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Hoffman v. Foremost Signature Insurance Co.

United States District Court, D. Oregon

October 21, 2013

MALINDA HOFFMAN, Plaintiff,
v.
FOREMOST SIGNATURE INSURANCE COMPANY, Defendant

Page 1071

[Copyrighted Material Omitted]

Page 1072

For Malinda Hoffman Plaintiff: R. Scott Taylor, LEAD ATTORNEY, Clinton L. Tapper, Taylor & Tapper, Eugene, OR.

For Foremost Signature Insurance Company, Defendant: Francis J. Maloney, III, Kyle A. Sturm, LEAD ATTORNEYS, Maloney Lauersdorf & Reiner, PC, Portland, OR.

OPINION

Page 1073

OPINION AND ORDER

Michael J. McShane, United States District Judge.

Plaintiff Malinda Hoffman brings this action seeking damages for alleged breach of an insurance policy covering her manufactured home. Both plaintiff and defendant filed motions for summary judgment. This Court has jurisdiction under 42 U.S.C. § 1332. Upon review, defendant's motion for summary judgment (#16) and plaintiff's motion for summary judgment (#23) are GRANTED IN PART and DENIED IN PART.

Page 1074

PROCEDURAL AND FACTUAL BACKGROUND

This action arises out of a claim that plaintiff filed under her Foremost Signature homeowners insurance policy. Plaintiff purchased a manufactured home in Springfield in August 2008 and insured the home with Foremost Signature effective May 4, 2011. Decl. of Kyle A. Sturm 2, May 14, 2013, ECF No. 19-3. Plaintiff filed a petition for bankruptcy on May 10, 2011, which resulted in discharge and closure of the estate on August 15, 2011. In re Malinda Hoffman, No. 11-62267-fra7 (Bankr. D. Or. 2011). On August 18, 2011, plaintiff contacted her insurance agent and requested to increase her policy limits for the manufactured home from $96,000 to $131,000 and for her personal property from $55,000 to $65,000. Def.'s Concise Statement of Material Fact ¶ 17, ECF No. 18. Defendant extended coverage for plaintiff's personal property but not her manufactured home. On August 22, 2011, plaintiff's manufactured home caught on fire and was subsequently determined to be a total loss. Id. at ¶ 19 & 20. Plaintiff submitted a " Proof of Loss" on February 27, 2011 seeking $115,200[1] per dwelling coverage, $9,600 per other structures coverage, $65,000 per personal property coverage, $19,000 per additional living expenses coverage, $5,000 per debris removal coverage, and $9,600 per code upgrade coverage for a total of $223,600. Id. at ¶ 21.

Defendant paid $96,000 toward dwelling coverage, $3,200 toward other structures coverage [payment 13], $65,500[2] toward personal property coverage, $7,678.50[3] toward additional living expenses, and $5,000 toward debris removal [payment 12] for a total of $177,378.50. Id. at ¶ 24; see also infra (Table 1). Plaintiff initially placed a down payment on a " replacement" manufactured home, but later withdrew it. Decl. of Kyle A. Sturm 3, May 14, 2013, ECF No. 19-7. Plaintiff then sought to replace her destroyed manufactured home with an Adair " stick-built" home. Decl. of Kyle A. Sturm 1, May 14, 2013, ECF No. 19-13. Defendant advised plaintiff that the policy did not provide additional replacement cost benefits for a " stickbuilt" home because it was not a new dwelling of like kind and quality per contract. Decl. of Kyle A. Sturm 1, May 14, 2013, ECF No. 19-8. Plaintiff did not replace her manufactured home or any other structures on her property, including a deck, septic pump house and storage shed, as of March 28, 2013. See Decl. of Kyle A. Sturm 3 & 6-7, ECF No. 19-7. Following the fire, plaintiff stayed at a hotel, and then subsequently moved in with her in-laws, who charged her $1,125 per month in rent. Decl. of Malinda Hoffman 1, ECF No. 24-4.

Plaintiff now seeks at least $39,975.65[4] for alleged breach of the insurance policy covering her manufactured home. See infra (Table 1).

Table 1

Coverage

Insurance

Paid

Dwelling

$96,000

$96,000

Replacement Dwelling (20%)

$19,200

$0

Other Structures

$9,600

$3,200

Personal Property

$65,000

$65,500

Additional Living Expenses

$19,200

$7,678.50

Debris Removal

$5,000

$5,000

Ordinance & Law Coverage

$0

Landscape & Miscellaneous

$0

Total

$214,000

$177,378.50

Table 1

Coverage

Sought

Complaint

Dwelling

$0

$0

Replacement Dwelling (20%)

$18,927.65

up to $20,000

Other Structures

$10,600

up to $8,000

Personal Property

[5]*

up to $28,000

Additional Living Expenses

at least $3,048

up to $15,000

Debris Removal

[6]$0

up to $3,000

Ordinance & Law Coverage

$5,400

up to $10,000

Landscape & Miscellaneous

$2,000

up to $2,000

Total

at least $39,975.65

up to $86,000

Page 1075

See Pl.'s Mot. Summ. J. 4, ECF No. 23-1; Pl.'s Resp. to Def.'s Reply to Pl.'s Mot. Summ. J. 14, ECF No. 32; Compl. 3-4, ECF No. 1.

STANDARD OF REVIEW

The court must grant summary judgment if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). An issue of fact is genuine " if the evidence is such that a reasonably jury could return a verdict for the nonmoving party." Villiarimo v. Aloha Island Air., Inc., 281 F.3d 1054, 1061 (9th Cir. 2002) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). The court views the evidence in the light most favorable to the non-moving party. Allen v. City of Los Angeles, 66 F.3d 1052, 1056 (9th Cir. 1995) (citing Jesinger v. Nevada Fed. Credit Union, 24 F.3d 1127, 1130 (9th Cir. 1994)). If the moving party shows that there are no genuine issues of material fact, the nonmoving party must go beyond the pleadings and designate facts showing an issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); see Fed.R.Civ.P. (56)(c).

DISCUSSION

Defendant contends that: (1) plaintiff is judicially estopped from valuing her manufactured home and personal property at higher rates than in her prior bankruptcy proceeding; (2) plaintiff is precluded from " replacement" dwelling coverage because she failed to replace her dwelling with a dwelling " of like kind and quality" within 365 days; (3) plaintiff is precluded from additional " other structure" coverage because she failed to replace and received actual cash value for these other structures; (4) plaintiff is precluded from " ordinance or law" coverage because she did not incur any building ordinance or law expenses; and (5) plaintiff is precluded from additional " personal property" coverage because she received her full policy limit. In response and upon her own motion, plaintiff contends that defendant failed to fully compensate her for adjusted living expenses under the contract and violated its duty of good faith and fair dealing.

I. Judicial Estoppel

Defendant contends that plaintiff's claims for damages resulting from loss of

Page 1076

(a) her manufactured home and (b) her personal property should be limited to the value she provided in her prior bankruptcy proceedings pursuant to Schedule A & B ($1 and $5,000 respectively). This Court may invoke the doctrine of judicial estoppel at its own discretion. New Hampshire v. Maine, 532 U.S. 742, 750, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001) (quoting Russell v. Rolfs, 893 F.2d 1033, 1037 (9th Cir. 1990)).

" Judicial estoppel is an equitable doctrine that precludes a party from gaining an advantage by asserting one position, and then later seeking an advantage by taking a clearly inconsistent position." Hamilton v. State Farm Fire & Casualty Company, 270 F.3d 778, 782 (9th Cir. 2001). In New Hampshire, the Supreme Court indicated that " several factors typically inform the decision whether to apply the doctrine in a particular case." 532 U.S. at 750. " First, a party's later position must be 'clearly inconsistent' with its earlier position." Id. " Second, courts regularly inquire whether the party has succeeded in persuading a court to accept that party's earlier position in a later proceeding would create the perception that either the first or the second court was misled." Id. (internal quotation marks omitted). " A third consideration is whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped." Id. at 751. In enumerating these factors, the Supreme Court held that these factors did " not establish inflexible prerequisites" and that " [a]dditional considerations may inform the doctrine's application in specific factual contexts." Id.

A. Plaintiff's Manufactured Home

Under 11 U.S.C. § 521(1), a " debtor shall file...a schedule of assets and liabilities." See also Hamilton, 270 F.3d at 785 (quoting In re Coastal Plains, 179 F.3d at 207-08) (internal quotation marks omitted) (" The Bankruptcy Code and Rules impose upon the bankruptcy debtors an express, affirmative duty to disclose all assets . . . ." ). Plaintiff listed the value[7] of her manufactured home as $1 under Bankruptcy Schedule A and then subsequently valued her manufactured home at $96,000 or more[8] in her proof of loss claim. Defendant contends that plaintiff's differing positions as to the value of her manufactured home are clearly inconsistent. Defendant's argument is unpersuasive.

First, this Court recognizes that plaintiff, appearing pro se in her bankruptcy petition, is entitled to additional leniency to the extent that her errors were inadvertent.[9] ...


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