Richards v. State Farm Fire & Cas. Co.

• Decision Date: 11 February 2022
• Docket Number: 2:20-cv-02503-TLP-atc
• Citation: 585 F.Supp.3d 1083
• Parties: James Edward RICHARDS and Karen Lynn Richards, Plaintiffs, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant.
• Court: U.S. District Court — Western District of Tennessee

585 F.Supp.3d 1083

James Edward RICHARDS and Karen Lynn Richards, Plaintiffs,

v.STATE FARM FIRE AND CASUALTY COMPANY, Defendant.

No. 2:20-cv-02503-TLP-atc

United States District Court, W.D. Tennessee, Western Division.

Signed February 11, 2022

Alexandria Fisher, Morgan & Morgan, Nashville, TN, Phillip N. Sanov, Morgan & Morgan PA, Houston, TX, for Plaintiffs.

Raleigh Kent Francis, Christopher L. Vescovo, Lewis Thomason, Memphis, TN, for Defendant.

ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

THOMAS L. PARKER, UNITED STATES DISTRICT JUDGE

At its core, this case revolves around the meaning of two phrases in an insurance policy. Plaintiffs James and Karen Richards bought an insurance policy ("the Policy") from Defendant State Farm Fire and Casualty Company. (ECF No. 1-1.) Plaintiffs’ home suffered significant water damage, so they filed an insurance claim with Defendant. (Id. ) Defendant denied the claim, asserting that ‘surface water’ and a ‘flood’—which, the Policy excluded from coverage—caused the water damage. (Id. at PageID 7.) So Plaintiffs sued Defendant in state court for "breach of contract" and "bad faith refusal to pay." (ECF No. 1-1 at PageID 7–8.) Defendant removed the case to this Court. (ECF No. 1.) It then moved for summary judgment. (ECF No. 45.)

The parties have fully briefed the issues in Defendant's summary judgment motion (see ECF Nos. 50 & 53), and the Court now addresses the merits of the claim. For the reasons below, the Court GRANTS Defendant's motion for summary judgment.

BACKGROUND

I. Undisputed Facts

Defendant submitted its statement of undisputed material facts (ECF No. 46), to which Plaintiffs responded (ECF No. 51). And Plaintiffs submitted their statement of additional material facts (ECF No. 52), to which Defendant responded (ECF No. 54). The Court recounts the undisputed material facts from these filings below.

On an early Spring morning in 2019, heavy rainfall, reportedly up to eleven inches, hit parts of Shelby County, Tennessee. (ECF No. 51 at PageID 224.)¹ Much of water entered the first floor and garage of Plaintiffs’ home, located at 8774 Montavesta Dr., Germantown, Tennessee. (ECF No. 51 at PageID 224.) The water came into Plaintiffs’ home from many openings, including "under and through the front doors and patio door and from the bathtub drain." (Id. at PageID 228.) The water eventually receded, and "it took approximately 30 to 45 minutes for the water to leave the house." (Id. ) Plaintiff Karen Richards photographed "the water inside the home at the point the water started to recede." (Id. )

When this rainstorm hit, Defendant insured Plaintiffs’ home with "Policy No. 42-GM-5502-5." (Id. ) The Policy, likewise, "was in full force and effect" throughout all times important to the suit. (Id. ) And so Plaintiffs filed a claim for their losses with Defendant. (Id. at PageID 229.) Defendant denied the claim, noting "that the loss had resulted from surface and/or flood water and was therefore not a covered loss under the Policy." (Id. ) But the terms "flood" and "surface water" are not defined in either the Policy or Defendant's "operations guide."² (ECF No. 54 at PageID 278–79.) The parties disagree about the meaning of these terms.

II. Procedural History

Plaintiffs sued in state court, alleging breach of contract and bad-faith refusal to pay under Tenn. Code Ann. § 56-7-105, when Defendant declined their water damage insurance claim. (See ECF No. 1-1 at PageID 6–9.) Defendant removed the suit to this Court under diversity jurisdiction (ECF No. 1),³ and answered the complaint (ECF No. 8). Later, Defendant deposed Plaintiffs (ECF Nos. 35 & 36) and moved for summary judgment (ECF No. 45). Plaintiffs responded to the summary judgment motion (ECF No. 50), and Defendant replied (ECF No. 53).

STANDARD OF REVIEW

A party is entitled to 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). "A fact is ‘material’ for purposes of summary judgment if proof of that fact would establish or refute an essential element of the cause of action or defense." Bruederle v. Louisville Metro Gov't , 687 F.3d 771, 776 (6th Cir. 2012) (citing Kendall v. Hoover Co. , 751 F.2d 171, 174 (6th Cir. 1984) ).

"In considering a motion for summary judgment, [the] court construes all reasonable inferences in favor of the nonmoving party." Robertson v. Lucas , 753 F.3d 606, 614 (6th Cir. 2014) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ). And "[t]he moving party bears the initial burden of demonstrating the absence of any genuine issue of material fact." Mosholder v. Barnhardt , 679 F.3d 443, 448 (6th Cir. 2012) (citing Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ).

"Once the moving party satisfies its initial burden, the burden shifts to the nonmoving party to set forth specific facts showing a triable issue of material fact." Id. at 448–49 ; Matsushita , 475 U.S. at 587, 106 S.Ct. 1348. This means that, if "the non-moving party fails to make a sufficient showing of an essential element of his case on which he bears the burden of proof, the moving parties are entitled to judgment as a matter of law and summary judgment is proper." Martinez v. Cracker Barrel Old Country Store, Inc. , 703 F.3d 911, 914 (6th Cir. 2013) (quoting Chapman v. United Auto Workers Loc. 1005 , 670 F.3d 677, 680 (6th Cir. 2012) (en banc)); see also Kalich v. AT&T Mobility, LLC , 679 F.3d 464, 469 (6th Cir. 2012).

What is more, "to show that a fact is, or is not, genuinely disputed, both parties are required to either cite to particular parts of materials in the record or show that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Bruederle , 687 F.3d at 776 (internal quotations and citations omitted); see also Mosholder , 679 F.3d at 448 ("To support its motion, the moving party may show ‘that there is an absence of evidence to support the nonmoving party's case.’ " (quoting Celotex , 477 U.S. at 325, 106 S.Ct. 2548 )). That said, "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge[.]" Martinez , 703 F.3d at 914 (alteration in original) (quoting Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). And so, "[t]he court need consider only the cited materials, but it may consider other materials in the record." Fed. R. Civ. P. 56(c)(3).

In the end, the "question is whether ‘the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.’ " Johnson v. Memphis Light Gas & Water Div. , 777 F.3d 838, 843 (6th Cir. 2015) (quoting Liberty Lobby , 477 U.S. at 251–52, 106 S.Ct. 2505 ). "[A] mere ‘scintilla’ of evidence in support of the non-moving party's position is insufficient to defeat summary judgment; rather, the non-moving party must present evidence upon which a reasonable jury could find in her favor." Tingle v. Arbors at Hilliard , 692 F.3d 523, 529 (6th Cir. 2012) (quoting Liberty Lobby , 477 U.S. at 251, 106 S.Ct. 2505 ). And statements in affidavits that are "nothing more than rumors, conclusory allegations and subjective beliefs" are insufficient evidence. Mitchell v. Toledo Hosp. , 964 F.2d 577, 584–85 (6th Cir. 1992). The Court now analyzes the parties’ claims under this standard.

ANALYSIS

Defendant contends that it is entitled to summary judgment on Plaintiffs’ breach of contract claim because Plaintiffs’ Policy "expressly provides that a loss caused by flood or surface water is not insured." (ECF No. 45-1 at PageID 137.) As a result, Defendant claims that it "appropriately denied [Plaintiffs’] claim." (Id. at PageID 141.) And because it properly denied the insurance claim, Defendant suggests that it is also entitled to summary judgment on Plaintiffs’ bad-faith denial argument. (Id. at PageID 146.) Interestingly, Plaintiffs agree that, if a ‘flood’ or ‘surface water’ caused the damage to their property and if their Policy does not cover this type of damage, their claims "should be dismissed[.]" (ECF No. 50-1 at PageID 210.)

Even so, Plaintiffs argue that Defendant's summary judgment motion should be denied because: (1) the water damage to their house was not cause by ‘flood’ or ‘surface water’ as those terms are commonly understood, (2) those terms are ambiguous and the Court must construe them "in favor of the insured," and (3) they proffered a prima facie case of bad-faith denial under § 56-7-105(a). (ECF No. 50-1 at PageID 214–21.)

This dispute largely hinges on whether Plaintiffs’ Policy covers damage caused by ‘flood’ and ‘surface water.’ The relevant sections of that Policy read:

SECTION I – LOSSES NOT INSURED

... 2. We do not insure under any coverage for any loss which would not have occurred in the absence of one or more of the following excluded events. We do not insure for such loss regardless of: (a) the cause of the excluded event; or (b) other causes of the loss; or (c) whether other causes acted concurrently or in any sequence with the excluded event to produce the loss; or (d) whether the event occurs suddenly or gradually, involves isolated or widespread damage, arises from natural or external forces, or occurs as a result of any combination of these:

...

Item 2.c Water is replaced by:

2. c. Water, meaning:

(1) Flood, surface water, waves (including tidal wave, tsunami, and seiche) tides, tidal water, overflow of any body of water, or spar or surge from any of these, all whether driven by wind or not; except as specifically provided in Section I – ADDITIONAL COVERAGES, Back-up of Sewer or Drain; ...

(ECF No. 1-1 at PageID 38, 19–20; see also ...