Michael Wade Simmons v. Auto-Owners Insurance Company

• Court: District Court, D. Arizona
• Decided: May 15, 2026
• Docket: 4:24-cv-00055
• Status: Unknown

Opinion

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

9 Michael Wade Simmons, No. CV-24-00055-TUC-AMM

10 Plaintiff, ORDER

11 v.

12 Auto-Owners Insurance Company,

13 Defendant. 14 15 Pending before the Court is Defendant Auto-Owners Insurance Company’s 16 Motion for Partial Summary Judgment. (Doc. 50.) The matter is fully briefed. (Docs. 50– 17 51, 54–55, 56.) The Court held oral argument on May 12, 2026. (Doc. 60.) 18 For the following reasons, the Court will grant the Motion for Partial Summary 19 Judgment. I. Procedural Background 20 Plaintiff Michael Wade Simmons brought this action in Pima County Superior 21 Court on December 21, 2023 against Defendant Auto-Owners Insurance Company. (Doc. 22 1 at 1.) Defendant removed the case on February 1, 2024 based on diversity. (Id.) 23 Plaintiff brings two claims. (Doc. 1-3 at 5–8.) In Count I, Plaintiff alleges breach 24 of contract because Defendant did not pay out $300,000 from his underinsured motorist 25 (“UIM”) policy after a rear-end collision that he claims resulted in injuries to his neck. 26 (Id. at 5–6.) In Count II, Plaintiff alleges bad faith because Defendant “put their own 27 interests ahead of their insured’s by failing to promptly investigate, evaluate, and pay 28 [Plaintiff’s] claim without a reasonable basis.” (Id. at 7.) Plaintiff seeks compensatory 1 damages, special damages for medical expenses and loss of income, and punitive 2 damages for bad faith. (Id.) 3 II. Relevant Facts 4 On September 24, 2021, Plaintiff Michael Wade Simmons was rear-ended by non- 5 party Daniel Navarro Dominguez. (Doc. 51 at 3; Doc. 55 at 1.) At the scene, Plaintiff told 6 the investigating officer “he was uninjured.” (Doc. 51 at 3; Doc. 55 at 1.) The 7 investigating officers reported the accident as a “non-injury collision.” (Doc. 51 at 3; 8 Doc. 55 at 2.) Both vehicles were operable and driven from the scene by their owners. 9 (Doc. 51 at 3; Doc. 55 at 2.) 10 Defendant insured Plaintiff under a commercial auto policy with UIM coverage 11 limits of $300,000 per person or $300,000 per accident to cover “damages . . . result[ing] 12 from bodily injury sustained by the insured caused by the accident.” (Doc. 51 at 3, 22; 13 Doc. 55 at 2.) The policy required Plaintiff’s cooperation in any claim investigation, 14 including providing authorizations to access medical records, participating in medical examinations, and agreeing to an examination under oath (“EUO”). (Doc. 51 at 3; Doc. 15 55 at 2.) 16 On September 29, 2021, Plaintiff’s counsel sent Defendant a letter notifying 17 Defendant of the accident. (Doc. 51 at 3; Doc. 55 at 2.) Plaintiff’s counsel called 18 Defendant that same day asking Defendant “not to open up UIM exposure yet.” (Doc. 51 19 at 3; Doc. 55 at 2.) Plaintiff’s counsel asked for a copy of the policy’s declaration page, 20 and Defendant mailed the copy to Plaintiff’s counsel the following day. (Doc. 51 at 4; 21 Doc. 55 at 2.) 22 On June 13, 2022, Plaintiff’s counsel provided Defendant with a notice of a UIM 23 claim and stated that a demand would soon follow. (Doc. 51 at 4; Doc. 55 at 2.) 24 On June 14, 2022, Plaintiff’s counsel sent a letter to Defendant stating that the at- 25 fault driver’s insurance paid the $25,000 policy limit, and Plaintiff demanded “his UIM 26 policy limit of $300,000.00 to resolve the matter.” (Doc. 51 at 4; Doc. 55 at 2.) The 27 demand letter informed Defendant that Plaintiff is a construction worker and that he 28 incurred expenses after being treated for pain in his neck, right shoulder, and back that he 1 began experiencing after the rear-end collision. (Doc. 51 at 4; Doc. 55 at 2.) The letter 2 listed past medical expenses including more than $66,000 for imaging and steroid 3 injections. (Doc. 51 at 4; Doc. 55 at 2.) It also detailed anticipated future medical 4 expenses of approximately $190,000 for anterior cervical surgery. (Doc. 51 at 4; Doc. 55 5 at 2.) With the letter, Plaintiff included records of chiropractic visits shortly after the 6 accident at which Plaintiff complained of pain and a record of an MRI taken two weeks 7 after the accident. (Doc. 55 at 3–4.) 8 Defendant’s Auto Claims Branch Manager Chris Khavari reviewed the demand 9 letter and records from Plaintiff’s counsel. (Doc. 51 at 42–43.) On July 6, 2022, Khavari 10 “determined there was insufficient information to pay the claim.” (Id. at 43.) He assigned 11 Auto Claims Adjuster Paul Steffensen to conduct further investigation. (Id. at 43, 55.) 12 On July 7, 2022, Steffensen emailed Plaintiff’s counsel requesting accident photos 13 and Plaintiff’s medical records for the past five years. (Doc. 51 at 4–5; Doc. 55 at 5.) In 14 response, Plaintiff’s counsel provided a property repair estimate showing $6,375 in damage. (Doc. 51 at 5; Doc. 55 at 5.) He did not otherwise respond to Steffensen’s 15 request. 16 On July 13, 2022, Defendant sent another letter to Plaintiff’s counsel to renew its 17 request for photos from the accident and Plaintiff’s medical records for the past five 18 years. (Doc. 51 at 5; Doc. 55 at 5.) Defendant notified Plaintiff that “in the absence of the 19 information we have requested, we cannot make an offer at this time.” (Doc. 51 at 5; 20 Doc. 55 at 5.) 21 On July 14, 2022, Defendant called Plaintiff’s counsel to follow up on its letter. 22 (Doc. 51 at 5; Doc. 55 at 5.) During this call, Defendant also asked Plaintiff’s counsel if 23 Defendant could take a recorded statement of Plaintiff. (Doc. 51 at 5; Doc. 55 at 5.) There 24 is no indication how Plaintiff’s counsel responded on the phone. 25 Later that day, Plaintiff’s counsel sent a letter to Defendant refusing a recorded 26 statement and denying having any accident photos. (Doc. 51 at 5; Doc. 55 at 5.) 27 Plaintiff’s counsel also wrote: “Please note, your insured has no medical records for 28 injuries in the last five (5) year[s] and therefore there is nothing to produce.” (Doc. 51 at 1 86.) Plaintiff’s counsel did not say whether Plaintiff had non-injury medical records from 2 the past five years, which Defendant believed were nonetheless relevant to investigating 3 the claim. (Doc. 56 at 6.) 4 On July 15, 2022, Steffensen spoke with Plaintiff informally. (Doc. 51 at 5, 51–52, 5 69–70; Doc. 55 at 5.) Steffensen wrote in his notes that Plaintiff “was very forthright to 6 any questions [he] brought forward.” (Doc. 51 at 51.) According to Steffensen, Plaintiff 7 described himself as a “workaholic” who had not missed any work up to that point. (Id. at 8 51–52.) He told Steffensen that “[h]e first felt the injuries from the accident the night that 9 they occurred,” and Steffensen recorded that statement in his notes in the claim file. (Id. 10 at 52.) He reported some improvement in symptoms but said that he experienced stiffness 11 and headaches and believed he would need neck surgery. (Id. at 52, 69; Doc. 55 at 5–6.) 12 Later that day, Steffensen emailed Plaintiff’s counsel explaining that Plaintiff had to 13 appear for an independent medical examination (“IME”) and an EUO because there was 14 not enough information to pay for surgery.1 (Doc. 51 at 5, 69–70.) On July 16, 2022, Steffensen made a note in the claim file that said there was not 15 enough information to offer payment, specifically because Steffensen was not sure that 16 surgery was reasonable or necessary. (Doc. 51 at 6, 51.) Steffensen noted that more 17 investigation was needed, including an IME and EUO. (Id. at 51.) 18 On July 19, 2022, Steffensen instructed Chandelle Yi, a registered nurse working 19 for the company, to review Plaintiff’s medical records to determine whether his past and 20 future treatment was reasonable. (Id. at 6, 50.) Nurse Yi opined that the epidural 21 injections Plaintiff received were “an overutilization of healthcare services” and were not 22 necessary “to treat any traumatic injuries to his cervical spine as a result of the [motor 23 vehicle accident] of 9/24/2021.” (Id. at 50.) Nurse Yi further opined that, based on the 24 medical records, Plaintiff had not suffered any traumatic injuries as a result of this 25 accident. (Id.) Nurse Yi recorded her findings in an entry to the claim file. (Id.) 26

27 1 The email is not in evidence, and Plaintiff contests its existence. (Doc. 55 at 6.) However, Steffensen’s sworn declaration states that he sent the email and communicated 28 the described information. (Doc. 51 at 69.) Steffensen’s note in the file supports his declaration. (Id. at 51.) 1 On July 26, 2022, Steffensen wrote in the claim file that an IME and EUO were “a 2 must” to proceed with the claim. (Id. at 49.) He described inconsistencies between 3 Plaintiff failing to report any injuries at the scene of the accident and subsequently 4 visiting a chiropractor 19 times and undergoing an MRI. (Id.) Steffensen reasoned that 5 Plaintiff’s pain was more likely a result of a chronic degenerative disease rather than the 6 impact of the accident. (Id.) 7 Defendant asserts that it never received a response to its July 15, 2022 email 8 requesting an IME and EUO. (Id. at 7.) Plaintiff contests ever receiving this email.2 (Doc. 9 55 at 7.) In any event, on July 29, 2022, Steffensen sent another email to Plaintiff’s 10 counsel requesting an IME and EUO. (Doc. 51 at 7.) 11 Plaintiff’s counsel did not respond. (Id.; Doc. 55 at 7.) Instead, Plaintiff’s counsel 12 submitted a renewed demand letter for Plaintiff’s policy limit on August 22, 2022. (Doc. 13 51 at 7; Doc. 55 at 7.) Defendant then retained counsel. (Doc. 51 at 7; Doc. 55 at 7.) 14 On August 25, 2022, Defendant’s counsel responded to Plaintiff’s renewed demand letter explaining that Defendant cannot pay the claim without further 15 information. (Doc. 51 at 7; Doc. 55 at 7.) Defendant’s counsel further wrote to Plaintiff: 16 “It is our understanding Auto-Owners’ requests of July 7, July 8, July 13 and July 14, 17 2022 for 5 years of prior medical records and Auto-Owners[’] requests of July 15 and 18 July 29, 2022 for an independent medical examination and examination under oath have 19 been refused.” (Doc. 51 at 7.) 20 On October 7, 2022, Plaintiff’s counsel responded by providing signed medical 21 authorizations allowing Defendant to access Plaintiff’s medical records from before 22 2016.3 (Id. at 7; Doc. 55 at 8.) Plaintiff’s counsel also emailed Defendant medical records 23 from Plaintiff’s 2015 car accident. (Doc. 51 at 8; Doc. 55 at 8.) 24

25 2 The email is not in evidence, and Plaintiff contests its existence. (Doc. 55 at 6.) However, Steffensen’s sworn declaration states that he sent the email and communicated 26 the described information. (Doc. 51 at 69.) Steffensen’s note in the file supports his declaration. (Id. at 51.) 27 3 The Court notes that these records would not have been disclosed in response to Defendant’s request for the previous five years of records. At the oral argument, Plaintiff 28 maintained that he did not have any medical treatment in the five years preceding the accident in 2021. 1 Thereafter, Defendant again requested an IME and EUO. (Doc. 51 at 8; Doc. 55 at 2 8.) The parties coordinated and conducted an EUO and an IME on March 7, 2023. (Doc. 3 51 at 8; Doc. 55 at 8.) In his EUO, Plaintiff testified he missed approximately three 4 cumulative weeks of work due to the accident and described prior accidents in 1995 and 5 2015. (Doc. 51 at 8; Doc. 55 at 8.) 6 Dr. Douglas P. Hartzler conducted the IME with Plaintiff. (Doc. 51 at 170.) After 7 the examination, Dr. Hartzler concluded that Plaintiff “may have aggravated his pre- 8 existing degenerative condition in the cervical spine” and “[t]here was no objective 9 evidence that a new injury occurred to the right shoulder.” (Id. at 8; Doc. 55 at 8.) Dr. 10 Hartzler also opined that “[t]he medical records do not support a need for MRI evaluation 11 with lack of documentation of failure of conservative treatment.” (Doc. 51 at 8; Doc. 55 12 at 9.) He similarly concluded that the epidural injections Plaintiff received were 13 unreasonably expensive and “did not address the area of pathology that [Plaintiff] may 14 have been complaining of.” (Doc. 51 at 8; Doc. 55 at 9.) Dr. Hartzler finally opined that “at this point in time[,] there is no need for future healthcare especially surgery.” (Doc. 15 51 at 9; Doc. 55 at 9.) 16 On March 10, 2023, Plaintiff’s counsel emailed Defendant a renewed demand for 17 the policy limit. (Doc. 51 at 9; Doc. 55 at 9.) Defendant’s counsel responded asking for 18 “employment records to substantiate missed time from work first disclosed in Plaintiff’s 19 EUO; and medical records related to the prior auto accidents that Plaintiff described in 20 his EUO.” (Doc. 51 at 9; Doc. 55 at 9.) Defendant also requested more time to investigate 21 the claim. (Doc. 51 at 9; Doc. 55 at 9.) Plaintiff’s counsel did not respond to these 22 requests. (Doc. 51 at 9; Doc. 55 at 9.) 23 On May 31, 2023, Plaintiff’s counsel sent a final demand letter for the policy 24 limit. (Doc. 51 at 9; Doc. 55 at 9.) There is no evidence of anything that occurred 25 between the parties following this letter until Plaintiff’s counsel filed the present lawsuit 26 on December 21, 2023. 27 III. Motion for Partial Summary Judgment 28 Defendant moved for partial summary judgment as to Count II and as to punitive 1 damages.4 (Doc. 50 at 14.) First, Defendant argues that it is entitled to summary judgment 2 as to Count II because there is no evidence to support either the objective or the 3 subjective prong of a claim of bad faith. (Id. at 8.) As to the objective prong, Defendant 4 argues there is no evidence that it acted unreasonably in investigating, evaluating, and 5 processing Plaintiff’s insurance claim. (Id.) Defendant argues its investigation and 6 responses were timely. (Id.) Defendant does not argue Plaintiff violated the cooperation 7 clause of his insurance policy but argues that “Plaintiff persistently delayed providing 8 information requested by [Defendant].”5 (Id. at 10.) Similarly, as to the subjective prong, 9 Defendant argues that even if it had acted unreasonably, there is no evidence that it did so 10 knowingly or with reckless disregard. (Id. at 11.) 11 Second, Defendant argues that it is entitled to summary judgment as to the 12 availability of punitive damages. (Id. at 13.) Defendant asserts that no reasonable jury 13 could find the requisite “evil hand” by clear and convincing evidence. (Id.) 14 Plaintiff opposes the motion because there are disputed questions of fact for a jury as to both the bad faith claim and punitive damages. (Doc. 54 at 1.) Plaintiff argues that a 15 reasonable jury could find that Defendant’s actions were objectively unreasonable by 16 failing to give Plaintiff “equal consideration.” (Id. at 11.) Plaintiff states that he provided 17 extensive evidence that he suffered at least an aggravation of a degenerative condition in 18 his cervical spine but “Defendant, as of the filing of the present lawsuit, had never 19 evaluated or processed Plaintiff’s claim.” (Id. at 13–14.) In other words, Plaintiff argues 20 he was “force[d] . . . to go through needless adversarial hoops in order to have the claim 21 adjudicated.” (Id. at 14.) 22 As to the subjective prong of a bad faith claim, Plaintiff argues that a reasonable 23 jury could find that Defendant’s actions were so reckless that it should have known it was 24 acting unreasonably. (Id. at 15.) Specifically, Plaintiff highlights that Defendant was 25 aware that “Plaintiff did not seek immediate medical treatment [after the accident] 26 4 Defendant agrees that there is a triable issue as to whether the accident caused 27 Plaintiff’s injuries and does not seek summary judgment on Count I. (Doc. 56 at 5 n.3.) 28 5 In its Reply, Defendant clarifies that it does not allege Plaintiff violated the cooperation clause. (Doc. 56 at 2.) 1 because he’s ‘stoic’ or that he was uninsured and could not afford to go to the hospital.” 2 (Id. at 15–16.) 3 Plaintiff also argues that he “provided responses to requests promptly, attended the 4 examination under oath (“EUO”) and a medical examination upon request, and answered 5 questions forthright and truthfully.” (Id. at 11.) 6 Finally, Plaintiff asserts that the issue of punitive damages should be decided by a 7 jury because there is evidence of an “evil hand.” (Id. at 17.) He argues (1) “Defendant 8 used its own nurse as a basis for not processing and paying Plaintiff’s claim when 9 Defendant’s employees are provided a bonus when premiums exceed claim payouts,” and 10 (2) “Defendant’s own adjuster felt Plaintiff was honest and defended the case as if 11 everything Plaintiff said was dishonest.” (Id.) If a jury agreed with either of these 12 theories, Plaintiff posits, they could reasonably find that Plaintiff is entitled to punitive 13 damages. (Id.) 14 Defendant disputes Plaintiff’s characterization of the bonus program. (Doc. 56 at 10.) It contends that its bonus program did not apply to Steffensen and, even if it had, the 15 program is based ultimately on the company’s profitability, not “arbitrary claim payment 16 goals . . . .” (Id.) Moreover, Defendant argues that nobody treated Plaintiff as dishonest in 17 his belief that his pain was due to the accident; rather, Defendant and its decisionmakers 18 simply disagreed that the injury was caused by the accident. (Id.) 19 IV. Standard of Review 20 The Court grants summary judgment if the pleadings and supporting documents, 21 viewed in the light most favorable to the non-moving party, “show[] that there is no 22 genuine issue as to any material fact and that the moving party is entitled to judgment as 23 a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (quoting Fed. R. 24 Civ. P. 56(a), (c)). An issue is genuine when a reasonable jury could resolve the disputed 25 facts in favor of either party. See Ellison v. Robertson, 357 F.3d 1072, 1075 (9th Cir. 26 2004) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 250–51 (1986)). A 27 disputed fact is material if it “might affect the outcome of the suit under the governing 28 law.” Anderson, 477 U.S. at 248. 1 The moving party bears the initial burden of establishing there is no genuine issue 2 of material fact. Celotex Corp., 477 U.S. at 323. The burden then shifts to the non- 3 movant to “come forward with ‘specific facts showing that there is a genuine issue for 4 trial.’” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) 5 (quoting Fed. R. Civ. P. 56(e)). The non-movant “must do more than simply show that 6 there is some metaphysical doubt as to the material facts.” Id. at 586–87. Likewise, the 7 non-movant’s bare assertions, standing alone, are insufficient to create a material issue of 8 fact and defeat a motion for summary judgment. Anderson, 477 U.S. at 247–48. Thus, 9 summary judgment is mandated “against a party who fails to make a showing sufficient 10 to establish the existence of an element essential to that party’s case, and on which that 11 party will bear the burden of proof at trial.” Celotex Corp., 477 U.S. at 322. 12 The Court’s role at the summary judgment stage is to determine whether there is a 13 genuine issue for trial. See Anderson, 477 U.S. at 249–50. “[T]here is no issue for trial 14 unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.” Id. at 249 (citing First Nat’l Bank of Ariz. v. Cities Serv. Co., 391 15 U.S. 253, 288–89 (1968)). “If the evidence is merely colorable, or is not significantly 16 probative, summary judgment may be granted.” Id. at 249–50 (citations omitted). 17 V. Discussion 18 A. Count II: Bad Faith 19 “The tort of bad faith arises when the insurer ‘intentionally denies, fails to process 20 or pay a claim without a reasonable basis.’” Zilisch v. State Farm Mut. Auto. Ins. Co., 21 995 P.2d 276, 279 (Ariz. 2000) (quoting Noble v. Nat’l Am. Life Ins. Co., 624 P.2d 866, 22 868 (Ariz. 1981)). “The plaintiff must also show the insurer knew it was acting 23 unreasonably or with reckless disregard of the lack of a reasonable basis for denying the 24 claim.” Columbus Life Ins. Co. v. Wilmington Trust NA, No. CV-21-00734-PHX-DJH, 25 2024 WL 4364130, at *3 (D. Ariz. Sept. 30, 2024) (citing Noble, 624 P.2d at 868). 26 Thus, the tort of bad faith against an insurer has two elements: (1) 27 unreasonableness, and (2) knowledge or reckless disregard. Zilisch, 995 P.2d at 280; 28 Golden Rule Ins. Co. v. Montgomery, 435 F. Supp. 2d 980, 995 (D. Ariz. 2006). 1 “The first element is clearly an objective test based upon a simple negligence 2 standard: did the insurance company act in a manner consistent with the way a reasonable 3 insurer would be expected to act under the circumstances.” Trus Joist Corp. v. Safeco Ins. 4 Co. of Am., 735 P.2d 125, 134 (Ariz. Ct. App. 1986); Golden Rule Ins. Co., 435 F. Supp. 5 2d at 995. “Where an insurer acts reasonably, there can be no bad faith.” Trus Joist 6 Corp., 735 P.2d at 134. 7 “To determine whether the insurer’s actions were reasonable, courts should 8 examine the insurer’s investigation and its evaluation and review of the investigative 9 results.” Brown v. U.S. Fid. & Guar. Co., 977 P.2d 807, 815 (Ariz. Ct. App. 1998). “If 10 the insurer conducted a reasonable investigation, it can safely and in good faith deny 11 claims that are fairly debatable.” Id. “Even if ultimately wrong, if a reasonable basis 12 existed for denying the claim, the insurer cannot be liable for bad faith.” Aetna Cas. & 13 Sur. Co. v. Superior Court In & For Cnty. of Maricopa, 778 P.2d 1333, 1336 (Ariz. Ct. 14 App. 1989). Generally, an insurer’s “belief in fair debatability ‘is a question of fact to be 15 determined by the jury.’” Zilisch, 995 P.2d at 279 (quoting Sparks v. Rep. Nat’l Life Ins. 16 Co., 647 P.2d 1127, 1137 (Ariz. 1982)). However, “there are times when the issue of bad 17 faith is not a question appropriate for determination by the jury.” Aetna Cas. & Sur. Co., 18 778 P.2d at 1336 (upholding trial’s court order of summary judgment in favor of insurer 19 on bad faith claim because insurer had a “reasonable basis” to deny the claim and its 20 investigation was adequate). 21 Furthermore, “[a]n insurance company’s failure to adequately investigate only 22 becomes material when a further investigation would have disclosed relevant facts.” Id. 23 Thus, a plaintiff must demonstrate what additional pertinent facts would have been 24 determined by further investigation to establish that the insurer’s pre-denial investigation 25 could amount to bad faith. See id.; Sobieski v. Am. Standard Ins. Co. of Wisconsin, 382 26 P.3d 89, 92 (Ariz. Ct. App. 2016) (finding insurance company’s investigation was 27 unreasonable when claim investigator failed to contact four witnesses to the accident and 28 failed to review the police report). 1 Here, Plaintiff fails to present any genuine dispute that Defendant’s investigation 2 was objectively unreasonable. Defendant promptly responded to the notice of the claim 3 and reviewed the initial documents provided including the police report from the 4 accident. Defendant then requested more information from Plaintiff including photos, 5 repair estimates, and medical records. At this time, Defendant made clear to Plaintiff that 6 it could not make an offer on his claim based on the information provided. 7 Over the course of the investigation that followed, Defendant repeated requests for 8 information until they were complete. For example, Defendant asked for five years of 9 prior medical records until it was made clear to Defendant that Plaintiff did not have any 10 medical records during that timeframe. 11 In a further effort to corroborate Plaintiff’s claim, Defendant had Nurse Yi 12 conduct a review of Plaintiff’s medical records. However, Defendant’s investigation did 13 not stop once Nurse Yi concluded that treatment was unnecessary. Defendant continued 14 to investigate the claim. Defendant conducted an EUO to permit Plaintiff to offer a sworn statement regarding his symptoms and injuries. Defendant also conducted an IME to 15 allow Dr. Hartzler to independently meet with and examine Plaintiff. 16 After Dr. Hartzler concluded that Plaintiff’s course of treatment was not supported 17 by his examination, Plaintiff sent a final demand letter to Defendant. Defendant again 18 informed Plaintiff that it did not have enough information to decide the claim because 19 Plaintiff did not provide sufficient evidence that his injuries related to the accident. 20 Nonetheless, Defendant tried to continue the investigation. Defendant’s counsel asked 21 Plaintiff for employment records and additional medical records related to Plaintiff’s 22 prior accidents. Instead of providing the requested documents, Plaintiff’s counsel stopped 23 participating in the investigation and filed this action. 24 These undisputed facts show that Defendant conducted a reasonable investigation. 25 It communicated regularly with Plaintiff at every stage of the investigation and informed 26 Plaintiff that it could not make an offer to pay the claim based on the information it had. 27 The fact that Defendant continued to try to corroborate Plaintiff’s claim does not render 28 the investigation unreasonable. Plaintiff likewise fails to demonstrate what additional 1 pertinent facts would have been uncovered by further investigation. 2 At oral argument, Plaintiff focused on Steffensen’s alleged failure to directly 3 inform Nurse Yi and Dr. Hartzler that Plaintiff told Steffensen he began experiencing 4 pain on the night of the accident and that Steffensen found Plaintiff “very forthright to 5 any questions [Steffensen] brought forward” during the informal conversation with 6 Plaintiff. (Doc. 51 at 51.) Plaintiff argued that, without this relevant information, Nurse 7 Yi and Dr. Hartzler could not reach adequate opinions, thereby rendering the 8 investigation unreasonable. 9 The Court disagrees. Nurse Yi was tasked with reviewing medical records, and Dr. 10 Hartzler was tasked with examining Plaintiff. It is undisputed that they did so. It is also 11 undisputed that Steffensen recorded in the claim file that Plaintiff reported to him 12 experiencing pain the night of the accident. Nurse Yi arguably had access to those notes 13 considering she made notes of her own in the claim file. It is similarly undisputed that Dr. 14 Hartzler independently met with and examined Plaintiff. At this time, Plaintiff could have directly informed Dr. Hartzler that he began experiencing pain the night of the accident. 15 If Nurse Yi and Dr. Hartzler were nonetheless unaware that Plaintiff reported pain the 16 night of the accident, and if that affects their opinions, that fact standing alone is 17 insufficient to establish a material issue of fact giving rise to a claim of bad faith. E.g., 18 Sobieski, 382 P.3d at 92 (it is unreasonable for a claim investigator to fail to review the 19 police report and fail to contact four witnesses to the accident); see also Anderson, 477 20 U.S. at 249–50 (“If the evidence is merely colorable, or is not significantly probative, 21 summary judgment may be granted.”) (citations omitted). Moreover, that question more 22 likely relates to Plaintiff’s claim for breach of contract, which is not at issue in this 23 motion. 24 For these reasons, the Court finds that no reasonable juror could conclude from the 25 undisputed facts that Defendant’s investigation was objectively unreasonable. Because 26 this is a threshold requirement for a claim of bad faith, the Court need not address the 27 second element of whether Defendant acted with the requisite knowledge or reckless 28 disregard. Accordingly, the Court will grant summary judgment in favor of Defendant as 1 to Count II of Plaintiff’s Complaint alleging bad faith. 2 B. Punitive Damages 3 An award of punitive damages is not a separate claim from the claim of bad faith. 4 Sisemore v. Farmers Ins. Co. of Ariz., 779 P.2d 1303, 1305 (Ariz. Ct. App. 1989). 5 “Punitive damages may not be awarded unless it is first found that the insurance company 6 acted in bad faith.” Id. Because the Court finds that Defendant is entitled to summary 7 judgment on Plaintiff’s claim that Defendant acted in bad faith, Defendant is likewise 8 entitled to summary judgment as to the availability of punitive damages for such a claim. 9 Moreover, even if the Court were to find that there is a triable issue as to whether 10 Defendant acted in bad faith, Plaintiff has not presented sufficient evidence as to punitive 11 damages. An award of punitive damages requires the plaintiff to offer clear and 12 convincing proof “that defendant’s evil hand was guided by an evil mind.” Nardelli v. 13 Metro. Grp. Prop. & Cas. Ins. Co., 277 P.3d 789, 801 (Ariz. Ct. App. 2012) (quoting 14 Rawlings v. Apodaca, 726 P.2d 565, 578 (Ariz. 1986)). Punitive damages in a bad faith action are appropriate “when, and only when, the facts establish that defendant’s conduct 15 was aggravated, outrageous, malicious or fraudulent.” Id. (quoting Rawlings, 726 P.2d at 16 578). Such conduct exists, for example, where there is evidence that an insurance 17 company set a “aggressive company-wide profit goal” and “tied the benefits of claims 18 offices and individuals to, among other things, the average amount paid on claims . . . .” 19 Id. at 802. On this type of record, “the jury could reasonably find the decisions [the 20 insurance company] made in adjusting [plaintiffs’] claim . . . were driven by financial self 21 interest and not by the merits of the [] claim or the terms of their [] policy, and therefore, 22 [the insurance company] acted outrageously and with the requisite evil mind.” Id. 23 Here, Plaintiff fails to provide any evidence that Defendant’s actions were 24 aggravated, outrageous, malicious, or fraudulent. To the extent that Plaintiff relies on an 25 alleged predatory bonus scheme, Plaintiff fails to offer evidence that Steffensen or Nurse 26 Yi—or any other decisionmaker in this investigation—was eligible for any such program. 27 Plaintiff’s mere assertions are not enough to survive summary judgment. Anderson, 477 28 U.S. at 249–50 (“If the evidence is merely colorable, or is not significantly probative, 1) summary judgment may be granted.). 2 VI. Conclusion 3 For the foregoing reasons, 4 IT IS ORDERED that Defendant’s Motion for Partial Summary Judgment is || GRANTED. (Doc. 50.) The only claim remaining in this case is Count I alleging breach || of contract. 7 Dated this 14th day of May, 2026. 8 ? . 2 fe 10 =" Tiondrable Angela M. Mamtinez 11 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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