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Sneakers Outlet, LLC v. Western World Insurance Co.

United States District Court, E.D. Louisiana

April 30, 2019

SNEAKERS OUTLET, LLC
v.
WESTERN WORLD INSURANCE COMPANY

         SECTION: “J” (1)

          ORDER AND REASONS

          CARL J. BARBIER UNITED STATES DISTRICT JUDGE

         Before the Court is a Motion to Dismiss, or alternatively, Motion for Summary Judgment (Rec. Doc. 7), filed by the Defendant, Western World Insurance Company. The motion is opposed (Rec. Doc. 8) by the Plaintiff, Sneakers Outlet, LLC.[1]Defendant replied (Rec. Doc. 13). Two days after the motion was fully briefed, Plaintiff filed a Motion for Voluntary Dismissal (Rec. Doc. 15), which Defendant opposes (Rec. Doc. 16). Considering the motions, the memoranda, the record, and the law, the Court finds the Defendant's motion should be GRANTED, and the Plaintiff's motion should be DENIED.

         FACTS AND PROCEDURAL HISTORY

         This dispute is between insurer and insured. Western World issued a general liability policy (the “Policy”) to Sneakers Outlet, a shoe retailer, for the 1-year period beginning on November 19, 2016.[2] On or around April 11, 2017, Sneakers Outlet's glass front door was smashed, and inventory and surveillance equipment-which presumably recorded the break-in-were taken from the premises.[3] Plaintiff alleges the break-in was discovered at 9:00 a.m., when Malek Jabar arrived for work. Malek is the son of the owner, Khir Jabar. It unclear when the police were called, but the sheriff's deputy did not arrive at the scene until 3:10 p.m.[4] The report written by the on-scene officer notes the following:

WHILE ON SCENE, [Khir] JABAR ADVISED ME THAT THE SHATTERED GLASS FROM THE ENTRY / EXIT DOOR WAS CLEANED UP BY HIS SON/WITNESS, MALEK JABAR AND THE STORE MERCHANDISE WAS NOT SEARCHED THROUGH. I OBSERVED THE FRONT DOOR WITHOUT A GLASS AND THERE WAS NO SHATTERED GLASS ON THE GROUND NEXT TO THE POINT OF ENTRY DOOR. THE STORE MERCHANDISE WAS NOT IN DISARAY [sic]. THE CONNECTING WIRES WERE HANGING FROM THE WALL WHERE THE VIDEO RECORDER WAS REMOVED FROM.
THE OWNER JABAR REFUSED CRIME SCENE[5]

         Sneakers Outlet gave Western World notice of the alleged break-in two weeks later, on April 25, 2017. On May 3, 2017, Western World assigned investigation of the loss to Team One Adjusting Services, LLC.[6] A couple of days later, on May 5, 2017, an investigator with Team One interviewed Khir Jabar.

         The investigator's report makes several observations that would later cause Western World to doubt the legitimacy of Sneakers Outlet's claim. First, although the store has a fully functional alarm system, the alarm did not sound at the time of the alleged break-in.[7] Previously, when someone had tried to break into the store the alarm had sounded, and nothing was stolen. Second, the investigator's report also documents a “discrepancy” between Mr. Jabar's statements and the sheriff's deputy's report. Mr. Jabar told the investigator that the crime scene was fingerprinted; the police report indicates, “Jabar refused crime scene.”[8] Additionally, Mr. Jabar provided the investigator with an itemized list of the inventory lost, calculated from invoices issued by a local The Athlete's Foot, which evidently supplies Sneakers Outlet with inventory.[9] The invoices used to calculate Sneakers Outlet's losses appear to be incomplete and are partially inaccurate. They list no invoice numbers, shipping dates or methods of shipping, and there are no signatures on them indicating they were ever authorized. Sneakers Outlet's street address is also misspelled on the forms. Sneakers Outlet did not provide any other evidence that it had received the shoes listed on the invoices or that it had paid for them.

         Team One submitted its report to Western World on May 15, 2017. Based on the evidence collected in Team One's report, Western World determined it needed to investigate further, through record requests and an examination of the insured under oath. This was Western World's right as a matter of contract. The Policy requires Sneakers Outlet to “[c]ooperate with [Western World] in the investigation or settlement of the claim.”[10] Additionally, the Policy empowers Western World to:

[E]xamine any insured under oath, while not in the presence of any other insured and at such times as may be reasonably required, about any matter relating to this insurance or the claim, including an insured's books and records. In the event of an examination, an insured's answers must be signed.[11]

         The Policy explains that the consequences of an insured's failure to meet its obligations under the Policy elsewhere in the contract: “No one may bring a legal action against [Western World] under this Coverage Part unless . . . there has been full compliance with all the terms of this Coverage Part.”[12]

         On June 1, 2017, Western World sent Khir Jabar a letter demanding he make himself available for an examination and that he produce certain records on June 12, 2017.[13] The day of the examination, Mr. Jabar called Western World's counsel to inform them he could not appear at the examination because he had to take his daughter to the doctor. The examination was rescheduled for June 14. Mr. Jabar then obtained counsel, Kirk Dorsey, who informed Western World that he needed time to familiarize himself with the case and that the examination would need to be postponed. According to Western World, Mr. Dorsey agreed to try to provide the requested documentation.[14]

         On June 28, 2017, Western World's counsel wrote Plaintiff's counsel to request a new date for the examination and again demanded the requested documentation be handed over. On June 29, 2017, Sneakers Outlet's counsel refused examination or production of documents, claiming the documents would be provided in the due course of discovery because litigation was imminent.[15] On July 11, 2017, Western World's counsel sent another letter, again asserting its right to conduct an examination under oath pursuant to the Policy.[16] Sneakers Outlet did not respond. On February 9, 2018, Western World sent yet another letter requesting examination of Mr. Jabar and the requested documentation. Again, Sneakers Outlet did not respond.

         On October 3, 2018, Sneakers Outlet filed its complaint against Western World.[17] Western World filed its motion to dismiss on November 23, 2018. Sneakers Outlet filed its motion for voluntary dismissal on January 16, 2019.

         STANDARD ...


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