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Nationwide Property and Casualty Co. v. Hunt

United States District Court, N.D. Alabama, Eastern Division

June 13, 2014

NATIONWIDE PROPERTY and CASUALTY COMPANY, Plaintiff,
v.
PHILLIP HUNT and COMMUNITY, & SOUTHERN BANK, INC. f/k/a FIRST NATIONAL BANK OF GEORGIA, Defendants.

MEMORANDUM OPINION

JOHN E. OTT, Chief Magistrate Judge.

In this declaratory judgment action, Plaintiff Nationwide Property and Casualty Company ("Nationwide") seeks a declaratory judgment that a homeowners insurance policy it issued to Defendant Phillip Hunt ("Hunt") is void and provides no coverage for a fire loss suffered by Hunt. Hunt, in turn, has filed a counterclaim against Nationwide for breach of the insurance policy.

Before the court is Nationwide's motion for summary judgment on both its request for declaratory relief and Hunt's counterclaim. (Doc. 19).[1] The motion has been fully briefed and is properly under submission before the court.[2] (Docs. 19, 20, 25, 26). For the reasons stated below, the court finds that the motion is due to be denied.

I. Factual Background[3] and Procedural History

In 2001, Hunt purchased a homeowners insurance policy from Nationwide (the "Policy"). (Doc. 20-1 at 3). The Policy insured the residence located at 783 County Road 50 in Fruithurst, Alabama (the "Property"), and provided coverage for the dwelling, detached structures, and personal property. (Doc. 19-10 at 3). As part of the Policy application process, Hunt confirmed that he was the owner of the Property and that it was owner occupied. (Doc. 19-10 at 3). On July 31, 2001, Hunt transferred title to the Property to his daughter via a warranty deed. (Doc. 19-4 at 2). He did not notify Nationwide of the transfer of title. (Doc. 20-1 at 2). Hunt continued to live in the residence and continued to pay the insurance premiums and taxes on the Property. (Doc. 20-1 at 2-3).

In May 2007, Hunt obtained a $170, 000.00 loan from First National Bank of Georgia ("First National") to make improvements to the Property. (Doc. 20-1 at 3). As security for the loan, Hunt's daughter granted First National a mortgage on the Property. (Doc. 19-5 at 2-6).

On October 1, 2009, Hunt filed a Chapter 13 Voluntary Petition in the United States Bankruptcy Court for the Northern District of Alabama, Case No. 1:09-bk-42917. Hunt represented in the bankruptcy petition that he held no interest in real property and that he leased the Property. (Doc. 19-2 at 19, 31).

On October 24, 2010, the Property and its contents were destroyed by fire. (Doc. 20-1 at 3). Hunt gave notice of the loss to Nationwide that same day. ( Id. ) Ten days later, on November 3, 2010, the bankruptcy trustee filed a motion to dismiss Hunt's bankruptcy case for failure to make the required payments under the bankruptcy plan. (Doc. 19-8). The bankruptcy court dismissed the case on December 8, 2010. (Doc. 19-9). Hunt never amended his bankruptcy petition to include a potential claim against Nationwide as an asset of his estate.

Hunt submitted a Proof of Loss to Nationwide on May 14, 2011. (Doc. 19-3). Nationwide initiated this action two months later, seeking a declaration that it owed no coverage to Hunt for the fire loss.[4] (Doc. 1). Hunt answered the complaint and asserted a counterclaim against Nationwide, alleging that Nationwide had breached the Policy by failing to reimburse him for the fire loss. (Doc. 6). Nationwide has now moved for summary judgment in its favor, arguing that Hunt's counterclaim is barred by judicial estoppel and that the Policy is void.

II. Summary Judgment Standard

Summary judgment is appropriate when there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(a). The party seeking summary judgment must first identify grounds that show the absence of a genuine issue (dispute) of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the non-movant, who must go beyond the pleadings and present affirmative evidence that a genuine issue (dispute) of material fact does exist. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986). In ruling on a motion for summary judgment, the court must draw all reasonable inferences in the light most favorable to the non-moving party. Sims v. MVM, Inc., 704 F.3d 1327, 1330 n.2 (11th Cir. 2013); Hill v. Wal-Mart, 510 F.Appx. 810, 813 (11th Cir. 2013). The court may consider materials including depositions, documents, electronically stored information, affidavits, and declarations. FED. R. CIV. P. 56(c)(1)(A).

III. Discussion

A. Is Hunt's counterclaim barred by judicial estoppel?

The doctrine of judicial estoppel operates "to protect the integrity of the judicial process' by prohibiting parties from deliberately changing positions according to the exigencies of the moment.'" New Hampshire v. Maine, 532 U.S. 742, 749-50 (2001) (quoting Edwards v. Aetna Life Ins. Co., 690 F.2d 595, 598 (6th Cir. 1982), and United States v. McCaskey, 9 F.3d 368, 378 (5th Cir. 1993)); see also Middleton v. Caterpillar Indus., Inc., 979 So.2d 53, 59 (Ala. 2007) (quoting New Hampshire ). Here, Nationwide asserts that Hunt's counterclaim is barred by judicial estoppel because he never identified a fire loss claim against Nationwide in his bankruptcy filings. Nationwide argues that Hunt's fire loss claim was an ...


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