Philippou v. American National Property & Casualty Company

          MEMORANDUM OPINION AND ORDER ^[1]

          SUSAN RUSS WALKER UNITED STATES MAGISTRATE JUDGE

         This matter is before the court on defendant's motion for summary judgment on plaintiffs' claim for breach of contract, which is set out in count I of the original complaint, and its claim for bad faith, which is set out in count III of the original complaint. Doc. 38. Plaintiffs filed a response to the motion conceding that the bad faith claim should be resolved in the defendant's favor. Doc. 40 at 2-3. Defendant filed a reply to the motion. Doc. 41. Upon review of the motion and the record, the court concludes that the motion for summary judgment is due to be granted.

         SUMMARY JUDGMENT STANDARD

         A movant is entitled to summary judgment if it “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). For summary judgment purposes, an issue of fact is “material” if, under the substantive law governing the claim, its presence or absence might affect the outcome of the suit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). If the movant fails to satisfy its initial burden, the motion for summary judgment will be denied. Kernel Records Oy v. Mosley, 694 F.3d 1294, 1300 (11th Cir. 2012), cert. denied, 133 S.Ct. 1810 (2013). If the movant adequately supports its motion, the burden shifts to the opposing party to establish - “by producing affidavits or other relevant and admissible evidence beyond the pleadings” - specific facts raising a genuine issue for trial. Josendis v. Wall to Wall Residence Repairs, Inc., 662 F.3d 1292, 1315 (11th Cir. 2011); Dietz v. Smithkline Beecham Corp., 598 F.3d 812, 815 (11th Cir. 2010); Fed.R.Civ.P. 56(c)(1)(A). “All affidavits [and declarations] must be based on personal knowledge and must set forth facts that would be admissible under the Federal Rules of Evidence[.]” Josendis, 662 F.3d at 1315; Fed.R.Civ.P. 56(c)(4). The court views the evidence and all reasonable factual inferences in the light most favorable to the nonmovant. Miller's Ale House, Inc. v. Boynton Carolina Ale House, LLC, 702 F.3d at 1315; Fed.R.Civ.P. 56(c)(4). However, “the nonmoving party ‘must do more than show that there is some metaphysical doubt as to the material facts, ” and “[i]f the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.” Graham v. State Farm Mut. Ins. Co., 193 F.3d 1274, 1282 (11th Cir. 1999) (internal citations omitted). “Conclusory, uncorroborated allegations by a plaintiff in an affidavit or deposition will not create an issue of fact for trial sufficient to defeat a well supported summary judgment motion.” Solliday v. Fed. Officers, 413 Fed.Appx. 206, 207 (11th Cir. 2011) (citing Earley v. Champion Int'l Corp., 907 F.2d 1077, 1081 (11th Cir. 1990)); see also Holifield v. Reno, 115 F.3d 1555, 1564 n.6 (11th Cir. 1997) (per curiam) (conclusory allegations based on subjective beliefs are likewise insufficient to create a genuine dispute of material fact). “Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine [dispute] for trial.'” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

         BACKGROUND

         Plaintiffs commenced this action based upon an insurance contract on their residential property. Doc. 1 at 2. The complaint alleges claims against the defendant, the insurer, for breach of contract (count I), intentional infliction of emotional distress or “outrage” (count II), bad faith (count III), negligence (count IV), recklessness and wantonness (count V), and gross negligence (count VI). Doc. 1 at 4-7. Defendant filed a motion to dismiss counts II, IV, V, and VI. Doc. 6 at 2. Plaintiffs stipulated to dismissal of counts IV, V, and VI and requested leave to amend their count II claim for intentional infliction of emotional distress. Doc. 10. The court granted leave to amend, Doc. 13, and plaintiffs filed an amended claim for intentional infliction of emotional distress, Doc. 15. Defendant then filed a motion to dismiss count II. Doc. 19. This court dismissed counts IV (negligence), V (recklessness and wantonness), and VI (gross negligence) with prejudice in accordance with plaintiffs' stipulation to dismissal of those counts, and granted defendant's motion to dismiss count II, leaving only plaintiffs' count I (breach of contract) and count III (bad faith) claims before the court. Doc. 23. Defendant's motion for summary judgment followed. Doc. 38.

         Defendant's motion for summary judgment contends that plaintiffs' failure to submit a sworn proof of loss - a required condition precedent to receiving coverage under the insurance policy - constitutes a breach of contract which precludes their claims, and also that defendant fully performed its obligations under the contract. Doc. 38 at 16. In addition, defendant contends that it did not act in bad faith because it had more than one lawful basis to deny further payment on plaintiffs' claim, and because it did not intentionally fail to determine the existence of a lawful basis for denial. Id. at 21-27.

         In their response to defendant's motion for summary judgment, plaintiffs concede that defendant is due summary judgment on the bad faith claim, and that the facts set forth in defendant's motion are not in dispute. Doc. 40 at 2-3. Furthermore, plaintiffs concede that there is no dispute of fact as to whether they failed to submit a sworn proof of loss as a condition precedent to their insurance contract. See Id. at 4-5. Instead, plaintiffs argue that defendant's timely payments on their claim, despite repeated demands for a sworn proof of loss and plaintiffs' failure to produce one, present a dispute of fact as to whether defendant waived the proof of loss condition by virtue of its conduct. Id. at 3-5.

         UNDISPUTED MATERIAL FACTS

         In considering defendant's motion for summary judgment, the court views the facts in the light most favorable to the non-moving parties, the plaintiffs. Welch v. Celotex Corp., 951 F.2d 1235, 1237 (11th Cir. 1992).

         A. Plaintiffs' Policy and Insurance Coverage^[2]

         Defendant issued a homeowner's insurance policy to plaintiffs for their residence in Montgomery, Alabama with the effective dates of August 4, 2014 to August 4, 2015. Doc. 38-2 ¶ 2; Doc. 38-2 at 8-9; Doc. 38-3 at 7-8. The policy provides coverage for accidental direct physical loss to the Plaintiffs' dwelling from all perils, with certain enumerated exceptions. Doc. 38-8 at 39-41. The policy also provides replacement cost coverage for damage to both the dwelling and personal property, and additional living expenses if the residence becomes uninhabitable. Id. at 43, 53. According to the policy's loss settlement provisions, payment for the dwelling is for “the actual cash value of the damage not to exceed the applicable limit of liability, until actual repair or replacement is completed.” Id. at 52.

         The policy also contains provisions which outline the duties required of the plaintiffs, the insured, as conditions of payment: to notify the insurer of loss; to protect the property from further damage; to make reasonable and necessary repairs to protect the property and keep accurate record of repair costs; to prepare an inventory of damaged property including quantities, descriptions, actual cash value and amount of losses (attaching evidence to substantiate the loss figures); to exhibit the damaged property and provide the insurance company with records and documents it requests; and to submit, within 60 days after the insurer requests, a signed, sworn proof of loss. Id. at 42-43. The policy also specifies that the insurer “will pay [insured] within 60 days after [insurer] receive[s] [insured's] proof of loss, ” that “[n]o action shall be brought unless there has been compliance with the policy provisions, ” and that any ...