Armstead v. Allstate Property & Casualty Insurance Company
Filing
44
OPINION AND ORDER DENYING 28 Motion for Summary Judgment; DENYING WITHOUT PREJUDICE 35 Motion in Limine to Exclude the Opinion Testimony of Brainard Miller and 33 Motion in Limine to Exclude the Opinion Testimony of Bruce Fredrics. Signed by Judge William S. Duffey, Jr on 5/20/2015. (adg)
Plaintiff reported the fire to Defendant. Between 2011 and 2012, Defendant
assigned an adjuster and a third-party contractor to inspect the damage to
Plaintiff’s house. Plaintiff disputed the amount estimated by Defendant’s
representatives, and she claims that Defendant’s preferred contractors and vendors
did not competently repair the damage to her home. Plaintiff alleges that the house
was further damaged during the repair process.
On February 3, 2013, Plaintiff submitted to Defendant her sworn proof of
loss in which she claims that the amount of her “whole loss and damage” is
$76,409.43, that she has a $500 deductible under the Policy, and that the “amount
claimed” under the Policy is $75,909.43. Defendant claims that it has paid
approximately $20,000 towards Plaintiff’s insurance claim.
On June 12, 2013, Plaintiff submitted to an Examination Under Oath (EUO),
and on July 29, 2013, Brainard Miller (“Miller”), the contractor Plaintiff retained
to assess the damage to her home also submitted to an EUO. During Miller’s
EUO, Plaintiff’s counsel told Defendant that Plaintiff “tape recorded all her phone
calls.” Miller’s EUO at 31:16-18. Miller testified that he recorded two or three of
his telephone conversations with Defendant’s representatives regarding Plaintiff’s
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claim. Id. at 33:17-25.1 On August 1, 2013, Defendant’s counsel emailed
Plaintiff’s counsel and requested that the telephone conversations Plaintiff
recorded be produced. Plaintiff declined on the ground that the recordings were
made in anticipation of litigation. Plaintiff stated that she would not produce the
recordings she made unless Defendant produced any recordings it had relating to
Plaintiff’s claim.
On August 2, 2013, Defendant informed Plaintiff that it did not record any
telephone conversations, and again requested Plaintiff to produce the telephone
recordings in her possession. Plaintiff did not respond to Defendant’s further
request for the recorded calls.
On September 10, 2013, Defendant again requested that Plaintiff produce
the recordings. Plaintiff again declined to produce the recordings unless Defendant
1
Defendant relies on certain of Miller’s EOU statements to claim that Plaintiff
“had secretly recorded her telephone conversations with Allstate representatives
and her telephone conversations with third parties related to her insurance claims.”
Def.’s Statement of Material Facts at ¶ 7. The portions of Miller’s testimony upon
which Defendant relies do not support the claim. Plaintiff’s counsel and Miller did
not assert that Plaintiff recorded telephone conversations with third parties
regarding her insurance claim. The EUO testimony cited by Defendant indicates
only that Plaintiff recorded her telephone conversations with Defendant’s
representatives and Miller recorded two or three conversations that he had with
Defendant’s representatives—not third parties. Miller’s EUO at 31-33. Miller
testified that he encouraged Plaintiff to record her conversations with Defendant’s
representatives to keep a record of events, because Defendant chose not to
communicate using email. Id. at 32: 8-17.
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provided a good faith basis for the request or explained how the recordings were
relevant to Plaintiff’s claim. On September 26, 2013, Defendant told Plaintiff that
the recordings were relevant to the “veracity” of Plaintiff’s “assertions” regarding
“[Defendant’s] conduct in this matter.” See Ex. H, attached to Aff. of Marvin
Dikeman. Plaintiff again refused to produce the recordings, claiming they are not
relevant to issues regarding coverage, or the amount of damage claimed, under the
Policy. On October 4, 2013, Defendant told Plaintiff that it intended to cease
making payments on Plaintiff’s claim. Defendant did not file a formal request
seeking discovery of the recordings and did not otherwise move to require the
production of the recordings.
On December 6, 2013, Plaintiff filed her Complaint in the State Court of
Fulton County, Georgia, asserting claims against Defendant for breach of contract,
breach of the implied covenant of good faith and fair dealing, bad faith, fraud,
promissory estoppel, unfair claims settlement practices, and negligent hiring,
retention, supervision and training. Plaintiff also asserted claims against
Defendant and its counsel for violations of the Georgia Racketeer Influenced and
Corrupt Organizations Act, punitive damages and attorneys’ fees.2
2
On February 25, 2014, Plaintiff voluntarily dismissed her claims against
Defendant’s counsel in the state court action. On February 27, 2014, Defendant
removed the state court action.
4
On October 15, 2014, Defendant moved for summary judgment on
Plaintiff’s claims for breach of contract, bad faith and promissory estoppel.3
Defendant argues that the action should be dismissed because the Policy required
Plaintiff to produce the audio recordings, and by failing to do so, Plaintiff breached
the terms of the Policy. As a result, Defendant contends the Policy’s “no action”
provision precludes Plaintiff’s claims.
II.
DISCUSSION
A.
Legal 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). Parties “asserting that a fact cannot be or is
genuinely disputed must support that assertion by . . . citing to particular parts of
materials in the record, including depositions, documents, electronically stored
information, affidavits or declarations, stipulations (including those made for
3
On July 18, 2014, the parties agreed to dismiss Plaintiff’s claims for breach of the
implied covenant of good faith and fair dealing and unfair claims settlement
practices. On December 3, 2014, the Court granted the Defendant’s Motion to
Dismiss Plaintiff’s claims for negligent hiring, supervision, training and retention,
fraud, Georgia RICO, punitive damages and attorneys’ fees. The remaining claims
in the case are for breach of contract, bad faith and promissory estoppel, the claims
that are the subject of this pending Motion for Summary Judgment.
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purposes of the motion only), admissions, interrogatory answers, or other
materials.” Fed. R. Civ. P. 56(c)(1).
The party seeking summary judgment bears the burden of demonstrating the
absence of a genuine dispute as to any material fact. Herzog v. Castle Rock
Entm’t, 193 F.3d 1241, 1246 (11th Cir. 1999). Once the moving party meets this
burden, the non-movant must demonstrate that summary judgment is inappropriate
by designating specific facts showing a genuine issue for trial. Graham v. State
Farm Mut. Ins. Co., 193 F.3d 1274, 1282 (11th Cir. 1999). Non-moving parties
“need not present evidence in a form necessary for admission at trial; however,
[they] may not merely rest on [their] pleadings.” Id.
The Court must view all evidence in the light most favorable to the party
opposing the motion and must draw all inferences in favor of the non-movant, but
only “to the extent supportable by the record.” Garczynski v. Bradshaw, 573 F.3d
1158, 1165 (11th Cir. 2009) (quoting Scott v. Harris, 550 U.S. 372, 381 n.8
(2007)). “[C]redibility determinations, the weighing of evidence, and the drawing
of inferences from the facts are the function of the jury . . . .” Graham, 193 F.3d at
1282. “If the record presents factual issues, the court must not decide them; it must
deny the motion and proceed to trial.” Herzog, 193 F.3d at 1246. But, “[w]here
the record taken as a whole could not lead a rational trier of fact to find for the
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non-moving party,” summary judgment for the moving party is proper. Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
B.
Analysis
1.
Recordings
Section 3(a) of the Policy requires an insured, in the event of a loss, to
comply with the following Policy provision:
a) Give us all accounting records, bills, invoices, and other vouchers,
or certified copies, which we may reasonably request to examine and
permit us to make copies.
The “no action” provision of the Policy provides:
12. Suit Against Us. No Suit or action may be brought against us
unless there has been full compliance with all policy terms. Any suit
or action must be brought within one year after the inception of loss or
damage.
Under Georgia law, “an insurance policy is simply a contract, the provisions
of which should be construed as any other type of contract. The construction of an
unambiguous contract is a question of law for the court.” Yeomans & Assoc.
Agency, Inc. v. Bowen Tree Surgeons, Inc., 618 S.E.2d 673, 677
(Ga. Ct. App. 2005). “Where the terms and conditions of an insurance contract are
clear and unambiguous, they must be given their literal meaning.”
Adams v. Atlanta Cas. Co., 509 S.E.2d 66, 68 (Ga. App. Ct. 1998). If the terms of
the policy are ambiguous, the ambiguities “must be strictly construed against the
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insurer as the drafter of the document.” See Federated Mut. Ins. Co. v. Ownbey
Enterprises, Inc., 627 S.E.2d 917, 921 (Ga. App. Ct. 2006). “An ambiguity is
duplicity, indistinctness, [or] an uncertainty of meaning or expression, and a word
or a phrase is ambiguous when it is of uncertain meaning and may be fairly
understood in more ways than one.” Id. (internal quotation marks and citations
omitted). “Where a term or a policy of insurance is susceptible to two or more
constructions, even when such multiple constructions are all logical and
reasonable, such term is ambiguous and will be strictly construed against the
insurer as the drafter and in favor of the insured.” Id.
Defendant contends that an audio recording of a telephone conversation
made during the claim handling process is a document required to be given to
Defendant pursuant to Section 3(a) of the Policy. The Court disagrees. Section
3(a) pertains to a discrete set of documents: “accounting records,” “bills,”
“invoices” “vouchers” and “certified copies.” These categories are all types of
documents that evidence the damages, repairs or remediation, and their cost,
associated with a loss. By their terms, they do not include conversations a policy
holder may have had with an insured during the claim adjudication process.4
4
The Court notes that accounts of these conversations are available to the
Defendant by simply speaking with the representatives of Defendant with whom
Plaintiff spoke.
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Defendant also has failed to provide any legal authority that construes the
documents described in Section 3(a) to include audio recordings. The Court thus
finds that Section 3(a) is not ambiguous and did not require Plaintiff to produce the
recordings demanded.
Even if the Court found these terms to be ambiguous—which it does not—
the terms are required to be strictly construed against Defendant as the drafter of
the Policy. Id. at 922. Here, Defendant could have defined more broadly a
policyholder’s obligation to produce materials, but did not choose to do so, and
thus must have meant to limit production to the discrete categories of financial
documents listed in Section 3(a). The Court concludes that Plaintiff did not breach
Section 3(a) because that provision does not unambiguously require Plaintiff to
produce audio recordings of telephone conversations with Defendant’s
representatives. Id. The “no action” provision, therefore, does not apply because
Defendant has failed to show that Plaintiff breached the Policy’s terms.
To the extent Defendant relies on Farmer v. Allstate Ins. Co., 396 F. Supp.
2d 1379 (N.D. Ga. 2005) and Roberts v. State Farm Fire and Casualty Co.,
No. 7:11-cv-86-HL, 2011 WL 6215700 (M.D. Ga. Dec. 14, 2011), to support that
Plaintiff is required to produce all requested documents, its reliance is misplaced.
Farmer and Roberts apply the principles set out by the Georgia Supreme Court in
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Halcome v. Cincinnati Ins. Co., 334 S.E.2d 157 (Ga. 1985) in cases where the
insurer claims it was defrauded by a plaintiff. In Halcome, the Georgia Supreme
Court held that the insureds breached the terms of their insurance policy by failing
to provide their insurer with documents or information about their bank accounts,
savings accounts, tax returns and W2 forms. Id. The insureds argued these
documents did not relate to the claims under investigation. Id. The Georgia
Supreme Court rejected the insureds’ relevance claim because there was, in
Halcome, evidence of possible fraud. A complete investigation of the claim
includes an investigation of the suspected fraud, including the income-related
documents requested. Id.5 Because a complete investigation of the claim entitles
an insurer to investigate suspected fraud, some courts have applied Halcome to
require the production of documents and materials that are not specifically required
by the terms of an insurance contract. See Farmer, 396 F. Supp. 2d at 1383
(applying Halcome to conclude that insurance contract required plaintiff to provide
information related to her income and sources of income, even though the
5
The Court notes that the insurance contract in Halcome required the insureds to
“provide us with records and documents we request.” This broad language, the
Georgia Supreme Court found, encompassed documents or information about the
insureds’ bank accounts, savings accounts, tax returns and W2 forms. The facts
are different here. Section 3(a) of the Policy is a narrower provision related to
specific document types that cannot be construed to encompass the production of
audio recordings.
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requested information was not identified in the insurance contract, because the
insurer provided evidence of suspected fraud). The request for information in
litigation to investigate a claim such as fraud is an ordinary litigation practice.
Defendant here does not claim that Plaintiff engaged in fraud.6 Defendant
told Plaintiff that the audio recordings were relevant to this action only because
they concern the “veracity” of Plaintiff’s assertions regarding “[Defendant’s]
conduct in this matter.”7 See Ex. H, attached to Aff. of Marvin Dikeman. Under
Georgia law, an insured is required to provide only “material information to the
6
For the first time in its Reply, Defendant argues that the “extreme changes in
estimates [of the amount claimed] gave Allstate a reason to question whether
Plaintiff’s claim was exaggerated.” Defendant’s Reply at 7. “It is well settled that
issues raised for the first time in a reply brief are deemed waived.” Nelson v. La
Crosse County District Attorney, 301 F.3d 820, 836 (7th Cir. 2002). See also King
v. Warden, No. 13-15362, 2014 WL 6610324, at *2 n.4 (11th Cir. 2014) (“We will
not consider [new] arguments raised for the first time in a reply brief—even with a
pro se party.”). Even if the Court considered this argument, it is not credible.
Defendant’s own estimates of Plaintiff’s loss changed significantly over time, and
Defendant has not presented evidence that Plaintiff intentionally misrepresented
the amount of the estimates. Defendant also has failed to present evidence that it
was investigating whether Plaintiff’s estimates were exaggerated at the time the
recordings were requested. The only reason given for the request was to assess the
“veracity” of Plaintiff’s assertions regarding “[Defendant’s] conduct in this
matter.” See Ex. H, attached to Aff. of Marvin Dikeman.
7
Defendant may claim it wants the recordings to compare against evidence offered
by Plaintiff regarding her discussions with Defendant’s representatives. If so, that
is, at most, an evidentiary question not one involving coverage of the insured
incident. As noted above, Defendant has access to its representatives to get their
account of the conversations with Plaintiff.
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insurer that the insurer is entitled to receive under the insurance policy.” See
Hines v. State Farm Fire and Casualty Co., 815 F.2d 648, 651 (11th Cir. 1987)
(internal quotation marks omitted). Defendant failed to show that it is entitled to
receive the audio recordings under the terms of the Policy. The Court also finds
that Defendant has not presented evidence that the audio recordings are material to
a complete investigation of the claim. For these reasons, Plaintiff’s claims are not
barred by the “no action” provision of the Policy and Defendant’s Motion for
Summary Judgment is denied.
2.
Motions in Limine
The Court does not now consider Defendant’s Motions in Limine. Motions
in Limine regarding evidence expected at trial are governed by the Court’s
Standing Order Regarding Civil Litigation (the “Standing Order”). See
http://www.gand.uscourts.gov/pdf/Standing_Order_Re_Civil_Litigation.pdf.
Paragraph 17 of the Court’s Standing Order states that “when the case is set for
trial, the parties will be advised of the briefing schedule for motions in limine.” Id.
If Defendant seeks to exclude evidence at trial, it may file a motion after the Court
determines the briefing schedule for Motions in Limine.
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III.
CONCLUSION
Accordingly, for the foregoing reasons,
IT IS HEREBY ORDERED that Defendant’s Motion for Summary
Judgment is DENIED [28].
IT IS FURTHER ORDERED that Defendant’s Motions in Limine to
Exclude the Opinion Testimony of Bruce Fredrics [33] and Brainard Miller [35]
are DENIED WITHOUT PREJUDICE.
SO ORDERED this 20th day of May, 2015.
_______________________________
WILLIAM S. DUFFEY, JR.
UNITED STATES DISTRICT JUDGE
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