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Tran v. Allstate Insurance Co.

United States District Court, S.D. Alabama, Southern Division

July 23, 2015

HAU THE TRAN, Plaintiff,


KRISTI K. DuBOSE, District Judge.

This matter is before the Court on Defendant's Motion for Partial Summary Judgment (Docs. 44, 46), Plaintiff's reply (Doc. 51), and Defendant's response (Doc. 52). For the reasons discussed herein, Defendant's Motion for Partial Summary Judgment on Counts Two and Four of the Complaint (Doc. 1) is GRANTED.

I. Factual Background[1]

On August 18, 2012, the VIP Nail Salon ("the salon"), located in Daphne, Alabama was intentionally set ablaze and sustained damages. (Doc. 51 at 8). Plaintiff Hau the Tran ("Tran") owned the salon. (Doc. 1-1 at 2). At the time of the fire, Tran's Toyota Avalon ("the vehicle") was parked behind the salon. (Doc. 51-2 at 69). The vehicle was also set on fire, resulting in damages. (Doc 1-1 at 2).

Tran had insurance coverage on both the salon and the vehicle through Defendant Allstate Insurance Company ("Allstate"). ( Id., Docs. 44-2 and 44-3). After the fires, Tran made insurance claims on the salon and vehicle. (Doc. 51 at 8). The parties do not dispute that Tran was covered under Allstate policies at the time of the losses, the amount of the policies, the terms of the policies, or that Tran made a timely claim under the policies. (Id.).

The state fire marshal investigated the fires and concluded that they had been intentionally set. (Docs. 44 at 2 and 51 at 8). Allstate referred Tran's claims to Investigator Wilbur Jordan. Jordan engaged in an investigation which included interviews of Tran, employees of nearby businesses, the employment of private fire investigator Gary Jones, and collection of documentation regarding the salon and vehicle, the fires, and Tran's whereabouts before and during the fires. (Docs. 44-4 and 44-5). During the course of the investigation, Allstate determined that Tran had been having trouble with the business and had recently significantly changed her insurance coverage. (Id.). Additionally, Tran had rooms reserved at the Grand Casino in Biloxi, Mississippi in the days prior to the fires. (Doc. 51-2 at 124). Matches from the Grand Casino were recovered at the scene of the fires. (Id.). Fire investigator Gary Jones determined that gasoline had been used as an accelerant and there were no signs of forced entry at the salon, indicating that the person who set the fires would require access to the salon via keys. (Docs. 51 at 8 and 44-6 at 1-2).

Tran's salon insurance policy stated that Allstate would not cover "[i]ntentional or criminal acts of or at the direction of any persons insured, if the loss that occurs: a) may be reasonably expected to result from such acts; or b) is the intended result of such acts." (Doc. 44-2 at 27). The concealment and fraud section of the policy stated: "This policy is void if you intentionally conceal or misrepresent any material facts or circumstances, before or after loss." (Id. at 70).

Tran's vehicle insurance policy stated, "This policy shall be deemed void from its inception if it was obtained or renewed through material misrepresentation, fraud or concealment of material fact. This means that Allstate will not be liable for any claims or damages which would otherwise be covered had there not been material misrepresentation, fraud, or concealment of material fact." (Doc. 44-3 at 29).

As a result of its investigation, Allstate concluded that Tran had been involved in setting or causing the fires to be set. (Doc. 51-2 at 86-87). Allstate also determined that Tran had made material misrepresentations during the investigation regarding her whereabouts around the time of the fires, her financial status, and the value and contents lost in the fire. (Doc. 51-2 at 84-92). As a result, Allstate denied Tran's insurance claims on both the salon and the vehicle.[2] Tran denies any involvement with the fires and making any material representations to Allstate.

On August 18, 2014, Tran filed suit in the Circuit Court of Baldwin County Alabama alleging breach of contract, fraudulent suppression, fraud, and bad faith. Allstate removed this action to the U.S. District Court for the Southern District of Alabama on September 10, 2014. Allstate now moves for partial summary judgment on Tran's fraudulent suppression and fraud claim (Count Two) and bad faith claim (Count Four).

II. Standard of Review

"The court shall grant summary judgment 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). Rule 56(c) provides as follows:

(1) Supporting Factual Positions. A party asserting that a fact cannot be or is genuinely disputed must support the assertion by:
(A) 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; or
(B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.
(2) Objection That a Fact Is Not Supported by Admissible Evidence. A party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence.
(3) Materials Not Cited. The court need consider only the cited materials, but it may consider other materials in the record.
(4) Affidavits or Declarations. An affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated.

Fed. R. Civ. P. Rule 56(c). The party seeking summary judgment bears the "initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, ' which it believes demonstrate the absence of a genuine issue of material fact." Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). If the nonmoving party fails to make "a sufficient showing on an essential element of her case with respect to which she has the burden of proof, " the moving party is entitled to summary judgment. Celotex, 477 U.S. at 323. "In reviewing whether the nonmoving party has met its burden, the court must stop short of weighing the evidence and making credibility determinations of the truth of the matter... the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994, 998-999 (11th Cir. 1992).

III. Analysis

A. Jurisdiction and Venue

Tran is a resident citizen of the state of Mississippi. (Doc. 1 at 3). Allstate is a corporation organized under the laws of the state of Illinois and authorized to do business as an insurance company in the state of Alabama. (Id.). The amount in controversy exceeds $75, 000. This Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332. Venue is proper because the events giving rise to this action occurred in Daphne, Alabama, within the Southern District of Alabama. 28 U.S.C. § 1391(b)(2) ("A civil action may be brought in-a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of the property that is the subject of the action is situated[.]").

B. Choice of Law

Before addressing the parties' substantive contentions, the Court must decide what substantive law governs the claims in this diversity action. "A federal court in a diversity case is required to apply the laws, including principles of conflict of laws, of the state in which the federal court sits." Manuel v. Convergys Corp., 430 F.3d 1132, 1139 (11th Cir.2005) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941)). Tran asserts several claims involving ...

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