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Classy Lady, Inc. v. Nationwide Mutual Insurance Co.

United States District Court, E.D. Tennessee, Knoxville

November 19, 2014

Classy Lady, Inc., Plaintiff,
Nationwide Mutual Insurance Co., Defendant.


PAMELA L. REEVES, District Judge.

This dispute over insurance coverage comes before the Court on the defendant Nationwide Mutual Insurance Company's motion for summary judgment. [R. 5]. Also before the Court is the plaintiff's motion for leave to file a response to the defendant's reply brief. [R. 19]. For the reasons discussed below, the plaintiff's motion for leave to file a response will be denied, and the defendant's motion for summary judgment will be granted.

I. Standard of Review

Summary judgment under Rule 56 of the Federal Rules of Civil Procedure 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." Fed.R.Civ.P. 56(a). The moving party bears the burden of establishing that no genuine issues of material fact exist. Celotex Corp. v. Cattrett, 477 U.S. 317, 330 n.2 (1986); Moore v. Philip Morris Co., Inc., 8 F.3d 335, 339 (6th Cir. 1993). All facts and inferences to be drawn therefrom must be viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. Ltd v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Burchett v. Keifer, 301 F.3d 937, 942 (6th Cir. 2002). Courts may not resolve genuine disputes of fact in favor of the movant. Tolan v. Cotton, 134 S.Ct. 1861, 1863 (2013) (vacating lower court's grant of summary judgment for "fail[ing to] adhere to the axiom that in ruling on a motion for summary judgment, the evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor") (internal quotations and citations omitted).

Once the moving party presents evidence sufficient to support a motion under Rule 56, the nonmoving party is not entitled to a trial merely on the basis of allegations. Celotex, 477 U.S. at 317. To establish a genuine issue as to the existence of a particular element, the nonmoving party must point to evidence in the record upon which a reasonable finder of fact could find in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The genuine issue must also be material; that is, it must involve facts that might affect the outcome of the suit under the governing law. Id.

The Court's function at the point of summary judgment is limited to determining whether sufficient evidence has been presented to make the issue of fact a proper question for the fact finder. Id. at 250. The Court does not weigh the evidence or determine the truth of the matter. Id. at 249. Nor does the Court search the record "to establish that it is bereft of a genuine issue of fact." Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479 (6th Cir. 1989). Thus, "the inquiry performed is the threshold inquiry of determining whether there is a need for a trial - whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson, 477 U.S. at 250.

II. Background

The plaintiff, the operator of a retail store in Knoxville, Tennessee, filed claims with Nationwide for damage to its store and two vehicles allegedly sustained as a result of a storm that occurred on April 27, 2011.[1] Nationwide investigated the claims and issued a check for $2, 245.20 on May 23, 2011 for damage to one of the vehicles. Additionally, Nationwide determined that some of the reported damage to the store was covered under the policy, and it issued a check for $3, 554.33 in July 2011. The plaintiff's president, David Horner, communicated to Nationwide that this amount would not cover the damage to the store, so Nationwide reopened the claim and sent an engineer to inspect the premises. The engineer concluded that the problems in the plaintiff's roof were caused by cracks, gaps, and loose areas of the membrane seams resulting from wear and tear and a lack of maintenance. Because maintenance issues and wear and tear are not covered under the applicable policy, the reopened claim was denied. Nationwide told Mr. Horner about the engineer's report in November 2011, and in January 2012, Nationwide sent a denial letter to the plaintiff via regular U.S. mail.

On March 6, 2012, Nationwide issued a check for the second vehicle in the amount of $8, 8272.00. Also in March 2012, Mr. Horner contacted Nationwide and requested a copy of the engineer's report, which Nationwide sent to him. The plaintiff eventually filed the present suit on November 22, 2013.

The plaintiff's insurance policy provides that "[n]o one may bring a legal action against [Nationwide] under this insurance unless... [t]he action is brought within 1 year after the date on which the direct physical loss or damage occurred." It also provides that Nationwide will give notice of its intentions within 30 days of receiving a sworn proof of loss, and that Nationwide would provide the plaintiff with forms necessary to submit a sworn proof of loss. Nationwide never provided the plaintiff with the sworn proof of loss forms, and the plaintiff never submitted a sworn proof of loss.

III. Discussion

Under Tennessee law, a provision in an insurance contract limiting suit or action on the policy to one year after the date of the loss is read to limit suits to one year after the cause of action accrues. See, e.g., Das v. State Farm Fire and Cas. Co., 713 S.W.2d 318, 322 (Tenn. Ct. App. 1986) (citing Boston Marine Insurance Co. v. Scales, 101 Tenn. 628, 641 (Tenn. 1899)). The cause of action accrues "upon denial of liability or upon expiration of the immunity period, whichever comes first." Certain Underwriters at Lloyd's of London v. Transcarriers, Inc., 107 S.W.3d 496, 799 (Tenn. Ct. App. 2002).

In this case, the defendant issued a denial on January 4, 2012, when it mailed the denial to the plaintiff. The denial letter unequivocally states, "[a]fter carefully considering the evidence, we have determined that the claim in question is not a covered loss. The damages to your roof appear to be related to wear and tear or faulty construction that are allowing rain water to enter and stain the ceiling. For this reason, payment cannot be made." [R. 5-1, p. 104]. Accordingly, the plaintiff had until January 4, 2013 to bring its lawsuit. It did not do so until November 2013.

The plaintiff makes four arguments for why this case should not be dismissed on limitations grounds. First, the plaintiff's president testified that he "[has] no recollection of ever receiving a letter from Mr. Lippard denying [his] claim." [R. 11-1, p. 4]. Second, the plaintiff argues that it was lulled into believing Nationwide would pay its claim for roof damage because Nationwide paid for damage to one of the plaintiff's automobiles after denying the roof damage claim. Third, the plaintiff contends that Nationwide is estopped from relying on the contractual limitations period because it failed to send the plaintiff the ...

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