Essex Ins. Co. v. William Kramer & Assocs., Inc.
| Decision Date | 08 June 2016 |
| Docket Number | No. 3:13-cv-1537 (MPS),3:13-cv-1537 (MPS) |
| Parties | Essex Insurance Company, Plaintiff, v. William Kramer & Associates, Inc., Defendant. |
| Court | U.S. District Court — District of Connecticut |
This case requires me to decide whether a jury's finding that the applicable statute of limitations was tolled under Connecticut's "continuing course of conduct" doctrine is supported by sufficient evidence. Essex Insurance Company ("Essex") asserts a negligence claim against independent adjuster William Kramer & Associates, LLC ("WKA"), arising out of Essex's employment of WKA in 2006 and 2007 to adjust losses to commercial properties in Florida caused by Hurricane Wilma. Essex claims that WKA was negligent in failing to inform Essex, before it issued the final claim check for the loss, of the existence of a mortgagee on one of the properties. The undisclosed mortgagee later sued Essex and received a large settlement.
The Court held a jury trial on February 10, 11, and 12, 2016. The jury found WKA negligent and awarded damages of $1,250,002.89. The jury also found that although Essex had brought suit more than three years after WKA's negligent conduct, the claim was not time-barred because WKA had engaged in a "continuing course of conduct" that tolled the applicable statute of limitations.
WKA has renewed its motion for judgment as a matter of law, arguing that no reasonable juror could find based on the evidence presented at trial that Connecticut's "continuing course of conduct" doctrine sufficiently tolled the statute of limitations to make Essex's claim timely. After construing the evidence in the light most favorable to Essex and drawing all reasonable inferences in its favor, I agree with WKA and conclude that it is entitled to judgment as a matter of law.
"Judgment as a matter of law may not properly be granted under Rule 50 unless the evidence, viewed in the light most favorable to the opposing party, is insufficient to permit a reasonable juror to find in her favor." Galdieri-Ambrosini v. Nat'l Realty & Dev. Corp., 136 F.3d 276, 289 (2d Cir. 1998).
[T]he district court must [also] draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence. . . . Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge. . . . Thus, although the Court should review the record as a whole, it must disregard all evidence favorable to the moving party that the jury is not required to believe.
Manganiello v. City of New York, 612 F.3d 149, 161 (2d Cir. 2010) (citations and internal quotation marks omitted). "Although a party making a Rule 50 motion always faces a heavyburden, that burden is particularly heavy, where, as here, the jury has deliberated in the case and actually returned its verdict in favor of the non-movant." Newton v. City of New York, 779 F.3d 140, 146 (2d Cir. 2015).
Construing the evidence presented at trial in the light most favorable to Essex, and drawing all reasonable inferences in its favor, the jury could have found the following facts.
In October of 2005, Hurricane Wilma damaged several properties in Florida, including a commercial property known as "The Villas." (Verna Test., ECF No. 79-3, at 6.) Before the storm, IDM, owner of The Villas and other properties in the area, obtained several layers of insurance to protect itself against loss. (Id. at 3.) IDM had an initial layer of $5 million in coverage from Aspen Insurance Company ("Aspen") and an excess layer of $10 million shared by Essex and a third insurance company. (Id. at 4.) After the storm, Essex received a Notice of Loss from IDM's retail agent, Brian Adams (an employee of insurance agency USI), indicating that the loss resulting from the damage to The Villas might reach Essex's layer of coverage. (Id. at 5.)
Aspen hired WKA to adjust the loss to the IDM properties for its initial layer of coverage. (Id.) Around that time, Dennis Martin, a WKA employee, contacted Essex and asked if WKA could also perform adjusting work for Essex should the loss reach Essex's excess layer. (Id.) It is customary for excess-layer insurers to engage the same independent adjuster as the initial layer insurer because all insurers can thereby share the information and work product already generated by the original adjuster, reducing the need for redundant work. (Id. at 6.) Richard Verna, an Essex employee, agreed to hire WKA as Essex's independent adjuster for theIDM properties, which included The Villas. (Id. at 5-6.)
On April 25, 2006, Adams sent WKA adjuster Robert Oberpriller a letter indicating there had been an issue with one of Aspen's payment checks. (Pl.'s Ex. 2.) Adams attached to his letter "a copy of the mortgagees" on each of the IDM properties. (Id.) The attached document, titled "IDM Management, Inc. /schedule of Mortgagees," listed Intervest National Bank ("Intervest") as a mortgagee on The Villas. (Id.) After receiving Adams's letter, Oberpriller sent a letter to Aspen employee Kevin Igoe, requesting that Aspen reissue the check referenced in Adams's letter. (Pl.'s Ex. 3.)
Upon hiring WKA, Essex (through Verna) requested that WKA perform a "full adjustment" on The Villas. (Verna Test. at 12.) A full adjustment includes inspecting the property, determining the scope of damage and estimating the loss, working with IDM to agree to an amount of loss, reviewing all coverage aspects of Essex's policy, identifying any potential coverage issues, and reporting all elements associated with the investigation and the claim measuring process. (Id.) It also includes identifying any mortgagees on the properties on which WKA was performing its work:
(Martin Test. at 10.) On multiple occasions while WKA was performing its adjusting work for Essex, Verna asked Martin and/or Oberpriller whether there was a mortgagee on The Villas, and the WKA employees responded in the negative:
While performing the adjusting work, WKA sent periodic status reports to Essex. (Id. at 15-17.) These reports included lists of the IDM properties as well as the name of any mortgagees on those properties. (Id.) The lists identified a mortgagee on each IDM property except The Villas, for which WKA indicated that there was "no mortgagee." (Id. at 17-18.) Each status report was signed by Oberpriller and Martin. (Id. at 18.) Had Oberpriller looked inWKA's files regarding the work it had done for Aspen, he would have seen the schedule of mortgagees it received from Adams, which indicated that Intervest was a mortgagee on The Villas. (Martin Test. at 3; see also Def.'s Ex. 51, at 152 ( ).) Martin agreed that Essex, while WKA was performing its adjusting work, could "fairly rely" on the fact that WKA would share information about IDM properties WKA obtained while performing work for Aspen, including the schedule of mortgagees Adams sent to Oberpriller. (Martin Test. at 7.)
In March 2007, before issuing Essex's final claim payment check for The Villas, Verna again asked Martin and Oberpriller if there was a mortgagee on The Villas. (Verna Test. at 13.) The WKA employees responded that they had not received a response from the policyholder as to whether a mortgagee interest existed on The Villas, but stated that there was no indication there was a mortgagee. (Id.) Verna assumed that when he inquired as to whether there was a mortgagee on The Villas, the WKA employees would look in their files to see if they had that information. (Id. at 13-14.) Verna never received any indication from WKA in 2007 that The Villas had a mortgagee. (Id. at 21.) Because Verna was not a licensed insurance adjuster in the State of Florida, he lacked authority to contact IDM or its representatives directly. (Id.) Essex issued the final claim payment check on March 19, 2007; it did not list Intervest as a payee. (Def.'s Ex. 515.) Had Verna known about Intervest's interest in The Villas, he would have included...
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