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No. 14-1545

In the United States Court of Appeals

For the Seventh Circuit

BRIAN V. SHIFRIN & MELANIE SHIFRIN, PLAINTIFFS-

APPELLANTS

v.

LIBERTY INSURANCE CORPORATION

DEFENDANT-APPELLEE

On Appeal from the United States District Court

For the Southern District of Indiana,

Case No. 1:12-cv-1011

The Honorable Judge Jane Magnus-Stinson

BRIEF OF PLAINTIFFS-APPELLANTS,

MELANIE SHIFRIN

Brian & Melanie Shifrin

11418 Altamount Dr

Fortville, IN 46040

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TABLE OF CONTENTS

TABLE OF CONTENTS.................................................................................................................... i

STATEMENT WITH REGARD TO ORAL ARGUMENT .................................................... viii

STATEMENT OF SUBJECT MATTER AND APPELLATE JURISDICTION .................... 1

I. District Court Jurisdiction ...................................................................................... 1

II. Jurisdiction in the Court of Appeals ........................................................................ 1

III. Subject Matter controversy ..................................................................................... 1

STATEMENT OF THE ISSUES ..................................................................................................... 3

CASE STATEMENT ....................................................................... Error! Bookmark not defined.

A. Case Summary. ................................................................................................... 5

B. The Parties and the Background. ............................................................................ 7

C. Action was filed in the State Court on March 1, 2012 after the Defendant refused

to respond to Notice of Breach of Contract. ............................................................ 8

D. When the case was removed to the District Court, Defendant supplied a new

service address for himself and uninhabitable house for Plaintiffs-Appellants. Strangely the State Court had the correct address of Appellants, Liberty

continued to communicate using correct address, and civil docket sheet and the certificate of service on removal notice had the correct address. ............................... 8

E. All District Court communications went to the Plaintiffs uninhabitable house

because Court ignored Plaintiff’s warning at initial conference and yet another notice of change of address. .................................................................................... 9

F. While denying discovery Defendant supplied three material falsified documents. ..... 9

G. Defendants submitted meretricious Summary Judgment using non sequitur fallacy

but bulls eyed own gross negligence and bad faith because adjuster stated that he observed and concealed “substantial damage” and “there was resulting water damage” five days after repairs of his selected contractor. ...................................... 10

H. On Reply Liberty ineffably back-pedaled with Fearrin’s story “adjuster saw the damages WHERE SHINGLES WERE MISSING but he paid for the tarps, the

tarps were still there, and tarps don’t last forever” implying tarps deteriorated in five days; original tarps were preserved for over a year by Appellants covering

them, knowingly added fraudulent affidavit of “Appraiser”, inadmissible, and withheld for years as “irrelevant” evidence. .......................................................... 10

I. Court findings: Court found that Plaintiffs-Appellants breached duty to mitigate

damages at the onset of the claim because of negligent repairs performed by

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Defendants selected contractor concealed by the adjuster leaked. Court further replaced “Factual background” with “Actions taken by Liberty”, and avoided

Plaintiffs-Appellants mitigated damages and installed TWO LAYERS of tarps, and improperly quoted the Plaintiffs, the first time in the history of the US . .......... 10

J. The truth is incontrovertible. Malice may attack it, ignorance may deride it, but in the end, there it is [Winston Churchill]. On January 10th 2014 Appellants discovered that the Defendant concealed that the house was only worth $63,000 and as such it was a total loss from day one. [A.691] ................... 11

STATEMENT OF THE CASE AND FACTS .............................................................................. 11

A. Events of March 2011. ....................................................................................... 11

B. Events of April 2011. ......................................................................................... 14

C. Events of mid-April-August 2011. .................................................................... 16

D. Events of mid- August 2011. ............................................................................. 18

E. Events of August 31st – Mid September 2011. ................................................. 18

F. September – October 2011. ............................................................................... 19

G. October-November 2011. ................................................................................... 19

H. Liberty brings in a biased/incompetent engineer. ........................................... 21

I. Defendant quickly executes appraisal over liability, causation, bad faith. .... 22

J. Insured learns about biased appraiser. ............................................................ 23

K. On summary judgment reply active fraudulent concealment of “Appraiser”

and Liberty argued including water and mold remediation would have

totaled the house. .............................................................................................. 23

SUMMARY OF ARGUMENTS ................................................................................................... 26

ARGUMENT .................................................................................................................................... 27

I. DISTRICT COURT IMPROPERLY FORMULATED THE DUTY AS

WHEN INSURER AGREED TO PERFORM THE REPAIRS – THE DUTY

AND PERFORMANCE LISTED IN THE CONTRACT BECOMES HIS.

THE INSURED’S “DUTY” DOES NOT APPLY TO DAMAGES

RESULTING FROM INJURIES OCCASIONED BY LIBERTY'S

CONDUCT. ....................................................................................................... 28

A. Review Standard De novo. ................................................................................... 28

B. Appellants were not under any duty and because Liberty never completed the initial

repairs Liberty agreed to perform based on adjuster observing “substantial damage”

where shingles were missing resulting in interior water damage. ............................ 28

C. As a result of this error: Liberty’s case is meretricious. ........................................... 29

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II. THE DISTRICT COURT ERRED IN GRANTING DEFENDANT THE

MOTION FOR SUMMARY JUDGMENT........................................................ 29

A. Review standard is de novo. ................................................................................. 29

B. Liberty failed to prove following elements: Duty, Reasonable, Necessary, Breach [failed to exercise reasonable diligence] and caused the identifiable item of harm not

attributable to the defendant's negligent conduct. .................................................. 29

C. Evidence provided conclusively shows that Appellants performed reasonable

Mitigation of Damages based on their knowledge: by fixing much larger structure that had no roof and was in danger of collapsing first, negligent repairs of the Defendant’s selected contractor when became aware of it next by installing two

layers of independent tarps, supplied court with photographs. Court improperly resolved ambiguous term “reasonable repairs” as to the Defendants definition “full

permanent roof replacement” for the total loss of the house. .................................. 31

D. Here Appellants argued that they performed mitigation and reasonable mitigation by

installing and maintaining tarping, appellants were prevented from full roof replacement by funds, by Liberty refusal to pay for decking and rafters. ................. 33

E. Even if Appellants did nothing, duty to mitigate damages should be deemed

performed as insured clearly bargained for replacement, house was a total loss; adjuster was requested to investigate total loss and appellants requested a settlement,

Appellants installed and maintained double tarps above and beyond of what’s reasonable. ........................................................................................................... 33

F. Court cannot weigh evidence on Summary Judgment. Mitigation of damages is a question for the jury. ............................................................................................ 34

III. GENUINE ISSUES OF MATERIAL FACT DO EXISTS AND THEREFORE

IT WAS IMPROPER TO GRANT SUMMARY JUDGMENT FOR THE

DEFENDANT. ................................................................................................... 34

A. Review standard de novo ..................................................................................... 34

B. Res ipsa loquitur doctrine. .................................................................................... 34

A. Experienced adjuster Fearrin, with superior knowledge and experience acted Negligently/ Gross negligently when concealed the information about leaks and

improper repairs waiting nearly two month during a rainy spring, delaying (refusing) to dry up the property in reckless disregard of the consequences as affecting

Appellants property. ............................................................................................. 36

C. Bad Faith ............................................................................................................. 38

D. Appellants suffered physical and emotional and should be able to present this bad faith case to the jury to decide the damages. .......................................................... 42

E. Estoppel and waiver. ................................................................................................. 42

IV. THE DISTRICT COURT COMMITTED PLAIN ERROR IN GRANTING

DEFENDANT THE MOTION FOR SUMMARY JUDGMENT WHEN

HELD BREACH OF “MITIGATION OF DAMAGES” BECAUSE THE

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MITIGATION OF DAMAGES IS NOT A DEFENSE TO THE ULTIMATE

ISSUE OF LIABILITY IN INDIANA AND IS AN OFFSET TO

RECOVERY. ...................................................................................................... 43

A. Standard Plain Error. ........................................................................................... 43

B. The issue of mitigation is a question of fact for the jury. Smith v. Rowe, 761 F.2d 360, 366-67 (7th Cir.1985). ................................................................................... 44

C. The error is not harmless – cause should go to jury trial. ........................................ 44

V. DISTRICT COURT IMPROPERLY DECIDED THAT DEMAND FOR

APPRAISAL VALID, NOT WAIVED AND MANDATORY. ........................... 44

A. Review standard de novo ..................................................................................... 44

B. District Court ignored waiver and instead adopted South Dakota law.................... 44

C. Defendant knew engineer was not truthful as he observed the leak, tornado. It could not have possibly been pre-existent. – Estoppel can be based on fraud .................... 45

D. Liberty did not compel – therefore appraisal was waived. ...................................... 45

E. Defendant did not meet its burden of proof to make appraisal mandatory. ............. 45

F. Appraisal was unconscionable .............................................................................. 46

V. THE TRIAL COURT ERRED IN FAILING TO GRANT APPELLANTS

MOTION FOR SUMMARY JUDGMENT:....................................................... 46

A. The court’s decision to grant or deny cross-motion for summary judgment reviewed de novo. ................................................................................................................ 46

C. Experienced adjuster Fearrin, with superior knowledge and experience acted Gross Negligently when concealed the information about leaks from Liberty initial and improper repairs waiting nearly two months during a rainy spring, delaying

(refusing) to dry up the property in reckless disregard of the consequences as affecting Appellants property. ............................................................................................. 46

D. Just as in Murphy Auto Sales, Inc., et al. v. Coomer et al. (1953), 123 Ind. App. 709, 112 N.E.2d 589 where defendant sold automobiles with worn-out engine, that fell

apart the very next day; appellants roof had substantial damage resulting in interior water damage still had missing shingles - five days after the repairs of the Liberty, and the adjuster concealed it, “delayed” moisture remediation. ............................. 48

E. Appellants suffered physical and emotional and should be able to present this bad faith case to the jury to decide the damages. .......................................................... 49

VI. THE TRIAL COURT ERRED IN FAILING TO GRANT APPELLANTS

MOTION 59(e) AS COURT ADMITTED BREACH WAS NOT

MATERIAL. ...................................................................................................... 49

CONCLUSIONS ............................................................................................................................. 49

CERTIFICATE OF COMPLIANCE WITH F.R.A.P RULE 32(A)(7) ....................................... 50

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CERTIFICATE OF SERVICE ........................................................................................................ 51

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TABLE OF AUTHORITIES

Cases

Anderson v. Liberty Lobby Inc., 477 U.S. 242, 255 (1986)..................................................... 27

Bank One, Texas, N.A. v. Taylor, 970 F.2d 16 (C.A.5 1992) ................................................. 30

Carrizales v. State Farm Lloyds, 518 F.3d 350 (5th Cir. 2008) ............................................... 43

Florio v. Tilley, 875 N.E.2d 253, 255 (Ind.Ct.App.2007). ...................................................... 32

Gayle Fischer vs. Michael and Noel Heymann 49A02-1204-PL-340 Indiana Court of Appeals ......... 37

Gross v. PPG Industries, Inc., 636 F.3d 884, 888 (7th Cir. 2011) ........................................... 27

Halliburton Oil Well Cementing Co. v. Millican, 171 F.2d 426, 430 (5th Cir.1948) ................ 30

Kocher v. Getz, 824 NE 2d 671 - Indiana Supreme Court 2005 ............................................. 43

Logan v. Commercial Union Ins. Co., 96 F. 3d 971, 982 - Court of Appeals, 7th Circuit 1996 .. 36, 47

Mutual Hospital Insurance, Inc. v. Klapper, 312 NE 2d 482 (Ind.Sup.Ct.1974) ................................ 45

Rex Insurance Co. v. Baldwin, 323 N.E.2d 270 (Ind.App. 1975) ..................................... 36, 47

Sellers v. Zurich Am. Ins. Co., 627 F.3d 627, 631 (7th Cir. 2010) .......................................... 27

Simmons v. Erie Ins. Exchange, 891 NE 2d 1059 – (Ind.Ct.App.2008) .................................. 30

Tate v. Secura Ins., 587 NE 2d 671(Ind.Sup.Ct.1992) ............................................................ 45

Unverzagt v. Young Builders, Inc., 215 So. 2d 823 – (La.Sup.Ct.1968) .................................. 30

Wiese-GMC, Inc. v. Wells, 626 N.E.2d 595, 599 (Ind.Ct.App.1993). .................................... 32

Willis v. Westerfield, 839 NE 2d 1187 - Indiana Supreme Court 2006 .................................... 43

Statutes

28 U.S.C. § 1291 .................................................................................................................... 1

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28 U.S.C. §§1332 ................................................................................................................... 1

Rules

59 (e) ..................................................................................................................................... 2

60(b)(1) .................................................................................................................................. 2

Fed. R. Civ. P. 56(a) ............................................................................................................ 32

Other Authorities

BLACK'S LAW DICTIONARY 931 (5th ed. 1979).............................................................. 47

CDC: Mold Prevention Strategies and Possible Health Effects in the Aftermath of Hurricanes and Major

Floods http://www.cdc.gov/mmwr/preview/mmwrhtml/rr5508a1.htm ............................. 48

DAN B. DOBBS, LAW OF REMEDIES § 12.21(2) (2d ed. 1993); ....................................... 33

EPA: Mold Remediation in Schools and Commercial Buildings

http://www.epa.gov/mold/mold_remediation.html ........................................................ 48

FEMA: http://www.fema.gov/9500-series-policy-publications/mold-remediation ................. 48

Insurance & Risk Management Glossary http://www.irmi.com/online/insurance-

glossary/terms/s/sue-and-labor-clause.aspx ...................................................................... 15

OSHA: Hurricane_Facts Mold_Facts

http://www.osha.gov/OshDoc/data_Hurricane_Facts/mold_fact.pdf .............................. 48

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STATEMENT WITH REGARD TO ORAL ARGUMENT

This case must be reviewed as Liberty Mutual attempts to reshape ALL Indiana

insurance laws using this pro Se litigation. The case is of exceptional importance, as it is 100%

reproducible in bad faith and is 100% Bad Faith.

I do not believe that this case requires Oral Argument. It should not be necessary to take

both of my daughters out of school to travel to Chicago, stay in a hotel, argue for 15 minutes

about a settled law that “duty to mitigate” is not without exceptions and limitations and offset

to the recovery in addition to question for the jury. Neither as a pro Se to argue if the Indiana

Supreme Court will hold appraisal “amount of loss” to include only “engineering issues” where

the defendant wilfully hired a biased engineer who nearly nine months later declared everything

pre-existenting, including not only the tornado damage, but the leaks from the initially

improperly fixed roof which were concealed by Liberty and were observed 2 months after; and

the fraudulent “appraiser”1 who was willing to commit a Class D felony by lying on the

1 Appraiser Liberty alleged bad faith Adjuster hired turns out to be owner of Claims Processing company

who Liberty and other insurers habitually hired to process the claims.

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affidavit about the fact he had only performed “several claims”2 for Liberty, while clearly listing

400 on his resume updated a few weeks earlier. This “Appraiser” (“Mr. Nash”) and Liberty’s

lies are so outrageous and insulting as they expected for anyone to believe that Mr. Nash spent

six months in Florida working for Liberty following hurricane Wilma and only performed

several claims.

Here Liberty volunteered to perform initial repairs and concealled that five days after the

“repairs” the house still had “substantial damage”, missing shingles, and leaking water.

Adjuster told insured to get a contractor, while refusing to dry it up, waiting for nearly two

months for additional damages. He brought in a team to create a moisture report, and

lost/destroyed it, created an estimate for pennies on the dollar and again refused to adjust.

While Appellants repaired the roof and installed new tarping - adjuster continued to refuse to

make any changes.

Shockingly Judge Stinson declared duty “as written”, declared as a matter of law that

additional damage that damaged what already was damaged meant breach of “duty” similar to

Examination Under Oath (“where under Indiana law mitigation is an offset to recovery,

requires defendant to quantify”), declared as a matter of law mitigation of damages means

permanent roof replacement(at least $8000 ) and not tarping that appellants maintained on the

house that was a total loss because of missing shingles; and declared adjuster had no duty to

disclose the leaky roof or complete the initial repairs. As a matter of law Judge Stinson stated

the house should not be remediated until a permanent roof is installed, where EPA, CDC,

OSHA, and FEMA states remediation is critical within 24 – 48 hours. And even later declared

2 Affidavit submitted in bad faith contained “several claims” statement with while same “Appraiser”

proudly updated resume on his web site claiming just several weeks prior 400 claims

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just because the house is a total loss does not mean it has to be totaled from the onset (lasted 10

month). Fraud from hiring biased /incompetent engineering can be decided by appraisal, fraud

from biased appraiser is irrelevant because it is “initial”.

The judgment in this matter should be reversed as it will do irreparable harm to

Indiana consumers and water remediation businesses while greatly enriching insurance

companies for unconscionable practices. Never in the history of the United States has any

Court that held that “duty” to mitigate damages involves high cost full permanent roof

replacement of the house that is a total loss because of missing shingles that were

improperly secured by the Defendants own selected contractor!

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STATEMENT OF SUBJECT MATTER AND APPELLATE JURISDICTION

I. District Court Jurisdiction

The original complaint3 in this matter was filed in the Madison County Circuit Court on

March 3rd, 2012 and on July 23, 2012. The initial jurisdiction of District Court was based on

28 U.S.C. §§1332. Plaintiffs are citizen of Indiana. Liberty Insurance Corporation is a

Massachusetts company with its principal place of business in Illinois. Jurisdiction is

founded on diversity. Indiana law controls all substantive issues.

II. Jurisdiction in the Court of Appeals

The United States Court of Appeals for the Seventh Circuit has jurisdiction of this

appeal pursuant to 28 U.S.C. § 1291. The district court entered Judgment against

Plaintiff on all claims on January 09, 2014 by declaring that by non-material “mitigation

breach” the Plaintiffs-Appellants breached the cause and appraisal. And on February

12th denied motions 59 (e) and 60(b)(1) explicitly stating the deadline for appeal runs

from February 12th, 2014. The Notice of Appeal was filed timely on March 12, 2014.

III. Subject Matter controversy

On January 10, 2014 Plaintiffs-Appellants after waiting nearly a year on Madison County to

reappraise the property, were notified that the house was a total loss. However, the appraisal

included was the original $63,000 valuation based on the purchase price six months prior to

tornado. Considering the paid-off claims amount there was no chance for a $75,000

jurisdiction even if punitive damages were included. Defendant obtained favorable

jurisdiction by bad faith and fraudulent concealment of the reserves and in bad faith denial

3 Citations to the required Short Appendix are in the form “A.___.” Citations to the record are in the form

“R.Vol.pageNumber”.

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of entire discovery. Pursuant to Espinueva v. Garrett, 895 F.2d 1164, 1166 (7th Cir. 1990)

appellants brought to this Court’s attention the potential jurisdictional issue. Here I

specifically authorized my husband to make a $20,000 settlement offer much less than

Liberty’s underpayment – and Liberty refused.

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STATEMENT OF THE ISSUES

I. Whether Court improperly resolved duty as “written”, as Shifrin’s owed no duty to

Liberty because Shifrin and Liberty agreed to let Liberty performed the initial repairs that

were never completed, and concealed, Shifrin’s had no knowledge of leaks unlike adjuster.

II. Whether Court improperly granted Liberty motion for Summary Judgment based on

duty to Mitigate damages because the Liberty failed satisfy mitigation of damages: “duty”,

“Reasonable”, “Necessary”, appellants controverted breach, failed the “identifiable item

of harm not attributable to the defendant's negligent conduct” (“further damages”),

unreasonable cost of full roof replacement for total loss building. And mitigation of

damages is the question for the jury.

III. Whether genuine issues of material fact do exist and therefore it was improper to

grant summary judgment for the defendant.

IV. Whether the court committed plain error when it held breach of “mitigation of

damages” to EUO because the mitigation of damages is not a defense to the ultimate issue of

liability in Indiana and is an offset to recovery.

V. Whether the district court improperly decided that appraisal was valid, not waived

and mandatory.

VI. Whether District Court erred when it did NOT grant Plaintiffs summary judgment

stemming from when an adjuster with 20+ years’ experience acted Gross Negligently by

concealing negligent roof repairs Liberty performed, still leaking water, and delaying

remediation in a reckless disregard of the consequences, used extreme interpretation of the

policy to delay and avoid compensating insured, oppressed insured, continuously deceived

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insured as to the value of the loss and continuously deceived insured with an incompetent

engineer that did not properly investigate the loss and an appraiser who actively concealed

his employment.

VII. The trial court erred in failing to grant appellants motion 59(e) as court admitted

breach was not material.

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CASE STATEMENT

A. Case Summary.

There is no way under Indiana law the Appellants could even get properly compensated

for the outrageous attempts of Liberty to avoid paying for a loss and destroying Appellants

home. What was not destroyed by the tornado was destroyed by Bad Faith of “Liberty

Mutual”. For four years of their life Appellants wasted to force Liberty to properly

investigate4 and honestly pay for the loss, life wasted by this shameless enterprise.

Here Liberty offered my husband to perform initial repairs. My husband accepted. He

gave Liberty the bargain, the jewel, the consideration to select competent repair person.

Liberty exploited this oral agreement / contract modification to hire negligent, economical

roofer who left “substantial damage”, and stuffed roof full of bits of shingles inserted

sideways.

Here, the adjuster with 23 years of experience knew that initial roof repairs Liberty

agreed to perform were not complete, observed “substantial damage” still resulting in

water damage five days after the Defendant selected contractor repairs, concealed from

the insured, in reckless disregard to the property of insured. Instead of calling his

contractor to complete the agreed upon repairs - adjuster Scott Fearrin took

photographs, refused to adjust the claim, demanded insured to spend $7,000 - $20,0005

to put a new roof on the house he knew was a total loss and waiting two months

observing constant rains. Defendant attempted to use this Liberty “concealed leak” that

damaged what already was damaged – to avoid paying this loss!

Adjuster willfully totaled the house on one side by delaying critical moisture

4 Liberty claimed that biased engineering issues: roof load and expensive siding should be resolved by

“appraisal”. 5 Due to damaged decking and roof ridge

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remediation until mitigation performance that he wanted was received, while on another

side concealing: leak, substantial damage, missing shingles, little bits of shingles stuffed

sideway and refusing to create an estimate. OSHA, EPA, CDC, FEMA in unison call for

immediate 24-48 hours remediation after tornadoes and hurricanes.

To oppress insured, adjuster Fearrin supplied the check for outside structures with no

estimate, than willfully included roof of the house into the demanded outside structures

estimate causing insured a one year delay in receiving payment. Knowing that the house is

a total loss, the adjuster wrote a ridiculously low estimate that he knew was false, destroyed

unfavorable evidence – a moisture report and the notice from the engineer, refused to

negotiate the claim again for six months without a valid reason arguing that Liberty is not

required to effectuate the claim if future damages are “likely”.

When Appellants complained to agent and IDOI, Liberty falsely told the Insurance

commissioner that insured stated he never mailed any estimates, while evidence is clear

countless estimates were emailed. Defendant oppressed insured by delaying settlement, and

not renewing the policy without 30 days’ notice, because insured refused to take an inferior

settlement, uncontrovertibly Defendant provided a biased / incompetent engineering

investigation that nine months later declared everything pre-existent, including concealed

leaks and a nearly $50,000 loss. Liberty demanded a contractor to “explain the loss”, and

immediately declared the Defendant had reached a phony unauthorized agreement with

the contractor for “everything” so Liberty will not negotiate with insured despite the policy;

declared that they will pay for mold and moisture remediation to someone else to avoid

totaling the house, and to prevent bad faith quickly called for appraisal – hiring the owner

of a claims adjusting company specifically for his services. Disputing “appraiser”

concealment of service for Liberty Mutual during Katrina, Liberty knowingly submitted on

summary judgment a reply false affidavit from this “appraiser” that apparently concealed

400 claims [$160,000] during Wilma.

Appellants aware of this “appraiser” and previous biased engineer –refused, seeking

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review of the entire claim. Adjuster never stated appraisal was mandatory or compelled.

Defendant openly argued that if mold and moisture remediation were included –

the house would be a total loss.

In litigation Defendant-Appellee refused to answer production requests, submitted a

falsified declaration page, a falsified contract for “everything”, spoliated adverse evidence,

claiming bad faith during litigation is not bad faith during adjusting – and declared that

Appellant breached the contract by refusing a biased Appraisal. The Defendant argued just

because the appraiser is biased, does not mean he is incompetent and Plaintiffs-Appellants

should hire their own biased appraiser.

The judgment in this matter should be reversed as it will do irreparable harm to

Indiana consumers while greatly enriching insurance companies for unconscionable

practices.

B. The Parties and the Background.

Mr. and Mrs. Shifrin, a married couple owners of InsuredUninsured.com, purchased

property, the subject of this litigation, six months prior to the tornado. Mr. Shifrin has an

engineering degree [R.14-1545b.66 Plaintiffs Summary Judgment Replay] and a Master’s

degree in Computer Science. Thus appellant is familiar with the Engineering Code of

Conduct, the proper way to perform an engineering investigation, studied years of materials

and is familiar with theories: momentums, molecular thermodynamic, saturation, and basic

load computations.

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C. Action was filed in the State Court on March 1, 2012 after the Defendant

refused to respond to Notice of Breach of Contract.

After Defendant refused to respond to Notice of Breach of Contract [Exhibit

A.664-667], on March 1, 2012, Plaintiffs-Appellants Brian and Melanie Shifrin, pro Se, filed

a complaint in Madison County Circuit Court #48C06-1203-PL-000034 stating that the

Defendant shorted them on just and proper payment following the Tornado[A.130-133].

In the active complaint [A.060-105], Plaintiffs alleged that the defendant selected a

contractor who negligently performed initial roof repairs that immediately leaked, adjuster

knew repairs were improper[A.68], used “delay, delay, deny” tactics and numerous bad faith

efforts in an attempt to settle the claim, and destroyed adverse evidence. Plaintiffs are

seeking declaratory relief that the last minute execution of appraisal was improper and in

bad faith. [A.94-95] Plaintiffs maintained reasonable repairs - temporary tarps to protect

already damaged sheathing [A.95].

D. When the case was removed to the District Court, Defendant supplied a new

service address for himself and uninhabitable house for Plaintiffs-Appellants.

Strangely the State Court had the correct address of Appellants, Liberty continued

to communicate using correct address, and civil docket sheet and the certificate of

service on removal notice had the correct address.

On June 14, 2012, defendant filed a notice of change of address [A.139], and on

July 7, 2012, plaintiffs filed their own. Defendant removed the case to the federal court on

July 27, 2012 citing diversity. Oddly when the case was removed, Defendant supplied the

District Court with proper own address, as for Plaintiffs the Defendant gave the address of

the uninhabitable property. However correct address was on civil docket sheet [A.141], all

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communications [A.144], removal [R.14-1545.15-18], notice to state [R.14-1545.88-89], and

State Court had the correct address.

E. All District Court communications went to the Plaintiffs uninhabitable house

because Court ignored Plaintiff’s warning at initial conference and yet another

notice of change of address.

However all correspondence with the Court went to uninhabitable house due to the

fact that the Court ignored the Initial conference statement and the notice of change of

address [R.14-1545a.81]. A status conference failed on 3/4/2013 as Plaintiffs were not

aware of Scheduler. See returned letter [A.149]. Defendant quickly answered amended

complaint on 3/6/2013 asserting a new number of affirmative defenses and immediately on

3/12/2013 submitted summary judgment without answering two pending discovery

requests, one for over six months.

F. While denying discovery Defendant supplied three material falsified documents.

-The evidence of disputed “agreement for all repairs” with some contractor6, who

was not authorized to perform repairs or negotiate, was falsified - taken from an old

withheld email to make it look like the contractor agreed to perform all repairs for

$44,785. [R.14-1545a.146 Cross-Motion-For-Summary-Judgment Exhibits “Contract” A.454,

“Email” A.456].

-False policy declaration page as cited by Defendant that would have stripped insured

from all proceeds. [R.14-1545a.156, R.14-1545a.164, A.264].

6 Document were provided by the contractor disputing that he agreed to perform all repairs

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-Knowingly False affidavit of “Appraiser” [A.536], his resume [A.576] updated a few

weeks prior [A.577].

G. Defendants submitted meretricious Summary Judgment using non sequitur fallacy but bulls eyed own gross negligence and bad faith because adjuster stated

that he observed and concealed “substantial damage” and “there was resulting

water damage” five days after repairs of his selected contractor.

Affidavit Fearrin [A.158.4] [R.14-1545a.11-13]. Appellants re-examined the adjuster’s

photographs and there was the water damage [A.321], eight days after the tornado

therefore nothing was repaired properly, exhibit [A.326_bottompicture, A573-574].

H. On Reply Liberty ineffably back-pedaled with Fearrin’s story “adjuster saw

the damages WHERE SHINGLES WERE MISSING but he paid for the tarps, the

tarps were still there, and tarps don’t last forever” implying tarps deteriorated in

five days; original tarps were preserved for over a year by Appellants covering

them, knowingly added fraudulent affidavit of “Appraiser”, inadmissible, and

withheld for years as “irrelevant” evidence.

Affidavit Fearrin#2 [A.538]. And the “TARPS” are not visible [A.325, A.326]

-Withheld as “irrelevant” despite asserted in the original complaint 30 days non-renewal

notice [A.130¶8], evidence easily producible while refusing to provide adverse disputing

evidence to exactly the same fact. [dct.106,107,108].

I. Court findings: Court found that Plaintiffs-Appellants breached duty to

mitigate damages at the onset of the claim because of negligent repairs performed

by Defendants selected contractor concealed by the adjuster leaked. Court further

replaced “Factual background” with “Actions taken by Liberty”, and avoided

Plaintiffs-Appellants mitigated damages and installed TWO LAYERS of tarps, and

improperly quoted the Plaintiffs, the first time in the history of the US .

11

Mistakenly, District Court replaced “Factual background” with “Actions taken

by Liberty”[A.006] and missed the fact that Liberty’s adjuster observed leaks from the

repairs Liberty agreed to perform. Court declared that Appellants tarps were not

reasonable repairs and $5000 ACV of shingles is not that bad, tarps only work for so

long. As proof the Court cited a leak that occurred after illusory repair which Liberty

performed and the Appellants breach of duty as “written” and held the non-material

breach also breached appraisal. Court followed declaring it is “reasonable” for insurers

not to water remediate houses for ten months until a permanent roof is in, and that “we

will pay you unless someone else is legally entitled to receive payment” – means

insurer can wait for someone else other than insured to be entitled in the future to avoid

total loss. The Court seems to have ignored countless instances of estoppel/unclean

hands/waiver based fraud, and bad faith.

J. The truth is incontrovertible. Malice may attack it, ignorance may deride it, but in the end, there it is [Winston Churchill]. On January 10th 2014 Appellants discovered that the Defendant concealed that the house was only worth $63,000 and as such it was a total loss from day one. [A.691]

Appellants specifically requested reserves [] and requested the adjuster to check if

the house is a total loss [A.346].

STATEMENT OF THE CASE AND FACTS

A. Events of March 2011.

12

1. The property was purchased six months prior to the tornado of February 28, 2011,

with a market value of the house at $82,500[R.14-1545a.142] and the Tornado of February

28, 2011 totaled the barn and the house. Decking was exposed on 2/28/2011 and uplifted.

[R.14-1545a.142, Exhibit 8 A.306; R.14-1545b.64, Exhibit 25 A.627].

2. Plaintiff Brian Shifrin reported the claim to the Defendant on 3/3/2011 and

requested the defendant to secure roof and siding. Liberty’s selected contractor Paul Davis

Restoration performed repairs. Repairs were performed in the dark. [R.14-1545a.167]

Unlike other adjacent houses where insurance tarped the entire roofs, in Plaintiffs residence

the defendants sub installed four tarps and lot’s of bad shingles, that contractor picked from

the ground and inserted sideways. [R.14-1545a.143].

3. In fact it was the Liberty phone rep asked Mr. Shifrin if he wants Liberty to arrange

for initial repairs. Mr. Shifrin answered “Yes”.[R.14-1545b.56]

4. On March 8th, five days after the repair, Defendant’s experienced adjuster with 20+

years of experience Mr. Scott Fearrin, observed “observed that the Plaintiffs' roof had

substantial damage where shingles had been removed during a storm, and there was

resulting interior water damage” in addition to photographed incomplete repairs[A.573-

574,A.326]

5. Adjuster advised the Plaintiffs that Plaintiffs needed to replace the roof immediately7

in order to protect the property from further damage[R.14-1545a.167] and did not say

anything about any leaks Id. Plaintiffs assumed all of the roof leaks had been properly

secured by the defendant’s subcontractor. The adjuster left without scheduling another

meeting or explaining the process to the homeowner, or policy options. Photographs Scott

Fearrin provided showed nothing critical. [A.326 Exhibit 11]. Plaintiffs did not go on the

roof to examine the tarps installed by the defendant’s subs nor would they have knowledge

7 Plaintiffs-Appellants failed to articulate that all adjuster said was get a contractor.

13

of how to inspect them. Plaintiffs wanted to see a complete estimate to see if they should

request payment under replacement cost because house is totaled, or ACV, or repair due to

the house being flooded. Id

6. Adjuster did not call[ed] his contractor back to fix leak [R.14-1545a.144]. On Reply

Liberty stated that “called his contractor back” is contrary to the terms of the applicable

insurance policy[R.14-1545a.368 Defendants Reply]. Therefore agreed upon Initial repairs

by the Defendant-Appellee were never completed.

7. The adjuster left without scheduling another meeting or explaining the process to the

homeowner, or policy options. [R.14-1545a.167].

8. Parties differ on water remediation: either adjuster completely concealed the need for

immediate [24-48 hours] remediation as advised by OSHA [CDC, EPA, FEMA] for a

completely flooded house with no outside moisture barrier (Tyvek) until appellants

discovered thirty days later while observed minor children affected by mold[R.14-

1545a.142], or stated that it will be done “later” because in adjuster’s opinion there is no

point to dry up the house until weeks later when permanent roof is installed and mold is

everywhere.

9. March 2011. Appellant assumed that all of the roof leaks had been properly secured

[R.14-1545a.167], worked days, nights and mornings to repair the barn that had no roof, no

way to tarp, had flooded drywalled offices using all of their funds, slept on the property, and

mowed the property, interviewed contractors while defendant’s adjuster was siting comfy

and refusing to adjust [R.14-1545b.63].

10. While adjuster on March 23rd issued the check for outside structures $14,266, a

fraction of the cost, without any supporting estimate[R.14-1545a.167,Exhibit 12 A.335] to

14

Plaintiffs-Appellants and their mortgage company FlagStar bank, in violation of IC 27-4-1-

4.5, and check was rejected by the bank due to lack of documentation.

B. Events of April 2011.

11. When demanded on April 4th, adjuster created a non-correlated estimate [Exhibit 13

A.338] and to oppress the insured willfully included roof of the house into outside structures

estimate causing insured one year delay in receiving payment[R.14-1545a.148, Exhibit 14 ].

Till summary judgment Defendant did not disclose what adjuster had really paid for[R.14-

1545a.168] .

12. On April 11 the Appellants requested Liberty to remediate the house, remove 2’

drywall so house can be dried up and were denied by the adjuster[R.14-1545a.168]. In the

litany of self-controverted statements the Defendant declared that it was because appellants

did NOT select a contractor to repair the “damage” [R.14-1545e.8 LibertyReply] that

appellants were not aware of [R.14-1545a.168], and in affidavit#2 same adjuster claimed

that Appellants did select the contractor in February or April with whom he had made an

agreement for roof repairs behind insured’s back for $6610.51 [A539¶9] that completely

unsupported[R.14-1545b.62¶3.5]. However the tornado was on February 28th and there was

no 29th, and it was not reported until March 3rd. In April Appellant’s waited on the adjuster.

13. Appellants could not perform repairs because adjuster would not pay for decking or

investigate rafters. [R.14-1545a.168]

14. On April 13th 2011 Appellants sent an email with a long list of repairs based on

interviews with contractors asking if the house is a total loss in light of the low market value.

The e-mail specifically listed decking and rafters believing adjuster attempted to avoid

15

paying [R.14-1545a.169 Exhibit email A.346]. On April 15th adjuster agreed to bring a team

to prepare moisture report, and for a meeting that was to be held on the 25th, nearly 45 days

in the stand-off. Id

15. That day adjuster was ten minutes late [R.14-1545a.169], later working on Sketch

and moisture team performed measurements by a two person team without the adjuster

present. Claims log states: “He was told that the measurements are only good for a day”[

R.14-1545b.16].

16. On April 25th the “additional damages” were discovered during an unusually rainy

spring that damaged previously damaged drywall and already wet insulation [R.14-

1545a.170]. Adjuster Defendant’s adjuster again reminded Plaintiffs of their obligation

under the insurance policy to protect the property from further damage, and appellants had

to Google it to see what it meant [R.14-1545a.170] and discovered from Insurance & Risk

Management Glossary8: “temporary placement of a tarp over a damaged roof to mitigate

further damage.”[R.14-1545b.5]

17. Adjuster would not investigate nor would he agree to pay for rafters and roof decking

[R.14-1545a.170].

18. In this matter Appellants requested EIGHT TIMES to cover decking and rafters

[R14-1545b.57,A.549-560¶¶18-31 Exhibits: A.600,A.606,A.612,A.346...] that were never

answered.

19. Defendant’s adjuster agreed to prepare an estimate for the damage based on what he

believed to be related to the loss. [R.14-1545e.9 LibertyMSJ] .

8 http://www.irmi.com/online/insuranceglossary/terms/s/sue-and-labor-clause.aspx

16

20. On April 28th adjuster [presumably realizing plaintiffs were interested in settlement]

issued estimate $29,486/$22,713. In the end, the adjuster refused to pay for water

remediation, wrote an incomplete estimate for mostly drywall, refused to apply any code

upgrades, stated that he will not negotiate despite the policy stating we will negotiate with

you, and walked away[R.14-1545a.170]. Immediately refused to make ANY changes until a

new roof was installed. [R.14-1545a.146]

21. Adjuster declared: “This estimate reflects what I believe to be the full repairs of the

home with some open items. Specifically the hvac repairs, possible chimney damages, any

code requirements, and the remediation of the premises once the roof is replaced.” [R.14-

1545a.367 Defendant’s reply].

22. Defendant stated “There is generally no point in attempting to estimate the cost to

repair the total damage under circumstances where additional damage is likely to develop”

[A.370].

C. Events of mid-April-August 2011.

23. On April 29 appellants informed adjuster they repaired the leak [R.14-1545b.56

Exhibit A.612], and will not be cashing the check because the estimate did not include any

large repairs and appeared fraudulent. Appellants still had not received any funds from the

bank for barn repair due to the intentional inclusion of the house roof on the outside

structures estimate. Nor could they cash the deficient check from the adjuster. [R.14-

1545a.171] Brian Shifrin developed severe chest pains he never previously had and went to

seek a medical opinion from a Community North physician. [Id, Exhibit A.496].

24. Same email contained the following line [R.14-1545b.63, A.550¶23]:

17

You did offer to pay for the roof and mailed us $5038.93 estimate for 30.33 sq ft complete

replacement, that you said our contractor "agreed" to it. Our contractor send us $6800

agreement and it doesn't include decking that is ruined and must be replaced anyway to

comply with current building code 3/8 decking with unsupported edge not allowed.

25. On May 5, 2011 a roofing contractor noticed an additional 20’ crack in the

foundation”[R.14-1545a.171] leaking water. Defendant’s engineer later investigated using

Patrick Carl from Donan Engineering determined that the cracks were related to the loss

event and stated to the insured that leaky foundation 20’ crack should be “painted

over”[R.14-1545a 171]. [O]nly several inches below the ground, it would expand and leak in

the winter when water freezes.[ R.14-1545a.172]

26. Numerous estimates were received and forwarded as individual emails to the

adjuster using the same DoD account as the other 46 emails: Vogt Carpet One for flooring

in the amount of $10,442 and discussed it with the adjuster; Dave Adams to remove and

replace blown-in insulation for $5,707.24, drywall, asbestos; cedar siding for $18,711.50,

followed by a large estimate from Don Kummic for additional interior work. [R.14-

1545a.173,A.398-423]. List of all forwarded emails[A.423]. On June 28, 2011 I also

forwarded via e-mail an HVAC estimate from Airtron to the adjuster. [A.421-2]

27. Don Kummic made a statement: "I know a house that should be totaled when I see

one. Even today he still states that. [R.14-1545a.174]

28. May – August: Adjuster continued to refuse to adjust, replace R13 insulation with

R38 per code, add damaged cedar ceiling, add A/C and furnace, add soffits, fireplace, well,

adjust baseboards to correct width from 2” to 3”, adjust them from paint grade to stain

grade, add stain baseboards, add patio door. Nearly all expensive repairs were kept off the

estimate. [R.14-1545a.173]

18

D. Events of mid- August 2011.

29. On August 13th Brian Shifrin called Liberty and customer service representative

stated that the renewal letter was in the mail. [R.14-1545a.174]

30. On August 29th Appellants made a complaint to IDOI about adjuster refusing to

adjust. [R.14-1545a.174 Exhibit A.602]

31. On August 30th Appellants contacted Liberty’s agent complaining that adjuster will

not adjust. Appellants also contacted adjuster’s supervisor on the same day and discussed

the estimate from Mr Kummic. [R.14-1545a.174]

32. On August 30, 2011, Scott Fearrin stated “it is my opinion that insured would like to cash

out on this loss and rebuild the property”. Id.

33. On August 31st 2011 defendant’s agent proposed to add appellant’s autos to the

policy. In the first week of September 2011, Mr. Shifrin received a voice mail message that

stated he should have known and that the policy was cancelled.[Id]. There was no 30 days

cancellation notice. The only thing that happened in between was that Brian Shifrin made a

complaint to the Indiana Department Of Insurance (“IDOI”) stating that the adjuster

refused to pay for repairs.

E. Events of August 31st – Mid September 2011.

34. On September 14, 2011, the Indiana Department of Insurance forwarded Brian

Shifrin a letter dated September 12, 2011 that was authored by Kevin May. In that letter,

Brian Shifrin learned that apparently he was still disagreeing with the engineer's report. And

apparently he stated to Mr. May that he never sent any estimates, not even the one that they

received and acknowledged receiving on August 29, 2011 even though Brian Shifrin and

19

Kevin May discussed this in a 23 minute long cell phone call made on August 30, 2011.[

R.14-1545a.175]

35. Plaintiffs attempted to provide a full estimate however refused to let Liberty adjuster

be present or negotiate at the tentative meeting with less than 24 hour notice aggrieved by

bad faith policy cancellation[R.14-1545a.175]. Judge Stinson using bits and pieces from

different documents provides her own spin of the events in the summary judgment vs the

reading defendant supplied evidence that there was no exact time, Mr. Shifrin had to go

back to work, and contractor was not interested. [A.151-154]

F. September – October 2011.

36. Double tarps were installed one on top of another and independently nailed so if one

tarp gets damaged another underneath will protect the roof. [R.14-1545a.148].

37. On September 28 supervisor privately states in the log: “Mr wants to demo the

house.” [R.14-1545a.176, A.382].

38. Plaintiffs provide Mr. Kummic, who also stated that the house should be

demolished, explain the loss with no authorization to negotiate the claim or perform repair.

G. October-November 2011.

39. New estimate was issued that was $47,769 or 62% larger than previous one but still

missing moisture, mold remediation, furnace, fireplace, decking, soffits, rafters, and code

upgrades that would have totaled the house. [R.14-1545a.177]

40. Mr. May proclaimed that he reached verbal and written agreement for all repairs. Id

41. Plaintiffs objected due to the fact that the most expensive repairs were kept off the

estimate: moisture remediation (at this point it meant removal of all drywall), mold

20

remediation ($5000), furnace, roof decking, fireplace, $12,370 in code upgrades, water

heater, the siding that now was exposed for nearly 8 months and estimated at $35,000; the

interior stain doors, baseboards, the soffits, the real flooring and not placing new subfloors

on the moldy boards.

42. No valid written agreement ever existed, defendant supplied only a doctored section

of the old email pasted into Microsoft Word: with stripped headers and stated we can do

what was on old estimate with no valid dates, signatures and requesting payment of $45k

made directly to the contractor. The “agreement” does not satisfy Indiana IC 24-5-11-10 [R.

14-1545a .146, Forgery:A.456 vs Real:A.458-459]

43. Mr. Shifrin re-interviewed the contractor, Don Kumic, on 3/28/2013 and the

contractor stated again that his professional opinion never changed since the first time he

saw the house on 7/2011, that the house should have been replaced, also he was willing to

do as to what is on the estimate. The contractor said that no reasonable person would be

repairing that house [R. 14-1545a .150].

44. Defendant advised that water remediation would be paid when the work was

performed declared that mold remediation that is covered by endorsement will be paid only

directly and after roof is replaced while not paying for decking or investigating the roof.

[R.14-1545a.178]

45. Policy states “We will adjust all losses with you. We will pay you unless some other person is

named in the policy or is legally entitled to receive payment.” [R.14-1545a.146]

46. Appellant requested ANY reasonable settlement9 siting asbestos, lead, mold, and

Defendant refuses knowing that countless repairs were not listed. [R.14-1545a.178]

9 Record references to affidavit and Exhibit 40 A.450

21

47. Plaintiffs religiously maintained the tarps. Id.

48. On October 31, 2011 I called siding company and new estimate came over 35,000.

Meaning that the house is totaled. [R.14-1545a.179].

H. Liberty brings in a biased/incompetent engineer.

49. Liberty brings in engineer to declare everything pre-existent Id Even before entering

the house he stated that roof decking damage was pre-existing. [R.14-1545a.180].

50. On 8/18/2011 plaintiffs arranged a meeting with a siding contractor with 40 years

experience and the engineer. The siding contractor showed that paint adhesion was still

excellent, except for maybe a couple places (based on how well the underlying boards were

prepared). Cracks were everywhere. The contractor stated that he cannot just replace the

bottom boards, he has to start from the top. He also stated that every manufacturer’s siding

is cut different and that he would have to remove the deck in order to replace siding on the

south wall and then left the meeting. I went with the engineer into the attic. All the engineer

carried for “equipment” was a screwdriver and a camera. [R.14-1545a.180].

51. When the homeowner questioned the next day his preexisting claim based on the

roof surviving for 42 years, and shingles would not hold up and offered the engineer an

opportunity to come back and use a proper infrared camera– the engineer refused and

declared that “he has not made up his mind” until the final report addendum. [R.14-

1545a.149, Exhibit A.468 Email]. Two days later the adjuster called and the same engineer

declared what he would be saying in that report. Id and violated code of conduct that bars

deceptive practices. Engineer violated the NSPE code of conduct. In addition, he did not

22

investigate the plaintiff’s claims following good faith covenant and just declared his own.

[Id, R.14-1545a.181].

52. Donan’s engineer advised Defendant that most of the roof damage, chimney

cracking, and siding damage was due to wear and tear. Id

53. On 12/7/2011 the adjuster sent an email claiming he does not have the engineer

report and it will be mailed by Friday and then they needed until the following Monday to

analyze it. However after insured immediately contacted the engineer on 12/7/2011,

plaintiff learned that was not the case, the Defendant already had the addendum. The

insured sent an email demanding the report as well as sent an email to the adjuster’s

supervisor requesting for an immediate adjuster change. The supervisor, Mr. Kevin May,

replied that “We will not be switching adjusters at this time. Scott and I have discussed

everything to this point.” Id

I. Defendant quickly executes appraisal over liability, causation, bad faith.

54. On December 8th Liberty refuses to replace the adjuster, adjuster declared “he just

received it”, adjuster quickly issues final estimate again missing all expensive items and

again declares “no negotiation is possible” because we reached an agreement with your

contractor, even though you stated you will not use him. Adjuster quickly executes

“appraisal”[A.486 Appraisal] to avoid dispute over causation, liability for siding, bad faith

and fraud. [R.14-1545a.163-164]

55. Defendant’s adjuster again willfully and knowingly hires a non-disinterested

appraiser. The owner of a claims processing company habitually employed by Liberty,

specifically adjuster cites as reason for hiring - his work for Liberty Mutual during Katrina.

23

Neither adjuster nor the “appraiser” disclosed habitual employment[R.14-1545a.482]. After

learning this fact, appellants declined.[R.14-1545b.61]

J. Insured learns about biased appraiser.

56. Defendant did NOT send any letters stating appraisal was mandatory[A.486] nor

compelled the appraisal[R.14-1545a.160] and adjuster stopped communicating with

appellants. Defendant claims that if insured read the Policy, they should have known

appraisal was mandatory in the policy.

57. Plaintiffs filed a complaint and continued to maintain temporary repairs seeking

declaratory relief. On December 14 Appellants obtained estimate for roof replacement

listing bad decking [R.14-1545b.67, Exhibit A.497]. [For the amount $7.795]

K. On summary judgment reply active fraudulent concealment of “Appraiser”

and Liberty argued including water and mold remediation would have totaled the

house.

58. Materially false affidavit of “appraiser” provided on REPLY actively concealing at

least 400 claims he performed for the Defendant; according to his just updated few weeks

prior resume ($160,000) in another event during hurricane Wilma. [A.536] his resume

[A.576] updated few weeks prior [A.577] and cited [R.14-1545b.060].

59. Liberty openly argued that just because appraiser is biased doesn’t mean that he is

incompetent; and Plaintiffs should have hired own biased appraiser.

60. Liberty even stated that:

24

Plaintiffs wanted to put the cart before the horse. They just wanted Liberty to pay them more money, and tried to use the undetermined cost for water remediation as leverage to

force the insurance company to total the property out.

Openly stating dispute was about not including moisture and mold remediation that about totaling the house.

That is exactly why Scott Fearrin refused to cooperate and adjust to pay for valid repairs,

and expensive items such as: furnace, fireplace, moisture and mold remediation, soffits and

downspout, proper 12” wavy cedar siding, insisting on taking the roof off the estimate,

refused to pay for decking, declared that they will pay for damages but only directly. [R.14-

1545b.55]

61. From the photographs supplied by the engineer plaintiffs discovered the truth:

structural roof ridge is SEVENTY PERCENT LESS than minimum required, thus the

sagging and needed code upgrade afforded by the policy.[A.559-560]

62. In summary judgment Defendant included the adjuster’s statement that he is not

aware of the completion of “all repairs”[R.14-1545e.013] linked to the affidavit of adjuster

with the added phrase and “specifically roof” statement.

63. In reality, Appellants emailed defense counsel of permanent shingle replacement

nine months prior and defense counsel also did not reply[R,A.702-703]. Plaintiffs provided

pictures of double tarps in the summary judgment[A.614-619]. Provided

affidavits[A.693,A.695-698], receipts[A.706], faded receipts[A.710], photographs of

repairs[A.712-A-716].

64. On reply Defendant supplied old evidence previously for two years withheld and

demanded on three productions requests – bad faith policy cancellation, via statements of

adjuster’s Supervisor who had no personal knowledge of the evidence. Containing nothing

but “reason Underwriting”. Evidence controverts oral statements of the Defendant and

25

written statements of the agent who allegedly sent the notice. In addition it controverts

Defendant’s own agent who offered to add a car to the apparently non-renewed policy.

65. Appellants received a statement from the County declaring the house a total loss and

listed 2011 Fair Market Value based on purchase price at $63,000; in addition the kitchen

was removed, meaning the house was a total loss from day one.[A.691]

26

SUMMARY OF ARGUMENTS

Indiana law recognizes duty to make reasonable and necessary repairs as common

law duty to Mitigate the Damages. Under Indiana law both legislature and Supreme Court:

mitigation of damages is an offset to the recovery and question of fact for the jury. Appellant

performed reasonable mitigation, while completely unclear if Appellants ever had the

“duty”10: two layers of tarping, considering total loss house – yet Plaintiffs-Appellants case

was dismissed on the pretense of the leak at the onset of the claim caused by

illusory/negligent repairs by individual Liberty contracted. Liberty never completed

contracted repairs, illusory/negligent repairs were photographed and CONCEALED by the

adjuster, who knew roof was leaking.

Liberty used extortion to avoid paying total loss. Mr. Fearrin knew repairs were

negligent, demanded full permanent roof replacement performance and refused to mitigate

the house, while observing daily rains for nearly 60 days in reckless to Plaintiffs-Appellants

property. All while Plaintiffs-Appellants worked diligently to fix another much larger

structure that had no roof and was in danger of collapse. With ill will and moral obliquity

Fearrin wrote ridiculously low estimate, and immediately refused to negotiate under

pretense of future damages even when informed that roof was repaired. While realizing

house is a total loss, and insured is asking for settlement - Liberty deceived IDOI, demanded

contractor to “negotiate”, declared some phony agreement that Liberty falsified from the

old email, declared that they will only pay for mold and moisture remediating directly, but

not until roof replaced. Undeniably hired biased engineer that declared everything pre-

existent, and quickly tried to execute appraisal to protect fraudulent opinion while destroyed

10 Defendant never completed promised initial repairs.

27

adverse evidence – Moisture report. Appraiser happened to be the owner of Claims

Servicing Company in bad faith submitted false affidavit “Appraiser” concealed 400

[$160,000] of claims for Liberty in just one event.

Two years in the Court Liberty used own negligence and bad faith at the onset of

the claim to avoid paying for furnace, fireplace, flooded water heater, soffits, decking,

rafters, code upgrades, expensive cedar siding, moisture, mold remediation that according to

the defendant own words will total the house, despite continuing to adjust for another

EIGHT month and appellants asserted estoppel res ipsa loquitur, and unclean hands

doctrines.

Appellants are seeking declaratory relief that late, defective, bad faith execution of

appraisal was void by fraud and the house was a total loss.

ARGUMENT

This Court “review[s] the district court’s decision on the parties’ cross-motions for summary

judgment de novo, construing all facts and inferences in favor of the party against whom

summary judgment was granted.” Gross v. PPG Industries, Inc., 636 F.3d 884, 888 (7th

Cir. 2011) (citing Sellers v. Zurich Am. Ins. Co., 627 F.3d 627, 631 (7th Cir. 2010)).

Summary judgment is appropriate “when there are no genuine issues of material fact and

judgment as a matter of law is warranted for the moving party.” Id. (citing Fed. R. Civ. P.

56(a); Anderson v. Liberty Lobby Inc., 477 U.S. 242, 255 (1986)).

28

I. DISTRICT COURT IMPROPERLY FORMULATED THE DUTY AS WHEN

INSURER AGREED TO PERFORM THE REPAIRS – THE DUTY AND

PERFORMANCE LISTED IN THE CONTRACT BECOMES HIS. THE INSURED’S

“DUTY” DOES NOT APPLY TO DAMAGES RESULTING FROM INJURIES

OCCASIONED BY LIBERTY'S CONDUCT.

A. Review Standard De novo.

B. Appellants were not under any duty and because Liberty never completed the

initial repairs Liberty agreed to perform based on adjuster observing “substantial

damage” where shingles were missing resulting in interior water damage.

Here controlling [SF.3,SF.2]11 March 3rd

In fact it was the Liberty phone rep asked Mr. Shifrin if he wants Liberty to arrange for initial

repairs. Mr. Shifrin answered “Yes”. Brian Shifrin requested the defendant to secure roof and siding. Liberty’s selected contractor Paul Davis Restoration performed repairs… [I]n Plaintiffs residence the defendants sub installed four tarps and lot’s of bad shingles, that contractor picked from the ground and

inserted sideways.

And [SF.4] March 8th

Defendant’s experienced adjuster with 20+ years of experience Mr. Scott Fearrin, observed “observed that the Plaintiffs' roof had substantial damage where shingles had been removed during a storm, and there was resulting interior water damage”[R.14-1545e.8 Liberty Brief, A] in addition to photographed incomplete repairs[A.573-574,A.326]

Therefore there was an agreement. Offer, acceptance, and consideration L. Simpson,

Contracts § 8 (2d ed. 1965). It was enforceable as Liberty obtained Appellants right to select

the contractor the benefit accruing to the promisor or a detriment to the promise” [Liberty].

Hamlin v. Steward, 622 N.E.2d 535, 539 (Ind.Ct. App.1993). Liberty never completed the agreed

upon repairs. Plaintiffs-Appellants specifically argued “It was the Defendant who was

responsible for repairs”. And Liberty was contractually obligated to complete the repairs.

11 Statement Of Fact References are in the form [SF.X]

29

It would be against public policy concern component of the duty Webb v. Jarvis, 575

N.E.2d 992 (Ind.1991) if Liberty can improperly perform the repairs / and never complete

them and hold the Shifrin’s liable for their own bad performance. Adjuster simply concealed

that repairs were incomplete [SF.4-6] and paid the bill [A.504]. From the facts, Appellants –

never released Liberty from the agreement.

C. As a result of this error: Liberty’s case is meretricious.

Liberty Mitigation affirmative should be stroked. Case remanded.

II. THE DISTRICT COURT ERRED IN GRANTING DEFENDANT THE

MOTION FOR SUMMARY JUDGMENT.

A. Review standard is de novo.

B. Liberty failed to prove following elements: Duty, Reasonable, Necessary, Breach

[failed to exercise reasonable diligence] and caused the identifiable item of harm not

attributable to the defendant's negligent conduct.

Duty - is in questionable at best as Appellants are argued that the Defendant never

completed initial repairs agreed upon. [ARG.I]

Reasonableness - is normally question for the jury, however here due to high cost should be

ascertained in favor of Appellants.

Duty to Mitigate of Damages should not force party to surrender their right to substantial

value and is not without exception and limitations. Thru entire summary judgment

Appellants argued that reasonable repairs were tarping and not $8k – 20,000 full permanent

roof replacement. Appellants provided the estimate for the amount of $7,795 [R.14-

30

1545b.67, Exhibit A.497 Roof Estimate], adjuster declared replacement cost at $6610

without any proof, not including decking. Neither estimate addresses code upgrade to

inferior ridge of the damaged roof and/or rafter’s replacement. Both represent of very

substantial value for the total loss house.

In Bank One, Texas, N.A. v. Taylor, 970 F.2d 16 (C.A.5 1992) at 29 court stated:

Although an injured party is required to use reasonable diligence to minimize his losses, he

is not required to "make unreasonable personal outlays of money," Halliburton Oil Well

Cementing Co. v. Millican, 171 F.2d 426, 430 (5th Cir.1948), or to "sacrifice a substantial

right of his own." Fidelity & Deposit Co. of Maryland v. Stool, 607 S.W.2d 17, 25

(Tex.Civ.App.--Tyler 1980, no writ). Rather, an injured party is required to incur "only

slight expense and reasonable effort" in mitigating his damages. City of San Antonio 801

S.W.2d at 151 (Pulaski Bank & Trust Co., 759 S.W.2d at 735).

In Unverzagt v. Young Builders, Inc., 215 So. 2d 823 – (La.Sup.Ct.1968) stated: The party

who is in default may not, however, mitigate his damages by showing that the other party

could have reduced those damages by expending large amounts of money or by incurring

substantial obligations… First of all, we are not so sure that $1000 to $1500 is a nominal

sum which a non-defaulting party should be required to expend to mitigate damages… Most

of those cited by defendant involved approximately $100 (one or two, perhaps, to $200) and

in Simmons v. Erie Ins. Exchange, 891 NE 2d 1059 – (Ind.Ct.App.2008) adopted explicitly

adopted Bank One decision.

Necessary – Liberty used inadmissible speculation “tarps do not last forever”, and the Leak

cause by incomplete Liberty repairs, and concealed[SF.6,SF.9].

31

Breach (“Further damage”)- “[d]uring the rainy spring season additional damage was largely

irrelevant, same wet ceiling, same wet insulation fell on a pre-damaged floor.” [SF.16],

considering it was the Liberty repairs[ARG.I], appellants had no knowledge of the leak[SF.5,

SF.12], and no further damage can be ascertained from this statement. In fact Liberty engineer

declared everything “pre-existent”[SF.49-52].

Identifiable – again there was no showing by the Liberty that any such simple repair would have

prevented the accrual of further damages to the flooded home at any time or showing what

exactly was damaged or could have been prevented. No showing was made by the Liberty, nor is

there any evidence in the record to even suggest that such $7,795[A.497] mitigation would have

limited “further damages”. It was Liberty job to perform initial repairs.

C. Evidence provided conclusively shows that Appellants performed reasonable

Mitigation of Damages based on their knowledge: by fixing much larger structure

that had no roof and was in danger of collapsing first, negligent repairs of the

Defendant’s selected contractor when became aware of it next by installing two

layers of independent tarps, supplied court with photographs. Court improperly

resolved ambiguous term “reasonable repairs” as to the Defendants definition “full

permanent roof replacement” for the total loss of the house.

Supporting facts are:

Prior to April 25th:

Liberty’s adjuster concealed that appellants roof was leaking with improper repairs

performed by Liberty’s Selected contractor. [SF.4,5]

Liberty never completed the repairs.[SF.6] Insured assumed all the leaks were

properly secured and repaired another building that had no roof, no way to tarp and worked

days and nights to complete. Therefore performed mitigation of damages on another

structure. [SF.9]

32

Plaintiffs-Appellant’s performance was hindered by the adjuster who refused to pay

for decking and would not investigate rafters [SF.13,SF.17-18] therefore they were forced to

tarp. Appellants have no duty to expect negligence of others. The “duty” does not apply to

damages resulting from injuries occasioned by the tortfeasor's conduct. Wiese-GMC, Inc. v.

Wells, 626 N.E.2d 595, 599 (Ind.Ct.App.1993).

Plaintiffs-Appellants behavior is reasonable that they would repair a much larger

structure that was had no roof, no way to tarp, had flooded drywalled offices using all of

their funds [SF.9] in danger of collapse. “An act is the proximate cause of an injury when

the injury “is a natural and probable consequence, which in light of the circumstances

should have been foreseen or anticipated.” Florio v. Tilley, 875 N.E.2d 253, 255

(Ind.Ct.App.2007). Appellants did not anticipate that adjuster would conceal negligent

repairs.

After April 25th:

-Appellants repaired the leaks and notified Liberty.[SF.23]

-Appellants maintained tarps and installed new tarps. [SF.36,41,57]

- Undisputed that Appellant’s mitigation performance here was so good that the

Defendant’s expert engineer who examined the roof eight months later not only could not

see the additional damages from a leak in April 2011, but also did not notice the damages

resulting from the tornado itself and undeniably declared causation as all “pre-existent”

prior to the tornado and “wear and tear”[ SF.52]. Therefore Appellants had perfect

mitigation.

33

Nothing in the Policy requires Appellants to complete the repairs, when seeking to void

appraisal and replace totaled property.

D. Here Appellants argued that they performed mitigation and reasonable mitigation

by installing and maintaining tarping, appellants were prevented from full roof

replacement by funds, by Liberty refusal to pay for decking and rafters.

To support Appellants cited that:

Mr. Shifrin out of context forgetting the “it doesn’t include decking” part. Id ¶ 23”

[R.11.L24] citing proper quote [A.550]:

You did offer to pay for the roof and mailed us $5038.93 estimate for 30.33 sq ft complete

replacement, that you said our contractor "agreed" to it. Our contractor send us $6800

agreement and it doesn't include decking that is ruined and must be replaced anyway to

comply with current building code 3/8 decking with unsupported edge not allowed

Reading this quote a reasonable juror would not agree with the Court: Liberty agreed to pay

for decking or the fact that estimate was proper and contractor agreed to it.

Still it mentions nothing about damaged sagged rafters[SF.13-14, SF.17-18].

E. Even if Appellants did nothing, duty to mitigate damages should be deemed

performed as insured clearly bargained for replacement, house was a total loss; adjuster

was requested to investigate total loss and appellants requested a settlement, Appellants

installed and maintained double tarps above and beyond of what’s reasonable.

In DAN B. DOBBS, LAW OF REMEDIES § 12.21(2) (2d ed. 1993); Professor Dobbs

argued that mitigation is not required in two situations: (1) when a party bargains to avoid

the requirement and (2) when enforcement of a mitigation requirement would encourage

34

breach. Dobbs suggested that these principles were particularly relevant to insurance

contracts. Here Appellants clearly bargained from day one 3/8/2011 to have a cash

settlement, and requested it[SF.46,SF.20].

F. Court cannot weigh evidence on Summary Judgment. Mitigation of damages is a

question for the jury.

Smith v. Rowe, 761 F.2d 360, 366-67 (7th Cir.1985). The reasonableness of mitigation is a

question for the jury citing same standard for Third, Fourth, Fifth, Seventh, Eighth, and

District of Columbia Circuits. In Payne v. Pauley, 337 F. 3d 767 – (7th Cir.2003) this court

stated “On summary judgment a court may not make credibility determinations, weigh the

evidence, or decide which inferences to draw from the facts; these are jobs for a factfinder.”

Appellants clearly controverted Liberty arguments stating they repaired damages in April

and informed the adjuster. They maintained tarps.[SF.36,SF.47,SF.63].

III. GENUINE ISSUES OF MATERIAL FACT DO EXISTS AND THEREFORE IT

WAS IMPROPER TO GRANT SUMMARY JUDGMENT FOR THE DEFENDANT.

A. Review standard de novo

Genuine issues of facts do exist on this claim, because reasonable minds could find

from the designated evidence.

B. Res ipsa loquitur doctrine.

A reasonable juror could determine that also the leak occurred; That Liberty was responsible

because Mr. Shifrin entered into a new agreement/contract or modified a contract with

Liberty on March 3rd 2014. There was an offer to perform the initial repairs, there was an

35

acceptance by both Mr. Shifrin and Liberty[SF.2-3], and there was a bargain, a consideration

– a right to choose the contractor. Contractual modification generally requires an offer,

acceptance, and consideration L. Simpson, Contracts § 8 (2d ed. 1965). "To constitute

consideration, there must be a benefit accruing to the promisor or a detriment to the

promisee." Hamlin v. Steward, 622 N.E.2d 535, 539 (Ind.Ct. App.1993). (quoting A & S

Corp. v. Midwest Commerce Banking Co., 525 N.E.2d 1290, 1292 (Ind.Ct.App.1988)). A

benefit is a legal right given to the promisor to which the promisor would not otherwise be

entitled. OVRS Acquisition Corp. v. Community Health Servs., Inc., 657 N.E.2d 117, 126

(Ind.Ct.App.1995). Supporting fact is:

[SF.2] Defendant’s phone rep asked Mr. Shifrin if he wants Liberty to arrange for initial repairs.

Mr. Shifrin answered “Yes”. [R.14-1545b.056]

Liberty executed the agreement and hired the selected contractor Liberty wanted - Paul

Davis. Liberty never completed the repairs, and the contractor performed illusory repairs:

installed four tarps and lot’s of bad shingles that contractor picked from the ground and inserted

sideways [R.14-1545a.143] [SF.2] – and because Adjuster Scott Fearrin never called them

back to complete the repairs. While adjuster “also observed that the roof of the house had

“substantial damage,” and there was resulting interior water damage”. [A.006 Judgment].

There is a clear act of concealment/negligence: Liberty never disclosed that Appellants

roof was leaking, in addition to the contractor’s incomplete repairs. In this cause we had no

discovery, were not aware of who and what type of Contractor performed these repairs. The

Appellants specifically requested “Your approved or preferred vendor list… roofers and

contractors, for windstorm claims in Indiana from March 1, 2011 through March 1, 2012”

[R14-1545a.345 Addendum]. And “The contract and all correspondence between the

Defendant insurer and the third party … roof repair” [R14-1545a.346] to determine if

appellants are third party beneficiary of the promise. Without, the Appellants were force to

use this doctrine because information was NOT available on this contractor and if the

36

Contractor was told by Liberty to insert shingles sideways or leave “substantial damage”

that was visible only by the adjuster. As in Worster v. Caylor, 110 NE 2d 337

(Ind.Sup.Court.1953) res ipsa loquitur doctrine is applicable.

A. Experienced adjuster Fearrin, with superior knowledge and experience

acted Negligently/ Gross negligently when concealed the information about

leaks and improper repairs waiting nearly two month during a rainy spring,

delaying (refusing) to dry up the property in reckless disregard of the

consequences as affecting Appellants property.

Under Indiana law punitive damages may be awarded for a tortious breach of an

insurance contract if the insurer's conduct amounted to "fraud, malice, gross negligence or

oppression" and "the public interest will be served by the deterrent effect punitive damages

will have upon future conduct of the wrongdoer and parties similarly situated." Vernon Fire

349 N.E.2d 173, 180 (Ind.Sup.Ct.1976); Rex Insurance Co. v. Baldwin, 323 N.E.2d 270

(Ind.App.1975);

In Logan v. Commercial Union Ins. Co., 96 F. 3d 971, 982 (7th Cir.1996) stated Gross

negligence defined as "the `intentional failure' to perform a duty `in reckless disregard of

the consequences as affecting the life or property of another,'" Id. at 332 n. 5 (quoting

BLACK'S LAW DICTIONARY 931 (5th ed. 1979)).

As appellants stated in the summary judgment and Res ipsa loquitur doctrine Liberty

was contractually obligated to perform the repairs [SF.2-3]. An experienced adjuster with

20+ years’ experience observed and photographed substantial roof damage after the “repair”

[SF.2-4], resulting in interior water damage while withholding that roof repairs were

completed and “delaying” remediation [SF.7-8]. Adjuster did not call his contractor back to

complete the repairs as the result repairs [SF.6]. Therefore adjuster failed to conform to the

37

duty of good faith and delegated duty. While insured worked day and night repairing

another structure in danger of collapsing[SF.9], house sustained “additional damage”

[SF.16].

B. “Mexican Standoffs” where Liberty adjuster refuses perform his duties because

Liberty failed to deliver the promised repairs – in the content of insurance such

behavior is bad faith .

Defendant created “Mexican Standoff” when adjuster in bad faith refuses to perform water

emergency mitigation[SF.8, SF.20, SF.44, SF.60], or refuses to adjust the estimate based on

own mitigation[ARG.I]. It is one thing to have a leak in one place, it is completely

devastating when the adjuster refused to mitigate the ENTIRE house. In recent Gayle Fischer

vs. Michael and Noel Heymann 49A02-1204-PL-340 (Ind.Appeals.2013) recited that:

If one party to a contract, either willfully or by mistake demands of the other a performance to

which he has no right under the contract and states definitely that, unless his demand is complied with, he will not render his promised performance, an anticipatory breach has been committed. Such a repudiation is conditional in character, but the condition is a performance to which the repudiator has no right . . .

Adjuster stayed silent about missing shingles for two month observing constant rains in

the Spring of 2011 while delaying water remediation. Unlike Fischer it was the adjuster who

did not deliver. Without a doubt reckless disregard to the Plaintiffs-Appellants property. The

outcome: total loss flows naturally: improperly repaired roof with never moisture

remediated house, continues to leak. What is it worth to an experienced adjuster that

unilaterally decided to “deduct” what he caused [SF.19]. And two years later, Defendant

claims that Appellants with no knowledge of “substantial damage” breached the contract by

negligent repairs of the adjuster.

38

Public interest requires the strongest deterrent possible from such outrageous behavior.

There is very little doubt that if Appellants would have hired their own contractor – initial

repairs would have been proper. Not only alleged tortfeasor Liberty was able to save on the

cost of proper roof tarping using 100% reproducible Bad Faith technique, it allows Liberty

to delay and even avoid paying entire claim as evident here. This conduct alone is gross

negligence and bad faith by any standards; however it did not stop there.

C. Bad Faith

In Erie Ins. Co. v. Hickman by Smith, 622 NE 2d 515 (Ind.Sup.Ct.1993) Supreme Court

of Indiana recognizing Implicit Duty of Good Faith stated that insurer breaches said

duty when

(1) making an unfounded refusal to pay policy proceeds;

(2) causing an unfounded delay in making payment;

(3) deceiving the insured; and

(4) exercising any unfair advantage to pressure an insured into settlement.

And ‘acted with malice, fraud, gross negligence, or oppressiveness which was not the result of a

mistake of fact or law, honest error or judgment, overzealousness, mere negligence, or other

human failing

A reasonable juror will conclude that Liberty acted with:

Gross Negligence: Liberty performed the initial repairs with the help of a selected

contractor [ARG.I] and concealed that they were leaking five days after and there is

substantial damage[SF.4], and waits for nearly sixty days for additional damages[SF.16].

Adjuster decided to “deduct” additional damage that he and Liberty caused [SF.19].

Malice: Liberty’s adjuster intended harm by concealing the leaks and refused to dry up the

house until adjuster gets the “mitigation performance” he wanted. No court ever held

mitigation performance of $7,795 cost is reasonable[SF.57].

39

Malice: Adjuster, with 20+ years of experience, included roof of the house into outside

structures estimate causing insured a one year delay in receiving payments[SF.11]. Adjuster

used it to force insured to perform unreasonable repair, hoping to avoid payment for

decking and rafters.

Fraud / Bad Faith: Liberty’s adjuster knew that the Engineer was either

incompetent/biased. Engineer declares everything pre-existent[SF.49-53], but adjuster

knows that he observed “substantial damage” in March 8th where shingles were missing

there was resulting water damage[SF.3]. He observed an additional leak in April.

Engineer stated to him that he will declare everything pre-existent a month prior[SF.51].

Instead of replacing the engineer immediately, adjuster obtains the false “pre-existent”

opinion, which should have instantly forced the adjuster to question the Engineer’s

report, instead he used it to deny benefits, and attempted to execute appraisal based on

said report. Such behavior is incompatible with duty of Good Faith and Fair Dealing.

Appellants lost mortgage payments and upkeep.

Additional bad faith can be ascertained from the Adjuster’s state of mind when adjuster

and supervisor stated “insured wants cash out and to rebuild the property” [SF.32,

SF.37] and adjuster demands contractor to negotiate the cost of repairs, and declared

verbal and written agreement with the contractor who was there to explain the loss

[SF.38-40] for “everything”. And falsified this unauthorized “agreement” missing all

large repairs[SF.40-42] made in violation of the Policy[SF.45]. And supervisor receiving

request for the settlement[SF.46] – instead declared to only pay directly to make sure

remediation is done right, or declaring he will only pay to contractor when the job is

performed[SF.44], will not negotiate. It is not a Good Faith dispute, where Liberty

admits liability but unilaterally sets condition on paying “when job performed”,

40

“after roof replaced”. And to finish Liberty brings in biased engineer and appraiser.

Considering supervisor, adjuster recalcitrant state of mind[SF.37,SF.32] is obvious.

They want to avoid paying the claim.

Adjuster bad faith’s tactics are clear: by including roof of the house, refusing to

adjust estimate, non-renewing the policy, delaying making payment on the policy,

coupled with its deliberate use of "economic coercion", increased plaintiff's financial

distress, thereby coercing them to compromise and settle to force a settlement, clearly

rises to the level of "outrageous conduct" to a person of "ordinary sensibilities."

Oppressiveness policy cancellation without 30 days’ notice and because refusal of

inferior settlement and insured complained to IDOI.[SF.29-31]

Bad Faith: Insured mailed countless estimates, Liberty falsely claims to IDOI that

same insured he did not mail anything, yet confirmed receiving at least one estimate,

Liberty refuses discovery to turn the mail logs about rest of the estimates.[SF.34]

Spoliation: Destroyed Adverse evidence - Moisture report: Reasonable juror will agree

that team working without adjuster present in the flooded house produced

measurements, which were mentioned in the log: “measurements are only good for a

day”. No measurements exist.[SF.14-15] And conclude that something was produced

with measurements that was only “good for a day”.

(3) deceiving the insured:

Liberty knew that Mr. Nash, the “Appraiser”, was not a competent “Appraiser”. Mr

Fearrin specifically hired him for his company employment and concealed the material

facts of “Employment” four hundred claims in just one event [SF.58]. It is impossible

41

that Liberty Mutual did not know that he performed numerous assignments for Liberty

Mutual.

Liberty’s adjuster knew that the Engineer was either incompetent/biased. There was a

leak in the roof on March 8th, there was “substantial damage”, missing shingles,

shingles stuffed sideways. The “pre-existent” opinion should have instantly force the

adjuster to question the Engineer’s report. Not for Mr Fearrin. He used it to deny, and

attempted to execute appraisal based on said report. Such behavior is incompatible with

duty of Good Faith and Fair Dealing.

Bad Faith could be ascertained from the state of mind of adjuster and supervisor when

they stated in the log insured wanted to “replace the house” and demanded a

“contractor who will perform repairs” or declared they reached agreement for

“everything” with unauthorized contractor. A reasonable juror can examine this

“agreement” that is missing all large repairs and falsified document created from the old

email.

HVAC deceit: Adjuster clearly stated HVAC repairs [SF.21]. Appellants obtained

estimate [SF.26]. Supervisor later declared never discussed.

(4) exercising any unfair advantage to pressure an insured into settlement.

When Liberty refused to adjust the claim on 4/28/2011 citing the possibility of further

damage[SF.20]. There is nothing in the policy that permits Liberty to extort unreasonable

mitigation performance. Not renew the policy because insured refused to take inferior offer.

(2) causing an unfounded delay in making payment; when Liberty refused to adjust the claim on

4/28/2011. The estimate went from $30,000 to $50,000 that still missing furnace, fireplace,

soffits, and rafters.

exercising any unfair advantage to pressure an insured into settlement

42

Defendant acting in bad faith to avoid paying the loss and put own interest ahead of

insured, insured is asking for settlement and supervisor claims he will pay mold and

moisture remediation but only after the roof replaced.

Hiring biased engineer is an actual malice and fraud: appellant lost month of mortgage

and upkeep on opinion that is not worth paper it is printed on, from observed leaks

March and April adjuster knew Report was false. He knew it was false the month prior.

Lied to the insured like about not having biased engineering report while adjuster was

clearly in the possession of it.

D. Appellants suffered physical and emotional and should be able to present this

bad faith case to the jury to decide the damages.

Brian Shifrin developed severe chest pains he never previously had and went to seek a

medical opinion from a Community North physician. [SF.23 A.496 EKG]. We been out

of the house for years fighting this “Liberty” insurer.

E. Estoppel and waiver.

Under Indiana law of insurance estoppel is synonymous with waiver, or distinctions

between them in insurance cases, “unnecessary or inadvisable” and “have used the terms

interchangeably” Tate v. Secura Ins., 587 NE 2d 671(Ind.Sup.Ct.1992). Supporting [SF.19].

Adjuster agreed to prepare an estimate for the damage based on what I believed to be related to the loss.

[A.160¶12]. Liberty positive conduct misled the Appellants into belief or reliance that

43

Liberty waived this “leak” [that did not cause any further damage] and continued estimating

and working with adjuster for another eight months. [A]ll while plaintiffs lost $7000 by

paying property taxes, mortgage payments, and upkeep [R.14-1545a.155] in

addition to Liberty issuing payments to Mortgage company [A.019] in October

therefore property had mortgage, Appellants provided [A.253 Amortization

Scheduler].

IV. THE DISTRICT COURT COMMITTED PLAIN ERROR IN GRANTING

DEFENDANT THE MOTION FOR SUMMARY JUDGMENT WHEN HELD

BREACH OF “MITIGATION OF DAMAGES” BECAUSE THE MITIGATION OF

DAMAGES IS NOT A DEFENSE TO THE ULTIMATE ISSUE OF LIABILITY IN

INDIANA AND IS AN OFFSET TO RECOVERY.

A. Standard Plain Error.

In Kocher v. Getz, 824 NE 2d 671 - (Ind.Sup.Ct.2005), the Indiana Supreme Court stated

Mitigation of damages is not a defense to the ultimate issue of liability and an offset to

recovery. Quoting Indiana Code §§ 34-6-2-7 S.C. stated “Fault” is specifically defined in the

Act as “any act or omission that is negligent, willful, wanton, reckless, or intentional toward

the person or property of others.” IC 34-6-2-45. Additionally Court stated: defense of

mitigation of damages based on a plaintiff’s acts or omissions occurring after an accident or

initial injury is not properly included in the determination and allocation of “fault” under

the Act but would go to the amount of damages recoverable”. Id at 674. Same Willis v.

Westerfield, 839 NE 2d 1187 - (Ind.Sup.Ct.2006).

In Carrizales v. State Farm Lloyds, 518 F.3d 350 (5th Cir.2008) the 5th Circuit, where

Texas Supreme Court, unlike Indiana, has not yet ruled if Mitigation is condition to

recovery, decided that “notice of occurrence” is a precondition, but neither repair records,

44

nor police reports, nor mitigation of damages are. And stated that insured does not have to

repair the house to be compensated. As Indicated above, the same issue WAS decided by

the Indiana legislature and the Indiana Supreme Court. There are no doubts that Plaintiffs-

Appellants complied with their obligations when installing and maintaining tarps and

provided pre-litigation pictures.

B. The issue of mitigation is a question of fact for the jury. Smith v. Rowe, 761 F.2d

360, 366-67 (7th Cir.1985).

C. The error is not harmless – cause should go to jury trial.

Provided our ability to perform stayed the discovery, discover reserves, the

experienced adjuster knew from day one that property was a total loss that

Defendant had no intent on paying.

V. DISTRICT COURT IMPROPERLY DECIDED THAT DEMAND FOR

APPRAISAL VALID, NOT WAIVED AND MANDATORY.

A. Review standard de novo

B. District Court ignored waiver and instead adopted South Dakota law.

Adjuster Mr. Fearrin never wanted an appraisal, he only executed it when he had the

Engineering report he knew was false. He observed the leak, “”. He willfully hired an

incompetent appraiser. He did in the middle of holiday season knowing Appellants will not

be able to counter his alleged fraud. He never compeled the Appraisal. The doctrines of

`waiver' and `estoppel' extend to practically every ground upon which an insurer may deny

liability." Travelers Insurance Co. v. Eviston (1941), 110 Ind. App. 143, 154, 37 N.E.2d 310.

45

In Indiana law of insurance estoppel is synonymous with waiver, or distinctions between

them in insurance cases, “unnecessary or inadvisable” and “have used the terms

interchangeably” Tate v. Secura Ins., 587 NE 2d 671(Ind.Sup.Ct.1992). Here Appellants

asserted that Appraisal was executed over bad faith, gross negligence, over biased

incompetent engineering, to avoid liability for additional damages such as deteriorated

siding because of adjuster’s blatant, bad faith refusal to adjust the claim, hiring incompetent

appraiser.

Undeniably hired incompetent appraiser, he was willing to commit a felony. Engineer

who declared “pre-existent” before even entering the house. Reasonable jurors can

strongly disagree with Judge Stinson: considering mental impressions of the

adjuster(30), supervisor states the same thing (35), demand to pay only directly,

not fixing leaks (5). Detrimental reliance is “all while plaintiffs lost $7000 by

paying property taxes, mortgage payments, and upkeep”.

C. Defendant knew engineer was not truthful as he observed the leak, tornado. It

could not have possibly been pre-existent. – Estoppel can be based on fraud

D. Liberty did not compel – therefore appraisal was waived.

E. Defendant did not meet its burden of proof to make appraisal mandatory.

Defendant claims that it is mandatory according to the policy. Under the Indiana law

defendant must show that he informed Plaintiffs that in fact it was mandatory. In Mutual

Hospital Insurance, Inc. v. Klapper, 312 NE 2d 482 (Ind.Sup.Ct.1974) Furthermore, as I have

said before, very few people read insurance policies. They are written in a language few people,

aside from lawyers, understand. The party seeking to enforce such a contract has the burden of

showing that the provisions were explained to the other party and came to his knowledge.

46

Defendant consistently relies on the statements in the contract, because adjuster clearly

did not inform. When plaintiffs declined because of countless issues adjuster stayed

silent, he was told to compel, adjuster did nothing, and defendant could have compelled

it when complaint was filed. Liberty again did nothing. But Equity aids the vigilant, not

those who rest on their rights. Liberty hoped that plaintiffs either will leave the roof

unattended or by claiming “no knowledge of complete repairs”. Liberty additionally

continued to litigate for years, and thus committed waiver.

F. Appraisal was unconscionable

1. Appraisal was unconscionable: defendant delayed claim, refused to pay / delayed

payment moisture remediation, house dried up, defendant hired partisan engineer and

appraiser who committed fraud upon the court by concealing employment on affidavit.

2. Appraisal was executed primarily over causation as damaged siding was estimated from

the same company and increased from $18,000 -> $35,000, and considering the very low

fair market value – house was a total loss.

V. THE TRIAL COURT ERRED IN FAILING TO GRANT APPELLANTS MOTION

FOR SUMMARY JUDGMENT:

A. The court’s decision to grant or deny cross-motion for summary judgment

reviewed de novo.

B. Liberty was contractually obligated to perform initial repairs, that were never

completed.

C. Experienced adjuster Fearrin, with superior knowledge and experience acted

Gross Negligently when concealed the information about leaks from Liberty

initial and improper repairs waiting nearly two months during a rainy

spring, delaying (refusing) to dry up the property in reckless disregard of the

consequences as affecting Appellants property.

47

Under Indiana law punitive damages may be awarded for a tortious breach of an

insurance contract if the insurer's conduct amounted to "fraud, malice, gross negligence or

oppression" and "the public interest will be served by the deterrent effect punitive damages

will have upon future conduct of the wrongdoer and parties similarly situated." Vernon Fire

349 N.E.2d 173, 180 (Ind.Sup.Ct.1976); Rex Insurance Co. v. Baldwin, 323 N.E.2d 270

(Ind.App.1975);

In Logan v. Commercial Union Ins. Co., 96 F. 3d 971, 982 (7th Cir.1996) stated Gross

negligence defined as "the `intentional failure' to perform a duty `in reckless disregard of

the consequences as affecting the life or property of another,'" Id. at 332 n. 5 (quoting

BLACK'S LAW DICTIONARY 931 (5th ed. 1979)).

Liberty agreed to perform the repairs performed by a Liberty [ARG.I, SF.2]. An

experienced adjuster with 20+ years’ experience observed and photographed substantial

roof damage after the “repair” [SF.3-5], resulting in interior water damage while

withholding that roof repairs were incomplete and “delaying” remediation [SF.7,8]. As a

result, repairs were never completed by Liberty [SF.6]. Therefore adjuster failed to conform

to the duty of good faith and follow the verbal contract[ARG.I]. While insured worked day

and night repairing another structure in [SF.9], house sustained “additional damage”

[SF.16]. Adjuster stayed silent about missing shingles for two months observing constant

rains in the Spring [SF.16] of 2011 while delaying water remediation Without a doubt

reckless disregard to the Plaintiffs-Appellants property. The outcome: total loss flows

naturally: improperly repaired roof with nonmoisture-remediated house that continued to

leak.

48

In “Mold Facts” document12 OSHA states: “Remove and discard all porous materials

that have been wet for more than 48 hours. Porous materials cannot be cleaned and may

remain a source of mold growth. Homeowners may want to temporarily store items outside

of the home until insurance claims can be filed” [R.14-1545a.145]. The CDC document13

“Mold Prevention Strategies and Possible Health Effects in the Aftermath of Hurricanes and Major

Floods” “Any structure flooded after hurricanes or major floods should be presumed to contain

materials contaminated with mold if those materials were not thoroughly dried within 48 hours

(15,16). In such cases, immediate steps to reduce the risk for exposure to mold are likely to be of greater

importance”. In EPA document14 “Mold Remediation in Schools and Commercial

Buildings” under “Mold Remediation - Key Steps” states “Dry non-moldy items within 48

hours”. FEMA15 specifically refers to the EPA document for 9500 serious policy. Knavishly

adjuster of 25 years, who clearly adjusted FEMA policies before, declared that there is no

point drying up the house “until the permanent roof is in place”. Apparently there was no

point of completing initial repairs either. The outcome: total loss flows naturally: improperly

repaired roof with nonmoisture-remediated house, which continued to leak.

D. Just as in Murphy Auto Sales, Inc., et al. v. Coomer et al. (1953), 123 Ind. App.

709, 112 N.E.2d 589 where defendant sold automobiles with worn-out engine,

that fell apart the very next day; appellants roof had substantial damage

resulting in interior water damage still had missing shingles - five days after the

repairs of the Liberty, and the adjuster concealed it, “delayed” moisture

remediation.

12 http://www.osha.gov/OshDoc/data_Hurricane_Facts/mold_fact.pdf 13 http://www.cdc.gov/mmwr/preview/mmwrhtml/rr5508a1.htm 14 http://www.epa.gov/mold/mold_remediation.html 15 http://www.fema.gov/9500-series-policy-publications/mold-remediation

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E. Appellants suffered physical and emotional and should be able to present this

bad faith case to the jury to decide the damages.

Brian Shifrin developed severe chest pains he never previously had and went to seek a

medical opinion from a Community North physician. [SF.23 A.496 EKG]. We been out of

the house for years fighting this “Liberty” insurer.

VI. THE TRIAL COURT ERRED IN FAILING TO GRANT APPELLANTS

MOTION 59(e) AS COURT ADMITTED BREACH WAS NOT MATERIAL.

A. In Foster v. State Farm Fire and Casualty Company, Dist. Court, ND Indiana 2011

The Defendant can only be relieved of its coverage duties under the Policy if the

Plaintiffs breached the contract, and their breach was material.

Court admitted that breach was not material.

CONCLUSIONS

For the foregoing reasons, the judgment of the lower court should be reversed, pleads to

grant one of bad faith counts, and the case remanded for further proceedings. Defendant

should not be able to use mitigation of damages as a defense against Bad Faith, Fraud,

Gross Negligence, Negligence, avoiding paying furnace, fireplace, soffits, rafters,

mitigations. Defendant should not be able to win by own breach, anticipatory breach from

refusal to mitigate, by hiring a biased engineer and appraisal, Appellants allowed to present

a case of fraud, bad faith to the jury.

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This industry needs reform and we are specifically setting up InsuredUninsured.com

to educate others and show Liberty’s techniques of underpayment, false claims adjustment

by Liberty, motion practices, and what was really argued.

Don’t forsake our state: do not allow any of Judge Stinson “opinions” that a total

loss house needs a new roof for adjuster to adjust, that insurer adjuster has no duty to

disclose leaks or mitigate until permanent roof is on, insurer can part the claim to avoid total

loss, that appraisal can be executed immediately over biased engineering issues, fraud from

hiring biased appraiser is irrelevant as long as it is initial, total house does not have to be

totaled from the onset (10 months).

Plaintiffs plead with the Court to restore the equity and grant the Bad Faith.

Dated: August 28, 2014

Respectfully submitted,

By:

Melanie G Shifrin

CERTIFICATE OF COMPLIANCE WITH F.R.A.P RULE 32(A)(7)

I, Melanie Shifrin, hereby certify that this brief complies with the type-volume limitation of

Fed. R. App. P. 32(a)(7)(B), because this brief contains 12,350 words, words, including

footnotes, from pages 1-50 in this brief excluding the parts of the brief exempted by Fed. R.

App. P. 32(a)(7)(B)(iii).

Melanie G Shifrin

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CERTIFICATE OF COMPLIANCE WITH CIRCUIT RULE 30(d)

I, Melanie G Shifrin, hereby certify that the submitted Required Short Appendix

and Separate Appendix of Appellant’s Brian & Melanie Shifrin [dct.38] contains and

includes all materials required by Circuit Rule 30(a) and (b) of the United States

Court of Appeals for the Seventh Circuit.

Melanie G Shifrin

CERTIFICATE OF SERVICE

The undersigned hereby certifies that on August 28, 2014, a true and correct copy

of the foregoing Appellant’s Melanie Shifrin Brief was served electronically on all

counsel via the CM/ECF system.

/s/ Brian Shifrin

Brian Shifrin