Jacobson v. American Family Insurance Company et al

Filing 76

ORDER granting summary judgment to Defendant on the issue of negligence, as raised in Doc. 55 . IT IS FURTHER ORDERED otherwise denying both Motions for Summary Judgment (Docs. 48 and 50 ). This Court's January 31, 2020 Order (Doc. 65 ) is amended to the extent that it is inconsistent with this Order. IT IS FURTHER ORDERED setting an in-person trial-setting conference for Tuesday, 3/10/2020, at 2:00 PM, in Courtroom 504, Sandra Day OConnor U.S. Federal Courthouse, 401 W. Washington St., Phoenix, Arizona 85003-2151. The parties shall be prepared to discuss a proposed length of trial and potential trial dates. See attached order for additional information. Signed by Judge Michael T. Liburdi on 2/26/2020. (RMW)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Tyler Jacobson, et al.,
Plaintiffs,

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ORDER

v.

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No. CV-17-04373-PHX-MTL

American Family Insurance Company, et
al.,

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Defendants.

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Background

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Before the Court are Defendant American Family Insurance Company’s Motion

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for Summary Judgment (Doc. 48) and Plaintiffs Cathy, William and Tyler Jacobson’s

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Cross-Motion for Summary Judgment (Doc. 50). The Court adjudicated some of the

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issues in those Motions in its January 31, 2020 Order. (Doc. 65.) The Court relies on the

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factual recitation contained in that Order.

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For the reasons expressed herein, the Court grants American Family summary

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judgment on the negligence claims and denies the cross-motions for summary judgment

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on the breach of contract claims of Cathy, William and Tyler Jacobson; the prior grant of

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summary judgment for Cathy Jacobson is vacated.

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Legal Analysis

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A.

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Rule 56 of the Federal Rules of Civil Procedure governs motions for summary

Legal Standard on a Motion for Summary Judgment

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judgment. The Court may grant summary judgment when the movant shows that (1)

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there are no genuine issues of material fact; and (2) when the evidence is viewed in the

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light most favorable to the non-moving party, the movant is entitled to a favorable

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judgment as a matter of law. Fed. R. Civ. P. 56(a); see also Adickes v. S. H. Kress & Co.,

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398 U.S. 144, 157 (1970). Material facts are those which might affect the outcome of the

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suit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue of fact does

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not arise solely from allegations in pleadings; the non-moving party also has to produce

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affirmative evidence to rebut the moving party’s motion. Id. at 257. When deciding a

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defendant’s motion for summary judgment, the “mere existence of a scintilla of evidence

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in support of the plaintiff’s position will be insufficient; there must be evidence on which

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the jury could reasonably find for the plaintiff” in order to deny a defendant’s motion. Id.

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at 252.

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B.

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Plaintiffs initially certified that they needed to provide an expert opinion affidavit

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to establish the insurance agent’s liability. (Doc. 22-1 at 32.) The Plaintiffs argue,

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however, that the affidavit was no longer necessary after dropping the insurance agent

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and agency from the lawsuit and pursuing the negligence claim against American Family

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under a vicarious liability theory. This Court rejected that argument, finding that the

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preliminary expert report requirement of A.R.S. § 12-2602 applies. (Doc. 71.)

Negligence

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Section 12-2602(F) states that the Court shall dismiss a case, without prejudice,

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when a plaintiff does not produce an expert opinion affidavit after a plaintiff has certified

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that one is required. Additionally, § 12-2602(C) allows an application for extension of

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time for compliance with the requirement under certain circumstances. Neither party has

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timely availed itself to the rights and remedies provided under the statute. Additionally,

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the Court cannot ignore that the statute seems to contemplate that this affidavit

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requirement will be addressed at an early stage of the case. See A.R.S. § 12-2602(B)

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(“the claimant shall serve [the] affidavit with initial disclosures. . . .”).

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More than two years have passed since the initial filing of this case in state court.

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(Doc. 1-1 at 13.) Thus, the lack of an expert opinion affidavit at this point of the case is

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no longer a matter of gatekeeping. Rather, it shows a fundamental obstacle to proceeding

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with a negligence trial: the lack of evidence to establish the insurance agent, Ms.

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Melody’s, duty vis-à-vis the Jacobsons, which is a lack of proof as to an essential element

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of the claim. Without the expert opinion, no reasonable juror could find in favor of the

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Jacobsons on the negligence claim.

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argument concerning the lack of an expert opinion affidavit (Doc. 55 at 9-12) as a motion

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for summary judgment on Plaintiffs’ negligence claim, based on Plaintiffs’ failure to

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disclose a standard of care expert, and grants the Motion.

Thus, the Court interprets American Family’s

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C.

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In its January 31, 2020 Order (Doc. 65), this Court granted Cathy Jacobson

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summary judgment with respect to her breach of contract claim, altering the policy for

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her purposes to meet what the Court found to be Ms. Jacobson’s reasonable expectations.

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Defendant argued in supplemental briefing (Doc. 72) and at oral argument (Doc. 71) that

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“[w]hether or not Cathy’s expectation of coverage was reasonable under the

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circumstances relied on by the Court is a question for the finder of fact.” (Doc. 72 at 5.)

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Plaintiffs countered by arguing that, under these circumstances, the scenarios in which a

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court will apply the reasonable expectations doctrine, as outlined in Gordinier v. Aetna

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Cas. & Sur. Co., 742 P.2d 277, 283-84 (Ariz. 1987), are applicable. (Doc. 74 at 8-11.)

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Defendant points to contravening evidence in the record, including the inferences to be

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drawn from Ms. Jacobson’s asking for a full coverage quote for Tyler Jacobson’s

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motorcycle. (Doc. 75 at 4.)

Breach of Contract

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After reviewing the parties’ supplemental briefing, the Court is now persuaded

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that while the actual terms of the policy are undisputed, a jury should decide whether the

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policy should be reformed to be consistent with Cathy Jacobson’s alleged reasonable

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expectations.1 See Taylor v. State Farm Mut. Auto. Ins. Co., 854 P.2d 1134, 1145 (Ariz.

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This decision, which rests on the current record and the legal standard for a motion for
summary judgment, is without prejudice to Plaintiffs’ moving for a directed verdict at the
close of evidence at trial.
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1993) (“because the extrinsic evidence established controversy over what occurred and

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what inferences to draw from the events, the matter was properly submitted to the jury.”).

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Any derivative claim for benefits for William and Tyler Jacobson would have to stem

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from a revision of the policy consistent with Ms. Jacobson’s alleged reasonable

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expectations.
All three Jacobson’s breach of contract claims shall be tried to a jury.

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III.

Conclusion

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Accordingly,

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IT IS ORDERED granting summary judgment to Defendant on the issue of

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negligence, as raised in Doc. 55.

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IT IS FURTHER ORDERED otherwise denying both Motions for Summary

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Judgment. (Docs. 48 and 50.) All three Plaintiffs’ breach of contract claims shall be

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tried to a jury.2 This Court’s January 31, 2020 Order (Doc. 65) is amended to the extent

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that it is inconsistent with this Order.

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IT IS FURTHER ORDERED setting an in-person trial-setting conference for

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Tuesday, March 10, 2020, at 2:00 P.M., in Courtroom 504, Sandra Day O’Connor U.S.

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Federal Courthouse, 401 W. Washington St., Phoenix, Arizona 85003-2151. The parties

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shall be prepared to discuss a proposed length of trial and potential trial dates.

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Dated this 26th day of February, 2020.

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As stated in the January 31, 2020 Order, the issue of bad faith shall also be tried to the
jury. The issue of punitive damages (see Doc. 10 at 11, ¶ 3) shall also be tried to the jury.
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