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The Meadows at Mainstone Farm Condominium Trust v. Strathmore Insurance Co.

United States District Court, D. Massachusetts

September 28, 2018




         Pending before this court is a motion to strike an expert opinion and a motion for summary judgment filed by defendant Strathmore Insurance Company (“defendant”) as well as a motion for leave to amend the complaint filed by plaintiff The Meadows at Mainstone Farm Condominium Trust (“plaintiff”). (Docket Entry ## 26, 28, 36). After conducting a hearing, this court took the motions under advisement.


         On December 17, 2016, plaintiff, a condominium trust, filed a two-count complaint against defendant, setting out a claim for breach of contract (Count I) and seeking a declaratory judgment (Count II). (Docket Entry # 1). With respect to Count I, the complaint requests judgment against defendant in the amount of plaintiff's damages, including interest and costs. (Docket Entry # 1). With respect to Count II, the complaint requests that this court declare that all amounts expended to repair damage are covered by the insurance policy at issue and that plaintiff is entitled to interest and costs on said amount. (Docket Entry # 1).

         On October 16, 2017, defendant filed the motion to strike the opinion of plaintiff's expert, Paul F. Amoruso, CPCU (“Amoruso”), which would be used to oppose defendant's upcoming motion for summary judgment. (Docket Entry # 26). Defendant filed the motion to strike on the grounds that the expert opinion contains “inadmissible conclusions of law, ” and the expert's report “lacks any specialized knowledge” that would assist a trier of fact in understanding or determining a factual issue. (Docket Entry # 26, p. 2). The motion asks this court to strike Amoruso's expert report in its entirety, preclude the use of the opinions to oppose a future summary judgment motion by defendant, and preclude Amoruso from testifying at trial. (Docket Entry # 26). Plaintiff argues that the motion to strike is deficient because it is premature, plaintiff gave “fair notice” to defendant about Amoruso's qualifications and opinions, and Amoruso's knowledge will assist a trier of fact in understanding and applying the disputed insurance policy. (Docket Entry # 27, p. 2). Defendant also challenges the competency of Matthew D. Langweber (“Langweber”), a resident at The Meadows at Mainstone Farm condominium complex (“the Meadows”), to testify concerning the frequency of communication between plaintiff and defendant following the loss. (Docket Entry # 34-1, ¶ 32) (Docket Entry # 30-2, ¶ 1).

         On October 31, 2017, defendant filed the summary judgment motion, asserting that the claims are time barred under both the statutory and the policy's limitations periods. (Docket Entry # 28). Defendant argues that under a two-year limitations period for covered losses under Massachusetts General Laws chapter 175, section 99 (“section 99”), the claims must have been filed by February 4, 2013 in order to be timely. (Docket Entry # 28). Plaintiff submits that the contractual two-year limitations period does not bar the claims for the type of loss at issue. (Docket Entry # 30). Plaintiff also contends that defendant waived or is estopped from raising the contractual limitations period. (Docket Entry # 30).

         In January 2018, plaintiff filed the motion for leave to amend the complaint. (Docket Entry # 36). Plaintiff seeks to amend the original complaint by adding claims for: (1) violation of Massachusetts General Laws chapter 176D (“chapter 176D”) (Count III); and (2) violation of Massachusetts General Laws chapter 93A (“chapter 93A”) (Count IV). (Docket Entry # 36-1). In opposing the motion, defendant contends that the proposed amendment is “futile, untimely, and prejudicial.” (Docket Entry # 38, p. 1).

         I. Defendant's Motion for Summary Judgment


         Effective as of May 28, 2010, defendant issued an insurance policy (“the policy”) for general commercial property liability coverage to plaintiff for the period of May 28, 2010 to May 28, 2011. (Docket Entry # 1, ¶ 2) (Docket Entry # 6, ¶ 2) (Docket Entry # 28-2, ¶ 1) (Docket Entry # 31, ¶¶ 1, 20) (Docket Entry # 34-1, ¶ 20) (Docket Entry # 28-4). The policy combines a variety of different coverages including, at plaintiff's request, a “Standard Massachusetts Fire Policy endorsement.” (Docket Entry # 34-1, ¶ 21). Endorsement CP 01 09 10-00 adds standard Massachusetts fire policy provisions which, in pertinent part, include the following:

Your policy contains Legal Actions Against Us, Appraisal and Cancellation Provisions. Massachusetts law requires that the Suit, Appraisal and Cancellation Provisions of the Massachusetts Standard Fire Policy supersede any similar provisions contained in your policy. Therefore, all Legal Action Against Us, Appraisal and Cancellation Provisions contained in your policy are void. The Suit, Appraisal and Cancellation Provisions of the Massachusetts Standard Fire Policy shall apply instead.

(Docket Entry # 28-4, p. 107, ¶ 1) (emphasis added). The endorsement further provides that:

. . . No. suit or action against this company for the recovery of any claim by virtue of this policy shall be sustained in any court of law or equity in this commonwealth unless commenced within two years from the time the loss occurred[.]

(Docket Entry # 28-4, p. 110) (emphasis added). In addition to the Standard Massachusetts Fire Policy endorsement, the policy contains language that prevents an individual from bringing legal action against defendant under the policy unless “[t]he action is brought within 2 years after the date on which the direct physical loss or damage occurred.” (Docket Entry # 28-2, ¶ 8) (Docket Entry # 31, ¶ 18) (Docket Entry # 28-4, p. 102).

         On February 4, 2011, a series of water intrusions from melting ice and snow caused interior damage to the ceiling, walls, and flooring inside plaintiff's buildings (“interior damage”). (Docket Entry # 28-2, ¶ 3) (Docket Entry # 31, ¶ 3). Three days later, on February 7, 2011, plaintiff notified defendant of an insurance claim arising from the flooding. (Docket Entry # 28-2, ¶ 2) (Docket Entry # 31, ¶ 2). In March 2011, plaintiff hired Criterium Turner Engineers as an expert consultant to assess the damage. (Docket Entry # 28-2, ¶ 5) (Docket Entry # 31, ¶ 5) (Docket Entry # 30-2, ¶ 3) (Docket Entry # 30-3, ¶ 3).[1] In July 2011, defendant made payments to plaintiff in order to rectify the interior damage resulting from the water intrusion and closed the claim. (Docket Entry # 28-2, ¶ 4) (Docket Entry # 31, ¶ 4).[2] The interior damage is not at issue in this litigation. (Docket Entry # 28-2, ¶ 4) (Docket Entry # 31, ¶ 4).

         After July 2011, plaintiff hired additional outside consultants to determine whether the water intrusions caused damage to the exterior walls, roofs, and siding of the condominium units (“exterior damage”).[3] (Docket Entry # 30-2, ¶ 3) (Docket Entry # 30-3, ¶ 3) (Docket Entry # 28-2, ¶ 5) (Docket Entry # 31, ¶ 5).[4] In September 2011, October 2011, March 2012, and June 2012, plaintiff hired and consulted with expert consultants to investigate the matter. (Docket Entry # 30-2, ¶ 3) (Docket Entry # 30-3, ¶ 3) (Docket Entry # 28-2, ¶ 5) (Docket Entry # 31, ¶ 5).[5] After receiving reports from its expert consultants after September 1, 2012, plaintiff estimated the repair costs for the exterior damage to be seven million dollars. (Docket Entry # 30-2, ¶ 3) (Docket Entry # 30-3, ¶ 3). By January 31, 2013, the expert consulting firm plaintiff hired in October 2011 expressed the belief “that ‘there is some damage that they will be able to positively identify that reflates to ice dams.'” (Docker Entry # 28-2, ¶ 5) (Docket Entry # 31, ¶ 5).[6] It is the policy's coverage, if any, for this exterior damage to the external structure of the condominium units that forms the central issue of this case.[7]

         On January 31, 2013, Jeff Grosser (“Grosser”), vice president of Rodman Insurance Agency (“Rodman”), defendant's local insurance agent, [8] emailed David Barrett of Crowninshield Management Corporation (“Crowninshield”), plaintiff's property management company. (Docket Entry # 28-2, ¶ 6) (Docket Entry # 31, ¶ 6). Correspondence from Rodman to Cronwinshield states the following: “‘Confirming that you did inquire about the merits of filing a supplemental claim related to the large ice dam loss because the contractor has indicated that there may be additional damage resulting from that loss.'” (Docket Entry # 28-6).

         On April 2, 2013, David Barrett (“Barrett”) of Crowninshield sent additional communication to Debbie Morda and Grosser of Rodman stating: “‘The board would like to investigate opening up a supplemental claim associated with a prior ice dam claim.'” (Docket Entry # 28-2, ¶ 8) (Docket Entry # 31, ¶ 8) (Docket Entry # 28-7). The email also requested contact with a Rodman insurance adjustor. (Docket Entry # 28-2, ¶ 8) (Docket Entry # 31, ¶ 8) (Docket Entry # 28-7).

         The following day, April 3, 2013, Christine Nemet (“Nemet”) of Rodman forwarded Barrett's April 2 email to Michael Kearney (“Kearney”), an adjuster at LaMarche Associates, Inc. (“LaMarche”). (Docket Entry # 28-2, ¶ 9) (Docket Entry 31, ¶ 9) (Docket Entry # 28-8, p. 2). LaMarche is an independent insurance adjustor that defendant had previously retained to evaluate and adjust the interior damages resulting from the flooding. (Docket Entry # 28-2, ¶ 9) (Docket Entry # 31, ¶ 9). In an April 3, 2013 reply email to Nemet, Kearney states that, “‘the two-year statute has expired on this claim that occurred in February 4, 2011.'” (Docket Entry # 28-2, ¶ 9) (Docket Entry # 31, ¶ 9) (Docket Entry # 28-8). Notably, Kearney also sent this email to Barrett and to John Auli (“Auli”), plaintiff's senior claims examiner. (Docket Entry # 28-8). In an email less than two hours later, Nemet asked Kearney to revisit the question of whether the statute of limitations had expired on claims arising from the exterior damage and that she needed “Greater New York” (“GNY”) “to authorize this supplemental.” (Docket Entry # 28-2, ¶ 9) (Docket Entry # 31, ¶ 9) (Docket Entry # 30-2, p. 5). Nemet's email also forwarded Rodman's January 31, 2013 email, which Nemet describes as “confirming there is a possible supplemental claim” sent “before the statute was up.” (Docket Entry # 28-2, ¶ 9) (Docket Entry # 31, ¶ 9) (Docket Entry # 30-2, p. 5).

         Later that morning, Steven Baroncini (“Baroncini”), defendant's vice president of property claims, sent a communication to Nemet at Rodman and Kearney at LaMarche further discussing the expiration of the limitations period.[9] (Docket Entry # 30-2, p. 5). Baroncini's email states that “[t]he suit limitation has passed, but that does not preclude the insured from reporting a supplement to their claim.” (Docket Entry # 30-2, p. 5).

         On April 4, 2013, LaMarche, writing on defendant's behalf, sent a reservation of rights letter to plaintiff in care of Crowninshield and to the attention of Barrett. (Docket Entry # 28-9) (Docket Entry # 28-2, ¶ 10) (Docket Entry # 31, ¶ 10). While the letter acknowledges that defendant would be “investigating . . . the supplemental claim, ” it also states defendant's intention to proceed with the investigation under a full reservation of rights. (Docket Entry # 28-9). The letter informs plaintiff that, “None of [defendant's] activities to date are to be construed as an admission of liability nor as a waiver of any of the rights or defenses available under the terms and conditions of the policy, all of which are hereby reserved.”10 (Docket Entry # 28-9).

         On or about August 8, 2013, defendant wrote to plaintiff to explain defendant's coverage position relative to plaintiff's supplemental claim. (Docket Entry # 28-2, ¶ 12) (Docket Entry # 31, ¶ 12). Denying coverage for the supplemental claim, the correspondence restated the terms set forth in the insurance policy including that: “no one may bring legal action against the insurance company unless: 1. There has been full compliance with all the terms of this coverage part; and 2. The action is brought within two years after the date on which the direct physical loss or damage occurred.” (Docket Entry # 28-2, ¶ 12) (Docket Entry # 31, ¶ 12) (Docket Entry # 28-10, p. 4). Following this denial of coverage, plaintiff retained counsel to assist with the supplemental claim. (Docket Entry # 31, ¶ 34) (Docket Entry # 34-1, ¶ 34). On December 19, 2013, Barrett responded to defendant's coverage position on plaintiff's behalf, advising that plaintiff “does not accept the findings in the rejection letter, ” and that it would provide additional information on the claim. (Docket Entry # 28-2, ¶ 13) (Docket Entry # 31, ¶ 13) (Docket Entry # 28-11).

         On May 30, 2014, Richard E. Quinby, Esq. (“Quinby”), plaintiff's counsel at the time, sent a letter to Auli requesting a reconsideration of the coverage denial made last year. (Docket Entry # 28-12). The letter asserts that various consultants advised plaintiff in “late 2012 or early 2013” that “there may be water penetration” to “the building envelope.” (Docket Entry # 28-12). The letter estimates the total cost of repair “to be $7.75 million.” (Docket Entry # 28-12). Acknowledging that defendant already made payments to repair the interior damage, the letter re-asserts plaintiff's position that the exterior damage should also be covered. (Docket Entry # 28-12). The letter concludes that if defendant did not pursue mediation prior to June 9, 2014, plaintiff would “file the appropriate action.” (Docket Entry # 28-12).

         After plaintiff's counsel asked defendant to reconsider the denial of coverage, defendant agreed to reconsider the denial. (Docket Entry # 30-2, ¶ 7) (Docket Entry # 30-3, ¶ 6) (Docket Entry # 34-1, ¶ 34). On July 30, 2014, defendant “through its coverage counsel sent a demand for examination under oath and request for production of documents.” (Docket Entry # 28-2, ¶ 19) (Docket Entry # 31, ¶ 19) (Docket Entry # 28-15). In this letter, defendant reiterated its reservation of rights, including the right to assert a statute of limitations defense. (Docket Entry # 28-15, p. 3). The letter sets forth the reservation of rights in the following manner:

This reservation includes, but is not limited to, reservation of its rights to continue to disclaim any obligations under this policy, if investigation of the circumstances surrounding this loss would so warrant, and to avail itself of any other policy defenses which it may have or which may arise including, without limitation, all rights and defenses arising out of the duties of the insured provisions and the exclusionary provisions.
Any and all investigations taken by Strathmore . . . shall not constitute a waiver of, or an estoppel to assert, any of the terms of the policy . . . or any rights or defenses . . ., including . . . limitations of actions . . ..

(Docket Entry # 28-15, p. 3). In addition to the reservation of rights, the letter requests that plaintiff provide additional information. (Docket Entry # 31, ¶ 36) (Docket Entry # 34-1, ¶ 36). Plaintiff provided certain additional information and produced two witnesses who made statements under oath. (Docket Entry # 31, ¶ 36) (Docket Entry # 34-1, ¶ 36).

         During defendant's investigation of the claim for exterior damage, Quinby, plaintiff's counsel at the time, interacted with defendant's counsel. Together with Langweber, Quinby gathered materials and produced documents requested by defendant's counsel. (Docket Entry # 30-3, ¶¶ 2, 10) (Docket Entry # 30-2, ¶ 8). Quinby avers that defendant's counsel “assured” him that defendant would “attempt to amicably resolve” the claim for exterior damage after contemplating the investigation. (Docket Entry # 30-3, ¶ 9).

         In an email on August 13, 2014 to defendant's counsel, Quinby recounted his efforts to compile the documents and stated that he “can withhold bringing an action . . . if we can agree on a tolling agreement.” (Docket Entry # 34-2, p. 4). In a reply email on September 5, 2014, defendant's counsel stated that “GNY would consider agreeing to” a tolling agreement “so long as the tolling agreement does not serve to revive any expired statute of limitations.” (Docket Entry # 34-2, p. 3) (emphasis added). In a reply email two hours later, plaintiff's counsel stated he “agree[d] on the tolling agreement.” (Docket Entry # 34-2, p. 3).

         In December 2014, both parties entered into a tolling agreement (“Tolling Agreement”) with an effective date “as of September 1, 2014.” (Docket Entry # 28-2, ¶ 15) (Docket Entry # 31, ¶ 15) (Docket Entry # 28-13, pp. 1, 4). The pertinent parts, which appear in paragraphs two and four, are as follows:

2.) This Tolling Agreement will terminate 30 calendar days after Strathmore Insurance Company notifies in writing The Meadows at Mainstone Farm Condominium Trust of its decision related to the Supplemental Claim (“Termination Date”).
4.) This Tolling Agreement shall not in any manner revive, resurrect, or create any claims, rights, causes of action or suits which have expired or are barred by any applicable statute of limitations or repose or other rule, provision, defense or principle based upon the passage of time (including, without limitation, waiver, estoppel and laches) whether statutory, contractual or otherwise existing as of the Effective Date or limit in any way the assertion of any defense available as of the Effective Date related to the Claim and Supplemental Claim.

(Docket Entry # 28-13, ¶¶ 2 & 4) (emphasis added). In the Tolling Agreement, the parties also agreed that the period from the agreement's effective date (September 1, 2014) to its termination date (30 days after defendant's coverage decision) would not be “asserted or relied upon in any way to compute” the running of the statute of limitations. (Docket Entry # 28-13, ¶¶ 1, 2).[11]

         On or about November 17, 2016, defendant provided plaintiff with a detailed basis for declining coverage for the supplemental claim for exterior damage. (Docket Entry # 28-2, ¶ 16) (Docket Entry # 31, ¶ 16). On December 17, 2016, in response to its receipt of the letter declining claim coverage, plaintiff filed this action. (Docket Entry # 28-2, ¶ 17) (Docket Entry # 31, ¶ 17).


         Summary judgment is designed “‘to pierce the boilerplate of the pleadings and assay the parties' proof in order to determine whether trial is actually required.'” Dávila v. Corporación De Puerto Rico Para La Difusión Pública, 498 F.3d 9, 12 (1st Cir. 2007). It is appropriate when the summary judgment record shows “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). It is inappropriate “if the record is sufficiently open-ended to permit a rational factfinder to resolve a material factual dispute in favor of either side.” Pierce v. Cotuit Fire Dist., 741 F.3d 295, 301 (1st Cir. 2014).

         “An issue is ‘genuine' when a rational factfinder could resolve it [in] either direction” and a “fact is ‘material' when its (non)existence could change a case's outcome.” Mu v. Omni Hotels Mgmt. Corp., 882 F.3d 1, 5 (1st Cir. 2018); accord Green Mountain Realty Corp. v. Leonard, 750 F.3d 30, 38 (1st Cir. 2014). Facts are viewed in favor of the non-movant, i.e., plaintiff. See Garcia-Garcia v. Costco Wholesale Corp., 878 F.3d 411, 417 (1st Cir. 2017) (court examines “‘record in the light most favorable to the nonmovant' and must make ‘all reasonable inferences in that party's favor'”); Ahmed v. Johnson, 752 F.3d 490, 495 (1st Cir. 2014). In reviewing a summary judgment motion, a court may examine all of the record materials on file even if not cited by the parties. Fed.R.Civ.P. 56(c)(3); Geshke v. Crocs, Inc., 740 F.3d 74, 77 (1st Cir. 2014). “‘“[C]onclusory allegations, improbable inferences, and unsupported speculation”'” are ignored. Garcia-Garcia v. Costo Wholesale Corp., 878 F.3d at 417.

         With respect to a statute of limitations defense, summary judgment is appropriate “where there is no dispute as to essential evidentiary facts controlling the application of the statute of limitations.” Nunheimer v. Continental Ins. Co., 68 F.Supp.2d 75, 77 (D. Mass. 1999). As an affirmative defense, “‘the defendant bears the burden of establishing” the applicability of the statute of limitations. Asociación de Suscripción Conjunta del Seguro de Responsabilidad Obligatorio v. Juarbe-Jimenez, 659 F.3d 42, 50 n.10 (1st Cir. 2011); see Fed.R.Civ.P. 8(c). As explained by the court in Asociación with respect to the statute of limitations:

“The party who has the burden of proof on a dispositive issue cannot attain summary judgment unless the evidence he provides on that issue is conclusive.” Torres Vargas v. Santiago Cummings, 149 F.3d 29, 36 (1st Cir. 1998) (internal citations omitted). Once the defendant produces such evidence, the burden shifts to the plaintiff to establish that the statute of limitations does not apply.

Id. (emphahsis added). Thus, if defendant provides evidence that the statute of limitations conclusively applies, plaintiff bears the burden to show that any tolling of the limitations period “is within the range where reasonable men and women can differ.”[12] Espada v. Lugo, 312 F.3d 1, 4 (1st Cir. 2002) (noting on summary that “plaintiff bears the burden of proving timeliness by establishing that she lacked the necessary knowledge or imputed knowledge before instituting the action”); Torres v. E.I. Dupont De Nemours & Co., 219 F.3d 13, 19 (1st Cir. 2000).


         A. Breach of Contract

         In Count I, plaintiff asserts that defendant's “failure to honor its contractual obligations and failure to make payment on the full amount of [p]laintiff's loss” under the policy constitutes a breach of contract. (Docket Entry # 1, ¶ 17). In light of defendant's refusal to cover the exterior damage, plaintiff purportedly expended “in excess of seven million dollars repairing the damage.” (Docket Entry # 1, ¶ 18).

         In seeking summary judgment, defendant sets forth the following arguments: (1) the applicable limitations period under the policy, which section 99 sets out by statute, is two years from the time the loss occurred; (2) in Massachusetts, the two-year limitations period in section 99 applies to all claims for first-party property losses; (3) the discovery rule does not apply; and (4) its actions have not waived the statute of limitations or estopped it from asserting such a defense. (Docket Entry # 28-1). As such, plaintiff's failure to file suit on or before February 4, 2013 forecloses its claims, according to defendant. (Docket Entry # 28-1).

         In Massachusetts, section 99 sets out a standard form and content to include in property policies insuring against loss or damage by fire. Mass. Gen. Laws ch. 175, § 99. The language includes a two-year limitations period. Mass. Gen. Laws ch. 175, § 99. In accordance with section 99's requirements, plaintiff's policy with defendant contains the following provision:

No suit or action against this company for the recovery of any claim by virtue of this policy shall be sustained in any court of law or equity in this commonwealth unless commenced within two years from the time the loss occurred[.]

(Docket Entry # 28-4, p. 110) (emphasis added); see Mass. Gen. Laws ch. 175, § 99 (containing same language). Plaintiff argues that the limitations language found in Massachusetts General Laws chapter 175, section 22 (“section ...

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