United States District Court, N.D. Alabama, Eastern Division
LIBERTY CORPORATE CAPITAL LIMITED, Plaintiff/Counterclaim Defendant,
CLUB EXCLUSIVE, INC., Defendant/Counterclaim Plaintiff.
VIRGINIA EMERSON HOPKINS UNITED STATES DISTRICT JUDGE
Defendant Liberty Corporate Capital Limited
(“Liberty”) initiated this insurance action on
May 13, 2016. (Doc. 1). Liberty sued Defendant/Counterclaim
Plaintiff Club Exclusive, Inc. (“Club Exclusive”)
for a declaratory judgment of its rights and obligations
under a commercial insurance policy (the
“Policy”) issued to Club Exclusive. Id.
Club Exclusive answered Liberty's complaint and
counterclaimed against Liberty on June 22, 2016. (Doc.
October 17, 2016, Liberty filed a Motion for Summary Judgment
(doc. 36) (the “Rule 56 Motion”) as to all
remaining claims and counterclaims. Club Exclusive failed to
respond to the Rule 56 Motion. On June 26, 2017, the Court
granted the Rule 56 Motion, entered a declaratory judgment in
favor of Liberty, and dismissed the entire action with
prejudice. (Docs. 38, 39).
Club Exclusive moved to set aside that Rule 56 judgment in
accordance with the excusable neglect standard under
Fed.R.Civ.P. 60(b). (Doc. 40). On November 21, 2017, the
Court granted Club Exclusive's request for post-judgment
relief. (Doc. 43). As a result, the Court's prior summary
judgment opinion (doc. 38) and final judgment order (doc. 39)
Exclusive filed its opposition to the Rule 56 Motion (doc.
44) on December 12, 2017. Liberty followed with a Partial
Motion To Strike Antineeka White's Affidavit (doc. 45)
(the “Partial Strike Motion”) on January 4, 2018,
and a reply in support of its Rule 56 Motion (doc. 46) on
January 5, 2018.
Exclusive opposed the Partial Strike Motion on January 31,
2018. (Doc. 47). Finally, on February 5, 2018, Liberty filed
its reply. (Doc. 48). Thus, the Rule 56 and Partial Strike
Motions are now ripe for disposition. For those reasons explained
below, Liberty's Rule 56 Motion is due to be granted in
part and otherwise denied. Liberty's Partial Strike
Motion is due to be granted.
Club Exclusive's Formation
Exclusive is an Alabama corporation formed on October 5,
2011. AF No. 1. Antineekia White (“Ms. White”)
acted as the incorporator and is Club Exclusive's owner,
director, and president. AF No. 2. Club Exclusive is a
distinct and separate entity from Ms. White. AF No. 3.1. Ms.
White understood that by incorporating Club Exclusive, there
would be a legal difference between her and it and that she
could potentially be protected from legal liability. AF No.
23, 2012, Ms. White purchased approximately 13 acres of land
in rural Alabama from Bruce Hutchinson for $2, 000. AF No.
4.1. This property was located at 3479 Barclay Road, Alpine,
Alabama 35014 (the “Property”). AF No. 4.2. Ms.
White personally owned the Property. AF No. 4.3.
White built a commercial building (the
“Building”) on the Property using her personal
funds. AF No. 5. Ms. White did not take out a loan to assist
in paying for the construction of the Building and paid for
the construction with unencumbered funds. AF No. 6.
White also purchased the contents of the Building with her
personal funds. AF No. 7.1. She never transferred the
ownership of such contents to Club Exclusive. AF No. 7.2.
April 30, 2012, Ms. White leased the Property to Club
Exclusive (the “Lease”). AF No. 8. The
Lease's three-year term expired on the last day of April
2015, and Club Exclusive did not renew the Lease pursuant to
its terms. AF No. 9. The Lease expressly states that in the
event Club Exclusive continued to occupy the Property after
the Lease's term expired, “whether with or against
the consent of [Ms. White], such tenancies shall be a tenancy
at sufferance and in no event a tenancy from month to month,
or from year to year.” AF No. 10.
2012, Club Exclusive applied for a liquor license. AF No. 11.
In the liquor license application, Club Exclusive is
correctly identified as leasing the Property from Ms. White.
AF No. 12. Ms. White signed the liquor license application on
behalf of Club Exclusive, thereby attesting to the
truthfulness of the responses given within the application in
reference to the “lease/property ownership.” AF
The Application and the Policy
April 4, 2014, Club Exclusive submitted an application for
insurance for the Property (the “Application”).
AF No. 14. Club Exclusive is the only one listed as an
applicant. AF No. 15. In the Application's section
inquiring into Club Exclusive's interest in the Property,
Club Exclusive specifically marked “owner”
instead of “tenant.” AF No. 16.
White provided the information contained in the Application
and signed the Application. AF No. 17.1. At the time she
signed the Application, the information had been filled out.
AF No. 17.2. The Application explicitly states that
“the undersigned is an authorized representative of the
Applicant and represents that reasonable inquiry has been
made to obtain the answers to questions on this
application.” AF No. 17.3. “He/she represents
that the answers are true, correct and complete to the best
of his/her knowledge.” AF No. 17.4.
on the information included in the Application, Liberty
subscribed to Policy (No. SMF 26514), which was issued to
“Club Exclusive, Inc.” through Southern Insurance
Underwriters, Inc. (“SIU”). AF No. 18. “SIU
is a managing general agent for Liberty with regard to the
Policy and generally subscribes to policies on behalf of
Liberty subject to certain conditions.” (Doc. 36-5 at 2
¶ 4). The Policy provided certain commercial
property insurance coverage to real and business personal
property located on the Property for the period of October
28, 2014, to October 28, 2015, subject to the Policy's
terms, limits, conditions, and exclusions. AF No. 18. Club
Exclusive is the only Named Insured listed in the Policy. AF
No. 19.1. No other person or entity is listed as a Named
Insured, Additional Insured, or any other type of insured. AF
between July 14, 2015, and July 16, 2015 (after the Lease had
expired), a fire burned the Building and its contents (the
“Loss” or “Fire”). AF No. 20. In
furtherance of its claim for the Loss, Club Exclusive
submitted a Sworn Statement in Proof of Loss (the
“Proof of Loss”) and attached a separate
Statement of Loss in support. AF No. 21.
the Proof of Loss and Statement of Loss, Club Exclusive made
a claim for $549, 000 in alleged damage to the Building, for
$151, 975.03 in alleged damage to business personal property
in the Building (the “BPP”), and $24, 033.49 for
debris removal (collectively known as the
“Claim”). AF No. 22.
The DJ Action
13, 2016, Liberty filed this declaratory judgment action (the
“DJ Action”) seeking a declaration that it owes
no duty or obligation to Club Exclusive under the Policy. AF
No. 23.1. In the DJ Action, Liberty argues, among other
things, that the Policy is void because Club Exclusive
misrepresented material facts in the Application, and because
Club Exclusive did not have an insurable interest in the
Property, Building, or the BPP. AF No. 23.2.
22, 2016, Club Exclusive filed its answer, counterclaim
complaint against Liberty, and crossclaim complaint against
Mr. Duesenberg and Ms. Washburn. AF No. 24. In the
counterclaim complaint, Club Exclusive asserts causes of
action against Liberty for breach of contract, bad faith
failure to investigate, bad faith failure to pay a valid
claim, and negligent hiring. AF No. 25.1. The negligent
hiring claim is based on the alleged wrongful acts Club
Exclusive asserts against Mr. Duesenberg and Ms. White in the
crossclaims. AF No. 25.2.
August 19, 2016, Mr. Duesenberg filed a Motion To Dismiss
Club Exclusive's crossclaims against him. AF No. 26. On
August 22, 2016, Ms. Washburn filed a Motion To Dismiss Club
Exclusive's crossclaims against her. AF No. 27. As
mentioned in the procedural history section, the Court
granted both Motions To Dismiss on October 24, 2016.
Consequently, the Court dismissed Mr. Duesenberg and Ms.
Washburn from this action. (Doc. 37 at 12).
to Michael Evans (“Mr. Evans”), the claims
counsel for the managing agency for Liberty (doc. 36-4 at 3
¶ 2),  “[a]t no point in time has [Ms.]
Washburn been an employee or agent of Liberty in any
capacity.” (Id. at 4 ¶ 4). Club Exclusive
has attempted to dispute this agency-related fact through Ms.
White's affidavit (doc. 44-1), the admissibility of which
the Court analyzes below.
judgment is proper only when there is no genuine issue of
material fact and the moving party is entitled to judgment as
a matter of law. Fed. R . Civ. P. 56(a). All reasonable
doubts about the facts and all justifiable inferences are
resolved in favor of the non-movant See Fitzpatrick v.
City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993)
(instructing that “district court should resolve all
reasonable doubts about the facts in favor of the non-movant,
and draw all justifiable inferences in his [or its]
favor” (internal quotation marks omitted) (quoting
United States v. Four Parcels of Real Property, 941
F.2d 1428, 1438 (11th Cir. 2006) (en banc))). A dispute is
genuine “if the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). When, such as here, the moving party is the
plaintiff, satisfying this initial Rule 56 burden means
“affirmatively . . . support[ing] its motion
with credible evidence …. [and] show[ing] that, on all
the essential elements of its case on which it bears the
burden of proof at trial, no reasonable jury could find for
the non-moving party.” Fitzpatrick, 2 F.3d at
1115 (emphasis in original) (citations and internal quotation
marks omitted) (quoting Four Parcels, 941 F.2d at
1438). Only “[o]nce the moving party has properly
supported its motion for summary judgment, [does] the burden
shift to the nonmoving party to ‘come forward with
specific facts showing that there is a genuine issue for
trial.'” International Stamp Art, Inc. v. U.S.
Postal Serv., 456 F.3d 1270, 1274 (11th Cir. 2006)
(quoting Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586-87 (1986)).
evidentiary decisions are reviewed under an
abuse-of-discretion standard” without regard to the
type of proof challenged. General Elec. Co. v.
Joiner, 522 U.S. 136, 141 (1997); id. at 143
(concluding that the Eleventh Circuit Court of Appeals
committed reversible error “[i]n applying an overly
‘stringent' review to [the district court's
experts' testimony] ruling [because] it failed to give
the trial court the deference that is the hallmark of
abuse-of-discretion review”). “An abuse of
discretion can occur where the district court applies the
wrong law, follows the wrong procedure, bases its decision on
clearly erroneous facts, or commits a clear error in
judgment.” United States v. Estelan, 156
Fed.Appx. 185, 196 (11th Cir. 2005) (citing United States
v. Brown, 415 F.3d 1257, 1266 (11th Cir. 2005)).
as the Eleventh Circuit has made clear, not every incorrect
evidentiary ruling constitutes reversible error:
Auto-Owners' second argument is that it is entitled to a
new trial on the basis of what it describes as a number of
erroneous evidentiary rulings by the district court.
Evidentiary rulings are also reviewed under an abuse of
discretion standard. Finch v. City of Vernon, 877
F.2d 1497, 1504 (11th Cir. 1989). Moreover, even if
Auto-Owners can show that certain errors were committed, the
errors must have affected “substantial rights” in
order to provide the basis for a new trial. See Fed.
R. Evid. 103(a). “Error in the admission or exclusion
of evidence is harmless if it does not affect the substantial
rights of the parties.” Perry, 734 F.2d at
1446. See also Allstate Insurance Co. v. James, 845
F.2d 315, 319 (11th Cir. 1988).
Haygood v. Auto-Owners Ins. Co., 995 F.2d 1512, 1515
(11th Cir. 1993). Therefore, even the existence of many
evidentiary errors does not guarantee that the party
appealing will receive a new trial. Instead, such erroneous
rulings by a district court must “affect the
substantial rights of the parties” for reversible error
to occur. Id.
Liberty's Partial Strike Motion
seeks to strike part of Ms. White's affidavit (doc. 44-1)
offered in opposition to its Rule 56 Motion. (Doc. 45 at
3-4). Ms. White provided this affidavit
“to supplement [her] Examination Under Oath of April
19, 2016.” (Doc. 44-1 at 2 ¶ 2). Liberty contests
portions of paragraphs 4 and 5 of her affidavit. There, Ms.
4. The agent of Liberty, Marian Washburn indicated
that after the business, Club Exclusive was operational, the
insurance would be switched to another type of policy of
5. After completing my Application for Commercial Insurance
on April 4, 2014, Liberty's agent, Marian
Washburn asked that I fax a copy of the deed to the land
Club Exclusive was to be built on, to her office. I complied
with her request.
(Doc. 44-1 at 2 ¶¶ 4-5 (emphasis
contends that Ms. White's passing references to Ms.
Washburn as Liberty's agent are conclusory as they are
offered “without providing a sufficient basis to
support such statements or establish[ing] [Ms. White's]
personal knowledge of [such facts].” (Doc. 45 at 3).
Rule 56(c)(4) provides:
(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. 56(c)(4) (emphasis added).
cites to several Eleventh Circuit cases which confirm that
striking and/or disregarding conclusory information contained
in a non-compliant Rule 56(c)(4) affidavit is appropriate.
(See Doc. 45 at 5 (citing collection of cases));
see also, e.g., Rogers v. Evans,
792 F.2d 1052, 1062 n.9 (11th Cir. 1986) (finding
“proper” district court's striking of an
affidavit “phrased in conclusory terms without citing
facts”); Evans v. Books-A-Million, 762 F.3d
1288, 1295 (11th Cir. 2014) (affirming district court's
decision to strike certain statements as “conclusory
and speculative”); id. (“Evans'[s]
affidavit did not provide specific, supporting facts
regarding, for example, the amount of other employees'
salaries compared to hers, the details of other
employees' financial advancement, or Mr. Dickson's
job performance, duties and evaluations.”); Neibert
v. Computer Scis. Corp., 621 Fed.Appx. 585, 593 (11th
Cir. 2015) (agreeing with district court's determination
that declaration was “wholly insubstantial” and
finding that “the bare assertions” contained
within it failed to “give rise to a genuine dispute
of material fact”); cf. Evers v. Gen. Motors
Corp., 770 F.2d 984, 986 (11th Cir. 1985) (agreeing with
the Ninth and D.C. Circuits “that Rules 703 and 705 do
not alter the requirement of Fed.R.Civ.P. 56[(c)(4)] that an
affidavit must set forth specific facts in order to have
any probative value”) (emphasis
with the foregoing authorities, Liberty argues:
Ms. White provides no basis for her statement that Ms.
Washburn was Liberty's agent. (see generally
Doc. 44-1). She does not explain how she would, or could,
know that Ms. Washburn is Liberty's agent. She does not
identify any other specific facts indicating Ms. Washburn was
acting on Liberty's behalf. Rather, she makes a passing,
conclusory statement that Ms. Washburn is Liberty's
agent. Such unsupported and speculative statements are in
direct contradiction to those allowed under Rule 56(c)(4).
Rather, they are the type of unsupported and non-probative
conclusory claims addressed in Rule 56(e) and should be
stricken from evidence.
(Doc. 45 at 5-6).
Exclusive's opposition to the Partial Strike Motion makes
no effort to address any of the cases cited by Liberty.
(See generally Doc. 47). Instead, after a brief
introduction, Club Exclusive discusses the various types of
agents that can arise under Alabama insurance law-general,
special, soliciting, and independent (or broker). (Doc. 47 at
effort to show that Ms. White “may offer her conclusion
or opinion that Marian Washburn was an [a]gent of
Liberty[.]” (doc. 47 at 8 (emphasis omitted)), Club
Exclusive only briefly mentions Fed.R.Civ.P. 56(c)(4).
Id. Club Exclusive spends a substantial amount of
time addressing the meaning of Fed.R.Evid. 701 (opinion
testimony by lay witnesses) and Fed.R.Evid. 104 (preliminary
questions including establishing an adequate foundation).
(Doc. 47 at 8-10).
Exclusive also references portions of Ms. White's
multiple oral examinations reflecting that she worked with
Ms. Washburn to obtain the Policy.(Doc. 47 at 12-13). More
specifically, Club Exclusive relies upon the ...