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Jack Williams and Williams v. Allstate Insurance Company and Does 1 Through

December 21, 2010


The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge


Through the present lawsuit, Plaintiffs Jack Williams and Cari Williams ("Plaintiffs") seek damages from their homeowners' insurance carrier, Defendant Allstate Insurance Company ("Allstate"), as a result of Allstate's denial of coverage for alleged windstorm-related loss to the roof of Plaintiffs' home in Gridley, California. Presently before the Court is Allstate's Motion for Partial Summary Judgment/Summary Adjudication as to Plaintiffs' claim for breach of the covenant of good faith and fair dealing, and their request that punitive damages be imposed against Allstate given their handling of the subject claim.

As will be set forth below, Allstate's Motion will be denied.


On the nights of January 3 and 5, 2008, a significant windstorm struck the area around Plaintiffs' home in Gridley, California. Newspaper reports indicated extensive damage. A storm gauge mounted on the roof of Plaintiffs' neighbor, Lyndol Swartz, reported wind speeds at 89 m.p.h. before the roof where the measurement device was located blew off. As a result of the storm, Plaintiffs claim to have sustained various wind-related losses, including damage to certain outbuildings as well as structural damage to the roof and other components of their home itself. Plaintiffs had a policy of homeowners' insurance issued by Allstate and submitted a claim for their losses. Given the magnitude of the storm and the number of claims made, Allstate assigned its National Catastrophe Team to the region.

The Allstate Claims Consultant assigned to handle the claim, Daniel Brett King, proceeded to retain Rimkus Consulting Group to assess causation in determining whether Plaintiffs' damage was covered under Allstate's policy. While the Allstate policy covered "sudden and accidental direct physical loss", it nonetheless contained various exclusions to that coverage grant, including exclusions for wear and tear, deterioration, and latent defect. See Allstate Policy, Ex. A to Pls.' Compl.

Tony Wu, a civil structural engineer employed by Rimkus, inspected Plaintiffs' property and prepared a report dated March 27, 2008.

Wu concluded that the sagging beams for the cathedral ceiling in Plaintiffs' living and dining rooms, and the separation observed in those beams, was caused not by wind, but rather from overload to the roof rafter system and the attachment at the top plate. Wu believed that the attachment had crept over time and did not think that the subject windstorm, which he described as entailing a maximum gust speed of 56 m.p.h., had caused the damage. Wu's conclusions in this regard, as well as his report as a whole, were peer reviewed by another Rimkus civil engineer, Diane Hunt. Hunt supported Wu's conclusions, opining that the roof sag occurred over time due to undersized rafters, as well as an improperly installed collar tie that overstressed the ceiling system.

On April 7, 2008, Allstate wrote to Plaintiffs to inform them that the roof/ceiling damage would not be covered. Allstate's letter indicated in pertinent part as follows:

"Specifically, the following facts are the basis for this decision: Our investigation revealed that there is no structural damage to roof from storm on January 4, 2008. The damages are not sudden and accidental; they are from insufficient framing due to the span of the room."

See April 7, 2008 letter, Ex. J to the Decl. of George A. Murphy in Opp'n to Mot. for Summ. J.

On April 13, 2008, in response to Allstate's denial of coverage, Jack Williams submitted various statements and letters which contested Allstate's determination, and indicated that the damage at issue did happen suddenly and did not exist until right after the January 4, 2008 windstorm.

The proffered materials included a statement from Rick Miller, who painted Plaintiffs' home in September of 2006. According to Miller, at that time, just over a year before the 2008 storm, he observed no signs of roof movement. Miller pointed to the varnish line of his paint job, and the subsequent slippage that occurred, as evidence that movement in the ceiling had occurred after he painted. See Miller Statement, Ex. 2 to Decl. of Jack Williams in Opp'n to Allstate's Mot. for Summ. J.

Jack Williams also submitted a letter signed by Robert Thomas, who, as a computer and network service provider to Plaintiffs, had visited their property some 23 times in December 2007 and 23 times during January of 2008. Thomas stated that at no time prior to the storm did he have any difficulty using either the front or garage door of Plaintiffs' residence, while afterwards they were no longer fully functional and appeared to be misaligned and unbalanced. Another frequent visitor to Plaintiffs' home, Kim Sorenson, who was also a neighbor, attested to wind gusts in the area up to 100 m.p.h. He observed the sagging roofline in Plaintiffs' home, as well as the separating open beams and malfunctioning front door, and indicated that in his ...

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