Ribitzki v. American Family

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT
PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
AVANNA ANN RIBITZKI, a single woman,
Plaintiff/Appellant,
v.
AMERICAN FAMILY MUTUAL INSURANCE COMPANY,
Defendant/Appellee.
No. 1 CA-CV 15-0509
FILED 12-22-2016
Appeal from the Superior Court in Maricopa County
No. CV2013-005242
The Honorable Katherine M. Cooper, Judge
AFFIRMED
COUNSEL
Avanna Ann Ribitzki, Scottsdale
Plaintiff/Appellant
Tyson & Mendes LLP, Phoenix
By Lynn M. Allen, JP Harrington Bisceglia
Counsel for Defendant/Appellee
RIBITZKI v. AMERICAN FAMILY
Decision of the Court
MEMORANDUM DECISION
Judge Randall M. Howe delivered the decision of the Court, in which
Presiding Judge Kenton D. Jones and Judge Donn Kessler joined.
H O W E, Judge:
¶1 Avanna Ann Ribitzki appeals from the trial court’s judgment
dismissing her claims against American Family Mutual Insurance
Company and denial of a motion for new trial. For the following reasons,
we affirm.
FACTS AND PROCEDURAL HISTORY
¶2 American Family insured Ribitzki under a homeowner’s
insurance policy that covered loss for personal property. In the event of
loss, the policy required that Ribitzki provide requested records, submit to
an examination under oath, and cooperate with all acts reasonably required
by the policy.
¶3 In November 2010, Ribitzki reported a claim to American
Family for loss of personal property due to a theft that occurred at her
temporary residence. Over the next several months, American Family
requested various documents. Ribitzki provided some documentation, but
delayed providing all the requested documents. American Family
reminded Ribitzki that the policy conditions required cooperation and
advised it could not process her claim without the requested documents.
Ribitzki provided additional documentation.
¶4 While investigating the insured property’s deed, American
Family noticed several discrepancies. American Family sent Ribitzki a
reservation of rights letter advising that “[a]n initial review of your loss has
identified facts which may affect the coverages provided under [the policy].
We are advising you at this time that there is a question whether the
coverage under the policy mentioned above will apply to this loss.” After
further review, American Family sent Ribitzki a letter explaining that
“many discrepancies” existed in her claim and that a “thorough
investigation is being conducted.”
¶5 American Family conducted an examination under oath in
June 2011. Ribitzki stated that upon abuse of questioning tactics, and the
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RIBITZKI v. AMERICAN FAMILY
Decision of the Court
eliciting of no new information, she ended the examination and walked out.
The record and contemporaneous correspondence of American Family,
however, indicates that Ribitzki chose not to proceed with the examination
after she was informed that her friend, the person who reported the theft,
could not attend. Ribitzki stated that she would reschedule the examination
under oath.
¶6 For several months, American Family sent letters requesting
that Ribitzki reschedule the examination under oath. Even after American
Family sent notice to Ribitzki that her claim would be placed on inactive
status for failing to comply with the policy conditions, Ribitzki failed to
reschedule the examination under oath.
¶7 In December 2013, Ribitzki sued American Family alleging
breach of contract and a violation of the covenant of good faith and fair
dealing, and sought punitive damages. American Family moved for
summary judgment pursuant to Arizona Rule of Civil Procedure 56, to
which Ribitzki never responded. The trial court granted American Family’s
motion and entered judgment dismissing all claims against American
Family. Ribitzki moved for a new trial, which the trial court denied. The
trial court noted that Ribitzki’s failure to respond was one basis to grant
summary judgment but that it had also reviewed the entire record and
found no genuine issue of material fact. Ribitzki timely appealed.
DISCUSSION
¶8 Ribitzki argues that the trial court erred by granting American
Family’s motion for summary judgment. Ribitzki does not, however,
challenge the denial of her motion for new trial. We review de novo
whether the trial court properly entered summary judgment. Awsienko v.
Cohen, 227 Ariz. 256, 258 ¶ 7, 257 P.3d 175, 177 (App. 2011). We view the
evidence in the light most favorable to Ribitzki, against whom the trial court
entered judgment. Id.¶9 Summary judgment is proper when “there is no genuine
dispute as to any material fact and the moving party is entitled to judgment
as a matter of law.” Ariz. R. Civ. P. 56(a). The nonmoving party “must set
forth specific facts showing that there is a genuine issue for trial.” Ariz. R.
Civ. P. 56(e). A nonmoving party who chooses to not respond “does so at
his peril because uncontroverted evidence favorable to the movant, and
from which only one inference can be drawn, will be presumed to be true.”
Choisser v. State ex rel. Herman, 12 Ariz. App. 259, 261, 469 P.2d 493, 495
(1970).
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RIBITZKI v. AMERICAN FAMILY
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¶10 Ribitzki argues that the trial court erred by granting summary
judgment as a discovery sanction and for lack of a response. Contrary to
Ribitzki’s argument, the trial court did not grant summary judgment as a
discovery sanction. Moreover, although the trial court cited Ribitzki’s lack
of response as one basis for granting summary judgment, the trial court
stated that it had reviewed the record and found no genuine issue of
material fact. Appellate courts “determine whether the judgment, not the
reasoning, of the trial court was correct.” Picaso v. Tucson Unified Sch. Dist.,
217 Ariz. 178, 181 ¶ 9, 171 P.3d 1219, 1222 (2007).
¶11 Breach of a cooperation clause is a defense to a claim for
breach of contract “if the insurer has been substantially prejudiced
thereby.” Clark Equip. Co. v. Ariz. Proper. & Cas. Ins. Guar. Fund, 189 Ariz.
433, 442, 943 P.2d 793, 802 (App. 1997). Although Ribitzki argues that the
evidence on the cooperation issue presented a factual dispute, because she
failed to respond to the Rule 56 motion, no factual dispute was before the
trial court. Because the policy requires submission to an examination under
oath and the undisputed record before the trial court shows Ribitzki’s
failure to comply therewith thwarted American Family’s ability to assess
the claim, the trial court properly granted summary judgment to American
Family based on Ribitzki’s breach of the cooperation clause. See Warrilow v.
Super. Ct., 142 Ariz. 250, 255, 689 P.2d 193, 198 (App. 1984) (holding that the
insured’s refusal to answer questions during the examination under oath
constituted a breach of contract and barred recovery on the claim).
¶12 As for Ribitzki’s claim for violation of the covenant of good
faith and fair dealing, an insurer that “intentionally denies, fails to process
or pay a claim without a reasonable basis for such action” breaches the
implied duty of good faith it owes to its insured. Regal Homes, Inc. v. CNA
Ins., 217 Ariz. 159, 170 ¶ 48, 171 P.3d 610, 621 (App. 2007). The insurer may
challenge claims that are “fairly debatable” without acting in bad faith. Id.¶13 The record before us is not clear whether American Family
was required to pay on Ribitzki’s claim, and no objective evidence shows
any unreasonable delay in processing Ribitzki’s claim. American Family
presented evidence—which, again, Ribitzki failed to refute—that it made
reasonable efforts to process the claim, placed the claim on inactive status
due to Ribitzki’s failure to comply, and advised it would reopen the claim
if Ribitzki complied. The record is devoid of any evidence that American
Family ever formally denied Ribitzki’s claims before Ribitzki filed suit.
Ribitzki cannot fail to comply with policy conditions, then complain that
American Family breached its contractual duty of good faith and fair
dealing and acted in bad faith when American Family could not adequately
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RIBITZKI v. AMERICAN FAMILY
Decision of the Court
assess its liability in the absence of Ribitzki’s cooperation. Ribitzki identifies
no evidence suggesting that American Family acted unreasonably under
these circumstances. In the absence of any evidence of bad faith, the trial
court properly granted summary judgment on the bad faith claim. Because
Rbitiski’s bad faith claim presents no genuine issue of material fact, we need
not consider American Family’s statute of limitations argument.
¶14 Relying on Robinson v. Higuera, Ribitzki next argues that she
was denied due process because an evidentiary hearing was required. See
157 Ariz. 622, 760 P.2d 622 (App. 1988). Robinson, however, discussed
default judgment, not summary judgment. Id. at 625, 760 P.2d at 625. Here,
no default judgment occurred. Instead, the trial court reviewed the entire
record and granted summary judgment on the merits.
¶15 Finally, because Ribitzki’s claims for breach of contract and
bad faith fail, the trial court properly dismissed her request for punitive
damages. See Saucedo ex rel. Sinaloa v. Salvation Army, 200 Ariz. 179, 185–86
¶ 21, 24 P.3d 1274, 1280–81 (App. 2001) (holding that the claimant could not
recover punitive damages in the absence of recovery of actual damages).
¶16 American Family requests attorneys’ fees incurred on appeal
pursuant to A.R.S. § 12–341.01. We grant its request and will award
reasonable fees upon timely compliance with Arizona Rule of Civil
Appellate Procedure 21.
CONCLUSION
¶17 For the foregoing reasons, we affirm.
AMY M. WOOD • Clerk of the Court
FILED: AA
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