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Revived Alive, Inc. v. Valley Forge Insurance Co.

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

August 31, 2017

REVIVED ALIVE, INC., Plaintiff,
v.
VALLEY FORGE INSURANCE COMPANY, Defendant.

          ORDER ON CROSS-MOTIONS DKT. ##16, 17

          Ronald B. Leighton, United States District Judge

         THIS MATTER is before the Court on the Parties' Cross-Motions for Partial Summary Judgment [Dkt. ##16, 17]. Plaintiff Revived Alive, Inc., dba Beyond the Veil, and Defendant Valley Forge Insurance Company contend no disputes of fact exist. They ask the Court to resolve the narrow questions of (1) whether Revived Alive had coverage under its policy's “newly acquired” property endorsement for 549 dresses that it purchased prior to Valley Forge's grant of coverage but within 180 days of its loss and (2) whether Valley Forge violated Washington's Insurance Fair Conduct Act, RCW 48.30.010 (2007), by denying coverage or by failing to bring the endorsement to Revived Alive's attention.

         I. DISCUSSION

         On April 10, 2014, Revived Alive purchased 380 dresses for resale at its Vancouver bridal shop. It bought 169 more on April 22, 2014. It obtained insurance from Valley Forge for one year, starting June 5, 2014 (57 days after April 10th). Less than three weeks later, the shop was damaged by a fire that had started at a neighboring establishment. Revived Alive had $116, 963.09 in (actual cash value) damage. Valley Forge paid $100, 000-what it claims was the policy's limit.

         Revived Alive argues it had $250, 000 in additional coverage under its policy's “newly acquired” property endorsement because it had purchased its dresses within 180 days of its loss. It claims Valley Forge failed to disclose this coverage, and so violated the IFCA. Valley Forge disagrees, arguing the endorsement only applies to property purchased after a policy has commenced. It also argues it did not (unreasonably) deny coverage. Each asks for partial summary judgment.

         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(a). 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. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50, 106 S.Ct. 2505 (1986); see also 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. See 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 no evidence exists that supports an element essential to the nonmovant's claim. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548 (1986). Once the movant has met this burden, the nonmoving party then must show the existence of a genuine issue for trial. See 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.

         The policy's “newly acquired” endorsement says in an addendum that Valley Forge will pay for damage to Revived Alive's business personal property that it newly acquires:

         1. Business Personal Property

a. When a Limit of Insurance is shown in the Declarations for Business Personal Property at any described premises, we will pay for direct physical loss of or damage to the following property caused by or resulting from a Covered Cause of Loss:
(1) Business Personal Property, including such property that you newly acquire, at a building you acquire by purchase or lease at any premises, including those premises shown in the Declarations; and
(2) Business Personal Property that you newly acquire at a described premises.
b. The most we will pay for loss of or damage to Business Personal Property under this Additional Coverage in any one occurrence is $250, 000 at each premises.

Dkt. #16 (Bragg Dec.) at Ex. C. This temporary coverage ends when (1) the policy as a whole expires, (2) the newly acquired property is more specifically insured, (3) Revived Alive reports the property's value to Valley Forge, or (4) “180 days expire after [Revived Alive's acquiring it] ….” Id.

         Revived Alive argues that because it purchased its dresses before any of these four terminating conditions occurred, Valley Forge should have covered the entirety of Revived Alive's loss. Valley Forge argues the addendum only applies to property purchased after an insurance policy is already in place-that it affords temporary coverage to property the insurer and insured have not yet had an opportunity to value accurately-and Revived ...


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