NOT FOR OFFICIAL PUBLICATION.

UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

MEMORANDUM DECISION

THOMPSON, Judge.

¶1 This case concerns the insurance claim handling on an insured's vehicle after an auto accident resulting in a total loss of that vehicle. Plaintiff-Appellant Judith E. Indihar (Indihar)1 appeals from the trial court's grant of summary judgment to State Farm Mutual Automobile Insurance, Co., (State Farm) as well as the trial court's dismissal of her amended complaint, without additional discovery. Finding no error, we affirm.

FACTUAL AND PROCEDURAL HISTORY

¶2 The facts are largely undisputed. On September 9, 2010, James L. Indihar, Jr., was in a covered motor vehicle collision. He submitted a claim to his insurer State Farm the next day. His 2008 Ford Mustang was deemed a total loss by both State Farm and a body shop of his choice. At the time of the accident, Indihar was making payments to Ford Motor Company (FMC). FMC had a lien on the vehicle.

¶3 Initially, Indihar contended that his vehicle was worth $38,000; State Farm disagreed. Some of the disputed value was over custom upgrades in the amount of $8,461.92, plus labor costs.2

¶4 On December 2, 2010, in writing, State Farm valued the total loss of the Mustang at an actual cash value (ACV) of $30,037.70 with a proposed payout of $28,917.34 after accounting for tax, title, deductible, and salvage value. State Farm provided Indihar with a general explanation of the appraisal process and advised him that State Farm was ready to tender $28,917.34 in advance of any appraisal if Indihar did not agree to their proposed ACV. He did not ask for an appraisal.

¶5 On December 20, 2010, Indihar told State Farm it could pay off the FMC lien and send him the balance or it could send him the payout and he would pay off FMC. Specifically, the body of the letter read:

Two days later, State Farm advised Indihar that it could not proceed with the payout until either Indihar got a salvage title for the Mustang or he gave State Farm possession of the Mustang.

¶6 In January 2011, Indihar filed suit against State Farm seeking declaratory judgment and alleging State Farm's prerequisites constituted a breach of the duty of good faith and fair dealing and breach of contract. The entire basis for the contract claim was that "STATE FARM has breached the insurance contract with Plaintiff to Plaintiff's damage." No more specifics were given.

¶7 State Farm filed an initial motion to dismiss which the trial court denied in May 2011. State Farm filed its answer in June 2011. On August 1, 2011, State Farm paid off FMC and provided Indihar with the balance of $9,342.30. Indihar kept the vehicle and sold the Mustang to a scrap dealer for $60.90, after removing various custom parts.

¶8 State Farm filed a motion for summary judgment on all claims. The trial court granted State Farm summary judgment as to bad faith and punitive damages, finding there was an "insufficient factual basis" to support those claims. As to the contract claim, the court told Indihar "I think that there's nothing in the complaint that really deals with the valuations and basis of the breach of contract. I don't see it in there anyplace." Indihar immediately made an oral motion to amend the complaint. The trial court denied State Farm summary judgment on the contract claim, saying it would deal with those claims once the amendment was filed.

¶9 Indihar filed a motion to compel seeking documents related to the valuation of the Mustang and a motion for discovery sanctions. Indihar also filed his amended complaint, adding allegations regarding State Farm's total loss valuation methodology. The amended complaint did not modify or add to the original language of the breach of contract claim. Indihar's discovery motions were denied, with the trial court finding "that the method of evaluation is not at issue for purposes of this litigation given the Court's ruling on the motion for summary judgment."

¶10 State Farm filed a motion to dismiss the amended complaint which the trial court granted. State Farm was awarded attorneys' fees in the amount of $22,044.50 and costs in the amount of $1,587.75. This appeal followed.

DISCUSSION

A. State Farm's Motion for Summary Judgment

¶11 Indihar argues that the trial court erred in granting summary judgment to State Farm on Indihar's bad faith and punitive damage claims. Indihar claims State Farm committed bad faith by attempting to "pocket" the money for the settlement and by failing to pay the undisputed portion of the settlement as required under the policy language.3 State Farm asserts that it complied with the policy language4 as well as the pertinent statute regarding the settlement of total loss claims in Arizona. The trial court found the facts of this matter did not present a genuine issue as to whether State Farm committed bad faith, and we agree.

¶12 Whether an insurance company's actions amount to bad faith "is a question of reasonableness under the circumstances . . . Whether the action amounts to bad faith depends upon whether the insurer failed to honor a claim without a reasonable basis for doing so." Sparks v. Republic Nat. Life Ins. Co., 132 Ariz. 529, 538, 647 P.2d 1127, 1136 (1982). In Linthicum v. Nationwide Life Ins. Co., this court observed that "[t]he tort of bad faith only arises when the insurance company intentionally denies or fails to process or pay a claim without a reasonable basis for such action. In applying this standard, however, it is necessary to determine whether a claim was properly investigated and whether the results of that investigation were reasonably reviewed and evaluated." 150 Ariz. 354, 362, 723 P.2d 703, 711 (App. 1985), aff'd in part, 150 Ariz. 326, 723 P.2d 675 (1986).

¶13 We review the grant of summary judgment de novo. Lewis v. Debord, 236 Ariz. 57, 59, ¶ 5, 335 P.3d 1136, 1138 (App. 2014). Summary judgment is appropriate when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Johnson v. Earnhardt's Gilbert Dodge, Inc., 212 Ariz. 381, 385, ¶ 15, 132 P.3d 825, 829 (2006); Ariz. R. Civ. P. 56. We review the interpretation of statutes and the interpretation of the language of an insurance policy de novo. Hohokam Irrigation and Drainage Dist. v. Ariz. Public Serv., 204 Ariz. 394, 397, 64 P.3d 836, 839 (2003); Sparks, 132 Ariz. at 534, 647 P.2d at 1132.

¶14 State Farm argued on summary judgment that:

To this end, State Farm cites to A.R.S. § 28-2091(A) and (C) (2010). Section 28-2091 governs how insurance companies process settlements for vehicles which are a total loss.5 Section (A) requires the insurer to submit an application for a salvage title to the Department of Motor Vehicles within thirty days along with a lien release, the endorsed title, and appropriate fees. This section applies when there is a salvage vehicle acquired by the insurer. If the insured chooses to keep a vehicle then A.R.S. § 28-2091(C) requires the insured to obtain a salvage title prior to either receiving payment for a total loss claim or disposing of the vehicle.

¶15 The relevant facts from Indihar's complaint are not in dispute. State Farm made a total loss offer to Indihar within three months of the accident. It stated it was committed to settling the claim as soon as practicable. It offered him a guaranteed settlement with room for a higher amount on appraisal, should he dispute the ACV. Indihar did not dispute the ACV or invoke his contractual right to an appraisal. State Farm advised Indihar that it would pay the claim once it received either a salvage title after the lien was paid off or the vehicle. State Farm did not fail to timely honor a claim, rather it gave Indihar two choices in how to proceed. Indihar chose neither option by keeping the vehicle and not paying off the FMC lien.

¶16 We have reviewed the policy provisions and the statute at issue. Section 28-2091, by its terms, provided for State Farm to either receive the Mustang or the salvage title before paying a settlement. Section (A) provides a thirty day window for the insured to obtain a title after the title is "properly assigned" by the owner and after satisfaction of any liens. Section (C) states "if the owner retains possession of a salvage vehicle or nonrepairable vehicle, the owner shall comply with this section before receiving a total loss settlement from the insurance company or otherwise disposing of the vehicle." (Emphasis added.) The facts here have an insured unwilling to comply with the terms of either A.R.S. § 28-2091(A) or (C), while demanding payment.

¶17 When interpreting a statute, we look first to the plain language as "the best and most reliable index of a statute's meaning." State v. Williams, 175 Ariz. 98, 100, 854 P.2d 131, 133 (1993). Under the plain language of the statute, State Farm was not required to pay off the FMC lien before a salvage title was acquired by Indihar as required by A.R.S. § 28-2091(C). For State Farm to initially abide by the statutory requirements was not unreasonable.6

¶18 "Where an insurer acts reasonably, there can be no bad faith." Trus Joist Corp. v. Safeco, Ins. Co., 153 Ariz. 95, 104, 735 P.2d 125, 134 (App. 1986); Lukes v. American Family Mut. Ins. Co., 455 F.Supp.2d 1010 (D.Ariz. 2006). Punitive damages require evidence that an insurer acted with an evil mind or with an intent to injure the insured or knowing of a substantial risk of harm to the insured. Tritschler v. Allstate Ins. Co., 213 Ariz. 505, 517, 144 P.3d 519, 531 (App. 2006). No such evidence was produced here. Punitive damages cannot be recovered in insurance bad faith cases without bad faith. See Hawkins v. Allstate Ins. Co., 152 Ariz. 490, 497, 733 P.2d 1073, 1080 (1987). The fact that State Farm did eventually undertake the risk of paying off FMC, without the surety of either the vehicle or the salvage title, does not change our analysis. The trial court is affirmed.

B. Dismissal of Indihar's Amended Complaint

¶19 Following an oral motion for amendment, Indihar filed an amended complaint asserting, again, the same three claims: (1) breach of duty of good faith and fair dealing, (2) breach of contract, and (3) a request for declaratory judgment. As to bad faith, Indihar now asserted State Farm failed to comply with Arizona Administrative Code7 (A.A.C.) § R20-6-801 in valuing the Mustang. As indicated in the amended complaint and elsewhere, Indihar did not dispute the value assigned to the Mustang, rather only disputed the methodology in reaching that number. Indihar asserted that State Farm refused to "obtain two or more qualified dealers located within the local market area, as required by law" and that, rather than following the regulation, used "Autosource, an outside service which uses databases of automobiles advertised for sale to calculate a value" for the car. Indihar further alleged a variety of new ways in which State Farm acted in bad faith, including when it: unreasonably failed to timely pay a fair settlement without a reasonable basis to do so, required unreasonably burdensome and unnecessary actions to resolve the claim, failed to provide a reasonable explanation of the basis for such acts, misrepresented pertinent facts and contract provisions related to the coverage, acted inconsistently with the policy language, acted with malice and bad faith in that unreasonable denial, failed to provide the security and protection from calamity which was the purpose of the policy, and caused him anxiety and mental distress.

¶20 Counts 2 (breach of contract) and 3 (declaratory action) remained identical to the prior complaint. The basis for the contract claim remained a bare "STATE FARM has breached the insurance contract with Plaintiff to Plaintiff's damage" along with a prayer for damages

¶21 Arizona requires the complaint to contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Ariz. R. Civ. P. 8(a)(2). In reviewing the dismissal for failure to state a claim, "well-pleaded material allegations of the complaint are taken as admitted, but conclusions of law or unwarranted deductions of fact are not." Aldabbagh v. Ariz. Dep't of Liquor Licenses and Control, 162 Ariz. 415, 417, 783 P.2d 1207, 1209 (App. 1989). This court reviews issues of law in a motion to dismiss a complaint de novo. City of Tucson v. Clear Channel Outdoor, Inc., 218 Ariz. 172, 180, 181 P.3d 219, 227 (App. 2008).

¶22 The material facts asserted by Indihar in the amended complaint were exactly as they were in the underlying complaint. Indihar did not dispute the ACV proposed by State Farm in December 2010. Indihar did not seek a further appraisal as allowed for under the policy language. Indihar could have chosen to turn over either the vehicle to State Farm or the salvage title to collect his settlement, but he did neither. The facts asserted in the amended complaint still do not state a sufficient legal basis for relief, rather the complaint reaches unsupported conclusions of law. See Aldabbagh, 162 Ariz. at 417, 783 P.2d at 1209. As Indihar has not shown either a breach of the insurance contract or a viable bad faith claim, the trial court's dismissal of the amended complaint is affirmed

C. Denial of Indihar's Motion to Compel

¶23 Between the time of the grant of summary judgment on the bad faith and punitive damage claims and the filing of the amended complaint, Indihar filed a motion to compel and motion for discovery sanctions seeking documents related to the valuation of the Mustang. The trial court denied the motion for discovery sanctions stating that "the method of evaluation is not at issue for purposes of this litigation given the Court's ruling on the motion for summary judgment."

¶24 The trial court has broad discretion when ruling on disclosure and discovery matters, and we will not disturb those rulings absent an abuse of discretion. Link v. Pima Cty., 193 Ariz. 336, 338, ¶ 3, 972 P.2d 669, 671 (App. 1998). In reviewing for an abuse of discretion, "[t]he question is not whether the judges of this court would have made an original like ruling, but whether a judicial mind, in view of the law and circumstances, could have made the ruling without exceeding the bounds of reason." Associated Indem. Corp. v. Warner, 143 Ariz. 567, 571, 694 P.2d 1181, 1185 (1985) (citation omitted). Given the above discussion regarding the dismissal of the amended complaint, we find no error in the trial court's denial of the motions.

D. Award of Attorneys' Fees Below

¶25 Indihar argues that the trial court erred in awarding fees to State Farm, first, on the bases outlined above, and secondarily because Indihar alleges State Farm was not the "successful party" under A.R.S. § 12-341.01. Indihar asserts that he was the successful party "because the filing of this lawsuit caused State Farm to do what it had refused to do before the lawsuit: pay off the lien to Ford Motor Credit." Additionally, Indihar asserts that because State Farm failed to request fees in its motion to dismiss, that request is waived. State Farm did request attorneys' fees in its answer and that request is sufficient.

¶26 Awards of attorneys' fees are reviewed for an abuse of discretion. Cohen v. Frey, 215 Ariz. 62, 68, ¶ 18, 157 P.3d 482, 488 (App. 2007). Finding State Farm was the successful party below, we affirm the trial court's award of fees and costs to State Farm.

CONCLUSION

¶27 For the above stated reasons, the trial court is affirmed. State Farm is granted attorneys' fees and costs on appeal in an amount to be determined after compliance with ARCAP, Rule 21.