Rose v. State Farm Fire & Cas. Co.

• Decision Date: 20 August 2012
• Docket Number: Case No.: 2:10-cv-874
• Court: U.S. District Court — Southern District of Ohio
• Parties: Richard K. Rose, Plaintiff, v. State Farm Fire & Casualty Co., Defendant.

Richard K. Rose, Plaintiff, v. State Farm Fire & Casualty Co., Defendant.

Case No.: 2:10-cv-874

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO EASTERN DIVISION

Dated: August 20, 2012

JUDGE SMITH

Magistrate Judge King

OPINION AND ORDER

This matter is before the Court on the parties' cross-motions for summary judgment as to Plaintiff Richard K. Rose's claims against Defendant State Farm Fire & Casualty Company for breach of contract and denying benefits in bad faith (Docs. 53 and 57). These motions are fully briefed and ripe for review. For the following reasons, the Court DENIES Plaintiff's Motion for Summary Judgment and GRANTS Defendant's Motion for Summary Judgment.

I. Background

This diversity action arises from Defendant's denial of insurance benefits following a fire at Plaintiff's property. Defendant issued a Homeowner's Insurance Policy to Plaintiff, effective June 13, 2008, to June 13, 2009 (the "Homeowner's Policy"). The Homeowner's Policy insured Plaintiff's residence located at 655 Green Valley Drive, Bidwell, Ohio (the "Property"). The Homeowner's Policy provided coverage for the dwelling with a policy limit of $533,000.00, dwelling extension of $53,300.00, and coverage for personal property with a policy limit of $399,750.00. Defendant also issued a Personal Articles Policy to Plaintiff, effective October 24,2008, through October 24, 2009. The Personal Articles Policy provided coverage for two Rolex watches, with a coverage amount of $39,150. The Homeowner's Policy and the Personal Articles Policy will be collectively referred to as the "Policies."

During the morning of January 7, 2009, a fire destroyed the dwelling at the Property. Plaintiff, who was the only person on the property when the fire started, testified at his deposition about the morning of the fire. On that day, his wife left for work at her usual time, somewhere between 7:45am and 8:20am. Plaintiff remained in the home with his four dogs. As was his usual custom, Plaintiff believes he probably smoked a cigarette while drinking his coffee. At some point, he drove his SUV down his driveway to see if his neighbor was available to talk about some work the neighbor was supposed to perform on Plaintiff's property. The neighbor was not at his shop, and between five and ten minutes later, Plaintiff returned to his property. While he was in the front of the property, he noticed smoke coming out of the upstairs foyer window. Because his front door was locked, Plaintiff ran around to the unlocked backdoor where he saw smoke and flames through the double windows of his kitchen area. Plaintiff then ran to the sliding glass door at the back of the house where his dogs were sitting, "in a state of panic." (Rose Dep. at 95). He opened the door and let his dogs out; the oldest dog had to be pulled out from underneath the dining room table. At this point the dogs were about twelve feet from where Plaintiff had seen flames in the window. Shortly thereafter, the windows over the kitchen sink blew out. Plaintiff then called 911 and placed his dogs in his truck. He could not recall whether the dogs were covered in soot or smelled of smoke. Plaintiff's wife testified that the dogs smelled and required baths and that one dog was seen by the veterinarian.

Within hours of the occurrence of the fire, Plaintiff reported a fire loss at the Property toDefendant. Defendant provided an immediate $2,500 advance payment to Plaintiff. The next day, Defendant provided an additional advance payment of $25,000. Plaintiff ultimately claimed losses of $696,373.30 for damage to the dwelling, $512,765.57 for damage to personal property, $30,000 for additional living expenses, and $29,850 for one Rolex watch.

The claim was assigned to one of Defendant's adjusters, Scott Harris, who initiated an investigation of the fire. During the evening of January 7, 2009, Mr. Harris called Plaintiff's telephone number on file and left a voicemail message. Mr. Harris also dialed a telephone number associated with Plaintiff's 26-year-old non-resident daughter, but Plaintiff's ex-wife, Kim Jividen, answered the telephone. Ms. Jividen provided information to Mr. Harris regarding their divorce, custody and child support matters, and other financial matters concerning Plaintiff. Mr. Harris contacted Plaintiff's local insurance agent and discussed Plaintiff and the fire loss with him. A few days after the fire, Rob Raker, a Special Investigation Unit Claim Representative for Defendant, became responsible for the claim made by Plaintiff. Mr. Raker began his investigation of the claim by visiting the Property on January 12, 2009, and talking with Plaintiff.

As part of the investigation, Defendant retained Michael Linscott, a fire investigator with SEA, Ltd., to investigate the origin and cause of the fire. Mr. Linscott also arrived at the Property on January 12, 2009, to complete a scene inspection and a cause and origin investigation. Mr. Linscott reviewed the exterior and interior of the Property, documenting the extensive damage to the Property. He talked with Plaintiff to obtain any information he had about the fire. He also examined and analyzed burn patterns to determine where the fire started.

Based on his initial investigation, Mr. Linscott decided that retaining the services of anelectrical engineer was important in determining whether an electrical problem started the fire. Consequently, Jeff Lindsey, an electrical engineer and colleague of Mr. Linscott's at SEA, Ltd., assisted in the investigation. On January 14, 2009, Messrs. Lindsey and Linscott arrived at the Property to further investigate the fire. Although they were unable to define a specific point of origin, they agreed that the fire generally originated around the kitchen's island and cabinetry. They removed electrical items for further examination.

On January 20, 2009, Mr. Raker took a recorded statement of Plaintiff and Shelly Rose, Plaintiff's current wife. Mr. Raker also spoke with Plaintiff's ex-wife, Ms. Jividen, and gathered information by searching public records, such as court and real estate records. In pursuing court documents and additional information regarding Plaintiff, Mr. Raker requested the assistance of claim test managers in West Virginia and Virginia. Prior to having any information from his fire investigator about the cause of the fire, Mr. Raker sent an email to these claim test managers requesting that they gather information on various West Virginia and Virginia cases involving Mr. Rose, dating as far back as 1987. (Raker Dep. Ex. D&E). While recognizing that the cases had "some age to them," Mr. Raker noted that the information has "good impeachment value and will help establish a pattern." (Raker Dep., Ex. D and E).

On May 18, 2009, Messrs. Linscott and Lindsey issued their "Dwelling Fire Analysis" (the "Report"). (Linscott Decl., Ex. A). The investigators reached a number of conclusions regarding the origin and cause of the fire:

The fire originated within an area in the kitchen that included the center island and extending north to the cabinets and the south end of the informal dining area.

Examination of all electrical items known to have been in the area of origin eliminated them as being the source of ignition.

Based on the statement by Mr. Rose, the insured, careless discarding of smoking materials in the trash container was eliminated as a potential source of ignition.

Based upon the statements by Mr. Rose and his wife, Shelly, cooking was eliminated as being the potential cause of the fire.

A non-reported human action cannot be eliminated as being causal to the ignition of this fire.

The last known person to have been in the kitchen and dining area, as well as on the property before the fire, was Mr. Rose.

(Id. at 1). In discussing the cause of the fire, the Report further states in part:

The investigation analyzed all potential sources that were found in and near the area of the origin; however, the ignition source was not identified. This includes items and activities reported by the Roses. Clearly, the fire occurred and evolved. Considering that Mr. Rose was the last person known to have been inside the dwelling within approximately 30 minutes of the fire's discovery, an unreported human action cannot be eliminated.

(Id. at 34). The report did not ultimately make any conclusion as to the cause of the fire.

At his deposition, which was held on August 18, 2011, Mr. Linscott stated that he did not know whether the fire was an accidental or incendiary fire because he did not have evidence that it was an incendiary fire. He further explained that, while he could identify the area where the fire originated, he could not identify the source of ignition even though "there had to be one." (Linscott Dep., at 79). Mr. Linscott evaluated "every potential source of ignition to this fire." (Id. at 78). Mr. Linscott eliminated electrical sources as a potential ignitor to the fire, and he also did not find evidence of any other possible ignition source in the fire origin area, such as a candle or a candle warmer. Under these circumstances, Mr. Linscott resolved that "it's more probable than not that it's some human act" that caused the fire. (Id. at 80). Despite this assertion, Mr. Linscott was still unable to conclude that the fire was "incendiary." (Id). TheState Fire Marshall also examined the Plaintiff's property, though no final conclusion on the cause of the fire has been made.¹

As part of the investigation, Defendant retained attorney Timothy J. Ryan to conduct examinations under oath of Plaintiff, his wife, and his ex-wife, as well as to provide a coverage opinion. At the conclusion of the investigation, Defendant denied Plaintiff's claims for insurance proceeds. Defendant could not identify the ignition source of the fire and claimed that Plaintiff violated "Intentional Acts" and "Concealment or Fraud" conditions of the insurance policy. Further, Defendant alleged that Plaintiff neglected to...