United States District Court, D. Maryland
BLISSFUL ENTERPRISES, Inc. Plaintiff,
CINCINNATI INSURANCE COMPANY, Defendant.
L. Russell, III United States District Judge.
MATTER is before the Court on Defendant Cincinnati Insurance
Company's (“Cincinnati”) Motion for Summary
Judgment (ECF No. 21) and Plaintiff Blissful Enterprises,
Inc.'s (“Blissful”) Opposition to
Defendant's Motion for Summary Judgment and Cross-Motion
for Summary Judgment (“Cross-Motion”) (ECF No.
23). The Motions are ripe for disposition, and no hearing is
necessary. See Local Rule 105.6 (D.Md. 2018). For
the reasons outlined below, the Court will grant
Cincinnati's Motion and deny Blissful's Motion.
owns and operates a hotel (the “Hotel”) at 2112
Emmorton Park Road in Edgewood, Maryland (the
“Property”). (Compl. ¶¶ 1, 11, ECF No.
2). Blissful insured the Property via a policy issued by
Cincinnati (the “Policy”). (Id. ¶
11; id. Ex. 1 [“Policy”], ECF No.
2-1). The Policy provides All Risk Coverage, or
Open Peril coverage, that is, coverage for all risk of loss
unless excluded by the Policy. (Id. ¶ 13).
Blissful purchased additional coverage included in a Hotel
Commercial Property Endorsement (the
“Endorsement”). (Compl. ¶ 20; Policy at
82-102). The Property contains a storm water drainage system
connected to the Hotel that “drains water from around
the building, and water from off the roof of the building,
through a system of pipes which feed into an underground
pipe.” (Id. ¶ 23).
January 14, 2016,  Blissful employees cleaning up leaves on
the Property noticed what appeared to be a
“sinkhole” next to the building. (Gregory Aff.
¶ 6, ECF No. 21-5; Def.'s Mot. Summ. J.
[“Def.'s Mot.”] Ex. 1(A) [“Cincinnati
Claim Notes”] at 8, ECF No. 21-6). Blissful reported
the incident (the “Loss”) to Cincinnati, stating
that underground pipes may be damaged. (Id.; Compl.
¶ 29). On January 20, 2016, John Gregory, a Cincinnati
Senior Claims Specialist, sent Blissful a Reservation of
Rights letter and noted that, “if there are damages to
underground pipes, drains, or flues, they must be physically
attached to Covered Property for the policy to
respond.” (Gregory Aff. ¶ 8; Cincinnati Claim
Notes at 8). Blissful retained William Baker to investigate
the loss and attached to its insurance claim his February 3,
2016 letter, which stated that a “metal pipe has failed
at the connection to the existing concrete manhole [which
resulted in] a large amount of soil be[ing] displace[d] down
the pipe, . . . caus[ing] two small retaining walls to fail
and to void soil from under concrete and stone inlet aprons
located in a drainage swale.” (Def.'s Mot. Ex 1(C)
[“Baker Letter”], ECF No. 21-8). Baker referred
to the loss as a “sinkhole.” (Id.). In a
February 4, 2016 email, Gregory emailed a Blissful
representative this statement: “based on the
engineer's report and hotel site plan, we will provide
coverage for the underground piping, however, as you are
aware, the policy will not respond to filling the sinkhole
itself.” (Compl. ¶ 30; Cincinnati Claim Notes at
11). Blissful then submitted an estimate (the
“Estimate”) of the repair and restoration cost,
$335, 484.00, (Compl. ¶ 31; id. Ex. 2
[“Estimate”], ECF No. 2-2). Surprised by the
repair cost, Cincinnati chose to inspect the loss and
evaluate the proposal. (Gregory Aff. ¶ 16). Upon
investigation, Cincinnati wrote to Baker, asking him to
explain how the loss satisfied the Policy's definition of
“sinkhole.” (Cincinnati Claim Notes at 29-30).
Baker could not confirm that it was, in fact, a sinkhole, so
Cincinnati and Blissful each retained an expert, and the
parties arranged a joint inspection of the Property for May
23, 2016. (Gregory Aff. ¶¶ 18-21). Following the
inspection, Blissful's expert, Robert Najewicz, reported
that “the bottom portion of the metal pipe was
significantly corroded resulting in a loss in the structural
integrity of the pipe that in turn appears to have
contributed to the lateral deflection or shearing in the pipe
and its subsequent collapse.” (Def.'s Mot. Ex. 2
[“Najewicz Report”] at 2, ECF No. 21-12).
Cincinnati's expert, August Domel, agreed that
“[t]he hole has occurred because of a breach in the
pipe where it connects to the manhole has resulted in soil
movement, ” which “allowed for the soil in the
area to enter the pipe and be transported away leaving a
hole.” (Def.'s Mot. Ex. 1(E) [“Domel
Report”] at 4, ECF No. 21-10). Domel disputed
Baker's sinkhole characterization because a sinkhole is
“a ground depression caused by the dissolving of soft
rocks naturally by groundwater circulating through them,
” whereas the Loss was related to pipe collapse.
(Id.). On August 1, 2016, having concluded the loss
was not actually a sinkhole or otherwise covered, Cincinnati
denied Blissful's claim. (Compl. ¶ 32; Gregory Aff.
about March 23, 2018, Blissful sued Cincinnati in the Circuit
Court for Harford County, Maryland. (Not. Removal at 1, ECF
No. 1). In its two-count Complaint, Blissful alleges: breach
of contract (Count I); and, in the alternative, promissory
estoppel (Count II). Blissful alleges the underground pipe
“collapsed due to decay hidden from view, and/or due to
defective material or methods by which the pipe was
installed, or due to breaking apart of the drain
system.” (Compl. ¶ 24). “Alternatively the
area containing the underground pipe sustained sinkhole
damage for which Cincinnati agreed coverage existed under the
Policy.” (Id. ¶ 25). Blissful alleges the
Loss is covered by the Policy's Collapse Coverage
Extension, (id. ¶¶ 17-19), or via the
Endorsement's coverage for underground pipes, flues or
drains, (id. ¶¶ 20-22).
April 26, 2018, Cincinnati removed the case to this Court.
(ECF No. 1). On December 11, 2018, Cincinnati filed its
Motion for Summary Judgment. (ECF No. 21). On January 2,
2019, Blissful filed an Opposition and Cross-Motion for
Summary Judgment. (ECF No. 23). On January 22, 2019,
Cincinnati filed an Opposition to the Cross-Motion and Reply
with respect to its Motion. (ECF No. 24). On January 31,
2019, Blissful filed a Reply. (ECF No. 25).
Standard of Review
reviewing a motion for summary judgment, the Court views the
facts in a light most favorable to the nonmovant, drawing all
justifiable inferences in that party's favor. Ricci
v. DeStefano, 557 U.S. 557, 586 (2009); Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (citing
Adickes v. S.H. Kress & Co., 398 U.S. 144,
158-59 (1970)). Summary judgment is proper when the movant
demonstrates, through “particular parts of materials in
the record, including depositions, documents, electronically
stored information, affidavits or declarations, stipulations
. . . admissions, interrogatory answers, or other materials,
” that “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), (c)(1)(A).
Significantly, a party must be able to present the materials
it cites in “a form that would be admissible in
evidence, ” Fed.R.Civ.P. 56(c)(2), and supporting
affidavits and declarations “must be made on personal
knowledge” and “set out facts that would be
admissible in evidence, ” Fed.R.Civ.P. 56(c)(4).
motion for summary judgment is properly made and supported,
the burden shifts to the nonmovant to identify evidence
showing there is genuine dispute of material fact. See
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 586-87 (1986). The nonmovant cannot create a
genuine dispute of material fact “through mere
speculation or the building of one inference upon
another.” Othentec Ltd. v. Phelan, 526 F.3d
135, 141 (4th Cir. 2008) (quoting Beale v. Hardy,
769 F.2d 213, 214 (4th Cir. 1985)).
“material fact” is one that might affect the
outcome of a party's case. Anderson, 477 U.S. at
248; see also JKC Holding Co. v. Wash. Sports Ventures,
Inc., 264 F.3d 459, 465 (4th Cir. 2001) (citing
Hooven-Lewis v. Caldera, 249 F.3d 259, 265 (4th Cir.
2001)). Whether a fact is considered to be
“material” is determined by the substantive law,
and “[o]nly disputes over facts that might affect the
outcome of the suit under the governing law will properly
preclude the entry of summary judgment.”
Anderson, 477 U.S. at 248; accord
Hooven-Lewis, 249 F.3d at 265. A “genuine”
dispute concerning a “material” fact arises when
the evidence is sufficient to allow a reasonable jury to
return a verdict in the nonmoving party's favor.
Anderson, 477 U.S. at 248. If the nonmovant has
failed to make a sufficient showing on an essential element
of her case where she has the burden of proof, “there
can be ‘no genuine [dispute] as to any material
fact,' since a complete failure of proof concerning an
essential element of the nonmoving party's case
necessarily renders all other facts immaterial.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
the parties have filed cross-motions for summary judgment,
the court must “review each motion separately on its
own merits to ‘determine whether either of the parties
deserves judgment as a matter of law.'”
Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir.
2003) (quoting Philip Morris Inc. v. Harshbarger,
122 F.3d 58, 62 n.4 (1st Cir. 1997)). Moreover, “[w]hen
considering each individual motion, the court must take care
to ‘resolve all factual disputes and any competing,
rational inferences in the light most favorable' to the
party opposing that motion.” Id. (quoting
Wightman v. Springfield Terminal Ry. Co., 100 F.3d
228, 230 (1st Cir. 1996)). The Court, however, must also
abide by its “affirmative obligation” to
“prevent factually unsupported claims and
defenses” from going to trial. Drewitt v.
Pratt, 999 F.2d 774, 778-79 (4th Cir. 1993) (quoting
Felty v. Graves-Humphreys Co., 818 F.2d 1126, 1128
(4th Cir. 1987)). If the evidence presented by the nonmovant
is merely colorable, or is not significantly probative,
summary judgment must be granted. Anderson, 477 U.S.
argues that the Policy does not cover the Loss, regardless of
which coverage part Blissful cites in support of its claim.
Cincinnati also argues that it is not estopped from asserting
Policy defenses and that Blissful should not be permitted to
claim damages for a retaining wall. Blissful maintains the
Policy covers the Loss, either under the Collapse Coverage
Extension or the Hotel Commercial Property Endorsement's
Underground Property Extension, that Cincinnati is estopped,
and that the Court should allow the retaining wall to be part
of its claim. At bottom, the Court agrees with Cincinnati.
it will focus the analysis that follows, the Court will first
address the retaining wall issue.
Cross-Motion, Blissful argues that the retaining wall that
was destroyed is included in the Loss coverage because it was
mentioned in discovery and that the Court should therefore
award it the “undisputed amount of loss in this case,
” $335, 484.00. (Pl.'s Mot. at 3, 35). Cincinnati
moves to strike the reference to the retaining wall because
Blissful did not allege damages to the retaining wall in its
Complaint, its expert does not mention it in his report, and
Blissful has made no damages claim for it. The Court agrees
plaintiff is “bound by the allegations contained in its
complaint and cannot, through the use of motion briefs, amend
the complaint.” Zachair, Ltd. v. Driggs, 965
F.Supp. 741, 748 n.4 (D.Md. 1997) aff'd, 141
F.3d 1162 (4th Cir. 1998); see also Barclay White
Skanska, Inc. v. Battelle Mem'l Inst., 262 Fed.Appx.
556, 563 (4th Cir. 2008) (“plaintiffs may not raise new
claims without amending their complaints after discovery has
the Complaint does not mention a retaining wall and instead
focuses on the damage to and replacement of the underground
pipe. The Complaint alleges Cincinnati agreed to pay for the
Loss and includes a screenshot of Gregory's February 4,
2016 email to Blissful's Mike Patel, in which Gregory
states that Cincinnati will cover the underground piping but
not will fill in the sinkhole. (Compl. ¶¶ 27-30).
In the next paragraph, the Complaint refers to the Estimate
that Blissful submitted to Cincinnati in 2016 and attached to
the Complaint as Exhibit 2. Titled “Comfort Inn Storm
Drain Pipe Replacement, ” the Estimate states the cost
of the work would be $335, 484.00 and contains no reference
to a retaining wall. (Id. Ex. 2 at 1). In its next
paragraph, the Complaint refers to Cincinnati's denial of
the claim, a letter which also focuses on “the cost of
pipe replacement and soil backfill” at the Property.
(Def.'s Mot. Ex. 1(F) [“Claim Denial Letter”]
at 1, ECF No. 21-11). Blissful's failure to specify that
their underground pipe claim also included damage to a
retaining wall deprived Cincinnati of adequate notice under
Rule 8. See Fed.R.Civ.P. 8(a)(2) (“a short and
plain statement of the claim showing that pleader is entitled
to relief”). Blissful notes that the retaining wall is
mentioned in response to Cincinnati's Requests for
Admissions, in a statement by Patel, and in Baker's
February 3, 2016 letter. But Cincinnati should not have to
guess what damages Blissful is claiming. The pre-suit
correspondence, save for the Baker letter, concerned the
underground pipes and the hole. If Blissful meant to include
the retaining wall in its claim for damages, it should have
made that clear in its Complaint. As a result, the Court will
deny Blissful's Motion as to the retaining wall.
Court will next turn to the Policy and the coverage parts