United States District Court, W.D. Oklahoma
CHARLES A. SHADID, L.L.C., Plaintiff,
ASPEN SPECIALTY INSURANCE COMPANY, Defendant.
TIMOTHY D. DeGIUSTI, UNITED STATES DISTRICT JUDGE
the Court is Defendant Aspen Specialty Insurance
Company's Motion for Summary Judgment [Doc. No. 39],
filed pursuant to Fed.R.Civ.P. 56. Defendant seeks a judgment
in its favor on all claims asserted in the Second Amended
Complaint [Doc. No. 8] and, alternatively, seeks a
determination of issues regarding recoverable damages.
Plaintiff Charles A. Shadid, L.L.C. has responded in
opposition to the Motion, and Defendant has replied. With
permission, Plaintiff has also filed a supplemental exhibit
of deposition testimony discussed in its brief, for which the
transcript was unavailable when the brief was
filed. The Motion is fully briefed and ripe for
brings this diversity action to recover damages for breach of
contract and breach of the insurer's duty of good faith
and fair dealing related to a commercial insurance policy and
an insured loss from a May 31, 2013 tornado allegedly
affecting 20 properties. See Second Am. Compl. [Doc.
No. 8], ¶ 6. Defendant seeks summary judgment on all
claims based on Plaintiff's alleged failure to cooperate
in an investigation of the insurance claim, which allegedly
prevented Defendant from completing a coverage decision or an
adjustment of the claim. Alternatively, Defendant contends it
is entitled to summary judgment on Plaintiff's bad faith
claim because the undisputed facts show Defendant acted
reasonably in its investigation and denial of the insurance
claim. Otherwise, Defendant seeks a determination as a matter
of law of two issues regarding the amount of damages that
Plaintiff can recover under the policy. Plaintiff denies that
all relevant facts are undisputed and that summary judgment
is proper on any claim or issue.
Summary judgment is proper “if the movant shows that
there is no genuine dispute as to any material fact and that
the movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). A material fact is one that “might
affect the outcome of the suit under the governing
law.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986). A dispute is genuine if the evidence is
such that a reasonable jury could return a verdict for either
party. Id. at 255. All facts and reasonable
inferences must be viewed in the light most favorable to the
nonmovant. Id. If a party who would bear the burden
of proof at trial lacks sufficient evidence on an essential
element of its claim or defense, all other factual issues
concerning the claim or defense become immaterial.
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
movant bears the burden of demonstrating the absence of a
dispute of material fact warranting summary judgment.
Celotex, 477 U.S. at 322-23. If the movant carries
this burden, the nonmovant must then go beyond the pleadings
and “set forth specific facts” that would be
admissible in evidence and that show a genuine issue for
trial. See Anderson, 477 U.S. at 248;
Celotex, 477 U.S. at 324; Adler v. Wal-Mart
Stores, Inc., 144 F.3d 664, 671 (10th Cir. 1998).
“To accomplish this, the facts must be identified by
reference to affidavits, deposition transcripts, or specific
exhibits incorporated therein.” Adler, 144
F.3d at 671; see also Fed. R. Civ. P. 56(c)(1)(A).
“The court need consider only the cited materials, but
may consider other materials in the record.”
See Fed. R. Civ. P. 56(c)(3). The Court's
inquiry is whether the facts and evidence identified by the
parties present “a sufficient disagreement to require
submission to a jury or whether it is so onesided that one
party must prevail as a matter of law.”
Anderson, 477 U.S. at 251-52.
of Undisputed Facts
August 20, 2012, until August 20, 2013, Plaintiff had
property insurance coverage for 25 commercial properties
under an insurance policy issued by Defendant to Charles A.
Shadid, Charles A. Shadid LLC, and Charles A. Shadid
Revocable Trust. Defendant received written notice of a
property loss dated August 15, 2013; the notice listed the
date of loss as May 31, 2013, and described the loss as storm
damage to one of the properties, Lakeshore Shopping
Center. On August 16, 2013, Defendant assigned the
claim to Associated Claims Management, Inc.
(“ACM”) for field adjustment. Later in August
2013, Mr. Shadid indicated that he intended to inspect more
insured properties and, if warranted, add other properties to
the claim. On August 27, 2013, a representative of ACM
notified Plaintiff that ACM would be scheduling inspections
of all 25 properties and would be requesting information
about prior claims, major repairs, and maintenance history
for the properties. On August 30, 2013, ACM was notified by a
public adjuster, Jerry Renfroe, that Plaintiff had hired him
to handle the insurance claim, and a schedule for
coordinating the property inspections was discussed.
sent a letter to Mr. Shadid dated September 4, 2013, asking
for information regarding the properties and damages
resulting from the loss. The letter listed five items of
information requested for each property: 1) specific repairs
or repair estimates for the loss; 2) dates the properties
were acquired; 3) major exterior repairs to roofs or siding
during the past 10 years; 4) other insurance claims filed on
the properties while they were under his care or control; and
5) a list of all property insurance policies covering the
properties during the past 10 years. As to other claims, ACM
directed Mr. Shadid “to include claims #s, policy #s,
and names of insurers, estimates, correspondence, and final
settlement documentation.” See Def.'s Ex.
8 [Doc. No. 39-8]. As support for these requests, ACM
referred to a policy provision regarding an insured's
duties in the event of a loss. On September 5, 2013, ACM and
Mr. Renfroe agreed on dates for the property inspections to
occur. On September 19, 2013, ACM asked Mr. Renfroe to
provide documents regarding prior building repairs and
insurance claims for Plaintiff's properties.
September 23 through 26, 2013, ACM inspected all 25
properties. Plaintiff had previously made an insurance claim
against a different insurer for a hailstorm loss in May 2010
involving many of the same properties. The inspections showed
that some roofs had been only partially replaced and some
roofs appeared to predate the 2010 hailstorm, and that there
was preexisting hail damage to some rooftop components and
Shadid responded to ACM's written request for information
by letter dated September 23, 2013. Rather than addressing each
numbered item in ACM's letter, Mr. Shadid provided a
response to each duty listed in the policy provision. Within
these responses, Mr. Shaded included a summary of repairs
that had been made to each property after the loss, the cost
of each repair, and a date and check number for the repair
(primarily June 25-27 or August 2, 2013). Regarding an
inventory of damaged property, Mr. Shadid stated:
“Damages are being assessed at the present time with
Insurer's adjuster, Ken Smith and Insured's public
adjuster, Jerry Renfroe starting 9/23/2013.”
See Def.'s Ex. 15 [Doc. No. 39-15] at 3 (ECF
page numbering). Mr. Shadid supplemented this statement in a
similar letter dated October 10, 2013 (Def.'s Ex. 16
[Doc. No. 39-16]), by providing an itemized repair estimate
(Def.'s Ex. 17 [Doc. No. 39-17) prepared by the public
adjuster. In Defendant's view, this estimate failed to
account for pre-existing damage or partial repairs and
wrongly included full replacement costs of all building
roofs, rooftop components, heating and cooling units, and
other structural components. In Plaintiff's view, the
estimate accounted for non-covered items, such as
pre-existing damage or wear and tear, as depreciation.
initial volley was followed by a series of letters, first
from ACM on November 4 and then from Defendant's counsel
on November 22 and December 8, 2013, followed by Mr.
Shadid's response on December 13, 2013. The letters
concerned Defendant's requests for additional information
and documents, and a request for an examination under oath
(“EUO”). Defendant took Mr. Shadid's EUO on
January 16, 2014. Among other things, Mr. Shadid stated that
Plaintiff was involved in litigation regarding its 2010
insurance claim and that Plaintiff had filed other insurance
claims regarding some of the properties. After the EUO,
Defendant learned that Plaintiff had made another insurance
claim related to hail damage in May 2012 that Defendant
believed included some or all of the same properties involved
in the May 2013 loss.
with a letter from Defendant's counsel to Plaintiff's
counsel dated February 7, 2014, and a response from
Plaintiff's counsel dated March 18, 2014, the parties
began a discussion of Defendant's requests for documents
and photographs related to the 2010 and 2012 insurance claims
and documents regarding any major exterior repairs for the
past 10 years. The discussion continued in letters exchanged
between ACM and Mr. Shadid in April, May and June of 2014.
Defendant generally took the position that this information
was needed to evaluate the condition of the roofs before the
May 2013 loss and to determine covered property damage.
Plaintiff generally took the position that it had provided
all relevant information and responsive documents (totaling
more than 600 pages) and that Defendant's requests for
additional materials were unreasonable and unjustified.
Plaintiff also asserted that a confidentiality provision in
its settlement agreement regarding the 2010 insurance claim
prevented the disclosure of information regarding the amount
of the 2010 loss, and Plaintiff made requests of ACM and
Defendant for the production of documents generated or
reviewed during the inspections and investigation of the May
2013 loss. In July 2014, however, Plaintiff's insurance
agent provided a list of completed roof repairs for
properties related to the 2010 insurance claim.
retained engineers to evaluate the damage to Plaintiff's
properties related to the May 2013 loss. The engineers and
ACM inspected the properties from May 5 to May 14, 2014. The
engineers also researched hail events, and considered the
repair information supplied by Plaintiff and its agent. The
engineers prepared reports for each ...