Bostock v. Aurora Loan Services, LLC et al

Filing 54

MEMORANDUM DECISION AND ORDER - IT IS ORDERED that: 1) Safecos Motion for Summary Judgment (Dkt. 41 ) is DENIED WITHOUT PREJUDICE for the reasons explained above. Safeco may file a supplemental brief and evidentiary materials in support of its motio n within 60 days of this Order.2) Bostocks Request for Additional Time (Dkt. 45 ) is GRANTED.3) Safecos Motion to Strike (Dkt. 53 ) is DENIED. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjs)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

BARBARA BOSTOCK,
Case No. 1:14-cv-00329-BLW
Plaintiff,
MEMORANDUM DECISION AND
ORDER

v.
AURORA LOAN SERVICES, LLC,
SAFECO INSURANCE CO. OF
ILLINOIS, MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC., and JOHN AND
JANE DOES 1-10,
Defendants.

INTRODUCTION
Pending before the Court is Defendant Safeco Insurance Co. of Illinois’ Motion
for Summary Judgment. (Dkt. 41). Additionally, Plaintiff Barbara Bostock has moved
for additional time to respond to the motion for summary judgment (Dkt. 45), which
prompted Safeco’s motion to strike her late-filed response (Dkt. 53). For the reasons
explained below, this Court will: (1) grant Bostock’s motion to file a late response; (2)
deny Safeco’s motion to strike; and (3) deny Safeco’s motion for summary judgment
without prejudice.

MEMORANDUM DECISION & ORDER - 1

FACTS
In March 2008, Bostock renewed a Homeowners Insurance Policy with Safeco on
a home she owned in Sun Valley, Idaho. See Aff. David Hager, Dkt. 41-5. The annual
premium on the one-year policy was $1,988. Id.
Around late November 2008, several months after this renewed policy was in
effect, Bostock’s elderly mother fell and broke her hip. Bostock traveled to Florida to
care for her mother. See Complaint, at 1, Dkt. 1-2. Shortly afterward, on December 8,
2008, Safeco sent Bostock a notice that her December 2008 insurance policy payment
had not been received. The notice stated that the policy would be cancelled if payment
was not postmarked and mailed by January 12, 2009. See Aff. Jerome Faulkner, Exhibit
1, at 5, Dkt. 41-4. On January 20, 2009 Safeco sent an additional notice to Bostock, as
well as her mortgage company, Aurora Loan Services, LLC, indicating that Bostock’s
insurance coverage had been cancelled for nonpayment. Jan. 20,2009 Letter, Ex. 3 to
Faulkner Dec., Dkt. 41-4, at 7. This letter informed Aurora that coverage would expire at
12:01 a.m. on February 14, 2009. Id.
Per the policy agreement, Safeco was required to provide Aurora notice of nonpayment as the mortgage holder, and allow Aurora to maintain protection in the event of
non-payment by Bostock. See Aff. David Hanger, at 31, Dkt. 41-5. Pending non-payment
by either Bostock or Aurora, Aurora’s coverage would have terminated on February 14,
2009. See Aff. Jerome Faulkner, Exhibit 3, at 7, Dkt. 41-4.
At some point before February 14, 2009, a loss occurred at the home. On
February 11, 2009, Bostock’s daughter, Mia Cherp, went by the home – which was
MEMORANDUM DECISION & ORDER - 2

vacant at the time – to check the thermostat. See Aff. Mark Sebastian, Exhibit C
(Recorded Statement of Mia Cherp, at 3 (CF 143), Dkt. 41-3; see also Pl’s Second
Response Br. at 3, Dkt. 47. She discovered that a pipe had burst, which caused flooding
in the interior of the home. Cherp immediately called her mother, and Bostock told her
that her insurance coverage may have lapsed. Cherp told her mother to reinstate the
policy and supplied a credit card number that her mother could use to make any
necessary payments. Cherp then went back to dealing with the flooding house.
Meanwhile, with Cherp’s credit card number in hand, one of Bostock’s friends
called Safeco. 1 She identified herself as Mia Cherp, used Cherp’s credit card to reinstate
the policy, and told the insurance company that there had not been any losses on the
property. See Aff. Jerry Faulkner, Exhibit 6, (CF 90), Dkt. 41-4.
Safeco inspected the home on February 18, 2009 and later informed Bostock that
it was denying coverage because the policy had been canceled for non-payment on
January 13, 2009 – before any damage had occurred to the home. Aff. Jerry Faulkner,
Exhibit 8 at 17, Dkt. 41-8; id. at Exhibit 7, at 15, Dkt. 41-7.
Although Bostock’s personal coverage had lapsed, her mortgage company,
Aurora, evidently exercised its right to preserve coverage on the property prior to that
coverage’s expiration on February 14, 2009. See Aff. David Hanger, at 31, ¶ 12(d), Dkt.
41-5. Safeco ultimately paid Aurora “over $100,000 on the claim”, and its payments to

1

The record indicates that the caller was not actually Mia Cherp, but instead was an acquaintance
of Bostock’s who was helping handle the payment over the phone. See Aff. Jerome Faulkner, Exhibit 6
(CF 90), Dkt. 41-4; see also Aff. Mark Sebastian, Exhibit B (CF 130), Dkt. 41-3 (Bostock admits the
caller was not her daughter).
MEMORANDUM DECISION & ORDER - 3

Aurora “were based on actual invoice for the work done.” Aff. Jerry Faulkner, ¶ 12–13,
Dkt. 41.
Bostock, however, contends that she paid for some repairs to the home, and,
further, that Safeco did not pay for personal property that was damaged or lost in the
flood. See Response, Dkt. 44; Compl. Dkt. 1-2, at 2. Plaintiff alleges that Safeco’s
failure to reimburse her under the insurance policy is a breach of contract. Id.
LEGAL STANDARD
Summary judgment is appropriate where a party can show that, as to any claim or
defense, “there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). One of the principal purposes of the
summary judgment “is to isolate and dispose of factually unsupported claims . . . .”
Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). It is “not a disfavored procedural
shortcut,” but is instead the “principal tool[ ] by which factually insufficient claims or
defenses [can] be isolated and prevented from going to trial with the attendant
unwarranted consumption of public and private resources.” Id. at 327. “[T]he mere
existence of some alleged factual dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 247-48 (1986). There must be a genuine dispute as to any material fact – a fact
“that may affect the outcome of the case.” Id. at 248.
The evidence must be viewed in the light most favorable to the non-moving party,
and the Court must not make credibility findings. Id. at 255. Direct testimony of the
non-movant must be believed, however implausible. Leslie v. Grupo ICA, 198 F.3d
MEMORANDUM DECISION & ORDER - 4

1152, 1159 (9th Cir. 1999). On the other hand, the Court is not required to adopt
unreasonable inferences from circumstantial evidence. McLaughlin v. Liu, 849 F.2d
1205, 1208 (9th Cir. 1988).
The moving party bears the initial burden of demonstrating the absence of a
genuine dispute as to material fact. Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir.
2001)(en banc). To carry this burden, the moving party need not introduce any
affirmative evidence (such as affidavits or deposition excerpts) but may simply point out
the absence of evidence to support the nonmoving party’s case. Fairbank v. Wunderman
Cato Johnson, 212 F.3d 528, 532 (9th Cir.2000).
This shifts the burden to the non-moving party to produce evidence sufficient to
support a jury verdict in her favor. Deveraux, 263 F.3d at 1076. The non-moving party
must go beyond the pleadings and show “by her [ ] affidavits, or by the depositions,
answers to interrogatories, or admissions on file” that a genuine dispute of material fact
exists. Celotex, 477 U.S. at 324.
However, the Court is “not required to comb through the record to find some
reason to deny a motion for summary judgment.” Carmen v. San Francisco Unified Sch.
Dist., 237 F.3d 1026, 1029 (9th Cir. 2001) (quotation omitted). Instead, the “party
opposing summary judgment must direct [the Court’s] attention to specific triable facts.”
Southern California Gas Co. v. City of Santa Ana, 336 F.3d 885, 889 (9th Cir. 2003).
Only admissible evidence may be considered in ruling on a motion for summary
judgment. Orr v. Bank of America, 285 F.3d 764, 773 (9th Cir. 2002); see also
Fed.R.Civ.P. 56(e). In determining admissibility for summary judgment purposes, it is
MEMORANDUM DECISION & ORDER - 5

the contents of the evidence rather than its form that must be considered. Fraser v.
Goodale, 342 F.3d 1032, 1036-37 (9th Cir. 2003). Statements in a brief, unsupported by
the record, cannot be used to create a factual dispute. Barnes v. Independent Auto.
Dealers, 64 F.3d 1389, 1396 n.3 (9th Cir. 1995). The Circuit has “repeatedly held that
documents which have not had a proper foundation laid to authenticate them cannot
support a motion for summary judgment.” Beyene v. Coleman Sec. Services, Inc., 854
F.2d 1179, 1182 (9th Cir. 1988). Authentication, required by Federal Rule of Evidence
901(a), is not satisfied simply by attaching a document to an affidavit. Id. The affidavit
must contain testimony of a witness with personal knowledge of the facts who attests to
the identity and due execution of the document. Id.
Finally, filings by pro se litigants are entitled to special deference and are not held
to the standards of attorneys. Eldridge v. Block, 832 F.2d 1132, 1137 (9th Cir.1987).
ANALYSIS
1.

Motion for Summary Judgment
Safeco says Bostock’s breach-of-contract claim fails because the insurance policy

had been canceled, relieving it of the obligation to pay Bostock’s claim. Safeco had the
right to cancel the policy if Bostock failed to pay her premiums. The policy states:
“When you have not paid the premium we may cancel at any time by notifying you at
least 20 days before the date cancellation takes effect.” Enhanced Quality-Plus
Homeowners Policy Declarations, Aff. David Hager, Exhibit 1, at 38, Dkt. 41-5. This
provision is in compliance with Idaho Code section 41-2401, which requires at least ten
days’ notice of a cancellation due to nonpayment. See I.C. § 41-2401(j).
MEMORANDUM DECISION & ORDER - 6

On December 8, 2008, Safeco sent a notice to Bostock indicating that her policy
would be cancelled if she did not make a scheduled payment of $174.66 by January 12,
2009. See Aff. Jerome Faulkner, Exhibit 1, at 5, Dkt. 41-4. Bostock says she did not
receive this notice, but only proof of mailing is required under both Idaho law and
Bostock’s insurance policy. See Aff. Jerome Faulkner, Exhibit 1, at 5, Dkt. 41-4. (“This
cancellation notice may be delivered to you, or mailed to you at your mailing address
shown in the Declarations. Proof of mailing shall be sufficient proof of notice.”); I.C. §
41-2401(j) (“proof of mailing of notice of cancellation . . . shall be sufficient proof of
notice.”)
Bostock fares better with her next argument. She says the cancellation was not
effective because as of December 8, 2008 – the date Safeco sent the missing-payment
letter – she had not missed any payments. In fact, she says she had overpaid during the
period leading up to December 2008. To support this assertion, Bostock submits copies
of four checks, all made out to Safeco, in the following amounts:
Date

Amount

Aug. 3, 2008
Sept. 15, 2008
Oct. 27, 2008
Nov. 5, 2008

$169.66
$174.67
$251.00
$340.33

Total

$935.66

These checks raise more questions than they answer. Why are they in such odd
amounts? Why aren’t all the checks for around $169.66 (like the first, August check),
since that is roughly the monthly premium? See Enhanced Quality-Plus Homeowners
MEMORANDUM DECISION & ORDER - 7

Policy Declarations, Aff. David Hager, Exhibit 1, at 16, Dkt. 41-5 (March 2008–2009
premium bill total $1988, plus $4 service charge per installment if paying in
installments). Do these checks show that Bostock was pre-paying monthly premiums on
this policy? Or was she making up for past, missed payments? Did the insurance
company receive these checks and credit Bostock for the payments? Were all these
checks intended for the homeowners’ policy, or was Bostock paying on other insurance
policies she had with Safeco? 2
It would seem that either party should be able to easily answer these questions
simply by submitting a complete payment log on this policy. Yet neither has. Safeco
relied solely on its December 8, 2008 notice to support its assertion that Bostock had
failed to pay her premiums, while Bostock has come forward with evidence of just four
payments.
On this record, if a jury drew inferences in Bostock’s favor, it could conclude that
Bostock was current on her homeowners’ insurance premiums as of September 2008,
and, further, that she began making extra payments in October 2008. Of course this is
not the only inference that could be drawn. A jury might also infer that Bostock was
submitting larger checks to make up for past missed payments. (In fact, the cover page of
her policy, dated March 2008, indicates that Bostock would need to make up around
$357.09 in monies owed the company. See Feb. 13, 2008 Letter, Dkt. 41-5 (insurance

2

It appears that Bostock also had automobile insurance with Safeco at one point. See Recorded Statement
of Mia Cherp, Dkt. 41-4, at CF93 (the insurance company representative informs the caller that “I show a
cross-reference auto policy as well. And I’m showing that one as cancelled.”)

MEMORANDUM DECISION & ORDER - 8

renewal letter states that “[a] $357.09 payment for the outstanding bill on your account
must be postmarked by March 16, 2008 to prevent cancellation of the policies on your
account.”) The jury could also infer that Bostock was making payments on other
insurance policies she held with Safeco.
The upshot is that there is a disputed issue of fact regarding whether Bostock had
failed to pay her insurance premiums as of December 8, 2008, when the company sent
the cancellation notice. Bostock has thus come forward with sufficient evidence to defeat
summary judgment. The Court will therefore deny Safeco’s motion, though it will do so
without prejudice given the various problems with Bostock’s brief.
2.

Bostock’s Late Response – Rule 6(b)(1)
Tardiness is Bostock’s first problem. Safeco filed its motion on March 30, 2016,

which meant Bostock had until April 25, 2016 to file her response. 3 Dist. Idaho Loc. Civ.
R. 7.1(c). On May 2, 2016 – a few days after this deadline passed – Bostock filed a
motion asking for additional time. See Plaintiff Request for Additional Time to Reply to
The Opposing Party’s Motion for Judgment or Dismissal, Dkt. 45. She said she had been
searching for a lawyer but had had no luck finding someone to represent her in this
action. Then, on May 16, 2016, before the Court ruled on her request for an extension,
Bostock filed her response. See Plaintiff’s “Dismissal of Motion for Summary

3

Bostock filed a brief with this Court on April, 19, 2016, entitled My Day in Court to Dismiss, yet this document
does not directly respond to the summary-judgment motion. See Dkt. 44. Rather, it appears to be aimed at
responding to discovery requests. Bostock obviously did not consider this to be her response, given that she later
filed a motion asking for more time to respond to the motion for summary judgment.

MEMORANDUM DECISION & ORDER - 9

Judgment,” Dkt. 47. Bostock thus filed her response roughly three weeks after it was
originally due.
The Court will construe Bostock’s request for additional time under Federal Rule
of Civil Procedure 6(b)(1). This rule provides:
(b)

Extending Time
(1)

In General. When an act may or must be done within a
specified time, the court may, for good cause, extend the
time:
(A) with or without motion or notice if the court acts, or if a
request is made, before the original time or its extension
expires; or
(B) on motion made after the time has expired if the party
failed to act because of excusable neglect.

“This rule, like all the Federal Rules of Civil Procedure, ‘[is] to be liberally construed to
effectuate the general purpose of seeing that cases are tried on the merits.’” Ahanchian v.
Xenon Pictures, Inc., 624 F.3d 1253, 1258-59 (9th Cir. 2010) (citation omitted); see also
Fed. R. Civ. P. 1 (“[The Federal Rules] should be construed and administered to secure
the just, speedy, and inexpensive determination of every action and proceeding.”).
The Court finds excusable neglect based on Bostock’s efforts to track down a
lawyer. The Court also observes that Bostock ultimately did not seek an overly lengthy
extension. The Court will therefore grant her Rule 6(b)(1) motion and deny Safeco’s
motion to strike the late pleading on the basis of timeliness. See generally Ahanchian,
624 F.3d at 1255 (observing that “district courts enjoy a wide latitude of discretion in
case management, . . . circumscribed by the courts’ overriding obligation to construe and
MEMORANDUM DECISION & ORDER - 10

administer the procedural rules so as ‘to secure the just, speedy, and inexpensive
determination of every action and proceeding.’”) (quoting Fed. R. Civ. P. 1).
3.

Safeco’s Request for Sanctions – Rule 37(c)(1)
The more troubling aspect of Bostock’s response is that she waited until now to

come forward with the four checks. She filed this lawsuit in August 2014 and then
waited almost two years before producing the checks, and then only in response to a
pending motion for summary judgment. 4 Bostock also failed to file formal, complete
responses to Safeco’s various discovery requests even after this Court entered an order
compelling her to do so.
Understandably frustrated with this state of affairs, Safeco asks for sanctions under
Rule 37(c)(1). Rule 37(c)(1) rule “forbid[s] the use at trial of any information required to
be disclosed by Rule 26(a) that is not properly disclosed.” Hoffman v. Constr. Protective
Servs., Inc., 541 F.3d 1175, 1179 (9th Cir. 2008) (quoting Yeti by Molly, Ltd. v. Deckers
Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001)). The rule provides:
If a party fails to provide information or identify a witness as required by
Rule 26(a) or (e), the party is not allowed to use that information or witness
to supply evidence on a motion, at a hearing, or at a trial, unless the failure
was substantially justified or is harmless.
Fed. R. Civ. P. 37(c)(1). In addition to or instead of this sanction, the court, on motion
and after giving an opportunity to be heard:

4

That said, at least one of these checks should not come as a surprise to Safeco. When Safeco’s investigator spoke
to Bostock in February 2009 (shortly after the flood was discovered), Bostock repeatedly said she wasn’t sure if she
was behind on her payments. See Recorded Statement, Dkt. 41-3. And in the context of that discussion, Bostock
alerted the representative to one of the four checks she now relies upon. See id. at CF136 (Bostock states, “here it is
. . . [check number] 5247 for $251”). Bostock seemed to be suggesting that Safeco had not credited her for this
payment.

MEMORANDUM DECISION & ORDER - 11

(A)

may order payment of the reasonable expenses, including attorney's
fees, caused by the failure;

(B)

may inform the jury of the party’s failure; and

(C)

may impose other appropriate sanctions, including any of the orders
listed in Rule 37(b)(2)(A)(i)-(vi).

Id. The party facing sanctions bears the burden of proving that its failure to disclose the
required information was substantially justified or is harmless. Torres v. City of L.A., 548
F.3d 1197, 1213 (9th Cir. 2008). Bostock has not offered any excuse for her failure to
produce these checks earlier in this action, other than her generalized assertion that she
has recently been attempting to find a lawyer. Sanctions are appropriate under these
circumstances. The Court determines that the following sanction is appropriate:
1. Bostock may present evidence of these four checks in her effort to defeat
summary judgment, but only on the following conditions:
2. Safeco may submit a supplemental brief in support of its motion for summary
judgment within 60 days of this Order. See Fed. R. Civ. P. 56(e). Presumably,
this submission will include a payment log and provide context regarding the
four checks Bostock submitted.
3. If Safeco wishes to depose Bostock, or if it needs Bostock to produce
additional documents to support this supplemental brief, the Court will allow
such discovery. If Bostock does not make herself available for a deposition
within a reasonable time, or if she does not timely respond to such additional
discovery requests, Safeco shall inform the Court, at which point, after
providing Bostock an opportunity to be respond in writing regarding any
MEMORANDUM DECISION & ORDER - 12

alleged failure, the Court shall proceed to rule on the summary-judgment
motion without considering the four checks mentioned above.
4. If this matter proceeds to trial, the Court will entertain Safeco’s motion to
inform the jury of Bostock’s initial failure to produce the four checks.
5.

Bostock’s Failure to File Formal Responses to Safeco’s RFAs – Rule 36
A third, related problem with Bostock’s response is that during discovery, she did

not file formal responses to Safeco’s Requests for Admission (RFAs). Any competent
lawyer knows that failing to respond to RFAs is deadly because the end result is that the
RFAs are deemed admitted, Fed. R. Civ. P. 36(a)(3), and the matter at hand is
“conclusively established unless the court, on motion, permits the admission to be
withdrawn or amended.” Fed. R. Civ. P. 36(b).
Safeco’s RFA Nos. 13 and 14 – if admitted – gut Bostock’s case. They ask
Bostock to admit the following:
No. 13: Please admit that your Policy had expired prior to the incident
occurring.
No. 14: Please admit that there was no coverage under the Policy for
your or your losses due to or resulting from the incident.”
Dkt. 41-3, at 8.
Bostock did not file formal responses to the RFAs. Nevertheless, in her many
submissions made during the discovery process (which she often filed with the Court),
Bostock continually denied that Safeco had the right to cancel her policy for nonpayment. She repeatedly asserted that Safeco was wrongly denying coverage. Under

MEMORANDUM DECISION & ORDER - 13

these circumstances, the Court will allow Bostock to contest the propriety of the alleged
cancelation.
ORDER
IT IS ORDERED that:
1) Safeco’s Motion for Summary Judgment (Dkt. 41) is DENIED
WITHOUT PREJUDICE for the reasons explained above. Safeco may
file a supplemental brief and evidentiary materials in support of its motion
within 60 days of this Order.
2) Bostock’s Request for Additional Time (Dkt. 45) is GRANTED.
3) Safeco’s Motion to Strike (Dkt. 53) is DENIED.
DATED: August 1, 2016

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

MEMORANDUM DECISION & ORDER - 14