Giaccone v. Canopius U.S. Ins. Co.

133 F.Supp.3d 668

Antonio GIACCONE and Rita Giaccone, Plaintiffs,

v.CANOPIUS U.S. INSURANCE COMPANY, Defendant.

Civil Action No. 14–6939 (JBS/KMW).

United States District Court, D. New Jersey.

Signed June 29, 2015.

Johnathan Wheeler, Esq., Law Offices of Jonathan Wheeler, P.C., Philadelphia, PA, for Plaintiffs.

Jared T. Greisman, Esq., White, Fleischner & Fino, LLP, Holmdel, NJ, for Defendant.

OPINION

SIMANDLE, Chief Judge:

I. INTRODUCTION

This insurance coverage litigation concerns Defendant Canopius U.S. Insurance Company's (hereinafter, "Defendant") refusal to pay insurance benefits to Plaintiffs Antonio Giaccone and Rita Giaccone (hereinafter, "Plaintiffs") for their claim that a January 31, 2013 storm severely damaged their commercial and rental property in Pleasantville, New Jersey. (See generally Compl. at ¶ 3.)

Defendant now moves at the outset of this action for summary judgment or for the dismissal of Plaintiffs' Complaint on the ground that they contractually released Defendant from "any and all further obligation" under the insurance policy, No. OUS16008338 (hereinafter, the "Policy"). (See generally Def.'s Br. at 1.) Defendant specifically asserts that the parties entered into a Release and Settlement Agreement (hereinafter, the "Settlement Agreement" or "Agreement") on November 27, 2013, concerning Plaintiffs' claim for property damage that occurred during Hurricane Sandy on October 29, 2012. (See Ex. C to Greisman Aff.) The provisions of the executed Agreement, however, release Defendant from "any and all claims" arising out of damages "that occurred on or about October 29, 2012 (the ‘Subject Loss')," and from "any and all" other claims that Plaintiffs could have asserted against the Policy, including unknown claims and those not expressly mentioned in the Settlement Agreement. (Id. at 1–3.) Indeed, the Agreement contains a specific covenant that Plaintiffs had, at the time of the Agreement's execution, "no remaining claims of any kind" under the Policy. (Id. at 3.)

As a result, Defendant asserts that Plaintiffs' supplemental claim for property damage that occurred on January 31, 2013, approximately ten months prior to execution of the Settlement Agreement, constitutes an impermissible attempt to recover "in contravention of the clear and unambiguous terms" of the Agreement. (Reisman Aff. at ¶ 13.) Defendant therefore requests that the Court enforce the Agreement "and dismiss Plaintiffs' Complaint, in its entirety, with prejudice," or, in the alternative, enter summary judgment in its favor. (Def.'s Br. at 1, 7–10.) In addition, and based upon the terms of the Settlement Agreement, Defendant seeks to recover the attorney's fees and costs incurred as a result of this litigation. (See id. at 9–10.)

Plaintiffs do not dispute the existence, or their execution, of the Settlement Agreement. Rather, Plaintiffs challenge the scope and interpretation of the Agreement on its face, and argue that certain language makes clear that the Agreement concerned only "losses from Super Storm Sandy on October 29, 2012, and not later losses to the property." (Pls.' Opp'n at 2, 6–8.) Plaintiffs therefore submit that the Settlement Agreement has no effect on their ability to pursue a claim for property damage that occurred on January 31, 2013. Moreover, even if the Agreement's terms sweep broadly to release any and all claims, Plaintiffs argue that factual disputes concerning the Agreements' validity preclude the entry of summary judgment. (See Pls.' Opp'n at 8–9.)

The principal issues before the Court concern the scope of the claims released in the Settlement Agreement, namely, whether the Agreement narrowly applies only to causes of damage stemming from Hurricane Sandy on October 29, 2012, or broadly precludes claims for any and all potential losses covered by the Policy; and whether issues of fact preclude the Agreement's enforcement.

For the reasons set forth below, the Court will treat Defendant's motion as one for summary judgment, and will grant the motion.

II. BACKGROUND

A. Factual and Procedural Background¹

Plaintiffs own a commercial and rental property in Pleasantville, New Jersey. (See generally Compl.) On May 31, 2012, Defendant issued Plaintiffs a "Commercial Lines" insurance policy for the period of May 2, 2012 to May 3, 2013. (Ex. A to Compl.)

On October 29, 2012, however, Hurricane Sandy "ripped the roof completely off of the building," allowing water to flood the property. (Giaccone Dep. at 8:1–9; see also Pls.' SMF at ¶ 2.) As a result, Plaintiffs, through their licensed Public Adjuster, Michael DeRita, submitted an insurance claim to Defendant for the losses associated with Hurricane Sandy. (DeRita Cert. at ¶¶ 1–2.) In investigating the claim, Defendant's claims agent represented that 80% of the damages to Plaintiffs' property resulted from a subsequent storm, rather than Hurricane Sandy. (See DeRita Cert. at ¶ 2; Ex. A to DeRita Cert.) Defendant's agent, in making the final offer, indicated that the offer was more than it would have been for just Sandy-related damage alone. (See Ex. A to DeRita Cert.)

Nevertheless, Defendant offered to settle Plaintiffs' claim in its entirety and, on October 31, 2013, forwarded a four page proposed settlement and release through Raphael & Associates, Defendant's claims administrators, in order to resolve the claim. (Ex. B to DeRita Aff.) The Agreement, which Plaintiffs executed on November 27, 2013, provided that Plaintiff would receive a total payment of $458,446.11 in full satisfaction of their outstanding insurance claim. (See generally Ex. C to Greisman Aff.) In exchange for this payment, Plaintiffs agreed to release any and all claims related to the property damage and loss that occurred on October 29, 2012, and further agreed to release all other claims that Plaintiffs "could have [ ] made" under the Policy and/or against Defendant. (Id. at 2–3.)

The Settlement Agreement provided, in particular, three specific provisions relevant to the pending motion. First, Plaintiffs agreed

to remise, release, acquit, and forever discharge [Defendant] ... of and from any and all claims, actions, causes of action, demands, rights, damages, costs, losses of services, expenses, interest, compensation, and obligations towards [Defendant], whatsoever (whether contractual, quasi-contractual, extra-contractual or otherwise), which [Plaintiffs] [then had] or which [t]hereafter accrue[d] on account of, or in any way growing out of damages (whether direct, consequential or punitive), interest, costs and fees resulting or to result from or in any way relating to the claim and/or loss and/or damage sustained to the property located at 118–124 South Main Street Pleasantville New Jersey 08232 as a result of wind and water damages that occurred on or about October 29, 2012 (the "Subject Loss" )....

(Id. (emphasis added).) Second, Plaintiffs agreed to

[r]elease [ ] and give [ ] up any and all claims and rights which [Plaintiffs] may have [had] against [Defendant ] ... including those of which [Plaintiffs were] not aware and those not mentioned in [the Settlement Agreement], ... [and] specifically release[d] the following claims: Any and all claims that were made or could have been made under or against [the Policy] issued by [Defendant], bearing Policy Number OUS016008388. It is specifically agreedthat there are no remaining claims of any kind which GIACCONE has under Policy Number OUS016008388.

(Id. at 2–3 (emphases added).) Finally, the Settlement Agreement provided for an award of "attorney's fees, interest, costs and expenses of litigation" to the "prevailing party in any action to enforce" the Settlement Agreement. (Id. at 4.)

In executing the Settlement Agreement, Plaintiffs acknowledged, before a Notary Public, that they read and reviewed the Agreement in its entirety and fully understood its provision. (Id. at 4.) Nevertheless, on January 16, 2014, ten months after executing the Settlement Agreement, Plaintiffs submitted a second claim under the Policy for damages allegedly sustained to their property during a subsequent storm on January 31, 2013. (Greisman Aff. at ¶ 11; see also Compl. at ¶ 3.) On June 10, 2014, however, Defendant denied coverage for this "supplemental claim" on the ground that the Settlement Agreement, on its face, released Defendant from any and all obligations under the 2012–2013 policy.² (Ex. E to Greisman Aff.)

Following Defendant's declination of coverage, Plaintiffs filed the initial state court Complaint on September 22, 2014, alleging that Defendant breached its contractual obligations and duty of good faith and fair dealing by refusing to provide coverage for the January 31, 2013 loss. (See Ex. A to Reisman Aff.) Defendant removed the action to this Court on November 6, 2014 [see Docket Item 1], and the pending motion followed. [See Docket Item 3.]

III. PRELIMINARY ISSUE

The Court must, at the outset, determine how to treat Defendant's motion.

Plaintiffs argue that the Settlement Agreement cannot form the basis of a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) because Plaintiffs' Complaint does not explicitly or implicitly rely upon the Agreement. (See, e.g., Pls.' Opp'n at 5–6.)

It is axiomatic that the Court may not, in resolving a motion to dismiss under Rule 12(b), consider "matters extraneous to the pleadings." In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir.1997). Rather, the Court may only consider a " ‘document integral to or explicitly relied upon in the complaint,’ " or an " ‘undisputedly authentic document’ " if such document forms the predicate for the complaint. In re Rockefeller Ctr. Props., Inc., Sec. Litig., 184 F.3d 280, 287 (3d Cir.1999) (citations omitted).

Here, Defendant's motion turns, in its entirety, upon the terms and interpretation of the Settlement Agreement, a document neither referenced nor inherently critical to Plaintiffs' Complaint. When "matters outside the pleadings are presented to and not excluded...