FILED
NOT FOR PUBLICATION
MAY 24 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
LINDA KABRICH, No. 14-35768
Plaintiff-Appellant, D.C. No. 2:12-cv-03052-LRS
v.
MEMORANDUM*
ALLSTATE PROPERTY AND
CASUALTY INSURANCE COMPANY,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of Washington
Lonny R. Suko, District Judge, Presiding
Submitted May 18, 2017**
Seattle, Washington
Before: GOULD and PAEZ, Circuit Judges, and LEMELLE,*** Senior District
Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Ivan L.R. Lemelle, Senior United States District Judge
for the Eastern District of Louisiana, sitting by designation.
Linda Kabrich appeals the district court’s order denying her motion for
summary judgment and granting the cross-motion for summary judgment filed by
Allstate Property and Casualty Insurance Company (“Allstate”). This case arises
out of water damage to Kabrich’s personal property. Her Allstate insurance policy
provided personal property protection up to $109,200 and stated that, in the event
of a loss, Kabrich must provide a detailed proof of loss. Kabrich contracted with
Rainbow International (“Rainbow”) to store her damaged property (amounting to
more than 15,000 individual items). Thereafter, Allstate repeatedly requested from
Kabrich the approximate age and original cost of the damaged items. Even though
she failed to provide this information, Allstate paid her $12,200. After Kabrich
filed suit, Allstate sent three additional requests for information. A complete
inventory was never provided. After Allstate’s motion to compel requesting access
to the property was granted, a contractor inspected it. Allstate concluded “that the
value of cleaning or replacement [would] exceed the remaining contents limit of
[Kabrich’s] policy” and issued the remaining limits to Kabrich.
We review de novo a district court’s ruling on cross-motions for summary
judgment. St. Surfing, LLC v. Great Am. E & S Ins. Co., 776 F.3d 603, 607 (9th
Cir. 2014). “A grant of 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
2
judgment as a matter of law.’” Rocky Mountain Farmers Union v. Corey, 730 F.3d
1070, 1086-87 (9th Cir. 2013) (quoting Fed. R. Civ. P. 56(a)). Washington law
applies in this diversity action. We have jurisdiction under 28 U.S.C. § 1291 and
we affirm.
Kabrich alleged breach of contract, bad faith, and violations of the
Consumer Protection Act (“CPA”) and Insurance Fair Conduct Act (“IFCA”). For
bad faith, a plaintiff must show “duty, breach of that duty, and damages . . .
caused” by the breach and that “the insurer’s breach . . . was unreasonable,
frivolous, or unfounded.” Smith v. Safeco Ins. Co., 78 P.3d 1274, 1277 (Wash.
2003). “The insurer is entitled to summary judgment if reasonable minds could not
differ that its denial of coverage was based upon reasonable grounds.” Id. Under
the CPA, “the plaintiff must show ‘(1) unfair or deceptive act or practice; (2)
occurring in trade or commerce; (3) public interest impact; (4) injury to plaintiff in
his or her business or property; (5) causation.’” Bain v. Metro. Mortg. Grp., Inc.,
285 P.3d 34, 49 (Wash. 2012). Nonetheless, “an incorrect denial of coverage does
not constitute an unfair trade practice if the insurer had ‘reasonable justification’
for denying coverage.” Starczewski v. Unigard Ins. Grp., 810 P.2d 58, 61 (Wash.
Ct. App. 1991); see also Leingang v. Pierce Cty. Med. Bureau, Inc., 930 P.2d 288,
299 (Wash. 1997). Under the IFCA, an insured “who is unreasonably denied a
3
claim for coverage or payment of benefits by an insurer” may sue to recover actual
damages and costs. Wash. Rev. Code § 48.30.015(1); see also Perez-Crisantos v.
State Farm Fire & Cas. Co., 389 P.3d 476, 479 (Wash. 2017).
Kabrich’s only ground for Allstate’s liability was “undue delay.” Her claim
for bad faith nevertheless fails because Allstate did not breach the insurance
contract. See Smith, 78 P.3d at 1277. She argues that the money paid by Allstate
directly to Rainbow cannot be used when calculating the total payments made
under the policy, but Kabrich authorized direct payment to Rainbow and
Washington case law provides that making insurance payments directly to
contractors is “a reasonable course of conduct consistent with the duties [the
insurer] assume[s]” under the policy. Baldwin v. Silver, 269 P.3d 284, 290 (Wash.
Ct. App. 2011). Further, Allstate did not act unreasonably. It repeatedly requested
additional information from Kabrich. Even though she failed to respond, in
violation of her obligations under the policy, Allstate made an initial payment of
$12,200. After Kabrich filed suit, Allstate made three additional requests for
information. When Kabrich’s contractor denied Allstate access to the property, the
district court granted access. When Allstate realized that Kabrich was entitled to
the policy limits, it tendered the amount remaining under the policy. The first part
of a CPA analysis “is closely related to the bad faith standard that we have already
4
held was not satisfied,” so, “[f]or essentially the same reasons . . . , we conclude
that the district court appropriately dismissed the CPA claims . . . .” Dewitt Constr.
Inc. v. Charter Oak Fire Ins. Co., 307 F.3d 1127, 1138 (9th Cir. 2002), as
amended on denial of reh’g and reh’g en banc. As to her IFCA claims, Kabrich
argues that Allstate unreasonably denied payment. Allstate made payments totaling
$251,113.13, including the $109,200 policy limit for personal property, even
though Kabrich failed to comply with her policy obligations. Therefore, the district
court appropriately granted summary judgment in favor of Allstate.
Kabrich asked the district court to certify a question to the Washington
Supreme Court that depended on a finding of bad faith. “We review for abuse of
discretion the district court’s denial of a request to certify a question to a state
supreme court.” Thompson v. Paul, 547 F.3d 1055, 1059 (9th Cir. 2008). Allstate
did not act in bad faith, so the district court did not abuse its discretion. We too
decline to certify the question.
“Attorney fees under Olympic [S.S. Co. v. Centennial Ins. Co., 811 P.2d 673,
681 (Wash. 1991)] are available only when the insured prevails.” Hardy v. Pemco
Mut. Ins. Co., 61 P.3d 380, 382 (Wash. Ct. App. 2003). Kabrich did not prevail and
therefore is not entitled to fees or costs.
AFFIRMED.
5