Chamblee Liquor, LLC v. Selective Insurance Company of the Southeast
Filing
11
OPINION AND ORDER GRANTING 9 Motion for Summary Judgment. Signed by Judge Thomas W. Thrash, Jr. on 4/26/2018. (jkl)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
CHAMBLEE LIQUOR, LLC,
Plaintiff,
v.
CIVIL ACTION FILE
NO. 1:17-CV-2515-TWT
SELECTIVE INSURANCE COMPANY
OF THE SOUTHEAST,
Defendant.
OPINION AND ORDER
This is an action seeking to recover on a commercial insurance policy. It
is before the Court on the Defendant’s Motion for Summary Judgment [Doc. 9].
For the reasons set forth below, the Defendant’s Motion for Summary Judgment
[Doc. 9] is GRANTED.
I. Background
This case arises from an alleged burglary in June 2015. The Plaintiff
Chamblee Liquor, LLC is a Georgia corporation with its principal place of
business in Chamblee, Georgia.1 The Defendant Selective Insurance Company
of the Southeast is a North Carolina corporation with its principal place of
business in Indiana.2 The Defendant issued insurance policy number S
1
Compl. ¶ 1 [Doc. 1-1].
2
Id. ¶ 2.
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211366601 (the “Insurance Policy”), a commercial insurance policy, to the
Plaintiff, with an effective date between May 30, 2015 and May 30, 2016.3 The
Insurance Policy includes coverage for property loss.4 The Plaintiff filed a claim
alleging that it suffered a property loss event as a result of a burglary that
occurred on or around June 21, 2015.5 The Plaintiff claimed a loss of $175,540.00
resulting from this burglary.6
The Insurance Policy requires the insured party to comply with specific
duties during a loss event.7 The “Duties in the Event of Loss or Damage”
provision of the policy provides that, in the event of loss or damage to the
covered property, the insured must:
(5) At our request, give us complete inventories of the damaged
and undamaged property. Include quantities, costs, values and
amount of loss claimed.
(6) As often as may be reasonably required, permit us to inspect
the property proving the loss or damage and examine your books
and records.
Also permit us to take samples of damaged and undamaged
property for inspection, testing and analysis, and permit us to
make copies from your books and records.
(7) Send us a signed, sworn proof of loss containing the information
3
Def.’s Statement of Material Facts ¶ 1; Ex. 1 at 13.
4
Def.’s Statement of Material Facts ¶ 2.
5
Id. ¶ 3.
6
Compl. ¶ 17.
7
Def.’s Statement of Material Facts ¶ 4.
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we request to investigate the claim. You must do this within 60
days after our request. We will supply you with the necessary
forms.
(8) Cooperate with us in the investigation or settlement of the
claim.8
This section also provided that the Defendant may examine any insured party
under oath about any matter relating to the Insurance Policy or insurance
claim, including the insured’s books and records.9
The Insurance Policy also limited the Plaintiff’s ability to bring a legal
action against the Defendant under the Insurance Policy, absent certain
requirements being met.10 This section, titled “Legal Action Against Us,”
provides that:
No one may bring a legal action against us under this insurance
unless:
a. There has been full compliance with all of the terms of this
insurance; and
b. The action is brought within two years after the date on which
the direct physical loss or damage occurred.11
Pursuant to these requirements, the Defendant made multiple requests upon
the Plaintiff for an inventory of damage and stolen property, including the
8
Id.
9
See Ex. 2 at 32 [Doc. 9-4].
10
Id. ¶ 5.
11
Id.
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quantities, costs, values, and the amount of loss claimed.12 The Defendant also
asked for any other information supporting the Plaintiff’s property damage
claim.13 These requests are evidenced by correspondence sent to the Plaintiff by
the Defendant following the Plaintiff’s insurance claim.14
On April 8, 2016, Satwant Singh Sewak, the CEO of the Plaintiff
Chamblee Liquor, LLC, underwent an Examination Under Oath, pursuant to
the terms of the Insurance Policy.15 Before this examination, the Defendant
requested various documents for Mr. Singh to produce for the examination,
including proof of loss calculations, accounting documents, and more.16 Mr.
Singh failed to produce these documents at the examination, and promised that
he would later produce them.17 After the examination, the Defendant sent the
Plaintiff a letter following up on these document requests.18 Ultimately, the
Plaintiff failed to ever produce these requested documents.19
On August 30, 2016, the Defendant sent the Plaintiff a letter formally
12
Id. ¶ 6.
13
Id.
14
Id. ¶ 7.
15
Id. ¶ 18.
16
Id. ¶¶ 19-20.
17
Id. ¶¶ 20-21; Ex. 2 at 43.
18
Ex. 2 at 43-44.
19
Def.’s Statement of Material Facts ¶¶ 22-23.
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denying its insurance claim.20 The Defendant stated that it denied the Plaintiff’s
claim due to the Plaintiff’s failure to comply with the terms of the Insurance
Policy.21 Specifically, the Defendant noted that the Plaintiff failed to produce
documents requested by the Defendant in support of the insurance claim, as
required by the Insurance Policy.22 On June 20, 2017, the Plaintiff filed this
action in state court, alleging claims for Negligent Failure to Settle and Bad
Faith. On July 5, 2017, the Defendant removed to this Court, and now moves for
summary judgment.
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.23 The
court should view the evidence and any inferences that may be drawn in the
light most favorable to the nonmovant.24 The party seeking summary judgment
must first identify grounds to show the absence of a genuine issue of material
fact.25 The burden then shifts to the non-movant, who must go beyond the
20
See Ex. 5 at 3.
21
Id.
22
Id.
23
FED. R. CIV. P. 56(a).
24
Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970).
25
Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).
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pleadings and present affirmative evidence to show that a genuine issue of
material fact exists.26 “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.”27
III. Discussion
The Plaintiff has filed no response to the Defendant’s Motion for
Summary Judgment. “Where ‘the adverse party does not respond, summary
judgment, if appropriate, shall be entered against the adverse party.’”28
Consequently, summary judgment, “even when unopposed, can only be entered
when ‘appropriate.’”29 A district court cannot enter summary judgment merely
because a motion is unopposed, but instead must consider the merits of the
motion.30 Nonetheless, “[t]he district court need not sua sponte review all of the
evidentiary materials on file at the time the motion is granted, but must ensure
that the motion itself is supported by evidentiary materials.”31 The Court, at the
least, must “review all of the evidentiary materials submitted in support of the
26
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986).
27
Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990).
United States v. One Piece of Real Property Located at 5800 SW
74th Ave., Miami, Fla., 363 F.3d 1099, 1101 (11th Cir. 2004) (quoting FED. R.
28
CIV. P. 56(e)).
29
Id.
30
Id.
31
Id.
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motion for summary judgment.”32 Therefore, the Court will review the merits of
the Defendant’s Motion for Summary Judgment to ensure that there is an
evidentiary basis for the entry of summary judgment.
The Plaintiff also failed to respond to a number of written discovery
requests made by the Defendant, including Requests for Admissions. On October
12, 2017, the Defendant served written discovery upon the Plaintiff, including
Interrogatories, a Request for Production, and Requests for Admissions.33 The
Plaintiff failed to respond to these discovery requests, which included thirty
Requests for Admissions.34 “Federal Rule of Civil Produce 36 expressly provides
that requests for admissions are automatically deemed admitted if not answered
within 30 days, and that the matters therein are ‘conclusively established’
unless the court on motion permits withdrawal or amendment of the
admissions.”35 This rule is “designed to expedite litigation, and it permits the
party securing admissions to rely on their binding effect.”36 Therefore, each of
these Requests for Admissions are deemed admitted, and the matters within
them are considered conclusively established. With these concessions in mind,
32
Id. at 1101-02.
33
See Ex. 3.
34
Def.’s Mot. for Summ. J., at 2.
35
United States v. 2204 Barbara Lane, 960 F.2d 126, 129 (11th Cir.
1992) (internal quotations omitted).
36
Id.
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the Court now turns to the merits of the Defendant’s Motion for Summary
Judgment.
The Defendant contends that the Plaintiff is barred from recovery because
it failed to comply with the provisions of the Insurance Policy before filing suit.37
“An insurer is entitled to require its insured to abide by the policy terms, and
the insured is required to cooperate with the insurer in investigation and
resolution of the claim.”38 Where an insurance policy requires production of
documents and the insured fails to comply with the terms, that failure
constitutes a breach of contract absent some principle excusing that failure.39
Conditions precedent must be met before the insured can enforce the insurance
contract and recover against the insurer.40 Here, the Insurance Policy requires
the Plaintiff to “give [the Defendant] complete inventories of the damaged and
undamaged property . . . [i]nclud[ing] quantities, costs, values and amount of
loss claimed,” “permit [the Defendant] to inspect the property proving the loss
or damage and examine [the Plaintiff’s] books and records,” and “[s]end [the
Defendant] a signed, sworn proof of loss containing the information [the
37
Def.’s Mot. for Summ. J., at 14-18.
38
Diamonds & Denims, Inc. v. First of Ga. Ins. Co., 203 Ga. App. 681,
683 (1992).
39
Halcome v. Cincinnati Ins. Co., 254 Ga. 742, 744 (1985).
40
KHD Deutz of Am. Corp. v. Utica Mut. Ins. Co., Inc., 220 Ga. App.
194, 195 (1996).
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Defendant] request[s] to investigate the claim.”41 The Insurance Policy further
provides no legal action may be brought unless “[t]here has been full compliance
with all of the terms of this insurance.”42 Providing requested documents is
therefore a condition precedent to bringing suit under the Insurance Policy.
The Plaintiff, by failing to respond to the Defendant’s Requests for
Admissions, admits the following dispositive facts. The Plaintiff received
multiple requests from the Defendant, over a period of several months, for
document production related to the Plaintiff’s insurance claim.43 These requests
asked the Plaintiff to produce a variety of documents, including inventory lists,
executed proof of loss forms, inventory of stolen property, estimates, invoices,
purchase orders, tax returns, and more.44 The Plaintiff failed to produce these
documents.45 The Plaintiff also failed to produce documents requested in
conjunction with the Examination Under Oath.46 Although the Plaintiff did
produce three of the documents requested, it failed to provide 28 other
documents requested by the Defendant in relation to this examination.47 Due to
41
Def.’s Statement of Material Facts ¶ 4.
42
Id. ¶ 5.
43
See Ex. 2 at 13-17.
44
Id.
45
Id.
46
See Ex. 5 at 2.
47
Id.
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the Plaintiff’s failure to respond to the Defendant’s discovery requests, these
facts are conclusively established. The Plaintiff therefore failed to comply with
the terms of the Insurance Policy and cannot recover. Consequently, the
Defendant did not act negligently in failing to accept the Plaintiff’s settlement
offer, and did not act in bad faith in refusing the Plaintiff’s insurance claim. For
these reasons, the Defendant is entitled to summary judgment.48
IV. Conclusion
For the reasons stated above, the Defendant’s Motion for Summary
Judgment [Doc. 9] is GRANTED.
SO ORDERED, this 26 day of April, 2018.
/s/Thomas W. Thrash
THOMAS W. THRASH, JR.
United States District Judge
48
In its Complaint, the Plaintiff also asserts a claim for attorneys’
fees. O.C.G.A. § 33-4-6 provides for the imposition of an award for attorneys’ fees
in the event of an insurer’s bad faith refusal to make payment under an
insurance policy. However, since the Defendant’s refusal was appropriate given
the Plaintiff’s non-compliance with the terms of the Insurance Policy, the
Plaintiff’s request for attorneys’ fees fails.
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