Opinion ID: 744916
Heading Depth: 1
Heading Rank: 4

Heading: The Ahrings' Cross-Appeals

Text: 40
41 The Ahrings appeal from the directed verdict entered in favor of SFM that the Ahrings are not entitled to any benefits under the Rogers' individual policies. We review the granting of a directed verdict de novo. Pierce, 76 F.3d at 1037. A directed verdict is proper when the evidence permits only one reasonable conclusion. Id. 42 The Ahrings contend that the directed verdict was improper because Larry Rogers' personal policy applied to the car as a newly acquired car. Under that policy, Newly Acquired Car is defined as follows: 43 Newly Acquired Car--means a car newly owned by you or your spouse if it:

44 a. if it is a private passenger car, we insure all other private passenger cars, or 45 b. if it is other than a private passenger car, we insure all cars 46 owned by you and your spouse on the date of its delivery to you or your spouse; 47 but only if you or your spouse: 48 1. tell us about it within 30 days after its delivery to your or your spouse; and 49 2. if you or your spouse has more than one of our car policies, tell us which one is to apply; and 50
51 That policy also requires that You are the sole owner of your car. The policy provides uninsured motorist (UM) coverage to any other person while occupying, with permission, either your car [or] a newly acquired car. The Ahrings argue that the Rogers had an insurable ownership interest in the collision pickup because it was partnership property. That insurable interest, they argue, was sufficient to make the collision pickup a Newly Acquired Car and coverage extended automatically for 30 days regardless of intent. 52 Under Arizona law, the Newly Acquired Car provision grants automatic coverage during the notification period. Daniels v. State Farm Mutual Auto. Ins. Co., 868 P.2d 353, 354 (Ariz.Ct.App.1994) (applying an identical provision). The majority position among states is that the provision is effective even if the policyholder only has a joint ownership interest in the vehicle. See 39 A.L.R.4th 229, 239 (1986); cf. Sellers v. Allstate Ins. Co., 555 P.2d 1113, 1115 (Ariz.1976) (applying similar additional automobile coverage from the wife's policy to husband with equitable ownership); R.J. Robinson and Son v. Houston Fire and Cas. Co., 200 So.2d 776, 777 & n. 3 (La.Ct.App.1967) (involving facts nearly identical to this case--a car newly acquired by a partnership garage--but holding that there was not sufficient ownership because partners do not have ownership interest in partnership property under the unique Louisiana partnership law). 53 We nonetheless hold that there is no coverage under the Rogers' individual policies. As stated in Daniels, the newly acquired car provision grants automatic coverage during the notification period. 868 P.2d at 354 (emphasis added). That is, the provision provides a coverage window for cars that the policyholder may choose to add to their insurance policy. The Ahrings also acknowledge that the Rogers had thirty days to notify SFM to insure the car. They then argue that coverage extends automatically because the collision took place within that window and the Rogers had not selected to apply a different policy. 54 The Ahrings fail to acknowledge that the Rogers could not select the SFM policy to apply to the collision pickup. The pickup could not be added to an individual policy because either of the Rogers must be the sole owner of any car selected for coverage. A newly acquired car provision provides temporary coverage while the policyholder decides whether to add the car to the policy. Such a provision may not apply where, as here, the car may never be added to the policy. 55 Reserve Ins. Co. v. Staats, 453 P.2d 239 (Ariz.Ct.App.1969) reached a similar conclusion under analogous circumstances. In that case, the policyholder crashed a car he had just bought and he tried to apply a newly acquired automobile provision. Id. at 241. The court noted that he sought, bought, and paid for an operator's policy, which he knew did not include coverage for an owned automobile. Id. at 242. The court held that the provision was inapplicable because the stated prerequisite for coverage, the insured's ownership of an automobile or automobiles insured under the policy, is not met. Id. Similarly, neither Rogers brother owned an automobile insured under his SFM policy because the pickup did not have one sole owner. Therefore, the newly acquired car provision is inapplicable for both of them. 6
56 In Arizona, to establish actionable fraud, the plaintiff must show a concurrence of nine elements: (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) the speaker's intent that it should be acted upon by the person and in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) the hearer's reliance on its truth; (8) the hearer's right to rely upon the representation; and (9) consequent and proximate injury. Staheli v. Kauffman, 595 P.2d 172, 175 (Ariz.1979). Each element must be proven by sufficient evidence. Echols v. Beauty Built Homes, Inc., 647 P.2d 629, 631 (Ariz.1982). 57 The district court properly refused to instruct the jury on a claim of fraud. The Ahrings cite a long list of actions by SFM which indicate that it was acting fraudulently in its investigation of the accident under the Rogers policies. Although none of these actions are persuasive, the Ahrings most notably fail to prove any damage whatsoever from all of this alleged misconduct. The absence of this crucial element is fatal to the Ahrings' claim of fraud. 58 The district court was also correct to enter a directed verdict on the issue of punitive damages. An award of punitive damages for a bad faith claim requires proof that the defendant's conduct was aggravated, outrageous, malicious, or fraudulent. Rawlings v. Apodaca, 726 P.2d 565, 578 (Ariz.1986). Punitive damages may not be awarded unless the evidence reflects something more than the conduct making up the elements of a tort. Id. at 577. The Ahrings failed to prove this something more.
59 The district court did not abuse its discretion when it denied the Ahrings' motion and granted SFM's motion for attorney's fees. The district court awarded SFM attorney's fees for the contract claim upon which it prevailed. See Ariz.Rev.Stat. Ann. § 12-341.01A (In any contested action arising out of a contract, express or implied, the court may award the successful party reasonable attorney's fees.) However, the district court denied the Ahrings' claim for attorney's fees and costs against SFM because, although attorney's fees are recoverable as damages in a bad faith action, Filasky v. Preferred Risk Mutual Ins. Co., 800 P.2d 20, 22 (Ariz.1987), the attorney's fees related to the bad faith portion of the trial were included as part of the bad faith damages awarded by the jury. 7 It was not an abuse of discretion for the district court to hold that the Ahrings are not entitled to any additional award for attorney's fees or costs related to their bad faith claim. 60 AFFIRMED. 61