State Farm Mutual Auto. Ins. v. Shelbie Frounfelter

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUL 31 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
STATE FARM MUTUAL AUTOMOBILE No. 17-35313
INSURANCE COMPANY; STATE FARM
FIRE AND CASUALTY COMPANY, D.C. No. 3:16-cv-05242-BHS
foreign insurers,
Plaintiffs - Appellees, MEMORANDUM *
v.
SHELBIE FROUNFELTER, a single
person,
Defendant,
and
SERGIO MORELOS, individually and the
marital community comprised thereof;
ROSA MORELOS, as administratrix of the
Estate of M. Rosario Chacon-Cisneros,
Defendants - Appellants.
Appeal from the United States District Court
for the Western District of Washington
Benjamin H. Settle, District Judge, Presiding
Argued and Submitted July 13, 2018
Seattle, Washington
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: CLIFTON and NGUYEN, Circuit Judges, and BATTAGLIA, ** District
Judge.
Sergio Morelos and Rosa Morelos (the “Morelos”) appeal the district court’s
orders granting summary judgment in favor of State Farm Mutual Automobile
Insurance Company and State Farm Fire and Casualty Company (individually and
collectively, “State Farm”). We have jurisdiction under 28 U.S.C. § 1291, and we
affirm.
1. We review a district court’s summary judgment orders de novo,
considering the evidence in the light most favorable to the non-moving party.
Fresno Motors, LLC v. Mercedes Benz USA, LLC, 771 F.3d 1119, 1125 (9th Cir.
2014). “Summary judgment is appropriate where ‘there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.’” Id.(quoting Fed. R. Civ. P. 56(a)).
2. The district court did not err in granting summary judgment in favor of
State Farm on the issue of coverage. The Morelos claim coverage under two
insurance policies issued to Defendant Shelbie Frounfelter’s father, Michael Webb.
But Webb’s policies define “insured” as persons or relatives who “reside
primarily” with the named insured or whose “primary residence” is with the named
insured. It is undisputed that Frounfelter primarily lived with her mother, Lisa
**
The Honorable Anthony J. Battaglia, United States District Judge for
the Southern District of California, sitting by designation.
2
Siler, at the time of the accident giving rise to the Morelos’ claims. Therefore, the
district court did not err in concluding that Frounfelter was not an insured under
Webb’s policies.
3. The Morelos cite no authorities supporting their claim that the district
court’s reading of the term “insured” in Webb’s policies violates Washington
public policy. “In general, a contract which is not prohibited by statute,
condemned by judicial decision, or contrary to the public morals contravenes no
principle of public policy.” State Farm Gen. Ins. Co. v. Emerson, 102 Wash. 2d
477, 481 (1984) (citation omitted). The cases the Morelos cite reflect a different
public policy: “full compensation for innocent victims of automobile accidents.”
Safeco Ins. Co. of Ill. v. Automobile Club Ins. Co., 108 Wash. App. 468, 475
(2001). But Frounfelter was not an innocent victim of an automobile accident.
Rather, a jury found that she acted negligently in causing the Morelos’ harm.
4. Finally, the district court did not err in granting summary judgment on
the Morelos’ bad faith claim. Even if State Farm breached a duty of good faith and
fair dealing to Frounfelter by failing to produce Webb’s policies in pre-litigation
negotiations, there is no evidence that the breach resulted in any harm. “[A]
showing of harm is an essential element of an action for bad faith handling of an
insurance claim.” Safeco Ins. Co. of Am. v. Butler, 118 Wash. 2d 383, 389 (1992).
3
Without a showing of harm, the Morelos’ bad faith claim fails. 1
AFFIRMED.
1
The Morelos argue that “there is a presumption of harm once an insured
establishes that the insurer acted in bad faith.” Werlinger v. Calrendon Nat’l Ins.
Co., 129 Wash. App. 804, 809–10 (2005) (citing Butler, 118 Wash. 2d at 391).
But this presumption is rebuttable. Id. Because the case continued to a jury
verdict even after Webb’s policies were disclosed a few weeks after the lawsuit
was filed, and there is no reason to assume things might have proceeded differently
with earlier disclosure, the facts demonstrate that no harm resulted from the lack of
disclosure.
4