State Farm Fire & Cas. Co. v. Trumble

• Decision Date: 01 May 1987
• Docket Number: Civ. No. 86-3035.
• Citation: 663 F. Supp. 317
• Court: U.S. District Court — District of Idaho
• Parties: STATE FARM FIRE & CASUALTY COMPANY, Plaintiff, v. Ilene TRUMBLE and Darrell Widman, husband and wife, Defendants.

663 F. Supp. 317

STATE FARM FIRE & CASUALTY COMPANY, Plaintiff, v. Ilene TRUMBLE and Darrell Widman, husband and wife, Defendants.

Civ. No. 86-3035.

United States District Court, D. Idaho.

May 1, 1987.

Michael E. McNichols, Clements Brown & McNichols, Lewiston, Idaho, for plaintiff.

Robert E. Kinney, Orofino, Idaho, for defendants.

ORDER

RYAN, District Judge.

This action was originally filed on April 7, 1986, as a declaratory judgment action. The plaintiff insurer claims that the defendant insured set fire to the dwelling covered by a fire insurance policy issued by plaintiff, and therefore, the fire was not accidental and not covered by the policy. The insurer also claims concealment and/or misrepresentation which, by policy provision, voids the policy. The plaintiff insurer requests that the court declare such to be the case and the policy to provide no coverage.

On October 1, 1986, defendant insureds filed an Answer and Counterclaim. The insureds claim that the fire was, in fact, accidental and that the plaintiff owes an obligation pursuant to the policy, as well as for emotional distress damages and punitive damages. Insureds also counterclaim on a theory of bad faith on the part of the insurer. The insureds demand a trial by jury.

On or about November 17, 1985, a fire destroyed the defendants' dwelling house. At the time, Ilene Trumble was the named insured on fire insurance policy No. 12-23-4453-1. However, Darrell Widman resided in the home as Trumble's common-law spouse.

The fire broke out just before 4:00 a.m. on November 17, 1985. Either on the same day or the next day, in compliance with duties imposed upon the insured, the insurance claim office in Clarkston, Washington, was contacted and a request that a claim be filed and processed was made. As will be discussed more fully below, the insurer began an investigation on November 18, 1985, including the retaining of Investigative Services, Inc., of Hayden Lake, Idaho, who assigned Investigators John Moore and Robert Johnson to the case. Moore conducted a physical investigation of the scene and Johnson conducted interviews. The defendants were interviewed. A sworn statement and proof of loss was submitted on or about December 30, 1985. An oral examination under oath of the defendants took place on March 20, 1986. On March 31, 1986, defendants were advised by plaintiff that the proof of loss submitted on December 30, 1985, could not be accepted. This action was commenced on April 7, 1986.

The plaintiff's Motion for Partial Summary Judgment relates solely to the claim of bad faith brought in defendants' Counterclaim. The issue and the motion appear quite easily decided. As a starting point, the Idaho Supreme Court, on December 29, 1986, in White v. Unigard Mutual Insurance Co., 112 Idaho 94, 730 P.2d 1014 (1986), in a case certified by Judge Callister, definitively recognized a tort action, distinct from an action on the contract, for an insurer's bad faith in handling the claims of an insured. The White court also specifically stated that it would not recognize a private right of action pursuant to Idaho Code § 41-1329. Therefore, the issue presented in this action is whether the counterclaiming insureds can present enough evidence to this court to establish at least an inference of bad faith so as to allow that claim to go to trial.

Plaintiff presents the following evidence to prove that it has diligently processed the claim, refused payment in good faith, and to negate any inference of bad faith. Plaintiff was notified of the fire on the same day of its occurrence, November 17, 1985. Plaintiff commenced its investigation on that date. Plaintiff retained the services of Investigative Services Group, Inc. (ISG), of Hayden Lake, Idaho, on November 17, 1985. Plaintiff states that it is policy to have an independent analysis done of the cause and origin of the fire. ISG assigned John Moore and Robert Johnson to the fire. On November 18, 1985, Moore commenced his investigation at the scene. Johnson interviewed witnesses and prepared an investigative report. Johnson took and recorded statements of defendants on December 4, 1985. Moore's investigation of the fire scene included taking samples to North Idaho College Regional Crime Lab for testing.

The conclusion of Moore's report states that some type of liquid accelerant was employed to set the fire as flammable materials similar in composition to gasoline and paint or lacquer thinner were discovered and shown in test results. It was also admitted by the defendants that they were the only two persons in the dwelling when the fire occurred. An examination of the defendants was taken under oath on March 20, 1986, after being rescheduled from February 19, 1986. Soon thereafter, this action was filed.

Plaintiff maintains that the above facts conclusively show that it has acted in good faith and upon the reasonable belief that the fire was not accidentally caused. Plaintiff further maintains that it has the legal right to invoke the jurisdiction of this court by filing a declaratory judgment action to determine issues raised by the facts of the case. Plaintiff claims that it is conceptually impossible for an insurer to be guilty of bad faith when it promptly exercises its rights to have a court of law determine the rights of the parties to an insurance contract.

In opposition, the defendants have submitted the affidavit of Bailey H. Reynolds, who also conducted an investigation of the fire scene. Mr. Reynolds' affidavit delineates the steps and procedures he used to investigate the scene and his conclusions. Reynolds concludes that the fire started as a result of a small grease fire which occurred in the kitchen at 1:30 a.m. on November 17, 1985. Defendants maintain that a small grease fire occurred while cooking pork chops, which was put out by baking soda. Defendants retired to bed and later the house was engulfed in flames. Bailey concludes that the grease fire caused smoldering behind built-in cupboards near the stove which eventually combusted into flame. Bailey asserts that the report completed by Moore neither investigated nor eliminated the possibility of fire starting in the kitchen which would be consistent with the facts and which causes Moore's report to be incomplete. Furthermore, Reynolds discusses at length the various flammable liquids which were located in the house and in the garage which may account for...