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Perry v. Peak Property and Cas. Ins.

United States District Court, D. Arizona

December 5, 2016

Kevin Perry, et al., Plaintiffs,
v.
Peak Property and Cas. Ins., Defendant.

          ORDER

          David C. Bury United States District Judge

         Before 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.

         SUMMARY

         In 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.

         BACKGROUND

         This 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).

         At the 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 plan.

         On 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.)

         On or 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.

         The 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.

         On 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.

         LEGAL STANDARD OF REVIEW

         Federal 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).

         The 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 ...


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