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Estate of Stone v. Peoples Insurance Agency, LLC

United States District Court, S.D. Indiana, New Albany Division

August 24, 2016




         This matter is before the Court on a Motion for Summary Judgment filed pursuant to Federal Rule of Civil Procedure 56 by Defendant Peoples Insurance Agency, LLC (“Peoples”) (Filing No. 43). Soon after a fire destroyed the house and personal property, Plaintiff Estate of David Stone (“the Estate”) learned that the previous insurance policy had not been renewed and a new insurance policy had not been procured. As a result, no insurance coverage was available to pay for the loss resulting from the fire. The Estate filed this action for declaratory and injunctive relief, seeking damages under a claim for breach of duty against Peoples, Branch Banking and Trust Company, and Westfield Insurance Company.[1] Peoples filed a motion for summary judgment, asserting that it owed no duty to the Estate, and thus, no claim for breach of duty against it can exist. For the reasons stated below, Peoples' Motion for Summary Judgment is granted.

         I. BACKGROUND

         The following material facts are not necessarily objectively true; but, as required by Federal Rule of Civil Procedure 56, the facts are presented in the light most favorable to the Estate as the non- moving party. See Zerante v. DeLuca, 555 F.3d 582, 584 (7th Cir. 2009); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).

         On December 9, 2012, David L. Stone and Carolyn R. Stone were issued Westfield Insurance Company “Farm Policy” No. FAB 1 920 308 (“the Policy”) covering the Stones' residence located at 4513 Stoneview Drive, Charlestown, Indiana (the “Stone Residence”) (Filing No. 50 at 2). The Policy had an effective date of December 9, 2012, providing insurance through December 9, 2013. The Policy was underwritten and procured by Wells Fargo Insurance Services USA, Inc. Id. Soon after the Policy's effective date of December 9, 2012, Wells Fargo sold the Policy to Peoples. Id.

         Cynthia Stone (“Cynthia”) was David Stone's daughter-in-law and power of attorney, and she lived at the Stone Residence. Cynthia also handled the homeowner's insurance for the Stone Residence, opening statements and making quarterly payments online through David and Carolyn Stone's checking account (Filing No. 50 at 3).

         More than a year before the Policy took effect, Carolyn Stone passed away on October 29, 2011. Two months before the Policy was to expire, David Stone passed away on October 9, 2013. Cynthia was appointed the personal representative of David Stone's Estate on October 22, 2013. Id.

         On October 17, 2013, Westfield Insurance Company issued and mailed to the Stone Residence a “Notice of Intent Not to Renew” the Policy, which referenced the date of notice of October 17, 2013, the Policy number, the Policy expiration date of December 9, 2013, the insurance agent as Peoples, and the insurer as Westfield Insurance Company. The non-renewal notice explained in bold, capital letters: “PLEASE BE ADVISED THAT THE ABOVE CAPTIONED INSURANCE POLICY WILL NOT BE RENEWED. YOUR INSURANCE WILL EXPIRE ON THE DATE AND HOUR SPECIFIED ABOVE.” (Filing No. 44-7 at 2.) It also explained that “[w]e are non-renewing your policy because the insurance company marked above will no longer be writing property and casualty insurance business with your agency. We recommend you contact your agent to obtain a replacement policy with another company.” Id. The policyholders, David and Carolyn Stone, were not alive at the time of this notice, so Cynthia received and read the non-renewal notice sometime later in October 2013 and understood that the Policy was set to expire on December 9, 2013 (Filing No. 50 at 3).

         On December 6, 2013, a voicemail message was left on the Stone Residence's answering machine by Tina Long (“Ms. Long”), a client account manager at Peoples. Ms. Long's message referenced the impending lapse in coverage and requested information about placing new insurance coverage. Id.

         Later that same day, Cynthia returned the call to Ms. Long but got her answering machine (Filing No. 50 at 4). The answering machine greeting informed callers, “Please remember that this voice message system cannot be used to bind or alter insurance coverage.” (Filing No. 44-6 at 4.) Cynthia left a return voicemail message on Ms. Long's answering machine stating, “coverage should remain the same as before, covering the same items and same dollar amounts.” (Filing No. 50 at 4.) Cynthia believed that, based on this voicemail message exchange, Peoples was procuring insurance for the Stone Residence. Id. at 4-5. Cynthia acknowledged that after leaving the voicemail message on December 6, 2013, she did not communicate with Ms. Long until December 18, 2013, after a fire destroyed the Stone Residence. Id. at 4.

         On December 18, 2013, the Stone Residence was destroyed by fire. That same day Cynthia called Peoples and spoke with Ms. Long, who informed Cynthia that the Policy had lapsed on December 9, 2013, and that coverage was not in place. Id. Ms. Long sent a letter to “David & Carolyn R. Stone” on December 20, 2013, noting that the Policy had not been renewed as of December 9, 2013, consistent with the non-renewal notice sent by Westfield Insurance Company (Filing No. 50-3 at 2). As a result, Westfield Insurance Company and Peoples would not provide coverage for the loss from the fire.

         On December 10, 2014, the Estate filed this action in state court, seeking declaratory relief and damages based on a breach of an unspecified duty. The case was removed to this Court and on October 14, 2015, Peoples filed its Motion for Summary Judgment.


         Federal Rule of Civil Procedure 56 provides that summary judgment is appropriate if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Hemsworth v., Inc., 476 F.3d 487, 489-90 (7th Cir. 2007). In ruling on a motion for summary judgment, the court reviews “the record in the light most favorable to the non-moving party and draw[s] all reasonable inferences in that party's favor.” Zerante, 555 F.3d at 584 (citation omitted). “However, inferences that are supported by only speculation or conjecture will not defeat a summary judgment motion.” Dorsey v. Morgan Stanley, 507 F.3d 624, 627 (7th Cir. 2007) (citation and quotation marks omitted). Additionally, “[a] party who bears the burden of proof on a particular issue may not rest on its pleadings, but must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact that requires trial.” H ...

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