Free Motion in Limine - District Court of Arizona - Arizona

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Lynn M. Allen, State Bar Number 012612 Amy N. Toppel, State Bar Number 022106 ALLEN & LEWIS, PLC 4835 East Cactus Road, Suite 340 Scottsdale, AZ 85254 Telephone: (602) 443-0402 Facsimile: (602) 443-0403 Attorneys for Plaintiff/Counter Defendant

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA American Family Mutual Insurance Company, Plaintiff/Counter Defendant, vs. Robert D. Dunn and Joy Lynn Dunn, Defendants/Counterclaimants. ) ) ) ) ) ) ) ) ) ) ) )

No. CV2003-1277 PHX SRB MOTION IN LIMINE RE PRINCIPAL-AGENT RELATIONSHIPS (Oral argument requested)

Plaintiff American Family Mutual Insurance Company ("American Family") moves for an order precluding defendants from referring to American Family's consulting engineers and contractor as agents of the company. This motion is supported by the accompanying memorandum of points and authorities and exhibit attached hereto. DATED this 12th day of September, 2005. ALLEN & LEWIS, PLC

By s/ Lynn M. Allen Lynn M. Allen Amy N. Toppel Attorneys for Plaintiff/Counter Defendant

Case 2:03-cv-01277-SRB

Document 196

Filed 09/12/2005

Page 1 of 4

ALLEN & LEWIS, PLC

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MEMORANDUM OF POINTS AND AUTHORITIES Introduction. Defendants were named insureds on an American Family homeowner's insurance policy. In May 1999, the defendants reported two claims to American Family arising from two separate plumbing leaks. American Family timely responded and paid the covered repairs associated with those leaks. Thereafter, the defendants claimed that the under slab plumbing leak caused earth movement resulting in cracking of foundations, walls, and ceilings. American Family conducted a thorough investigation, including hiring appropriate and qualified experts to provide opinions on causation of damage and repair recommendations. Specifically, those

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experts provided opinions that the earth movement and slab cracks were not related to either of the two plumbing leaks. American Family reasonably relied on the opinions and recommendations of those experts. American Family sought estimates from appropriate and qualified contractors for covered repairs to the residence, and paid the defendants the amounts of those estimates. Thereafter, American Family paid the covered damages as set by the appraisal award. To date, none of the repairs to the residence have been started. The defendants assert that American Family acted in bad faith in its investigation, evaluation, and settlement of their claims. Specifically, defendants allege inadequate and biased investigation, making "lowball" offers, and delay in claims settlement.

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II.

Legal Argument. In papers filed with the court, the defendants' attorney refers to American Family's

consulting engineers and contractor (Ninyo & Moore, Ronald Starling, Dusty Creek Construction) as agents of American Family. However, there is no evidence establishing a principal-agent relationship. An agent is one who acts on behalf of another. See Southeast Ariz. Med. Ctr. v. Ariz. Health Care Cost Containment Sys., 188 Ariz. 276, 282, 935 P.2d 854, 860 (App.1996). "An essential element of the principal-agent relationship which carries a fiduciary responsibility is the ability of the agent to act on behalf of his principal with third parties." Equitable Life & Cas. Ins. Co. v. Rutledge, 9 Ariz.App. 551, 555, 454 P.2d 869, 873 (1969); see also In re Coupon Clearing Serv., Inc., 113 F.3d 1091, 1099 (9th

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Cir.1997) ("One of the chief characteristics of an agency relationship is the 'authority to act for and in the place of the principal for the purpose of bringing him or her into legal relations with third parties."). An agency relationship does not exist unless the purported principal has right to control transaction and to have it done for his benefit. See Brown v. Arizona Dept. of Real Estate, 181 Ariz. 320, 890 P.2d 615 (App. 1995). There is no evidence of actual or apparent authority for the consulting engineers or contractor to act on American Family's behalf. There is no evidence that American Family had the right to control the actions of the consulting engineers and contractor for

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American Family's agents, as that would imply that these consultants were controlled by American Family. III. Conclusion. For all of the foregoing reasons, American Family requests for an order precluding defendants from referring to American Family's consulting engineers and contractor as agents of the company. DATED this 12th day of September, 2005. ALLEN & LEWIS, PLC

By s/ Lynn M. Allen Lynn M. Allen Amy N. Toppel Attorneys for Plaintiff/Counter Defendant ORIGINAL electronically filed this 12th day of September, 2005, with: The Clerk of The Court United States District Court COPY hand-delivered this 12th day of September, 2005 to: The Hon. Susan R. Bolton United States District Court By: Laura Sakakibara

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