Hall v. S. River Restoration, Inc., Civil Action No. 1:16–2239 (CKK)

• Decision Date: 11 September 2017
• Docket Number: Civil Action No. 1:16–2239 (CKK)
• Parties: Christopher HALL, et al., Plaintiffs v. SOUTH RIVER RESTORATION, INC., et al., Defendants
• Court: U.S. District Court — District of Columbia

270 F.Supp.3d 117

Christopher HALL, et al., Plaintiffs

v.SOUTH RIVER RESTORATION, INC., et al., Defendants

Civil Action No. 1:16–2239 (CKK)

United States District Court, District of Columbia.

Filed September 11, 2017

Erin L. Webb, Tayman Lane Chaverri, LLP, Washington, DC, for Plaintiffs.

Margaret Fonshell Ward, Ward & Herzog, LLC, Baltimore, MD, James Douglas Cuthbertson, Alexandria, VA, James H. Cole, Jennie Philip, Katharine E. Mooney, Marshall, Dennehey, Warner, Coleman & Goggin PC, Philadelphia, PA, for Defendants.

MEMORANDUM OPINION

(September 11, 2017)

COLLEEN KOLLAR–KOTELLY, United States District Judge

Plaintiffs Christopher Hall, Piper Hall, and their child B.H. bring this lawsuit against Defendants South River Restoration, Inc. ("South River") and USAA Casualty Insurance Company ("USAA") for their respective roles in the ill-fated attempt to repair Plaintiffs' Washington D.C. home after it was damaged during Superstorm Sandy. Pending before the Court is USAA's [10] Motion to Dismiss. Upon consideration of the pleadings,¹ the relevant legal authorities, and the record as a whole, the Court GRANTS–IN–PART and DENIES–IN–PART Defendant's motion. The Court finds that Plaintiffs' breach of contract and Consumer Protection Procedures Act ("CPPA") claims are plausible and should not be dismissed at this early stage in the case. However, Plaintiffs' negligence-based claims will be dismissed without prejudice because Plaintiffs have not pled that Defendant owed them any duty that is meaningfully distinct and independent from the duties Defendant owed Plaintiffs pursuant to their homeowners' insurance policy.

I. BACKGROUND

Plaintiffs' home was seriously damaged during Superstorm Sandy. Compl., ECF No. 1, at ¶ 12. Plaintiffs allege that when they filed a claim with USAA, their home insurance provider, USAA accepted coverage but required that Plaintiffs use one of USAA's preferred contractors, South River, to do the repair work. Id. ¶¶ 3, 26, 297. Plaintiffs allege that instead of repairing their home, South River spent the next four years causing their home further damage through their negligent work. Id. ¶¶ 3–4. Plaintiffs allegedly complained about South River's work to USAA on numerous occasions, and asked USAA to allow them to use another contractor. See, e.g. , id. ¶¶ 32, 44, 55, 62, 82, 93, 147. USAA repeatedly refused. Id. Eventually, USAA issued Plaintiffs a check that it claimed satisfied its obligation to pay for the storm damage to Plaintiffs' home, and informed Plaintiffs that it would no longer be involved with their claim. Id. ¶¶ 186–88. Plaintiffs filed this lawsuit soon thereafter. Plaintiffs assert causes of action against USAA for breach of contract, violation of the CPPA, negligence, negligent infliction of emotional distress and negligent misrepresentation. Id. ¶¶ 292–348. Defendant USAA has moved to dismiss all of the claims against it.

II. LEGAL STANDARD

Pursuant to Federal Rule 12(b)(6), a party may move to dismiss a complaint on the grounds that it "fail[s] to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). "[A] complaint [does not] suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 557, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). Rather, a complaint must contain sufficient factual allegations that, if accepted as true, "state a claim to relief that is plausible on its face." Twombly , 550 U.S. at 570, 127 S.Ct. 1955. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. "In evaluating a motion to dismiss, the Court must accept the factual allegations in the complaint as true and draw all reasonable inferences in favor of plaintiff." Nat'l Postal Prof'l Nurses v.U.S. Postal Serv. , 461 F.Supp.2d 24, 27 (D.D.C. 2006).

III. DISCUSSION

The Court will grant Defendant's motion in part and deny it in part. The Court will not dismiss Plaintiffs' breach of contract or CPPA claims against USAA because these claims have been adequately pled, and Defendant's arguments that they are untimely are not well-taken at this early stage in the litigation. The Court does, however, agree with Defendant that Plaintiffs have not adequately pled their negligence-based claims because Plaintiffs have not identified a tort duty Defendant owed Plaintiffs that is independent of the parties' insurance contract. The Court will accordingly dismiss the negligence-based claims without prejudice.

A. Plaintiffs' Breach of Contract Claim

Defendant argues that Plaintiffs' breach of contract claim should be dismissed for two reasons. First, Defendant argues that Plaintiffs have not pled "the specific contractual duty they are claiming has been breached." Def.'s Mem. at 5. The Court disagrees. Plaintiffs allege that under their homeowners' insurance policy, Defendant had a duty "to pay for ‘sudden and accidental direct, physical loss’ to the Halls' residence." Compl. ¶ 293. The complaint alleges that USAA breached this duty to pay for the damage to Plaintiffs' home when USAA conditioned payment on the use of a particular contractor who, instead of repairing Plaintiffs' home for the amount of money provided by USAA, only damaged Plaintiffs' home further. Id. ¶¶ 3, 4, 15–19, 25–26, 292–308.² Development of the record may eventually reveal that this duty was not in fact breached, but at the pleading stage the Court is satisfied that Plaintiffs have plausibly pled their contract claim. Accepting all factual allegations as true and drawing all reasonable inferences for Plaintiffs, the complaint plausibly alleges that the Defendant's actions, viewed in their entirety, were insufficient to satisfy its obligation under the contract to pay to repair the damage to Plaintiffs' home.

Second, Defendant argues that Plaintiffs' breach of contract claim should be dismissed because Plaintiffs' insurance policy contained a suit limitation provision that states that "[n]o action can be brought against us unless you have ... [s]tarted the action within two years after the date of the loss." Def.'s Mem. at 6, Ex. B at 23. Again, the Court disagrees. Defendant is correct that "[c]ontractual provisions limiting the period within which insurance policy-holders may validly initiate a lawsuit are generally enforceable under District of Columbia law." Martinez v. Hartford Cas. Ins. Co. , 429 F.Supp.2d 52, 56 (D.D.C. 2006). However, the Court is not convinced that Plaintiffs' contract claim should be dismissed at the pleading stage on the basis of this provision given the particular facts in this case.

As an initial matter, the parties in this case dispute the meaning of the word "loss" in the suit limitation provision. Defendant argues that Plaintiffs' "loss" occurred in 2012 when their home was damaged by Superstorm Sandy. Def.'s Mem. at 6–7. Plaintiffs disagree, arguing that "[i]n this situation, ‘loss’ as that term is used in the Policy more correctly refers to the ultimate expense the Halls face to rectify the damage that South River and USAA caused to their home, and the related consequential damages described in the Complaint." Pls.' Opp'n at 9.

Although the Court notes that Plaintiffs' interpretation appears to be at least a reasonable one under the circumstances, it need not resolve the parties' dispute over the meaning of "loss" at this time. Regardless of which interpretation is correct, dismissal on the pleadings on the basis of this limitation provision would be inappropriate. On the one hand, if the Court were to accept Plaintiffs' interpretation of the term "loss," Plaintiffs' complaint would clearly be timely because their "loss" did not occur until July 2016, when USAA allegedly informed Plaintiffs that it would not pay the full amount required to repair their home. Plaintiffs' lawsuit was filed only months later.

On the other hand, even if the Court were to accept Defendants' view that the term "loss" means the date of the original damage to Plaintiffs' home, the complaint still should not be dismissed at the pleading stage on the basis of the suit limitation provision because Plaintiffs may have successful waiver or estoppel arguments. "A defendant is estopped from raising [a limitations period] as a defense if that defendant has done anything that would tend to lull the plaintiff into inaction and thereby permit the [limitations period] to run against him." Martinez , 429 F.Supp.2d at 57 (quoting Partnership Placements, Inc. v. Landmark Ins. Co. , 722 A.2d 837, 842 (D.C. 1998) ). Additionally, an insurance company may waive a contractual limitations period if it "has conceded liability and some discussion of a settlement offer has occurred." Id. at 59 (quoting Bailey v. Greenberg , 516 A.2d 934, 938 (D.C. 1986) ).³

Plaintiffs argue that these doctrines apply here, and their arguments are supported by the allegations in the complaint and are at least plausible. Plaintiff argues that Defendant has either waived, or is estopped from relying on, the limitations provision because it accepted coverage of the damage to Plaintiffs' home in 2012, and then "spent four years telling the Halls that it would restore the Halls' home to the state it was in before it was damaged, which is what USAA promised to do under the Policy." Pls.' Opp'n at 7. Plaintiffs also argue that a representative of USAA made certain representations to the Plaintiffs about not enforcing a three year limitation period on a warranty of South River's work. Id. at 7–8.⁴ The Court will not make a final ruling on the merits of these arguments at this time. It merely holds that the fact that Plaintiffs have plausible waiver or estoppel arguments renders dismissal of their breach of contract claim on the basis of the suit...