291 P.3d 427
Idaho2012Background
- Linfords' home sustained fire damage; policy with State Farm covered accidental direct physical loss under Coverage A.
- Linfords hired contractor to repair fire damage and remodel; State Farm adjusted loss estimate upward and paid initial amounts.
- Parties entered appraisal agreement to resolve the amount of loss under Coverage A; third-party appraiser issued a determination on replacement cost value.
- Contractor filed suit against Linfords; Linfords counterclaims and third-party claim against State Farm for indemnity and bad faith.
- District court granted partial summary judgment: no duty to defend under Coverage A or L; resolved loss amount via appraisal; contractor's claims decided later.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Duty to defend under Coverage A | Linfords argue State Farm must defend under Coverage A for costs arising from the contractor suit. | State Farm contends Coverage A defense duty is not triggered by the contractor suit and was properly not awarded. | No duty to defend under Coverage A. |
| Duty to defend under Coverage L | Linfords contend Coverage L obligates defense because suit was for damages due to property damage. | State Farm argues Coverage L does not apply; policy excludes Linfords' home and suit is contract-based, not property damage damages. | No duty to defend under Coverage L. |
| Breach of contract and bad faith claims | Linfords maintain breach and bad faith claims against State Farm were viable given denial or delay of coverages. | State Farm argues the contract and policy terms foreclose these claims and that appraisal resolved the loss amount. | District court properly dismissed breach and bad faith claims. |
| Attorney fees on appeal | Linfords seek potential fee recovery under statutes. | State Farm seeks fees on appeal for frivolous conduct. | State Farm awarded attorney fees on appeal. |
Key Cases Cited
- Constr. Mgmt. Sys., Inc. v. Assurance Co. of Am., 135 Idaho 680 (2001) (duty to defend depends on policy language and pleaded claims)
- Foremost Ins. Co. v. Putzier, 100 Idaho 883 (1980) (duty to defend is determined by policy language, not extrinsic arguments)
- Magic Valley Potato Shippers v. Continental Ins., 112 Idaho 1073 (1987) (contract action with no tort property damage does not trigger defense duty)
- Clear Springs Foods, Inc. v. Spackman, 150 Idaho 790 (2011) (issues raised on appeal not preserved below are not reviewed)
- Purvis v. Progressive Cas. Ins. Co., 142 Idaho 213 (2005) (policy interpretation and context crucial to contract-based disputes)
- Robinson v. State Farm Mut. Auto. Ins. Co., 137 Idaho 173 (2002) (bad faith requires a duty under contract and standards for coverage)
- Cascade Auto Glass, Inc. v. Idaho Farm Bureau Ins. Co., 141 Idaho 660 (2005) (policy language read as a whole; avoid isolated phrases)