Hayes v. S. Fid. Ins. Co.

Decision Date15 October 2014
Docket NumberCIVIL ACTION NO: 14-376 SECTION: "S" (1)
PartiesEVONTHE HAYES v. SOUTHERN FIDELITY INSURANCE COMPANY
CourtU.S. District Court — Eastern District of Louisiana
ORDER AND REASONS

IT IS HEREBY ORDERED that Southern Fidelity Insurance Company's Motion for Summary Judgment (Doc. #28) is GRANTED in part, as to the initial adjustment of plaintiff's claim and the September 4, 2012, proof of loss, and DENIED in part as to plaintiff's claim regarding the January 15, 2013, proof of loss.

IT IS FURTHER ORDERED that Southern Fidelity Insurance Company's Motion In Limine Regarding the Homeowners' Insurance Policy's Loss Settlement Provision and the Mold Endorsement (Doc. #27) is DENIED.

IT IS FURTHER ORDERED that Southern Fidelity Insurance Company's Motion In Limine to Exclude Expert Testimony (Doc. #26) is DENIED.

IT IS FURTHER ORDERED that Evonthe Hayes' Motion for Leave to File a Supplemental Witness List (Doc. #48) to name John Humphrey as a witness is DENIED.

BACKGROUND

This matter is before the court on Southern Fidelity Insurance Company's ("SFIC") Motion for Summary Judgment regarding plaintiff's bad faith claims (Doc. #28), SFIC's Motion In Limine regarding the homeowners' insurance policy's loss settlement provision and mold endorsement (Doc.#27)1, and SFIC's Motion In Limine to Exclude Expert Testimony (Doc. #26). It is also before the court on plaintiff's motion to name John Humphry as a witness after the deadline for submitting witnesses lists has passed (Doc. #48).

Plaintiff, Evonthe Hayes, owns a home located at 45 Muirfield Drive, LaPlace, Louisiana. On August 28, 2012, Hurricane Isaac made landfall, and caused wind and rain damage to Evonthe's home. At the time of the loss, the property was covered by a homeowners' insurance policy issued by SFIC. The policy, with effective dates of February 25, 2012, to February 25, 2013, had a building damage limit of liability of $360,500, and listed Terrence and Evonthe Hayes as named insureds.

On August 31, 2012, Evonthe reported the loss to SFIC. On September 4, 2012, Mark Sacharski with Trinity Insurance Services inspected the property on SFIC's behalf. He estimated the value of the damages to be $48,698.08. Sarcharski also submitted a valuation report, listing a 3,732 square feet home with a replacement cost of $246.89 per finished square foot, which resulted in an estimated replacement cost of $921,398.31. The report notes that the contact for the inspection was Terrence Hayes of Richmond, Texas, and that his ex-wife, Evonthe, was the person present during the inspection.

On September 18, 2012, SFIC issued a check for $22,711.29 to Evonthe Hayes and Terrence Hayes. This amount was based on Sarcharski's estimate, a hurricane deductible of $7,210, and non-recoverable depreciation of $18,776.79. The letter accompanying the check stated that the insuredswere not entitled to recover depreciation due to the application of the co-insurance penalty found in the policy's loss settlement provision, because the house was not insured to at least 80% of its full replacement cost. Terrence requested that a stop payment order be issued on the check to prevent it from being tendered without his permission. He eventually endorsed the check, and the proceeds were placed into Evonthe's domestic attorney's trust account.

On January 15, 2013, Evonthe submitted to SFIC a report completed by Daniel Onofrey of Michaelson & Messinger Insurance Specialists, LLC regarding her property damage. Onofrey estimated the damage to be $550,726.05. Thereafter, SFIC sought reinspection of the property, and hired Professional Adjusting Services, Inc. Keith Roberge, an inspector with Professional Adjusting, arranged the inspection with Terrance. On January 25, 2013, Roberge attempted to inspect the property. While he was there, Evonthe telephoned Onofrey, and Onofrey and David Lincoln, also from Michaelson, arrived and escorted Roberge off of the property. Roberge's report states: "the public adjustor would not allow us to complete the re-inspection of the loss so no estimates have been prepared." Evonthe claims that SFIC's representatives refused to schedule the inspection through Michaelson for a time when Onofrey could be available to attend.

SFIC also retained HSA Engineers & Scientists to reinspect the property. HSA attempted to schedule the inspection through Michaelson, and telephoned Michaelson on February 14, 2013, February 15, 2013 and February 21, 2013 for that purpose. Evonthe did not grant HSA access to the property until after her initial lawsuit was filed.

On February 7, 2013, in a letter sent by certified mail and electronic mail, SFIC requested that Evonthe submit to an examination under oath on February 27, 2013, and provide certain listed documents. Evonthe did not attend the meeting. On February 28, 2013, SFIC wrote to Evonthe,requesting that she reschedule the examination under oath, and confirming that Evonthe refused access to the property to SFIC's independent adjustor and engineer. Evonthe claims that she did not receive the letters. SFIC also sought to conduct an examination under oath of Terrence, but he also failed to attend.

On May 13, 2013, Evonthe's counsel wrote to SFIC's counsel stating that she retained him, and that he "had been provided with your request to take [Evonthe's] examination under oath." The letter further stated that Evonthe "intends to cooperate with her insurer during its 'investigation' of damage to her house from Hurricane Isaac," and requested scheduling her examination under oath.

On May 23, 2013, Evonthe filed her first action against SFIC in the Fortieth Judicial District Court, Parish of St. John the Baptist, State of Louisiana, alleging that SFIC breached the insurance contract and acted in bad faith by failing to properly adjust her insurance claim and by not paying the appropriate amount under the policy. SFIC timely removed the matter to the United States District Court for the Eastern District of Louisiana alleging diversity subject matter jurisdiction under 28 U.S.C. § 1332.2

On May 29, 2013, SFIC's counsel wrote to Evonthe's counsel confirming their previous conversation that counsel would provide dates for her examination under oath, dates for an inspection of the property and estimates and reports from Evonthe's contractor and engineer. The letter indicated that the parties were working together to schedule the examination under oath and reinspection, and provide the relevant documentation to SFIC. Evonthe's counsel responded that he would obtain dates from her for the examination under oath, and asked for proposed dates for the inspection.

On June 12, 2013, Evonthe requested that SFIC participate in the insurance appraisal process provided in the policy. SFIC refused, stating that Evonthe's request was untimely and that her chosen appraiser, Onofrey, was not an eligible appraiser. On June 28, 2013, Evonthe filed a motion to compel SFIC to participate in the insurance appraisal process.

On July 1, 2013, SFIC filed a motion for summary judgment arguing that Evonthe's suit should be dismissed with prejudice because she did not comply with the policy's conditions precedent to filing suit. Particularly, the motion alleged that she refused to submit to the examination under oath, and refused access to the property to SFIC's adjustor and engineer. Evonthe argued that she did not receive notice of the examination under oath, and that she did not refuse access to the property for inspection, but rather that the SFIC inspector came to her home unannounced. Evonthe contended that she was willing to submit to the examination under oath and allow the reinspection of the property.

On August 2, 2013, this court denied SFIC's motion for summary judgment finding that dismissal with prejudice was unwarranted because Evonthe was willing to submit to the examination under oath, claimed she did not receive the notices, and that her delay did not prejudice SFIC. Therefore, this court dismissed the action without prejudice to allow Evonthe to comply with the conditions precedent to filing suit, namely the examination under oath and the reinspection of the property.

On August 30, 2013, HSA and U.S. Cat Adjustors reinspected the property on SFIC's behalf. Erik Moore of HSA found that the stained interior finishes and suspected microbial growth that Evonthe claims were caused by the hurricane damage due to wind and rain were actually caused by excess moisture resulting from overflow of the air conditioning condensate drain pain in the attic.Carroll Smith of U.S. Cat did not find any additional damages to the property that were not included in Trinity's original adjustment, and found that any additional damages were more likely than not caused by the overflow of the air conditioning condensate drain pain in the attic.

On February 10, 2014, Evonthe re-filed her case against SFIC in state court. On February 18, 2014, SFIC removed the action to the United States District Court for the Eastern District of Louisiana and it was assigned Civil Action No. 14-376. SFIC now moves for summary judgment on Evonthe's bad faith claims, a ruling that the policy's co-insurance penalty found in the loss settlement provision applies because Evonthe failed to insure the property to 80% of its full replacement cost, and that the policy's mold endorsement limits Evonthe's claims for "any and all damages associated with mold, fungi and/or bacteria" to $10,000. SFIC further seeks to exclude the reports and testimony of Evonthe's proposed experts arguing that she failed to comply with Rule 26(a)(2) of the Federal Rules of Civil Procedure and the court's Scheduling Order. SFIC also argues that Onofrey's estimate should be excluded because it is unsigned and does not offer sufficient opinions or conclusions, and that James G. Gilbert should be excluded from testifying because he never examined the property and relied on an inspection by Humphrey. Hays seeks leave of court to...

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