Stoploss Specialists, LLC v. Vericlaim, Inc.

• Decision Date: 26 September 2018
• Docket Number: CIVIL ACTION NO. 1:16-CV-3644-AT
• Citation: 340 F.Supp.3d 1334
• Parties: STOPLOSS SPECIALISTS, LLC and John Lewis, Plaintiffs, v. VERICLAIM, INC. and Sedgwick Claims Management Services, Inc., Defendants.
• Court: U.S. District Court — Northern District of Georgia

340 F.Supp.3d 1334

STOPLOSS SPECIALISTS, LLC and John Lewis, Plaintiffs,

v.VERICLAIM, INC. and Sedgwick Claims Management Services, Inc., Defendants.

CIVIL ACTION NO. 1:16-CV-3644-AT

United States District Court, N.D. Georgia, Atlanta Division.

Signed September 26, 2018

John F. Wymer, III, Lauren Alane Nations, Sherman & Howard, L.L.C., Atlanta, GA, for Plaintiffs.

Robert C. Khayat, Jr., The Khayat Law Firm, Atlanta, GA, for Defendants.

ORDER

AMY TOTENBERG, UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

Plaintiffs, StopLoss Specialists, LLC ("StopLoss") and John Lewis ("Lewis") (collectively, the "Plaintiffs") bring this diversity action against Defendants, VeriClaim, Inc. ("VeriClaim") and Sedgwick Claims Management Services, Inc. ("Sedgwick") (collectively, the "Defendants") seeking damages and injunctive relief premised upon an allegedly defamatory email written and disseminated by one of VeriClaim's employees. See generally Amended Complaint ("Am. Compl.") (Doc. 12). Specifically, Plaintiffs allege various state statutory and common law causes of action, including Defamation/Defamation per se (Count I), violation of the Georgia Uniform Deceptive Trade Practices Act, O.C.G.A. § 10-1-370, et seq. (Count II), Tortious Interference with Business Relations (Count III), Punitive Damages (Count IV) and Attorney's Fees (Count V). See id.¹

Presently before the Court are the parties' cross-motions for summary judgment in accordance with Fed. R. Civ. P. 56. See Notices of Motion (Docs. 70, 72). For the reasons that follow, Defendants' motion for summary judgment is DENIED and Plaintiffs' cross-motion for summary judgment is GRANTED, in part .

II. FACTUAL BACKGROUND

The following facts,² which are undisputed unless otherwise noted, are taken from the parties' Local Rule 56.1 Statements, the September 12, 2017 Declaration of Thomas Rongstad ("Rongstad Decl."), the July 14, 2017 Deposition of Thomas Rongstad ("Rongstad Dep."), the July 6, 2017 Deposition of StopLoss Specialists, LLC taken by John Lewis and the Deposition of John Lewis ("Lewis Dep."), the July 2, 2017 Deposition of Michael Cox ("Cox Dep."), the July 24, 2017 Deposition of Randell Whitehead ("Whitehead Dep."), the August 14, 2017 Deposition of Scott Chambers ("Chambers Dep."), the Deposition of Jennifer Hoyal ("Hoyal Dep.") and the Deposition of Nathan Brooks ("Brooks Dep.") as well as the exhibits attached thereto.³

A. StopLoss' Business Model

StopLoss Specialists, LLC ("StopLoss") provides emergency mitigation and remediation services following the occurrence of catastrophic events such as hurricanes, tornadoes, flooding and fire. Plaintiffs' Statement of Undisputed Material Facts ("Pls.' 56.1 Statement") ¶ 1. StopLoss is jointly owned by John Lewis and his wife. Id. The scope of work that StopLoss performs includes "drying a structure, preparing it for rebuild [as well as] decontaminating a structure from mold, mercury, and even Ebola

." Id. Therefore, where StopLoss is contracted to perform mitigation and remediation services their team "decontaminate[s], clean[s] [and] prepare[s] buildings and commercial structures for rebuild." Id. StopLoss maintains a permanent workforce of approximately eight employees "which it can supplement with a temporary workforce consisting of potentially hundreds of personnel provided for, and vetted by, temporary labor providers ...." Id. ¶ 2. Approximately ninety-five percent of StopLoss' business is generated from referrals. Id. ¶ 5. Generally, the owner of a damaged property retains StopLoss directly. Id.

B. The 2014 Escambia County Rainstorm

On April 29-30, 2014, a severe rainstorm impacted Escambia County (Pensacola), Florida. Id. ¶ 7. During this 24-hour period, 22 inches of rain fell, resulting in severe flooding. Id. Nineteen Escambia County buildings, including the Sheriff's offices and the county jail, suffered flood damage. Id. ; Defendants' Statement of Undisputed Material Facts ("Defs.' 56.1 Statement") ¶ 1. While the loss attributable to the flooding alone totaled $8 million, an explosion during the flood caused further damage such that the overall loss totaled between $45-50 million. Pls.' 56.1 Statement ¶ 8; Defs.' 56.1 Statement ¶ 2.

Following the storm, Escambia County, which had utilized StopLoss' remediation services during a previous weather event in 2012, again retained StopLoss to "be its primary mitigation contractor." Pls.' 56.1 Statement ¶ 9; see also Defs.' 56.1 Statement ¶ 26 ("StopLoss was given this job as part of its existing contractual relationship with Escambia County, and StopLoss estimated the project would cost $1.83 million"). StopLoss' primary point-of-contact with Escambia County was David Wheeler, the county's Facilities Director. Pls.' 56.1 Statement ¶ 9. After being retained, John Lewis contacted Nathan Brooks ("Brooks"), "president and majority owner of SouthernCAT" in order to offer Brooks the "opportunity to joint venture with StopLoss on the [Escambia County] project." Id. ¶ 10. In response, "Brooks traveled from Chicago to Pensacola that same day." Id. StopLoss' eight permanent employees all were assigned to the Escambia County project and were augmented by seasonal contract employees who performed the actual physical remediation efforts. Defs.' 56.1 Statement ¶ 21. These seasonal employees were "drawn from a pool of about 300 workers supplied by various companies, including OMI, Legacy, and Russell Construction." Id. ¶ 22.

Although Escambia County had retained StopLoss directly, it was nevertheless "insured for at least part of the ... [l]oss" Defs.' 56.1 Statement ¶ 3. After being notified of the loss, Escambia County's insurance carriers subsequently hired Defendant VeriClaim to "serve as the insurance adjuster." Id. ¶ 4.⁴ VeriClaim, in turn, assigned specific personnel to adjust the loss associated with the Escambia County rainstorm, including Tom Rongstad "(Rongstad"), who served as a general claims adjuster. Id. ¶ 7. Rongstad, a licensed insurance adjuster, possessed 28 years of experience in the insurance industry and had maintained a relationship with VeriClaim "or companies it acquired since 1992." Id. ¶¶ 8-10; Pls.' 56.1 Statement ¶ 14. As a general adjuster assigned to the Escambia County loss, Rongstad "represented the insurance companies" and, in that capacity, "evaluated the process of remediation and repairs, evaluated problem areas, and sought to apprise, through VeriClaim, the status of the loss and its remediation." Defs.' 56.1 Statement ¶¶ 12-13. Thus, Rongstad "made rounds each day to check on the progress of the remediation by vendors, often visiting buildings under repair multiple times in the same day." Id. ¶ 14. As an insurance adjuster for VeriClaim, Rongstad reported to Scott Chambers, who was the lead adjuster in charge of the Escambia County loss and who, in turn, reported directly to the insurance carriers. Pls.' 56.1 Statement ¶ 13.

After being retained as the insurance adjuster, VeriClaim, upon obtaining authorization, engaged Madsen Kneppers & Associates ("MKA") to "clerk the works" for the Escambia County loss. Defs.' 56.1 Statement ¶¶ 15-16. In this capacity, MKA was tasked with "visit[ing] all of the locations where mitigation was occurring, count the employees on the property, count the equipment that is running, record the hour meters, and then compare its observations against vendor invoices to ensure accuracy." Id. ¶ 16.

C. The Daily 10:00 AM Meetings

In light of the scope of the project, during the first two to three weeks following the storm, a daily 10:00 a.m. meeting was held in order to discuss the "ongoing challenges and develop avenues to overcome those challenges...." Pls.' 56.1 Statement ¶ 17. Rongstad elaborated that the challenges faced included "[h]ow to restore 19 buildings and the services they provide. Inmate housing, juvenile detention housing[,] [w]hat to do with these people, where to put them ... how many counties over are we going to use? This was a huge challenge. We had over 600 inmates displaced [and] [t]hat was a huge challenge, to find housing for 600 inmates." Rongstad Dep. at 35-36. The meetings also served as a forum "to talk about what had been accomplished and what was going to be accomplished." Brooks Dep. at 26.

Although the overall attendees at the daily meeting "changed on a daily basis," Rongstad Dep. at 35, those persons who typically attended included: Tom Rongstad (VeriClaim), Michael Watts (Escambia County), Jim Flee (Insurance Broker), Michael Cox (MKA), John Lewis (StopLoss), George Caras (StopLoss), Jennifer Hoyal (StopLoss/SouthernCAT) and Nathan Brooks (StopLoss/SouthernCAT). Pls.' 56.1 Statement ¶ 18. In addition, sometimes Escambia county Commissioners would attend the daily meeting as well. Id. ¶ 18. Generally, there were about twenty total attendees at the daily meeting. Rongstad Dep. at 35.

Notwithstanding the overarching purpose of the daily meeting, Jennifer Hoyal (StopLoss/SouthernCAT), who attended the daily meeting during the first week of the flood response, Hoyal Dep. at 38, stated that in her view the meeting

was like walking into a buzz saw every time we went in ... where it felt like we were being gunned for ... Usually those meetings are productive. There's a productive element to the meeting ... [but] [t]he meetings just didn't play out that way. It was more we walk in and there was a lot of accusations thrown about what we were or weren't getting done and then we would say, no, that is complete ... It was a very abrasive ... very confrontational [ ] and we really didn't understand why. We had never worked with [Rongstad] before [and] we didn't know why he was so confrontational with us and really seemed to be trying to get us thrown off the project is what it seemed like [to me].

Id. at 19-20. In addition, Nathan Brooks (StopLoss/SouthernCAT), when asked how he would "describe Mr. Rongstad's demeanor when he interacted with you and John Lewis at [the daily] meetings" stated that Rongstad...