Olga Despotis Trust v. Cincinnati Ins. Co.
| Decision Date | 17 October 2014 |
| Docket Number | No. 4:12-CV-2369 RLW,4:12-CV-2369 RLW |
| Parties | OLGA DESPOTIS TRUST, Plaintiff, v. THE CINCINNATI INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
This matter is before the court on Defendant's Motion for Summary Judgment as to Count III of Plaintiff's Complaint (ECF No. 39) and Plaintiff's Motion for Partial Summary Judgment (ECF No. 49). These matters are fully briefed and ready for disposition.
Plaintiff Olga Despotis Trust ("Plaintiff") owned a commercial property which was destroyed by a tornado on December 31, 2010. (Defendant's Statement of Facts in Support of its Motion for Partial Summary Judgment as to Count III of Plaintiff's Complaint ("DSUMF"), ECF No. 41, ¶1; Plaintiff's Statement of Uncontroverted Facts in Support of Motion for Partial Summary Judgment ("PSUMF"), ECF No. 50, ¶50). Plaintiff's property was insured at the time of the tornado by Defendant The Cincinnati Insurance Company ("Defendant") under Policy No. 05EBP0030517 ("the Policy"). (DSUMF, ¶2, PSUMF, ¶2). The Policy provides the following appraisal provision:
Defendant calculated its Actual Cash Value ("ACV") of the loss and paid $813, 931. (DSUMF, ¶4). By a letter dated March 9, 2011, Plaintiff notified Defendant that Plaintiff disagreed with Defendant's calculation of the ACV. (DSUMF, ¶5). By a letter dated April 19, 2011, Defendant advised Plaintiff of its intent to invoke its rights under the appraisal provision. (PSUMF, ¶5). Defendant's April 19, 2011 letter stated, "Cincinnati Insurance will select an appraiser within 10 days of the date of this letter and advise you of same." (PSUMF, ¶6). On April 20, 2011, Plaintiff's counsel sent Defendant a letter rejecting the demand for appraisal and stating that "using the appraisal process to determine the disputed portions of the loss under the Policy is completely unproductive." (DSUMF, ¶7). By letter dated May 2, 2011, Defendant requested that Plaintiff reconsider its position declining to participate in the appraisal process. (DSUMF, ¶8). In a letter dated May 4, 2011, Plaintiff asked Defendant to confirm, in writing, whether Defendant agreed to be bound by the outcome of the appraisal process as described in the policy of insurance. (PSUMF, ¶19). On May 11, 2011, Defendant responded that "the terms and conditions of the appraisal process set forth in the policy of insurance are binding upon both the insured and the insurance company." Plaintiff did not agree to participate in appraisal process.
(DSUMF, ¶9). On May 18, 2011, Plaintiff filed a lawsuit (which was subsequently dismissed). (PSUMF, ¶25). On December 21, 2012, Plaintiff filed this Complaint. (DSUMF, ¶10). Count III of the Complaint was for declaratory judgment regarding the appraisal provision, seeking to have this Court declare that the appraisal provision of the Policy unenforceable because it was vague and ambiguous. (DSUMF, ¶11). In Count III, Plaintiff alleged that the appraisal provision was unenforceable because it states that a decision by any two of the three decisionmakers (the two appraisers and the umpire) is binding but, after an appraisal, Defendant retains the right to deny the claim. (DSUMF, ¶12). Plaintiff also complains that in Defendant's Answer to Plaintiff's Complaint and in Plaintiff's Supplemental Answers and Objections to Plaintiff's First Set of Interrogatories, Defendant did not identify the appraisal process as an affirmative defense. (PSUMF, ¶¶7-11).
Tore Swanson, Associate Manager, Property Claims for Defendant, testified that Defendant did not select an appraiser under the terms of the appraisal provision. (PSUMF, ¶¶12-15). Defendant's employee, Mr. Redick, supervised Plaintiff's claims. (PSUMF, ¶16). Mr. Redick testified that Defendant did not select an appraiser under the terms of the appraisal provision. (PSUMF, ¶¶17-18). Plaintiff was not notified of Defendant's selection of an impartial appraiser by May 9, 2011, which was 20 days after the date of Defendant's April 19, 2011 letter. (PSUMF, ¶¶20-21).
The Court may grant a motion for summary judgment if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Citrate, 477 U.S. 317, 322 (1986);Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011). The substantive law determines which facts are critical and which are irrelevant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Only disputes over facts that might affect the outcome will properly preclude summary judgment. Id. Summary judgment is not proper if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Id.
A moving party always bears the burden of informing the Court of the basis of its motion. Celotex Corp., 477 U.S. at 323. Once the moving party discharges this burden, the nonmoving party must set forth specific facts demonstrating that there is a dispute as to a genuine issue of material fact, not the "mere existence of some alleged factual dispute." Fed. R. Civ. P. 56(e); Anderson, 477 U.S. at 248. The nonmoving party may not rest upon mere allegations or denials of his pleading. Id.
In passing on a motion for summary judgment, the Court must view the facts in the light most favorable to the nonmoving party, and all justifiable inferences are to be drawn in his favor. Celotex Corp., 477 U.S. at 331. The Court's function is not to weigh the evidence but to determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 249. "'Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge.'" Torgerson, 643 F.3d at 1042 (quoting Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000)).
In this case, the parties have filed competing motions for summary judgment seeking declaratory judgment regarding the enforceability of the appraisal provision of the Policy as alleged in Count III of Plaintiff's Complaint. As stated, the parties dispute the amount of money payable under the Policy for damage to Plaintiff's commercial property.
Defendant argues that it is entitled to summary judgment on Count III because Plaintiff failed to comply with the appraisal provision of the Policy. Defendant contends that the appraisal provision is clear and unambiguous. The language of the Policy provides that Defendant contends that an ambiguity is not created simply because there is a possibility that an umpire could come to a determination with which both parties disagree and then the umpire's decision would not be binding. (ECF No. 40 at 7).
Likewise, Defendant contends that retaining its ability to deny Plaintiff's claim does not give rise to an ambiguity. (ECF No. 40 at 8-9). Defendant contends that this provision simply means that the insurer does not waive its rights to deny a claim based upon a defense or an exclusion to coverage because an appraisal is conducted.
Plaintiff, on the other hand, argues that Defendant cannot invoke the appraisal provision because it did not comply with its own appraisal provision. Plaintiff admits that the parties disagreed over the amount of the loss and that Defendant's April 19, 2011 letter stated that it would "serve as Cincinnati Insurance's written demand for appraisal of the disputed portions of the loss." Plaintiff argue that Defendant, however, failed to notify Plaintiff of its designated appraiser as outlined in the April 19, 2011 letter and required in the Policy. See April 19, 2011 letter ("Cincinnati Insurance will select an appraiser within 10 days of the date of this letter and advise you of same"), ECF No. 50-5; Policy at 36-37, ECF 50-2 ("each party will select acompetent and impartial appraiser"). Plaintiff cites to testimony of Tore Swanson, Associate Manager, Property Claims for Defendant and his supervisor, Mr. Swanson, who both stated that Defendant did not engage an appraiser for this dispute. (ECF No. 51 at 5-6). Because Defendant has never fully complied with the appraisal provision by appointing an appraiser, Plaintiff claims that Defendant waived its rights under the appraisal provision. (ECF No. 51 at 7).
In the alternative, Plaintiff argues that Defendant is estopped from asserting any defense under the appraisal provision...
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