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

United States District Court, D. Maryland

August 11, 2017



          THEODORE D. CHUANG, United States District Judge

         In 2013, Defendants Service Insurance Agency, LLC ("SIA"), an insurance brokerage, and Timothy O'Bryan, an insurance broker, notified Plaintiff Access Limousine Service, Inc. ("Access") that Access's insurance policy would not be renewed for the following year. According to Access, Defendants did not give Access sufficient notice of the nonrenewal to permit Access to obtain a new insurance policy before its coverage lapsed, and the resulting lapse in coverage damaged Access's business. Access has now brought this civil action, alleging that Defendants' conduct was negligent and that Access is entitled to $500, 000 in damages as a result. Defendants have filed a Motion for Summary Judgment in which they assert that they are entitled to summary judgment because Access cannot prove damages. For the reasons that follow, the Motion is GRANTED.


         I. The Insurance Policy

         Access provides transportation services and is required to maintain a commercial vehicle insurance policy in order to operate its business. From 1993 to 2013, Access maintained such an insurance policy administered by SIA. O'Bryan served as Access's broker and was responsible for the renewal, adjustment, and administration of Access's insurance policy.

         On May 31, 2013, Access provided SIA with a completed application to renew its insurance policy, which was set to expire on August 12, 2013. Access did not hear from O'Bryan or any other SIA employee until August 7, 2013, when Defendants informed Access that the policy could not be renewed and would be expiring in five days. Access was unable to procure new insurance before the policy expired on August 12, 2013. As a result, it could not operate its business until it obtained new coverage in September 2013.

         II. Damages

         Access has claimed that it suffered lost profits as a result of Defendants' negligent conduct. In an interrogatory response, Access claimed that it "sustained damages of approximately $10, 000, 000" because it was "left without insurance coverage for 30 days." Interrog. No.6, Mot. Summ. J. Ex. B at 5, ECF No. 57-3. Specifically, Access asserts that it lost profits when TripperBus, a company with which Access had a service contract it claims was worth $1.9 million, terminated that contract on August 12, 2013 because Access no longer had vehicle insurance. Access also claims that it lost profits relating to "prospeciive business opportunities" that were thwarted by the loss of insurance. Pl's Opp'n Mot. Summ. J. ("Opp'n") at 1-2, ECF No. 58.

         To establish the alleged lost profits relating to the cancellation of the TripperBus contract, Access provided an interrogatory response stating that due to the lapse in insurance:

Access was unable to operate and its contract with T[r]ipperBus, another transportation company ... was immediately terminated resulting [in] the laying off of 98% of Access's workforce. The T[r]ipperBus contract was worth $1, 900, 000.00. Access continued to suffer losses of revenue due to the layoffs. Had Access not been forced to layoff its workforce and not lost the contract with T[r]ipperbus, Access would have had estimated annual revenues of $3, 000, 000.00 to $5, 000, 000.00 between 2013 and the present.

         Interrog. No.6, Mot. Summ. J. Ex. B at 5-6. Access also provided a letter dated November 15, 2016, attached as an exhibit to Access's Opposition, in which a TripperBus official stated that:

This is to confirm as of August 12, 2013 I terminated the contract between Access Limousine and TripperBus to and from NY and Arlington/Bethesda due for not be able [sic] to provide TripperBus a Certificate of Insurance.

Opp'n Ex. 2, ECF No. 58-2. In addition, Access offered the deposition testimony of Keyvan Shokraei, Access's President, who testified that "[w]e had a contract that once they find out our insurance is cancelled, they withdraw their contract, " such that Access did not "make that money." Shokraei Dep. at 16:14-21, Dec. 6, 2016, Opp'n Ex. 3, ECF No. 58-3 (hereinafter, "2nd Shokraei Dep."). However, Shokraei admitted that he did not know how much the contract would have generated in profits for Access. No other evidence in the record describes the TripperBus contract.

         As for the lost profits on "prospective business opportunities, " Access relied on the deposition testimony Shokraei as well as that of Anna Anderson, the Access employee in charge of Access's books and records. Shokraei was unable to establish Access's profit or loss for August 2013, the month of the insurance cancellation. He estimated that the profit margin for the year prior to that month was "35 to 40 percent, " 2nd Shokraei Dep. at 21:11-19, but admitted that this figure represented Access's monthly targets rather than actual profits and was based on speculation:

Q: On what do you base your estimate that your profit margin was about 35 to 40 percent?
A: Based on how much our expenses are.
Q: What documents were reviewed in arriving at that conclusion?
A: We always operate our prices between 35 to 40 percent. Now, if we can't get that much, that's a different story, ...

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