United States District Court, E.D. Michigan, Southern Division
R. GRAND UNITED STATES MAGISTRATE JUDGE
AND ORDER (1) DENYING PLAINTIFF'S MOTION FOR SUMMARY
JUDGMENT (ECF NO. 27), (2) DENYING DEFENDANT'S MOTION FOR
SUMMARY JUDGMENT (ECF NO. 29), AND (3) DENYING
DEFENDANT'S MOTION TO EXCLUDE TESTIMONY OF
PLAINTIFF'S EXPERT, RAYMOND FAIR (ECF NO. 28)
D. BORMAN UNITED STATES DISTRICT JUDGE
an insurance loss case. Plaintiff claims to have suffered
damage to her home as a result of water damage, allegedly
caused by burst frozen pipes, and seeks to recovery under a
policy of insurance issued by Defendant Allstate Property
& Casualty Insurance Co. (“Allstate”).
Allstate has denied coverage under the Policy's fraud
provision. Both parties have filed motions for summary
judgment (ECF Nos. 27, 29) and filed respective Responses
(ECF Nos. 36, 35) and Allstate filed a Reply (ECF No. 37).
Allstate has also filed a motion to exclude Plaintiff's
expert, Raymond Fair (ECF No. 28), to which Plaintiff has
responded (ECF No. 32) and Allstate has replied (ECF No. 33).
The Court held a hearing on all three motions on February 14,
2018. For the reasons that follow, the Court DENIES all three
Plaintiff's Previous Claims and Allstate's
Investigation of the February 2015 Loss
Faith Samuels came to the United States from Jamaica in 1999
and lost her husband in a car accident in or about 2008.
Plaintiff received approximately $200, 000 in life insurance
proceeds in connection with his death. Her adult son, Ackeem
Dehaney, received approximately $100, 000. Ms. Samuels
utilized a good portion of these funds to purchase five or
six income producing rental properties in the Detroit area
which she has managed/lived in and/or sold over the past ten
years. (ECF No. 36, Def.'s Resp. to Pl.'s Mot. Summ.
J. Ex. 1, May 3, 2017 Deposition of Faith Samuels 7:16-23,
13:3-20:13, 143:10-144:14; Ex. 4, July 28, 2015 Examination
Under Oath (“EUO”) of Faith Samuels 20:12-17.)
August, 2013, Plaintiff sustained a fire loss at one of her
rental properties and filed a claim with Allstate, which
Allstate paid. (EUO of Faith Samuels 12:20-13:5.) In April,
2014, Plaintiff filed another claim with Allstate, this time
for water damage caused by a burst pipe in Plaintiff's
boiler heating system at the property where Plaintiff
resides, 17151 Annchester Road, Detroit, Michigan 48219, the
same Property that is the subject of the loss at issue in
this action. (Pl.'s Dep. 52:19-53:6.) With respect to
that April 16, 2014 water damage incident, Plaintiff
explained that in the space of a week she noticed that water
was dripping from the boiler in the basement and from a
radiator in one of the bedrooms and that the boiler was not
heating the home. (Pl.'s Dep. 56:13-58:1.) Plaintiff then
purchased some space heaters to heat the home: “I buy
space heater when that happened with that, with the water
running, and then I wasn't getting any heat from the
furnace, I don't know why I didn't get heat from the
furnace.” (Pl.'s Dep. 59:17-20.) Ultimately, and
the event that caused Plaintiff to finally file a claim with
Allstate, according to Plaintiff something burst in the wall
behind the radiator in the living room causing damage to the
drywall. (Pl.'s Dep. 53:7-54:6.) Plaintiff's friend,
Mr. Bilroy Nicholas, patched the wall in Plaintiff's
living room that was damaged as a result of the April 16,
2014 water incident free of charge. (Pl.'s Dep.
127:22-128:9; ECF No. 35, Pl.'s Resp. To Def.'s Mot.
Summ. J. Ex. 7, Bilroy Nicholas Dep. I 17:6-20-18:10.)
1, 2014, Allstate denied Plaintiff's claim “for the
loss that occurred on April 16, 2014.” (Def.'s
Resp. to Pl.'s Mot. Summ. J. Ex. 3, May 1, 2014 Denial
Letter.) In sum, Allstate based its denial on Policy
provisions that exclude coverage for “lack of
maintenance” - damage caused by seepage or leakage from
plumbing or heating fixtures that is of a sustained nature,
i.e. occurring over a period of weeks, months, or years.
(Id.) Allstate engaged an engineer from Donan
Engineering, Chad Peterson, to conduct a study of the
Annchester Road property (“the Property”) to
determine the cause of the boiler failure and water damage.
Mr. Peterson conducted his study on May 20, 2014 and issued
his Report on June 3, 2014. (Def.'s Mot. Summ. J. Ex. 2,
June 3, 2014 Report of Chad E. Peterson.) Mr. Peterson made
the following observations, as relevant here, following his
study of the Property:
Water-damaged plaster is evident in the northeast corner of
the living room where the radiator's relief valve was
venting steam. Water damage was observed near the southeast
corner of the living room's ceiling. The water damage to
the ceiling is due to the freezing and rupturing of water
lines going to the second-floor master bedroom's radiator
. . . . No. damage was evident in the radiator.
Water damage is evident on the north wall and ceiling of the
dining room . . . the result of the freezing and rupturing of
water lines going to the radiator of the second-floor,
northwest bedroom . . . . The radiator has no apparent
damage. Ms. Samuels pointed out damage to the floor around a
radiator that is located on the second-floor, southeast
bedroom. The floor damage is the result of a long-term leak
around the radiator and is not the result of freeze damage.
The boiler is located in the basement . . . . Water was
evident on the floor of the basement beneath a corroded
boiler pipe. Water was dripping from the deteriorated steel
pipe. The pipe is deteriorated due to long-term corrosion.
(June 3, 2014 Peterson Report 1-2.)
Peterson concluded that “the corrosion of the boiler
pipe in the basement likely caused a decrease in the water
volume in the system that caused the system to
overheat.” (June 3, 2014 Peterson Report 3.) Mr.
Peterson further concluded that “[t]he corrosion of the
pipe is due to a lack of maintenance.” (Id.)
“When the system overheated, the relief valve in the
living room vented the steam and damaged the wall. Ms.
Samuels then turned the boiler system off and used a few
space heaters to keep the house warm. . . . The water that
remained in the boiler pipes above the living room and dining
room froze, expanded, and caused the pipes to break and water
to the ceilings and wall. The water in the pipes froze
because the space heaters were not keeping the house warm
testified at her EUO that she understood Allstate denied her
May 2014 claim due to long term issues with boiler and lack
of maintenance of pre-existing conditions. (Pl.'s EUO
73:11-74:8.) There is no evidence in the record that
Plaintiff contested Allstate's May 1, 2014 denial of her
claim for the loss that allegedly occurred on April 16, 2014.
In fact, Plaintiff claims that after Allstate denied the
claim in May 2014, she had someone come to inspect and repair
the issues that had been identified with the boiler.
Plaintiff recalled that she was told that there was a
corroded pipe that was leaking in the basement and that she
had “Lonnie” come and replace the corroded pipe.
(Pl.'s EUO 82:17-84:13.) In support of her statement that
“Lonnie” came and “fixed” the broken
leaking pipe, Plaintiff offered an invoice from
“Strickly H/C, ” which Plaintiff explained was
“Lonnie's” company, dated May 5, 2014, that
indicated “Lonnie” performed the following
services: “Clean inspected boiler and repaired
radiators. System is operating ok.” (Def.'s Resp.
to Pl.'s Mot. Summ. J. Ex. 7, May 5, 2014 Invoice from
Strickly H/C.) The invoice, which is stamped “PAID,
” notes an amount charged for the services of $250, but
does not indicate if the charge included parts and labor or
even if any parts were provided. (Id.) Specifically,
Plaintiff testified as follows regarding the alleged May 5,
2014 repair by Lonnie:
Q: Was your [April 2014] claim denied for long-term leaking
from the radiators?
A: That's what they told me.
Q: And was the, did they also tell you that there was a
corroded pipe in the boiler and that was badly leaking during
the 2014 loss, that that's what caused the problem, do
A: No, I don't know.
Q: About a corroded pipe in the boiler that was badly leaking
during the 2014 loss?
A: I thought he told me - okay. Okay.
Q: You got to let me finish. Do you know that or no?
A: I don't remember but I know it was leaking.
Q: The corroded pipe in the boiler was leaking?
A: Yes. And water was leaking on the floor so the guy came in
and fixed it and that, that's what you have.
Q: And who was that [guy who fixed it]?
Q: Is that the invoice that [May 5, 2014 invoice from
Strickly H/C] we marked as Exhibit 2?
A: Yes, that's it.
Q: Because it doesn't say that and that's why I'm
asking if he fixed the corroded pipe in the boiler, whether
it was replaced because it just said cleaned and inspected
and repaired radiator. You don't know - did he tell you
that [he fixed the corroded pipe]?
A: He said when he finished and everything is done, you see
the water used to run out of the boiler and the ground so
when he's finished and there's no more water running
on the ground. Water used to run.
Q: Okay. What, what I'm asking is did he fix that
corroded pipe, did he replace that pipe?
A: Yes, he did.
(Pl.'s EUO 82:17-84:13.)
testified that when she first reported to Allstate that the
boiler had been repaired, she stated that an individual named
Clarence had done the repair. She corrected herself at her
EUO, explaining that when she went to look for the receipt
for the work as requested by Allstate, she discovered the May
5, 2014 receipt from Strickly H/C and remembered that Lonnie,
not Clarence, had done the work. Plaintiff confirmed that the
only evidence she has to substantiate her claim that she did
have the boiler repaired after Allstate denied her claim in
May 2014 because of improper maintenance, is the May 5, 2014
receipt from Lonnie. (Pl.'s EUO 93:14-95:5.)
Mitchell of Strickly H/C testified that he was at the
Property in November or December 2013, when he was called by
Plaintiff to service her boiler. (Def.'s Resp. to
Pl.'s Mot. Summ. J. Ex. 18, July 25, 2017 Deposition of
Lonnie Dennell Mitchell 25:7-26:12.) Mr. Mitchell testified
that he recalled going to Plaintiff's home in the winter,
when it was cold outside, and repaired the boiler. He
recalled that Plaintiff called him sometime later to get a
copy of the invoice for the work he had performed. When
questioned about the May 5, 2014 invoice from Strickly H/C on
which Plaintiff relies to substantiate her claim that she had
her boiler repaired after Allstate denied her claim
on May 1, 2014, Mr. Mitchell testified:
Q: Is that the date that you prepared or generated or typed
[the May 5, 2014 receipt]?
A: I would say that's when I generated because I believe
she didn't have her invoice, that's what it was, she
didn't have her invoice and she needed an invoice and I
sent that to her.
Q: So after you did the work on the boiler [in November or
December 2013] you were contacted by Ms. Samuels and asked
for the invoice again.
A: Yes, that is right.
Q: And she told you she couldn't find it.
Q: When you had originally done the work for Ms. Samuels for
the boiler you would have e-mailed her the invoice; is that
what your practice would have been?
A: Or I would have gave her a hand receipt because it was
cash. Because when I do cash transaction, right up front I
give a hand receipt.
Q: So you hand-wrote a receipt for Ms. Samuels that just
would have said that she paid you $250?
A: Yes, with her address and she signed off for whatever the
Q: And that occurred in the winter, November or December?
A: Yes, it was the winter.
Q: So if [the invoice] is dated May 5, 2014, then the
November or December would have been 2013 because it would
have been the prior November or December?
Q: So, then Ms. Samuels called you in May 2014 and asked for
a copy of an invoice because she couldn't find one.
Q: So just to put a real fine point on it, in May 2014 you
were not at Ms. Samuels' home and did not perform work at
the home, right?
Q: You were there in November or December of 2013 at the
Annchester Road property, right?
Q: You were not there in May, 2014, correct?
A: Not performing any work.
Q: Were you there for some other reason in May 2014 at Ms.
Q: One thing you do know is you weren't there in May
A: All I know is I fixed her boiler and it was working,
Q: And you didn't do that in May 2014, did you?
A: You've got to think in May of 2014, let's just be
realistic, do you use your heat?
Q: It doesn't matter. Were you there in May 2014?
A: No. I'm saying nobody use their heat in May.
Q: So you wouldn't have been there in May?
(Mitchell Dep. 51:4-25, 54:2-20, 62:11-19, 78:1-11.)
February 11, 2015, DTE was called to the Property to
investigate Plaintiff's suspicion of a gas leak in the
home. (Def.'s Resp. to Pl.'s Mot. Summ. J. Ex. 10,
Sept. 18, 2017 Deposition of Maurice Wilson 11:4-16.)
Plaintiff reported to Mr. Wilson when he arrived at the
Property that the boiler had been off for a couple of days
and she thought she smelled gas - it was February and it was
Q: [A]fter she had told me that it had been off for two days,
her boiler had not worked in two days, my thing was to turn
it off, make it safe . . . .
A: So Ms. Samuels told you on February 11, 2015 that - I want
to get this straight - the boiler hadn't been working for
a couple of days?
Q: According to this. Now, like I said, I can't - I'm
not going from my memory. But according to these notes,
that's what she said. And that would be the first thing -
one of the things I would put in there, because thing about
it, it was February 15th and it was cold, and my first
question would be, how long has it been off.
A: So on February 11, when you arrived at the home, the
boiler was off?
Q: It was off when I arrived there.
Q: So when you arrived it was off, when you left it was off?
(Wilson Dep. 13:18-14:12, 15:14-15.) Mr. Wilson detected no
gas leaking and left the Property with the boiler not
working. Mr. Wilson explained that it is not DTE's job to
get the furnace back up and running after they have cleared
the Property for a suspected gas leak. (Wilson Dep.
Saturday, February 21, 2015, just ten days after Mr. Wilson
made the DTE service call to the Property and found the
boiler not in working condition, Plaintiff left the Property
with her children and went to stay with her mother because
the heat was not working and the house was so cold.
(Pl.'s Dep. 56:3-61:13.) Plaintiff testified as follows
in her deposition:
Q: Why did you decide to leave Annchester on that Saturday
A: Because the house was cold.
Q: And you know when you turned up the thermostat, the house
didn't get warm?
Q: And you knew that when you turned up the thermostat, if
the boiler's working, the house is supposed to get
Q: So you knew something was wrong with the ...