Hampton v. First Protective Ins.
| Decision Date | 13 May 2020 |
| Docket Number | No. 9:17-cv-03374-DCN,9:17-cv-03374-DCN |
| Citation | 461 F.Supp.3d 265 |
| Court | U.S. District Court — District of South Carolina |
| Parties | Phillip Derrick HAMPTON and Travis Hampton, Plaintiffs, v. FIRST PROTECTIVE INSURANCE d/b/a Frontline Homeowners Insurance, and Selective Insurance Company of the Southeast, Defendants. |
Brett Lamb Stevens, Stevens Law LLC, Columbia, SC, George J. Kefalos, George J. Kefalos Law Office, Charleston, SC, for Plaintiffs.
David Jay Parrish, Nexsen Pruet, Charleston, SC, John J. Murphy, III, Pro Hac Vice, Stradley Ronon Stevens and Young LLP, Cherry Hill, NJ, for Defendants.
This matter is before the court on defendant Selective Insurance Company of the Southeast's ("Selective") motion for partial summary judgment, ECF No. 43, and plaintiffs Phillip Derrick Hampton and Travis Hampton's (collectively, "plaintiffs") motion for summary judgment, ECF No. 45. For the reasons set forth below, the court grants in part and denies in part the motions.
This insurance coverage dispute arises out of the damage Hurricane Matthew wrought throughout the Southeastern United States in October 2016. The following facts are taken from the parties’ joint stipulation of facts and are thus undisputed. See ECF No. 44. Plaintiffs are the owners of a beachfront property located at 130 Harbor Drive North on St. Helena Island, South Carolina. At the time Hurricane Matthew made landfall, plaintiffs maintained a residence on the property that was elevated on pilings ("the Residence"). The Residence consisted of an elevated first floor, an elevated second floor, and an open-air ground floor, which included a carport resting on a concrete slab, an enclosed storage area, and a staircase. The property also included a boardwalk that led from the Residence to the beach.
Plaintiffs purchased a Standard Flood Insurance Policy ("the Policy") through Selective for the period of January 22, 2016 through January 22, 2017. In their complaint, plaintiffs allege that on October 8, 2016, high winds, rain, and storm surge from Hurricane Matthew caused substantial damage to the Residence. On October 11, 2016, plaintiffs notified Selective that the Residence had suffered flood-related damage. Upon Selective's request, on October 20, 2016, Christopher Felder of CNC Resource ("CNC"), an independent adjusting firm, inspected the Residence and submitted a report to Selective estimating that the damage covered under the Policy would cost $28,681.32 to repair (the "CNC Report"). After application of the $5,000 deductible due upon a claim of building damage under the Policy, the CNC report recommended a $23,681.32 payout.
Plaintiffs hired Principal Claims Group ("PCG"), a public adjusting firm, to assess the damage of the Residence, and on November 2, 2016, PCG published a report (the "First PCG Report"), which estimated damages of $738,707.07 based upon PCG's finding that the Residence was a total loss. On February 2, 2017, plaintiffs submitted a proof of loss to Selective claiming building damage in the amount of $738,707.07 based on the Frist PCG Report. On March 10, 2017, PCG prepared a second report for plaintiffs (the "Second PCG Report"). Where the First PCG Report estimated the total damage to the Residence, the Second PCG Report honed in on flood-related damage to the dwelling area of the Residence, i.e., damage which PCG believed was covered under the Policy. The Second PCG Report estimated a total of $47,139.72 of flood-related damage to the Residence, not including personal property. The Second PCG Report did not apply the $5,000 deductible due under the Policy upon a claim of building damage, which would have reduced its estimate to $42,139.72.
Selective accepted the findings of the CNC Report and, on March 16, 2017, issued payment to plaintiffs in the amount of $23,681.32. Selective denied plaintiffs’ remaining claims. On April 18, 2017, Keith Shaffer, plaintiffs’ contractor, prepared an additional report on behalf of plaintiffs, which opined that the Second PCG Report failed to take into account additional needed repairs to the Residence that would cost an additional $94,547.00 (the "Shaffer Report"). After Hurricane Matthew, the South Carolina Department of Health and Environmental Control ("SCDHEC") determined that the Residence was located on an active beach. Because S.C. Code Ann. § 48-39-290 prohibits repair or replacement of a home located on an active beach, plaintiffs had the Residence transported to a different property that they owned on Harbor Island in the spring of 2017. The cost of moving the Residence exceeded $30,000. On March 8, 2019, plaintiffs filed a proof of loss with Selective seeking "Increased Cost of Compliance" ("ICC") benefits under the Policy, based on their transportation of the Residence. ICC benefits are capped at $30,000 under the Policy. On March 25, 2019, Selective denied plaintiffs’ ICC claim in its entirety.
On December 14, 2017, plaintiffs filed this action against Selective, bringing a claim for breach of contract and seeking a declaratory judgment that they are due "total loss" damages under the Policy.1 ECF No. 1. On February 17, 2020, Selective filed a motion for partial summary judgment. ECF No. 43. On March 13, 2020, plaintiffs responded in opposition to the motion, ECF No. 48, and on March 20, 2020, Selective replied, ECF No. 51. On February 17, 2020, plaintiffs filed a cross-motion for summary judgment. ECF No. 45. On March 13, 2020, Selective filed a response to the motion, ECF No. 49, and on March 20, 2020, plaintiffs filed a reply, ECF No. 50. The court held a hearing on the matter on May 4, 2020. As such, the motions are now ripe for the court's review.
Summary judgment shall be granted "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). Rule 56(c) of the Federal Rules of Civil Procedure requires that the district court enter judgment against a party who, " ‘after adequate time for discovery ... fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.’ " Stone v. Liberty Mut. Ins. Co., 105 F.3d 188, 190 (4th Cir. 1997) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ). "[T]his 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." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id. at 248, 106 S.Ct. 2505. "[S]ummary 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." Id.
"[A]t the summary judgment stage the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Id. at 249, 106 S.Ct. 2505. When the party moving for summary judgment does not bear the ultimate burden of persuasion at trial, it may discharge its burden by demonstrating to the court that there is an absence of evidence to support the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The non-movant must then "make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322, 106 S.Ct. 2548.
Any reasonable inferences are to be drawn in favor of the nonmoving party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505, Webster v. U.S. Dep't of Agric., 685 F.3d 411, 421 (4th Cir. 2012). However, to defeat summary judgment, the nonmoving party must rely on more than conclusory allegations, mere speculation, the building of one inference upon another, or the mere existence of a scintilla of evidence. See Anderson, 477 U.S. at 252, 106 S.Ct. 2505 ; Stone, 105 F.3d at 191. Rather, "a party opposing a properly supported motion for summary judgment ... must ‘set forth specific facts showing that there is a genuine issue for trial.’ " Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003) (quoting Fed. R. Civ. P. 56(e) (2002) (amended 2010)). If the adverse party fails to provide evidence establishing that the fact finder could reasonably decide in his favor, then summary judgment shall be entered "regardless of ‘[a]ny proof or evidentiary requirements imposed by the substantive law.’ " Id. (quoting Anderson, 477 U.S. at 248, 106 S.Ct. 2505 ).
This dispute involves three different types of coverage included in the Policy: (1) Coverage A—Building Property ("Building Property coverage"), (2) Coverage D—Increased Cost of Compliance ("ICC coverage"), and (3) Coverage C – Personal Property ("Personal Property coverage"). With respect to Building Property coverage, plaintiffs contend that they are entitled to benefits equivalent to the Residence's full value because Hurricane Matthew rendered the Residence a "total loss" under the Policy. In the alternative, plaintiffs argue that they are entitled to $136,686.72 of Building Property coverage for damage to the Residence. According to plaintiffs, "This number is [the sum of] $47,139.72 [the value of the damage estimated in the Second PCG Report] and $94,547.00 [the value of additional damage estimated in the Shaffer Report] ... minus the $5,000.00 deductible." ECF No. 45 at 5. In response,...
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