United States District Court, D. Oregon
OPINION AND ORDER
JOHN V. ACOSTA, Magistrate Judge.
Lucille Beck ("Beck") and Metropolitan Property and Casualty Insurance Company ("Metropolitan") disagree over the amount Metropolitan must pay Beck pursuant to her insurance policy for the loss of her home from a 2011 fire. After attempts to reach agreement on an amount to be paid failed, Beck sued Metropolitan to recover the actual cash value ("ACV") of her home in accordance with the policy's coverage. Beck does not allege bad faith against Metropolitan, and Metropolitan does not contend Beck's loss is not covered under her policy. The sole dispute in this case is how much money Metropolitan must pay Beck under the insurance contract for the loss of her home.
The parties' instant dispute arises from Metropolitan's motion to amend its answer to add seven new affirmative defenses. The seven proposed defenses are based on Metropolitan's theory that in August 2012 the paities settled all or pait of their dispute over the amount Beck should receive for the loss to her home. Beck opposes Metropolitan's motion. Because Metropolitan unduly delayed raising the proposed defenses and seeks to add defenses which are futile, and because Beck would be unduly prejudiced at this point if Metropolitan is allowed to add the new defenses, Metropolitan's motion to ainend is denied.
In December 2011, a fire occurred at and destroyed Beck's home. The day after the fire, Beck filed a claim for loss with Metropolitan, her insurer. On January 4, 2012, Beck asked her long-time attorney, Clai·ence Greenwood ("Greenwood"), to negotiate a resolution of her claim. (April 14, 2014, Declai·ation of Clarence Greenwood ("First Greenwood Deel.") (Dkt. 24) at ¶ 2). Greenwood initially attempted to resolve Beck's claim with Metropolitan, which efforts resulted in Metropolitan tendering $347, 786.34 on February 29, 2012, to compensate Beck for the dainage to her house. (July 2, 2014, Declaration of Andrew Reilly ("First Reilly Decl.")(Dkt. No. 50) at ¶ 5.) Beck rejected that amount as sufficient to resolve her claim.
On March 2, 2012, Andrew Reilly ("Reilly"), one of Greenwood's law partners, retained the services of general contractor Harry Shook ("Shook"), of Partners, Inc., to prepare estimates on the scope and expense of the repairs necessary to rebuild Beck's home. Specifically, Reilly retained Shook "to assist us with the preparation and presentation of Ms. Beck's fire loss claim at her residence[.]" (March 2, 2012, letter of Andrew Reilly to Hany Shook ("Reilly Letter") at 1.) Ultimately, on March 27, 2012, Shook estimated the cost to repair Beck's home at $565, 327.00. (Declaration of Spencer Funk ("Funk Deel.") (Dkt. No. 37) at ¶ 3.)
Metropolitan assigned one of its adjusters, Spencer Funk ("Funk"), to prepare a separate estimate of Beck's loss. Metropolitan also hired Andy McCabe ("McCabe") of McBride Construction to assist Funk in that effort. At the end of March 2012, Funk inspected Beck's house and estimated the cost to repair Beck's house at $428, 000.00. (Funk Deel. at ¶ 2.) McCabe, however, prepared a scope of repairs that estimated the cost at $520, 144.44. (First Reilly Deel. at ¶ 5.)
On August 28 and 29, 2012, Shook, Funk, and McCabe met at Beck's damaged home to review and discuss the estimates. (Funk Deel. at ¶ 5.) In preparation for the meeting, Reilly emailed Funk to explain that Shook was beingmade available "to have a sit down' to discuss his scope and bid." (July 23, 2014, Declaration of Andrew Reilly ("Second Reilly Decl.")(Dkt. No. 68), Ex 1 at 2.) Atthe two-day meeting, Funk, McCabe, and Shook did a room-by-room review of the house and attempted to negotiate changes to Shook's estimate. (Funk Deel. at ¶ 5.) On the afternoon of August 29, Greenwood and Beck anived at the property to review the progress Shook and Funk had made. (Funk Deel. at¶ 6.) According to Funk, Greenwood was "impatient about arriving at a final estimate expense number, " but Funk explained that he, McCabe, and Shook had just finished reviewing the scope of repairs and still needed to revise 300 line-items before the estimate was finalized. (Funk Deel. at ¶ 6.) Funk agreed to assist Shook by making the agreed-upon changes to the Shook estimate. Funk revised the estimate and sent it to Shook who, upon receiving the new estimate, called Funk to advise that Shook "planned to meet with more general contractors to inspect the site and review the estimate... prior to his meeting with Mr. Greenwood on September 12, 2012." (Funk Deel. at ¶ 8.)
In a September 18, 2012, email to Funk, Greenwood acknowledged his receipt of the new estimate and requested a written synopsis of changes Funk and Shook made to the estimate, which Greenwood referred to as a "redline document." (July 23, 2014, Declaration of Clarence Greenwood ("Second Greenwood Deel.") (Dkt. No. 67), Ex. 1 at 4-5.) Greenwood explained that, in its non-annotated form, the estimate "leaves [him] to either hunt and peck through two documents (or more) to discern what the suggested negotiated changes [Metropolitan] is requesting... or prepare [his] own redline of the [Metropolitan] requested changes" before he could advise Beck. (Second Greenwood Deel., Ex. 1 at 5.) According to Greenwood, the redline document was indispensable because "to settle the home loss [he] need[ ed] to understand the changes [Metropolitan] is proposing and go over the changes with the owner of the home." (Second Greenwood Deel., Ex. 1 at 5.) Greenwood concluded by noting that he "would like to continue the negotiation and settlement process with the agreement in place that if settlement does not result, anything said or done in this negotiation process will not be used as evidence by either party later on in the process." (Second Greenwood Deel., Ex. 1 at 5.)
Funk replied via a letter sent September 21, 2012, in which he explains that he and Shook "agreed on each and every line item, " but disagreed about "the interpretation of the results." (Second Greenwood Deel., Ex. 1 at 1.) Funk stated that he, McCabe, and Shook all agreed on an estimate of $434, 041.62, but Shook no longer had permission to talk with him about the estimate and, "short of some compelling argument to the contrary, " he considered his role in the negotiations concluded. (Second Greenwood Deel., Ex.1 at 2.) Finally, Funk warned Greenwood that Beck had "a duty to secure an agreed figure per the estimate prior to initiating" construction to restore her home. (Second Greenwood Deel., Ex.1 at 2) (emphasis original.)
Greenwood emailed Funk on September 28, 2012, after receiving and reviewing Funk's September 21 letter. (Second Greenwood Deel., Ex. 2 at 1.) In Greenwood's email, he confirmed that the parties "are still in the process of negotiating a settlement of the home fire loss...." (Second Greenwood Deel., Ex.2 at 1.) He also renewed his request for Funk to rewrite the estimate in "redlined fotmat" which would succinctly explain the changes made to the nearly 300 revised line-items. (Second Greenwood Deel., Ex.2 at 1.)
In anticipation of an October 19, 2012, conference call between Funk, Greenwood, Shook, Beck, and one of Beck's sons, Greenwood sent Funk a letter on October 18 "as a continuation of the efforts to negotiate and settle the fire loss damage to the home." (Second Greenwood Deel., Ex.3 at 1.) Greenwood outlined areas of disagreement that he and Beck had with the revised estimate. Notably, the parties differed in the cost of: (1) masonry, steel components, and the fireplace; (2) insulation; (3) light fixtures; (4) permitting fees; (5) finish carpentry; and (7) labor. (Second Greenwood Deel., Ex.3 at 2-3.) Greenwood also outlined the following "open items" for which he reserved Beck's right to request reimbursement:
(a) The floors on the second floor remain open on the issue of whether they need to be replaced;
(b) The library walls and ceiling remain open as to the condition and repair;
(c) Heat, vent, and ducting will remain open as to the type of and size of replacement furnace and costs of installation;
(d) There is an open issue regarding any other conditions that may be discovered once the ...