Brenner v. Hanover Insurance Company, No. 4:2014cv05099 - Document 26 (E.D. Wash. 2015)
Court Description: ORDER DENYING MOTION FOR SUMMARY JUDGMENT, denying 11 Motion for Summary Judgment. Signed by Chief Judge Rosanna Malouf Peterson. (LR, Case Administrator)
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Brenner v. Hanover Insurance Company Doc. 26 1 2 3 4 5 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 6 7 MARK BRENNER, NO: 4:14-CV-5099-RMP Plaintiff, 8 v. ORDER DENYING MOTION FOR SUMMARY JUDGMENT 9 10 11 HANOVER INSURANCE COMPANY, Defendant. 12 13 Before the Court is Defendant’s Motion for Summary Judgment, ECF No. 14 11. The Court has reviewed the motion, Plaintiff’s response, Defendant’s reply, 15 and the supporting documents. The Court is fully informed. 16 BACKGROUND 17 On October 7, 2013, Plaintiff, Mark Brenner (“Brenner”), learned that 18 sewage was backing up into his place of business. ECF No. 14, Ex. 1 at 2. 19 Plumbers were hired who unsuccessfully attempted to remove any blockage from 20 ORDER DENYING MOTION FOR SUMMARY JUDGMENT ~ 1 Dockets.Justia.com 1 the sewer pipe using a plumber’s snake and a high-pressure water jet system. ECF 2 No. 14, Ex. 1 at 2. 3 On or about October 17, 2013, Brenner realized that inexpensive options 4 would not resolve the issue and contacted his insurance agent at The Partners 5 Group. ECF No. 14, Ex. 1 at 2. On the same day, the agent notified Defendant, 6 Hanover Insurance Company (“Hanover”), Brenner’s insurer, about the claim. See 7 ECF No. 13 at 1. Kathy Gleason, a property adjuster for Hanover, called Brenner 8 on October 18 and 21 to discuss the claim. ECF No. 13 at 1, 2. 9 Meanwhile, Brenner hired Roto-Rooter to repair the problem. ECF No. 18 10 at 2. The repair required the excavation of a substantial amount of earth because 11 the sewer pipes were buried approximately 15 to 20 feet below ground. ECF No. 12 14, Ex. 1 at 3. The project was completed near the end of October 2013. ECF No. 13 14, Ex. 1 at 3. 14 On October 24, 2013, Brenner returned Ms. Gleason’s telephone calls and 15 informed her that the repair work had been completed. ECF No. 13 at 2. Brenner 16 stated that he did not know the cause of the pipe break. See ECF No. 13 at 2. 17 Brenner sent Ms. Gleason a copy of the repair invoice from Roto-Rooter, which 18 also did not explain the cause of the pipe break. See ECF No. 13, Ex. 3. 19 Ms. Gleason states that she discussed the repair with John Door, a 20 representative from Roto-Rooter, and that he told her that seven feet of sewer line ORDER DENYING MOTION FOR SUMMARY JUDGMENT ~ 2 1 were missing. ECF No. 13 at 3. According to Ms. Gleason’s account of what Mr. 2 Door said, the building’s sewer line never had been connected to the city’s line. 3 ECF No. 13 at 3. Hanover wrote to Brenner on November 18, 2013, to inform him 4 that “[t]he policy would not provide coverage to access and install a run of line that 5 never existed.” ECF No. 13, Ex. 4 at 1. 6 7 8 9 10 On January 16, 2014, Roto-Rooter sent a letter to Hanover with a different explanation of the cause of the damage: In our professional opinion the pipe had to have been damaged and pulled apart in some other way from an unknown source. This could have been done from other work being performed in the proximity of this pipe such as other utilities being installed or even ground movement. The exact reason for the damage cannot be determined, however deterioration and the lack of original piping can be ruled out. 11 ECF No. 13, Ex. 5. Hanover thereafter sent Brenner a new letter denying 12 coverage, this time on the basis of policy exclusions for earth movement and 13 negligent work. ECF No. 13, Ex. 6. 14 Brenner’s counsel then sent a letter to Hanover, arguing in part that an 15 additional endorsement in Brenner’s policy covered the loss. ECF No. 13, Ex. 7. 16 In response, Hanover repeated its prior grounds for denying coverage and added 17 that Brenner materially had breached the policy conditions by not providing 18 Hanover the opportunity to inspect the damaged pipe. ECF No. 13, Ex. 8. No 19 damaged sections of pipe were saved, and although Hanover was given pictures 20 that Roto-Rooter had taken during the repair, Hanover contends that the pictures do ORDER DENYING MOTION FOR SUMMARY JUDGMENT ~ 3 1 not depict the section of pipe that allegedly was broken. See ECF Nos. 13, Ex. 8; 2 25 at 2; 18, Exs. A-G. 3 Brenner filed this action in Benton County Superior Court, seeking relief 4 including a declaratory judgment stating that the policy covers his insurance claim. 5 ECF No. 14, Ex. 1 at 1, 6. Hanover removed the action to this Court. ECF No. 1. 6 ANALYSIS 7 Hanover contends that summary judgment is appropriate because none of 8 the proposed theories for the damage would be covered by Brenner’s policy and 9 because the claim is barred by the absence of any physical evidence showing 10 damage to the sewer pipe. ECF No. 11. Brenner responds that the cause of the 11 damage and whether the damage is covered by the insurance policy remain 12 disputed issues of material fact. ECF No. 17. 13 Summary Judgment Standard 14 Summary judgment is appropriate when there is no genuine dispute as to any 15 material fact and the moving party is entitled to judgment as a matter of law. Fed. 16 R. Civ. P. 56(a). The moving party bears the initial burden of demonstrating the 17 absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 18 317, 323 (1986). 19 The party asserting the existence of an issue of material fact must show 20 “‘sufficient evidence supporting the claimed factual dispute . . . to require a jury or ORDER DENYING MOTION FOR SUMMARY JUDGMENT ~ 4 1 judge to resolve the parties’ differing versions of the truth at trial.’” T.W. Elec. 2 Serv. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987) (quoting 3 First Nat’l Bank v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968)). 4 nonmoving party “may not rely on denials in the pleadings but must produce 5 specific evidence, through affidavits or admissible discovery material, to show that 6 the dispute exists.” Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 7 1991). In deciding a motion for summary judgment, a court must construe the 8 evidence and draw all reasonable inferences in the light most favorable to the 9 nonmoving party. T.W. Elec. Serv., 809 F.2d at 630-31. 10 The The Court applies state law to the interpretation of insurance policies, which 11 are construed as contracts. State Farm General Ins. Co. v. Emerson, 102 Wn.2d 12 477, 480 (1984).1 Washington courts apply a two-step process to determine 13 1 14 When exercising diversity jurisdiction, federal district courts apply the choice of 15 law rules of the forum state. Fields v. Legacy Health Sys., 413 F.3d 943, 950 (9th 16 Cir. 2005). Washington state courts interpret parties’ rights under an insurance 17 policy according to the law of the state with the most significant contacts with the 18 policy. Dairyland Ins. Co. v. State Farm Mut. Auto. Ins. Co., 41 Wn. App. 26, 30- 19 31 (1985). The parties refer to Washington law. The Court agrees that 20 Washington law governs. ORDER DENYING MOTION FOR SUMMARY JUDGMENT ~ 5 1 whether insurance coverage exists. McDonald v. State Farm Fire & Cas. Co., 119 2 Wn.2d 724, 731 (1992). “The insured must show the loss falls within the scope of 3 the policy’s insured losses. To avoid coverage, the insurer must then show the loss 4 is excluded by specific policy language.” Id. Insurance policies are interpreted in 5 accordance with how they would be understood by an average person. Nat’l Union 6 Fire Ins. Co. of Pittsburgh, Pa. v. Zuver, 110 Wn.2d 207, 210 (1988). 7 Hanover asserts that there is no genuine dispute that Brenner’s policy does 8 not cover damage caused by either of the two proffered theories: that the damage 9 resulted from worker negligence or ground movement. ECF No. 11 at 16-19. 10 However, the record does not establish definitively what caused the damage. 11 According to Hanover, Roto-Rooter first stated that the building’s line never had 12 been connected, and the subsequent letter from Roto-Rooter indicates that the 13 company had not ascertained the cause of the damage. ECF Nos. 13 at 3; 13, Ex. 14 5. Hanover alternatively contends that summary judgment is appropriate because 15 the true cause of the damage cannot be determined, in light of Roto-Rooter’s 16 statement to that effect. However, while stated opinions may be evidence of the 17 cause of the damage and whether the cause can be determined, such statements 18 certainly do not resolve the issues beyond legitimate dispute.2 19 2 20 to rely on Roto-Rooter’s letter to defeat the motion for summary judgment, while Curiously, Hanover objects that it would be an improper use of hearsay evidence ORDER DENYING MOTION FOR SUMMARY JUDGMENT ~ 6 1 Hanover also argues that summary judgment is appropriate because of the 2 policy’s exclusion from coverage of loss or damage to property “where there is no 3 physical evidence to show what happened to the property . . . .” ECF No. 11 at 20 4 (emphasis omitted). Although no damaged pipe was produced for Hanover’s 5 inspection, the fact that Brenner’s property was damaged is undisputed, and 6 7 8 also basing its motion in part on the truth of Roto-Rooter’s statement that the cause 9 of the damage cannot be determined. ECF No. 25 at 6 n.2; see also ECF No. 25 at 10 4-5 (“Plaintiff’s own statements and arguments that causation cannot be 11 determined supports preclusion of coverage pursuant to the above unambiguous 12 policy provisions.”). On a motion for summary judgment, the Court considers 13 whether the substance of the proffered evidence could be admissible at trial, not 14 whether evidence would be admissible in its current form. Fraser v. Goodale, 342 15 F.3d 1032, 1036 (9th Cir. 2003) (“At the summary judgment stage, we do not 16 focus on the admissibility of the evidence’s form. We instead focus on the 17 admissibility of its contents.”). Although statements as presented in Roto-Rooter’s 18 letter may constitute inadmissible hearsay evidence, there is no apparent reason 19 why the drafter of the letter could not testify in court to overcome any hearsay 20 objection. ORDER DENYING MOTION FOR SUMMARY JUDGMENT ~ 7 1 presumably additional physical evidence of the damage existed when Hanover was 2 notified of the issue. This is not a suitable basis for summary judgment. 3 4 5 6 7 Accordingly, IT IS HEREBY ORDERED that Hanover’s Motion for Summary Judgment, ECF No. 11, is DENIED. The District Court Clerk is directed to enter this Order and provide copies to counsel. DATED this 11th day of March 2015. 8 9 s/ Rosanna Malouf Peterson ROSANNA MALOUF PETERSON Chief United States District Court Judge 10 11 12 13 14 15 16 17 18 19 20 ORDER DENYING MOTION FOR SUMMARY JUDGMENT ~ 8
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