Dash et al v. Selective Insurance Company of South Carolina
Filing
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ORDER AND OPINION granting in part and denying in part 79 Motion for Summary Judgment as set out. Signed by Honorable J Michelle Childs on 5/19/2015. (mbro, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
ORANGEBURG DIVISION
Franklin Dash, Debbie Dash,
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Plaintiffs,
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v.
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Selective Insurance Company of South
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Carolina,
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Defendant.
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____________________________________)
Civil Action No. 5:12-cv-02732-JMC
ORDER AND OPINION
Plaintiffs Franklin and Debbie Dash (collectively “Plaintiffs”) filed this action alleging
breach of contract and bad faith by Defendant Selective Insurance Company of South Carolina
(“Defendant”) for failure to pay the full replacement and repair costs stemming from a house
fire. (ECF No. 1.) This matter is before the court on Defendant’s Motion for Summary
Judgment. (ECF No. 79.) For the reasons set forth herein, the court thereby GRANTS IN
PART AND DENIES IN PART Defendant’s Motion (ECF No. 79).
I. RELEVANT FACTUAL AND PROCEDURAL BACKGROUND
On January 16, 2011, a fire damaged Plaintiffs’ home in St. Matthews, South Carolina.
(ECF No. 1 at 1.) Per Plaintiffs’ homeowners insurance policy with Defendant, Defendant made
payments totaling approximately $103,000—approximately $78,000 to Plaintiffs for repair and
replacement and approximately $25,000 directly to companies for repair and cleaning services.
(ECF No. 96 at 2.) On October 13, 2011, Defendant mailed to Plaintiffs a “Policy Release and
Sworn Statement in Proof of Loss” for Plaintiffs to sign and return, upon receipt of which
Defendants would issue a final payment of $7,174.20. (ECF No. 96-1 at 5.) Plaintiffs refused to
sign the release because they allege “their home was not completed and their personal property
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had not been completely replaced and restored.” (ECF No. 96 at 3.) On October 18, 2011, the
parties entered into the appraisal process in an attempt to resolve the claim. (ECF No. 79-1 at 6.)
However, on May 7, 2012, Plaintiffs sent Defendant a letter advising Defendant they no longer
wished to proceed with the appraisal process. (ECF No. 96-1 at 16.)
Plaintiffs filed their Complaint on September 20, 2012, alleging breach of contract and
bad faith by Defendant. (ECF No. 1.) Defendant filed a Motion for Summary Judgment on
January 15, 2015. (ECF No. 79.)
II. LEGAL STANDARD AND ANALYSIS
Summary judgment should be granted “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). A fact is “material” if proof of its existence or non-existence would affect the
disposition of the case under the applicable law. Anderson v. Liberty Lobby Inc., 477 U.S. 242,
248–49 (1986). A genuine question of material fact exists where, after reviewing the record as a
whole, the court finds that a reasonable jury could return a verdict for the nonmoving party.
Newport News Holdings Corp. v. Virtual City Vision, 650 F.3d 423, 434 (4th Cir. 2011).
In ruling on a motion for summary judgment, a court must view the evidence in the light
most favorable to the non-moving party. Perini Corp. v. Perini Constr., Inc., 915 F.2d 121, 12324 (4th Cir. 1990). The non-moving party may not oppose a motion for summary judgment with
mere allegations or denial of the movant’s pleading, but instead must “set forth specific facts”
demonstrating a genuine issue for trial. Fed. R. Civ. P. 56(e); see Celotex Corp. v. Catrett, 477
U.S. 317, 324 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986); Shealy v.
Winston, 929 F.2d 1009, 1012 (4th Cir. 1991). All that is required is that “sufficient evidence
supporting the claimed factual dispute be shown to require a jury or judge to resolve the parties’
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differing versions of the truth at trial.”
Anderson, 477 U.S. at 249.
“Mere unsupported
speculation . . . is not enough to defeat a summary judgment motion.” Ennis v. Nat’l Ass’n of
Bus. & Educ. Radio, Inc., 53 F.3d 55, 62 (4th Cir. 1995). A party cannot create a genuine issue
of material fact solely with conclusions in his or her own affidavit or deposition that are not
based on personal knowledge. See Latif v. The Cmty. Coll. of Baltimore, No. 08-2023, 2009 WL
4643890, at *2 (4th Cir. Dec. 9, 2009).
To prove breach of contract, a plaintiff must show (1) the existence of a binding contract
between the parties, (2) a breach of the contract by the defendant, and (3) damages caused by the
breach. Fuller v. Eastern Fire & Cas. Ins. Co., 124 S.E.2d 602, 610 (S.C. 1962). “[T]here is an
implied covenant of good faith and fair dealing in every insurance contract ‘that neither party
will do anything to impair the other’s rights to receive benefits under the contract.’” Tadlock
Painting Co. v. Maryland Cas. Co., 473 S.E.2d 52, 53 (S.C. 1996) (quoting Nichols v. State
Farm Mut. Auto. Ins. Co., 306 S.E.2d 616, 618 (S.C. 1983) superseded on other grounds.). “An
insured may recover damages for a bad faith denial of coverage if he or she proves there was no
reasonable basis to support the insurer’s decision to deny benefits under a mutually binding
insurance contract.” Dowling v. Home Buyers Warranty Corp., II, 400 S.E.2d 143, 144 (S.C.
1991) (citations omitted).
The parties do not dispute the existence of a binding contract between them.
As
Defendant notes, the crux of this case is “the scope and cost of the repairs and cost of the
replacement of certain personal property.” (ECF No. 79-1 at 1.) Plaintiffs’ policy states that
Defendant “will pay the cost to repair or replace, after application of deductible and without
deduction for depreciation, but not more than… [t]he necessary amount actually spent to repair
or replace the damaged building.” (ECF No. 79-1 at 9.) Further, for personal property, the
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policy states Defendant will “pay no more than the least of the following amounts: (1)
Replacement cost at the time of loss without deduction for depreciation; (2) The full cost of
repair at the time of loss; (3) The limit of liability that applies to Coverage C, if applicable.” (Id.
at 10.)
Defendant argues Plaintiffs “have produced no evidence that any of the repairs or damage
to personal property they now claim [Defendant] failed to pay were reasonable, necessary, or
caused by the fire.” (ECF No. 79-1 at 13.) However, Plaintiffs provide several documents of
communications with Defendant regarding additional requests for mattress replacement,
additional painting, and other repairs and replacements. (See ECF No. 96-6.) Further, Plaintiffs
provide documents outlining several supplemental requests made during the repair process to
which Defendant either acquiesced or agreed to compromise. (See ECF No. 96-7.) Although
Defendant argues there is no evidence any refusal by Defendant to pay repairs or replacements it
felt was required under the policy, Plaintiffs provide evidence of multiple items they felt were
necessary to fully and properly repair the damage caused by the fire. At the core, this dispute is
a disagreement over the extent of coverage afforded by the policy. A reasonable juror could find
the policy obligated Defendant to pay for Plaintiffs’ requests in order to fully repair Plaintiffs’
home after the fire, and that a failure to pay constituted a breach of the policy. Further, a
reasonable juror could find that Plaintiffs suffered damages in the form of out-of-pocket
expenses Plaintiffs allege they incurred as a result of Defendant’s failure to pay additional funds.
(See ECF No. 96-11.) Thus, summary judgment is denied as to Plaintiffs’ breach of contract
claim.
With regard to Plaintiffs’ bad faith claim, a reasonable juror could not find “there was no
reasonable basis” to support Defendant’s coverage decision. Plaintiffs argue “Defendant also
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failed to provide reasonable explanation and basis when denying or making a compromise offer
of claim settlement.” (ECF No. 96 at 21.) However, Plaintiffs argument rests on Defendant’s
failure to pay what Plaintiffs allege is required under the policy: “[Insurance adjustor Randy]
Eichhorn testified that there were communications between the Plaintiffs and the contractors that
lead [sic] to disputes about the full replacement and loss of use. Specifically, Mr. Eichhorn
testified… that he did not paid [sic] for the full amount of the damages by the house fire but
rather paid what the estimated amount that [Plaintiffs’] contractor submitted. Plaintiffs argue
that the estimate was not sufficient to complete the work and pay for the damaged personal
property.” (ECF No. 96 at 21 (emphasis added).) Just as in Stevenson v. Allstate Ins. Co.,
“nothing in the record suggests that this was the result of anything other than a good-faith dispute
about the extent of coverage.” 2012 WL 1986444, at *5 (D.S.C. June 4, 2012).
Indeed, the record shows many instances of Defendant explaining to Plaintiffs that
certain requests were not covered under the policy. In an entry from Defendant’s Claims Inquiry
System printout, provided by Plaintiffs, Adjustor Eichhorn noted, “Mr. Dash wants the entire
roof replaced due to the [shingles] matching issue. Explained that the policy pays for damaged
property only, not to match. After 45 minute conversation, I agreed to replace the front side of
the roof. He is not in agreement w/ this solution.” (ECF No. 96-4 at 19 (emphasis added).) The
Claims Inquiry printout notes other compromises and increases in coverage allowance, as well,
including: an agreement by Eichhorn to replace Plaintiffs’ refrigerator, which was damaged due
to mold from spoiled food and not directly from the fire, and a further agreement to increase the
allowance for the refrigerator from $822 to $1500 (id. at 15-16), and an agreement by Eichhorn
to completely replace Plaintiffs’ pool table after initially offering to only replace the felt and rails
on the table (id. at 14). Rather than demonstrate an unreasonable refusal by Defendant to pay
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under the claim, therefore showing bad faith, the record demonstrates that Defendant not only
explained the limits of the policy’s coverage to Plaintiffs, but was willing to compromise on
various requests, sometimes providing coverage beyond the policy’s provisions. As such, no
reasonable juror could find that Defendant acted unreasonably, and therefore in bad faith, when
denying Plaintiffs’ requests for additional payment. Therefore, summary judgment is granted as
to Plaintiffs’ bad faith claim.
III. CONCLUSION
Based on the aforementioned reasons, it is therefore ordered that Defendant’s Motion for
Summary Judgment (ECF No. 79) is GRANTED as to Plaintiffs’ bad faith claim and DENIED
as to Plaintiffs’ breach of contract claim. This action will go forward on Plaintiff’s breach of
contract claim only.
IT IS SO ORDERED.
United States District Judge
May 19, 2015
Columbia, South Carolina
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