Endemann v. Liberty Ins. Corp.

• Decision Date: 25 March 2019
• Docket Number: 5:18-cv-00701
• Citation: 390 F.Supp.3d 362
• Parties: Kyle ENDEMANN, Plaintiff, v. LIBERTY INSURANCE CORP., Defendant.
• Court: U.S. District Court — Northern District of New York

390 F.Supp.3d 362

Kyle ENDEMANN, Plaintiff,

v.LIBERTY INSURANCE CORP., Defendant.

5:18-cv-00701

United States District Court, N.D. New York.

Signed March 25, 2019

Alan J. Pierce, Hancock, Estabrook Law Firm, Syracuse, NY, for Plaintiff.

Jonathan Schapp, Goldberg, Segalla Law Firm, Buffalo, NY, for Defendant.

DECISION & ORDER

THOMAS J. McAVOY, Senior United States District Judge

I. INTRODUCTION

Plaintiff Kyle Endemann commenced this action seeking to recover damages based upon Defendant Liberty Insurance Corporation's ("Liberty" or "Defendant") alleged failure to pay Plaintiff's property insurance claim under his homeowners insurance policy. Defendant moves to dismiss the action pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief can be granted. For the reasons that follow, the motion is granted in part and denied in part.

II. BACKGROUND

a. Procedural

This action relates to property damage for which Plaintiff seeks recovery under his homeowners insurance policy issued by Defendant. Am. Compl. ¶¶ 6-7. Plaintiff filed the Summons and Complaint in the New York State Supreme Court, Madison County, on January 22, 2018. Defendant removed the action to this Court, Dkt. No. 1, and filed a motion to dismiss. Dkt. No. 5.

In response to that motion, Plaintiff filed the Amended Complaint, Dkt. No. 9, asserting new factual allegations and legal conclusions but no new causes of action. The original motion was denied as moot, Dkt. No. 12, and the matter is now before the Court on Defendant's motion to dismiss the Amended Complaint. Dkt. No. 13. The Amended Complaint alleges causes of action sounding in Declaratory Judgment (First Cause of Action), Breach of Contract (Second Cause of Action), Violation of the Duty of Good Faith and Fair Dealing (Third Cause of Action), and Violation of General Business Law § 349 (Fourth Cause of Action).

b. Factual¹

Plaintiff owns his home located at 214 Driftwood Dr., Oneida, New York ("the Home"). Am. Compl. ¶ 5. Defendant sold Plaintiff a LibertyGuard Deluxe Homeowners Policy No. H37-228-506632-40 (the "Policy") with a policy period of June 29, 2013 through June 29, 2014 "insuring Plaintiff against risk of, among other things, water loss and damage to the Home, subject to certain conditions and exclusions in the Policy." Id. ¶ 6. "On or about February 21, 2014, Plaintiff's neighbor Edward Dubois discharged a large quantity of water above ground from his sump pump downhill to the Home, which then entered the Home causing significant water and related damage to the Home and to Plaintiff's contents ("the Loss")." Id. ¶ 7. Shortly thereafter, Plaintiff notified Defendant of water damage in his home. Id. ¶ 8.

On March 3, 2014, Plaintiff's public adjuster, Darin Checchia, had a meeting with Defendant's adjuster, Kim Guignard, in the basement of the Home without Plaintiff present. Id. ¶ 9, 11-12. Prior to this meeting, Ms. Guignard was "made aware ... that Plaintiff's neighbor ... was the cause of his loss due to the fact that [the neighbor] illegally diverted his sump pump discharge with a mechanical device directly at his house above ground causing a direct physical loss to his basement, garage, patio, yard and foundation." Id. ¶ 10. After Ms. Guignard left, Mr. Checchia handed Plaintiff a check for $10,500. Am. Compl. ¶¶ 9-12. Plaintiff later learned that Defendant chose to adjust the claim under the Policy's backup of sewer/sump pump overflow and debris removal endorsements, and, in doing so, paid the full amount of the Policy limits related thereto. Id. ¶ 13-15. "It was never communicated to Plaintiff by Defendant that his loss was covered in full under the Policy." Id. ¶ 13. However, "the loss clearly exceeded those limits and was covered in full under the Policy up to the policy limits." Id. ¶ 14. When Plaintiff received Defendant's March 3, 2014 letter referencing "that Plaintiff's sump pump failed" and requesting information about the installation and repair of the "failed sump pump," Plaintiff immediately contacted Defendant "stating that [he] did not have a sump pump on the date of his loss." Id. ¶ 15.

Sometime prior to August 26, 2014, Plaintiff "called his insurance agent to see if they would collaborate with [Plaintiff] by subrogating against Adirondack Insurance (Dubois' insurance company) at the same time Plaintiff filed a lawsuit against Dubois so they could get their $10,500 back that they paid [Plaintiff] on March 3, 2014." Id. ¶ 16. Plaintiff's insurance agent told him that he needed to speak with a team member from Liberty's subrogation department. Id. On August 24, 2014, Plaintiff drafted a letter to Defendant asking "if you would like to work with me in regards to getting reimbursed the $10,500 that you paid out on my claim dated February 21, 2014." Am. Compl. Ex. B. Plaintiff indicates in this letter, inter alia , "I am out a total of between $80,000 - $85,000 due to Edward Dubois diverting his water onto my property for over a month causing damage to my basement, garage, and foundation." Id. When Plaintiff spoke with a Liberty subrogation department team member, he was told that there was very little chance that any of the monies would be recouped. Am. Compl. ¶ 16. Plaintiff then called Liberty's corporate office and spoke to a President's Service Team representative. Id. Plaintiff sent this representative "all his information proving that his neighbor was the cause of his loss. The representative stated that the team would take a look at his situation and contact him as soon as they came to a decision." Id. Approximately a month later, "Plaintiff received a phone call from Defendant ... stating that they were going to subrogate against Adirondack Insurance on his behalf for his deductible and the monies they paid him." Id. ¶ 18. In October 2014, Plaintiff received correspondence from the law firm handling the subrogation case for Defendant. Id. ¶ 19. Plaintiff asserts that, based upon his telephone calls and the information provided to Defendant's representatives, "Defendant was aware of Plaintiffs entire situation, ... including the fact that Plaintiff did not have a sump pump on his date of loss along with all his documentation to prove the fact that his neighbor was the cause of his damages as of this date." Id. ¶ 20.

Plaintiff contends that "[p]rior to June 5, 2017," his former attorney corresponded with Defendant's representative, Gary Peters, in regard to Plaintiff filing a new claim. Id. ¶ 21. Plaintiff was advised that a new adjuster was assigned to his matter, and that his former attorney had sent to Mr. Peters all of Plaintiff's "work product and professional reports." Id. When Plaintiff learned that Mr. Peters had not received the professional reports, "Plaintiff personally resent them on June 9, 2017." Id.

On June 5, 2017, Plaintiff tried to reach his new adjuster by telephone to file a new claim, but the adjuster was not available so Plaintiff contacted the adjuster's manager, Heather Campbell. Id. ¶ 22. During a conversation with Ms. Campbell, Plaintiff explained "that in 2016 Plaintiff began to notice substantially increased damage to his home. Plaintiff further explained that he hired several professionals that evaluated, inspected and gave estimates for damage that had begun to show itself in 2016. These professionals stated without question that all the new damages were directly tied back to his neighbor diverting of his sump pump discharge at his home." Id. Ms. Campbell informed Plaintiff that he "could not file a new claim because his original claim was for the same date of loss as the new claim Plaintiff was attempting to file and that his original claim was still open." Id. ¶ 22; see also id. ¶ 25 ("Plaintiff was told by Ms. Campbell that his original claim from his date of loss was still open and active during their phone conversation on June 5, 2017."). Plaintiff then stated that the claim was not properly adjusted. Id. ¶ 22.

[Ms. Campbell] responded that his sump pump malfunctioned and that was the only coverage Plaintiff had that would pertain to his loss. Plaintiff told her that he did not have a sump pump on the date of loss. He told Ms. Campbell that he responded to Ms. Guignard's March 4, 2014 letter and advised Defendant that he had no sump pump on the date of loss, and that Defendant was made aware of this again in August 2014 when Plaintiff sent all his information to Defendant's President's Service Team for them to subrogate against his neighbor to recoup the $10,500 they paid out on the back up of sewer/sump pump overflow endorsement. Ms. Campbell then asked Plaintiff if he had drains around his house. Plaintiff confirmed he did and she stated that they overflowed and that they paid me out for that. She again reiterated that Plaintiff was already paid out by Defendant and that the only coverage he had was the back up of sewer/sump pump overflow endorsement. At that point, Plaintiff asked to speak with her manager. Plaintiff then reached out to Mike Famiglietti.

Id.

On June 7, 2017, Plaintiff sent letters via email to both Mr. Famiglietti and Ms. Campbell requesting that they re-examine "his current open and active claim with Defendant from his date of loss on February 21, 2014." Id. ¶ 25. On June 9, 2017, Plaintiff's professional reports were emailed to Mr. Peters, Ms. Campbell, and Mr. Famiglietti. Id. ¶ 26.

Defendant denied the claim by letter on June 12, 2017, but the letter "does not cite or identify any Policy conditions, exclusions and/or limitations, including the limitations period for suing Defendant following a loss." Id. ¶ 27. On June 14, 2017, Plaintiff responded to Defendant's denial letter by pointing out "that they were not in compliance with the Unfair Claim Practices Act and applicable regulations ( New York Insurance Law § 2601 and 11 N.Y. C.R.R. § 216, et seq.), which clearly provides that Defendant must identify the facts that they relied upon to trigger each specific exclusion. It was unclear...