Mortera v. State Farm Fire & Cas. Co.
| Decision Date | 20 September 2021 |
| Docket Number | Civil No. 1:20-cv-00224-HSO-JCG |
| Citation | 561 F.Supp.3d 684 |
| Parties | Gilberto Alarcon MORTERA, Plaintiff v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant |
| Court | U.S. District Court — Southern District of Mississippi |
Christopher J. Weldy, Weldy Law Firm, PLLC, Jackson, MS, for Plaintiff.
John A. Banahan, Calen J. Wills, Bryan, Nelson, Schroeder, Castigliola & Banahan, Pascagoula, MS, for Defendant.
BEFORE THE COURT are Defendant State Farm Fire and Casualty Company's Motion [41] for Summary Judgment, or in the Alternative, Motion for Partial Summary Judgment as to Punitive and Extra-Contractual Damages, and Plaintiff Gilberto Alarcon Mortera's Motion [67] for Summary Judgment. After due consideration of the record, the parties’ Motions, related pleadings, and relevant legal authority, the Court finds that Defendant State Farm Fire and Casualty Company's Motion [41] for Summary Judgment should be granted and that Plaintiff Gilberto Alarcon Mortera's Motion [67] for Summary Judgment should be denied as moot. Plaintiff's claims against Defendant will be dismissed with prejudice.
Gilberto Alarcon Mortera ("Plaintiff" or "Mortera") owns a condominium unit in the Kona Villa complex in Diamondhead, Mississippi. State Ct. R. [3] at 7. On or about July 7, 2018, Plaintiff's unit was damaged from "a long-time water leak and ultimate failure of the hot water heater" in the unit above his. Mem. [54] at 2. At the time of the incident, Kona Villa Owners Association ("Kona Villa") was insured with Defendant State Farm Fire and Casualty Company ("Defendant" or "State Farm"). See Ex. 1 [54-1]. The Renewal Declarations Page of Kona Villa's policy with State Farm provides that Kona Villa is the only named insured. Id. at 2. The Complaint alleges that Plaintiff's property was also insured under this policy. State Ct. R. [3] at 8. Specifically, he lists the following items as being damaged by the incident: the unit's flooring, oven, refrigerator, microwave, dishwasher, bedroom furniture in multiple rooms, wood shutters, window blinds, cabinets, drapery rod, and a bathroom mirror. Ex. 5 [54-5] at 1. Plaintiff did not have any other insurance on his unit. Ex. 6 [54-6] at 27.
State Farm was notified of the water damage to Plaintiff's unit on July 16, 2018, by Kona Villa's Treasurer. Id. at 31. State Farm processed the claim as a "First Party Property" claim and informed Kona Villa's Treasurer that it was Kona Villa's decision whether to file a claim. Id. 30-31. On August 15, 2018, Bruce Howell ("Howell"), a State Farm Claim Representative, inspected the damaged units, including Plaintiff's, with Kona Villa property manager Randy Piefer ("Piefer"). Id. at 26-27. Howell reviewed the maintenance portion of Kona Villa's bylaws and determined that the "damages sustained by the unit owners to the interior of the units is not the responsibility of [Kona Villa]." Id. at 27. Howell indicated that a full copy of the bylaws would be placed in the file and reviewed "one final time with TM Burney." Id.
On September 7, 2018, Jeff Crow, a State Farm Claim Representative, sent Kona Villa a closing letter in response to a request from Piefer. Ex. 4 [41-4]. The letter confirmed that, based on State Farm's review of the bylaws, the damage was the responsibility of each unit owner and that Kona Villa should contact State Farm if it discovered any damages that fell within Kona Villa's responsibility. Id. at 2.
On February 4, 2020, Piefer informed State Farm that Plaintiff's counsel had contacted Kona Villa and requested that State Farm conduct an additional review of the damages. Ex. 6 [54-6] at 26. Piefer advised State Farm that he was unsure if Kona Villa wanted State Farm to perform an additional review, id. , and State Farm's claim file does not indicate that a subsequent review ever occurred, see generally id.
On February 17, 2020, Plaintiff's counsel contacted State Farm and spoke with Andrea Wills ("Wills"). Id. at 25. Wills informed counsel that State Farm had not denied the claim and that, according to the Kona Villa bylaws, the individual unit owners were "responsible for the damage to the interior of the unit." Id. at 25. Kona Villa later granted State Farm permission to send a copy of its closing letter to Plaintiff's counsel but refused to allow State Farm to release a copy of its insurance policy to Plaintiff. Id. at 25.
On March 12, 2020, Plaintiff filed this action against State Farm in the Circuit Court of Hancock County, Mississippi. State Ct. R. [3] at 6. The Complaint alleges that Plaintiff "was insured under an insurance policy issued by State Farm," and that State Farm breached "its duty to promptly, fully, and fairly investigate and evaluate Plaintiff's claim" and breached "its duty of good faith and fair dealing" by refusing to pay insurance benefits due to Plaintiff. Id. at 8-9. State Farm removed the case to this Court pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. Ex. 2 [1-2] at 1.
State Farm has filed the instant Motion [41] for Summary Judgment or, in the Alternative, Motion for Partial Summary Judgment as to Punitive and Extra-Contractual Damages. Mot. [41]. State Farm argues that Plaintiff is not an insured under the Kona Villa policy and, as such, is not permitted to maintain a direct action against State Farm. State Farm also contends that Plaintiff cannot satisfy his burden of proving that it acted without an arguable basis and is not entitled to recover punitive or extra-contractual damages. Id. at 2.
In support of its Motion [41], State Farm submitted the deposition of its Rule 30(b)(6) corporate representative, Darrel Burney. Ex. 7 [41-7]. Burney testified extensively on the policy and for whom it provided coverage. Id. He confirmed State Farm's position that Kona Villa is the only named insured and that the "provisions outlined under Section [I] of this policy, would all be for the benefit of the [Kona Villa]." Id. at 54-55. Burney acknowledged that some of the items covered under Section I1 of the policy are property of the unit owner, but he clarified that the individual unit owners are not an insured under Section I of the policy. Id. at 52-53. Burney explained State Farm's position that "for the benefit of" means that if there was a covered loss that exceeded Kona Villa's deductible under Section I of the policy, then State Farm would tender payment to Kona Villa. Id. at 56-57. State Farm contends that only the named insured, Kona Villa, is entitled to the "benefits" of the policy under Section I. Id. at 58-59.
Plaintiff has filed a Memorandum [54] in Opposition to the Motion [41] and his own Motion [67] for Summary Judgment, essentially reiterating many of the arguments set forth in his Response to State Farm's Motion [41] for Summary Judgment. Plaintiff argues that he is either an insured or a third-party beneficiary under the language of the policy, which allows him to bring this direct action. Mem. [68] at 1. He asserts that State Farm denied his insurance claim without a good faith basis for doing so, entitling him to punitive and extra-contractual damages.
Summary judgment is appropriate "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 evidence is viewed in the light most favorable to the non-movants with all reasonable inferences drawn in their favor." United States Sec. & Exch. Comm'n v. Kahlon , 873 F.3d 500, 504 (5th Cir. 2017).
When faced with a properly supported motion for summary judgment, the non-moving party must show the existence of a genuine issue of material fact by producing "significant probative evidence." Hamilton v. Segue Software, Inc. , 232 F.3d 473, 477 (5th Cir. 2000). "A genuine dispute of material fact means that evidence is such that a reasonable jury could return a verdict for the nonmoving party." Royal v. CCC&R Tres Arboles, L.L.C. , 736 F.3d 396, 400 (5th Cir. 2013) (quotation omitted). "If the evidence is merely colorable, or is not significantly probative, summary judgment is appropriate." Cutting Underwater Techs. USA, Inc. v. ENI U.S. Operating Co. , 671 F.3d 512, 517 (5th Cir. 2012) (quoting Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 249-50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (internal quotation marks omitted)).
Because this case arises under the Court's diversity jurisdiction, it must apply the substantive law of the forum state, Mississippi. State Farm Mut. Auto. Ins. Co. v. LogistiCare Sols., LLC , 751 F.3d 684, 688 (5th Cir. 2014) (citing Erie R.R. Co. v. Tompkins , 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) ). Mississippi law requires the following elements in order to form a valid contract: "(1) two or more contracting parties, (2) consideration, (3) an agreement that is sufficiently definite, (4) parties with legal capacity to make a contract, (5) mutual assent, and (6) no legal prohibition precluding contract formation." GGNSC Batesville, LLC v. Johnson , 109 So. 3d 562, 565 (Miss. 2013) (quoting Adams Cmty. Care Ctr., LLC v. Reed , 37 So. 3d 1155, 1158 (Miss. 2003) ). For a breach of contract claim, the plaintiff must prove by a preponderance of the evidence: (1) "the existence of a valid and binding contract" and (2) "that the defendant has broken, or breached it." Bus. Commc'ns., Inc. v. Banks , 90 So. 3d 1221, 1224-25 (Miss. 2012) (overruling Warwick v. Matheney , 603 So. 2d 330, 336 (Miss. 1992) ).
The Mississippi Supreme Court has held that "insurance policies are...
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