Judith Moore v. Safeco Insurance Company of Am , 549 F. App'x 651 ( 2013 )

FILED
NOT FOR PUBLICATION DEC 11 2013
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
JUDITH MOORE, WALTER W. No. 12-56459
MOORE,
D.C. No. 2:11-CV-01891-DMG
Plaintiffs - Appellants, (AJW)
v.
MEMORANDUM*
SAFECO INSURANCE COMPANY OF
AMERICA,
Defendant - Appellee.
Appeal from the United States District Court
for the Central District of California
Dolly M. Gee, District Judge, Presiding
Argued and Submitted November 8, 2013
Pasadena, California
Before: GOULD and BYBEE, Circuit Judges, and CHEN, District Judge.**
Plaintiffs-appellants Judith Moore and Walter W. Moore, husband and wife,
appeal the district court’s orders denying their motions for partial summary
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The Honorable Edward M. Chen, United States District Court for the
Northern District of California, sitting by designation.
judgment and granting defendant-appellee Safeco Insurance Company of
America’s motions for partial summary judgment. The Moores had a homeowners
insurance policy with Safeco. They submitted a claim to Safeco after discovering a
fungus (later determined to be poria) in their home. Safeco paid the Moores a total
of $18,702.67 for the claim. The Moores take the position that Safeco should have
paid up to the full policy limits for their fungus-related repairs. They filed suit
against Safeco for breach of contract, promissory estoppel, unfair competition, bad
faith, and declaratory relief. We have jurisdiction pursuant to 28 U.S.C. § 1291,
and we affirm.1
1
Post-hearing, the Moores submitted a letter in which they, inter alia,
provide new evidence that was not part of the appellate record. We agree with
Safeco that the letter and accompanying new evidence should be stricken from the
record. See Trans-Sterling, Inc. v. Bible, 804 F.2d 525, 528 (9th Cir. 1986) (noting
that Federal Rule of Appellate Procedure 28(j) “permits a party to bring new
authorities to the attention of the court; it is not designed to bring new evidence
through the back door”). We also note that the Moores’ attempt to justify the new
evidence is not well supported. The Moores assert that Safeco claimed before the
district court that it has always covered
(continued...)
2
First, the district court did not abuse its discretion in denying the Moores’
initial motion for partial summary judgment on Safeco’s fifth affirmative defense
pending the completion of reasonable discovery pursuant to Federal Rule of Civil
Procedure 56(d). See Burlington N. Santa Fe R.R. Co. v. Assiniboine & Sioux
Tribes, 323 F.3d 767, 773 (9th Cir. 2003) (noting that “[w]here . . . a summary
judgment motion is filed . . . before a party has had any realistic opportunity to
pursue discovery relating to its theory of the case, district courts should grant any
Rule 56[(d)] motion fairly freely”); Garrett v. City & Cnty. of San Francisco, 818
F.2d 1515, 1518 (9th Cir. 1987).
Second, the district court properly denied the Moores’ motion for partial
summary judgment and granted Safeco’s motion for partial summary judgment on
the breach-of-contract claim. As of 1999, the insurance policy contained a clear
and conspicuous provision under which fungi-related loss or costs were completely
excluded. Cf. Thompson v. Occidental Life Ins. Co., 513 P.2d 353, 364 (Cal. 1973)
1
(...continued)
fungi-related loss or costs. ER 156 (hearing). But the transcript reflects that
Safeco’s counsel made that statement about coverage for fungi-related loss or costs
with respect to how the policy existed from 2002 and on. Finally, we note that,
even if we were to consider the new evidence submitted by the Moores, it would
not affect the disposition of this case. Even if Safeco had in the past paid on some
claims for mold-related loss or costs in spite of a mold exclusion, that does not
change the clear and unambiguous limit on payment to losses related to fungi
under the Moores’ policy.
3
(stating that “[p]rovisions which purport to exclude coverage or substantially limit
liability must be set forth in plain, clear and conspicuous language”). Then in
2002, the policy was modified with a clear and conspicuous provision providing an
exception to the exclusion of fungi-related loss or costs — i.e., if there was a
covered loss under the policy, then the insured would be paid up to $10,000 for
fungi-related loss or costs. Rather than imposing a reduction in coverage as the
Moores contend, the 2002 policy (and subsequent policies) added coverage
previously excluded. The Moores were given clear and adequate notice of the
$10,000 limitation.
While the Moores argue that the provision added in 2002 is ambiguous
because of Safeco’s course of performance after entering into the contract, the
interpretation they offer (that fungi-related losses were not subject to a sublimit of
$10,000) is not an interpretation to which the language of the policy is reasonably
susceptible. See Employers Reins. Co. v. Superior Court, 74 Cal. Rptr. 3d 733, 744
(Cal. Ct. App. 2008) (noting that extrinsic evidence such as “course of
performance” evidence can be offered “to expose a latent ambiguity” in a contract
term but only “when relevant to prove a meaning to which the language of the
instrument is reasonably susceptible”) (internal citation and quotation marks
omitted).
4
Third, the district court properly denied the Moores’ motion for partial
summary judgment and granted Safeco’s motion for partial summary judgment on
the promissory estoppel claim. As the district court noted, for a promissory
estoppel claim to be viable, there must be a clear and unambiguous promise. See
CalFarm Ins. Co. v. Krusiewicz, 31 Cal. Rptr. 3d 619, 627 (Cal. Ct. App. 2005).
Neither the declarations page nor the e-mails cited by the Moores contain a clear
and unambiguous promise that the cost of fungi-related repairs would be covered
in excess of the $10,000 limit. For example, as the district court explained in its
opinion, Safeco’s e-mail of January 14 could be interpreted in multiple ways –
including as a statement that the $8,702.67 payment was for water damage (the
covered loss) which would then “kick in” the $10,000 payment for fungi-related
loss or costs. Furthermore, promissory estoppel requires reasonable reliance. See
Aceves v. U.S. Bank, N.A., 120 Cal. Rptr. 3d 507, 514 (Cal. Ct. App. 2011). Here,
there could be no such reliance in light of Safeco’s repeated disclosure to the
Moores of the express terms of the policy regarding fungi (i.e., both the exclusion
and the exception to the exclusion) and the unambiguous nature of the provision
limiting coverage for fungi-related loss or costs.
Fourth, the district court’s denial of the Moores’ motion for partial summary
judgment and grant of Safeco’s motion for partial summary judgment on the unfair
5
competition claim was appropriate. The Moores’ arguments underlying the unfair
competition claim are largely a rehash of their contention that they were not given
adequate notice of the $10,000 limit for fungi-related loss or costs. For the reasons
stated above, that contention has no merit. The Moores’ assertion that Safeco
engaged in unfair competition by violating California Insurance Code § 10101-03
is also without merit. Contrary to what the Moores argue, those statutes did not
require Safeco to put the $10,000 limit on the declarations page for the policy.
California Insurance Code § 10101 simply provides that an insured must be given a
copy of the California Residential Property Insurance disclosure statement “as
contained in Section 10102.” Section 10102 in turn discusses the contents and
format of the disclosure statement. See CAL. INS. CODE § 10102. Section 10103
provides in relevant part that “[n]o policy of residential property insurance may be
issued or renewed in this state unless it provides the following information on the
declarations page of the policy: (1) The limits of liability for the structure.” CAL.
INS. CODE § 10103(a)(1). The section does not on its face require an insurer to
provide information on sublimits or coverage limitations.
Fifth, the district court correctly granted Safeco’s motion for partial
summary judgment on the claim for bad faith. No reasonable jury could find that
Safeco unreasonably denied payment for all fungi-related repairs. As noted above,
6
the $10,000 limit on fungi-related loss or costs was clear and unambiguous. To the
extent the Moores maintain that Safeco unreasonably delayed the payment of
benefits (i.e., the more than $18,000 that was paid), again, no reasonable jury could
find such delay based on the evidence of record. For example, under the policy,
fungi-related loss or costs were excluded unless there was a covered loss in the first
place, and nothing in the record suggests that Safeco was not diligent in trying to
find a covered loss (i.e., a water source that was not excluded under the policy).
Safeco had an employee inspect the house and even hired two companies (ServPro
and American Leak Detection) to try to pinpoint the source of water. In addition,
Safeco took into account the conclusions of the Moores’ plumber regarding the
source of the water when it issued its initial letter denying the Moores’ claim. It
was not unreasonable for Safeco to conclude, in its denial letter, that the uncapped
roof pipe suggested that there was water accumulation over time, which would
mean exclusion rather than coverage. Furthermore, when the Moores asked Safeco
to reconsider the denial, it did.
Finally, the district court did not err in granting Safeco’s motion for partial
summary judgment on the claim for declaratory relief. As the district court
determined, the Moores lacked standing to pursue the claim or the claim was not
ripe because there was no evidence that the poria in the Moores’ house had spread
7
to any of their neighbors’ homes. See Eureka Fed. Sav. & Loan Ass’n v. Am. Cas.
Co., 873 F.2d 229, 231 (9th Cir. 1989) (stating declaratory relief is appropriate
“[w]here there is such a concrete case admitting of an immediate and definitive
determination of the legal rights of the parties in an adversary proceeding upon the
facts alleged”).
Accordingly, the district court’s summary judgment rulings as to the
foregoing claims are AFFIRMED.
8