United States District Court, D. Arizona
REPORT AND RECOMMENDATION
LESLIE A. BOWMAN, Magistrate Judge.
Pending before the court is the defendant's motion to decertify the class pursuant to FED.R.CIV.P. 23, filed on October 15, 2013. (Doc. 248)
The plaintiff in this class action, Rosemary Guadiana, claims the defendant breached her homeowner's insurance policy by failing to pay the cost of tearing out and replacing part of the structure when she replaced her polybutylene (PB) plumbing. Guadiana intends to prove at trial that when a section of PB pipe springs a leak, the only way to fix the plumbing system is to replace all the PB pipe. Having done just that, Guadiana claims her insurer must pay the tear-out cost associated with accessing and replacing all that pipe.
The defendant, State Farm Fire and Casualty Company (State Farm), moves that this court decertify the Arizona class certified by this court on March 31, 2011. (Doc. 139); (Doc. 145) State Farm argues that factual and legal developments show Guadiana's claim no longer satisfies the requirements of Rule 23. Fed.R.Civ.P.
The case has been referred to Magistrate Judge Bowman for all pretrial matters pursuant to LRCiv 72.1. Rules of Practice of the U.S. District Court for the District of Arizona. The court finds the motion suitable for decision without oral argument.
The motion should be denied. Recent legal and factual developments do not require the court to decertify the plaintiff's Rule 23(b)(3) class.
FACTUAL AND PROCEDURAL BACKGROUND
Guadiana had a homeowner's insurance policy with the defendant, State Farm. (Doc. 247, ¶ 3) On September 9, 2004, her home sustained water damage when the plumbing leaked. Id. at ¶ 1 Shortly afterwards, Guadiana summoned her nephew who installed a repair coupling to plug the leaking pipe. (Doc. 254, ¶ 13)
Guadiana discovered her plumbing system was constructed with polybutylene (PB) pipe. (Doc. 247, ¶ 1) "[S]he was told by two different plumbing experts that the only way to repair a PB system is to replace the PB piping." (Doc. 254, ¶ 14) Accordingly, she replaced all the PB pipes in her home with a different piping material. Id.
Guadiana's homeowner's insurance policy contains the following "tear-out" provision:
We do not insure for any loss... which consists of, or is directly and immediately caused by...
* * *
f. continuous or repeated seepage or leakage of water or steam from a:
(1) heating, air conditioning or automatic fire protective sprinkler system;
(2) household appliance; or
(3) plumbing system, including from, within or around any shower stall, shower bath, tub installation, or other plumbing fixture, including their walls, ceilings or floors;
which occurs over a period of time. If loss to covered property is caused by water or steam not otherwise excluded, we will cover the cost of tearing out and replacing any part of the building necessary to repair the system or appliance. We do not cover loss to the system or appliance from which the water or steam escaped....
(Doc. 247, ¶ 6) (emphasis added). Guadiana made a claim under this provision for the costs incurred in tearing out and replacing that part of the structure necessary to replace her entire PB piping system. (Doc. 47) State Farm took the position that it only had to pay tear-out costs necessary to access the section of the pipe that leaked.
On July 11, 2007, Guadiana filed this action in U.S. District Court. (Doc. 1) She filed an amended complaint on February 12, 2009. (Doc. 47) She claims State Farm's failure to pay her entire tear-out costs is a breach of contract. Originally she also claimed State Farm acted in bad faith, but this claim has been dismissed. (Doc. 96, p. 11); (Doc. 109)
State Farm filed a motion to dismiss on September 14, 2007 for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6). FED.R.CIV.P. This court denied the motion on September 2, 2008. In construing the tear-out provision, the court concluded as follows: "If Guadiana can establish as a matter of fact that the system that caused the covered loss includes all the pipes in her house and it was necessary to replace all the pipes to repair that ...