Judge Audra Mori, Case 20STCV00198 2023-02-24 Tentative Ruling

Plaintiff Insurance Company of the West (“ICW”) filed this action against defendants Majestic Realty Company, Pacific Palms Resort, and the City of Industry (the “City”) for subrogation concerning workers’ compensation benefits. ICW alleges that defendants failed to repair and maintain an iron fence at 1 Industry Hills Parkway, City of Industry, California 91744 (the “Property”), which resulted in the fence collapsing upon Marcelino Osorio (“Osorio”), who was working in the course and scope of his employment at the time.[1] Osorio’s employer was insured for workers’ compensation benefits by ICW. ICW seeks reimbursement for the workers’ compensation benefits paid to Osorio. The operative Second Amended Complaint (“SAC”) asserts causes of action for negligence and premises liability against defendants.

The City now moves for summary judgment as to ICW’s claims against it. ICW opposes the motion, and the City filed a reply.

The City asserts that ICW failed to comply with the claim presentation requirements of the Government Tort Claims Act (the “Act”), which bars ICW’s action against the City. The City provides that on May 28, 2019, ICW’s senior claims examiner submitted a notice to the City that it was seeking recovery of workers’ compensation benefits from the City, and on June 14, 2019, the City’s third-party claim administrator, Adolph Hernandez (“Hernandez”) of Keenan & Associates, responded to the notice by indicating that it was insufficient pursuant to Government Code § 905 et seq. The City states that on June 17, 2019, ICW’s senior claims examiner sent an email to the City’s claim administrator, Hernandez, providing further information in response to the City’s June 14, 2019 response, but that same day the City’s claim administrator informed ICW he was not authorized to accept a claim or amended claim on the City’s behalf. On July 3, 2019, the City’s claim administrator sent a letter rejecting ICW’s original May 28, 2019 notice, and since then, West has not submitted an amended claim to the City Clerk or anyone at the City.

The City argues it is entitled to summary judgment because ICW then filed this action on January 3, 2020, without satisfying the claims presentation requirements of the Act, and after the time for presenting any claim expired. Further, the City contends that ICW fails to properly alleges facts demonstrating compliance with the Act because the SAC fails to allege facts showing or excusing compliance with the claims presentation requirement. Additionally, the City contends that the California Supreme Court has rejected the argument that government employees that receive misdirected claims have a responsibility to pass the claim along to the correct person or agency, so Plaintiff cannot truthfully allege compliance with the Act. Lastly, the City argues that ICW fails to satisfy the elements necessary to satisfy the elements of estoppel. More specifically, the City argues that Plaintiff’s Second Amended Complaint fails to allege the mandatory element of estoppel that ICW was ignorant of the true state of the claim.

ICW argues that the City’s third-party claims administrator issued a rejection notice and a right to sue letter to ICW on the City’s behalf. ICW argues that whether ICW’s claims are barred by non-compliance with the Act’s requirements, or whether the City is estopped from asserting non-compliance as a defense in light of the rejection notice and right to sue letter are disputed issues of material fact. ICW asserts that substantial compliance satisfies the claims presentation requirement because there is no dispute that ICW timely filed its claim, and that Hernandez was a third-party administrator authorized by the City to review and reject tort claims on behalf of the City. Additionally, ICW contends there are disputed issues of fact as to whether the City is estopped from asserting non-compliance as a defense based on the notice of rejection letter issued by Hernandez on behalf of the City, which ICW relied on in believing that the City received, reviewed and rejected ICW’s claim.

Plaintiff, with its opposition, submits two objections to the City’s directed at the City’s undisputed material facts Nos. 24 and 26 contained in the City’s separate statement. Objections to a separate statement are improper. (See Cal. Rules of Code, rule 3.1354(b).) The Court, therefore, declines to rule on the purported objections to facts in the City’s separate statement.

Summary judgment is proper “if all the papers submitted 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.” (Code Civ. Proc. §437c(c).) The moving party bears the initial burden of production to make a prima facie showing that there are no triable issues of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) A defendant moving for summary judgment must show either (1) that one or more elements of the cause of action cannot be established or (2) that there is a complete defense to that cause of action. (Id. at §437c(p).) A defendant may discharge this burden by furnishing either (1) affirmative evidence of the required facts or (2) discovery responses conceding that the plaintiff lacks evidence to establish an essential element of the plaintiff's case. If a defendant chooses the latter option, he or she must present evidence “and not simply point out that plaintiff does not possess and cannot reasonably obtain needed evidence….” (Aguilar, supra, 25 Cal.4^th at 865-66.)

[A] defendant may simply show the plaintiff cannot establish an essential element of the cause of action “by showing that the plaintiff does not possess, and cannot reasonably obtain, needed evidence.” (Id. at p. 854.) Thus, rather than affirmatively disproving or negating an element (e.g., causation), a defendant moving for summary judgment has the option of presenting evidence reflecting the plaintiff does not possess evidence to prove that element. “The defendant may, but need not, present evidence that conclusively negates an element of the plaintiff's cause of action. The defendant may also present evidence that the plaintiff does not possess, and cannot reasonably obtain, needed evidence—as through admissions by the plaintiff following extensive discovery to the effect that he has discovered nothing” to support an essential element of his case. (Aguilar, supra, at p. 855.) Under the latter approach, a defendant's initial evidentiary showing may “consist of the deposition testimony of the plaintiff's witnesses, the plaintiff's factually devoid discovery responses, or admissions by the plaintiff in deposition or in response to requests for admission that he or she has not discovered anything that supports an essential element of the cause of action.” (Lona v. Citibank, N.A., supra, 202 Cal.App.4th at p. 110.) In other words, a defendant may show the plaintiff does not possess evidence to support an element of the cause of action by means of presenting the plaintiff's factually devoid discovery responses from which an absence of evidence may be reasonably inferred. (Scheiding v. Dinwiddie Construction Co. (1999) 69 Cal.App.4th 64, 83.)

Thus, a moving defendant has two means by which to shift the burden of proof under the summary judgment statute: “The defendant may rely upon factually insufficient discovery responses by the plaintiff to show that the plaintiff cannot establish an essential element of the cause of action sued upon. [Citation.] [Or a]lternatively, the defendant may utilize the tried and true technique of negating (‘disproving’) an essential element of the plaintiff's cause of action.” (Brantly v. Pisaro (1996) 42 Cal.App.4th 1591, 1598.)

Until the moving defendant has discharged its burden of proof, the opposing plaintiff has no burden to come forward with any evidence. Once the moving defendant has discharged its burden as to a particular cause of action, however, the plaintiff may defeat the motion by producing evidence showing that a triable issue of one or more material facts exists as to that cause of action. (Id. at §437c(p)(2).) On a motion for summary judgment, the moving party's supporting documents are strictly construed and those of his opponent liberally construed, and doubts as to the propriety of summary judgment should be resolved against granting the motion. (D’Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 21.)

Government Code § 945.5 provides, “No suit for damages may be maintained against a public entity unless the claim has been presented to it.”

California Government Code § 911.2(a) states, “[a] claim relating to a cause of action for death or for injury to person or to personal property or growing crops shall be presented as provided in Article 2 (commencing with Section 915) not later than six months after the accrual of the cause of action.” Government Code § 945.6 provides:

(a) Except as provided in Sections 946.4 and 946.6 and subject to subdivision (b), any suit brought against a public entity on a cause of action for which a claim is required to be presented in accordance with Chapter 1 (commencing with Section 900) and Chapter 2 (commencing with Section 910) of Part 3 of this division must be commenced:

(1) If written notice is given in accordance with Section 913, not later than six months after the date such notice is personally delivered or deposited in the mail.

(a) A claim, any amendment thereto, or an application to the public entity for leave to present a late claim shall be presented to a local public entity by any of the following means:

(2) Mailing it to the clerk, secretary, auditor, or to the governing body at its principal office.

(3) If expressly authorized by an ordinance or resolution of the public entity, submitting it electronically to the public entity in the manner specified in the ordinance or resolution.

(e) A claim, amendment, or application shall be deemed to have been presented in compliance with this section even though it is not delivered or mailed as provided in this section if, within the time prescribed for presentation thereof, any of the following apply:

(1) It is actually received by the clerk, secretary, auditor, or board of the local public entity.

“The Tort Claims Act requires that any civil complaint for money or damages first be presented to and rejected by the pertinent public entity [Citation]. The act creates a bond between the administrative claim and the judicial complaint…” (Munoz v. State of California (1995) 33 Cal.App.4th 1767, 1776.) “The failure to timely present a proper claim … bars a plaintiff from filing a lawsuit against that entity. [Citation.]” (Gong v. City of Rosemead (2014) 226 Cal.App.4th 363, 374.) “Even if the public entity has actual knowledge of facts that might support a claim, the claims statutes still must be satisfied. [Citation.]” (DiCampli-Mintz v. County of Santa Clara (2012) 55 Cal.4th 983, 990.) “ ‘The filing of a claim is a condition precedent to the maintenance of any cause of action against the public entity and is therefore an element that a plaintiff is required to prove in order to prevail.’ ” (Id., citing Del Real v. City of Riverside (2002) 95 Cal.App.4th 761, 767.)

“The claimant bears the burden of ensuring that the claim is presented to the appropriate public entity.” (DiCampli-Mintz, 55 Cal.4th at 991, citing Life v. County of Los Angeles (1991) 227 Cal.App.3d 894, 901.)

Section 915(a)(1) reflects the Legislature's intent to precisely identify those who may receive claims on behalf of a local public entity. Section 915(e)(1) reflects the Legislature's intent that a misdirected claim will satisfy the presentation requirement if the claim is “actually received” by a statutorily designated recipient. Thus, compliance with section 915(e)(1) requires actual receipt of the misdirected claim by one of the designated recipients. If an appropriate public employee or board never receives the claim, an undelivered or misdirected claim fails to comply with the statute.

“Plaintiff is required to comply with a claims statute, and has complied with applicable claims statutes. The City of Industry is estopped from asserting Plaintiff failed to comply with the claim filing requirement as Plaintiff was deterred from delivering its amended claim based on the City of Industry's own actions in issuing the rejection of claim notice dated 7/3/2019. The rejection indicated that Plaintiff had 6 months to file the instant court action. Plaintiff relied on the 7/3/2019 denial letter that the claim was properly presented to the City of lndustry pursuant to Government Code § 915 and that the City of Industry rejected the claim and provided Plaintiff, per Government Code § 945.6, 6 months to file the instant action.

On May 28, 2019, ICW’s senior claims examiner submitted a notice to the City stating that it was seeking to recover workers’ compensation benefits from the City. (Mot. Undisputed Material Fact (“UMF”) 1.) The relevant notice is a letter addressed to a “Mr. Bing Hyun with the City of Industry,” which states that according to ICW’s insured, the injuries alleged by Osorio are the direct result of the City’s negligence.[2] (Mot. Volume of Evid. Exh. B [Exh. A attached thereto].) On June 14, 2019, the City’s third-party claim administrator, Hernandez of Keenan & Associates, responded to the May 28, 2019 notice by stating, in part, “Your claim which was received by the City of Industry on June 11, 2019 failed to comply substantially with certain Government Code sections.”.[3] (Mot. UMF 2.) Further, Hernandez informed ICW, “if you wish to file an amended claim correcting these deficiencies, you should do so within that time period.” (Mot. Volume of Evid. Exh. B [Exh. B attached thereto].)

On June 17, 2019, ICW’s senior claims examiner sent an email to Hernandez with further information in response to the June 14, 2019 letter. (Id. at 3.) That same day, Hernandez responded to ICW’s email stating, “we are not authorized to accept a claim or an amended claim on behalf of the City of Industry,” and referred ICW to various Government Code sections.[4] (Id. at 4.) ICW responded that it would involve an attorney to ensure a claim was opened, to which Hernandez responded, “Anyone filing a claim against a public entity must follow California Government Codes as detailed in our notice of insufficiency.” (Id. at 5-6.) On July 3, 2019, Hernandez sent a letter rejecting ICW’s original May 28, 2019 notice. (Id. at 7.) The letter stated, “Subject to certain exceptions, you have only six (6) months from the date this notice was personally delivered or deposited in the mail to file a court action in the State of California on this claim.” (Mot. Volume of Evid. Exh. B [Exh.G attached thereto].) Since July 3, 2019, ICW has not submitted an amended claim or made any other communications to the City Clerk or anyone else at the City, nor has ICW sent an amended claim or communication to Hernandez. (Id. at 8-9.) Rather, on January 2, 2020, ICW filed this action for reimbursement of workers’ compensation benefits paid to Osorio, who was allegedly injured while working when an iron fence fell on him on April 25, 2019. (Id. at 10.)

The City avers that ICW knew that it had to submit a claim to the City Clerk, and ICW failed to do so. The evidence thus shows that after ICW sent the May 28, 2019 notice to the City, the City informed ICW that its claim was insufficient for multiple reasons. (Mot. Volume of Evid. Exh. B [Exhs. A-B attached thereto].) ICW’s senior claims examiner then sent Hernandez an email with additional information regarding ICW’s claim, and Hernandez informed ICW he was not authorized to accept claims or amended claims on behalf of the City. (Mot. Volume of Evid. Exh. B [Exhs. C-F attached thereto].) ICW then did not file a new or amended claim with the City or City Clerk.

In opposition, ICW does not dispute that after it was informed that its May 28, 2019 notice was insufficient, it failed to deliver or mail a proper claim to the “clerk, secretary or auditor” as required by § 915(a). Likewise, there is no evidence showing that the “clerk, secretary, auditor or board” ever received an amended claim from ICW. (Gov. Code § 915(e)(1).) ICW, however, contends that it substantially complied with the Act’s requirements because the City authorized Hernandez to review and reject claims. Further, ICW asserts that it followed-up with additional information and responses to Hernandez in through email communications.

While ICW argues that Hernandez had authority to review and reject claims on behalf of the City, ICW does not submit any evidence showing that Hernandez was authorized to accept claims or amended claims on the City’s behalf. Nor does ICW provide evidence showing that Hernandez made any such representation to ICW. Additionally, to the extent that ICW argues that it provided additional information to Hernandez about ICW’s claim, the evidence shows only that ICW’s senior claims examiner sent an email to Hernandez with additional information regarding ICW’s claim. ICW fails to cite any authority suggesting that an email in this context is sufficient to satisfy the requirements of Government Code § 915. Notably, ICW fails to distinguish or acknowledge the Supreme Court's ruling in DiCampli-Mintz, holding that a misdirected claim fails to comply with the Act. (See DiCampli-Mintz, at p. 995.)

However, ICW also alleges that the City is estopped from asserting that ICW failed to comply with the claim filing requirement because ICW was deterred from delivering its amended claim based on the City’s actions. The City’s motion therefore turns on whether it establishes it is entitled to judgment as a matter of law as to ICW’s estoppel claims.

“The procedural requirements for claim presentation are prerequisites to litigation against a local public entity or employee thereof … A cause of action that is subject to the statutory claim procedure must allege either that the plaintiff complied with the claims presentation requirement, or that a recognized exception or excuse for noncompliance exists.” (Gong, 226 Cal.App.4th at 374.)

A public entity “may be estopped from asserting the limitations of the claims statute where its agents or employees have prevented or deterred the filing of a timely claim by some affirmative act.” (Santos v. Los Angeles Unified School Dist. (2017) 17 Cal.App.5th 1065, 1075.) “ ‘Estoppel most commonly results from misleading statements about the need for or advisability of a claim.’ [Citation.] However, ‘[e]quitable estoppel does not require factually misleading statements.’ [Citations.] ‘[A]ctual fraud or the intent to mislead is not essential.’ ” (Id. at 1075-76.) However, “[r]eliance by the party asserting the estoppel on the conduct of the party to be estopped must have been reasonable under the circumstances.” (Id. at 1076.)

“Estoppel as a bar to a public entity’s assertion of the defense of noncompliance arises when the plaintiff establishes by a preponderance of the evidence: (1) the public entity was apprised of the facts, (2) it intended its conduct to be acted upon, (3) plaintiff was ignorant of the true state of facts, and (4) [the plaintiff] relied upon the conduct to his detriment.” (Id. at 1076.)

Here, the City contends that ICW’s SAC fails to address the third element necessary for estoppel as articulated in Santos v. Los Angeles Unified School Dist. (2017) 17 Cal.App.5th 1065. In particular, the City argues that ICW fails to address whether ICW was ignorant of the true state of facts. The City argues that the facts are clear that Hernandez emailed ICW’s senior claims examiner, Farid Shatara (“Shatara”), Hernandez was not authorized to accept a claim or amended claim on behalf of the City, and that anyone filing a claim was required to comply with the Government Code. The City asserts that ICW thus had actual notice that a new or amended claim had to be served on the City Clerk, but ICW failed to do so.

ICW’s complaint serves to frame the scope of the issues which must be addressed in the summary judgment motion. (FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 381-82.) “The pleadings delimit the issues to be considered on a motion for summary judgment…Thus, a defendant moving for summary judgment need address only the issues raised by the complaint; the plaintiff cannot bring up new, unpleaded issues in his or her opposing papers.” (Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1253, internal citations and quotations omitted.)

In ruling on a motion for summary judgment or motion for summary adjudication, a court must “first [weigh] the sufficiency of the causes of action stated” and “if the pleadings are not defective, the court may then determine from the evidence in support of and in opposition to the motion ‘whether the triable issues apparently raised by them are real or merely the product of adept pleading and then if necessary, [determine] whether there are triable issues underlying those causes.’” (Hejmadi v. Amfac, Inc. (1988) 202 Cal.App.3d 525, 536.) “If the court finds that the pleading is insufficient, it has discretion…to grant the opposing party leave to amend.” (Id.; see also Prue v. Brady Co./San Diego, Inc. (2015) 242 Cal.App.4th 1367, 1375-1376 [“When a motion for summary judgment is used to test whether the complaint states a cause of action, the court will apply the rule applicable to demurrers and accept the allegations of the complaint as true.”].)

A summary judgment motion necessarily includes a test of the pleadings and can become a motion for judgment on the pleadings. [Citation.] We explained in FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 282 Cal.Rptr. 508: “The procedure for resolving a summary judgment motion presupposes that the pleadings are adequate to put in issue a cause of action or defense thereto. [Citation.] However a pleading may be defective in failing to allege an element of a cause of action or in failing to intelligibly identify a defense thereto. In such a case, the moving party need not address a missing element or, obviously, respond to assertions which are unintelligible or make out no recognizable legal claim. The summary judgment proceeding is thereby necessarily transmuted into a test of the pleadings and the summary judgment motion into a motion for judgment on the pleadings. In these circumstances it has been said that a defendant's ‘motion for summary judgment necessarily includes a test of the sufficiency of the complaint and as such is in legal effect a motion for judgment on the pleadings.’ [Citation.]”

(Stolz v. Wong Communications Limited Partnership (1994) 25 Cal. App. 4th 1811, 1817.)

Although it is disfavored “to submit to the court for summary adjudication, matters which essentially tested the sufficiency of the pleadings,” “[a] motion for summary judgment may effectively operate as a motion for judgment on the pleadings. [Citation.] The grounds for the motion are, however, the same as for a general demurrer, that is, failure to state a cause of action. [Citation.] In deciding a motion for judgment on the pleadings, a court must accept the allegations of the complaint as true.” (Hejmadi v. Amfac, Inc. (1988) 202 Cal.App.3d 525, 535-36.)

The standard for ruling on a motion for judgment on the pleadings is essentially the same as that applicable to a general demurrer, that is, whether under the state of the pleadings, it appears that a party is entitled to judgment as a matter of law. (See Bezirdjian v. O'Reilly (2010) 183 Cal.App.4th 316, 321-322 (citing Schabarum v. California Legislature (1998) 60 Cal.App.4th 1205, 1216).)

In this case, because the City argues that the SAC is insufficiently pled as it does not address whether ICW was unaware of the true state of facts, the City’s motion is transmuted into a motion for judgment on the pleadings and must be analyzed to determine whether the SAC lacks sufficient facts to assert the estoppel claim. As the City contends, the SAC on its face does not contain any allegations stating that ICW was ignorant of the true state of facts regarding ICW’s need to present an amended claim to the City’s Clerk. Accordingly, the SAC, on its face, fails to allege that the City is estopped from failing to comply with the claim filing requirement. (Santos, 17 Cal.App.5th at 1076.)

However, in its opposition, ICW argues that Hernandez’s July 3, 2019 rejection of claim letter stated that the City had reviewed and rejected ICW’s claim, and the letter contained a clear statement that ICW was required to file an action with the Court within six months or risk its claims being forever barred. ICW submits Shatara’s declaration wherein Shatara attests that he relied on the June 14, 2019 and July 3, 2019 letters to form “the belief that the CITY had properly received ICW’s tort claim, reviewed said claim and had made a decision to reject ICW’s Tort Claim.” (Opp. Shatara Decl. ¶ 13.)

In the furtherance of justice and the liberal policy in favor of amendments, ICW has shown sufficient grounds to amend its complaint to allege whether ICW was ignorant of the true state of facts.[5] The Court may grant a party leave to amend a complaint at any time before judgment, including at a hearing for a motion for summary judgment. (Mediterranean Const. Co. v. State Farm Fire & Cas. Co. (1998) 66 Cal.App.4th 257, 264, n. 8; see also Kirby v. Albert D. Seeno Const. Co. (1992) 11 Cal.App.4th 1059, 1069, n. 7.) The Court will allow ICW to amend its SAC in these circumstances to properly plead the elements for its estoppel claim.

Based on the foregoing, Defendant’s motion, which has been transmuted into a motion for judgment on the pleadings, is granted with 10 days leave to amend. (CCP § 438(i); see Stolz, 25 Cal. App. 4th at 1817; see also Hejmadi, 202 Cal.App.3d at 536 [in ruling on a motion for summary judgment, “If the court finds that the pleading is insufficient, it has discretion…to grant the opposing party leave to amend.”].)

Hon. Audra Mori

Judge of the Superior Court

[1] Pursuant to stipulation, this matter has been consolidated with Case No. 20STCV14009, which was filed by Osorio against the City and Pacific Palms Resort for damages arising from the same incident concerning the iron fence falling on top of Osorio. (Min. Order, April 20, 2021.)

[2] No other details regarding the incident involving Osorio are provided in this notice. (See Gov. Code § 910.)

[3] The letter further referred ICW to Government Code §§ 910, 910.2, 910.4, and 910.8.

[4] Hernandez’s email referred ICW to Government Code §§ 910,910.2, 910.4, and 910.8, “and other sections of the Government Code pertaining to the filing of the claims against a public entity.” (Mot. Volume of Evid. Exh. B [Exhs. C-F attached thereto].)

[5] If ICW can properly plead the elements required for estoppel, the language of the letters sent to ICW, in making every reasonable inference in non-moving ICW’s favor, might indicate that ICW attempted to comply with the Act’s claim requirements but was deterred from delivering its claim to the proper official by the City’s actions. Whether ICW’s reliance was reasonable in light of the City’s other communications with ICW might then be a question of fact for the factfinder. (Estate of Bonzi (2013) 216 Cal.App.4th 1085, 1106 [estoppel is question of fact unless only one conclusion can be drawn from undisputed facts]; Estill v. County of Shasta (2018) 25 Cal.App.5th 702, 711 [same].)