allstate Insurance Company

Decision Date24 March 2006
Docket NumberNo. CIVA105CV712LTSJMR.,CIVA105CV712LTSJMR.
Citation422 F.Supp.2d 690
PartiesElmer and Alexa BUENTE Plaintiffs v. ALLSTATE INSURANCE COMPANY, et al. Defendants
CourtU.S. District Court — Southern District of Mississippi

Richard F. Scruggs, The Scruggs Law Firm, PA, Oxford, MS, for Plaintiffs.

Damany Freeman Ransom, Fred L. Banks, Jr., Phelps Dunbar, Jackson, MS, Dan W. Webb, Webb, Sanders & Williams, PLLC, Tupelo, MS, for Defendants.

MEMORANDUM OPINION

SENTER, Senior District Judge.

The Court has before it Defendant Allstate Insurance Company's (Allstate) motion for judgment on the pleadings under F.R.Civ.P. 12(c). In considering this motion, the Court must accept as true the well-pleaded facts set out in the complaint, and the Court must allow all inferences favorable to the plaintiffs Lowrey v. Texas A & M University System, 117 F.3d 242 (5th Cir.1997). Dismissal is proper only if it appears that the plaintiffs can prove no set of facts in support of their allegations that would entitle them to relief. Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).

The complaint alleges the following relevant facts: In June 2005, Plaintiffs purchased a residence in Gulfport, Mississippi. At the time this property was purchased, Plaintiffs also purchased a policy of homeowners insurance from Defendant Allstate. The policy (Policy Number 915930365) is attached to the complaint as Exhibit A. The policy was in force during the policy period June 24, 2005, through June 24, 2006.

The Allstate policy was sold through Allstate agent Brenda Pace. Plaintiffs have alleged that "... Allstate and its agent Brenda Pace expressly represented to Plaintiffs that they would have full and comprehensive coverage for any and all hurricane damage, including any and all damage proximately, efficiently, and typically caused by hurricane wind and `storm surge' proximately caused by hurricanes." (Complaint, Paragraph 11).

Plaintiffs have also alleged that they made an inquiry to Allstate representative Ms. Pace as to whether they needed to purchase additional flood insurance. This inquiry was apparently answered, according to the complaint, not by Ms. Pace, but by one of her employees. The plaintiffs allege that "... prior to purchasing the home, Sue (with Brenda Pace's office, Allstate's agent) told Plaintiffs they were required to have hurricane insurance on the residence. However, when Plaintiffs asked Allstate's agent Pace about whether they should also obtain optional `flood coverage,' Sue told them that they did not need additional flood coverage because they did not live in a flood plain. In this conversation, this same Allstate representative further affirmed that Plaintiffs' hurricane coverage would cover any damage caused by a hurricane." (Complaint, Paragraph 12).

Plaintiffs allege that they relied upon the representations set out in paragraphs 11 and 12 of the complaint. Specifically, the complaint alleges that "Plaintiffs ... relied upon Allstate's agent's representations that their hurricane coverage would cover any damage caused by a hurricane and thus they did not need flood insurance." (Complaint, Paragraph 14).

Paragraphs 15 and 16 of the complaint set out a number of allegations that are not part of the well-pleaded complaint. These allegations, which the Court is not obliged to accept, concern the plaintiffs' interpretation of the terms of the insurance contract, including the endorsement containing the "Hurricane Deductible." Baker Farms, Inc. v. Hulse, 54 Fed. Appx.404 (5th Cir.2002). The meaning of the unambiguous terms of an insurance policy are determined by the Court as a matter of law, not as questions of fact. Nat Harrison Associates, Inc. v. Gulf States Utilities Co., 491 F.2d 578 (5th Cir.1974).

Plaintiffs allege that they reasonably relied upon the representations made by Allstate's representatives and upon their own subjective expectations concerning the coverage provided by the insurance policy in making the decision not to purchase flood insurance coverage. (Complaint, Paragraph 17).

On August 29, 2005, the insured property was damaged during Hurricane Katrina. Plaintiffs allege that the damage was caused by "hurricane wind, rain, and/or storm surge from Hurricane Katrina." (Complaint, Paragraph 18).

Plaintiffs allege that "Plaintiffs also called the Allstate `Natural Disaster Hotline' to inquire whether the damage to their residence would be covered under the subject policy. The Allstate representative they spoke to assured Plaintiffs that damage from `storm surge' would be covered under the subject policy." (Complaint, Paragraph 20).

The adjuster Allstate sent to inspect the insured property after Hurricane Katrina told the plaintiffs that "Allstate only pays him for adjustment of damages caused by wind, not water." (Complaint, Paragraph 21).

Allstate tendered its check for $2,600.35, representing the amount of the covered loss (net of the applicable deductible) as determined by the Allstate adjuster. Plaintiffs contend that their covered losses are between $50,000 and $100,000. (Complaint, Paragraph 22).

The Provisions of the Allstate Policy

Allstate's insurance policy number 915930365 is identified on its face as "Allstate Property and Casualty Insurance Company Deluxe Homeowners Policy." Allstate's agent is identified as Brenda S. Pace; 440 Courthouse; Gulfport, MS 39507. The policy contains the following relevant provisions:

With respect to the insured dwelling (Section I, Coverage A) and other structures (Section I, Coverage B):

Losses We Cover ...

We will cover sudden and accidental direct physical loss to [the insured property] . . . except as limited or excluded in this policy. (Policy Pages 5 through 8)

Losses We Do Not Cover ...

We do not cover loss to the [insured] property consisting of or caused by:

1. Flood, including, but not limited to surface water, waves, tidal water or overflow of any body of water, or spray from any of these, whether or not driven by wind.

* * * * * *

4. Water or any other substance on or below the surface of the ground, regardless of its source. This includes water or any other substance which exerts pressure on, or flows, seeps or leaks through any part of the residence premises.

* * * * * *

21. Weather Conditions that contribute in any way with a cause of loss excluded in this section to produce a loss.

* * * * * *

23. We do not cover loss to covered property . . . when:

a) there are two or more causes of loss to the covered property; and

b) the predominant cause(s) of loss is (are) excluded under Losses We Do Not Cover, items 1 through 22 above.

With respect to personal property (Section I, Coverage C, Personal Property Protection):

Losses We Cover ...

We will cover sudden and accidental direct physical loss to the [insured personal] property . . . except as limited or excluded in this policy, caused by:

2. Windstorm or Hail.

We do not cover:

a) loss to covered property inside a building structure, caused by rain, snow, sleet, sand or dust unless the wind or hail first damages the roof or walls and the wind forces rain, snow, sleet, sand or dust through the damaged roof or wall ...

* * * * * *

16. Breakage of glass, meaning damage to covered personal property caused by breakage of glass constituting a part of any building structure on the residence premises. This does not include damage to the glass.

Losses We Do Not Cover ...

We do not cover loss to [insured personal] property caused by or consisting of:

1. Flood, including, but not limited to surface water, waves, tidal water or overflow of any body of water, or spray from any of these, whether or not driven by wind.

* * * * * *

4. Water or any other substance on or below the surface of the ground, regardless of its source. This includes water or any other substance which exerts pressure on, or flows, seeps or leaks through any part of the residence premises.

* * * * * *

13. Weather conditions that contribute in any way with a cause of loss excluded in this section to produce a loss.

* * * * * *

15. We do not cover loss to [insured personal] property when:

a) there are two or more causes of loss to the covered property; and

b) the predominant cause(s) of loss is (are) excluded under Losses We Do Not Cover items 1 through 14 above.

Additional Protection

11. Collapse

We will cover:

a) the entire collapse of a covered building structure;

b) the entire collapse of part of a covered building structure;

c) direct physical loss to covered property caused by (a) or (b) above.

For coverage to apply, the collapse of a building structure specified in (a) or (b) above must be a sudden and accidental direct physical loss caused by one or more of the following:

a) a loss we cover under Section I, Coverage C—Personal Property Protection Applicable Rules of Law

The Interpretation of the Insurance Contract

The interpretation of the terms of an insurance policy present questions of law, not fact. Gore v. American Motorists Insurance Co., 441 F.2d 10 (5th Cir.1971); U.S. Fidelity & Guar. Co. v. Omnibank, 812 So.2d 196 (Miss.2002). The terms of an insurance policy are to be interpreted under the rules of construction generally applicable to written contracts; and, where the terms of an insurance policy are clear and unambiguous, they are to be enforced as written. Shaw v. Burchfield, 481 So.2d 247 (Miss.1985); Farmland Mutual Ins. Co. v. Scruggs, 886 So.2d 714 (Miss.2004). Any ambiguity in the terms of an insurance policy is to be resolved in favor of the insured and against the insurer who drew the contract. Williams v. Life Ins. Co. of Georgia, 367 So.2d 922 (Miss.1979). An insurance contract is to be considered as a whole, and each of its provisions should be given a reasonable interpretation that is, to the extent possible, consistent with the other terms of the contract. Glantz Contracting Co. v. General Electric Co., 379 So.2d 912 (Miss.1980).

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