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Winder v. State Farm Fire and Casualty Co.

United States District Court, E.D. Washington

October 20, 2017

JOHN and PATTY WINDER, husband and wife as assignees of ARIEL GRUBB, a single person, assignor, Plaintiffs,
STATE FARM FIRE AND CASUALTY COMPANY, a foreign insurer licensed to do business in the State of Washington, Defendant.



         BEFORE THE COURT is Defendant's Motion for Summary Judgment (ECF No. 11). This matter was submitted for consideration without oral argument. The Court has reviewed the record and files therein, and is fully informed. For the reasons discussed below, the Defendant's Motion for Summary Judgment (ECF No. 11) is GRANTED.


         Plaintiffs John Winder, Patty Winder, assignees of Ariel Grubb bring this action against State Farm Fire and Casualty Company (State Farm) for bad faith, Insurance Fair Conduct Act violation, breach of insurance contract, and Consumer Protection Act violation. ECF No. 1-2 at ¶¶ 3-6. Defendants move for summary judgment on all claims. ECF No. 11.


         The following facts are not disputed. On November 9, 2012, Ariel Grubb was involved in a motor vehicle accident when Ms. Grubb struck Patty Winder while she was crossing the street in Pullman, Washington. ECF Nos. 12 at ¶ 1; 19 at ¶ 6. Ms. Grubb was driving a car owned by her father, David Grubb, and insured by State Farm. ECF Nos. 12 at ¶ 3; 19 at ¶ 6. Mr. Grubb carried a personal liability umbrella policy (PLUP) with State Farm. ECF Nos. 12 at ¶ 4; 19 at ¶ 12. State Farm opened a claim under the auto liability policy on November 10, 2012, after receiving notice of the accident. ECF Nos. 12 at ¶ 7; 19 at ¶ 8. In October 2014, as part of its coverage investigation, State Farm reviewed if Ms. Grubb qualified as an insured under the PLUP policy. ECF Nos. 12 at ¶ 14; 19 at ¶ 21. Under a PLUP policy, an “insured” means “you and your relatives whose primary residence is your household.” ECF No. 12-2 at 6 (Ex. A).

         On November 14, 2015, Ms. Grubb confirmed that she used her parents address for mail as she was moving around various apartments while at veterinary school in Pullman, Washington. ECF Nos. 12 at ¶ 21; 19 at ¶ 24; 12-4 at 2 (Ex. C). She graduated from college in May 2008, lived with her parents and in Portland for a year, and then started veterinary school where she mainly supported herself with student loans. Id. She graduated veterinary school in May 2013 and moved to Portland. Id.

         On December 1, 2014, State Farm denied coverage to Ms. Grubb under the PLUP policy. ECF No. 12-6 at 2-3 (Ex. E). In March and April 2015, State Farm requested further information from Ms. Grubb. She responded that from 2009 to 2013 she stayed at the Valleyford, Washington address where her parents lived during school breaks, part of the summer breaks, and would visit on weekends. ECF Nos. 12 at ¶¶ 26-28; 19 at ¶¶ 27-29; 12-10 at 2 (Ex. I). She kept her belongings at her parents' house while she was traveling abroad and stayed there during her clinical year rotations. Id. Ms. Grubb stated that she considered the Pullman address as her primary residence and her Valleyford address as her permanent legal residence. ECF No. 12-10 at 3. Her parents helped support her by paying her car bills, health insurance, and cell phone bills. ECF No. 12 at ¶ 29. She financed her education and other living expenses with federal loans. Id. Ms. Grubb's parents stated that she was free to come and go, “provided she extended some common courtesy about letting them know.” ECF Nos. 12 at ¶ 31; 19 at ¶ 31, 12-11 at 2 (Ex. J).

         On June 22, 2015, the Winders filed suit against Ms. Grubb and they entered into a covenant judgment settlement. ECF Nos. 12 at ¶¶ 33-34; 19 at ¶¶ 32, 39. On September 16, 2016, a judgment was entered against Ms. Grubb in the amount of $700, 000. ECF No. 19 at ¶ 40. This case was filed on October 12, 2016 in Spokane County Superior Court. ECF No. 1-2 at 2. On November 10, 2016, State Farm removed the case to this Court under 28 U.S.C. § 1332. ECF No. 19 at ¶ 43.


         Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). For purposes of summary judgment, a fact is “material” if it might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A material fact is “genuine” where the evidence is such that a reasonable jury could find in favor of the non-moving party. Id. The moving party bears the initial burden of showing the absence of any genuine issues of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the non-moving party to identify specific facts showing there is a genuine issue of material fact. Anderson, 477 U.S. at 256.

         In ruling on a motion for summary judgment, the court views the facts, as well as all rational inferences therefrom, in the light most favorable to the non-moving party. Scott v. Harris, 550 U.S. 372, 378 (2007). The court must only consider admissible evidence. Orr v. Bank of America, NT & SA, 285 F.3d 764 (9th Cir. 2002). There must be evidence on which a jury could reasonably find for the plaintiff and a “mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient.” Anderson, 477 U.S. at 252.

         A. Valleyford and Pullman Residences

         State Farm contends that it is clear Ms. Grubb's primary residence was in Pullman, but Plaintiffs argue she primarily resided at the Valleyford address. ECF Nos. 11 at 5; 20 at 10. In Washington, interpreting an insurance policy is a question of law where the policy is construed as a whole. Am. Star Ins. Co. v. Grice, 121 Wash.2d 869, 874 (1993), supplemented, 123 Wash.2d 131 (1994). The court will not modify a contract if the policy language is clear and unambiguous. Id. If the language is fairly susceptible to two different reasonable interpretations, then the court may apply extrinsic evidence to resolve ambiguities. Id. at 874-75. If ambiguity remains, ...

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