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J. Edward Kerley (175695) Dylan L. Schaffer (153612) Kerley Sehaffer LLP 1939 Harrison Street, ¹900 Oakland, California 94612 Telephone: (510) 379-5801 Email: service&kslaw.us Attorneys for Plaintiff SUPERIOR COURT FOR THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES — UNLIMITED JURISDICTION10 JAY ROTHMAN, an individual, Case No. Plaintiff, COMPLAINT AND DEMAND FOR12 JURY TRIAL V.13 CALIFORNIA FAIR PLAN14 ASSOCIATION, an unincorporated association, DOES I through 10,15 Defendants.161719202122232425 I COMPLAINT AND DEMAND FOR JURY TRIAL 1. Each allegation in this complaint is based upon information and belief, except those allegations which pertain to Plaintiff which are based on personal knowledge. Each allegation stated on information and belief is likely to have evidentiary support after a reasonable opportunity for investigation and discovery. PARTIES/VENUE/JURISDICTION 2. CALIFORNIA FAIR PLAN ASSOCIATION (CFP) is a California unincorporated association licensed to conduct business in the State of California. 3. JAY ROTHMAN (Rothman) is a resident of Los Angeles County at the time of the relevant events. At the time of the relevant events Rothman was over the age of 65. 4. The true names and capacities of defendants, DOES I through 10, are unknown and they are10 therefore sued by fictitious names. Each of the DOE defendants is, in some manner, responsible for the damages alleged. All allegations in this complaint are asserted equally12 against DOES 1 to 10.13 5. Venue is proper in the Superior Court of California for the County of Los Angeles. The14 allegations and claims for relief set forth herein arise out of unlawful acts committed in Los15 Angeles County, the contract underlying this suit was formed and breached there, CFP16 transacts business and derive substantial revenue from its activities there, and the real1718 property owned by Rothman and at the heart of his lawsuit is located in Los Angeles County.19 ROTHMAN'S CFP POLICY20 6. Rothman purchased a policy of insurance from CFP, identified as policy number CFP21 2705617 00 (Policy), insuring against damage predominantly caused by named perils,22 including fire, for the period January 30, 2021, to January 30, 2022, at Rothman's home at232425 2 COMPLAINT AND DEMAND FOR JURY TRIAL 91364.'. 19734 Wells Drive, Woodland Hills, CA The Policy is a standard homeowners form issued in identical or nearly identical form to hundreds of thousands of California residents from 2017 to the present. 8. The Policy contains coverage limits as follows, among others: Dwelling repairs - $ 2,600,000; Personal Property - $ 200,000; Fair Rental Value - $ 150,000, in addition to further amounts provided by the Policy. STATUTE OF LIMITATIONS 9. By agreement of the parties, the statute of limitations in this matter was tolled until March 1, 2025. This complaint is therefore timely filed.10 ROTHMAN'S LOSS AND CLAIM 10. On or about May 14, 2021, the Property was damaged and rendered uninhabitable by a loss12 predominantly caused by a fire commonly known as the Palisades wildfire.13 11. Rothman provided timely notice of the loss and damage to the Property.14 12. Rothman satisfied all conditions of the Policy.15 13. CFP assigned the loss claim number 544416 (Claim).16 14. As has been its practice since 2012, a practice admitted based on the desire to goal of saving17 millions of dollars in claim expenses, CFP failed to retain a licensed environmental18 professional or contractor to investigate the scope of loss at the Property or determine its19 habitability.20 15. Instead, as is its practice across wildfire claims, CFP hired an unqualified, untrained, and21 unguided outside adjuster who conducted an inadequate inspection.22 16. The adjuster is employed by EA Renfroe and Company, an entity CFP pays millions of2324 'he Policy, including declaration pages and form are attached as Exhibit A.25 3 COMPLAINT AND DEMAND FOR JURY TRIAL dollars each year for both inside and outside adjusting services. Renfroe adjusters are not independent or objective, but instead are biased and incapable of objective investigation of any CFP loss. 17. On September 27, 2021, Rothman submitted a repair estimate to CFP for $ 129,544.01 from a licensed remediation contractor. 18. On October 1, 2021, in violation of 10 CCR section 2695.9, which required CFP to pay, adjust, or deny the claim, CFP's agent sent an "approved [repair] estimate" for $ 1,995.85, below the Policy deductible. In the letter CFP indicated that it would pay no further benefits. 19. The letter contained a "Suit Against Us" paragraph which falsely informed Rothman that he10 had one year after the date of loss to file suit; under California law, the limitations period is two years.12 20. Thereafter, as it has done in many hundreds of wildfire claims since 2012, CFP informed13 Rothman that he was required to remediate the property first, after which CFP would14 determine if there was physical damage pursuant to the two invalid and unenforceable policy15 provision.16 21. CFP has done nothing since 2012 to investigate whether directing wildfire victims to17 remediate their own houses is safe or effective.18 22. CFP's directive put Rothman's health and safety in jeopardy.19 23. Thereafter Rothman repeatedly sought CFP's agreement to further investigation and/or pay20 his claim, but CFP refused.21 24. CFP unreasonably failed to pay Rothman at least tens of thousands of dollars in Policy22 benefits due for repairs of the home, repair and replacement of contents, and for loss of use in23 the form of fair rental value payments, in reliance on policy provisions it knew at the time24 were invalid and unenforceable.25 4 COMPLAINT AND DEMAND FOR JURY TRIAL 25. CFP's failure to pay policy benefits was the result of an investigation it knew to be incompetent and was intentionally inadequate in keeping with CFP's conduct since 2012 when, with the goal of saving its member companies millions of dollars, it made the system- wide decision to stop hiring licensed environmental professionals and licensed construction professionals to determine the extent of wildfire damage and/or the true cost of repairs. 6 ALLEGATIONS RELATING TO APPROVAL AND VALIDITY OF THE POLICY 7 26. As it was obligated to do pursuant to Insurance Code $ 10090 et seq., and CFP's Plan of 8 Operation, CFP submitted its proposed property policy for approval to the California 9 Department of Insurance (CDI) on October 18, 2016.10 27. The Rothman Policy in relevant part is identical to the Policy submitted by CFP in October 2016.12 28. In or about October 2016 (State Tracking No. 16-6646) CFP sought approval for its new13 form property policy which sought to limit coverage, reduce claims investigation expenses,14 and reduce indemnity payments to policyholders by inclusion in the form of, among other15 changes: ~ a newly defined definition of "direct physical loss";16 ~ coverage for "smoke damage"; and17 ~ mandatory dispute resolution for "smoke damage" claims.18 29. In its communications with the CDI prior to October 2016, and in its form filing in October19 2016, CFP misrepresented and concealed the true intent and effect of the changes set forth20 above.21 30. At the time it sought approval of its new property policy form in or about October 2016 and22 thereafter, in fact, CFP intended by the changes set forth above to limit coverage provided by23 its property policies, to reduce claims investigation expenses, and to reduce indemnity24 payments for covered fire losses.25 5 COMPLAINT AND DEMAND FOR JURY TRIAL 31. At the time it sought approval of its new property policy in or about October 2016 and thereafter, in fact, knowing that CDI would consider reductions in coverage, savings in claims expenses, and savings in indemnity payments, in making its decision whether to approve the proposed changes, CFP deliberately misrepresented and concealed the true impact of the proposed modifications to its policy form and withheld the nue facts from CDI, for the purpose of maximizing the profits of its contributing companies, and for an anti- competitive purpose, in violation of Insurance Code $ )10090 et seq. and Business & Professions Code $ )17200 et seq. 32. CFP misrepresented and concealed the true coverage reductions to its property policy, as the policy was interpreted by CFP, while aware that the CDI had separately required CFP to10 revise its policy to ensure its loss settlement practices conformed with California law. 33. Specifically, in or about October 2016, as part of its form filing, CFP told the CDI: "The12 changes in the policy will either provide no change in coverage or will provide some13 broadening of coverage."14 34. In the same filing, CFP expressly adopted each of the assertions in the form filing, including the assertions in the preceding two paragraphs.15 35. In communications to sales agents and brokers in California in or about April 2017, in which16 it introduced the revised property policy—the Policy issued to Rothman— CFP informed the17 sales agents and brokers that the changes to its new form policy set forth above, including but18 not limited to the new definition of "Direct physical loss," amounted to a reduction of19 coverage and would result in denials of claims that would have been paid under the prior20 policy.21 36. In communications and guidelines provided to both in-house adjusters and outside adjusters22 contracted to investigate CFP losses, as well as to CFP claims supervisors, after about April23 2017, CFP informed the adjusters and supervisors that the changes to its new form policy set24 forth above, including but not limited to the new definition of "Direct physical loss,"25 6 COMPLAINT AND DEMAND FOR JURY TRIAL amounted to a reduction of coverage and would result in denials of claims that would have been paid under the prior policy. 37. In communications to new and renewing policyholders after July 2017, CFP stated that the changes to its new form policy set forth above, including but not limited to the new definition of "Direct physical loss," amounted to a reduction of coverage and would result in denials of claims that would have been paid under the prior policy. 38. In its pre-October 2016 communications with the CDI, its October 2016 application for approval of it policy, in communications with the CDI during the approval process both within and outside the form approval process, and in communications and filings with the CDI thereafter, CFP did not correct, revise, or supplement its prior statements as to the10 coverage, expense, and/or indemnity effects of the October 2016 proposed modifications to its property policy, which became effective July 2017.12 39. Each of the communications and filings set forth above —including but not limited to the pre-13 October 2016 communications with the CDI, communications and representations that were14 part of the application for approval of the new policy form issued in July 2017, communications after October 2016 regarding the new form outside of the formal filing and15 review process, guidelines and training provided to CFP adjusters (both in-house and16 outside), communications with brokers, and communications with policyholders —were17 written by, approved by, and/or ratified by CFP's officers and managing agents, CFP's18 Governing Committee including each of the defendant Governing Committee members19 named here, the Governing Committee's Claims Sub-Committee, the Governing20 Committee's Underwriting Sub-Committee, and individual voting members of the Governing21 Committee, and/or Lewis Brisbois Bisgaard /ir, Smith and its partner, Elise Klein.22 40. CDI approved the policy form on the basis of the false pretenses set forth above the policy on23 January 25, 2017, but has never properly approved the policy.24 41. After July 2017, having obtained approval for its new policy form by means of concealment25 7 COMPLAINT AND DEMAND FOR JURY TRIAL and misrepresentation, CFP sold the policy to Rothman. 42. From July 2017 to the present, consistent with its warning to its customers, brokers, and training of its adjusters, CFP has intentionally refused to investigate, and/or denied or partially denied benefits payments relating to, many hundreds of covered fire claims in reliance on the changes to the insuring language of its policy for which it obtained approval on false pretense in or about 2017, as set forth above, including the Rothman claim. 43. From July 2017 to the present, in reliance on the changes to the insuring language of its policy for which it obtained approval on false pretense in or about 2017, CFP has put the health and safety of its customers, including Rothman, at risk, by insisting that following a wildfire claim the insureds conduct remediation at their own homes prior to testing for10 contaminants and wildfire debris, and before CFP will consider paying repair benefits to remediate wildfire damage to homes and personal property.12 44. In correspondence on January 4, 2021, during the pendency of the Rothman claim, CDI13 alerted CFP that the Policy is invalid and that approval for the Policy was obtained by CFP in14 reliance on misrepresentations to CDI regarding coverage implications of the form submitted for approval.15 45. In its January 4, 2021, correspondence to CFP, CDI demanded the following:16 ~ CFP was directed to review all fire and/or smoke damage claims it has denied, in17 whole or in part, since the violative policy language took effect in January 2017, and18 adjust these claims without applying that violative policy language;19 ~ CFP was directed to submit a revised policy form that omits the violative language20 discussed below and take such additional steps as described below;21 ~ Until such as time as CFP submitted s a revised policy form and that form is approved22 by CDI, CDI directed CFP to read and interpret its policy in a manner that complies23 with applicable law;24 ~ CFP was directed to cease any application or interpretation of the violative language25 8 COMPLAINT AND DEMAND FOR JURY TRIAL contained in its Dwelling Fire Policy to deny, in whole or in part, the payment of claims; ~ CFP was directed to make an immediate form filing to revise its Dwelling Fire Policy so as to comport with California law; ~ CFP was directed to provide CDI with the following information within thirty (30) days from January 4, 2021: (I) a list of any and all fire and/or smoke damage claims that CFP has denied, in whole or in part, since January I, 2017, including claimed amounts, names of policyholders, and all documentation of the reasons for denying the claims, in whole or in part; and (2) a list of all pending litigation, including captioning information, involving CFP claim denials, in whole or in part, under the10 Dwelling Fire Policy currently in use or that was approved by the Department in form filing no. 16-6646.12 46. Contrary to the directives of the CDI in its January 2021 letter, since that time, CFP has not13 changed its claims handling practices in wildfire as set forth above, including in the Rothman14 claim. 47. Following a year-long investigation of CFP's misconduct in wildfire claims, in a Report of15 the Targeted Market Conduct Examination of California CFP Association adopted May 25,16 2022, CDI concluded:17 ~ The Policy fails to provide coverage for fire that is "substantially equivalent to or18 more favorable to the insured than that contained in the California Standard Form19 Fire Insurance Policy as reflected in CIC II2071";20 ~ CFP "failed to provide coverage for all loss by fire as set forth in the California21 Standard Form Fire Insurance Policy";22 ~ In the application for approval of the Policy, CFP "omitted relevant facts and23 misrepresented revised language as providing broad or broader coverage than the24 policy provided previously. In [CFP's] Filing Memorandum in support of its form25 9 COMPLAINT AND DEMAND FOR JURY TRIAL filing to CDI, [CFP] specifically represented to CDI that its proposed revisions, including its new definition of "direct physical loss," would not reduce or eliminate existing coverages, might even broaden coverage, and would have no rate impact. Specifically, [CFP] stated: 'The changes in the policy will either provide no change in coverage or will provide some broadening of coverage. The CFP will not revise rates for the additional coverage.'espite its representations to CDI, [CFP] handled claims for smoke damage based on its policy's definition of 'direct physical damage's requiring permanent physical changes to covered property. However, loss caused by fire does not require 'permanent physical changes'or there to be coverage. Further, a10 loss from smoke stemming from fire should be adjusted as would a loss caused only by fire. Smoke damage is not a separate occurrence from fire. [CFP's]12 definition of smoke and/or smoke damage is not at least equivalent to that13 required under the Standard Form Fire Insurance Policy and is therefore a14 violation of law." ~ CFP's "handling of smoke damage claims is in violation of CIC I]2070 and is an15 unfair practice under CIC $ 790.03(h)(3) and CIC $ 790.03(h)(5)."16 48. Since issuance of the Market Conduct Examination Report, CFP has not reopened or17 readjusted any wildfire smoke damage claims, including the Rothman claim, in which it18 relied on the illegal and fraudulently approved Policy.19 49. For the reasons articulated by CDI, the CFP Policy issued to Rothman is invalid and20 unenforceable, and was not lawfully the basis for CFP's investigation and payment of the21 Rothman claim.22 50. At the time of the Rothman claim, and since, although it has an ongoing duty of good faith23 and fair dealing as relates to Rothman, CFP has known that its policy is invalid and24 unenforceable and was not lawfully the basis for CFP 's investigation and payment of the25 10 COMPLAINT AND DEMAND FOR JURY TRIAL Rothman claim, but CFP has done nothing to mitigate its unlawful conduct in the Rothman claim. 51. In the period 2019 to the time of the Rothman claim, CFP's senior management, including its Vice President of Claims, its Vice President of Underwriting, and its lawyers, were informed by several senior managers in the claims department that its investigation and adjusting of wildfire claims and fair rental value claims was (a) violative of California law and (b) fell far short of industry standards regarding investigation and adjusting of wildfire claims and fair rental value claims. 52. Consistent with its response to the CDI conclusions and directives, in response to these complaints by senior managers, instead of reforming its claims handling to comport with10 California law and industry standards, CFP intentionally made no changes to its wildfire claims handling, including its handling of the Rothman claim.12 CFP'S TORTIOUS BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING - FAILURE TO INVESTIGATE13 53. California law and regulations that apply to fair claims handling require property insurers,14 upon notification of a claim, to diligently conduct a thorough, fair, and objective15 investigation of the claim. 10 CCR section 2695.7(d).16 54. As reflected in the relevant jury instruction, CACI 2332, an insurer can breach the implied17 covenant of good faith and fair dealing, and become liable for harm caused by its tort,18 including both Policy benefits unpaid and consequential damages such as attorneys'ees,19 public adjuster fees, investigative costs, increased costs of construction, interest, and20 emotional distress, if it fails to comply with its obligation under section 2695.7(d) to conduct21 a thorough and objective investigation after a report of a loss.22 55. Under CACI 2332, the elements a plaintiff must satisfy to demonstrate an actionable breach23 of the implied covenant of good faith and fair dealing that is read into every property2425 11 COMPLAINT AND DEMAND FOR JURY TRIAL insurance policy are as follows: (a) a covered loss under a property policy, (b) a properly presented claim to be compensated for the loss, (c) the insurer's failure to conduct a full, fair, prompt, and thorough investigation of all bases of the claim, (d) harm, and (e) the failure to investigate was a substantial factor in causing the harm. 56. CFP breached the covenant of good faith and fair dealing by knowingly and intentionally, failing to conduct a thorough and objective investigation of the claim, with the purpose of saving its member companies millions of dollars, and without regard for the potential risks to its customers'ealth and safety, as follows: ~ CFP failed to hire a licensed and competent investigator to determine the extent of10 actual loss and/or damage to the Property and its contents caused by the Palisades fire, and for loss of use/fair rental value;12 ~ CFP failed to hire a licensed and competent investigator to determine the cost to13 repair of actual loss and/or damage to the Property and its contents caused by the14 Palisades fire, and for loss of use/fair rental value;15 ~ CFP relied for its investigation of the of actual loss and/or damage to the Property16 and its contents on a brief inspection by an unlicensed, unqualified, and17 incompetent investigator, and unreasonably and maliciously based its refusal to18 pay policy benefits on that unqualified and unlicensed inspection;19 ~ CFP failed to investigate or consider the scope of actual loss and/or damage to the20 Property from the Palisades fire, and cost to repair such of actual loss and/or21 damage, and for loss of use/fair rental value;22 ~ CFP failed to consider, further investigate, or properly rely on evidence of actual23 loss and/or damage to the Property delivered to CFP by Rothman which proved24 that the Palisades fire had resulted in an actual loss and/or damage to the Property25 12 COMPLAINT AND DEMAND FOR JURY TRIAL and its contents which required repairs, and for loss of use/fair rental value; ~ CFP failed to competently investigate the uninhabitability of the Property, putting the health and safety of its elderly customer at risk, and for loss of use/fair rental value. 57. In the investigation of Rothman's claim under his Policy, CFP also knowingly and intentionally failed to satisfy its obligation to conduct a thorough and objective investigation, with the purpose of saving its member companies millions of dollars, and without regard for the potential risks to its customers'ealth and safety, as follows: ~ CFP failed to consult any expert, consult any professional or academic research or10 literature, or conduct any investigation or experimentation, as applies to the "visible to the unaided human eye" language in its "Smoke Damage" coverage;12 ~ CFP failed to consult any expert, consult any professional or academic research,13 or conduct any investigation or experimentation, as applies to the "unaided nose14 of an average person" language in its "Smoke Damage" coverage;15 ~ CFP failed consult any expert, consult any professional or academic research, or16 conduct any investigation or experimentation, regarding the existence of the nose17 "an average human" or the existence of "an average human";18 ~ CFP did not consult any expert or conduct any research regarding the ability of19 any person or its adjuster to see or smell damage to the Property, including the20 ability to see damage located inside walls, cavities, fireplaces, chimneys, attic21 spaces, and HVAC systems.22 ~ CFP failed to train or provide inspection guidelines to the outside inspector who23 investigate the loss regarding how to detect wildfire damage or to apply the CFP24 Policy;25 13 COMPLAINT AND DEMAND FOR JURY TRIAL ~ Prior to its investigation of the Rothman claim, CFP failed to consult any expert, consult any professional or academic research or literature, or conduct any investigation or experimentation, regarding: o the scope of potential damage to dwelling components resulting from wildfires in populated areas; o the scope of potential damage by wildfire to dwelling contents, including but limited to clothing, furniture, bedding, mattresses, and electronics; o the tendency of structures to circulate air from building cavities to living areas;10 o the impact of wildfire on building components, including but not limited to insulation, flooring (natural wood, engineered, untreated, tile), drywall,12 interior wall cavities, exterior surfaces, exterior structures and electrical13 systems, plaster, wallpaper, interior electrical systems, unsealed framing,14 HVAC, roofing components, appliances;15 o the impact of heat generated by an urban firestorm on roofs and roofing16 material including roofing sealings with regard to reduced longevity and17 effectiveness to avoid water intrusion;18 o the impact of heat generated by an urban firestorm on exterior finishes19 including paint, stucco, and plaster;20 o the impact of heat generated by an urban firestorm on the longevity,21 conduction efficacy, and sealing qualities of energy-efficient windows;22 o the contents of wildfire debris generated by the Palisades fire, or any prior23 urban firestorm including but not limited to Thomas (Santa Barbara),24 Camp (Paradise), Tubbs (Santa Rose), Atlas (Napa), Woolsey (Los25 14 COMPLAINT AND DEMAND FOR JURY TRIAL Angeles), or Camp (Paradise and environs); o the presence of heavy metals in intact dwellings following an urban firestorm, including but not limited to VOCs and semi-VOCs; o the ability of micro-sized particulates to absorb VOCs, semi-VOCs, and other compounds that may be dangerous to the health and safety of dwelling occupants; o the odor or non-odor character of wildfire debris, including soot, char, and ash; o the risk to human health and safety, including the health and safety of10 dwelling residents, including children, elderly, and health-compromised persons, posed by the presence of wildfire debris;12 o the nature and scope and necessary investigation of dwellings and13 dwelling contents impacted by wildfire debris resulting from urban14 firestorms, including but not limited to air testing, surface sampling, cavity15 testing by licensed professionals and sample analysis by certified16 laboratories;17 o the nature and scope of necessary repairs to dwellings and dwelling18 contents impacted by wildfire debris as a result of an urban firestorm;19 o safety and efficacy as applies to dwellings and dwelling contents impacted20 by wildfire debris resulting from an urban firestorm of cleaning techniques21 commonly used by restoration companies on dwelling components, versus22 cleaning techniques used by untrained persons or homeowners;23 o the efficacy of thermal fogging, ozone treatment, and other chemical24 methods for odor neutralization; and25 15 COMPLAINT AND DEMAND FOR JURY TRIAL o the safety and health implications and effects of requiring homeowners to repair damage caused by wildfires to their homes without assistance or input from licensed remediation professionals. 58. Rothman suffered an actual loss and/or physical damage to his Property and contents, the predominant cause of which was a covered peril, fire. He properly notified CFP of the loss, made a timely claim for repairs. CFP thereafter acted unreasonably and in violation of the Policy's implied covenant of good faith and fair dealing by failing to conduct a full, fair, prompt, and thorough investigation of all bases of these claims (CACI 2332), which resulted in harm to Rothman.10 CFP'S TORTIOUS BREACH OF THK IMPLIED COVENANT OF GOOD FAITH AND11 FAIR DEALING - FAILURE TO PAY POLICY BENEFITS12 59. California law and regulations that apply to fair claims handling require property insurers,13 upon notification of a claim, to diligently pay all benefits due under the policy.14 60. As reflected in CACI 2331, an insurer can breach the implied covenant of good faith and fair15 dealing, and become liable for harm caused by its tort, including both policy benefits unpaid16 and consequential damages such as attorneys'ees, interest, and emotional distress, if it fails17 to pay policy benefits owed following report of a loss covered under a property policy.18 61. Under CACI 2331, the elements a plaintiff must satisfy to demonstrate an actionable breach19 of the implied covenant of good faith and fair dealing that is read into every property20 insurance policy are as follows: (a) a covered loss under a property policy, (b) notification to21 the insurer of the loss, (c) the insurer's delay paying, or failure to pay, policy benefits, (d)22 harm, and (e) the failure to investigate was a substantial factor in causing the harm.23 62. CFP breached the covenant of good faith and fair dealing by unreasonably failing to pay24 policy benefits as follows:25 16 COMPLAINT AND DEMAND FOR JURY TRIAL ~ CFP unreasonably, and with fraud, malice, and oppression failed to pay policy benefits for repairs of the dwelling; ~ CFP unreasonably and with fraud, malice, and oppression failed to pay policy benefits for repair and replacement of damaged and destroyed contents; ~ CFP unreasonably and with fraud, malice, and oppression failed to pay policy benefits for loss of use in the form of fair rental value. CFP'S BREACH OF THK POLICY 63. As a result of its tortious breach of the implied covenant of good faith and fair dealing— including but not limited to its unreasonable failure to conduct a thorough investigation of the10 damage to the Property and its contents predominantly caused by fire, and its unreasonable failure to pay Policy benefits due under all coverages — CFP intentionally, unreasonably,12 maliciously, and fraudulently breached the following provisions of the Policy: (a)13 Declaration page showing coverages for dwelling repairs, other structures, personal property,14 fair rental value, ordinance and law coverage, dwelling replacement cost, and fire and15 lighting coverage, (b) Agreement section, (c) Coverages section, including dwelling, other16 structures, personal property, fair rental value, debris removal, reasonable repairs, (d) Perils17 Insured Against, (e) Conditions section: "Duties After Loss" including prompt notice,18 protection from further damage, reasonable repairs, keep accurate records of repair, provide19 photographs and documentary evidence of repairs, (f) Loss Settlement section, including a.-20 c., (g) Loss Payment section.21 FIRST CAUSE OF ACTION (BREACH OF THK IMPLIED COVENANT22 OF GOOD FAITH AND FAIR DEALING)23 64. Rothman incorporates by reference the preceding paragraphs as though fully set forth here, as24 against all CFP and Does 1-10.25 17 COMPLAINT AND DEMAND FOR JURY TRIAL 65. Rothman sustained actual loss and/or physical damage to the Property and its contents and became eligible for fair rental value payments due to damage, predominantly caused by fire, a covered peril under the Policy. 66. Rothman timely notified CFP of the loss and otherwise complied with all policy provisions that are conditions precedent to coverage. 67. CFP and DOES 1-10 breached the implied covenant of good faith and fair dealing as set forth. 68. As a direct and proximate result of CFP's and DOES 1-10's breach of the covenant of good faith and fair dealing as set forth above, including the failure to investigate as required by 1010 CCR 2695.7(d), the failure to pay policy benefits for repairs to the Property, repairs and replacement of personal property, and fair rental value, all due under the Policy following the12 loss, and breach of the specific portions of the Policy set forth above, Rothman lost contract13 benefits under the Policy, sustained consequential damages including emotional distress,14 attorneys fees, expert and investigative expenses, and costs in seeking enforcement of his15 contractual rights.16 69. In doing the things set forth above, CFP and DOES 1-10 acted intentionally with fraud,17 malice, and oppression in that they knowingly and intentionally violated Rothman's rights18 under the insurance policy, and purposefully misrepresented and concealed material facts, for19 the purpose of depriving Rothman of the payment of Policy benefits, which in turn was for20 the purpose of reducing claims expenses and indemnity expenses to avoid assessment to its21 member companies.22 70. Rothman is therefore entitled to exemplary damages in amounts to be proved at trial, to23 include a three-times multiplier in the discretion of the jury pursuant to Civil Code section24 3345.25 18 COMPLAINT AND DEMAND FOR JURY TRIAL 71. Among other things set forth in detail above, and incorporated here by reference, CFP did the following, which amount to fraud, malice, and oppression: ~ Repeatedly lied to the CDI, as set forth; ~ Obtained the policy it relied on to fail to investigate and refuse policy payment to Rothman by fraudulent means; ~ Intentionally and deliberately failed and refused to conduct a thorough or objective investigation of the Rothman claim and many hundreds of similar wildfire smoke damage claims, for the express purpose of avoiding millions of dollars of claims expenses;10 ~ Relied in its investigation and adjusting of the Rothman claim, many hundreds of similar wildfire smoke damage claims, on policy provisions CFP knew to be12 invalid;13 ~ Relied in its investigation and adjusting of the Rothman claim, many hundreds of14 similar wildfire smoke damage claims, on policy provisions as to which CFP15 committed fraud to obtain their approval for use in California, including as relates16 to Rothman;17 ~ In the Rothman claim and in many hundreds of similar wildfire smoke damage18 claims, CFP intentionally failed to conduct a thorough, objective, and fair19 investigation of the scope of damage to the Property and its contents, and of the20 uninhabitability of the Property following the loss, intentionally putting the health21 and safety of its elderly customer at risk;22 ~ In the Rothman claim as in many hundreds of similar wildfire smoke damage23 claims, CFP concealed and intentionally failed to pay benefits for repairs to the24 Property, knowing that by failing to do so it was putting its elderly and vulnerable25 19 COMPLAINT AND DEMAND FOR JURY TRIAL customer's health and safety at risk; ~ In the Rothman claim as in many hundreds of similar wildfire smoke damage claims, CFP concealed and intentionally failed to pay benefits for repairs to contents knowing that by failing to do so it was putting its elderly and vulnerable customer's health and safety at risk; ~ In the Rothman claim as in many hundreds of similar wildfire smoke damage claims, CFP concealed and intentionally failed to pay benefits for fair rental value knowing that by failing to do so it was putting its elderly and vulnerable customer's health and safety at risk; and10 ~ CFP compelled Rothman to hire counsel and file a lawsuit to obtain benefits due under the Policy.12 72. As evidence that the various acts of bad faith, malice, fraud, and oppression set forth above13 and below were done knowingly, deliberately, and intentionally, each of those acts is part of14 a pattern of institutional bad faith, fraud, malice, and oppression by CFP in many hundreds of15 claims since at least 2012, designed to reduce claims expenses and indemnity payments, thus16 avoiding assessments to the admitted California insurers that are compelled by law to17 participate in CFP pursuant to Insurance Code (tj10090 et seq.18 73. For example, following losses relating to wildfires in California after July 2017, and in19 violation of 10 CCR $ 2695.7(d), CFP routinely and deliberately failed to conduct thorough,20 fair, and objective investigations of homes and personal property that were damaged by fire,21 with knowledge or constructive knowledge that its failure to determine the extent of damage22 could lead to serious health consequences to its insureds.23 74. Having failed to adequately investigate the extent of damage to its insureds'omes, CFP24 routinely denies or partially denies fire claims, and fails to pay benefits for dwelling repairs25 20 COMPLAINT AND DEMAND FOR JURY TRIAL and cleaning/replacement of contents necessitated by damage to its insureds'omes and pays either nothing or small amounts for repairs and/or replacement of contents. 75. CFP likewise routinely failed to undertake thorough, fair, and objective investigations into the true fair rental value of its insured properties, or the true period of restoration in which fair rental value benefits should be paid. 76. Having failed to adequately investigate the extent of damage to its insureds'omes, CFP routinely fails to investigate the value of, and fails to pay policy benefits owing for, the true fair rental value of its insured properties. 77. CFP is engaged in an institutional scheme to cheat victims of fire losses of least tens of10 millions of dollars in policy benefits, for the purpose of enriching its member insurers. 78. CFP's failure to investigate fire claims across California, and its failure to pay for damage to12 dwellings and contents caused by fires, as well as loss of use benefits in the form of fair13 rental value payments, is fundamentally at odds with its core mission, which is to provide the14 minimum coverage fire insurance to those otherwise unable to obtain insurance. By failing to15 adequately investigate and pay fire claims relying on the illegal, unfair, deceptive conduct set16 forth above, as well as in routine breach of its own policy, CFP engages in widespread law17 violations and thus is liable not only for bad faith, but for exemplary damages due to its18 institutional malfeasance.19 ALLEGATIONS RELATING TO CONDUCT OF, AND APPROVAL AND RATIFICATION BY, CFP'S MANAGING AGENTS, OFFICERS AND DIRECTORS2021 79. Annalise Jivan (CFP President, ret.), Victoria Roach (CFP President), John Boeder (CFP VP22 for Underwriting) and Estee Natale, and DOES 1-10, either made, authorized, or ratified23 some or all the decisions vis a vis Rothman's claim and Policy, as well as the institutional24 practices described above, in violation of California law, in tortious breach of the contract,25 21 COMPLAINT AND DEMAND FOR JURY TRIAL and with malice, fraud, and oppression. As such, they are managing agents of CFP pursuant to Civil Code (3294. PRAYER FOR RELIEF Rothman prays for judgment against CFP and DOES 1-10 as follows: l. for unpaid Policy benefits; 2. for consequential damages including but not limited to attorneys'ees and emotional distress; 3. for exemplary damages for fraud, oppression, and malice; 4. for a three-times multiplier to be applied by the jury to any punitive damages10 award pursuant to Civil Code section 3345; 5. for pre-judgment interest pursuant to Civil Code section 3288;12 6. for costs of suit;13 7. for such other relief the Court finds just and proper.14 Dated: July 15,2024 KERLEY SCHAFFER LLP15161718 BY: Dylan L. Schaffer Attorneys for Plaintiff19202122232425 22 COMPLAINT AND DEMAND FOR JURY TRIAL DEMAND FOR JURY TRIAL Plaintiff requests a jury trial. 3 Dated: July 15, 2024 KERLEY SCHAFFER LLP 4 BY: Dylan L. Schaffer Attorneys for Plaintiff101213141516171819202122232425 23 COMPLAINT AND DEMAND FOR JURY TRIALEXHIBIT A EXHIBIT A California FAIR Plan Association DWELLING INSURANCE POLICY DECLARATIONS 725 S. Figueroa Street, Suite 3900 TRANSACTION TYPE Endorsem*ntC A L I F O R N A Los Angeles, CA 90017 IFAIR PLANPROPERTY INsURANcE (800) 339-4099 YOUR INSURANCE BROKER www.cfpnet.corn MARC AGHA 8925 SEPULVEDA BLVD,STE 205ENDORsem*nT EFFECTIVE DATE 03/24/2021 PHONE NUMBER (323) 401-3053POLICY NUMBER CFP 2705617 00POLICY PERIOD 01/30/2021 To 01/30/2022 12:01 a m at the property locationINSURED NAME AND MAILING ADDRESS PROPERTY LOCATIONJAY ROTHMAN 19734 WELLS DR21900 BURBANK BLVD STE 210 WOODLAND HILLS, CA 91364WOODLAND HILLS, CA 91367I IMPORTANT NOTICE TO INSURED The FAIR Plan does not estimate the cost to rebuild your home, or the cost of labor and materials in your (or any other) area, or determine the appropriateness of the coverage you select. Instead, those are your responsibilities. However, we are required by law to tell you that, "The limit of liability for this structure (Coverage A) is based on an estimate of the cost to rebuild your home, including an approximate cost for labor and materials in your area, and specific information that you have provided about your home".I RATING INFORMATION YEAR BUILT OCCUPANCY ¹ OF UNITS CONSTRUCTION TYPE DEDUCTIBLE 1966 OWNER 1 FRAME
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On March 27, 2024, Plaintiff Philip Markowitz (Plaintiff) filed a Complaint against Defendants Foremost Insurance Company Grand Rapids, Michigan (Defendant) and Does 1 to 10, alleging causes of action for: (1) Breach of Insurance Contract; and (2) Tortious Breach of Insurance Contract. On March 28, 2024, this action was reassigned to the Honorable Mel Red Recana sitting in Department 45 at the Stanley Mosk Courthouse. (03/28/24 Minute Order.) On May 8, 2024, Defendant filed and served the instant Motion to Strike Punitive Damages Allegations. Also, on such date, Plaintiff filed and served an opposition to the motion. Defendant filed and served a reply brief on July 2, 2024. Legal Standard Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof.¿ (Code of Civ. Proc., § 435, subd. (b)(1); Cal. Rules of Court, rule 3.1322, subd. 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LOS ANGELES UNIFIED SCHOOL DISTRICT, A SCHOOL DISTRICT, VS SCOTTSDALE INDEMNITY COMPANY, ET AL.
Jul 11, 2024 |21STCV28642
Case Number: 21STCV28642 Hearing Date: July 11, 2024 Dept: 53 Superior Court of California County of Los Angeles Central District Department 53 los angeles unified school district ; Plaintiff, vs. scottsdale indemnity company a/k/a nationwide e&s / specialty , et al.; Defendants. Case No.: 21STCV28642 Hearing Date: July 11, 2024 Time: 10:00 a.m. [tentative] Order RE: plaintiffs motion for court determination of defendant scottsdale indemnity companys claim of privilege MOVING PARTY: Plaintiff Los Angeles Unified School District RESPONDING PARTY: Defendant Scottsdale Indemnity Company Motion for Court Determination of Defendant Scottsdale Indemnity Companys Claim of Privilege The court considered the moving, opposition, and reply papers filed in connection with this motion. DISCUSSION Plaintiff Los Angeles Unified School District (Plaintiff) moves the court for an order determining, pursuant to Code of Civil Procedure section 2031.285, that the attorney-client privilege or the attorney work production protection do not apply, or that defendant Scottsdale Indemnity Company (Defendant) has waived any claim of such privilege or protection, as to (1) all or part of Defendants production of documents identified as Bates Nos. SCD0000732 SCD0001049, and (2) the portions of the March 25, 2024 deposition of Ana Campos concerning Exhibit 17 to that deposition. If electronically stored information produced in discovery is subject to a claim of privilege or of protection as attorney work product, the party making the claim may notify any party that received the information of the claim and the basis for the claim. (Code Civ. Proc., § 2031.285, subd. (a).) After being notified of a claim of privilege or of protection under subdivision (a), a party that received the information shall immediately sequester the information and either return the specified information and any copies that may exist or present the information to the court conditionally under seal for a determination of the claim. (Code Civ. Proc., § 2031.285, subd. (b).) As a threshold matter, the court notes that the parties have not set forth, in their briefs, the exact documents in the approximate 400-page production that Defendant contends are privileged. (Andrade Decl., Ex. A [March 26, 2024 letter requesting the destruction of documents bates-numbered SCD0000732-SCD0001049]; Gerson Decl., ¶¶ 4-8.) However, Defendants revised privilege log, dated April 19, 2024, has identified the following page numberswhich consist of emails, draft letters, counsels notes, and a form setting forth premium information of a third partyas privileged: (1) numbers 906-910 (attorney-client privilege); (2) numbers 912-917 (attorney-client privilege); (3) numbers 918-920 (work product protection); (4) numbers 924-928 (attorney-client privilege); (5) number 943 (work product protection); (6) numbers 956-958 (attorney-client privilege and work product protection); (7) numbers 959-962 (work product protection); (8) numbers 962-966 (attorney-client privilege); (9) numbers 1046-1049 (attorney-client privilege); and (10) counsels notes set forth on pages 733, 827, 831, 836, 839, 842, 845, 852, 854, 856, 858, 860, 861, 871, 972, 973, 975, 977, 1005, 1009, 1011, 1013, 1016, 1018, 1020, 1022, 1025, 1027, 1030, 1034, 1037, 1040, 1042, 1044, and 1045 (work product protection). (Andrade Decl., Ex. F, Privilege Log, p. 1; Gerson Decl., ¶ 15 [On April 19, 2024, [Defendant] reproduced the file with appropriate redactions of the privileged documents contained within the file, and produced alongside it a new privilege log, noting the redactions].) Thus, the court has evaluated Plaintiffs motion and Defendants claims of privilege as to the documents identified in Defendants April 19, 2024 privilege log. First, the court finds that Defendant has met its burden to show that the documents containing email correspondence are protected by the attorney-client privilege. (Costco Wholesale Corp. v. Superior Court (2009) 47 Cal.4th 725, 733 [The party claiming the privilege has the burden of establishing the preliminary facts necessary to support its exercise, i.e., a communication made in the course of an attorney-client relationship].) Defendant has submitted evidence establishing that it retained (1) the law firm Selman Breitman, LLP (the Selman Firm) as its outside coverage counsel, and (2) the law firm Manning & Kass, Ellrod, Ramirez, Trester LLP (the Manning Firm) to defend defendant After School All Stars (ASAS) in the underlying action and in this action. (Gerson Decl., Ex. A, McRoberts Decl., ¶ 7; Hochhausler Decl., ¶¶ 1-2, 4.) Defendant has also submitted evidence explaining that K&K Insurance Group, Inc. (K&K) acted as its claims administrator, and performed various claims administrations functions, including retaining defense counsel for ASAS. (Gerson Decl., Ex. A, McRoberts Decl., ¶ 8.) As to the communications between Defendant (including through its claims administrator, K&K) and the Manning Firm regarding the defense of ASAS, the court finds that Defendant has made a prima facie showing that the communications were made in the course of a tripartite attorney-client relationship and therefore are protected by the attorney-client privilege because (1) [w]hen an insurer retains counsel to defend its insured, a tripartite attorney-client relationship arises among the insurer, insured, and counsel[,] and (2) Defendant has submitted evidence establishing that it, as the insurer for ASAS, retained the Manning Firm to represent ASAS, its insured. (Bank of America, N.A. v. Superior Court (2013) 212 Cal.App.4th 1076, 1083; Hochhausler Decl., ¶ 4; Andrade Decl., Ex. F, Privilege Log, p. 1, ¶ 9 [email correspondence between Manning Firm and K&K].) Thus, the confidential communications between either the insurer [(here, Defendant)] or the insured [(here, ASAS)] and counsel [(here, the Manning Firm)] are protected by the attorney-client privilege, and both the insurer and insured are holders of the privilege. (Bank of America, N.A., supra, 212 Cal.App.4th at p. 1083.) As to the communications between Defendant (including through its claims administrator, K&K) and the Selman Firm, the court finds that Defendant has made a prima facie claim of privilege by showing that (1) Defendant retained the Selman Firm to act as its coverage counsel, such that (2) the communications described in the privilege logwhich describe the subject emails as confidential communications with coverage counselwere made in the course of an attorney-client relationship. (Gerson Decl., Ex. A, McRoberts Decl., ¶ 7; Costco Wholesale Corp., supra, 47 Cal.4th at p. 733 [party has initial burden of establishing preliminary facts of a communication made in the course of an attorney-client relationship]; Andrade Decl., Ex. F, Privilege Log, p. 1, ¶¶ 1 [email correspondence between Selman Firm and K&K], 2 [email correspondence forwarding communications from Selman Firm between K&K and Defendant], 4 [email correspondence between K&K, Selman Firm, and Defendant], 6 [email correspondence between K&K, Selman Firm, and Defendant], 8 [email correspondence between Selman Firm, K&K, and Defendant].) Thus, the court finds that Defendant has met its burden to make a prima facie claim of privilege as to the communications between it, its claims adjuster K&K, the Manning Firm, and the Selman Firm. (Costco Wholesale Corp., supra, 47 Cal.4th at p. 733.) Second, the court finds that Plaintiff has not met its burden to show that the communications are not privileged. (Costco Wholesale Corp., supra, 47 Cal.4th at p. 733 [Once that party establishes facts necessary to support a prima facie claim of privilege, the communication is presumed to have been made in confidence and the opponent of the claim of privilege has the burden of proof to establish the communication was not confidential or that the privilege does not for other reasons apply].) Plaintiff contends that the privilege arising from an attorney-client relationship (whether arising from a tripartite relationship or generally) does not apply here because such privilege does not protect an insurers internal communications concerning coverage issues relevant to the insureds litigation and Defendant retained coverage counsel to perform [Defendants] investigation of the claim (i.e., claims handling)[.] (Reply, p. 3:1-3, 3:8-9.) The court disagrees. The court acknowledges that a court should determine the dominant purpose of the relationship between an insurance company and its in-house attorneys to determine whether the relationship is one of attorney-client or one of claims adjuster-insurance corporation. (Costco Wholesale Corp., supra, 47 Cal.4th at pp. 739-740.) If the court determines that the dominant purpose of such a relationship is not that of attorney and client, communications between the insurer and its counsel that is acting as a claims adjuster would not be protected by the attorney-client privilege. (Id. at p. 740.) As set forth above, Defendant met its initial burden to show the existence of an attorney-client relationship by submitting evidence establishing that it retained the Selman Firm as its coverage counsel, such that it is presumed that the communications were made in confidence. (Gerson Decl., Ex. A, McRoberts Decl., ¶ 7; Costco Wholesale Corp., supra, 47 Cal.4th at p. 733.) Plaintiff contends that Defendants relationship with the Selman Firm is more analogous to claims adjuster-insurance company than attorney-client. In support of this contention, Plaintiff relies on the following two assertions made by Defendant in its motion for summary judgment or, alternatively, summary adjudication: (1) Defendant retained coverage counsel who promptly sought information necessary for [Defendants] coverage investigation[,] and (2) Defendant promptly retained coverage counsel and promptly agreed to defend [Plaintiff] under a reservation of rights. (Andrade Reply Decl., Ex. H, p. 24:4-5, 24:8-11.) The court finds that these two statements do not show that the dominant purpose of the relationship between Defendant and the Selman Firm was that of claims adjuster-insurance corporation. These statements do not establish that the Selman Firm was acting solely as a claims adjuster, or even acting mostly as a claims adjuster, on behalf of Defendant. As set forth above, the inquiry concerns the dominant purpose of the relationship between Defendant and the Selman Firm. (Costco Wholesale Corp., supra, 47 Cal.4th at p. 739 [emphasis added].) Thus, the court finds that Plaintiff has not shown that the attorney-client privilege does not apply on the ground that the dominant purpose of Defendant and the Selman Firms relationship was that of claims adjuster-insurance corporation. Moreover, the court finds relevant that, in its opposition papers, Defendant represented that its communications involving, inter alia, the Selman Firm concerned case strategy and case updates, further supporting Defendants assertion of the existence of an attorney-client relationship between it and the Selman Firm. (Opp., p. 12:11-13.) Third, the court finds that Plaintiff has not met its burden to show that Defendant waived its right to assert the attorney-client privilege and work product protection. (Costco Wholesale Corp., supra, 47 Cal.4th at p. 733.) The right of any person to claim attorney-client privilege is waived with respect to a communication protected by the privilege if any holder of the privilege, without coercion, has disclosed a significant part of the communication or has consented to the disclosure made by anyone. Consent to disclosure is manifested by any statement or other conduct of the holder of the privilege indicating consent to the disclosure, including failure to claim the privilege in any proceeding in which the holder has legal standing and the opportunity to claim the privilege. (Evid. Code, § 912, subd. (a).) [T]he disclosure contemplated in Evidence Code section 912 involves some measure of choice and deliberation on the part of the privilege holder. (McDermott Will & Emery LLP v. Superior Court (2017) 10 Cal.App.5th 1038, 1101; State Compensation Ins. Fund v. WPS, Inc. (1999) 70 Cal.App.4th 644, 652 [Based on the language of Evidence Code section 912, we hold that waiver does not include accidental, inadvertent disclosure of privileged information by the attorney].) When determining whether an inadvertent disclosure waived the attorney-client privilege, a trial court must examine both the subjective intent of the privilege holder and any manifestation of the holders intent to disclose the information. [Citations.] Other relevant considerations include the precautions the holder took to maintain the privilege and the promptness with which the holder sought return of the inadvertently disclosed document. (McDermott Will & Emery LLP, supra, 10 Cal.App.5th at pp. 1101-1102 [internal citations omitted].) Plaintiff contends that both Defendant and ASAS waived their rights to assert the attorney-client privilege and work product protection because (1) Defendant did not attempt to claw back the documents until two years after the production thereof; (2) Defendant raised a privileged-based objection at the end of deposition, after allowing Plaintiffs counsel to question Ana Campos about one of those documents; and (3) ASAS did not assert the privilege at the deposition of Ana Campos. The court disagrees. Defendant has submitted evidence establishing that (1) its counsel inadvertently overlooked the subject communications and documents and did not intend to include those documents in Defendants production, and (2) it did not discover the production of the privileged documents until the March 25, 2024 deposition of Ana Campos. (Gerson Decl., ¶¶ 8-13; Roberts Decl., ¶¶ 2-4.) Moreover, counsel states that they did not have occasion to review the documents after Defendants 2022 production. (Gerson Decl., ¶ 12; Roberts Decl., ¶ 6.) The court finds that Defendant did not have the subjective intent to disclose privileged materials to Plaintiff in its production, nor did Defendant manifest an intent to disclose or to consent to disclose such information by asserting the privilege two years after its production, in light of the evidence establishing that Defendant first learned of the disclosure at that time and (1) asserted the privilege at the end of the deposition and on the record, and (2) promptly requested, the day after the deposition, that Plaintiff destroy the documents. (McDermott Will & Emery LLP, supra, 10 Cal.App.5th at p. 1101; Evid. Code, § 912, subd. (a); Andrade Decl., Ex. A [March 26, 2024 letter from Defendant requesting destruction of documents].) The court acknowledges, as Plaintiff has pointed out, that Defendants counsel did not object to the use of one privileged document (labeled as Exhibit 17) until the conclusion of Ana Camposs deposition. (Limber Decl., ¶ 5 [stating that, [a]t the conclusion of the Campos deposition[,] counsel asserted privilege].) However, the court finds that this conduct does not evidence a subjective intent to disclose privileged information. The attorney representing Defendant in this deposition has stated, in her declaration, that while she believed the exhibit appeared on its face to contain privileged material, she wanted to fully review and analyze the document and identify all individuals referenced, before making any statements on the record. (Limber Decl., ¶ 3.) After reviewing the exhibit during a break, counsel asserted the attorney-client privilege on the record. (Limber Decl., ¶¶ 4-5.) The court finds that Defendants counsels conduct, in ensuring the applicability of the claim of privilege before asserting it on the record and doing so at the conclusion of the deposition, does not show a subjective intent to disclose the information, or to consent to its disclosure. (McDermott Will & Emery LLP, supra, 10 Cal.App.5th at p. 1101; Evid. Code, § 912, subd. (a).) The court further finds that ASAS did not waive its right to claim the attorney-client privilege and work product protection by electing not to assert the privileges at the deposition of Ana Campos. Counsel for ASAS has stated, in his declaration, that (1) he did not intend to waive any privilege claims on behalf of ASAS, and (2) he did not make an objection on the deposition record because Defendant had already asserted the privilege, such that counsel did not see the need to make a redundant objection. (Hochhausler Decl., ¶¶ 8, 6.) The court finds that this evidence shows that ASAS did not have the subjective intent to disclose or to consent to the disclosure of privileged information. (McDermott Will & Emery LLP, supra, 10 Cal.App.5th at p. 1101; Evid. Code, § 912, subd. (a).) Thus, for the reasons set forth above, the court finds that Plaintiff did not meet its burden to show that Defendant and/or ASAS waived their rights to assert the attorney-client privilege. Finally, the court notes that three entries on Defendants privilege log identify three categories of documents that it contends are subject to the work product protection. (Andrade Decl., Ex. F, Privilege Log, p. 1, ¶¶ 3, 5, 10.) The parties do not expressly address these entries or dispute that they are subject to the work product protection provided by Code of Civil Procedure section 2018.010 et seq.; instead, Plaintiff appears only to argue that Defendant and ASAS waived this protection. (Mot., p. 10:22-25.) However, the court has determined, for the reasons set forth above, that Defendant did not waive its right to claim that the documents in the subject production are privileged. The court finds that Defendant did not waive its right to claim the work product protection for the same reasons set forth above. ORDER The court denies plaintiff Los Angeles Unified School Districts motion for determination of claim of privilege. The court orders defendant Scottsdale Indemnity Company to give notice of this ruling. IT IS SO ORDERED. DATED: July 11, 2024 _____________________________ Robert B. Broadbelt III Judge of the Superior Court
Ruling
AND ASSET MANAGEMENT, INC. VS GOTHAM INSURANCE COMPANY, ET AL.
Jul 16, 2024 |23STCV12862
Case Number: 23STCV12862 Hearing Date: July 16, 2024 Dept: 48 SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT AND ASSET MANAGEMENT, INC., Plaintiff, vs. GOTHAM INSURANCE COMPANY, et al., Defendants. ) ) ) ) ) ) ) ) ) ) ) CASE NO.: 23STCV12862 [TENTATIVE] ORDER GRANTING APPLICATION FOR ADMISSION PRO HAC VICE Dept. 48 8:30 a.m. July 16, 2024 Thomas D. Jacobson seeks to be admitted pro hac vice to represent Defendant Gotham Insurance Company in this action. An attorney in good standing in another jurisdiction who is not be a resident of California, regularly employed in California, or regularly engaged in substantial business, professional, or other activities in California may apply to appear as counsel pro hac vice in California. (California Rules of Court, rule 9.40(a).) The attorney must a verified application together with proof of service by mail of a copy of the application and notice of hearing on all parties who have appeared in the case and on the State Bar of California at its San Francisco office. (California Rules of Court, rule 9.40(c).) The applicant must also pay a $50.00 fee to the State Bar of California. (California Rules of Court, rule 9.40(e).) The application must state (1) the applicants residence and office addresses; (2) the courts to which the applicant has been admitted to practice and the dates of admission; (3) that the applicant is a member in good standing in those courts; (4) that the applicant is not currently suspended or disbarred in any court; (5) the title of each court and cause in which the applicant has filed an application to appear as counsel pro hac vice in this state in the preceding two years, the date of each application, and whether or not it was granted; and (6) the name, address, and telephone number of the active member of the State Bar of California who is attorney of record in the local action. (California Rules of Court, rule 9.40(d).) The amended application complies with the requirements, and the $500.00 application fee has been paid. (Gov. Code, § 70617, subd. (e)(1).) Accordingly, the amended application for admission pro hac vice is GRANTED. On or before July 16, 2025, counsel must pay the annual renewal fee of $500.00. (Gov. Code, § 70617, subd. (e)(2).) A Non-Appearance Case Review Re: Annual Pro Hac Vice Renewal Fees by Thomas D. Jacobson is scheduled for July 18, 2025 at 9:00 AM in Department 48 at Stanley Mosk Courthouse. Moving party to give notice. Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. If all parties in the case submit on the tentative ruling, no appearances before the Court are required unless a companion hearing (for example, a Case Management Conference) is also on calendar. Dated this 16th day of July 2024 Hon. Thomas D. Long Judge of the Superior Court
Ruling
BOGHOS TOVMASSIAN, ET AL. VS HIPPOS INSURANCE SERVICE, ET AL.
Jul 12, 2024 |23STCV10128
Case Number: 23STCV10128 Hearing Date: July 12, 2024 Dept: 32 BOGHOS TOVMASSIAN, et al., Plaintiffs, v. HIPPO INSURANCE SERVICES, et al., Defendants. Case No.: 23STCV10128 Hearing Date: July 12, 2024 [TENTATIVE] order RE: defendants motion for summary judgment BACKGROUND On May 5, 2023, Plaintiffs Boghos Tovmassian and Marguerite Tovmassian filed this action against Defendants Hippo Insurance Services (Hippo), Spinnaker Insurance Company (Spinnaker), and Patrick Hix, alleging (1) breach of insurance contract, (2) breach of the covenant of good faith and fair dealing, and (3) elder abuse. According to the complaint, Plaintiffs own a home located in Tujunga, California (the Property). (Compl. ¶ 1.) The Property was insured by a homeowners insurance policy issued by Hippo, which is owned and underwritten by Spinnaker. (Ibid.) In December 2021, the Property suffered wind and water intrusion, leading Plaintiffs to make a claim. (Ibid.) Plaintiffs allege that Defendants failed to conduct a full and fair investigation, which resulted in an insufficient payout. (Id., ¶ 3.) On April 25, 2024, Hippo and Spinnaker filed the instant motion for summary judgment. Plaintiffs have not filed an opposition. LEGAL STANDARD The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) Code of Civil Procedure section 437c, subdivision (c) requires the trial judge to grant summary judgment if all the evidence submitted, and all inferences reasonably deducible from the evidence and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law. (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues; the function of the affidavits or declarations is to disclose whether there is any triable issue of fact within the issues delimited by the pleadings. (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59, 67, citing FPI Development, Inc. v. Nakashima (1991) 231 Cal. App. 3d 367, 381-382.) As to each claim as framed by the complaint, the defendant moving for summary judgment must satisfy the initial burden of proof by presenting facts to negate an essential element, or to establish a defense. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.) Once the defendant has met that burden, the burden shifts to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.) Courts liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party. (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.) DISCUSSION I. Hippos Liability a. Plaintiffs Had No Contract with Hippo To establish breach of contract, a plaintiff must show: (1) the contract existed, (2) the plaintiffs performance of the contract or excuse for nonperformance, (3) the defendants breach, and (4) the resulting damage to the plaintiff. (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.) A plaintiff cannot assert a claim for breach of contract against one who is not a party to the contract. (Tri-Continent Internat. Corp. v. Paris Savings & Loan Assn. (1993) 12 Cal.App.4th 1354, 1359.) It is undisputed that the policy was issued by Spinnaker, with Hippo as the program administrator. (Def.s Undisputed Facts (UF) 1; Carden Decl., Ex. A.) The policy was signed by Spinnakers CEO. (Ibid.) Therefore, Hippo has satisfied its initial burden by showing that it was not a party to the policy with Plaintiffs. This is sufficient to shift the burden to Plaintiffs, who do not oppose the motion or present any contrary evidence. Accordingly, Hippo is not liable for breach of contract as a matter of law. b. Hippo Cannot be Liable for the Implied Covenant The covenant of good faith and fair dealing, implied by law in every contract, exists merely to prevent one contracting party from unfairly frustrating the other partys right to receive the benefits of the agreement actually made. (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 349-50.) In the absence of a contractual relationship, no implied covenant claims may be stated. (Gulf Ins. Co. v. TIG Ins. Co. (2001) 86 Cal.App.4th 422, 430.) As discussed above, Hippo has established that it had no contractual relationship with Plaintiffs. Accordingly, Plaintiffs cannot maintain an implied covenant claim against Hippo. c. Hippo Cannot be Liable for Elder Abuse Financial abuse of an elder or dependent adult occurs when a person or entity does any of the following: takes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both. (Welf. & Inst. Code, § 15610.30.) Hippo could not have wrongfully retained Plaintiffs property (i.e., the insurance proceeds) if it was not a party to the policy and did not have any obligation to pay Plaintiffs. Therefore, the elder abuse claim fails as a matter of law. II. Spinnakers Liability a. The Claims are Time-Barred Under California law parties may agree to a provision shortening the statute of limitations, qualified, however, by the requirement that the period fixed is not in itself unreasonable or is not so unreasonable as to show imposition or undue advantage. (William L. Lyon & Associates, Inc. v. Superior Court (2012) 204 Cal.App.4th 1294, 1307, quoting Capehart v. Heady (1962) 206 Cal.App.2d 386, 388.) [A] covenant shortening the period of limitations is a valid provision of an insurance contract and cannot be ignored with impunity as long as the limitation is not so unreasonable as to show imposition or undue advantage. (Prudential-LMI Com. Ins. v. Superior Court (1990) 51 Cal.3d 674, 683.) One year was not an unfair period of limitation. (Ibid.; see also Ins. Code, § 2071(a) [imposing one-year limitations period for fire insurance claims].) The statute of limitations for actions on insurance claims is equitably tolled from the time the insured notifies the insurer of the claim until coverage is denied. (Marselis v. Allstate Ins. Co. (2004) 121 Cal.App.4th 122, 124.) The reason for the tolling rule is to avoid penalizing the insured for the time consumed by the insurer investigating the claim. (Id. at p. 125.) The running of the limitations period resumes upon the insurers denial of a claim, and no further tolling occurs, even if the insurer reconsiders its denial. (Singh v. Allstate Ins. Co. (1998) 63 Cal.App.4th 135, 142.) Here, the insurance policy provides that [n]o action can be brought against us unless . . . the action is started within one year after the date of loss. (Carden Decl., Ex. A.) The loss occurred on December 30, 2021. (Compl. ¶ 1.) Plaintiffs reported the loss to Spinnaker on January 8, 2022. (Carden Decl. ¶ 4, Ex. B.) Spinnaker issued notice of its coverage position on January 27, 2022, granting coverage on certain items and denying the rest. (Id., ¶ 5, Ex. C.) Plaintiffs did not file this action until May 5, 2023, well past the one-year limitations period, even accounting for the tolling period between January 8, 2022 and January 27, 2022. Spinnakers reopening of the claim on May 17, 2022 based on Plaintiffs request for reconsideration (Carden Decl. ¶13) did not further toll the limitations period. Therefore, Spinnaker has met its initial burden by establishing that the claims are time-barred.[1] This is sufficient to shift the burden to Plaintiffs, who do not oppose the motion or present any contrary evidence. Accordingly, Spinnaker is not liable as a matter of law. b. Spinnaker Did Not Breach the Policy There can be no breach of the insurance policy . . . [where] the undisputed evidence established that [the insurer] paid all amounts due under the policy. (Janney v. CSAA Ins. Exchange (2021) 70 Cal.App.5th 374, 390.) Here, the policy covered direct physical loss to property. (Carden Decl., Ex. A.) Spinnaker covered damage to the first-floor flooring, the only part of the Property directly damaged by the water intrusion. (Carden Decl. ¶ 14, Ex. F.) Spinnaker declined to cover the undamaged stairs and second-floor flooring. (Ibid.) Spinnaker issued payment for the covered portions. (Id., ¶¶ 5-6, Ex. C, D.) Spinnaker has met its initial burden by showing that it satisfied its obligations under the policy. This is sufficient to shift the burden to Plaintiffs, who do not oppose the motion or present any contrary evidence. Accordingly, Spinnaker is not liable for breach of contract as a matter of law for this independent reason. c. Spinnaker Could Not Have Breached the Implied Covenant [A] bad faith claim cannot be maintained unless policy benefits are due. (Love v. Fire Ins. Exchange (1990) 221 Cal.App.3d 1136, 1153.) Spinnaker could not have acted in bad faith if it correctly denied policy coverage. Furthermore, as discussed above, the claim is time-barred. Therefore, the implied covenant claim fails as a matter of law. d. Spinnaker Could Not Have Committed Elder Abuse Likewise, Spinnaker could not have wrongfully retained insurance benefits if it correctly denied them, and the claim is time-barred in any case. Therefore, the elder abuse claim fails as a matter of law. CONCLUSION The motion for summary judgment filed by Hippo and Spinnaker is GRANTED. [1] This applies to all three causes of action, not just breach of contract, because the policy states that no action may be brought outside one year. The policy does not restrict the limitations period to claims on the policy itself. Furthermore, where the essence of [a] claim[] is an attempt to recover [d]amages for failure to provide benefits under subject contract of insurance, the claim is fundamentally a claim on the policy and is thus time barred under the limitations period stated in the policy. (Magnolia Square Homeowners Ass'n v. Safeco Ins. Co. (1990) 221 Cal.App.3d 1049, 1063, quoting Lawrence v. Western Mutual Ins. Co. (1988) 204 Cal.App.3d 565, 575.)
Ruling
Jul 12, 2024 |22STCV13457
Case Number: 22STCV13457 Hearing Date: July 12, 2024 Dept: 17 Superior Court of California County of Los Angeles DEPARTMENT 17 TENTATIVE RULING CBD FRANCHISING, INC. vs. CENTRAL JERSEY DOORS & CLOSETS, LLC Case No.: 22STCV13457 Hearing Date: July 12, 2024 CBD Franchisings motion for reconsideration is DENIED. On 4/21/2022, Plaintiff CBD Franchising, Inc. (Plaintiff or CBD) filed suit against Central Jersey Doors & Closets, LLC, Mary Conway, William Conway, One Day Doors and Closets, Inc., and One Day Enterprises, alleging: (1) breach of written contract; (2) breach of the implied duty of good faith and fair dealing; (3) tortious interference with contractual relations; and (4) unlawful business practices. On 5/21/2024, the Court granted One Day Defendants motion for summary judgment. Now, CBD Franchising moves for reconsideration of that ruling. Discussion CBD Franchising argues that the Court should reconsider its MSJ ruling because it was denied the opportunity to respond to the non-compete provision arguments and because there was a good will transfer here within the meaning of Business and Professions Code section 16601. After review, the Court denies the motion for several reasons: First, the Court disagrees that One Day Defendants only raised goodwill arguments in reply, or that CBD Franchising was denied an opportunity to fully respond to these arguments. One Day Defendants opening brief in support of their motion for summary judgment argued that the 2013 Franchise Agreement expressly and repeatedly states that it does not transfer any goodwill. Moreover, CBD was provided a full opportunity to respond in oral argument, and the Court fully considered those arguments in its ruling. Importantly, as noted by One Day Defendants, CBDF argued for the first time at the May 9, 2024, hearing on the One Day Defendants motion for summary judgment that the 2013 Franchise Agreement (1) transfers a license to use its goodwill and (2) is part of a series of integrated agreements that includes both the 2016 Asset Purchase Agreement and the 2016 Transfer Agreement. (Opp., 4:10-12.) As such, CBD Franchising itself advanced arguments for the first time at oral argument which it request be considered now. Taken together, the Court fails to find that CBD Franchisings motion is based upon new or different facts, circ*mstances, or law, as a motion for reconsideration must be. (Code Civ. Proc., § 1008, subd. (a).) Second, even setting aside the fact that reconsideration is not appropriate given the lack of new or different facts or law, the Court reaches the same conclusion as to the merits for several reasons: First, Section 16601 provides that a person who sells the goodwill of a business. . . may agree with the buyer to refrain from carrying on a similar business within a specified geographic area. (Bus & Prof. Code, § 16601, italics added.) Here, there was no evidence submitted to show that the Conways, as sellers, sold the goodwill of a business to CBDF as buyer. Rather, CBDF argues that it licensed its goodwill to the Conways via the 2013 Franchise Agreement; that the Conways assigned goodwill to DenMatt Industries via the 2016 Asset Purchase Agreement; and that the Conways, with CBDFs consent, assigned their license to use CBDFs goodwill to DenMatt Industries via the 2016 Transfer Agreement. As such, there is no evidence that the Conways ever sold their goodwill, or that they did so with CBDF agreeing as a buyer to refrain from carrying on a similar business within a specified geographic area. Indeed, the 2013 Franchise Agreement expressly states that it does not transfer the ownership of any goodwill, whether associated with CBDFs proprietary marks or otherwise, such that a franchisee could never sell any goodwill following the termination or expiration of the agreement: Following the termination or expiration of this agreement, no monetary amount will be attributable to any goodwill associated with your use of the Proprietary Marks or operation of the franchised Business or Closets By Design Location, include any local goodwill. (MSJ C.E. Ex. 9, p. 130 2013 Franchise Agreement at p. 42, § 15.01.) The Northern District of Californias decision in Scott v. Snelling and Snelling, Inc. (N.D. Cal. 1990) 732 F.Supp. 1034 supports this interpretation. In Scott, the plaintiff-franchisor argued that section 16601 applied because a franchise agreement is akin to a sale of goodwill in a business. (Id. at p. 1041.) The Northern District disagreed, and instead found that a franchisor simply does not sell its goodwill to the franchisee but instead, consistent with the terms of a license, only agrees that the franchisee may benefit from the goodwill for a specified period of time. (Id.) Given that distinction, the court rejected the plaintiff-franchisors argument that section 16601 applied, noting that the position that a franchisor sells its goodwill by entering into a franchise agreement while retaining its ownership of the goodwill is patently untenable. (Id. at p. 1041, fn. 9.) As applied here, CBDF, as a franchiser, never sold any goodwill to the Conways, and thus the Conways never owned any goodwill to sell. Third, the Court maintains that the 2013 Franchise Agreement, 2016 Asset Purchase Agreement, and 2016 Transfer Agreement are not integrated agreements that should be read together. Civil Code section 1642 provides that [s]everal contracts relating to the same matters, between the same parties, and made as part of substantially one transaction, are to be taken together. (Civil Code, § 1642.) But, here, the three referenced agreements do not relate to the same matters, are not between the same parties, and were not made as part of substantially one transaction. As noted by One Day Defendants: - The three agreements were signed at different times over a more than three-and-a-half-year period: the Conways signed the 2013 Franchise Agreement in December 2012; signed the 2016 Asset Purchase Agreement over three years later in March 2016; and signed the 2016 Transfer Agreement five more months later in August 2016. - The three agreements relate to three distinct transactions: the Conways sought a franchise relationship via the 2013 Franchise Agreement; sold and assigned assets to DenMatt Industries via the 2016 Asset Purchase Agreement; and transferred their post-termination rights, duties, and obligations under the 2013 Franchise Agreement to DenMatt Industries via the 2016 Transfer Agreement. - The three agreements were not signed by the same parties: neither CBDF nor DenMatt Industries signed the 2013 Franchise Agreement, and CBDF did not sign the 2016 Asset Purchase Agreement. - And the three agreements do not each reference the other: the 2013 Franchise agreement does not reference the 2016 Asset Purchase Agreement or the 2016 Transfer Agreement; the 2016 Asset Purchase Agreement does not reference the 2016 Transfer Agreement; and the 2016 Transfer Agreementwhich CBDF calls the most important document in the transaction and references as the agreement that binds all three agreements together (Recons. Mot. 7, 17)does not even reference the 2016 Asset Purchase Agreement. (Opp., 7:6-16.) Moreover, even assuming the three referenced agreements were integrated agreements that should be read together, that does not mean that they were merged into one contract. (Mountain Air Enters., LLC v. Sundowner Towers, LLC (2017) 3 Cal.5th 744, 759, noting that while it is the rule that several contracts relating to the same matters are to be construed together (citing Civ. Code, sec. 1642), it does not follow that for all purposes they constitute one contract.) And even if the contracts to be read as one, there is still nothing which would show a sale of the goodwill of a business to CBDF, as required to fall within the scope of the section 16601. Based on the foregoing, CBDFs motion for reconsideration is denied. It is so ordered. Dated: July , 2024 Hon. Jon R. Takasugi Judge of the Superior Court Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org. If a party submits on the tentative, the partys email must include the case number and must identify the party submitting on the tentative. If all parties to a motion submit, the court will adopt this tentative as the final order. If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar. For more information, please contact the court clerk at (213) 633-0517.
Ruling
CHINYERE VALERIE IBE VS BAMBOO INSURANCE SERVICES, INC., A CORPORATION, ET AL.
Jul 10, 2024 |24CHCV00588
Case Number: 24CHCV00588 Hearing Date: July 10, 2024 Dept: F43 Dept. F43 Date: 7-10-24 Case #24CHCV00588 , Chinyere Valerie Ibe vs. Bamboo Insurance Services, Inc., et al. Trial Date: N/A DEMURRER TO FIRST AMENDED COMPLAINT WITH MOTION TO STRIKE MOVING PARTY: Defendant 818 Restoration and Construction, LLC RESPONDING PARTY: Plaintiff Chinyere Valerie Ibe RELIEF REQUESTED Demurrer to the Complaint · 4th Cause of Action for Intentional Misrepresentation · 5th Cause of Action for Violation of California Business & Professional Code · 6th Cause of Action for Unjust Enrichment · 7th Cause of Action for Defamation Motion to Strike · Page 24, Paragraph 111 entitled Prayer for Relief, Lines 23-25 [claim for punitive damages] RULING: Defendants demurrer is sustained. Defendants motion to strike is granted. SUMMARY OF ACTION Plaintiff Chinyere Valerie Ibe (Plaintiff) filed her First Amended Complaint (FAC), in pro per, on March 25, 2024. Plaintiffs complaint alleges seven causes of action for (1) Breach of the Duty of Good Faith and Fair Dealing; (2) Bad Faith Denial of Insurance Claim; (3) Breach of the Contractual Duty to Pay a Covered Insurance Claim; (4) Intentional Misrepresentation; (5) Violations of Cal. Bus. & Prof. Code §§ 17200, et. seq.; (6) Unjust Enrichment; and (7) Defamation. The First through Third Causes of Action are only against Defendant Bamboo Insurance Services, Inc. The Fourth through Seventh Causes of Action are against all Defendants. Defendant 818 Restoration and Construction, LLC (818 Restoration) is the demurring Defendant in this instance. 818 Restoration demurs to the Fourth through Seventh Causes of Action. Plaintiffs FAC alleges that the water heater in the garage of her home burst. This caused the garage to flood, damaging the drywall and items that were stored in the garage. Plaintiffs FAC alleges that on Marh 24, 2023, Defendant Bamboo Insurance sent out a leak detector from 818 Restoration to take pictures of the damaged drywall in the garage. (FAC, ¶ 21.) She also alleges that water was still trickling out of the water heater when the leak detector from 818 Restoration came out. (FAC, ¶ 25.) She also alleges that 818 Restoration was working with Bamboo to create a story that Plaintiff falsely reported that the water heater flooded the garage. (FAC, ¶ 34.) Plaintiff also alleges that Bamboo, using its contractors, including 818 Restoration, found ways to deny her claim. (FAC, ¶ 61.) The last allegations in Plaintiffs FAC related to 818 Restoration is that it made one or more defamatory statements about Plaintiff to a person other than Plaintiff. (FAC, ¶¶ 100, 103.) There are no other specific allegations related to 818 Restoration. 818 Restoration filed its demurrer on May 28, 2024. Plaintiff filed an opposition on June 26, 2024, with proof of service by mail. On July 1, 2024, 818 Restoration filed a notice of non-opposition to its demurrer, as it apparently had no knowledge of the opposition that was filed by Plaintiff with the Court and had not yet received the opposition in the mail. Plaintiffs opposition only argues that she was not validly served with the demurrer because she had not consented to service of the demurrer via email, which is how she claimed she received the demurrer. However, the proof of service filed with Defendants demurrer indicates that Plaintiff was served via U.S. Mail, so it is unknown why she did not receive the demurrer in the mail. Plaintiff also argues that Defendant did not meet and confer, but Defendants demurrer indicates that it attempted to meet and confer with Plaintiff, but Plaintiff did not respond to attempts to meet and confer with her. Plaintiffs opposition contains no arguments regarding the merits of the demurrer and motion to strike. The Court will address the merits of the demurrer and the motion to strike. ANALYSIS A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (CCP § 430.30(a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading by raising questions of law. (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties. (CCP § 452.) The court treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law& (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.) In applying these standards, the court liberally construes the complaint to determine whether a cause of action has been stated. (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733.) Fourth Cause of Action for Intentional Misrepresentation Defendant 818 Restoration demurs to Plaintiffs cause of action for intentional misrepresentation on the basis that it fails to plead any specific allegations against 818 Restoration. The elements of intentional misrepresentation are (1) a misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance, (4) actual and justifiable reliance, and (5) resulting damage. (Aton Center, Inc. v. United Healthcare Ins. Co. (2023) 93 Cal.App.5th 1214, 1245.) Notably, in California, fraud must be pled specifically; general and conclusory allegations do not suffice. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered. (Id.) There are no specific allegations against 818 Restoration under this cause of action. Instead, Plaintiff just alleges that Defendants made misrepresentations regarding what would be covered by Plaintiffs insurance policy. (FAC, ¶ 78.) 818 Restoration was not Plaintiffs insurance provider. It was simply an inspector hired by Plaintiffs provider, Bamboo Insurance. There are no allegations under this cause of action for any misrepresentations made specifically by 818 Restoration. Defendants demurrer to Plaintiffs Fourth Cause of Action is sustained with leave to amend. Fifth Cause of Action for Violation of Cal. Bus. & Prof. Code §§ 17200 et. seq. 818 Restoration demurs to this cause of action on the basis that there are insufficient facts against 818 Restoration to support this cause of action. Cal. Business & Professions Code § 17200 et seq. includes the California Unfair Competition Law and provides consumers with remedies when businesses engage in unfair or fraudulent practices. Plaintiffs FAC does not contain any allegations indicating that 818 Restoration violated the Business and Professions Code. The only specific allegation against 818 Restoration under this cause of action is that Bamboo used it to find ways to deny Plaintiffs claims. This is not sufficient to indicate that 818 Restoration itself engaged any acts that would constitute a violation of the Business and Professions Code. Defendants demurrer to Plaintiffs Fifth Cause of Action is sustained with leave to amend. Sixth Cause of Action for Unjust Enrichment 818 Restoration demurs to this cause of action on the basis that it does not allege sufficient facts to constitute a cause of action against 818 Restoration. The theory of unjust enrichment requires one who acquires a benefit at the expense of another to either return the thing or its equivalent to the aggrieved party so as not to be unjustly enriched. (Lyles v. Sangadeo-Patel (2014) 255 Cal.App. 4th 759.) Though Defendant does not raise this argument, the Court will note that there is no cause of action for unjust enrichment in California. (Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 785, 793 (unjust enrichment is not a valid cause of action under California law).) Unjust enrichment is not a valid cause of action. Furthermore, Plaintiffs FAC contains no allegations indicating how 818 Restoration was unjustly enriched. Because unjust enrichment is not a valid cause of action, Defendants demurrer to Plaintiffs Sixth Cause of Action is sustained without leave to amend. Seventh Cause of Action for Defamation 818 Restoration demurs to this cause of action on the basis that it does not allege facts sufficient to constitute a cause of action for defamation. Defamation is an intentional tort that requires proof that the defendant intended to publish the defamatory statement. (Stellar v. State Farm General Ins. Co. (2007) 157 Cal.App 4th 1498.) California law requires that any words constituting an alleged defamation must be specifically identified, if not pleaded verbatim, in the complaint. (ZL Technologies, Inc. v Does 1 17 (2017) 13 Cal.App. 5th 603.) The only allegations that Plaintiff has against 818 Restoration under this cause of action is that it noted that a potential slab leak had occurred in the garage as the water did not reflect a failed water heater in the April 14, 2023, denial of benefits letter to Plaintiff, and that 818 Restoration made one or more of the states to a person other than Ms. Ibe. (FAC, ¶¶ 100, 103.) There is nothing in Plaintiffs FAC to indicate how 818 Restoration defamed Plaintiff, as the letter would have been issued by Plaintiffs insurance provider, nor does Plaintiff specifically identify the alleged defamation. Defendants demurrer to Plaintiffs Seventh Cause of Action is sustained with leave to amend. Motion to Strike Defendant had moved to strike Plaintiffs request for punitive damages. This Court may strike from the complaint any irrelevant, false, or improper matter. Under CCP § 435, [a]ny party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof. Under CCP § 436(a), [t]he court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper . . . [s]trike out any irrelevant, false, or improper matter inserted in any pleading. Punitive damages are governed by Civ. Code § 3294: In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant. (Civ. Code § 3294(a).) To state a prima facie claim for punitive damages, a complaint must set forth the elements as stated in Civ. Code § 3294. (Coll. Hosp., Inc. v. Superior Court (1994) 8 Cal.4th 704, 721.) Malice is defined in the statute as conduct intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others. (Id. at 725.) Oppression is despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that persons rights. (Civ. Code § 3294(c)(2).) Fraud is defined as an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury. (Civ. Code § 3294(c)(3).)¿ ¿ Plaintiff has requested punitive damages as part of her prayer for relief, but nowhere in her FAC does she allege that 818 Restoration acted with malice, fraud, or oppression. Because she has not alleged that it acted with malice, fraud, or oppression, she cannot maintain a claim for punitive damages against 818 Restoration. Defendants motion to strike Plaintiffs request for punitive damages is granted for 818 Restoration only. It could still apply to other Defendants. CONCLUSION Defendants demurrer to Plaintiffs Fourth, Fifth, and Seventh Causes of Action is sustained with leave to amend. Defendants demurrer to Plaintiffs Sixth Cause of Action is sustained without leave to amend. Defendants motion to strike is granted. Moving party to give notice to all parties.
Ruling
LGP EQUIPMENT RENTALS, INC. VS LAGD PROPERTIES LLC, ET AL.
Jul 10, 2024 |21STCV33926
Case Number: 21STCV33926 Hearing Date: July 10, 2024 Dept: 45 Superior Court of California County of Los Angeles LGP EQUIPMENT RENTALS, INC., a California Corporation, Plaintiff, vs. LAGD PROPERTIES LLC, a California limited liability company; 1st DESIGN AND DEVELOPMENT, a California Corporation; RAMON ROMERO, an individual dba SOUTHERN CALI CONSTRUCITON; L.A. GREEN DESIGNS, an unknown form of entity; and DOES 1 through 100, inclusive, Defendants. Case No.: 21STCV33926 DEPARTMENT 45 [TENTATIVE] RULING Action Filed: 09/14/21 1ST Amended Complaint Filed: 07/17/23 Trial Date: None set. Hearing date: 07/10/2024 Moving Party: Plaintiff LGP Equipment Rentals, Inc. Responding Party: Defendant 1ST Choice Design and Development Motion to Compel Initial Responses to Request for Production of Documents, Set One and Request for Sanctions in the Amount of $3,000.00 The Court considered the moving, opposition, and reply papers. The motion is GRANTED. Recommendation: Grant, Defendant is ordered to serve responses to Requests for Production, Set One without objections within 20 days of this order. Defendant and Defense Counsel are also ordered to pay monetary sanctions jointly and severally in the amount of $750.00 to Plaintiff through its counsel of record. Reason: Plaintiff served Requests for Production, Set One, on December 18, 2023. To date, the Defendant has not served any responses. However, Defendant argues that after a diligent search, it was unable to locate the documents it initially believed it had. Defendants counsel states [w]hen I was corresponding with Plaintiffs counsel, I was unaware that the documents did not exist and based on discussions with my Client we both believed the documents did exist but eventually Defendant was unable to locate them after a diligent search. (Diefenbach Decl. ¶ 8; See also Innabi Decl. ¶ 5, Ex. C.) Moreover, Tony Holder, the principal and owner of Defendant 1st Choice Design & Development states Defendant is ultimately unable to produce the documents because the project file was taken from a former employee who worked as the project manager for both projects, Mr. Alberto Dominguez. (Holder Decl. ¶ 2.) Mr. Holder further states [t]he records that 1st Choice did have that were not lost at the project site were lost when 1st Choice changed office locations in approximately June of 2021 . . . 1st Choice does not have any responsive documents in its custody and control that it can make available for production. I initially believed the project documents existed but was unable to locate them after a diligent search and realized that Mr. Dominguez was in charge of the documents and then other documents were lost during a move. (Id. at ¶¶ 4-6.) Nevertheless, the Court notes Defendant fails to provide any evidence for its speculations of the former employee taking the records. Therefore, the Court should grant the motion under CCP section 2031.300 and impose the reasonable amount of $750.00 (1.5 hours at $500 per hour) in monetary sanctions on the Defendant and Defense Counsel, jointly and severally. Other Notes: There is a discrepancy as to the sanction amount requested. In the moving papers, Plaintiff seeks $3,000.00 in sanctions. However, in the reply papers, Plaintiff seeks $2,000.00 in sanctions. It is so ordered. Dated: July 10, 2024 _______________________ MEL RED RECANA Judge of the Superior Court
Ruling
ARMANI MARSALIS GATES, I VS LEMONADE INSURANCE AGENCY, LLC.
Jul 09, 2024 |23STCV05225
Case Number: 23STCV05225 Hearing Date: July 9, 2024 Dept: 45 Superior Court of California County of Los Angeles ARMANI MARSALIS GATES I, Plaintiff, vs. LEMONADE INSURANCE AGENCY, LLC, Defendants. Case No.: 23STCV05225 DEPARTMENT 45 [TENTATIVE] RULING Action Filed: 03/09/2023 [1st Amended Complaint Filed: N/A] Trial Date: 05/27/2025 Hearing date: 07/09/2024 Moving Party: Defendant Lemonade Insurance Agency, LLC Responding Party: N/A - Unopposed Defendants Motion to Compel Plaintiffs Responses to Request for Production of Documents (Set 1) The Court considered the moving papers. Defendants Motion to Compel Plaintiffs Responses to Request for Production of Documents (Set 1), is GRANTED. The Court will impose a sanction on Plaintiff, and award said sanction to Defendant in the amount of $1,500.00. Responses and the monetary sanctions are due to Defendant within 20 days of this order. Background Armani Marsalis Gates I filed a Complaint on March 9, 2023 alleging breach of contract and intentional infliction of emotional distress. The motion before the Court now is Lemonade Insurance Agency, LLCs (Defendant) Motion to Compel Plaintiffs Responses to Request for Production of Documents, Set 1 (the Motion). No opposition has been filed, and Defendant files a Notice of Non-Opposition. Discussion Legal Standard If a party to whom a demand for inspection, copying, testing, or sampling is directed fails to serve a timely response to it, the following rules shall apply: (a) The party to whom the demand for inspection, copying, testing, or sampling is directed waives any objection to the demand, including one based on privilege or on the protection for work product under Chapter 4&(b) The party making the demand may move for an order compelling response to the demand. (c) Except as provided in subdivision (d), the court shall impose a monetary sanction under Chapter 7 (commencing with Section 2023.010) against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel a response to a demand for inspection, copying, testing, or sampling, unless it finds that the one subject to the sanction acted with substantial justification or that other circ*mstances make the imposition of the sanction unjust. (CCP § 2031.300) The court may impose a monetary sanction ordering that one engaging in the misuse of the discovery process, or any attorney advising that conduct, or both pay the reasonable expenses, including attorney's fees, incurred by anyone as a result of that conduct. (CCP § 2023.030(a).) Misuses of the discovery process include, but are not limited to, the following: (d) Failing to respond or to submit to an authorized method of discovery. (CCP § 2023.010) Analysis Attached to the moving papers, Defendant provides the Declaration of William A. Hadikusumo (Hadikusumo Decl.) which states that on July 5, 2023, Plaintiff was served by Defendant with Requests for Production of Documents, Set 1. (Hadikusumo Decl., ¶3.) The deadline to provide responses was August 8, 2023 but no responses were provided. On August 9, 2023, Defendant reach out and provided an extension until September 6, 2023, however, no responses were ever received. (Hadikusumo Decl., ¶¶5-9.) Therefore, the Motion is granted, and sanctions are warranted. Sanctions Defense counsel provides the following calculations: · Counsels hourly rate is $240.00 · Counsel spent 5 hours preparing the instant Motion · Counsel anticipates the hearing taking 1 hour · Counsel incurred a filing fee of $60.00 · Counsel requests a total of $1,500.00 Accordingly, the Court will impose a sanction on Plaintiff, and award said sanction to Defendant in the amount of $1,500.00. Conclusion Defendants Motion to Compel Plaintiffs Responses to Request for Production of Documents (Set 1), is GRANTED. The Court will impose a sanction on Plaintiff, and award said sanction to Defendant in the amount of $1,500.00. Responses and the monetary sanctions are due to Defendant within 20 days of this order. It is so ordered. Dated: July 9, 2024 _______________________ MEL RED RECANA Judge of the Superior Court
Ruling
GOLDRICH KEST, LLC VS CERTAIN UNDERWRITERS AT LLOYD?S, LONDON, ET AL.
Jul 12, 2024 |11/28/2022 |23SMCV03537
Case Number: 23SMCV03537 Hearing Date: July 12, 2024 Dept: N TENTATIVE RULING Defendant Homeland Insurance Company of New Yorks Application for Admission of Christian P. Jones for Homeland Insurance Company of New York as Counsel Pro Hac Vice is GRANTED. Defendant Homeland Insurance Company of New York to give notice. REASONING Counsel who are not active members of the California State Bar and have not been granted permission to appear pro hac vice are prohibited from representing a party in California courts. (Gentis v. Safeguard Bus. Systems, Inc. (1998) 60 Cal.App.4th 1294, 1308.) Counsel licensed in another state may, in the courts discretion, be permitted to appear as counsel pro hac vice if counsel is associated with an attorney of record who is an active member of the California bar. (Cal. Rules of Court, rule 9.40(a).) Appearance pro hac vice is a privilege and not a right under the United States Constitution. (Leis v. Flynt (1979) 439 U.S. 438, 441.) An application to appear in California as counsel pro hac vice must state: (1) The applicants residence and office address; (2) The courts to which the applicant has been admitted to practice and the dates of admission; (3) That the applicant is a member in good standing in those courts; (4) That the applicant is not currently suspended or disbarred in any court; (5) The title of court and cause in which the applicant has filed an application to appear as counsel pro hac vice in this state in the preceding two years, the date of each application, and whether or not it was granted; and (6) The name, address, and telephone number of the active member of the State Bar of California who is attorney of record. (Cal. Rules of Court, rule 9.40(d).) Christian P. Jones represents that he is a member in good standing of all bars and with all courts in which he is admitted to practice, and while he has appeared in three other actions in California in the preceding two years, this is not a significantly high number so as to warrant denial of an application to appear pro hac vice here. He has met the requirements of California Rules of Court, rule 9.40(d), he appears qualified and ready to appear pro hac vice, and there are no other facts or circ*mstances to show that his appearance in this action would cause a significant disruption of orderly justice. Accordingly, Defendant Homeland Insurance Company of New Yorks Application for Admission of Christian P. Jones for Homeland Insurance Company of New York as Counsel Pro Hac Vice is GRANTED.
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Mar 30, 2022 |Harry Jay Ford III |Other Contract Dispute (not breach/insurance/fraud/negligence) (General Jurisdiction) |Other Contract Dispute (not breach/insurance/fraud/negligence) (General Jurisdiction) |22SMCV00451
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Jul 03, 2024 |Christian R. Gullon |Other Contract Dispute (not breach/insurance/fraud/negligence) (General Jurisdiction) |Other Contract Dispute (not breach/insurance/fraud/negligence) (General Jurisdiction) |24PSCV02153
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FLORA YAMIN VS AMERICAN STATES PREFERRED INSURANCE COMPANY, ET AL.
Jul 10, 2024 |Mark A. Young |Insurance Coverage (not complex) (General Jurisdiction) |Insurance Coverage (not complex) (General Jurisdiction) |24SMCV03322
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LAURETTA U. OKAFOR VS INTEGON NATIONAL INSURANCE COMPANY
Jul 03, 2024 |Gary Y. Tanaka |Insurance Coverage (not complex) (General Jurisdiction) |Insurance Coverage (not complex) (General Jurisdiction) |24TRCV02198
