Harris v. American Modern Home Ins. Co., 4:07 CV 656 DDN.
| Decision Date | 30 May 2008 |
| Docket Number | No. 4:07 CV 656 DDN.,4:07 CV 656 DDN. |
| Citation | 571 F.Supp.2d 1066 |
| Parties | Pierre HARRIS, Plaintiff, v. AMERICAN MODERN HOME INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
Melvin L. Raymond, Wilson and Associates, St. Louis, MO, for Plaintiff.
Corey Kraushaar, Robert W. Cockerham, Brown and James, P.C., St. Louis, MO, for Defendant.
This action is before the court on the motion of defendant American Modern Home Insurance Company (AMHIC) for summary judgment (Doc. 37). The parties have consented to the exercise of plenary authority by the undersigned United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). (Doc. 8.) A hearing was held on April 23, 2008.
Plaintiff Pierre Harris commenced this action in the Circuit Court of the City of St. Louis. In his state court petition, Harris alleges that the home he owned on 3430 Grace Avenue (Grace Ave. property), was damaged by a windstorm and hailstorm on July 19, 2006. (Doc. 1 at ¶¶ 1, 4.) Harris alleges he made a claim on the property insurance policy issued by AMHIC and that AMHIC paid him $5,735.60 after its claim representative, Arthur Smith, investigated the damage. (Id. at ¶ 6.) According to the petition, John Grimes, an outside appraiser appointed by Harris, also conducted an investigation, and estimated the damages at $75,490.86. (Id. at ¶¶ 9, 20.) Harris alleges that AMHIC failed to pay the full amount of the claim, breaching the terms of the insurance policy. (Id. at ¶ 24.) In the Count 1 claim for breach of the policy contract plaintiff Harris seeks recovery of $75,490.86. Harris also alleges a Count 2 claim for statutory penalties for vexatious refusal to pay under Mo.Rev. Stat. § 375.420. (Doc. 1 at 13.)
Insurer AMHIC removed the action to this court, invoking diversity of citizenship subject matter jurisdiction under 28 U.S.C. §§ 1332 and 1441(a). AMHIC alleges that it is incorporated in Ohio, with its principal place of business in Ohio, and that Harris is a Missouri citizen. (Doc. 1 at ¶¶ 2, 3.) AMHIC further alleges that the aggregate of Harris's two claims exceeds $75,000. (Id. at ¶¶ 4, 5.)
AMHIC denies Harris's claims and counterclaims for a declaratory judgment that Harris did not comply with the provisions of the policy and is therefore barred from recovery. (Id. at ¶¶ 20-22.) AMHIC also seeks to recover from Harris its payment of $5,735.60. (Id. at ¶ 24.)
Summary judgment must be granted when the pleadings and proffer of evidence demonstrate that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Devin v. Schwan's Home Serv., Inc., 491 F.3d 778, 785 (8th Cir.2007). The court must view the evidence in the light most favorable to the nonmoving party and accord it the benefit of all reasonable inferences. Devin, 491 F.3d at 785. A fact is "material" if it could affect the ultimate disposition of the case, and a factual dispute is "genuine" if there is substantial evidence to support a reasonable jury verdict in favor of the non-moving party. Die-Cutting Diversified, Inc. v. United Nat'l Ins. Co., 353 F.Supp.2d 1053, 1054-55 (E.D.Mo.2004).
Initially, the moving party must demonstrate the absence of an issue for trial. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. Once a motion is properly made and supported, the nonmoving party may not rest upon the allegations in its pleadings but must instead proffer admissible evidence that demonstrates a genuine issue of material fact. Fed.R.Civ.P. 56(e); Howard v. Columbia Pub. Sch. Dist., 363 F.3d 797, 800 (8th Cir.2004); Krein v. DBA Corp., 327 F.3d 723, 726 (8th Cir.2003).
The record before the court indicates that the following facts are not disputed. On July 15, 1996, Pierre Harris, and his wife, Denise Harris, jointly purchased 3430 Grace Avenue. (Doc. 38, Ex. 1.) On December 8, 1997, the Harrises jointly transferred title to the property to Valerie Ann Lane, acting as trustee. The document indicates that the Harris' address was then 12931 Dunstone, Florissant, Missouri. (Doc. 38, Ex. 2.) On October 18, 2003, Lane, as trustee, transferred title to the property to Future Investors of Harris and Harris (FIHH). Pierre Harris signed the warranty deed on behalf of FIHH. (Doc. 38, Ex. 3.) On April 20, 2005, FIHH transferred title to the property by quit-claim deed to Denise Harris, "a Married Woman as her sole and separate property whose post office address is 3430 Grace Avenue, St. Louis, MO 63116...."1 Pierre and Denise Harris each signed as Members of FIHH. (Doc. 38, Ex. 4.) After April 20, 2005, there were no other transfers of the property. (Doc. 38, Ex. 5 at 7-9.)
On August 22, 2005, AMHIC issued a "Dwelling Property" insurance policy No. 0770045434914 for the 3430 Grace Ave. property. The insured property is described in the policy as "rental." The named insured on the policy is Pierre Harris, P.O. Box 688, Florissant, Missouri. The insured property is described as 3430 Grace Avenue, St. Louis, MO 63116. The policy term is from August 22, 2005, to August 22, 2006. The coverage for the Grace Ave. property is limited to $170,000, with a deductible of $1,000. (Doc. 38, Ex. 6 at 1.)
Among other perils, the policy covered loss caused by hail. (Doc. 38, Ex. 6 at 9.) After a hail storm on July 19, 2006, Pierre Harris filed a claim with AMHIC, alleging damage to the Grace Ave. property. (Doc. 38, Ex. 7 at ¶¶ 4-5.) The claim was for a partial loss, and after an inspection by Arthur Smith, a claims representative, AMHIC paid plaintiff Harris $5,735.60 for the property damage. (Doc. 38, Ex. 8 at 12; Doc. 38, Ex. 7 at ¶ 6.)
Sometime in August 2006, after receiving the property damage award, plaintiff Harris contacted John Grimes, an appraiser. (Doc. 38, Ex. 9 at 78-80; Doc. 38, Ex. 10 at 48.) On August 22, 2006, Grimes and Harris entered into a two-page "Contract For Personal Service." (Doc. 38, Ex. 11.) Under the contract, Harris retained Grimes
as his representative and appraiser in an appraisal action under and according to the provisions of a policy of insurance CONCERNING A CLAIM FOR HAIL AND WINDSTORM AND LIGHTNING DAMAGE occurring to the real property located at 3430 through 3432 Grace Avenue ... [and] occurring to the real property located at 4914 Hooke Avenue, St. Louis City, Missouri. . . .
(Doc. 38, Ex. 11 at 1.) By this contract Harris agreed to pay Grimes "an amount equal to 15% of the final appraised value of the loss and damage" to both properties "caused by either hail and windstorm and, or lightning and all consequential loss sustained thereto on account of hail and windstorm and, or lightning including, but not limited to loss of use, if any." (Id.) By the contract, Harris authorized Grimes to act as his "attorney-in-fact to perform and do any act required to be done in regards to the appraisal of damage done to the property, up to [and] including final settlement of all matters relating to" the two properties. (Id.) Further, Grimes agreed "to represent and act as appraiser for [Harris] . . . in an action for appraisal under the provisions of the policy of insurance concerning [the two properties]. . . ." Grimes also agreed to "actively pursue the matter of appraisal to a full conclusion based upon a fair and equitable determination of the loss and damage sustained to each property." (Id.) The written agreement also provided for the non-refundable initial payment by Harris to Grimes of $300 for each of the two properties, which would be deducted from the final 15% fees. (Id. at 1-2.)
During one of their conversations, Grimes told Pierre Harris that he could be awarded damages for vexatious refusal to pay if a court determined that AMHIC had not properly evaluated the loss. (Doc. 38, Ex. 10 at 6; Doc. 38, Ex. 9 at 21.) After speaking with Harris, Grimes inspected the Grace Ave. property. During this initial inspection, and based on Harris's statements, Grimes expressed an informal opinion about the extent of the damage, but did not conduct a formal appraisal at the time. (Doc. 38, Ex. 8 at 26.)
Based on Grimes's informal opinion, information gained from city contractors, and his own observations, Harris came to believe that AMHIC's damage award was insufficient. (Doc. 38, Ex. 9 at 15.) With the help of Mr. Grimes, Pierre Harris sent Arthur Smith, the AMHIC Claim Adjustor, an "Appraisal Demand Letter" dated October 3, 2006. In the letter, Harris demanded that "the loss and actual cash value be set by appraisal according to the provisions of [Missouri] Department of Insurance Regulation 20 CSR 500-1.100(2)(A). . . ." (Doc. 38, Ex. 12 at 1.) In Harris's opinion, the award failed to consider damage to the front porch roof deck, gutters and downspout, parapet wall, and to the cornice. (Doc. 38, Ex. 12 at 1; Doc. 38, Ex. 8 at 20.) Also, Harris stated that he had selected John Grimes as his appraiser. (Doc. 38, Ex. 12 at 2.) This was the first of several letters exchanged between the parties and their representatives. (See Doc. 38, Exs. 12-14, Exs. 17-24.)
In an October 12, 2006, letter to Harris, Smith accepted the conditions of Harris's letter, and agreed to attempt to settle the claim through an informal appraisal process. The letter scheduled a second inspection of the Grace Ave. property, which occurred on October 18, 2006. (Doc. 38, Ex. 13; Doc. 38, Ex. 7 at ¶ 16.)
On October 19, 2006, Smith wrote to Harris, informing him that he had met with Grimes, but that the two parties were unable to settle the insurance claim. Smith informed Harris that the formal appraisal process had begun.2 As part of the formal appraisal process, each party was to choose a competent appraiser...
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