Jadick v. Nationwide Prop. & Cas. Ins. Co.

• Decision Date: 15 June 2012
• Docket Number: 2100432.
• Citation: 98 So.3d 5
• Court: Alabama Court of Civil Appeals
• Parties: Alexander Paul JADICK, as administrator ad litem of the estate of Val Jadick, deceased v. NATIONWIDE PROPERTY & CASUALTY INSURANCE COMPANY.

98 So.3d 5

Alexander Paul JADICK, as administrator ad litem of the estate of Val Jadick, deceased

v.NATIONWIDE PROPERTY & CASUALTY INSURANCE COMPANY.

2100432.

Court of Civil Appeals of Alabama.

Dec. 16, 2011.

Rehearing Denied April 6, 2012.

Certiorari Denied June 15, 2012

Alabama Supreme Court 1110927.

Michael A. Wing, Mobile, for appellant.

Kori L. Clement and Stephanie White Schmidt of Hare, Clement & Duck, P.C., Birmingham, for appellee.

PER CURIAM.

Alexander Paul Jadick, as administrator ad litem of the estate of Val Jadick (“Jadick”), deceased, appeals from a summary judgment of the Mobile Circuit Court in favor of Nationwide Property & Casualty Insurance Co. (“Nationwide”).

In June 2009, Jadick initiated a civil action in the trial court, alleging that Nationwide had breached an insurance policy it had issued to Jadick by failing to comply with an appraisal clause pertaining to disputes between the parties as to the amount of a particular loss and that it had exercised bad faith in doing so. In November 2009, Jadick filed a motion in which he requested an appraisal and the appointment of an umpire. In January 2010, Jadick filed a motion to recuse.¹ Both motions were denied. In April 2010, Jadick filed a motion to reconsider, seeking relief from the rulings on both his recusal and appraisal motions, which motion was thereafter denied. Jadick then filed a petition for writ of mandamus regarding the recusal issue; this court dismissed that petition on the basis that it was untimely. Ex parte Jadick (No. 2090892).

Nationwide filed a motion for a summary judgment in July 2010, to which Jadick responded in opposition. Nationwide thereafter filed a motion to strike an affidavit Jadick had submitted in support of his response in opposition, arguing that it was based on hearsay; that motion was granted. The trial court held a hearing in December 2010, and, at that time, Jadick filed a supplemental response in opposition to the motion for a summary judgment and attached another affidavit. In response, Nationwide filed a motion to strike the second affidavit, arguing that the affidavit was also based on hearsay. Nationwide further argued that Jadick's supplemental response should be struck from the record because Jadick had failed to file the supplementalresponse at least two days before the hearing. SeeRule 56(c)(2), Ala. R. Civ. P. The trial court entered a summary judgment in Nationwide's favor in December 2010, contemporaneously granting Nationwide's second motion to strike, prompting Jadick's appeal. Because Jadick died during the pendency of this appeal, Alexander Paul Jadick, the administrator ad litem of Jadick's estate (“the administrator”), has been substituted as a party.

The undisputed facts reveal that Jadick suffered a fire loss at his residence on August 4, 2007. He reported the loss to Nationwide the following day. The present litigation arose out of the events that thereafter transpired. On August 7, 2007, Nationwide conducted a routine inspection of the damaged property; on August 22, 2007, Nationwide provided Jadick with an estimate of the amount of damage sustained by the residence. The cover page for the estimate stated, in pertinent part, as follows:

“If any hidden, or additional damaged items, and/or damaged items are discovered, please contact me or have your contractor or vendor contact me immediately. Coverage for the hidden or additional damages and/or damaged items, would need to be determined, and may require an inspection/re-inspection, before any supplemental payment would be authorized. Please do not destroy, or discard any of the hidden, or additional damages, and/or damaged items, until we have had an opportunity to review the hidden or additional damages and/or damaged items, and have reached an agreement with you on any supplemental cost.”

(Emphasis added.)

On August 28, 2007, Nationwide issued a payment in the amount of $63,072.23, consistent with the estimate, to Jadick (and the lienholder on the house) to cover the loss; the letter attached to that payment indicated that payment for overhead and profit would be paid once Jadick hired a qualified general contractor to repair the residence and stated that, with payment for overhead and profit, Jadick would receive a total of approximately $76,004.59.

In October 2007, Jadick entered into a contract with Robert Mullen Builders, Inc. (“Mullen Builders”), to make the needed repairs for $78,000. In December 2007, Nationwide sent a letter to Jadick telling him to contact its employee immediately if any hidden or additional costs were discovered during the repair process. The language of that letter included the language that had been included in the letter attached to the first payment (quoted above). In January 2008, Mullen Builders sent a letter to Jadick demanding to be paid in full at that time, including payment of an additional $1,448.23 to cover county-inspection fees. After receiving the bill from Jadick, Nationwide issued payment in the amounts requested, thereby paying off the remaining balance owed to Mullen Builders.

The appraisal clause of Jadick's insurance policy with Nationwide stated:

“If you and we fail to agree on the amount of loss, either can demand that the amount be set by appraisal. If either makes a written demand for appraisal, each will select a competent, independent appraiser and notify the other of the appraiser's identity within twenty days of the receipt of the written demand. The two appraisers will then select a competent, impartial umpire. If the two appraisers cannot agree on an umpire within 15 days, you or we can ask a judge of a court of record in the county where the resident premises is located to select a competent, impartial umpire.”

In April 2009, 15 months after Mullen Builders had completed its repairs and had been paid in full, Jadick obtained an estimate from Hargrove & Company, LLC (“Hargrove”), regarding damage caused by the fire, which estimate was higher than the first estimate Nationwide had submitted to Jadick. Jadick wrote Nationwide a letter demanding that it conduct an appraisal and attached the estimate obtained from Hargrove to that letter. The record shows that that demand letter was the first time Jadick had informed Nationwide that he did not agree with the original estimate and with the payment paid to Mullen Builders. Nationwide refused to conduct an appraisal, positing that Jadick had not taken the necessary steps to invoke the appraisal clause in the policy, including demonstrating that a disagreement existed between the parties as to the first estimate.

After Nationwide denied Jadick's request that it conduct an appraisal, Jadick commenced the underlying action. After Jadick filed his motion in the trial court seeking to invoke the appraisal clause and to appoint an umpire, Nationwide filed a response in opposition to Jadick's motion, asserting 1) that it had told and encouraged Jadick at least twice to notify it immediately if any hidden or additional defects became apparent warranting increased repair costs and 2) that Jadick had not only failed to provide, but had also conceded that he did not have, a basis upon which to disagree with the original estimate and to invoke the appraisal clause. In support of its assertion that Jadick had no basis on which to disagree with the original estimate, Nationwide referenced Jadick's response to a discovery request; in response to Nationwide's request that Jadick “state in detail all damages” that he was claiming and that he “produce any and all documents which substantiate such damages,” Jadick had conceded that he “need[ed] the appraisal to occur to get the accurate figures of damages.”

As we have noted, after the trial court denied Jadick's motion to invoke the appraisal clause and to appoint an umpire and his motion for recusal, Nationwide sought a summary judgment in its favor. Responding in opposition, Jadick argued that the amount Nationwide had agreed to pay pursuant to the first estimate had prohibited Mullen Builders from making some repairs and using some materials. In support of that argument, Jadick attached an affidavit of Robert Mullen (“Mullen”), the proprietor of Mullen Builders, in which he stated that he had replaced only a section of the roof instead of replacing the entire roof; that he had installed carpet instead of repairing the hardwood floors that had existed in the house before the fire; and that, “based on the insurance company's disallowance of certain items, Jadick was forced to decide how best to allocate the funds that were allowed by the insurance company.” The record reveals no evidence of a disagreement or of any coverage issues that had arisen out of the first estimate, nor does it reveal that Nationwide refused to pay for anything before Mullen Builders commenced repairing the property. Nationwide filed a motion to strike Mullen's affidavit, and that motion was granted. On the day of the hearing set for arguments on Nationwide's summary-judgment motion, Jadick filed a supplemental response in opposition to the summary-judgment motion and attached a second affidavit from Mullen. Nationwide argued that that supplemental response and Mullen's affidavit should be struck from the record because Mullen's statements were hearsay and because the supplemental response was untimely because it was filed on the day of the hearing. SeeRule 56(c)(2), Ala. R. Civ. P. In entering the summary judgment in favor of Nationwide, the trial court also granted Nationwide's second motion to strike.

On appeal, the administrator argues 1) that the trial court erred in denying the motion to recuse; 2) that the trial court erred in denying the motion to invoke the appraisal clause and to appoint an umpire and in concluding that Nationwide did not breach its policy as a matter of law; and 3) that the trial court erred in striking the affidavit of Mullen attached to the supplemental response to...