Ware v. State Farm Fire and Casualty Company

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

EASTERN DIVISION

BERANDA WARE, )

Plaintiff, )

)

v. ) Case No. 1:19-cv-01077-ACA

)

STATE FARM FIRE AND )

CASUALTY COMPANY, )

Defendant. )

MEMORANDUM OPINION

A fire destroyed Plaintiff Beranda Ware’s house and she made a claim under

her insurance policy with Defendant State Farm Fire and Casualty Company (“State

Farm”). State Farm did not deny the claim, but after ten months it also had not paid

the claim, so Ms. Ware sued State Farm alleging a breach of contract. Before the

court is State Farm’s motion for summary judgment. (Doc. 23).

After careful consideration, the court WILL GRANT the motion in favor of

State Farm and against Ms. Ware because she has not presented any evidence that

she satisfied the conditions precedent to coverage. Therefore, State Farm has no

duty under the policy.

I. BACKGROUND

In deciding a motion for summary judgment, the court “draw[s] all inferences

and review[s] all evidence in the light most favorable to the non-moving party.”

Hamilton v. Southland Christian Sch., Inc., 680 F.3d 1316, 1318 (11th Cir. 2012)

(quotation marks omitted).

Ms. Ware owned a home located at 1219 W. 14th Street, Anniston, Alabama.

(Doc. 1-1 at 7). In August 2018, Ms. Ware’s home caught fire and sustained

substantial damage to the structure and personal property located inside. (Id. at 8).

At the time, State Farm Policy 01-BD-X751-9 (“the Policy”) insured the house.

(Doc. 22-1 at 2 ¶ 5). In accordance with the terms of the Policy, Ms. Ware notified

State Farm of her claim six days after the fire. (Doc. 22-1 at 2 ¶¶ 2, 6).

The Policy obligates Ms. Ware to cooperate in the investigation of the claim,

including submitting to an examination under oath and providing requested records

and documents. (Doc. 22-1 at 36 ¶¶ 2, 2(d); Doc. 22-10 at 2–3). As part of its

investigation, State Farm requested that Ms. Ware provide financial and mortgage

documentation including, among other things, tax returns, mortgage payment

history, proof of income, credit and loan agreements and monthly bank statements.

(Doc. 22-10 at 3–4 ). Ms. Ware did not provide any responsive documentation until

May 28, 2019. (Id. at 10). And, as of at least the week before she filed suit,

Ms. Ware had not fully responded to State Farm’s request for documents. (Id.).

The Policy also requires an inventory of damaged property, including the

“quantity, description, age, replacement cost, and amount of loss,” as well as

documentation to substantiate the replacement cost and amount of loss. (Doc. 22-1

at 36 ¶ 2(c)). A month after Ms. Ware submitted her claim, State Farm sent

Ms. Ware a link to a website where she could fill out a personal property inventory.

(Doc. 22- 1 at 3 ¶ 8). But Ms. Ware did not submit the inventory of her personal

property for over six months. (Doc. 22-1 at 3, ¶ 10).

The written inventory Ms. Ware initially submitted did not contain the

information required by State Farm. Rather, Ms. Ware merely provided a list of

thirty-seven items without including a “detailed description of [each] item.” (Doc.

22-6 at 2–3; Doc. 22-7 at 3). Ms. Ware did not provide the model number and/or

specifications, condition, or age for any item (doc. 22-1 at 4, ¶¶ 13–15; doc. 22-6 at

2–3; doc. 22-7 at 3) and identified only two items on the initial inventory by brand,

(doc. 22-1 at 4 ¶ 13). Ms. Ware also failed to attach any documentation evidencing

ownership of any items. (Doc. 22- 1 at 4–5 ¶ 15; Doc. 22-6 at 2–3; Doc. 22-7 at 3).

In May 2019, Ms. Ware submitted a supplemental inventory listing forty-one

items and stating that she had $29,577.02 in lost or damaged personal property.

(Doc. 22-1 at 5; Doc. 22-8 at 3). Ms. Ware’s supplemental inventory was no more

detailed than her initial inventory, except she did give the brand of her desktop

computer. (Doc. 22-1 at 5, ¶ 18; Doc. 22-8 at 2–3; Doc. 22-8 at ¶ 14). Once again,

Ms. Ware did not provide any evidence ownership of these items. (Id.)

State Farm sent Ms. Ware four letters between January 2019 and June 2019

requesting information related to her claim. (Doc. 22-9 at 3; Doc. 22-10). On June

3, 2019, State Farm wrote Ms. Ware’s attorney describing all outstanding document

requests and deficiencies in detail and listed eighteen categories of documents

Ms. Ware failed to produce. (Doc. 22-10 at 10–12). Ms. Ware did not respond to

that letter or produce the requested documents. Instead, she filed this lawsuit seven

days later. (See Doc. 22-9).

II. DISCUSSION

Ms. Ware’s complaint states one cause of action for breach of contract.

Before the court addresses the merits of her claim it has an obligation to determine

jurisdiction over the complaint. United States v. Hays, 515 U.S. 737, 742 (1995)

(“[F]ederal courts are under an independent obligation to examine their own

jurisdiction, and standing is perhaps the most important of [the jurisdictional]

doctrines.”) (quoting FW/PBS, Inc. v. Dallas, 493 U.S. 215, 230–31 (1990)).

Accordingly, the court will first address whether Ms. Ware has standing to bring this

action, then address the merits of her claim.

A. Ms. Ware’s Standing to Bring the Claim

State Farm has not actually denied Ms. Ware’s claim. And, because

Ms. Ware’s complaint did not address this fact, the court ordered Ms. Ware to show

cause whether she has standing to bring the complaint. (Doc. 42). Ms. Ware’s

response contends that “[w]hile State Farm has not formally denied [her] insurance

claim, its actions during the 10 months prior to [Ms. Ware’s] suit constituted a

constructive denial of her claim constituting an anticipatory repudiation of its own

obligations under the Subject Policy.” (Doc. 44 at 2). And, she contends, this

constructive denial caused her economic injury. (Id.)

State Farm counters that because the facts of the case do not support

Ms. Ware’s claim of constructive denial, she does not have standing. The court

recognizes that “the question of whether the plaintiff ‘has a cognizable injury

sufficient to confer standing is closely bound up with the question of whether and

how the law will grant [her] relief.’” Debernardis v. IQ Formulations, LLC, 942

F.3d 1076, 1084 (11th Cir. 2019) (citation omitted). But courts must consider

“Article III’s requirement of injury in fact” separately from “a plaintiff’s potential

causes of action, for the concepts are not coextensive.” Id. (quotation omitted).

Here, State Farm’s argument conflates these two distinct questions. Analyzed

separately, the court finds that Ms. Ware alleged sufficient facts to establish that she

suffered an injury in fact. She alleges that State Farm caused her economic injury

by failing to timely satisfy her claim. For purposes of standing, this allegation is

enough. Accordingly, Ms. Ware has standing to bring her claim for breach of

contract.

B. The Merits of Ms. Ware’s Claim.

Having determined that Ms. Ware has standing to assert a claim of breach of

contract, the court must now determine whether State Farm repudiated or breached

the Policy. Under Federal Rule of Civil Procedure 56(a), summary judgment is

proper “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.”

Ms. Ware asserts that State Farm breached the contract by failing to pay

insurance proceeds due to Ms. Ware as a named insured. (Doc. 1-1 at 15). For

Ms. Ware to survive summary judgment, she must present evidence from which a

reasonable jury could find: (1) the existence of a valid contract between her and State

Farm, (2) her performance under the contract, (3) State Farm’s failure to perform,

and (4) resulting damage. State Farm Fire and Cas. Co. v. Slade, 747 So. 2d 293,

303 (Ala. 1999) (citing So. Medical Health Sys. v. Vaughn, 6s69 So. 2d 98, 99 (Ala.

1995)). It is clear from the evidence that a valid contract exists between Ms. Ware

and State Farm. (Doc. 22-2). However, Ms. Ware cannot establish her performance

under the contract. Thus, State Farm did not have a duty to perform under the

contract.

It is well settled that an insured has an obligation to satisfy all contractual

conditions precedent to coverage. Nationwide Ins. Co. v. Nilsen, 745 So.2d 264, 267

(Ala. 1998). And, an insurer’s obligation to pay—or even evaluate—covered claims

under a policy of insurance is not triggered until the insured complies with the

insurer’s reasonable requests pursuant to a “duties after loss” provision. See Nilsen,

745 So. 2d at 266 (citation omitted). Under the terms of the Policy, Ms. Ware was

required to (1) provide documents requested by State Farm; (2) provide an inventory

list “showing in detail the quantity, description, age, replacement cost, and amount

of loss;” (3) provide “all bills, receipts, and related documents that substantiate the

figures in the inventory;” and (4) submit a sworn proof of loss statement within 60

days of the occurrence. Only after complying with these conditions could Ms. Ware

recover under the insurance contract.

It is undisputed that Ms. Ware did not produce most of the requested

documents to State Farm before filing suit. (See Doc. 22-9). And, Ms. Ware admits

her descriptions in her inventory are too vague to enable State Farm to adequately

assess the value of her claim. (Doc. 22-4 at 12–13, 42:3–45:9). Under these facts,

Ms. Ware’s breach of contract claim fails as a matter of law. Nilson, 745 So.2d at

266.

Ms. Ware contends that she is relieved from her obligations under the contract

because State Farm did not provide her with a copy of the Policy and/or because the

information State Farm requires was destroyed in the fire. (See Doc. 25 at 14–17,

23). Ms. Ware cannot prevail on either of these arguments.

Ms. Ware contends that it is “undisputed” that State Farm failed to provide

her with a copy of the Policy until months after she filed the instant lawsuit. (Doc.

25 at 14 (citing Doc. 26-14)). Ms. Ware’s contention is based entirely on a

declaration she filed in response to State Farm’s motion for summary judgment. (See

Doc. 26-14). In it, Ms. Ware testifies that “at no time prior to the fire which

destroyed my home . . . , did I have a copy of State Farm’s Policy of Insurance on

that property.” (Id.).

But Ms. Ware’s declaration does not preclude summary judgment in this case.

The statement contained in Ms. Ware’s declaration is flatly contradicted by

Ms. Ware’s previous sworn testimony.1 (Doc. 22-3 at 3, 5:3–5:6 (testifying that she

received a copy of the policy when it was issued)). Because Ms. Ware did not

provide any explanation for this contradiction, the court will disregard the testimony

in the declaration. McCormick v. City of Fort Lauderdale, 333 F.3d 1234, 1240 n.7

(11th Cir. 2003) (“Under the law of this Circuit, we may disregard an affidavit

submitted solely for the purpose of opposing a motion for summary judgment when

that affidavit is directly contradicted by deposition testimony.”). Thus, the only

evidence before the court establishes that Ms. Ware received a copy of the Policy

when she procured her insurance, and State Farm is not estopped from asserting

conditions precedent to its obligation to pay or evaluate the claim.

And, even if the court accepted Ms. Ware’s testimony that she never received

the Policy, she cannot establish the prejudice necessary to relieve her of its

requirements. Alabama law provides that an insurer may be estopped from asserting

1 Ms. Ware’s assertion that she never received a copy of the Policy is also contradicted

by her attorney’s representation that it was destroyed in the fire. (Doc. 26-6 at 3).

conditions of coverage where the insured is prejudiced by the insurer’s failure to

deliver a copy of the policy to the insured. Ala. Code § 27-14-19; Brown Mach.

Works & Supply Co., Inc. v. Ins. Co. of N. Am., 659 So.2d 51, 61 (Ala. 1995). State

Farm notified Ms. Ware of her obligations under the Policy—by quoting directly

from its terms—in November 2018. (Doc. 26-2 at 3–4). If Ms. Ware had questions

about the accuracy of these obligations, she could have requested a copy of the

policy. Yet the evidence before the court establishes that she did not request a copy

of the Policy until after she filed this lawsuit. (Doc. 26-6 at 3). Moreover, State

Farm has not denied coverage because Ms. Ware failed to comply with her

obligations under the Policy. Because Ms. Ware cannot show prejudice, State Farm

is not estopped from asserting conditions of coverage.

Finally, Ms. Ware alternatively argues that State Farm was obligated to

perform under the contract because she satisfied the conditions precedent “as best as

she could.” (Doc. 30 at 23). Notably, Ms. Ware does not assert that she lacked the

ability to obtain replacement documents. Instead, she simply argues that her copies

of the records were burned in the fire and were not in her physical possession.

Ms. Ware does not cite, and this court cannot find, any legal authority to support the

argument that State Farm can only require a policyholder to produce documents in

her physical possession. Moreover, the argument makes little practical sense. As

the owner of the personal property and accounts, Ms. Ware is in the best position to

obtain the necessary information as efficiently and expeditiously as possible.

Accordingly, Ms. Ware cannot prevail under this argument.

Hl. CONCLUSION

Because Ms. Ware did not satisfy the conditions precedent to which she was

obligated, State Farm was under no obligation to fulfill its part of the contract.

Consequently, State Farm did not breach its contract with Ms. Ware. For the

foregoing reasons, the court WILL GRANT State Farm’s motion for summary

judgment and WILL ENTER SUMMARY JUDGMENT in favor of State Farm

and against Ms. Ware. The court will enter a separate final judgment consistent with

this memorandum opinion.

DONE and ORDERED this November 30, 2020.

fo

UNITED STATES DISTRICT JUDGE

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