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Union Insurance Co. v. Blakeney Palmer Co., LLC

United States District Court, Northern District of Alabama, Western Division

December 12, 2014

UNION INSURANCE COMPANY, Plaintiff,
v.
BLAKENEY PALMER CO., LLC., Defendant.

MEMORANDUM OPINION

R. DAVID PROCTOR UNITED STATES DISTRICT JUDGE

Plaintiff, Union Insurance Company (“Plaintiff/Counter-Defendant), and Defendant, Blakeney Palmer Co. L.L.C., (“Defendanf or “Counter-Plaintiff) have both moved for summary judgment on Plaintiffs fraud claim. (Docs. # 83 and 87). After careful review, the court concludes that there are material issues of fact that preclude a grant of summary judgment for either party.

I. Introduction

This case presents an insurance dispute. Plaintiff insured Defendant’s apartment complex, University Village, which was damaged in the April 27, 2011 tornado in Tuscaloosa, Alabama. Defendant made a claim under the policy for repairs, lost rents, and depreciation. Plaintiff paid the claim in the amount of $877, 682.09 and Defendant represented that it had made repairs.

Defendant later submitted a claim ostensibly for additional damage incurred in the April 27, 2011 tornado in the amount of $2, 292, 753.84. Defendant asserts that its initial claim was only for a portion of “necessary” repairs sufficient to enable it to rent the apartments, and that it always contemplated undertaking more extensive repairs. Plaintiff’s position is that it understood that the initial claim was to repair all of the damage caused by the tornado.

Plaintiff investigated and eventually refused to pay the supplemental claim. It thereafter filed this declaratory judgment action seeking to void the policy under its terms and under Alabama Code Section 27-14-28 due to Defendant’s alleged fraud. Plaintiff asserts that, in investigating Defendant’s supplemental claim, it discovered, among other things, that Defendant had not made all of the repairs that were the basis for the initial claim it had previously paid. Therefore, Plaintiff asserts that Defendant made intentional, material misrepresentations in relation to its initial claim. Plaintiff also asserts that the damage sought to be repaired under the supplemental claim was not the result of wind or tornado damage and is not covered by the policy. (Doc. # 1).

II. Relevant Undisputed Facts

Plaintiff insured Defendant’s apartment complex, University Village, located in Tuscaloosa, Alabama, which suffered damage during a tornado on April 27, 2011. (Docs. # 1, 17). Defendant made a claim under its policy with Plaintiff related to the tornado damage. (Doc. # 1). The policy provides in relevant part:

A. Concealment, Misrepresentation or Fraud
This Coverage Part is void in any case of fraud by you as it relates to this Coverage Part at any time. It is also void if you or any other insured, at any time, intentionally conceal or misrepresent a material fact concerning:
1. This Coverage Part;
2. The Covered Property;
3. Your interest in the Covered ...

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