Free Response to Motion - District Court of Arizona - Arizona

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Richard T. Treon (No. 002064) TREON, AGUIRRE & NEWMAN, P.A. 2700 N. Central Avenue, Suite 1400 Phoenix, Arizona 85004-1133 Telephone: (602) 285-4400 Facsimile: (602) 285-4483 Daniel B. Treon (No. 014911) Douglas G. Shook (No. 005950) Stephen E. Silverman (No. 016757) TREON & SHOOK, P.L.L.C. 2700 N. Central Avenue, Suite 1000 Phoenix, Arizona 85004-1133 Telephone: (602) 265-7100 Facsimile: (602) 265-7400 Attorneys for Defendants/Counterclaimants

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA AMERICAN FAMILY INSURANCE COMPANY, Plaintiff/Counterclaim Defendant, v. ROBERT and JOY DUNN, NO. CV2003-1277 PHX SRB

RESPONSE TO MOTION IN LIMINE RE NONRENEWAL OF POLICY

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Defendants/Counterclaimants.

The Dunns are not alleging that American Family's refusal to renew their insurance policy in the midst of an open claim was an independent act of bad faith.

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The fact that American Family non-renewed the Dunns' policy, however, is relevant to an issue American Family injected into the case at the last minute: the Dunns' alleged failure to mitigate their damages. American Family apparently plans to argue to the jury that the Dunns somehow contributed to the harm they suffered as a result

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of American Family's unreasonable adjustment of their claim. American Family nonrenewed the Dunns' policy in the early part of 2000, but did not even take an initial position on the claim until December 2000. It is not fair for American Family to argue to the jury that the Dunns did not act reasonably given the circumstances, without letting the Dunns explain to the jury what those circumstances were. The Dunns will not argue that the non-renewal was an unreaonable or ilelgal underwriting decision. From a claims processing standpoint, however, it was unreasonable for American Family to refuse to complete the adjustment of an open claim and provide the Dunns all of the undisputed benefits available to them before their coverage was terminated. American Family admits that it had a duty to give equal consideration to the Dunns' interests during the adjustment of their claim. See Rawlings v. Apodaca, 151 Ariz. 149, 157, 726 P.2d 565, 573 (1986). The Dunns had

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a substantial interest in having the adjustment of their open claim completed before American Family terminated coverage. American Family had an undisputed duty to give fair consideration to this interest in making its decisions regarding the adjustment of their claim. A reasonable jury could conclude that the adjusting delays that

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extended beyond the termination of the policy is additional evidence that American Family failed to give equal consideration to the Dunns' interests and failed to treat them fairly under all of the circumstances of the claim. See id.; Zilisch v. State Farm Mut. Auto. Ins. Co., 196 Ariz. 234, 238, 995 P.2d 276, 280 (2000).

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The fact that American Family terminated the Dunns' insurance coverage goes directly to responding to American Family's "failure to mitigate" defense. Additionally, it is evidence that American Family did not give the Dunns equal consideration. The Dunns respectfully request that the motion in limine be denied. DATED this 21st day of September, 2005. TREON, AGUIRRE & NEWMAN, P.A. By: s/Richard T. Treon Richard T. Treon, Esq. 2700 North Central Avenue, Suite 1400 Phoenix, Arizona 85004 and TREON & SHOOK, P.L.L.C. By: s/Stephen E. Silverman Daniel B. Treon Douglas Shook Stephen E. Silverman 2700 North Central Avenue, Suite 1000 Phoenix, Arizona 85004 Attorneys for Defendants/Counterclaimants

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ORIGINAL of the foregoing electronically filed this 21st day of September, 2005, with: U.S. District Court Clerk

COPY hand delivered this 21st day of September, 2005, to: The Honorable Susan R. Bolton United States District Court By: s/Barbara Bopp

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