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Cottet v. Country Mutual Insurance Co.

United States District Court, D. Oregon

November 9, 2017




         Plaintiffs Gabriel Cottet ("Gabriel") and Katie Cottet ("Katie" and, collectively with Gabriel, the "Cottets") filed this action against their insurer, defendant Country Mutual Insurance Company ("CMI") in the Multnomah County Circuit Court on October 3, 2016. CMI removed plaintiffs' action to this court effective October 26, 2016, on the asserted basis of diversity jurisdiction.

         By and through their complaint, plaintiffs (each, a citizen of Oregon) allege that CMI (a corporation organized under the laws of the State of Illinois and headquartered in Illinois) issued them a homeowners insurance policy (the "Policy") pursuant to which CMI was obliged to provide coverage for damage to plaintiffs' home (the "insured premises") and for damage to plaintiffs' personal property, whether or not such property was located within the insured premises at the time the damage occurred. Plaintiffs further allege that, in November 2015, a fire destroyed a garage located on a parcel of land owned by plaintiffs but separate from and adjoining the insured premises. At the time the fire occurred, the garage contained a large custom-built kiln which was also damaged by the fire. The parties agree that the value of the kiln exceeded the limits of coverage under the Policy. The parties further agree that CMI has paid all amounts due and owing under the Policy for damage to plaintiffs' personal property damaged in the fire other than damage to the kiln, and that the damage to the kiln is covered under the Policy if the kiln is properly characterized as plaintiffs' personal property, but not if the kiln is properly characterized as a fixture of the damaged garage. Thus, the parties' sole dispute is as to the proper characterization of the kiln either as personal property or as a fixture.

         Arising out of the foregoing, plaintiffs allege CMI's liability under Oregon common law for breach of contract and for breach of the implied covenant of good faith and fair dealing, and seek damages in the approximate amount of $260, 000, plus pre-and post-judgment interest, attorney fees, and costs. This court has diversity jurisdiction over plaintiffs' claims pursuant to 28 U.S.C. § 1332, based on the complete diversity of the parties and the amount in controversy.

         Now before the court are plaintiffs' motion (#10) for summary judgment and CMI's cross-motion (#16) for summary judgment. I have considered the motions, oral argument on behalf of the parties, and all of the pleadings and papers on file. For the reasons set forth below, plaintiffs' motion (#10) for summary judgment is denied, and CMI's motion (#16) for summary judgment is granted.


         Summary judgment is appropriate "if 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). A party taking the position that a material fact either "cannot be or is genuinely disputed" must support that position either by citation to specific evidence of record "including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials, " by showing that the evidence of record does not establish either the presence or absence of such a dispute, or by showing that an opposing party is unable to produce sufficient admissible evidence to establish the presence or absence of such a dispute. Fed.R.Civ.P. 56(c). The substantive law governing a claim or defense determines whether a fact is material. See Moreland v. Las Vegas Metro. Police Dep't, 159 F.3d 365, 369 (9th Cir. 1998).

         Summary judgment is not proper if material factual issues exist for trial. See, e.g., Celotex Corp. v. Catrett, 477 U.S. 318, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Warren v. City of Carlsbad, 58 F.3d 439, 441 (9th Cir. 1995). In evaluating a motion for summary judgment, the district courts of the United States must draw all reasonable inferences in favor of the nonmoving party, and may neither make credibility determinations nor perform any weighing of the evidence. See, e.g., Lytle v. Household Mfg., Inc., 494 U.S. 545, 554-55 (1990); Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 150 (2000).

         On cross-motions for summary judgment, the court must consider each motion separately to determine whether either party has met its burden with the facts construed in the light most favorable to the other. See Fed. R. Civ. P. 56; see also, e.g., Fair Hous. Council v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 2001). A court may not grant summary judgment where the court finds unresolved issues of material fact, even where the parties allege the absence of any material disputed facts. See id.


         I. The Parties

         Plaintiffs the Cottets are individual citizens of Oregon. Defendant CMI is a corporation organized under the laws of the State of Illinois and headquartered in Illinois. CMI is engaged in the business of providing insurance, including homeowners insurance, II. Material Facts[1]

         In 1978, plaintiff Gabriel's father, Joel Cottet ("Joel") owned two adjacent lots in N.W. Portland, Oregon. See Declaration (#14) of Gabe Cottet ("Cottet Decl."), ¶¶ 2-3; Declaration (#13) of Mark Lewis ("Lewis Decl"), ¶¶ 3, 5, 6. Joel's residence was located on one of the two lots (now, the insured premises) and he kept a brick pottery kiln of approximately 128 cubic feet in volume in a garage located on the second of the two lots (the "adjoining lot"). See Lewis Decl, ¶ 5.

         In or around 1979, Joel moved the brick pottery kiln from the garage on the adjoining lot to another property he owned, and replaced it with a significantly larger pottery kiln - approximately 1000 cubic feet in volume - that he personally had helped to design. See id., ¶ 7. Cottet Decl., ¶ 3. In order to fit the new kiln onto the adjoining lot, it was necessary for Joel to pour a new, additional 25'x25' concrete pad for the existing garage, and then to build new walls and a roof to enclose the newly added pad and the custom-build kiln. See Lewis Decl., ¶ 8. The new concrete slab was equipped with a trench intended to be used as a flue for a large downdraft-style kiln like the one Joel had designed. See Declaration (#17) of Daniel E. Thenell ("Thenell Decl. I"), ¶ 8, Exh. 4 (Deposition of Gabriel Cottet ("Cottet Depo.")), 38:20 - 39:2, 43:11-17. That flue was connected to a chimney of loose-stacked, unmortared bricks. See Declaration (#12) of Robert Graydon ("Graydon Decl."), ¶j¶ 8, 12. The main structure of the kiln was made of six solid metal plates approximately 10'x10' in area which were welded together with short seam welds each of a few inches in length. See id., ¶ 8. The metal plates were surrounded by metal piping that could be detatched by unscrewing four connectors. See Id. The interior of the kiln was lined with flame-retardant fiber. See Id. The kiln was attached to its power supply with wire nut screws, and attached to the gas utility line with a union joint. See id., ΒΆΒΆ 8-9. ...

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