Esparza v. Allstate Fire and Casualty Insurance Company

• Court: District Court, D. Arizona
• Decided: September 9, 2025
• Docket: 2:24-cv-00230
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Victor Esparza, et al., No. CV-24-00230-PHX-ROS

10 Plaintiffs, ORDER

11 v.

12 Allstate Fire and Casualty Insurance Company, et al., 13 Defendants. 14

15 16 Plaintiffs Victor and Sylvia Esparza (“Esparzas”) filed suit against Defendant 17 Allstate Fire and Casualty Insurance Company (“Allstate”) for breach of contract, bad 18 faith, and unfair settlement practices. Allstate has moved for summary judgment on all 19 counts. For what follows, Allstate’s motion will be granted. 20 FACTUAL BACKGROUND 21 The following facts are not the subject of reasonable dispute unless otherwise noted. 22 The Esparzas and Allstate filed separate statements of fact in support of their positions. 23 (Doc. 79 at 26-45; “PSOF”, Doc. 60; “DSOF”) and the Esparzas have filed contravening 24 statements of fact (Doc. 79 at 1-26; “CSOF”). The Court has reviewed the objections and 25 where the proffered evidence was determined inadmissible or immaterial it was not 26 considered to resolve the motion. Allstate issued a Deluxe Plus Homeowner’s Policy (“Policy”) to the Esparzas 27 subject to applicable provisions, conditions, restrictions, exclusions, and limitations. As 28 1 relevant, the Policy provides Coverage A for Dwelling Protection Coverage, an Additional 2 Living Expense (“ALE”) provision for a loss under Coverage A, and Coverage C for 3 Personal Property Protection Coverage. The ALE provision states, “[w]e will pay the 4 reasonable increase in living expenses necessary to maintain your normal standard of living 5 when a direct physical loss we cover . . . makes your residence premises uninhabitable.” 6 ALE payment is limited to the least of “(1) the time period required to repair or replace the 7 property . . . using due diligence and dispatch; (2) if you permanently relocate, the shortest 8 time for your household to settle elsewhere, or (3) 12 months.” The Policy also contains 9 the following relevant condition: 10 Section I Conditions . . . 11 3. What You Must Do After A Loss 12 In the event of a loss to any property that may be covered by this policy, you must: 13 … d) give us all accounting records, bills, invoices and other vouchers, 14 or certified copies, which we may reasonably request to examine 15 and permit us to make copies. e) produce receipts for any increased costs to maintain your standard 16 of living while you reside elsewhere, and records supporting any 17 claim for loss of rental income.

18 (emphasis in original). 19 On or about January 11, 2022, the Esparza residence sustained a slab leak that 20 affected the garage, living room, kitchen, and pantry. The Esparzas reported a claim to 21 Allstate on January 12, 2022 and Allstate states the claim was assigned to employee Angelo 22 Maestas. From January 12 to January 14, 2022, the Esparzas state Allstate repeatedly 23 apologized for ignoring their calls about the leak and the water damage. 24 On January 14, 2022, Mr. Maestas visited the Esparzas house and noted the water 25 was turned off by a plumber and the line was capped. When first investigating the Esparzas’ 26 slab leak, Mrs. Esparza testifies Mr. Maestas yelled at the Esparzas for interrupting his 27 dinner and then apologized. 28 A. Temporary Housing 1 Because no hot water was available and five people, a dog, and a cat were residing 2 in the Esparza residence, Mr. Maestas assigned an Additional Living Expense (“ALE”) 3 vendor named CRS Temporary Housing (“CRS”) to provide temporary housing for the 4 Esparzas. 5 After being moved out of their residence, the Esparzas repeatedly moved temporary 6 housing units. On January 15, 2022, the Esparzas were moved to the Hilton Squaw Peak 7 in Phoenix. The Esparzas allege they did not request a resort, but that the family was getting 8 sick from the lack of water and use of equipment in their home, and Mr. Maestas offered 9 to provide a resort to the family. On January 27, 2022, Mr. Maestas advised CRS Allstate 10 would cover reasonable ALE costs until repairs were completed or the Esparzas residence 11 became livable. 12 On February 1, 2022, CRS sent an email to Allstate stating the Esparzas were 13 requesting a transfer from the Hilton Squaw Peak to a new hotel due to (1) being locked 14 out of rooms due to no credit card on file for incidentals, (2) a lack of water for 4 days, and (3) a leak on the hotel premises. In response to these problems, the Squaw Peak Hilton 15 offered the Esparzas a $500 credit, but due to an alleged misunderstanding about the 16 amount of the credit, the Esparzas accumulated a $1200 bill, and the Squaw Peak Hilton 17 locked the Esparzas out of their rooms for failing to settle the outstanding balance. The 18 Esparzas do not dispute the credit misunderstanding, but allege they instead were locked 19 out of rooms because Allstate and CRS refused to pay for the rooms despite notifying 20 Allstate and CRS about conditions at the hotel. Additionally, the Esparzas provide hearsay 21 evidence that Squaw Peak Hilton called the police and a police report was filed against the 22 Esparzas for trespassing and nonpayment, but the Esparzas have not provided admissible 23 records including the police report or affidavits on summary judgment. 24 On February 1, 2022, CRS moved the Esparzas to the Homewood Suites. On 25 February 3-4, 2022, the Esparzas again requested a move from the Homewood Suites due 26 to elevator issues which required Mrs. Esparza’s 82-year old mother to struggle to climb 27 the stairs and Allstate approved the Esparzas’ move to the Renaissance Hotel in Glendale. 28 On February 17, 2022, because the Renaissance Hotel was sold out on February 18, 1 the Esparzas were moved to four studio suites with full kitchens at the Residence Inn. On 2 February 18, 2022, the Esparzas were again moved from the Residence Inn to the La Quinta 3 Inn “due to construction that made it difficult to access the hotel and caused a lot of noise.” 4 That same day, the Esparzas again requested a move from the La Quinta Inn due to the 5 smell and Mr. Maestas approved Mrs. Esparza’s request to book her own hotel if she 6 uploaded hotel invoices. Mr. Maestas also extended the Esparzas temporary housing for a 7 long-term rental until April 20, 2022 due to continued construction delays on the Esparza 8 residence. On February 21, 2022, the Esparzas had a conversation with Allstate 9 representative Jill Jenkins who noted the Esparzas had rejected 20 hotel options1 presented 10 the previous week. 11 On February 24, 2022, Mr. Maestas documented a conversation with CRS regarding 12 the Esparzas and a long-term rental. Mr. Maestas’s note states CRS informed him they 13 were attempting to contact the Esparzas to review available housing options and if the 14 Esparzas deemed them acceptable, to perform a walk-through of the property before arranging lease agreements.2 Brian Bressie of Allstate sent an email to Mrs. Jenkins 15 indicating Allstate would “pin down how long to get [Mrs. Esparza] into a house. Then we 16 can give her a cut off day for the hotel. She can either take the home or she can cash out 17 for that amount for a release full and final for ALE.” 18 On February 25, 2022, Allstate received an email from CRS stating the Esparzas 19 rejected a presented offer for long-term housing without viewing the property. On that 20 same date, Mr. Bressie (1) reviewed the offered property, (2) confirmed work on the 21

22 1 The Esparzas deny they were offered 20 hotel options, but do not dispute the conversation with Mrs. Jenkins. 23 2 Though insurance claim files are generally considered admissible as business records 24 provided they are kept in the regular course of business and meet the requirements of FRE Rule 803(6)(b), that does not mean every item in the file is available for all purposes. See 25 Traum v. Equitable Life Assur. Soc'y of the United States, 240 F. Supp. 2d 776, 780-2 (N.D. 26 Ill. 2002) (discussing when insurance claim files are admissible). While the Esparzas raise some hearsay objections, they raise no specific objections to the claim file and the Court 27 finds the claim file generally admissible. Significantly, the Court has not considered parts 28 of the claim file where hearsay objections are well-taken or where evidence is clearly inadmissible. 1 Esparza’s home was scheduled to be completed in mid-April, and (3) spoke with CRS who 2 informed him if Mrs. Esparza accepted the long-term property, a reasonable hotel end date 3 would be March 4, 2022. Mr. Bressie informed the Esparzas Allstate would pay for their 4 hotel until March 4, then the Esparzas faced two options: (1) accept the house presented by 5 CRS and remain there until home repairs were complete, or (2) accept a cash out of 6 $4,692.50 consisting of 6 weeks rent plus the cleaning deposit in exchange for a signed 7 release of the ALE claim.3 The Esparzas claim Mr. Bressie never offered them long-term 8 housing, told the Esparzas they were spending Allstate’s money, and told them they had to 9 accept the settlement or they would get nothing else. On February 27, 2022, the Esparzas 10 sent an email to Allstate recounting difficulties with temporary housing and explaining 11 they rejected long-term properties offered by CRS because they were 25 to 30 miles from 12 their home, and they had not yet received mileage reimbursement from Allstate. 13 On March 1, 2022, Mr. Maestas sent the Esparzas an email confirming a hotel 14 checkout date of March 4, 2022 and advising the Esparzas he would contact them the next day for settlement of the ALE claim. On March 4, 2022, Mr. Maestas sent an email to Mrs. 15 Esparza advising her he issued payment in the amount of $4,692.50 for 6 weeks of rent 16 plus a $350 cleaning deposit. 17 B. Expenses Owed 18 The parties dispute reimbursement of expenses under the Policy. It is undisputed on 19 January 19, 2022, after the Esparzas were in temporary housing, Mr. Maestas contacted 20 Mrs. Esparza to provide an update on her claim and to explain he requested a company 21 begin making a repair estimate on the slab leak. The file states “insured said she would be 22 uploading photo of receipts from the plumber and also additional living expense [sic] that 23 had been paid out of pocket.” On January 21, 2022, it is undisputed Mrs. Esparza uploaded 24 documents regarding a plumber, assessment of the home cause of loss, and a cap fee to 25

26 3 Allstate cited an email from Mr. Bessie at [Exhibit 2, entry February 25, 2022 at 3:52 pm, Bates Labeled ESPARZACLM 0218 to 0219]. While the Esparzas raise no objection, the 27 Court notes the document ESPARZACLM 0219 is not in Allstate’s statement of facts. 28 Nevertheless, the parties appear to agree Mr. Bressie conveyed an offer to the Esparzas on this date. The Court deems it admissible and material. 1 restore water to the home, and Allstate made payments in the amount of $1,369.00. That 2 same day, Mr. Maestas authorized a $1,000 payment to the Esparzas to cover additional 3 food expenses.4 4 On February 3, 2022, Mrs. Esparza asked about partial payment of expenses 5 incurred for food, laundry, estimates, mileage, and their pet. Mrs. Esparza stated Allstate 6 promised payment would be issued two weeks prior and asked, “to escalate the payment.” 7 The Esparzas allege they often skipped meals to save money because Allstate refused to 8 pay for their meals. 9 On February 16, 2022, after failing to reach Mrs. Esparza over the phone, Mr. 10 Maestas made a claim note and emailed Mrs. Esparza asking her as required by the Policy 11 to upload additional receipts for daily food costs. The email and claim note states Mrs. 12 Esparza was spending an average daily amount of $364 for a total of $10,920 over a 30- 13 day period compared with a pre-loss daily average of $10.71 for $321.42 over a 30-day 14 period.5 Allstate states Mrs. Esparza refused their request for receipts, while the Esparzas claim Allstate already had the needed information allegedly as required by the Policy. 15 On February 17, 2022, Mr. Maestas entered a claim note outlining previously 16 submitted ALE expenses and noted the receipts he received from the Esparzas totaled less 17 than the $1,000 payment he had previously authorized. Mr. Maestas sent an email 18 providing Mrs. Esparza with (1) an update on construction, (2) notice of extension of 19 temporary housing, (3) a need for laundry receipts, (4) an explanation of how he found the 20 receipts were less than the $1000 previously sent, and (5) an explanation of the ALE policy. 21 Mrs. Esparza responded contending Allstate “constantly lied” about the ALE, was “wrong” 22 about calculations, and incorrectly interpreted the Policy but offered no admissible 23 evidence to support these claims. On February 18, 2022, Mr. Maestas entered a claim note 24

25 4 The Esparzas objected to this statement of fact as hearsay and a misstatement of the 26 material facts and evidence. Nevertheless, the Esparzas have not expressly disputed a $1,000 payment was issued and do not dispute later accountings of the $1,000 payment. 27 (PSOF ¶¶ 47, 51; CSOF at ¶ ¶ 46, 50). 28 5 While the Esparzas dispute the email and claim note in part, they state they do not dispute the reported amounts they spent or Mr. Maestas’s email. 1 confirming he spoke with Mrs. Esparza. Mr. Maestas’s note states though Ms. Esparza felt 2 she had uploaded necessary documents for a reimbursement, he explained to her to get 3 accurate reimbursement “we would need to have all receipts showing the additional cost 4 for reimbursement.” 5 On February 21, 2022, Mr. Maestas entered a claim note recapping claim payments 6 to the Esparzas and noted though Mrs. Esparza claimed additional payments were owed 7 for “plumbing demo and access,” additional invoices were needed. On February 23, 2022, 8 following up on a phone conversation the previous day, Allstate manager Jill Jenkins sent 9 an email to Mrs. Esparza informing her about the process of reimbursement for housing, 10 repairs, laundry, mileage, and utilities.6 On that same day, Mrs. Esparza responded to Mrs. 11 Jenkins’ email stating she was not adequately compensated for laundry and requested 12 Allstate reconsider denying her ALE reimbursement demand. Later on the same day, Mr. 13 Maestas, after speaking with Mrs. Esparza, paid the Esparzas $280 for laundry services, 14 $9,516.10 for the estimated total of future construction on the Esparza home, and sent Mrs. Esparza an email explaining the payments. 15 On March 16, 2022, Mrs. Esparza sent a demand for ALE benefits claiming: (1) 16 $18,200 for meals between January 14 - March 4, 2022, (2) $7,920.90 for mileage, (3) 17 $415 for laundry expenses, (4) $315 for pet expenses, and (5) $738 for utility expenses for 18 a total demand of $27,038.90. On March 22, 2022, Allstate sent an email to the Esparzas 19 to again attempt to explain the documentation needed pursuant to the Policy to adjust the 20 claim and requested details regarding a baseline for food, mileage, and additional utility 21 expenses incurred by the Esparzas. On March 23, 2022, the Esparzas responded claiming 22 again Allstate already had the necessary documentation. On March 25, 2022, Mr. Maestas 23 sent another email asking Mrs. Esparza to provide, in accordance with requirements in the 24

25 6 The Esparzas, though objecting to parts of the phone conversation with Mrs. Jenkins 26 offered by Allstate as “hearsay and mistreatment of material facts,” do not dispute the conversation occurred with Mrs. Jenkins or the follow-up email. The Court notes part of 27 Mrs. Jenkins’s email contained in document ESPARZACLM 1251 is not in Allstate’s 28 statement of facts, but without specific objection by the Esparzas, the Court deems it admissible and material. 1 Policy, a baseline of costs for reimbursement. On March 30, 2022, the Esparzas sent 2 another email without including the required documentation and demanded Allstate pay 3 their full demand in 10 days or they would be forced to seek legal remedies. On April 4, 4 2025, Mr. Maestas sent another email stating he would resolve the Esparza’s claim once 5 additional required Policy information was submitted. In this series of emails, the Esparzas 6 do not dispute no receipts were uploaded, but contend they had already submitted all the 7 information necessary to process the claim and Allstate never intended to make them 8 whole. 9 Allstate states the following payments were made based on the claim file: 10 • $1,369.00 Dwelling to Sylvia Esparza on 1/21/22 11 • $1,000.00 ALE Advance to Sylvia Esparza on 2/7/22 12 • $316.00 Dwelling to Sylvia Esparza on 2/17/22 13 • $9,516.00 Dwelling to Sylvia Esparza on 2/23/22 14 • $280.00 ALE to Sylvia Esparza on 2/23/22 15 • $4,692.50 ALE to Sylvia Esparza on 3/4/22 16 • $58,180.03 ALE to CRS Temp Housing on 7/15/22 17 In their disclosure statement, the Esparzas claim they sustained damages in the 18 amount of $294,416.90. When asked to explain this amount in her deposition, Ms. Esparza 19 did not offer the required Policy documentation but stated she “believe[d] that it’s far 20 more” and “I’m not sure how that – that equation came out. I think I looked at the bills. I 21 think I looked at the claim. I was trying to – I’d have to look and see how that all came 22 about.” 23 C. Other Allegations 24 The Esparzas make several additional allegations regarding Allstate’s conduct, 25 particularly of Allstate representative Mr. Maestas. The Esparzas allege Mr. Maestas, yelled at them on several occasions, mischaracterized their statements, and “planned and 26 deliberately created a scheme to make it appear like he was concerned for Plaintiffs’ safety 27 and sorry for not responding to Plaintiffs’ urgent calls and yelling at them but he was not.” 28 1 The Esparzas further allege Mr. Maestas stopped work on their home and 2 intentionally made efforts to deny their claims. Specifically, Mrs. Esparza testified Mr. 3 Maestas “repeatedly engaged in a pattern of bad tactics by causing unnecessary delays, 4 caused breakdowns in communication, stopped all work for repairs of the [sic], refused to 5 communicate with Plaintiffs and trades, lied to housing vendor and Plaintiffs, repeatedly 6 threatened to close Plaintiffs’ claim without payment, and mischaracterized Mrs. Esparza.” 7 The Esparzas state Mr. Maestas “angered the trades because he instructed Plaintiffs to turn 8 off the equipment and stopped all work.” The Esparzas also allege Mr. Maestas “repeatedly 9 reported Plaintiffs and the claim for subrogation and [the Special Investigation Unit]”, 10 which he knew was not true and would cause further delays and prevent payment on the 11 claim.” 12 D. Procedural History 13 The Esparzas filed a complaint in Maricopa County Superior against Allstate on 14 January 2, 2024 alleging three counts: (1) breach of contract, (2) bad faith, and (3) unfair settlement practices. The Esparzas have also included Count IV entitled “Plaintiff 15 Damages” and Count V entitled “Loss of Wages.” On February 1, 2024, Allstate removed 16 this case from Maricopa County Superior Court to this Court. And on January 2, 2025, 17 Allstate filed this motion for summary judgment on all counts. 18 LEGAL STANDARD 19 A court must grant summary judgment if the pleadings and supporting documents, 20 viewed in the light most favorable to the nonmoving party, “show that there is no genuine 21 issue as to any material fact and that the moving party is entitled to judgment as a matter 22 of law.” Fed. R. Civ. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). 23 The moving party bears the initial responsibility of presenting the basis for its motion and 24 identifying those portions of the record that it believes demonstrates the absence of a 25 genuine issue of material fact. Celotex, 477 U.S. at 323. The non-moving party must then 26 point to specific facts establishing there is a genuine issue of material fact for trial. Id. 27 At summary judgment, the Court considers only admissible evidence. See Fed. R. 28 Civ. P. 56(c)(1)(B). When considering a motion for summary judgment, a court should not 1 weigh the evidence or assess credibility; instead, “the evidence of the non-movant is to be 2 believed, and all justifiable inferences are to be drawn in his favor.” Anderson v. Liberty 3 Lobby, Inc., 477 U.S. 242, 255 (1986). A genuine issue of material fact exists “if the 4 [admissible] evidence is such that a reasonable jury could return a verdict for the 5 nonmoving party.” Id. at 248. In ruling on the motion for summary judgment, the Court 6 will construe the evidence in the light most favorable to the non-moving party. Barlow v. 7 Ground, 943 F.2d 1132, 1135 (9th Cir. 1991). 8 As a federal court sitting in diversity jurisdiction, the Court applies Arizona 9 substantive law and federal procedural law. Kauffman v. Jesser, 844 F. Supp. 2d 943, 949 10 (D. Ariz. 2012). 11 ANALYSIS 12 A. Breach of Contract 13 “When recovery is sought under an insurance contract, the insured has the burden 14 of proving that his loss was due to an insured risk.” Pac. Indem. Co. v. Kohlhase, 455 P.2d 277, 279 (Ariz Ct. App. 1969). “The insurer, on the other hand, has the burden of showing 15 that the loss was within a policy exclusion.” Id. 16 Under Arizona law, a breach of contract claim requires a plaintiff to prove 3 17 elements: (1) the existence of a contract, (2) a breach of that contract, and (3) resulting 18 damages. First Am. Title Ins. Co. v. Johnson Bank, 372 P.3d 292, 297 (Ariz. 2016). 19 Pursuant to the Policy, Plaintiffs allege they were not adequately reimbursed for (1) 20 laundry, (2) meals, (3) additional living expenses, (4) estimates for repairs, (5) out of 21 pocket expenses, (6) and utility increases. Plaintiffs raise several other allegations that 22 Defendants (1) “refused to act with professional standards, integrity, and fairness,” (2) 23 “knowingly and willfully caused delays which damaged Plaintiffs’ property”, (3) “used 24 unfair settlement practices and . . . required Plaintiff to accept a payment, to vacate the 25 hotel, and to pay for their own repairs and housing,” (4) “engaged in egregious, unfair and 26 dishonest acts”, and (5) “failed to adopt and practice a standard covenant of good faith and 27 fair dealings.” 28 Defendants argue Plaintiffs have not alleged specific facts in their Complaint to 1 show violations of Dwelling Protection Coverage – Coverage A or Personal Property 2 Protection Coverage – Coverage C. Plaintiffs do not address this argument in their 3 Response beyond reiterating an assertion in the Complaint that Defendants refused to pay 4 for repair estimates and required Plaintiffs to pay for their own repairs. Plaintiffs’ 5 Complaint and Response do not specifically identify any contractual duties breached under 6 these coverages nor have Plaintiffs set forth specific facts other than their own testimony 7 that Defendants have failed to provide repair expenses. Rule 56 requires the non-moving 8 party to “set forth specific facts showing there is a genuine issue for trial” and not to “rest 9 upon the mere allegations or denials of [the party’s] pleading.” Fed. R. Civ. P. 56(e); 10 Matsushita Elec. Indus. Co, Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). 11 Accordingly, summary judgment will be granted finding Defendants did not breach any 12 contractual duties based on Dwelling Protection Coverage – Coverage A and Personal 13 Property Protection Coverage – Coverage C. 14 With regards to Alternative Living Expenses for a loss under Coverage A, the Policy provides Plaintiffs must “produce receipts for any increased costs to maintain your standard 15 of living while you reside elsewhere.” Plaintiffs have not offered admissible other than 16 their oral testimony that Defendants have not reimbursed expenses for which it is alleged 17 they have provided required receipts to Defendants. It is undisputed Defendants repeatedly 18 explained to Plaintiffs, pursuant to the Policy terms, it was necessary to provide receipts to 19 establish these expenses and that Plaintiffs would be reimbursed only when such receipts 20 were provided. (PSOF ¶¶ 36, 40, 42, 48, 61, 63; CSOF ¶¶ 36; 40; 42; 48; 60; 62). And yet 21 despite repeatedly receiving this information and reminded of the Policy terms, Plaintiffs 22 did not provide necessary documentation and insisted to Defendants without proof that 23 they already had provided the necessary information to calculate their expenses. 24 At this motion for summary judgment, Plaintiff has offered nothing but their own 25 conclusory and often inadmissible statements that Defendants were provided sufficient 26 receipts to cover their claimed ALE expenses. Plaintiffs have not identified what specific 27 receipts were submitted or even copies of them, when they were submitted and to whom, 28 why they were sufficient, nor any basis for recovering the thousands of dollars claimed 1 were owed to them. Despite the modest burden Plaintiff is under to resist a motion for 2 summary judgment, when considering an insurance breach of contract claim, summary 3 judgment is appropriate when “Plaintiff’s conclusory assertion unsupported by either fact 4 or evidence does not present an adequate record to support a finding in his favor.” 5 Thompson v. Property & Cas. Ins. Co., 2015 U.S. Dist. LEXIS 16807, at *36-37 (D. Ariz. 6 2015); see also Marks v. U.S. Dep’t of Justice, 578 F.2d 261, 263 (9th Cir. 1978) 7 (“Conclusory allegations unsupported by factual data will not create a triable issue of 8 fact.”). Additionally, case law on ALE expenses provides an insured cannot survive 9 summary judgment on a breach of contract claim when the insured fails to provide 10 admissible evidence of “receipts or proofs of payment for his alternative living expenses . 11 . . Nor[] any evidence that, under this or any contract, Defendant was obligated to advance 12 [insured] the alternative living funds.” Christopherson v. Am. Strategic Ins. Corp., 483 F. 13 Supp. 3d 631, 639 (E.D. Wis. 2020), aff’d, 999 F.3d 503 (7th Cir. 2021). Summary 14 judgment will be granted finding Defendants did not breach any contractual duties based on Alternative Living Expenses under Coverage A. 15 While Plaintiffs raise an additional array of breach of contract allegations against 16 Defendants regarding bad faith, Plaintiffs have not set forth admissible facts alleging any 17 additional way in which Defendants might have breached a Policy provision. Accordingly, 18 Defendants are entitled to summary judgment on Plaintiffs’ breach of contract claim. 19 B. Bad Faith 20 “The tort of bad faith arises when the insurance company intentionally denies, fails 21 to process or pay a claim without a reasonable basis for such action.” Noble v. National 22 Am. Life Ins. Co., 624 P.2d 866, 868 (Ariz. 1981). “To show a claim for bad faith, a plaintiff 23 must show the absence of a reasonable basis for denying the benefits of the policy and the 24 defendant’s knowledge or reckless disregard of a lack of reasonable basis for denying the 25 claim.” Id. at 868 (internal citations omitted). Further, a plaintiff must show that an insurer 26 acted “intentionally, not inadvertently or mistakenly and that the [insurer] dealt unfairly or 27 dishonestly with the [insured’s] claim or failed to give fair or equal consideration to 28 [insured’s] interests.” Rawlings v. Apodaca, P.2d 565, 577-78 (Ariz. 1986). 1 Plaintiffs allege Defendants repeatedly engaged in dishonest, malicious, or 2 oppressive conduct to avoid liability. In addition to breaching the contract, Plaintiffs allege 3 that Defendants (1) yelled at Plaintiffs and called them liars, (2) caused the police to be 4 called on Plaintiffs, (3) caused delays for repairs to the Plaintiffs’ property, (4) refused to 5 take phone calls, (5) threatened to close their claim, and (6) referred their claim to the 6 Special Investigation Unit (“SIU”) and subrogation. Defendants argue these allegations are 7 factually deficient or fail as a matter of law and the Court will consider each in turn. 8 1. Yelling or Calling Plaintiffs’ Liars 9 Plaintiffs allege Defendants’ representatives called them liars or yelled at them 10 based on Mrs. Esparza’s August 6, 2024 deposition. Defendants argue allegations based 11 only on Plaintiffs’ own testimony are insufficient, as Plaintiffs have not identified any 12 letters or emails complaining that Defendants called Plaintiffs a liar, any letters or emails 13 from Defendants’ representatives accusing Plaintiffs of lying, nor have Plaintiffs 14 expounded on what Defendants accused them of lying about.7 In Montoya Lopez v. Allstate Ins. Co., 282 F. Supp. 2d 1095 (D. Ariz. 2003), the 15 insureds alleged an insurance company acted in bad faith by delaying the processing of 16 their claim. The court held the insured’s attorney’s “claims that [the adjuster] was 17 ‘obstructionist’ and that her conduct indicated she did not want to interview Mr. Lopez do 18 not create an issue of material fact because they constitute inadmissible hearsay.” Id. at 19 1101. “In addition, his self-serving letter, written only six days after he responded to [the 20 adjuster’s] request, stating that she was being uncooperative, proves nothing. At most, it is 21 his own opinion.” Id. The court held “[t]here simply is no objective evidence of 22 unreasonable delay” and the insureds “also fail[] to provide evidence of [the adjuster’s] 23 subjective unreasonableness.” Id. The Esparza’s allegations that Allstate representatives 24 yelled or called them liars is based solely on their own testimony and is accordingly 25 insufficient to establish bad faith. 26

27 7 Defendants note Plaintiffs allege “Allstate contended the estimate submitted by Plaintiffs’ 28 contractors was fraudulent and it was untrustworthy,” but argue no such assertion is made in the cited claim file ESPARZACLM 1254. The Court agrees. 1 2. Causing Police to be Called on Plaintiffs 2 Plaintiffs allege Defendants’ failure to pay the hotel bill led the Squaw Peak Hilton 3 to call the police who filed a police report against the Esparzas for trespassing and 4 nonpayment. Defendants argue the police call occurred because Mrs. Esparza inadvertently 5 overspent a $500 credit provided by the hotel, and Plaintiffs have neither provided the 6 police reports nor any other evidence that the police were called because Defendants failed 7 to pay the hotel. Additionally, it is undisputed CRS employee Tiffany Taylor “asked the 8 resort manager not to call the police because Plaintiffs were invited guests at the resort and 9 not trespassers.” 10 Regardless of the reasons for the police call, Plaintiffs have cited no authority that 11 requires Defendants to prepay Plaintiffs’ ALE expenses at the hotel rather than pursuant to 12 the terms of the Policy as later reimbursements, nor responsibility for the actions of hotel 13 employees who are not agents of Allstate. This allegation is thus insufficient to establish 14 bad faith against Defendants. 3. Causing Delay for Repairs to Plaintiffs’ Property 15 Plaintiffs also allege Defendants’ actions caused repairs to the Esparza’s property 16 to be delayed. In particular, Plaintiffs allege Defendants caused trade workers on their 17 home to be upset with them, that Plaintiffs were individually required to contact trade 18 workers obtain the scope, work, sketches, and timeline for repairs, and that Defendants 19 refused to accept an estimate submitted by Plaintiffs’ contractors. All the allegations 20 regarding the trade workers are inadmissible hearsay. And Defendants argue the record 21 indicates “repairs were on hold till the pipe that caused the loss was rerouted.” (Exhibit 9 22 to Plaintiffs’ Response, Doc. No. 78-2, entry 1/27/2022 at 11:11 a.m., Bates Labeled 23 ESPARZACLM 1301). Defendants also argue Plaintiffs’ allegations omit several emails 24 in the record where Defendants directly contacted trade companies to obtain documentation 25 on the claim, job scope, and timeline. Plaintiffs also admit “Mr. Maestas informed Plaintiffs 26 that he wanted to communicate directly with the trades and not involve Plaintiffs.” (CSOF 27 ¶ 33). 28 Plaintiffs have not provided admissible evidence beyond their own testimony that 1 Defendants caused delays to their home repairs. As in Montoya Lopez, “[t]here . . . is no 2 objective evidence of unreasonable delay” and the insureds “also fails to provide evidence 3 of [the adjuster’s] subjective unreasonableness.” 282 F. Supp. 2d at 1101. Accordingly, 4 Plaintiffs have not established bad faith on this allegation. 5 4. Refusing to Take Plaintiffs’ Calls 6 Plaintiffs also allege Defendants refused to take Plaintiffs’ calls. Defendants argue 7 while Plaintiffs were not always able to speak with Mr. Maestas, on nights and weekends, 8 Plaintiffs were able to contact Allstate’s on call-manager, a Saturday duty manager, and 9 the third-party housing vendor CRS’s After-Hours Specialists. Defendants further respond 10 it is undisputed that Defendants responded to each of the Esparza’s 20 complaints in the 11 record and Plaintiffs have not demonstrated in the Policy or any authority requiring 12 Defendants to be on-call 24 hours or that other employees cannot be used to take calls on 13 nights and weekends. Based on the record and the lack of cited admissible facts and 14 authority, Plaintiffs’ allegations are insufficient to support a claim of bad faith. 5. Threatening to Close Plaintiffs’ Claim 15 Plaintiffs also allege Defendants repeatedly threatened to close their claim. 16 However, Plaintiffs have not presented evidence in the record besides their own testimony 17 that Defendants threatened to close their claim. Additionally, the fact an insurer informs an 18 insured they are closing the insured’s file until they receive additional items “does not mean 19 [insurer] acted in bad faith absent a showing that this resulted in some sort of financial 20 advantage or that it resulted in additional delay in payment of [insured’s] claim.” Montoya 21 Lopez, 282 F. Supp. 2d at 1101-02. Accordingly, Plaintiffs’ allegation is insufficient to 22 support a claim of bad faith. 23 6. Referring Plaintiffs’ Claim to SIU and Subrogation 24 Plaintiffs repeatedly allege Defendants referred their claim to SIU and subrogation. 25 However, a referral of claim to SIU is not actionable without “evidence that the referral of 26 the claim to SIU was made to harm [insured].” Robles v. Am Zurich Ins. Co., 2022 WL 27 22864986 at *8 (D. Ariz. 2022) (internal citations omitted). 28 Plaintiffs have provided no evidence of a subrogation referral nor any way in which 1 subrogation would impact their rights under the Policy. While there is evidence of an SIU 2 referral in the claim file, Plaintiffs have provided no evidence other than their own 3 testimony Defendants’ SIU referral was made to harm or derive financial advantage. Thus, 4 these allegations cannot support a claim of bad faith. 5 7. Conclusion 6 Plaintiffs have not alleged Defendants have breached the Policy, nor are any of 7 Plaintiffs’ additional allegations sufficient to support a claim of bad faith. Accordingly, 8 Defendants are entitled to summary judgment on bad faith. 9 C. Unfair Settlement Practices 10 Plaintiffs’ next count alleges Allstate engaged in unfair settlement practices. 11 However, under Arizona law, there is no independent tortious action for unfair settlement 12 practices separate from bad faith. While the Arizona Unfair Claim Settlement Practices 13 Act, A.R.S. § 20-461, provides limitations on insurance company practices, the statue 14 “exclusively provides an administrative remedy” and nothing in the section “is intended to provide any private right or cause of action.” Accordingly, Allstate’s motion for summary 15 judgment on unfair settlement practices will be granted on this count. 16 D. Damages 17 Lastly, Count IV - Plaintiff Damages alleges Plaintiffs are seeking “general 18 damages, property damages, and special damages, and other losses and miscellaneous 19 expenses.” Count V – Loss of Wages alleges Plaintiffs “have suffered anxiety, worry, 20 emotional stress, fear, feelings of hopeless [sic], lost wages, and other damages to be 21 determined at trial” and seeks “an award for all their damages including punitive damages. 22 . . .” 23 These counts are not separate causes of action, they are forms of potential relief to 24 the other counts. See Sisemore v. Farmers Ins. Co of Ariz., 779 P.2d 1303, 1305 (Ariz. Ct. 25 App. 1989) (“[Punitive damages] is not a ‘claim’ that can be enforced separately from the 26 bad faith claim.”). Summary judgment will be granted on these remaining counts because 27 they fail to state a claim upon which relief can be granted. 28 CONCLUSION 1 Plaintiffs have not shown a genuine issue of material fact exists for trial on any of their counts. Accordingly, the Court will grant Allstate’s Motion for Summary Judgment in its entirety. 4 IT IS ORDERED Defendant Allstate’s Motion for Summary Judgment (Doc. 54) || is GRANTED. The Clerk of Court is directed to enter judgment in favor of Defendant and 6|| close this case. 7 Dated this 9th day of September, 2025. 8 as, LY - 9 / —“

11 Senior United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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