United States District Court, D. Connecticut
RULING ON CROSS-MOTIONS FOR SUMMARY JUDGMENT
R. UNDERHILL UNITED STATES DISTRICT JUDGE
case arises out of an insurance coverage dispute between
Preferred Display, Inc. (“PDI”), and Great
American Insurance Company of New York (“Great
American”). The loss at issue resulted from a fire at
PDI's premises, and Great American acknowledges that
there is coverage for that loss. The parties'
disagreement revolves around the amount payable for the loss
pursuant to the terms of the Great American policy.
principal issue raised by this case is whether the
“Other Insurance” and “Coinsurance”
clauses of the Great American policy operate in combination
to cumulatively reduce the amount payable to PDI. At my
suggestion, the parties filed cross-motions for summary
judgment addressing that issue. Great American also seeks
dismissal of various claims in PDI's complaint for
failure to state a claim.
reasons set forth below, I grant summary judgment in favor of
PDI on the declaratory judgment and breach of contract claims
(Counts One and Two) and deny in substantial part Great
American's cross-motion for summary judgment, a portion
of which I treat as a motion to dismiss certain of the causes
of action in PDI's complaint.
Standard of Review
judgment is appropriate when the record demonstrates 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); see also Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 256 (1986).
ruling on a summary judgment motion, the court must construe
the facts of record in the light most favorable to the
nonmoving party and must resolve all ambiguities and draw all
reasonable inferences against the moving party.
Anderson, 477 U.S. at 255; Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986); Adickes v. S.H. Kress & Co., 398 U.S.
144, 158-59 (1970); see also Aldrich v. Randolph Cent.
Sch. Dist., 963 F.2d. 520, 523 (2d Cir. 1992) (court is
required to “resolve all ambiguities and draw all
inferences in favor of the nonmoving party”).
context of cross-motions for summary judgment, the same
standard is applied. See Scholastic, Inc. v. Harris,
259 F.3d 73, 81 (2d Cir. 2001). However, in deciding each
motion, the court must construe the evidence in the light
most favorable to the non-moving party. Id.
Motion to Dismiss
motion to dismiss for failure to state a claim pursuant to
Rule 12(b)(6) of the Federal Rules of Civil Procedure is
designed “merely to assess the legal feasibility of a
complaint, not to assay the weight of evidence which might be
offered in support thereof”. Ryder Energy
Distribution Corp. v. Merrill Lynch Commodities, Inc.,
748 F.2d 774, 779 (2d Cir. 1984) (quoting Geisler v.
Petrocelli, 616 F.2d 636, 639 (2d Cir. 1980)).
deciding a motion to dismiss pursuant to Rule 12(b)(6), the
court must accept the material facts alleged in the complaint
as true, draw all reasonable inferences in favor of the
plaintiff, and decide whether it is plausible that the
plaintiff has a valid claim for relief. Ashcroft
v. Iqbal, 556 U.S. 662, 678-79 (2009); Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555-56 (2007); Leeds
v. Meltz, 85 F.3d 51, 53 (2d Cir. 1996).
Twombly, “[f]actual allegations must be enough
to raise a right to relief above the speculative
level”, and assert a cause of action with enough heft
to show entitlement to relief and “enough facts to
state a claim to relief that is plausible on its face”.
550 U.S. at 555, 570; see also Iqbal, 556 U.S. at
679 (“While legal conclusions can provide the framework
of a complaint, they must be supported by factual
allegations.”). The plausibility standard set forth in
Twombly and Iqbal obligates the plaintiff
to “provide the grounds of his entitlement to
relief” through more than “labels and
conclusions, and a formulaic recitation of the elements of a
cause of action”. Twombly, 550 U.S. at 555
(quotation marks omitted). Plausibility at the pleading stage
is nonetheless distinct from probability, and “a
well-pleaded complaint may proceed even if it strikes a savvy
judge that actual proof of [the claims] is improbable, and .
. . recovery is very remote and unlikely.” Id.
at 556 (quotation marks omitted).
about 2015, Great American issued its Select Business Policy
(the “Policy”) to PDI. At the relevant point in
time, the Policy provided up to $4, 000, 000 in coverage for
damage to business personal property in PDI's possession
at 32 Roaring Brook Plaza, East Glasonbury, Connecticut (the
“Property”). PDI also purchased $2, 000, 000 of
similar insurance from The Hartford Insurance Company.
about November 11, 2015, during the coverage period of both
policies, a fire caused damage to and destruction of
PDI's business personal property located at the Property.
For the purposes of this motion, the parties agree that the
value of the covered property at the time of the loss was $7,
907, 217, and the actual cash value (“ACV”) of
the loss to PDI's covered property was $6, 392, 119.
Def.'s Local Rule 56(a)1 Stmt. at ¶¶ 14-15
(doc. # 56-16); Pl.'s Local Rule 56(a)2 Stmt. at
¶¶ 14-15 (doc. # 58-1). Great American has taken
the position that, under the terms of the Policy, it owes PDI
substantially less than the $4, 000, 000 coverage limit of
American's coverage position relies on two policy
provisions, namely the “Other Insurance” and
“Coinsurance” clauses. The Other Insurance clause
1. You may have other insurance subject to
the same plan, terms, conditions and provisions as the
insurance under this Coverage Part. If you do, we will pay
our share of the covered loss or damage. Our share is the
proportion that the applicable Limit of Insurance under this
Coverage Part bears to the Limits of Insurance of all
insurance covering on the same basis.
2. If there is other insurance covering the
same loss or damage, other than that described in
1. above, we will pay only for the amount of
covered loss or damage in excess of the amount due from that
other insurance, whether you can collect on it or not. But we
will not pay more than the applicable Limit of Insurance or
more than the actual amount of loss or damage.
Select Business Policy Conditions, Form SB 86 01 (Ed. 07 02)
XS at 1 (doc. # 56-5).
Coinsurance clause provides:
If a Coinsurance percentage is shown in the Declarations for
Building, Personal Property or Personal Property of Others,
the following condition applies:
a. We will not pay the full amount of any
loss if the value of Covered Property at the time of loss
times the Coinsurance percentage shown for it in the
Declarations is greater than the Limit of Insurance for the
Instead, we will determine the most we will pay using the
(1) multiply the value of Covered Property
at the time of the loss by the Coinsurance percentage;
(2) divide the Limit of Insurance of the
property by the figure determined in Step
(3) multiply the total amount of loss,
before the application of any deductible, by the figure