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Carlyle v. Travelers Home and Marine Insurance Co.

United States District Court, D. Maryland, Northern Division

November 19, 2014

CARVET CARLYLE, Plaintiff,
v.
THE TRAVELERS HOME AND MARINE INSURANCE COMPANY, Defendant.

MEMORANDUM OPINION

WILLIAM D. QUARLES, Jr., District Judge.

Carvet Carlyle sued The Travelers Home and Marine Insurance Company ("Travelers") in the Circuit Court for Baltimore City for breach of contract. ECF No. 2. Travelers removed to this Court. ECF No. 1. Pending is Travelers's motion for reconsideration of the Court's June 5, 2014 Order denying its motion to dismiss Count II of Carlyle's Second Amended Complaint as moot, and granting Carlyle's motion for leave to file a third amended complaint. ECF No. 38.[1] No hearing is necessary. Local Rule 105.6 (D. Md. 2014). For the following reasons, Travelers's motion for reconsideration will be denied.

I. Background[2]

A. Facts

Since August 11, 1999, Carlyle[3] has owned a home at 4124 Marx Avenue in Baltimore, Maryland (the "Baltimore home"). ECF No. 36 ¶ 4. Beginning in 2005, Carlyle rented her home to a tenant. Id. ¶ 7.[4] On September 25, 2009, Carlyle purchased a homeowner's insurance policy from Travelers for the period of September 25, 2009 through September 25, 2011 (the "Policy"). Id. ¶ 5. Carlyle paid all the premiums due under the Policy. Id. ¶ 6.

In February 2010, Baltimore "experienced a massive, and largely unprecedented, winter snowstorm that deposited between 2 and 3 feet of snow." Id. ¶ 8. During and after the storm, the Baltimore home sustained damage to the "roof, siding, water pipes, ceilings, walls, floors, fixtures, and personal items" because of the "extreme weather conditions." Id. ¶¶ 9-10. Also in February 2010, someone broke into the Baltimore home, stole Carlyle's personal property, and caused more damage to the home. Id. ¶ 11.

On March 1, 2010, Carlyle reported the property damage and theft to Travelers. Id. ¶ 13. Travelers assigned three claim numbers to Carlyle's report - one to the damaged water pipes; one to the damaged roof and siding; and one to the burglary. Id. ¶¶ 14-16. Each claim had a $1, 000 deductible. See id. ¶¶ 36, 42. Because the snowstorm damage claims "arose out of the same occurrence" - and should have been considered one claim - Travelers improperly obtained two deductibles from Carlyle for snowstorm-related loss. See id. ¶ 36.

Travelers inspected the Baltimore home and initially concluded that the pipe leaks were unrelated to the snowstorm. Id. ¶ 17. However, Travelers later paid Carlyle $2, 365.89[5] for replacing the pipes; this amount is far less than Carlyle's multiple third-party estimates of the actual cost of replacing the pipes. Id. ¶¶ 18-20. "Travelers knew or should have known that no contractor would undertake the repairs for the estimated cost of repair." Id. ¶ 21.

Because Travelers and Carlyle continued to dispute whether other water damage caused by the damaged pipes resulted from the snowstorm, Carlyle "was forced to obtain an independent plumber." Id. ¶¶ 22-23. The plumber concluded that water damage to the basement and other parts of the Baltimore home was attributable to the snowstorm. Id. ¶ 23. This new information prompted Travelers to re-inspect the home. Id. ¶ 24. Although Travelers then recognized that the additional water damage was caused by the snowstorm, it did not increase its payment to Carlyle. Id. ¶¶ 24-25. Instead, Travelers assigned its Special Investigations Unit ("SIU") to extensively investigate Carlyle's "personal affairs to determine whether any exclusion under the terms of the Policy might apply." Id. ¶ 25. The SIU investigation requested "extensive and unreasonable amounts of documentation" from Carlyle, including, inter alia, her income tax returns, proof of her income, and disclosure of her bank accounts and creditors. Id. ¶ 51. During the investigation, Travelers also made "offensive and unsubstantiated... accusations" about Carlyle, including that she "neglected her property and allowed squatters to reside in her home." Id. ¶ 52.

As a result of the delayed repairs to the water damage caused by Travelers's "continued reluctance to provide adequate compensation, " mold developed in the Baltimore home. Id. ¶ 32. Although Carlyle reported the "resultant mold growth" - which was covered by the Policy - to Travelers, it did not increase payment to Carlyle and instead assigned the SIU to determine if an exclusion applied. Id. ¶¶ 33-35. Since March 2010, because of the mold growth, the Baltimore home has been uninhabitable, forcing Carlyle to lose rental income from her tenant and to move elsewhere and pay monthly rent. See id. ¶¶ 58-59.

Travelers also paid Carlyle $3, 122.02[6] for the damage to the siding and roof. Id. ¶ 26. Carlyle contested Travelers's valuation of the damage, and Travelers issued an additional payment of $1, 107.74. Id. ¶ 27. Even with this second payment, Travelers's repair estimate was far less than Carlyle's multiple third-party estimates of the cost of repairing the damage to the home. See id. ¶¶ 28-29. "Travelers knew or should have known" that Carlyle would not be able to obtain the needed repairs for Travelers's estimated cost of repair. Id. ¶ 30.

On March 5, 2010, Carlyle filed a police report about the stolen property. Id. ¶ 39. Although Carlyle provided Travelers "numerous photos, lists and receipts to substantiate the loss, " Travelers claimed that she had not sufficiently documented her loss. See id. ¶¶ 40-41. Travelers eventually paid Carlyle $2, 236.67 for the missing items and $1, 397.20[7] for damage caused by the break-in. Id. ¶ 42. These payments were far less than the amount of actual damage and loss, and Carlyle was unable to find a contractor willing to fix the property damage for Travelers's estimated cost of repair. See id. ¶¶ 43-45. Travelers "knew or should have known" that these payments were insufficient. Id. ¶¶ 46-47.

On May 21, 2012, Travelers issued a final determination letter for Carlyle's snowstorm-related damage claims, which "refused to indemnify [Carlyle] to the full extent of her damages." Id. ¶ 54. On November 14, 2012, Carlyle submitted a complaint to the Maryland Insurance Administration ("MIA"), asserting that Travelers had improperly denied coverage. ECF No. 33-2 at 1.[8] On December 4, 2012, Travelers issued a ...


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