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Witt v. Property & Casualty Insurance Co. of Hartford

United States District Court, W.D. Washington, Tacoma

January 19, 2017



          Ronald B. Leighton United States District Judge

         THIS MATTER is before the Court on Defendant Hartford's Motion for Partial Summary Judgment on Plaintiff Witts' contract claims. [Dkt. #12]. The Witts purchased a Hartford homeowners policy for their home, which was damaged by fire in February, 2015. Hartford has paid more than $650, 000 for the claim. The case (and this motion) involves three areas of continued dispute over Hartford's obligations under the policy:

         (1) The policy covered the structure for $251, 000 (“Coverage A”), which was extended if the structure was replaced. Hartford argues that the extended replacement limit is capped at 1.5 times the stated coverage, or $376, 500. The Witts claim that the coverage was extended for an additional 1.5 times the stated structure coverage, or [$251, 000 (1.5 x 251, 000)] = $627, 500. Hartford argues that this is a plain vanilla contract construction issue and that the Witts' reading is wrong as a matter of law. The Witts argue that the contract is unambiguous and that their reading is correct, and that if it is ambiguous it must be construed in their favor.

         (2) The policy included an additional living expenses, or ALE, coverage. The Witts claim that Hartford's adjuster agreed to pay them $1400 per month to live in a cabin on the property, in lieu of paying them significantly more to live in a rental home. In reliance on that promise, they refurbished the cabin to make it livable.

         The Witts' claim depends on their public adjuster's claim that the promise was made, and their own claim that they reasonably relied on it. Hartford ultimately paid $5650 for this work, but denies that it ever agreed or promised to pay the Witts any monthly amount to live in their own cabin. Hartford argues that the policy is clear that ALE coverage is triggered only where such expenses are actually incurred, that they consistently told the Witts this, and that there is no evidence in support of the Witt's claim.

         (3) The policy included an “ordinance and law” coverage, which pays for cost increases due to building code enforcement. The Witts claim they incurred additional costs (a total of $54, 200, of which Hartford has paid $32, 350) due to code compliance. The Witts therefore claim an additional $21, 850 for increased code compliance costs. Hartford claims that it already characterized repair costs that would not have otherwise been payable (due to the cap discussed above) as code costs, and denies that it owes any additional amounts. It claims there is no support for the Witts' additional code claim as a matter of law.

         A. Summary Judgment Standard.

         Summary judgment is proper “if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). In determining whether an issue of fact exists, the Court must view all evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor. Anderson Liberty Lobby, Inc., 477 U.S. 242, 248-50 (1986); Bagdadi v. Nazar, 84 F.3d 1194, 1197 (9th Cir. 1996). A genuine issue of material fact exists where there is sufficient evidence for a reasonable factfinder to find for the nonmoving party. Anderson, 477 U.S. at 248. The inquiry is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Id. At 251-52. The moving party bears the initial burden of showing that there is no evidence which supports an element essential to the non-movant's claim. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Once the movant has met this burden, the nonmoving party then must show that there is a genuine issue for trial. Anderson, 477 U.S. at 250. If the nonmoving party fails to establish the existence of a genuine issue of material fact, “the moving party is entitled to judgment as a matter of law.” Celotex, 477 U.S. at 323-24.

         There is no requirement that the moving party negate elements of the non-movant's case. Lujan v. National Wildlife Federation, 497 U.S. 871, 110 S.Ct. 3177, 111 L.Ed. 2D 695 (1990). Once the moving party has met its burden, the non-movant must then produce concrete evidence, without merely relying on allegations in the pleadings, that there remain genuine factual issues. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505 (1986).

         B. Coverage A included a 150% cap, not an additional 150% coverage, for structure replacement.

         There can be no dispute about the terms of the policy, despite the fact that it requires the reader to look in multiple places to find those terms. It states:

         B. If there is a toss to the building insured under Coverage A that exceeds the Coverage A limit of liability shown in the Declarations:

1. We will increase the Coverage A limit of liability to equal the current "replacement cost" of the building. However, in no event will such increased limit exceed * times the Coveraae A amount shown in the Declarations.

[Dkt. #113-15 at 31] The asterisk refers the reader to an endorsement, which provides that the entry “may be left blank if shown elsewhere in the coverage.” Hartford claims that the applicable “elsewhere” is the Policy Declarations, which provide that the “additional ...

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