BREWTON v. LIBERTY MUTUAL HOLDING COMPANY INC et al
Filing
77
ORDER: The Court DECLINES to alter its previous 60 order granting summary judgment against Brewtons failure to assess claims and DENIES Brewton's 71 motion to file a third amended complaint; and finding as MOOT 70 Motion to Strike. The Plaintiff shall show cause no later than September 25, 2018 why this case should not be dismissed for lack of subject matter jurisdiction. Ordered by US DISTRICT JUDGE MARC THOMAS TREADWELL on 9/4/2018. (tlh)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
MACON DIVISION
CHANDRA H. BREWTON,
Plaintiff,
v.
THE FIRST LIBERTY INSURANCE
CORPORATION,
Defendant.
)
)
)
)
)
)
)
)
)
)
)
CASE NO. 5:14-CV-436(MTT)
ORDER
This case is one of several putative class actions filed in this Court in which the
plaintiffs, all of whom are represented by the same lawyers, allege that the insurance
companies providing their homeowners coverage have denied that their policies provide
coverage for the diminished value of property damaged as a result of a loss that is
overwise covered by their policies. Basically, the Plaintiffs want their insurers to accept
what has been clearly established by the Georgia Supreme Court—when the value of a
home has decreased as the result of a covered loss even though the home has been
fully repaired, the insurer must compensate the insured for that diminished value. State
Farm Mut. Auto. Ins. Co. v. Mabry, 274 Ga. 498, 556 S.E.2d 114 (2001); Royal Capital
Dev. LLC v. Maryland Cas. Co., 291 Ga. 262, 728 S.E.2d 234 (2012). The Georgia
Supreme Court has also held that when an insurer denies coverage for diminished
value and has refused to assess a loss for diminished value, a court appropriately can
order the insurer to assess for diminished value. Mabry, 274 Ga. at 509-10, 556 S.E.2d
at 123-24. When the plaintiffs’ lawyers filed this suit on behalf of Chandra Brewton, they
thought The First Liberty Insurance Corporation was one of those insurers that
stubbornly refused to accept that its policy covered diminished value. Only long after
filing suit did Brewton’s lawyers discover they were wrong. For First Liberty, in
response to the Georgia Supreme Court’s rulings, had acknowledged that Brewton’s
policy covered diminished value and had assessed her loss to determine whether the
value of her home had diminished notwithstanding the repairs paid for by First Liberty.
Given that, the Court granted First Liberty’s motion for summary judgment on Brewton’s
claim that First Liberty did not assess her loss for diminished value. Doc. 60.
Brewton has submitted further evidence and asked the Court to reconsider.
Brewton asks this court to fashion a remedy that goes beyond the limited remedy
created by the Georgia Supreme Court in Mabry. Even though First Liberty
acknowledged her policy covered her loss, and even though it assessed her loss to see
if the value of her home had diminished, she wants the Court to order First Liberty to do
another assessment, what she calls a proper assessment. Doc. 69. Brewton has also
moved to amend her complaint. Doc. 71. As discussed below, the Court DECLINES to
alter its previous order granting summary judgment against Brewton’s “failure to
assess” claims (Doc. 60) and DENIES Brewton’s motion to file a third amended
complaint (Doc. 71).1
I. MOTION FOR SUMMARY JUDGMENT
A.
Procedural History and Previous Order
In State Farm Mut. Auto. Ins. Co. v. Mabry, the Georgia Supreme Court held that
insurers must assess and pay for diminished value absent an explicit policy provision
1
Brewton also moved to strike the deposition errata sheet submitted by First Liberty’s corporate
designee, Charles Bradley Spinks. Doc. 70. But First Liberty withdrew that errata sheet. Doc. 72.
Accordingly, the motion to strike (Doc. 70) is MOOT.
-2-
excluding such coverage. 274 Ga. 498, 556 S.E.2d 114 (2001). Mabry involved an
automobile insurer, but in Royal Capital Dev. LLC v. Maryland Cas. Co., the Georgia
Supreme Court answered a question certified by the Eleventh Circuit and held that
Mabry applies to real property insurance policies as well. 291 Ga. 262, 728 S.E.2d 234
(2012). So, like the other plaintiffs asserting these claims against their insurers,
Brewton alleges in her “cookie cutter” complaint2 that her homeowner’s insurance policy
covers diminished value and that First Liberty failed to assess her property to see
whether its value had decreased, thereby breaching its contract with her. See Doc. 49
¶¶ 28, 31, 42.
But First Liberty had recognized that the Georgia Supreme Court ruled that
casualty policies cover diminished value in Mabry and Royal Capital, and it had begun
assessing losses for diminished value. Specifically, First Liberty charged its adjusters
with completing a four-step procedure to determine whether diminished value existed:
(1) verify that Royal Capital applies to the claim by determining whether the claim was a
first-party real property claim in Georgia, (2) decide whether diminished value could
exist by looking for certain “unusual” circumstances in which diminished value “could
apply” even with full repairs, (3) determine whether repairs returned the property to its
pre-loss value, and (4) if no diminished value is found, communicate that decision to the
insured and note the decision in the claim file. Docs. 51-1 at 3-4; 51-10 at 2-3. If,
however, the adjuster determines that there is a possibility that repairs alone are
insufficient to return the property to its pre-loss value, he or she is required to report the
2
See Doc. 59 at 12-13, Transcript of April 25, 2017 Phone Conference at 12:24-13:1 (Court: “But tell me,
is not your Complaint here just a cookie cutter of all your other complaints?” Counsel for Plaintiff: “The
Complaint is the same, yes.”).
-3-
possibility to First Liberty personnel specifically assigned to consider the possibility of
diminished value. Docs. 51-6 at 8:3-4; 69-12 at 43:16-45:13, 53:2-10.
Thus, as the Court summed up in the previous order, “this was not a
Mabry/Royal Capital case. It was just a simple, garden variety dispute over the value of
a fully-covered claim.” Doc. 60 at 13. Because First Liberty did not deny coverage for
Brewton’s diminished value claim and did not fail to assess for diminished value, the
Court granted First Liberty’s motion for summary judgment on her failure to assess
claim. However, the Court noted Brewton’s suggestion in her response to the motion
for summary judgment that discovery had not yet closed and that “perhaps further
discovery could yield evidence” that would make dismissal of her failure to assess
claims inappropriate. Id. at 16 (citing Doc. 53 at 24). Given the collapse of the factual
and legal grounds for her claims, that seemed unlikely. Nevertheless, the Court allowed
Brewton to continue discovery on the issue and gave her the chance to supplement her
response to the motion for summary judgment. Docs. 62; 65. Brewton has now done
so. Doc. 69.
B.
Summary Judgment Standard
A court shall grant summary judgment “if the movant shows 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). “When the non[-]moving party has the burden of
proof at trial, the moving party is not required to ‘support its motion with affidavits or
other similar material negating the opponent’s claim.’” Four Parcels of Real Prop., 941
F.2d 1428, 1437 (11th Cir. 1991) (quoting Celotex Corp. v. Cartrett, 477 U.S. 317, 323
(1986)). The moving party “simply may show . . . that there is an absence of evidence
-4-
to support the non[-]moving party’s case.” Id. at 1438 (internal quotation marks and
citation omitted). “Assuming the moving party has met its burden, the non-movant must
then show a genuine dispute regarding any issue for which it will bear the burden of
proof at trial.” Info. Sys. & Networks Corp. v. City of Atlanta, 281 F.3d 1220, 1224-25
(11th Cir. 2002) (citing Celotex Corp., 477 U.S. at 324).
In determining whether a genuine dispute of material fact exists, “[t]he evidence
of the non-movant is to be believed, and all justifiable inferences are to be drawn in his
favor.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (citation omitted). A
material fact is any fact relevant or necessary to the outcome of the suit. Id. at 248.
And a factual dispute is genuine “if the evidence is such that a reasonable jury could
return a verdict for the non[-]moving party.” Id.
C.
Brewton’s Supplemental Response to First Liberty’s Motion for Summary
Judgment
In her supplemental response, Brewton argues that new evidence reveals that
First Liberty’s diminished value assessment of Brewton’s home was a “sham
assessment” that was not an assessment at all. See generally Doc. 69. In her motion,
though, Brewton mostly highlights evidence the Court has already considered, including
the adequacy of (1) training of the adjuster who assessed her home for diminished
value, (2) steps that the adjuster took in assessing Brewton’s home for diminished
value, and (3) the standard operating procedure First Liberty had in place for adjusters
to assess for diminished value. See generally id. Although the standard operating
procedure directed assessors to consider diminished value—including whether “the
perception of ‘stigma’” could make the property “less desirable in the marketplace”—
-5-
Brewton contends that new evidence reveals these procedures were inadequate, to the
point of being a “sham.” Doc. 53-6; Doc. 69 at 16, 19-23.
This new evidence can be summarized as: (1) deposition testimony from First
Liberty’s adjusters, claims unit manager, and point person for diminished value that,
Brewton argues, admit that First Liberty adjusters “merely looked for condition and not
value,” and (2) First Liberty’s inability to demonstrate that it ever paid out, set aside
funds to pay out, or changed software to allow it to internally record paying out any
diminished value claims. See Doc. 69 at 22-24.
However, Brewton simply overstates the evidence when she contends that First
Liberty’s adjusters and head of the examining group “all admit that, in carrying out the
SOP, adjusters merely looked at condition and not value.” Doc. 69 at 22. She cites for
that proposition her new statement of material facts, which in turn cites the depositions
of Drexel Cook,3 Charles Bradley Spinks, Robert Lee Brown, Jr., Richard Jonathan
Benson, and Ricky Dale Summerlin. Id.; Doc. 69-3 ¶¶ 44, 46 (citing Docs. 53-14 at
145:16-146:8; 69-9 at 200:20-201:2, 254:3-9; 69-10 at “110:91-111:”; 69-11 at 53:1354:6; 69-12 at 139:12-21). But, at the pertinent excerpt, Cook was asked under what
circumstances “other than the items that are listed in the standard operating procedure”
he could imagine the possibility of diminished value, and he answered that a contractor
being unable to repair a home to its “preexisting conditions” or pre-loss “position” was
the only other instance he could think of. He also testified that when he assessed
Brewton’s home, he considered “any type of issue with the value of the home,” based
on “the cause of loss and—and—and exactly what’s going on, why we have this claim.”
3
Cook’s deposition was already in the record the Court considered in tentatively granting summary
judgment. Doc. 53-14.
-6-
Doc. 53-14 at 145:16-147:11, 157:2-23 (emphasis added). Brown, an adjuster who
works in Georgia for First Liberty, testified that, to determine whether a home that had
suffered fire damage (not Brewton’s) could have suffered diminished value, he
considered “the repairs that are needed and what the final result is going to be after the
repairs are completed” in determining the ultimate change in “value” to the home, as
directed by the documents provided by First Liberty, such as the standard operating
procedure and frequently asked questions. Doc. 69-10 at 10:24-11:12, 63:8-14, 110:19111:12. Later in the deposition, Brown was asked whether, in determining that the firedamaged home could not have suffered diminished value, he had considered “whether
the market value of the home would be affected by the perceptions of any potential
buyers upon learning that more than 50 percent of the home was affected by a fire;” he
answered, “[t]hat was taken into consideration, yes,” and that was what he meant when
he testified earlier that he “basically looked at the whole picture” in determining whether
the home could have suffered diminished value. Id. at 140:1-24. Benson, a project
manager who works for First Liberty on technology projects after having served as a
claims adjuster (though, like Brown, he was not Brewton’s adjuster), testified multiple
times that he could not remember what factors he considered in assessing diminished
value when he was a claims adjuster. Doc. 69-11 at 23:15-24:20, 49:22-52:23. Finally,
Benson answered, “I think the main factor is whether or not the home is put back in preloss condition,” before reiterating multiple more times that he could not recall other
factors. Id. 53:13-54:20. That tentative statement, made by a former adjuster who
claimed many times to not recall how to assess for diminished value, certainly does not
constitute an admission “that, in carrying out the SOP, adjusters merely looked at
-7-
condition and not value.” Doc. 69 at 22. Nor do the statements from the other
adjusters.
Brewton similarly mischaracterizes the deposition testimony of First Liberty
higher-ups. At his deposition, Spinks, a claims unit manager for First Liberty’s General
Adjusters Complex Team and First Liberty’s corporate designee, was asked to confirm
that First Liberty adjusters are “not trained to determine premarket value” and are
trained “to determine whether the property has been brought back to its pre-loss
condition,” and he responded, “[t]hat is correct” to both. Doc. 69-9 at 8:22-9:2, 200:20201:2, 254:3-9. But that followed a series of questions in which Spinks testified that
adjusters should, in consultation with their managers, pass certain claims with the
possibility of diminished value up to the examining group, as highlighted in the standard
operating procedure. Id. at 196:12-16, 198:17-200:19. Elsewhere, when asked how
First Liberty assessed for diminished value, Spinks testified that “you have to take each
and every one on its own merit and evaluate it accordingly,” and to do that requires,
“[a]s we’ve laid out in our standard operating procedure, bringing it back to pre-loss
value, determining whether the property has been stigmatized.” Id. at 253:4-20. Finally,
at the pertinent part of his deposition, Summerlin, a First Liberty technical claims
consultant who served as the point person for developing First Liberty’s diminished
value assessments and reviewed claims presented to him by adjusters and managers,
was asked this question: “Before the adjuster makes the decision of either ‘Yes’ or ‘No,’
what is he or she, under [the standard operating procedure], supposed to consider?”
Doc. 69-12 at 25:1-4, 139:12-14. Summerlin answered, “Looking at all the facts related
to the loss itself, the type of—and—and quantity of repairs that are necessary to restore
-8-
the structure or building to its original condition.” Id. at 139:15-21. A few moments later
in his deposition, Summerlin makes clear that it is his opinion that “[g]enerally” stigma
does not exist in a home that has been returned to its pre-loss condition because “the
perception, at least in general, is that the property has been improved.” Id. at 143:23144:5 (emphases added). Summerlin continued that there could be stigma when a loss
“would not be related to the actual physical damage. It would just be a psychological
perception” associated with the loss. Id. at 144:20-145:7. It is therefore not true that, as
Brewton contends, “the reality is that adjusters considered only the ‘condition’ of the
property when determining whether” diminished value could exist. Doc. 69 at 22.
Brewton also argues that the fact that First Liberty did not pay out, set aside
funds to pay out, or change software to allow it to internally record paying out any
diminished value claims demonstrates that the standard operating procedure was a
“sham.” Doc. 69 at 20-22. Brewton argues that “a procedure that does not result a [sic]
‘single [property] having any diminished value’ is not credible under Mabry.” Id. at 23.
But that quote and determination come from the Mabry state trial court, in an order
which was not taken up by the Georgia Supreme Court and evaluated the defendant
automobile insurer’s compliance with another court order, and the term “[property]” was,
in the Mabry trial court’s order, “vehicle.” Doc. 69-23 at 2, 6. The state trial court noted
the inconsistency between the defendant’s assertion that no vehicles had suffered
diminished value and the defendant’s expert’s testimony that “diminished value will
occur in ‘most’ vehicles after repairs have been completed following a loss,” especially
in light of the defendant’s complete lack of a “standard or uniform measure or guide
employed” for assessing for diminished value. Id. at 6-7 (emphasis added).
-9-
But vehicles experience stigma—and, accordingly, diminished value—at a much
higher rate than do pieces of real property. As the Court noted in its prior order,
Typically, the repair of a wrecked car fixes it. But there is a common
perception that a wrecked car loses value notwithstanding complete
repairs. Thus, when a CARFAX report, for example, reveals that a car
has been damaged in an accident, the value of the car in the eye of a
potential purchaser decreases even though the car has been repaired.
Doc. 60 at 2-3. In contrast, in Royal Capital, the Georgia Supreme Court noted that it is
“unusual” for diminished value to exist in real property notwithstanding full repairs. 291
Ga. at 265, 728 S.E.2d at 236-37 (quoting John Thurmond & Assocs. v. Kennedy, 284
Ga. 469, 471 n.2, 668 S.E.2d 666, 669 n.2 (2008)). Accordingly, the absence of any
paid diminished value claims does not, in itself, create a factual issue as to whether
First Liberty’s assessment procedure was a “sham.”4
And Summerlin’s uncontroverted testimony demonstrates a real effort to adhere
to Mabry and Royal Capital. After Royal Capital was decided, Summerlin headed a
“team to develop standard operating procedures related to how we would handle the
diminution in value issue, and also training materials, and also be a part of the actual
delivery of some of the training.” Doc. 69-12 at 38:25-39:7. The team met for “probably
an average of two meetings . . . per week” for a period of months to develop those
materials. Id. at 42:8-11. First Liberty distributed the standard operating procedure to
adjusters, and it also distributed a “Frequently Asked Questions” and a PowerPoint
presentation that adjusters and managers could access as further guidance and
4
Significantly, though, the Georgia Supreme Court in Mabry never considered the question of whether
diminished value actually existed in a particular automobile claim. Faced with the daunting challenge of
assessing thousands of claims that were filed during the applicable statute of limitations and, no doubt,
because of its admission that diminished value was common in the automobile context, State Farm
settled, agreeing to pay diminished value, presumably on every loss, pursuant to a uniform formula. See
generally Frank E. Jenkins III & Wallace Miller III, Georgia Automobile Insurance Law § 25:2 (2017-2018
Edition).
- 10 -
support. Id. at 66:11-20. After the standard operating procedure was developed,
Summerlin spent “probably a couple of hours a week fielding questions” and helping
train adjusters. Id. at 42:17-24. In his role reviewing claims passed along to him by
adjusters and managers, Summerlin discussed or examined the possible diminished
value of “maybe a dozen or two” specific claims. Id. at 43:16-45-13, 53:2-10. He
testified that (1) he did not ever find diminished value in any of the cases that he
reviewed for diminished value based on the types of loss of those cases, and (2) he was
not surprised by that outcome because, as the Georgia Supreme Court observed in
Royal Capital, diminished value would be unusual in real property cases, in which full
repair usually is sufficient to eliminate any loss due to stigma. Id. at 142:18-143:16.
Brewton argues that “a Mabry-compliant assessment” must include “an
appropriate methodology based on standards and criteria to calculate diminished
value.” Doc. 69 at 19. But that requirement was imposed by the Mabry state trial court
in an order considering the defendant automobile insurer’s compliance with the court’s
previous injunction. See generally Doc. 69-23; see also Doc. 69 at 19-20 (Brewton’s
supplemental response, citing to Mabry trial court orders). The Mabry decision that
binds this Court, as well as the one that through Royal Capital also applies to real
property claims, held that (1) diminished value can exist on insured properties
notwithstanding full repair, (2) insurers must pay for diminished value if repairs do not
return a property to its pre-loss value, (3) insurers are “obligated to assess that element
of loss along with the elements of physical damage when a policyholder makes a
general claim of loss,” and (4) it was not error for the Mabry trial court to order the
defendant automobile insurer to develop an appropriate methodology for assessing for
- 11 -
diminished value and to report to the trial court the manner in which it was complying
with that requirement. Mabry, 274 Ga. at 509-10, 556 S.E.2d at 123-24. There is not,
in short, a “Mabry-compliant assessment” which all insurers must use. Doc. 69 at 19.
But the fundamental problem with Brewton’s effort to salvage her failure to
assess claim by creating a factual issue is that there is no legal basis for her claim. The
“failure to assess” claim recognized in Mabry, and the resulting order to assess to
remedy that failure, arose in a situation in which an insurer denied its policy covered
diminished value and thus refused to assess for diminished value. Here, the undisputed
facts are that First Liberty admitted Brewton’s policy covers diminished value, it
established a standard operating procedure to assess for diminish value, and Brewton’s
adjuster assessed her home for diminished value. The adjuster testified that he
concluded that there was not a possibility for diminished value at Brewton’s home
because, based on his two inspections of the home, there was “[n]othing that out of the
ordinary” as to the “type of loss” that would cause him to alert his superiors that he felt
there could be diminished value. Doc. 53-14 at 129:22-130:2, 160:2-17, 163:3-25. The
adjuster further testified that he has sent a matter up for further examination of
diminished value, but that, in contrast to that case, he did not think Brewton’s home had
the potential for stigma. Id. at 129:22-130:9, 140:10-16, 160:2-161:17.
Thus, in the end, Brewton contests the adequacy of the assessment she
received for a covered loss, not the denial of coverage and the total failure to assess.
Simply put, she asserts a claim not sanctioned by Mabry, and the Court sees no reason
to expand Mabry to create such a claim. Nothing has changed since the Court’s
previous assessment of this case:
- 12 -
Brewton’s claim is not a Mabry/Royal Capital claim. Nothing in Georgia
law supports Brewton’s new and un-pleaded theory that an insured can
bring a stand-alone claim for the failure to properly assess a covered loss.
Again, insureds have long had a remedy when they think their insurer has
undervalued their claims—they file a lawsuit claiming that they should get
more than what their insurers want to pay. Mabry afforded an insured
another remedy in a very narrow situation. When an insurer improperly
denies coverage for diminished value and thus refuses to assess for
diminished value, the insured may be entitled to an equitable remedy, i.e.,
an order directing the insurer to assess for diminished value. Mabry did
not give the “insured the right to insist on any particular claims handling
procedure,” but rather “merely required that [insurers] handle all elements
of loss in each claim” by “develop[ing] an appropriate methodology for
making such evaluations.” Mabry, 274 Ga. at 509-10, 556 S.E.2d at 12324.
Doc. 60 at 15-16.5
II. MOTION TO AMEND COMPLAINT
Brewton also moves to amend her complaint pursuant to Federal Rule of Civil
Procedure 15(a)(2). Doc. 71. Brewton “seeks leave to amend to add allegations
related to, and claims arising from, [First Liberty]’s scheme that was created and
implemented to give the appearance that [First Liberty] was complying with its duty
under Georgia law and its insurance policies to assess for and pay diminished value
when, in reality, [First Liberty] never intended to do so.” Doc. 71-1 at 1. Specifically,
Brewton wishes to add claims for violations of the Georgia Racketeer Influenced and
Corrupt Organizations (RICO) Act based on First Liberty’s theft by taking and theft by
deception of Brewton and other insureds’ contract rights and services. Id. at 1; Doc. 71-
5
In a single paragraph at the end of her 30-page supplemental response, citing only a single general
treatise for legal authority, Brewton “requests, in the alternative, to substitute plaintiffs” for the “failure to
assess” claims. Doc. 69 at 28. She argues that First Liberty’s standard operating procedure was not in
place when some insureds’ losses occurred and, therefore, even if the standard operating procedure is
valid as to Brewton, other insureds’ homes were not assessed pursuant to the standard operating
procedure. Id. The Court does not have sufficient legal or evidentiary grounds to grant such a request
attached to a supplemental response to a motion for summary judgment.
- 13 -
2 at ¶¶ 136-37, 141-43, 157-60. As discussed below, the motion is denied because of
the futility of the added claims and, in the alternative, the late stage at which Brewton
seeks to amend when she should have known facts underlying her requested new
claims much earlier.
A.
Motion to Amend Standard
Leave to amend should be “freely give[n] . . . when justice so requires.” Fed. R.
Civ. P. 15(a)(2). The Court “need not, however, allow an amendment (1) where there
has been undue delay, bad faith, dilatory motive, or repeated failure to cure deficiencies
by amendments previously allowed; (2) where allowing amendment would cause undue
prejudice to the opposing party; or (3) where amendment would be futile.” Bryant v.
Dupree, 252 F.3d 1161, 1163 (11th Cir. 2001) (citing Foman v. Davis, 371 U.S. 178,
182 (1962)). “[D]enial of leave to amend is justified by futility when the complaint as
amended is still subject to dismissal.” Hall v. United Ins. Co. of Am., 367 F.3d 1255,
1263 (11th Cir. 2004) (internal quotation marks and citation omitted).
B.
Futility
Brewton has been afforded the chance to conduct discovery, and, as discussed
above, the Court finds as a matter of law that Brewton cannot show that First Liberty
conducted a “sham” assessment for diminished value that was not an assessment at all.
The same reasons for that finding require the finding that Brewton’s Georgia RICO
claims fail as a matter of law.
Brewton argues that First Liberty “created and implemented a scheme that would
ensure the end result would be no payment of any diminished value.” Doc. 71-1 at 5.
Brewton’s requested amendments allege that First Liberty thus, through its “sham
- 14 -
procedure,” engaged in the racketeering activity of theft of its insureds’ contract rights,
services, premiums, and “money as payment for diminution in value losses the insureds
had incurred,” by taking for itself money that should have gone to assessing and paying
insureds’ diminished value. Doc. 71-2 ¶¶ 142-44. The requested amendments allege
that First Liberty engaged in the predicate act of theft by taking when it “took premiums
from [its insureds] with the intent of depriving the insureds with the coverage for which
they were paying,” and that First Liberty engaged in the predicate act of theft by
deception when it promised performance of services which it did not intend to perform.
Id. ¶¶ 157-60. In support of those allegations, Brewton cites the evidence she
highlighted in her supplemental response to the motion for summary judgment. Doc.
71-1 at 6-9.
But, as discussed above, the evidence, viewed in the light most favorable to
Brewton, shows that First Liberty assessed Brewton’s home for diminished value, and if
Brewton contests First Liberty’s finding that there was no diminished value, her remedy
is to contest First Liberty’s failure to pay. The evidence, viewed in the light most
favorable to Brewton, does not permit a reasonable jury to find that First Liberty
implemented a “sham” assessment process for diminished value that amounts to no
assessment at all. But the argument that First Liberty only performed a “sham”
assessment is the basis of all of Brewton’s requested amendments. See generally
Docs. 71-1; 71-2. Accordingly, since the Court has found as a matter of law that First
Liberty did not perform a “sham” assessment that amounts to no assessment at all,
Brewton’s requested amendments are futile. See Hall, 367 F.3d at 1263 (holding that
the district court properly denied a motion to file an amended complaint that would have
- 15 -
added new claims that would have been subject to dismissal as a matter of law for the
same reasons the district court granted summary judgment on the operative complaint).
C.
Unfair Prejudice and Undue Delay
In its order on a previous motion to amend, the Court found that justice required
allowing Brewton’s amendments, which enlarged the class by adding insureds who
suffered other types of damage and restructured the claims to trace the Court’s rulings
in other diminished value cases. See generally Doc. 48. The Court found that, because
“[d]iscovery only recently commenced and the parties have already taken the proposed
amendment into account in their discovery schedule” and the amendment would expand
the class but the issues would remain the same, First Liberty would not suffer undue
prejudice and Brewton could not be found to have acted with undue delay. See
generally Doc. 48. The Court further noted that there was no evidence that amendment
would result in “prejudice, . . . advanced discovery, or interruption of the proceedings.”
Id. at 9.
The same cannot be said now. To enable First Liberty to address the new
allegations against it would require re-opening discovery and setting a new schedule for
dispositive motions. Brewton argues that “[t]he recent discovery verifies [her] belief that
the [standard operating procedure] in fact was a sham” and therefore she has not
delayed in moving to amend. Doc. 71-1 at 10-11. As discussed above, that recent
discovery consisted of depositions by First Liberty’s adjusters, claims unit manager, and
diminished value point person, as well as First Liberty’s inability to demonstrate that it
ever paid out, set aside funds to pay out, or changed software to allow it to internally
record paying out any diminished value claims.
- 16 -
But the record shows that Brewton should have been, and indeed was, aware of
the facts underlying her new claims well before conducting supplemental discovery and
moving to amend. On January 27, 2017, Brewton deposed Cook, the adjuster who
assessed her property for diminished value, and Cook testified that he had evaluated
Brewton’s property pursuant to First Liberty’s standard operating procedure. Doc. 53-14
at 129:11-130:4, 157:2-14. In a letter dated April 3, 2017, First Liberty’s counsel
informed Brewton’s counsel that it intended to argue that First Liberty did assess for
diminished value. Doc. 51-5 at 2. According to the letter, Brewton’s claim file, which
noted that diminished value had been assessed, “was included in First Liberty’s very
first document production in August 2016.” Id. at 4. Long before moving to amend,
Brewton also had access to the standard operating procedure, frequently asked
questions, and a form letter that included the prepopulated statement that diminished
value had been assessed for but not found, and she attached all of that evidence to her
response to First Liberty’s original motion for summary judgment. Docs. 53-6; 53-7; 5310. And in her response to First Liberty’s motion for summary judgment, which Brewton
filed on May 8, 2017, Brewton cited all of that evidence in arguing that “[i]n reality, the
[standard operating procedure] is a sham—a phony roadmap designed to allow First
Liberty to say that it is performing its contractual obligations when it is not.” Doc. 53 at
5; see id. at 5-11. As discussed above, the argument that the standard operating
procedure is a sham is the basis of the claims Brewton seeks to add. It is thus clear
that Brewton should have known and in fact did know facts supporting her new claims
much earlier than when she filed her motion to amend.6
6
The Court also notes that the Scheduling and Discovery Orders prepared by the parties required that
“[a]ll motions seeking to amend the pleadings or to join parties or claims must be filed as soon as the
- 17 -
Accordingly, in the alternative to finding that the amendments are futile, the Court
finds that the amendments would result in unfair prejudice and constitute undue delay.
See, e.g., Tampa Bay Water v. HDR Eng’g, Inc., 731 F.3d 1171, 1186 (11th Cir. 2013)
(“A district court may find undue delay when the movant knew of facts supporting the
new claim long before the movant requested leave to amend, and amendment would
further delay the proceedings.” (citations omitted)).
III. CONCLUSION
For the reasons discussed above, the Court DECLINES to alter its previous
order granting summary judgment on Brewton’s “failure to assess” claims (Doc. 60) and
DENIES Brewton’s motion to file a third amended class action complaint (Doc. 71).
ORDER TO SHOW CAUSE
Finally, as a result of the Court’s order dismissing Brewton’s failure to assess
claim, only her failure to pay diminished value claim remains. It seems certain that that
claim is not sufficient to satisfy the jurisdictional threshold for diversity jurisdiction.
Accordingly, the Plaintiff shall show cause no later than September 25, 2018 why this
case should not be dismissed for lack of subject matter jurisdiction.
SO ORDERED, this 4th day of September, 2018.
S/ Marc T. Treadwell
MARC T. TREADWELL, JUDGE
UNITED STATES DISTRICT COURT
need becomes apparent.” Docs. 35 at 7; 46 at 3. While these orders did not set a specific date as a
deadline to amend the pleadings or add claims, it is clear, for the reasons discussed above, that the need
should have become apparent much earlier than Brewton actually moved to amend, and the Scheduling
and Discovery Orders should have further underlined to Brewton the requirement that she move to
amend sooner than she did.
- 18 -
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?