GARLAND E. BURRELL Jr., District Judge.
Defendant Progressive Choice Insurance Company
If the nonmovant does not "specifically . . . [controvert duly supported] facts identified in the [movant's] statement of undisputed facts," the nonmovant "is deemed to have admitted the validity of the facts contained in the [movant's] statement."
"Because a district court has no independent duty `to scour the record in search of a genuine issue of triable fact,' and may `rely on the nonmoving party to identify with reasonable particularity the evidence that precludes summary judgment,' . . . the district court . . . [is] under no obligation to undertake a cumbersome review of the record on the [nonmoving party's] behalf."
Further, "at this stage of the litigation, the judge does not. . . . make credibility determinations with respect to statements made in affidavits, answers to interrogatories, admissions, or depositions. These determinations are within the province of the factfinder at trial."
The following facts concern the motion and are either undisputed or are "deemed" uncontroverted since they have not been controverted with specific facts as required by Local Rule 260(b).
"In June 2009, Plaintiffs purchased a California Motor Vehicle Insurance Policy [(the `Policy')] from Progressive [for the Mustang], the terms of which included . . . fire and theft protection. . . ." (Pls.' Resp. to Def.'s Statement of Undisputed Material Facts ("UMF") No. 2, ECF No. 46-1.) "The Policy also provided that Progressive `may deny coverage for an accident or loss if [the insured] has concealed or misrepresented any material fact or circumstance, or engaged in fraudulent conduct, in connection with the presentation or settlement of a claim.'" (UMF No. 7 (emphasis removed).)
"Plaintiffs reported the alleged theft of the Mustang to Progressive on the morning of December 3, 2009." (UMF No. 8.) Claims specialist Tara Flaherty handled their claim. (Flaherty Decl. ¶ 1.)
The night before, on December 2, 2009, at 11:45-50 PM, (Ex. 9 at 1098), "the King County Fire Department recovered [the Mustang] . . . after responding to a report of vehicle fire." (UMF No. 11.)
Progressive conducted an investigation of the claim, part of which includes an interview of Ivey on December 3, 2009 (the "December 3 interview"), (
"On May 18, 2010, . . . Flaherty[] completed a final summary of the claim . . . and made a determination to deny coverage based on factual inconsistencies in the [claim's] presentation[,] . . . `together with the timing of the events on the night of the alleged theft, [evidence involving] the transpondered key,[
Progressive argues its motion on Plaintiffs' breach of contract claim should be granted because it "properly determined that material misrepresentations by Plaintiffs voided coverage" under the Policy's fraud and concealment provision.
The following statements are undisputed or are "deemed" uncontroverted.
Progressive asserts Reitz and Ivey gave inconsistent statements about when they came home on December 2, 2009, the night of the Mustang's loss. (Mot. 9:10-22.) Specifically, Progressive cites Ivey's December 3 interview, in which the following communication is recorded: Flaherty asked Ivey, "when you . . . came home, you said it was around 8:30 [PM]. . . . [W]as [Reitz] home at the time?" Ivey responded that Reitz was not home. (Ex. 3 at 1663;
In the December 4 interview, Reitz "stated that she got home at approximately 8:30 [PM], and Ivey arrived sometime after 10:00 [PM], when she was already in bed." (UMF No. 24.) In her December 22 interview, Reitz stated: "Ivey arrived home after she did, at 9:00 or 9:15 [PM], that she did not go to sleep until 10:00 [PM]." (UMF No. 25.) She also stated: "I remember [Ivey] was home at . . . 9:00-ish or 9:45-ish." (Ex. 19 at 1695.) "In her EUO, Reitz stated that she was up and awake when . . . Ivey arrived home between 8:00 [PM] and 9:00 [PM]." (UMF No. 28.)
Progressive also cites inconsistent statements from Ivey about when he last saw the Mustang. (Mot. 9:24-28, 10:1-2.) "On December 3, 2009, the day Ivey allegedly discovered the theft, Ivey told Progressive he last saw the Mustang between 9:30 and 9:45 [PM], when he went to retrieve cigarettes from the vehicle." (UMF No. 29.) "Ivey told police that he last saw the Mustang at 10:00 [PM]." (UMF No. 30.) "In his [California] Affidavit of [Vehicle] Theft, Ivey said he last saw the Mustang at 10:30 [PM]." (UMF No. 31.)
"In his December 22, 2009 statement, Ivey claimed he last saw the Mustang . . . when he parked it upon arriving home sometime after 8:00 [PM]. In his EUO, Ivey stated that he did not remember going out to retrieve cigarettes from the Mustang on the evening of the alleged theft, and did not think that he did." (UMF No. 32.)
Progressive further cites inconsistent statements Reitz made about whether, on December 2, 2009, she heard the Mustang on the night of its loss. (Mot. 10:3-12.) In her December 22 interview, "Reitz stated that she heard Ivey return home on the night of December 2, 2009, because the Mustang has a loud exhaust." (UMF No. 33.) In her EUO, the examiner asked Reitz: "[D]o you remember hearing the engine that night?" (Ex. 34 at 1835.) She responded: "I don't even know. I can't even say that. . . . But then, I don't want it to lead to where [Ivey] didn't drive the car home. . . ." (
Progressive also argues Plaintiffs made inconsistent statements about who discovered the loss on December 3, 2009. (Mot. 10:13-20.) In the December 3 interview, "Ivey said that he discovered the loss when he went outside that morning to smoke. At the time, Reitz was inside getting ready for work, and Ivey went back inside to advise her of the loss." (UMF No. 36.)
In the December 4 interview, "Reitz said she did not remember who discovered the loss, but thought she noticed the Mustang was missing when she looked outside and saw it was not parked in its usual place." (UMF No. 37.) In her December 22 interview, Reitz said, "[Ivey] went out to his car to get the cigarettes and the car was gone." (Ex. 19 at 1699.)
Progressive also cites inconsistencies involving Plaintiffs' text messages on the night of the Mustang's loss.
Plaintiffs object to Progressive's use of Plaintiffs' text messages, arguing this evidence lacks foundation. (UMF 13:18-23; UMF No. 39.) Specifically, Flaherty declares that "[b]etween 8:54 [PM] and 12:26 [AM], there were 17 text messages between Rietz and Ivey's cell phone." (Flaherty Decl. ¶ 36.) Progressive argues this evidence should be considered because "Flaherty . . . has demonstrated her competency to testify about the contents of the claim file." (Def.'s Reply to Opp'n ("Reply") 6:2-4.) Although Flaherty has shown she has personal knowledge of Plaintiffs' claim file, (
Progressive also relies on the following uncontroverted facts in number 41: "Although Reitz initially said that she was half asleep in bed when Ivey got home, she later testified that she called Progressive two times to make sure her payment went through and made a telephone payment on the car after he came home." (UMF No. 41.) Plaintiffs make a hearsay objection to this evidence which is overruled because Plaintiffs have not shown this evidence is hearsay.
Plaintiffs argue that notwithstanding the referenced inconsistencies, "Progressive has not shown that these `inconsistencies' amount to justification for refusing to . . . indemnif[y Plaintiffs] under the [P]olicy." (Pls.' Opp'n to Mot. ("Opp'n") 3:16-18, ECF No. 46.)
An insurer may deny coverage under a policy's fraud and concealment provision, if an insured's misrepresentation (1) concerns a material matter and (2) was "knowingly and intentionally made with knowledge of its falsity and with intent of defrauding the insurer."
An insured's misrepresentation relates to a material matter if it "concerns a subject reasonably relevant to the insure[r]'s investigation, and if a reasonable insurer would attach importance to the fact misrepresented."
"[W]hether a false statement was made knowingly and with the intent to deceive the insurer is usually a question of fact but may be decided as a matter of law where the insured admits that he made knowingly false statements with the intent that the insurer rely upon them."
Progressive argues that Plaintiffs' inconsistent statements involve material matters since "[their statements] affected the timing of the alleged theft, which had to have occurred within an implausibly small window of time." (Mot. 14:20-22.)
However, Progressive has not shown the absence of a genuine issue of material fact on the issue of whether any statement a Plaintiff made was made "with knowledge of its falsity and with intent of defrauding [Progressive]."
Progressive argues it is entitled to summary judgment on Plaintiffs' breach of the implied covenant of good faith and fair dealing ("bad faith") claim, because "a genuine dispute existed as to coverage." (Mot. 16:3-6.) Progressive further argues, inter alia, "the factual inconsistencies in Plaintiffs' narrative of the events on the night of the loss . . . [and] the [North American Technical and Forensic Services ("]NATS[")] report," which it obtained on the coverage issue, establish a genuine dispute as to its liability under the Policy, and Progressive's investigative record shows it "conducted a reasonable and thorough investigation of Plaintiffs' claim." (Mot. 16:4-6, 17:14-15.)
Plaintiffs counter that Progressive did not "fully and fairly investigate[] [Plaintiffs'] claim[]." (Opp'n 6:7-23.)
Further, Plaintiffs make numerous objections to evidence involved with Progressive's investigation. Specifically, Plaintiffs object on foundation grounds to paragraph five of Flaherty's Declaration, where she discusses the steps taken to investigate Plaintiffs' claim. (UMF 7:17-24;
Plaintiffs further object to the admissibility of the NATS report, on the following grounds: compound, lacks foundation, unqualified opinion testimony, and hearsay. (UMF 8:7-8; UMF No. 19.) Progressive responds "Flaherty . . . has demonstrated her competency to testify about the contents of the claim file." (Def.'s Reply to Opp'n ("Reply") 6:2-4.) It further responds that "the underlying statements [in the claim file] are not hearsay because they are offered to show their effect upon Progressive's investigation and evaluation of Plaintiffs' claim." (Reply 5:28, 6:1-2.)
Plaintiffs' compound objection is overruled. Plaintiffs' foundation objection is also overruled since Flaherty declares "Progressive obtained a report from [NATS]," and the NATS report is addressed to Flaherty and Progressive. (Flaherty Decl. ¶ 30; Ex. 27 at 1331.)
Further, the NATS report is not hearsay since Progressive offers it for its effect upon Progressive in evaluating Plaintiffs' claim, rather than for the truth of the opinions expressed therein.
The NATS report "noted that the Mustang was electronically protected by an OEM[
"[T]o establish a breach of the implied covenant of good faith and fair dealing under California law, a plaintiff must show: (1) benefits due under the policy were withheld; and (2) the reason for withholding benefits was unreasonable or without proper cause."
Moreover, "a court can conclude as a matter of law that an insurer's denial of a claim is not unreasonable, so long as there existed a genuine issue as to the insurer's liability."
Plaintiffs also argue that Progressive's investigation was deficient because Progressive did not "attempt to determine if the Mustang had been towed or hauled away on a flatbed truck, which would have offered a harmless explanation for the `inconsistencies' Progressive relied upon to deny the claim." (Opp'n 5:17-23.) However, Flaherty declares: "[I]t did not make sense that a thief would steal the Mustang (presumably by having it towed . . . away), only to set fire to it within a very short time and without stripping it of valuable parts." (Flaherty Decl. ¶ 42.)
Progressive has shown that its denial of Plaintiffs' claim was not unreasonable since "there existed a genuine issue as to [its] liability,"
Progressive requests "an order specifying for the purpose of trial that Plaintiffs are not entitled to damages over the liability limit specified in the [Policy]." (Mot. 3:27-28.) Rule 56(g) authorizes, but does not require, the order requested by Progressive as follows: "If the court does not grant all the relief requested by the motion, it may enter an order stating any material fact—including an item of damages or other relief—that is not genuinely in dispute and treating the fact as established in the case." Fed. R. Civ. P. 56(g).
Progressive argues: "There is no evidence that [portions of] the damages [Plaintiffs seek in their Complaint] were contemplated by the parties at the time of contracting," and hence such damages are not recoverable. (Mot. 21:23-24.) Concerning this, Plaintiffs allege as follows in their Complaint:
(Compl. ¶ 19, ECF No. 1 (emphasis added).)
Progressive asserts that under the Policy between Plaintiffs and Progressive, "[t]he relevant limit of liability . . . for loss to a covered auto was `the actual cash value of the stolen or damaged property at the time of loss reduced by the applicable deductible.'" (UMF No. 5;
Plaintiffs counter that Progressive "has not offered . . . evidence to support its contention that the parties contemplated nothing more than casualty damages." (Opp'n 7:6-9.)
"Contract damages are generally limited to those within the contemplation of the parties when the contract was entered into or at least reasonably foreseeable by them at the time; consequential damages beyond the expectations of the parties are not recoverable."
Plaintiffs have not shown the existence of a genuine disputed issue of fact on whether the parties contemplated damages beyond the Policy's liability limit set forth in the Policy, and in light of the pled contract-based claim.
For the stated reasons, Progressive's motion is DENIED in part and GRANTED in part.
