Title: Parks v. Safeco Ins Co of Illinois

State: idaho

Issuer: Idaho Supreme Court (civil)

Document:

1 
 
 
IN THE SUPREME COURT OF THE STATE OF IDAHO 
Docket No. 43376 
 
DAVID & KRISTINA PARKS, 
 
       Plaintiffs-Appellants, 
 
v. 
 
SAFECO INSURANCE COMPANY OF 
ILLINOIS, 
 
       Defendants-Respondents. 
_____________________________________ 
) 
) 
) 
) 
) 
) 
) 
) 
) 
)
) 
 
Pocatello, May 2016 Term 
 
2016 Opinion No.  84 
 
Filed: July 27, 2016 
 
Stephen W. Kenyon, Clerk 
 
    
    
    
Appeal from the District Court of the Sixth Judicial District of the State 
 
of Idaho, Bannock County. Hon. Stephen S. Dunn, District Judge. 
 
 
The judgment of the district court is affirmed.  Attorney fees and costs 
 
on appeal are awarded to respondent. 
 
 
Lowell N. Hawkes, Chartered, Pocatello, attorneys for appellants. 
 
Lowell N. Hawkes argued. 
 
 
Anderson, Julian & Hull, LLP, Boise, attorneys for respondent.  Mark D. 
 
Sebastian argued. 
_________________________ 
W. JONES, Justice 
I.  NATURE OF THE CASE 
David and Kristina Parks (collectively the “Parks”) appeal from a district court dismissal 
on summary judgment. A wildfire destroyed the Parks’ house, which was insured by Safeco 
Insurance Company (“Safeco”). The Parks purchased an existing house, and Safeco paid the 
Parks a total of $255,000, the cost of the replacement house less the value of the land. The Parks 
filed a complaint against Safeco alleging: (1) they are entitled to $440,195.55 under the policy 
and (2) Safeco committed bad faith in handling the claim. Safeco filed a Motion for Summary 
Judgment asserting that the policy was not breached and its conduct did not constitute bad faith. 
The Parks filed a Cross-Motion for Summary Judgment asserting that Safeco misrepresented the 
policy. Additionally, the Parks moved to amend their complaint to include a claim for punitive 
damages. The district court held that: (1) there was no breach of contract because the policy was 
unambiguous and the Parks received the amount due under the clear language of the policy; (2) 
 
2 
 
Safeco did not commit bad faith in handling the claim because it complied with the terms of the 
policy and paid the Parks the amount owed; and (3) the Parks had not established a reasonable 
likelihood of proving facts at trial sufficient to support an award of punitive damages.  
II.  FACTUAL AND PROCEDURAL BACKGROUND 
On June 28, 2012, a fire in Pocatello, Idaho destroyed the Parks’ house. The Parks’ house 
was insured through a homeowners policy (“Policy”) issued by Safeco, which provided a total 
home coverage of $464,875. Following the fire, Safeco hired an appraiser to determine the actual 
cash value (“ACV”) of the Parks’ destroyed house. The Policy defined ACV as “the market 
value of property in a used condition equal to that of the lost or damaged property, if reasonably 
available on the used market.” Mrs. Parks understood that, pursuant to the Policy, Safeco would 
pay the ACV as soon as the appraisal was completed, but the replacement cost payment would 
be handled once a replacement was made.  
The appraisal was completed on July 21, 2012, and stated that the ACV of the Parks’ 
destroyed house was $169,000. Accordingly, on July 26, 2012, Safeco mailed a check for 
$169,000 to the Parks. Although the Parks believed the ACV of their house was higher than the 
appraisal, Mr. Parks acknowledged that he had no grounds upon which to argue. Safeco clarified 
to Mr. Parks that the ACV was not the complete payment; it was “just the beginning.”  
 
In a letter sent with the ACV payment, Safeco informed the Parks that the limit of their 
coverage was $464,875. The letter stated, “[i]n order to claim the full replacement cost, you must 
replace the dwelling.” The letter included the relevant portions of the Policy and informed the 
Parks that Safeco was “in the process of obtaining a replacement cost bid for equivalent 
construction of your home. . . . You may replace your dwelling on the existing location; build on 
a new location or purchase an existing home.”  
On September 20, 2012, Belfor Construction (“Belfor”), which was hired by Safeco, 
estimated that it would cost $440,195.55 to replace the Parks’ house, using equivalent 
construction. On October 17, 2012, the Parks’ stated they could not agree that $169,000 was the 
ACV of their house. Additionally, the Parks’ asked whether Safeco was willing to be bound by 
the Belfor estimate. Safeco confirmed that it approved the Belfor estimate and clarified that it 
would “pay the replacement cost of the dwelling up [to] $440,195.55 or the amount actually 
incurred, whichever is less.”  
 
3 
 
On December 6, 2012, the Parks purchased a home in the Idaho Falls area for $300,000 
(the house was valued at $255,000 and the land was valued at $45,000).1 Mr. Parks 
acknowledged that the amount actually incurred as a result of the fire, in terms of replacing the 
existing structure, was $300,000, less the value of the land.  
On December 26, 2012, the Parks sent a demand letter to Safeco requesting payment of 
$440,195.55, less the credit of the ACV check, for a net payment of $271,195.55 as their “direct 
financial loss.” Additionally, the Parks explained that they purchased an existing house in the 
Idaho Falls area instead of rebuilding on the lot of their destroyed house. Safeco responded to 
clarify that it agreed to pay up to $440,195.55 for the cost of replacement or the amount actually 
incurred, whichever was less. Safeco also requested documentation to confirm the replacement 
had been made and the amount actually spent. After receiving no response, Safeco sent another 
letter, on January 22, 2013, again requesting documents to confirm the purchase of a new house. 
The following day, the Parks reiterated that their actual loss was $440,195.55. Again, Safeco 
requested the documents necessary to determine the replacement cost. Safeco also stated: “We 
agree the replacement cost of the damaged structure will be provided up to the amount of 
$440,195.55. Upon receipt of the documentation to confirm replacement and the amount actually 
spent, we will promptly review for replacement cost payment per the Loss Settlement provision 
of our policy.” Safeco continued to request the documents necessary to determine the amount 
due for the replacement. On May 31, 2013, the Parks provided documentation of the Idaho Falls 
house purchase, but disputed Safeco’s claim that the replacement cost was limited to the amount 
actually spent.  
On June 8, 2013, Safeco agreed “to pay the additional undisputed amount for the 
difference between the market value and replacement cost of the dwelling which has been 
incurred by Mr. And Mrs. Parks at this time.” In response, the Parks notified Safeco they would 
be “filing suit against Safeco on the house loss given Safeco’s rejection of the Parks’ right to 
recover their actual insured loss – their ‘Direct Financial Loss’ – acknowledged by Safeco and as 
determined by its own selected evaluator.” On June 14, 2013, Safeco paid the Parks $86,000 for 
                                                 
1 The Parks do not dispute that the land is not included in replacement cost, nor are they disputing the valuation of 
the land.  
 
4 
 
the undisputed dwelling replacement cost ($300,000 for the cost of the Idaho Falls home, less 
$45,000 for the land, less the $169,000 previously paid).2  
On June 13, 2013, the Parks filed a complaint against Safeco, alleging that they were 
entitled to $440,195.55 under the Policy and that Safeco acted in bad faith in the handling of the 
matter. Safeco filed a Motion for Summary Judgment asserting that it did not breach the Policy 
and it did not act in bad faith. The Parks filed their own Motion for Summary Judgment, arguing 
there was no genuine issue of fact as to their entitlement to the full amount of the replacement 
cost for the loss of their house. The Parks’ motion also requested an order allowing them to 
amend their complaint to add a claim for punitive damages. The Parks included a declaration 
from an insurance industry expert that the word “incurred” as used in the Policy must mean the 
amount estimated to repair or replace the loss. Safeco moved, inter alia, to strike the expert’s 
declaration because it was: (1) untimely and (2) irrelevant and infringed on the court’s 
determination of questions of law.3 Ultimately, the district court granted Safeco’s motion for 
summary judgment, denied the Parks’ motion for summary judgment, and denied the Parks’ 
motion to amend their complaint.  
First, the district court held that the Replacement Cost provision of the Policy was 
unambiguous. Specifically the district court held that the word “replace” was unambiguous. The 
district court noted that the Parks had three options to replace their destroyed home: (1) rebuild 
their house in the same location; (2) build a house in a new location; or (3) purchase an existing 
home. Despite the fact that the definition of “replace” varied depending on the context, the 
district court held that it was not reasonably subject to conflicting interpretations. Thus, “[w]ithin 
the context of the Replacement Cost provision, all interpretations of ‘replace’ as used in the 
Policy plainly provide that [Safeco had] three options to ‘supply or substitute an equivalent for’ 
the [Parks’] destroyed home.” Additionally, the district court held that the term “incur” in the 
Replacement Cost provision was unambiguous. The district court held that the term could not 
reasonably be interpreted to include the Belfor estimate; rather, the Parks “incurred or brought on 
themselves an expense to replace their destroyed home by buying a replacement home in Idaho 
Falls.” 
                                                 
2 The Parks received an additional amount in this payment for their personal property losses. They have received the 
full limit for their personal property losses. Accordingly, no part of their claim against Safeco involves personal 
property.  
3 The district court did not rule on Safeco’s motion to strike.  
 
5 
 
Second, the district court held there were no genuine issues of fact regarding Safeco’s 
compliance with the obligations under the Policy. The district court noted: “[t]here is nothing in 
the Policy that allows Plaintiffs to purchase a less expensive house and then claim the difference 
between the less expensive house and the cost to rebuild.” Therefore, the district court held that 
the Policy was unambiguous, the Parks were bound by its plain terms, and the Parks received the 
amount due under the clear language of the Policy. 
Third, the district court noted that to recover under a claim of bad faith, there must also 
have been a duty under the Policy that was breached. The district court found there was no 
breach of contract, and, therefore, Safeco could not have committed bad faith in handling the 
Parks’ Policy. 
Fourth, the district court denied the Parks’ motion to amend the complaint to add a claim 
for punitive damages because the Parks had “not established a reasonable likelihood of proving 
facts at trial sufficient to support an award of punitive damages.”  
The Parks appealed. 
III.  ISSUES ON APPEAL 
1. 
Whether the district court erred in granting summary judgment against the Parks 
regarding their breach of contract claim.  
2. 
Whether the district court erred in granting summary judgment against the Parks 
regarding their claim that Safeco’s conduct constituted bad faith. 
3. 
Whether the district court erred in holding that the Parks were not entitled to amend their 
Complaint to assert a claim for punitive damages.  
4. 
Whether either party is entitled to attorney fees on appeal pursuant to Idaho Code section 
41-1839.  
IV.  STANDARD OF REVIEW 
A. 
Summary Judgment 
On appeal from the grant of a motion for summary judgment, we review 
that decision de novo but apply the same standard used by the district court in 
ruling on the motion. McColm–Traska v. Valley View Inc., 138 Idaho 497, 65 
P.3d 519 (2003); Carnell v. Barker Management, Inc., 137 Idaho 322, 48 P.3d 
651 (2002). As a general rule, this Court will affirm the judgment “if the 
pleadings, depositions, and admissions on file, together with the affidavits, if any, 
show that there is no genuine issue as to any material fact and that the moving 
party is entitled to a judgment as a matter of law.” I.R.C.P. 56(c); Carnell, 137 
Idaho at 327, 48 P.3d at 656. When making its determination, the Court construes 
all facts in the light most favorable to the nonmoving party. Id. 
 
6 
 
Cascade Auto Glass, Inc. v. Idaho Farm Bureau Ins. Co., 141 Idaho 660, 662, 115 P.3d 751, 753 
(2005).  
B. 
Motion to Amend Complaint 
 
“A trial court’s ruling on a motion to amend a complaint to add a claim for punitive 
damages is reviewed for an abuse of discretion.” Weinstein v. Prudential Property and Cas. Ins. 
Co., 149 Idaho 299, 311, 233 P.3d 1221, 1233 (2010) (citing Todd v. Sullivan Constr. LLC, 146 
Idaho 118, 121, 191 P.3d 196, 199 (2008)). To determine whether a district court abused its 
discretion, this Court applies a three part test asking whether the district court: “(1) correctly 
perceived the issue as one of discretion; (2) acted within the outer boundaries of its discretion 
and consistently with the legal standards applicable to the specific choices available to it; and (3) 
reached its decision by an exercise of reason.” Marek v. Lawrence, 153 Idaho 50, 53, 278 P.3d 
920, 923 (2012) (quoting Commercial Ventures, Inc. v. Rex M. & Lynn Lea Family Trust, 145 
Idaho 208, 212, 177 P.3d 955, 959 (2008)).  
V.  ANALYSIS 
A. 
The district court did not err in granting summary judgment in favor of Safeco 
regarding the Parks’ breach of contract claim.  
We affirm the district court’s grant of summary judgment for Safeco. “In interpreting an 
insurance policy, ‘where the policy language is clear and unambiguous, coverage must be 
determined, as a matter of law, according to the plain meaning of the words used.’” Cascade 
Auto Glass, 141 Idaho at 662–63, 115 P.3d at 753–54 (quoting Clark v. Prudential Property and 
Cas. Ins. Co., 138 Idaho 538, 541, 66 P.3d 242, 245 (2003)). Here, Safeco satisfied its 
obligations under the plain language of the Policy by complying with subsection (1), the relevant 
portion of the Loss Settlement provision.  
Subsection (1) of the Loss Settlement provision states that Safeco would pay the full cost 
of replacement, but not exceeding the smallest of the following: (a) the limit of liability under the 
policy ($464,875); (b) the replacement cost on the same premises ($440,195.55); (c) the amount 
actually and necessarily incurred to replace the building ($255,000); or (d) the direct financial 
loss incurred (the Parks claim this is the Belfor estimate of $440,195.55). Safeco had already 
paid the Parks $169,000, the ACV of their house, pursuant to subsection (3) of the Loss 
Settlement provision. The Parks then decided to purchase the Idaho Falls house, which cost 
$255,000 ($300,000 purchase price less $45,000 for the land). Safeco paid the Parks $86,000 two 
weeks after receiving documentation of the Parks’ purchase of the Idaho Falls house, and well 
 
7 
 
within the thirty day payment window set out in the Policy. All told, Safeco complied with the 
plain language of the Policy by paying the Parks $255,000 for the replacement cost ($169,000 
previously paid as the ACV plus $86,000). Mrs. Parks conceded that Safeco paid for “the totality 
of the replacement home.”  
B. 
The district court did not err in granting summary judgment against the Parks 
regarding their claim that Safeco committed bad faith in handling the claim.  
The Parks argue that Safeco acted in bad faith by paying the ACV and withholding 
further payment until the Parks had incurred an expense to replace their house. Safeco contends 
that it complied with Idaho case law by making payments to the Parks as it was able to determine 
the Parks’ damages – first, advancing the payment of $169,000 as the ACV, and second, waiting 
to pay the Parks the remainder due under the Policy until the Parks had replaced their house and 
provided the appropriate documentation.  
In order for a first-party insured to recover on a bad faith claim, the 
insured must show: “1) the insurer intentionally and unreasonably denied or 
withheld payment; 2) the claim was not fairly debatable; 3) the denial or failure to 
pay was not the result of a good faith mistake; and 4) the resulting harm is not 
fully compensable by contract damages.” Robinson v. State Farm Mut. Auto. Ins. 
Co., 137 Idaho 173, 176, 45 P.3d 829, 832 (2002). Although the tort of bad faith 
is not a breach of contract claim, to find that the insurer committed bad faith there 
must also have been a duty under the contract that was breached. Id. at 179, 45 
P.3d at 835. 
Dave’s Inc. v. Linford, 153 Idaho 744, 753, 291 P.3d 427, 436 (2012).   
This Court has held that a duty under a contract must be breached in order to find bad 
faith. Id. Here, Safeco did not breach the Policy; therefore, Safeco did not commit bad faith. 
C. 
The district court did not err in holding that the Parks were not entitled to amend 
their Complaint to assert a claim for punitive damages.  
The Parks contend that their insurance expert concluded that Safeco’s conduct was 
outrageous. Based solely on the declaration of their expert, the Parks contend that they are 
entitled to present the issue to a jury.  
Idaho Code section 6-1604 provides that a plaintiff seeking to recover punitive damages 
“must prove, by clear and convincing evidence, oppressive, fraudulent, malicious or outrageous 
conduct by the party against whom the claim for punitive damages is asserted.” I.C. § 6-1604(1). 
Idaho Code section 6-1604(2) provides that a court must allow a motion to amend pleadings to 
include punitive damages if, “after weighing the evidence presented, the court concludes that, the 
 
8 
 
moving party has established at such hearing a reasonable likelihood of proving facts at trial 
sufficient to support an award of punitive damages.” I.C. § 6-1604(2).  
The test to determine whether a trial court has abused its discretion in ruling on a motion 
to amend a complaint to add a claim for punitive damages consists of three parts asking whether 
the trial court: “(1) correctly perceived the issue as one of discretion; (2) acted within the outer 
boundaries of its discretion and consistently with the legal standards applicable to the specific 
choices available to it; and (3) reached its decision by an exercise of reason.” Marek, 153 Idaho  
at 53, 278 P.3d at 923  (quoting Commercial Ventures, Inc., 145 Idaho at 212, 177 P.2d at 959 ).  
The Parks have failed to demonstrate that an abuse of discretion occurred under any part 
of the test applied by this Court.  
Regarding the first part of the test, the Parks do not argue that the district court perceived 
the issue as anything other than an exercise of discretion. Because it is the Parks’ burden to 
demonstrate, which they do not attempt to do, this Court cannot hold that the district court 
abused its discretion under the first part of the test.  
Regarding the second part of the test, the Parks failed to demonstrate that the district 
court violated any legal standard or law in deciding not to allow the complaint to be amended to 
add a claim for punitive damages. The Parks’ briefs are devoid of any legal argument regarding 
the district court’s abuse of discretion. The Parks merely state that the “bottom line is that a 
seasoned, respected, insurance professional has carefully reviewed the conduct of Safeco and 
provided a . . . detailed factual basis for why Safeco’s conduct was outrageous. . . . The Parks are 
entitled to present that evidence to a jury.” There is no evidence to find an abuse of discretion 
under the second part of the test, which requires that a violation of a law or legal standard be 
identified.  
Regarding the third part of the test, the Parks have failed to demonstrate that the district 
court’s action was outside the bounds of reason. In the briefs, the Parks argue that they are 
entitled to present their expert’s declaration to a jury, but provide no explanation regarding why 
the district court’s denial as to their motion to amend the complaint was outside the bounds of 
reason. The district court held that Safeco fulfilled the unambiguous terms of the Policy and the 
Parks could not demonstrate a reasonable likelihood that Safeco committed a bad act with a bad 
state of mind. Further, the district court concluded that the Parks had not established a reasonable 
likelihood of proving facts at trial sufficient to support an award of punitive damages.  
 
9 
 
In sum, because the Parks have not satisfied the three part abuse of discretion test the 
district court’s denial of the Parks’ motion to amend their complaint was not an abuse of 
discretion.  
D. 
Safeco is entitled to attorney’s fees on appeal.  
The Parks argue that according to Idaho Code section 41-1839(1) they are entitled to 
attorney’s fees on appeal because Safeco has not paid the amount justly due within thirty days 
after the proof of loss was furnished. In response, Safeco argues that the ACV was paid within 
thirty days of receiving the ACV appraisal, and the remainder of the amount justly due was paid 
within thirty days of receiving documentation of the purchase price of the Idaho Falls house. 
Accordingly, Safeco argues that the Parks are not entitled to attorney’s fees on appeal.  
Separately, Safeco argues that according to Idaho Code section 41-1839(4) it is entitled to 
attorney’s fees on appeal. Further, Safeco argues that it is entitled to costs of appeal as a matter 
of right, should it be found to be the prevailing party pursuant to Idaho Appellate Rule 40.  
This Court has analyzed Idaho Code section 41-1839(1) as follows: 
The statute “contains two requirements for an insured to be entitled to an 
award of attorney fees: (1) the insured must provide a proof of loss as required by 
the insurance policy; and (2) the insurer must fail to pay the amount justly due 
within thirty days after receipt of the proof of loss.” Parsons v. Mutual of 
Enumclaw Ins. Co., 143 Idaho 743, 746–47, 152 P.3d 614, 617–18 (2007). 
“As defined by this Court, a submitted proof of loss is sufficient when the 
insured provides the insurer with enough information to allow the insurer a 
reasonable opportunity to investigate and determine its liability.” Greenough v. 
Farm Bureau Mut. Ins. Co. of Idaho, 142 Idaho 589, 593, 130 P.3d 1127, 1131 
(2006). It must also mention a specific sum so that a tender can be 
made, Associates Discount Corp. of Idaho v. Yosemite Ins. Co., 96 Idaho 249, 
257, 526 P.2d 854, 862 (1973), or provide the basis for calculating the amount of 
the claimed loss, Boel v. Stewart Title Guar. Co., 137 Idaho 9, 14, 43 P.3d 768, 
773 (2002) (demand for payment of existing mortgage sufficient even though 
amount owing on the mortgage was not mentioned). 
Weinstein, 149 Idaho at 327–28, 233 P.3d at 1249–50. Here, the Parks have failed to 
demonstrate that Safeco did not pay the amount justly due within thirty days after receipt of the 
proof of loss. First, Safeco paid the Parks five days after the appraiser determined the ACV of 
the Parks destroyed home. Then, Safeco paid the remaining amount due two weeks after 
receiving the closing documents of the purchase of the Idaho Falls home. Thus, Safeco paid the 
amount justly due within thirty days after receipt of each proof of loss; therefore, the Parks are 
not entitled to attorney fees on appeal.  
 
10 
 
Idaho Code section 41-1839(4) provides in pertinent part: “attorney’s fees may be 
awarded by the court when it finds, from the facts presented to it that a case was brought, 
pursued or defended frivolously, unreasonably or without foundation.” I.C. § 41-1839(4). Here, 
the Parks’ arguments were unreasonable and lacked foundation. The language in the Policy was 
unambiguous. Moreover, Safeco, on numerous occasions, informed the Parks’ of their options. 
Therefore, we award Safeco attorney fees according to Idaho Code section 41-1839(4). 
Additionally, Safeco, as the prevailing party, is entitled to costs pursuant to Idaho Appellate Rule 
40.  
VI.  CONCLUSION 
We affirm the district court’s April 23, 2015 judgment. Attorney fees and costs to Safeco. 
Justices EISMANN, BURDICK and HORTON, CONCUR. 
Chief Justice JIM JONES concurring in part and dissenting in part. 
 
I concur in the Court’s opinion, with the exception of the award of attorney fees to 
Safeco. While the Parks’ claims are not articulated particularly well, it appears to me that they 
were asking for an extension of existing law and I would therefore not characterize the case as 
having been pursued frivolously within the meaning of Idaho Code section 49-1839(4).  
 
This case presents some equities in favor of the Parks but those equities are outweighed 
by the specific language written by Safeco into its insurance policy. It is fairly obvious that the 
Parks’ attorney allowed his concept of “replacement” to outweigh the limiting language 
employed in the policy’s replacement cost option. As defined in the policy, “replace” does not 
necessarily have the meaning that comes to mind in everyday life. Webster’s New World 
Dictionary defines replace in this context as “to provide a substitute or equivalent for.” However, 
the policy defines the full cost of replacement as “the full amount actually and necessarily 
incurred to . . .  replace the damaged building.” So, the policy only provides for payment of the 
cost incurred by the insured to replace the building. The Parks argue that the replacement 
building should be equivalent in size and quality to the building that was destroyed. That is not 
an unreasonable argument but it conflicts with the policy language. In addition to the not 
unreasonable assumption of equivalency of the replacement, counsel for the Parks appeared to 
have been thrown off by the determination made by Belfor Construction on behalf of Safeco that 
the cost to replace the Parks’ house with equivalent construction was $440,195.55. At oral 
argument of this case, Safeco’s counsel conceded that had the Parks chosen to have the house 
 
11 
 
rebuilt on the same lot where it had stood when the fire occurred or had the Parks purchased a 
house valued in excess of the Belfor estimate, the Parks would have received the full 
$440,195.55. It is not entirely clear that Safeco would have agreed because, as an alternate to the 
replacement provision, the policy provides for payment of the “direct financial loss you incur,” 
and provides that the lesser of the two amounts will be paid. Arguably, the direct financial loss 
incurred by the Parks would have been closer to the $169,000 paid to the Parks as the “actual 
cash value” of the destroyed home under other provisions of the policy. 
 
The Parks could have challenged the actual cash value determined by Safeco, but they 
did not. Their counsel invoked the replacement cost option 181 days after the date of loss. Safeco 
overlooked the 180-day deadline for making claim based on the replacement cost option, which 
resulted in an additional $86,000 being paid to the Parks for the purchase of the Idaho Falls 
home.  
 
In the correspondence that led up to the Parks’ invocation of the replacement cost option, 
it is fairly clear that there was a misunderstanding between Safeco and the Parks’ counsel 
regarding what would be paid. In a letter to the Parks’ counsel, dated September 20, 2012, 
Safeco provided a copy of the Belfor estimate, stating that it was “a bid for the replacement of 
the Parks’ home, using equivalent construction.” By letter dated November 24, 2012, Safeco said 
that it would “pay the replacement cost of the dwelling up to $440,195.55 or the amount actually 
incurred, whichever is less.” In a letter to Safeco, dated December 26, 2012, the Parks’ counsel 
invoked the replacement cost option, indicating that the Parks had decided to purchase an 
existing home and stating an expectation that the Parks would receive an additional $271,195.55 
over and above the $169,000 they had already received. Safeco responded on December 27, 
indicating that it would pay “the amount actually spent” for the replacement home. It is likely 
that the Parks then realized the Belfor estimate would not be the basis for payment because the 
record indicates they did not furnish the purchase documents for the Idaho Falls home until five 
months later and after several requests by Safeco to furnish the same.  
 
The Parks make a number of arguments that have some appeal but they simply cannot get 
over the explicit language employed in the insurance policy. The Parks seem to be arguing that 
their reasonable expectations should prevail over the language in the policy, but this Court long 
ago rejected the reasonable expectations doctrine, shortly after having adopted the same. In 1979, 
I found myself in the awkward position of presenting an insurance coverage case to the Idaho 
 
12 
 
Supreme Court shortly after it had disavowed the reasonable expectations doctrine. My written 
briefing, submitted before the disavowal, asserted that doctrine in support of coverage. 
According to the Court: 
The thorn of Corgatelli v. Globe Life & Accident Ins. Co., 96 Idaho 616, 533 P.2d 
737 (1975), which made the adoption of that doctrine in Idaho a debatable 
question, was recently removed from the side of our jurisprudence. Casey v. 
Highlands, 100 Idaho 505, 600 P.2d 1387 (1979), decided after this appeal was 
brought, expressly rejected the doctrine of reasonable expectations in favor of 
traditional contract rules of construction.  
Foremost Ins. Co. v. Putizer, 100 Idaho 883, 888, 606 P.2d 987, 992 (1980). My client, Robert 
C. Knievel, a/k/a Evel Knievel, lost out in that case and the Parks must similarly lose out in this 
case. However, I think they made a valiant enough effort to escape the award of attorney fees 
against them.