Hampton v. Allstate Ins. Co.

• Decision Date: 06 May 1999
• Docket Number: No. 1-98-0077.,1-98-0077.
• Citation: 48 F.Supp.2d 739
• Parties: John Robert HAMPTON, et ux. v. ALLSTATE INSURANCE COMPANY.
• Court: U.S. District Court — Middle District of Tennessee

48 F.Supp.2d 739

John Robert HAMPTON, et ux. v. ALLSTATE INSURANCE COMPANY.

No. 1-98-0077.

United States District Court, M.D. Tennessee, Columbia Division.

May 6, 1999.

Randy Hillhouse, Hillhouse & Huddleston, Lawrenceburg, TN, for plaintiffs.

Russell E. Reviere, Rainey, Kizer, Butler, Reviere & Bell, Jackson, TN, for defendant.

MEMORANDUM

HIGGINS, District Judge.

The plaintiffs, John Robert Hampton and Pamela Renee Hampton, Tennessee citizens, originally filed this action in the Circuit Court of Wayne County, Tennessee, against the defendant, Allstate Insurance Company, an Illinois corporation with its principal place of business in Northbrook, Illinois. The plaintiffs' claims arise out of their insurance policy with Allstate. They allege that Allstate denied their insurance claims for damages to their house and the contents that were destroyed by fire. The plaintiffs' claims are for the value of their dwelling and its contents, as well as their additional living expenses, as a result of the fire, in the total amount of $113,900.00. In addition, the plaintiffs seek the state statutory penalty under the bad faith insurance practices statute, Tenn.Code Ann. § 56-7-105.

Allstate removed the action to this Court, citing the amount in controversy and the diversity of citizenship of the parties as vesting this Court with jurisdiction under 28 U.S.C. § 1332, the federal diversity statute.

Pending before the Court is the defendant's motion (filed December 7, 1998; Docket Entry No. 6) for partial summary judgment contending that the plaintiffs did not make a formal demand, as required by Tennessee law, to assert a claim under Tenn.Code Ann. § 57-6-105 and, therefore, the Court should dismiss this claim. In response, the plaintiffs submitted the affidavit of Pamela Renee Hampton identifying the repeated demands that she made upon Allstate officials after Allstate denied their insurance claims, including a demand for the bad faith penalty.

Upon consideration of Tennessee law and in light of the rule that with a motion for summary judgment the facts are to be construed in a light most favorable to the plaintiffs, the Court concludes that there is sufficient evidence to support a judgment on the plaintiffs' bad faith penalty claim. Allstate investigated the plaintiffs' claims and concluded that the plaintiffs intentionally set or caused the setting of the fire at their residence and willfully misrepresented the value of their loss. The plaintiffs assert that they made a formal demand upon Allstate when they made repeated requests for payment of their claims and gave repeated notices of their intent to assert a claim for the bad faith penalty for Allstate's earlier and continued denial of their claims.

Given the passage of sixty days from the date of the plaintiffs' alleged demands for payment of their claims, including a claim for bad faith denial, the Court concludes that there are material factual disputes about whether such a demand was made.

Accordingly, the defendant's motion (filed December 7, 1998; Docket Entry No. 6) for partial summary judgment will be denied.

I.

According to Pamela Hampton's affidavit (filed January 28, 1999; Docket Entry No. 12), a fire destroyed the Hamptons' home and contents, and she and her husband submitted claim forms to Allstate, their insurer, to pay the damages covered by the insurance policy, but Allstate refused to pay. Pamela Hampton received a letter, dated February 17, 1998, from Rand Smith of Allstate who stated that after its investigation, Allstate concluded that the Hamptons intentionally set or caused to be set the fire at their residence and that they made misrepresentations as to the amount and extent of the destroyed personal property. Accordingly, Allstate denied the Hamptons' claims in their entirety.

After receipt of this letter, Pamela Hampton spoke with Brad Hawkins, a special investigations adjuster with Allstate, by telephone and demanded that Allstate pay her and her husband's claims and informed Mr. Hawkins that if Allstate did not do so, she would file a legal action for emotional distress, slander, bad faith and any other claim permissible by law. Pamela Hampton insists that she specifically informed Mr. Hawkins that she would make a claim for bad faith. On March 11, 1998, Pamela Hampton called Colleen Treanor, an Allstate representative in Chicago, and made another demand for the payment of their claims and again asserted that a legal claim for "bad faith damages" would be made, if the claims were not paid. Thereafter, Pamela Hampton spoke with John Alexander, an Allstate supervisor, and reiterated her intent to sue for all remedies under law.

Ms. Hampton repeated her demands to Brian Walker, Allstate's representative for Tennessee and Alabama. On March 11, 1998, Pamela Hampton also complained to Ella Brown in Allstate's regional office that if their insurance claims were not paid within 60 days, she would sue Allstate.

Allstate does not challenge any of the specific factual assertions in Pamela Hampton's affidavit. According to Mr. Hawkins, Allstate did not receive "any demand for payment" between February 17, 1998, and May 12, 1998. Brad Hawkins affidavit (filed February 7, 1998; Docket Entry No. 9). On May 12, 1998, the Hamptons filed their action in the Circuit Court for Wayne County.

II.

In Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), the United States Supreme Court explained the nature of a motion for summary judgment:

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.

As to materiality, the substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.

Liberty Lobby, 477 U.S. at 247-48, 106 S.Ct. 2505 (emphasis in the original and added in part). Earlier the Supreme Court defined a material fact for Rule 56 purposes as "[w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no `genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citations omitted).

There is a certain framework in considering a summary judgment motion as to the required showing of the respective parties.

Of course, a party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any," which it believes demonstrate the absence of a genuine issue of material fact.... [W]e find no express or implied requirement in Rule 56 that the moving party support its motion with affidavits or other similar materials negating the opponent's claim.

Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

As the United States Court of Appeals for the Sixth Circuit explained, "[t]he moving party bears the burden of satisfying Rule 56(c) standards." Martin v. Kelley, 803 F.2d 236, 239, n. 4 (6th Cir.1986). The moving party's burden is to show "`clearly and convincingly' ... the absence of any genuine issues of material fact." Sims v. Memphis Processors, Inc., 926 F.2d 524, 526 (6th Cir.1991) (citation omitted). "So long as the movant has met its initial burden of `demonstrat[ing] the absence of a genuine issue of material fact,' the non-moving party then `must set forth the specific facts showing that there is a genuine issue for trial.'" Emmons v. McLaughlin, 874 F.2d 351, 353 (6th Cir.1989) (quoting Celotex and Rule 56(e)).

Once the moving party meets its initial burden, the Court of Appeals warned that "[t]he respondent must address more than a scintilla of evidence to overcome the motions [and] ... must `present affirmative evidence in order to defeat a properly supported motion for summary judgment.'" Street v. J.C. Bradford & Co., 886 F.2d 1472 (6th Cir.1989). Moreover, the Court of Appeals explained that

The respondent must "do more than simply show that there is some metaphysical doubt as to the material facts." Further, "[w]here the record taken as a whole could not lead a rational trier of fact to find" for the respondent, the motion should be granted. The trial court has at least some discretion to determine whether the respondent's claim is "implausible."

Street, 886 F.2d at 1480. See also Hutt v. Gibson Fiber Glass Prod., Inc., 914 F.2d 790, 792 (6th Cir.1990) (citation omitted) ("A court deciding a motion for summary judgment must determine `whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" quoting Liberty Lobby.)

If both parties make their respective showings, the Court then determines if the material factual dispute is genuine, applying the governing law.

More important for present purposes, summary judgment will not lie if the dispute about a material fact is "genuine," that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.

....

Progressing to the specific issue in this case, we are convinced that the...