Martell et al v. Ameriprise Auto & Home Insurance et al
Filing
37
OPINION AND ORDER denying 24 Plaintiff's Motion for Summary Judgment and CANCELLING January 18, 2012 Hearing. Signed by District Judge Robert H. Cleland. (LWag)
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
CARLOS MARTELL and
CAMILLE GLYNN,
Plaintiffs,
Case No. 2:10-cv-14896
v.
IDS PROPERTY CASUALTY
INSURANCE COMPANY,
Defendant.
/
OPINION AND ORDER DENYING PLAINTIFFS’ MOTION FOR SUMMARY
JUDGMENT AND CANCELLING JANUARY 18, 2012 MOTION HEARING
Plaintiffs have moved for summary judgment against Defendant in this insurancecontract dispute, arguing Defendant wrongfully denied a claim on their homeowners’
insurance policy for losses sustained in a fire that destroyed their home. The motion
has been fully briefed, and the court determines a hearing to be unnecessary. See E.D.
Mich. LR 7.1(f)(2). Because Defendant successfully demonstrates an issue of material
fact as to whether Plaintiffs intentionally caused the fire that brought about their losses,
the court will deny the motion.
I. BACKGROUND
Around 11:00 p.m. on the night of June 14, 2010, Plaintiffs’ neighbor reported a
fire in Plaintiffs’ residence at 3750 Christopher Drive in Brighton, Michigan. (Morland
Dep. 46:3-47:6, 79:25-80:12, Aug. 18, 2011, Dkt. # 24-8.) Despite the efforts of the
Brighton Area Fire Department, the house suffered extensive fire damage and ultimately
had to be demolished. (Brighton Area Fire Dep’t Invest’n Rep. 2, Dkt. # 24-4
[hereinafter BAFD Invest’n.].) Additionally, two vehicles parked in the driveway of the
residence sustained severe heat damage, (id. at 14-15), and the basement showed
signs of vandalism, including graffiti spray-painted on the wall, a broken television, and
damage to Plaintiffs’ pool table, countertops, and built-in cabinets, (Adamczyk Dep. 9:413:16, Aug. 24, 2011, Dkt. # 24-11). Later investigation revealed that the fire had been
intentionally set using incendiary chemicals distributed throughout several rooms of the
house. (BAFD Invest’n 13; Invest’n of Fire Loss 13, Dkt. # 31 [hereinafter Adamczyk
Invest’n].) Detective Curt Novara of the Livingston County Sheriff Department began a
criminal investigation of the fire, but as of yet has been unable to identify any suspects.
(Novara Dep. 14:14-19, Sept. 8, 2011, Dkt. # 24-15.)
Plaintiffs were not home at the time of the fire, having left that morning with
several of their children for an overnight outing at Cedar Point Amusement Park in
Sandusky, Ohio. (C. Martell Aff. ¶¶ 5-7, Dkt. # 24-3.) Plaintiffs and their family received
word of the fire from their neighbor as soon as she discovered it, and Plaintiff Glynn
successfully urged the neighbor to take their two dogs to safety from their tether in the
backyard of the house. (Morland Dep. 47:7-19.) The group then checked out of their
hotel and left Sandusky, allegedly arriving on the scene of the fire at approximately 3:00
a.m. on June 15, 2010. (C. Martell Aff. ¶¶ 9-10; Pl.’s Mot. Summ. J. 8, Dkt. # 24.)
At the time of the fire, Plaintiffs’ residence was covered by a valid homeowners
insurance policy issued by Defendant. (Pl.’s Mot. Summ. J. 5.) Plaintiffs timely notified
Defendant of the fire and submitted a proof of loss on October 5, 2010. (Id.; Proof of
Loss, Dkt. # 24-5.) After an internal and an independent investigation of Plaintiffs’
claim, Defendant denied the claim via a letter dated December 6, 2010. In the letter,
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Defendant stated that the fire loss was not covered under Plaintiffs’ insurance policy
because they had failed to prove that it was not intentional and because they had “made
misrepresentations regarding issues material to the loss.” (Denial Letter 1-2, Dkt. # 246.)
On December 9, 2010, Plaintiffs filed this action, alleging Defendant breached
their insurance contract by denying their claim. Currently, Plaintiffs seek payment in full
of their claim plus penalty interest under Michigan’s Uniform Trade Practices Act. See
Mich. Comp. Laws § 500.2006.1 In response, Defendant presents several affirmative
defenses to justify their nonpayment of the claim. Primarily, Defendant alleges that
Plaintiffs were directly or indirectly responsible for the fire, thereby rendering their claim
invalid. At the close of discovery, Plaintiffs filed the instant motion for summary
judgment.
II. STANDARD
Under Federal Rule of Civil Procedure 56, summary judgment is proper when
“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
deciding a motion for summary judgment, the court “is not to ‘weigh the evidence and
determine the truth of the matter but to determine whether there is a genuine issue for
trial.’” Sagan v. United States, 342 F.3d 493, 497 (6th Cir. 2003) (quoting Anderson v.
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Plaintiffs’ amended complaint originally contained two additional counts based
on Defendant’s refusal to consent to the value of their fire loss or take independent
action to determine the amount of loss. (See Am. Compl. ¶¶ 17-23, Dkt. # 5.)
However, the parties dismissed these counts by a stipulated order entered on
November 2, 2011.
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Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). “The central issue is ‘whether the
evidence presents a sufficient disagreement to require submission to a jury or whether it
is so one-sided that one party must prevail as a matter of law.’” Id. at 497 (quoting
Anderson, 477 U.S. at 251-52). “The judge’s inquiry, therefore, unavoidably asks
whether reasonable jurors could find by a preponderance of the evidence that the
[movant] is entitled to a verdict . . . .” Anderson, 477 U.S. at 252.
The party seeking summary judgment has the initial burden of showing the
absence of a genuine dispute as to a material fact. Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986). The burden then shifts to the nonmovant, who “must set forth specific
facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 256. It is
not enough for the nonmovant to “simply show that there is some metaphysical doubt as
to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
586 (1986). Rather, the nonmovant must sufficiently allege a fact that, if proven, “would
have [the] effect of establishing or refuting one of essential elements of a cause of
action or defense asserted by the parties.” Midwest Media Prop. L.L.C. v. Symmes
Twp., Ohio, 503 F.3d 456, 469 (6th Cir. 2007) (alteration in original) (quoting Kendall v.
Hoover Co., 751 F.2d 171, 174 (6th Cir. 1984)) (internal quotation marks omitted).
Both parties must support their assertions “that a fact cannot be or is genuinely
disputed” by “citing to particular parts of materials in the record, including depositions,
documents, electronically stored information, affidavits or declarations, stipulations
(including those made for purposes of the motion only), admissions, interrogatory
answers, or other materials.” Fed. R. Civ. P. 56(c)(1)(A). Alternatively, either party may
carry its burden by “showing that the materials cited do not establish the absence or
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presence of a genuine dispute, or that an adverse party cannot produce admissible
evidence to support the fact.” Id. 56(c)(1)(B). “The court must view the evidence in the
light most favorable to the non-moving party, drawing all reasonable inferences in that
party’s favor.” Sagan, 342 F.3d at 497 (citing Matsushita, 475 U.S. at 587).
III. DISCUSSION
Both Plaintiffs and Defendant agree that the viability of Plaintiffs’ suit depends
upon whether Defendant can establish a valid affirmative defense to Plaintiffs’ claim for
insurance proceeds. Principally, Defendant advances defenses of arson and fraud and
false swearing, both of which are based upon the contention that Plaintiffs intentionally
brought about the fire in their home. Defendant has presented enough evidence to
create a triable issue as to whether Plaintiffs were responsible for the fire, so the court
will deny Plaintiffs’ motion for summary judgment.
“It is axiomatic that a person who owns insured property and causes it to burn is
not entitled to collect the insurance proceeds.” Lichon v. Am. Universal Ins. Co., 459
N.W.2d 288, 291 (Mich. 1990). “Where an arson defense is raised by an insurer, the
burden is on the insurer to prove by a preponderance of the evidence that the plaintiff
set fire to the building or caused it to be set on fire.” George v. Travelers Indem. Co.,
265 N.W.2d 59, 62 (Mich. Ct. App. 1978) (citing Walz v Peninsular Fire Ins. Co., 191
N.W. 230, 236 (Mich. 1922)). An insurer may prove arson through circumstantial
evidence. O-So Detroit, Inc. v. Home Ins. Co., 973 F.2d 498, 502 (6th Cir. 1992) (citing
Peterson v. Oceana Circuit Judge, 219 N.W. 934, 934-935 (Mich. 1928)). For example,
an insurer may carry its burden by presenting independent evidence of the incendiary
origins of the fire coupled with circumstantial evidence of the plaintiff’s motive and
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opportunity to set the fire. George, 265 N.W.2d at 62 (citing, inter alia, People v.
Dorrikas, 92 N.W.2d 305, 313-14 (Mich. 1958) (Carr, J., dissenting in part)).
It is undisputed that the fire that destroyed Plaintiffs’ home was incendiary. (See
BAFD Invest’n 13; Adamczyk Invest’n 13.) Plaintiffs have presented credible evidence
that they were out of town when the fire was set, and a criminal investigation has not yet
yielded any suspects in the matter. However, Defendant adduces several pieces of
circumstantial evidence that suggest Plaintiffs had the motive to burn down the house
and may have arranged for an unknown individual or individuals to perpetrate the crime
while they traveled to Cedar Point:
•
Plaintiffs admitting to having tiki torch lamp oil in their garage, stored
in a closed cabinet close to the door leading into the home, as well as
several containers of gasoline in the garage in plain view, (GlynnMartell Exam. Under Oath 61:9-20, Aug. 19, 2010, Dkt. # 30-2; C.
Martell Exam. Under Oath 177:14-178:14, Dkt. # 30-11);
•
Plaintiffs were in serious financial distress in the months leading up to
the fire, as evidenced by the following:
<
Plaintiffs were several months behind in their mortgage
payments for the Christopher Street premises and
unsuccessfully attempted to renegotiate this mortgage
with the bank before the fire occurred, (Glynn-Martell
Exam. Under Oath 22:7-24:10; Resp. Opp’n Mot.
Summ. J. Ex. 11, Dkt. # 30-12);
<
Plaintiffs were behind in mortgage payments on a rental
home they also owned (located in Belleville, Michigan)
at the time of the fire, (Sommerville Aff. ¶ 7, Dkt. # 309);
<
Plaintiff Martell admitted to an internet gambling habit
for the six months before the fire of $50 to $100 per
month. However, bank records revealed transactions
consistent with internet gaming in excess of $175.00 in
April of 2010 alone, (Sommerville Aff. ¶ 7);
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<
Plaintiff Glynn’s Capital One Visa credit card was past
due in the amount of $2,913.84 as of May 12, 2010,
(Glynn-Martell Exam. Under Oath 24:16-22);
<
Plaintiff Glynn had taken loans from her 401-K
retirement savings in excess of $26,000.00, (GlynnMartell Exam. Under Oath 20:18-21:6);
<
Plaintiffs received a shut-off notice from DTE for the
Christopher Drive premises on May 20, 2010,
(Sommerville Aff. ¶ 7);
•
Plaintiff Glynn and Plaintiffs’ sons, Victor and Bryan, agreed during
their Statements Under Oath that the family dogs were never left
outside (in fact, according to Bryan they were left to defecate inside
the home in many instances); however, on the night of the fire, while
Plaintiffs were in Sandusky, Ohio, on an overnight trip, the dogs were
left tethered outside in the backyard, (Glynn-Martell Exam. Under
Oath 39:7-40:11; B. Glynn Dep. 45:1-16, Aug. 8, 2011, Dkt. # 30-4; V.
Martell Exam. Under Oath 69:8-23, Sept. 23, 2010, Dkt. # 30-13);
•
Although away on an overnight trip, Plaintiffs allegedly did not ensure
that the doors to their home were locked, (Sommerville Aff. ¶ 7);
•
While some graffiti was observed on one wall of the basement of the
premises, there was no evidence that any items of value were stolen
from the home, (id.);
•
No known enemies of Plaintiffs or other persons with motive were
identified as potentially being responsible for and having had
opportunity to set the fire, (id.); and
•
In a conversation that occurred within the six-month period preceding
the fire, Plaintiff Martell remarked to a neighbor “I can’t afford my
f***ing house,” (Dunatchik Dep. 13:2-15:6, Oct. 17, 2011, Dkt. # 30-5).
(Resp. Opp’n Mot. Summ. J. 8-10, 13, Dkt. # 30.) With these facts, Defendant has
shown an issue of material fact as to Plaintiffs’ possible involvement in the fire, such
that Defendant’s affirmative defense of arson should be presented to a jury. See, e.g.,
Fitzgerald v. Great Cent. Ins. Co., 842 F.2d 157 (6th Cir. 1988) (applying Michigan law
and holding insurers presented enough evidence to warrant sending issue of arson to
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jury upon showing that the plaintiffs suffered financial problems, that the plaintiff, his
child, and dog who lived in insured premises were staying elsewhere on night fire
occurred, and there was no evidence of breaking and entering on night of fire, implying
plaintiffs had provided arsonist access to building).
Additionally, “[t]he attempt to defraud the company by [an] insured, by the making
of false affidavits in relation to loss, is a complete bar to a recovery upon the policy.”
Monaghan v. Agric. Fire Ins. Co., 18 N.W. 797, 804 (Mich. 1884). If Plaintiffs did in fact
have a hand in setting the fire, Defendant may be able to show that representations
they made in connection with their claim regarding the cause and origin of the fire were
false. Accordingly, Defendant’s proffered evidence of Plaintiffs’ potential responsibility
for the fire is also sufficient to allow its fraud and false swearing defense to survive
summary judgment. See J.C. Wyckoff & Assocs. v. Standard Fire Ins. Co., 936 F.2d
1474, 1484-1486 (6th Cir. 1991) (discussing elements of Michigan’s fraud and false
swearing defense in the context of litigation in which insurer also raised arson defense).
Plaintiffs attempt to avoid the denial of their summary-judgment motion by
presenting an alternative theory of the origins of the fire. To that end, Plaintiffs argue
that a vandal or vandals—perhaps one Cody Simmons, a boy who had recently lived
with his mother as a renter in the basement of the Christopher Street house—took
advantage of their absence to enter the home, damage the property and fixtures in the
basement, and set the fire. They also bring forth evidence to refute Defendant’s
allegation that they were having severe financial problems, including bank statements,
tax returns, and mortgage documents. (See Reply Supp. Mot. Summ. J. Exs. 16-24,
Dkt. # 32-16 to -24.) However, this is clearly a fact dispute. The evidence before the
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court “presents a sufficient disagreement to require submission to a jury” on the issue of
Plaintiffs’ involvement in the fire. Anderson, 477 U.S. at 251-52. Plaintiffs may argue to
the factfinder that they did not commit arson or fraud and false swearing, but they have
not satisfied the court that the evidence “is so one-sided that [they] must prevail as a
matter of law.” Id. at 252. Accordingly, summary judgment on Plaintiffs’ claims for
breach of their insurance contract is inappropriate.
IV. CONCLUSION
For the foregoing reasons, IT IS ORDERED that Plaintiffs’ motion for summary
judgment [Dkt. # 24] is DENIED.
IT IS FURTHER ORDERED that the January 18, 2012 motion hearing is
CANCELLED.
s/Robert H. Cleland
ROBERT H. CLELAND
UNITED STATES DISTRICT JUDGE
Dated: January 10, 2012
I hereby certify that a copy of the foregoing document was mailed to counsel of record
on this date, January 10, 2012, by electronic and/or ordinary mail.
s/Lisa Wagner
Case Manager and Deputy Clerk
(313) 234-5522
S:\Cleland\JUDGE'S DESK\C2 ORDERS\10-14896.MARTELL.DenMotSummJ.set.wpd
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