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Ma Amba Minnesota, Inc. v. Cafourek & Associates, Inc.

United States District Court, D. Minnesota

May 1, 2019

Ma Amba Minnesota, Inc., a Minnesota corporation d/b/a Countryside Motel, Plaintiff,
v.
Cafourek & Associates, Inc., a Minnesota corporation, and Auto-Owners Insurance Company, Defendants.[1]

          Dustin C. Jones and Ken D. Schueler, Dunlap & Seeger, PA, for Plaintiff.

          Aaron M. Simon, Brownson Norby, PLLC, for Defendant Cafourek & Associates.

          William R. DeJean, Nielsen & Treas, LLC, and Brock P. Alton, Gislason & Hunter LLP, for Defendant Auto-Owners Insurance Company.

          MEMORANDUM OPINION AND ORDER

          SUSAN RICHARD NELSON, UNITED STATES DISTRICT JUDGE

         In November 2007, Plaintiff Ma Amba Minnesota, Inc. (“Ma Amba”) purchased a motel in Albert Lea, Minnesota, and, in so doing, took over the flood insurance policy of the motel's prior owner. Although Ma Amba did not realize it at the time, this flood insurance policy only provided coverage for one of the motel's four buildings. Unaware of this condition, Ma Amba renewed the prior owner's insurance policy on an annual basis, always through Defendant Cafourek & Associates, Inc. (“Cafourek”), its local insurance agent. About a decade later, though, in September 2016, a flood damaged two of the motel's buildings. It was only then that Ma Amba learned about the policy's “one building” limitation. Displeased at this situation, and seeking to recover its unclaimed losses, Ma Amba decided to sue Cafourek for negligence. In essence, Ma Amba argued that Cafourek, without prompting, should have told it about the “one building” limitation at some point between November 2007 and September 2016.

         Cafourek now moves for summary judgment. Ma Amba opposes the motion. Because the Court finds that Cafourek had no affirmative duty to inform Ma Amba of any inadequacies in the at-issue insurance policy, and because no reasonable juror could find that Cafourek otherwise acted negligently toward Ma Amba, the Court grants Cafourek's motion.

         I. BACKGROUND

         A. The Parties

         Plaintiff Ma Amba is a Minnesota corporation that owns only one asset: the Countryside Motel in Albert Lea, Minnesota. (See A. Patel Dep. [Doc. No. 46-1] at 11.) Ma Amba, in turn, is owned by a married, college-educated couple named Abhi Patel (the husband) and Falguni Patel (the wife). (See id. at 11-12; see also A. Patel Dec. [Doc. No. 51] ¶ 5 (noting that he earned a B.S. from Gujarat University in India in the 1980s with a major in physics); F. Patel. Dec. [Doc. No. 52] ¶ 3 (noting that she earned a B.S. from Gujarat University with a major in business administration and accounting).) The Patels live in Haines City, Florida, and have worked in the motel business for decades. (See A. Patel Dep. at 5, 8; accord F. Patel Dep. [Doc. No. 46-2] at 6-7.) Moreover, since 2005, the Patels have personally owned and operated at least five motels, spread across four states. (See A. Patel Dep. at 9, 111-12.) Currently, the Patels own three motels, including the Countryside Motel (see id. at 8), and have incorporated each of those motels into a separate corporation (see id. at 11). Abhi Patel is “in charge of purchasing insurance” for the Patels' motels. (Id. at 12.) And, over the years, he has purchased insurance for a variety of properties, and through a variety of agents. (See id. at 30-33.)

         Defendant Cafourek & Associates is an insurance agency based in Albert Lea, Minnesota; it has been in business since 1989. (See Ryan Cafourek Dep. [Doc. No. 46-4] at 7-8.) At all relevant times, Ryan Cafourek was one of the agency's owners (see id. at 15), and Terin Smith-Bangert was an agent/customer service representative working beneath Mr. Cafourek (see Smith-Bangert Dep. [Doc. No. 46-3] at 11-13).

         B. Factual History

         The facts in this case are neither complicated nor disputed in any material way. From an unknown point in time until November 2007, a man named Jay Bhakta owned the Countryside Motel. (See A. Patel Dep. at 18-19; Cafourek Dep. at 22-24.) Mr. Bhakta maintained an Auto-Owners Insurance flood insurance policy on the motel, which he had purchased through a (former) Cafourek agent named Rajesh Bhakta (no relation). (See Cafourek Dep. at 21-24; Smith-Bangert Dep. at 35-36.) However, for somewhat unclear reasons, Mr. Jay Bhakta only maintained flood insurance on one of the four buildings that comprised the Countryside Motel. (See Cafourek Dep. at 37.)[2] Apparently, both Mr. Bhakta and Mr. Cafourek were aware of this oddity, because of flooding that damaged two buildings in the “early 2000s.” (See id. at 36-38.) As Mr. Cafourek recalled during his deposition, even after this “early 2000s flood, ” Mr. Bhakta did not once “complain” to Cafourek about his flood insurance policy. (Id. at 37.)

         Several years later, in November 2007, Mr. Bhakta sold the Countryside Motel to Abhi Patel/Ma Amba, in what was essentially a hand-shake deal. (See A. Patel Dep. at 18-22 (explaining that he had “never seen” Mr. Bhakta before this purchase, and that he bought the motel “without much discussion” or “negotiation”).) In arranging this transaction, the two men discussed neither flood insurance nor the earlier flooding incident. (See, e.g., id. at 20-21 (Q: Were there any discussions with Mr. Bhakta about insurance? A: No. . . . Q: Did Mr. Bhakta have any conversations with you about any flooding at the motel prior to you purchasing it? A: No.”).)

         Shortly thereafter, Mr. Cafourek reached out to the Patels and asked if they wanted to continue using Cafourek & Associates for the Countryside Motel's insurance needs (of which flood insurance was just a part). (See Cafourek Dep. at 27-28.) Mr. Patel agreed to continue working with Cafourek (see A. Patel Dep. at 22-25), and, with respect to flood insurance, simply requested that Cafourek provide Ma Amba “the same thing [Mr. Bhakta] had” (Cafourek Dep. at 28, 44). At Mr. Cafourek's instruction, then, Ms. Smith-Bangert transferred Mr. Bhakta's flood insurance policy into Ma Amba's name. (See Smith-Bangert Dep. at 37-43; see also Defs.' Ex. 6-8 [Doc. Nos. 46-4 to 46-7] (transfer documentation).) Importantly, all parties agree that, during these initial conversations in 2007 and 2008, the Patels did not ask Cafourek any questions about the policy, and Cafourek, in turn, did not inform the Patels that the flood insurance policy only covered one building. As best the Court can tell, the parties did not discuss the issue at all. (See A. Patel Dep. at 23-26; F. Patel Dep. at 9-11; Cafourek Dep. at 28-29.) Moreover, in the ensuing years, Mr. Patel did not discuss his flood insurance with anyone employed at Cafourek in any substantive manner. (See, e.g., A. Patel Dep. at 25 (“Q: Prior to the flooding and the flood claim at the motel in Albert Lea, Minnesota, were there any communications with Ryan [Cafourek] or Terin [Smith-Bangert] about flood insurance at the motel? A: No.”).) Rather, on an annual basis, Mr. Patel would simply call Ms. Smith-Bangert to renew the policy at whatever dollar amount he desired for that year, and she would follow his instructions. (See Smith-Bangert Dep. at 50-51; A. Patel Dep. at 25-30, 106-07.)[3]

         On September 22, 2016, nearly a decade after Ma Amba took over Mr. Bhakta's policy, a flood from the nearby Albert Lea lake caused damage to two of the Countryside Motel's four buildings: a “structure that had the office and [some] guest rooms, ” and a “garage/shed.” (See A. Patel Dep. at 34-35.)[4] When Mr. Patel called Cafourek to inquire about his insurance coverage, he learned, to his surprise, that Ma Amba's flood insurance policy would only cover one of the two damaged buildings. (See A. Patel Dec. ¶¶ 15-16.) Mr. Patel was surprised by this news because, up until this incident, he had believed that that the policy covered all four buildings. (See A. Patel Dep. at 54.) This belief stemmed entirely from Mr. Patel's assumption that his policy should have covered his entire motel (based on his interpretation of the policy “declaration page, ” which did not address the question one way or the other), and from Cafourek's supposed “failure” to inform him or his wife to the contrary. (Id.; accord F. Patel Dec. ¶¶ 15-16.) However, neither Patel alleges that anyone from Cafourek affirmatively told them that the policy covered all four buildings in the motel; again, it appears that the issue was simply not discussed. (See also A. Patel. Dep. at 102 (further emphasizing that, prior to the September 2016 flood, “nobody told [him] anything” about his insurance policy).)

         As such, following the September 2016 flood, Ma Amba applied for (and received) coverage for the damage caused to the “structure that had the office and [some] guest rooms, ” but not for the damage caused to the “garage/shed.” (A. Patel Dep. at 34-35.) This discrepancy left Ma Amba with an unpaid insurance claim of approximately ...


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