Lwood v. Allstate Ins. Co., Civil Action No. 3:11-CV-128-JVB
| Decision Date | 14 December 2012 |
| Docket Number | Civil Action No. 3:11-CV-128-JVB |
| Parties | LARRY L.WOOD, Plaintiff, v. ALLSTATE INSURANCE COMPANY, Defendant. ALLSTATE INSURANCE COMPANY, Counter-Claimant, v. LARRY L.WOOD, Counter-Defendant. |
| Court | U.S. District Court — Northern District of Indiana |
Larry Wood and his now deceased wife, Joyce, rented their Walkerton, Indiana home of almost forty years to their newish neighbors, the Webers, who proceeded to trash the place. To make matters worse, when the Webers finally vacated the premises after months of failing to pay rent, personal property or fixtures from the house were missing. Mr. Wood's home insurer, Allstate, denied his eventual claim for the losses, and he sued in state court for breach of contract and bad faith. Allstate removed to federal court on the basis of diversity jurisdiction and countersued for a declaratory judgment that it has no obligation to Mr. Wood for his claimed losses. The Court now addresses Allstate's pending global Motion for Summary Judgment, and Mr. Wood's Motion to Strike part of Allstate's reply brief.
The Court will grant Allstate's Motion as to the bad-faith claim, because Mr. Wood has no evidence Allstate acted with a culpable state of mind. Allstate's Motion will be denied as to much of the alleged breach of contract, however. Although Mr. Wood has no "dwelling" coverage for these losses because he was not living at the insured home, Allstate has failed to establish it is entitled to judgment as a matter of law with respect to the coverages for personal property and structures other than the dwelling. The Motion to Strike will be denied because, contrary to Mr. Wood's contention, Allstate had raised its nonresidency-based dwelling-coverage argument before its reply brief.
The Woods insured their home at 1204 Emerick Drive ("the Subject Premises") under an Allstate "Deluxe Homeowners Policy" from 1970 until Allstate cancelled in late 2010. Allstate does not allege the Woods breached their Policy obligations.
The following count among the most central features of the Policy:1
• "'You' or 'your'—means the person named on the Policy Declarations as the insured and that person's resident spouse." (Policy 2.)
• " 'Dwelling'—means a one, two, three or four family building structure, identified as the insured property on the Policy Declarations, where you reside and which is principally used as a private residence." (Id. at 3.)
• The Policy Declarations make "Larry L. & Joyce Wood" the "Named Insureds" and identify the property insured by the location 1204 Emerick Drive, Walkerton, IN 46574-9543.
• "'Insured person(s)'—means you and, if a resident of your household: a) any relative; and b) any dependent person in your care." (Id. at 2.)
• "'Residence premises'—means the dwelling, other structures and land located at the address stated on the Policy Declarations." (Id. at 3.)
• Notable undefined terms include "sudden and accidental," "direct," and "vandalism."
• The three Policy coverage categories germane to this Order, set out on pages 5 through 12 of the Policy, are "Dwelling Protection" under "Coverage A," "Other Structures Protection" under "Coverage B," and "Personal Property Protection" under "Coverage C."
• Dwelling Protection under Coverage A applies to "wall-to-wall carpeting fastened to your dwelling," certain "construction materials and supplies," and "[y]our dwelling including attached structures." (Id. at 5.)
• "Other Structures Protection" under Coverage B is for other structures "separated from your dwelling by clear space" or "attached to your dwelling by only a fence, utility line, or similar connection," as well as certain other construction materials and supplies, and "wall-to-wall carpeting fastened to other building structures." (Id.)
• Compensable losses under Coverages A and B include "sudden and accidental direct physical loss to property described in Coverage A—Dwelling Protection and Coverage B—Other Structures Protection except as limited or excluded in [the] policy." (Id. at 5.)
• Coverages A and B specifically exclude:
(Id. at 7.)
• Coverage C is for "[p]ersonal property owned or used by an insured anywhere in the world." (Id. at 8.)
• Coverage C specifically includes, with an irrelevant exception, "Vandalism and Malicious Mischief" and:
In fall 2008, Mr. and Mrs. Wood moved out of the Subject Premises, taking up residence three blocks away with their son and his wife. Around that time, Mr. and Mrs. Wood decided to rent the Subject Premises to the Webers, who had lived across the street from the Subject Premises for about a year and a half.
The Webers were occasionally late paying their rent, and Mr. Wood eventually decided not to renew their lease. Even by May 2010 or later, however, he claims he had "no concerns" about the Webers' treatment of his home, and he did not inspect the premises while the Webers inhabited them. Allstate, on the other hand, contends Mr. Wood knew the Webers were making significant changes to the house "months before" he informed Allstate of them. But according to Mr. Wood, it was not until mid-October 2010, when the Webers finally left the Subject Premises for good, that he discovered the havoc the Webers had wreaked. Mr. Wood describes the scene this way:
In the kitchen a large table was missing, the floor was removed, a floor-to-ceiling cupboard was removed leaving exposed wires hanging from the ceiling, cabinets were damaged, the sink was unusable, the countertop was damaged, the floor was damaged, a cupboard was removed, light covers were removed, the appliances had been removed and the exterior door was damaged so that it could not be opened. In the dining room, heat registers were missing, baseboard was ripped off, ceiling fans were removed and panelling was taken off the walls. Throughout the home, ductwork, PVC, galvanized and copper pipes were removed. In the bathroom, the sink and walls were damaged and the pipes to the sink had been removed. Doors throughout the home had large holes in them. The attic trap door was missing. Windows throughout the home were missing or damaged. Bedroom closets were torn out and not replaced and drywall was damaged. A shelf above the basement stairs and the basement handrail were removed. The walls in the basement bedroom were damaged. A large furnace was replaced with a smallerfurnace placed on top of pallets. Parts of the side porch were destroyed. The smoke detectors and thermostat were removed.
(Response 6-7 (citations omitted).)
Mr. Wood called his Allstate agent to report his claim in the third week of October 2010. He says delays ensued before an adjuster came to inspect. The adjuster responsible, Robert Boyer, did not keep his handwritten notes from the inspection, but he testifies that he transferred them into a claim log. Mr. Wood disputes making some of the statements Mr. Boyer attributes to him in the Allstate claim file.
During Mr. Boyer's inspection, he paid attention only to what Mr. Wood pointed out to him. Ultimately, Mr. Boyer determined Mr. Wood's claimed losses were not covered, in some instances because he found damage was not "sudden and accidental;" in others, he classified damage as wear and tear, found no damage, or considered changes to the property remodeling, or believed no vandalism or theft had occurred, or found that damage had resulted from a lack of maintenance.
Mr. Wood disagreed with Allstate's determination, and ultimately filed this lawsuit, in an Indiana state court. Allstate removed to this United States District Court, the parties completed discovery, and Allstate filed this Motion. Mr. Wood responded, and Allstate replied. Mr. Wood has also moved to strike a portion of Allstate's Reply, advancing that it raises a defense for the first time.
A federal district court grants a 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 motion amounts to "put up or shut up" time, "when aparty must show what evidence it has that would convince a trier of fact to accept its version of events." Schacht v. Wisc. Dep't of Corr., 175 F.3d 497, 504 (7th Cir. 1999), unrelated dictum retracted by Higgins v. Mississippi, 217 F.3d 951, 953-54 (7th Cir. 2000). The question for each claim is whether the evidence raises any set of reasonable inferences that would enable the nonmoving party to prevail. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) () If so, the motion is denied; otherwise, granted. See id.
The allocation and the weight of the parties' evidentiary burdens at trial have a place in this summary-judgment analysis, as well.
The Court has not determined whether federal and state law conflict as to burden allocation for the breach-of-contract claim, but if there is a conflict, the issue should be governed by Indiana law. Neither party has raised...
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