Aetna Cas. and Sur. Co. v. Superior Court In and For County of Maricopa
| Decision Date | 30 March 1989 |
| Docket Number | CA-SA,No. 1,1 |
| Citation | 778 P.2d 1333,161 Ariz. 437 |
| Parties | The AETNA CASUALTY AND SURETY COMPANY, a Connecticut corporation, Petitioner, Cross-Real Party in Interest, v. SUPERIOR COURT of the State of Arizona, In and For the COUNTY OF MARICOPA, Honorable William P. Sargeant III, a judge thereof, Respondent Judge, Tina GORDINIER, Real Party in Interest, Cross-Petitioner. 88-266. |
| Court | Arizona Court of Appeals |
Petitioner, The Aetna Casualty and Surety Company, ("the insurance company") has filed this special action petition seeking review of the trial court's denial of its motion for summary judgment on Tina Gordinier's ("the plaintiff") breach of contract and bad faith claims against it. The insurance company contends that as a matter of law its conduct cannot constitute bad faith because it had a reasonable basis for denying coverage, as evidenced by the fact that two Arizona courts agreed with the insurance company that the plaintiff was not covered under the policy.
The plaintiff/cross-petitioner has requested review of the trial court's denial of her motion to compel production of documents.
On January 10, 1989, we entered an order accepting jurisdiction and granting relief to the insurance company on the bad faith issue. This opinion sets forth the reasons for our order.
Plaintiff and her husband purchased insurance for their car. Plaintiff's husband was the "named insured" on the policy. Both plaintiff and her husband were listed as covered drivers. The policy contained provisions that limited coverage to the named insured, the spouse if residing in the same residence, any family member residing in the same residence as the named insured, and any person occupying a covered vehicle. Thus plaintiff was covered by the policy as long as she lived in the same residence as her husband or the accident involved the covered vehicle.
After the policy was issued plaintiff and her husband separated. Thereafter, the policy was renewed and another vehicle was added by endorsement. Plaintiff was subsequently involved in an accident while riding on an uninsured motorcycle belonging to a friend. The other vehicle involved in the accident was underinsured.
Plaintiff made a claim on the policy under its uninsured and underinsured provisions. Agents of the insurance company investigated her claim by speaking with her husband, his mother, and an eyewitness to the accident, as well as reviewing the police report regarding the accident. The insurance company agents did not attempt to speak with the plaintiff. The insurance company denied plaintiff's claim on the grounds that she was not a covered person under the policy because she did not reside with the named insured.
After denial of coverage plaintiff filed an action against the insurance company alleging bad faith and breach of contract, among other claims. The trial court granted the insurance company's motion for summary judgment, finding that the plaintiff was not a covered person under the policy. Plaintiff appealed from that judgment. This court, Division 2, affirmed the summary judgment entered by the trial court. 154 Ariz. 262, 742 P.2d 273. On review, the supreme court reversed the court of appeal's decision, finding that a factual question existed as to the plaintiff's reasonable expectations regarding her coverage by the policy. 154 Ariz. 262, 742 P.2d 277.
After the supreme court issued its opinion in the matter, and without awaiting a trial on the merits of the factual question found by the supreme court, the insurance company paid to plaintiff the policy limits on both the uninsured and underinsured provisions of the policy. The insurance company then moved for summary judgment on the plaintiff's remaining claims. The plaintiff moved to compel production of the insurance company's entire claims file. The trial court granted the insurance company's motion for summary judgment as to all of the claims except for the breach of contract claim and the bad faith claim. The court denied the plaintiff's motion to compel production of documents.
We generally decline to accept jurisdiction over cases seeking review of orders denying summary judgment. United States v. Superior Court In and For Maricopa County, 144 Ariz. 265, 697 P.2d 658 (1985). However, we will accept jurisdiction when the question presented is a pure issue of law which can be decided at this stage of the litigation and when our decision will terminate the litigation. Id.; Lim v. Pima County Superior Court, 126 Ariz. 481, 616 P.2d 941 (App.1980). We accept jurisdiction in this case because the primary issue presented, whether the conduct of the insurance company can constitute bad faith, is purely an issue of law which can be decided without additional proceedings. Additionally, our decision will limit further extended litigation in this already protracted legal proceeding.
The plaintiff contends that the insurance company acted in bad faith by failing to adequately investigate her claim before it denied coverage. The plaintiff correctly notes that an incomplete pre-denial investigation of an insured's claim can expose the insurance company to liability for bad faith. See Rawlings v. Apodaca, 151 Ariz. 149, 160, 726 P.2d 565, 576 (1986). She argues that the question of whether the insurance investigation was adequate or was an act of bad faith is a disputed issue of fact and therefore summary judgment is not appropriate.
An insurance company's failure to adequately investigate only becomes material when a further investigation would have disclosed relevant facts. Pace v. Insurance Co. of North America, 838 F.2d 572, 584 (1st Cir.1988) (); see also Blue Cross And Blue Shield of Alabama v. Granger, 461 So.2d 1320, 1325 (Ala.1984) (...
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