Hall v. South River Restoration, Inc.
270 F. Supp. 3d 117
| D.D.C. | 2017Background
- Plaintiffs Christopher and Piper Hall (and their child) allege Superstorm Sandy damaged their D.C. home and they filed a claim with their insurer USAA.
- USAA accepted coverage but required Plaintiffs to use USAA’s preferred contractor, South River Restoration, to perform repairs.
- Plaintiffs allege South River’s work over four years further damaged the home; Plaintiffs repeatedly complained to USAA and requested a different contractor, but USAA refused.
- In 2016 USAA issued a payment it claimed satisfied the claim and informed Plaintiffs it would no longer be involved; Plaintiffs then sued.
- Plaintiffs assert breach of contract, violation of the D.C. Consumer Protection Procedures Act (CPPA), negligence, negligent infliction of emotional distress, and negligent misrepresentation against USAA.
- USAA moved to dismiss; the court denied dismissal of the breach and CPPA claims but dismissed the negligence-based claims without prejudice for failure to allege a tort duty independent of the insurance contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether breach of contract claim is sufficiently pleaded | Hall: USAA breached its duty to pay to repair the home by conditioning payment on use of South River whose work worsened damage | USAA: Complaint fails to identify specific contractual duty breached and is time-barred by the policy’s two-year suit limitation | Denied dismissal — breach claim plausibly pleaded; timeliness not resolved on pleadings (waiver/estoppel and loss timing disputed) |
| Whether the policy’s two-year suit limitation bars the contract claim | Hall: “Loss” includes the later, continuing damage/expense from USAA/South River conduct; waiver/estoppel apply | USAA: Loss occurred at Sandy (2012); limitation thus bars suit | Denied dismissal — factual dispute over meaning of “loss” and plausible waiver/estoppel; premature to decide on 12(b)(6) |
| Whether CPPA claim survives | Hall: USAA was sufficiently connected to the supply side (conditioned payment, supervised South River, made warranty representations) making it a “merchant” under CPPA | USAA: Not a merchant; CPPA claim time-barred | Denied dismissal — complaint plausibly alleges USAA’s supply-side role; limitations defense not resolvable on face of complaint |
| Whether negligence-based claims survive independent of the contract | Hall: USAA owed duties to act reasonably in coordinating and paying for repairs and in recommending/selecting contractor | USAA: All alleged duties arise from the insurance contract; no independent tort duty | Granted in part — negligence, negligent infliction of emotional distress, and negligent misrepresentation dismissed without prejudice for failing to allege duties independent of the contract |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: factual allegations must plausibly suggest liability)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard for federal complaints)
- Choharis v. State Farm Fire & Cas. Co., 961 A.2d 1080 (D.C. 2008) (tort claims tied to insurance contracts must be based on duties independent of the contract)
- Martinez v. Hartford Cas. Ins. Co., 429 F. Supp. 2d 52 (D.D.C. 2006) (contractual suit limitations generally enforceable; waiver/estoppel can preclude limitations defense)
- Sundberg v. TTR Realty, LLC, 109 A.3d 1123 (D.C. 2015) (CPPA covers trade practices arising out of consumer-merchant relationships)