John P. Boesel, Iii v. State Farm Fire and Casualty Insurance Company, a foreign corporation

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JOHN P. BOESEL, III,
Plaintiff - Appellant,
v.
STATE FARM FIRE AND CASUALTY
INSURANCE COMPANY, a foreign
corporation,
Defendant - Appellee.
No. 12-15043
D.C. No. 2:10-cv-01039-TL
MEMORANDUM*
Appeal from the United States District Court
for the District of Arizona
Tim Leonard, Senior District Judge, Presiding
Argued and Submitted February 12, 2014
San Francisco, California
Before: TALLMAN and RAWLINSON, Circuit Judges, and RICE, District
Judge.**
John Boesel, III (Boesel) challenges the entry of summary judgment in favor
of State Farm Fire and Casualty Insurance Company (State Farm).
FILED
MAR 21 2014
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The Honorable Thomas O. Rice, United States District Judge for the
Eastern District of Washington, sitting by designation.

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1. Boesel contends that State Farm breached the insurance policy contract
when it failed to pay him for losses he incurred in connection with the theft of certain
jade pieces. To determine whether a breach of contract has occurred, “[w]e interpret
an insurance policy according to its plain and ordinary meaning, examining it from
the viewpoint of an individual untrained in law or business . . . .” Desert Mountain
Props. Ltd. P’ship v. Liberty Mut. Fire Ins. Co., 236 P.3d 421, 427 (Ariz. Ct. App.
2010) (citation omitted).
The insurance policy provides, in relevant part, that the “policy is void as to you
and any other insured, if you or any other insured under this policy has intentionally
concealed or misrepresented any material fact or circumstance relating to this
insurance, whether before or after a loss.” (Emphasis added). This language states a
concealment or misrepresentation exclusion. See Am. Pepper Supply Co. v. Fed. Ins.
Co., 93 P.3d 507, 508 & n.2 (Ariz. 2004) (en banc). The record reflects that Boesel
concealed the report from Elliot Glasser indicating that the two carvings had an
estimated value of only $30,000. Because this omission impeded State Farm’s ability
to ascertain the authenticity and value of the jade items, State Farm permissibly
invoked the concealment or misrepresentation exclusion to deny the claim. See id. at
511 (noting that an insurer proves a “concealment or misrepresentation exclusion is
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met . . . [by showing] that the insured has materially misrepresented its claim or
concealed evidence that would permit a fair resolution of its claim”).
State Farm also denied the claim due to Boesel’s non-cooperation. The
insurance policy provides that after a loss, the insured must “prepare an inventory of
damaged or stolen personal property[;]. . . provide us with records and documents we
request and permit us to make copies; submit to and subscribe, while not in the
presence of any other insured: (a) statements; and (b) examinations under oath; and
produce employees, members of the insured’s household or others for examination
under oath to the extent it is within the insured’s power to do so . . . .” This language
requires the insured to cooperate with State Farm’s investigation of the loss. See
Clark Equip. Co. v. Ariz. Prop. & Cas. Ins. Guar. Fund, 943 P.2d 793, 801 & n.8
(Ariz. Ct. App. 1997). An insured’s breach of a cooperation provision relieves an
insurer of liability “if the insurer has been substantially prejudiced thereby. . . .” Id.
at 802 (citations omitted) (emphasis in the original). The record evidence
demonstrated that Boesel did not attempt to identify the author of the Certificate of
Authenticity, and failed to provide State Farm with Edward Liu’s contact information.
These actions breached the duty to cooperate, and substantially prejudiced State
Farm’s ability to approximate the value of the claimed loss. See Warrilow v. Superior
Court, 689 P.2d 193, 196-98 (Ariz. Ct. App. 1984) (holding that insured violated a
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cooperation clause by failing to provide insurer with information that would aid the
insurer in ascertaining its liability).
Boesel’s failure to comply with the misrepresentation and cooperation
provisions of the policy justified State Farm’s denial of coverage. Therefore, the
district court properly concluded that Boesel’s breach of contract claim fails. See Holt
v. Utica Mut. Ins. Co., 759 P.2d 623, 627 (Ariz. 1988) (en banc) (noting that “an
insured’s breach of policy conditions . . . [may] be a defense to an action on the
policy”).
2. We also reject Boesel’s bad faith claim. In Arizona, an insured alleging
breach of the duty of good faith must show both that: (a) the insurer acted
unreasonably in investigating, evaluating, or processing the claim and (b) either knew
or was conscious of the fact that it acted unreasonably. See Zilisch v. State Farm Mut.
Auto. Ins. Co., 995 P.2d 276, 280 (Ariz. 2000) (en banc). Boesel failed to create a
genuine issue of material fact that State Farm acted in bad faith.
The district court acted within its discretion in excluding the expert report
proffered by Boesel. See Nationwide Transp. Fin. v. Cass Info. Sys., Inc., 523 F.3d
1051, 1058-60 (9th Cir. 2008) (noting that a district court may exclude expert
testimony that largely consists of legal conclusions). In addition, none of the conduct
identified by Boesel suggests that State Farm acted unreasonably under these facts.
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So long as there is a legitimate question of coverage, denial of a claim, without more,
does not give rise to a bad faith claim. See Desert Mountain Props., 236 P.3d at 442-
43. Accordingly, the district court properly entered summary judgment on Boesel’s
bad faith claim.
3. The district court properly rejected Boesel’s request for punitive
damages. In order to obtain punitive damages, Boesel must first show the commission
of an underlying tort. See Saucedo v. Salvation Army, 24 P.3d 1274, 1277 (Ariz. Ct.
App. 2001). Because Boesel’s underlying breach of contract and breach of the duty
of good faith and fair dealing claims fail, he has no basis upon which to seek an award
of punitive damages.
4. In its answering brief, State Farm requested an award of fees and costs.
However, Ninth Circuit Rule 39-1 requires that such requests be made by way of a
verified bill of costs and a separate request for attorney fees.
AFFIRMED.
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