Millard Gutter Co. v. Nationwide Ins.

1

MILLARD GUTTER COMPANY, a corporation d/b/a MILLARD ROOFING AND GUTTER; GILLICK ENTERPRISES, INC.; and GROSS POINT HOLDINGS, LLC, Plaintiffs, v. NATIONWIDE INSURANCE, a/k/a or d/b/a NATIONWIDE, and DEPOSITORS INSURANCE COMPANY, Defendants.

No. 8:18CV23

United States District Court, D. Nebraska

July 21, 2023

MEMORANDUM AND ORDER REGARDING THE PARTIES' CROSS-MOTIONS FOR PARTIAL SUMMARY JUDGMENT AND SUMMARY JUDGMENT

Brian C. Buescher, United States District Judge

This case arising from an insurance claim for hail damage to the roof of a commercial building is before the Court on cross-motions for summary judgment. The first such motion is Plaintiffs' Motion for Partial Summary Judgment on the claim of liability for repairs and replacements undertaken by the Plaintiffs and the payment of the contractor's unpaid charges for such repairs. Filing 69. The second motion is Defendants' Motion for Summary Judgment on Plaintiffs' claims of breach of contract and bad faith. Filing 72. For the reasons stated below Plaintiffs' Motion is denied, and Defendants' Motion is granted in part and denied in part.

I. INTRODUCTION

The factual background and the procedural background here are not comprehensive. Indeed, the Court's ability to set out either a comprehensive factual background or a coherent nucleus of the operative facts with key disputes has been hampered by both Plaintiffs and Defendants. Plaintiffs' Motion fails to comply with the version of NECivR 56.1 that has been in effect since December 1, 2022. However, some of Plaintiffs' failure to respond properly to Defendants' statement of facts is attributable to Defendants' greatly muddying the waters by submitting a 35-page statement of undisputed facts ¶ 250 numbered paragraphs that is unnecessary and out of proportion to the issues raised by the case and including what Plaintiffs correctly describe as “distortions” of record testimony and assertions of legal positions as “facts.” Furthermore, Defendants' responses to Plaintiffs' statements of fact are often lengthy, repetitive, and non-responsive to the facts stated. The parties' insistence on talking past each other and mischaracterizing evidence has undermined the prompt and economical resolution of this lawsuit. The parties would do well to keep that in mind as trial approaches.

A. Factual Background

Notwithstanding the parties' unhelpful conduct, the Court has attempted to glean from their submissions the essential factual context for the present motions. That essential factual background is much the same as the factual background set out in the Court's recent Memorandum and Order Regarding the Parties' Motions in Limine. Filing 108 at 2-3. As in that ruling, some facts for context were drawn from undisputed allegations in Plaintiffs' Complaint. Filing 1-3 (removed Complaint); Filing 8 (answer). Other disputed and undisputed facts are drawn from the parties' statements of facts in support of their Motions for Summary Judgment.

At relevant times, plaintiffs Gillick Enterprises, Inc., (Gillick) and Gross Point Holdings, LLC, (Gross Point) were named insureds on a policy for property located in Omaha, Nebraska, issued under the name of defendant Depositors Insurance Company (Depositors). Filing 91 at 1 (¶ 1).^[1] Plaintiffs allege that Gillick and Gross Point assigned all their right to proceeds under any and all applicable insurance policies to plaintiff Millard Gutter Company (Millard). Filing 1-3 at 5 (¶ 12). Millard is a contractor doing business in Douglas and Sarpy Counties in Nebraska. Filing 1-3 at 2 (¶ 1). The Court will refer to Plaintiffs collectively as “Millard.”

Defendant Depositors is an affiliate of defendant Nationwide Insurance (Nationwide). Filing 8 at 2 (¶ 6). Gillick and Gross Point submitted a claim for storm damage to its commercial building during the covered period, which was accepted by Depositors and Nationwide. Filing 91 at 2 (¶ 2). Nationwide and its agents and employees have been involved in the adjustment of a claimed loss associated with that claim. Filing 1-3 at 3-4 (¶ 4). The Court will refer to Defendants collectively as “the Insurers.”

The insured property has three buildings on it: a “Refrigeration Building,” a “Truck Wash,” and a “Main Building.” Filing 76 at 2 (¶ 5). Millard clarifies that the “Main Building” comprises 98% of the structures on the property, with the “Refrigeration Building” attached to the “Main Building,” and the “Truck Wash” resembling a shack. Filing 93 at 5 (¶ 1). The parties agree that the “Main Building” on the insured property has an “EPDM style” roof, consisting of a rubber membrane over polyisocyanurate rigid foam (ISO board), and a top layer of river rock ballast. See, e.g., Filing 77 at 2 (describing the components of an EPDM style roof); Filing 74 at 3 (noting that the EPDM roof has an EPDM membrane and ISO board underneath). The parties' central dispute is the extent of hail damage and repairs required to the roof of the Main Building. Millard contends that “it became apparent that it was not possible to perform those repairs [authorized by the Insurers] without removal and replacement of the roof assembly, irrespective of whether or not particular areas of the roof had suffered direct physical loss.” Filing 70 at 2. In contrast, the Insurers dispute that “there was any hail caused damage to the main building necessitating the complete replacement of the main building's roof.” Filing 75 at 1.

More specifically, the Insurers assert (or admit) that the scope of work and pricing in an estimate prepared for Depositors by Young & Associates-described in this and the Court's previous ruling as the “Weber Estimate,” Filing 87-2-identifies the adjusted and paid work for repair to involved structures at the property. Filing 91 at 2 (¶ 3). To put it another way, the Insurers assert that the Weber Estimate establishes the repairs they are required to cover. Filing 91 at 3 (¶ 5). The Weber Estimate is based on reports of various consultants hired by the Insurers. Filing 91 at 2 (¶ 2). Millard asserts that the Weber Estimate did not include approval for replacement of the EPDM roof on the Main Building and that Weber indicated he was not allowed to include costs to replace the ballast roof in his estimate. Filing 91 at 2 (¶ 4). Millard contends that in order to make the repairs authorized in the Weber Estimate, it was necessary to remove ballast rock and cut into the EPDM roof of the building, which would necessitate replacement of the entire roof. Filing 91 at 3-4 (¶¶ 6-7). Millard alleges that the Insurers never addressed its claim that the work authorized under the Weber Estimate would trigger the need to replace the roof because making the authorized repairs would create consequential physical damage. Filing 91 at 21 (¶ 21). The Insurers respond that the Weber Estimate did not include adjustment for replacement of the EPDM style rubber membrane roof on the Main Building because that roof did not sustain any covered loss due to a covered cause of loss and that the Weber Estimate addresses the proper repairs. Filing 91 at 2-4 (¶¶ 4-7, 21).

B. Procedural Background

Millard originally filed this action in the District Court of Sarpy County, Nebraska, but the Insurers removed it to this Court. Filing 1. In the removed Complaint, Millard asserts that the Insurers breached their contractual obligations under the applicable insurance policy by failing to pay the fair and reasonable costs to perform repairs of covered losses. See, e.g., Filing 1-3 at 7 (¶ 30). Millard also asserts that the Insurers breached their obligations of good faith and fair dealing by causing arbitrary and capricious delays and by withholding repair approval without reasonable basis. Filing 1-3 at 9 (¶ 40). The Insurers deny Millard's claims and asserts various affirmative defenses. Filing 8. Trial in this matter is set to begin on August 8, 2023. Filing 56.

Whether this case proceeds to trial as scheduled depends on the disposition of the cross-motions for summary judgment now before the Court. The Court will summarize the applicable standards for summary judgment then consider the parties' Motions in turn.

II. STANDARDS FOR SUMMARY JUDGMENT

Under Rule 56 of the Federal Rules of Civil Procedure, “[t]he court shall grant summary judgment 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). Thus, whether or not a court should grant summary judgment often turns on whether or not genuine issues of material fact are apparent on the record. In that context, “‘[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.'” Rusness v. Becker Cnty., 31 F.4th 606, 614 (8th Cir. 2022) (quoting Doe v. Dardanelle Sch. Dist., 928 F.3d 722, 725 (8th Cir. 2019), in turn quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

“The moving party bears the burden of showing the absence of a genuine dispute.” Glover v. Bostrom, 31 F.4th 601, 603 (8th Cir.) (citing Fed.R.Civ.P. 56(a)), reh'g denied, No. 20-2884, 2022 WL 1564097 (8th Cir. May 18, 2022). The party opposing summary judgment must “cit[e] particular materials in the record” or show that the “materials cited do not establish the . . . absence of a genuine dispute.” Fed.R.Civ.P. 56(c)(1). On a motion for summary judgment, “a district court should ‘not weigh the evidence, make credibility determinations, or attempt to discern the truth of any factual issue.'” Avenoso v. Reliance Standard Life Ins. Co., 19 F.4th 1020, 1024 (8th Cir. 2021) (quoting Great Plains Real Est. Dev., L.L.C. v. Union Cent. Life Ins., 536 F.3d 939, 943-44 (8th Cir. 2008)). Instead, ...