United States District Court, D. Arizona
C. Bury United States District Judge
the Court is Defendant's Motion for Judgment on the
Pleadings and Plaintiffs' Cross Motion for Judgment on
the Pleadings. Oral argument was heard by the Court on
November 28, 2016. The Court now rules.
August 2016, a declaratory relief, breach of contract and bad
faith action was originally filed in state court, then
removed to federal court based on diversity. Defendant
immediately filed a Motion for Judgment on the Pleadings
(DMJOP) and Plaintiffs filed a Joint Cross Motion for
Judgment on the Pleadings (XPMJOP). Plaintiffs are: Farmers
Ins. Co. (Farmers), Renee Holguin Perry and Kevin Perry
(Holguin Perry)(divorced in May 2014), and Nancy Smith
(Smith). Defendant is Peak Property and Cas. Ins. Corp.
(Peak), Holguin Perry's automobile insurance carrier,
doing business in Wisconsin. This action is in federal court
based on diversity because the car accident occurred in
Arizona involving all Arizona citizens with the Defendant
being located and incorporated in the state of Wisconsin.
Arizona law applies.
case arises out of a traffic accident that occurred on
January 22, 2013. It involved two primary vehicles: the Lexus
was driven by Perry Holguin, who ran a red light and hit
Smith, who was driving a Ford. The accident collaterally
involved three other vehicles. The Lexus driven by Perry
Holguin was insured by Peak. One of the collaterally involved
vehicles was insured by Farmers. Farmers, Holguin Perry and
Smith have jointly filed this action against Peak for failing
to compensate the injured resulting in the breach of contract
(Count Two) and bad faith allegations (Count Three).
time of the accident, Holguin Perry had a policy of
automobile insurance with Peak that insured them for
liability up to $100, 000/$300, 000 for bodily injury and
$10, 000 for property damage stemming from an accident. The
Policy as initially written was effective November 10, 2012
through May 10, 2013. The Policy was on a monthly payment
December 20, 2012, Peak mailed a document entitled
“Installment Notice” showing a minimum payment of
$286.37 due on January 9, 2013. The
Installment Notice states: “Payments received after the
cancel date or in an amount less than the minimum amount due
may incur an additional fee.” (DMJOP, Ex. 2.)
about January 18, 2013, Peak mailed a document entitled
“Nonpayment Cancellation Notice” with a print
date of January 18, 2013 (the Notice). (DMJOP, Ex. 4.) The
Notice states: “If a minimum payment of $286.37 is not
received by 01/19/2013 your coverage will end on 01/19/2013
12:01 a.m. Standard Time.” (Id.). The Notice
goes on to state that the insured may reinstate the Policy by
paying $286.37 by January 19, 2013 at 12:01 a.m. (midnight).
The installment payment was due to be paid by January 9, 2013
and Holguin Perry did not tender a payment to the insurance
company until January 23, 2013.
Holguin Perrys allege they did not receive notice of the
notice of cancellation until January 23rd. Holguin Perry paid
$294.37 over the phone to Peak on January 23, 2013. The
Holguin Perrys paid the required $286.37 in the Notice plus a
$5.00 late fee.
December 3, 2013, Smith filed her Complaint against the
Holguin Perrys in state court. Peak refused to settle the
matter or defend the Holguin Perrys because it took the
position that there was a lapse in the insurance contract and
they were not covered by insurance on the date of the
accident, January 22, 2013. As a result, the Perrys entered
into a Settlement Agreement and Assignment (Damron
Agreement) with Smith and Farmers. Smith, the Holguin Perrys
and Farmers filed the action against Peak alleging causes of
action for declaratory relief, breach of contract and
insurance bad faith.
STANDARD OF REVIEW
Rule of Civil Procedure 12(c) permits a party to move for
judgment on the pleadings after the pleadings are closed.
Judgment on the pleadings “is properly granted when
there is no issue of material fact in dispute, and the moving
party is entitled to judgment as a matter of law.”
Fleming v. Pickard, 581 F.3d 922, 925 (9th
Cir.2009). For a Rule 12(c) motion, all material allegations
contained in the nonmoving party's pleadings are accepted
as true. Hal Roach Studios v. Richard Feiner & Co.,
Inc., 896 F.2d 1542, 1550 (9th Cir.1989); Chavez v.
United States, 683 F.3d 1102, 1108 (9th Cir.2012).
district court's review is generally limited to the
contents of the complaint. The court may consider documents
attached to the complaint, documents incorporated by
reference in the complaint, or matters of judicial notice
without converting the Rule 12(c) motion into a motion for