Motions for summary judgment are critical tools to litigation, if they can be won.
Motions for summary judgment are critical tools to litigation, if they can be won. They are useful for narrowing the issues for trial and can potentially end the litigation. In any case, a cost-benefit analysis must be performed to determine the chances of successfully obtaining summary judgment and the expenses to be incurred preparing the motion. However, such analysis can be daunting and particularly problematic in cases of insurance fraud with suspicious evidence being presented in support of a given claim. Fortunately for insurers, the United States District Court for the Northern District of Georgia has recently reiterated and clarified that not all evidence presented by the insured, typically the non-moving party, will be sufficient to defeat a properly submitted motion for summary judgment on behalf of the carrier.
In Federal Court, summary judgment shall be granted “if the pleadings, depositions, answer 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 judgment as a matter of law.” Fed. R. Civ. P. 56. By its terms, the summary judgment standard provides that “the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion… the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Put another way, the basic issue before a court is whether the evidence presents a sufficient disagreement between the parties to require submission to a jury or whether a case is so one-sided that one party must prevail as a matter of law. Allen v. Tyson Foods, Inc. 121 F.3d 642, 646 (1997) (citing Anderson, 477 U.S. at 251-52)). The moving party must show the absence of a genuine issue as to any material fact, and when deciding whether that burden has been met, a court must view the moving party’s evidence and all factual inferences arising from it in the light most favorable to the nonmoving party. Allen121 F.3d at 646 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970) and Fitzpatrick v. the City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993)). Once a motion for summary judgment has been properly submitted, the burden then shifts to the non-moving party to present facts establishing that there is a genuine issue for trial. Eberhardt v. Waters, 901 F.2d 1578, 1580 (quoting Anderson, 477 U.S. at 248). The non-moving party must demonstrate that there is indeed a material issue of fact that prevents summary judgment, looking to the facts and justifiable inferences that may be drawn from the record as a whole. Allen, 121 F.3d at 646 (citing Tipton v. Bergrohr GMBH-Siegen, 965 F.2d. 994, 998 (11th Cir. 1992)) (emphasis added). “A mere scintilla of evidence supporting the nonmoving party’s position will not suffice; there must be enough of a showing that the jury could reasonably find for that party.” Allen, 121 F.3d at 646 (quoting Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990).
But what is reasonable and how much evidence is enough to defeat summary judgment? In the case of Anthony L. Detamore v. Travelers Home & Marine Insurance Company, handled by our firm, the Northern District Court provided guidance. Civil Action. No. 1:13-CV-2553-WBH, Document 95 (N.D. Ga. September 8, 2016).
In Detamore, the undisputed facts were as follows: In 2011, Anthony Detamore purchased a home in disrepair in South East Atlanta (“the Property”) for $15,000. Detamore then purchased a homeowner’s policy for the property from Travelers Home & Marine Insurance Company, insuring the dwelling for at least $250,000. It was Detamore’s position that he wanted to hire someone to remove debris from the Property and located a potential contractor, Bill Jones of Bill Jones Contracting Services, on Craig’s List for the job. Detamore then allegedly met with Jones, executing a contract with him for removal of the debris. Thereafter, less than 10 days after obtaining the subject insurance policy, the Property was destroyed and Detamore filed a claim with Travelers seeking coverage for the resulting property damage. Detamore alleged that he hired Jones to only clear debris and trees, but due to an apparent misunderstanding, Jones destroyed the dwelling (the “Loss”). Despite Travelers’ extensive investigation, based on information provided by Detamore, Travelers’ representatives were never able to locate Jones, and in fact, believed Jones did not exist.
However, this was not Detamore’s only bout of bad luck with home repair. Three months prior to the Loss, Detamore, as representative of his company A L D Properties, had filed a claim with American Zurich Insurance Company, a claim eerily similar to the claim Detamore filed with Travelers. The Zurich claim involved property Detamore had purchased in early 2011 for $14,000 and later insured with Zurich for $300,000. Detamore represented to Zurich that a month after his purchase of that property, he rented a machine to remove dirt, but a day laborer, hired by a friend of Detamore’s, misunderstood the directions given to him and demolished the house. Thereafter, neither Detamore nor Zurich were able to locate the day laborer that had allegedly demolished the home. Id.; see also Detamore, Document 86 (September 30, 2015).
After Plaintiff’s claim with Travelers was denied, based in part on Detamore’s violation of the concealment and fraud provision of his Travelers’ policy, Detamore filed suit and Travelers removed the action to the Northern District of Georgia. Ultimately, Travelers was awarded summary judgment on all Counts of Detamore’s Complaint.
As part of its decision, the Northern District of Georgia found that, among other reasons, Travelers was entitled to summary judgment “simply because no reasonable jury would believe [Detamore’s] version of events.” Document 95, at *5. The Court explained that it could not credit Detamore’s story that “he twice purchased houses for a nominal purchase price, insured those houses for much more than he paid for them, and then, purely coincidentally, both houses were destroyed by individuals who disappeared.” Id.
Looking to the evidence presented by Detamore, including Detamore’s own testimony, the Craig’s List ad, and a single invoice allegedly from Jones, the Court noted that there appeared to be no evidence that Jones existed. Id. at 5. The Court explained that while it “must view all evidence and draw all reasonable inferences in the light most favorable to [Detamore], those inferences must be reasonable.” Id. at 6. Further clarifying what is reasonable, the Court went on to explain that where the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial.” Id. (citing Allen, 121 F.3d at 646). The Court concluded with noting that if evidence is merely colorable or not significantly probative, summary judgment may be granted. Id. (citing Anderson, 477 U.S. at 249-50).
In light of the Detamore decision, insurers should look carefully at the evidence presented by the other side when considering a potential motion for summary judgment in Federal Court. Would that evidence lead a rational tried of fact to find for the non-moving party, or is it merely colorable and not significantly probative to the issues at hand? The lesson learned from Detamore is that when faced with minimal, suspicious evidence, motions for summary judgment should be strongly considered.