1 2 3
4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE
9 10 ALLSTATE INDEMNITY CASE NO. C20-1508JLR COMPANY, 11 ORDER DENYING Plaintiff, THIRD-PARTY DEFENDANT 12 v. PAUL DAVIS’S MOTION TO DISMISS AND DENYING
13 PLAINTIFF ALLSTATE’S RANDY LINDQUIST, et al., MOTION FOR PARTIAL 14 SUMMARY JUDGMENT Defendants. 15
RANDY LINDQUIST, 16 Third-Party Plaintiff, 17 v. 18 MELODY J. GRONDAHL, et al., 19 Third-Party Defendants.
20 21 22 1 I. INTRODUCTION 2 Before the court is Plaintiff/Counter-Defendant Allstate Indemnity Company’s 3 (“Allstate”) motion for partial summary judgment (MSJ (Dkt. # 8)) and Third-Party
4 Defendant G & J Restoration, Inc.’s (“Paul Davis”) motion to dismiss for failure to state 5 a claim (MTD (Dkt. # 39)). Defendant/Counter-Claimant/Third-Party Plaintiff Randy 6 Lindquist opposes both motions. (MSJ Resp. (Dkt. # 40); MTD Resp. (Dkt. # 47).) The 7 court has considered the parties’ submissions, the relevant portions of the record, and the 8 applicable law. Being fully advised,1 the court DENIES Paul Davis’s motion to dismiss
9 and DENIES Allstate’s motion for partial summary judgment. 10 II. BACKGROUND 11 A. Factual Background 12 This case stems from a fire that burned down Mr. Lindquist’s house at 6920 Fisher 13 Road in Edmonds, WA (“6920 Fisher Road”) on December 25, 2019. (MSJ Resp. at 5;
14 Leid Decl. (Dkt. # 9) ¶ 5, Ex. C (“Lindquist EUO”) at 4:6-8.) Allstate issued a 15 homeowner’s insurance policy for 6920 Fisher Road in 2004 and renewed the policy on 16 an annual basis thereafter. (Compl. (Dkt. # 1) ¶ 3.1). The policy provides dwelling 17 protection with limits of $3,311,872, other structures protection with limits of $331,188, 18 and personal property protection with limits of $2,483,904. (Id. ¶ 3.5.) After the fire in
19 20
21 1 No party requests oral argument, (see MSJ at 1; MTD at 1; MSJ Resp. at 1; MTD Resp. at 1) and the court concludes that oral argument would not be helpful to its disposition of the 22 motions. See Local Rules W.D. Wash. LCR 7(b)(4). 1 2019, Mr. Lindquist timely notified Allstate of the incident. (Answer2 (Dkt. # 27) ¶ 64.) 2 As a part of its investigation of the fire, Allstate contracted with Paul Davis in early 2020 3 to perform work on the property. (Id. ¶¶ 100-01.) The court begins by laying out the
4 facts most relevant to Paul Davis’s motion to dismiss before turning to a description of 5 those most relevant to Allstate’s motion for summary judgment. 6 1. Paul Davis and the Aftermath of the Fire3 7 After the fire, Allstate retained the company EFI Global to conduct a 8 cause-and-origin investigation of the fire and someone placed signs at 6920 Fisher Road
9 stating that the property was being investigated by EFI Global. (Id. ¶¶ 68, 71.) On an 10 unspecified date after the fire, Mr. Lindquist visited 6920 Fisher Road and saw Paul 11 Davis personnel and machinery on the property. (Id. ¶ 77.) He also noticed that a chain 12 and lock securing the front gate of the property had been replaced with a much larger 13 chain and lock without his permission. (Id. ¶¶ 78-79.) Neither Allstate nor Paul Davis
14 provided Mr. Lindquist a key to this new lock. (Id. ¶ 80.) On another unspecified day, 15 Mr. Lindquist again visited the property and saw that a large portion of the remaining 16 structure at 6920 Fisher Road had been “newly demolished and reduced to rubble.” (Id. 17 ¶ 83.) 18
19 2 The court uses “Answer” to refer to Mr. Lindquist’s answer, counterclaims, and 20 third-party complaint.
3 For the purposes of evaluating Paul Davis’s motion to dismiss, the court accepts all 21 well-pleaded allegations in Mr. Lindquist’s third-party complaint as true and draws all reasonable inferences in favor of Mr. Lindquist. See Wyler Summit P’ship v. Turner Broad. Sys., 22 Inc., 135 F.3d 658, 661 (9th Cir. 1998). 1 In July 2020, Allstate provided Mr. Lindquist with an estimate dated February 7, 2 2020, that appeared to be issued by Paul Davis. (Id. ¶¶ 97, 103.) According to this 3 estimate, Allstate contacted Paul Davis on January 27, 2020, and Paul Davis inspected
4 6920 Fisher Road on January 31, 2020. (Id. ¶¶ 100-01.) The estimate listed “Lindquist 5 Randy” as the insured, and included the estimated costs for, among other items: an 6 excavator to demolish the standing structure, materials to construct a ramp to access the 7 basement, an articulating man lift to assist in collapsing some structures on the property, 8 and a bobcat machine for moving debris and cars on the property. (Id. ¶¶ 98, 104.)
9 Nothing in the estimate mentioned repair or reconstruction of the home. (Id. ¶ 103.) Mr. 10 Lindquist now brings a claim of trespass against Paul Davis. (Id. ¶¶ 191-95.) 11 2. Mr. Lindquist’s 2013 Bankruptcy 12 Allstate’s motion for partial summary judgment is based on an alleged 13 inconsistency between the value Mr. Lindquist claimed for his personal property at 6920
14 Fisher Road in a 2013 bankruptcy proceeding, and the value he claimed for his personal 15 property to Allstate after the 2019 fire. (MSJ at 1.) Mr. Lindquist filed for Chapter 11 16 bankruptcy in 2013. (MSJ Resp. at 6.) In these proceedings, he submitted an amended 17 schedule B personal property form. (Leid Decl. ¶ 3, Ex. A (“Personal Property 18 Schedule”).) This form listed the value of his personal property at 6920 Fisher Road in
19 2013 as $4,700. (Id. at 1, 3.) During his bankruptcy suit in 2013, Mr. Lindquist moved 20 out of 6920 Fisher Road due to “the expense of the house.” (Lindquist EUO at 21 28:13-17.) After moving out, there were several break-ins at 6920 Fisher Road, but Mr. 22 Lindquist states that he caught the intruders and there were no damages to the property 1 before the fire, although in 2014 some copper lions were stolen from the house. (Id. at 2 45:19-22, 50:7-20.) 3 On August 12, 2020, Mr. Lindquist submitted to Allstate a sworn statement in
4 proof of loss of personal property for his property destroyed in the fire. (Leid Decl. ¶ 4, 5 Ex. B (“Proof of Loss”).) In this form, he claimed that the actual cash value of his 6 personal property at 6920 Fisher Road was $917,818.85 at the time of the fire. (Id. at 2.) 7 B. Procedural Background 8 Plaintiff Allstate filed this lawsuit against Mr. Lindquist and Defendant JPMorgan
9 Chase Bank, N.A., on October 13, 2020. (See Compl.) Allstate seeks declaratory relief 10 establishing that Mr. Lindquist’s homeowner’s insurance policy does not cover harm to 11 6920 Fisher Road caused by the fire on December 25, 2019. (See id. ¶¶ 6.1-6.3.) On 12 November 12, 2020, Allstate filed a motion for partial summary judgment. (MSJ.) 13 Allstate seeks to judicially estop Mr. Lindquist “from claiming more personal property
14 than he disclosed in his Bankruptcy filings” in 2013. (Id. at 1.) 15 On November 19, 2020, Mr. Lindquist filed a motion to continue Allstate’s 16 motion for partial summary judgment. (Mot. to Continue (Dkt. # 12).) On November 30, 17 2020, Mr. Lindquist filed his response to Allstate’s motion for partial summary judgment. 18 (Initial MSJ Resp. (Dkt. # 16).) The court granted Mr. Lindquist’s motion to continue on
19 December 3, 2020, in order to allow the parties to conduct further discovery and 20 factfinding before the court ruled on the Allstate’s motion. (See 12/3/20 Order (Dkt. 21 # 20).) Mr. Lindquist filed a new response on February 1, 2021, which included a motion 22 to strike portions of Allstate’s motion. (MSJ Resp.) Allstate filed a reply on February 5, 1 2021, which included a motion to strike two declarations filed by Mr. Lindquist. (MSJ 2 Reply (Dkt. # 43) (moving to strike Howson Decl. (Dkt # 12) and Sternberg Decl. (Dkt. 3 # 17)).) Mr. Lindquist filed a surreply on February 10, 2021. (MSJ Surreply (Dkt.
4 # 45).) On March 1, 2021, Allstate filed a surreply regarding its motion to strike the two 5 declarations. (MTS Surreply (Dkt. # 49).) 6 On December 29, 2020, Mr. Lindquist filed his answer, defenses, counterclaims 7 and third-party complaint. (Answer.) In it, he names Melody J. Grondahl and Paul Davis 8 as Third-Party Defendants. (Id. at 1.) On January 27, 2021, Paul Davis filed a motion to
9 dismiss Mr. Lindquist’s claims against it. (MTD.) Mr. Lindquist filed his response on 10 February 16, 2021. (MTD Resp.) 11 III. ANALYSIS 12 The court first analyzes Paul Davis’s motion to dismiss before turning to Allstate’s 13 motion for partial summary judgment.
14 A. Motion to Dismiss 15 1. Legal Standard 16 Federal Rule of Civil Procedure 12(b)(6) provides for dismissal for “failure to 17 state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). When 18 considering a motion to dismiss under Rule 12(b)(6), the court construes the complaint in
19 the light most favorable to the nonmoving party. Livid Holdings Ltd. v. Salomon Smith 20 Barney, Inc., 416 F.3d 940, 946 (9th Cir. 2005). The court must accept all well-pleaded 21 facts as true and draw all reasonable inferences in favor of the plaintiff. Wyler Summit, 22 135 F.3d at 661. The court, however, is not required “to accept as true allegations that 1 are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” 2 Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). “To survive a 3 motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to
4 ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 5 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also 6 Telesaurus VPC, LLC v. Power, 623 F.3d 998, 1003 (9th Cir. 2010). “A claim has facial 7 plausibility when the plaintiff pleads factual content that allows the court to draw the 8 reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556
9 U.S. at 677-78. Dismissal under Rule 12(b)(6) can be based on the lack of a cognizable 10 legal theory or the absence of sufficient facts alleged under a cognizable legal theory. 11 Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). 12 2. Mr. Lindquist’s Trespass Claim 13 Mr. Lindquist’s sole claim against Paul Davis is for intentional trespass. (Answer
14 ¶¶ 191-95.) Intentional trespass occurs when there is “(1) an invasion of property 15 affecting an interest in exclusive possession, (2) an intentional act, (3) reasonable 16 foreseeability that the act would disturb the plaintiff’s possessory interest, and (4) actual 17 and substantial damages.” Grundy v. Brack Family Tr., 213 P.3d 619, 624 (Wash. Ct. 18 App. 2009).
19 Paul Davis contends that Mr. Lindquist’s third-party complaint fails to state a 20 claim for trespass. (See MTD.) Specifically, it submits that Mr. Lindquist has not 21 sufficiently pleaded that (1) he suffered an invasion of his exclusive possession of the 22 property at 6920 Fisher Road, (2) he suffered any damage as a result of Paul Davis’s 1 actions, or (3) he did not waive any claim for trespass. (Id. at 4-6.) The court disagrees, 2 and addresses each of Paul Davis’s arguments in turn. 3 First, Mr. Lindquist has sufficiently pleaded that he suffered an invasion of his
4 exclusive possession of the property. Paul Davis argues that because both Allstate and 5 Mr. Lindquist agree that Allstate had a duty to investigate the fire loss, any entrance onto 6 the property by Paul Davis that involved investigating the loss at Allstate’s behest cannot 7 be viewed as an invasion. (MTD at 4.) It further submits that Mr. Lindquist was under a 8 duty to cooperate with Allstate’s investigation of the claim, and thus Paul Davis’s actions
9 at 6920 Fisher Road, which were a part of Allstate’s investigation, cannot be viewed as 10 an invasion of the property. (Id. at 4-5, 7 (arguing Mr. Lindquist “cannot sustain a 11 trespass claim against Paul Davis where Paul Davis was merely Allstate’s contractor that 12 made the investigation site safe for investigators and acted at Allstate’s express 13 direction”).)
14 But Mr. Lindquist has alleged that Paul Davis entered his property, installed new 15 locks on the gate, and conducted extensive unauthorized demolition on the property. 16 (Answer ¶¶ 77-84, 104.) Even if Paul Davis were on Mr. Lindquist’s property for the 17 valid purpose of investigating a loss, Mr. Lindquist has alleged sufficient facts to draw a 18 reasonable inference that Paul Davis exceeded the scope of any valid purpose for being
19 on the property. (See Torre v. City of Renton, 164 F. Supp. 3d 1275, 1285 (W.D. Wash. 20 2016) (“Under Washington law, a person commits a trespass if he intentionally enters the 21 property of another without sufficient privilege or if his actions on the property exceed 22 the scope of that privilege.”).) Mr. Lindquist also pleads sufficient facts to overcome 1 Paul Davis’s agency defense at this stage in the proceeding. He asserts that Paul Davis 2 knew that Mr. Lindquist was the owner of 6920 Fisher Road and planned various 3 demolition activities at the property without his consent. (Answer ¶¶ 98, 104). Paul
4 Davis presents no case law in which courts have dismissed a claim with similar 5 allegations at this stage in the proceedings based on an agency theory (see generally 6 MTD), and the court concludes that Mr. Lindquist’s third-party complaint pleads 7 sufficient facts to support an inference that Paul Davis invaded his exclusive possession 8 of the property at 6920 Fisher Road.
9 Second, Mr. Lindquist has sufficiently pleaded that he suffered harm as a result of 10 Paul Davis’s invasion. He alleges that Paul Davis’s actions resulted in substantial 11 damages resulting from “among other things . . . alter[ing] the condition of the property 12 and . . . destroy[ing] and/or remov[ing] evidence from the property relevant to [Mr.] 13 Lindquist’s ability to support his claim for coverage under the policy.” (Answer ¶ 195.)
14 Paul Davis argues that Mr. Lindquist has failed to sufficiently plead that its actions 15 impacted Mr. Lindquist’s ability to support his claim for coverage. (See MTD at 6.) But 16 even accepting this as true, Paul Davis ignores that Mr. Lindquist asserts harm beyond 17 just the alleged destruction or removal of evidence relevant to Mr. Lindquist’s insurance 18 dispute. (Id.) The court concludes Mr. Lindquist has pleaded sufficient facts to support
19 an inference that Paul Davis’s actions on his property resulted in harm. 20 Third, the court cannot find, based on its review of the pleadings, that Mr. 21 Lindquist waived his claim of trespass. Paul Davis argues that because Mr. Lindquist 22 saw Paul Davis’s equipment and personnel on his property, but did not attempt to ask 1 Paul Davis or Allstate to stop their activity on the property, he has waived any claim of 2 trespass. (MTD at 5 (citing Salyers v. Metropolitan Life Ins. Co., 871 F.3d 934, 938 (9th 3 Cir. 2017) (discussing waiver doctrine in ERISA cases)).) But as Paul Davis argues
4 elsewhere in its motion, before the alleged demolition occurred on the property, Mr. 5 Lindquist only had reason to believe Paul Davis was a part of a required post-loss 6 investigation that would not involve any demolition or removal of property. (See MTD at 7 4.) Accordingly, at this stage in the proceedings, the court does not conclude that Mr. 8 Lindquist waived his claim for trespass.
9 In sum, the court finds that Mr. Lindquist has pleaded sufficient facts to support 10 the reasonable inference that Paul Davis is liable for trespass. Paul Davis’s motion to 11 dismiss is DENIED. 12 B. Motion for Partial Summary Judgment 13 Allstate’s motion presents a narrow question of judicial estoppel. Allstate seeks to
14 estop Mr. Lindquist from seeking damages of over $4,700 for the loss of personal 15 property during the fire at 6920 Fisher Road based on representations that Mr. Lindquist 16 made in his Personal Property Schedule in a 2013 bankruptcy proceeding. (MSJ at 1.) 17 The court first addresses the parties’ motions to strike before laying out the legal standard 18 for summary judgment and turning to the merits of Allstate’s motion.
19 1. Motions to Strike 20 Allstate and Mr. Lindquist both present motions to strike related to Allstate’s 21 motion for partial summary judgment. (MSJ Reply at 6-7; MSJ Resp. at 6) The court 22 1 DENIES Allstate’s motion to strike and GRANTS in part and DENIES in part Mr. 2 Lindquist’s motion to strike. 3 a. Allstate’s Motion to Strike
4 Allstate moves to strike the declarations of Craig Sternberg and Roger Howson on 5 the basis that they contain “(1) inadmissible legal conclusions or opinions on ultimate 6 issues; and (2) are attempts to surreptitiously interject as-yet unqualified expert opinions 7 into the record.” (MSJ Reply at 6 (citing Fed. R. Civ. P. 56(c)(2, 4)).) Mr. Lindquist 8 argues that the declarations of Mr. Howson, Mr. Lindquist’s personal property inventory
9 expert in this insurance dispute, and Mr. Sternberg, Mr. Lindquist’s counsel during his 10 2013 bankruptcy proceeding, properly provide evidence rebutting Allstate’s arguments 11 for judicial estoppel. (See MSJ Surreply at 1-3.) The court agrees with Mr. Lindquist. 12 Allstate’s motion to strike is not well taken. Allstate filed its motion for partial 13 summary judgment less than a month after it filed its complaint. (See Dkt.) Expert
14 witness disclosures are not due until February 16, 2022, and the dispositive motions 15 deadline in this matter is May 17, 2022. (Sched. Order (Dkt. # 30.) The court previously 16 delayed ruling on this motion because “Mr. Lindquist is entitled to present evidence 17 regarding the valuation methodologies, the effect of the passage of time on the valuation 18 analyses, and what property was included in each valuation.” (12/3/20 Order at 5.) Mr.
19 Lindquist now offers, for the purpose of resolving this motion for partial summary 20 judgment, the declarations of two individuals who not only are experienced in these 21 valuations generally, but were actually involved in the two valuation processes that form 22 the basis for Allstate’s judicial estoppel argument. (See generally Sternberg Decl.; 1 Howson Decl.) It is precisely this type of evidence that the court previously determined 2 Mr. Lindquist was entitled to present, and, as described below, Allstate’s objections are 3 without merit.
4 Allstate first contends that the declarations of Mr. Sternberg and Mr. Howson 5 “surreptitiously offer opinions on an ultimate issue.” (Id.) But Allstate does not make 6 clear what ultimate issue it believes these declarations seek to embrace. (See id. at 6-7.) 7 As best the court can tell, Allstate’s motion to strike is based on both declarations 8 offering allegedly improper opinions “about what valuation method must be used to
9 evaluate property losses in the context of insurance claims.” (See id.) But Allstate’s own 10 surreply concedes that any such opinion is “implicit[].” (MTS Surreply at 4.) Allstate’s 11 motion for summary judgment asks the court to determine if two valuations are “clearly 12 inconsistent.” See infra § III.B.3.a. The court reads the declarations as offering 13 testimony about how Mr. Lindquist’s assets were valued in two different settings, not
14 about whether a legal standard has been met or judicial estoppel should apply. (See 15 generally Sternberg Decl.; Howson Decl.) This is not opining on an ultimate issue.4 16 Allstate also offers a one-sentence argument that Mr. Sternberg and Mr. Howson’s 17 declarations should be excluded because they offer improper expert opinions. (See MSJ 18
19 4 Further, Allstate does not attempt to explain why the declarations would be 20 objectionable even if they discussed an ultimate issue. (See MSJ Reply); Fed. R. Evid. 704 (“An opinion is not objectionable just because it embraces an ultimate issue.”); see also Donelson v. Providence Health & Servs.-Wash., 823 F. Supp. 2d 1179, 1193 (E.D. Wash. 2011) (“[A]n 21 expert may offer his opinion as to facts that, if found, would support a conclusion that the legal standard at issue was satisfied, but he may not testify as to whether the legal standard has been 22 satisfied.”). 1 Reply at 6-7; but see MTS Surreply (not discussing expert witness argument).) Mr. 2 Sternberg and Mr. Howson primarily attest to how they performed the valuations in Mr. 3 Lindquist’s bankruptcy proceeding and insurance claim respectively. (See generally
4 Sternberg Decl.; Howson Decl.) Both declarations go slightly beyond what occurred in 5 those particular valuations and opine more generally on valuation methodologies to 6 explain the valuations in Mr. Lindquist’s two proceedings. (See Sternberg Decl. ¶ 7 7 (describing liquidation valuation in bankruptcy proceedings); Howson Decl. ¶ 12 8 (discussing liquidation valuation versus market valuation).) Mr. Sternberg has decades of
9 experience practicing creditor/debtor law, and Mr. Howson has worked in insurance 10 adjustment for over 40 years. (Sternberg Decl. ¶ 2; Howson Decl. ¶ 2, Ex. A.) The court 11 finds that their opinions about valuations in their respective fields are based on sufficient 12 specialized knowledge and facts, and are the product of reliable principles that have been 13 reliably applied in this case. See Fed. R. Evid. 702. Thus, for the limited purposes of
14 this summary judgment motion, the court concludes that Mr. Sternberg and Mr. 15 Howson’s statements in their declarations regarding valuation methods for property in 16 bankruptcy and insurance processes is both reliable and relevant, and complies with the 17 requirements of Federal Rule of Civil Procedure 56(c)(4). The court DENIES Allstate’s 18 motion to strike the declarations of Mr. Sternberg and Mr. Howson.
19 b. Mr. Lindquist’s Motion to Strike 20 Mr. Lindquist moves to strike “conclusory allegations” in Allstate’s motion for 21 summary judgment that are related to Allstate’s knowledge about the occupancy of Mr. 22 Lindquist’s home and Mr. Lindquist’s obligations to report vandalism or protect personal 1 property. (MSJ Resp. at 8 (moving to strike MSJ at 2:3-7, 11-13, 16-17, 3:4-7).) For all 2 but one of the allegations Mr. Lindquist moves to strike, Allstate cites only its own 3 complaint in support. (See MSJ at 2:3-6, 11-13, 16-17, 3:4-7; but see id. at 2:6-7 (citing
4 Lindquist EUO).) Allstate does not respond to Mr. Lindquist’s motion to strike. (See 5 generally MSJ Reply; MTS Surreply.) 6 Summary judgment requires the moving party to present evidence that, if 7 uncontroverted at trial, would entitle it to prevail as a matter of law on an issue. UA 8 Local 343 v. Nor-Cal Plumbing, Inc., 48 F.3d 1465, 1473 (9th Cir. 1994). “[A party]’s
9 assertions in its pleadings are not evidence.” United States v. Zermeno, 66 F.3d 1058, 10 1062 (9th Cir. 1995). Thus, Mr. Lindquist’s motion to strike is GRANTED for the 11 portions of Allstate’s summary judgment motion that rely solely on assertions made in 12 Allstate’s complaint. Mr. Lindquist’s motion to strike is DENIED to the extent it moves 13 to strike portions that rely on Mr. Lindquist’s examination under oath, which Allstate
14 properly filed as a declaration in support of its motion. (See Lindquist EOU.) 15 2. Legal Standard 16 Summary judgment is appropriate if the evidence, when viewed in the light most 17 favorable to the non-moving party, demonstrates “that there is no genuine dispute as to 18 any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ.
19 P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Galen v. Cty. of L.A., 20 477 F.3d 652, 658 (9th Cir. 2007). The moving party bears the initial burden to show 21 there is no genuine issue of material fact and that he or she is entitled to prevail as a 22 matter of law. Celotex, 477 U.S. at 323. If the moving party will bear the ultimate 1 burden of persuasion at trial, it must establish a prima facie showing in support of its 2 position on that issue. UA Local 343, at 1471. That is, the moving party must present 3 evidence that, if uncontroverted at trial, would entitle it to prevail on that issue. Id. at
4 1473. If the moving party meets his or her burden, then the non-moving party “must 5 make a showing sufficient to establish a genuine dispute of material fact regarding the 6 existence of the essential elements of his case that he must prove at trial” to withstand 7 summary judgment.5 Galen, 477 F.3d at 658. 8 3. Judicial Estoppel
9 Judicial estoppel is an “equitable doctrine invoked by a court at its discretion.” 10 New Hampshire v. Maine, 532 U.S. 742, 750 (2001) (quoting Russell v. Rolfs, 893 F.2d 11 1033, 1037 (9th Cir. 1990)) (internal quotation marks omitted). Courts invoke judicial 12 estoppel “to prevent a party from gaining an advantage by taking inconsistent positions” 13 and to “protect against a litigant playing fast and loose with the courts.” Hamilton v.
14 State Farm Fire & Cas. Co., 270 F.3d 778, 782 (9th Cir. 2001) (quoting Russell, 893 15 F.2d at 1037) (internal quotations omitted). The court considers three factors in 16 determining whether to apply the doctrine: (1) whether the party’s later position is 17 “clearly inconsistent” with its earlier position; (2) whether the party succeeded in 18 persuading a court to accept the earlier position and the court’s acceptance of the later
19 20 5 The same standard and procedural rules apply to motions for partial summary judgment. See Fed. R. Civ. P. 56(a); Lies v. Farrell Lines, Inc., 641 F.2d 765, 768 (9th Cir. 1981) (noting 21 that, on a motion for partial summary judgment “the moving party has the burden of showing that there is no genuine issue as to any material fact and that he is entitled to a partial summary 22 judgment as a matter of law”). 1 position would lead to the perception that the party misled either court; and (3) whether 2 “the party seeking to assert an inconsistent position would derive an unfair advantage or 3 impose an unfair detriment on the opposing party if not estopped.” See New Hampshire,
4 532 U.S. at 750-51 (citations omitted). The court addresses each of these factors in turn. 5 a. Inconsistent Position 6 Allstate argues that Mr. Lindquist’s inconsistent positions are straightforward: in 7 his 2013 Personal Property Schedule, Mr. Lindquist claimed $4,700 in property at 6920 8 Fisher Road, but in this case he is claiming $917,818.85 for personal property loss as a
9 result of the 2019 fire. (MSJ at 1.) Mr. Lindquist responds that the values are not 10 “clearly inconsistent” because they involve different inventory standards and different 11 valuation methods. (MSJ Resp. at 10.) 12 This court has previously concluded that, in the context of comparing bankruptcy 13 personal property valuations and valuations in insurance claims, a finding of “clearly
14 inconsistent positions requires more than a threshold inconsistency.” Naxos, LLC v. Am. 15 Family Ins. Co., 611 B.R. 358, 364 (W.D. Wash. 2019) (citations and quotations 16 omitted). In Naxos, the plaintiff insurance company moved for partial summary 17 judgment by judicial estoppel after the insured claimed $6,300 in a bankruptcy personal 18 property schedule, but $261,009.89 in business personal property at the same location in
19 an insurance dispute a year later. Id. This court concluded that the discrepancy in the 20 amounts established only a threshold inconsistency and, without more detail about the 21 valuations, left the court “wondering if comparing the Personal Property Schedule to the 22 appraisal award is an apples-to-apples comparison.” Id. This court noted that it does not 1 condone the practice of undervaluing property in a bankruptcy proceeding only to value 2 that property significantly more in an insurance dispute. Id. at 365 (collecting cases). 3 But the court also concluded that the insurer had failed to meet its burden for summary
4 judgment because it had failed to submit any evidence that the valuations used the same 5 methodology, covered the same property, and had not been affected by intervening 6 circumstances between the bankruptcy and the insurance dispute. Id. 7 Allstate contends that Naxos is distinguishable based on the size and nature of the 8 discrepancy in valuations, as well as evidence that Mr. Lindquist’s property had lowered
9 in value since the bankruptcy proceeding.6 (MSJ Reply at 5.) But while the discrepancy 10 in values is larger here than in Naxos, that does not change the fact that Allstate has not 11 provided evidence that this is an apples-to-apples comparison. As with the movant in 12 Naxos, Allstate points to the difference in the results of the two valuations, but provides 13 no arguments, or evidence to support them, that the valuations should be viewed as the
14 result of the same valuation methodology. (See MSJ at 7-8 (failing to discuss potential 15 differences in valuation methodologies).)7 While Allstate presents no evidence 16 confirming the valuations methodologies should be viewed as parallel, Mr. Lindquist 17 provides declarations supporting the contention that they should be viewed differently. 18
19 6 Allstate also argues that Naxos is not binding on this court. (MSJ Reply at 5.) While this is technically true, this court believes it was correct when it denied summary judgment in 20 Naxos. 7 The failure to present evidence negating different valuation methodologies is all the more relevant because Allstate seeks to judicially estop Mr. Lindquist from claiming any value 21 higher than what he claimed in his bankruptcy proceedings, not just the $917,818.85 he asserted in his Proof of Loss. (MSJ at 1; MSJ Reply at 7.) Thus, Allstate has shouldered the burden of 22 demonstrating that any value over $4,700 is clearly inconsistent with the bankruptcy valuation. 1 (Compare Sternberg Decl. ¶¶ 6-7, with Howson Decl. ¶¶ 5-9 (describing Personal 2 Property Schedule as a result of liquidation valuation and Proof of Loss as a result of 3 assessing retail value of property).) Viewed in the light most favorable to Mr. Lindquist,
4 the evidence points to the two values being the result of different methodologies, rather 5 than being “clearly inconsistent.” 6 The court is similarly unconvinced by Allstate’s argument that the property must 7 have been less valuable due to break-ins and vandalism between the bankruptcy and the 8 fire. The vast majority of the “evidence” that Allstate cites for the diminishment of value
9 comes from its own complaint. (See MSJ at 2-3; see also MSJ Reply at 5 (citing no 10 evidence); supra § III.B.1.b (explaining that pleadings are not evidence).) Looking at 11 actual evidence before the court, Mr. Lindquist refers to break-ins occurring at 6920 12 Fisher Road in his examination under oath, but he also states that he caught the intruders 13 and had them arrested, and that there were no damages from these break-ins. (Lindquist
14 EUO at 50:7-20.) Viewed in the light most favorable to Mr. Lindquist, the evidence does 15 not suggest a diminishment in value between the 2013 bankruptcy and 2019 fire that 16 would distinguish this case from Naxos. The court concludes that Allstate has not 17 demonstrated a clear inconsistency, and this factor weighs against judicial estoppel. 18 b. Judicial Acceptance
19 The second factor courts consider in determining whether judicial estoppel is 20 appropriate asks whether the first court adopted the party’s allegedly inconsistent position 21 and, as such, was misled. See New Hampshire, 532 U.S. at 750. In the bankruptcy 22 context, the Ninth Circuit has noted that “[a] bankruptcy court may ‘accept’ the debtor’s 1 assertions” in a number of ways, including confirming the plan of reorganization. See 2 Hamilton, 270 F.3d at 784 (collecting cases). But the Hamilton court also noted that the 3 key for judicial acceptance is whether the bankruptcy court “rel[ied] on the debtor’s
4 nondisclosure.” See id.; see also Interstate Fire & Cas. Co. v. Underwriters at Lloyd’s, 5 London, 139 F.3d 1234, 1239 (9th Cir. 1998), as amended (May 13, 1998) (“A majority 6 of courts apply judicial estoppel only if the court has relied on the party’s previously 7 inconsistent statement, and we have recently adopted that rule.”). 8 For this factor, Allstate argues that the bankruptcy court was misled because when
9 Mr. Lindquist submitted his Personal Property Schedule to the bankruptcy court he 10 “materially undervalued this asset when compared to the allege [sic] value he stated in his 11 sworn statement to Allstate” and the bankruptcy court confirmed Mr. Lindquist’s plan. 12 (MSJ at 10.) In other words, Allstate argues that the bankruptcy court must have been 13 misled because Mr. Lindquist made misleading arguments. Not only is Allstate’s
14 argument circular—assuming that Mr. Lindquist made misleading statements to prove the 15 court was misled—it is misguided. Even if the court assumes that Mr. Lindquist made 16 misleading statements, that does not mean the bankruptcy court adopted or relied on 17 those statements and was thus misled by them. Allstate has presented no evidence or 18 arguments that the bankruptcy court relied on, or even considered, Mr. Lindquist’s
19 Personal Property Schedule when confirming his plan and entering a final decree in his 20 bankruptcy case. (See generally MSJ.) Mr. Lindquist, on the other hand, provides the 21 court with the bankruptcy court’s reorganization plans and approved settlements, none of 22 which demonstrate a reliance on Mr. Lindquist’s Personal Property Schedule. (See 1 Knudsen Decl. ¶¶ 4-6, Exs. C-E.) Accordingly, the court finds that Allstate failed to 2 carry its burden on this factor. 3 c. Unfair Advantage
4 The third judicial estoppel factor asks whether the party asserting an inconsistent 5 position would receive an “unfair advantage or impose an unfair detriment on the 6 opposing party if not estopped.” See New Hampshire, 532 U.S. at 751. Allstate argues 7 that Mr. Lindquist Personal Property Schedule gave Mr. Lindquist an unfair advantage 8 and created a detriment to his creditors because he was able to hide value from his
9 creditors. (MSJ at 11.) This, in turn, creates a detriment for Allstate, because it may be 10 forced to pay Mr. Lindquist for the value of these assets. (Id.) But Allstate provides no 11 evidence that Mr. Lindquist would have had to give up more in the restructuring of his 12 property if his Personal Property Schedule had been valued differently. (See generally 13 MSJ.) Mr. Lindquist, on the other hand, has provided evidence that his reorganization
14 plan used other secured assets to satisfy his debt, and the trustee never asked for detailed 15 information about his personal property. (Sternberg Decl. ¶¶ 4-6.) Taken in the light 16 most favorable to Mr. Lindquist, the evidence does not support Allstate’s contention that 17 Mr. Lindquist’s allegedly inconsistent valuation has resulted in an unfair advantage or 18 detriment. This factor weighs against Allstate.
19 In sum, the court finds that all three estoppel factors weigh against granting 20 Allstate’s motion for partial summary judgment. The court reiterates that all parties 21 should strive for full and frank disclosure in their bankruptcy filings. But Allstate 22 brought this motion and bears the burden to establish there are no material disputes of 1 fact and that it is entitled to summary judgment as a matter of law. Allstate has not met 2 that burden. Thus, its motion for partial summary judgment is DENIED. 3 IV. CONCLUSION
4 For the reasons set forth above, the court DENIES Paul Davis’s motion to dismiss 5 (Dkt. # 39) and DENIES Allstate’s motion for partial summary judgment (Dkt. # 8). 6 7 Dated this 5th day of March, 2021. 8 A 9 10 JAMES L. ROBART United States District Judge 11 12 13 14 15 16 17 18
19 20 21 22