Mendoza v. Farmers Insurance Company, No. 22421-0-III (WA 11/22/2005), 22421-0-III
| Decision Date | 22 November 2005 |
| Docket Number | No. 22421-0-III,22421-0-III |
| Court | Washington Supreme Court |
| Parties | ROSA E. MENDOZA, Appellant, v. FARMERS INSURANCE COMPANY OF WASHINGTON, Respondent. |
Appeal from Superior Court of Yakima County. Docket No. 02-2-02444-0. Judgment or order under review. Date filed: 08/29/2003. Judge signing: Hon. Michael W Leavitt.
Counsel for Appellant(s), Rosa E. Mendoza (Appearing Pro Se), 12 South F Street, Toppenish, WA 98948.
Counsel for Respondent(s), Ryan J Hall, Cole Lether Wathen & Leid PC, 1000 2nd Ave Ste 1300, Seattle, WA 98104-1082.
Rick J. Wathen, Cole Lether Wathen & Leid PC, 1000 2nd Ave Ste 1300, Seattle, WA 98104-1082
After her residence was destroyed in a fire, an insured received a check for structural damage from her insurer. She disputed the amount of the loss. The insurer opened an investigation. The insured and others were deposed in an effort to resolve the claim. More than a year after the loss, the insurer denied the claim. The insured filed suit. The trial court granted the insurer's summary judgment motion on the bases that: (1) the insured's claim was time-barred in that the policy required that she file suit within one year of the loss; and (2) the coverage was voided when the insured, through her attorneys-in-fact, misrepresented and/or concealed material facts concerning the claim. The insured appeals the summary dismissal asserting material issues of fact concerning whether the insurer is estopped from asserting a time-bar defense and, whether the statements of others—even if she could be held responsible for them—constituted intentional misrepresentations of fact material to the insurance claim. She also claims the trial court erred by refusing to consider certain materials already on file when it ruled on summary judgment. We agree with each of the insured's contentions and reverse and remand.
Rosa Mendoza bought a house in Moxee, Washington in approximately 1998 for $52,000. In the spring of 2001, she relocated to Virginia to take advantage of an employment opportunity. Rosa2 left her sister, Alma Mendoza, in charge of the house while she was away. Alma and her boyfriend, Jose Garcia, decided to fix the house so it could be rented. They decided to tear down the inside walls, remove the existing sawdust insulation, re-insulate, and replace the inside walls with sheetrock. Jose was in control of this project. He was physically involved but Alma was not.
Jose spoke with Raul Campos about helping out, but Raul ultimately did no work on the house. At some point, Jose told Alma that Raul might do some of the work. Jose began doing the work in his spare time, enlisting the help of friends when he could. Alma sometimes came by to water the lawn and saw people working, and she assumed it was Raul and his son. Rosa was in Virginia and had no personal knowledge of who was performing the work on her house. She understood that Jose was supervising other persons.
On May 6, 2001, about three weeks after Rosa moved to Virginia, a fire occurred at her home. Alma reported the fire to Rosa's insurer, Farmers Insurance Company of Washington, on May 16. Fire officials determined the cause of the fire to be accidental—when sawdust was removed from the walls and scooped off the floors, it became packed into the baseboard heater. Farmers' investigator agreed. Building officials deemed the damage too extensive to repair and ordered that the house be torn down to the foundation. Farmers sent an adjuster who went through the burned rubble with Jose and itemized the personal effects lost in the fire.
Alma and Jose helped Rosa make the following claims under her fire insurance policy: $67,244.65 to rebuild the home, $4,476.71 for tires, and $9,353.98 for stereo equipment and other personal property. After making the claim, Alma and Jose found out that the tires and stereo equipment belonged to Rosa's longtime live-in boyfriend with whom Rosa had two children. They mistakenly assumed that the boyfriend's tires and stereo were covered under the policy.
On June 20, 2001, Farmers paid the personal property claim in the amount of $2,884.90. On July 24, Farmers issued a check to Rosa for the fair market value of the loss to her home in the amount of $21,419.40. Rosa signed a notarized document on July 10, in which she purported to leave Alma `in charge' of her home and with `full responsibility' for any decisions that needed to be made. Clerk's Papers (CP) at 316. Alma, in turn, signed a notarized document on August 15 in which she authorized Jose to `share the rights and authority' in Rosa's property and its reconstruction. CP at 317.
While she acknowledged that her personal property claims had been resolved, Rosa was not satisfied with the amount of the loss on the house and hired counsel in September 2001. Farmers opened an investigation of the claim. Farmers' counsel wrote Rosa, Alma, and Jose, asking for documentation and requesting that they submit to examinations under oath.
Between September 2001 and May 2002, counsel exchanged more than a dozen letters. Virtually every letter addressed to Rosa included an estoppel disclaimer and nonwaiver notice:
You are respectfully advised that Farmers Insurance Company of Washington requires full and complete compliance with all of the terms and conditions of the policy. Farmers Insurance Company of Washington reserves all of its rights and defenses, and no waiver nor estoppel is intended nor should be inferred.
CP at 65-66, 78, 84, 213, 216, 217, 219, 224; see also CP at 96, 100. Farmers also advised that because its investigation was ongoing, it could neither admit nor deny liability.
On October 18, 2001, Rosa asked Farmers for an appraisal. She noted that Farmers' investigation was pushing the policy deadline for repairs within 180 days of loss. Rosa also remarked that even though she had an obligation as the insured under the policy to submit to a deposition, she did not think Alma and Jose would have such a duty. Nonetheless, Alma and Jose voluntarily agreed to cooperate and submit to an examination under oath.
Farmers responded on October 23 that a coverage investigation was being conducted: CP at 65. Farmers also refused to depose Rosa telephonically.
On November 9, Rosa wrote Farmers explaining the relationship between Rosa, Alma, and Jose. She provided a repair bid and designated her appraiser. She then commented, CP at 68. She commented that winter was coming and she needed to secure her house from further damage.
Farmers responded on November 27. It wrote that because its investigation was ongoing, Rosa's request for appraisal was premature. In response to the offer to help, Farmers told Rosa she could provide the documents requested in its September 11 letter and submit to examination under oath. Farmers threatened to close the claim if Rosa did not submit the materials and schedule the depositions within two months.
On December 20, 2001, Rosa responded to each enumerated request in Farmers' September 11 letter. Rosa commented that all of the information could have been provided to the adjuster at the outset if he would have requested it. Rosa enclosed a copy of a complaint and indicated she wished to have it filed and served `if something cannot be resolved during the first week of January, 2002.' CP at 223.
Farmers responded on January 2, 2002 that `In light of the representations you have made in your {letter of December 20, 2001}, Farmers would like to proceed with your client's examination under oath as soon as possible.' CP at 224.
The parties agreed to the particulars for the depositions. On April 4, 2002, Farmers deposed Rosa, Alma, and Jose.
On April 16, Rosa provided Farmers the documents it requested during the depositions. She asked, `Please contact me concerning the next step and where we go from here.' CP at 86. Farmers next responded on April 25 by providing deposition transcripts and correction and signature pages.
Rosa wrote to Farmers on May 8. In reference to Farmers' questions at the depositions, she wrote, CP at 227. In closing she wrote, CP at 227.
Farmers issued another check to Rosa on May 8, 2002, in the amount of $21,419.40 for damage to her house.
On May 18, Farmers' adjuster, Heath Abel, took a recorded statement from Alma. An investigator hired by Farmers also spoke with Alma on May 19.
Finally, on May 22, Farmers wrote Rosa that it was concluding its coverage investigation and would soon provide its findings in writing. Farmers advised that it had never asserted that no claim had been filed.3
On June 25, Farmers advised Rosa that it was denying coverage. The denial was based on a provision precluding coverage when the insured misrepresents or conceals material facts.4 Farmers essentially claimed that the inconsistencies in statements...
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