Cook v. USAA Cas. Ins. Co.
| Decision Date | 04 February 2020 |
| Docket Number | 1:16-cv-00207-JCN |
| Parties | JENNIE M. COOK, Plaintiff v. USAA CASUALTY INSURANCE COMPANY, Defendant |
| Court | U.S. District Court — District of Maine |
In this action, Plaintiff alleges that Defendant breached an insurance contract and unfairly resolved her insurance claim after her house was damaged by a fire. (First Amended Complaint, ECF No. 8.) The matter is before the Court on Defendant's motion for summary judgment. (ECF No. 100.)
Following a review of the record, and after consideration of the parties' arguments, the Court grants in part and denies in part Defendant's motion.
Plaintiff filed her complaint in Maine Superior Court alleging a claim for breach of contract and an unfair claims settlement claim. (Complaint, ECF No. 1-2.) Defendant removed the case to federal court based on diversity jurisdiction. (Notice of Removal, ECF No. 1.) Plaintiff subsequently filed a motion to amend the complaint, which motion the Court granted. (Motion and Order, ECF Nos. 6 - 7.)
In her amended complaint, Plaintiff alleged: (1) breach of contract claiming that she was entitled to the full repair or replacement value of the loss and to additional fair rental value payments; (2) unfair claims settlement practices; (3) negligence; and (4) negligent misrepresentation regarding coverage for ordinances and building codes. (Amended Complaint, ECF No. 8.) In her response to the motion for summary judgment, Plaintiff sought to dismiss the negligence and negligent misrepresentation claims. (Opposition to Motion for Summary Judgment at 4, ECF No. 114.)
After the close of discovery, Defendant filed a motion for summary judgment. (Motion, ECF No. 100.) At the hearing on the motion, Plaintiff raised for the first time a potential jurisdictional issue. Plaintiff then filed a motion to amend the complaint, a motion to join an indispensable party, and a motion to remand the matter to state court. (Motions, ECF Nos. 125 - 127.) The Court denied the motions. (Order, ECF No. 157.)
Plaintiff's counsel subsequently moved to withdraw (Motion, ECF No. 165) and Plaintiff moved to stay the proceedings. (Motions to Stay, ECF Nos. 159, 162.) The Court granted the motion to withdraw and denied the motion to stay, but the Court permitted Plaintiff the opportunity to file a motion to supplement her summary judgment filing. (Order, ECF No. 168.) Plaintiff then requested leave to amend her opposition to Defendant's motion for summary judgment. (Fourth Amended Motion for Leave to File Amended Opposition, ECF No. 191; Plaintiff's Supplemented Opposition, ECF No. 190-3.) The Court granted Plaintiff leave to amend her opposition. (Order, ECF No. 192).Defendant filed a memorandum in reply to the supplemental opposition.1 (Reply, ECF No. 194.)
In October 2012, Plaintiff contacted Defendant to secure a Rental Dwelling Policy on real property located at 188 Veazie Street, Old Town, Maine (the Property). (Defendant's Statement of Facts ¶ 1, ECF No. 101, hereinafter DSMF.) Plaintiff originally purchased the Property with her husband in 1984 as their primary residence. (Plaintiff's Additional Statement of Material Facts ¶ 137, ECF No. 113, hereinafter PASMF.) Plaintiff is a trained and experienced real estate appraiser, and she describes the Property as a beautiful, older, Victorian or Colonial home. (Id. ¶¶ 138 - 140.) Plaintiff made a number of improvements to the Property. (Id. ¶ 141.) During Plaintiff's initial phone call with Defendant, Plaintiff discussed "characteristics of [the] house," and Defendant's representative then provided an estimated monthly premium and explained the application process. (DSMF ¶ 2.) No other matters were discussed on this call. (Id.) On November 16, 2012, Defendant issued Policy No. 00278416380A, insuring the Property. (Id. ¶ 3.) The initial coverage was made conditional on an inspection. (PASMF ¶ 176.)
On November 28, 2012, Mueller Inspections performed an inspection of the Property, which inspection revealed a series of "Condition Concerns," including extensive moss growth, particularly on the roof, as well as a crumbling chimney. (DSMF ¶ 4.) In March 2013, Plaintiff had a series of phone calls with an underwriter for Defendant in which they "talked about just the conditions and just some other safety conditions," and the underwriter addressed her questions related to increased coverage limits based on the inspection and repairs that would be needed in order to maintain coverage. (Id. ¶ 5.) After the inspections, Defendant increased the cost of replacement to $444,000. (PASMF ¶ 177.)
Tenants occupied the Property from July 2012 through July 2013. (DSMF ¶ 6.) The Property was vacant between from July 2013 to the date of the fire in September 2013. (Id. ¶ 7.) During this time, Plaintiff lived in Virginia. (Id. ¶ 11.)
On September 24, 2013 at approximately 7:00 a.m., a fire was reported at the Property. (Id. ¶ 16.) The Fire Department determined that the fire was confined to an area of approximately six square feet on the second-floor rear portion of the Property. (Id. ¶ 18.) The Fire Department estimated that "not much water" (less than 1,000 gallons) was used to extinguish the fire, and they were able to suppress it in a short period of time. (Id. ¶ 19.) The Fire Department's report reflects that only one story of the Property suffered any minor or serious damage, and that there was no heat damage on the first floor. (Id. ¶ 20.)
At approximately 4:15 p.m. on September 24, 2013, Plaintiff called Defendant and advised that the Fire Department was performing water mitigation at that time. (Id. ¶ 21.) Paul Davis Restoration (Davis) was a participant in Defendant's Property Direct Repair Program, the details of which program Defendant outlined in a letter to Plaintiff. (Id. ¶ 22.) On September 25, 2013, at 8:23 a.m., Plaintiff called Defendant, during which call the nature of Defendant's relationship with Davis was explained; Plaintiff consented to the retention of Davis to perform post-fire mitigation services. (Id. ¶ 23.)
On September 25, 2013, Plaintiff and Davis entered into a contract to perform post-fire mitigation services. (Id. ¶ 24.) Joe Ouellette, a Davis representative, inspected the Property and documented its condition with a series of photographs. (Id. ¶ 25.) Plaintiff returned to Virginia on September 26, 2013. (Id. ¶ 26.)
On September 27, 2013, Mr. Ouellette advised Defendant that the claim was a "fairly large loss." (Id. ¶ 27.) On the same day, the matter was assigned to Dennis McLaughlin, a general adjuster who handles losses in excess of $50,000. (Id. ¶ 28.) Mr. Ouellette advised Mr. McLaughlin that there was extensive fire damage in the second-floor back bedroom and hallway and "heat and smoke damage throughout the house." (Id. ¶ 29.) Mr. McLaughlin also spoke with Old Town Fire Chief O'Malley about the origin and cause of the fire. (Id. ¶ 30.) Mr. McLaughlin called Plaintiff the same day to explain the claims process and documented that "she will be working with Paul Davis Restoration to do the repairs." (Id. ¶ 31.) Mr. Ouellette spoke with Defendant which authorized the start of the demolition and clean-up. (Id. ¶ 32.)
On September 30, 2013, Mr. McLaughlin first inspected the Property. (Id. ¶ 33.) Mr. McLaughlin met with Mr. Ouellette at the Property to conduct a second inspection on October 3, 2013. (Id. ¶ 34.) On October 3, 2013, the reconstruction assignment under the Property Direct Repair Program was cancelled, as Mr. McLaughlin said he would write his own estimate. (Id. ¶ 35.) On October 3, 2013, Mr. Ouellette advised Contractor Connection that there were minimal water levels and that no dry out was needed. (Id. ¶ 36.) On October 7, 2013, Mr. Ouellette again advised Contractor Connection that water mitigation was not necessary. (Id. ¶ 37.) On October 9, 2013, Mr. McLaughlin prepared an initial estimate of structural damage and sent a check to Plaintiff, payable to her and her mortgage company, OCWEN Loan Servicing, LLC ("OCWEN") as follows:
| Replacement Cost: |
| $184,836.16 |
| Less Depreciation |
| ($55,557.71) |
| Actual Cash Value |
| $129,278.45 |
| Less Deductible |
| ($2,500.00) |
| Net Claim |
| $126,778.45 |
(Id. ¶ 38.) On October 10, 2013, Mr. McLaughlin spoke with Plaintiff and confirmed that all settlement documents had been sent and she would receive them soon. (Id. ¶ 39.)
On October 11, 2013, Keith Trembley, a Davis representative, advised Defendant that no water mitigation (fans and dehumidifiers) was needed and requested a cancellation of the water mitigation assignment. (Id. ¶ 40.)
On October 11, 2013, Davis began the cleaning portion of the loss after Plaintiff called and provided Davis with verbal authorization to begin demolition and cleaningservices. (Id. ¶¶ 41 - 42.) On October 13, 2013, Davis began the demolition portion of the loss by tearing out wet and damaged material. (Id. ¶ 43.)
On November 5, 2013, Mr. McLaughlin reviewed and paid Davis' invoice for structural cleaning and fire mitigation in the amount of $14,255.70. (Id. ¶ 48.) Payment was issued to Plaintiff, Davis, and to Plaintiff's mortgage company, OCWEN. (Id.) Mr. McLaughlin contacted Plaintiff to explain the amount being paid based on Davis' November 5, 2013 invoice and the services that had been rendered. (Id. ¶ 49.) Davis submitted an invoice in the amount of $15,005.61 for the cost of demolition, temporary power, plumbing repairs and debris removal. (Id. ¶ 50.) On November 15, 2013, Mr. McLaughlin received the invoice and paid Plaintiff, Davis, and OCWEN. (Id. ¶ 51.)
On November 20, 2013, Mr. McLaughlin received and paid a board-up bill in the amount of $1,222, payable to Northeast Restoration, Plaintiff and OCWEN. (Id. ¶ 52.) On the same day, Mr. McLaughlin also received an asbestos removal and disposal estimate in the amount of...
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