Opinion ID: 167029
Heading Depth: 3
Heading Rank: 3

Heading: First-Party Claims for Damage to Floors

Text: The Elworthys next raise claims regarding CGU’s refusal to pay policy benefits for damage to the floors in their home. Although their brief is not entirely clear on the matter, they seem to argue both that the failure to pay was a breach of the contract and that the failure to pay was done in bad faith. We will address the breach of contract claim first. Generally, “the insured has the burden of proving that its loss was due to an insured risk[] [and] the insurer has the burden of showing that the loss was within a policy exclusion.” Hursh Agency, Inc. v. Wigwam Homes, Inc., 664 P.2d 27, 31 (Wyo. 1983). “When the evidence is conflicting, the question of whether the loss is within the risks of the policy or excepted therefrom is ordinarily for the trier of fact.” Id. In this case, there is no conflicting evidence on whether the damage to the -9- floors was excluded from coverage. The policy excluded from coverage damages caused by “faulty, inadequate or defective: (1) . . . (2) Design, specifications, workmanship, repair, construction, renovation, remodeling, . . .(3) Materials used in repair, construction, renovation or remodeling.” Mr. Elworthy admitted in an affidavit that the damages were due to Cosner’s use of improper materials in remodeling the home. Although he later filed an affidavit contradicting those earlier statements, the District Court was correct to disregard it. See Burns v. Bd. of County Comm’rs of Jackson County, 330 F.3d 1275, 1281–82 (10th Cir. 2003) (“We will disregard a contrary affidavit . . . when it constitutes an attempt to create a sham fact issue.”) (quotation marks omitted)). Therefore, although this issue ordinarily presents a question of fact for the jury, summary judgment is appropriate in this case because there is no genuine dispute of material fact. Finally, the Elworthys argue that CGU’s failure to pay for the damage to the floors was done in bad faith. See Gainsco Ins. Co. v. Amoco Prod. Co., 53 P.3d 1051, 1058 (Wyo. 2002) (recognizing a cause of action against an insurer for failure to pay a claim in bad faith). “To establish a claim for . . . bad faith, a plaintiff must establish (1) the absence of any reasonable basis for denying the claim, and (2) the insurer’s knowledge or reckless disregard of the lack of a reasonable basis for denying the claim.” Id. Because the policy did not cover the Elworthy’s loss, CGU’s denial of the claims was clearly legitimate. Thus, the Elworthys have no bad faith claim against CGU. - 10 -