O'Quinn v. Gen. Star Indem. Co.
| Decision Date | 05 August 2014 |
| Docket Number | CIVIL ACTION NO. 1:13-CV-471 |
| Parties | DANA O'QUINN, Plaintiff, v. GENERAL STAR INDEMNITY COMPANY, Defendant. |
| Court | U.S. District Court — Eastern District of Texas |
Pursuant to 28 U.S.C. § 636(c), the Local Rules for the United States District Court for the Eastern District of Texas, and the consent of the parties, this case is before undersigned United States Magistrate Judge, at Beaumont, Texas, for all matters, including trial and entry ofjudgment. Pending before the court are the defendant's two motions for summary judgment, Traditional Motion for Summary Judgment (doc. #23) and No-Evidence Motion for Summary Judgment (doc. #17).
In the interest of efficiency, the Court will address both motions in one order. The Court first resolves the defendant's No-Evidence Motion for Summary Judgment, followed by the Traditional Motion for Summary Judgment.
On July 24, 2013, the plaintiff, Danna O'Quinn, ("plaintiff" or "O'Quinn") filed her Original Petition in the 136th Judicial District Court of Jefferson County, Texas, against defendant General Star Indemnity Company ("defendant" or "General Star"). See Plaintiff's Original Petition and Notice of Removal (doc #1-4). In the Original Petition, plaintiff states that she purchased insurance from defendant to insure her property, Alibi's, a nightclub and restaurant, located in Jefferson County, Texas. See Original Petition, at p. 2. On July 4, 2011, a fire significantly damaged the insured property. Id. O'Quinn filed an insurance claim on the property. She contends that General Star has made some payment, but has refused to pay "certain depreciation losses, omitted and underpaid some items." Id. Plaintiff also states in the Original Petition that the defendant improperly calculated the damages from the property. Id. at 3. Plaintiff alleges that General Star has not attempted in good faith "to effect a prompt, fair, and equitable settlement of a claim submitted in which liability has become reasonably clear." Id. Plaintiff also contends that General Star was negligent in "omitting line items for payment, under pricing items, and omitting depreciation entries." Id. Based on these allegations, the plaintiff asserts causes of actions for negligence; breach of contract; breach of implied covenant of good faith and fair dealings; and violations of Section 542.003, 542.058 and 542.060 of the Texas Insurance Code.
The evidence submitted with the parties' briefs sets forth the following background information. On January 22, 2004, O'Quinn's husband Brian O'Quinn filed the Articles of Incorporation for Cahoots Entertainment, Inc. ("Cahoots"). See Defendant's No-Evidence Motionfor Summary Judgment (doc #17, p. 1). Brian O'Quinn, as President and Director of Cahoots, executed a Lease Agreement with landlord Wallace Debes and signed a promissory note for $355,000.00. Id. at 2. Plaintiff's name was absent from these agreements, but O'Quinn completed an insurance application from General Star that represented she was the owner of the property. Id. This policy provided coverage for a Replacement Cost of $400,000 and coverage for Business Personal Property of $300,000. See Commercial Property Coverage Part Declarations (Exhibit #3 to the Motion for Summary Judgment).
The abovementioned fire on July 4, 2011, caused significant damage to Alibi's. On January 3, 2012, General Star presented O'Quinn with a Sworn Statement of Proof of Loss seven months after the fire. See Plaintiff's Response to Defendant's Traditional Motion for Summary Judgment (doc #28, p.1). On January 4, 2012, O'Quinn sent a letter to General Star with changes and stipulating that she was reserving her right to make a claim for additional damages. See Letter, Exhibit 2 to Plaintiff's Response to Defendant's Traditional Motion for Summary Judgment (doc # 28-2).
On February 15, 2012, O'Quinn signed a Policyholder's Property Damage Release that stated she accepted the settlement of all claims, but reserved the right to pursue "a supplemental claim for additional damages, if discovered, and to review and revisit the depreciation calculation." See Plaintiff's Response, at p.1. General Star issued a final payment of $429,211.93. See Defendant's Traditional Motion for Summary Judgment (doc #23, p.2). These payments were made in accordance with provisions of the policy and in compliance with Actual Cash Value ("ACV"), which depreciated the property. Id. For O'Quinn to recover the depreciation, she would have to make repairs to the property to receive the Replacement Cost Value ("RCV") of the property. Id. at 3. On February 6,2013, O'Quinn filed a supplemental claim for additional damages and asserted the claims discussed herein. Id. at 2.
The defendant urges that summary judgment is warranted due to a lack of evidence. General Star argues that O'Quinn has no insurable interest in the property, has not shown any evidence of an interest in the property, and therefore, cannot recover under an insurance policy. See Defendant's No-Evidence Motion for Summary Judgment (doc #17, p. 3).
In her response, O'Quinn contends she has managed the club with her husband and that the club is the primary source of income for her family. See Plaintiff's Response to Defendant's Motion for Summary Judgment (doc #19, p.4). O'Quinn argues that she has community property in Cahoots and that General Star overlooks Texas law allowing a wife the ability to purchase insurance on a husband's property even if she is not a leasehold owner. Id. at 5. Furthermore, O'Quinn argues that General Star has acknowledged O'Quinn has insurable interest in the property because it paid her substantial money for the fire loss under the policy. Id. at 8.
The defendant filed a reply in support of its motion for summary judgment. See Reply Brief (doc #17). General Star reasserts its argument that O'Quinn has no insurable interest in the property. Id. at 4. General Star contends that Cahoots is the corporation that derives an insurable interest in the property because it was the party that signed the lease agreement, obtained the promissory note and derived a pecuniary benefit from the existence of the property. Id. Moreover, General Star argues that O'Quinn has no evidence of an insurable interest as she did not expend any personal funds, was not a tenant or suffer any personal loss. Id. Furthermore, General Star claims that if there wasevidence, it would have been uncovered already because of the extensive discovery that has taken place. Id. at 4.
Federal rules govern procedural requirements for motions for summary judgment filed in federal cases, irrespective of the basis for the court's jurisdiction. See Doe v. Doe, 941 F.2d 280, 287 (5th Cir. 1991). Summary judgment shall be rendered when 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. Catrett, 477 U.S. 317, 323-25, 106 S. Ct. 2548, 91 L. Ed.2d 265(1986); Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). An issue is genuine if the evidence is sufficient for a reasonable jury to return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255-56, 106 S. Ct. 2505, 91 L. Ed.2d 202 (1986). A fact is material when it is relevant or necessary to the ultimate conclusion of the case. 477 U.S. at 248.
Rule 56(c) places the initial burden on the moving party to identify those portions of the record which it believes demonstrate the absence of a genuine issue of material fact. See Celotex Corp., 477 U.S. at 323. The movant's burden is only to point out the absence of evidence supporting the nonmovant's case. Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 913 (5th Cir.); cert. denied, 506 U.S. 832, 113 S. Ct. 98, 121 L. Ed.2d 59 (1992).
When the moving party has carried its burden of demonstrating the absence of a genuine issue of material fact, the nonmoving party bears the burden of coming forward with "specific facts showing that there is a genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). In considering a motion for summary judgment, "the evidence of thenon-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S. Ct. 2505 (1986). All inferences drawn from the factual record must be viewed in the light most favorable to the nonmoving party. Matsushita, 475 U.S. at 587. However, the nonmovant may not rest on the mere allegations or denials of its pleadings, but must respond by setting forth specific facts indicating a genuine issue for trial. Webb v. Cardiothoracic Surgery Assocs. of North Texas, P.A., 139 F.3d 532, 536 (5th Cir. 1998). The Court must consider all of the evidence but refrain from making any credibility determinations or weighing the evidence. See Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007) (citation omitted). Mere conclusory allegations are not competent summary judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996). Unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence. See Forsyth v. Barr, 19 F.3d1527, 1533 (5th Cir.), cert. denied, 513 U.S. 871, 115 S. Ct. 195, 130 L. Ed.2d 127 (1994).
The party opposing summary judgment is required to identify specific evidence in the...
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