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Arrangement Between Insurance Services Entity and Contractors Does Not Provide Homeowner with Claim for Unjust Enrichment

Amy Stetson Smith v. Alacrity Services, LLC
Case No.: JKB-10-3064 (D. Md. 2011)

by Eric M. Leppo, Associate
Semmes, Bowen & Semmes (

In this recent Opinion from the United States District Court for the District of Maryland, Magistrate Judge James K. Bredar granted Defendant’s Motion for Summary Judgment. The Court found that Plaintiff could not support either count of her Class Action Complaint.

Plaintiff Amy Stetson Smith is a Baltimore homeowner who experienced a fire in her home in 2007. Approximately $36,000.00 in damage was done. Her homeowners insurance was provided by Allstate Insurance Company. The Defendant, Alacrity Services, LLC is an insurance services provider who maintains a network of contractors who perform home repairs known as AlacNet. The network is comprised of approximately fourteen hundred (1400) contractors nationwide.

When Allstate is alerted to a claim, a local contractor is directed through AlacNet to contact the homeowner about providing the repairs. If the homeowner chooses to use the contractor, the contractor then presents an estimate for work directly to Allstate. Alacrity confirms completion of the work to Allstate and makes sure payment is made to the contractor. In Ms. Smith’s case, the contractor provided by AlacNet was Mid-Atlantic Restoration, LLC, t/a Paul Davis Restoration – Chesapeake Bay. Ms. Smith signed a work authorization agreement with Mid-Atlantic, and also signed a Certificate of Satisfaction upon completion of the work.

Ms. Smith did not know when she was provided the estimate (or when Mid-Atlantic was performing their work) that AlacNet contractors pay 2.8 percent of the money they receive back to Alacrity in order to participate in AlacNet. She attempted to pursue a class action lawsuit against Alacrity on behalf of similarly situated homeowners nationwide arguing that they were being deprived of 2.8 percent of the insurance proceeds they were entitled to from Allstate. Her Complaint alleged that Alacrity had and received money it was not entitled to, and/or was unjustly enriched as a result.

The Court noted that Maryland recognizes a common law cause of action for money had and received. Benson v. State of Maryland, 887 A.2d 525, 547 (Md. 2005). However, succeeding on such a cause of action requires a showing that one has received money as a mistake of law or fact and did not have a right to it. The Court pointed out that Plaintiff’s contention is essentially that Alacrity received money paid by Allstate that she should have received. However, her entitlement to any such money from Allstate would be controlled by her own policy of insurance or contract with Allstate. The Court stated that Allstate was not a party to the case and the issue of whether Ms. Smith did not receive money she was owed from Allstate would require an action against Allstate not Alacrity.

Similarly, the Court granted Alacrity’s Motion for Summary Judgment on the unjust enrichment count. The elements of unjust enrichment are that the plaintiff conferred a benefit; defendant appreciated the benefit; and acceptance or retention of the benefit that would be inequitable. Benson, 887 A.2d at 546. While Alacrity did receive payment from Mid-Atlantic as the contractor, the Court held that Smith made no showing that it was inequitable for Alacrity to receive it, or any right of hers that was infringed by such a payment.

As to Smith’s contention that such payment resulted in Mid-Atlantic providing her with lesser quality work to account for the money being paid out to Alacrity, the Court again suggested that the remedy would properly be against Mid-Atlantic if they had done so.