Shirley v. Allstate Ins. Co.
| Citation | 392 F.Supp.3d 1185 |
| Decision Date | 12 August 2019 |
| Docket Number | Case No.: 3:18-cv-0994-AJB-BGS |
| Parties | Jensen SHIRLEY and Karen Shirley, Plaintiffs, v. ALLSTATE INSURANCE CO., Defendant. |
| Court | U.S. District Court — Southern District of California |
Kenneth N. Greenfield, Law Offices of Kenneth N. Greenfield, San Diego, CA, for Plaintiff.
John D. Edson, Sheppard, Mullin, Richter & Hampton, LLP, San Diego, CA, for Defendant.
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
During the Lilac Wildfire, Plaintiffs Jensen and Karen Shirley were evacuated from their home. After returning, they filed a claim with their home insurance company, Defendant Allstate Insurance Company, for damages related to the wildfires. Allstate now moves for summary judgment arguing there is no evidence showing any damage to the Shirleys' home. In fact, four expert reports state as much. The Shirleys attempt to defeat the summary judgment motion by providing little contrary evidence and hypothetical questions contesting Allstate's investigation. However, the Shirleys cannot win with rhetoric. Because they failed to show there is a triable issue of material fact, the Court GRANTS Allstate's motion. (Doc. No. 23.)
Plaintiffs' breach of contract and breach of implied convenient and fair dealing case concerns alleged damage done to their home from the 2017 Lilac Fire. (Doc. No. 1-3 ¶ 7.) After evacuating their home, Plaintiffs allege "the entire interior of the home, and all of its contents, were severely smoke damaged." (Id. ¶ 7.) Plaintiffs filed a claim with Allstate for damages, which was later denied. (Id. ¶¶ 8–9.)
Defendants argue despite multiple stages of expert testing show no physical smoke damage, soot, ash, or char, was found in the Shirleys' home, justifying their denial of Plaintiffs' insurance claim. Plaintiffs dispute this, asserting that Allstate purposely narrowed the search of their home to soot, ash, and char in order to deny their claim. Plaintiffs also claim Allstate failed to test their furniture, clothing, or outside landscaping for damage as well.
Summary judgment is appropriate under Federal Rule of Civil Procedure 56 if the moving party demonstrates the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A fact is material when, under the governing substantive law, it could 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 is genuine if a reasonable jury could return a verdict for the nonmoving party. Id. A party seeking summary judgment bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex Corp. , 477 U.S. at 323, 106 S.Ct. 2548.
The moving party can satisfy this burden in two ways: (1) by presenting evidence that negates an essential element of the nonmoving party's case; or (2) by demonstrating the nonmoving party failed to establish an essential element of the nonmoving party's case on which the nonmoving party bears the burden of proving at trial. Id. at 322–23, 106 S.Ct. 2548. If the moving party carries its initial burden, the burden of production shifts to the nonmoving party to set forth facts showing a genuine issue of a disputed fact remains. Id. at 330, 106 S.Ct. 2548. When ruling on a summary judgment motion, the court must view all inferences drawn from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
The Shirleys' complaint brings two causes of action for breach of contract and breach of implied covenant of good faith and fair dealing. (Doc. No. 1-3 at 5–6.) The Shirleys also request punitive damages. (Id. at 7.) Allstate moves for summary judgment on the two causes of action and the punitive damages request.
There are two issues regarding the breach of contract claim. First, Allstate argues they did not breach the contract because no expert found evidence of wildfire contamination in the home. Second, Allstate argues the Shirleys never submitted a claim for landscaping damages, and although they try to improperly raise it later in the proceedings, it does not create a triable issue of material fact and the Court should grant summary judgment regarding these issues as well.
Allstate asserts Plaintiffs have the burden of establishing "an event is a claim within the scope of basic coverage." (Doc. No. 23-1 at 16 (quoting City of Vernon v. Southern Cal. Edison Co. , 955 F.2d 1361, 1365 (9th Cir. 1992) ).) Here, Allstate argues that means "the Shirleys had the burden in establishing that ‘physical loss to the property,’ defined as ‘physical injury to or destruction of tangible property, including loss of its use resulting from such physical injury or destruction.’ " (Id. at 17.) Allstate further asserts that under their insurance policy, the Shirleys "cannot meet that burden by alleging the existence of smoke ‘vapors, fumes’ and ‘contaminants or pollutants.’ " (Id. )
Here, Allstate states of the four different experts who ran tests on the Shirleys' home, none found evidence their home suffered "ash or soot contamination from the wildfire." (Id. ) Several people—hired by both parties—inspected the home. The Shirleys hired several people to assist them with their insurance claim. First, they hired Marc Gross, an adjuster. Gross then hired Bill Hersum, a remediation contractor. The Shirleys also hired an environmental consulting firm, VERT Environmental. David Kelly, a VERT representative, inspected the property. Allstate, as a part of their internal process, sent an adjuster to inspect the Shirleys' home, Andrew Ansardi. Allstate later hired an expert, RiskNomics LLC, to inspect the home after litigation commenced.
Yet, of all the hired experts, no one found any wildfire contamination was present in the Shirleys' home. Working for the Shirleys, EMSL Analytical analyzed materials VERT sent them and found no wildfire contamination. VERT's report initially supported the Shirleys' allegations that there were wildfire contaminants in their home. It stated VERT found char damage indicative of "a combustion by-product," "as well as opaque dark particles (categorized as burnt rubber), and concluded by "confirm[ing] the presence of smoke contamination within the property." (Doc. No. 23-4, Exhibit 2, 35–37). However, both Missy Waldman—VERT's employee who sent the email to Marc Gross with the purported findings—and Nathan Borsheim—the president of VERT—contradicted these initial findings.
First, as to the char damage, Borsheim testified that he could not confirm that the two percent char finding came from the Lilac fire. (Borsheim Depo., Doc. No. 23-11 at 26.) Second, as to the burnt rubber, both Borsheim and Waldman confirmed the burnt rubber finding was a mistake. (Borsheim Depo. at 25.) Burnt rubber is usually associated with combustion by-products, (id. ), thus its presence would be indicative of wildfire contamination. However, Borsheim testified that the lab report erred and Waldman confirmed she mis-typed. (Id. ) The correct finding was "rubber dust." (Id. )
Third, as to the soot and ash, VERT never confirmed there was ash or soot inside the Shirleys' home. (Borsheim Depo. at 20.) Regarding the Shirleys' claims regarding wildfire odor, Waldman confirmed that VERT never made a finding that any odors were from the wildfire and stated the company does not "do causation." (Waldman Depo., Doc. No. 23-11 at 45.) Finally, regarding VERT's conclusions, Borsheim stated the report sent to Gross and the Shirleys was a "limited preliminary inspection," and not a formal report. (Id. at 16– 17.) Borsheim stated VERT never made a determination whether the wildfire was the cause of the contamination. (Id. at 19.)
Moreover, Ansardi, Allstate's adjuster, found no ash or soot was present in the home, nor did he smell any smoke inside the home. (Andrew Ansardi Decl., Doc. No. 23-14, ¶¶ 4–5.) Hersum, the Shirleys' remediation contractor, also found no evidence of soot or ash, nor did he smell any smoke. (Bill Hersum Depo., Doc. No. 23-11 at 53; 54.) Allstate then hired a new expert, RiskNomics LLC, to inspect the property again. However, they found no evidence of wildfire contamination. (Doc. No. 23-10 at 5–6.) Mr. Shirley admits no expert could find ash or soot in his home. (Jensen Shirley Depo., Doc. No. 23-12 at 149.) After the Shirleys brought this suit, RiskNomics against tested, and again found no contaminants in the home. (Doc. No. 23-13 at 75–130.)
Allstate argues that because no expert could find evidence of wildfire soot or ash contamination in the Shirleys' home, Allstate did not breach its contract with the Shirleys by denying their insurance claim. Thus, Allstate requests the Court grant summary judgment on the breach of contract claim. The Shirleys argue that Allstate "continues to mischaracterize wildfire residue as involving only ‘soot,’ ‘ash,’ and ‘char,’ " when it "includes a wide range of particulate material." (Doc. No. 25 at 16.) The Shirleys charge that Allstate only tested for soot, ash, and char thus they could have never discovered if any other contaminants existed within the home from wildfire. (Id. ) The Shirleys assert Allstate's limiting tests were self-serving and "designed to withhold insurance policy benefits for damage caused by smoke contamination." However, Allstate retorts that Plaintiffs' own expert, Dan Baxter, testified that "the industry standard for determining whether wildfire residue exists requires the use of analytical testing." (Doc. No. 26 at 3.) Further, the Shirleys' never put forth any expert or other testimony challenging Allstate's methods or suggesting what the testing standards should have...
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