Baker v. The Phoenix Insurance Company

Filing 79

ORDER ON MOTIONS FOR SUMMARY JUDGMENT: 63 Plaintiff's Motion for Summary Judgment; denying 64 Defendant's Motion for Partial Summary Judgment by Judge James L. Robart.(MD)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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WILLIAM H. BAKER,
Plaintiff,

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ORDER ON MOTIONS FOR
SUMMARY JUDGMENT

v.

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CASE NO. C12-1788JLR

THE PHOENIX INSURANCE
COMPANY,

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Defendant.
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I.

INTRODUCTION

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Before the court are Plaintiff William H. Baker’s second motion for summary
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judgment (Baker MSJ 2 (Dkt. # 63)) and Defendant The Phoenix Insurance Company’s
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(“Phoenix”) fourth motion for summary judgment (Phoenix MSJ 4 (Dkt. # 64)). This is a
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car crash case. Mr. Baker was rear-ended on I-90 by a motorist who did not have enough
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money or insurance to pay all of Mr. Baker’s medical bills. This insurance dispute
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followed.
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ORDER- 1

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As the court has previously noted, certain aspects of this case bear a strong

2 resemblance to the mythical bird with which Defendant shares its name. Each time the
3 court rules on a motion for summary judgment, another one seems to rise—as if by
4 magic—to take its place. The court has expended a substantial amount of judicial
5 resources ruling on these motions—an amount far in excess of the parties’ proportionate
6 share of the court’s time. Accordingly, the court provides only a brief explanation of its
7 decision to DENY both motions in large part, GRANTING only with respect to Mr.
8 Baker’s claim for breach of fiduciary duty. This case is rife with material fact issues
9 regarding whether it was reasonable for Phoenix to deny Mr. Baker insurance coverage,
10 so summary judgment is improper.
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II.

FACTUAL BACKGROUND

This is an insurance coverage dispute. Mr. Baker was rear-ended on Interstate 90

13 by a motorist who did not have enough money or insurance to pay all of Mr. Baker’s
14 medical bills. (Compl. (Dkt. # 1-2) ¶¶ 4.1-4.3.) Now, the two sides dispute whether Mr.
15 Baker is entitled to Uninsured-Underinsured Motorist coverage (“UIM”) under a Phoenix
16 insurance policy covering Mr. Baker’s truck. Mr. Baker alleges breach of contract, bad
17 faith, and numerous other causes of action against Pheonix. (Id. ¶¶ 6.1-10.3.)
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Mr. Baker made a UIM claim with Phoenix after his car was struck by an

19 uninsured/underinsured1 motorist named Sameer Mohamed. (Compl. ¶¶ 4.1-4.3.) Mr.
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The Complaint does not make clear whether Mr. Mohamed was underinsured or

22 uninsured, describing him as “underinsured and possibly uninsured,” and
ORDER- 2

1 Mohamed’s car hit Mr. Baker’s 1993 Dodge truck from behind, pushing it into the car
2 directly ahead of Mr. Baker. (Id. ¶¶ 4.3-4.5.) The parties do not dispute that Mr.
3 Mohamed was the sole cause of the accident. Meanwhile, Mr. Baker’s truck was
4 registered in Mr. Baker’s name, but it was not insured in his name. (1st Shoemaker Decl.
5 (Dkt. # 15-4) Ex. D at 3, 7.) Instead, the truck was insured in the name of Bibb
6 Construction LLC (“Bibb”), a company owned by Mr. Baker’s adult son. (Id at 7; Id. Ex.
7 A.)
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Phoenix denied Mr. Baker’s UIM claim, informing him that he had no UIM

9 coverage under Bibb’s policy. (Id. Ex. F.) Phoenix informed Mr. Baker that, although
10 Bibb’s policy included $1,000,000.00 of UIM coverage, this coverage only applied to
11 automobiles owned by Bibb. (Id.) Phoenix told Mr. Baker that since he, not Bibb,
12 owned the 1993 Dodge, it was not covered by Bibb’s policy. (Id.) Accordingly, Phoenix
13 denied Mr. Baker’s UIM claim entirely. (Id.)
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However, as the court stated in its previous order, this issue is not as simple as

15 Phoenix makes it out to be. It is true that Bibb’s policy originally provided UIM
16 coverage only for autos owned by Bibb. (See id.) However, before the accident, Mr.
17 Baker’s son contacted his insurance agent to add the 1993 Dodge to the policy. (Baker
18 Decl. (Dkt. # 19-1) ¶¶ 4-5.) Phoenix agreed to add the Dodge and issued an endorsement
19 to the policy that named the Dodge as an insured auto. (See 1st Shoemaker Decl. Ex. B.)
20 The endorsement stated that the 1993 Dodge was covered for UIM benefits (among other
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“underinsured/uninsured.” (Compl. ¶¶ 4.3, 4.5.) For purposes of this motion, it is irrelevant

22 whether Mr. Mohamed was underinsured or uninsured.
ORDER- 3

1 coverages) and that Phoenix would collect a premium for UIM coverage. (Id. at 6.)
2 Phoenix did collect this premium. (Baker Decl. ¶ 6.)
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Mr. Baker moved for summary judgment on the coverage issue, and the court

4 granted his motion. (9/3/13 Order (Dkt. # 47) at 4-7.) The court concluded that Mr.
5 Baker was entitled to UIM coverage as a matter of law because the policy was ambiguous
6 with respect to UIM benefits and, in Washington, ambiguities in insurance contracts are
7 resolved in favor of the insured. (See id.) These motions for summary judgment
8 followed.
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There has been a substantial amount of motions practice in this case. This is

10 Phoenix’s fourth motion for summary judgment (see Dkt. ## 14, 25, 42 (withdrawn), 64),
11 and Mr. Baker’s second motion for summary judgment (see Dkt. ## 37, 63). The parties
12 currently have 10 motions in limine pending (see Dkt. ## 74, 77), and have filed two
13 discovery motions (see Dkt. ## 56, 59) for a total of 18 motions.
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III.

ANALYSIS

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Summary Judgment Standard

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Summary judgment is appropriate if the evidence, when viewed in the light most

17 favorable to the non-moving party, demonstrates “that there is no genuine dispute as to
18 any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ.
19 P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Galen v. Cnty. of L.A.,
20 477 F.3d 652, 658 (9th Cir. 2007). A fact is “material” if it might affect the outcome of
21 the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is
22 “genuine” if the evidence is such that reasonable persons could disagree about whether
ORDER- 4

1 the facts claimed by the moving party are true. Aydin Corp. v. Loral Corp., 718 F.2d
2 897, 902 (9th Cir. 1983).
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[T]he issue of material fact required . . . to be present to entitle a party to
proceed to trial is not required to be resolved conclusively in favor of the
party asserting its existence; rather, all that is required is that sufficient
evidence supporting the claimed factual dispute be shown to require a jury
or judge to resolve the parties’ differing versions of the truth at trial.

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6 First Nat. Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968).
The court is “required to view the facts and draw reasonable inferences in the light

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8 most favorable to the [non-moving] party.” Scott v. Harris, 550 U.S. 372, 378 (2007).
9 The court may not weigh evidence or make credibility determinations in analyzing a
10 motion for summary judgment because these are “jury functions, not those of a judge.”
11 Liberty Lobby, 477 U.S. at 249-50.
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The moving party bears the initial burden of showing there is no genuine issue of

13 material fact and that he or she is entitled to prevail as a matter of law. Celotex, 477 U.S.
14 at 323. If the moving party meets his or her burden, the non-moving party “must make a
15 showing sufficient to establish a genuine dispute of material fact regarding the existence
16 of the essential elements of his case that he must prove at trial.” Galen, 477 F.3d at 658.
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Summary Judgment is Not Appropriate Because There Are Genuine Disputes
of Material Fact

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In light of the volume of motions filed in this case, this order will be brief. Both
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sides ask for summary judgment with respect to one or more of Mr. Baker’s extra-

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contractual claims. Mr. Baker asks the court to declare that it was unreasonable, as a
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matter of law, for Phoenix to deny him UIM benefits. (Baker MSJ 2 at 1, 6.) Mr. Baker
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ORDER- 5

1 asserts that “although reasonableness is usually a question for trial, Phoenix’s denial of
2 UIM coverage to Mr. Baker was so clearly unreasonable that Mr. Baker is entitled to
3 judgment as a matter of law on his IFCA claims.” (Id. at 6.) On the other hand, Phoenix
4 asks the court to declare that it was reasonable, as a matter of law, for Phoenix to deny
5 Mr. Baker UIM benefits. (Phoenix MSJ 4 at 1-2.) Phoenix asserts that its conduct was
6 reasonable because the court declared the policy to be ambiguous and hence, by
7 definition, its interpretation was reasonable. (See id. at 2-3.)
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Neither side makes a persuasive argument. The parties’ motions demonstrate that

9 there are genuine issues of material fact with respect to reasonableness. (Compare Baker
10 MSJ 2 with Phoenix MSJ 4.) Each side takes a completely opposite position on
11 reasonableness, and both sides support their position with evidence. (See, e.g., Strzelec
12 Decl. (Dkt. # 50-1); 2d Shoemaker Decl. (Dkt. # 65).) The court concludes that, based on
13 this evidence, reasonable persons could disagree about whether Phoenix’s conduct was
14 reasonable. See Aydin, 718 F.2d at 902. The court also rejects Phoenix’s argument that
15 its conduct was reasonable as a matter of law simply because there were two reasonable
16 interpretations of the insurance contract. (Phoenix MSJ 4 at 2-3.) As noted previously,
17 where there are two reasonable interpretations, the insured is entitled to coverage. Am.
18 Nat. Fire Ins. Co. v. B&L Trucking & Const. Co., Inc., 951 P.2d 250, 256 (Wash. 1998).
19 This rule of law existed when Phoenix made its coverage determination. Thus, it was
20 arguably unreasonable for Phoenix not to extend coverage even though its interpretation
21 of the contract was reasonable. These arguments need to be made to a jury; summary
22 judgment is not appropriate.
ORDER- 6

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However, Phoenix’s motion is granted in one respect. The court dismisses Mr.

2 Baker’s claim for breach of fiduciary duty. Washington courts have yet to recognize a
3 claim for breach of fiduciary duty by an insured against an insurer. See Neyens v. Am.
4 Family Mut. Ins. Co., No. C12-1038JLR, 2012 WL 5499870, at *2 (W.D. Wash. Nov. 13,
5 2012); Safeco Ins. Co. of Am. v. Butler, 823 P.2d 499, 503 (Wash. 1992); Van Noy v.
6 State Farm Mut. Auto. Ins. Co., 16 P.3d 574, 578-79 (Wash. 2001) (insurance
7 relationship is not a “true fiduciary” relationship); St. Paul Fire & Marine Ins. Co. v.
8 Onvia, Inc., 196 P.3d 664, 667 (2008) (insurance relationship is only “akin to” a fiduciary
9 relationship).
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In all other respects, both motions are DENIED.

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IV.

CONCLUSION

For the foregoing reasons, the court GRANTS Phoenix’s motion for summary

13 judgment with respect to Mr. Baker’s fiduciary duty claim and DENIES Phoenix and Mr.
14 Baker’s motions otherwise (Dkt. ## 63, 64).
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Dated this 22nd day of January, 2014.

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JAMES L. ROBART
United States District Judge

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ORDER- 7