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Allen v. Country Mutual Insurance Co. Inc.

United States District Court, Ninth Circuit

December 31, 2013

Derrick Allen, Plaintiff,
Country Mutual Insurance Company, Inc., a foreign corporation dba Country Mutual Insurance Company dba Country Financial; et al., Defendants.


G. MURRAY SNOW, District Judge.

Pending before this Court is Defendant's Motion to Dismiss (Doc. 9) which this Court converted to a motion for summary judgment (Doc. 16). Pursuant to that change, the parties filed supplemental briefing. (Docs. 17-23.) For the following reasons, the Motion is granted without prejudice to Allen re-filing his claim upon compliance with the terms of his insurance policy.


Plaintiff Derrick Allen alleges bad faith against his insurance company, Defendant Country Mutual Insurance Company, Inc. ("Country Mutual"), in their handling of his claim based on the theft of his two motorcycles and motorcycle trailer. (Doc. 1-1.) The theft occurred on November 2, 2012, and there is no dispute that the motorcycles and trailer were covered under Allen's policy with Country Mutual. (Doc. 17 at 1-2; Doc. 18 at 2.) Allen reported the theft to the police and Country Mutual that day. (Doc. 18 at 2.)

There is a dispute as to the value of the motorcycles. Allen states in his declaration that before insuring the motorcycles, Country Mutual had an underwriter evaluate them and determined that they were of "show quality" and that each had a market value of $55, 000. (Doc. 19 at 7.) Country Mutual ignores this allegation and points to other indicators of the motorcycles' value, such as their initial purchase prices of $10, 000 and $23, 000. (Doc. 17 at 2.) Country Mutual hired an appraiser after the theft, who appears to have determined that they were worth $32, 815.05 and $24, 148.75 respectively. ( Id. at 5.)

On December 5, Country Mutual sent Allen a letter requesting documentation to verify improvements made to the motorcycles and trailer. (Doc. 17, Ex. G.) Five days later, Country Mutual sent a Notice of Reservation of Rights regarding each motorcycle. ( Id., Ex. H.) In those notices, Country Mutual informed Allen that his claim may not be covered and generally cited various sections of his policy, but did not cite any specific problems or concern. ( Id. ) On the same day it sent these notices that the claims may not be covered at all, Country Mutual also sent two Automobile Proof of Loss statements for Allen to sign which listed the values of the motorcycles as $32, 815.05 and $24, 148.75. ( Id., Ex. I.) These forms included a place for Allen to sign whereby he was acknowledging receipt of the payment of those amounts as the contractual obligation. ( Id. )

Allen acquired representation by an attorney, who sent a demand letter on January 16, 2013, asking for payment of the alleged full value of $55, 000 per motorcycle by February 1. ( Id., at Ex. J.) For the next several months, Allen's attorney exchanged multiple emails and letters with Country Mutual. ( Id., Exs. J-X.) On January 21, Country Mutual asked the attorney to have Allen complete an Automobile Proof of Loss, which he did on March 19. (Doc. 17-1, at 6-7.) On March 7, Country Mutual received a National Insurance Crime Bureau Hotline Tip indicating that an anonymous caller felt that Allen was fraudulently reporting his motorcycles as stolen. (Doc. 71, Ex. M.) On March 28, the attorney for Country Mutual contacted Allen's attorney to request and schedule an Examination Under Oath ("EUO") pursuant to the terms of his policy. ( Id., Ex. O.)

On April 8, over five months from the time of the theft, Allen filed the present suit in Maricopa County. ( Id., Exs. P-U; Doc. 1-1, at 3-7.) Allen's counsel asserted that Allen could comply with the policy's EUO requirement by submitting to a deposition during the course of this bad faith lawsuit. (Doc. 17, Ex. R.) Country Mutual then removed the case to this court (Doc. 1) and made the Motion to Dismiss (Doc. 9). Briefing is now complete on the converted motion to dismiss which will now be addressed as a motion for summary judgment. (Docs. 17-23.)



Summary judgment is appropriate if the evidence, viewed in the light most favorable to the nonmoving party, demonstrates "that 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). "[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

Substantive law determines which facts are material and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "A fact issue is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002) (quoting Anderson, 477 U.S. at 248). Thus, the nonmoving party must show that the genuine factual issues "can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.'" Cal. Architectural Bldg. Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir. 1987) (quoting Anderson, 477 U.S. at 250).

Furthermore, the party opposing summary judgment "may not rest upon the mere allegations or denials of [the party's] pleadings, but... must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e); see Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Brinson v. Linda Rose Joint Venture, 53 F.3d 1044, 1049 (9th Cir. 1995).

When a summary judgment motion is filed "before a party has had any realistic opportunity to pursue discovery relating to its theory of the case, district courts should grant any Rule [56(d), formerly] 56(f) motion fairly freely." Burlington N. Santa Fe R. Co. v. Assiniboine & Sioux Tribes of Fort Peck Reservation, 323 F.3d 767, 773 (9th Cir. 2003). However, the burden is on the nonmoving party to show "by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition." Fed.R.Civ.P. 56(d); Margolis v. Ryan, 140 F.3d 850, 853 (9th Cir. 1998). The request to defer consideration must "clearly show what information is sought and how it would preclude summary judgment.'" Spear v. United States, No. CIV. 11-1742-PHX-PGR, 2012 WL 2029747, at *2 (D. Ariz. June 6, 2012) (citing Margolis , 140 F.3d at 853). More specifically, the nonmoving party must set forth in affidavit ...

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