1 WO 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE DISTRICT OF ARIZONA 7 Sally Le and Cuong Le, husband and wife, ) 8 ) CV 22-00044-TUC-SHR (MAA) Plaintiffs, ) 9 v. ) ) 10 State Farm Fire and Casualty Company, a) REPORT AND foreign corporation, et al., ) RECOMMENDATION 11 ) Defendants. ) 12 ) ______________________________________) 13 14 Pending before the court is the plaintiffs’ motion for partial summary judgment filed on 15 September 7, 2023. (Doc. 101.) The defendants have not filed a response. See LRCiv 7.2(i). 16 The case has been referred to Magistrate Judge Ambri for report and recommendation 17 pursuant to the Local Rules of Practice. LRCiv 72.1; (Doc. 82.) 18 The motion should be granted. More than 60 days have passed since this court affirmed 19 the appraisal award, and State Farm has not paid the balance as required by the insurance 20 contract. (Doc. 101, p. 5.) There is no genuine issue of material fact, and the plaintiffs are 21 entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). 22 23 Background 24 Sally Le owns a rental property on E. Beverly Street in Tucson, Arizona. (Doc. 102, p. 25 1, Plaintiffs’ Statement of Facts.)1 The property was damaged by fire sometime during the first 26 27 1 Where the non-movant “fails to properly address another party’s assertion of fact as required by Rule 56(c),” the court may consider the facts presented by the movant as 28 1 week of May, 2020. (Doc. 102, p. 2.) Mrs. Le reported the fire to her insurer, State Farm. Id. 2 Mrs. Le then hired a public insurance adjuster, Associated Adjustment Bureau (“Associated”). 3 Id. Associated estimated the fire damage at $182,608.42 on a replacement cost value basis. Id. 4 State Farm was unwilling to pay the loss amount submitted by Associated, so the Les 5 asserted their right to an appraisal pursuant to the terms of the insurance policy. (Doc. 102, pp. 6 2-3.) On or about September 21, 2021, the appraisal panel issued an award that assessed the 7 replacement cost value damages at $193,509.49 and the actual cash value damages at 8 $177,398.90. (Doc. 102, p. 3.) On or about December 24, 2021, the appraisal panel issued a 9 “Corrected Appraisal Award” clarifying the scope of the panel’s award. Id. State Farm 10 objected to the size of the panel’s award but paid the Les a supplemental sum of $27,767.99. 11 (Doc. 102, p. 4.) 12 On December 27, 2021, The Les filed suit in Pima County Superior Court against State 13 Farm claiming breach of contract and breach of the duty of good faith. (Doc. 102, p. 4.) The 14 breach of contract claim includes a claim that State Farm breached the insurance contract by 15 failing to pay the full value of the appraisal award. (Doc. 102, p. 4.) On January 26, 2022, State 16 Farm removed the action to this court. (Doc. 1.) On February 23, 2022, the Les filed a motion 17 to confirm the appraisal award pursuant to A.R.S. § 12-1511. (Doc. 11.) On April 1, 2022, State 18 Farm filed a combined response and motion to vacate the appraisal award pursuant to A.R.S. 19 § 12-1512. (Doc. 25.) 20 On December 27, 2022, this court confirmed the Corrected Appraisal Award issued on 21 December 24, 2021. (Doc. 56.) In a subsequent filing, State Farm asserted that “the balance 22 owed [from the appraisal award] is $84,096.85, not $86,401.85 as Plaintiff claims.” (Doc. 102, 23 p. 5; Doc. 63, pp. 1-2.) 24 The plaintiffs filed the pending motion for partial summary judgment on September 8, 25 2023. (Doc. 101.) They argue that the defendant, State Farm, is in breach of the residential 26 insurance contract, which specifies that payment of an appraisal award must be made 60 days 27 from the date “there is a filing of an appraisal award with us.” (Doc. 101, p. 5.) 28 1 2 Summary Judgment 3 Summary judgment is available only “if the movant shows that there is no genuine 4 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. 5 R. Civ. P. 56(a). There is a genuine dispute “if the evidence is such that a reasonable jury could 6 return a verdict for the non[-]moving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 7 248, 106 S.Ct. 2505, 2510 (1986). 8 The initial burden rests on the moving party to point out the absence of any genuine issue 9 of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553 (1986). 10 “Where the moving party will have the burden of proof on an issue at trial, the movant must 11 affirmatively demonstrate that no reasonable trier of fact could find other than for the moving 12 party.” Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). “Where the 13 non-moving party bears the burden of proof at trial, the moving party need only prove that there 14 is an absence of evidence to support the non-moving party’s case.” In re Oracle Corp. 15 Securities Litigation, 627 F.3d 376, 387 (9th Cir. 2010). 16 Once initially satisfied, the burden shifts to the non-movant to demonstrate through the 17 production of probative evidence that an issue of fact remains to be tried. Celotex Corp., 477 18 U.S. at 324, 106 S.Ct. at 2553. “If a reasonable jury viewing the summary judgment record 19 could find by a preponderance of the evidence that [the non-movant is] entitled to a verdict in 20 [its] favor, then summary judgment [is] inappropriate; conversely, if a reasonable jury could not 21 find [for the non-movant], then summary judgment [is] correct.” Cornwell v. Electra Cent. 22 Credit Union, 439 F.3d 1018, 1027-28 (9th Cir. 2006). 23 “In judging evidence at the summary judgment stage, the court does not make credibility 24 determinations or weigh conflicting evidence.” Soremekun v. Thrifty Payless, Inc., 509 F.3d 25 978, 984 (9th Cir. 2007). “Rather, it draws all inferences in the light most favorable to the non[- 26 ]moving party.” Id. 27 28 1 “Summary judgment is particularly appropriate to resolve questions of insurance 2 coverage, since the interpretation of a written contract is a matter of law to be determined by 3 the court.” 757BD LLC v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 330 F. Supp. 3d 1143, 4 1148 (D. Ariz. 2018), aff’d, 804 F. App’x 592 (9th Cir. 2020). 5 6 Insurance Policy Interpretation 7 “[T]he tenets of insurance policy contractual interpretation are well-established.” Nat’l 8 Fire Ins. Co. of Hartford v. James River Ins., 162 F. Supp. 3d 898, 903–04 (D. Ariz. 2016), 9 clarified on denial of reconsideration, 2016 WL 2606984 (D. Ariz. 2016). “An insurance 10 policy must be read as a whole, so as to give a reasonable and harmonious effect to all of its 11 provisions.” Id. “The Court must construe the written terms of the policy to effectuate the 12 parties’ intent, and to protect the reasonable expectations of the insured . . . .” Id. “[T]he 13 [p]olicy’s language must be viewed from the standpoint of the average layman who is untrained 14 in the law or the field of insurance.” Id.
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1 WO 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE DISTRICT OF ARIZONA 7 Sally Le and Cuong Le, husband and wife, ) 8 ) CV 22-00044-TUC-SHR (MAA) Plaintiffs, ) 9 v. ) ) 10 State Farm Fire and Casualty Company, a) REPORT AND foreign corporation, et al., ) RECOMMENDATION 11 ) Defendants. ) 12 ) ______________________________________) 13 14 Pending before the court is the plaintiffs’ motion for partial summary judgment filed on 15 September 7, 2023. (Doc. 101.) The defendants have not filed a response. See LRCiv 7.2(i). 16 The case has been referred to Magistrate Judge Ambri for report and recommendation 17 pursuant to the Local Rules of Practice. LRCiv 72.1; (Doc. 82.) 18 The motion should be granted. More than 60 days have passed since this court affirmed 19 the appraisal award, and State Farm has not paid the balance as required by the insurance 20 contract. (Doc. 101, p. 5.) There is no genuine issue of material fact, and the plaintiffs are 21 entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). 22 23 Background 24 Sally Le owns a rental property on E. Beverly Street in Tucson, Arizona. (Doc. 102, p. 25 1, Plaintiffs’ Statement of Facts.)1 The property was damaged by fire sometime during the first 26 27 1 Where the non-movant “fails to properly address another party’s assertion of fact as required by Rule 56(c),” the court may consider the facts presented by the movant as 28 1 week of May, 2020. (Doc. 102, p. 2.) Mrs. Le reported the fire to her insurer, State Farm. Id. 2 Mrs. Le then hired a public insurance adjuster, Associated Adjustment Bureau (“Associated”). 3 Id. Associated estimated the fire damage at $182,608.42 on a replacement cost value basis. Id. 4 State Farm was unwilling to pay the loss amount submitted by Associated, so the Les 5 asserted their right to an appraisal pursuant to the terms of the insurance policy. (Doc. 102, pp. 6 2-3.) On or about September 21, 2021, the appraisal panel issued an award that assessed the 7 replacement cost value damages at $193,509.49 and the actual cash value damages at 8 $177,398.90. (Doc. 102, p. 3.) On or about December 24, 2021, the appraisal panel issued a 9 “Corrected Appraisal Award” clarifying the scope of the panel’s award. Id. State Farm 10 objected to the size of the panel’s award but paid the Les a supplemental sum of $27,767.99. 11 (Doc. 102, p. 4.) 12 On December 27, 2021, The Les filed suit in Pima County Superior Court against State 13 Farm claiming breach of contract and breach of the duty of good faith. (Doc. 102, p. 4.) The 14 breach of contract claim includes a claim that State Farm breached the insurance contract by 15 failing to pay the full value of the appraisal award. (Doc. 102, p. 4.) On January 26, 2022, State 16 Farm removed the action to this court. (Doc. 1.) On February 23, 2022, the Les filed a motion 17 to confirm the appraisal award pursuant to A.R.S. § 12-1511. (Doc. 11.) On April 1, 2022, State 18 Farm filed a combined response and motion to vacate the appraisal award pursuant to A.R.S. 19 § 12-1512. (Doc. 25.) 20 On December 27, 2022, this court confirmed the Corrected Appraisal Award issued on 21 December 24, 2021. (Doc. 56.) In a subsequent filing, State Farm asserted that “the balance 22 owed [from the appraisal award] is $84,096.85, not $86,401.85 as Plaintiff claims.” (Doc. 102, 23 p. 5; Doc. 63, pp. 1-2.) 24 The plaintiffs filed the pending motion for partial summary judgment on September 8, 25 2023. (Doc. 101.) They argue that the defendant, State Farm, is in breach of the residential 26 insurance contract, which specifies that payment of an appraisal award must be made 60 days 27 from the date “there is a filing of an appraisal award with us.” (Doc. 101, p. 5.) 28 1 2 Summary Judgment 3 Summary judgment is available only “if the movant shows that there is no genuine 4 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. 5 R. Civ. P. 56(a). There is a genuine dispute “if the evidence is such that a reasonable jury could 6 return a verdict for the non[-]moving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 7 248, 106 S.Ct. 2505, 2510 (1986). 8 The initial burden rests on the moving party to point out the absence of any genuine issue 9 of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553 (1986). 10 “Where the moving party will have the burden of proof on an issue at trial, the movant must 11 affirmatively demonstrate that no reasonable trier of fact could find other than for the moving 12 party.” Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). “Where the 13 non-moving party bears the burden of proof at trial, the moving party need only prove that there 14 is an absence of evidence to support the non-moving party’s case.” In re Oracle Corp. 15 Securities Litigation, 627 F.3d 376, 387 (9th Cir. 2010). 16 Once initially satisfied, the burden shifts to the non-movant to demonstrate through the 17 production of probative evidence that an issue of fact remains to be tried. Celotex Corp., 477 18 U.S. at 324, 106 S.Ct. at 2553. “If a reasonable jury viewing the summary judgment record 19 could find by a preponderance of the evidence that [the non-movant is] entitled to a verdict in 20 [its] favor, then summary judgment [is] inappropriate; conversely, if a reasonable jury could not 21 find [for the non-movant], then summary judgment [is] correct.” Cornwell v. Electra Cent. 22 Credit Union, 439 F.3d 1018, 1027-28 (9th Cir. 2006). 23 “In judging evidence at the summary judgment stage, the court does not make credibility 24 determinations or weigh conflicting evidence.” Soremekun v. Thrifty Payless, Inc., 509 F.3d 25 978, 984 (9th Cir. 2007). “Rather, it draws all inferences in the light most favorable to the non[- 26 ]moving party.” Id. 27 28 1 “Summary judgment is particularly appropriate to resolve questions of insurance 2 coverage, since the interpretation of a written contract is a matter of law to be determined by 3 the court.” 757BD LLC v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 330 F. Supp. 3d 1143, 4 1148 (D. Ariz. 2018), aff’d, 804 F. App’x 592 (9th Cir. 2020). 5 6 Insurance Policy Interpretation 7 “[T]he tenets of insurance policy contractual interpretation are well-established.” Nat’l 8 Fire Ins. Co. of Hartford v. James River Ins., 162 F. Supp. 3d 898, 903–04 (D. Ariz. 2016), 9 clarified on denial of reconsideration, 2016 WL 2606984 (D. Ariz. 2016). “An insurance 10 policy must be read as a whole, so as to give a reasonable and harmonious effect to all of its 11 provisions.” Id. “The Court must construe the written terms of the policy to effectuate the 12 parties’ intent, and to protect the reasonable expectations of the insured . . . .” Id. “[T]he 13 [p]olicy’s language must be viewed from the standpoint of the average layman who is untrained 14 in the law or the field of insurance.” Id. “Where the language of the policy is clear, the Court 15 shall afford it its plain and ordinary meaning and apply it as written.” Id. “[C]ourts construe 16 a clause subject to different interpretations by examining the language of the clause, public 17 policy considerations, and the purpose of the transaction as a whole.” Id. 18 19 Analysis: Breach of Contract 20 The Les assert that State Farm has breached that part of the insurance policy that requires 21 payment 60 days from the filing of an appraisal award. The policy reads in pertinent part as 22 follows: 23 Loss Payment. We will adjust all losses with you. We will pay you unless some other person is named in the policy or is legally entitled to receive payment. Loss 24 will be payable 60 days after we receive your proof of loss and: 25 a. reach agreement with you; b. there is an entry of a final judgment; or 26 c. there is a filing of an appraisal award with us. 27 (Doc. 102, p. 5, emphasis added.) 28 1 The appraisal award was confirmed by this court on December 27, 2022. (Doc. 102, p. 2 || 4.) State Farm acknowledged that the balance still outstanding on the award is $84,096.85. 3 || (Doc. 102, p. 5.) Sixty days have since past, and State Farm has not paid the balance owed as 4 || required by the insurance contract. /d.; see also Bennett v. Homesite Ins. Co., 636 F. Supp. 3d 5 |] 1267, 1272 (W.D. Wash. 2022) (“The Court agrees with the Bennetts that the plain meaning 6 || of the operative provision [“‘loss will be payable’’] requires payment to be made within 30 days 7 || of the underlying prerequisites being met.”). 8 There “is no genuine dispute as to any material fact” and “the movant is entitled to 9 || judgment as a matter of law.” Fed. R. Civ. P. 56(a); see, e.g., Bennett v. Homesite Ins. Co., 636 10 F. Supp. 3d 1267, 1272 (W.D. Wash. 2022) (“[T]he Court agrees with the Bennetts that 11 || Homesite breached the policy by not making payment within 30 days of the appraisal award.”). 12 RECOMMENDATION 13 The Magistrate Judge recommends that the District Court, after its independent review 14 || of the record, enter an order 15 GRANTING the plaintiffs’ motion for partial summary judgment on the plaintiffs’ 16 || breach of contract claim. (Doc. 101.) 17 Pursuant to 28 U.S.C. §636 (b), any party may serve and file written objections within 18 || 14 days of being served with a copy of this report and recommendation. If objections are not 19 || timely filed, the party’s right to de novo review may be waived. The Local Rules permit the 20 || filing of a response to an objection. They do not permit the filing of a reply to a response 21 without the permission of the District Court. 22 DATED this 13" day of November, 2023. 23 24 : Re GOODY 6 Honorable Michael A. Ambri 27 United States Magistrate Judge 28 -5-