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Access Limousine Service, Inc. v. Service Insurance Agency, LLC

United States District Court, D. Maryland

October 19, 2016

ACCESS LIMOUSINE SERVICE, INC., Plaintiff,
v.
SERVICE INSURANCE AGENCY, LLC and TIMOTHY O'BRYAN, Defendants.

          MEMORANDUM OPINION

          THEODORE D. CHUANG UNITED STATES DISTRICT JUDGE

         Plaintiff Access Limousine Service, Inc. ("Access") has filed a negligence claim against Defendants Service Insurance Agency ("SIA") and Timothy O'Bryan (collectively, "Defendants") arising from Defendants' late notification to Access of its decision not to renew Access's insurance policy. This matter is before the Court on Defendants' Motion for Summary Judgment, ECF No. 21, filed on May 5, 2016 (the "First Motion for Summary Judgment"), and Defendants' Motion for Summary Judgment Regarding Plaintiffs Lack of Necessary Expert Witnesses, ECF No. 41, filed on August 12, 2016 (the "Second Motion for Summary Judgment"). The issues before the Court are (1) whether Access is precluded by judicial estoppel from bringing its negligence claim because it failed to schedule the claim in an earlier bankruptcy proceeding; and (2) whether Defendants are entitled to judgment as a matter of law because the Court has stricken Access's proposed damages expert. Both motions are briefed and ripe for disposition, and no hearing is necessary to resolve them. See D. Md. Local R. 106.5. For the reasons set forth below, both motions are DENIED.

         BACKGROUND

         Access is a Maryland corporation that provides transportation services. In order to operate its business, Access is required to maintain a commercial automobile insurance policy. Between 1993 and 2013, Access fulfilled this requirement by maintaining a commercial automobile insurance policy administered by SIA, a Virginia-based insurance company. O'Bryan, SIA's owner, served as Access's broker and in that capacity was responsible for the renewal, adjustment, and administration of Plaintiff s insurance policy.

         On May 30, 2013, Defendants provided Access with an application to renew its insurance policy, which was set to expire on August 12, 2013. Access returned the forms on May 31, 2013. Neither Defendant contacted Access again until August 7, 2013, when Defendants informed Access that they were unable to renew its policy and that the policy would be expiring in five days. Access had not expected that it would be unable to renew its insurance policy and could not obtain new insurance before the August 12, 2013 expiration date. Neither Defendant took any action to help Access extend the policy or procure a new one, and after the expiration date passed, Access was unable to operate its business because it lacked the required insurance coverage. Although Access secured alternative insurance coverage from another carrier within 90 days, it suffered "significant economic loss" in the meantime. Compl. ¶ 14, ECF No. 2.

         I. Access's Bankruptcy

         On September 13, 2013, Access filed for Chapter 11 Bankruptcy in the United States Bankruptcy Court for the District of Maryland. See Voluntary Petition, First Mot. Summ. J. Ex. A, ECF No. 21-3. Access's Schedule of Personal Property, filed on October 8, 2013, stated that Access's assets included automobiles, vans, and other vehicles, some of which had. been repossessed; approximately $13, 300 in six different bank accounts; and assorted office furnishings and computers. Next to the line for "Other contingent and unliquidated claims of every nature, including tax refunds, counterclaims of the debtor, and rights to setoff claims, " Access indicated that it had no such claims by placing an "X" in the space labeled "NONE." See Schedule B - Personal Property, First Mot. Summ. J. Ex. B, ECF No. 21-4. Keyvan Shokraei, Access's President, signed a "Declaration Concerning Debtor's Schedules" in which he stated under penalty of perjury that the schedules were true and correct to the best of his knowledge, information, and belief. Access filed an amended schedule on October 28, 2013, which again did not identify any legal claims as assets.

         Access was never granted a discharge in bankruptcy. On January 31, 2014, the United States Trustee filed a Motion to Convert Case to Chapter 7 or, in the Alternative, to Dismiss the Case. In its Motion, the Trustee asserted that Access had failed to file required monthly operating reports, make required fee payments to the Office of the United States Trustee, provide information requested by the Trustee, and file a reorganization plan and disclosure statement. See Motion to Convert Case to Chapter 7 or, in the Alternative, to Dismiss Case, In re Access Limousine Service, Inc., No. 13-25615, at 2-5 (Bankr. D. Md. Jan. 31, 2014), Dkt. No. 93.[1]The Trustee asserted that because Access had not "taken any affirmative steps to move this case toward confirmation, " "the best interests of the estate and the creditors would be served ... by converting this case to Chapter 7 or dismissing it." Id. at 5. Access filed an Objection denying the Trustee's assertions and submitted several of the missing monthly operating reports. Nevertheless, the bankruptcy court ordered the case dismissed and terminated the automatic stay on April 8, 2014.

         II. Procedural History

         On December 4, 2015, Access filed this suit for negligence against Defendants in the Circuit Court of Maryland for Prince George's County, asserting that Defendants caused Access to lose its mandatory insurance coverage by (1) failing timely to notify Access regarding the cancellation or non-renewal of its policy and (2) failing to maintain Access's policy or secure alternative coverage. Access asserts that Defendants are liable for $500, 000 in damages for losses suffered during the period it was unable to operate because it was uninsured.

         Defendants timely removed the matter to this Court and properly invoked diversity jurisdiction pursuant to 28 U.S.C. § 1332 because Access is a citizen of Maryland and Defendants are citizens of Virginia. In an Amended Answer filed on April 5, 2016, Defendants asserted the defense of judicial estoppel. On May 5, 2016, Defendants filed the First Motion for Summary Judgment. Access filed its Opposition to the Motion on May 23, 2016. Defendants filed a reply brief on May 25, 2016.

         With the First Motion for Summary Judgment pending, the Parties proceeded to discovery. On June 7, 2016, Defendants filed a Motion to Strike Plaintiffs Expert Designations. While that motion was pending, on August 12, 2016, Defendants filed the Second Motion for Summary Judgment. Access filed its Opposition to the Second Motion on August 29, 2016. After a hearing on September 14, 2016, United States Magistrate Judge Charles B. Day denied the Motion to Strike as to Access's standard of care expert, but granted the motion as to Access's damages expert.

         DISCUSSION

         In their First Motion for Summary Judgment, Defendants invoke the doctrine of judicial estoppel and argue that Access is barred from bringing this lawsuit because Access did not list the negligence claim as an asset in its Chapter 11 bankruptcy Schedule of Personal Property. Access contends that judicial estoppel is unwarranted in this case because the omission was unintentional. In their Second Motion for Summary Judgment, Defendants assert that they are entitled to judgment as a matter of law because Access cannot prove the existence and amount of damages without its expert witness on damages, whose ...


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