Atai v. Allstate Indemnity Company
Filing
49
ORDER denying 39 Motion for Partial Summary Judgment; granting 36 Motion to Amend Expert Repoert of Phil Grandchamp. Signed by Judge Thomas W. Thrash, Jr on 4/11/2014. (ss)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
SHAHLA ATAI,
Plaintiff,
v.
CIVIL ACTION FILE
NO. 1:13-CV-342-TWT
ALLSTATE INDEMNITY
COMPANY,
Defendant.
OPINION AND ORDER
The Plaintiff seeks partial summary judgment on her claim that the Defendant,
Allstate, cannot prove an exclusion from her homeowner’s insurance policy. Allstate
denied coverage because it believed that the Plaintiff and her ex-husband worked
together to vandalize the home and because it believed the Plaintiff concealed or
misrepresented material facts in seeking to collect on her policy. The Plaintiff
contends that Allstate has only weak circumstantial evidence to support its grounds
for exclusion. However, Allstate’s evidence is sufficient to create an issue of fact
capable of defeating summary judgment.
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I. Background
The Plaintiff’s home in Duluth, Georgia (the “Property”) was found thoroughly
vandalized on June 7, 2011. The Plaintiff had been out of town since May 21, and the
Plaintiff’s daughter discovered the vandalism when she went to the Property to
retrieve a belonging. The Plaintiff’s daughter immediately contacted her father, Shawn
Atai, to report the vandalism. Shawn Atai had been divorced from the Plaintiff, Shahla
Atai, since February 2011.
The parties dispute the facts surrounding the claims filing process. According
to the Plaintiff, she promptly filed a claim and Allstate sent an investigator, Kenneth
Wright, to assess the damage. On April 5, 2012, the Plaintiff submitted a list of
vandalized contents to Allstate, including the replacement costs of the items, through
her public adjuster, Phillip Grandchamp. The list sought to recover $900,913.56,
including the policy limits for the contents of the Property in the amount of $549,750,
$356,163.56 in structural damage, and discounting the $5,000 deductible. (See Pl.’s
Mot. for Partial Summ. J., Ex. F). Although the Plaintiff claimed she lost over
$973,000 in property, she only sought the $549,750 policy limit. Allstate examined
Grandchamp under oath on May 31, 2012. During his examination he realized his staff
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had misreported the price of several items on his list, and on July 2, 2012, he amended
his list to reflect the changed prices.1
Allstate, which officially denied the Plaintiff’s claim on June 29, 2012, paints
a different set of facts. Allstate argues that the Plaintiff filed her first claim on
November 22, 2011, not April 5, 2012. Only after Allstate examined the Plaintiff
under oath on February 24, 2012, and announced its intention to conduct a detailed
inventory of the Plaintiff’s claimed losses, did the Plaintiff file her second claim on
April 5, 2012. (See Shahla Atai Dep. Exs. 1 & 2). Allstate denied that claim on June
29, 2012, because it was fraudulent and because Allstate believed Shawn Atai had
committed the vandalism. After the Plaintiff filed this suit on January 31, 2013,
Allstate deposed the Plaintiff and again indicated its intention to investigate the
Plaintiff’s claims for fraud. After the deposition, the Plaintiff sought to submit a
renewed list of vandalized items, even though she had stated in the deposition that she
stood by her claim completely. (See id. at 47-49). Allstate denied the Plaintiff’s
request to submit a new list. However, the next day, the Plaintiff announced she had
discovered an amendment to her April 5, 2012 claim which had been prepared on July
1
On December 23, 2013, the Plaintiff moved to amend the Expert Report of
Phil Grandchamp. Although the Defendant argues in its summary judgment opposition
that this amendment is not genuine, the Defendant has not opposed the motion itself
and granting the motion will not change the outcome of the Plaintiff’s motion for
partial summary judgment. Accordingly, the Plaintiff’s motion to amend should be
granted.
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2, 2012. Although this amendment was purportedly submitted by Grandchamp, he
testified in his September 2013 deposition that he had done no work for the Plaintiff
since his April 5, 2012 report. (Grandchamp Dep. at 9, 47). The Plaintiff now seeks
partial summary judgment on the grounds that Allstate cannot meet its burden of
showing that an exclusion to the vandalism coverage of the Plaintiff’s homeowner’s
policy applies.
II. Summary Judgment Standard
Summary judgment is appropriate only when the pleadings, depositions, and
affidavits submitted by the parties show that no genuine issue of material fact exists
and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c).
The court should view the evidence and any inferences that may be drawn in the light
most favorable to the nonmovant. Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59
(1970). The party seeking summary judgment must first identify grounds that show
the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S.
317, 323-24 (1986). The burden then shifts to the nonmovant, who must go beyond
the pleadings and present affirmative evidence to show that a genuine issue of material
fact does exist. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986).
III. Discussion
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Although the burden is on Allstate to show an exclusion from the homeowner’s
policy it issued to the Plaintiff, Allstate’s evidence here is sufficient to create an issue
of fact on each of its grounds for exclusion. See Livaditis v. American Cas. Co. of
Reading, Pa., 117 Ga. App. 297, 300 (1968). First, Allstate argues that Shawn Atai,
the Plaintiff’s ex-husband, worked with the Plaintiff to commit the vandalism. This
argument implicates two provisions in the homeowner’s insurance policy:
Losses We Do Not Cover Under Coverages A and B: We do not cover
loss to the property described in Coverage A – Dwelling Protection or
Coverage B – Other Structures Protection consisting of or caused
by:… 9. Intentional or criminal acts of or at the direction of any Insured
person, if the loss that occurs: (a) may be reasonably expected to result
from such acts; or (b) is the intended result of such acts…
Losses We Do Not Cover Under Coverage C: We do not cover loss to
the property described in Coverage C – Personal Property Protection
caused by or consisting of:… 9. Intentional or criminal acts of or at the
direction of any Insured person, if the loss that occurs: (a) may be
reasonably expected to result from such acts; or (b) is the intended result
of such acts….This exclusion applies regardless of whether or not the
Insured person is actually charged with or convicted of a crime
(Pl.’s Mot. for Partial Summ. J., Ex. A at 6, 10-11). The Plaintiff argues that these
exclusions do not apply because the Defendant only relies on bare circumstantial
evidence to support its allegations that Shawn Atai committed the vandalism.
However, the Defendant’s evidence is entitled to more consideration than the Plaintiff
suggests. First, an investigator hired by the Plaintiff, Kim Gilliam, concluded from the
nature of the vandalism itself that it was either the product of a fraudulent insurance
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claim or of a hate crime. But Gilliam found no indications of a hate crime. (See
Gilliam Dep. at 80). Further, Gilliam felt that Shawn Atai was “very involved in [the]
matter” and “was just too involved with [the Property] for it not to be his house.” (Id.
at 22, 48-49). The investigator also felt that the vandalism was not the usual vandalism
she had seen committed by strangers. (Id. at 53, 97-98). Although the Defendant’s
evidence is circumstantial, the Defendant is essentially trying to show that the Plaintiff
committed fraud, and “[p]roof of fraud is seldom ever susceptible of direct proof.”
Levine v. Suntrust Robinson Humphrey, 321 Ga. App. 268, 274 (2013) (quoting
Almond v. McCranie, 283 Ga. App. 887, 889 (2007)). While this evidence does not
prove that the Plaintiff and Shawn Atai were working together to defraud Allstate, the
evidence does create an issue of fact as to whether the Plaintiff directed Shawn Atai
to commit any intentional or criminal acts that would trigger the policy exclusions.
Allstate also denied coverage under the homeowner’s policy on an exclusion
on the grounds of misrepresentation:
We do not cover any loss or occurrence in which any Insured person
has concealed or misrepresented any material fact or circumstance.
(Pl.’s Mot. for Partial Summ. J., Ex. A at 5). Here too the Defendant can point to
sufficient evidence to create an issue of fact concerning whether the Plaintiff
concealed or misrepresented any material fact or circumstance. The Defendant’s
response brief lists several reported losses where the corresponding replacement costs
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were so disproportionate as to suggest fraudulent activity. A decorative plate bearing
a price tag for $20.50 was listed with a $195 replacement cost. A patio lantern bearing
a price tag for $12.00 was listed with a $306 replacement cost. Two wooden frames
were listed as worth $287.97 and two vases were listed as worth $358.00, but the price
tags on the frames showed a cost of $11 each and the tags on the vases showed a cost
of $37.50 each. The UPC code on a bowl allegedly worth $49.99 showed that the
bowl was purchased for $2.39. Additionally, the Defendant identified for sale online
for $50 an exact Herend Clay pitcher that the Plaintiff claimed was worth $8,525.
(Wright Aff. ¶ 8). This evidence, let alone the Plaintiff’s multiple amendments to her
claim, is sufficient to create an issue of fact capable of defeating summary judgment.
The Plaintiff, however, contends that any alleged misrepresentation is not
dispositive under Allstate Ins. Co. v. Baugh, 173 Ga. App. 615 (1985), because the
Plaintiff is seeking to recover far more than the policy provides. In Baugh, the court
held that some misstatements by the insured as to the value of property destroyed in
a fire did not trigger a policy exclusion because “it was not shown that these
misstatements were willfully or intentionally made for the purpose of defrauding the
company [because the evidence clearly showed that the property destroyed] exceeded
the amount of insurance upon all the personalty.” Id. at 616. Contrary to the Plaintiff’s
assertion, this case did not create a rule that misrepresentations of the value of
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destroyed property are meaningless for purposes of policy exclusions when the
insurance policy limit is clearly surpassed. Rather, the case held that there was an
issue of fact as to whether the plaintiff’s misstatements were fraudulent in part
because the overall recovery sought was beyond the policy limit. See Barber v.
Wausau Underwriters Ins. Co., 184 Ga. App. 479 (1987) (discussing Baugh). In
Barber, the court concluded that evidence that the damage to an insured’s home
amounted to only one-fifth of the insured’s asserted claim was sufficient for the claim
of fraud to have gone to a jury. Id. Here, like in Barber, there is some evidence that
the claimed value of many lost items far exceeds their actual value. Accordingly, the
evidence suggesting fraud is sufficient to create an issue of fact and defeat the
Plaintiff’s motion for partial summary judgment. The Plaintiff’s motion for partial
summary judgment should be denied.
IV. Conclusion
For the reasons set forth above, the Plaintiff’s Motion for Partial Summary
Judgment [Doc. 39] is DENIED. The Plaintiff’s Motion to Amend the Expert Report
of Phil Grandchamp [Doc. 36] is GRANTED.
SO ORDERED, this 11 day of April, 2014.
/s/Thomas W. Thrash
THOMAS W. THRASH, JR.
United States District Judge
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