Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_11-cv-00836/USCOURTS-azd-2_11-cv-00836-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1446 Breach of Contract- Insurance

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

James J. Everett,

Plaintiff,

v.

American Family Mutual Insurance Co.,

Defendant. 

)

)

)

)

)

)

)

)

)

)

)

No. CV-11-836-PHX-SMM

ORDER

Before the Court is Plaintiff’s Motion for Partial Summary Judgment (Doc. 59), and

Defendant’s Motion for Summary Judgment (Doc. 61). The Court will order further briefing

from the parties.

BACKGROUND

Plaintiff was insured by Defendant under a policy that contained, among other

provisions, a clause guaranteeing him against loss caused by theft. (Doc. 59 at 6.) The

policy excluded from coverage theft committed by Plaintiff’s “spouse who is a resident of

[Plaintiff’s] household.” (Id. at 7.) 

On December 28, 2008, Plaintiff informed his then-wife, Ms. Colleen Brusseau, that

he intended to move out of the marital residence “sometime soon.” (Doc. 62 ¶ 10.) Ms.

Brusseau filed for divorce from Plaintiff on February 2, 2009. (Id. ¶ 12.) On February 14,

2009, Plaintiff visited his Prescott vacation residence; the last time Plaintiff had visited the

residence prior to this occasion was in November of 2008. (Id. ¶¶ 3-4.) Upon entering the

Prescott residence, Plaintiff allegedly discovered that a large amount of personal property

Case 2:11-cv-00836-SMM Document 77 Filed 01/10/13 Page 1 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 2 -

was missing. (Id. ¶ 3.)

Plaintiff called the Yavapai County Sheriff’s Office that same day, February 14, to

report the property missing. (Id. ¶ 5.) Officer Murray of the Yavapai County Sheriff’s

Office took a report. (Doc. 62-1 at 47.) Plaintiff informed Officer Murray that among the

items missing were four Honda “Quads” and a Honda motorcycle, which were registered to

him in Arizona. (Id. at 48.) The officer checked and found that no Hondas were registered

to Plaintiff in Arizona. (Id.) The officer then checked the Vehicle Identification Numbers

of the Hondas, and found that they were all registered to Ms. Brusseau. (Id.)

Officer Murray called Plaintiff back and informed him that the Hondas were now

registered to Ms. Brusseau. (Id.) Plaintiff informed the officer that Ms. Brusseau was his

wife, but that they were separated. (Id.) The officer later contacted Ms. Brusseau by

telephone on March 15, 2009, and she told the officer that she took the items from the

Prescott property, and that Plaintiff knew she had done so. (Id. at 49.)

On February 20, 2009, Plaintiff’s attorney O’Connor sent a letter to Ms. Brusseau’s

attorney. (Doc. 62 ¶ 16.) The letter stated: “It appears your client has taken 95% of the

furnishings from the Prescott residence. Demand is made for return of these items

immediately since its [sic] my clients [sic] sole and separate property.” (Doc. 62-1 at 72.)

At the divorce hearing, Ms. Brusseau again admitted to taking various items from the

Prescott property. (Doc. 62 ¶ 17.) A Decree of Dissolution of Marriage from the Superior

Court of Maricopa County was entered in June of 2010. (Doc. 69 ¶ 18.) As part of that

decree, the court found that “with two exceptions, the tangible personal property [Brusseau]

took from the Prescott house consisted of her sole and separate property . . . and an equitable

portion of the community property in that house.” (Doc. 62-2 at 12.) The two exceptions

found by the court were a washer and dryer, and the four Hondas; the court thus ordered Ms.

Brusseau to reimburse Plaintiff for value of these items. (Id.) 

On March 2, 2009, Plaintiff submitted a claim with Defendant for theft of the personal

property taken from the Prescott residence. (Id. at 2.) Defendant eventually denied

Plaintiff’s claim. (Id. at 5.) Plaintiff thereupon brought this action in the Maricopa County

Case 2:11-cv-00836-SMM Document 77 Filed 01/10/13 Page 2 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 3 -

Superior Court, alleging one count of breach of contract and one count of breach of the duty

of good faith and fair dealing. (Doc. 1.) Defendant timely removed to this Court. (Id.) 

On June 1, 2012, Defendant brought its motion for summary judgment, arguing that

there exists no genuine issue of material fact and that judgment in its favor is appropriate as

a matter of law. (Doc. 59.) Defendant contends that there is no question that: (1) Plaintiff’s

ex-wife was a member of Plaintiff’s “household” at the time of the theft and thus the theft

is not covered under the policy; (2) Plaintiff breached the cooperation clause of the policy;

(3) Plaintiff violated the material misrepresentation/fraud clause of the policy; (4) Defendant

acted in good faith in adjusting Plaintiff’s claim; and (5) there is no evidence to support

Plaintiff’s punitive damages claim. (Id. at 1.)

Plaintiff simultaneously brought his motion for partial summary judgment, arguing

that the undisputed facts show that his ex-wife was not a member of his household at the time

she took the property from the Prescott residence. (Doc. 61.)

DISCUSSION

Rule 56(f)(2), FED.R.CIV.P., provides that after giving notice and a reasonable time

to respond, the court may grant a motion for summary judgment on grounds not raised by a

party. 

Here, the parties’ cross motions concentrate heavily on the question of whether Ms.

Brusseau qualified as a “resident” of Plaintiff’s household and thus an insured under the

policy. (Doc. 61 at 6-8; Doc. 59 at 5-8.) According to Defendant’s reasoning, because Ms.

Brusseau was still a resident of Plaintiff’s household and thus an insured, the theft of the

items from the Prescott home fall under the policy’s exclusion for thefts by individuals

covered under the policy. (Doc. 61 at 6-8.) Plaintiff maintains that Ms. Brusseau was no

longer a resident of his household, and thus that her theft of the items is not excluded from

coverage. (Doc. 59 at 5-8.) 

However, the parties do not address the question of whether Ms. Brusseau’s taking

of the items from the Prescott home can be considered a “theft” at all. Under the policy,

Defendant purported to cover direct physical loss to personal property when caused by theft.

Case 2:11-cv-00836-SMM Document 77 Filed 01/10/13 Page 3 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 4 -

(Doc. 62-1 at 16.) In Arizona, theft is defined by A.R.S. § 13-1802(A), which provides that

“[a] person commits theft if, without lawful authority, the person knowingly: 1. Controls

property of another with the intent to deprive the other person of such property . . . .”

(emphasis added.)

Here, it is undisputed that Plaintiff and Ms. Brusseau were not yet divorced at the time

she took the property from the home, nor was their any order issued by any court concerning

distribution of their community property. Moreover, the decree later entered in the Superior

Court of Maricopa County expressly found that nearly all of the property Ms. Brusseau took

was her own private property or an equitable share of the community property. Given that

Plaintiff’s claim under the policy includes many, if not all, of these items of community

property or Ms. Brusseau’s property, the Court is skeptical that any legal basis exists for

defining their taking as a “theft.”

Accordingly, after considering the parties’ motions, including all responses, replies,

statements of fact, and exhibits,

IT IS HEREBY ORDERED that the parties shall submit additional briefing on the

issue of whether Ms. Brusseau’s removal of community property and her own personal

property from the Prescott home constitutes a “theft.”

IT IS FURTHER ORDERED that the parties shall exchange briefs on this issue no

later than February 8, 2013. After reviewing the opposing briefs, the parties shall file their

briefs on this issue to the Court no later than February 15, 2013. No responses or replies

will be accepted.

DATED this 9th day of January, 2013.

Case 2:11-cv-00836-SMM Document 77 Filed 01/10/13 Page 4 of 4