Moutry v. The Travelers Home & Marine Ins. Co.

• Decision Date: 15 February 2023
• Docket Number: 22-cv-0070-bhl
• Parties: MCKINLEY MOUTRY, Plaintiff, v. THE TRAVELERS HOME AND MARINE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Eastern District of Wisconsin

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MCKINLEY MOUTRY, Plaintiff, v. THE TRAVELERS HOME AND MARINE INSURANCE COMPANY, Defendant.

No. 22-cv-0070-bhl

United States District Court, E.D. Wisconsin

February 15, 2023

ORDER GRANTING SUMMARY JUDGMENT

BRETT H. LUDWIG United States District Judge

In this lawsuit, Plaintiff McKinley Moutry seeks to recover under an insurance policy for losses he sustained when a fired burned down his second house in Jonesboro, Georgia. Moutry's insurer, Defendant Travelers Home and Marine Insurance Company (Travelers), denied coverage after investigating his claim and finding out that he did not reside at the Jonesboro property, as required by his policy's “residence premises” condition. Moutry then filed this lawsuit alleging breach of contract and bad faith denial of coverage. When Travelers sought summary judgment on both claims, Moutry filed both a response and a motion for leave to amend his complaint. Because the undisputed facts confirm Travelers' position, its motion for summary judgment will be granted. Additionally, because amendment at this late stage would be unfairly prejudicial, Moutry's motion to amend will be denied.

FACTUAL BACKGROUND^[1]

In August of 2015, McKinley Moutry, a resident of Milwaukee Wisconsin, purchased a second home in Jonesboro, Georgia that he intended to occupy during the winter. (ECF No. 1-2 ¶4; ECF No. 15-4 at 9:5-20.) Shortly before closing, he called Travelers' 1-800 number and asked to add the new Georgia property to his existing policy. (ECF No. 18 at 2.) But a Travelers' representative informed him that he would need a separate policy. (Id.) Moutry therefore promptly purchased a second homeowner's policy, substantially similar to the one he already had. (ECF No. 15-4 at 19:10-15.)

Under the new policy (like the old one), Travelers agreed to cover “the ‘residence premises' shown in the Declarations.” (ECF No. 15-1 at 18.) “Residence premises” means:

a. The one family dwelling where you reside; or

b. The two, three or four family dwelling where you reside in at least one of the family units;

and which is shown as the “residence premises” in the Declarations.

(Id.) The policy's Declarations page listed Moutry's single-family dwelling located at 9013 Greystone Road, Jonesboro, Georgia as the “residence premises.” (Id. at 2.)

Despite his initial intentions, Moutry never moved into his new Jonesboro property. In fact, he never even visited it, choosing instead to rent it out. (ECF Nos. 15 at 7; 15-4 at 13:2314:13.) This worked well for about four years, until October 5, 2019, when the house caught fire and burned down. (ECF No. 15 at 7-8; ECF No. 1-2 ¶7.)

Seeking coverage for fire loss, Moutry filed a claim under his second Travelers' policy. (ECF No. 1-2 ¶7.) But on October 26, 2020, after investigation, Travelers denied the claim on the basis that Moutry had never resided at 9013 Greystone Road, so it did not meet the definition of a “residence premises.” (ECF No. 15-8 at 2-4.) Nearly a year later, Moutry filed this lawsuit, alleging claims for breach of contract and bad faith denial of insurance coverage. (ECF No. 1-2 ¶¶13-19.)

LEGAL STANDARD

“Summary judgment is appropriate where the admissible evidence reveals no genuine issue of any material fact.” Sweatt v. Union Pac. R. Co., 796 F.3d 701, 707 (7th Cir. 2015) (citing Fed.R.Civ.P. 56(c)). Material facts are those under the applicable substantive law that “might affect the outcome of the suit.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue of “material fact is ‘genuine' . . . if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. If the parties assert different views of the facts, the Court must construe the record in the light most favorable to the nonmoving party. E.E.O.C. v. Sears, Roebuck & Co., 233 F.3d 432, 437 (7th Cir. 2000).

ANALYSIS

Moutry contends Travelers breached its contract by failing to provide the coverage it promised under its policy. (ECF No 1-2 ¶¶13-15.)^[2] Travelers argues that a plain reading of the insurance policy corroborates its decision to deny coverage. Moutry counters that a jury could conclude that he reasonably relied on Travelers' own agent to issue him an appropriate policy and thus require Travelers to provide the coverage its agent led Moutry to believe he would receive. Because the facts do not permit Moutry's proposed inference, Travelers' motion for summary judgment will be granted.

I. Moutry's Breach of Contract Claim Fails.

Under Georgia law,^[3]“insurance is a matter of contract, and the parties to an insurance policy are bound by its plain and unambiguous terms.” Richards v. Hanover Ins. Co., 299 S.E.2d 561, 563 (Ga. 1983) (citing Barker v. Coastal States, 225 S.E.2d 924 (Ga.Ct.App. 1976)). If terms are undefined, courts may look to dictionaries to “supply the[ir] plain, ordinary, and popular” meanings. Cunningham v. Middle Ga. Mut. Ins. Co., 601 S.E.2d 382, 384 (Ga.Ct.App. 2004) (quoting Larson v. Ga. Farm Bureau Mut. Ins. Co., 520 S.E.2d 45, 47 (Ga.Ct.App. 1999)).

In this case, whether Moutry's Jonesboro home qualifies as a “residence premises” turns on the definition of “reside.” (See ECF No. 15-1 at 18 (defining “residence premises” according to where the insured “reside[s]”).) The policy does not define “reside,” but the term has an established meaning in ordinary English. According to Merriam-Webster, “reside” means “to dwell permanently or continuously: occupy a place as one's legal domicile.” Reside, Merriam-Webster Dictionary (10th ed. 1994).

Moutry has never even visited the state of Georgia, let alone the Jonesboro property. (ECF No. 15 at 7.) He, therefore, necessarily never dwelt permanently or continuously there. This means the Jonesboro property cannot be “[t]he one family dwelling where [Moutry] reside[s]” within the Travelers policy's meaning, so it does not qualify as a “residence premises.” (See ECF No. 15-1 at 18.)

But the question remains whether Georgia courts would strictly enforce the “residence premises” provision against Moutry in these circumstances. “When interpreting state law, a federal court's task is to determine how the state's highest court would rule.” Rodas v. Seidlin, 656 F.3d 610, 626 (7th Cir. 2011) (citing Konradi v. United States, 919 F.2d 1207, 1213 (7th Cir. 1990)). If the state's highest court “has not yet addressed [an] issue, the federal court should ‘consult and follow the decisions of intermediate appellate courts' to predict how the [highest court] would act given the chance, unless ‘there is a convincing reason to predict the state's highest court would disagree.'” Webber v. Armlist LLC, 572 F.Supp.3d 603, 619 (E.D. Wis. 2021) (quoting ADT Sec. Servs., Inc. v. Lisle-Woodridge Fire Prot. Dist., 672 F.3d 492, 498 (7th Cir. 2012)). While the Supreme Court of Georgia has never directly addressed an insurance policy that includes the “residence premises” clause found in Moutry's policy, Georgia law would almost certainly apply the policy according to its plain terms. Indeed, Georgia appellate courts have confirmed that insurers are entitled to deny coverage based on noncompliance with nearly identical provisions. In Epps v. Nicholson, 370 S.E.2d 13 (Ga.Ct.App. 1988), the Georgia Court of Appeals upheld a denial of coverage where the insured did not reside at the “residence premises” identified in the policy declarations. Similarly, in Varsalona v. Auto-Owners Ins. Co., 637 S.E.2d 64, 65-66 (Ga.Ct.App. 2006), the court of appeals held that because “neither insured ever used the property as a residence,” they had not satisfied the “residence premises” provision of their insurance policy. The court in Georgia Farm Bureau Mutual Insurance Company v. Kephart, 439 S.E.2d 682 (Ga.Ct.App. 1993), also found no coverage where the insured did not reside at the “residence premises” as required by their policy. The Supreme Court of Georgia lent at least some indirect support to these interpretations in Roland v. Georgia Farm Bureau Mutual Insurance Company, 462 S.E.2d 623, 625 (Ga. 1995), in which it acknowledged Kephart, and generally blessed its holding while ultimately distinguishing it based on a unique set of facts not relevant here. Id. Other federal courts tasked with reading the writing on the wall have also concluded that the Supreme Court of Georgia would strictly construe “residence premises” clauses under these circumstances. For example, in Mahens v. Allstate Insurance Company, 447 Fed.Appx. 51, 55 (11th Cir. 2011), the Eleventh Circuit Court of Appeals, which sits in Atlanta, applied Georgia law and upheld a denial of coverage because the insurance policy “language plainly and unambiguously required [the insured] to reside at the property listed on the policy,” and the insured had not done so. See also Lyons v. Allstate Ins. Co., 996 F.Supp.2d 1316, 1320-21 (N.D.Ga. 2014) (insured who stayed at dwelling a few times a year did not reside there, and coverage for fire damage was barred under the “residence premises” provision). The Court therefore concludes that Georgia law requires strict application of “residence premises” provisions in insurance contracts.

Moutry attempts to evade this conclusion, citing recent decisions holding that an insurer is not entitled to summary judgment “when [its] insurance agent ‘has undertaken to perform an additional service,' beyond merely procuring specified insurance, ‘such as determining the amount of insurance required, and the insured relies upon the agent to perform that service.'” Cottingham &amp Butler, Inc. v. Belu, 774 S.E.2d 747, 750 (Ga.Ct.App. 2015) (quoting Fregeau v. Hall, 396 S.E.2d 241, 242 (Ga.Ct.App. 1990)). As Moutry now tells it, the Travelers' representative he spoke to on the 1-800 line was an “agent”...