Joshua Lee Henderson and Meredith Ashley Henderson v. State Farm Fire and Casualty Company, et al.

Summary

The United States District Court for the Southern District of Alabama addresses State Farm’s motion for summary judgment in a Hurricane Sally homeowners’ insurance dispute. The court holds that the plaintiffs waived their appraisal rights and, alternatively, that appraisal is unavailable because the parties dispute coverage, causation, and the scope of damage. The order also excludes the plaintiffs’ proposed expert, Byron Johnson, for failure to comply with Federal Rule of Civil Procedure 26(a)(2)(B).

Holdings

1. Plaintiffs waived their contractual right to appraisal by allowing the action to proceed for more than a year, participating in discovery, litigating dispositive motions, and failing to seek an order compelling appraisal despite the issue having been raised earlier in the litigation.
2. Appraisal was unavailable because the dispute involved coverage and causation, not merely the monetary amount of agreed-upon damage.
3. State Farm was not entitled to summary judgment on the breach-of-contract claim merely because plaintiffs' excluded expert did not calculate actual cash value. The claim could proceed because the parties disputed the extent and amount of covered damage, plaintiffs identified other experts, and the court could not determine at the summary-judgment stage that plaintiffs would lack trial evidence.
4. State Farm was entitled to summary judgment on plaintiffs' bad-faith claims because the undisputed evidence showed that State Farm investigated the claim and had an arguable or debatable reason for denying portions of it.
5. Summary judgment was warranted on the negligent hiring, training, and supervision claim because plaintiffs conceded the issue at the hearing.
6. Byron Johnson was excluded from testifying as an expert because plaintiffs failed to provide the written expert report required by Federal Rule of Civil Procedure 26(a)(2)(B), and the failure was neither substantially justified nor harmless under Rule 37(c)(1).

Questions Presented

1. Whether plaintiffs waived their contractual right to appraisal by substantially participating in litigation without seeking to compel appraisal.
2. Whether appraisal was unavailable because the parties disputed coverage, causation, and the scope of damage rather than only the amount of loss.
3. Whether State Farm was entitled to summary judgment on plaintiffs' breach-of-contract claim because plaintiffs allegedly lacked evidence of the actual cash value of repairs.
4. Whether State Farm was entitled to summary judgment on plaintiffs' bad-faith claims because the undisputed evidence showed an arguable or debatable reason for the claim determination and an investigation of the claim.
5. Whether plaintiffs' negligent hiring, training, and supervision claim should be dismissed.
6. Whether plaintiffs' designated expert Byron Johnson should be excluded for failure to provide the report required by Federal Rule of Civil Procedure 26(a)(2)(B).

Disposition

other