Witt et al v. Property & Casualty Insurance Company of Hartford

Filing 21

ORDER granting 12 Defendant's Motion for Partial Summary Judgment on all three counts; signed by Judge Ronald B. Leighton.(DN)

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1 HONORABLE RONALD B. LEIGHTON 2 3 4 5 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA 7 8 KENNETH W WITT & KIT WITT, CASE NO. C16-5202-RBL 9 Plaintiffs, 10 v. ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT 11 12 PROPERTY & CASUALTY INSURANCE COMPANY OF HARTFORD, 13 Defendant. 14 15 THIS MATTER is before the Court on Defendant Hartford’s Motion for Partial Summary 16 Judgment on Plaintiff Witts’ contract claims. [Dkt. #12]. The Witts purchased a Hartford 17 homeowners policy for their home, which was damaged by fire in February, 2015. Hartford has 18 paid more than $650,000 for the claim. The case (and this motion) involves three areas of 19 continued dispute over Hartford’s obligations under the policy: 20 (1) The policy covered the structure for $251,000 (“Coverage A”), which was extended if 21 the structure was replaced. Hartford argues that the extended replacement limit is capped at 1.5 22 times the stated coverage, or $376,500. The Witts claim that the coverage was extended for an 23 additional 1.5 times the stated structure coverage, or [$251,000 + (1.5 x 251,000)] = $627,500. 24 ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT - 1 1 Hartford argues that this is a plain vanilla contract construction issue and that the Witts’ reading 2 is wrong as a matter of law. The Witts argue that the contract is unambiguous and that their 3 reading is correct, and that if it is ambiguous it must be construed in their favor. 4 (2) The policy included an additional living expenses, or ALE, coverage. The Witts claim 5 that Hartford’s adjuster agreed to pay them $1400 per month to live in a cabin on the property, in 6 lieu of paying them significantly more to live in a rental home. In reliance on that promise, they 7 refurbished the cabin to make it livable. 8 The Witts’ claim depends on their public adjuster’s claim that the promise was made, and 9 their own claim that they reasonably relied on it. Hartford ultimately paid $5650 for this work, 10 but denies that it ever agreed or promised to pay the Witts any monthly amount to live in their 11 own cabin. Hartford argues that the policy is clear that ALE coverage is triggered only where 12 such expenses are actually incurred, that they consistently told the Witts this, and that there is no 13 evidence in support of the Witt’s claim. 14 (3) The policy included an “ordinance and law” coverage, which pays for cost increases 15 due to building code enforcement. The Witts claim they incurred additional costs (a total of 16 $54,200, of which Hartford has paid $32,350) due to code compliance. The Witts therefore claim 17 an additional $21,850 for increased code compliance costs. Hartford claims that it already 18 characterized repair costs that would not have otherwise been payable (due to the cap discussed 19 above) as code costs, and denies that it owes any additional amounts. It claims there is no 20 support for the Witts’ additional code claim as a matter of law. 21 A. Summary Judgment Standard. 22 Summary judgment is proper “if the pleadings, the discovery and disclosure materials on 23 file, and any affidavits show that there is no genuine issue as to any material fact and that the 24 movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). In determining ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT - 2 1 whether an issue of fact exists, the Court must view all evidence in the light most favorable to 2 the nonmoving party and draw all reasonable inferences in that party’s favor. Anderson Liberty 3 Lobby, Inc., 477 U.S. 242, 248-50 (1986); Bagdadi v. Nazar, 84 F.3d 1194, 1197 (9th Cir. 1996). 4 A genuine issue of material fact exists where there is sufficient evidence for a reasonable 5 factfinder to find for the nonmoving party. Anderson, 477 U.S. at 248. The inquiry is “whether 6 the evidence presents a sufficient disagreement to require submission to a jury or whether it is so 7 one-sided that one party must prevail as a matter of law.” Id. At 251-52. The moving party 8 bears the initial burden of showing that there is no evidence which supports an element essential 9 to the non-movant’s claim. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Once the 10 movant has met this burden, the nonmoving party then must show that there is a genuine issue 11 for trial. Anderson, 477 U.S. at 250. If the nonmoving party fails to establish the existence of a 12 genuine issue of material fact, “the moving party is entitled to judgment as a matter of law.” 13 Celotex, 477 U.S. at 323-24. 14 There is no requirement that the moving party negate elements of the non-movant’s case. 15 Lujan v. National Wildlife Federation, 497 U.S. 871, 110 S. Ct. 3177, 111 L. Ed. 2d 695 (1990). 16 Once the moving party has met its burden, the non-movant must then produce concrete evidence, 17 without merely relying on allegations in the pleadings, that there remain genuine factual issues. 18 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505 (1986). 19 B. Coverage A included a 150% cap, not an additional 150% coverage, for structure replacement. 20 There can be no dispute about the terms of the policy, despite the fact that it requires the 21 reader to look in multiple places to find those terms. It states: 22 23 24 ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT - 3 1 2 3 [Dkt. #113-15 at 31] The asterisk refers the reader to an endorsement, which provides that the 4 entry “may be left blank if shown elsewhere in the coverage.” Hartford claims that the 5 applicable “elsewhere” is the Policy Declarations, which provide that the “additional limits 6 coverage” is “CAP 1.5.” See Dkt. #13-15 at 4. 7 The Witts claim that this coverage provides an additional 1.5 times the base structure 8 coverage of $251,000—or a total of 2.5 times the stated coverage. But there is no legal or logical 9 support for this argument. 10 The word “additional” does not appear in the coverage; instead, in the event of 11 replacement (rebuilding), the limit is increased, but shall not exceed “[1.5] times the amount 12 [$251,000] shown” in the Declarations. There is no other way to reasonably read this 13 unambiguous provision: the increased replacement coverage is capped at 1.5 times the base 14 coverage. $251,000 times 1.5 is $376,500. There is no support for the claim that the limit is 15 increased by an additional 1.5 times the base amount. Hartford’s reading is correct, as a matter 16 of law, and the Witts’ is not. Hartford’s motion for partial summary judgment on the applicable 17 replacement coverage is GRANTED. 18 C. The Witt’s ALE claim fails as a matter of law. 19 The Witts’ claim $1400 per month in “loss of use,” or Alternate Living Expenses, for 20 living in the cabin on their property. They do not dispute that the policy’s ALE coverage applies 21 only where the additional living expense is actually incurred. They claim instead that, at an 22 unspecified time, an unidentified Hartford adjuster promised their public adjuster that the insurer 23 would pay them to stay in their cabin. There is no claim or evidence that the promise was 24 ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT - 4 1 written. Specifically, their public adjuster, Jack Thomas, claims the “Hartford adjuster” promised 2 that Hartford would pay the Witts $1400 per month to live in the cabin, and that in reliance on 3 that promise the Witts spent almost $6000 making it livable. Then, Thomas claims, Hartford 4 reneged on that promise: 5 6 7 8 9 [Dkt. #16 at 3] 10 Kit Witt’s declaration confirms that any promise was made to Thomas, and not to her: 11 12 13 14 [Dkt. #17 at 2] 15 Hartford denies that it or its adjuster did or would make such a promise, given the 16 policy’s clear language. Thomas’s own documents undermine his vague claim that there was 17 such an agreement. Some five months after the fire, after the cabin renovations had been 18 completed, and after the Witts moved in, (and after Thomas had corresponded with Hartford on 19 various other matters, without mentioning any promise) Thomas contacted Hartford’s adjuster 20 about the loss. He wrote: 21 22 The loss of use matter remains unresolved. Again, the insured will agree to a rental allowance of $1500 per month. . . . They will stay in the cabin on the property, but only if you agree to the $1500 rental allowance. 23 [Dkt. # 13-5 at 2 (emphasis added)]. 24 ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT - 5 1 This is not evidence of Hartford’s past promise to pay $1400 per month; it is evidence 2 that, the through their public adjuster, the Witts offered to stay in the cabin if Hartford agreed to 3 pay $1500 them per month. Hartford’s adjuster, Baldwin, promptly rejected that offer, because 4 the policy did not cover alternate living expenses that were not actually incurred: 5 6 7 8 9 10 [Dkt. #13-6]. There is no evidence or claim that Hartford ever agreed to pay such an amount at a later date, though it is apparent that the Witts continued to live in the cabin. On October 19, Thomas again raised the issue of the ALE, both with respect to the $1400 and to the cabin refurbishment costs: 11 12 13 14 15 16 [Dkt. #13-9] Hartford claims they did not get the letter for about a month. In any event, on October 21, Baldwin similarly asked Thomas to document the cabin refurbishment costs: 17 18 19 20 21 22 23 24 [Dkt. #13-8] It is undisputed that these costs (after some adjustment) were paid in December, 2015. Shortly before she retired, Baldwin informed Thomas of the payment: ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT - 6 1 2 3 4 [Dkt. # 13-10] 5 The Witts argue that Hartford is estopped from denying its promise to pay $1400 per 6 month because they relied on that promise to refurbish the cabin. Hartford argues that equitable 7 estoppel cannot create coverage where none existed. See Baker v. The Pheonix Ins. Co., 2013 8 WL 3208564 (W.D. Wa. 2013) and the cases cited therein. [Cited by Hartford in its Reply; Dkt. 9 # 19 at 5]. It also argues that the Witts cannot establish the requirements for estoppel, in any 10 event: they cannot show reasonable reliance on the vague promise to a third party that they 11 allege, and they certainly cannot claim they relied on any such promise after their offer to accept 12 $1500 per month was rejected on July 27, 2015. [See also Dkt. #13 at Exhibits 7 and 8]. Their 13 investment in the cabin is not reliance because Harford promptly reimbursed them for those costs 14 when they were presented, presumably under the ALE coverage. 15 The Witts’ claim for ALE coverage in the form of $1400 per month for living in the 16 cabin on their property is unsupportable as a matter of law. Hartford’s Motion for summary 17 judgment on this claim is GRANTED, and that claim is dismissed with prejudice. 18 D. Code compliance. 19 Hartford’s policy provided an additional coverage for code compliance and related costs, 20 which was limited to an additional 10% of “Coverage A.” The basis of the Witts’ code cost claim 1 21 is not clear . Their Response asserts only that the number sought and the number paid are not the 22 same. It does not articulate, or demonstrate, any discrepancy, and it does not address the fact that 23 1 Indeed, it is not entirely clear that they continue to assert this claim at all. Footnote 2 in 24 their Response concedes that the code claim has been “paid in full.” [Dkt. # 15 at 5, note 2]. ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT - 7 1 the code compliance limit is $37,650 (10% of the increased Coverage A), which more than 2 Hartford paid but far less than they seek. Instead, they argue only: 3 4 5 [Dkt. #15 at 9] Adjuster Thomas’s testimony in support of this claim is similarly conclusory: 6 7 8 9 10 11 12 13 14 [Dkt. # 16 at 4]. This is an argument, or a conclusion; it is not evidence. The Witts have not established that Hartford breached its contract to cover increased code compliance costs. Hartford’s Motion for Summary Judgment on this claim is GRANTED. 15 16 17 18 *** Hartford’s Motion for Partial Summary Judgment on all three issues is GRANTED. IT IS SO ORDERED. Dated this 19th day of January, 2017. 19 20 A 21 Ronald B. Leighton United States District Judge 22 23 24 ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT - 8

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