United States District Court, D. Connecticut
CORRECTED MEMORANDUM AND ORDER
Michael P. Shea, U.S.D.J.
case requires me to decide whether a jury’s finding
that the applicable statute of limitations was tolled under
Connecticut’s "continuing course of conduct"
doctrine is supported by sufficient evidence. Essex Insurance
Company ("Essex") asserts a negligence claim
against independent adjuster William Kramer & Associates, LLC
("WKA"), arising out of Essex’s employment of
WKA in 2006 and 2007 to adjust losses to commercial
properties in Florida caused by Hurricane Wilma. Essex claims
that WKA was negligent in failing to inform Essex, before it
issued the final claim check for the loss, of the existence
of a mortgagee on one of the properties. The undisclosed
mortgagee later sued Essex and received a large settlement.
Court held a jury trial on February 10, 11, and 12, 2016. The
jury found WKA negligent and awarded damages of $1, 250,
002.89. The jury also found that although Essex had brought
suit more than three years after WKA’s negligent
conduct, the claim was not time-barred because WKA had
engaged in a "continuing course of conduct" that
tolled the applicable statute of limitations.
renewed its motion for judgment as a matter of law, arguing
that no reasonable juror could find based on the evidence
presented at trial that Connecticut’s "continuing
course of conduct" doctrine sufficiently tolled the
statute of limitations to make Essex’s claim timely.
After construing the evidence in the light most favorable to
Essex and drawing all reasonable inferences in its favor, I
agree with WKA and conclude that it is entitled to judgment
as a matter of law.
Civ. P. 50(a)(1)(B) states,
If a party has been fully heard on an issue during a jury
trial and the court finds that a reasonable jury would not
have a legally sufficient evidentiary basis to find for the
party on that issue, the court may . . . grant a motion for
judgment as a matter of law against the party on a claim . .
. that, under the controlling law, can be maintained . . .
only with a favorable finding on that issue.
as a matter of law may not properly be granted under Rule 50
unless the evidence, viewed in the light most favorable to
the opposing party, is insufficient to permit a reasonable
juror to find in her favor." Galdieri-Ambrosini v.
Nat’l Realty & Dev. Corp., 136 F.3d 276, 289 (2d
[T]he district court must [also] draw all reasonable
inferences in favor of the nonmoving party, and it may not
make credibility determinations or weigh the evidence. . . .
Credibility determinations, the weighing of the evidence, and
the drawing of legitimate inferences from the facts are jury
functions, not those of a judge. . . . Thus, although the
Court should review the record as a whole, it must disregard
all evidence favorable to the moving party that the jury is
not required to believe.
Manganiello v. City of New York, 612 F.3d 149, 161
(2d Cir. 2010) (citations and internal quotation marks
omitted). "Although a party making a Rule 50 motion
always faces a heavy burden, that burden is particularly
heavy, where, as here, the jury has deliberated in the case
and actually returned its verdict in favor of the
non-movant." Newton v. City of New York, 779
F.3d 140, 146 (2d Cir. 2015).
the evidence presented at trial in the light most favorable
to Essex, and drawing all reasonable inferences in its favor,
the jury could have found the following facts.
Essex Hires WKA to Adjust Losses to The Villas
October of 2005, Hurricane Wilma damaged several properties
in Florida, including a commercial property known as
"The Villas." (Verna Test., ECF No. 79-3, at 6.)
Before the storm, IDM, owner of The Villas and other
properties in the area, obtained several layers of insurance
to protect itself against loss. (Id. at 3.) IDM had
an initial layer of $5 million in coverage from Aspen
Insurance Company ("Aspen") and an excess layer of
$10 million shared by Essex and a third insurance company.
(Id. at 4.) After the storm, Essex received a Notice
of Loss from IDM’s retail agent, Brian Adams (an
employee of insurance agency USI), indicating that the loss
resulting from the damage to The Villas might reach
Essex’s layer of coverage. (Id. at 5.)
hired WKA to adjust the loss to the IDM properties for its
initial layer of coverage. (Id.) Around that time,
Dennis Martin, a WKA employee, contacted Essex and asked if
WKA could also perform adjusting work for Essex should the
loss reach Essex’s excess layer. (Id.) It is
customary for excess-layer insurers to engage the same
independent adjuster as the initial layer insurer because all
insurers can thereby share the information and work product
already generated by the original adjuster, reducing the need
for redundant work. (Id. at 6.) Richard Verna, an
Essex employee, agreed to hire WKA as Essex’s
independent adjuster for the IDM properties, which included
The Villas. (Id. at 5-6.)
April 25, 2006, Adams sent WKA adjuster Robert Oberpriller a
letter indicating there had been an issue with one of
Aspen’s payment checks. (Pl.’s Ex. 2.) Adams
attached to his letter "a copy of the mortgagees"
on each of the IDM properties. (Id.) The attached
document, titled "IDM Management, Inc. /schedule of
Mortgagees, " listed Intervest National Bank
("Intervest") as a mortgagee on The Villas.
(Id.) After receiving Adams’s letter,
Oberpriller sent a letter to Aspen employee Kevin Igoe,
requesting that Aspen reissue the check referenced in
Adams’s letter. (Pl.’s Ex. 3.)
WKA Performs Adjusting Work on The Villas
hiring WKA, Essex (through Verna) requested that WKA perform
a "full adjustment" on The Villas. (Verna Test. at
12.) A full adjustment includes inspecting the property,
determining the scope of damage and estimating the loss,
working with IDM to agree to an amount of loss, reviewing all
coverage aspects of Essex’s policy, identifying any
potential coverage issues, and reporting all elements
associated with the investigation and the claim measuring
process. (Id.) It also includes identifying any
mortgagees on the properties on which WKA was performing its
Q: Did WKA at the time it was adjusting the loss for Essex
Insurance Company . . . have a duty to Essex to follow the
instructions that was given to it by Essex regarding
adjusting the loss?
Q: And one of the things we’ve looked at a few times in
this case is an assignment from Aspen, the first insurer that
said identify the mortgagees, right?
Q: That was one of the duties in this case of William Kramer
and Associates, wasn’t it?
Q: And that duty wasn’t just to Aspen, was it?
A: No, to all insurance companies.
Q: Including Essex, correct?
(Martin Test. at 10.) On multiple occasions while WKA was
performing its adjusting work for Essex, Verna asked Martin
and/or Oberpriller whether there was a mortgagee on The
Villas, and the WKA employees responded in the negative:
Q: And did you specifically in 2006 ask WKA, in particular,
Mr. Oberpriller or Mr. Martin who was working on the file, to
identify if there was a mortgagee for [T]he Villas?
A: I did, yes.
Q: And do you recall receiving [this] email . . . from Mr.
Oberpriller dated August 28, 2006, in particular, in the
second line where he indicates there is no mortgage company
for [T]he Villas?
A: Yes, sir, I recognize this.
Q: And at that period, was that the response you’re
receiving from WKA, that there was not a mortgage company for
(Verna Test. at 12-13.)
performing the adjusting work, WKA sent periodic status
reports to Essex. (Id. at 15-17.) These reports
included lists of the IDM properties as well as the name of
any mortgagees on those properties. (Id.) The lists
identified a mortgagee on each IDM property except The
Villas, for which WKA indicated that there was "no
mortgagee." (Id. at 17-18.) Each status report
was signed by Oberpriller and Martin. (Id. at 18.)
Had Oberpriller looked in WKA’s files regarding the
work it had done for Aspen, he would have seen the schedule
of mortgagees it received from Adams, which indicated that
Intervest was a mortgagee on The Villas. (Martin Test. at 3;
see also Def.’s Ex. 51, at 152 ("Q: Would
you agree with me, sir, that had you looked in WKA’s
file or had you looked at this in particular, this letter
that was addressed to you . . . that you could have seen on
the schedule of mortgagees . . . that The Villas did have a
mortgagee? A: Yes.").) Martin agreed that Essex, while
WKA was performing its adjusting work, could "fairly
rely" on the fact that WKA would share information about
IDM properties WKA obtained while performing work for Aspen,
including the schedule of mortgagees Adams sent to
Oberpriller. (Martin Test. at 7.)
March 2007, before issuing Essex’s final claim payment
check for The Villas, Verna again asked Martin and
Oberpriller if there was a mortgagee on The Villas. (Verna
Test. at 13.) The WKA employees responded that they had not
received a response from the policyholder as to whether a
mortgagee interest existed on The Villas, but stated that
there was no indication there was a mortgagee. (Id.)
Verna assumed that when he inquired as to whether there was a
mortgagee on The Villas, the WKA employees would look in
their files to see if they had that information.
(Id. at 13-14.) Verna never received any indication
from WKA in 2007 that The Villas had a mortgagee.
(Id. at 21.) Because Verna was not a licensed
insurance adjuster in the State of Florida, he lacked
authority to contact IDM or its representatives directly.
(Id.) Essex issued the final claim payment check on
March 19, 2007; it did not list Intervest as a payee.
(Def.’s Ex. 515.) Had Verna known about
Intervest’s interest in The Villas, he would have
included Intervest on the payment check or reached out to
Intervest to "let them know that we had been apprised
that they had an interest" and that Essex was going to
make its final claim payment. (Verna Test. at 25.) Because
WKA failed to inform Essex about Intervest’s interest,
Verna was not in a position to initiate any such discussion
with Intervest or IDM. (Id. at 26; Martin Test. at
WKA’s Post-March 2007 Relationship with Essex
and WKA never executed a written contract regarding
WKA’s adjusting work on the IDM properties. Once Essex
issued its final payment check to IDM, Verna ceased
"tracking what was going on" with the IDM
properties. (Verna Test. at 30.) WKA, however, still
considered Essex its "client" after finishing its
adjusting work on the IDM properties, and continues to do so
"[e]ven to this day." (Martin Test. at 25.) In
August or September of 2007, Martin contacted Essex to inform
it that AXIS Insurance Company ("AXIS"), which held
the final excess layer of coverage on the IDM properties, had
contacted WKA and asked how Essex had made its payment checks
payable. (Verna Test. at 28.) In addition, when WKA was
subpoenaed in 2009 and when Martin was required to testify at
a deposition in 2012 in connection with a lawsuit Intervest
had initiated regarding the IDM properties (the
"Intervest Action") - which is discussed in greater
detail below - WKA billed Essex for the costs it incurred. At
trial, Mr. Martin of WKA testified as follows:
Q: But you do remember that at each time that you -- WKA was
contacted about [T]he Villas or IDM after March ’07,
you would reach out to Essex on each of those occasions,
A: I can’t say, sir, each occasion.
Q: Well, I’ve shown you at least two[, the 2009
subpoena and the 2012 deposition], right?
Q: And you would use their attorneys, right?
Q: And you would bill them for the services they provided
A: Usually, yes.
(Id. at 24-25.) This was because WKA and Essex had
on "ongoing relationship" with Essex with regard to
The Villas, even after 2007:
Q: And you still had that relationship with Essex regarding
IDM and [T]he Villas loss even up until the time of 2012, at
the time you were billing them for services, correct?
. . .
Q: You’re still treating them like your client, right?
Q: Because you had an ongoing relationship with them,
A: Sure. Even to this day.
(Id. at 19, 25.)