Fuller v. Mercury Insurance Company of Georgia
Filing
135
ORDER granting 121 Plaintiff Nationstar Mortgage LLC's Motion for Summary Judgment on Plaintiff Sonya Fuller's Crossclaim and denying 118 Defendant Mercury Insurance Company of Georgia's Motion for Summary Judgment as to Plaintiff Nationstar Mortgage LLC; denying 119 Plaintiff Sonya Fuller's Motion for Equitable Relief; denying 120 Plaintiff Nationstar Mortgage LLC's Motion for Summary Judgment on Defendant Mercury Insurance Company of Georgia's Counterclaim. Signed by Judge Thomas W. Thrash, Jr. on 8/24/16. (jkl)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
SONYA FULLER, et al.,
Plaintiffs,
v.
CIVIL ACTION FILE
NO. 1:13-CV-1914-TWT
MERCURY INSURANCE
COMPANY OF GEORGIA,
Defendant.
OPINION AND ORDER
This is an action to recover on a homeowner’s insurance policy. It is before the
Court on the Defendant Mercury Insurance Company of Georgia’s Motion for
Summary Judgment as to Plaintiff Nationstar Mortgage LLC [Doc. 118], the Plaintiff
Sonya Fuller’s Motion for Equitable Relief [Doc. 119], the Plaintiff Nationstar
Mortgage LLC’s Motion for Summary Judgment on Defendant Mercury Insurance
Company of Georgia’s Counterclaim [Doc. 120], and the Plaintiff Nationstar
Mortgage LLC’s Motion for Summary Judgment on Plaintiff Sonya Fuller’s
Crossclaim [Doc. 121]. For the reasons stated below, the Defendant Mercury
Insurance Company of Georgia’s Motion for Summary Judgment as to Plaintiff
Nationstar Mortgage LLC and the Plaintiff Nationstar Mortgage LLC’s Motion for
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Summary Judgment on Defendant Mercury Insurance Company of Georgia’s
Counterclaim are both DENIED. The Plaintiff Nationstar Mortgage LLC’s Motion for
Summary Judgment on Plaintiff Sonya Fuller’s Crossclaim is GRANTED and the
Plaintiff Sonya Fuller’s Motion for Equitable Relief is DENIED.
I. Background
The original Plaintiff, Sonya Fuller, owns property located at 648 Reed Road,
Smyrna, Georgia.1 On March 2, 2010, Fuller executed a Closed-End Fixed Rate Home
Equity Conversion Security Deed, otherwise known as a reverse mortgage, on the
home in favor of Homestar Financial Corporation.2 Homestar Financial Corporation
assigned its interest in the reverse mortgage to Generation Mortgage on March 9,
2010, and again on June 2, 2011.3 On May 6, 2015, Generation assigned the reverse
mortgage to the other Plaintiff here, Nationstar Mortgage, LLC.4
The reverse mortgage required Fuller to insure all improvements on the
property against hazards, casualties, and contingencies, including fire.5 The
1
Nationstar Mortgage’s Statement of Facts in Support of its Mot. for
Summ. J. on Mercury Ins.’s Counterclaim ¶ 1.
2
Id.
3
Id. ¶ 2.
4
Id. ¶ 26.
5
Id. ¶ 3.
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Defendant, Mercury Insurance Company, insured the property under a homeowner’s
insurance policy.6 The coverage became effective on February 26, 2011, and expired
on February 26, 2012.7 The policy provided fire loss coverage up to $191,000 for the
dwelling on the property, $19,100 for other structures on the property, $133,700 for
unscheduled personal property, and $38,200 for loss of use.8 The policy listed Fuller
as the homeowner and Generation Mortgage as the mortgagee.9 The policy provided
that losses would be payable to both the mortgagee and the homeowner.10 It further
stated that if Mercury denied coverage to the homeowner, the mortgagee could still
be paid, provided it complied with certain conditions.11 The conditions included
providing a sworn statement of loss, submitting to examinations under oath, and
providing records and documents.12 The parties agree as to the language of the policy
that was actually in place at the relevant times, but Nationstar claims it was provided
6
Id. ¶ 4.
7
Id.
8
Id. ¶ 5.
9
Id. ¶ 6.
10
Mercury Ins.’s Statement of Facts ¶ 4.
11
Id.
12
Id. ¶¶ 4-5.
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with a different policy, which required only a proof of loss and imposed no other
conditions on recovery by a mortgagee, up until May 2, 2016.13
On December 18, 2011, the property was damaged by fire.14 On December 18,
2011, Fuller notified Mercury Insurance of the fire and filed a sworn proof of loss for
damage to the dwelling in the amount of $191,000.15 Mercury Insurance investigated
the loss and in the process, requested documents from Fuller related to her finances
and the reverse mortgage.16 The parties dispute precisely which documents were
actually received by Mercury Insurance, but they do agree that Fuller provided, and
Mercury Insurance received, a 2011 year-end balance statement for the reverse
mortgage.17 Mercury Insurance concluded its investigation into the fire on November
13, 2012.18 At that point, it sent a letter to Fuller denying her claim on the grounds that
13
Nationstar’s Response to Mercury Ins.’s Statement of Facts ¶ 4.
14
Nationstar Mortgage’s Statement of Facts in Support of its Mot. for
Summ. J. on Mercury Ins.’s Counterclaim ¶ 7.
15
Id. ¶ 8.
16
Id. ¶ 9.
17
Mercury Ins.’s Response to Nationstar’s Statement of Facts ¶¶ 10-12;
Nationstar Mortgage’s Statement of Facts in Support of its Mot. for Summ. J. on
Mercury Ins.’s Counterclaim ¶ 13.
18
Nationstar Mortgage’s Statement of Facts in Support of its Mot. for
Summ. J. on Mercury Ins.’s Counterclaim ¶ 14.
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Fuller or someone acting on her behalf intentionally set fire to the home and that
Fuller misrepresented and concealed material facts during investigation of the claim.19
During the investigation into the fire, Mercury Insurance did not contact
Generation directly to ask for information.20 On March 13, 2015, Mercury Insurance
did send a letter to Generation seeking documents and a proof of loss.21 On April 27,
2015, Generation provided a sworn statement in proof of loss, as requested by
Mercury Insurance.22 On June 5, 2015, after Generation had already transferred the
reverse mortgage to Nationstar, Mercury Insurance acknowledged receipt of the proof
of loss and requested other documents from Generation.23 Generation did not provide
further documentation.24 Mercury Insurance did not request documents from
Nationstar before Nationstar became a party to this litigation.25
19
Id. ¶ 16.
20
Id. ¶ 15.
21
Taylor Aff. ¶ 3, Ex. A.
22
Nationstar Mortgage’s Statement of Facts in Support of its Mot. for
Summ. J. on Mercury Ins.’s Counterclaim ¶ 25.
23
Id. ¶ 27.
24
Id. ¶ 28.
25
Id. ¶ 29.
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On May 9, 2013, Fuller filed suit against Mercury for breach of insurance
contract and bad faith denial of coverage. Mercury removed Fuller’s lawsuit to this
Court. On December 29, 2015, this Court granted Mercury Insurance and Fuller’s
motion to add Nationstar as a party to this litigation. Mercury Insurance then filed a
counterclaim seeking to limit Nationstar’s right to recovery. Fuller filed a crossclaim
seeking the same. Nationstar then filed a claim seeking a declaratory judgment that
it is entitled to the insurance proceeds to satisfy Fuller’s liability under the reverse
mortgage. All of the parties now move for summary judgment on various claims.
II. Legal Standard
Summary judgment is appropriate only when the pleadings, depositions, and
affidavits submitted by the parties show no genuine issue of material fact exists and
that the movant is entitled to judgment as a matter of law.26 The court should view the
evidence and any inferences that may be drawn in the light most favorable to the
nonmovant.27 The party seeking summary judgment must first identify grounds to
show the absence of a genuine issue of material fact.28 The burden then shifts to the
nonmovant, who must go beyond the pleadings and present affirmative evidence to
26
FED. R. CIV. P. 56(a).
27
Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970).
28
Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).
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show that a genuine issue of material fact does exist.29 “A mere ‘scintilla’ of evidence
supporting the opposing party’s position will not suffice; there must be a sufficient
showing that the jury could reasonably find for that party.”30
III. Discussion
A.
Motions for Summary Judgment Between Nationstar and Mercury
Insurance
Mercury Insurance asks this Court for a declaratory judgment against
Nationstar, arguing that Nationstar has no viable claims against Mercury Insurance.
Nationstar also seeks a declaratory judgment that it does have a right to the insurance
proceeds. Both Nationstar and Mercury Insurance move for summary judgment. As
a threshold matter, Mercury Insurance argues that any claims Nationstar might have
are barred by the suit limitations period in the insurance policy. The parties dispute
the length of the limitations period. Regardless of the length of the limitations period,
however, where an insurer engages in conduct that would lead an insured to believe
that the limitations period will be extended, the limitations period can be waived.31
Here, Mercury Insurance sent a letter regarding this suit to Generation Mortgage,
29
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986).
30
Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990).
31
See Georgia Mut. Ins. Co. v. Glennville Bank & Trust Co., 229 Ga. App.
402, 404 (1997).
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Nationstar’s predecessor in interest, on March 13, 2015.32 That letter was dated over
three years after the fire, and therefore outside the two-year limitations period. This
Court therefore finds that Mercury Insurance has waived any defense under the
contractual limitations period. In addition, the insured filed suit within the two-year
limitations period. Under Georgia law, this is sufficient to allow recovery by the
mortgagee even if it intervened after the expiration of the limitations period.33
Next, Mercury Insurance argues that Nationstar failed to comply with the
conditions of the insurance policy before bringing suit. If an insured fails to comply
with conditions of the insurance policy that are prerequisites to suit, it may be barred
from recovery under the policy.34 Where, however, the insured cooperated to some
extent, there is a question of fact for the jury.35 Here, it is undisputed that Mercury
Insurance sent two letters to Generation Mortgage, Nationstar’s predecessor in
interest. In those letters, Mercury Insurance requested documents and a proof of loss.
It is also undisputed that Generation/Nationstar provided a statement of loss. Because
32
Taylor Aff. ¶ 3, Ex. A.
33
Georgia Mut. Ins. Co. v. Glennville Bank & Trust Co., 229 Ga. App. 402,
404-405 (1997).
34
Diamonds & Denims, Inc. v. First of Ga. Ins. Co., 203 Ga. App. 681, 683
(1992).
35
Id.
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Nationstar did comply with Mercury Insurance’s requests to some extent, there is an
issue of fact for a jury as to whether the conditions of the policy were satisfied. This
is especially true given that the insurance policy apparently quoted to Generation and
Nationstar, and in fact attached to Mercury Insurance’s Amended Answer and
Counterclaim, requires only a proof of loss by the mortgagee, not compliance with
other conditions.36 The insurer’s failure to act with diligence and good faith in
securing material information is also a question of fact for the jury.37 Both Nationstar
and Mercury Insurance’s motions for summary judgment should therefore be denied.
B.
Motions for Summary Judgment Between Fuller and Nationstar
Sonya Fuller moves for equitable relief against Nationstar. She argues that if
she settles with Mercury Insurance, Nationstar has waived its right to any proceeds.
She seeks a declaratory judgment to that effect. Nationstar also moves for summary
judgment on Fuller’s crossclaim for declaratory judgment. A court may enter a
declaratory judgment only where there is a “definite and concrete” controversy.38 A
declaratory judgment may not be “an opinion advising what the law would be upon
36
Mercury Ins.’s Amended Answer to Complaint and Counterclaim, at Ex.
1, p. 18, ¶ L.2.
37
Diamonds & Denims, 203 Ga. App. at 683.
38
Miccosukee Tribe of Indians of Fla. v. Kraus-Anderson Constr. Co., 607
F.3d 1268, 1275 n.14 (11th Cir. 2010).
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a hypothetical state of facts.”39 Here, Fuller states in her crossclaim against Nationstar
that “due to the uncertainty in the outcome of the litigation, [she] would like to settle
the case with [Mercury Insurance].”40 Fuller goes on to request that this Court rule that
“equity prevents Nationstar from receiving any portion of the funds from the
settlement.”41 What Fuller requests is precisely what the Eleventh Circuit has
forbidden – an opinion advising what the law would be given a hypothetical state of
facts. She asks this Court what the law would be in the hypothetical scenario in which
she settled the case. This Court declines to issue such an improper advisory opinion.
Fuller’s motion for equitable relief on her crossclaim should be denied. Nationstar’s
motion for summary judgment on Fuller’s crossclaim should be granted as to the
ripeness defense.
IV. Conclusion
For the reasons stated above, the Defendant Mercury Insurance Company of
Georgia’s Motion for Summary Judgment as to Plaintiff Nationstar Mortgage LLC
[Doc. 118] is DENIED, the Plaintiff Sonya Fuller’s Motion for Equitable Relief [Doc.
119] is DENIED, the Plaintiff Nationstar Mortgage LLC’s Motion for Summary
39
40
41
Owners Ins. Co. v. Parsons, 610 F. App’x 895, 897 (11th Cir. 2015).
Pl. Sonya Fuller’s Crossclaim Against Nationstar Mortgage, LLC ¶ 21.
Id. ¶ 22.
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Judgment on Defendant Mercury Insurance Company of Georgia’s Counterclaim
[Doc. 120] is DENIED, and the Plaintiff Nationstar Mortgage LLC’s Motion for
Summary Judgment on Plaintiff Sonya Fuller’s Crossclaim [Doc. 121] is GRANTED.
SO ORDERED, this 24 day of August, 2016.
/s/Thomas W. Thrash
THOMAS W. THRASH, JR.
United States District Judge
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