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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Adams Craig Acquisitions LLC, et al.,

Plaintiffs,

v. 

Defendant Atain Specialty Insurance 

Company, et al.,

Defendants.

No. CV-18-00817-PHX-GMS

ORDER 

Pending before the Court are the Motion for (Partial) Summary Judgment of 

Plaintiffs Adams Craig Acquisitions, LLC (“ACA”) and Adams Craig Technologies, LLC 

(“ACT”) (Doc. 55.) and the (Cross) Motion for Summary Judgment of Defendants Atain

Specialty Insurance Co. (“Defendant Atain”) and Dynamic Claims Services, Inc.

(“Defendant Dynamic”) (Doc. 53.). For the following reasons Plaintiffs’ Motion is denied, 

and Defendants’ Motions are granted in part and denied in part. 

BACKGROUND

This case arises out of an insurance contract. Plaintiff ACA purchased a 

Comprehensive General Liability Policy (“Policy”) from Defendant Atain effective 

December 17, 2015 through December 17, 2016. 

In March 2014, Plaintiffs

1

contracted to remodel a residence in Paradise Valley. The 

remodel was completed in June 2016. In August 2016, the homeowners notified Plaintiffs 

of a water leak in the garage. It was eventually determined that roof caps, incorrectly 

 

1 ACT was doing business under ACA’s trade name. Both entities are managed by the 

same principal, Mr. Stephen Adams.
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installed by one of Plaintiffs’ subcontractors, JLC Roofing, Inc. (“JLC”), were the cause 

of the leak. The Arizona Registrar of Contractors (“ROC”) ordered JLC to repair the 

defective roof caps. JLC complied with the ROC’s order. However, JLC refused to repair

and denied responsibility for any damage caused by water seepage under the walk deck

above the garage. JLC’s insurance carrier also refused to participate in resolving the issue. 

On February 24, 2017, Plaintiffs decided to make a claim under their policy with Atain. 

Atain promptly hired Defendant Dynamic as an independent adjuster to review the site. 

Defendant Dynamic’s representative Mr. Marvin Heinl met with Plaintiffs’ 

principal, Mr. Adams, to inspect the residence. After the inspection, Mr. Heinl told Mr. 

Adams that he had a duty to “mitigate his damages.” (Doc. 56-5 at 18.) Mr. Heinl then 

issued the inspection report (“Dynamic Report”) on March 21, 2017. The Dynamic Report 

acknowledged that “damages to the drywall in the garage [are] directly related to the 

deficiency in the roof cap installation on the second level roof.” (Doc. 56-6 at 9.) The 

Dynamic Report further noted that Mr. Adams claimed the deficient roof caps also resulted 

in damage to the walk deck above the garage. The Dynamic Report did not opine on the

cause of the damage to the walk deck, but instead suggested that a third-party expert be 

hired to evaluate Mr. Adams’s assertion. However, the Dynamic Report did explain that 

much of the evidence “of the waterproof barriers and deck application, and the sealing with 

the parapets and perimeter wall of the home” had been lost. (Doc. 56-6 at 9.) Defendant 

Atain did not conduct any further investigation.

There is some dispute as to the comprehensiveness of the information Plaintiffs 

provided to Defendant Atain. All parties agree, however, that Defendant Atain sent 

requests for information on April 4, 2017, May 11, 2017, and June 9, 2017. On July 21, 

2017, Defendant Atain issued its initial coverage analysis. Plaintiffs submitted additional 

information in September 2017. Defendant Atain issued its final coverage determination

in a letter on October 11, 2017 and remitted payment for the covered claims. Plaintiffs 

requested reimbursement for $120,008.37, and Defendant Atain paid Plaintiffs $28,362.97.

Defendant Atain determined there were three categories to ACA’s Claim: (1) repairs 
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and costs related to the incorrectly installed roof caps—the source of the water intrusion; 

(2) repairs and costs to the drywall and insulation resulting from the water intrusion; and 

(3) repairs and replacement of the walk deck above the garage. Defendant Atain agreed to 

pay the costs associated with the repairs of the resulting damage to the drywall and 

insulation but refused to pay the costs associated with repairing the roof caps and the walk 

deck. Defendant Atain asserted that the denied costs were not covered under the Policy 

because they were incurred to repair “defective work” rather than “resulting damage.” 

Defendant Atain also denied Plaintiffs’ requests for coverage of their own labor costs in 

investigating and repairing the leak and other damages. 

Plaintiffs brought suit against Defendant Atain in the Superior Court for Maricopa 

County alleging breach of contract, breach of the covenant of good faith and fair dealing, 

promissory estoppel, and negligent misrepresentation. Plaintiffs also assert that Defendant

Dynamic aided and abetted Defendant Atain in breaching its insurance contract with 

Plaintiffs. Defendants timely removed the action to this court. Subsequently, Plaintiffs 

moved for summary judgment on the breach of contract and bad faith claims, while

Defendants cross-moved for summary judgment on all the asserted claims.

DISCUSSION

I. Legal Standard

The purpose of summary judgment is “to isolate and dispose of factually 

unsupported claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323–24, 106 S. Ct. 2548, 91 

L.Ed.2d 265 (1986). Summary judgment is appropriate if the evidence, viewed in the light 

most favorable to the nonmoving party, shows “that there is no genuine issue as to any 

material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. 

P. 56(c). Only disputes over facts that might affect the outcome of the suit will preclude 

the entry of summary judgment, and the disputed evidence must be “such that a reasonable 

jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 

U.S. 242, 248 (1986).

“[A] party seeking summary judgment always bears the initial responsibility of 
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informing the district court of the basis for its motion and identifying those portions of [the 

record] which it believes demonstrate the absence of a genuine issue of material fact.” 

Celotex, 477 U.S. at 323. Parties opposing summary judgment are required to “cit[e] to 

particular parts of materials in the record” establishing a genuine dispute or “show[ ] that 

the materials cited do not establish the absence . . . of a genuine dispute.” Fed. R. Civ. P. 

56(c)(1). A district court has no independent duty “to scour the record in search of a 

genuine issue of triable fact[.]” Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996). 

“[W]hen simultaneous cross-motions for summary judgment on the same claim are before 

the court, the court must consider the appropriate evidentiary material identified and 

submitted in support of both motions, and in opposition to both motions, before ruling on 

each of them.” Fair Housing Council of Riverside Cnty., Inc. v. Riverside Two, 249 F.3d 

1132, 1134 (9th Cir. 2001).

II. Analysis

A. Breach of Contract

The Policy provides, “[w]e will pay those sums that the insured becomes legally 

obligated to pay as damages because of bodily injury or property damage to which this 

insurance applies.” (Doc. 54-1 at 57.) The parties’ dispute the scope and application of this 

provision.

1. Resulting Damages

Under the Policy, property damage must be caused by an “occurrence.” Faulty 

workmanship is not an occurrence in Arizona. As a result, the cost of repairing defective 

work, including the “get to” costs required to make repairs to defective work, are not 

covered “property damage.” Desert Mountain Props. Ltd. P’ship v. Liberty Mut. Fire Ins. 

Co., 225 Ariz. 194, 214–15, 236 P.3d 421, 441–42 (Ariz. Ct. App. 2010). However, 

damage that results from defective work (“resulting damage”) is an occurrence in Arizona. 

Lennar Corp. v. Auto-Owners Ins. Co., 214 Ariz. 255, 262, 151 P.3d 538, 545 (Ct. App. 

2007). Thus, the costs of repairing resulting damage, including the “get to” costs, are 

covered property damage. Desert Mountain, 225 Ariz. at 214–15, 236 P.3d at 441–42. 
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Here, the parties agree that the roof caps constitute defective work. Thus, any 

expenses incurred getting to or repairing the roof caps are not covered under the Policy. 

Conversely, any expenses incurred getting to or repairing damage caused by the faulty roof 

caps are covered under the Policy. The parties have highlighted two claims where this 

classification is determinative: (1) the removal and replacement of the wall siding below 

the roof caps; and (2) the removal and replacement of the walk deck materials.

2

The wall siding: Plaintiffs contend that the wall siding had to be removed to get to 

water damage which was caused by the leak originating from the faulty roof caps. 

Defendant Atain asserts that the siding was instead removed to get to the defective roof 

caps themselves. Neither party points to evidence in the record to support their position 

beyond their respective Statement of Facts in which each party provides a conclusory 

statement as to the reason for the removal. Without more, a reasonable juror could conclude 

in favor of either party. Because there is a genuine dispute as to why the siding was 

removed, summary judgment as to this issue is denied to both Plaintiffs and Defendants.

The walk deck: Plaintiffs assert that the damage to the walk deck was caused by the 

deficient roof caps. Specifically, Mr. Adams explained in his declaration that “the water 

was running behind the siding and underneath the walk deck tile, damaging the tile as a 

result of the water leak.” (Doc. 63-1 at 3.) Defendant Atain contends that Plaintiffs failed 

to provide any evidence, beyond Mr. Adams’s own statement, to support Mr. Adams’s 

theory. Instead, Firesky Coating LLC (“Firesky”), an entity retained by Plaintiffs, 

submitted a letter to Defendant Atain’s adjuster stating that “the [walk] deck was 

improperly installed, inadequate to hold decking and otherwise incorrect and not completed 

in a workmanlike manner.” (Doc. 54-3 at 97.) Moreover, none of the other entities hired 

by Plaintiffs to source the leak or evaluate the damage opined on the cause of the damage 

to the walk deck. Based on the Firesky letter and the lack of controverting evidence, 

Defendant Atain concluded that the walk deck was replaced to repair Plaintiffs’ defective 

 

2 Defendant Atain also denied Plaintiffs’ claim for the costs incurred reinstalling the walk 

deck hand rails. In their briefing, Plaintiffs seem to include this expense with the general 

expenses incurred in repairing and replacing the walk deck “materials.” Thus, the analysis 

provided for the walk deck includes consideration of the walk deck hand rails. 
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work. However, the Firesky letter does not preclude the possibility that the walk deck was 

also damaged as a result of the faulty roof caps. Neither party has produced sufficient 

evidence to preclude an issue of fact as to the cause of the walk deck’s damage. Summary 

judgment on this issue is denied to both Plaintiffs and Defendants. 

2. Plaintiffs’ Labor Costs

The parties also dispute whether the Policy requires Defendant Atain to reimburse 

Plaintiffs for their own time spent addressing the damage to the residence. Defendants 

assert that the Policy language— “legally obligated to pay as damages”—suggests that the 

Policy is limited to covering only those costs that the insured owes to third parties. 

In Arizona, an insurance policy is interpreted “according to its plain and ordinary 

meaning, examining it from the viewpoint of an individual untrained in law or business.” 

Desert Mountain, 225 Ariz. at 200, 236 P.3d at 427. The ordinary meaning of a “legal 

obligation to pay” is “any obligation enforceable by law, including for example, an 

obligation created by statute, contract or the common law.” Id. at 428. The ordinary 

meaning of “damages” is the “estimated money equivalent for detriment or injury 

sustained.” Id. at 429. The relevant injury or detriment within the context of the Policy is 

that of the homeowners, not the insured. Id. at 202–03. (holding that the expenses the 

insured incurred repairing resulting property damage the insured was contractually 

obligated to repair constituted the “estimated money equivalent for detriment or injury 

sustained” by the homeowners, and were covered under the Policy) (emphasis added).

Consequently, to the extent the insured has a legal obligation to make repairs, any expenses 

incurred by the insured to repair resulting damage are covered under the Policy. It is

immaterial whether the insured made the repairs itself or contracted with a third party. 

In the instant case, the parties do not dispute that Plaintiffs were contractually liable 

for the correction of any defects that resulted from their construction. To the extent 

Plaintiffs’ requested labor costs were incurred repairing resulting damage, they are covered 

under the Policy. However, there is a genuine dispute as to which damages addressed at 

the residence constitute resulting damages. As a result, there is also a genuine dispute as to 
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whether Plaintiffs’ labor costs were incurred repairing covered resulting damage or 

uncovered defective work. Because neither party has produced sufficient evidence to 

preclude a reasonable juror from returning a verdict for the nonmoving party, summary 

judgment on this issue is denied to both Plaintiffs and Defendants. 

3. Prejudice

Defendant Atain asserts that the coverage determination is immaterial because 

Plaintiff ACA waived its rights to reimbursement under the Policy by failing to provide 

Defendant Atain with timely notice of the occurrence. The Policy requires Plaintiffs notify 

Defendant Atain “as soon as practicable.” (Doc. 54-1 at 67.) In Arizona, however, “an 

insured’s failure to give notice does not relieve an insurer of its contractual liability . . . 

unless the insurer can demonstrate prejudice due to the delay.” Liberty Mut. Fire Ins. Co. 

v. Mandile, 192 Ariz. 216, 223, 963 P.2d 295, 302 (Ct. App. 1997). To show prejudice the 

insurer must demonstrate that the insured’s actions “had an actual and substantial adverse 

[effect]” on the insurer’s ability to adjust the claim. Desert Mountain, 225 Ariz. at 207, 236 

P.3d at 434 (alteration in original). Prejudice must be based on more than delay alone. Id.

(citing Globe Indem. Co. v. Blomfield, 115 Ariz. 5, 7, 562 P.2d 1372, 1374 (Ct. App. 

1977)). Moreover, vague assertions of what the insurer could have done had it been notified 

sooner are also insufficient. Blomfield, 115 Ariz. at 7, 562 P.2d at 1374.

In Blomfield, to support its claim of prejudice, the insurer produced statements by 

its claims manager proclaiming that if the company had known of the incident sooner it 

may have been able to handle the incident more directly or settle the suit earlier. Id. The 

Arizona Court of Appeals explained, “[t]hese vague statements do not present any evidence 

of prejudice,” and upheld the trial court’s grant of summary judgment. Id.

Defendant Atain claims prejudice in the following respects: (1) it “lost the right to 

preserve and protect the property from damage caused by additional rainstorms”; (2) it 

“was effectively precluded from having a professional evaluate Mr. Adam’s unsupported 

claim that the roof cap leak caused damage to the tile on the Walk Deck” because most of 

the evidence had been lost before Atain was notified of the occurrence; and (3) it was 
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deprived of the opportunity to select someone other than the insured to manage the 

correction of the defective work. (Doc. 53 at 12, Doc. 64 at 8.) As an initial matter, these 

claims of prejudice go beyond the vague assertions deemed insufficient in Blomfield and 

are not insufficient as a matter of law.

Plaintiffs argue that Defendant Atain’s claim of prejudice is “disingenuous” because 

Defendant Atain failed to take the steps it claims it would have taken even after it received 

notice. Namely, that Defendant Atain failed to hire an expert to investigate the extent of 

the damage caused by the roof caps and failed to take any steps to protect the site from 

future damage. However, it is undisputed that relevant evidence was lost and the residence 

was further damaged due to rainstorms before Defendant Atain was able to inspect the 

property. Thus, regardless of how Defendant Atain handled the claim after notice was 

received, a reasonable juror could conclude that Defendant Atain’s ability to adjust the 

claim was substantially adversely effected by Plaintiffs’ conduct.

Conversely, Defendant Atain has not produced any evidence that a more complete 

investigation would have been conducted or feasible if it had a received prior notice. 

Liberty Mut. Fire Ins. Co., 192 Ariz. at 224, 963 P.2d at 303 (explaining that the insurer 

failed to make a sufficient showing of prejudice to warrant summary judgment when it 

failed to provide evidence that a more complete investigation would have been undertaken 

or feasible had the insurer received notice of the incident earlier). Without such a showing, 

a reasonable juror could conclude that Defendant Atain was not prejudiced by Plaintiffs’ 

conduct. Because neither party has produced sufficient evidence to preclude a reasonable 

juror from returning a verdict for the nonmoving party, summary judgment on this issue is 

denied to both Plaintiffs and Defendants.

B. Breach of the Covenant of Good Faith and Fair Dealing

1. Bad Faith

Plaintiffs also argue that Defendant Atain acted in bad faith. “An insured alleging 

breach of the duty of good faith must show both that the insurer acted unreasonably in 

investigating, evaluating or processing the claim and that it either knew or was conscious 
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of the fact that it acted unreasonably.” Desert Mountain, 225 Ariz. at 215, 236 P.3d at 442.

The test is both objective and subjective. Nardelli v. Metro. Grp. Prop. & Cas. Ins. Co.,

230 Ariz. 592, 597–98, 277 P.3d 789, 794–95 (Ct. App. 2012). “If the insured fails to 

designate evidence from which a jury could reasonably return a verdict on both prongs, 

then summary judgment is proper.” Addie v. Am. Family Mut. Ins. Co., No. CV–11–2534–

PHX–SMM, 2014 WL 2624922, at *4 (citing Lasma Corp. v. Monarch Ins. Co. of Ohio, 

159 Ariz. 59, 64, 764 P.2d 1118, 1123 (1988)). With respect to the objective prong, an 

insurer’s failure to pay a claim is not unreasonable when the claim’s validity is “fairly 

debatable.” Rawlings v. Apodaca, 151 Ariz. 149, 156, 726 P.2d 565, 572 (1986). The 

subjective prong requires some “consciously unreasonable conduct.” Addie, 2014 WL 

2624922 at *5 (quoting Trus Joist Corp. v. Safeco Ins. Co. of Am., 153 Ariz. 95, 104, 735 

P.2d 125, 134 (App.1986)). An “insurer is conscious of its unreasonable conduct if it either 

knew its actions lacked a reasonable basis or acted with sufficiently reckless disregard as 

to whether it had a reasonable basis for its conduct.” Id. (citing Nardelli, 230 Ariz. at 598, 

277 P.3d at 795). 

In the instant case, Defendant’s decision not to retain an expert to evaluate the extent 

of the damage caused by the faulty roof caps creates a genuine dispute concerning the 

reasonableness of Defendant Atain’s conduct. Defendant Atain contends this decision was 

based on the Dynamic Report’s notation that most of the evidence needed to evaluate the 

damage was missing. The Dynamic Report, however, also suggested that Defendant Atain 

hire an expert to evaluate the claim. Arguably, the suggestion to hire an expert implies that 

the extent of the damage could still be evaluated despite the missing the evidence. 

Consequently, a juror could reasonably conclude that Defendant Atain’s investigation was 

unreasonably inadequate notwithstanding the missing evidence. However, a reasonable 

juror could also conclude the converse. Plaintiff’s claim for breach of the covenant of good 

faith and fair dealing survives summary judgment on these grounds. Summary judgment 

on this issue is denied to both Plaintiffs and Defendants.
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2. Punitive Damages

Plaintiffs have not produced sufficient evidence to survive summary judgment with 

respect to their request for punitive damages. In Arizona, to recover punitive damages 

Plaintiffs must provide “clear and convincing evidence that the insurer engaged in 

‘aggravated and outrageous conduct’ with an ‘evil mind.’” Addie, 2014 WL 2624922 at *5 

(quoting Linthicum v. Nationwide Life Ins. Co., 150 Ariz. 326, 332, 723 P.2d 675, 681 

(1986)). This requisite standard may be “evidenced by a showing that the defendant was 

consciously aware of the needs and rights of the insured and nevertheless, ignored its 

obligations.” Linthicum, 150 Ariz. at 332, 723 P.2d at 681. The standard for punitive 

damages is notably more demanding than the standard for tort damages. Rawlings v. 

Apodaca, 151 Ariz. 149, 162, 726 P.2d 565, 578 (1986). In Rawlings, the Arizona Supreme 

Court explained that while tort damages may only require a showing of indifference, 

punitive damages require plaintiff to show an intent to harm. Id. 

Plaintiffs’ request for punitive damages is based on the same grounds advanced as 

the basis for their bad faith claim. While there may be a genuine dispute as to whether 

Defendant Atain’s decision not to further investigate the extent of the damage caused by 

the roof caps was unreasonable, Plaintiffs have not pointed to any evidence in the record 

to suggest this decision was made with an evil mind. Rawlings, 151 Ariz. at 162, 726 P.2d 

at 578 (“Indifference to facts or failure to investigate are sufficient to establish the tort of

bad faith but may not rise to the level required by the punitive damage rule.”); see Haney 

v. ACE Am. Ins. Co., No. CV–13–02429–PHX–DGC, 2015 WL 3750777, at *4 (D. Ariz. 

June 16, 2015) (noting that Arizona caselaw establishes “that punitive damages are not 

merited where an insurer merely takes a groundless position and fails to investigate the 

adequacy of the position”). Defendants’ Motion for Summary Judgment on the issue of 

Punitive Damages is granted. Plaintiffs’ Motion is denied. 

C. Promissory Estoppel

Plaintiffs contend that Defendant Atain’s agent, Mr. Heinl, directed Plaintiffs to 

“mitigate damages.” Plaintiffs assert that it proceeded with repairs to the property in 
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reliance on this directive. Defendant Atain explains that Plaintiffs were always under a duty 

to mitigate damages. Thus, Mr. Heinl’s recommendation was not a promise or 

representation that can serve as the basis for promissory estoppel. 

“To prove promissory estoppel, plaintiff must show that Defendant made a promise 

and should have reasonably foreseen that plaintiff would rely on that promise, and plaintiff 

must also show that he actually relied on the promise to his detriment.” Higginbottom v. 

State, 203 Ariz. 139, 144, 51 P.3d 972, 977 (Ct. App. 2002). Here, it is undisputed that Mr. 

Heinl told Mr. Adams, at the conclusion of the inspection, that he had a duty to “mitigate 

his damages.” Notably, Defendant Atain does not contest Plaintiffs’ assertion that Mr. 

Heinl was Defendant Atain’s agent. Thus, a juror could reasonably conclude that Mr. 

Heinl’s direction to Mr. Adams was a direction by Defendant Atain to proceed with repairs. 

Defendants’ arguments principally rely on the content of the phrase and fail to address how 

Plaintiffs may have interpreted the directive under the applicable context. Because 

Defendants have not produced sufficient evidence to preclude a reasonable juror from 

returning a verdict in favor of the non-moving party, Defendants’ Motion for Summary 

Judgment on this claim is denied.

D. Negligent Misrepresentation

Plaintiffs’ basis for their claim of negligent misrepresentation is seemingly based 

on Defendants’ failure to disclose “all relevant Policy provisions that could affect coverage 

for Plaintiffs’ damages.” (Doc. 1-5 at 11.) In Arizona, a claim for negligent 

misrepresentation can only be based on a failure to disclose information, if the nondisclosing party was required to provide the desired information. Van Buren v. Pima 

Community College Dist. Bd., 113 Ariz. 85, 87, 546 P.2d 821, 823 (1976) (“A claim for 

relief for negligent misrepresentation is one governed by the principles of the law of 

negligence.”).

Plaintiffs have not cited any authority that suggests Defendants were required to 

inform Plaintiffs of “all relevant Policy provisions.” The Court finds support to the 

contrary. See Certain Underwriters at Lloyds, London v. Payson Premier, LLC, No. 2 CA–
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CV 2008–0169, 2009 WL 1156705, at *3 (Ariz. Ct. App. Apr. 29, 2009); (“We find no 

authority suggesting an insurer must explain all possible implications of unambiguous 

policy terms.”); AAA Full Transportation System v. Patterson, No. 1 CA–CV 09–0204, 

2010 WL 1640976, at *2 (Ariz. Ct. App. Apr. 22, 2010) (explaining that the trial court did 

not err in denying the insured’s motion for new trial where the evidence at trial showed the 

insurer’s agent made no representation as to whether a claim would be covered and the 

insured failed to cite any authority for the proposition that the insured had a duty to inform 

the insured whether its claim would be covered). Plaintiffs have not provided any evidence 

on which a reasonable juror could conclude that Defendants were obliged to inform them 

of “all relevant Policy provisions.” Failure to disclose in such an instance cannot be 

characterized as negligent misrepresentation. Defendants are entitled to summary judgment 

on this claim. 

E. Aiding and Abetting

Plaintiffs assert that Defendant Dynamic assisted or encouraged Defendant Atain in 

unreasonably denying coverage of Plaintiffs’ claims. To prove aiding and abetting tortious 

conduct, the plaintiff must prove: “(1) the primary tortfeasor must commit a tort that causes 

injury to the plaintiff; (2) the defendant must know that the primary tortfeasor’s conduct 

constitutes a breach of duty; and (3) the defendant must substantially assist or encourage 

the primary tortfeasor in the achievement of the breach.” Wells Fargo Bank v. Ariz. 

Laborers, Teamsters and Cement Masons Local No. 395 Pension Trust Fund, 201 Ariz. 

474, 485, 38 P.3d 12, 23 (2002).

Plaintiffs argue that Dynamic’s Report, the basis on which Defendant Atain denied 

many of Plaintiffs’ claims, constitutes substantial assistance or encouragement of 

Defendant Atain’s allegedly tortious conduct. However, Plaintiffs’ assertions are 

misguided. Defendant Dynamic’s involvement with Plaintiffs’ claim was limited to

visiting the site and issuing the report. There is no evidence in the record to suggest that 

Dynamic knew of, or encouraged, any future breaches of duty by Defendant Atain with 

respect to Plaintiffs’ claims. Dynamic’s undisputed involvement in this case hardly rises to 
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the level necessary to properly allege a claim of aiding and abetting. Defendants are entitled 

to summary judgment on this claim.

CONCLUSION

Plaintiffs’ claims for breach of contract, bad faith, and promissory estoppel hinge 

on factual disputes that must be determined by a finder of fact. Plaintiffs, however, not 

only failed to illustrate a genuine dispute, but rather failed to allege necessary facts to 

substantiate their claims of negligent misrepresentation and aiding and abetting. The same 

can be said with respect to Plaintiffs’ request for punitive damages. 

IT IS THERFORE ORDERED that the Motion for (Partial) Summary Judgment 

of Plaintiffs (Doc. 55.) is DENIED, and the (Cross) Motion for Summary Judgment of 

Defendants (Doc. 53.) is GRANTED IN PART AND DENIED IN PART.

Dated this 4th day of September, 2019.