Greer v. Owners Ins. Co.

• Decision Date: 06 June 2006
• Docket Number: No. 3:05 CV 232 RV/MD.,3:05 CV 232 RV/MD.
• Citation: 434 F.Supp.2d 1267
• Parties: Donald T. GREER and, Elizabeth P. Greer, Plaintiffs, v. OWNERS INSURANCE COMPANY and Fidelity National Property and Casualty Insurance Company, Defendants.
• Court: U.S. District Court — Northern District of Florida

434 F.Supp.2d 1267

Donald T. GREER and, Elizabeth P. Greer, Plaintiffs, v. OWNERS INSURANCE COMPANY and Fidelity National Property and Casualty Insurance Company, Defendants.

No. 3:05 CV 232 RV/MD.

United States District Court, N.D. Florida, Pensacola Division.

June 6, 2006.

COPYRIGHT MATERIAL OMITTED

WHF Wiltshire, Harrell Wiltshire, P.A., Pensacola, FL, for Plaintiffs.

John Auld Unzicker, Jr., Michelle Lynn Hendrix, Vernis & Bowling of Northwest Florida, P.A., Pensacola, FL, Gerald J. Nielsen, William T. Treas, Nielsen Law Firm, Metairie, LA, for Defendants.

ORDER

VINSON, Senior District Judge.

In this insurance dispute, Plaintiffs Donald T. Greer and Elizabeth P. Greer seek to recover the full face amount of their property insurance policies issued by Defendant Owners Insurance Company and Defendant Fidelity National Property and Casualty Insurance Company. Pending is the motion for judgment on the pleadings submitted by Defendant Fidelity National Property and Casualty Insurance Company. (Doc. 37). Also pending are the motions for summary judgment submitted by the plaintiffs and the defendants. (Does. 45, 63, and 69). A hearing concerning the parties' respective summary judgment motions was held on March 9, 2006. One day after this hearing, on March 10, 2006, the plaintiffs submitted a notice of filing with this Court, attaching evidence in opposition to the motion for summary judgment filed by Defendant Fidelity National Property and Casualty Insurance Company. (Doc. 137). Defendant Fidelity National Property and Casualty Insurance Company has filed a motion to strike this evidence. (Doc. 141). Unless otherwise noted, the following facts appear to be undisputed in the record.

I. FACTUAL BACKGROUND

Plaintiffs Donald T. Greer and Elizabeth P. Greer own a home located approximately 900 feet from Star Lake, a tidal inlet connected to Escambia Bay, in Pensacola, Florida. The plaintiffs maintained two insurance policies covering their residential property. Defendant Owners Insurance Company ("Owners") provided the plaintiffs a homeowner's insurance policy covering fire and wind damage, among other perils, and Defendant Fidelity National Property and Casualty Company ("Fidelity") provided a policy covering the plaintiffs for damage caused by flood.

Owners' windstorm insurance policy provides the following coverage limits: (a) $202,000 for the plaintiffs' residential dwelling, (b) $20,200 for "other structures," defined as structures which are not attached to the dwelling; (c) $141,400 for personal property; and (d) $40,400 for additional living expenses, including any reasonable increase in living expenses necessary to maintain the plaintiffs' normal standard of living while they live elsewhere, in the event that a covered loss makes their home uninhabitable.

Owners' policy covered direct loss to the plaintiffs' property unless the loss came within one of the exclusions set forth in the policy. One such exclusion provides:

"We do not cover loss to covered property caused directly or indirectly by any of the following, whether or not any other cause or event contributes concurrently or in any sequence to the loss:

* * * * * *

"Water damage, meaning:

(a) flood, surface water, waves, tidal water or overflow of a body of water.

We do not cover spray from any of these, whether or not driven by the wind."

The terms of Owners' policy with respect to "personal property" includes coverage for the following peril:

"Windstorm or Hail. This peril does not include loss:

(a) to covered property in any building, caused by rain, snow, sand, sleet or dust unless the building is first damaged by the direct force of wind or hail, creating an opening through which the rain, snow, sleet or dust enters the building;"

Fidelity issued the plaintiffs a standard flood insurance policy ("SFIP"), which coverage is provided by the federal government under the National Flood Insurance Program. In accordance with the terms of the SFIP, the plaintiffs' home was insured for $221,400, with a $500 deductible, and the contents of the plaintiffs' home was insured for $100,000, with a $500 deductible.

As a result of Hurricane Ivan, which hit the Pensacola area on or about September 15, 2004, the plaintiffs' home suffered damage. Mr. Greer went to inspect his home two days after the storm, and he testified that the walls of the home still appeared to be intact, the doors and the windows were not broken, and the roof was still attached. However, the interior of his home was in shambles due to substantial flooding, and it appeared that some wind-driven rain had entered the house through ridge vents and exhaust fan openings. Further, the opening to the attic was ajar. On the outside of the plaintiffs' home there was significant debris strewn about, and a tree had fallen on the plaintiffs' roof.

Greer immediately called his insurance agent, who in turn contacted representatives from Fidelity and Owners. Fidelity notified Colonial Claims Corporation, an independent adjusting company, to assist the plaintiffs in making a claim under their flood insurance policy. Colonial's adjuster, David Edwards, examined the property approximately two weeks after the hurricane. During the storm, flood water invaded the interior of the house, with the high water line reaching at least 21 inches up the interior walls. Following Edwards' inspection, Greer e-mailed Edwards a spread sheet, listing the personal property that was damaged. However, Greer states that he had difficulty getting Edwards to correspond with him or return his phone calls.¹

A FEMA adjuster estimated the cost of repairs due to flooding to be $27,238.00, while an adjuster from the Small Business Administration ("SBA") placed the flooding damage cost at $127,511.70.² Fidelity's adjuster eventually estimated that the cost to repair damage due to flooding would be near the middle of these two ranges— $71,956.90. Accordingly, Fidelity issued payments to the plaintiffs in the amount of $66,522.00 and $4,934.20, the recoverable depreciation, for a total payment of $71,456.90 (after the $500 deductible). Fidelity did not make any payment to the plaintiffs for the personal property damages. During the hearing in this case, Fidelity explained that it did not issue a payment for the plaintiffs' personal property because it never received a claim or itemized list from the plaintiffs. In fact, a memo from Fidelity's adjuster, dated January 27, 2005, indicates, "contents inventory has not been submitted." However, it appears from the top of a copy of Greer's e-mail (late-filed and challenged by Fidelity) that the list was in fact sent to Fidelity's adjuster.

Owners also sent an adjuster to the plaintiffs' property to inspect the damage. Owners' adjuster, James Magouirk, determined that the extent of damage caused by wind, as opposed to flooding, was confined to the roof, the ceiling, and some attic insulation. Owners' expert, Daniel T. Sheehan, a professional engineer, agreed with Magouirk's assessment. According to Sheehan, who also inspected the plaintiffs' home, the interior of the home was not subject to damage caused by high winds because the doors and windows had remained intact. The wind blew off some of the roofing shingles, but the physical evidence and the pictures of the roof reveal that, even though the roof lost some shingles during the hurricane, there were no sections where the wood roof deck was exposed. Thus, the roof was still providing a substantially watertight surface throughout the hurricane. Nevertheless, some water did get into the attic, resulting in relatively minor water damage to the attic insulation and to the sheetrock ceilings in various rooms of the home.³ Sheehan determined that it would be necessary to replace the roof. Thus, according to Sheehan and Owners' adjuster, the repairs due to damage caused by wind included replacing the roof shingles, performing some minor ceiling repairs, removing and replacing some of the attic insulation, and some inside painting. However, Sheehan agreed with Magouirk that the scope of the damage caused by the wind was limited to the roof, attic, and ceilings.

Sheehan explained that the damage caused by flood and the damage caused by wind are easily distinguishable in the plaintiffs' house because of the presence of a high water mark inside the house, and due to the fact that during the hurricane none of the walls, roof, windows, or exterior doors were breached by the wind. Magouirk's cost estimate, which Sheehan agreed was accurate, estimated the total cost of repairs to the dwelling due to wind damage to be $15,149.92. Further, Magouirk also estimated that Owners was liable for $980 under the "Other Structures" coverage, and $250.00 under the "Personal Property" coverage of the insurance policy. Thus, Magouirk determined that Owners total liability was $16,379.92. Owners subsequently paid to the plaintiffs $16,879.92, which represents the $16,379.92, plus a $1,000 payment for the policy limit for sewage back-up, minus the $500 deductible.⁴

Shortly after the storm, the plaintiffs hired Ed Rankin, a licensed residential contractor, to inspect their home and determine the total cost of repairs. According to Greer, Rankin was not supposed to differentiate between damage caused by wind and that caused by flood. Rankin ultimately estimated that the total cost of repairs to the plaintiffs' home, caused by the combined damage due to flooding and wind-storm, would be $182,570.61. On Rankin's detailed cost repair estimate, there is a section titled "Wind Storm Repairs," which lists the cost of repairing items related to the roof, ceiling, and attic insulation. The total cost of those repairs, according to Rankin's report, are approximately $31,000, plus markup and tax. However, Rankin explained that he only prepared the repair cost estimate in that format because he had reviewed the cost repair estimates of the insurance companies,...