Judge: Ashfaq G. Chowdhury, Case: 24NNCV01075, Date: 2024-06-28 Tentative Ruling
Case Number: 24NNCV01075 Hearing Date: June 28, 2024 Dept: E
Case No: 24NNCV01075
Hearing Date: 06/28/2024 – 8:30am
Trial Date: UNSET
Case Name: MOVSES KOSTANYAN v. LANCER INSURANCE
COMPANY, and DOES 1-100
TENTATIVE RULING ON
DEMURRER
Moving Party: Defendant, Lancer Insurance Company
Responding Party: Plaintiff,
Movses Kostanyan
Moving Papers: Notice;
Memorandum; Request for Judicial Notice; Declaration of Service; Declaration of
Sean T. Cahill
Opposing Papers: Opposition
Reply Papers: Reply;
Declaration of Service
Proof of Service
Timely Filed (CRC Rule 3.1300): Ok
16/21 Court Days Lapsed (CCP § 1005(b)): Ok
Proper Address: Ok
RELIEF REQUESTED
“Defendant LANCER INSURANCE COMPANY (“Lancer”) will and hereby does Demurrer to
Plaintiff MOVSES KOSTANYAN’s (“Plaintiff”) Complaint alleging a Breach of the
Covenant of Good Faith and Dealing on the following grounds:
1.
The court has no jurisdiction over the subject of the cause of action alleged
in the pleading as there is a currently pending UIM claim. [CCP §430.10(a)].
2.
There is another action pending between the same parties on the same underlying
cause of action the active UIM claim. [CCP §430.10(c)].
3.
The sole cause of action fails to state facts sufficient to constitute a cause
of action. [CCP §430.10(e)].
4.
The pleading is uncertain. As used in this subdivision, "uncertain"
includes ambiguous and unintelligible [C.C.P. §430.10(f)].
5.
In an action founded upon a contract, it cannot be ascertained from the
pleading whether the contract is written, oral, or implied by conduct. [C.C.P.
§430.10(g].
The
demurrer is based upon this notice, the grounds stated in the demurrer, the
memorandum of points and authorities in support thereof, the declaration of
Sean T. Cahill, the notice of lodgment and exhibits thereto, the request for
judicial notice and exhibits thereto all pleadings on file herein, and any
documentary or oral evidence that may be presented at the hearing on this
matter.”
(Def.
Not. p. 1-2.)
PROCEDURAL
Meet
and Confer
A party filing a
demurrer “shall meet and confer in person or by telephone with the party who
filed the pleading that is subject to demurrer for the purpose of determining
whether an agreement can be reached that would resolve the objections to be
raised in the demurrer.” (Code Civ. Proc., § 430.41, subd. (a).) “The parties shall meet and confer at least
five days before the date the responsive pleading is due. If the parties are
not able to meet and confer at least five days prior to the date the responsive
pleading is due, the demurring party shall be granted an automatic 30-day
extension of time within which to file a responsive pleading, by filing and
serving, on or before the date on which a demurrer would be due, a declaration
stating under penalty of perjury that a good faith attempt to meet and confer
was made and explaining the reasons why the parties could not meet and
confer.” (Code Civ. Proc., § 430.41,
subd. (a)(2).) Failure to sufficiently meet and confer is not grounds to
overrule or sustain a demurrer. (Id., § 430.41(a)(4).)
Here,
Defendant’s counsel alleged that a meet and confer occurred. (Cahill Decl. ¶
10.)
LEGAL STANDARDS FOR DEMURRERS
Demurrer
– Sufficiency
A demurrer for
sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda, (2007) 147 Cal.App.4th
740, 747.) When considering demurrers,
courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of
Water and Power (2006) 144 Cal.App.4th 1216, 1228.) 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 a demurrer proceeding, the defects must be apparent on the face of
the pleading or via proper judicial notice.
(Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968,
994.) A demurrer tests the pleadings
alone and not the evidence or other extrinsic matters; therefore, it lies only
where the defects appear on the face of the pleading or are judicially
noticed. (Code Civ. Proc., §§ 430.30,
430.70.) The only issue involved in a
demurrer hearing is whether the complaint, as it stands, unconnected with
extraneous matters, states a cause of action. (Hahn, supra, 147
Cal.App.4th at 747.)
The
general rule is that the plaintiff need only allege ultimate facts, not
evidentiary facts. (Doe v. City of
Los Angeles (2007) 42 Cal.4th 531, 550.) “All that is required of a
plaintiff, as a matter of pleading … is that his complaint set forth the
essential facts of the case with reasonable precision and with sufficient
particularity to acquaint the defendant with the nature, source and extent of
his cause of action.” (Rannard v. Lockheed Aircraft Corp. (1945) 26
Cal.2d 149, 156-157.)
On
demurrer, a trial court has an independent duty to “determine whether or not
the … complaint alleges facts sufficient to state a cause of action under any
legal theory.” (Das v. Bank of America, N.A. (2010) 186 Cal.App.4th 727,
734.) Demurrers do not lie as to only
parts of causes of action, where some valid claim is alleged but “must dispose
of an entire cause of action to be sustained.”
(Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97,
119.) “Generally
it is an abuse of discretion to sustain a demurrer without leave to amend if
there is any reasonable possibility that the defect can be cured by
amendment.” (Goodman v. Kennedy
(1976) 18 Cal.3d 335, 349.)
Demurrer – Uncertainty
A special demurrer for uncertainty, CCP § 430.10(f), is disfavored and will
only be sustained where the pleading is so bad that defendant cannot reasonably
respond—i.e., cannot reasonably determine what issues must be admitted or
denied, or what counts or claims are directed against him/her.
(Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612,
616.) Moreover, even if the pleading is somewhat vague, “ambiguities can
be clarified under modern discovery procedures.” (Ibid.)
ANALYSIS
Preliminary Background
Plaintiff,
Movses Kostanyan, filed the instant Complaint on 4/18/2024. Plaintiff alleges
that himself and his business MNM Limo Services, Inc. was insured by Defendant,
Lancer Insurance Company. (Compl. ¶ 5.) Plaintiff alleges that on or about
December 4, 2022, while said insurance policy was in effect, Plaintiff was
injured in an automobile collision. (Id. at ¶ 8.) Plaintiff alleges that
the negligent party causing the collision was only insured for $15,000.00 and
that the insurance carrier for the at-fault party paid their total liability
policy limit of $15,000.00 (Id.)
Plaintiff alleges that on
August 11, 2023, he submitted a demand for settlement to Defendant to resolve
his underinsured motorist claim pursuant to the terms of his policy of insurance
with Lancer Insurance Company. (See Compl. ¶ 9.) Plaintiff’s action alleges, in
part, that Defendant unreasonably failed to make uninsured and underinsured
motorist payments to Plaintiff when Defendant knew that Plaintiff was entitled
to said payments under the said contract of insurance; delayed payments to
Plaintiff; withheld payments to Plaintiff; and failed to pay
uninsured/underinsured motorist benefits and medical benefits. (See Compl. ¶ 10.)
Breach of Contract
As
an initial matter, the caption of Plaintiff’s Complaint is simply titled
“Breach of Covenant of Good Faith and Fair Dealing.” There is no allegation in
the caption that this Complaint is alleging a breach of contract cause of
action.
However, Paragraph 5 of the Complaint alleges:
On or about December 4, 2022, Plaintiff,
MOVSES KOSTANYAN and his business MNM LIMO SERVICES, INC. were insured by
Defendant, LANCER INSURANCE COMPANY (hereinafter LANCER), AND DOES 1 through
25, under a policy of insurance bearing Policy No. BA174666. The
Defendants created the contract of insurance and issued the contract of
insurance to the Plaintiff, therefore, each Defendant knows each and
every term and condition of said contract of insurance. If Plaintiff has
not attached all pertinent portions of the insurance policy it’s because
Plaintiff cannot locate any further documents. Since the Defendants created the
contract of insurance and issued the contract of insurance to the Plaintiff,
Defendants, and each of them, know each and every term and condition of said
contract of insurance and, therefore, this complaint is not vague simply
because a copy of the complete insurance contract is not attached.
There is no prejudice or uncertainty to the Defendants in this regard. Among
other things the contract of insurance agreed to provide uninsured motorist
benefits and underinsured motorist benefits to the Plaintiff with a policy
limit of $30,000.00 per person per occurrence.
(Compl. ¶ 5, emph added.)
Paragraph 5 of the
Complaint makes the Complaint confusing to decipher because it appears as if
Plaintiff may be attempting to plead a cause of action for breach of contract;
however, the caption of the Complaint does not indicate that a breach of
contract cause of action is being brought.
To add further confusion,
when Defendant demurs and argues that Plaintiff fails to plead the material
terms of the contract or provide a copy of the insurance contract, Plaintiff’s
Opposition argues, “The Complaint is not a complaint for breach of contract.”
(Oppo p. 9.) Additionally, to continue making matters confusing as to what the
Complaint is alleging, despite Plaintiff’s Opposition admitting that the
Complaint is not a complaint for breach of contract, this admission is located
in a section of the Opposition titled “The Complaint is Not Uncertain Because
Plaintiff Has Sufficiently Alleged The Material Terms of the Insuring Contract.”
(Oppo. p. 8.)
TENTATIVE RULING
BREACH OF CONTRACT
To state a cause of action for breach of contract, Plaintiff
must allege “(1) the existence of the contract, (2) plaintiff’s performance or
excuse for nonperformance, (3) defendant’s breach, and (4) resulting damages to
the plaintiff.” (Oasis West Realty,
LLC v. Goldman (2011) 51 Cal.4th 811, 821.)
A cause of action for breach of contract is subject to demurrer if “it
cannot be ascertained from the pleading whether the contract is written, is
oral, or is implied by conduct.” (Code
Civ. Proc., § 430.10(g).) A written contract must be pled verbatim in the body
of the complaint, be attached to the complaint and incorporated by reference,
or be pled according to its legal effect.
(Bowden v. Robinson (1977) 67 Cal.App.3d 705, 718.) An allegation
of an oral agreement must “set[] forth the substance of its relative
terms.” (Gautier v. General Tel. Co. (1965)
234 Cal.App.2d 302, 305.)
If Plaintiff is alleging
a breach-of-contract cause of action, Plaintiff did not state facts sufficient
to constitute a cause of action. While Plaintiff’s Complaint seems to indicate
that Plaintiff may be alleging a cause of action for breach of contract,
Plaintiff’s Opposition explicitly stated, “The Complaint is not a complaint for
breach of contract.” (Oppo p. 9.) Further, even if Plaintiff was alleging a
breach of contract cause of action, it is unclear if Plaintiff is alleging that
the contract was written, oral, or is implied by conduct. A cause of action for
breach of contract is subject to demurrer if “it cannot be ascertained from the
pleading whether the contract is written, is oral, or is implied by conduct.”
(Code Civ. Proc., § 430.10(g).)
Defendant’s demurrer to
the breach of contract cause of action is SUSTAINED with leave to amend
granted. Plaintiff is to file and serve an amended complaint within 20 days of
the Court’s order.
Breach Of The Implied Covenant Of Good Faith
And Fair Dealing
“Every contract imposes upon each party a
duty of good faith and fair dealing in its performance and its enforcement.” (Hicks
v. E.T. Legg & Associates (2001) 89 Cal.App.4th 496, 508.) “It is
universally recognized the scope of conduct prohibited by the covenant of good
faith is circumscribed by the purposes and express terms of the contract.” (Id.
at 509.)
“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 party’s right to receive
the benefits of the agreement actually made.” (Guz v. Bechtel (2000) 24
Cal.4th 317, 349.)
Under Merced Irr. Dist. v. County of
Mariposa :
Under California
law, to allege a claim for breach of the covenant of good faith and fair
dealing, a plaintiff must allege the following elements: (1) the plaintiff and
the defendant entered into a contract; (2) the plaintiff did all or
substantively all of the things that the contract required him to do or that he
was excused from having to do so; (3) all conditions required for the
defendant's performance had occurred; (4) the defendant unfairly interfered
with the plaintiff's right to receive the benefits of the contract; and (5) the
defendant's conduct harmed the plaintiff. See Judicial Counsel
of California Civil Jury Instructions § 325 (2013); see
also Reinhardt v. Gemini Motor Transport, 879 F.Supp.2d 1138,
1145 (E.D.Cal.2012).
(Merced Irr.
Dist. v. County of Mariposa (E.D. Cal. 2013) 941 F.Supp.2d 1237, 1280,
discussing California law.)
‘[T]he implied covenant of good faith and fair dealing
is limited to assuring compliance with the express terms of the
contract, and cannot be extended to create obligations not contemplated by the
contract.’” (Ragland v. U.S. Bank Nat. Assn. (2012) 209 Cal.App.4th 182,
206 (quoting Pasadena Live v. City of Pasadena (2004) 114 Cal.App.4th
1089, 1094).)
A breach of the implied covenant of good faith and
fair dealing involves something beyond breach of the contractual duty itself
and it has been held that bad faith implies unfair dealing rather than mistaken
judgment. (Careau & Co. v. Security Pacific Business Credit, Inc. (1990)
222 Cal.App.3d 1371, 1394.)
TENTATIVE RULING -
BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING
Here, Plaintiff does not allege the
preliminary matter that Plaintiff and Defendant entered into a contract, as
Plaintiff admits in its Opposition that the Complaint is not a complaint for
breach of contract. Further, as previously discussed, a breach of contract
claim was not alleged, because at the very least, it cannot be ascertained from
the pleading if Plaintiff is alleging the contract was written, oral, or
implied by conduct.
Defendant’s demurrer to the cause of
action for breach of covenant of good faith and fair dealing is SUSTAINED with
leave to amend granted. Plaintiff is to file and serve an amended complaint
within 20 days of the Court’s order.
Jurisdiction
Defendant
argues that this Court has no jurisdiction over the subject of the cause of
action alleged in the pleading because there is a currently pending UIM claim.
Defendant argues there is another action pending between the same parties on
the same underlying cause of action in the active UIM claim.
Defendant’s arguments here make no sense,
and Defendant does not support its arguments with any legal authority.
Defendant seems to be under the impression that since it repeatedly requested
information from Plaintiff to evaluate the UIM claim, this Court has no
jurisdiction and that there is another pending action between the same parties.
Defendant’s argument is unavailing.
Whatever Defendant is trying to argue, it makes little sense, and whatever
Defendant is trying to argue, Defendant did not support its argument with legal
authority.
Arbitration
Defendant
argues that except in unusual circumstances, the insured cannot bring suit
against the insurer prior to arbitration because arbitration is a condition
precedent to payment of policy benefits. Defendant cites to Kortmeyer v.
California Insurance Guarantee Ass’n (1992) 9 Cal.App.4th 1285, 1291.
Under the Court’s perusal of Kortmeyer,
the Court fails to understand Defendant’s argument. The Court fails to see how Kortmeyer
stands for the proposition that a Defendant can essentially turn a demurrer
that tests the pleadings of the Complaint into a simultaneous motion to compel
arbitration.
Request for Judicial Notice
Pursuant
to Evidence Code §§ 452 and 453, Defendant requests judicial notice of the
following documents as evidence that Plaintiff currently has a pending
Underinsured Motorist Claim (UIM Claim) and that Plaintiff’s refusal to abide
by the terms of the insurance policy in this open and pending UIM claim has led
to the immediate inappropriate and very premature complaint:
• Attached and incorporated to the
declaration of Sean Cahill as Exhibit “1” is a true and correct copy of
Plaintiff’s August 11, 2023, UIM demand.
• Attached and incorporated to the
declaration of Sean Cahill as Exhibit “2” is a true and correct copy of a
December 8, 2022, correspondence from Lancer Insurance Company to Plaintiff’s
counsel acknowledging the UIM claim and requesting information to investigate
the claim.
• Attached and incorporated to the
declaration of Sean Cahill as Exhibit “3” is a true and correct copy of a March
17, 2023, correspondence from Lancer Insurance Company to Plaintiff’s counsel
discussing the UIM claim and requesting information to investigate the claim.
• Attached and incorporated to the
declaration of Sean Cahill as Exhibit “4” is a true and correct copy of a May
22, 2023, correspondence from Lancer Insurance Company to Plaintiff’s counsel
discussing the UIM claim and requesting information to investigate the claim.
• Attached and incorporated to the
declaration of Sean Cahill as Exhibit “5” is a true and correct copy of an
August 15, 2023, correspondence to Plaintiff’s counsel discussing the UIM claim
and requesting information to investigate the claim.
• Attached and incorporated to the
declaration of Sean Cahill as Exhibit “6” is a true and correct copy of
Plaintiff’s January 8, 2024, demand for UIM arbitration.
• Attached and incorporated to the
declaration of Sean Cahill as Exhibit “7” is a true and correct copy of January
9, 2024, correspondence from Lancer Insurance Company to the Plaintiff’s
counsel discussing the demand for UIM arbitration and requesting information to
investigate the claim. Judicial Notice of this exhibit is also requested as to
the existence of a current open UIM claim in this matter in this matter.
(RJN p. 1-2.)
Plaintiff’s Opposition argues that
correspondence between Plaintiff’s counsel and insurance adjusters does not
fall under any of the categories of Evidence Code § 452.
Reply argues that Defendant seeks judicial
notice not of the truth of the matters asserted within the documents in
question, but solely of their existence and their official consideration in the
course of business. Defendant argues that these documents can be judicially
noticed under Evid. Code § 452(h) which states, “Facts and propositions that
are not reasonably subject to dispute and are capable of immediate and accurate
determination by resort to sources of reasonably indisputable accuracy.”
Here, the Court does not find Defendant’s
argument availing. Further, none of the documents submitted for judicial notice
assisted the Court in determining its ruling on the demurrer.
Defendant’s requests for judicial notice
are DENIED.