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Psi, LLC v. Nautilus Insurance Co.

United States District Court, D. Massachusetts

December 30, 2014

PSI, LLC, Plaintiff,
v.
NAUTILUS INSURANCE COMPANY, Defendant.

MEMORANDUM AND ORDER

DENISE J. CASPER, District Judge.

I. Introduction

Plaintiff PSI, LLC ("PSI") has filed this lawsuit against Defendant Nautilus Insurance Company ("Nautilus") alleging violations of the Fair Housing Amendments Act ("FHAA"), an amendment to the Fair Housing Act (the "FHA"), 42 U.S.C. § 3601, et seq., and the Americans with Disabilities Act (the "ADA"), 42 U.S.C. § 12101, et seq. D. 1. Nautilus has now moved for summary judgment. D. 30. For the reasons stated below, the Court ALLOWS the motion.

II. Standard of Review

The Court grants summary judgment where there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). "A fact is material if it carries with it the potential to affect the outcome of the suit under applicable law." Santiago-Ramos v. Centennial P.R. Wireless Corp., 217 F.3d 46, 52 (1st Cir. 2000) (citation and internal quotation marks omitted). The movant bears the burden of demonstrating the absence of a genuine issue of material fact. Carmona v. Toledo, 215 F.3d 124, 132 (1st Cir. 2000); see Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the movant meets its burden, the non-moving party may not rest on the allegations or denials in its pleadings, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986), but must come forward with specific admissible facts showing that there is a genuine issue for trial. Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 5 (1st Cir. 2010). The Court "view[s] the record in the light most favorable to the nonmovant, drawing reasonable inferences in his favor." Noonan v. Staples, Inc., 556 F.3d 20, 25 (1st Cir. 2009) (citation omitted).

III. Factual Background

Unless otherwise noted, the following facts are as stated in Nautilus's statement of facts, D. 31, and are not disputed by PSI, D. 40 (PSI's response). PSI was organized in May 2012. D. 31 ¶ 3; D. 40 ¶ 3. It operates two sober homes for individuals recovering from substance abuse, one in Revere, Massachusetts and the other in East Boston, Massachusetts. Id . ¶ 4; D. 40 ¶ 4. Each property has three floors and has capacity for 30 residents. Id . ¶¶ 7, 10; D. 40 ¶¶ 7, 10.

Following PSI's acquisition of the properties, PSI retained an insurance broker, Lukatsky Insurance Group ("Lukatsky"), to secure insurance for the sober homes. Id . ¶ 13; D. 40 ¶ 13. In April 2012, Lukatsky requested quotes from A.I.I. Insurance Brokerage of Mass, Inc. ("A.I.I.") for liability and property insurance for the sober homes. Id . ¶ 16; D. 40 ¶ 16. A.I.I. is a "special broker" pursuant to Mass. Gen. L. c. 175, § 168, and may consequently coordinate insurance agreements between "surplus line" insurers, such as Nautilus, and Massachusetts entities. D. 32 at 3, n. 5.

In calculating PSI's premium, A.I.I. classified the sober homes as "Halfway Houses- Other Than Not-For-Profit." D. 31 ¶ 18; D. 40 ¶ 18. This classification includes not only sober homes, but other forms of transitional housing, such as transitional housing for the homeless. Id . ¶ 19; D. 40 ¶ 19. Liability for properties classified as halfway houses is calculated according to the number of beds at the property, which is also how Nautilus calculates liability coverage for shelters and student housing. D. 46, Exh. 1 ¶¶ 3-5 (Chalmers Affidavit). A.I.I. provided Lukatsky with a quote of $9, 886.56 for $500, 000 per occurrence and $1, 000, 000 annual aggregate in liability coverage and $900, 000 in first-party property coverage for the two sober houses, which Lukatsky thereafter accepted on behalf of PSI. D. 31 ¶¶ 20, 22-24; D. 40 ¶¶ 20, 22-24. The $9, 886.56 premium was composed of $3, 158.00 per month for liability coverage and $6, 156.00 a month for property coverage with $572.56 in taxes and fees. D. 30, Exh. 10 at 4. In May 2012, after Lukatsky accepted the quote on PSI's behalf, A.I.I. confirmed coverage between Nautilus and PSI. D. 31 ¶ 24; D. 40 ¶ 24. Nautilus then issued the policy to PSI, effective May 17, 2012 through May 17, 2013. Id . ¶ 25; D. 40 ¶ 25. The premium was never altered during the coverage period. Id . ¶ 29; D. 40 ¶ 29. In August 2012, Nautilus cancelled the policy for nonpayment of the premium. Id . ¶ 33; D. 40 ¶ 33.

IV. Procedural History

Plaintiffs initiated this action on November 7, 2012. D. 1. PSI has now moved for summary judgment. D. 30. The Court held a hearing on the pending motion on November 19, 2014 and took the matter under advisement. D. 48.

V. Discussion

A. Whether Nautilus Violated the Fair Housing Act

The FHA makes it unlawful to discriminate "in the sale or rental, or to otherwise make unavailable or deny, a dwelling to any buyer or renter because of a handicap of- (A) that buyer or renter, (B) a person residing in or intending to reside in that dwelling after it is so sold, rented, or made available; or (C) any person associated with that buyer or renter." 42 U.S.C. § 3604(f)(1)(A)-(C). The FHA also prohibits discrimination "against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection with such dwelling, because of a handicap of [the same affiliated people identified under subsection (f)(1)]." 42 U.S.C. § 3604(f)(2). Under the statute, prohibited discrimination also includes "a refusal to make ...


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