Court Opinion

ID: 9931660
Source: CourtListenerOpinion
Date Created: 2024-02-09 17:00:58.825818+00
Date Added: 2024-06-11T12:25:17.219025
License: Public Domain

Appellate Case: 22-3192     Document: 010110997682        Date Filed: 02/09/2024      Page: 1
                                                                                     FILED
                                                                         United States Court of Appeals
                       UNITED STATES COURT OF APPEALS                            Tenth Circuit

                              FOR THE TENTH CIRCUIT                           February 9, 2024
                          _________________________________
                                                                            Christopher M. Wolpert
                                                                                Clerk of Court
  BRANDON STEVEN MOTORS, LLC,

        Plaintiff - Appellant,

  v.                                                           No. 22-3192
                                                      (D.C. No. 2:19-CV-02659-HLT)
  LANDMARK AMERICAN INSURANCE                                    (D. Kan.)
  COMPANY,

        Defendant - Appellee.
                       _________________________________

                              ORDER AND JUDGMENT *
                          _________________________________

 Before BACHARACH, McHUGH, and MORITZ, Circuit Judges.
                  _________________________________

        Appellant, Brandon Steven Motors, LLC (“BSM”), brought this action against its

 insurer, Appellee, Landmark American Insurance Company (“Landmark”), seeking

 payment of its claims arising from a severe hailstorm. BSM owns car dealerships in

 Wichita, Kansas, and purchased a “Dealer’s Open Lot Coverage” insurance policy (the

 “Policy”) from Landmark. On May 5, 2019, a hailstorm damaged several hundred of

 BSM’s vehicles. BSM submitted a claim, and Landmark hired Expert Auto Claims

 (“EAC”) to inspect the vehicles and assess the damage. BSM hired USA Dent to repair

        *
          This order and judgment is not binding precedent, except under the doctrines of
 law of the case, res judicata, and collateral estoppel. It may be cited, however, for its
 persuasive value consistent with Federal Rule of Appellate Procedure 32.1 and
 Tenth Circuit R 32.1.
Appellate Case: 22-3192      Document: 010110997682          Date Filed: 02/09/2024      Page: 2

 the damaged vehicles and to assist in the claims process. On June 24, 2019, EAC sent

 Landmark a spreadsheet detailing the claim total for each vehicle as well as the net

 amount available after consideration of the insurance deductible and loss from an earlier

 storm, resulting in a total of $2,300,949.19. With Landmark’s permission, EAC shared

 the spreadsheet with BSM, and BSM agreed the numbers were acceptable. While this

 assessment was occurring, USA Dent was repairing BSM’s vehicles. BSM paid USA

 Dent an initial amount of $150,000 and agreed to pay USA Dent 50% of the insurance

 proceeds.

        After receiving the spreadsheet from EAC, BSM reached out to Landmark asking

 when the claim would be paid. Landmark stated that it was still investigating BSM’s

 claim, and then sent BSM a reservation-of-rights letter, retained counsel, and sent BSM a

 document request letter. In response, BSM filed suit in the District of Kansas on October

 25, 2019, alleging one count of breach of contract and one count of breach of the duty of

 good faith and fair dealing.

        Landmark moved for summary judgment, and the district court granted the

 motion, concluding the contract did not require that Landmark pay the $2.3 million figure

 detailed in the spreadsheet. The court explained that the Policy limited BSM to recovery

 of the “actual cost” to repair the vehicles and that, even if the Policy did not so limit the

 recovery, nothing in the agreement entitles BSM to recover the $2.3 million in the

 spreadsheet. As a result, BSM could not succeed on either of its claims.

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        BSM appeals, requesting that we reverse the district court’s grant of summary

 judgment. Because we conclude that BSM has raised a genuine dispute of material fact,

 we reverse and remand this case for further proceedings.

                                 I.       BACKGROUND

                                  A.       Factual History

        BSM’s Open Lot Coverage Insurance Policy

        BSM owns dealerships in Wichita, Kansas, with hundreds of vehicles for sale on

 open lots. BSM purchased a “Dealer’s Open Lot Coverage” insurance policy from

 Landmark with a $2.5 million limit, effective August 31, 2018, to August 31, 2019. BSM

 paid Landmark $1,452,465 for the premium and fees.

        Section III of the Policy states: “The coverage afforded hereunder is ‘loss’ caused

 by or resulting from ‘Collision’ and ‘Comprehensive’ including ‘Flood’, ‘Earthquake’,

 Trick and Device and False Pretense, Theft, and Transit.” App. Vol. 1 at 160. The Policy

 provides, with our emphasis:

        “Comprehensive” shall be defined as “loss” caused by or resulting from
        damage to a covered “automobile” from any external cause except as other
        [sic] otherwise excluded or “loss” caused by “collision” of the “automobile”.
        Breakage of glass and “loss” caused by missiles, falling objects, fire, theft,
        explosion, “earthquake”, windstorm, hail, water, “flood”, vandalism, riot or
        civil commotion shall not be deemed ‘loss’ cause by “collision” or upset.

 Id. at 157. “Loss” is defined as “accidental, external, direct physical destruction, theft or

 damage to a covered ‘automobile.’” Id. at 159.

        Section IX.4. of the Policy, titled “Payment of Loss” provides:

        The Company at it’s [sic] sole option may pay for the loss in money or may
        repair or replace the damaged or stolen unit or part thereof but if requested

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        by the Company, the Insured shall replace such unit or part thereof or furnish
        the labor and materials necessary for repairs thereto and the Company shall
        pay only the actual cost to the insured. The Company may, at any time before
        the loss is paid or the unit [i]s so replaced, at their expense return any stolen
        unit to the Insured, with payment for any resultant damage thereto to or may
        take all or part of the damaged or stolen unit at the agreed or appraised value
        but there shall be no abandonment to the Company.

        The loss shall not become payable unless, as a condition precedent to
        liability, there shall have been full compliance with all the terms and
        conditions of this policy and in any event payment shall not be made until
        thirty (30) days after verified proof of loss shall have been received by the
        Company and if an appraisal is demanded then not until thirty (30) days after
        an award has been made by the appraiser.

 Id. at 167. Accordingly, Landmark had the option to pay the loss, to repair or replace the

 damaged vehicles, or to request that BSM furnish the repairs and recover its actual costs

 in doing so. The Policy goes on to describe how loss will be calculated if the vehicles are

 repaired.

        Section X of the Policy is titled “Basis of Loss Settlement and Adjustment” and

 states in relevant part:

        In the event of a partial “loss” to any “automobile” insured hereunder which
        is not settled on an appearance damage basis, “We” will calculate
        settlement as follows:

        Labor rates will be calculated as ninety percent (90%) of participating
        dealer’s customary insurance labor rates. Parts, paint and any other materials
        will be calculated at seventy-five percent (75%) of participating dealer’s
        customary retail cost. If the participating dealer subcontracts all or part of the
        repairs to a repair facility in which they, their officers, shareholders or
        employees have no financial interest, ‘We’ will make settlement at the cost
        to the participating dealer, subject to this rate being approved by “Us”.

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 Id. at 169 (emphasis added). Where the claim is settled on an appearance damage basis,

 the Policy provisions detailing the calculation of labor rates for repairs are expressly

 inapplicable.

        Damage to BSM’s Inventory and Investigation

        On May 5, 2019, a hailstorm occurred in Wichita. Several hundred vehicles on

 BSM’s lot were damaged in the storm. On May 6, 2019, Tim Bishop of BSM submitted a

 claim and inventory list of the vehicles damaged by the hailstorm to Landmark. Dan

 Durbin of Landmark was assigned the claim.

        Mr. Durbin retained EAC “to visually inspect all of the vehicles that [were] being

 claimed, to let [him] know what caused the damage, and the scope of damage, as well as

 taking photos, writing estimates, and generally assisting the insured with the process.”

 App. Vol. 4 at 905. BSM hired USA Dent to repair the damaged vehicles and help in the

 claim process. The exact date on which BSM hired USA Dent is not clear from the

 record, but Landmark asserts that BSM hired USA Dent the day after the storm, and

 BSM represents that USA Dent was working on its vehicles in May and June 2019. EAC

 inspected the damage to BSM’s inventory from May 7 through May 17, 2019. It is

 undisputed that Landmark never requested that BSM repair the damaged vehicles. The

 parties also agree that EAC and USA Dent jointly inspected the damaged vehicles.

        On June 4, 2019, EAC sent a two-page report to Mr. Durbin of Landmark. Per that

 report, “[t]he initial assignment involved loss damage to the vehicle inventory of Brandon

 Stevens Motors and Eddy’s Motors, LLC, Chrysler Jeep Dodge located in Wichita, KS.”

 App. Vol. 8 at 1870. The report found that “[d]amage to the dealer inventory comes in

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 the form of severe weather resulting in wind and hail damage to most panels,” and that

 “[p]arts were replaced as needed and panels were repainted as needed.” Id. at 1871. The

 report explained that hail damage “was estimated using the standard pricing grid used by

 most major insurers for Paintless Dent Repair and the Audatex Estimating System for

 conventional repair” and that “[a] 10% labor discount and a 25% parts discount were

 applied.” Id.

        Mr. Durbin then hired G4S, an investigative unit “with specialized experience in

 investigating fraud.” App. Vol. 4 at 908. G4S investigated and submitted a report to

 Landmark proposing a follow-up investigation. The record and district court’s order

 denying summary judgment for BSM indicate that Landmark rejected this proposal. See,

 e.g., App. Vol. 8 at 1708 (“G4S’s report made some suggestions for additional

 investigation and stated that an insurance fraud referral to the state was not warranted.

 Landmark rejected G4S’s suggestions for additional investigation.”).

        On June 24, 2019, Donna Foster of EAC sent Mr. Durbin of Landmark a

 spreadsheet regarding BSM’s loss (the “EAC Spreadsheet”). The EAC Spreadsheet

 identified the vehicles on BSM’s lot, noted the claim total for each vehicle, and listed the

 amount after consideration of the deductible and loss from an earlier storm. The

 spreadsheet calculated a total of $2,300,949.19 in losses. On June 25, Mr. Durbin gave

 Ms. Foster permission to “share this with the insured to see if they agree.” App. Vol. 2

 at 347; see also App. Vol. 5 at 1073. That same day, Ms. Foster emailed the spreadsheet

 to Mr. Bishop of BSM, stating,

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        This store was involved in a loss in February and a loss in May. For the units
        that were involved in both losses we deducted the loss paid in the February
        loss from the appraised May 5, 2019 loss. I did not have any information that
        you repaired any of these units or replaced any parts, but if you have and can
        provide that information to your insurance carrier they will take that into
        consideration.

 App. Vol. 2 at 346; see also App. Vol. 5 at 1072.

        Mr. Bishop asked what the next steps were for “getting this claim paid.” App.

 Vol. 5 at 1072. Mr. Durbin responded asking whether Mr. Bishop agreed regarding the

 latest spreadsheet and informing Mr. Bishop that he “need[ed] one more item from

 Expert Auto.” Id. at 1071. Mr. Bishop confirmed that “the numbers are acceptable.” Id.

        Repairs to BSM’s Inventory

        In May and June 2019, USA Dent set up a “workshop” on BSM’s lot and began

 repairing the damaged vehicles with a method known as “paintless dent repair.”

 Mr. Bishop of BSM testified that most of the damaged vehicles had been repaired by late

 June or early July 2019. BSM represents that, on May 30, 2019, they paid USA Dent

 $150,000 “because the repair workers ‘were getting a little unrest about getting paid.’”

 Appellant’s Br. at 12 (quoting App. Vol. 4 at 826). BSM also represents that when it

 hired USA Dent, BSM agreed to pay USA Dent 40% to 60% of the insurance proceeds.

 The parties agree that BSM eventually agreed to pay USA Dent 50% of the insurance

 proceeds. A representative of USA Dent testified that they reached this agreement in part

 because USA Dent “[was] not fixing the cars 100 percent,” as “the damage was beyond

 the scope of what paintless dent repair can fix to put a new car back to new.” App. Vol. 4

 at 1018.

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        Dispute Over BSM’s Claim

        After agreeing to the EAC Spreadsheet, Mr. Bishop followed up with Landmark

 on July 1, 2019, to ask whether payment would occur soon. Mr. Durbin responded in the

 negative and stated that the “investigation continues.” App. Vol. 5 at 1109. Landmark

 was seeking additional information delineating between wind and hail damage, and

 Mr. Durbin indicated that payment would not take place until the investigation was

 complete.

        On July 3, 2019, Landmark sent a reservation-of-rights letter questioning whether

 the claimed damages were caused by a covered loss, in part because it was not clear to

 Landmark that wind speeds had reached sufficient velocity to damage the vehicles.

 Landmark noted that it “ha[d] concerns about whether BSM ha[d] misrepresented or

 concealed material facts from Landmark during its investigation of the claimed loss.”

 App. Vol. 2 at 376.

        On July 30, 2019, Mr. Durbin informed Mr. Bishop and Brandon Steven that

 Landmark had retained counsel and was putting together a document request letter. On

 August 14, 2019, Landmark’s counsel sent a letter requesting eleven categories of

 documents, a sworn statement of loss as provided for in the Policy, and an examination

 under oath. The list of requested documents included a request for “[a]ll invoices,

 receipts, proposals, estimates or other documents reflecting any actual repairs of the

 claimed damages to the vehicles as a result of hail and/or wind on May 5, 2019.” App.

 Vol. 1 at 104. BSM responded on September 6. Regarding the request for documents

 reflecting the “actual repairs,” BSM responded:

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        Request No. 7 fails to recognize that the policy provides coverage for Actual
        Cash Value and is not based upon the actual repairs. Regardless, BSM had
        an oral agreement with USA Dent to make the repairs based upon the
        spreadsheet created by Expert Auto that Landmark has had in its possession
        since June.

 Id. at 213.

        USA Dent subsequently created invoices for the repairs to BSM’s inventory. BSM

 represents that Anthony Cope of USA Dent created these invoices by “reviewing

 paperwork and notes by Dennis Sanders of USA Dent that included the ‘digits of a VIN

 number on a car’ and ‘dollar amount,’ which he cross-referenced to ‘match up’ with each

 vehicle.” Appellant’s Br. at 20. Mr. Sanders testified that the “invoices go back to

 basically trying to get within a number that was close to what the spreadsheet was sent to

 [BSM] by the insurance company.” Supp. App. Vol. 1 at 168. The district court similarly

 explained that USA Dent appears to have created these invoices after BSM’s dispute with

 Landmark arose.

                                B.      Procedural History

        BSM filed suit in the District of Kansas on October 25, 2019, alleging one count

 of breach of contract and one count of breach of the duty of good faith and fair dealing.

        BSM filed a motion for partial summary judgment on its breach of contract claim.

 The district court denied BSM’s motion. Landmark then moved for summary judgment

 on both of BSM’s claims. The district court explained “[t]his case ultimately comes down

 to the interpretation of the insurance policy--a question of law” and granted summary

 judgment “[b]ecause the policy does not provide for payment based on the estimated cost

 of repairs when repairs were completed.” App. Vol. 8 at 1954. Thus, the court held BSM

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  could not prove the elements of breach of contract because BSM could not show that

  Landmark had breached the contract by refusing to pay the $2.3 million provided in the

  EAC Spreadsheet. In reaching its conclusion, the court explained that it would “draw[]

  largely on its earlier finding of undisputed facts, except to the extent those facts are no

  longer relevant, and [would] supplement where new facts have been provided by the

  parties.” Id. at 1955.

         The court first found that Section IX.4. of the Policy, titled “Payment of Loss,”

  specifically states Landmark will pay only the “actual cost to the insured” in cases such

  as this one, where the insured replaces the damaged unit or furnishes the labor and

  materials necessary for repairs to the unit. Id. at 1963. The court rejected BSM’s

  argument that this provision does not apply because Landmark did not request that BSM

  conduct the repairs, finding that Landmark had not made this request only because BSM

  advised Landmark that the repairs had already been conducted.

         Next, the district court concluded that, even if the “actual cost” provision of

  Section IX.4. did not apply, BSM has not established that it is entitled to payment of the

  “estimated cost of repair in the spreadsheet” under the Policy. Id. at 1964. The court

  rejected BSM’s argument that Landmark was obligated to pay the EAC Spreadsheet

  amount as a loss that had been settled on an “appearance damage basis,” noting the

  court’s previous factual finding that “there was no agreement that the amount in the

  spreadsheet would be paid,” and concluding that the parties had clearly not settled the

  claim on an appearance damage basis given the present dispute. Id. at 1965. The court

  then rejected BSM’s alternative argument that, if the spreadsheet did not represent a

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  settlement on an appearance damage basis, the spreadsheet amount had been calculated in

  compliance with the provisions of Section X.A. and thus should be paid.

         Because the district court found that BSM has not identified any contractual

  obligation Landmark violated, and breach of the implied covenant of good faith and fair

  dealing does not create a contractual obligation where there is none under Kansas law,

  the court concluded Landmark was also entitled to summary judgment on BSM’s claim

  for breach of the implied covenant of good faith and fair dealing.

         BSM timely appealed.

                                  II.       DISCUSSION

         On appeal, BSM argues that the district court erred in concluding Landmark did

  not breach the Policy and requests that we reverse the order granting summary judgment.

  This appeal turns on whether Landmark has breached the Policy because it has failed to

  pay BSM the $2.3 million provided for in the EAC Spreadsheet. 1 BSM argues it is

  entitled to this amount as “pay[ment] for the loss in money” as provided for in Section

  IX.D. of the Policy because the EAC Spreadsheet represented an amount “settled on an

  appearance damage basis” as referenced in Section X.A. BSM further asserts the district

  court erred in concluding the Policy’s provision limiting Landmark’s payment to the

         1
           On appeal, neither party appears to dispute that the damage to BSM’s vehicles
  falls within the scope of Section III and is thus a covered loss under the Policy. The
  parties instead focus on whether Landmark breached the Policy when it failed to pay the
  amount provided for in the EAC Spreadsheet. Similarly, in granting Landmark’s motion
  for summary judgment, the district court noted that “BSM is still entitled to pursue a
  claim for the costs it incurred as a result of the storm, in accordance with the terms of the
  [P]olicy.” App. Vol. 8 at 1970–71.

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  “actual cost” to BSM applies under such circumstances. Finally, BSM argues that

  Landmark is not entitled to costs pursuant to Federal Rule of Civil Procedure 54(d)(1),

  and that BSM is entitled to pursue its right to attorney’s fees under Kansas state law.

                                   A.       Standard of Review

         “We review the district court’s decision[] on [a] motion[] for summary judgment

  de novo, applying the same standard as the district court.” Adamson v. Multi Cmty.

  Diversified Servs., Inc., 514 F.3d 1136, 1145 (10th Cir. 2008). Summary judgment is

  appropriate only if “there is no genuine dispute as to any material fact and the movant is

  entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “A fact is ‘material’ if,

  under the governing law, it could have an effect on the outcome of the lawsuit.”

  Adamson, 514 F.3d at 1145 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

  (1986)). “When applying this standard, we view the evidence and draw reasonable

  inferences therefrom in the light most favorable to the nonmoving party.” Utah Animal

  Rts. Coal. v. Salt Lake Cnty., 566 F.3d 1236, 1242 (10th Cir. 2009).

                                    B.       Legal Standard

         The parties agree this dispute is governed by Kansas state law. The elements of a

  breach of contract claim under Kansas law are: “(1) the existence of a contract between

  the parties; (2) sufficient consideration to support the contract; (3) the plaintiff’s

  performance or willingness to perform in compliance with the contract; (4) the

  defendant’s breach of the contract; and (5) damages to the plaintiff caused by the

  breach.” Stechschulte v. Jennings, 298 P.3d 1083, 1098 (Kan. 2013).

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         “Under Kansas law, an insurance policy constitutes a contract, and the

  interpretation of a contract is a question of law.” BancInsure, Inc. v. F.D.I.C., 796 F.3d

  1226, 1233 (10th Cir. 2015) (citing AMCO Ins. Co. v. Beck, 929 P.2d 162, 165 (Kan.

  1996)). However, “[w]hether a contract has been breached is a question of fact.” Waste

  Connections of Kansas, Inc. v. Ritchie Corp., 298 P.3d 250, 265 (Kan. 2013).

         “The primary rule in interpreting written contracts is to ascertain the intent of the

  parties.” Liggatt v. Emps. Mut. Cas. Co., 46 P.3d 1120, 1125 (Kan. 2002). “If the

  language in an insurance policy is clear and unambiguous, it must be construed in its

  plain, ordinary, and popular sense and according to the sense and meaning of the terms

  used.” Marshall v. Kan. Med. Mut. Ins. Co., 73 P.3d 120, 130 (Kan. 2003); BancInsure,

  Inc., 796 F.3d at 1233 (“Where the language of an insurance policy is clear and

  unambiguous, we must apply it in its plain and ordinary sense.” (citing Warner v. Stover,

  153 P.3d 1245, 1247 (Kan. 2007))). Our “function is to enforce the contract as made.”

  Cath. Diocese of Dodge City v. Raymer, 840 P.2d 456, 459 (Kan. 1992).

         “To be ambiguous, a contract must contain provisions or language of doubtful or

  conflicting meaning, as gleaned from a natural and reasonable interpretation of its

  language.” Id.; see also Liggatt, 46 P.3d at 1125 (“Ambiguity exists if the contract

  contains provisions or language of doubtful or conflicting meaning.”). “If the language is

  ambiguous, the construction most favorable to the insured must prevail.” Brumley v. Lee,

  963 P.2d 1224, 1226 (Kan. 1998).

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                                       C.      Analysis

         The district court rejected BSM’s argument that the EAC Spreadsheet represented

  an amount “settled on an appearance damage basis.” In addition, the district court found

  that Landmark is obligated to pay only the “actual cost of those repairs” to BSM. App.

  Vol. 8 at 1963. Thus, the court held that BSM had failed to demonstrate Landmark

  breached the insurance contract by refusing to pay the EAC Spreadsheet amount and

  failed to provide sufficient evidence of the actual cost of repair. Accordingly, the court

  granted Landmark’s motion for summary judgment.

         In reaching this conclusion, however, the district court relied on certain factual

  findings unfavorable to BSM. Because there exists a genuine dispute of material fact over

  whether Landmark and BSM agreed to settle this claim on an appearance damage basis,

  the district court erred in granting summary judgment.

         Agreement to Settle on an Appearance Damage Basis

         The term “appearance damage basis” in the Policy is ambiguous. We interpret this

  ambiguous term in a manner favorable to BSM to mean that the parties have agreed on an

  amount to settle the claim. We further conclude that there exists a genuine dispute over

  whether the parties agreed Landmark would pay BSM the amount in the EAC

  Spreadsheet to settle this claim. This dispute is material to whether Landmark breached

  the Policy, and thus whether BSM can prevail on its breach of contract claim. Summary

  judgment is therefore improper.

         The term “appearance damage basis” in the Policy is ambiguous because its

  meaning is doubtful and cannot be gleaned from a natural and reasonable interpretation

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  of the language. See Raymer, 840 P.2d at 459. The term is not explained or defined

  anywhere in the Policy. Instead, it appears one time, in Section X.A., where the Policy

  outlines how a settlement will be calculated “[i]n the event of a partial ‘loss’ to any

  ‘automobile’ insured hereunder which is not settled on an appearance damage basis[.]”

  App. Vol. 1 at 169 (emphasis added). Rather than providing any guidance on settling a

  claim on this basis, the section merely explains how a settlement will be calculated when

  a loss has not been settled on an appearance damage basis. The term is not used

  elsewhere in the Policy. Although Landmark asserts in both its briefing and at oral

  argument that the Policy is unambiguous, Landmark does not provide us with any

  definition of the term “appearance damage basis.” 2

         We interpret the term “appearance damage basis” to “mean[] if the parties can

  agree on what the value is of the damage.” See App. Vol. 3 at 598. BSM proposes this

  interpretation on appeal, relying on the testimony of Landmark’s Rule 30(b)(6) witness,

  Brian Snead. Adoption of BSM’s proposed interpretation is appropriate because the term

  is ambiguous and, in such cases, “the construction most favorable to the insured must

  prevail.” Brumley, 963 P.2d at 1226. Further, Landmark conceded before the district

         2
           Landmark concedes that, to the extent there is any ambiguity, it would be
  construed against Landmark. However, Landmark maintained at oral argument that
  “there is no ambiguity in the Policy.” Oral Argument at 19:12–19:14, Brandon Steven
  Motors, LLC v. Landmark American Insurance Co., No. 22-3192 (10th Cir. Jan. 17,
  2024), https://www.ca10.uscourts.gov/sites/ca10/files/oralarguments/22-3192.mp3 (“Oral
  Argument”). Rather than providing the unambiguous meaning of “appearance damage
  basis,” however, Landmark merely asserted that the interpretation of this term was “an
  extremely minor issue” prior to this appeal. Id. at 19:21–19:23.

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  court that this is an appropriate interpretation of “appearance damage basis.” App. Vol. 8

  at 1926. The district court thus adopted this definition in resolving both BSM’s and

  Landmark’s motions for summary judgment. App. Vol. 8 at 1957 (“‘Appearance damage

  basis’ as used in Section X.A. is where both sides agree on the value of the damage.”); id.

  at 1715 (“The parties agree that ‘appearance damage basis’ is where both parties agree on

  the value of the damage.”).

         “[V]iew[ing] the evidence and draw[ing] reasonable inferences therefrom in the

  light most favorable to [BSM],” Utah Animal Rts. Coal., 566 F.3d at 1242, BSM has

  come forward with evidence creating a factual dispute over whether the parties agreed

  that the value of the damage was $2.3 million, as provided in the EAC Spreadsheet, and

  thus settled this claim on an appearance damage basis. The record reflects that on

  June 24, 2019, EAC sent the spreadsheet to Mr. Durbin of Landmark for his review and

  approval before it was sent to BSM. The following day, Mr. Durbin directed EAC to send

  the spreadsheet to BSM to see if BSM agreed, and Mr. Durbin later testified that he had

  no problem with the spreadsheet. EAC then sent the spreadsheet to Mr. Bishop of BSM

  for his review. Mr. Durbin then specifically asked Mr. Bishop “[a]re you in agreement

  with the latest spreadsheet?” and Mr. Bishop responded, “[y]es sir, the numbers are

  acceptable.” App. Vol. 5 at 1071. This exchange, viewed in the light most favorable to

  BSM, supports a reasonable inference that the parties agreed the claim would be settled

  based on the appearance value provided for in the EAC Spreadsheet.

         The timing of the repairs and the circulation of the EAC Spreadsheet also creates a

  factual question regarding the spreadsheet’s purpose. Landmark asserts, and the district

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  court concluded, that the EAC Spreadsheet was merely an estimate of the cost of fully

  repairing all the vehicles. But USA Dent conducted repairs in May and June 2019, and

  Mr. Bishop testified that the majority of the repairs were completed by late June or early

  July 2019. Thus, many of the repairs were completed before Landmark sought BSM’s

  agreement on the EAC Spreadsheet on June 25. It is also undisputed that EAC and USA

  Dent were both present during EAC’s assessment. In fact, EAC’s June 4, 2019, report to

  Landmark states that “[p]arts were replaced as needed and panels were repainted as

  needed.” App. Vol. 8 at 1871. This reference to ongoing repairs suggests that Landmark

  was aware BSM was conducting repairs, but still intended to circulate and receive BSM’s

  agreement on the EAC Spreadsheet. Yet, there is no indication that Landmark ordered

  BSM to cease making repairs, nor is there any explanation for why Landmark would seek

  BSM’s agreement regarding an estimated cost of repairs after a significant portion of

  those repairs had been completed. From this evidence, the jury could draw a reasonable

  inference that Landmark and BSM were arriving at an appearance damage basis

  settlement through use of the EAC Spreadsheet.

         In addition, BSM asserted that Landmark has settled prior claims this way. This

  representation is bolstered by EAC’s June 4, 2019, report, which provides “[t]he initial

  assignment involved loss damage to the vehicle inventory of Brandon Stevens Motors

  and Eddy’s Motors, LLC, Chrysler Jeep Dodge located in Wichita, KS.” Id. at 1870

  (emphasis added). BSM also relies on Mr. Bishop’s testimony that “[BSM] anticipated

  that the amount the adjuster had written the loss for, net of our deductibles for said loss,

  would be the amount that [BSM] would receive in compensation for -- for the insurance

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  claim.” App. Vol. 3 at 697. BSM also references the testimony of two USA Dent

  representatives who state that their understanding was that the spreadsheet represented an

  agreed upon amount for the settlement. This evidence further supports BSM’s position

  that the parties had reached an agreement to settle the claim based on the EAC

  Spreadsheet.

         Finally, the Policy itself appears to undercut Landmark’s argument that the EAC

  Spreadsheet merely estimated the cost of conducting full repairs, rather than paintless

  dent repairs, on BSM’s vehicles. For example, Landmark argues that the Policy “simply

  does not give BSM the option of cutting a deal with USA Dent on the cost of repairs to

  the vehicles using the paintless dent repair method” while also “collecting from

  Landmark the larger sum of the estimated repair costs including the estimated cost to

  replace the damaged hoods, roofs and neck lids, as set out in the [EAC] spreadsheet.”

  Appellee’s Br. at 28. But Section X.D. of the Policy provides: “The ‘Insured’ agrees to

  use paintless dent repair procedures where legally permitted. If repairs are not completed

  using paintless dent repair procedures, where legally permitted, ‘We’ will not pay more

  than the amount that would have been incurred for necessary expenses using this method

  of repair.” App. Vol. 1 at 169. If the Policy specifically provides that BSM is obligated to

  conduct repairs using paintless dent repair procedures where permitted, then it is not clear

  why Landmark would seek an estimated cost of an alternative, more expensive method of

  repair with the understanding that BSM would in fact conduct these more expensive

  repairs.

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         Despite the conflicting evidence, the district court found as a matter of law that the

  parties had not settled the claim because the present litigation highlights their

  disagreement regarding the purpose of the EAC Spreadsheet. The court relied on its

  factual finding from an earlier order denying BSM’s summary judgment motion that the

  parties had never agreed Landmark would pay BSM the amount in the EAC Spreadsheet.

  But while that decision properly made factual findings and inferences in favor of

  Landmark, the non-moving party in BSM’s motion for summary judgment, applying

  those same inferences in deciding Landmark’s motion for summary judgment improperly

  relies on factual findings and inferences unfavorable to BSM, the non-movant. Although

  the parties now dispute whether they settled the claim on an “appearance damage basis,”

  this does not mean the parties never reached an agreement regarding how to settle the

  claim. BSM asserts the parties reached such an agreement and Landmark subsequently

  reneged in bad faith and in violation of the Policy. As discussed, BSM has come forward

  with evidence from which the jury could find the parties reached an appearance damage

  basis settlement. To the extent the parties reached such an agreement, BSM may have

  been entitled to payment of that amount as a “pay[ment] for the loss in money,” without

  any obligation to detail actual repair costs under the Policy. See App. Vol. 1 at 167.

         Given these disputed material facts, the district court erred when it granted

  summary judgment based on its finding that the EAC Spreadsheet was solely an

  estimated cost of conducting repairs, and that the parties never settled the claim on an

  “appearance damage basis.”

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         Applicability of the “Actual Cost” Provision of Section IX.4.

         The district court held BSM cannot establish Landmark breached the contract

  when it failed to pay the EAC Spreadsheet amount because BSM’s recovery is limited to

  only the “actual cost” of repairs. Section IX.4. of the Policy includes the provision

  addressing when Landmark shall pay only the “actual cost” of repairs to the insured. The

  relevant portion of Section IX.4., titled “Payment of Loss” provides:

         The Company at it’s [sic] sole option may pay for the loss in money or may
         repair or replace the damaged or stolen unit or part thereof but if requested
         by the Company, the Insured shall replace such unit or part thereof or furnish
         the labor and materials necessary for repairs thereto and the Company shall
         pay only the actual cost to the insured.

  App. Vol. 1 at 167 (emphasis added). The district court held that there were no disputed

  facts that could render the limitation to actual damages inapplicable. We disagree.

         First, Section IX.4. allowed Landmark to pay the claim in money, repair the

  vehicles itself, or request that BSM make the repairs and then pay only the actual costs of

  those repairs. If, as BSM alleges, Landmark chose the first option—payment in money on

  an appearance damages basis—that payment is untethered from the subsequent restriction

  on actual cost of repair. Indeed, Section X.A. of the Policy expressly excludes settlements

  made on an appearance damages basis from its provisions governing labor rates and the

  cost of materials.

         Second, Landmark never requested that BSM repair the damaged vehicles. The

  district court made a factual finding that Landmark did not ask BSM to make the repairs

  solely because BSM had already done so. Thus, the court held that the “actual cost”

  provision applied in this case despite the absence of any request from Landmark that

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  BSM furnish the repairs. But this finding, which was unfavorable to BSM, was

  inappropriate in the context of a motion for summary judgment because the evidence

  could support a reasonable inference that Landmark did not make such a request to BSM

  for other reasons. See Utah Animal Rts. Coal., 566 F.3d at 1242 (10th Cir. 2009) (“When

  applying [the summary judgment] standard, we view the evidence and draw reasonable

  inferences therefrom in the light most favorable to the nonmoving party.”).

         For example, the parties do not dispute that USA Dent was present and working

  with EAC during the investigation, or that EAC provided a report in early June 2019

  noting “[p]arts were replaced as needed and panels were repainted as needed.” App.

  Vol. 8 at 1871. This evidence suggests that Landmark was aware BSM was conducting

  repairs. Despite this knowledge, the record and the parties’ representations at oral

  argument indicate that Landmark never instructed BSM to stop conducting repairs, and

  instead moved forward with completion of the EAC Spreadsheet. Viewing the evidence

  and drawing all reasonable inferences in the light most favorable to BSM, it would be

  reasonable to infer that Landmark chose not to request that BSM furnish the repairs as

  provided in Section IX.4. because Landmark intended to pay for the loss in money

  pursuant to an appearance damages agreement based on the EAC Spreadsheet. The

  district court is correct that Landmark now disputes any such agreement, but there is

  evidence from which a jury could determine otherwise.

         For the foregoing reasons, the district court erred when it relied on Section IX.4. to

  grant summary judgment for Landmark. There exist material facts in dispute regarding

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  whether Landmark and BSM settled this claim on an “appearance damage basis,” thereby

  obviating the need for detailed repair records.

         Costs and Attorney’s Fees

         Finally, BSM asserts that reversal of the motion for summary judgment requires

  that any cost awarded to Landmark pursuant to Federal Rule of Civil Procedure 54(d)(1)

  be vacated. BSM also argues it is entitled to pursue its claims and its right to attorney’s

  fees under Kansas state law.

         a.     Landmark’s Request for Costs

         Landmark filed a request for costs to which BSM filed an objection. BSM now

  argues that reversal of the order granting summary judgment requires that any cost award

  be vacated. However, the district court docket does not reflect that the court has granted

  Landmark’s request. Thus, no costs order exists to be vacated.

         b.     BSM’s Claim for Attorney Fees

         The district court concluded that, “[b]ecause Landmark is entitled to summary

  judgment on both claims, BSM’s claim for attorney fees is moot.” App. Vol. 8 at 1970

  n.11 (first citing to Kan. Stat. Ann. § 40-908 (addressing attorney fees when “judgment is

  rendered against any insurance company”); and then citing to Kan. Stat. Ann. § 40-256

  (same)). On appeal, BSM argues that, if we reverse the district court’s grant of summary

  judgment, BSM is entitled to pursue its claims and right to attorney’s fees under Kan.

  Stat. Ann. § 40-908. The Kansas statute upon which BSM relies provides:

         That in all actions now pending, or hereafter commenced in which judgment
         is rendered against any insurance company on any policy given to insure any
         property in this state against loss by fire, tornado, lightning or hail, the court

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         in rendering such judgment shall allow the plaintiff a reasonable sum as an
         attorney's fee for services in such action including proceeding upon appeal
         to be recovered and collected as a part of the costs: Provided, however, That
         when a tender is made by such insurance company before the commencement
         of the action in which judgment is rendered and the amount recovered is not
         in excess of such tender no such costs shall be allowed.

  Kan. Stat. Ann. § 40-908 (emphasis added). Although we reverse the district court’s grant

  of summary judgment in favor of Landmark, BSM is not entitled to attorney’s fees. At

  this stage of the proceedings, no judgment has been rendered against Landmark. Our

  decision merely permits the litigation to proceed to a final judgment, which will

  determine which party prevails.

                               III.       CONCLUSION

         There exists a genuine dispute of material fact regarding whether the parties

  agreed to settle this claim on an appearance damage basis, and thus whether Landmark

  breached the Policy. We therefore REVERSE the district court’s grant of summary

  judgment and REMAND this case to the district court for further proceedings.

                                               Entered for the Court

                                               Carolyn B. McHugh
                                               Circuit Judge

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