United States District Court, E.D. Washington
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY
JUDGMENT AND DENYING PLAINTIFFS' MOTIONS TO AMEND
COMPLAINT AND TO STRIKE DECLARATION
Rosanna Malouf Peterson, United States District Judge.
THE COURT is a motion for summary judgment by Defendant State
Farm Fire and Casualty Company (“State Farm”),
ECF No. 24; a motion to amend or correct the complaint by
Plaintiffs Barry Chapman and Jessie Norris
(“Chapman”), ECF No. 29; and a motion to strike,
also by Chapman, ECF No. 45. Having reviewed the parties'
submissions, the remaining docket, and the relevant law, the
Court is fully informed.
filing this lawsuit, Chapman filed and served a claim and
complaint on State Farm on October 11, 2016, pursuant to the
Insurance Fair Conduct Act (“IFCA”), in chapter
48.30 of the Revised Code of Washington (“RCW”).
Chapman asserts that the 20-day IFCA notice “set forth
the basis for the reasons for the [IFCA] claim including
violations of WAC 284-30-330, RCW 48.30.015 and finally for
any other violations is [sic] formal discovery in the
underlying action otherwise disclosed.” ECF No. 29 at
October 25, 2016, Chapman filed his complaint in Pierce
County Superior Court, stating only claims for breach of
insurance contract and breach of the duty of good faith and
fair dealing. ECF No. 1-1. The complaint sought
“compensatory and exemplary damages for any injury,
harm, economic and non-economic damages or losses, ” as
well as Chapman's attorneys' fees and costs and
“such other and further relief as the Court deems just
and equitable.” ECF No. 1-1 at 5. In explaining why
Chapman filed the complaint fewer than twenty days after
providing the IFCA notice, Chapman recounts: “Because
the State Farm policy had a shorter limitation time for
filing a breach of contract action, the lawsuit was required
to be filed before the IFCA notice time had run.” ECF
No. 29 at 3; see also ECF No. 25-2 at 8 (citing a
portion of the insurance contract that provided that
“[n]o action shall be brought unless there has been
compliance with the policy provisions and the action is
started within one year after the date of loss or
Farm removed the action to this Court on June 19, 2017. ECF
No. 1. The Court scheduled a bench trial scheduling
conference for November 9, 2017, ECF No. 8, and the parties
submitted a joint status certificate in preparation for the
conference, ECF No. 9. The certificate indicated:
“Plaintiffs . . . anticipate filing a motion to amend
the complaint to add counts alleging violations of the
Washington Insurance Fair Claims Act and the Washington
Consumer Protection Act.” ECF No. 9 at 2.
discussion with the parties at the scheduling conference, the
Court issued a bench trial scheduling order that, among other
deadlines and hearings scheduled, set a December 21, 2017
deadline for moving to amend the pleadings. ECF No. 11 at 3.
is no dispute that despite subsequent stipulated motions to
amend pretrial deadlines and continue the trial date by the
parties, the December 21, 2017 deadline to move to amend
pleadings remained intact. See ECF Nos. 17, 19, 21,
and 22. The discovery cutoff in this matter passed on
December 19, 2018. ECF No. 22. The dispositive motion
deadline passed on January 10, 2019. Id. A bench
trial is scheduled for May 13, 2019. ECF No. 19 at 9.
following facts are undisputed, unless otherwise noted.
owns a rental property in Spokane, Washington, that was built
in 1909. ECF Nos. 1-1 at 3; 25-9 at 3. On approximately
October 26, 2015, a fire next door to the property damaged
Chapman's rental property, to the point that the property
was uninhabitable. ECF Nos. 1-1 at 3; 36-1 at 1. The home was
unoccupied at the time, while Chapman undertook a limited
remodeling project. ECF No. 25-5 at 9. Thus, Chapman was not
holding the property out for rent at the time of the fire.
ECF No. 25-10 at 3.
the relevant time period, Chapman held a rental dwelling
insurance policy through State Farm that insured the
“residence premises” for “property damage,
” including “physical damage to or destruction of
tangible property, including loss of use of [the]
property.” ECF Nos. 25-1 at 8; 36-1 at 1. The policy
covered damage to the dwelling (Coverage A) up to $136, 900,
with 20% extra replacement cost coverage up to $13, 690,
available under circumstances explained below; damage to
personal property (Coverage B) up to $6, 845; and loss of
rent (Coverage C) up to the amount of the actual loss. ECF
No. 25-1 at 3. The parties dispute Coverage A at this stage
in the lawsuit.
respect to Coverage A, for damage to the dwelling, an
“Extra Replacement Cost Coverage Endorsement” was
in place that provided:
We will settle covered losses for the amount you actually and
necessarily spend to repair or replace the dwelling under
Coverage A . . . up to the applicable limit of liability
shown in the Declarations. If the amount
spent for covered damage exceeds the applicable limit of
liability stated in the Declarations, an
additional 20% of the stated limit is available to cover the
cost of repair or replacement.
Id. at 31.
addition, Coverage A was subject to the following parameter:
[State Farm] will pay the cost of repair or replacement,
without deduction for depreciation, but not exceeding the
smaller of the following amounts:
(a) The replacement cost of that part of the building damaged
for equivalent construction and use on the same
(b) The amount actually and necessarily spent to repair or
replace the damaged building; or
(c) The limit stated in the Extra Replacement Cost Coverage
Id. at 14 (emphasis added).
insurance policy defined “replacement cost” as
“the cost, at the time of loss, to repair or replace
the damaged property with new materials of like kind and
quality, without deduction for depreciation.” ECF
No. 25-1 at 21 (emphasis added). The policy did not define
“equivalent construction and use” or “like
kind and quality.”
following terms were also in place regarding payment of
actual cash value (“ACV”) versus replacement cost
[State Farm] will pay the actual cash value of the damage to
the buildings, up to the policy limit, until actual repair or
replacement is completed.
[The insured] may disregard the replacement cost loss
settlement provisions and make claim under this policy for
loss or damage to buildings on an actual cash value basis and
then make claim within 180 days after loss for any additional
liability on a replacement cost basis. . . .
Until actual repair or replacement is completed, [State Farm]
will pay only the actual cash value at the time of the loss
of the damaged part of the building, up to the applicable
limit of liability shown in the
Declarations, not to exceed the cost to
repair or replace the damaged part of the building; 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 building, or an amount up to the applicable limit
of liability shown in the Declarations,
whichever is less; and 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
building within two years after the date of loss, and notify
[State Farm] within 30 days after the work has been
Id. at 34.
the fire, Chapman immediately reported the loss to State
Farm, and State Farm accepted ...