United States District Court, D. Arizona
G. Campbell, Senior United States District Judge
Kasper Smoke Kastle LLC asserts claims for breach of
contract, bad faith, and punitive damages against Defendant
Atlantic Casualty Insurance Company. Doc. 1-1 at 5-11.
Defendant moves for partial summary judgment and to strike
portions of Plaintiff's response and controverting
statement of facts. Docs. 76, 84. Plaintiff moves for
alternative relief in regard to the motion to strike. Doc.
89. The requests for oral argument are denied because the
issues are fully briefed and oral argument will not aid the
Court's decision. See Fed. R. Civ. P. 78(b);
LRCiv 7.2(f). The Court will grant the motion for partial
summary judgment, deny the motion to strike as improper, and
deny the motion for alternate relief as moot.
following facts are undisputed unless otherwise noted. On
August 21, 2016, a fire occurred at Plaintiff's retail
business, causing fire damage to the roof and smoke damage
throughout much of the building. Docs. 77 ¶ 15, 81
¶ 16. Plaintiff held a business insurance policy issued
by Defendant that provided $300, 000 in building coverage and
$300, 000 in business personal property coverage. Doc. 77
¶ 4. Plaintiff submitted a timely claim for the loss.
Id. ¶ 17.
retained Mosher Adjustment Company (“Mosher”) to
assist with inspecting and adjusting the claim. Id.
¶ 19. Plaintiff first retained Resolution Fire Flood
(“Resolution”) and subsequently retained the
Brown O'Haver Public Adjusters (“BOH”) to
represent its interests. Id. ¶¶ 20, 27.
The parties disagree on whether Plaintiff is entitled to
payment for additional replacement costs for the structure,
and the value of Plaintiff's business personal property.
parties agree that the structure portion of Plaintiff's
insurance claim includes a replacement cost value
(“RCV”) of $75, 326.42 and an actual cash value
(“ACV”) for repairs of $64, 907.76. Id.
¶ 51. The $10, 418.67 difference between the RCV and ACV
represents the added value for replacement costs.
policy states that Defendant will not pay replacement costs
until “the lost or damaged property is actually
repaired or replaced” and “[u]nless the repair or
replacement is made as soon as reasonably possible after the
loss or damage.” Id. ¶ 59. The policy
also states that Defendant will not pay any RCV in excess of
“the amount actually spent for necessary repair or
replacement.” Id. ¶ 60. Defendant has
paid Plaintiff the $64, 907.76 for the ACV of the structure
loss, but has not paid the additional $10, 418.67 in RCV
because the parties dispute whether Plaintiff has in fact
completed the required repairs. Docs. 76 at 8, 80 at 4.
business personal property claim, Plaintiff's initial
adjuster, Resolution, estimated the value of the salvageable
items at $26, 854.54. Doc. 77 ¶ 26. Defendant's
adjuster, Mosher, estimated the value of the non-salvageable
items at $15, 004.81. Id. ¶ 24. Defendant paid
Plaintiff both of these amounts, totaling $41, 859.35.
Id. ¶ 26. Plaintiff ultimately rejected
Resolution's findings regarding the salvageability of
various items and retained BOH. Id. ¶ 39. BOH
developed its own valuation of the contents, arriving at a
retail value of $73, 528.08 (Doc. 77-4 at 43-50) and business
personal property value of $137, 380.35 (Id. at
94-98). Defendant declined to pay more than the $41, 859.35
it already had paid based on Resolution's estimate. Doc.
77 ¶¶ 26, 42.
Summary judgment standard.
seeking summary judgment “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). Summary judgment is
appropriate if the evidence, viewed in the light most
favorable to the nonmoving party, shows “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). Summary judgment is also 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.” Celotex, 477 U.S. at 322. Only
disputes over facts that might affect the outcome of the suit
will preclude summary judgment, and the disputed evidence
must be “such that a reasonable jury could return a
verdict for the nonmoving party.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248
Breach of Contract for Structure Damage.
argues that it is entitled to summary judgment on the
structural portion of Plaintiff's claim because it has
paid all of the amounts specified in Plaintiff's proofs
of loss, minus the RCV. Defendant contends that Plaintiff has
neither completed its repair work nor submitted the necessary
invoices showing the repairs and therefore is not entitled to
the RCV. Doc. 76 at 8. Plaintiff argues that it did complete
the required repair work and that Defendant has violated the
policy by failing to pay the RCV. Doc. 80 at 4.
available under the policy only if Plaintiff completes the
required repair work. Doc. 77 ¶ 59. The policy states:
“we will not pay on a replacement cost basis for any
loss or damage: (1) Until the lost or damaged property is
actually repaired or replaced; and (2) Unless the repair or