Charbonneau v. Chartis Prop. Cas. Co.

• Decision Date: 30 June 2015
• Docket Number: CIVIL ACTION NO. 13-4323
• Court: U.S. District Court — Eastern District of Pennsylvania
• Parties: JULIE CHARBONNEAU, Plaintiff, v. CHARTIS PROPERTY CASUALTY CO., Defendant.

JULIE CHARBONNEAU, Plaintiff, v. CHARTIS PROPERTY CASUALTY CO., Defendant.

CIVIL ACTION NO. 13-4323

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

June 30, 2015

MEMORANDUM

YOHN, J.

On April 4, 2012, plaintiff Julie Charbonneau was living as a tenant at Bloomfield, a historic home in Villanova, Pennsylvania, when a fire destroyed the property. Charbonneau thereafter attempted to exercise an option under her lease to purchase Bloomfield from Jerald Batoff, the property's owner. During roughly the same period of time, Batoff was involved in negotiations with the issuer of his homeowner's insurance policy, defendant Chartis Property Casualty Company, which ultimately agreed to pay him $18.5 million (plus additional payments already made) as a result of the fire. Several rounds of litigation ensued between Batoff and Charbonneau, leading to a settlement agreement under which Charbonneau received $11 million of the $18.5 million and title to Bloomfield. Charbonneau subsequently brought this action against Chartis, claiming that Chartis's dealings with Batoff were improper and that she has been wrongly denied millions of dollars in additional insurance proceeds owed to her to cover the cost of rebuilding Bloomfield. Chartis has filed a motion for summary judgment, to which Charbonneau responded in opposition. Because there is a genuine dispute of material fact withrespect to only plaintiff's claim for intentional interference with contractual relations, I will grant the motion as to her other claims.

I. FACTUAL BACKGROUND & PROCEDURAL HISTORY

In December 2011, Batoff and Charbonneau executed a lease/option agreement ("LOA") for Bloomfield, a property located in Villanova, Pennsylvania. Pl.'s Resp. & Counterstatement of Facts to Def.'s Statement of Undisputed Material Facts ("Resp.") at 5 ¶ 19; Def.'s Statement of Undisputed Material Facts ("SUMF") Ex. A at 2. Under the LOA, Charbonneau had the option to purchase Bloomfield from Batoff during the lease period for $3.9 million. Resp. 6 ¶ 21; SUMF Ex. C at § 5(a)(iii). In the event that Bloomfield suffered a casualty during the lease period costing more than $1 million to repair, the LOA further provided that Charbonneau could likewise exercise her option, and that she would also be "entitled to receive at closing a credit in the amount of any insurance proceeds paid to [Batoff], and an assignment [of Batoff's] rights to receive any unpaid proceeds." Resp. 6 ¶ 22; SUMF Ex. C at § 17. Bloomfield was destroyed by fire on April 4, 2012. Resp. 6 ¶ 23; SUMF 5 ¶ 23.

At the time of the fire, Batoff held a homeowner's insurance policy for Bloomfield issued by Chartis Property Casualty Company. Resp. 3 ¶ 10; SUMF 3 ¶ 10. The policy provided for two different types of payments in the event of a covered loss: "Replacement Cost" coverage or "Guaranteed Rebuilding Cost" coverage. Resp. 4 ¶¶ 14-15; SUMF Ex. A at 31. As defined by the policy, "Replacement Cost Coverage means that for a covered loss [Chartis] will pay the reconstruction cost of your house or other permanent structures, up to the coverage limit shown for that location on your Declarations Page, for each occurrence." Id. The declarations page of Batoff's policy specifies that the coverage limit for his dwelling is $22,373,762. SUMF Ex. A at2.¹ The policy further provides that Chartis will pay this reconstruction cost "whether or not you will actually rebuild your house or other permanent structures." Id. at 31. By contrast, the policy states that "Guaranteed Rebuilding Cost coverage means that for a covered loss we will pay the reconstruction cost of your house or other permanent structure, for each occurrence, even if this amount is greater than the amount of coverage shown on the Declarations Page." Id. A payment of the Guaranteed Rebuilding Cost, however, requires that "you must repair or rebuild your home or other permanent structure at the same location." Id. The policy also contains a non-assignment clause providing that "[n]o one covered under this policy may assign or turn over any right or interest in regard to the policy without [Chartis's] written consent," as well as a commencement of suit provision that states the policyholder "agree[s] to bring any action against [Chartis] within one year after a loss occurs, but not until thirty (30) days after proof of loss has been filed and the amount of loss has been determined." Resp. 4-5 ¶¶ 16-17; SUMF Ex. A at 18.

Both Batoff and Charbonneau retained the public adjusting firm Clarke & Cohen to assist with filing their respective insurance claims arising out of the fire. Resp. 7 ¶ 24; SUMF 5 ¶ 24. During this process, neither Batoff nor Charbonneau submitted a proof of loss to Chartis. Resp. 7 ¶ 25; SUMF 5-6 ¶ 25. On July 25, 2012, Batoff informed Charbonneau that he believed the option provision of the LOA was null and void and that Charbonneau was in breach of the LOA. Resp. 8 ¶ 27; SUMF 6 ¶ 27. By letter to Batoff on August 7, 2012, Charbonneau stated that she "hereby exercises the option" under the LOA. The letter constitutes mostly a rebuttal to Batoff's claim that the purchase option was null and void or never existed. Significantly, it containsabsolutely no reference to an assignment of the insurance proceeds. Resp. 8 ¶ 28; SUMF Ex. H. On August 15, 2012, Batoff sued Charbonneau in the Delaware County Court of Common Pleas, and the case was subsequently removed to this district. Resp. 9-10 ¶ 32; SUMF 7 ¶ 32; see also Batoff v. Charbonneau (Batoff I), No. 12-cv-5397-WY (E.D. Pa. Sept. 21, 2012). Shortly thereafter, Batoff filed a second suit against Charbonneau and her co-tenant at Bloomfield, Dean Topolinski. Resp. 9-10 ¶ 32; SUMF 7 ¶ 32; see also Batoff v. Topolinski (Batoff II), No. 12-cv-6673-WY (E.D. Pa. Nov. 29, 2012).

On September 16, 2012, Richard Cohen of Clarke & Cohen sent a letter to Chartis on behalf of Batoff, stating in part:

I think it is important to remind you that we are quickly coming to the end of the window Mr. Batoff has allowed me to continue discussing a negotiated deal. If we are not able to come to an agreed figure by the end of the week, I am being directed to proceed with submitting our claim.

As I told you when we spoke on Monday of last week, I had no room to negotiate from the figure I expressed would get this done. Frankly I am a little surprised by your most recent offer based on the potential exposure to Chartis if we do not get a deal done. The figure I gave you is a significant savings to Chartis and I think we both agree we will get to the total policy limits as well as far into the guaranteed replacement cost provision the longer this continues.

Resp. 10-11 ¶ 35; SUMF Ex. K. On October 1, 2012, Chartis and Batoff reached a settlement of Batoff's insurance claim, under which Chartis agreed to pay Batoff an additional $18.5 million. Resp. 12-13 ¶ 40; SUMF 9 ¶ 40. Batoff also released Chartis from any further "claims, demands, damages, actions or other form of proceedings of any kind whatsoever" arising out of the fire, released Chartis from any claims of bad faith under 42 Pa. Cons. Stat. Ann. § 8371, and agreed to indemnify Chartis against any future claims arising out of Batoff's policy, specifically including claims made by Charbonneau or Topolinski. Resp. 13-14 ¶¶ 42-43; SUMF Ex. F. On October 1, 2012, Charbonneau filed counterclaims in Batoff I, seeking various forms of relief, including a declaration that "[a]t the closing, Defendants have the right to be assigned Mr. Batoff's rights to receive any insurance proceeds paid with respect to the Property post-closing . . . ." Resp. 14-15 ¶ 46; SUMF 11 ¶ 46. Charbonneau further requested specific performance such that "[a]t the closing, Jerald Batoff shall assign to Defendants the right to receive any insurance proceeds received post-closing . . . ." Resp. 16-18 ¶ 47; SUMF 11 ¶ 47. Charbonneau made essentially the same requests for relief in her amended counterclaims in Batoff I, filed on October 22, 2012. Resp. 18-21 ¶¶ 48-50; SUMF 11-12 ¶¶ 48-50.

On April 5, 2013, Charbonneau entered into a settlement agreement and mutual release with Batoff, under which Batoff agreed to disburse to Charbonneau $11 million in insurance proceeds that Chartis had previously paid to him. Resp. 23-24 ¶¶ 54-55; SUMF Ex. P. Moreover, Batoff agreed to convey title of Bloomfield to Charbonneau within ten days of the court's approval of the settlement. Resp. 24 ¶ 56; SUMF 13-14 ¶ 56. Batoff and Charbonneau further agreed to a mutual release and discharge of "any and all claims, demands, causes of action, obligations, damages, and liabilities" against one another. Resp. 24 ¶ 57; SUMF 14 ¶ 57. By its terms, the settlement agreement was fully integrated. Resp. 25 ¶ 59; SUMF 14-15 ¶ 59. Title to Bloomfield transferred as agreed from Batoff to Charbonneau in May 2013 by way of a "modified stipulation" entered with the court, which did not include an assignment of any of Batoff's rights under his insurance policy. Resp. 26 ¶¶ 61-62; SUMF Ex. Q. Charbonneau admits that she never notified Chartis of an assignment from Batoff. Resp. 26-27 ¶ 64; SUMF 15-16 ¶ 64.

Charbonneau filed this lawsuit against Chartis on July 25, 2013. Chartis filed a motion to dismiss on September 20, 2013, which I denied on March 26, 2014. See Doc. No. 15. Chartismoved for summary judgment on June 25, 2014, which I denied without opinion by order on October 16, 2014. See Doc. No. 49. Charbonneau subsequently filed an amended complaint on October 21, 2014. Chartis then filed this renewed motion for summary judgment on April 15, 2015. Charbonneau submitted a response in opposition on May 20, 2015, and Chartis replied on May 27, 2015.

II. STANDARD OF REVIEW

"The court shall grant summary judgment 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). "Material facts are those that could affect the outcome of the...