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Jolly v. Nationwide Agribusiness Insurance Co.

United States District Court, D. Maryland

April 6, 2016

CHARLES N. JOLLY, Plaintiff,


Ellen Lipton Hollander United States District Judge

On December 1, 2015, in the Circuit Court for Kent County, plaintiff Charles Jolly filed suit against defendants Nationwide Agribusiness Insurance Company (“Nationwide”) and Allied Property and Casualty Insurance Company (“Allied”), [1] alleging that defendants failed to pay a claim pursuant to a farm insurance policy.[2] ECF 1 ¶ 1, Notice of Removal; see ECF 2, Complaint. The Complaint asserts two claims: bad faith failure to promptly and willingly pay the claim (Court I) and breach of contract (Count II). ECF 2 ¶¶ 19-26. On January 7, 2016, Nationwide removed the case pursuant to 28 U.S.C. §§ 1332(a)(1), 1441, and 1446. ECF 1 at 1.

On January 11, 2016, Nationwide filed a Motion to Dismiss (ECF 9), pursuant to Fed.R.Civ.P. 12(b)(6), accompanied by a memorandum of law (ECF 9-1) (collectively, the “Motion”). Jolly filed an Opposition to the Motion (ECF 20), accompanied by a memorandum of law (ECF 20-1) (collectively the “Opposition”). Nationwide has replied (ECF 25, “Reply”).

The Motion has been fully briefed, and no hearing is necessary to resolve it. See Local Rule 105.6. For the reasons that follow, I will grant the Motion in part and deny it in part.

I. Factual and Procedural Background[3]

On December 14, 2013, Jolly purchased a one-year farm owner’s insurance policy from Nationwide. ECF 2 ¶ 7.[4] According to Jolly, he never received a “complete copy” of his insurance policy. Id. ¶ 8. On January 7, 2014, pipes in a dwelling allegedly covered by the policy burst and caused “extensive damages.” Id. ¶ 9.

Plaintiff contacted Nationwide (id. ¶ 10), which inspected the dwelling and provided an “initial valuation of damages.” Id. ¶ 11. Plaintiff then hired a contractor to perform repairs. Id. ¶ 12. The contractor determined that Nationwide’s valuation of the damages was “insufficient” and that costs would “increase as repairs progressed.” Id. Plaintiff maintains, id. ¶ 14: “Plaintiff was in regular contact with Defendant and/or its agents regarding the damage and repairs being made and that costs were ongoing.” According to Jolly, Nationwide made payments on January 16, 2014, February 7, 2014, and April 2, 2014, totaling $19, 952.69, $11, 555.01, and $4, 873.91, respectively. Id. ¶ 13. Plaintiff submits that these payments were “not final settlements of the claim . . . .” Id. Jolly contends that repairs concluded around November 2014. Id.

Jolly maintains that, after repairs were completed, Nationwide “dragged out its claim period for over an additional year by demanding more documentation of the claim and elaborate explanation of the need for each repair.” Id. ¶ 14. By letter of September 14, 2015, Nationwide denied Jolly further compensation for his loss. ECF 2-2 at 1, Letter from Nationwide to Jolly. It said, in relevant part, id.:

Based on our review of the claim activities an initial estimate was written and a copy [of] said estimate was provided to Mr. Jolly and the undisputed Actual Cash Value payment was released on January 16, 2014[.] Subsequently Mr. Jolly and his contractor reviewed the initial estimate and had some questions as to the scope of this estimate. Nationwide sent a representative back to the loss location to meet with Mr. Jolly and his contractor. Subsequent to that meeting revisions were made to the original estimate and a copy of the revised estimate was issued to Mr. Jolly and another undisputed Actual Cash Value payment was released.
Nationwide was not made of aware [sic] of any additional difference in scope or pricing related to coverage damages related to this claim until Mr. Jolly presented a supplemental demand fro [sic] additional damages on or about November 25, 2014 subsequent to the completion and renovation of the loss location[.]
Based on our review of the Farm Property Coverage Form- FP70010 0701 and the opening statement in the estimate provided by Nationwide we will be unable to increase the scope of loss or increase our settlement related to the above captioned claim because Nationwide was not made aware of the additional claimed damage and not provided access to re-inspected [sic] the claimed additional damage.

Thereafter, Jolly filed suit. He appended to his Complaint Nationwide’s letter of September 14, 2015 (ECF 2-2), which includes the claim number for his claim (id. at 1), and quotes “policy language found in the Form Property Coverage Form . . . .” Id. at 2. Jolly also submitted a copy of “Your Farmowners Insurance Portfolio” (the “Portfolio”). ECF 2-1. In particular, the Portfolio provides Jolly’s policy and billing account numbers (id. at 1), as well as the address of the insured property. Id. at 7. It also includes farm property schedules (id. at 8-11), which identify the insured property, including a “dwelling, ” a “pole building, ” a “John Deere, ” and “household personal property.” Id. at 8. In addition, the Portfolio includes a “Farm Endorsements Schedule, ” which provides further information about coverage endorsements and exclusions. Id. at 13.

II. Failure to State a Claim

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