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Nguyen v. American Family Mutual Ins. Co.

United States District Court, D. Arizona

September 9, 2014

Henry Nguyen, Plaintiff,
American Family Mutual Ins. Co., Defendant.


STEPHEN M. McNAMEE, District Judge.

Pending before the Court is Defendant's motion for summary judgment. (Doc. 77.) The motion is fully briefed. (See Docs. 78, 82, 89-90, 95-97.) Also pending is Defendant's separate motion to strike, which is fully briefed. (Docs. 91, 97, 100.) After reviewing the briefs, the Court will grant Defendant's motion for summary judgment and will grant in part, deny in part, and sanction Defendant for filing a separate motion to strike.


Plaintiff Henry Nguyen ("Nguyen or Mr. Nguyen"), who lives in California, owns commercial property located at 775 N. Arizona Blvd. in Coolidge, Arizona. Mr. Nguyen's commercial property was insured under an insurance policy issued by Defendant American Family Mutual Insurance Co. ("American Family"). The property consists of eight business suites, which Mr. Nguyen purchased in 2006. (Doc. 78-1 at 80.) Mr. Nguyen hired Norris Management as his property manager for the commercial property. (Id. at 81.)

It is undisputed by the parties that on October 5, 2010, the metropolitan Phoenix area suffered a significant wind and hail storm. (Doc. 77 at 2.) Norris Management maintenance records show that they oversaw roof repairs at the property both before and after the October 5, 2010 storm. (Doc. 78-1 at 117-96.) Norris Management continued to receive complaints from tenants regarding roof leaks and made multiple roof repairs between April 2011 and March 2013. (Id.)

In October 2011, Mr. Nguyen emailed his insurance agent about reported storm damage to his commercial property. (Doc. 100-1 at 6 ("Because of the rain last couple weeks now the roof is leaking and damage hard...").) The agent's email response recommended that Mr. Nguyen call the office and file a claim. (Id.) There is no evidence that Mr. Nguyen followed through and filed a claim with American Family at this time.

On April 2, 2012, Mr. Nguyen filed a damage claim with his commercial property for hail and storm damage. (Doc. 78-1 at 198-99.) The date of loss was stated as March 28, 2012. (Id. at 198.) American Family assigned Edwin Reyes to adjust the claim by investigating and evaluating possible hail and storm damage. Mr. Reyes inspected the commercial property with Mr. Nguyen's roofing contractor, Clifford Ray. (Doc. 95-4 at 3.) Mr. Ray pointed out to Mr. Reyes damage he believed to have been caused by hail. (Doc. 95-4 at 3.) Mr. Reyes evaluated the roof for hail damage using test squares. (Doc. 78-1 at 207.) Upon inspecting the property Mr. Reyes found hail damage to the property's roof top air conditioning units but concluded that they could be repaired by combing each unit's fins rather than having to replace the entire units. ( Id., see also id. at 214-20.) American Family estimated the repair damage to the air conditioners was $433.32, which was below the Policy's deductible, $1, 000, and therefore a payment was not issued. (Id.)

Mr. Reyes further found that other roof damage was not caused by the storm of March 28, 2012. (Id. at 214-20.) It is undisputed that Reyes inspected and evaluated Mr. Nguyen's claim based on the March 28, 2012 date of loss. After the inspection, on May 2, 2012, American Family provided Mr. Nguyen its repair estimate and a letter explaining that other damages to the property were not caused by the recent March 28, 2012 hailstorm, but were attributed to neglect and wear and tear. (Id.) American Family reported that the roof damages at issue included pockets of air and water that had formed underneath the roofing material giving the roof a wavy appearance. (Id.) The letter directed Mr. Nguyen to the exclusion section of his policy, which stated that damages due to neglect and wear and tear were not covered under the Policy. (Id.; see also id. at 25.)

Subsequently, Mr. Nguyen contacted his contractor, Ray Brothers Construction, who recommended that he retain a public adjusting company. (Id. at 106-08.). Within a few days, Mr. Nguyen contracted with Home Restorers, LLC, a public adjusting firm. (Id. at 221-22.)

Mr. Nguyen filed his complaint in this matter on October 4, 2012. (Doc. 1.) Mr. Nguyen's complaint specifically alleged that the date of the loss for the claim was March 28, 2012. (Id.) On May 3, 2013, at Mr. Nguyen's deposition, he testified that his property was damaged in fact by the October 5, 2010 storm. The parties stipulated to allow Mr. Nguyen to file a FAC for the limited purpose of conforming the date of loss to the evidence; Mr. Nguyen filed a FAC changing the date of loss from March 28, 2012 to October 5, 2010. (Docs. 34, 38.) The parties also requested extensions of pre-trial deadlines and the Court held a hearing regarding the request that pre-trial discovery deadlines be extended. (Docs. 39, 44.) At the hearing, the Court specifically asked Mr. Nguyen about the change in the alleged date of loss from March 2012 to October 2010, to which he replied the parties agreed that the alleged date of loss was the October 5, 2010 storm. (Id.) The Court extended the pretrial deadlines (Doc. 45), and following the close of discovery, American Family moved for summary judgment (Doc. 77).


Summary Judgment

A court must grant summary judgment if the pleadings and supporting documents, viewed in the light most favorable to the nonmoving party, show "that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); see Celotex Corp. v. Catrett , 477 U.S. 317, 322-23 (1986); Jesinger v. Nevada Fed. Credit Union , 24 F.3d 1127, 1130 (9th Cir. 1994). Substantive law determines which facts are material. See Anderson v. Liberty Lobby , 477 U.S. 242, 248 (1986); see also Jesinger , 24 F.3d at 1130. "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson , 477 U.S. at 248. The dispute must also be genuine, that is, the evidence must be "such that a reasonable jury could return a verdict for the nonmoving party." Id .; see Jesinger , 24 F.3d at 1130.

A principal purpose of summary judgment is "to isolate and dispose of factually unsupported claims." Celotex , 477 U.S. at 323-24. Summary judgment is appropriate against a party who "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322; see also Citadel Holding Corp. v. Roven , 26 F.3d 960, 964 (9th Cir. 1994). The moving party need not disprove matters on which the opponent has the burden of proof at trial. See Celotex , 477 U.S. at 323. 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." See Matsushita Elec. Indus. Co. v. Zenith Radio , 475 U.S. 574, 586-87 (1986) (quoting Fed.R.Civ.P. 56(e) (1963) (amended 2010)); Brinson v. Linda Rose Joint Venture , 53 F.3d 1044, 1049 (9th Cir. 1995). The non-movant's bare assertions, standing alone, are insufficient to create a material issue of fact and defeat a motion for summary judgment. Anderson , 477 U.S. at 247-48.

Breach of Contract

In an action for breach of contract, the plaintiff has the burden of proving "the existence of a contract, breach of the contract, and resulting damages." Chartone, Inc. v. Bernini , 207 Ariz. 162, 170, 83 P.3d 1103, 1112 (App. 2004) (citing Thunderbird Metallurgical, Inc. v. Ariz. Testing Lab. , 5 Ariz.App. 48, 423 P.2d 124 (1976)).

Provisions of insurance contracts should be construed according to their plain and ordinary meaning. National Bank v. St. Paul Fire & Marine Ins. Co. , 193 Ariz. 581, 584, 975 P.2d 711, 714 (App. 1999). The interpretation of an insurance contract is a question of law, as is the question of whether the contract's terms are ambiguous. Id . In Arizona, courts must construe a clause which is subject to differing interpretations by "examining the language of the clause, public policy considerations, and the purpose of the transaction as a whole." State Farm Mut. Auto. Ins. Co. v. Wilson , 162 Ariz. 251, 257, 782 P.2d 727, 733 (1989).

"Where the contract language is unclear and can be reasonably construed in more than one sense, an ambiguity is said to exist and such ambiguity will be construed against the insurer." Sparks v. Republic Nat'l Life Ins. Co. , 132 Ariz. 529, 534, 647 P.2d 1127, 1132 (1982). To determine whether such an ambiguity exists, the contract language "should be examined from the viewpoint of one not trained in law or in the insurance business." Id . Moreover, an insurance policy must be read as a whole to give "reasonable and harmonious meaning and effect to all its provisions.'" National Bank , 193 Ariz. at 584, 975 P.2d at 714 (quoting Fed. Ins. Co. v. P.A.T. Homes, Inc. , 113 Ariz. 136, 139, 547 P.2d 1050, 1053 (1976)).


Motion to Strike

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