Catlin Syndicated Limited v. Ramuji, LLC et al

Filing 250

MEMORANDUM OPINION. Signed by Judge Annemarie Carney Axon on 4/8/2019. (TLM, )

FILED
2019 Apr-08 AM 10:20
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
MIDDLE DIVISION
CATLIN SYNDICATED LIMITED,
Plaintiff,
v.
RAMUJI, LLC, et al.,
Defendants.

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4:16-cv-01331-ACA

MEMORANDUM OPINION
This matter comes before the court on a motion for summary judgment filed
by a set of parties that the court will refer to as the Underwriters. (Doc. 237). The
Underwriters are Plaintiff Catlin Syndicated Limited (“Catlin”) and Third Party
Defendants Syndicate 1414 at Lloyd’s, Syndicate 5820 at Lloyd’s, Syndicate 727
at Lloyd’s, and Syndicate 1861 at Lloyd’s. (Doc. 237; see also Doc. 188 at 15–
16).
As background, Defendant Ramuji, LLC owned and operated a motel. It
had a mortgage on the property through Defendant Peoples Independent Bank
(“PIB”). PIB, in turn, obtained a mortgage protection insurance policy through
Intervenor Great American Assurance Company (“Great American”).

The

mortgage protection insurance policy provided that if, in the event of any loss or
damage to the motel, PIB did not receive “acceptable hazard insurance” from

Ramuji, Great American would cover the loss or damage. Although Ramuji had a
commercial insurance policy from the Underwriters covering the motel, the
commercial insurance policy did not list PIB as a beneficiary until after a fire
destroyed the motel. As a result, PIB made a claim to Great American under the
mortgage protection insurance policy. Great American has issued a reservation of
rights letter but has not yet paid or denied the claim.
Against that backdrop, Catlin—one of the Underwriters—filed this lawsuit
against Ramuji and PIB, spawning a host of counterclaims, third party claims, and
crossclaims, including Great American’s third party claims as an intervenor.
Because Great American’s obligation to pay PIB under its mortgage protection
insurance policy depends on whether the Underwriters pay PIB under Ramuji’s
commercial insurance policy, Great American requests a declaratory judgment that
(1) it need not cover PIB’s claim because the Underwriters must cover PIB’s
claim; (2) the Underwriters are estopped from denying PIB’s claim; and (3) the
Underwriters “are liable” to Great American.

(Doc. 93 at 9–10).

The

Underwriters have now moved for summary judgment on those requests for
declaratory judgment. (Doc. 237).
Because the court’s earlier rulings preclude all of Great American’s claims
against the Underwriters, the court WILL GRANT the motion for summary

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judgment and WILL ENTER SUMMARY JUDGMENT in favor of the
Underwriters and against Great American.
I.

BACKGROUND

In deciding a motion for summary judgment, the court “draw[s] all
inferences and review[s] all evidence in the light most favorable to the non-moving
party.” Hamilton v. Southland Christian Sch., Inc., 680 F.3d 1316, 1318 (11th Cir.
2012) (quotation marks omitted).
1.

Facts

Ramuji owns a motel located in Boaz, Alabama. (See Doc. 237 at 4; Doc.
243 at 2). Ramuji obtained insurance on the property through its insurance agent,
Randy Jones & Associates, and the agent’s employee Jon Pair. (Doc. 127-1 at 9–
10, 97). Because of the type of insurance Ramuji was seeking, Randy Jones &
Associates had to work with another insurance broker, which in turn contacted the
Underwriters’ managing general agent, which issued a commercial insurance
policy to Ramuji. (Doc. 127-1 at 87, 100; Doc. 127-3 at 3, 14 Doc. 127-5 at 26–
27; Doc. 192-1 at 10; see also Doc. 237 at 5–6; Doc. 243 at 2). Great American
concedes that Randy Jones & Associates and Mr. Pain were not agents of the
Underwriters, but instead agents of Ramuji. (See Doc. 2376 at 4–5 ¶¶ 2–3; Doc.
243 at 2).

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PIB has been the mortgagee of Ramuji’s property since 2004 (doc. 46 at 27–
26), but the commercial insurance policy that Ramuji obtained from the
Underwriters did not list PIB as the mortgagee of the property. (See Doc. 90-7 at
5–6; Doc. 192-1 at 11). Meanwhile, PIB obtained mortgage protection insurance
from Great American, “insur[ing] [PIB] against direct loss or damage to property
in which [PIB has] . . . a mortgagee interest” if “acceptable hazard insurance has
been cancelled or has not been received from the mortgagor . . . .” (Doc. 93-1 at 3)
(emphasis omitted). “Acceptable hazard insurance” is “insurance on the described
location naming [PIB] as mortgage holder and meeting [PIB’s] requirements set
forth in the mortgage agreement.” (Id.) (emphasis omitted). The policy also
provides that “[i]f the property is covered by [Ramuji’s] acceptable hazard
insurance, this insurance shall not apply and shall not contribute to the payment of
any loss.” (Id. at 11) (emphasis omitted). Finally, the policy provides that, if
Great American makes a payment to PIB, Great American may require an
assignment of PIB’s rights of recovery, making Great American PIB’s subrogee.
(Id. at 11).
After a fire on April 2, 2016, destroyed the motel, Ramuji made a claim to
the Underwriters under its commercial insurance policy. (Doc. 144 at 15; see also
Doc. 237 at 9; Doc. 243 at 2). On April 25, 2016, through Randy Jones &
Associates, Ramuji asked to add PIB to the policy as a mortgagee effective at the

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inception of the policy. (Doc. 127-5 at 13–15). The Underwriters’ agent informed
Ramuji that it could not retroactively add PIB as a mortgagee, but it added the
bank by endorsement effective April 25, 2016. (Id. at 14; see Doc. 90-7 at 60–61).
The Underwriters eventually denied Ramuji’s fire loss claim. (See Doc. 46 at 5).
According to Great American’s complaint, at some point PIB notified Great
American of the April 2 fire at the motel and made a claim under the mortgage
protection insurance policy. (Doc. 93 at 7 ¶ 19). Great American has issued a
reservation of rights letter stating that it will cover PIB’s claim only if the
Underwriters’ policy does not cover PIB. (Id. at 8 ¶ 22).
2.

Relevant Procedural History

Catlin filed this lawsuit, seeking in relevant part a declaratory judgment that
PIB does not have standing to present a claim under Ramuji’s insurance policy.
(Doc. 1 at 10–11). Great American moved to intervene because a determination
about PIB’s coverage under the Underwriters’ insurance policy would dictate
whether PIB is covered under Great American’s mortgage protection insurance
policy. (Doc. 21 at 5). The court granted Great American’s motion and allowed it
to intervene in the lawsuit. (Doc. 87 at 3).
Great American’s complaint seeks a declaratory judgment that
(1) the Underwriters must cover PIB’s claim under the policy
between the Underwriters and Ramuji, and as a result Great
American is not required to cover PIB’s claim under the policy
between Great American and PIB (doc. 93 at 9–10 ¶¶ 26–27); or
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(2) the Underwriters are “contractually bound by and otherwise
estopped from” denying PIB’s claim under the policy between
the Underwriters and Ramuji because acts, omissions, and
misrepresentations made by Randy Jones & Associates and its
employee Jon Pair (id. at 10 ¶ 28); or
(3) the Underwriters are liable to Great American (as subrogee to
PIB) based on acts, omissions, and misrepresentations made by
Randy Jones & Associates and its employee Jon Pair (id. at 10
¶ 29).
Great American, purportedly as subrogee for PIB, also asserted claims against
Randy Jones & Associates and Mr. Pair (see id.), but the court dismissed those
claims for lack of standing. (Doc. 111 at 18). The court explained that because
Great American did not plead that it had paid PIB anything under the mortgage
protection insurance policy, Great American was not PIB’s subrogee, and could
not assert claims against Randy Jones & Associates and Mr. Pair in that capacity.
(See id. at 14–18).
The court later entered a declaratory judgment that PIB does not have
standing to make a claim for the April 2, 2016 fire loss under Ramuji’s insurance
policy with the Underwriters. (Doc. 229 at 2). The court also entered summary
judgment against PIB on PIB’s counterclaims and third party claims that the
Underwriters breached Ramuji’s insurance contract by failing to pay PIB as a third
party beneficiary. (Id.; see also Doc. 228 at 5–6).

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II.

DISCUSSION

In deciding a motion for summary judgment, the court must determine
whether, accepting the evidence in the light most favorable to the non-moving
party, the moving party is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(a); see also Hamilton, 680 F.3d at 1318.
Great American seeks a declaratory judgment that (1) it is not required to
cover PIB’s claim under the mortgage protection insurance policy because the
Underwriters must cover PIB’s claim under Ramuji’s commercial insurance
policy; (2) the Underwriters are “contractually bound by and otherwise estopped
from” denying PIB’s claim under Ramuji’s insurance policy; or (3) the
Underwriters “are liable” to Great American based on the acts, omissions, and
misrepresentations of Randy Jones & Associates and Mr. Pair. (Doc. 93 at 9–10).
The Underwriters move for summary judgment on all of Great American’s
requests for declaratory judgment on the basis that the court’s rulings on earlier
motions preclude Great American’s claims. (Doc. 237).
The court has issued a declaratory judgment “that PIB does not have
standing to make a claim under Ramuji, LLC’s commercial insurance policy for
the April 2, 2016 fire loss.” (Doc. 229 at 2). Great American briefly argues that
the court should reconsider its ruling because a clause in Ramuji’s policy provides
that negligence on the part of the mortgagor (Ramuji) cannot invalidate the interest

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of the mortgagee (PIB). 1 (Doc. 243 at 6). The court rejects this argument. As the
court has stated, the language of Ramuji’s insurance policy—and specifically the
clause about which Great American argues—is clear: the policy covers only
entities named in the policy, of which PIB is not one. (Doc. 105 at 14; Doc. 228 at
7 n.2).

None of the arguments or evidence presented to the court warrant

reconsideration of that holding.

Accordingly, the court WILL GRANT the

Underwriters’ motion for summary judgment as to Great American’s first request
for a declaratory judgment.
In its second request for a declaratory judgment, Great American seeks a
declaration that the Underwriters are “contractually bound by and otherwise
estopped from” denying PIB’s claim under Ramuji’s policy because of acts,
omissions, and misrepresentations made by Randy Jones & Associates and its
employee Jon Pair. (Doc. 93 at 10 ¶ 28). Again, the court’s earlier ruling on PIB’s
standing to make a claim under Ramuji’s policy forecloses this claim. PIB cannot
make a claim under the commercial insurance policy, so whether the Underwriters
are bound by or estopped from denying such a claim is irrelevant.

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In its response brief, Great American also requested that the court defer ruling on this
motion for summary judgment until after the completion of all briefing on the motion for
summary judgment that the Underwriters filed against Ramuji. (Doc. 243 at 7–8). The court
declines to postpone ruling on the Underwriters’ motion for summary judgment against Great
American because, since Great American made that request, the court has dismissed all of the
claims, counterclaims, and third party claims asserted between the Underwriters and Ramuji,
mooting the motion for summary judgment relating to those claims.
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In the alternative, Great American has presented no evidence creating a
genuine dispute of material fact about whether Randy Jones & Associates or
Mr. Pair were agents with the ability to bind the Underwriters. To the contrary,
Great American concedes that Randy Jones & Associates and Mr. Pair were agents
for the Underwriters. (Doc. 237 at 4–5 ¶¶ 2–3; see Doc. 243 at 2). As such, they
could not bind the Underwriters. Accordingly, the court WILL GRANT the
Underwriters’ motion for summary judgment as to Great American’s second
request for declaratory judgment.
In its third and final request for declaratory judgment, Great American
requests a declaration that the Underwriters “are liable” to Great American, as
subrogree to PIB, based on acts, omissions, and misrepresentations made by Randy
Jones & Associates and its employee Jon Pair. (Doc. 93 at 10 ¶ 29). The court has
already ruled that Great American’s third party complaint does not adequately
plead that Great American is PIB’s subrogee. (Doc. 111 at 18). Great American
has presented no evidence to alter the court’s conclusion. Because Great American
is not PIB’s subrogee, Great American cannot assert a claim as its subrogee.
Accordingly, the court WILL GRANT the Underwriters’ motion for summary
judgment as to Great American’s third request for declaratory judgment.

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III.

CONCLUSION

The court WILL GRANT the Underwriters’ motion for summary judgment
and WILL ENTER SUMMARY JUDGMENT in favor of the Underwriters and
against Great American on all of Great American’s requests for declaratory relief
against the Underwriters. Because this ruling addresses all of Great American’s
remaining claims, the court will term Great American as a party. 2
The court will enter a separate order consistent with this opinion.
DONE and ORDERED this April 8, 2019.

_________________________________
ANNEMARIE CARNEY AXON
UNITED STATES DISTRICT JUDGE

2

An earlier memorandum opinion from this court indicated that Great American’s claims
against Randy Jones & Associates and Mr. Pair remained pending. (See Doc. 228 at 10). The
court was mistaken. The court had already dismissed Great American’s claims against Randy
Jones & Associates and Mr. Pair. (See Doc. 111).
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