Fraley

In this insurance bad faith case, Ernest Fraley and Linda Fraley appeal a summary judgment in favor of Allstate Insurance Company (Allstate). The principal issue is whether a homeowners policy required the Fraleys to repair or replace their damaged property within 180 days of a certain date as a prerequisite to obtaining replacement cost. We conclude it did, and accordingly affirm the judgment.

Factual and Procedural Background

On May 17, 1994, a fire extensively damaged the Fraleys’ home. The loss was covered by their deluxe homeowners policy with Allstate. It provides in pertinent part:

Allstate promptly investigated the claim, but the parties’ contractors could not agree on the scope or cost of repair. In the meantime, Allstate’s appraiser set actual cash value of the home at $200,000. In September 1994, Allstate paid the Fraleys $164,822, the amount of its latest repair estimate. In December 1994, however, Allstate conceded the minimum repair cost was $199,671.94. It sent the Fraleys a check for $35,178, explaining that it, “together with the $164,822 previously paid . . . , represented payment of the actual cash value [of $200,000] . . . .” Allstate advised the…