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Katopothis v. Windsor-Mount Joy Mutual Insurance Co.

United States Court of Appeals, District of Columbia Circuit

October 12, 2018

Vasilli Katopothis and Francesca Dahlgren, Appellants
v.
Windsor-Mount Joy Mutual Insurance Co. and R.W. Home Services, Inc., doing business as Gale Force Cleaning And Restoration, Appellees

          Submitted September 18, 2017

          Appeal from the United States District Court for the District of Columbia (No. 1:14-cv-00380)

          On Rehearing Glenn H. Silver was on the briefs for appellants. Erik B. Lawson entered an appearance.

          George D. Bogris was on the brief for appellee R.W. Home Services, Inc., d/b/a Gale Force Cleaning and Restoration.

          Charles B. Peoples was on the brief for appellee Windsor-Mount Joy Mutual Insurance Co.

          Before: Griffith and Katsas, [*] Circuit Judges, and Sentelle, Senior Circuit Judge.

          Griffith, Circuit Judge

         We issued our initial opinion in this case on July 31, 2018. Because of a concern with the disposition, we vacated that opinion and sua sponte ordered rehearing and supplemental briefing. We now substitute the following opinion in its place.

         Vasilli Katopothis and Francesca Dahlgren (the "Dahlgrens") own a beach home that flooded in a plumbing accident while they were away. They sued their insurance company for breach of contract when it refused to cover the damage. They also sued their cleaning-and-restoration company for failing to adequately remedy the damage and prevent mold. The district court granted summary judgment in favor of the insurance company based on the plain language of the Dahlgrens' insurance policy and transferred the claims against the cleaning-and-restoration company to the district court in Delaware for lack of personal jurisdiction. We lack jurisdiction to review the transfer order but affirm the grant of summary judgment.

         I

         A

         In May 2000, the Dahlgrens, who reside in the District of Columbia, purchased a beach home in Rehoboth Beach, Delaware, where they spend most of their weekends. At all times relevant to this litigation, the house was a second residence and remained fully furnished with the accessories of daily life, such as furniture, clothes, food, toiletries, and medicine. When not at their beach home, the Dahlgrens routinely left the heat on to prevent the pipes from freezing and asked a friend to check on the house and retrieve the mail. They did not, however, shut off the water supply.

         In February 2013, Ms. Dahlgren returned to the beach home to find two inches of standing water throughout the main level and additional water "gushing" from the ceiling overhead. The Dahlgrens had been away for ten days, and, in their absence, a pressurized hot water pipe in the upstairs bathroom had separated at the joint and flooded the house.

         The Dahlgrens notified their insurance company, Windsor-Mount Joy Mutual Insurance Co. ("Windsor-Mount"), about the flooding. They also contracted with R.W. Home Services, Inc., doing business as Gale Force Cleaning and Restoration ("Gale Force"), to remedy the damage and prevent mold. According to the Dahlgrens, Gale Force was negligent in its clean-up effort and mold spread through the house, so the Dahlgrens eventually decided to tear it down and build a new one.

         The Dahlgrens timely filed an insurance claim with Windsor-Mount to cover the damage from the accident. The insurance company denied the claim because, while they were away, the Dahlgrens had failed to shut off the water where it entered the house.

         B

         The Dahlgrens sued Windsor-Mount for breach of contract and alleged $800, 000 in damages. They filed suit in the Superior Court of the District of Columbia, but Windsor-Mount, a Pennsylvania corporation with its principal place of business in Pennsylvania, invoked federal diversity jurisdiction and removed the case to the district court. See 28 U.S.C. §§ 1332(a), 1441(a). Windsor-Mount impleaded Gale Force as a third-party defendant on the theory that if Windsor-Mount was liable to the Dahlgrens, the extent of its liability turned on Gale Force's conduct. The Dahlgrens amended their complaint to add claims against Gale Force as well for breach of contract, negligence, negligent misrepresentation, and violations of the Delaware Consumer Fraud Act, 6 Del. Code §§ 2511-27. The Dahlgrens and Windsor-Mount then filed cross-motions for summary judgment, and Gale Force moved to be dismissed from the case for lack of personal jurisdiction.

         The district court determined that the Dahlgrens could not recover under the clear terms of their insurance policy and granted summary judgment against them on that issue. See Katopothis v. Windsor-Mount Joy Mut. Ins. Co., 211 F.Supp.3d 1, 13-21 (D.D.C. 2016). While the Dahlgrens argued that Delaware law should apply and Windsor-Mount argued for District of Columbia law, the district court was not put to the choice because the insurance claim failed under the law of both jurisdictions. See id. at 13-14; see also City of Harper Woods Emps.' Ret. Sys. v. Olver, 589 F.3d 1292, 1298 (D.C. Cir. 2009) ("A federal court sitting in diversity applies the conflict of law rules of the forum in which it sits." (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941))); USA Waste of Md., Inc. v. Love, 954 A.2d 1027, 1032 (D.C. 2008) ("A conflict of laws does not exist when the laws of the different jurisdictions are identical or would produce the identical result on the facts presented.").

         The district court also concluded that the Dahlgrens did not allege that Gale Force, a Delaware corporation with its principal place of business in Delaware, had sufficient contacts with the District of Columbia to establish personal jurisdiction. The district court accordingly did not resolve the Dahlgrens' claims against Gale Force, but instead transferred them to the district court in Delaware. Katopothis, 211 F.Supp.3d at 21-27; see 28 U.S.C § 1406(a); Sinclair v. Kleindienst, 711 F.2d 291, 293-94 (D.C. Cir. 1983) (construing 28 U.S.C. § 1406(a) to authorize transfer of venue for lack of personal jurisdiction).

         The district court issued its order on September 26, 2016. On October 7, 2016, the clerk transferred the case file to the district court in Delaware, where the Dahlgrens' claims against Gale Force have been stayed pending the outcome of this litigation. The Dahlgrens filed their notice of appeal to this court on October 11, 2016. The Dahlgrens argue that the district court below ...


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