FLORISTS'MUT. INS. CO. v. Tatterson
| Decision Date | 06 October 1992 |
| Docket Number | Civ. A. No. 91-29-NN. |
| Citation | 802 F. Supp. 1426 |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | FLORISTS' MUTUAL INSURANCE COMPANY, Appellant, v. William B. TATTERSON, Jr., t/a Tatterson Greenhouses, Appellee. |
Raymond L. Hogge, Jr., Swope, Richard McAllister Williams, Worrell, Kelly, Greer & Frank, Norfolk, Va., for appellant.
Charles S. Russell Jr., Albert Davis Bugg Jr., Rumsey, Breeden, Hubbard, Bugg & Terry, Irvington, Va., for appellee.
This matter comes before the Court, pursuant to 28 U.S.C. § 636(c)(4), on appeal from a jury trial before a United States Magistrate Judge. The appellee, William B. Tatterson, a greenhouse operator, obtained a judgment for $165,000.00 in this action on an insurance contract which insured his crops and buildings from "direct loss" due to "weight of snow," claiming damages to his crops flowing from a snowstorm. The appellant, Florists' Mutual Insurance Company, denied coverage for alleged crop damage contending that it was not direct. Tatterson also alleged that the insurer failed to exercise good faith in settling the damage to his buildings.
A jury entered an interrogatory verdict of $165,000.00 for damages sustained by Tatterson's plants due to "overcrowding" or "loss of growing space," but did not find any bad faith. Appellant maintains that the Magistrate Judge improperly denied its motion for summary judgment and subsequent motions for a directed verdict and judgment as a matter of law, and that the Magistrate Judge improperly permitted the testimony of one of appellee's expert witnesses about the damages incurred to appellee's business. Appellee cross-appealed on the grounds that the Magistrate Judge gave an improper instruction to the jury in the charge relating to appellee's bad faith claim.
The parties have briefed the issues and this Court has heard argument. This Court holds that the Magistrate Judge erred in denying Florists' Mutual's motion for summary judgment or judgment as a matter of law with regard to Tatterson's claim for damages to his insured crops. Although the Court finds no error in the charges relating to bad faith, it need not address the issue because the Court finds as a matter of law a lack of any bad faith. Therefore, appellee's objection to the instructions is moot. This Court also need not review the Magistrate Judge's decision to allow the testimony of Tatterson's expert witness.
Appellant, Florists' Mutual Insurance Company ("Florists' Mutual") is an insurance company which provides casualty and indemnity insurance to plant growers. Appellee, William B. Tatterson, Jr. ("Tatterson"), is the owner and sole proprietor of a commercial greenhouse in Port Haywood, Virginia, where he grows a variety of plants for the wholesale market year around.
Tatterson grows plants during the winter in twenty-nine long, narrow greenhouses which, insofar as this case is concerned, were built in a "Quonset Hut" style with plastic spread over a half-circle metal frame.1 The greenhouses in question contained ten rows of plants hanging from the metal frames and running lengthwise, with five rows hanging on each half of the structure. Plants were also positioned below the hanging plants on the floor and on benches. Tatterson insured the greenhouses as well as the crops contained therein with the appellant, and this suit is based on that policy.
On Friday, February 24, 1989, a snowstorm caused snow to accumulate on one side of eight of Tatterson's twenty-nine insured greenhouses causing the metal ribs on that side of the greenhouses to sag or cave in, but not breaking the plastic covering. The plants themselves, insofar as this case is concerned, were not physically damaged during the storm. Tatterson propped up the sagging sides of the greenhouses, but some portions were still hanging too low to properly accommodate the plants which were hanging from the metal frames because some of the hanging plants were too close to the plants on the benches and on the floor.2
To alleviate this problem, Tatterson decided to move not more than 19 rows of the 80 rows of hanging plants in the damaged greenhouses to the undamaged sides of some of the damaged greenhouses and to approximately 12 of the undamaged greenhouses. The damaged greenhouses were almost all 148 feet long and 30 feet wide or 4,440 square feet. Assuming 2 3/8 rows of hanging plants out of 10 were affected (19 out of 80 rows), then a maximum of 23.375% of the greenhouses damaged by the storm were affected. That percentage constitutes approximately ¼ of each damaged greenhouse, or 1,110 square feet in each of the eight greenhouses — a total of 8,880 square feet affected. This relocation of the hanging plants, according to Tatterson's experts, caused "overcrowding" and the plants received less than optimal amounts of air and light. After passage of time, the placement of the plants in the overcrowded conditions caused the plants to become "leggy" and "stretched" in comparison to the plants grown in previous years. Although Tatterson testified that the number of hanging plants which he was growing at the time of the storm in 1989 was double the number grown in previous years, the record does not reveal that the experts gave any consideration to this fact in assessing damages or causal connection.3
The experts testified that this leggy condition caused the plants to sell for a lower gross sales price than that which Tatterson anticipated. Tatterson himself testified that he had anticipated selling these plants at an expected 50% price rise from $5.00 to $7.50. One expert, a private insurance adjuster who helped present the claim, testified over objection that Tatterson's 1989 crop loss was based on calculations utilizing a projection of ten months of Tatterson's 1989 gross sales. The expert derived the 1989 gross sales price by extrapolating a 13.24 percent growth in 1989 based on the sales from January through October 1987 compared to sales from January through October 1988, and utilizing that percentage of growth4 for 1989 over 1988. He indicated that sales would increase by $264,430 and that cost of goods in prior years was 79.8 cents of every dollar less some costs that did not rise with increased sales. According to the expert, this would produce a cost of goods or crop loss of approximately $211,000. The economy and other factors were not taken into consideration.
To summarize plaintiff's experts: the leggy condition of the plants resulted from overcrowding; overcrowding was brought about by movement of the plants; movement of the plants was necessitated by damage to the eight greenhouses; and the damage to the eight greenhouses was in turn caused by weight of snow. This chain of events led to a reduction in the anticipated sales price of the plants from the twenty-nine greenhouses, ultimately inflicting a loss in excess of the maximum limit of liability set forth in the insurance policy, $165,000.5
At the time of the snowstorm, Tatterson had in effect an insurance policy issued by Florists' Mutual which provided coverage for damages to Tatterson's greenhouses as well as to his plants. Part I of the insurance contract reads as follows:
this policy covers direct loss caused by a Named Peril to the structure of a plastic covered greenhouse(s) including fixtures and equipment in use therein and permanently attached to said structure.
(emphasis added). Among the named perils insured under the contract is "weight of snow." Specifically, Part III of the contract states that "this insurance covers Property Insured against direct physical damage caused by ... weight of snow." (emphasis added). A related portion of the policy, entitled "Plastic Greenhouse Crop Coverage Endorsement," provided insurance against the loss of the plants grown in the greenhouses. This section stated:
This endorsement insures growing crops against direct loss caused by the Named Perils of the policy, only while located within the insured plastic greenhouse structure(s) described in the declarations for which crops coverage is specifically indicated.
(emphasis added).
After the storm, Tatterson sought to recover, under the insurance policy with Florists' Mutual, money for property damage to his greenhouses and for damage to his plants. Florists' Mutual eventually paid Tatterson $45,659.00 for his property damage claim, but refused to compensate Tatterson for any plant damage. The company maintained that any crop damage caused by the alleged overcrowding was not covered by the insurance contract.
Tatterson asserts that he is entitled to recover under the insurance contract for the damages sustained to all of his plants due to overcrowding. In essence, Tatterson claims that the sagging roofs caused him to move some plants and this produced overcrowding. Tatterson characterizes the damage resulting from the overcrowding as a "direct loss" caused by "weight of snow" even though most of the plants allegedly affected were never located in portions of the greenhouses damaged by snow.
Tatterson also maintains that, after the storm, Florists' Mutual failed to promptly assess the damage to his greenhouses and assigned an adjuster to examine the damage who was not competent to perform the task. According to Tatterson, if Florists' Mutual had promptly, in compliance with its requirement of good faith, advanced money for the property damage to his greenhouses, the harm to his plants from overcrowding would not have occurred because alternative housing for the plants would have been arranged or built. He indicates that no money or insufficient money was advanced by the insurance company during the first thirty-five days after the storm to build facilities to house the rows of plants which had to be moved.
Tatterson sought to recover (1) $165,000 under the terms of the contract for direct damage to his plants;6 (...
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