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Davis v. Allstate Insurance Company

United States District Court, S.D. Mississippi, Southern Division

December 14, 2017




         BEFORE THE COURT is the Motion [74] for Partial Summary Judgment filed by Defendant Allstate Insurance Company (“Allstate”). After two fires broke out at a residential property owned by Plaintiff Darrell Davis (“Mr. Davis”), he filed an insurance claim with Allstate. Allstate denied the claim and asserted that Mr. Davis committed civil arson. In response, Mr. Davis filed this lawsuit against Allstate, alleging claims for breach of contract, bad faith, and punitive damages. Allstate moves for partial summary judgment on Mr. Davis' bad faith and punitive damages claims. For the reasons more fully stated below, the Motion should be granted, and Mr. Davis' claims for bad faith and punitive damages should be dismissed with prejudice.

         I. BACKGROUND

         A. Factual Background

         1. Mr. Davis Rents a House to Ms. Skipper

         Mr. Davis owns a house (“Property”) located in Moss Point, Mississippi. Mr. Davis did not live at the Property, but used it as a rental investment. It is undisputed that Mr. Davis resides two or three minutes away from the Property. Pl. Exam. [74-3] at 87. In 2011, Mr. Davis incurred a net loss of $1, 149.00 on the Property. Pl. Dep. [74-6] at 63-64. In 2013, Mr. Davis earned a net profit of $2, 036.00 on his two rental properties, one of which was the Property. Id. at 60-61. The Property was insured by Allstate under a policy of insurance for a period beginning on April 14, 2014. Policy Decl. [74-1] at 4. The insurance policy does not cover losses caused by “[i]ntentional or criminal acts of or at the direction of any insured person, if the loss that occurs: a) may be reasonably expected to result from such acts; or b) is the intended result of such acts.” Id. at 32.

         Beginning in early 2014, Mr. Davis rented the Property to Jackie Skipper (“Ms. Skipper”). Pl. Exam. [74-3] at 13-14. Ms. Skipper gave Mr. Davis $150.00 as a deposit to move in, although the deposit was supposed to be $550.00. Id. at 49-50. The Mississippi Regional Housing Authority paid Ms. Skipper's rent of $800.00 per month. Id. at 13-14. On August 5, 2014, Ms. Skipper forwarded a complaint to the Housing Authority regarding broken appliances in the Property and Mr. Davis' treatment of her. Skipper Compl. Form [74-10]. The Housing Authority notified Mr. Davis of the complaint, at which point he went to speak with Ms. Skipper. Pl. Exam. [74-3] at 42. Ms. Skipper told Mr. Davis that “she just wanted to just get out, ” presumably referring to her lease. Id. Mr. Davis responded, “no problem. All you had to do was come to me and I would have let you out.” Id. The two agreed that Mr. Davis would make an effort to let Ms. Skipper move out. Id. at 43. According to Mr. Davis, her lease expired on October 1, 2014. Id.

         Ms. Skipper moved out during the “late part of September” 2014, but she “still had the keys to the place.” Id. at 34. At some point after October 1, 2014, Mr. Davis visited the Property and noticed that Ms. Skipper had many items still in the house - “her radios, her TVs, TV stands, all her table stuff was in there, aquarium, food and everything.” Id. at 34-35. Mr. Davis believed that he “still couldn't touch her stuff until [he] got a order to remove her from the courts.” Id. at 34.

         Mr. Davis also observed extensive damage to the interior of the residence. Id. at 34-35. “Pretty much all the rooms” had three-inch and six-inch holes in the wall. Id. Several walls also had six to twelve-inch gashes. Id. at 22. The bathroom and room doors “were just hanging on the frame” and “[a]ll the smoke detectors were down in the back of the house.” Id. at 34-35. Mr. Davis “would have to get somebody in there to clean it when she moved out” because there were “gobs of food and stuff that was splattered on the wall.” Id. at 39. Moreover, the Property was infested with “roaches and stuff just everywhere.” Id. Mr. Davis believed he would have to replace the oven in the house because in his view it was substantially damaged. Id. Ms. Skipper also left Mr. Davis “with a $400 light bill.” Pl. Dep. [74-6] at 71.

         2. Two Fires Ablaze in the Property

         On the morning of October 5, 2014, two fires broke out at separate times inside the Property. The exact time of the first fire is unclear, as there is some evidence that the first fire alarm was received at 1:01 a.m., Jones Report [74-9] at 5, but according to Allstate claims adjuster Wilbur Jordan (“Jordan”), the fire department was first dispatched at 4:02 a.m. and arrived at the Property at 4:05 a.m. Jordan Dep. [74-8] at 35. “[T]he initial fire originated along the south living room wall with the flames spreading vertically to the attic. The responding firemen contained the damages to this location and departed the premises.” Jones Report [74-9] at 5. The fire department was again dispatched to the Property at 6:03 a.m. and arrived at 6:06 a.m. Jordan Dep. [74-8] at 35-36. This time, “flames were venting the roof over the west end of the house.” Jones Report [74-9] at 5. This second fire “originated in the west hallway closet and spread vertically into the attic.” Id. at 3.

         3. Allstate Investigates and Denies Mr. Davis' Insurance Claim

         Mr. Davis filed a claim on his insurance policy with Allstate for damage incurred as a result of the fires. On October 6, 2014, Allstate requested Gary Jones (“Jones”) to investigate the origin and cause of the fires. Jones Report [74-9] at 2. Jones is employed as a Fire Investigator with a company called EFI Global, Inc. Jones Aff. [74-2] at ¶ 2. Jones has been working continuously in the field of fire and explosion investigations for over thirty-five years and has been accepted as an expert in this field in several states. Id.

         Jones began investigating the following day on October 7, 2014. Id. During his inspection, Jones noted that “[e]lectrical service was not connected to the building” and gas service was also not in use at the time of loss. Jones Report [74- 9] at 3. With regard to the second fire, Jones noticed that “[a]n access opening in the west hallway ceiling had been removed so the flames could easily access the attic.” Id. at 3-4. Jones found that “[t]he flooring was damaged from direct flame impingement consistent with an ignitable liquid.” Id. at 4. Jones detected “an unusual odor . . . similar to gasoline” when he opened the hallway HVAC closet. Id. Jones submitted two fire debris samples to EFI Global's chemical lab to test for ignitable liquids. Jones Report [74-9] at 4, 18. The lab reported that the fire debris from the hallway closet did not contain a measurable level of ignitable liquids. Id. However, the HVAC filter and debris from the HVAC closet contained a relatively high level of gasoline residue. Id.

         On October 13, 2014, Jones prepared his Fire Investigation Report. Id. at 1. Jones concluded:

All potential accidental heat/ignition sources within the areas of origin have been excluded. The absence of electrical and gas services eliminates either utility or an appliance requiring their service. Separate points of origin are indicative of human involvement and the presence of gasoline where none should have been found is consistent with an incendiary fire cause.
. . . .
Fire pattern analysis indicates that the fire originated in separate locations in the living room and west hallway closet. Evidence indicates that ignition resulted from an open flame. Evidence indicates the first fuel ignited consisted of gasoline vapors followed by available ...

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