Court Opinion

ID: 801769
Source: CourtListenerOpinion
Date Created: 2012-06-06 18:25:58+00
Date Added: 2024-06-11T18:00:01.526845
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                            No. 11-1711

TASTEE TREATS, INCORPORATED,

                Plaintiff - Appellant,

           v.

UNITED STATES FIDELITY AND GUARANTY COMPANY,

                Defendant - Appellee.

                            No. 11-1771

TASTEE TREATS, INCORPORATED,

                Plaintiff - Appellee,

           v.

UNITED STATES FIDELITY AND GUARANTY COMPANY,

                Defendant - Appellant.

Appeals from the United States District Court for the Southern
District of West Virginia, at Beckley.     Thomas E. Johnston,
District Judge. (5:07-cv-00338)

Argued:   May 16, 2012                         Decided:   June 6, 2012

Before AGEE and    DIAZ,   Circuit   Judges,   and   HAMILTON,   Senior
Circuit Judge.
Affirmed by unpublished per curiam opinion.

ARGUED: David Sean Hart, HAYDEN & HART, Beckley, West Virginia,
for Appellant/Cross-Appellee. Avrum Levicoff, LEVICOFF, SILKO &
DEEMER,   PC,  Pittsburgh,   Pennsylvania, for  Appellee/Cross-
Appellant.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:

             Tastee Treats, Incorporated, (Tastee Treats), a West

Virginia     corporation,                brought    this       insurance       coverage      action

against United States Fidelity and Guaranty Company (USF&G), a

Maryland corporation, in the Circuit Court of Raleigh County,

West Virginia, after USF&G denied Tastee Treats’ claim that it

was entitled to insurance coverage for damage to a Dairy Queen

restaurant        it    owned        in     Huntington,          West       Virginia       under    an

insurance policy (the Policy) issued to it by USF&G.                                     The damage

to the restaurant was caused by the collapse of two ninety-six

inch   culverts         which       were     located         near    the    restaurant       and    on

property owned by the City of Huntington.

             In    its        complaint,       Tastee          Treats       sought     a    host    of

damages,     including             compensatory,             consequential,         and     punitive

damages, as well as attorneys’ fees.                             Following removal of the

case   to    the       United       States     District             Court    for    the     Southern

District     of    West       Virginia,        the       parties       engaged      in     pre-trial

discovery.

             On        July        21,     2008,        on    cross-motions          for    summary

judgment, the district court entered partial summary judgment

for Tastee Treats in a memorandum opinion and order, holding

that   the   damage           to    the     Dairy       Queen       building       caused    by    the

collapse of the culverts was a covered loss under the Policy.

In its opinion, the district court rejected USF&G’s contention

                                                    3
that coverage was precluded under the Policy’s earth movement

exclusion.        As    a    result,     Tastee      Treats    received   from     USF&G

approximately $50,000.00.

            In an opinion dated November 29, 2010, the district

court resolved the vast majority of Tastee Treats’ claims.                             In

particular, the district court held that Tastee Treats had not

stopped operating within the appropriate period defined in the

Policy, and, as a result, it could not recover for lost business

income and that Tastee Treats could not recover for the value of

the Dairy Queen building because the $650,000.00 settlement in a

parallel state court action against the City of Huntington with

the resultant abandonment of Tastee Treats’ lease meant that

Tastee   Treats        no    longer     had     an   insurable      interest     in   the

property.        The district court further held that, viewing the

evidence    in    a    light     most    favorable     to     Tastee   Treats,    Tastee

Treats still had potentially viable claims for extra expense

coverage    related         to   the    costs     incurred     in   dealing    with   the

collapse of the culverts, as well as extra-contractual damages

for attorneys’ fees, annoyance, aggravation, and inconvenience.

            At the specific request of Tastee Treats, the district

court also permitted additional discovery related to bad faith

and punitive damages.             Following a telephonic status conference

on December 3, 2010, the district court entered a scheduling

order instructing the parties to complete all discovery requests

                                              4
related to bad faith and punitive damages by December 21, 2010,

and all such depositions by February 4, 2011.                        On December 20,

2010,   Tastee        Treats    sent    a     letter    to    the    district      court

requesting additional time to make expert disclosures related to

bad faith damages.             The district court granted Tastee Treats’

request and directed that all such expert disclosures be made no

later than January 28, 2011.                 In lieu of meeting that deadline,

Tastee Treats filed a motion to extend the deadline, which the

district court granted, and the deadline was revised to February

4, 2011.     No further extension of any deadline was sought by

either party or granted by the district court.

            On February 8, 2011, USF&G filed a motion for summary

judgment,    arguing       that        the     record   contained         insufficient

evidence    to    show    that    Tastee      Treats    was   owed       extra   expense

damages under the Policy or suffered any other damages at all.

Tastee Treats did not file a response to USF&G’s motion.                             One

month later, on March 8, 2011, USF&G filed a motion to dismiss

the action because Tastee Treats failed to prosecute its case or

comply with the district court’s scheduling order and revisions

thereto.

            On March 16, 2011, the district court held a status

conference       to    confer    with        the   parties.         At    that    status

conference, Tastee Treats’ counsel informed the district court

that his prolonged disobedience was due to his involvement as a

                                              5
scholastic      wrestling          coach.     The    district      court     vacated    its

current scheduling order and instructed Tastee Treats’ counsel

to file with the district court his requested relief, whatever

that   may   be     under     the     circumstances.           Despite     the   district

court’s instruction, Tastee Treats filed nothing.                            On April 4,

2011, the district court entered an order instructing Tastee

Treats to show cause why the case should not be dismissed within

ten days.         Tastee Treats finally responded on April 14, 2011,

restating    that      its     counsel       was    busy    coaching     wrestling      and

suggesting      that    a     sanction       less    drastic    than     dismissal      was

appropriate.

             On    June       7,     2011,    the     district       court    entered     a

memorandum opinion and order resolving all remaining issues in

the case.         First, the district court dismissed the case for

failure to prosecute, because Tastee Treats’ extreme dilatory

conduct for half a year was unacceptable and that no sanction

less than dismissal would induce Tastee Treats to proceed in a

timely    and     professional         manner.         In    the     alternative,       the

district court held that USF&G was entitled to summary judgment

on the merits of all remaining issues.

             On appeal, Tastee Treats takes issue with the district

court’s   ruling       that    it     was    not    entitled    to    damages    for    the

annoyance, the aggravation, and the inconvenience it suffered,

as well as attorneys’ fees.                  Remarkably, Tastee Treats does not

                                              6
challenge the district court’s decision to dismiss the case for

failure to prosecute.          In its cross-appeal, USF&G claims the

district    court    erred    when    it       held   that   the   Policy’s    earth

movement exclusion did not preclude coverage for the damage to

the Dairy Queen.

            Having had the benefit of oral argument and having

carefully reviewed the briefs, the record, and the controlling

legal    authorities,   we    are     persuaded       that   the   district    court

correctly decided each issue before it.                   Accordingly, we affirm

the     district    court’s    judgment         based    substantially    on    the

reasoning set forth in the district court’s careful and thorough

opinions.     See Tastee Treats, Inc. v. United States Fid. and

Guar. Co., No. 5:07-cv-00338, 2011 WL 2265541 (S.D.W.Va. June 7,

2011); Tastee Treats, Inc. v. United States Fid. and Guar. Co.,

No.   5:07-cv-00338,         2010    WL    4919606      (S.D.W.Va.   November    29,

2010); Tastee Treats, Inc. v. United States Fid. and Guar. Co.,

No. 5:07-cv-00338, 2008 WL 2836701 (S.D.W.Va. July 21, 2008).

                                                                         AFFIRMED

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