American National Property and Casualty Company v. Stutte et al

Filing 36

LOCAL RULE 7.1(d) SUPPLEMENTAL BRIEF to 27 MOTION for Partial Summary Judgment by Laura Jean Stutte, Carol Ann Stutte filed by Laura Jean Stutte, Carol Ann Stutte. (Attachments: # 1 Exhibit 1, # 2 Affidavit of Lora Lee Black)(Hardin, Jonathan)

IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE

AMERICAN NATIONAL PROPERTY
AND CASUALTY COMPANY,
Plaintiff
v.
CAROL ANN STUTTE, et al.
Defendants.

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CIVIL ACTION
NO. 3:11-CV-219

THE STUTTES’ SUPPLEMENTAL MEMORANDUM IN OPPOSITION TO
ANPAC’S MOTION FOR PARTIAL SUMMARY JUDGMENT
Pursuant to Local Rule 7.1(d), Defendants and Counter-Plaintiffs, Carol Ann Stutte and
Laura Jean Stutte (collectively, the “Stuttes”), by and through counsel, submit this Supplemental
Memorandum in Opposition to Plaintiff and Counter-Defendant American National Property and
Casualty Company’s (“ANPAC’s”) Motion for Partial Summary Judgment. Local Rule 7.1(d)
provides that “a party may file a supplemental brief of no more than 5 pages to call to the Court’s
attention developments occurring after a party’s final brief is filed.”
This Memorandum calls to the Court’s attention developments occurring after the
Stuttes’ opposition brief was filed. The Stuttes have uncovered evidence that raises serious
doubts about whether ANPAC was acting in good faith and with diligence when it investigated
and ultimately denied the Stuttes’ insurance claim. For the reasons stated herein, and those set
forth in the Stuttes’ prior opposition brief, ANPAC’s summary judgment motion – filed before
the parties have taken any discovery – is premature and should be DENIED.

Background and Procedural History
On September 4, 2010, the Stuttes’ home and its contents were destroyed by fire. The
property, located at 2715 Highway 360, Vonore, Monroe County, Tennessee, was insured by
ANPAC under Special Homeowners Policy No. 41-H-V66-965-7 (the “Policy”). The Stuttes
timely noticed a claim under the Policy. ANPAC denied the Stuttes’ claim and filed the present
action in May 2011. Compl. ¶ 5 (Dkt. No. 1); Rule 56(d) Declaration of Scott J. Levitt ¶ 1 (Nov.
15, 2011) (Dkt. No. 31). ANPAC’s denial letter and lawsuit accused the Stuttes of setting fire to
their home and committing insurance fraud; however, ANPAC did not set forth any facts in
support of these grave allegations. Compl. ¶ 6; Levitt Decl. ¶ 1. The Stuttes filed counterclaims
for breach of contract, declaratory judgment, violation of the Tennessee Consumer Protection
Act (“TCPA”), and bad faith. The Stuttes alleged, among other things, that ANPAC knew the
Stuttes could not possibly have set fire to their home because they were physically present in
Nashville, Tennessee – approximately 200 miles away – at the time of the fire. See Am.
Countercl. ¶¶ 12, 36, 42 (Dkt. No. 20).
On October 25, 2011, ANPAC moved for partial summary judgment on the Stuttes’ bad
faith and TCPA claims. (Dkt. Nos. 27-29.) ANPAC’s motion and supporting memorandum
relied on two affidavits and fourteen exhibits, all of which fall wholly outside of the pleadings.
Levitt Decl. ¶ 6. In these materials, ANPAC made numerous factual allegations that the Stuttes
vigorously dispute, and of most of which the Stuttes were previously unaware. Id. According to
ANPAC, “after the loss, [it] conducted an extensive and thorough investigation of the Stuttes’
insurance claim.” ANPAC’s Mem. 12 (Dkt. No. 28). Notably, ANPAC asserted that “[d]uring
its investigation, [it] obtained the Stuttes’ cell phone records,” Affidavit of Stacey Jennings ¶¶
48-54 (Oct. 11, 2011) (Dkt. No. 27-1), and that its “analysis [of those records] did not indicate

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that the Stuttes were in Nashville, at the time of the fire, as they reported,” ANPAC’s Mem. 14.
ANPAC also alleged that it had “hired a private investigator, Gary Noland, to assist ANPAC in
investigating the claim, obtaining information and conducting witness interviews.” Jennings Aff.
¶ 11.
On November 15, 2011, the Stuttes filed a Memorandum in Opposition, noting that under
Federal Rule of Civil Procedure 56(d) and well-established Sixth Circuit precedent, summary
judgment is improper where – as here – no discovery has taken place. See Stuttes’ Mem. 6-12
(Dkt. No. 30). On November 23, 2011, ANPAC filed a Reply Memorandum, arguing that the
Stuttes’ should not be allowed to conduct any discovery before ANPAC’s motion is ruled upon.
See ANPAC’s Reply Mem. 1 (Dkt. No. 33).
New Developments
After ANPAC’s motion was fully briefed, the Stuttes’ ongoing investigation uncovered
evidence that raises serious doubts concerning whether ANPAC was acting in good faith and
with diligence when it investigated and ultimately denied the Stuttes’ claim. First, the Stuttes
have obtained records of over two dozen cell phone calls that Carol and Laura Stutte placed or
received around the time of the fire. See Ltr. from Scott J. Levitt to N. Mark Kinsman & Russell
E. Reviere 1 (Jan. 30, 2012) (attached as Exhibit 1). These records include location data that
proves that the Stuttes were physically present in Nashville, Tennessee, on the evening of
September 4, 2010, that Carol Stutte traveled from Nashville to Vonore in the early hours of
September 5, 2010, and that Laura Stutte was in Nashville until mid-afternoon on September 5,
2010, when they placed or received each of the relevant calls. See id., Tabs A-C. Even though
ANPAC had represented in its motion that “[d]uring its investigation, [it] obtained the Stuttes’
cell phone records,” Jennings Aff. ¶ 48, plainly ANPAC’s investigation was deficient in failing

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to turn up these records. Incidentally, counsel for the Stuttes provided ANPAC with copies of
these phone records on January 30, 2012, and afforded ANPAC an opportunity to acknowledge
its coverage obligations and withdraw its lawsuit, see Levitt Ltr. at 3. ANPAC did not respond.
Second, the Stuttes have obtained an affidavit from Lora Lee Black – a witness whom
Gary Noland interviewed as part of ANPAC’s investigation. See Affidavit of Lora Lee Black
(Feb. 14, 2012) (attached as Exhibit 2); Affidavit of Gary Noland ¶¶ 25-28 (Sept. 30, 2011) (Dkt.
No. 27-2). During the interview, Ms. Black informed Mr. Noland that she was with the Stuttes
in Nashville, Tennessee, before, during and after the fire and, therefore, the Stuttes could not
have burned down their home. Black Aff. ¶¶ 2, 5-8. Ms. Black also attempted to provide Mr.
Noland with time-stamped pictures and documents, including her cell and home phone records,
from their trip to Nashville. Id. ¶¶ 3-4, 7, 11. And Ms. Black advised Mr. Noland that she had
toured the Stuttes’ home on the day of the fire and there was “no furniture missing except for [a
few] bookcases.”1 Id. ¶ 8. However, Mr. Noland expressed “little or no interest in hearing [Ms.
Black] recount the details of [her] trip with the Stuttes to Nashville . . . . Instead, he was sharply
focused on getting ‘dirt’ on the Stuttes[.]”

Id.

He “showed barely any interest in th[e]

documents” and “never looked at any of the time-stamped pictures of the Nashville trip.” Id. ¶¶
7, 11. It became clear to Ms. Black that “Mr. Noland saw his job as finding evidence to support
ANPAC’s apparent theory that the Stuttes lied about going to Nashville and [about] having no
involvement in the fire. He ignored and did not want to see any evidence that contradicted that
theory.” Id. ¶ 13.

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In its summary judgment motion, ANPAC alleged (and the Stuttes dispute) that “a large
amount of furniture was removed from the Stuttes’ house during the two weeks before the fire,”
and that there was no visible sign of furniture in the Stuttes’ house on the day of the fire.
Jennings Aff. ¶¶ 28, 32.

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Argument
ANPAC’s motion for partial summary judgment relies heavily on its investigation of the
Stuttes’ cell phone records, and on the witness interviews conducted by its private investigator,
Mr. Noland, in order to claim that “there can be no genuine dispute of material fact that ANPAC
acted in good faith in denying the Stuttes’ fire insurance claim and did not otherwise act unfairly
or deceptively.” ANPAC’s Mem. 22. To the contrary, evidence uncovered by the Stuttes
indicates that ANPAC conducted its investigation in an incompetent, deceptive, misleading, and
unfair manner, and that ANPAC ultimately denied the Stuttes’ claim in bad faith. At minimum,
the evidence described herein raises genuine issues of material fact and demonstrates why the
Stuttes must be given the “‘full opportunity to conduct discovery’” that the law requires. Ball v.
Union Carbide Corp., 385 F.3d 713, 719 (6th Cir. 2004) (quoting Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 257 (1986)).
Conclusion
For the foregoing reasons, and those stated in ANPAC’s prior opposition brief, ANPAC’s
motion for summary judgment is premature and should be DENIED.
Dated: February 15, 2012

Respectfully submitted,
/s/ Seth A. Tucker
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Seth A. Tucker (pro hac vice)
Scott J. Levitt (pro hac vice)
Jonathan G. Hardin (pro hac vice)
COVINGTON & BURLING LLP
1201 Pennsylvania Avenue NW
Washington, DC 20004-2401
Tel: [phone]
Fax: [phone]
Email: [e-mail]
[e-mail]
[e-mail]

Peter J. Alliman (BPR No. 5984)
WHITE, CARSON & ALLIMAN, P.C.
135 College Street
Madisonville, TN 37354
Tel: [phone]
Fax: [phone]
Email: [e-mail]

Attorneys for Defendants Carol Ann and Laura Jean Stutte

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CERTIFICATE OF SERVICE
I hereby certify that on this 15th day of February, 2012, a copy of the foregoing
SUPPLEMENTAL MEMORANDUM IN OPPOSITION TO ANPAC’S MOTION FOR
PARTIAL SUMMARY JUDGMENT was filed electronically using the Court’s Electronic
Filing System. Notice of this filing will be served through the Electronic Filing System to
parties or counsel who are Filing Users, and by first-class mail to any party or counsel who is not
served through the Electronic Filing System.

/s/ Jonathan G. Hardin
Jonathan G. Hardin (pro hac vice)
COVINGTON & BURLING LLP
1201 Pennsylvania Avenue NW
Washington, DC 20004-2401
Tel: [phone]
Fax: [phone]
Email: [e-mail]

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