Northland LLC v. Contractors Bonding & Insurance Company
| Decision Date | 17 May 2022 |
| Docket Number | Case No. 4:21-cv-00281-DCN |
| Citation | 603 F.Supp.3d 933 |
| Parties | NORTHLAND LLC, an Idaho limited liability company, and Kayla Briggs, an individual, Plaintiffs, v. CONTRACTORS BONDING & INSURANCE COMPANY, Defendant |
| Court | U.S. District Court — District of Idaho |
Austin D. Huff, Idaho Consumer Law Firm, Idaho Falls, Leland Faux, Leland Faux, Esq. PLLC, Idaho Falls, ID, for Plaintiffs.
Anne E. Henderson, Duke Evett, PLLC, Boise, Keely E. Duke, Duke Evett, PLLC, Boise, ID, for Defendant.
Pending before the Court are the parties’ competing Motions for Summary Judgment (Dkts. 10, 11) as well as Defendant Contractors Bonding & Insurance Company's ("Contractors Bonding") Motion to Strike (Dkt. 16).
The Court held oral argument on February 4, 2022, and took the motions under advisement. Upon review, and for the reasons outlined below, the Court DENIES the Motion to Strike, DENIES Northland's Motion for Summary Judgment, and GRANTS Contractors Bonding's Motion for Summary Judgment.
In their Complaint (Dkt. 1-2), Plaintiffs, Northland, LLC, and Kayla Briggs (collectively "Northland"), bring three causes of action against Contractors Bonding: (1) breach of contract; (2) insurance bad faith; and (3) declaratory relief. Id. at 4–5. On July 1, 2021, Contractors Bonding removed the instant action to federal court. Dkt. 1.
As will be outlined in greater detail below, the purpose of this lawsuit is to determine whether, under the language of an insurance policy, Contractors Bonding should have defended Northland in two other lawsuits and whether Contractors Bonding is liable for the underlying damages at issue in those lawsuits.
As a matter of contract interpretation, the parties brought early cross-motions for summary judgment. Dkts. 10, 11. In support of its response to Contractors Bonding's Motion for Summary Judgment (Dkt. 14), Northland included the declaration of Kayla Briggs (Dkt. 14-1). Contractors Bonding subsequently moved to strike portions of that declaration. Dkt. 16.
The Court held oral argument regarding all motions on February 4, 2022, and took the matters under advisement.
Northland is a limited liability company, doing business as an "interior carpentry contractor." Dkt. 10-2, at 5. Contractors Bonding is an insurance company.
Northland entered into an insurance policy with Contractors Bonding, effective on February 1, 2019, under policy number G11FE0317 (the "Policy"). Relevant here, the Policy includes commercial general liability coverage and inland marine property coverage.
Northland rented shop space at 11084 N. Moonbeam Drive, Ucon, Idaho. On or about September 28, 2019, a fire started in the shop space and consumed the premises.
Contractors Bonding investigated the fire and paid Northland for certain damages and claims. During the course of the investigation, Northland notified Contractors Bonding of two complaints naming Northland and/or Kayla Briggs as defendants.
The first complaint, filed on December 19, 2019, was brought by Brad and Heather Ball against James Palmer1 and Kayla Briggs, doing business as Northland, LLC. This case was filed in Idaho state court (the "Ball Complaint").
The second complaint was filed on December 12, 2019, in California state court. In that case, a company—Balboa Capital Corporation—sued Northland, Kayla Briggs, and James Palmer (the "Balboa Complaint").
After reviewing both complaints, Contractors Bonding determined there was no coverage under the Policy for the acts, omissions, or damages claimed by those parties against Northland and/or Briggs. Contactors Bonding issued a letter to Northland explaining its analysis and why it would be denying coverage as to the Ball and Balboa Complaints.
Northland disagreed with Contractors Bonding's assessment and filed this lawsuit, seeking a declaratory judgment that Contractors Bonding is contractually obligated to defend it in the Ball and Balboa Complaints and is liable for the underlying damages each complainant seeks.
Summary judgment is appropriate where the moving party can show that, as to any claim or defense, "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). The Court must enter summary judgment if a party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). One of the principal purposes of the summary judgment rule "is to isolate and dispose of factually unsupported claims or defenses." Id. It is not "a disfavored procedural shortcut," but is instead the "principal tool[ ] by which factually insufficient claims or defenses [can] be isolated and prevented from going to trial with the attendant unwarranted consumption of public and private resources." Id. at 327, 106 S.Ct. 2548.
"The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (emphasis in original). Material facts are those "that might affect the outcome of the suit under the governing law." Id. at 248, 106 S.Ct. 2505. Summary judgment is not appropriate "if the dispute about a material fact is ‘genuine,’ that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.
The Court's role at summary judgment is not "to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson , 477 U.S. at 249, 106 S.Ct. 2505. The Court does not make credibility determinations at this stage of the litigation, as such determinations are reserved for the trier of fact. Hanon v. Dataproducts Corp. , 976 F.2d 497, 507 (9th Cir. 1992). In considering a motion for summary judgment, the Court must also "view[ ] the facts in the non-moving party's favor[.]" Zetwick v. Cty. of Yolo , 850 F.3d 436, 441 (9th Cir. 2017).
However, the Court need not accept allegations by the non-moving party if such allegations are not supported by sufficient evidence. Anderson , 477 U.S. at 249, 106 S.Ct. 2505. Instead, the nonmoving party "must go beyond the pleadings and by its own evidence ‘set forth specific facts showing that there is a genuine issue for trial.’ " Far Out Productions, Inc. v. Oskar , 247 F.3d 986, 997 (9th Cir. 2001) (quoting Fed. R. Civ. P. 56(e) ); Keenan v. Allan , 91 F.3d 1275, 1279 (9th Cir. 1996) (). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson , 477 U.S. at 249–50, 106 S.Ct. 2505 (cleaned up).
The standard applicable to motions for summary judgment does not generally change if the parties file cross motions. See, e.g. , Cady v. Hartford Life & Accidental Ins. , 930 F. Supp. 2d 1216, 1223 (D. Idaho 2013). However, the Court must evaluate each party's motion on its own merits. Fair Housing Council of Riverside Cty., Inc. v. Riverside Two , 249 F.3d 1132, 1136 (9th Cir. 2001).
"It is well settled that a federal court exercising diversity jurisdiction must apply substantive state law." Am. Triticale, Inc. v. Nytco Servs. Inc., 664 F.2d 1136, 1141 (9th Cir. 1981) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) ). Per Idaho law, when an insurance policy has language that "is clear and unambiguous, coverage must be determined as a matter of law, according to the plain meaning of the words used." Farm Bureau Mut. Ins. Co. v. Eisenman , 153 Idaho 549, 286 P.3d 185, 188 (2012). In interpreting an insurance policy, Idaho courts look to the plain meaning of the words to determine if there are any ambiguities. Cascade Auto Glass, Inc. v. Idaho Farm Bureau Ins. , 141 Idaho 660, 115 P.3d 751, 754 (2005). A provision within an insurance policy is ambiguous if "it is reasonably subject to conflicting interpretations." North Pac. Ins. Co. v. Mai, 130 Idaho 251, 939 P.2d 570, 572 (1997) (citing City of Boise v. Planet Ins. Co., 126 Idaho 51, 878 P.2d 750, 754 (1994) ). Whether a contract is ambiguous is a question of law. Trinity Universal Ins. Co. v. Kirsling, 139 Idaho 89, 73 P.3d 102, 105 (2003). As the Idaho Supreme Court has explained:
To determine if an insurance policy is ambiguous, the general rules of contract law are applied subject to certain special canons of construction. These rules include looking at the plain language of the policy and reading the provisions within the context in which they occur in the policy. Additionally, unless contrary intent is shown, common, non-technical words are given the meaning applied by laymen in daily usage—as opposed to the meaning derived from legal usage—in order to effectuate the intent of the parties.
Scout, LLC v. Truck Ins. Exch. , 164 Idaho 593, 434 P.3d 197, 204 (2019) (cleaned up). The burden is on the insurer to use clear and precise language if it desires to restrict the scope of its coverage. Id. If a policy term or provision is ambiguous, it is to be construed liberally, in favor of recovery, with all ambiguities being resolved against the insurer. Id. Ambiguities are resolved against the insurer because "insurance policies are contracts of adhesion, not subject to negotiation between the parties." Id. (citing Moss v. Mid-Am. Fire & Marine Ins. Co. , 103 Idaho 298, 647 P.2d 754, 756 (1982) ).
In a situation, such as here, where a motion to strike...
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