Langston v. State Farm Fire & Cas. Co.
| Decision Date | 13 June 2022 |
| Docket Number | 2:21-cv-2055 |
| Parties | ANNA S. LANGSTON and ETHAN LANGSTON Plaintiffs, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant. |
| Court | U.S. District Court — Western District of Tennessee |
This is an insurance case. Plaintiffs Anna S. Langston and Ethan Langston assert claims of breach of contract and bad faith refusal to pay under Tennessee law. (ECF No. 1.) Before the Court is Defendant State Farm Fire and Casualty Company's (“State Farm”) Motion for Summary Judgment (the “Motion.”) (ECF No. 22.) Plaintiffs have opposed the Motion. (ECF No. 27.) For the following reasons, the Motion is GRANTED in part and DENIED in part.
The following facts are undisputed.
On March 20, 2019, Anna and Ethan Langston purchased an all-risk homeowner's policy with State Farm (the “Policy”) for their home in Germantown Tennessee. (ECF No. 1-1.) On or around January 16, 2020, while the Policy was in full force and effect, the Langstons discovered water damage to their insured property. (Id.) The Langstons' cast-iron plumbing system had failed, and water had leaked from the plumbing system and damaged the their kitchen cabinets. On January 20, 2020, the Langstons filed a claim with State Farm. (Id.) State Farm denied the claim on February 14, 2020. (Id.) On November 4, 2020, Plaintiffs sent a letter to State Farm that said in part, “Please also accept this correspondence as a demand, pursuant to T.C.A. § 56-7-105, for payment of the insured's loss.” (ECF No. 1-1 at 69.)
On January 11, 2021, the Langstons filed suit in the Circuit Court of Shelby County, Tennessee, alleging breach of contract and bad faith refusal to pay. (ECF No. 1.) State Farm removed to this Court on January 26, 2021. (Id.) Around this time, Plaintiffs enlisted three expert witnesses to assess and survey the damage: Jimmy Rooker, Sonya Jones, and Michael Ward. State Farm hired its own expert, Thomas Smith. On March 15, 2022, State Farm filed the Motion. Plaintiffs responded on April 11, 2022. (ECF No. 27.) State Farm replied on April 25, 2022. (ECF No. 29.)
The Court has diversity jurisdiction under 28 U.S.C. § 1332. A federal district court has original jurisdiction of all civil actions between citizens of different states “where the matter in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs.” 28 U.S.C. § 1332(a)(1).
Plaintiffs are Tennessee citizens. (ECF No. 1.) State Farm is a corporation with its principal place of business in Illinois. (Id.) Plaintiffs seek no less than $50, 000 to repair the property, consequential damages, and attorney's fees. (Id.) It is more likely than not that the amount in controversy exceeds $75, 000. The Court has jurisdiction.
State substantive law applies to state law claims in federal court. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78-80 (1938). When there is no dispute that a certain state's substantive law applies, the court need not conduct a choice-of-law analysis sua sponte. See GBJ Corp. v. E. Ohio Paving Co., 139 F.3d 1080, 1085 (6th Cir. 1998). Throughout the case, the parties have assumed that Tennessee substantive law governs Plaintiffs' claims. (See ECF Nos. 22, 27.) The Court will apply Tennessee substantive law.
Under Federal Rule of Civil Procedure 56, a court shall grant a party's motion for summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The moving party can meet this burden by showing the court that the nonmoving party, having had sufficient opportunity for discovery, has no evidence to support an essential element of his case. See Fed.R.Civ.P. 56(c)(1); Viet v. Le, 951 F.3d 818, 823 (6 th Cir. 2020) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)).
When confronted with a properly-supported motion for summary judgment, the nonmoving party must set forth specific facts showing that there is a genuine dispute for trial. See Fed. R. Civ. P. 56(c). “A ‘genuine' dispute exists when the plaintiff presents ‘significant probative evidence' ‘on which a reasonable jury could return a verdict for her.'” EEOC v. Ford Motor Co., 782 F.3d 753, 760 (6th Cir. 2015) (quoting Chappell v. City of Cleveland, 585 F.3d 901, 915 (6th Cir. 2009)). The nonmoving party “must show that there is more than ‘some metaphysical doubt as to the material facts.'” Goodman v. J.P. Morgan Inv. Mgmt., Inc., 954 F.3d 852, 859 (6th Cir. 2020) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)).
A party may not oppose a properly supported summary judgment motion by mere reliance on the pleadings. Celotex Corp., 477 U.S. at 324. Instead, the nonmoving party must adduce concrete evidence on which a reasonable juror could return a verdict in her favor. See Fed.R.Civ.P. 56(c)(1). The Court does not have the duty to search the record for such evidence. See Fed. R. Civ. P. 56(c) (3); InterRoyal Corp. v. Sponseller, 889 F.2d 108, 111 (6th Cir. 1989). “When a motion for summary judgment is properly made and supported and the nonmoving party fails to respond with a showing sufficient to establish an essential element of its case, summary judgment is appropriate.” Wimbush v. Wyeth, 619 F.3d 632, 636 (6th Cir. 2010).
Although summary judgment must be used carefully, it “is an integral part of the Federal Rules as a whole, which are designed to secure the just, speedy, and inexpensive determination of every action[, ] rather than a disfavored procedural shortcut.” FDIC v. Jeff Miller Stables, 573 F.3d 289, 294 (6th Cir. 2009) (quotation marks and citations omitted).
Plaintiffs allege that State Farm breached the Policy by refusing to pay for a covered loss. State Farm seeks summary judgment and argues that Plaintiffs' loss is not covered by the Policy. At issue are two clauses in the Policy: the “resulting loss” clause and the “tear out” clause.
The Policy is an all-risk policy, which “automatically covers any loss unless the policy contains a provision expressly excluding the loss from coverage.” Cincinnati Ins. Co. v. Banks, 610 Fed.Appx. 453, 457 (6th Cir. 2015) (quoting HCA, Inc. v. Am. Prot. Ins. Co., 174 F.3d 184, 187 (Tenn. Ct. App. 2005)). Under an all-risk policy, the claimants bear the initial burden of proving that they come within the terms of the policy. Id. The insurer carries the burden if it claims that one of the policy exclusions applies to the claimant and prevents recovery. Id. (internal quotations and citations omitted). Exceptions, exclusions, and limitations in insurance policies must be construed against the insurance company and in favor of the insured. Id. (quoting Allstate Ins. Co. v. Watts, 811 S.W.2d 883, 886 (Tenn. 1991)).
It is undisputed that Plaintiffs had a valid all-risk insurance policy and that the property sustained direct physical damage caused by water while the Policy was in effect. Plaintiffs have met their initial burden of establishing that their claim is within the terms of the policy.
State Farm argues that the resulting loss clause in the Policy excludes Plaintiffs' loss from coverage. The resulting loss clause states:
State Farm contends that the loss to the plumbing system was caused by continuous or repeated seepage of water that led to the wear, tear, and deterioration of the cast iron plumbing system. The parties' expert witnesses agree. Jimmy Rooker says that the plumbing system failed because of wear, tear, rust, deterioration, and corrosion, which resulted from a continuous seepage and leakage coming from the cast iron drainpipe. (ECF No. 22-4.) Rooker believes that the leak had been going on for years and that this was not an overnight problem. (Id.) Sonya Jones says the plumbing system failed because of continuous seepage of water and waste that led to wear, tear, rust, deterioration, and corrosion. (ECF No. 225.) Thomas Smith says the cast iron pipe contained corrosion because of improper maintenance of the drainpipe and deterioration of the cast iron material over the years. (ECF No. 22-7.)
The Langstons do not dispute this, but argue that “resulting loss” clause provides an exception to the exception. It states in relevant part: “However, we do insure for any resulting loss from items a. through m unless the resulting loss is itself a Loss Not Insured by this Section.” The Langstons contend that the ensuing water damage to their kitchen cabinets is a covered loss under the Policy even if the loss to the plumbing system is not. State...
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