Kenneth Sellman v. Safeco Insurance Company of America

CourtCourt of Appeals for the Fourth Circuit
DecidedJune 5, 2024
Docket22-2145
StatusUnpublished

This text of Kenneth Sellman v. Safeco Insurance Company of America (Kenneth Sellman v. Safeco Insurance Company of America) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kenneth Sellman v. Safeco Insurance Company of America, (4th Cir. 2024).

Opinion

USCA4 Appeal: 22-2145 Doc: 46 Filed: 06/05/2024 Pg: 1 of 16

UNPUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 22-2145

KENNETH SELLMAN; NANCY SELLMAN, husband and wife,

Plaintiffs – Appellants,

v.

SAFECO INSURANCE COMPANY OF AMERICA,

Defendant – Appellee.

Appeal from the United States District Court for the Northern District of West Virginia, at Wheeling. John Preston Bailey, District Judge. (5:21-cv-00192-JPB)

Argued: December 7, 2023 Decided: June 5, 2024

Before DIAZ, Chief Judge, NIEMEYER, Circuit Judge, and Rossie David ALSTON, Jr., United States District Judge for the Eastern District of Virginia, sitting by designation.

Affirmed by unpublished opinion. Judge Alston wrote the opinion, in which Chief Judge Diaz and Judge Niemeyer joined.

ARGUED: James G. Bordas, III, BORDAS & BORDAS, PLLC, Wheeling, West Virginia, for Appellants. William Michael Harter, FROST BROWN TODD LLP, Columbus, Ohio, for Appellee. ON BRIEF: Richard A. Monahan, Justin J. Selep, BORDAS & BORDAS, PLLC, Wheeling, West Virginia, for Appellants. Mary Claire Davis, FROST BROWN TODD LLP, Charleston, West Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit. USCA4 Appeal: 22-2145 Doc: 46 Filed: 06/05/2024 Pg: 2 of 16

ALSTON, District Judge:

This case arises from an insurance dispute for losses sustained by Kenneth and

Nancy Sellman as a result of a motor vehicle accident that damaged their home. The

district court granted Safeco Insurance Company’s (“Safeco”) motion for partial summary

judgment on Hayseeds damages. In a claim for Hayseeds damages, an insured party may

recover reasonable attorney fees, costs, and expenses incurred in connection with their

claim, where the insured has “substantially prevailed” against the insurer. Hayseeds, Inc.

v. State Farm Fire & Casualty Co., 352 S.E.2d 73, 74 (W. Va. 1986). The parties

proceeded to trial on the remaining common law and statutory bad faith claims. The jury

found in favor of Safeco, and thereafter the Sellmans moved for a new trial. The district

court denied the motion. Finding no error, we affirm.

I.

On October 19, 2020, the Sellmans’ home and personal property were damaged

after a drunk driver crashed into their home. At the time of the accident, the Sellmans’

home was insured by Safeco, and their coverage was in full force and effect. The day after

the accident, the Sellmans filed a timely claim for property damage with Safeco. After

receiving the claim, Safeco sent an engineer, Randal Exley, to review the damage. Shortly

after receipt of the claim, Safeco also sent an adjuster to further inspect the damage in the

Sellmans’ home.

Throughout November of 2020, Safeco reached out to the Sellmans to review its

findings regarding the claim. The Sellmans disagreed with Safeco’s findings, particularly

with regard to the foundational and structural damage to the house. The Sellmans then

2 USCA4 Appeal: 22-2145 Doc: 46 Filed: 06/05/2024 Pg: 3 of 16

retained their own contractor to examine the damage. Safeco and the Sellmans’ contractor

agreed that they would not have a clear understanding of the full extent of the structural

damage until the interior fixtures were removed. Therefore, Safeco stated that the

adjustment would happen in two phases. First, Safeco would address all the known

damages. Then, it would adjust the claim for the unknown damages.

On November 17, 2020, Safeco issued the Sellmans a check for $49,500.64. In a

follow-up email, a Safeco adjuster noted that the payment reflected “only the known

damages” and that Safeco planned to adjust the rest of the damages based on Safeco’s

future findings.

From mid-January 2021 to mid-April 2021, Safeco contacted the Sellmans to

determine the status of the repairs. Safeco claims that it did not receive a response to its

initial correspondence to the Sellmans. It was not until April 21, 2021, that Safeco received

a response from the Sellmans. Between April 21, 2021 and May 17, 2021, the Sellmans

sent additional estimates. On May 25, 2021, Safeco advised the Sellmans that it would like

to reinspect the home based on the newly provided estimates. The Sellmans then retained

counsel, Mr. Selep, who sent a letter requesting payment of $251,540. The letter stated:

If Safeco is willing to do the right thing and issue Mr. and Mrs. Sellman a check for $251,540.00, they will not incur any attorney fee. However, if Safeco is not willing to do the right thing, we will have to become more involved in this matter to help the Sellman’s [sic] recover the benefits they are rightfully entitled to.

J.A. 415. Mr. Selep also emailed Safeco to schedule the requested reinspection.

Safeco reinspected the home with Mr. Exley and Mr. Selep on June 15, 2021. After

the inspection was completed, Safeco emailed Mr. Selep to clarify the math in Mr. Selep’s

3 USCA4 Appeal: 22-2145 Doc: 46 Filed: 06/05/2024 Pg: 4 of 16

demand letter, and Safeco then received an updated estimate from the Sellmans’ contractor.

Two days after receiving the updated estimate, Safeco agreed to pay the Sellmans $251,540

dollars for the damage to their home and $14,263.03 for anticipated packing and moving

expenses. In August 2021, Safeco stated in the claim file that the Sellmans

retained an Attorney. . . and [a] business decision has been made and approved by Examining to settle the dwelling and other structures based on [plaintiffs’] Contractor’s estimate as a final settlement.

J.A. 356.

The Sellmans filed suit against Safeco on October 7, 2021, asserting claims for

breach of the implied covenant of good faith and fair dealing, violations of the West

Virginia Unfair Claims Settlement Practices Act, and “substantially prevailing” damages

under Hayseeds, 352 S.E.2d at 74. Each party moved for partial summary judgment on the

issue of Hayseeds damages. After full briefing, the district court granted Safeco’s motion

and denied the Sellmans’ motion regarding Hayseeds damages. Essentially, the district

court held that the Sellmans had not “substantially prevailed” on their claim and that the

Sellmans had not shown that their attorney’s services were necessary, as is required to

recover under Hayseeds. Hayseeds, 352 S.E.2d at 74. The Sellmans’ remaining claims

proceeded to jury trial.

In preparation for trial on the remaining two claims, the parties filed various motions

in limine. After full briefing, the district court held that the Sellmans’ insurance expert,

Chris A. Johnson, would be excluded because he had “not worked as a claim representative

for over 30 years, he ha[d] no apparent experience in West Virginia, and he [wa]s not a

West Virginia attorney.” Furthermore, the district court held that Safeco’s insurance

4 USCA4 Appeal: 22-2145 Doc: 46 Filed: 06/05/2024 Pg: 5 of 16

expert, J. Rudy Martin, would be permitted to testify, mainly because the district court and

the West Virginia Supreme Court of Appeals had previously found that he was qualified

as an expert witness in other insurance claims handling for property damage cases.

During the trial, Safeco also elicited testimony from its engineer, Mr. Exley. The

Sellmans objected to Mr. Exley’s testimony and asserted that the jury should only be

permitted to consider Mr. Exley’s report and not his live testimony. The district court

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