Carter v. Geico Direct
| Decision Date | 16 October 2007 |
| Docket Number | CV. No. 07-00140 DAE-LEK. |
| Citation | 520 F.Supp.2d 1212 |
| Parties | Michell CARTER, formerly known as Michell Powell, Plaintiff, v. GEICO DIRECT, also known as Government Employees Insurance Company, and/or Geico General Insurance Company, and/or Geico Indemnity Company, and/or Geico Casualty Company, Defendants. |
| Court | U.S. District Court — District of Hawaii |
James Ireijo, Cool, CA, for Plaintiff.
Ewing M. Martin, III, Kathy K. Higham, Kessner Duca Umebayashi Bain & Matsunaga, Honolulu, HI, for Defendants.
ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
On October 15, 2007, the Court heard Defendants' Motion for Summary Judgment. Kathy K. Higham, Esq., appeared at the hearing on behalf of Defendants; James Ireijo, Esq., appeared at the hearing on behalf of Plaintiff. After reviewing Defendants GEICO Direct, also known as Government Employees Insurance Company, and/or GEICO General Insurance Company, and/or GEICO Indemnity Company, and/or GEICO Casualty Company's (collectively, "GEICO" or "Defendants") Motion for Summary Judgment and the supporting and opposing memoranda, the Court GRANTS Defendants' Motion for Summary Judgment.
On March 22, 2003, Jeffrey and Michell Powell (collectively, "the Powells") made an Underinsured Motorist ("UIM") demand through counsel for benefits from GEICO in the amount of $50,000.00 or for the full UIM coverage if that amount was incorrect.1 The demand letter also "forewarned" GEICO that the Powells contemplated surgical expenses and warned GEICO that a failure to make payment in a timely manner would constitute bad faith and that GEICO would be liable in full for its failure to pay. Moreover, the Powells indicated that they would seek arbitration should GEICO decide not to pay the full UIM policy. On March 31, 2003, six business days later, GEICO responded to the letter, through Sylvia Domingo, the Claims Examiner, providing that GEICO "neither accept[ed] nor reject[ed] such demand as [it] had inadequate information." The letter further stated:
Part of our obligation as an insurer is to fully investigate any claim presented. Because your client is making a claim on their Underinsured Motorists Coverage, we are under an obligation to request independent documentation which supports your client's claim.
In order to properly evaluate your client's claim, we are requesting additional documentation, not limited to the following:
• documentation from Ms. Powell's employer on the reasons she lost her job and date of her termination. This documentation should also include some information from her employer indicating why Ms. Powell was not offered Cobra or some other form of medical insurance once her employment was terminated.
• documentation on the Powell's intent to purchase a home.
• Dr. Ebesugawa's notation recommending surgery and the type of surgery being performed.
(Emphasis added.) Approximately two days later, GEICO sent a letter to the Powells' counsel providing that "the UIM limit of the Powells' policy stands at 50/100 × 2 vehicles." The Powells did not submit any supporting documentation for their claims.
Despite the failure to submit any of the requested documentation, the Powells, through counsel, made a demand for arbitration in a letter dated April 11, 2003, stating that GEICO's April 2, 2003 letter providing the Powells' policy limit was "unresponsive." In response, GEICO, through Ms. Domingo, sent a letter to the Powells' counsel, clarifying that the purpose of GEICO's April 2, 2003 letter was to notify the Powells that the UIM coverage on their policy was different than that suggested, per the Powells' request. GEICO further noted,
GEICO's UIM Hawaii Family Automobile Insurance Policy ("UIM policy") provides, in pertinent part:
ARBITRATION
Except as set forth in the last sentence of this paragraph, any dispute arising between any insured and us regarding:
(a) the extent to which the insured is legally entitled to recover against an owner or operator of an uninsured motor vehicle (i.e., issues of liability); or
(b) the amount of damages sustained by the insured
may be arbitrated. ...
We will be obligated to pay no more than the applicable policy limits for this coverage regardless of whether an arbitration results in an award in excess of the applicable policy limits for this coverage as defined in this policy.
Unless otherwise required by state law, the method, manner and format of any arbitration process will be subject to agreement by you and us. ...
The Powells and GEICO agreed to a single arbitrator to resolve the dispute concerning the UIM claim and, on February 23, 2005, the arbitrator awarded $84,317.00 to the Powells. After deducting the "collision loss deductible" and the sum of $20,000.00, which was the amount that the bodily injury insurer for the adverse driver paid, GEICO paid Plaintiff the sum of $54,317.00. On March 15, 2005, Defendants, through counsel, sent a letter to Plaintiffs counsel, enclosing a Satisfaction of Arbitration Award document and a draft in the amount of $54,317.00. In that letter, counsel noted, "[t]he draft is not to be negotiated until the Satisfaction of Arbitration Award has been executed by all parties and returned to us." The Satisfaction of Arbitration Award was executed on March 18, 2005, which also was the date on which the draft was deposited.
Dissatisfied with the way in which GEICO handled Plaintiffs claims, on March 16, 2007, Plaintiff filed a Complaint against GEICO for tortious breach of contract and bad faith denial of insurance benefits or, in other words, breach of the implied covenant of good faith and fair dealing. On August 27, 2007, Defendants filed the instant motion for summary judgment, which Plaintiff opposed on September 21, 2007. On October 3, 2007, Defendants filed a reply.
Rule 56 requires summary judgment to be granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Porter v. California Dept. of Corrections, 419 F.3d 885, 891 (9th Cir.2005); Addisu v. Fred Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir.2000). A main purpose of summary judgment is to dispose of factually unsupported claims and defenses. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
Summary judgment must be granted against a party that fails to demonstrate facts to establish what will be an essential element at trial. See id. at 323, 106 S.Ct. 2548. A moving party without the ultimate burden of persuasion at trial — usually, but not always, the defendant — has both the initial burden of production and the ultimate burden of persuasion on a motion for summary judgment. Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir.2000). The burden initially falls upon the moving party to identify for the court those "portions of the materials on file that it believes demonstrate the absence of any genuine issue of material fact." T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir.1987) (citing Celotex Corp., 477 U.S. at 323, 106 S.Ct. 2548).
Once the moving party has carried its burden under Rule 56, the nonmoving party "must set forth specific facts showing that there is a genuine issue for trial" and may not rely on the mere allegations in the pleadings. Porter, 419 F.3d at 891 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). In setting forth "specific facts," the nonmoving party may not meet its burden" on a summary judgment motion by making general references to evidence without page or line numbers. S. Cal. Gas Co. v. City of Santa Ana, 336 F.3d 885, 889 (9th Cir.2003); Local Rule 56.1(f) (). "[A]t least some `significant probative evidence'" must be produced. T.W. Elec. Serv., 809 F.2d at 630 (quoting First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 290, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968)). "A scintilla of evidence or evidence that is merely colorable or not significantly probative does not present a genuine issue of material fact." Addisu, 198 F.3d at 1134.
When "direct evidence" produced by the moving party conflicts with "direct evidence" produced by the party opposing summary judgment, "the judge must assume the truth of the evidence set forth by the nonmoving party with respect to that fact." T.W. Elec. Serv., 809 F.2d at 631. In other words, evidence and inferences must be construed in the light most favorable to the nonmoving party. Porter, 419 F.3d at 891. The court does not make credibility determinations or weigh conflicting evidence at the summary judgment stage. Id. However, inferences may be drawn from underlying facts not in dispute, as well, as from disputed facts that the judge is required to resolve in favor of the nonmoving party. T.W. Elec. Serv., 809 F.2d at 631.
Defendants argue that Plaintiffs claims are time-barred under Hawaii Revised Statutes ("Haw.Rev.Stat.") § 431:10C-315(a)'s two-year statute of limitations. Moreover, Defendants assert that, as a matter of law, they did not breach any terms of the UIM policy or deny insurance benefits in bad faith. That is so because, Defendants argue, the UIM policy provides for arbitration to resolve disputes over the...
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