Memorandum Decision
{T1 The Human Ensemble, LLC (Human Ensemble) appeals from the entry of summary judgment in favor of Scottsdale Insurance Company (Scottsdale), Human Ensemble's general liability insurance provider. Human Ensemble takes issue with the district court's decision to consider Scottsdale's renewed motion for summary judgment on Human Ensemble's claims for breach of contract, breach of the covenant of good faith and fair dealing, and negligence, after the court had previously denied the motion. Human Ensemble also asserts that the court's ruling was based on an erroneous understanding of the application of the implied covenant of good faith and fair dealing to insurance contracts. In particular, Human Ensemble asserts that a general lability insurance carrier has a duty to timely investigate the scope of coverage in order to promptly notify the insured when the policy does not cover the property damages incurred. We affirm.
T2 In October 2005, Human Ensemble purchased: two insurance policies: a general liability policy from Scottsdale and a property damage policy from Colony Insurance Company (Colony) 1 In late December 2005, a toilet overflowed in a building owned by Human Ensemble, resulting in several inches of standing water. When cleanup efforts stalled, Human Ensemble's commercial tenants sued for damages because they had "to relocate and incur moving expenses, increased rent, lost profit and other damages." Due to some confusion unexplained in the appellate briefing, Human Ensemble filed a claim in early January 2006 for its cleanup expenses with its liability carrier, Scottsdale, rather than with Colony, its property damage insurer. About this same time, Scottsdale agreed to defend Human Ensemble against the liability claims filed by its tenants. Approximately six weeks later, on February 21, 2006, Scottsdale informed Human Ensemble that it was the general liability insurer only and would not cover Human Ensemble's claims for property damage because it had not issued a property damage policy. The six-week gap between Human Ensemble's submission of the claim and Scottsdale's disclosure became the basis for Human Ensemble's assertion that Scottsdale violated the implied duty of good faith and fair dealing in the general liability policy that is now at issue on appeal. At all times relevant, Scottsdale continued to defend Human Ensemble in the separate liability case brought by its tenants, which was still pending when this appeal was filed.
T3 In June 2006, Colony, which is not a party to this appeal, filed a complaint seeking a declaratory judgment "that Colony is not obligated, under the terms of the Insurance Contract, to pay ... any claims, losses, damages, costs, and/or expenses" in connection with the water leak problems. Scottsdale intervened in the declaratory judgment action in January 2008 to have the court determine its own obligations to Human Ensemble. Human Ensemble then counterclaimed against Scottsdale, asserting claims for breach of contract, breach of the implied
T4 Five months later, the case was reassigned to a different judge within the same district. Scottsdale hired new counsel and filed a renewed motion for summary judgment (the renewed motion), asserting that the bad faith claim was not ripe because Scottsdale had not yet withheld any benefits due under the insurance policy, that Sceotts-dale had no actionable duty to inform Human Ensemble of the coverage terms in a policy it had sought out and purchased, and that, in any event, Human Ensemble was on notice of the coverage terms by virtue of signing the Colony policy application and the disclosures on both policies. The district court determined that the renewed motion was "procedurally appropriate" because it "presented new legal theories and authorities not previously considered." After hearing argument, it granted the renewed motion for summary judgment.
I. The District Court Did Not Abuse Its Discretion in Reconsidering the Previous Denial of Scottsdale's Motion for Summary Judgment.
$5 Human Ensemble argues that the district court should not have reconsidered its denial of the original motion for summary judgment. We conclude, however, that reconsideration was within the district court's discretion. Rule 54(b) of the Utah Rules of Civil Procedure permits a court "to revis[e] at any time before the entry of judgment adjudicating all the claims and rights and liabilities of all the parties" "any order or other form of decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties." Utah R. Civ. P. 54(b). "This is true even when a second judge has taken over the case because the two judges, while different persons, constitute a single judicial office." PC Crane Serv., LLC v. McQueen Masonry, Inc.,
16 Whether to reconsider a prior ruling is ordinarily within the sound disceretion of the district court, as only the parties of a case are bound by the court's nonfinal decisions. Mid-America Pipeline Co. v. Four-Four, Inc.,
17 Because the case was not yet fully resolved, the district court "was not required to reconsider ... [nor] was [it] forbidden
IL The District Court Appropriately Granted Summary Judgment in Favor of Scottsdale on the Bad Faith Claim.
18 We next address Human Ensemble's claim that the district court erred in granting summary judgment on the bad faith claim. Summary judgment is appropriate when "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Utah R. Civ. P. 56(c). "We review a district court's decision to grant summary judgment for correctness, with no deference to the district court's conclusions." State ex rel. School & Inst. Trust Land Admin. v. Mathis,
19 The district court granted summary judgment to Scottsdale on the basis "that the duty of good faith extends only to benefits actually provided for under the applicable insurance policy" and Seottsdale had not denied Human Ensemble any of the bargained-for benefits. Human Ensemble argues that this decision was incorrect because a breach of the insurance contract is not a prerequisite to a claim of breach of the implied covenant of good faith and fair dealing. We agree with Human Ensemble that a breach of contract is not necessary for a claim of bad faith to arise. See Christiansen v. Farmers Ins. Exch.,
110 The covenant of good faith and fair dealing "inheres in almost every contract" and is "implied in contracts to protect the express covenants and promises of the contract." KeyBank Nat'l Ass'n v. Systems W. Computer Res., Inc.,
the implied obligation of good faith performance contemplates, at the very least, that the insurer will diligently investigate the facts to enable it to determine whether a claim is valid, will fairly evaluate the claim, and will thereafter act promptly and reasonably in rejecting or settling the claim. The duty of good faith also requires the insurer to deal with laymen as laymen and not as experts in the subtleties of law and underwriting and to refrain from actions that will injure the insured's ability to obtain the benefits of the contract.
{ 12 Human Ensemble asserts that Scottsdale breached the implied duty to investigate, not by failing to adequately inquire into what caused the water leak and the nature and extent of the resulting damage, but by failing to notify Human Ensemble for over six weeks that its general liability policy did not cover property damage. Specifically, Human Ensemble claims that had Scottsdale "diligently investigate[d] the facts ... to determine whether [the] claim [wals valid," see Beck,
{13 When a claim appears at least nominally to fall within the seope of the subject matter of the policy, it makes sense to expect the insurer not only to investigate the underlying facts, but also to promptly determine whether the claim ought to be denied because of some exclusion or exception in the policy. Such an interpretation of the implied duty to diligently investigate ensures that an insured, who reasonably might expect a property damage policy to cover damages to personal property from a water damage incident, is timely put on notice that the insurer considers the damages to fall under an exclusion or exception, for example, where the policy excludes damages to property owned by third parties. The insurer may be in an advantaged position with regard to understanding the details of coverage, and recognition of such a duty ensures that the insurer does "not ... intentionally or purposely do anything [that] will destroy or injure the [insured]'s right to receive the fruits of the contract." See United States Fid. & Guarantee,
14 And while it is reasonable to expect that an insurer like Scottsdale would determine early in the process whether an insured's claim falls within the general subject matter of its liability policy or involves a subject, such as a property damage claim, that is clearly outside the broad scope of the policy, that expectation arises from a sense of the insurer's own self-interest rather than from any notion of a special duty to the insured under the cireumstances. It was the insured in the first place who purchased a liability policy from Scottsdale and a separate property damage policy from Colony. It therefore seems as reasonable to expect that Human Ensemble would be responsible for keeping track of which insurance company provided which type of coverage as it would that Scottsdale would do so. See, eg., John Call Eng'g, Inc. v. Manti City Corp.,
1 15 Indeed, Human Ensemble admits that it purchased a general liability policy from Scottsdale and a property damage policy from a separate company, Colony. While Human Ensemble purchased these insurance policies through an independent agent, it is undisputed that one of its principals, Gibbs Smith, signed the application for Human Ensemble's property damage coverage with Colony, and Smith and another principal, Gary Justesen, both signed policy disclosures on the Scottsdale Hability policy that described the policy's scope of coverage. In addition, the Seottsdale policy itself clearly identifies commercial general liability in the "Coverage Part(s)" and expressly excludes commercial property damage as "NOT COVERED." Further, all of the policy declarations and forms address general liability only. Human Ensemble therefore was on notice of the scope of its Scottsdale insurance policy and was aware that it had purchased property damage coverage from Colony, not Scottsdale. See John Call Eng'g, Inc.,
1 16 As a consequence, we can see no basis for concluding that an insurer's implied duty "to refrain from actions that will injure the insured's ability to obtain the benefits of the contract" would make Scottsdale liable for failure to timely discover and disclose to Human Ensemble that it had not purchased property damage coverage from Scottsdale, but from another insurer altogether. See Beck v. Farmers Ins. Exch., 701 P.24 795, 801 (Utah 1985). Such an obligation does not seem to fall within the good faith duty, which "protect[s] the express covenants and promises of the contract," because it is outside the scope of the bargained-for benefits of the insurance contract that Human Ensemble actually purchased. See KeyBank Nat'l Ass'n v. Systems W. Computer Res., Inc.,
III Scottsdale's Request for Attorney Fees Incurred on Appeal Is Denied, but It May Recover Its Costs.
{17 Scottsdale seeks reimbursement for attorney fees and costs incurred on appeal on the basis that the " 'appeal is obviously without any merit and has been taken with no reasonable likelihood of prevailing, and results in delayed implementation of the judgment of the lower court; increased costs of litigation; and dissipation of [court] time and resources."" (Quoting Porco v. Porco,
1 18 We affirm the grant of summary judgment to Scottsdale. Attorney fees to Sceotts-dale are denied, but it may recover its costs.
Notes
. Human Ensemble actually purchased these policies through an independent insurance agent. Human Ensemble admitted, however, that one of its principals, Gibbs Smith, signed the application for the Colony policy and two of its principals, Smith and Gary Justesen, signed disclosures on both policies.
. Certain of these factors "function only to dictate when the district court has no discretion but rather must reconsider a previously decided, un-appealed issue." Mid-America Pipeline Co. v. Four-Four, Inc.,
. Human Ensemble has also failed to identify what harm actually resulted from Scottsdale's
. Because we uphold the grant of summary judgment in favor of Scottsdale on Human Ensemble's failure to demonstrate that notice of the policy's coverage was within the scope of the implied covenant of good faith and fair dealing, we do not address Scottsdale's alternative bases for affirming the judgment.