Forsman v. United Fin. Cas. Co.

• Decision Date: 21 August 2013
• Docket Number: No. CV 12–157–M–DWM.,CV 12–157–M–DWM.
• Citation: 966 F.Supp.2d 1091
• Parties: Valerie FORSMAN and Lloyd Gruber, individually and on behalf of themselves and all others similarly situated, Plaintiffs, v. UNITED FINANCIAL CASUALTY COMPANY, Progressive, and Does 1–25, Defendants.
• Court: U.S. District Court — District of Montana

966 F.Supp.2d 1091

Valerie FORSMAN and Lloyd Gruber, individually and on behalf of themselves and all others similarly situated, Plaintiffs,

v.UNITED FINANCIAL CASUALTY COMPANY, Progressive, and Does 1–25, Defendants.

No. CV 12–157–M–DWM.

United States District Court,

D. Montana,

Missoula Division.

Aug. 21, 2013.

Alan J. Lerner, Evan F. Danno, Lerner Law Firm, Kalispell, MT, Judah M. Gersh, Viscomi Baraban & Gersh, Whitefish, MT, for Plaintiffs.

Amy O. Duerk, Robert J. Phillips, Phillips Haffey P.C., Missoula, MT, Casie D. Collignon, Paul G. Karlsgodt, Baker & Hostetler, Denver, CO, for Defendants.

ORDER

DONALD W. MOLLOY, District Judge.

I. Introduction

On March 30, 2012, Plaintiffs Valerie Forsman and Lloyd Gruber (collectively “Plaintiffs”) filed their Complaint and Class Action Claims against United Financial Casualty Company and Progressive ¹ (collectively “Defendants”), alleging that Defendants breached their automobile insurance contracts and violated Montana's “made whole” doctrine by denying their collision claims after they were in automobile accidents with at-fault third parties whose insurers paid for Plaintiffs' damages. Pursuant to Federal Rule of Civil Procedure 12(c), Defendant United Financial Casualty Company (“United Financial”) moves for judgment on the pleadings as to Plaintiffs' claims. (Doc. 20.) Plaintiffs move for partial summary judgment, (doc. 15), and, in response, United Financial has filed for 56(d) relief, (doc. 27). United Financial's 12(c) motion is well-taken, so it is granted. United Financial's Rule 56(d) motion is therefore denied as moot. Plaintiffs' motion for partial summary judgment is also denied.

II. Background

A. Factual Background

Plaintiffs allege they each carried collision coverage with United Financial when they were each involved in automobile accidents with at-fault, third-party drivers. (Compl., doc. 5, ¶¶ 3–4.) Plaintiff Forsman alleges her accident damaged her automobile in an amount exceeding $10,000 and Plaintiff Gruber alleges his accident damaged his automobile in an amount exceeding $1,100. ( Id.) According to the Complaint, the damage to Plaintiffs' respective automobiles “was paid by the at-fault driver's insurance company” in settlement. ( Id.)

Both Plaintiffs allege they made claims under their respective collision coverage with United Financial, and their claims were denied pursuant to the “duplicate recovery” provision under the collision coverage of the policy, which provides:

Payments for loss covered under Collision Coverage, a Comprehensive Coverage, Fire and Theft with Combined Additional Coverage are subject to the following provisions:

* * * * * *

c. duplicate recovery for the same elements of damages is not permitted.

( Id.) Plaintiffs allege that neither of them were compensated for all of their damages and costs of recovery (including attorneys fees) by settlement with the at-fault insurers. ( Id. at ¶ 5.)

The relevant provision regarding what is included under the policies' Collision Coverage states: “Subject to the Limits of Liability, if you pay the premium for Collision Coverage, we will pay for loss to your insured auto and its equipment when it collides with another object or overturns.” (Doc. 21–2, Ex. 2 at 14.)

B. Procedural Background

On March 20, 2012, Plaintiffs filed their Complaint and Class Action Claims in the Montana Eleventh District, Flathead County. On September 13, 2012, the case was removed to federal court. On January 25, 2013, Plaintiffs filed a Motion for Partial Summary Judgment, (doc. 15), and United Financial filed a 12(c) Motion for Judgment on the Pleadings, (doc. 20). On March 1, 2013, United Financial filed a Rule 56(d) motion, requesting this Court permit it to conduct discovery related to Plaintiffs' partial summary judgment motion to the extent the Court considers or relies on facts concerning whether Plaintiffs were “made whole” under Montana law or whether they subjectively expected to receive coverage. (Doc. 27).

III. Legal Standards

A. Rule 12(c)

A Rule 12(c) motion for judgment on the pleadings is the functional equivalent of a Rule 12(b)(6) motion to dismiss for failure to state a claim, except it is filed after the answer. See Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 n. 4 (9th Cir.2011). Accordingly, the Court must “inquire whether the complaint's factual allegations, together with all reasonable inferences, state a plausible claim for relief.” Id. A facially plausible complaint “pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 676, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). In considering the motions, the Court “must accept all factual allegations in the complaint as true and construe them in the light most favorable to the non-moving party.” Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir.2009). However, a court is not required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences. Sprewell v. Golden St. Warriors, 266 F.3d 979, 988 (9th Cir.2001). “Judgment on the pleadings is properly granted when there is no material fact in dispute, and the moving party is entitled to judgment as a matter of law.” Fleming, 581 F.3d at 925.

B. Rule 56(d)

Federal Rule of Civil Procedure 56(d) provides: “If a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may: (1) defer considering the motion or deny it; (2) allow time to obtain affidavits or declarations or to take discovery; or (3) issue any other appropriate order.” The party seeking a continuance bears the burden to show what specific facts it hopes to discover that will raise an issue of material fact. Contl. Maritime of S.F., Inc. v. Pac. Coast Metal Trades Dist. Council, Metal Trades Dept., AFL–CIO, 817 F.2d 1391, 1395 (9th Cir.1987). A court's decision whether or not to grant 56(d) relief is reviewed for abuse of discretion. Tatum v. City & Co. of S.F., 441 F.3d 1090, 1100 (9th Cir.2006).

C. Summary Judgment

“The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis of its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Material facts are those which might affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable fact-finder to return a verdict for the nonmoving party. Id.

IV. Analysis

A. Rule 12(c) Motion

1. This Court may properly consider the insurance policy and attached orders without converting United Financial's 12(c) motion for judgment on the pleadings into a motion for summary judgment.

“Judgment on the pleadings is limited to material included in the pleadings.” Yakima Valley Memorial Hosp. v. Wash. St. Dept. of Health, 654 F.3d 919, 925 n. 6 (9th Cir.2011). However, in ruling on a 12(c) motion, the Court may consider—in addition to the complaint—“documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007). A document “may be incorporated by reference into a complaint if the plaintiff refers extensively to the document or the document forms the basis of the plaintiff's claim.” United States v. Ritchie, 342 F.3d 903, 908 (9th Cir.2003). The Court's decision to incorporate documents in the complaint by reference is reviewed for abuse of discretion. Davis v. HSBC Bank Nev., N.A., 691 F.3d 1152, 1160 (9th Cir.2012).

Here, the insurance policy and its language form the basis of Plaintiffs' claims and, as such, meets the requirements for a document incorporated by reference. Similarly, the Court may take judicial notice of attached orders. As a result, this Court may consider those documents without converting United Financial's 12(c) motion into a motion for summary judgment.

2. Attorneys fees and costs are not recoverable under the policies' Collision Coverage.

Plaintiffs first contend their claims were improperly denied absent recovery for attorneys' fees and costs. United Financial contends Plaintiffs' claims were properly denied on the grounds that attorneys' fees and costs of recovery are not covered under Plaintiffs' collision policies because they are not sudden, direct, and accidental loss or damage, nor are they damage to any auto described on Plaintiffs' Declarations Pages.

Montana follows the general rule “that a party in a civil action is not entitled to attorney fees absent a specific contractual or statutory provision.” Mt. W. Farm Bureau Mut. Ins. Co. v. Brewer, 315 Mont. 231, 69 P.3d 652, 655 (2003). An exception to this rule, however, may be found if an insurer breaches is obligation to defend an insured. Id.

Here, Defendants did not breach its duty to defend. Rather, Plaintiffs pursued recovery from the insurance companies of the at-fault drivers and then approached their own insurance company, Defendants, to ask for recovery for the expenses of that endeavor. Although Montana has recognized recovery for attorneys' fees and costs in the first instance, it has not in the second.

Plaintiffs made their claims in this case under their Collision Coverage, which state: “Subject to the Limits...