RLF Nazareth, LLC v. York RSG (Int'l)

• Docket Number: 3:19-cv-0071
• Decision Date: 12 July 2023
• Parties: RLF NAZARETH, LLC, Plaintiff, v. YORK RSG (INTERNATIONAL), LIMITED and CERTAIN UNDERWRITERS AT LLOYDS OF LONDON ASCRIBING TO CONTRACT 1706400, Defendants.
• Court: U.S. District Court — Virgin Islands

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RLF NAZARETH, LLC, Plaintiff, v. YORK RSG (INTERNATIONAL), LIMITED and CERTAIN UNDERWRITERS AT LLOYDS OF LONDON ASCRIBING TO CONTRACT 1706400, Defendants.

No. 3:19-cv-0071

United States District Court, D. Virgin Islands, St. Thomas and St. John Division

July 12, 2023

Attorneys:

Ryan C. Meade, Esq., QUINTAIRO, PRIETO, WOOD & BOYER, P.A. MIAMI, FLORIDA For the Plaintiff RLF Nazareth, LLC.

Joseph D. Sauerwein, Esq., Matthew J. Duensing, Esq., DUENSING &amp CASNER, ST. THOMAS, UNITED STATES VIRGIN ISLANDS For the Defendant Certain Underwriters at Lloyds Ascribing to Contract 1706400.

Douglas L. Capdeville, Esq., LAW OFFICES OF DOUGLAS L CAPDEVILLE CHRISTIANSTED, UNITED STATES VIRGIN ISLANDS For the Defendant York RSG (International) Limited.

MEMORANDUM OPINION

ROBERT A. MOLLOY, Chief Judge.

BEFORE THE COURT is Defendant Certain Underwriters at Lloyd of London Ascribing to Contract 1706400 (“Lloyds”) Motion to Enforce Umpire's Award and Determination of Coverage. (ECF No. 84.) Also before the Court is Plaintiff RLF Nazareth, LLC's (“RLF”) Motion to Strike [Lloyds'] Motion to Enforce Umpire's Award and Determination of Coverage. (ECF No. 91.) For the reasons stated below, the Court will grant Lloyds' Motion to Enforce, in part, and deny in part. The Court will also deny RLF's Motion to Strike.

I. FACTS AND PROCEDURAL HISTORY

This matter arises out of Plaintiff RLF's effort to recover proceeds from an insurance policy it has with Defendant Lloyds for damages to RLF's property sustained during Hurricane Irma. (ECF No. 1.) Following the hurricane, RLF filed a claim with Lloyds for their insured property which included the main dwelling and three smaller cottages. See ECF No. 83. However, when Lloyds' agent, York RSG (International), Limited (“York”), sent out an adjuster to inspect the property, the adjuster incorrectly adjusted only the main house and not the accompanying cottages. (ECF Nos. 83 and 98.) Consequently, the adjuster concluded that the gross adjusted loss value for the RFL property was only $60,000. (ECF Nos. 83-1 and 98.) Believing there were well over $60,000 in damages, RLF retained its own adjustment firm, Global Consulting Systems, LLC (“Global Consulting”), to conduct an alternative adjustment on the property. (ECF Nos. 87 and 98.) Global Consulting found that the property had incurred a loss of $556,494.02. (ECF Nos. 87 at 5 and ECF No. 87-10.) While Lloyds allegedly sent over a new offer that included coverage for the cottages, the parties were still unable to agree to the value of the loss. See ECF 98 at 3. Given the impasse, Lloyds sought to invoke Section G of the RLF insurance policy, which states-

If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will choose a competent and impartial appraiser within 20 days after receiving a written request from the other. The two appraisers will choose an umpire. If they cannot agree upon an umpire within 15 days, you or we may request that the choice be made by a judge of a court of record in the state where the Described Location is located. The appraisers will separately set the amount of loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon will be the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will set the amount of loss.

(ECF No. 49-1.) RLF disagreed that Lloyds could invoke Section G at that time. (ECF Nos. 49 and 55.) Lloyds thus sought a motion to compel compliance with the appraisal process set out in Section G. (ECF No. 49.)

On April 26, 2021, the Magistrate Judge ordered the parties to proceed in accordance with the appraisal provision outlined in Section G of the policy. (ECF No. 59.) After going through the appraisal procedures, the parties' respective appraisers, and the designated umpire, agreed on an appraisal award on September 20, 2021. (ECF No. 70-1.) The Award determined that the Replacement Cost Value of the main dwelling (including the accompanying cottages) was $301,012.29. Id. The award listed the replacement value of the deck area ($21,000) and the pool area ($15,000) separately because there was still a dispute about whether those two areas were covered under the insurance policy. Id.

Lloyds' instant motion now seeks to enforce the Umpire's appraisal award and reduce the total recoverable damages by the deductible amount ($162,600). (ECF No. 84.) Additionally, while Lloyds' motion concedes that the deck area is covered under the insurance policy, the motion requests the Court to find that the pool area is not covered. See id.

In response, RLF filed a motion to strike believing that Lloyds' motion to enforce is effectively a motion for summary judgment, and therefore, the motion must comply with LRCi 56.1(a) (the local rule addressing how a party is to move for summary judgment). (ECF No. 91 at 2.) Because RLF contends that Lloyds' motion to enforce does not comply with LRCi 56.1(a), RLF argues that Lloyds' entire motion should be stricken from the record. Id.

In addition to the motion to strike, RLF filed a response to Lloyds' motion in which RLF argues that Lloyds does not need an order from the Court enforcing the appraisal award because the policy states that the loss shall be payable sixty days after the filing of an award. (ECF No. 95.) Therefore, RLF contends that Lloyds should have already paid the undisputed amount well before the motion to enforce was filed. See id. RLF's response also maintains that the policy covers the pool area. See id. With the facts considered, the Court will now address each motion in turn.

II. DISCUSSION

A. RLF's Motion to Strike

The Court will begin by addressing RLF's motion to strike. While “[i]t is beyond question that the District Court has the authority to strike filings that fail to comply with its local rules,” a district judge generally has broad discretion to “depart from the strictures of its own local procedural rules where (1) it has a sound rational for doing so, and (2) so doing does not unfairly prejudice a party who has relied on the local rule to his detriment.” Weitzner v. Sanofi Pasteur Inc., 909 F.3d 604, 614 (3d Cir. 2018) (“[A] district court's application and interpretation of its own local rules should generally be reviewed for abuse of discretion.”); United States v. Eleven Vehicles, Their Equip. and Accessories, 200 F.3d 203, 215 (3d Cir. 2000); see also Nittany Outdoor Advert., LLC v. College Township, 179 F.Supp.3d 436, 439 (M.D. Pa. 2016) (“[L]ocal rules are binding on the district court unless there is a justifiable reason to excuse their command.”).

The main contention in RLF's motion to strike is that Lloyds' motion to enforce is essentially a partial motion for summary judgment on whether the pool area is covered under the insurance policy and whether the policy deductible should be applied to the final appraisal award. Consequently, RLF contends that because Lloyds is effectively seeking summary judgment on these two discrete issues, Lloyds' failure to comply with the local rules for summary judgment is fatal.

Although RLF is likely correct that Lloyds' motion, practically speaking, involves a request for summary judgment,^[1] RLF has not been detrimentally harmed or unfairly prejudiced by Lloyds' failure to comply with the local rules for summary judgment. The noncompliance here is Lloyds' failure to provide a statement of undisputed facts. However, the Court first notes that Lloyds' procedural misstep does not appear to have been in bad faith. As Lloyds correctly points out in its reply brief, district courts, including the District Court of the Virgin Islands, have ruled on coverage issues without requiring the movant to comply with the local rules for summary judgment. See, e.g., Korsun v. Guardian Ins. Co., Civ. No. 1:18-cv-00047, 2021 WL 4942810 at *2 (D.V.I. Oct. 22, 2021). Accordingly, it cannot be said that Lloyds filed the motion in bad faith to avoid the requirements set out in the local rules. Thus, Lloyds' non-compliance may be excused. See Pipko v. C.I.A., 312 F.Supp.2d 669, 675 (D.N.J. 2004) (“Although typically the Court requires a movant to include a L. Civ. R. 56.1 Statement with his or her moving papers, failure to do so may be excused where there is no evidence of bad faith.”) (citing Fowler v. Borough of Westville, 97 F.Supp.2d 602, 606-07 (D.N.J. 2000));^[2]see also Davis v. Milligan, Civ. No. SX-18-CV-337, 2020 WL 13261002, at *2 (V.I. Super. Ct. Dec. 3, 2020) (finding movant's “failure to include a statement of undisputed facts does not automatically render her motion fatally deficient.”).

Moreover in light of RLF's subsequent actions, Lloyds' failure to provide a statement of undisputed facts did little, if anything, to prejudice RLF. On March 18, 2022, RLF essentially eliminated any potential prejudice when it filed an opposition to Lloyds' motion to enforce. The filing includes a section titled “Statement of Material Facts.” In that section, RLF appears to have provided all the facts it believes are relevant to the issues raised in Lloyds' motion to enforce. Thus, as long as the Court accepts all of RLF's statements of material facts as true, RLF will not be prejudiced by Lloyds' non-compliance. See Anderson Liberty Lobby, Inc., 477 U.S. 242, 247 (1986) (explaining that summary judgment may be granted as long as ‘“there is no genuine issue as to any material fact.”') (quoting Fed.R.Civ.P. 56(c)). Accordingly, the Court will address Lloyds' motion with the assumption that RLF's statements of material facts are undisputed. See Fed.R.Civ.P. 56(e)(2) (“If a party fails to properly support an assertion of fact or fails to properly address...