Taylor v. Allstate Insurance Group et al

Filing 15

ORDER GRANTING DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT, granting 6 Motion for Partial Summary Judgment. Signed by Judge Stanley A Bastian. (LR, Case Administrator)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF WASHINGTON

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9 GARY TAYLOR, a single man
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Plaintiff,

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v.

No. 2:15-cv-00030-SAB

ORDER GRANTING

12 ALLSTATE INSURANCE GROUP and

DEFENDANT’S MOTION FOR

13 ALLSTATE PROPERTY AND

PARTIAL SUMMARY

14 CASUALTY INSURANCE COMPANY,

JUDGMENT

15 an Illinois Corporation,
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Defendant.

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Before the Court is Defendant’s Motion for Partial Summary Judgment

19 Regarding One Year Suit Limitation, ECF No. 6. The motion was heard without
20 oral argument. Plaintiff is represented by Scott Volyn. Defendant is represented by
21 Jeremy Zener.
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MOTION STANDARD
Summary judgment is appropriate if the “pleadings, depositions, answers to

24 interrogatories, and admissions on file, together with the affidavits, if any, show
25 that there is no genuine issue as to any material fact and that the moving party is
26 entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). There is no
27 genuine issue for trial unless there is sufficient evidence favoring the non-moving
28 party for a jury to return a verdict in that party’s favor. Anderson v. Liberty Lobby,
ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL
SUMMARY JUDGMENT ~ 1

1 Inc., 477 U.S. 242, 250 (1986). The moving party has the initial burden of
2 showing the absence of a genuine issue of fact for trial. Celotex Corp. v. Catrett,
3 477 U.S. 317, 325 (1986). If the moving party meets its initial burden, the non4 moving party must go beyond the pleadings and “set forth specific facts showing
5 that there is a genuine issue for trial.” Id. at 325; Anderson, 477 U.S. at 248.
In addition to showing that there are no questions of material fact, the

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7 moving party must also show that it is entitled to judgment as a matter of law.
8 Smith v. University of Washington Law School, 233 F.3d 1188, 1193 (9th Cir.
9 2000). The moving party is entitled to judgment as a matter of law when the non10 moving party fails to make a sufficient showing on an essential element of a claim
11 on which the non-moving party has the burden of proof. Celotex, 477 U.S. at 323.
12 The non-moving party cannot rely on conclusory allegations alone to create an
13 issue of material fact. Hansen v. United States, 7 F.3d 137, 138 (9th Cir. 1993).
When considering a motion for summary judgment, a court may neither

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15 weigh the evidence nor assess credibility; instead, “the evidence of the non16 movant is to be believed, and all justifiable inferences are to be drawn in his
17 favor.” Anderson, 477 U.S. at 255.
BACKGROUND FACTS

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The following facts are taken from Plaintiff’s complaint and Defendant’s

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20 Statement of Facts, as Plaintiff did not file a Statement of Facts with his response.

Defendant Allstate Property and Casualty Insurance Co. issued Plaintiff a

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22 homeowner’s insurance policy. Plaintiff made a claim on the policy for water loss
23 and theft loss that occurred in October and November, 2009. The water damage
24 was caused by a contractor who was hired to install wood flooring, after the first
25 contractor was unable to complete the job.
Plaintiff had moved out of his home during the remodel project. When he

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The Court includes the facts from Plaintiff’s complaint to provide context and
28 background information.
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ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL
SUMMARY JUDGMENT ~ 2

1 went to review the floors, he noticed that several items of personal property were
2 missing. He confronted the contractor, who denied stealing anything. The
3 contractor then asked for additional money beyond the terms of the contract,
4 which Plaintiff refused to pay, although he did pay the balance of the contract.
5 After Plaintiff moved back into the home, he noticed other items were missing. A
6 couple of days later, he discovered that the toilet the contractor had recently
7 reinstalled was leaking. It caused extensive water damage to the wall behind the
8 toilet and into the adjacent garage area.
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An inspector reported to Plaintiff that it appeared the leakage was caused

10 intentionally because the toilet water fittings in all the bathrooms had been placed
11 upon the initial thread of fittings, but never tightened. The inspection also revealed
12 extensive damage throughout the house caused by the leaking toilets. A local
13 disaster recovery construction company attempted to repair the damage, but also
14 caused substantial damage.
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Plaintiff submitted claims to Defendant Allstate, who accepted the claims

16 and began issuing payments on Plaintiff’s water loss claim in November, 2009. It
17 also accepted coverage for Plaintiff’s theft loss. Defendant ultimately closed the
18 theft claim when Plaintiff failed to provide information to allow Defendant to
19 adjust the loss. Defendant continued to issue payments on the water loss until
20 October 28, 2010. Ultimately, Defendant made payments totaling $111,334.71 on
21 Plaintiff’s water loss claim.
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Plaintiff retained his current attorney, Scott Volyn, on or about February 24,

23 2010. He filed a lawsuit against Defendant in Chelan County Superior Court on
24 December 24, 2014, alleging breach of contract, violation of the Consumer
25 Protection Act, bad faith, negligence, and violations of the Insurance Fair Conduct
26 Act. He asserts he has incurred $95,000 in unreimbursed losses.
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Defendant removed the action to the Eastern District of Washington.

28 Defendant now moves for summary judgment on all of Plaintiff’s contractual
ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL
SUMMARY JUDGMENT ~ 3

1 claims as a matter of law because Plaintiff failed to file his lawsuit within one year
2 from the inception of loss or damage.
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ANALYSIS

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The homeowner’s policy in question has the following clause:

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12. Action Against Us
No one may bring an action against us in any way related to the
existence or amount of coverage, or the amount of loss for which
coverage is sought, under a coverage to which Section I Conditions
applies, unless:
a) there has been full compliance with all policy terms;
b) the action is commenced within one year after the inception
of loss or damage.

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Defendant argues the time period for filing a lawsuit expired on October 27,

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12 2010 and November 9, 2010. Because there is evidence in the record that
13 Defendant paid claims in 2011, Defendant argues that even if the Court were to
14 use this date, the limitation period would expire in 2012. It is undisputed that
15 Plaintiff filed his suit more than two years after Allstate last adjusted his claim.
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Plaintiff argues that his claim is based on Defendant’s failure to complete

17 the adjustment process and to allow a claim to remain open, uncompleted for four
18 years. He maintains his cause of action is based on this continuing violation.
19 According to Plaintiff, his suit is timely within the interpretation of the contract
20 language and the lay understanding of the insured. He maintains that the impact of
21 allowing the claim to remain open is that the one year limitation does not begin to
22 run. In other words, the complete inaction by Defendant has tolled the one-year
23 provision, and the breach of contract claim is timely.
Under Washington law, an insurance contract may include reasonable
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25 limitations on liability. Ashburn v. Safeco Ins. Co. of Am., 42 Wash.App. 692, 695
26 (1986). Washington courts have upheld the validity of the 1-year limitation on
27 insurance contracts. Id. (citations omitted). Limitations of actions provisions in a
28 contract prevail over general statute of limitations unless prohibited by statute or
ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL
SUMMARY JUDGMENT ~ 4

1 public policy, or unless they are unreasonable. Id. Wash. Rev. Code § 48.18.200
2 provides that the limitation of a right of action in an insurance policy may not be
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3 less than 1 year from the date of loss. Washington courts interpret this to

4 impliedly authorize a 1-year limitation. Ashburn, 52 Wash.App. at 697.
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An insured has an affirmative duty under Washington law to read their

6 policy and be on notice of the terms and conditions of the policy. Dombrosky v.
7 Farmer Ins. Co. of Wash., 84 Wash.App. 245, 257 (1996).
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A close review of Plaintiff’s arguments reveals that he is not challenging the

9 one-year limitation, that is, under a plain reading of the clause, the time period for
10 bringing a lawsuit against Defendant is one year after the inception of the loss or
11 damage, which, according to Defendant’s uncontroverted Statement of Facts,
12 occurred on October 27, 2009 and November 9, 2009, and was reported on
13 November 9, 2009 (water loss) and November 19, 2009 (theft loss). Rather, he is
14 arguing that the one year limitation should be equitably tolled.
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The elements of equitable estoppel are: (1) an act that is inconsistent with a

16 later claim; (2) another party’s reasonable reliance on the act; and (3) injury to the
17 other party that would result if the first party is permitted to repudiate the earlier
18 act. Dombrosky, 84 Wash.App. at 256. Equitable estoppel is not favored under
19 Washington law, and the party asserting estoppel must prove each of the elements
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22 2(1) No insurance contract delivered or issued for delivery in this state and
covering subjects located, resident, or to be performed in this state, shall contain
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any condition, stipulation, or agreement
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25 (c) limiting right of action against the insurer to a period of less than one year from
the time when the cause of action accrues in connection with all insurances other
26 than property and marine and transportation insurances. In contracts of property
27 insurance, or of marine and transportation insurance, such limitation shall not be
to a period of less than one year from the date of the loss. Wash. Rev. Code §
28 48.18.200.
ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL
SUMMARY JUDGMENT ~ 5

1 by clear, cogent, and convincing evidence. Robinson v. City of Seattle, 119
2 Wash.2d 34, 82 (1992).
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Washington courts have applied the doctrine of equitable estoppel to an

4 insurance contract claim. See Dickson v. U.S. Fidelity & Guaranty Co. 77 Wash.2d
5 785, 788 (1970); David v. Oakland Home Insur. Co., 11 Wash.181, 185 (1895).
6 Generally in cases in which the time limitation clause was tolled, the insurance
7 company took some action that gave the impression that the claim was still open
8 for consideration, notwithstanding that the time for filing the lawsuit had passed.
9 For instance, in Dickson, the insurance agent made a statement to the insured that
10 the rejection of the claim was not final and he then failed to forward the claim to
11 the home office for over 6 months. 77 Wash.2d at 788. The trial court determined
12 that because the plaintiffs commenced suit within a reasonable time after learning
13 of the final decision of the home office, the insurance company was equitably
14 estopped from raising the time limitation provision. Id. Similarly, in David, the
15 court held that an insurance company waived the policy’s period of limitation
16 where the insured made settlement offers that were rejected by the insurer. 11
17 Wash. at 185. The court held that these ongoing negotiations were such “as to
18 warrant the insured in believing that the matter was still open for further
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19 consideration and adjustment between the parties.” Id.

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22 3 As the Court explained:
So long as the insured was thus given the right to suppose that the
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question of adjustment was an open one, he had the right to assume that
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the condition of the policy as to the time for the commencement of an
action thereon had been waived by the company. And such waiver would
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continue until, by some definite action on its part, the company had
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notified the insured of the rejection of his claim. After which, he would
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have a reasonable time in which to commence an action upon the policy.
Id.
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ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL
SUMMARY JUDGMENT ~ 6

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In this case, there is no genuine issue of material fact regarding whether

2 equitable estoppel applies, and thus summary judgment as a matter of law on
3 Plaintiff’s insurance contract claims is appropriate. There is nothing in the record
4 to establish that Defendant gave Plaintiff any indication that the claim was still
5 open for consideration after it closed the theft claim and stopped issuing payments
6 on the water loss claim in October 28, 2010. There is nothing in the record to
7 suggest that Defendant did anything after this date that would cause Plaintiff to
8 believe that his claim was still being processed. In fact, the record is devoid of any
9 communications between Plaintiff and Defendant. Plaintiff indicates that he
10 received his last payment in 2011. At the minimum, the limitation period for filing
11 a lawsuit would have expired in 2012. Even then, Plaintiff did not file this lawsuit
12 until December, 2014. Unlike the insured in Dickson, Plaintiff did not bring this
13 lawsuit within a reasonable time. Rather, he waited until over three years after the
14 last payment, and nearly five years after the loss occurred before filing suit. There
15 is nothing in the record to support a finding that this was reasonable.
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Accordingly, IT IS HEREBY ORDERED:

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1. Defendant’s Motion for Partial Summary Judgment Regarding One Year

18 Suit Limitation, ECF No. 6, is GRANTED.
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IT IS SO ORDERED. The District Court Executive is hereby directed to

20 file this Order and provide copies to counsel.
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DATED this 5th day of May, 2015.

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Stanley A. Bastian

United States District Judge

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ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL
SUMMARY JUDGMENT ~ 7