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Kifer v. American Family Mutual Insurance Co.

United States District Court, Western District of Washington, Tacoma

March 16, 2015



ROBERT J. BRYAN, United States District Judge

This matter comes before the Court on Defendant American Family Mutual Insurance Company’s (“American Family”) Motion for Protective Order (Dkt. 63), Plaintiffs’ Motion to Compel Production of Documents from Defendant (Dkt. 67), Defendant’s Motion to Compel IRS Records and Tax Returns (Dkt. 65), and Defendant’s Motion to Strike (Dkt. 80). The Court has considered the pleadings filed in support of and in opposition to the motions and the file herein.

This case arises from an insurance coverage dispute following a November 3, 2012 fire at Plaintiffs’ personal residence. Dkt. 1. At the time of the fire, Plaintiffs had an insurance policy with Defendant, policy number 46-BD7584-01. Dkt. 18-1. Plaintiffs make claims for breach of contract, for violations of the duties of good faith and fair dealing found in the Washington Administrative Code (“WAC”) 284-30-330 pursuant to the Insurance Fair Conduct Act, RCW 48.30.010, et seq. (“IFCA”), and for violations of Washington’s Consumer Protection Act (“CPA”) RCW 19.86, et seq. Dkt. 72.

Parties here certify that they have conferred and attempted to resolve these discovery disputes, pursuant to Rule 37(a)(1), to no avail. These motions followed.

Defendant moves for the issuance of an order protecting it from having to produce documents asserted to be created in anticipation of litigation and that are protected by attorney-client privilege and the work product doctrine. Dkt. 63. Defendant also moves for a protective order from having to produce irrelevant advertising materials. Dkt. 63. Plaintiffs did not directly respond to the motion for protective order, but, instead filed their Motion to Compel (Dkt. 67) seeking an order compelling these purportedly protected documents and the advertising materials. These two motions should be considered together. Defendant opposes the Plaintiffs’ motion to compel. Dkt. 75. Parties certify that they have conferred on these discovery issues. The motions should be granted, in part, and denied, in part.

Defendant also moves the Court for an order compelling Plaintiffs to execute a stipulation and release to allow Defendant to obtain Plaintiffs’ IRS records and tax returns from 2011 to present from the IRS. Dkt. 65. (The Plaintiffs’ personal copies were purportedly destroyed in the fire. Id.) Plaintiffs have responded and oppose the motion. Dkt. 77. The information sought is relevant, so, Defendant’s motion (Dkt. 65) should be granted.


The following facts are taken from the February 10, 2015 Order on Defendant’s Motion for Partial Summary Judgment and Plaintiff’s Motion for Leave to Amend Complaint (Dkt. 62, at 2-5):

The fire was caused by a malfunctioning heater/fan in a bathroom. Dkt. 18-2. On November 21, 2012, the fire was determined to be accidental. Dkt. 18- 2. Plaintiffs submitted claims to Defendant for the loss, and Defendant accepted coverage. Id. Defendant paid Plaintiffs $3, 000 on November 8, 2012 as an advance on their personal property. Dkt. 21.
On February 21, 2013, Plaintiffs’ repair estimate was completed by Har-Bro West. Dkt. 52-4. Har-Bro West estimated that the replacement cost value (“RCV”) of the structure was $413, 474.56. Id., at 51.
On March 29, 2013, Defendant sent Plaintiffs an estimate of damages for the structure by its contractor, Belfor Property Restoration. Dkt. 52-1. The actual cash value (“ACV”) (cost of replacement less depreciation) was estimated to be $123, 534.15. Id., at 1. The RCV of the structure was estimated to be $267, 871.94. Id., at 1. In that estimate, Plaintiffs were informed:

If you wish to make a claim for the recoverable depreciation amount, you must do TWO things:

1. You must have the item(s) replaced or repaired within one year from your date of loss. *Exception: Georgia and Washington policies ONLY -Please refer to your policy language as well as the section of this estimate titled Claiming Recoverable Depreciation following the Estimate Recap or Coverage Limit Details sections.
2. You must submit a final repair bill or purchase receipt showing the item(s) has been repaired or replaced.
The attached estimate is what we expect to be the reasonable cost to repair or replace the property. This estimate may not include permit fees. If total charges for repair/replacement plus permits exceed the amount shown here for that repair/replacement, prior to any deductible, then additional amounts may be payable. If the actual cost is more or less, the final payment will be adjusted accordingly.

Dkt. 52-1, at 1.

On May 7, 2013, Defendant’s contractor, Belfor’s, estimate regarding repair of the structure increased: the ACV was estimated to be $147, 241.16 and the RCV of the structure was estimated to be $321, 446.87. Dkt. 52-7, at 1.
On May 28, 2013, Defendant paid Plaintiffs $122, 534.15 ($123, 534.15 less the $1, 000 deductible) on Plaintiffs’ structure claim in accord with the March 29, 2013 estimate. Dkt. 22-2.
Prior to the fire, Plaintiffs were having difficulty paying their mortgage, were “$100, 000 underwater, ” and were trying to negotiate a loan modification with their bank. Dkt. 60-1, at 7. Plaintiffs state that they had difficulty trying to decide whether to fix the home. Dkt. 60-1, at 8.
In June of 2013, Plaintiffs sent Defendant their content inventory. Dkt. 52-15. The ACV for contents was estimated to be $542, 164.95 and the RCV of the contents was estimated to be $651, 879.31. Id., at 2.
On August 6, 2013, Belfor, issued a new estimate for repairs to the structure for $394, 588.33 RCV. Dkt. 52-9, at 1.
Plaintiffs demanded an appraisal in accord with the policy provisions on August 30, 2013. Dkt. 52-10.
On November 1, 2013, Plaintiffs filed this case in Clark County Washington Superior Court. Dkt. 1. Plaintiffs’ Complaint alleged that Defendant: 1) breached their contract in failing to pay for the loss of both the structure and contents of the structure and 2) breached the covenant good faith and fair dealing pursuant to the IFCA, RCW 48.30.010, et seq., and the WAC ...

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