Von Schwab et al v. AAA Fire & Casualty Insurance Company

Filing 55

ORDER denying without prejudice 9 Motion for Summary Judgment. By Judge Christine M. Arguello on 09/15/2014. (athom, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 14-cv-00183-CMA-BNB
CAROL VON SCHWAB, and
RONALD VON SCHWAB,
Plaintiffs,
v.
AAA FIRE & CASUALTY INSURANCE COMPANY,
a/k/a ACA INSURANCE COMPANY, an Indiana corporation,
Defendant.

ORDER DENYING MOTION FOR SUMMARY JUDGMENT

This matter is before the Court on Plaintiffs’ Motion for Summary Judgment
(Question of Law and Declaratory Judgment). (Doc. # 9.)
On January 22, 2014, Plaintiffs Carol and Ronald Von Schwab filed the instant
case alleging claims for (1) breach of contract and declaratory judgment, (2)
unreasonable delay, and (3) bad faith. (Doc. # 1.) On February 27, 2014, before
engaging in any discovery, Plaintiffs filed the instant motion asking this Court to grant
summary judgment on their first claim. Specifically, Plaintiffs ask this Court to declare
that they are entitled to an appraisal under their insurance contract. (Doc. # 9.)
The appraisal provision of the policy states, in part, “If you and we fail to agree on
the amount of the loss, either may demand an appraisal of the loss.” (Doc. # 9-2 at 15.)
Therefore, Defendant contends, and Plaintiffs agree that this provision is applicable only

once the insurance company and insured agrees there is a covered loss. (Doc. ## 12
at 10; 18 at 6.) Plaintiffs respond that there was a covered loss and that only the
amount of those losses is in dispute. However, it appears that although Defendant
found there was covered losses to the gutters, painted trim, siding, decking, and vinyl
windows, it did not find that there were covered losses to the roof. The losses to the
roof form the basis of Plaintiffs’ claims.
Defendant’s letter denying coverage for the hail damage to the roof states:
Inspection revealed no direct physical loss to the function of, or life
expectancy of, the roofing itself from the storm on reported date of loss. . .
. This specific shingle manufacturer (Masonite) was involved and paid out
to claimants in a class action lawsuit due to failure of this product. . . . The
product was found to be defective and [does] not serve the purpose for
which it was intended. . . . Douglas County Code does not allow this type
of roofing and therefore the roofs must be replaced.
The letter goes on to state policy language applicable to the claim, including that
Defendant does not insure for loss caused by defective “materials used in repair,
construction, renovation, or remodeling.” (Doc. # 12-2 at 1-2.)
Without first determining that there were covered losses with respect to the roof,
this Court cannot construe the applicability of the appraisal provision. To do otherwise
would be to render an advisory opinion. See Ashcroft v. Mattis, 431 U.S. 171, 172
(1977) (“For a declaratory judgment to issue, there must be a dispute which ‘calls, not
for an advisory opinion upon a hypothetical basis, but for an adjudication of present right
upon established facts.’”) (citation omitted). Moreover, it is clear that discovery will aid
this Court and the parties in determining whether there was a covered loss relating to
the roof and the resulting applicability of the appraisal provision. This is evidenced by

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Plaintiffs’ Motion to Supplement their Motion for Summary Judgment with facts
discovered through a deposition taken pursuant to Fed. R. Civ. P. 30(b)(6).
Accordingly, the Court DENIES WITHOUT PREJUDICE Plaintiffs’ Motion for
Summary Judgment (Question of Law and Declaratory Judgment). (Doc. # 9.)
DATED: September 15, 2014
BY THE COURT:

_______________________________
CHRISTINE M. ARGUELLO
United States District Judge

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