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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HONORABLE RONALD B. LEIGHTON

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT TACOMA

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KENNETH W WITT & KIT WITT,

CASE NO. C16-5202-RBL

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Plaintiffs,
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v.

ORDER GRANTING
DEFENDANT’S MOTION FOR
PARTIAL SUMMARY JUDGMENT

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PROPERTY & CASUALTY
INSURANCE COMPANY OF
HARTFORD,

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Defendant.
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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:
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(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.
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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.
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(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.
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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.
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(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.
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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.
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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.
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There can be no dispute about the terms of the policy, despite the fact that it requires the
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reader to look in multiple places to find those terms. It states:
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ORDER GRANTING DEFENDANT’S MOTION
FOR PARTIAL SUMMARY JUDGMENT - 3

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[Dkt. #113-15 at 31] The asterisk refers the reader to an endorsement, which provides that the
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entry “may be left blank if shown elsewhere in the coverage.” Hartford claims that the
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applicable “elsewhere” is the Policy Declarations, which provide that the “additional limits
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coverage” is “CAP 1.5.” See Dkt. #13-15 at 4.
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The Witts claim that this coverage provides an additional 1.5 times the base structure
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coverage of $251,000—or a total of 2.5 times the stated coverage. But there is no legal or logical
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support for this argument.
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The word “additional” does not appear in the coverage; instead, in the event of
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replacement (rebuilding), the limit is increased, but shall not exceed “[1.5] times the amount
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[$251,000] shown” in the Declarations. There is no other way to reasonably read this
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unambiguous provision: the increased replacement coverage is capped at 1.5 times the base
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coverage. $251,000 times 1.5 is $376,500. There is no support for the claim that the limit is
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increased by an additional 1.5 times the base amount. Hartford’s reading is correct, as a matter
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of law, and the Witts’ is not. Hartford’s motion for partial summary judgment on the applicable
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replacement coverage is GRANTED.
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C. The Witt’s ALE claim fails as a matter of law.
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The Witts’ claim $1400 per month in “loss of use,” or Alternate Living Expenses, for
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living in the cabin on their property. They do not dispute that the policy’s ALE coverage applies
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only where the additional living expense is actually incurred. They claim instead that, at an
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unspecified time, an unidentified Hartford adjuster promised their public adjuster that the insurer
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would pay them to stay in their cabin. There is no claim or evidence that the promise was
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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:
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Kit Witt’s declaration confirms that any promise was made to Thomas, and not to her:

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[Dkt. #17 at 2]
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Hartford denies that it or its adjuster did or would make such a promise, given the
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policy’s clear language. Thomas’s own documents undermine his vague claim that there was
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such an agreement. Some five months after the fire, after the cabin renovations had been
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completed, and after the Witts moved in, (and after Thomas had corresponded with Hartford on
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various other matters, without mentioning any promise) Thomas contacted Hartford’s adjuster
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about the loss. He wrote:
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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.

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[Dkt. # 13-5 at 2 (emphasis added)].
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ORDER GRANTING DEFENDANT’S MOTION
FOR PARTIAL SUMMARY JUDGMENT - 5

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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:
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[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:

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[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:

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[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

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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.
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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.
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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
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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
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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:
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5 [Dkt. #15 at 9] Adjuster Thomas’s testimony in support of this claim is similarly conclusory:
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[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.

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Hartford’s Motion for Partial Summary Judgment on all three issues is GRANTED.
IT IS SO ORDERED.
Dated this 19th day of January, 2017.

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A

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Ronald B. Leighton
United States District Judge

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ORDER GRANTING DEFENDANT’S MOTION
FOR PARTIAL SUMMARY JUDGMENT - 8