State Farm Fire & Cas. Co. v. Habibzai
| Decision Date | 22 August 2017 |
| Docket Number | Docket no. 2:16-cv-67-GZS |
| Parties | STATE FARM FIRE & CASUALTY COMPANY, Plaintiff, v. WASI HABIBZAI et al., Defendants. |
| Court | U.S. District Court — District of Maine |
Before the Court is the Motion for Summary Judgment (ECF No. 44) filed by Defendants and Counterclaim Plaintiffs Wasi Habibzai and Manija Habibzai (together, "Defendants" or "Habibzais"). For reasons explained herein, the Court GRANTS IN PART and DENIES IN PART the Motion.
Generally, a party is entitled to summary judgment if, on the record before the Court, it appears "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). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). An issue is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248. A "material fact" is one that has "the potential to affect the outcome of the suit under the applicable law." Nereida-Gonzalez v. Tirado-Delgado, 990 F.2d 701, 703 (1st Cir. 1993).
The party moving for summary judgment must demonstrate an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). In determining whether this burden is met, the Court must view the record in the light most favorable to the nonmoving party and give that party the benefit of all reasonable inferences in its favor. Santoni v. Potter, 369 F.3d 594, 598 (1st Cir. 2004). Once the moving party has made this preliminary showing, the nonmoving party must "produce specific facts, in suitable evidentiary form, to establish the presence of a trialworthy issue." Triangle Trading Co., Inc. v. Robroy Indus., Inc., 200 F.3d 1, 2 (1st Cir. 1999) (quotation marks and punctuation omitted); see also Fed. R. Civ. P. 56(e). "Mere allegations, or conjecture unsupported in the record, are insufficient." Barros-Villahermosa v. United States, 642 F.3d 56, 58 (1st Cir. 2011) (quoting Rivera-Marcano v. Normeat Royal Dane Quality A/S, 998 F.2d 34, 37 (1st Cir. 1993)); see also Wilson v. Moulison N. Corp., 639 F.3d 1, 6 (1st Cir. 2011) (). "As to any essential factual element of its claim on which the nonmovant would bear the burden of proof at trial, its failure to come forward with sufficient evidence to generate a trialworthy issue warrants summary judgment for the moving party." In re Ralar Distribs., Inc., 4 F.3d 62, 67 (1st Cir. 1993). Ultimately, summary judgment does not require "an all-or-nothing approach" and the Court may grant partial summary judgment on only certain claims or even part of a claim. Wright & Miller, 10B Federal Practice & Procedure § 2737 (4th ed. 2016); see also Fed. R. Civ. P. 56(g).
District of Maine Local Rule 56 prescribes a detailed process by which the parties are to place before the Court the "material facts . . . as to which the moving party contends there is no genuine issue." D. Me. Loc. R. 56(b). The Local Rule further requires each statement of material fact to be followed by a "record citation[ ] . . . to the specific page or paragraph of identified record material supporting the assertion." D. Me. Loc. R. 56(f). Ultimately, in constructing the narrative of undisputed facts for purposes of summary judgment, the Court deems any statement with a supporting record citation admitted but "may disregard any statement of fact not supported by a specific citation to record material properly considered on summary judgment." D. Me. Loc. R. 56(f); see also Fed. R. Civ. P. 56(e)(2) ().
On June 23, 2015, a house located at 17 Garett Avenue in Gray, Maine (the "Gray Property")2 burned to the ground. Initial construction of this house began with the issuance of a building permit for construction of a new home in May 2002. The initial construction ran into some problems and the property thereafter became a bank-owned property. Michael Beaulieur a/k/a Beaulieu ("Beaulieu"),3 a general contractor and real estate investor, heard about the propertyfrom a realtor and decided to purchase the property as an investment in 2003.4 On October 10, 2003, Beaulieu paid York Federal Credit Union $150,000 to purchase the partially constructed Gray Property.5
At the time of Beaulieu's purchase, the Gray Property was framed, enclosed in plywood, but missing windows, doors, and waterproofing. Between 2003 and 2004, Beaulieu installed windows, doors, a deck, and exterior "Tyvek" waterproofing. In a letter dated February 5, 2004, the Town Code Enforcement Officer informed Beaulieu the original building permit had lapsed and that he was issuing a Stop Work Order on the Gray Property. (ECF No. 52-3 at PageID # 822.) The Stop Work Order noted "structural problems" with the house and indicated an engineer review would be necessary before another building permit could issue. (Id.) Thereafter, the property sat untouched for approximately eight years.
Beaulieu financed his purchase of the Gray Property as well as the planned additional construction with a $295,000 loan from Downeast Mortgage Corporation ("Downeast Mortgage").6 Downeast Mortgage was co-owned by Jim Lindvall ("Jim" or "Lindvall"), a mortgage lender and a real estate investor. In 2007 or 2008, Jim Lindvall incorporated Market Trading Company, LLC ("Market Trading"), a sole-member limited liability company, to purchase three mortgages from Downeast Mortgage; one of those mortgages was for the Gray Property. Asa result, Market Trading then became the mortgage holder for the Gray Property. While there is no documentation that Beaulieu ever paid off the mortgage on the Gray Property, Beaulieu maintains that by July 2012, he owed Lindvall nothing on the Gray Property.
Defendants Wasi Habibzai ("Wasi")7 and his wife, Manija Habibzai ("Manija") have lived in Maine since immigrating to the United States from Afghanistan in 1990. They have been married for approximately seventeen years and have three sons. Manija speaks English as a second language; for Wasi, English is a third language.8 Together, they have operated a used car business known as Silver Motors for more than ten years.9 The Habibzais are Muslim. In accordance with their religious practice, the Habibzais do not charge interest or incur interest charges. As a result, they generally do not use credit cards10 and conduct much of their business in cash. However, they also use debit cards and maintain bank accounts.
Sometime in the early 2000s, Wasi was introduced to Beaulieu by Beaulieu's brother. Beaulieu, in turn, introduced Wasi to Lindvall in 2008. This introduction was made in connection with Wasi negotiating to buy a property in Buxton, Maine, that was then an investment jointly held by Beaulieu and Lindvall. Wasi made a $5,000 cash deposit towards the purchase of this Buxton property. He then discovered some issues with the property and sought the return of his deposit.According to Wasi, Lindvall and Beaulieu "screw[ed]" him by refusing to give him back his deposit for about four years. (W. Habibzai 9/2/15 Dep. (ECF No. 53) at PageID # 851.)
Instead of returning the deposit, Lindvall eventually offered to sell Wasi the Gray Property by sometime in 2012 or 2013. Contemporaneous documentation of this agreement is lacking.11 However, the deposition testimony of the Habizais and Michael Beaulieu, both establish an agreement between Wasi, Beaulieu, and Lindvall to sell the Gray Property to the Habibzais.12
The Habibzais recommenced construction on the Gray Property shortly after reaching an agreement to buy it. Working alongside family and friends,13 the Habibzais completed additional construction.14 (R. 281-86; 337; 384-401.)15 Wasi also obtained an electrical permit in October 2013 and established electrical service for the Gray Property in his own name. (R. 337 & 340-42.) However, prior to the fire on June 23, 2015, the Habibzais did not obtain any building permit or certificate of occupancy for the Gray Property.
Pursuant to the terms of their agreement, Wasi made monthly cash payments to Lindvall toward the purchase of the Gray Property.16 These payments varied in amount. According to Wasi, the payments ranged from at least $800 to approximately $9,000 each and all of the necessary payments to Lindvall (totaling over $80,000) were made before September 19, 2014.17 Ultimately, the earliest documentation of the transfer of the Gray Property from Beaulieu to Wasi is a quitclaim deed dated March 17, 2015.18 (R. 403-04.) This quitclaim deed was recorded on April 13, 2015.
After making the necessary payments to purchase the Gray Property, the Habibzais acquired a homeowner's insurance policy on the Gray Property from State Farm Fire and Casualty Company ("Plaintiff" or "State Farm") through John Couture Insurance Agency on September 19, 2014 (hereinafter, "the Policy"). The Policy provided a dwelling coverage limit of $397,200 andan additional personal property coverage limit of $297,900. The Habibzais made their first premium payment to State Farm on the day they acquired the Policy. They continued to make timely payments during all relevant times thereafter. The Habibzais' premium payments were made in cash.
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