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Her v. State Farm Ins. Co.

United States District Court, E.D. California

March 13, 2015


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[Copyrighted Material Omitted]

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For Chierfue Her, Ge Xiong, Plaintiffs: Timothy I. Marks, LEAD ATTORNEY, Timothy I. Marks & Associates, Fresno, CA.

For State Farm Insurance Company, Defendant: Stephen Paul Ellingson, LEAD ATTORNEY, Hayes Scott Bonino Ellingson & Mclay, Redwood City, CA; Jamie A Radack, Hayes Davis Bonino Ellingson McLay and Scott, Redwood City, CA; Stephen M. Hayes, Hayes, Scott, Bonino, Ellingson & McLay LLP, Redwood Shores, CA.

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(Doc. No. 9)


This is an insurance dispute between Plaintiffs Chierfue Her (" Her" ) and Ge Xiong (" Xiong" ) and their former insurer, State Farm Insurance Company (" State Farm" ). Plaintiffs have alleged state law claims for breach of contract and bad faith. State Farm now moves for summary judgment on all claims alleged against it. For the reasons that follow, the motion will be granted in part and denied in part.


In October 2011, Plaintiffs had a State Farm Renter's Insurance Policy (" the Policy" ).

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See DUMF 1. The Policy had limits of $50,000 for personal property, $1,000 for cash, and $5,000 for jewelry. See Defendant's Ex. 1; Xiong Dec. ¶ 8. The Policy contained a section entitled " Your Duties After Loss." See DUMF 34. In pertinent part, that section provides:

After a loss to which this insurance may apply, you shall see that the following duties are performed:
. . .
(c) prepare an inventory of damaged or stolen property. Show in detail the quantity, description, age, replacement cost and amount of loss. Attach to the inventory all bills, receipts and related documents that substantiate the figures in the inventory;
. . .
(e) submit to us, within 60 days after the loss, your signed, sworn proof of loss which sets forth, the best of your knowledge and belief:
. . .
(6) an inventory of damaged or stolen personal property described in 2.c.

DUMF 34.

Additionally, under a section entitled " Conditions," the Policy contained a provision entitled " Concealment and Fraud." See DUMF 1. The " Concealment and Fraud" section reads: " This policy is void as to you and any other insured if you or any other insured under this policy has intentionally concealed or misrepresented any material fact or circumstances relating to this insurance, whether before or after the loss." Id.

On October 7, 2011, Xiong left her home around 11:00 a.m. and returned around 1:45 p.m., and discovered that a door had been forced and her bedroom ransacked. See Defendant's Ex. 2; Xiong Dec. ¶ 3. Plaintiffs contacted the Clovis Police Department and reported a burglary of their residence. See DUMF 2. Officer Griffith of the Clovis Police Department responded to the call. See Defendant's Ex. 2. Officer Griffith prepared a Crime Report that indicates: the burglars targeted the master bedroom and ignored all other rooms; the burglars rifled through the dresser drawers and a filing cabinet but no items were taken; the burglars broke into a dead-bolted closet were they took large amounts of cash, jewelry, and a handgun; the burglars likely targeted the house and master bedroom because they were familiar with the house; and it did not appear that the burglars spent any time searching other locations inside the house. See id.; DUMF 2. The Crime Report indicates that the following items were stolen or damaged: (1) three doors; (2) $7,000 in cash; (3) one handgun; (4) seven silver bars; (5) four gold necklaces; and (6) seven gold bracelets. See id. The police told Plaintiffs to make a detailed examination of anything else that was missing and to describe missing items in as great a detail as possible in order to aid in the return of property in case an arrest was made. See Her Dec. ¶ 5; Xiong Dec. ¶ 5.

On Monday October 10, 2011, Plaintiffs contacted State Farm and made a claim under the Policy. See DUMF 3. State Farm appears to have set reserves of $4,300 for the claim. See Doc. No. 15-1 at p.17. The same day, State Farm sent Plaintiffs a confirmation letter and a Personal Property Inventory Customer Worksheet (" the Worksheet" ). See DUMF 3. The Worksheet lists the insured, the date of loss, and the " room" where items were damaged or lost. See Defendant's Ex. 7. The Worksheet has columns for quantity, a detailed description of an item, the brand name or model of an item, where the item was purchased, the age of the item, the current repair or replacement cost of the

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item, and whether documentation for the item has been attached. See id There is a warning that submitting a false claim is a crime, and a space for the insured's signature and date. See id State Farm also advised Plaintiffs that the maximum recovery for any cash stolen was $1,000.00 and that the maximum recovery for lost coins, jewelry, or fur was $5,000.00. See Her Dec. ¶ 8; Xiong Dec. ¶ 8. Plaintiffs were aware of these limitations. See id

On October 11 and October 12, 2011, Plaintiffs provided State Farm with several lists of stolen or damaged " personal assets." See Defendants' Exs. 4, 5. The October 11 list identified 41 items, including electronic equipment, clothing, jewelry, cash, silver coins and bars, and damaged furniture. See Defendant's Ex. 4. The October 12 list identified four items, including a Rolex watch, a VCR, and damaged furniture. See Defendant's Ex. 5. On October 13, 2011, State Farm requested that Plaintiffs provide the age, replacement cost, brand names, receipts, and repair estimates for the identified items. See DUMF 37.

On October 25, 2011, Plaintiffs submitted four signed Worksheets. See Doc. No. 8. The Worksheets included: 2 televisions (a 19" set valued at $429.99 and a 25" set $1,099.99) purchased at Best Buy, 2 laptop computers purchased at Best Buy valued at $1,600.00, 1 desktop computer purchased at Costco valued at $1,500.00, 1 laser printer purchased at Costco valued at $350.00, 1 blue ray player purchased at Best Buy valued at $169.99, 1 3D Blue Ray purchased at Best Buy valued at $229.98, 1 VCR purchased at Sears valued at $475.99, 1 Sony digital camera purchased at Costco valued at $399.97, 1 Nikon digital camera purchased at Costco valued at $1,800.00, 1 Rolex watch purchased online and valued at $25,000.00, 1 handgun valued at $732.13, 5 men's suits valued at $2,500.00, 10 women's Hmong costumes valued at $2,000.00, $19,500.00 in cash, 2 children's bed sets valued at $1,000.00, 1 mattress set valued at $3,000.00, 2 sofas/loveseats valued at $1,595.99, 1 corner sofa valued at $2,296.00, 2 night stands valued at $600.00, 1 dresser with mirror valued at $1,000.00, 10 dresses valued at $1,500.00, 1 metal filing cabinet valued at $145.00, 1,000 silver coins valued at $5,000.00, 3 silver bars valued at $1,800.00, 9 gold rings valued at $11,700.00, 3 silver necklaces for Hmong costumes valued at $3,450.00, 4 gold necklaces valued at $3,600.00, and 8 gold bracelets valued at over $20,000.00. See DUMF 8. In comparison to the lists submitted on October 11 and October 12, the October 25 Worksheets added a Sony digital camera, reduced the estimated value of the desktop computer from $2,000.00 to $1,500.00, increased the value of the nightstands from $500.00 to $600.00, reduced the value of the 19" television set from $800 to $429.99, and reduced the value of the 25" television from $1,800 to $1,099.99. Cf DUMFs 4, 5 with DUMF 8.

Plaintiffs had to estimate and attempt to recall where, when, and for how much certain items were obtained. See Her Dec. ¶ 9; Xiong Dec. ¶ 9. Plaintiffs declare that they completed these forms to the best of their ability and estimated the costs of various items, such as cameras and televisions. See id Because some of the items were purchased over six years prior, Her did not have a complete recollection of where, when, or for how much an item was obtained, or current value. See Her Dec. ¶ 12. Plaintiffs listed additional sums knowing that they were not recoverable because State Farm wanted a complete list of everything missing or broken. See Her Dec. ¶ 10; Xiong Dec. ¶ 10. Plaintiffs submitted receipts for various items claimed, and submitted photographs of Xiong wearing traditional Hmong costumes and jewelry. See PUMF's 126-138. At least one of the receipts, for a 73"

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television, is for an item that appears to have never been claimed as stolen. Cf PUMF 131 with DUMF's 4, 5, 8 & Defendant's Ex. 2 at 55.

On November 11, 2011, State Farm requested an inspection, additional documentation to substantiate the claimed items, and furniture repair invoices. See Doc. No. 9.

On November 16, 2011, Plaintiffs sent State Farm receipts and bank statements, including a receipt for a Nikon camera purchased for $1,479.00, a receipt for a Nikon camera purchased for $149.99, and a receipt for a Canon camcorder for $849.99. See DUMF 10. The Canon camcorder and the lesser valued Nikon had not been claimed as stolen or damaged before. See DUMF's 4, 5, 8. Also on November 16, a State Farm inspector went through Plaintiffs' residence with Plaintiffs. See DUMF 59. The inspector was shown where items were taken from (including two intact piggy banks in the closet that Plaintiffs indicated had been emptied from the bottom) and where damaged furniture was located (except for two dresser drawers that had been discarded). See id.; Defendant's Ex. 10.

On November 17, 2011, State Farm interviewed Peggy Lee, who worked with Plaintiffs at the local State Farm agent's office. See Doc. No. 60. Lee said that Plaintiffs initially reported that $7,000 had been taken from their youngest daughter's piggy bank. See id

On November 23, 2011, State Farm sent Plaintiffs a letter indicating that the investigation was ongoing and requested additional documentation and receipts, that Her provide a recorded statement, and that a Sworn Proof of Loss be submitted. See DUMF 39; Defendant's Ex. 12.

On November 28, 2011, Her gave a recorded statement. See DUMF 62. Her stated that his 17 year old and 9 year old daughters lived with him, that they moved to the rental four years ago following Her's full time language teaching position being reduced to part time and a foreclosure on their previous home. See id Her stated that he and Xiong also earned money from farming and selling crops at farmers markets. See id Her stated that the burglars had broken into the closet, that he stored jewelry, cameras, suits, etc. in the closet, and that after the police left additional items were discovered to be missing or damaged. See DUMF 63.

When asked about some of the stolen electronics, Her explained that his children had the 19" and 25" televisions in their rooms, and that he had purchased one television at Best Buy and the other at Walmart. See DUMF 11. Her stated that he had paid cash for the desktop computer and laser printer at Costco, and because he paid cash, Costco had no record of the purchase. See DUMF 12. Her stated that he purchased the Rolex online and made two payments with personal checks, one for $5,000 and one for $20,000. See DUMF 70. Her stated that he could not remember when he purchased the Rolex, and that the bank would not have records going back far enough. See DUMF 73.

Her stated that they noticed the damage to couches after the police left. See DUMF 69. Her stated that there was $19,000 in a waist-pouch that was stolen and $500 in the piggy banks, and that the burglars took the waist pouch and emptied the piggy banks. See DUMF 71.

On December 6, 2011, State Farm spoke to Plaintiffs' landlord, who said that he had been at the residence fixing a sprinkler the day of the burglary. See DUMF 75. The landlord went back to the residence on October 7 after Plaintiffs had informed him of the burglary. See id. The landlord ...

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