Steven Volkswagen, Inc. v. Zurich Am. Ins. Co.
| Decision Date | 22 May 2020 |
| Docket Number | Case No. 19-1161-JWB |
| Parties | STEVEN VOLKSWAGEN, INC. and STEVEN VOLKSWAGEN, INC. d/b/a STEVEN INFINITI, Plaintiffs, v. ZURICH AMERICAN INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — District of Kansas |
This matter is before the court on Defendant's motion for summary judgment (Doc. 155.) The motion is fully briefed and is ripe for review. (Docs. 156, 161, 170.) For the reasons stated herein, the motion for summary judgment is GRANTED.
In keeping with the standards governing summary judgment, the following statement of facts views the evidence, and all reasonable inferences therefrom, in the light most favorable to Plaintiff, the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) ().
During the time period at issue, Defendant Zurich American Insurance Company issued policies to Infiniti Financial Services and Nissan Motor Acceptance Corporation, and their respective divisions. Plaintiffs Steven Volkswagen and Steven Infiniti, car dealerships in Wichita, Kansas, were additional insureds under the policies. On February 23, 2019, Plaintiffs' vehicle inventory consisted of new and used Volkswagens and Infinitis. On that date, Plaintiffs suffered a loss due to a windstorm. On March 6, 2019, Plaintiffs submitted claims to Defendant for the losses which involved 79 new Volkswagens, 60 used Volkswagens, 56 new Infinitis, and 16 used Infinitis. On that same day, Defendant sent an independent adjuster to assess the alleged damage on the vehicles. Nearly all alleged damage was determined to be microscopic. Defendant issued two checks totaling $475,343.44 to Plaintiffs for the claims. In paying the claims, Defendant paid the lesser of either the repair or replacement cost of the damaged vehicles. (Docs. 154 at 2; 156 at 3-4; 161 at 2.)
Plaintiffs filed this suit alleging that Defendant breached the contracts and its duty to act in good faith by paying the cost to repair instead of the replacement cost of the headlights, taillights, and wheels ("the parts at issue"). The other damaged parts that were part of the claims are not at issue in this case. Plaintiffs do not dispute the extent, or the amount of, physical damages determined by the independent adjuster. Rather, Plaintiffs contend that they should be paid for the replacement cost of the parts at issue. The policies at issue are identical with respect to the language regarding wind damage to a vehicle. The relevant language is as follows:
(
It is undisputed that the claims submitted are subject to the policies' provisions regarding the windstorm/hail deductible. Plaintiffs contend that they are owed an additional $525,120.01 in damages on the claims. This additional amount is alleged to be the cost of the replacement for theparts at issue. Plaintiffs did not obtain an expert to perform an independent evaluation of the damages to the vehicles. Plaintiffs also did not have an independent assessment of the cost of replacement or repair to the damages on the vehicles. Plaintiffs have included a spreadsheet which details the calculation for payment of the claims based on the cost of replacing the parts at issue and an adjustment of the salvage value. (Docs. 156 at 4-6; 161 at 2-3, Exh. A.)
Plaintiffs' position in this case is that Defendant should pay the claims based on the actual cash value of the parts at issue even though that amount is clearly higher than the repair cost. In support of that position, Plaintiffs included several statements of facts that were supported by an affidavit of Harold Johnson, Plaintiffs' chief financial officer. Defendant moves to strike almost all of the statements in the affidavit on the basis that they are improper expert opinion or not based on personal knowledge. (Doc. 168.)
Pursuant to Fed. R. Civ. P. 56(c)(4), "[a]n affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated." In response to the motion to strike, Plaintiffs state that they are not utilizing an expert in this case and that "all of Harold Johnson's testimony relates to the mathematical computation of the loss adjustment." (Doc. 171 at 1.) Plaintiffs further state that the numbers utilized by Johnson are the same numbers that Defendant used. Plaintiffs offer no further position on any specific statements set forth in Johnson's affidavit. Therefore, because Johnson is not offering expert testimony on any issue, in addition to a showing of personal knowledge, any opinion testimony must be admissible under Fed. R. Evid. 701 which requires it to be based on his perception, helpful to the jury, and not based on scientific or technical knowledge within the scope of Rule 702. Under that Rule, courts have allowed an officer of the business to testify about financial matters without requiring that officerto be an expert. Ryan Dev. Co., L.C. v. Indiana Lumbermens Mut. Ins. Co., 711 F.3d 1165, 1170 (10th Cir. 2013) ()). "Rule 701 allows lay witnesses to offer 'observations that are common enough and require a limited amount of expertise, if any.'" Id. (quotation omitted).
When an affidavit fails to comply with Rule 56, it is subject to a motion to strike. Radiologix, Inc. v. Radiology & Nuclear Med., LLC, No. 15-4927-DDC-KGS, 2017 WL 5007143, at *2 (D. Kan. Nov. 2, 2017) (citing Noblett v. Gen. Elec. Credit Corp., 400 F.2d 442, 445 (10th Cir. 1968) and Fed. R. Civ. P. 56(e)). Recently, however, our court has simply disregarded the portions of the affidavit that are not based on personal knowledge or admissible evidence. Id. "Instead of striking an affidavit, the better approach is for the court to consider each affidavit and, to the extent it may assert a fact which is not admissible evidence, simply exclude the requested fact from the court's ultimate findings." Id. Therefore, the court will address the relevant statements in the affidavit and determine whether they are admissible. Inadmissible evidence will be disregarded.
In Johnson's affidavit, he states that he is the chief financial officer of Plaintiffs' dealerships. In that role, he is responsible for the "preparation of dealership financial statements, accounts receivable, accounts payable, bank reconciliations, interface with financial institutions, floor plan monitoring and maintenance, and inventory control." (Doc. 161, Exh. A at 1.) Johnson's affidavit does not state that he is the person who prepares and handles claims for insurance although as the chief financial officer it may be inferred that he has some role, at least in the financial calculations he has prepared. The affidavit does state that he performed the assessment of the monetary losses, which is the calculation of the damages at $525,120.01. Although Defendant challenges the calculation of damages, the court finds that Johnson's affidavitprovides personal knowledge for those calculations and, in his role for Plaintiff, he would have familiarity with the financial aspect of losses to the dealerships.
The affidavit also includes numerous references to a claim made under the policies in 2018. For instance, Johnson states that "Defendant's representative adjusted the claims pursuant to the policy language as the wind damage adjustment in 2019 was totally inconsistent with the wind damage adjustment in 2018 even though the terms of policy were precisely the same." (Id.) Johnson also states that "Defendant adjusted the 2018 wind damage casualty loss consistent with an [Actual Cash Value] ACV policy." (Id. at 2.) Johnson, however, provides no basis for these statements. Johnson does not provide any background information regarding the 2018 claim. For example, he does not state that he submitted the claim or that he reviewed the same, or whether the cost of repair was less than the cost of the replacement parts for the vehicles involved in the 2018 claim. Essentially, the affidavit provides no information that would support a finding that Johnson has personal knowledge regarding the 2018 claim and how Defendant handled that claim. Pack v. ...
To continue reading
Request your trial