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Braun-Salinas v. American Family Insurance Group

United States District Court, D. Oregon, Portland Division

April 1, 2014

SONIA BRAUN-SALINAS and SALINAS, husband and wife, and ESTER MACEDO, individually, Plaintiff,
v.
AMERICAN FAMILY INSURANCE GROUP d/b/a AMERICAN FAMILY MUTUAL INSURANCE COMPANY, a foreign business corporation, Defendant.

OPINION AND ORDER

JOHN V. ACOSTA, Magistrate Judge.

Introduction

Plaintiffs Sonia Braun-Salinas ("Braun-Salinas"), Guillermo Salinas ("Salinas"), and Ester Macedo ("Macedo")(collectively "Plaintiffs"), seek payment of $1, 000, 000 under the personal umbrella policy, identified as Policy No. 36-U02919-01 (the "Umbrella Policy"), issued to Salinas and Braun-Salinas by defendant American Family Insurance Group ("American") for injuries sustained by Braun-Salinas and Macedo in a motor vehicle accident, and payment of $100, 000 under the Family Car Policy, identified as Policy No. 1171-2136-02-46-FPPA-OR (the "Car Policy"), also issued to Salinas and Braun-Salinas by American, for loss of consortium suffered by Salinas as a result of the physical injuries to his wife, Braun-Salinas. Additionally, Plaintiffs seek $1, 500, 000 in emotional distress damages. American moves for summary judgment on Plaintiffs' tort-based claims, including claims for intentional infliction of emotional distress, negligent infliction of emotional distress, and negligence per se, as well as Plaintiffs' claims for breach of the implied covenant of good faith and fair dealing and for emotional distress damages based on a breach of contract, and Salinas's claim for loss of consortium.

The court finds that Plaintiffs have failed to establish that American breached its implied duty of good faith and fair dealing, that OR. REV. STAT. 746.230 imposes duties on insurers separate from those found in the policies, or that Salinas's loss of consortium claim is considered a "bodily injury" under the terms of the Car Policy. The court also finds that Plaintiffs have conceded their claims for intentional and negligent infliction of emotional distress and emotional distress damages based on breach of contract. Accordingly, American's motion for partial summary judgment is granted in its entirety.[1]

Background

On January 14, 2011, Braun-Salinas and Macedo were seriously injured in a motor vehicle accident caused by the negligence of Huy Tang Hoang. (First Am. Compl. ("Compl.") ¶¶ 4-5.) On April 12, 2011, Hoang's insurer, Geico Insurance Company, tendered its policy limits of $25, 000 per person, $50, 000 per occurrence, to Braun-Salinas and Macedo. (Nichols Decl. Ex. 2; Compl. ¶ 20.) On October 14, 2011, Braun-Salinas and Macedo made a demand on American for the $100, 000 per person policy limits of the Car Policy pursuant to the underinsured motorist endorsement. (Nichols Decl. Ex. 4.) By November 20, 2011, American confirmed its settlement with Braun-Salinas and Macedo under the Car Policy for the amount of $75, 000 per person, the policy limits less the amounts previously paid by Geico to Braun-Salinas and Macedo. (Nichols Decl. Ex. 5; Compl. ¶ 22.) American recognized a possible claim under the Umbrella Policy and requested records for additional medical treatment provided to Braun-Salinas and Macedo. (Nichols Decl. Ex. 5.)

In a letter dated January 16, 2012, Plaintiffs demanded payment of the $1, 000, 000 policy limits of the Umbrella Policy for the injuries to Braun-Salinas and Macedo. (Nichols Decl. Ex. 6.) On February 9, 2012, American acknowledged the demand, advised Plaintiffs it was reviewing the file, and again requested additional medical information, noting that Braun-Salinas and Macedo were still being treated for their injuries. (Nichols Decl. Ex. 7.) On March 9, 2012, American documented a telephone call with Plaintiffs' counsel in which American explained that it would not make a settlement offer until it received invoices for recent medical treatment provided to Braun-Salinas and Macedo. (Nichols Decl. Ex. 8.)

On May 11, 2012, Plaintiffs advised American by letter that Salinas planned to make a claim against the Car Policy for loss of consortium. (Nichols Decl. Ex. 10.) Additionally, Plaintiffs informed American they had obtained the medical records requested by American and would forward them to American in the near future. (Nichols Decl. Ex. 10.) On June 6, 2012, American denied Salinas's loss of consortium claim, explaining that it "does not fall within the UIM coverage and his claim does not mee[t] the definition of a bodily injury." (Nichols Decl. Ex. 11 at 1.) In doing so, American relied on the provisions of the Car Policy which provide:

We will pay compensatory damages for bodily injury which an insured person is legally entitled to recover from the owner or operator of an underinsured motor vehicle. The bodily injury must be sustained by an insured person and must be caused by accident and arise out of the use of the underinsured motor vehicle.

(Nichols Decl. Ex. 11 at 1; Kocher-Moar Decl. Ex. 1 at AF 18.) The term "bodily injury" is defined in the Car Policy as "bodily injury to or sickness, disease or death of any person." (Nichols Decl. Ex. 11 at 1; Ex. 15 at 2.)

On September 17, 2012, Wade Nielsen informed Plaintiffs that he was now handling their claim file for American and asked for Plaintiff's cooperation to "help accumulate the necessary materials that will ultimately result in timely settlement decisions." (Nichols Decl. Ex. 12.) On December 28, 2012, American advised Plaintiffs that "[b]ased on the policy language there may not be coverage for Ester Macedo under the umbrella policy." (Nichols Decl. Ex. 13 at 1.) On January 10, 2013, Plaintiffs objected to American's preliminary finding of lack of coverage for Macedo, arguing that Macedo is covered both as a user of a motor vehicle and as a domestic employee of the insured under the Umbrella Policy and that American waived any dispute over her coverage by accepting, and settling, her claim under the Car Policy. (Nichols Decl. Ex. 14 at 1-3.) Plaintiffs represented that to date, Braun-Salinas and Macedo had "over $200, 000 in combined medical specials alone" and asserted that based on the resulting injuries, the $1, 000, 000 policy limits of the Umbrella Policy "simply do not compensate my clients for their injuries." (Nichols Decl. Ex. 14 at 3.) Plaintiffs again demanded American settle Braun-Salinas and Macedo's claim for the full policy limits of the Umbrella Policy and advised American that if it failed to settle the claim by January 14, 2013, Plaintiffs would commence litigation and seek attorney fees and litigation expenses. (Nichols Decl. Ex. 14 at 4.) Upon receiving the letter dated January 10, 2013, American offered to settle Braun-Salinas and Macedo's claim under the Umbrella Policy for $200, 000, representing $100, 000 for each claimant. (Nichols Decl. ¶ 15.) Plaintiffs filed this action in Circuit Court of the State of Oregon for the County of Multnomah on January 14, 2013. American removed the action to this court on February 14, 2013.

Legal Standard

Summary judgment is appropriate where 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) (2012). Summary judgment is not proper if material factual issues exist for trial. Warren v. City of Carlsbad, 58 F.3d 439, 441 (9th Cir. 1995).

The moving party has the burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party shows the absence of a genuine issue of material fact, the nonmoving party must go beyond the pleadings and identify facts which show a genuine issue for trial. Id. at 324. A nonmoving party cannot defeat summary judgment by relying on the allegations in the complaint, or with unsupported conjecture or conclusory statements. Hernandez v. Spacelabs Medical, Inc., 343 F.3d 1107, 1112 (9th Cir. 2003). Thus, summary judgment should be entered against "a party who 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, 477 U.S. at 322.

The court must view the evidence in the light most favorable to the nonmoving party. Bell v. Cameron Meadows Land Co., 669 F.2d 1278, 1284 (9th Cir. 1982). All reasonable doubt as to the existence of a genuine issue of fact should be resolved against the moving party. Hector v. Wiens, 533 F.2d 429, 432 (9th Cir. 1976). Where different ultimate inferences may be drawn, summary ...


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