Judge: Colin Leis, Case: 22STCV16445, Date: 2025-05-22 Tentative Ruling

Case Number: 22STCV16445    Hearing Date: May 22, 2025    Dept: 74

Riddick v. National General Insurance Company et al.

Defendant National General Insurance Company and Integon National Insurance Company’s Motion for Summary Judgment, or in the Alternative, Summary Adjudication

BACKGROUND 

The motion arises from a breach of contract action.

Plaintiff Timothy Riddick filed a complaint against National General Insurance Company; Integon National Insurance Company; Freeway Insurance Services America, LLC; All Star General Insurance Agency, Inc.; and Argin Sargisian.  Plaintiff alleged three causes of action: (1) Breach of Contract, (2) Breach of Duty of Good Faith and Fair Dealing, and (3) Professional Negligence.

Defendants National General Insurance Company (National) and Integon National Insurance Company (Integon) (collectively Defendants) move for summary judgment, or in the alternative, summary adjudication.

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.)  The California Code of Civil Procedure Section 437c(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.  (CCP § 437c(p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.)  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.)

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.)

DISCUSSION

             Defendants move for summary judgment on the grounds that Plaintiff failed to disclosure material facts when applying for his car insurance with Integon.  Defendants argue that Plaintiff’s failure to disclose that he was living with his 18-year-old daughter was a material misrepresentation on his car insurance application, and thus, Plaintiff’s causes of action for breach of contract and breach of good faith and fair dealing.  Plaintiff’s Third Cause of Action for professional negligence does not name Defendants.

            Plaintiff applied for a car insurance policy with Integon.  (UMF No. 1.)  As part of the application, Integon required an applicant to disclose all household members 14 years and older.  (UMF Nos. 9-12.)  At the time, Plaintiff was living with his 18-year-old daughter.  (UMF No. 8.)  Plaintiff failed to list his daughter on the application.  (UMF No. 13.)  Although Plaintiff states that he doesn’t remember all of the questions on the application, Plaintiff certified that all responses were accurate.  (UMF No. 10.)  Plaintiff was assisted by a broker in filing out application.  (UMF Nos. 3-5.)  The broker also certified that he asked Plaintiff all the questions on the application.  (UMF No. 14.) 

            When evaluating insurance applications, Integon uses a proprietary software to establish the “insurability” of an applicant.  (UMF Nos. 27, 31.)  Household members on a policy are either “rated” or excluded from coverage.  (UMF No. 30.)  After processing the application, including any rated or excluded household members, Integon uses an algorithm to generate the premium.  (UMF No. 33.) 

            Plaintiff submitted a claim for an accident which occurred on May 16, 2020.  (UMF No. 37.)  After this, Plaintiff submitted two statements confirming that his daughter lived with him.  (UMF Nos. 38, 29.)  Upon discovering that Plaintiff had another household member, Integon ran a “re-rate” to determine the effect that the new information would have on the policy.  (UMF Nos. 44, 45.)  Integon determined that had Plaintiff’s daughter have been disclosed, she would have been an “unacceptable risk” and could not have been added to the Policy.  (UMF Nos. 48, 49.)  If Plaintiff’s daughter was known to Integon, it would have either excluded her from the Policy or not issued the Policy.  (UMF No. 51.)  Given the discovered information, Integon decided to rescind Plaintiff’s policy.  (UMF No. 56.)  Integon also issued Plaintiff a check for premium payments on the Policy.  (UMF No. 58.) 

            Insurance companies may rescind the policy if there is a misrepresentation or concealment of a material fact in connection with the application for the policy.  (Superior Dispatch, Inc. v. Insurance Corp. of New York (2010) 181 Cal.App.4th 175, 191.)  A material fact is one which would have affected the insurer’s underwriting decision.  (Ibid.)  Rescission applies retroactively and extinguishing the contract and liability.  (Sharabianlou v. Karp (2010) 181 Cal.App.4th 1133, 1145.)  Additionally, a misrepresentation establishes a complete defense in an action on the policy.  (Superior Dispatch, supra, 181 Cal.App.4th at pp. 192.) 

            The central undisputed facts are that (1) Plaintiff did not list Plaintiff’s daughter on his insurance application, (2) Plaintiff’s daughter was living with him at the time of the application, (3) the application specifically requests Plaintiff list all inhabitants over the age of 14, (4) Integon would not have offered Plaintiff the policy without excluding Plaintiff’s daughter, and (5) Integon rescinded the policy in response to the failure to include Plaintiff’s daughter in the application.  (UMF Nos. 13, 8, 9-12, 51, 56.)  Defendant has met its initial burden in establishing that the policy was invalid and established a complete defense to the causes of action for breach of contract and implied covenant of good faith and fair dealing. 

            Plaintiff has not opposed the motion.  (See Notice of Non-Opposition 5/15/25.) 

            Therefore, the Court grants summary judgment.

CONCLUSION

            The Court grants Defendants’ Motion for Summary Judgment.

            Defendants to give notice.