Mullowney v. USAA Casualty Insurance Company

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
__________________________________________
)
JAMES T. MULLOWNEY, JR. 	)
Plaintiff, 	)
)
v. 	) 	C.A. No. 22-404-JJM-PAS
)
USAA CASUALTY INSURANCE 	)
COMPANY 	)
Defendant. 	)
__________________________________________)
ORDER
Before the Court is USAA Casualty Insurance Company’s (“USAA”) Motion for
Partial Summary Judgment, ECF No. 39. 	For the reasons stated below, the Court
grants USAA’s Motion for Partial Summary Judgment.
I. 	BACKGROUND
This dispute arises from James Mullowney’s attempt to recover homeowner’s
insurance proceeds following a leak, which caused extensive water damage to his
residence in Newport, Rhode Island. ECF No. 40 at 1. After Mr. Mullowney filed a
claim, USAA assigned an independent adjuster who inspected the damage to the
property and provided Mr. Mullowney with an initial payment of $80,636.74.
Id. at 2.
Following the receipt of his first payment, Mr. Mullowney hired an individual to act
as his public adjuster who subsequently prepared a damages estimate totaling
$402,322.17.
	Id. 	In response, USAA hired a different adjuster who conducted an
updated 	assessment 	of 	the 	property, 	which 	resulted 	in 	USAA 	providing 	Mr.
Mullowney with an additional $97,100.
Id.
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Although USAA supplied Mr. Mullowney with $322,718 within three months
after he filed his claim, the parties could not reach a complete agreement on the
compensation owed.1
	Id. at 2-3. 	As a result, Mr. Mullowney elected to initiate the
appraisal process outlined by the insurance policy.
Id. Specifically, the policy permits
either party to demand an appraisal of the loss suffered that involves both parties
selecting their own appraiser and the appraisers jointly selecting an umpire to resolve
any valuation dispute that may arise between them.
Id. at 3. Of relevance here, the
policy specifies that a decision reached by the parties’ appraisers “will set the amount
of the loss” and that once the parties reach a determination on contractual liability,
“the appraisal award is binding on you and us.”
Id. at 3.
Following the parties’ selection of their appraisal panel, the group conducted
an extensive review and evaluation of the property, including an inspection with Mr.
Mullowney.
Id. at 5. The panel also relied on the expertise of several consultants, at
least one of whom had the opportunity to view the premises.
	Id. 	Thereafter, the
panel provided the parties with a unanimous appraisal award executed by all three
of its members.
Id. 	Following the panel’s development of the award and application
of the limitations contained in Mr. Mullowney’s policy, USAA issued a supplemental
payment of $734,787 to Mr. Mullowney.
Id. at 7-8. Consistent with the policy, USAA
also provided Mr. Mullowney with the opportunity to obtain additional withheld
funds upon proof that he completed the requisite repairs to the property.
Id. at 8-9.
1 Along with the two initial payments that Mr. Mullowney received, USAA also
provided him with an additional $144,982 during this three-month period.
See ECF
No. 39-3 ¶ 11.
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While Mr. Mullowney initially provided some documentation indicating that
he undertook efforts to repair the property, USAA deemed the information he
provided insufficient and sought further proof of the work that he performed.
Id. at 9-
10. 	During this repair-documentation dispute, Mr. Mullowney sued USAA alleging
that it failed to adequately investigate the loss or provide him with the requisite
payment as mandated by the policy.
	See ECF No. 1 ¶¶ 12-13. 	Despite USAA’s
decision to grant Mr. Mullowney an extension to provide more detail regarding the
work he performed, Mr. Mullowney failed to do so.
	Id. at 10-11. 	After this Court
partially granted USAA’s motion to dismiss Mr. Mullowney’s negligence claim and
denied their motion to confirm the panel’s damages award as an arbitration award,
USAA moved for partial summary judgment. 2
II. 	STANDARD OF REVIEW
To succeed on a motion for summary judgment, litigants must demonstrate
that a genuine issue of material fact does not exist and that they are entitled to
judgment as a matter of law.
	See Boykin v. Genzyme Therapeutic Prods., LP, 93
F.4th 56, 60 (1st Cir. 2024) (citing Fed. R. Civ. P. 56(a)). 	“The summary judgment
ritual is standard fare: once the movant adumbrates an absence of evidence to
support the nonmoving party’s case, the burden shifts to the nonmovant to establish
the genuine issue of material fact.”
	Id. (citation modified). 	Critically, “to carry this
burden, the nonmovant cannot simply rely on evidence that is conjectural or
2 Also, under Rule 42(b) of the Federal Rules of Civil Procedure, the Court
bifurcated Mr. Mullowney’s bad faith claims pending its resolution of his contract
claim.
See ECF No. 27.
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problematic but, rather, must present definite, competent evidence.”
	Id. (citation
modified). Finally, the interpretation of an insurance contract constitutes a question
of law and courts must evaluate these policies by applying the same rules that govern
the construction of contracts.
	See Atmed Treatment Ctr., Inc. v. Travelers Indem.
Co., 285 A.3d 352, 359-60 (R.I. 2022).
III. 	DISCUSSION
The record does not present any genuine dispute of material fact concerning
Mr. Mullowney’s contract claim, and the law supports judgment for USAA. 	The
record reveals that USAA complied with the assessment-dispute provisions contained
in the policy and that Mr. Mullowney has presented no evidence or contractual
language suggesting that USAA breached the policy’s terms.
Mr. Mullowney appears to argue that the delay between the payment that he
initially received, and the amount USAA awarded him breaches the contract in and
of itself. 	ECF No. 42 at 3-6. 	His argument is that USAA undervalued the property
based on a delay in payment alone. But Mr. Mullowney neither directs the Court to
a contract term that would allow the Court to characterize USAA’s supposed delay as
a breach, nor does he provide the Court with binding authority that would permit the
Court to characterize a delay in payment as authorizing a legitimate contractual
action against USAA.
See id. As a result of Mr. Mullowney’s inability to demonstrate
a genuine factual dispute about his contract claim, the Court determines that it must
grant summary judgment in USAA’s favor.
See Boykin, 93 F.4th at 60 (determining
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that 	a 	party 	opposing 	summary 	judgment 	must 	present 	“definite, 	competent”
evidence in support of the Court’s decision to deny this relief).
Moreover, 	the 	Court 	rejects 	Mr. 	Mullowney’s 	attempt 	to argue 	that 	an
incomplete or inadequate evaluation of the property’s damages entitles him to relief
here.
See ECF No. 42 at 1-2 (arguing that USAA should have taken additional steps
to 	evaluate 	whether 	hidden 	water 	damage 	existed). 	Mr. 	Mullowney 	had 	a
knowledgeable representative act on his behalf during the final appraisal stage of
this dispute, who then reached a unanimous decision with USAA’s representative
and their jointly appointed umpire. ECF No. 40 at 5. Even when viewed in the light
most favorable to Mr. Mullowney, no factual dispute exists regarding whether the
appraisal process occurred in a way that either violated the policy’s terms or was
otherwise unlawful.
	Boykin, 93 F.4th at 60. Although Mr. Mullowney now seeks to
contest the methods undertaken to evaluate the damage that took place to the
property, these retroactive arguments do not give rise to an actionable claim for a
breach of contract and Mr. Mullowney fails to provide the Court with authority that
would allow it to conclude otherwise.
See generally ECF No. 40.
Still, Mr. Mullowney argues that USAA’s treatment of his claim and the
general unfairness that took place during its evaluation allows him to withstand
summary judgment.
See id. at 6-13. Mr. Mullowney contends that USAA’s behavior
runs afoul of the implied covenant of good faith and fair dealing as well as public
policy considerations concerning the conduct of insurance companies and the speed
at which they resolve claims writ large.
Id. Despite this argument, Rhode Island law
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requires litigants seeking to recover under a bad faith theory to first establish a
breach of contract.
Wolf v. Geico Ins. Co., 682 F. Supp. 2d 197, 198 (D.R.I. 2010) (“It
has long been held in this state that a bad faith action does not exist until the plaintiff
first establishes a breach of contract.”) (citing
Lamoureaux v. Merrimack Mut. Fire
Ins. Co., 751 A.2d 1290, 1293 (R.I. 2000) and
Zarrella v. Minnesota Mut. Life Ins. Co.,
824 A.2d 1249, 1261 (R.I. 2003)). Indeed, this longstanding principle of law served as
the basis for the Court to bifurcate Mr. Mullowney’s bad faith claims
in this case.
ECF No. 27 at 4. The Court therefore rejects Mr. Mullowney’s attempt to evade this
legal perquisite to the Court’s evaluation of his bad-faith claim.
Consequently, the Court determines that summary judgment in USAA’s favor
is appropriate. 	Moreover, based on the Court’s resolution of the instant motion, it
also determines that Mr. Mullowney’s bad faith claims are no longer viable as well.3
IV. 	CONCLUSION
There 	being 	no 	genuine 	issue 	of 	material 	fact, 	USAA 	has 	successfully
demonstrated its entitlement to summary judgment. As a result, the Court GRANTS
USAA’s Motion for Partial Summary Judgment, ECF No. 39. 	Final judgment shall
enter for the Defendant on all counts.
3 As USAA mentioned in its memorandum, the Court has every expectation
that USAA will remit the additional $7,500 payment to Mr. Mullowney based on the
outstanding, undisputed amount owed for business personal property coverage.
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IT IS SO ORDERED.
s/John J. McConnell, Jr.
___________________________
JOHN J. MCCONNELL, JR.
Chief Judge
United States District Court
April 20, 2026
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