NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24

MEMORANDUM DECISION

KESSLER, Judge

¶ 1 Robert and Rebecca Dean ("the Deans") appeal from the superior court's decision granting summary judgment in favor of Foremost Affiliated Insurance Services, Inc., dba Foremost Insurance Company ("Foremost") and Pete Cavner, an agent of Foremost. For the following reasons, we affirm the court's judgment.

FACTUAL AND PROCEDURAL HISTORY1

¶ 2 In December 2005, the Deans' home, insured by Foremost, was damaged by a fire. Cavner, Foremost's claim adjuster, evaluated the damage to the home and referred the Deans to Sunsetters Construction ("Sunsetters") for reconstruction. The Deans hired Sunsetters, who completed the work in May 2006. Cavner visited the Deans' home and told Foremost that all work had been completed. Foremost paid the Deans, who then were responsible to pay Sunsetters.

¶ 3 Sunsetters sued the Deans, alleging they had not paid the entire amount owed. The Deans requested that Foremost indemnify and defend them, but Foremost declined. The Deans testified they withheld a portion of the payment because they believed Sunsetters's work was substandard and incomplete. A jury awarded Sunsetters the $15,500 it requested. This court affirmed the judgment against the Deans. Sunsetters Constr., Inc. v. Dean, 1 CA-CV 08-0553, 1 CA-CV 08-0687, 2009 WL 4981569 (Ariz. App. Dec. 22, 2009) (mem. decision).

¶ 4 After the Sunsetters litigation, the Deans sued Foremost and Cavner alleging breach of contract; negligence per se for failure to supervise; negligence; breach of the covenant of good faith and fair dealing(insurance bad faith); alternatively, breach of contract (between Foremost and Sunsetters) as to the third-party beneficiary (the Deans); fraud; nuisance for loss of use; and intentional and negligent infliction of emotional distress. The claims were based on the theory that Foremost was responsible for Sunsetters's substandard work and for failure to comply with building codes.2

¶ 5 Foremost and Cavner moved for summary judgment, arguing that because of the prior Sunsetters litigation, the Deans were collaterally estopped from obtaining relief on all Regarding the latter claim, Foremost and Cavner contended an insurance bad faith claim can arise only from a contract between the insured and insurer and the contract here was between the Deans and Sunsetters. Thus, there could be no insurance bad faith claim based on the Sunsetters's substandard work. Foremost and Cavner also argued that the Deans presented no evidence showing "an intentional act to support their bad faith claim."

¶ 6 The Deans contested only the insurance bad faith claim. They argued that Foremost, in bad faith, denied them the benefit of having their home restored to its original condition. They did not contest summary judgment based upon the collateral estoppel effect of the Sunsetters litigation nor did they argue facts and law to support their claim of intentional infliction of emotional distress.

¶ 7 The trial court granted Foremost and Cavner's motion for summary judgment. The Deans timely appealed. This court has jurisdiction pursuant to Article 6, Section 9, of the Arizona Constitution and Arizona Revised Statutes ("A.R.S.") section 12-2101(B) (2003).

STANDARD OF REVIEW

¶ 8 We review de novo a trial court's grant of summary judgment "on the basis of the record made in the trial court," applying "the same standard as that used by the trial court." United Bank of Ariz. v. Allyn, 167 Ariz. 191, 195, 805 P.2d 1012, 1016 (App. 1990). In doing so, we determine whether any genuine issues of material fact exist and whether the trial court correctly applied the law. L. Harvey Concrete, Inc. v. Agro Constr. & Supply Co., 189 Ariz. 178, 180, 939 P.2d 811, 813 (App. 1997). Summary judgment is appropriate when the evidence presents no genuine issue of material fact and the movant is entitled to a judgment as a matter of law. Ariz. R. Civ. P. 56(c)(1); Orme Sch. v. Reeves, 166 Ariz. 301, 305, 802 P.2d 1000, 1004 (1990).

DISCUSSION

¶ 9 The Deans' opening brief is convoluted at best. We glean from it and the record below that the basis of all of the Deans' claims is that Sunsetters performed substandard work on their home. From this premise the Deans essentially argue Foremost had a duty to supervise and ensure the work Sunsetters performed restored the home to its former condition before The Deans argue that the work was not finished on their home when Foremost made the last payment to them and closed their claim; thus, they argue that they did not receive the benefits of their insurance contract to restore the home to its original condition. Arising from these premises, the Deans alleged the claims against Foremost and Cavner.

I. The Deans waived or abandoned all their claims except the insurance bad faith claim.

¶ 10 In the trial court, Foremost and Cavner contended collateral estoppel barred all the Deans' claims except their insurance bad faith claim. The Deans failed to contest summary judgment on the grounds of collateral estoppel. The Deans also do not address the collateral estoppel issues in their opening brief.3

¶ 11 We may decline to address an issue not raised in the opening brief, especially when that issue formed the basis for the trial court's decision. State Farm Mut. Auto. Ins. Co. v. Novak, 167 Ariz. 363, 370, 807 P.2d 531, 538 (App. 1990) (finding waiver where the opening brief did not state "any contentions or supporting reasoning on [the] issues, . . . cite any authority or portions of the record, and [did] not address the substance of the superior court's rulings"). Accordingly, the Deans have waived all of their claims except for the insurance bad faith claim. To the extent collateral estoppel would not bar their intentional infliction of emotional distress claim, the Deans failed to present any facts or argue law below that would preclude summary judgment on that claim.

II. The trial court did not err in granting summary judgment on the Deans' claim of insurance bad faith.

¶ 12 The Deans argue that Foremost and Cavner had a duty to obtain a letter of satisfaction from the Deans before Foremost closed their claim and paid Sunsetters. They argue that the letter signed by Robert Dean was forged, although the Deans do not clearly state by whom. It appears the Deans argue that had the letter not been forged, the work would not have been deemed complete and the claim closed, all of which allegedly precluded the Deans from ensuring Sunsetters completed the reconstruction. Because it was allegedly Cavner's duty to acquire the letter, the Deans contend he and Foremost had actual knowledge the letter was forged.

¶ 13 There are two elements to the tort of bad faith: "the insurer acted unreasonably toward its insured" and "the insurer acted knowing that it was acting unreasonably or . . . with such reckless disregard that such knowledge may be imputed to it." Miel v. State Farm Mut. Auto. Ins. Co., 185 Ariz. 104, 110, 912 P.2d 1333, 1339 (App. 1995). In insurance cases, an "intentional act by which the insurer fails to provide the insured with the security and protection from calamity which is the object of the relationship" constitutes insurance bad faith in tort. Rawlings v. Apodaca, 151 Ariz. 149, 160, 726 P.2d 565, 576 (1986) (footnote omitted). The level of intent required is "an evil hand" or "the intent to do the act," but not an "evil mind" or the intent to harm the insured. Id. Negligence in the form of mere mistakes, inadvertence, loss of papers, and misfiling of documents is insufficient to establish an insurance bad faith claim. Id. at 160 n.5, 726 P.2d at 576 n.5.

¶ 14 "The tort of bad faith can be alleged only if the facts pleaded would, on the basis of an objective standard," show the actions of the insurer were unreasonable. Noble v. Nat'l Am. Life Ins. Co., 128 Ariz. 188, 190, 624 P.2d 866, 868 (1981). If it is fairly debatable that the insurer's handling of the insured's claim was reasonable, then summary judgment is appropriate. See Lasma Corp. v. Monarch Ins. Co. of Ohio, 159 Ariz. 59, 64, 764 P.2d 1118, 1123 (1988) (holding that the trial court erred in allowing the claim of insurance bad faith to go to the jury where the claim was fairly debatable); Aetna Cas. & Sur. Co. v. Superior Court, 161 Ariz. 437, 440, 778 P.2d 1333, 1336 (App. 1989) (stating "there are times when the issue of bad faith is not a question appropriate for determination by the jury").

¶ 15 The trial court did not err in granting summary The Deans independently contracted with Sunsetters and paid Sunsetters from the money Foremost disbursed to them. Nothing Foremost or Cavner did prevented the Deans from withholding money from Sunsetters on the theory that the job was incomplete or substandard. Assuming someone did forge Robert Dean's signature on the letter of satisfaction, there is nothing in the record showing Foremost or Cavner either did so or knew about it. The Deans presented no law to support their argument that an insurance company has a duty to obtain a letter from the claimant that he or she is satisfied with the contractor's work before the insurance company distributes the insurance funds to the insured. Even so, the Deans moved back into their home, allowed Cavner to inspect the home, and did not object to any allegedly incomplete work until over two months later, when Sunsetters sued the Deans.

¶ 16 The Deans' reliance on notes in Foremost's internal insurance file stating that Cavner erroneously handled the Deans' claim shows mere inadvertence or mistake, not unreasonable conduct to deny the Deans the benefit of their insurance policy. When read in context, the notes show that Foremost was unhappy with Cavner's inattentive handling of Sunsetters's request for supplemental money in an amount equal to theoriginal estimate to complete the Regardless, Foremost paid the Deans the entire supplemental amount requested. Again, the Deans did not notify Foremost until months later that their home was allegedly incomplete. In any event, while the Deans argue their home was not completed, the record shows that they had Sunsetters upgrade certain parts of the home, such as the tile, countertops, and bathrooms, in exchange for not replacing other parts of the home, such as the fireplace and some walls. Rebecca Dean even admitted in an arbitration hearing in the Sunsetters litigation that the reconstruction was nicer than the prior condition of the home.

¶ 17 The Deans did not present facts to support a claim of insurance bad faith; therefore, the trial court did not err in granting summary judgment.4

III. The trial court did not abuse its discretion in granting Foremost and Cavner's request for attorneys' fees.

¶ 18 The Deans argue the trial court erred in awarding attorneys' fees and request attorneys' fees on appeal, although they do not cite any authority for their request. Foremost and Cavner request an award of attorneys' fees pursuant to Rule 21 of the Arizona Rules of Civil Appellate Procedure and A.R.S. § 12-341.01(A) (2003), which authorizes an award of reasonable attorneys' fees to the successful party in an action arising out of contract.

¶ 19 Because in this context the "tort of bad faith cannot be committed absent the existence of an insurance contract," an insurance bad faith claim "is so intrinsically related to the contract" that it arises out of a contract for purposes of A.R.S. § 12-341.01(A). Sparks v. Republic Nat'l Life Ins. Co., 132 Ariz. 529, 544, 647 P.2d 1127, 1142 (1982). We review the trial court's discretionary award of statutory attorneys' fees for an abuse of discretion. Radkowsky v. Provident Life & Acc. Ins. Co., 196 Ariz. 110, 113, ¶ 18, 993 P.2d 1074, 1077 (App. 1999).

¶ 20 The trial court was not required to and did not set forth its reasons for awarding attorneys' fees under A.R.S. § 12-341.01(A). See Assoc. Indem. Corp. v. Warner, 143 Ariz. 567, 571, 694 P.2d 1181, 1185 (1985). Given the lack of merit of the Deans' arguments, that they were unsuccessful in all relief sought, and the claim had been previously adjudicated, there was a reasonable basis to award attorneys' fees below under that section. See Hart v. Seven Resorts Inc., 190 Ariz. 272, 283, 947 P.2d 846, 857 (App. 1997) (enumerating the factors a court should consider in deciding an attorneys' fees request).

¶ 21 For the foregoing reasons, we affirm the trial court's award, award Foremost and Cavner reasonable attorneys' fees on appeal, and deny the Deans' request for fees.

CONCLUSION

¶ 22 We affirm the summary judgment entered in favor of Foremost and Cavner. We award them reasonable attorneys' fees and costs on appeal upon timely compliance with ARCAP Rule 21.5

PATRICIA A. OROZCO, Presiding Judge, MICHAEL J. BROWN, Judge, concurring.