Patriot Ins. Co. V. Quality Home Care, LLc.

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STATE Of M_<\ll\!E CLMBERLAND, ss SCPERIOR COCRT CI\1L.ACTIO:\ N~;k~~w~~~~-~~~~l-1'4 I' ,\TRIO 1' I:\SUR'I.NCE COMPA\:Y, ORDER ON PLAINTIFF'S MOrlO:-.:! fOR 'iUM~ARY jCDC!vffiNT Plaintiff QUALITY HOME CARE, LLC, Before the court is plaintiff P~triot Insurance Company:s motion for summary judgment un both counl~ of its complaint, which addre~ses a claimed loss tu1der plaintiff's insurance policy. Defendant Quality Home Care, Inc. has filed no opposition tu lh~ motion. for the following reason~, the motion is granted. PROCEDURAL HISTORY In ib complamt filed on July 13, 2013, plainbff seeks in coLrnt I a declaratory JUdgment that th~ insurance puhcy ISSued to detendant does not cover the clrumed loss and allq-;r·; in counlll a fraudulent insurance act claim under 2.4-A M.R.S. § 2.186 (2.013). Defendant tiled an an~wer on September 9, 2013 and an amended answ<'r 1 and a coLrnterclaim on january 2.6, 2014. follo·wmg an Lrnsuccessful mediation, coLrnsel for defendant moved to Withdra·w on ~ay 19, 2014 because the attomcydient nclatiunship had broken down. Tiw court granted the moticm to withdraw -=----cc--c-I Plam'c.ft formally chol\~ng~s <;~rved ~ - :he effectiveness of li1e amendment because 11 was emillled but not as reqmred under the Matne R·Jles ofCiv!l Procedure. (PI'> Br 2 :-t.l.) on June 10, 2014, but stated that defendant was obligated to retain otllE'r C"ounsel or '10t1fy the court that defendant v-.11l 2 be repre~L'Illmg ilseif The court has received no communication from defendant. On September 22, 2014, plaint::lf! hied a motwn for summary iudgment. Plaintiff attached the requirt'd Rulo' 7(b)(1) notk<'. Plaintiff rcpres.,nls that the motion was mailed to three of defendant'" bu"'ness addresses in Kentucky, including an address whert' plaintiff h~d n·a,-h.,d dckndant before trial. Defendant has not filed any opposition to the motion or any other communication with the court Accordingly, th,, motion is cons1dered unopposed. BACKCROU:'\TI The followmg facts, supported by nTord citations, arc deemed ,tdrmtted On F<·bruary 24, 2013, cl 3 fire caused damage to the property at 23 Virginia Place in Limestone, :'vlaine. (Supp. S.M.F. 'fl' 7, 11.) At tssue in t±us case is wheth<·r plaintiff 1S hable for the damage under an inourancc policy plamhff issued to defendant Defendant !Sa !muted liability company organi~.,,d in K<'nillC"ky that was c"tablished to perfom1 m-home care to the elderly. (Supp- S.:VLF. 'l[": 5-6_) Defendant owns tlw damaged building, ~ thirty-L-ight unit aparlmL'Ill complex, wluch was listed on the instuanct' policv. (Supp- S.\1 F_ 'll':: 7, 9.) Thv msurancc policy V>.·clS in effect at the l:!me of the fire. (Supp. S.M.F. '::'If lO-ll.) After the fire, 2 llecause defendant 1s an LLC, aE atComcy must represent defendant in ITus case. See 4 M.RS. § ilOi (2013) 3 Sec M.R. Civ. P. 56(h)(4). 2 defendant submitted da1ms for coverage for property loss, frozen p1pes <md water loss, and busmess income lo~~- (Supp. S.M.F. 'If 12-14.) Plainbff invebtigated the daJms and demed coverage on June 24, 2013. (Supp. S.l\LF. 'If 18.) Plc1intilf claim~ th~t defendant made false statemenl" to plaintiffs mvestigators in violation of the pohcy and that the building was vacant for more th~n 60 days leadmg up to the fire, which voido cov<Crage for acts of vandahsm_ .1\cn,rding to plaintiffs fire invesb.gator, arson was the cause of the fire at the building. (Supp. S.M.F. <_ 9116, 19, 22-50.) /\,part of the investigatiOn, plainb.ff took statemcnls from Craig Perkins, an owner of Quality Home Care who subm1tted the 1murancc c-laims. (Supp S.M.F. <f<r 16, 19.) In h1s fir,l wcord<.·d Quality !lome C:arc lca"('d th~ ~tatement, l\[r_ Perkins claimed that buildi11g to Frankco Disaster Recovery, LLC ("frankco"). (Supp. S.M. F.'][ 22) 1\lr. Perkins presented a lease signed by lumseli for Qual!\}' !lome Care and Rex Tokr for Frankco. (Supp. S.M.F. 'L'If 23, 24.) Plaml:!ff subsequently lc~med that frankco was dissolved at the hme of the fire or shortly thereafter. (Supp. S.J\1.1-'. '][ 26_) N"verthdebs, Mr Perkins claimed a loss of bltstness income in the amount of S1S,50([ per month based on the lease agrvenwnt 1.vith Frankco. (Supp. 5.:\f.I'. 'If 25.) \Jr. 1'\'rkino oloo claimed that Fr~nkco responded to a CraJgshst post advc,-tising th<· a,·a!labiht}· of the prem1~cs for ;case. (Supp- S.M.f. 0:: 2S.) In his first statement, l\lr Perkins derued that h<' had any relationship w1th Mr. Toler or the owner of Frankco, Frank Fitzgerald. (Supp. 5.:\I.I'. 'lf'i 27, 30.) Plainhff conb.nued 1ts mvesligalion after taking 'll,fr_ Perkins's recorded statement and decided to conduct an exammal:!on ot Mr. Perkins undeT oath_ A.t the exammal:!on, Mr. Perkinh admitted that l\1r_ Toler had not s1gned the lease 3 agnTment and that :\fr. Perkins had signed Mr. Toler's name. (Supp. S.M.P. 'lf 33.) :\ir. Perkins furthcT ~dmitt~d that he hww :\1r. Toler and :\lr. fltzger,tld, that 'vh. Perkins contributed $15,0UU to che starl-up Frclnk.(·o, and that he was a member of Frankco. ISupp. S.l\1.1-. 'll 32.) He further not responded to a Craigshst ad clbout lPa~ing expl~ined that Frankco had the building but that :\1r. Perkins had a convcrscllion about the lease with Mr. Fitzgerald m Long Island, New York. (Supp. S.l\I.P. '[ 2'!.) Lcadmg up to the fin·, Mr. Perkins took steps to ev1cl tenants who refused to leave the building, mduding ~hutting off utilities to the buildmg sometime in OclobL'T or November 2012. (Supp. S.M.F '::9! 42-43.) The electnctl:y was not switched on agam pnor to the flre. (Supp. S.M.!'. '!1. 42.) By january, only ~ k>v tenants remamed m the building, and Frankco did not occupy the premises prior to the flre. ISupp. 5.]\J.F. 9l'll44-4.~.) DISCUSSION A. Standard of Rcv1CVv "Summary judgment is appropnate if the record reflects that there 1s no genuine i""ue 0f mater1al fact and the movant is en!Jtled to judgment as a matter of law." Dussau]t v. J{]U: C:oach l.ankrn Holdings, LL(. 2014 l'vlE 8, C: 12, 86 A.3d 52 (quoting F.R. CarrQ.ij, Inc. v. TD Bank :\.A. 2010 MI: 115, '] tl, matenal facl1s one th~t b A.Jd b41iJ. "A can affect the outcome of the case, and there is a genume 1ssue when tlwre is sufficient evidence for a fact-fmder to choose betv..'een competing versions of the iact." McilroY\'. Gibson's App:e Orchard, 2D12 \·11:' 59, ~ 7, 43A.3d 948 (quoti!'lg N. E. Ins. Co. v. Young, 2.011 \IE H9, \\'hen the pl~intiff 0 · 17, 2.6 A.3d 794). is the moving party. "the plamtiff has the burden lo demonstrate that each element of 1ls cla1m 4 1S e~tabli,hed without dispute os to material bet within the summary judgment record" Cach LLC v. Kulas 21lll _1\.lE 70, 'li 8, 21 A.3d 1D13 (quoi:Jng :-<. St,1r Capital Acqms,twn, 2[)09 IdE 12'1, '1l S, 984 A.Zd 127~1- l.U:;~ Victor Only facts properly St1pported by record citali(mb are deemed adm1lll'd when the non-mO\Ililg pMty fails to controvert those facts.ld. 'li 9. B. Count I 1. False Statements Plaintiff first argues that the lo% i~ not covered because dde11dant's representative made !abe statements to plamtiffs investigators after the fire. The pollcy states: CONCEALME~T, MJSREPRESE~TATlON or FRAUD Y.,'e do not provide coverage to one or more m-;tJred" ("insureds") who, at any' Orne: l. lntenbonally concealed or nusreprese:nted a material fad; 2. Engaged m fraudulent conduct; or 3. !dade a lal~e 'takmcnt; relat:mg to this insurance. (Supp. 5.:!\f.F. "[ 21.) Plaintiff's Cvld<"llC'E' shows that Mr. Perkins made false statements about his relatwnship W1th the members of I'rankco, h1~ rrwn Quality Home Care and hanl.co, and that he stgned _Mr. Toler's name on lease. In addiUon, Mr. P~rkins th~ submitted a da1m for lost busmess mcome when he knew Frankco had dJssolved and would probably not be makmg anv future pclyments under the le,JSe. l'akmg these fac:s as admitt<·d, plamhff has demo:nslr<>ted tl1at 'Mr. Perkms made his recorded statement to fal~r· statements on beh<>lf of ddendant in pl~mtiff's mvesllg<>tor~ 5 Tiwse false statement" are suffic1ent for pi am tiff to deny coverage under the policy. See Bavmon v. State brm Ins. Co., 23i F. App'x. 858, 561 (6th C1r. 2DOiJ. 2. 60 Dav V ,Kaney Plaml:!ff has also shown t1,at thl• property w~s vacant for 60 days leading up to the fire. '] h'-' policy ,;tal<'b' 6. V~cancy a. lJescnption of Term~ (l) As used in th1s Vacancv Cond1tion, the term building and the tenn vacimt have the meanings set forth in (1 )(~)and (l)(b) below: (b) Wher. this policy is 1ssued to the owner or general lessee oi a buildmg, building means the entire bmldmg. Such budding is ~a<ant unll"c;o at l<'abt 31% of its total square footage is: (i) Rented to a lessee or sub-lessee and uocd by th<·lesset• or sub-lessee to crmduC"t its ruotomary operationb; (ii) L'sed by the building owner to conduct cu"tomary operation' (2) Bmldmgs u:cder con,truclwn or renovation are not considl'red vaco1nl b. \'acancy Proviswns If the butldmg where loss or damage occurs hd.o bcm vacant for mon' than 60 c-onsecutJ,·e davs before that loss or damage ocmrs: (1) \Ve will not pay for any loss or damage caused by any of the followmg even 1f they are Covered Cac:ses of Loss; (a) Vandalism; (b) Sprinkler leakage, unless you have pmtcded tlw system agamst freezmg (c) Building glass breakage; (d) Water Da.•nage; (e) Theft; or (f) Attempted lh.cft. (Supp. S \f_F_ ~ 20.) Defendant was not using the buildmg fm it" own purpo~""· but had acqmred il for invesbncnt inmmP (Supp- S \1.F. 'li 40.) ~1r. Perkms 6 stated that he was trymg- to gc'': knants out ot Lh<e h11ilding in October or :'\o\'ember 2Jl12. Because dler" wcr~ onlv a coup!" of tvmmts leit in )anu,U\' and . . Frankco had 'lOt moved into Lh" premises, less than -l'l% of tt& square foobg" \'vas being used to cuncluct a busmess's cu<tomMy operatwns leadmg up to the fire on rebruary· 2-1, 2013. Under the pohcy, plaintiff is not obhg,lted lo mver loss due to Vi111dahsm in the event the building has been vacant for more than 60 days. 'I he fi"' otarted aha result of arson. L.sing the <'rdi11ary mearung of iii\ u11ddined term, arson 15 a type of vandalislll under this lyp<' of exclusiOn where fmc is 110t a separately listed cause of loss. See !_>ear Riyer :\1ut. Ins. Co. v. Williams, 133 P.3d 798, 801 (L"tah U. App- 2006) (holdmg "that lhl' policy language excludes coverag" of vandalism or mahcwus m1.ochid loss<>s regardiess oi the means u.oed to inflict tho"'~ lo""'"' even when a loss could also be such Jh ar~on"); d1ar~cterJzed by a more sphihc term Batltslull v. Farmers ;\llia11e<.' 111&. Co., 127 P.Jd 1111, 1114-15 (N_M 2006) (same); Costabde v. 1\klru_ Prup. & Cas. Ins. Co. 193 F Supp. 2d -'1-65, 478 (D. Conn. 2002) ("j\V]here _.. a policy sectwn provide' all-risk coverage and does not list fire and vandalism as separate cam''" of loss, no ambigmty cuises and arson does inde<ed f.dl vvithin the defuul:!on of vandabsm")_ Although there are contrary dcLi,Hm&, those cases usually mvolvc a policy that refers to vandalism and fue as sep,u<llc pcnlc; but 011ly excludes COVl'rage for vandahsm m the e\'ent of prolongt'd 1\fidwbl 7H7 F_ .-~caney. See ~ Bates_ _y Hartford Ins. Co. of Supp. 2d 65::', 662 (ED_ Mid1 201:). The vandalism cxdusiun prov1des a SL']Jarate basis for plamti±fs demal of mverage. 7 C. Count Jl 1. Fraudulent Jnwrance Act th~ Irc insur~nce 'l'CC'nd COlmt, pl<1mtif:' alleges detendar.t committed a fraudulent act under 24-A ld.RS. § 2lS6 action in which it the court mcly -"-LRS. ~ '\ 1S '.20~J). prmwn that a person ~ward l'hat oecction pro\"Ldes, "li]n d committ~d '-~vil a fraudulent insurance ad, reasonable attom<o·y's fees and costs to the insurer." 24-A 2lS6i7J_ b'rcludulent insurance act~~ defined JS: "Fraudule:-~t msurarKC ad" mecans any of the following ~cts or omiosions when committed knowingly and with inl<mt to defraud: (l) Presenhng, or cau~mg to be presented, or preparing any information cont.nning f~lse representations d" to ~ material fact with knowledge or belief that the illformation will be presented :_,,. or on be~alf of an insured, cla.Jmant or apphcant to' a11 insurer, msurance produce: or other person engat;ccl in the busmess of in~urance concerrung ~.ny of the following: (c) A claim for payment or benefit pursuant to on insura.J>ce policv . 24-A ld.R.S. § 211:\6(1 )(A)_ As discussed abrwe, Mr. Pvrkinb made false statements on ht·holf of defendant to obtain Hi, fraudulent mtent can b~ Goodchild p~yment infcrr~d under the company's insurance policy. front the CLrcwnstance~. 25 F.3d 55. 60 (1st C:ir 199•1) ('Fraud S<·<' Lnited 1~ usu~llv State§_~'_, proven by Cm"llmstantial evidence. Din"t proof of a k.'1owbg mlc11t t(' defraud ts rare."). Plamtiff is therefore entitled to its cost" a11d attonwy's fees. ), its collllterdairn, ddr'11dant alleged plamtJfi- wrongfully denied coverage for defendant's da1m. A.:; disc:.lssed above, Lhe denial of coverage was proper. 8 The entry is P!a,nbffb Motwn for Sllln:tldry Judgment 1s GlZ,\NTEO. Judgment lS entered i11 fayor of Plilintiff and ilgainst Ddcnd~nt on 1-'lamtiff's Complaint and Dckndant's Countc>rdarm. 1-Vithin 30 da\'.> of the date of this order, Plaintiff wtll file an affida~it of 1ts allom<>v's fees and costs. 24·.-\ \1 R.S. § 2186ii)_ . l\1ills Justice, Superior Court N~nn· CLTVffiERLA!\D CV-lJ,298 9 :OFCOUR'l~ "lanJ Cnunty ry ~ireet Ground Floor nd, ME 04101 MATTHEW .\IEH,\LIC ESQ !\OR MAt•> 1-IA-"SOI'i & DFTROY PO BOX 4600 PORTLAND ME 04112-4600 QUALITY HOME CARE LLC 11)60fi STO-"ERREAKER RD LOUISVILLE KY 40291 <

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