Cranme v. Harleysville Insurance Co., 111717 FED3, 17-1596

Docket Nº:17-1596
Opinion Judge:SHWARTZ, Circuit Judge
Party Name:ANNA CRANMER, Individually; BRIAN CRANMER, Individually; TINY TOTS DAYCARE PRESCHOOL, LLC d/b/a TINY TOTS DAY CARE PRESCHOOL, Appellants v. HARLEYSVILLE INSURANCE COMPANY; PHILADELPHIA INDEMNITY INSURANCE COMPANY
Judge Panel:Before: HARDIMAN, SHWARTZ, and ROTH, Circuit Judges
Case Date:November 17, 2017
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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ANNA CRANMER, Individually; BRIAN CRANMER, Individually; TINY TOTS DAYCARE PRESCHOOL, LLC d/b/a TINY TOTS DAY CARE PRESCHOOL, Appellants

v.

HARLEYSVILLE INSURANCE COMPANY; PHILADELPHIA INDEMNITY INSURANCE COMPANY

No. 17-1596

United States Court of Appeals, Third Circuit

November 17, 2017

NOT PRECEDENTIAL

Submitted under Third Circuit L.A.R. 34.1(a) October 11, 2017

Appeal from the United States District Court for the District of New Jersey (D.C. No. 2:14-cv-03206) District Judge: Honorable Esther Salas

Before: HARDIMAN, SHWARTZ, and ROTH, Circuit Judges

OPINION [*]

SHWARTZ, Circuit Judge

Anna Cranmer, Brian Cranmer, and Tiny Tots Daycare Preschool, LLC (collectively "Plaintiffs") appeal the District Court's orders (1) granting summary judgment to Defendant Philadelphia Indemnity Insurance Company ("PIIC") based on the affirmative defense of accord and satisfaction and (2) denying reconsideration of that order. Because undisputed material facts support the accord and satisfaction defense and because Plaintiffs did not satisfy the reconsideration standard, we will affirm.

I

The Cranmers own Tiny Tots Daycare Preschool, LLC ("Tiny Tots"). Tiny Tots was covered by an insurance policy from PIIC that covered business-related personal property and business interruption losses. Tiny Tots suffered damage from Superstorm Sandy and filed claims totaling $956, 455.09 with PIIC. PIIC's certified public accountants valued Plaintiffs' losses at $28, 542.84. After an unsuccessful attempt to resolve the dispute in New Jersey's Sandy mediation program, Plaintiffs retained counsel at The Rain Law Firm ("RLF") to represent Tiny Tots, and RLF notified PIIC of that representation by letter dated July 18, 2013.

After a conversation between PIIC's counsel and RLF, PIIC's counsel sent RLF a letter dated August 15, 2013: (1) acknowledging receipt of the July 18, 2013 correspondence, (2) noting that "multiple calls" to RLF "have gone unanswered, " and (3) stating, "[a]s I explained to your client, Anna Cranmer, at the time of mediation, . . . upon a review and expert evaluation of hundreds of pages of documents produced by Tiny Tots in support of its claim for recovery, " PIIC determined that Tiny Tots "is entitled to $28, 542.84 reimbursement under the coverage provided to it by [PIIC]." App. 341. The letter concluded as follows: Accordingly, should I not hear from you within ten (10) days of your receipt of this correspondence, I will instruct [PIIC] to tender settlement in an amount of $28, 542.84 payable to Tiny Tots Daycare Preschool, LLC and [RLF], its attorney. We will deem the acceptance of this payment as full and final settlement of this claim as well as a release by your client of any further demand for recovery as against Philadelphia Insurance Companies.

App. 341. The letter was delivered to RLF's office, but RLF did not respond to the letter.

On September 23, 2013, PIIC's counsel sent RLF a check for $28, 542.84, with an accompanying letter that stated: Pursuant to my correspondence to you dated August 15, 2013, enclosed please find [PIIC's] check, number 1111429396, made payable to Tiny Tots Day Care Preschool, LLC and [RLF] in the amount of $28, 542.84 which is being tendered to you in good faith for the purposes of settlement. Upon your receipt of the enclosed, please contact my office so that we may discuss this matter and the positions of the parties moving forward.

App. 345-46. The check was marked "FINAL, " and the comment line stated "Business Income, windstorm damage, loss of income from the date of loss through the period of restoration." App. 346. RLF did not respond to this letter. However, the check was deposited on October 4, 2013 and was endorsed by "Tiny Tots Daycare Preschool" and "Gregg J. Anderson" on behalf of RLF. App. 350. On December 9, 2013, PIIC's counsel sent RLF a request for a signed release of claims against PIIC, but he received no response.

Plaintiffs filed a Complaint asserting breach of contract and breach of the implied covenant of good faith and fair dealing against PIIC. The District Court granted PIIC's motion for summary judgment on both claims.

Plaintiffs moved for reconsideration and attached materials not previously included in their opposition to PIIC's motion for summary judgment, including certifications from Anna Cranmer and RLF attorney Matthew Kotzen stating that Cranmer never accepted or saw the $28, 542.84 check and that RLF accepted that check only for partial payment of the claim. Based on these certifications, the District Court ordered the parties to submit supplemental briefing on the issue of RLF's authority and its impact on accord and satisfaction under the reconsideration standard. In response, Plaintiffs submitted additional certifications from Cranmer and Kotzen, which stated that (1) Cranmer "agreed to allow [RLF] to deposit the [$28, 542.84] check" based on the understanding that it was a partial payment, and (2) RLF lacked authority to settle Plaintiffs' claim for $28, 542.84 and did not have authority to endorse checks on behalf of Tiny Tots. The District Court denied the reconsideration motion, finding that Plaintiffs failed to satisfy the reconsideration standard. Plaintiffs appeal.

II1

Plaintiffs argue that the...

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