JLD Props. of St. Albans, LLC v. Patriot Ins. Co.
| Decision Date | 17 December 2021 |
| Docket Number | Case No. 2:20-cv-00134 |
| Citation | 576 F.Supp.3d 172 |
| Parties | JLD PROPERTIES OF ST. ALBANS, LLC, Plaintiff, v. PATRIOT INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — District of Vermont |
Matthew B. Byrne, Esq., Gravel & Shea PC, Burlington, VT, for Plaintiff.
Anthony J. Antonellis, Esq., Pro Hac Vice, Brendan L. Labbe, Esq., Pro Hac Vice, Sloane and Walsh, LLP, Boson, MA, John E. Brady, Esq., Brady Donahue, Springfield, VT, for Defendant.
Plaintiff JLD Properties of St. Albans, LLC brings this action against Defendant Patriot Insurance Company seeking a declaratory judgment that coverage exists for damage to its property under an insurance policy issued by Defendant (Count I) and alleging violations of the Vermont Consumer Fraud Act (the "VCFA"), 9 V.S.A. § 2453 (Counts II and III).
On September 9, 2020, Plaintiff filed the original Complaint in this action. Defendant moved to dismiss the Complaint, and on May 21, 2021, the court issued an Opinion and Order granting Defendant's motion to dismiss and granting leave to amend. Plaintiff filed an Amended Complaint on June 8, 2021. On June 22, 2021, Defendant filed the instant motion to dismiss Plaintiff's Amended Complaint (Doc. 33). On July 8, 2021, Plaintiff opposed Defendant's motion, and on July 22, 2021, Defendant replied. A hearing was held on August 31, 2021, at which time the court took the pending motion under advisement.
Plaintiff is represented by Matthew B. Byrne, Esq. Defendant is represented by Anthony J. Antonellis, Esq.; Brendan L. Labbe, Esq.; and John E. Brady, Esq.
Plaintiff is a Vermont limited liability company that purchased an insurance policy from Defendant which "provides coverage for wind damage" (the "Policy"). (Doc. 32 at 2, ¶ 8.) In October 2017, a windstorm caused damage to a building owned by Plaintiff located in St. Albans, Vermont. The damage included "lifting of the roof and creating openings in the roof." Id. at ¶ 10. Defendant sent an adjuster, Alex Hill of Colonial Adjustment, to investigate the cause of the damage in 2017. Plaintiff fully cooperated with the investigation, including by providing Mr. Hill with access to the building and information about quotes for repairs.
Plaintiff alleges that Mr. Hill provided a report to Defendant but a copy was not provided to Plaintiff. Mr. Hill's investigation allegedly determined that wind had lifted and damaged the membrane roofing in the northwest corner of the roof. Defendant initially confirmed coverage for the wind damage and issued payments "for the temporary repairs and permanent replacement of the entire roof including the entire roof membrane." Id. at 4, ¶ 31.
In a July 13, 2018 letter, Joe Bernard, a Senior Claims Representative employed by Defendant, stated that "[a]fter a covered loss such as yours, your policy provides that we pay for the current repair/replacement value of your property, less depreciation for wear and tear." Id. at 5, ¶ 32 (internal quotation marks omitted). Plaintiff asserts that in sending this letter, "[Defendant] intended for [Plaintiff] to rely on its representations concerning coverage" and that Plaintiff did rely "on that determination of coverage to its detriment." Id. at 2, 5, ¶¶ 11, 34. Plaintiff further contends that its reliance was reasonable "given that [Defendant] had sent its own independent investigator and the conclusions of the investigator appeared to be reasonable." Id. at 5, ¶ 35.
On January 10, 2020, Plaintiff requested coverage under the Policy for additional repairs allegedly necessitated by the 2017 wind damage which it contends were "latent and not easily detected." (Doc. 32 at 6, ¶ 38.) Plaintiff asserts that "[o]nce it discovered the damage, [it] promptly reported the damage to [Defendant]." Id. Defendant hired "Ms. Evans" to conduct an investigation into the newly reported damage. Id. at 6, ¶ 40. Plaintiff alleges that Ms. Evans made several mistakes and misstatements of fact in her investigation, including her conclusion that "the previous holes in the roof had no role in the damage"; her failure to "use contemporary evidence from 2017 to examine the true cause of the issue with the wall"; her statement that "only the South Wall had been repointed in 2015"; erroneously attributing certain statements to a witness; and mislabeling photos. Id. at 6-7, ¶¶ 42-43, 47. Plaintiff contends that "Ms. Evans's conclusions were contrary to the conclusions of Mr. Hill and were based on less evidence and erroneous evidence." Id. at 6, ¶ 44.
Defendant denied coverage in two letters which allegedly relied on investigative inaccuracies. In June of 2020, Plaintiff's insurance broker sent an email to Defendant explaining the alleged factual inaccuracies in its investigation; however, Defendant did not request additional information or conduct a new investigation.
After Plaintiff filed its original Complaint in this action, Defendant sent a third coverage letter in which it asserted a "suit limitation clause" defense. Id. at 3, ¶ 20. Plaintiff alleges that this defense is "part of a standard strategy to increase the costs of obtaining coverage so that rational economic actors will not pursue coverage to which they are entitled because the costs of obtaining that coverage exceeds the amount of damages available under the policy" and "allows [Defendant] to make profits that it is not otherwise entitled to the detriment of its insureds." (Doc. 32 at 3, ¶¶ 21-22.) Plaintiff asserts that Defendant's third letter fails to respond to the June 2020 email sent by its insurance broker. Plaintiff alleges that it Id. at 4, ¶ 25.
With regard to Commercial Property, the Policy states in relevant part that:
(Doc. 33-5 at 57.) Plaintiff's Complaint was filed on September 9, 2020, more than two years from "the date on which the direct physical loss or damage occurred." Id.
To survive a motion to dismiss filed pursuant to Fed. R. Civ. P. 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). Plaintiff must allege sufficient facts to "nudge[ ] their claims across the line from conceivable to plausible[.]" Twombly , 550 U.S. at 570, 127 S.Ct. 1955. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937.
The sufficiency of a complaint under Rule 12(b)(6) is evaluated using a "two-pronged approach[.]" Hayden v. Paterson , 594 F.3d 150, 161 (2d Cir. 2010) (internal quotation marks omitted) (quoting Iqbal , 556 U.S. at 679, 129 S.Ct. 1937 ). First, the court discounts legal conclusions and "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements[.]" Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. The court is also " ‘not bound to accept as true a legal conclusion couched as a factual allegation[.]’ " Id. (citation omitted). Second, the court considers whether the factual allegations, taken as true, "plausibly give rise to an entitlement to relief." Id. at 679, 129 S.Ct. 1937. This second step is fact-bound and context-specific, requiring the court "to draw on its judicial experience and common sense." Id. The court does not "weigh the evidence" or "evaluate the likelihood" that a plaintiff's claims will prevail. Christiansen v. Omnicom Grp., Inc. , 852 F.3d 195, 201 (2d Cir. 2017).
"Although the statute of limitations is ordinarily an affirmative defense that must be raised in the answer, a statute of limitations defense may be decided on a Rule 12(b)(6) motion if the defense appears on the face of the complaint." Ellul v. Congregation of Christian Bros. , 774 F.3d 791, 798 n.12 (2d Cir. 2014).
Plaintiff contends that "the [c]ourt has no basis to take judicial notice of" the insurance policy attached as Exhibit D to Defendant's motion to dismiss because "the [c]ourt has no basis from the Complaint to assure itself that the policy that [Defendant] attaches to its [m]otion to [d]ismiss is the same policy that [Plaintiff] discusses in its [C]omplaint." (Doc. 34 at 14-15.) At oral argument, Plaintiff identified no factual basis for its belief that Exhibit D may not be the correct policy, acknowledged it possessed no other policy, and contended that it need not identify the contract under which it brings its breach of contract claim until summary judgment. See Fed. R. Civ. P. 11. The court disagrees. A plaintiff may not rely on an insurance policy in bringing suit and then contend the court may not consider that policy as integral to its complaint. See Classic Laundry & Linen Corp. v. Travelers Cas. Ins. Co. of Am. , 2017 WL 4350610, at *3 (S.D.N.Y. June 30, 2017) ().
A document is " ‘integral’ " to the complaint if the complaint " ‘relies heavily upon [the document's] terms and effect[.]’ "...
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