Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Endurance American Specialty Insurance Co. v. William Kramer & Associates, LLC

United States District Court, D. Connecticut

August 15, 2019

ENDURANCE AMERICAN SPECIALTY INSURANCE COMPANY, Plaintiff,
v.
WILLIAM KRAMER & ASSOCIATES, LLC, Defendant.

          RULING ON MOTION TO DISMISS

          MICHAEL P. SHEA, U.S.D.J.

         Plaintiff, Endurance American Specialty Insurance Company (“Endurance”), brought this action on February 1, 2018, against William Kramer & Associates, LLC's (“WKA”) related to WKA's assessment of damages to the Caravelle Resort in Myrtle Beach, South Carolina following Hurricane Matthew in October 2016. (ECF No. 1.) Endurance asserts negligence claims for failure to disclose and failure to mitigate, as well as a claim for breach of fiduciary duty. (ECF No. 1.) Two additional property insurers of the Caravelle Resort, James River Insurance Company (“James River”), and AXIS Surplus Insurance Company (“AXIS”) intervened as plaintiffs and assert the same claims against WKA. (See ECF Nos. 32, 34.)

         On August 31, 2018, WKA filed a third-party complaint against Madsen, Kneppers and Associates, Inc. (“Madsen”) for common law indemnification, asserting that Madsen is liable for all or part of any damages that WKA owes the plaintiff and intervenor plaintiffs. (ECF No. 58 (hereinafter “Third-Party Complaint”).) Madsen moves to dismiss the Third-Party Complaint for failure to state a claim. (ECF No. 82.) For the reasons explained below, Madsen's motion to dismiss is GRANTED.

         I. Factual Allegations

         Common Allegations

         The facts below are drawn from all operative complaints, including WKA's Third-Party Complaint against Madsen. (Endurance Compl, ECF No. 1; Axis Compl., ECF No. 32; James River Compl., ECF No. 34; Third-Party Compl., ECF No. 58.) Accordingly, these allegations are taken as true for the purposes of deciding the present motion to dismiss.

         On October 8, 2016, Hurricane Matthew caused damage to The Caravelle Resort in Myrtle Beach, South Carolina (“Caravelle”). (ECF No. 1 ¶ 12; ECF No. 32 ¶ 12; ECF No. 34 ¶ 12; ECF No. 58 ¶ 5.) Caravelle held insurance policies issued by Endurance American Specialty Insurance Company (“Endurance”), Liberty Surplus Insurance Corporation (“Liberty”), James River Insurance Company (“James River”), and AXIS Surplus Insurance Company (“AXIS”) (hereinafter Endurance, Liberty, AXIS, and James River collectively referred to as “the Market”). (ECF No. 1 ¶¶ 6-9; ECF No. 32 ¶¶ 6-9; ECF No. 34 ¶¶ 7-9; ECF No. 58 ¶ 6-7.)[1] On October 10, 2016, Caravelle submitted a claim to the Market (the “Claim”) for the damages caused by Hurricane Matthew. (ECF No. 1 ¶ 13; ECF No. 32 ¶ 13; ECF No. 34 ¶ 13; ECF No. 58 ¶ 7.) William Kramer & Associates, LLC's (“WKA”), an independent loss adjustment firm, was appointed as loss adjuster as required under the Market Policies, and was assigned to adjust all claims related to damage from Hurricane Matthew. (ECF No. 1 ¶¶ 10-11, 14; ECF No. 32 ¶¶ 10-11, 14; ECF No. 34 ¶¶ 10-11, 14; ECF No. 58 ¶ 8.) WKA began evaluating the damages and taking steps to mitigate the potential for further damage on October 14, 2016. (ECF No. 1 ¶¶ 15-16; ECF No. 32 ¶¶ 15-16; ECF No. 34 ¶¶ 15-16; ECF No. 58 ¶ 9.)

         Allegations of the Underlying Complaints Against WKA The following facts are taken from the Plaintiffs and Intervenor Plaintiffs' complaints against WKA. (See Endurance Compl, ECF No. 1; Axis Compl., ECF No. 32; James River Compl., ECF No. 34.) These facts are set forth only to provide context for WKA's third-party allegations; the Court does not accept them as true for the purposes of deciding this motion.

         After WKA began its work, the Market retained Madsen, Kneppers and Associates, Inc. (“Madsen”), a construction consulting and engineering firm, to assist in the investigation and adjustment process and to develop protocols for remediating and repairing the damage caused by Matthew. (ECF No. 1 ¶¶ 17-18; ECF No. 32 ¶¶ 17-18; ECF No. 34 ¶¶ 17-18.) Madsen was tasked with identifying the damage proximately caused by Matthew and reporting its findings and recommendations to WKA to the Market. (ECF No. 1 ¶¶ 18-19; ECF No. 32 ¶¶ 18-19; ECF No. 34 ¶¶ 18-19.)

         On November 2, 2016, WKA estimated that the total loss estimate for mitigation and reconstruction was $2.9 million. (ECF No. 1 ¶ 20; ECF No. 32 ¶ 20; ECF No. 34 ¶ 20.) Over the following weeks, WKA's estimate rose repeatedly. (ECF No. 1 ¶ 21; ECF No. 32 ¶ 21; ECF No. 34 ¶ 21.) AXIS and James River retained an independent adjusting firm to peer review WKA's work. (ECF No. 1 ¶¶ 9, 21-22; ECF No. 32 ¶¶ 9, 21-22; ECF No. 34 ¶¶ 8, 21-22.) On December 30, 2016, WKA reported a revised estimated total loss value of $18 million. (ECF No. 1 ¶ 23; ECF No. 32 ¶ 23; ECF No. 34 ¶ 23.) The Market agreed to resolve Caravelle's Claim on January 27, 2017 for $24 million. (ECF No. 1 ¶ 24; ECF No. 32 ¶ 24; ECF No. 34 ¶¶ 24-25.)

         Endurance, James River, and Axis allege that WKA failed to disclose “material facts and issues, ” including that Caravelle's “claimed damages were either preexisting or not proximately caused by Hurricane Matthew.” (ECF No. 1 ¶ 26; ECF No. 32 ¶ 26; ECF No. 34 ¶ 29.) More specifically, WKA did not relay “material information” it received from Madsen, including Madsen's concerns regarding rooms designated for reconstruction that were unaffected by Hurricane Matthew. (ECF No. 1 ¶¶ 27-29; ECF No. 32 ¶¶ 27-29; ECF No. 34 ¶¶ 30-32.) The Market relied upon WKA's representations “without being informed that much of the repair and reconstruction was unwarranted or unrelated to Hurricane Matthew damage.” (ECF No. 1 ¶ 30; ECF No. 32 ¶ 30; ECF No. 34 ¶ 33.) As a result of WKA's failure to disclose relevant and material information to the Market about the source of the damage, the Market paid for the rehabilitation of the entire resort instead of only Hurricane Matthew-specific damages. (ECF No. 1 ¶ 32; ECF No. 32 ¶ 32; ECF No. 34 ¶ 35.) The Market alleges WKA knew or should have known that if it had properly disclosed material information, the Market “would not have agreed to pay for the scope of damages assessed by WKA.” (ECF No. 1 ¶ 31; ECF No. 32 ¶ 31; ECF No. 34 ¶ 34.)

         Allegations of WKA's Third-Party Complaint Against Madsen

         The factual allegations below are drawn from WKA's Third-Party Complaint (ECF No. 58) against Madsen and are accepted as true for the purpose of adjudicating this motion.

         On October 14, 2016, WKA began to inspect and assess the damage to Caravelle caused by Hurricane Matthew. (ECF No. ¶ 9.) During the course of WKA's work it became necessary to engage a construction consulting firm. (Id. ¶ 10.) “Madsen was engaged to provide remediation and repair consulting with respect to the Claim.” (Id. ¶ 11.) “WKA relied on Madsen with regard to certain aspects of the adjustment of the Claim, including but not limited to remediation and repair.” (Id. ¶ 12.) On November 2, 2016, Madsen provided WKA with a damage estimate of $3.1 million, which WKA conveyed to Endurance and Liberty. (Id. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.