United States District Court, E.D. Washington
ORDER GRANTING DEFENDANT'S AND DENYING
PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT
ROSANNA MALOUF PETERSON United States District Judge.
THE COURT are cross-motions for summary judgment from
Plaintiffs Douglas and Alejandra Creel, ECF No. 42, and
Defendant State Farm Fire and Casualty Company (“State
Farm”), ECF No. 39. Having reviewed all submitted
documents related to the motions and having heard oral
argument from the parties on February 28, 2018, the Court
grants Defendant's summary judgment motion and denies
Facts The following facts are undisputed,
unless otherwise noted.
November 17, 2015, a record-breaking windstorm felled a tree
that inflicted severe damage on the house of Plaintiffs
Alejandra and Douglas Creel, in south Spokane. See
ECF No. 41-1 at 2-3. At the time of the storm, the Creels
were insured by State Farm under a homeowner's insurance
policy covering damage to their dwelling (“Coverage
A”) and to their personal property (“Coverage
B”), as well as additional living expenses
(“Coverage C”) as a result of their loss. ECF
Nos. 41-2 at 6-7; 41-5 at 9. Only the coverage for damage to
the Creels' dwelling, Coverage A, is at issue in this
night of the windstorm, the Creels entered into a contract
with a restoration contractor, Guardian Restoration
(“Guardian”), to perform the repairs on their
house. ECF No. 41-5 at 4-5. Mr. Creel reported the loss to
State Farm the following morning. ECF No. 41-5 at 6. State
Farm accepted the Creels' claim.
Farm adjustor inspected the property on November 22, 2015,
and on or around December 4, 2015, made an initial estimate
of the loss associated with the structural damage to the
house. ECF No. 41-2 at 2-3.
Creels' policy through State Farm insured the “cost
to repair or replace with similar construction and for the
same use . . . the damaged part of the property . . .
.” ECF No. 41-17 at 2. The policy further provided
(1) until actual repair or replacement is completed, [State
Farm] will pay only the actual cash value at the time of the
loss of the applicable limit of liability shown in the
Declarations, not to exceed the cost to repair or replace the
damaged part of the property;
(2) when the repair or replacement is actually completed
[State Farm] will pay the covered additional amount [the
insured] actually and necessarily spend[s] to repair or
replace the damaged part of the property, or an amount up to
the applicable limit of liability shown in the Declarations,
whichever is less;
(3) to receive any additional payments on a replacement cost
basis, [the insured] must complete the actual repair or
replacement of the damaged part of the property within two
years after the date of loss, and notify [State Farm] within
30 days after the work has been completed; . . . .
ECF No. 41-17 at 2.
undisputed that State Farm paid the Creels for the
replacement and repair of the damaged property, rather than
the actual cash value of the property, which would have
included depreciation. ECF No. 41-2 at 12-13. State Farm
avers that it paid replacement cost to the Creels because the
Creels immediately retained a contractor to perform the work
and represented throughout the claims adjustment process that
their intention was to repair the property. Id.
Farm's structural damage claim policy further bound the
insurer to provide the insured “with a detailed
estimate of the scope of the damage and cost of
repairs.” ECF No. 41-8 at 1. In a document explaining
the policy, State Farm informed the Creels:
If you select a contractor whose estimate is the same as or
lower than our estimate, based on the same scope of damages,
we will pay based upon their estimate. If your
contractor's estimate is higher than ours, you should
contact your claim representative prior to beginning repairs.
ECF No. 46-18 at 1.
December 30, 2015, Guardian estimated the total cost to
restore the dwelling as $330, 829.78. ECF No. 41-14. State
Farm initially estimated $95, 512.95 in damage to the
dwelling under Coverage A and paid the Creels that amount on
December 4, 2015. ECF No. 41-2 at 2-3, 7. According to State
Farm's adjustor, the initial Coverage A payment covered
the damage apparent during State Farm's first visual
inspection of the premises. ECF No. 41-2 at 3. Guardian next
supplied an estimate to the Creels and State Farm that
included $73, 936.76 in demolition and asbestos removal. A
State Farm adjuster met with a representative of Guardian on
January 28, 2016, to inspect the property with respect to
Guardian's estimate. Subsequently, on February 1, 2016,
State Farm paid the Creels an additional $81, 769.11 under
Coverage A for asbestos abatement, demolition, and estimate
revisions. ECF No. 41-2 at 4-6, 8.
March until June 2016, State Farm and Guardian went back and
forth with estimates regarding the comprehensive replacement
cost for the damaged portions of the Creels' house. In
April 2016, State Farm engaged an engineer to provide a
“structural engineering opinion regarding the extent of
repairs necessary to restore the home . . . .” ECF No.
46-17. By June 17, 2016, State Farm updated its estimate to
$208, 756.24 to repair the damage to the dwelling, and paid
the Creels the difference between that estimate and its
previous estimate. ECF No. 41-5 at 7. State Farm also
requested that the Creels begin construction at that time.
ECF No. 41-5 at 7. As of late June 2016, State Farm's
estimate of comprehensive repair cost was approximately $122,
000 less than Guardian's estimate. ECF Nos. 14-13 and
June 2016, Ms. Creel casually encountered an agent from the
local State Farm office while both women were pursuing a
hobby; after hearing Ms. Creel's frustrations regarding
what she perceived as a stalled adjustment process, the agent
suggested to the Creels two alternative contractors to
contact for repair estimates. ECF No. 41-5 at 7. Mr. Creel
contacted one of the two businesses, Capstone Construction
Co., Inc. (“Capstone”), and asked for an estimate
to repair their property. Id. On July ...