Gibney v. State Farm Fire & Cas. Co.
| Citation | 897 F.Supp.2d 618 |
| Decision Date | 25 September 2012 |
| Docket Number | Case No. 2:10–CV–00708. |
| Court | U.S. District Court — Southern District of Ohio |
| Parties | Mark GIBNEY, et al., Plaintiffs, v. STATE FARM FIRE & CASUALTY CO., Defendant. |
OPINION TEXT STARTS HERE
Adam J. Bennett, Andrew P. Cooke, Cooke, Demers & Gleason, LLC, New Albany, OH, for Plaintiffs.
Gregory Harold Collins, Davis & Young, Akron, OH, for Defendant.
This matter is before the Court on Defendant State Farm Fire & Casualty Company's (“State Farm”) Motion for Summary Judgment with respect to all claims brought against it by Plaintiffs Mark Gibney and Brenda Gibney, as well as Intervenor Plaintiff, PNC Bank N.A. (“PNC”). (Dkt. 39.) Plaintiffs seek to recover based on Defendant's denial of a claim made under their insurance policy with Defendant. For the reasons set forth herein, Defendant's Motion is GRANTED in part and DENIED in part.
Additionally, Intervenor Plaintiff, PNC, has brought a Motion to Strike Defendant's arguments for summary judgment on PNC's claims. PNC also requests, in the alternative, additional discovery and leave to file a Sur–Reply. For the reasons set forth herein, Intervenor Plaintiff's Motion to Strike is DENIED, its request to file a Sur–Reply is GRANTED, and its request for additional discovery is DENIED.
State Farm issued Homeowner's Insurance Policy No. 35–BH–C787–0 to Gibney for the property located at 7729 Roberts Road, Hilliard, Ohio 43026 (the “Property”), effective July 23, 2008 through July 23, 2009 (the “Policy,”). 1 On July 3, 2009, a fire occurred in the Gibneys' residence, located at the Property (the “July 3 Fire” or “the fire”). The July 3 Fire caused fire, smoke and water damage to the Property, rendering it uninhabitable. (Raker Decl., ¶ 5.) Gibney promptly filed a claim with State Farm. ( Id.) State Farm opened an investigation as per its standard protocol.
In the course of State Farm's investigation, various members of Gibney's extended family testified under oath that Gibney reported multiple and contradicting versions of the events surrounding the July 3 Fire. In some versions Gibney allegedly told them, he was asleep when the fire started, in others he dropped a pan of boiling grease on the floor, and in others he did not learn of the fire until after he was at a hospital to visit his grandson. According to Julie Lively, Gibney's daughter-in-law, Gibney originally stated that he fell asleep while cooking chicken wings, smelled smoke, and called the fire department.2 (4/15/10 Lively EUO. at pp. 19–21.) Later that night, Lively testifies, Gibney stated that he dropped the pan on the floor, which started a fire that rapidly grew too large for him to extinguish. ( Id. at pp. 22–23.)
In Gibney's deposition and his examination under oath, he testified that he was home alone on the evening of July 3, not long before the fire was discovered. (2/17/10 Gibney EUO, p. 155.) Gibney reported that he was cooking chicken wings on the stove. ( Id. at pp. 158–61, 166–68.) Gibney stated that after he began heating the grease, he received a call from his ex-wife, Gibney, who was at Children's Hospital. ( Id. at pp. 157–58, 176; Gibney Depo., pp. 119–22.) Gibney testified that Gibney advised that the Gibneys' grandson was in poor medical condition, and Gibney should come to the hospital immediately. (2/17/10 Gibney EUO, pp. 157–58, 176.) In response to her call, as Gibney described, he immediately left the Property and locked the door to the residence. ( Id. at pp. 157–59, 166, 171, 260.) Gibney further testified that, when he arrived at the hospital, he realized he may have left the boiling grease on the stove. ( Id. at pp. 159–60). He then called the fire department and told them that he may have set his house on fire. ( Id. at pp. 159–60, 174–75).
On July 25, 2009, while State Farm was in the process of investigating and adjusting the July 3 Fire, Gibney reported that a second fire had occurred overnight at the Property (the “July 25 Fire”). (Raker Decl., ¶ 6.) Gibney admits that no one was living at the Property at the time of the second fire. He speculated that the July 25 Fire had an electrical cause, and he reported that the Property was a total loss after the July 25 Fire. () On August 13, 2009, State Farm sent a Reservation of Rights letter to Gibney advising him that State Farm was reserving all rights to deny coverage. (Raker Decl. ¶ 7, Exh.
B.) 3
State Farm retained origin and cause expert Scott Bennett to investigate the origin and cause of both the July 3 Fire and the July 25 Fire. (Bennett Depo. at pp. 18–19, 119.) On November 30, 2009, Bennett issued an Origin and Cause Report relating to the July 25 Fire. ( Id., Exh. C.) In his November 30, 2009 Report, Bennett explained that flooring samples tested positive for the ignitable liquids styrene, alpha-methylstyrene, and turpentine. (11/30/09 Origin and Cause Report, p. 4.) Bennett concluded that the cause of the July 25 Fire was “undetermined” but “suspicious.” ( Id. at p. 5; Bennett Depo. at pp. 87–91.)
On May 15, 2010, Bennett issued an Origin and Cause Report relating to the July 3 Fire. () In his Report, Bennett found that despite Gibney's claim that the July 3 Fire started because he left a stove on while heating grease, the July 3 Fire actually “originated on or at the kitchen island, which was not attached to the stove.” (5/15/10 Report at p. 3, Dkt. 39–3, at 27.) He further concluded that “[t]he electric stove was neither on, nor in operation, when the fire department arrived,” and that the July 3 Fire was caused by “a human act.” ( Id.) At his deposition, Bennett clarified that the cause of the July 3 Fire was an “intentional human act.” (Bennett Depo. at pp. 129–36.)
On July 22 and July 30, 2010, State Farm advised Gibney that it was denying his claim relating to the July 3 Fire. (Raker Decl. ¶ 12.) State Farm advised Gibney that he had breached the Policy's “Concealment or Fraud” condition for coverage (the “Condition”). ( See Policy, id. Exh. D. at 04372.) State Farm added that, based upon Plaintiff's breach of the Condition, State Farm was retroactively voiding the Policy as of July 3, 2009 at 12:01 a.m. ( Id. at 04372). State Farm further explained that because it was voiding the Policy as of July 3, 2009, Plaintiff would have “no coverage with State Farm” for any claims for loss after that date. ( Id. at 04373.)
Gibney reported that, on November 29, 2009, an alleged theft of contents in his barn occurred, and he made a claim under the Policy for this loss. (2/17/10 Gibney EUO, pp. 261–62, 272.) Since State Farm declared the Policy void as of the July 3 date of loss, State Farm also denied coverage for the alleged theft loss. (Raker Decl., ¶ 13.)
Plaintiffs maintain that Gibney did not intentionally set the July 3 Fire, and explain that his “limitations” in recounting consistently the cause of the July 3 Fire are due to the “amnesia” he suffers as a result of a head injury he sustained in a 1996 car accident. (2/17/10 Gibney EOU at 42.) Gibney's head injury causes him to appear intoxicated when he is not ( id. at 206–07); affects his speech (Bennett Depo. at 35–36); and, according to his family's testimony, Gibney has memory issues and behaves as though “he's kind of not always there.” (B. Gibney EOU, p. 28–29, 33.) The Plaintiffs insist that despite Gibney's limitations, in his testimony, examinations, and depositions, he has consistently related the material facts surrounding the July 3 Fire.
On July 2, 2010, Plaintiffs filed the present lawsuit against State Farm in the Franklin County Court of Common Pleas, which was later removed to this Court on August 9, 2010, under diversity jurisdiction.( See Dkt. 1.) Plaintiffs' Amended Complaint makes three claims: (1) State Farm breached the Policy by denying Gibney's claims for loss (Am. Compl., Doc. 9, ¶¶ 10–11); (2) State Farm acted in bad faith by denying Gibney's claims for loss ( id. at ¶¶ 12–14); and (3) State Farm waived its right to void the Policy and was estopped from asserting a lack of coverage ( id. at ¶¶ 15–22). State Farm denies each of these claims.
PNC, Intervenor Plaintiff, claims that as the owner and servicer of the mortgage executed by Gibney on the Property, it is a joint loss payee on the Policy under the “Mortgage Clause” of the Policy. (PNC Compl. ¶ 1, 4; see Policy § 10(a).) As of the date of this Opinion and Order, Mark Gibney is in default on his obligations under the note and mortgage executed in favor of PNC's predecessor in interest, National City Bank. (PNC Compl. ¶ 7.) On March 26, 2012, PNC, as the loan servicing agent, filed a foreclosure action in the Franklin County Court of Common Pleas (the “Foreclosure Action,” Case No. 10–CVE–12–18569, see Dkt. 46–4). The Foreclosure Action has been stayed pending the outcome of this action. (PNC Compl. ¶ 9.) Even though State Farm voided the Policy effective July 3, 2009, it nevertheless paid PNC Bank $190,402.66 under the Mortgage Clause for loss resulting from the July 3 Fire.
On February 8, 2012, PNC moved to intervene in this action on the Plaintiffs' side, as an interested party, under Fed.R.Civ.P. 24. (Dkt. 35.) On February 29, 2012, prior to PNC intervening, State Farm moved for summary judgment with respect to Plaintiffs' claims. On March 6, 2012, Magistrate Judge Abel granted PNC's request for intervention, as it holds a note and mortgage on Plaintiff's property, and is a designated loss payee on the insurance policy at issue in this case. (Dkt. 41.) PNC filed an Intervening Complaint on March 26, 2012. (Dkt. 46.) In it, PNC alleges it has...
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...rights letter may, under certain circumstances, support a claim for bad faith or estoppel. See, e.g., Gibney v. State Farm Fire & Cas. Co., 897 F. Supp.2d 618, 630-31 (S.D. Ohio 2012) (under Ohio law, insurer may be estopped from denying coverage if it makes clear misrepresentation as to co......