Greene v. Stevens Gas Service, 2004 VT 67 (VT 7/30/2004), 2003-221.

Decision Date30 July 2004
Docket NumberNo. 2003-221.,2003-221.
Citation2004 VT 67
CourtVermont Supreme Court
PartiesGary Greene v. Stevens Gas Service and CI Co-operative Fire Insurance

On Appeal from Chittenden Superior Court, Dennis R. Pearson, J.

Thomas C. Nuovo of Bauer, Anderson & Gravel, Burlington, for Plaintiff-Appellant.

Richard P. Foote of Conley & Foote, Middlebury, for Defendant-Appellee.

William H. Sorrell, Attorney General, and David B. Borsykowsky, Assistant Attorney General, Montpelier, for Amicus Curiae State of Vermont.

PRESENT: Amestoy, C.J., Dooley, Johnson, Skoglund and Reiber, JJ.

DOOLEY, J.

¶ 1. Plaintiff, Gary Greene, appeals a grant of summary judgment dismissing claims against his insurer, Co-operative Insurance Company (Co-op), for breach of contract, breach of implied covenant of good faith and fair dealing, and also for consumer fraud under Vermont's Consumer Fraud Act, 9 V.S.A. §§ 2451-2480g. The Vermont Attorney General filed a brief amicus curiae in support of plaintiff, arguing that the 1985 amendments to the Consumer Fraud Act have broadened the act's scope such that it now applies to insurance, and Wilder v. Aetna Life & Cas. Ins. Co., 140 Vt. 16, 433 A.2d 309 (1981) is no longer controlling law. Without reaching whether the consumer fraud law now extends to insurance, we affirm.

¶ 2. The facts before us are in the summary judgment record and plaintiff's complaint. In September 1995, plaintiff obtained homeowner's insurance from defendant through its local agent, Williston Insurance Agency. The policy covered a log home plaintiff intended to build at his site in Underhill, Vermont. Construction began that fall, but was not complete by winter. In order to ensure that construction could continue through the winter, plaintiff hired Stevens Gas Service1 to provide propane space heaters at the building site.

¶ 3. According to plaintiff's complaint, on December 7 or 8, 1995, an employee of Stevens Gas Service left the heaters on at full power for over 12 hours, causing the interior of the house to reach a temperature of approximately 192_F. As a result, the logs split, cracked, and twisted causing the walls to become uneven, twisted and bowed. Also, the superheating caused an ice build-up on the exterior of the house that ruined windows and other components of the building. Shortly thereafter, plaintiff filed a claim on the homeowner's policy. On December 23, defendant sent two builders, both of whom had some experience with solid wood wall buildings, to investigate the damage. The investigators reported that the excessive heat had accelerated the natural process of the wood beams "checking," that is, cracking that normally occurs through drying of the wood over time. In a letter dated January 8, 1996, a claims representative for defendant notified plaintiff that defendant had denied the claim because it "fails to see any monetary loss as the cracks to the center of the logs are a natural process occurring over several years . . . [and the] excessive heat within the home sped up the natural drying and shrinking process of the logs." It concluded that the inspection found "no signs or evidence indicating any structural damage to your log home due to the accelerated process which occurred."

¶ 4. Over the next six months, plaintiff obtained at least two repair estimates. However, he never provided these estimates to defendant or notified the company that he disputed its decision not to pay the claim.2 The next exchange between the parties did not occur until nearly a year after the heating incident, on December 5, 1996, when plaintiff's roommate called defendant's claims representative to request information from the company's file. The representative mailed a letter to plaintiff the following day providing the requested information. It reiterated that Co-op had found no monetary loss, but also stated that plaintiff's claim would not be covered in any case because the policy's Errors, Omissions, and Defects exclusion applied.3

¶ 5. In January 1997, plaintiff obtained two more repair estimates. Two months later, on March 25, 1997, plaintiff's attorney left a message with the claims representative, who returned the call the next day. The attorney requested information concerning a possible suit by plaintiff against Stevens Gas Service. According to the facts available in the record, there was no further contact between plaintiff or his attorney and defendant until December 3, 2001, when the present suit was filed.

¶ 6. Plaintiff's complaint alleged three counts: (1) violation by defendant of the Consumer Fraud Act; (2) negligence by Stevens Gas Service; and (3) breach of contract and breach of implied covenants of good faith and fair dealing by defendant and Stevens Gas Service. Because Stevens Gas Service is not a party to this appeal, we do not consider the second issue here.

¶ 7. In February 2002, defendant filed a motion to dismiss counts one and three — that is, all counts against it — because (1) all the claims against it were barred by the suit time limitation provision in the insurance contract; and (2) the Consumer Fraud Act violation claim could not be sustained because the act does not apply to insurance transactions. In response to plaintiff's answer that the motion to dismiss was based on facts beyond the complaint, defendant converted it to a motion for summary judgment on the same grounds, attaching an affidavit of the claims representative and a statement of undisputed material facts consistent with our recitation of the facts above. Plaintiff filed his affidavit, a statement of disputed facts and a memorandum arguing that the limitation period in the insurance contract could not be enforced because defendant failed to give notice of it pursuant to a state insurance regulation, that defendant's denial of coverage was wrong and that the complaint stated a valid consumer fraud claim.

¶ 8. Initially, the court granted summary judgment with respect to the consumer fraud claim, on the basis that the act did not cover insurance transactions, but denied defendant's motion with respect to plaintiff's claim that defendant breached the insurance contract and violated the covenants of good faith and fair dealing because there was a question of fact relating to whether defendant should have notified plaintiff of the imminent expiration of the notice period. The court refused to reconsider its dismissal of the consumer fraud claim, adding as an additional ground that the undisputed facts do not show consumer fraud as alleged in plaintiff's complaint. It did reconsider its denial of the summary judgment motion with respect to plaintiff's claim in the complaint that defendant breached the insurance contract and violated the covenants of good faith and fair dealing, dismissing that count because the contract time limitation applied and had expired before the complaint was filed and defendant had no obligation to inform plaintiff of the imminent expiration of the limitation period. Because no claims remained against defendant, the superior court awarded it final judgment under V.R.C.P. 54(b) to allow this appeal to go forward. Plaintiff now appeals the trial court's dismissal of his claims against defendant.

¶ 9. We review a grant of summary judgment using the same standard of review applied by the trial court. Al Baraka Bancorp (Chicago), Inc. v. Hilweh, 163 Vt. 148, 153, 656 A.2d 197, 200-01 (1994). "Summary judgment is appropriate only where the moving party establishes that there is no genuine issue of material fact and that the party is entitled to judgment as a matter of law." Samplid Enters., Inc. v. First Vt. Bank, 165 Vt. 22, 25, 676 A.2d 774, 786 (1996); V.R.C.P. 56(c)(3). Although the nonmoving party is entitled to the benefit of all reasonable doubts and inferences, City of Burlington v. Nat'l Union Fire Ins. Co., 163 Vt. 124, 127, 655 A.2d 719, 721 (1994), according to V.R.C.P. 56(e),

[w]hen a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.

¶ 10. We begin with the appeal of plaintiff's consumer fraud complaint. As stated above, the superior court dismissed this claim because it held both that the Consumer Fraud Act did not apply to insurance transactions and that plaintiff failed to demonstrate a consumer fraud case even if the act applied. The court's first ground is based on our decision in Wilder, 140 Vt. 16, 433 A.2d 309. Plaintiff and amicus curiae, the Vermont Attorney General, argue that Wilder is no longer good law after the 1985 amendments to the Consumer Fraud Act. We do not reach this argument. We conclude, instead, that the court's second ground was correct. Thus, we do not decide whether the Consumer Fraud Act applied, but hold that even if the act applied, the superior court properly granted summary judgment for defendant on the consumer fraud count.

¶ 11. We note that the court's analysis of this issue was made difficult by plaintiff's shifting positions. Plaintiff's complaint stated that plaintiff "is a consumer who contracted for goods and services in reliance upon false or fraudulent representations or practices prohibited by the Consumer Fraud Act and sustained damages as a result of that fraud." Exactly what the "false and fraudulent" representations were is not specified. In response to defendant's motion for summary judgment, plaintiff indicated that one of the material facts in dispute was that plaintiff believed that his insurance policy would cover damages caused by contractors. His affidavit stated he was not informed that the policy contained an exclusion for...

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