Cascade Auto Glass v. Idaho Farm Bureau, 30321.

• Decision Date: 17 June 2005
• Docket Number: No. 30321.,30321.
• Citation: 141 Idaho 660,115 P.3d 751
• Parties: CASCADE AUTO GLASS, INC., Plaintiff-Appellant, v. IDAHO FARM BUREAU INSURANCE COMPANY, Defendant-Respondent.
• Court: Idaho Supreme Court

115 P.3d 751

141 Idaho 660

CASCADE AUTO GLASS, INC., Plaintiff-Appellant, v. IDAHO FARM BUREAU INSURANCE COMPANY, Defendant-Respondent.

No. 30321.

Supreme Court of Idaho, Boise, April 2005 Term.

June 17, 2005.

Baker & Harris, Blackfoot, and Livgard & Rabuse, P.L.L.P., Minneapolis, MN, for appellant. Charles J. Lloyd argued.

Merrill & Merrill, Chtd., Pocatello, for respondent. Stephen S. Dunn argued.

TROUT, Justice.

This is an appeal from an order granting summary judgment in favor of Farm Bureau Mutual Insurance Company of Idaho, Inc. (Farm Bureau) against Cascade Auto Glass, Inc. (Cascade), in an action seeking payments, in excess of those previously made by Farm Bureau, for glass repair and replacement services provided by Cascade to Farm Bureau insureds at various locations in Idaho. The issues presented require an interpretation of the insurance policy language and a determination of whether Farm Bureau met its obligations under the insurance contract.

I. FACTUAL AND PROCEDURAL BACKGROUND

The Farm Bureau policies at issue here generally provide coverage for the repair or replacement of accidental glass breakage on the insureds' vehicles. Each Farm Bureau policy states the amount Farm Bureau is obligated to pay for glass repair or replacement claims. Reduced to its essential language, the applicable policy provision in dispute (described as "Coverage S") states:

Our limit of liability under [the comprehensive coverage in the policy governing automobile glass] ... is:

... (2) The cost of repair or replacement using parts of like kind and quality ... The cost of repair or replacement is based on the cost of repair agreed upon by us or an estimate written based upon the prevailing competitive price. The prevailing competitive price means labor rates, parts, and material prices charged by a substantial number of repair facilities in the area where the insured vehicle is to be repaired.

Pursuant to the policy language quoted above, Farm Bureau establishes the prices it agrees to pay for various glass repair and replacement services in each geographic area in which its insureds receive that service, which prices change from time to time. Each time the prices change, Farm Bureau provides notice of its newly established prices by having its third-party glass claims administrator send a letter to the glass shops, which clearly states the prices Farm Bureau agrees to pay for glass repair or replacement services. Farm Bureau pays all glass shops within the same geographical area at the same rate. Cascade has acknowledged receiving all such letters.

Cascade is a glass replacement and repair company providing people with glass services, some of whom are insured by Farm Bureau. In each instance that Cascade performed a service for a Farm Bureau insured, in lieu of payment for the work from the insured, Cascade obtained an assignment of proceeds in order to receive the money directly from Farm Bureau. After completing the work and receiving the executed assignment, Cascade then submitted its invoices directly to Farm Bureau or one of Farm Bureau's authorized third-party claims processors for processing. At this point, a check was normally sent to Cascade, in the amount Farm Bureau had previously agreed to pay for the services. Cascade routinely submitted invoices for amounts higher than what Farm Bureau had said it would pay. When this occurred, Farm Bureau had the invoice audited and simply made payment to Cascade in the lower amount provided for in the Farm Bureau notices.

Cascade brought an action against Farm Bureau for breach of contract, contending that on over 1,700 submitted invoices, Farm Bureau failed to pay the total amounts due Cascade under the insurance contract which amounted to $257,379.61. The essence of Cascade's complaint is that Cascade provided Farm Bureau's insureds quality glass repair or replacement services with "parts of like kind and quality" and submitted fair and reasonable invoices representing their cost for such services; therefore, Farm Bureau's obligation under the insurance contract was to pay Cascade the full amount of the invoice, without regard to Farm Bureau's determination and notification of what it was willing to pay.

Farm Bureau brought a motion for summary judgment, claiming that Cascade lacked standing to assert these claims and that Farm Bureau had already paid all amounts it was obligated to pay under the insurance policies. As to standing, for 1,647 of the 1,706 invoices in dispute, the district court held that Cascade had standing and could properly assert its claims against Farm Bureau. The court then granted Farm Bureau summary judgment on the remaining issue, finding that Farm Bureau's obligation to pay under the insurance contract was not controlled by the phrase "using parts of like kind and quality." Rather, other modifying language in the policy allowed Farm Bureau, upon giving notice to glass repair shops, to pay only the amount it had previously agreed to pay for these claims. The district court found the insurance policy was not ambiguous and that Farm Bureau had fulfilled its obligations. Cascade timely filed this appeal.

II. STANDARD OF REVIEW

On appeal from the grant of a motion for summary judgment, we review that decision de novo but apply the same standard used by the district court in ruling on the motion. McColm-Traska v. Valley View Inc., 138 Idaho 497, 65 P.3d 519 (2003); Carnell v. Barker Management, Inc., 137 Idaho 322, 48 P.3d 651 (2002). As a general rule, this Court will affirm the judgment "if the pleadings, depositions, 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." I.R.C.P. 56(c); Carnell, 137 Idaho at 327, 48 P.3d at 656. When making its determination, the Court construes all facts in the light most favorable to the nonmoving party. Id.

III. ANALYSIS

A. The Insurance Policy is Unambiguous

In interpreting an insurance policy, "where the policy language is clear and unambiguous, coverage must be determined, as a matter of law, according to the plain meaning of the words used." Clark v. Prudential Property and Cas. Ins. Co., 138 Idaho 538, 541, 66 P.3d 242, 245 (2003) (citing Mutual of Enumclaw Ins. Co. v. Roberts, 128 Idaho 232, 235, 912 P.2d 119, 122 (1996)). "This Court construes insurance contracts in a light most favorable to the insured and in a manner which will provide full coverage for the indicated risks rather than to narrow its protection." Smith v. O/P Transp., 128 Idaho 697, 700, 918 P.2d 281, 284 (1996).

In construing an insurance policy, the Court must look to the plain meaning of the words to determine if there are any ambiguities. Clark, 138 Idaho at 540, 66 P.3d at 244. This determination is a question of law. Trinity Universal Ins. Co. v. Kirsling, 139 Idaho 89, 73 P.3d 102, 105 (2003) (citing DBSI/TRI v. v. Bender, 130 Idaho 796, 802, 948 P.2d 151, 157 (1997)). In resolving this question of law, the Court must construe the policy "as a whole, not by an isolated phrase." Selkirk Seed Co. v. State Ins. Fund, 135 Idaho 434, 437, 18 P.3d 956, 959 (2000). An insurance policy provision is ambiguous if "it is reasonably subject to conflicting interpretations." North Pac. Ins. Co. v. Mai, 130 Idaho 251, 253, 939 P.2d 570, 572 (1997) (citing City of Boise v. Planet Ins. Co., 126 Idaho 51, 55, 878 P.2d 750, 754 (1994)).

If the Court finds any ambiguities in the insurance policy, they must be construed against the insurer. Farmers Ins. Co. of Idaho v. Talbot, 133 Idaho 428, 435, 987 P.2d 1043, 1050 (1999); See also Foremost Ins. Co. v. Putzier, 102 Idaho 138, 627 P.2d 317 (1981) ("......