Judge: Cynthia A Freeland, Case: 37-2022-00006813-CU-PO-NC, Date: 2024-06-28 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - June 27, 2024

06/28/2024  01:30:00 PM  N-27 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Cynthia A. Freeland

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Civil - Unlimited  PI/PD/WD - Other Summary Judgment / Summary Adjudication (Civil) 37-2022-00006813-CU-PO-NC RUTERBUSCH VS FLASH HOME INSPECTIONS LLC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Summary Judgment and/or Adjudication, 03/26/2024

Defendant Flash Home Inspections, LLC ('Defendant')'s motion for summary judgment is denied.

Initial Considerations The Parties' Requests for Judicial Notice Defendant's request for judicial notice of: (1) Plaintiff Victor Ruterbusch ('Plaintiff')'s initial Complaint and First Amended Complaint (the 'FAC'), and (2) Defendant's Answer to the FAC is granted. See Cal. Evid.

Code § 452(d). The court takes judicial notice of the existence of these records; however, it does not take judicial notice of the truth of the matters asserted therein. See Board of Pilot Commissioners for the Bays of San Francisco, San Pablo and Suisun v. Superior Court (2013) 218 Cal. App. 4th 577, 597.

Plaintiff's request for judicial notice is granted. See Cal. Evid. Code §§ 451(a), 452(c); People ex rel.

Schlesinger v. Sachs (2023) 97 Cal. App. 5th 800.

Plaintiff's Memorandum of Points and Authorities in Opposition to the Motion Plaintiff's Memorandum of Points and Authorities in opposition to the motion is procedurally deficient as it does not contain a table of contents and a table of authorities notwithstanding the fact that it exceeds 10 pages in length. See Cal. R. Ct. 3.1113(f).The court places Plaintiff on notice that future failures to comply with the California Rules of Court and the California Code of Civil Procedure could result in the court disregarding the submission.

Defendant's Objections to Mr. Tatro's Declaration The court sustains the following objections made by Defendant to Mr. Tatro's declaration: first, second, third, fourth, fifth, ninth, fifteenth (to the extent Mr. Tatro attempts to provide evidence as to Plaintiff's healing and future health care needs), twenty-sixth (to the extent Mr. Tatro represents that Mr. Kelleher confirmed receipt of the additional emergency room records), thirtieth (to the extent Mr. Tatro states that Mr. Kelleher conveyed Defendant's consent to mediate the claim), thirty-first (to the extent Mr. Tatro characterizes Defendant's statute of limitations affirmative defense as 'artificial'), and thirty-third.

Defendant's remaining objections are overruled.

Factual Background and Procedural History Calendar No.: Event ID:  TENTATIVE RULINGS

3101151 CASE NUMBER: CASE TITLE:  RUTERBUSCH VS FLASH HOME INSPECTIONS LLC [IMAGED]  37-2022-00006813-CU-PO-NC This action arises from injuries suffered following an allegedly negligent home inspection. Defendant is a home inspection company subject to various regulations, including the CREIA Standards of Practice and Code of Ethics. On January 20, 2020, Plaintiff and Defendant entered into a Standard Residential Inspection Agreement (the 'Agreement') under which Defendant agreed to perform an inspection of the real property located at 1640 Clearwater Place, Encinitas, CA 92024 (the 'Property'). That same day, Defendant performed its inspection of the Property and provided its inspection report, and Plaintiff paid Defendant $450.00 for those services. Relevant to the pending dispute is a portion of the Agreement entitled 'General Provisions', which provides that: No legal action or proceeding of any kind, including those sounding in tort or contract, can be commenced against Inspector/Inspection Company or its officers, agents, or employees more than one year from the date Client discovers, or through the exercise of reasonable diligence should have discovered, the cause of action. In no event shall the time for commencement of a legal action or proceeding exceed two years from the date of the subject inspection. THIS TIME PERIOD IS SHORTER THAN OTHERWISE PROVIDED BY LAW.

See Defendant's Separate Statement of Undisputed Material Facts ('UMF') and Plaintiff's Opposition thereto, ¶ 11 (emphasis in original). Plaintiff signed the Agreement on January 20, 2020. The following text can be found directly above the signature line in bold: 'Client acknowledges having read and understood all terms, conditions, and limitations of this Agreement and voluntarily agrees to be bound thereby and to pay the fee listed herein.' Ibid., at ¶ 10 (emphasis in original).

On February 25, 2020, Plaintiff turned on the hot water in the master bathroom sink in the Property to fill up the basin and wash his face. In so doing, Plaintiff suffered second and third degree burns to his right arm from the scalding hot water, which burns required a trip to the emergency room. One to two months after the incident, i.e., no later than April 25, 2020, Plaintiff and his wife, Robyne Ruterbusch, who were married at all relevant times, discussed the possibility that Defendant had done something wrong concerning the incident. On December 28, 2020, Plaintiff's counsel emailed Defendant's principal, Steve Lauriano, requesting the contact information for Defendant's liability insurance representative so that Plaintiff could submit a claim in connection with the incident.

On February 22, 2022, Plaintiff commenced this action by filing a Complaint against Defendant alleging a single cause of action for general negligence. On April 8, 2022, Plaintiff filed the operative FAC again alleging a single cause of action against Defendant for negligence. The FAC alleges that Defendant owed Plaintiff a professional duty of care not to expose Plaintiff to an unreasonable risk of harm.

Defendant also owed Plaintiff a duty, as a home inspector, to identify material defects in systems, structures, and components pursuant to California Business & Professions Code ('BPC') § 7195(a).

Defendant allegedly breached the standard of care of a home inspector and exposed Plaintiff to an unreasonable risk of harm by leaving the water heater temperature at its highest setting without notifying Plaintiff of that danger in Defendant's inspection report.

Defendant now seeks summary judgment on the grounds that Plaintiff's negligence claim is time-barred under the one-year limitations period set forth in the Agreement.

Legal Analysis Motions for summary judgment and adjudication are subject to the same rules and procedures. See Lunardi v. Great-West Life Assurance Co. (1995) 37 Cal. App. 4th 807, 819; Cal. Code Civ. P. § 437c(f)(2). The court applies a three-step analysis when ruling on a motion for summary judgment or adjudication: (1) identify the causes of action, issue(s) of duty or defense framed by the pleadings; (2) determine whether the movant has satisfied his or her burden of showing the defense or causes of action have no merit because one or more elements cannot be established, or that there is a complete defense to the cause or causes of action, or that a duty exists or does not exist; and (3) if the movant has made a prima facie showing that he or she is entitled to judgment as a matter of law, the burden shifts and the court determines whether the opposing party has provided evidence of a triable material Calendar No.: Event ID:  TENTATIVE RULINGS

3101151 CASE NUMBER: CASE TITLE:  RUTERBUSCH VS FLASH HOME INSPECTIONS LLC [IMAGED]  37-2022-00006813-CU-PO-NC fact as to the cause of action, issue of duty or defense. See Linden Partners v. Wilshire Linden Assocs.

(1998) 62 Cal.4th 508, 518; Choi v. Sagemark Consulting (2017) 18 Cal. App. 5th 308, 318 (citing Cal. Code Civ. P. §§ 437c(o), (p)(2); Pipitone v. Williams (2016) 244 Cal. App. 4th 1437, 1449). The opposing party 'must set forth specific facts beyond the pleadings to show the existence of a triable issue of material fact.' Choi, 18 Cal. App. 5th at 318 (citing Cal. Code Civ. P. § 437c(p)(2)). 'There is a triable issue of fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.' Aguilar v. Atlantic Richfield Co. (2001) 25 Cal. 4th 826, 850. The court must 'liberally construe the evidence in support of the [opposing party] and resolve doubts concerning the evidence in favor of that party.' Dore v. Arnold Worldwide, Inc. (2006) 39 Cal. 4th 384, 389.

Defendant's motion for summary judgment is denied. 'To succeed in a negligence action, the plaintiff must show that (1) the defendant owed the plaintiff a legal duty, (2) the defendant breached the duty, and (3) the breach proximately or legally caused (4) the plaintiff's damages or injuries.' Thomas v. Stenberg (2012) 206 Cal. App. 4th 654, 662. The statute of limitations for general negligence claims is two years. See Aldana v. Stillwagon (2016) 2 Cal. App. 5th 1, 5; Cal. Code Civ. P. § 335.1. Generally, a cause of action accrues when the wrongful act is completed. See, e.g., Neel v. Magana, Olney, Levy, Cathcart & Gelfand (1971) 6 Cal. 3d 176, 187. An exception to this rule is known as the 'delayed discovery rule'. Under the delayed discovery rule, 'a cause of action . . . accrues when the plaintiff discovers or should have discovered all facts essential to his cause of action ...; this has been interpreted under the discovery rule to be when plaintiff either (1) actually discovered his injury and its negligent cause or (2) could have discovered injury and cause through the exercise of reasonable diligence.' Leaf v. City of San Mateo (1980) 104 Cal. App. 3d 398, 407. The Second District Court of Appeal, for policy reasons and by recognizing the Legislature's 1996 adoption of BPC § 7196, has held that the delayed discovery rule applies in the home inspection context. See Moreno v. Sanchez (2003) 106 Cal. App. 4th 1415, 1428-1429 ('[C]auses of action for breach of a home inspector's duty of care should accrue in all cases, not on the date of the inspection, but when the homeowner discovers, or with the exercise of reasonable diligence should have discovered, the inspector's breach.').

As an initial matter, Plaintiff's contention that the shortened limitation period set forth in the Agreement is unconscionable is not well taken. Unconscionability has substantive and procedural elements. See Armendariz v. Foundation Health Psychcare Servs., Inc. (2000) 24 Cal. 4th 83, 114. 'The prevailing view is that [procedural and substantive unconscionability] must both be present in order for the court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability.' Ibid. (quoting Stirlen v. Supercuts, Inc. (1997) 51 Cal. App. 4th 1519, 1533). However, courts employ a 'sliding scale' approach to determining unconscionability: 'the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.' Armendariz, 24 Cal. 4th at 114. The sliding scale analysis 'requires the court to examine the totality of the agreement's substantive terms as well as the circumstances of its formation to determine whether the overall bargain was unreasonably one-sided.' Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal. 4th 1109, 1146. The pertinent inquiry is whether the contract's terms are sufficiently fair in light of all the facts and circumstances. See Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal. 4th 899, 912.

Plaintiff has demonstrated that the Agreement is slightly procedurally unconscionable. Procedural unconscionability requires oppression or surprise. See Samaniego v. Empire Today LLC (2012) 205 Cal. App. 4th 1138, 1144. 'Oppression results from unequal bargaining power, when a contracting party has no meaningful choice but to accept contract terms. Unfair surprise results from misleading bargaining conduct or other circumstances indicating that party's consent was not an informed choice.' Dotson v. Amgen, Inc. (2010) 181 Cal. App. 4th 975, 980. In this case, Plaintiff contends that the Agreement is procedurally unconscionable because: (1) the pertinent clause concerning the one-year limitations period is written in six-point font, and (2) the Agreement was offered on a 'take it or leave it basis', i.e., it is a contract of adhesion. The court respectfully disagrees.

Plaintiff has submitted no admissible evidence that the language limiting the limitations period to Calendar No.: Event ID:  TENTATIVE RULINGS

3101151 CASE NUMBER: CASE TITLE:  RUTERBUSCH VS FLASH HOME INSPECTIONS LLC [IMAGED]  37-2022-00006813-CU-PO-NC one-year was provided to him in six-point font. Even if Plaintiff had done so, however, the court nevertheless would not find the Agreement unconscionable on that basis alone. Indeed, California courts have held that font size is one of many factors courts should consider in determining whether a contract is procedurally unconscionable. See, e.g., Fisher v. MoneyGram Intern., Inc. (2021) 66 Cal. App. 5th 1084; Ali v. Daylight Transport, LLC (2020) 59 Cal. App. 5th 462; Leon v. Family Fitness Center, Inc.

(1998) 61 Cal. App. 4th 1227. To the extent Plaintiff contends that Conservatorship of Link (1984) 158 Cal. App. 3d 138 creates a brightline rule requiring that contractual provisions be provided in at least eight to ten-point font, the court respectfully disagrees. Conservatorship of Link 'established a rule-of-thumb for release of liability clauses in contracts; it found a release in five and one-half point type was unenforceable, in part because '[t]'ypeface smaller than eight-point is an unsatisfactory reading medium.' Fisher, 66 Cal. App. 5th at 1102 (quoting Conservatorship of Link, 158 Cal. App. 3d at 141).

Moreover, Plaintiff has not presented any evidence that he was unaware of the subject provision in the Agreement or that Defendant otherwise misled him into signing the contract. Furthermore, Plaintiff provides no evidence that the Agreement was a contract of adhesion. See OTO, L.L.C. v. Kho (2019) 8 Cal. 5th 111, 126 ('An adhesive contract is standardized, generally on a preprinted form, and offered by the party with superior bargaining power 'on a take-it-or-leave-it basis.'). In this case, there is no evidence that the Agreement was presented to Plaintiff on a 'take it or leave it basis'.

As set forth above, courts employ a sliding scale approach to determining unconscionability.

Consequently, because Plaintiff has shown that the Agreement is only slightly procedurally unconscionable, he must demonstrate significant substantive unconscionability to prevail. He fails to do so. 'Substantive unconscionability arises when a contract imposes unduly harsh, oppressive, or one-sided terms.' Ajamian v. CantorCO2e, L.P. (2012) 203 Cal. App. 4th 771, 797 (citing Armendariz, 24 Cal. 4th at 113). 'This includes consideration of the extent to which the disputed term is outside the reasonable expectation of the nondrafting party or is unduly oppressive.'' Carbajal v. CWPSC, Inc.

(2016) 245 Cal. App. 4th 227, 247 (quoting The McCaffrey Grp., Inc. v. Super. Ct. (2014) 224 Cal. App. 4th 1330, 1349-1350). In this case, Plaintiff contends that an attempt to shorten the statutory period in which to bring a negligence action alters a consumer's fundamental rights and violates the public policy favoring adjudication of claims on the merits. The court respectfully disagrees. To start, Plaintiff's reliance upon BPC § 7199 is not well taken. BPC § 7199 provides that '[t]he time for commencement of a legal action for breach of duty arising from a home inspection report shall not exceed four years from the date of the inspection.' Cal. Bus. & Prof. Code § 7199. BPC § 7199 does not prohibit contractual provisions shortening the time in which to file such an action; rather, the statute merely provides that a legal action cannot be commenced more than four years after the inspection date. Moreover, the statute does not speak to the delayed discovery rule.

Accordingly, the court finds that Plaintiff has failed to demonstrate that the Agreement is void as unconscionable.

Plaintiff next contends that under California law, contractual modifications to limitation periods generally are not upheld when related to home inspections and other specially skilled trades. The court respectfully disagrees. Simply put, the cases upon which Plaintiff has relied, namely Moreno, Charnay, and Seelenfreund, are distinguishable because the Agreement, unlike the contracts at issue in those cases, accounts for the delayed discovery rule consistent with California law.

That being said, the court finds that genuine disputes of material facts warrant denial of the motion. More specifically, the court finds a triable issue of fact as to whether Defendant is equitably estopped from asserting its statute of limitations defense. 'Four elements must ordinarily be proved to establish an equitable estoppel: (1) The party to be estopped must know the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting the estoppel had the right to believe that it was so intended; (3) the party asserting the estoppel must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury. [Citation.]' Migliore v. Mid-Century Ins. Co. (2002) 97 Cal. App. 4th 592, 606 (quoting Spray, Gould & Bowers v. Associated Internat. Ins. Co. (1999) 71 Cal. App. 4th 1260, 1268). 'The existence of an estoppel is generally a question of fact.' Doe v. Marten (2020) 49 Cal. App. 5th 1022, 1029.

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3101151 CASE NUMBER: CASE TITLE:  RUTERBUSCH VS FLASH HOME INSPECTIONS LLC [IMAGED]  37-2022-00006813-CU-PO-NC In this case, there is a triable issue of material fact as to whether Defendant's acts or omissions caused Plaintiff to reasonably believe that his negligence claim was subject to the standard two-year limitations period as opposed to the one-year period to which the parties contracted. Toward that end, the evidence shows that the parties entered into the Agreement on January 20, 2020. Plaintiff's injury occurred on February 25, 2020. Mrs. Ruterbusch testified, which testimony Plaintiff corroborated, that the couple discussed Defendant's possible involvement in causing Plaintiff's injuries about one to two months after the fact, or by April 25, 2020. The parties agree that the latest date on which Plaintiff learned of his potential claim against Defendant was on December 28, 2020 – the date on which Plaintiff's counsel emailed Mr. Lauriano requesting the contact information for Defendant's liability insurance carrier.

Consequently, applying the one-year limitations period set forth in the Agreement, Plaintiff needed to have filed this action by no later than either April 25, 2021 or December 28, 2021 – he did not do so until February 22, 2022.

However, the evidence shows that on January 29, 2021, Katie Petralia of Nationwide Insurance Company emailed Plaintiff's counsel requesting further information regarding Plaintiff's claim. See Plaintiff's Notice of Lodgment ('NOL'), Ex. 3. On February 9, 2021, Ms. Petralia sent Plaintiff's counsel a follow-up email requesting medical records and photos from Plaintiff. Ibid., Ex. 4. On February 19, 2021, Ms. Petralia emailed Plaintiff's counsel a letter denying liability and therefore denying Plaintiff's claim because the 'claim related to the water temperature in the bathroom' and thus was outside the scope of the inspection Defendant performed. Ibid., Ex. 6. That same day, Ms. Petralia emailed Mr. Lauriano and informed him that Nationwide had denied Plaintiff's claim but '[t]he attorney can still file a lawsuit or institute an arbitration related to this matter.' Ibid., Ex. 7. On March 4, 2021, Ms. Petralia, in response to Plaintiff's counsel's February 28, 2021 email, confirmed that Nationwide had denied coverage based on Defendant's contention that it was not responsible for inspecting the water temperature. Ibid., Ex. 9. On May 3, 2021, Ms. Petralia emailed Mr. Laureano stating, in relevant part, that 'Claimant has two years from the date of the incident to file a lawsuit.' Ibid., Exs. 8, 10. On March 18, 2022, Ms. Petralia emailed Plaintiff's counsel to inform him that Plaintiff's claim was being reassigned to another Nationwide adjuster, Geri Ferrante. Ibid., Ex. 11. On March 24, 2022, Ms. Ferrante emailed Plaintiff's counsel confirming the reassignment and indicating that she would review the claims package. Ibid., Ex. 12. On April 11, 2022, Ms. Ferrante emailed Plaintiff's counsel stating that she would be having a conference with management concerning Plaintiff's claim. Ibid., Ex. 13. On April 14, 2022, Mr. Kelleher sent Plaintiff's counsel correspondence requesting further documents and/or information concerning Plaintiff's injuries. Ibid., Ex. 14. On May 17, 2022, Mr. Kelleher emailed Plaintiff's counsel asking for further records as well as an extension of time to respond to Plaintiff's settlement demand. Ibid., Ex. 15. Mr.

Kelleher sent a further email requesting additional information on June 8, 2022. Ibid., Ex. 16. On August 11, 2022, Ms. D'Agostino sent Plaintiff's counsel correspondence stating that it was Defendant's position that Plaintiff's claim was time-barred – which fact Ms. D'Agostino claims Plaintiff's counsel was aware of on June 8, 2022. Ibid., Ex. 18.

Based on the foregoing, there is a triable issue of material fact on the issue of equitable estoppel.

Notably, the court agrees with Plaintiff that nothing in the foregoing correspondences suggests that the parties understood the limitations period to be one year – indeed, it is a question of fact as to what the parties understood and when. Buttressing this conclusion is the fact that the parties engaged in significant efforts to resolve Plaintiff's claim even after he commenced this action on February 22, 2022.

Toward that end, it appears undisputed that the earliest that Defendant raised the statute of limitation issue was on June 8, 2022. There is an additional issue of fact as to whether Defendant's and its insurance carrier's failure to raise the statute of limitations argument sooner was intentional and/or that Plaintiff had a right to believe the two-year limitations period applied to his negligence claim based on Defendant's and its insurance carrier's conduct.

Accordingly, the court denies Defendant's motion for summary judgment.

Conclusion Calendar No.: Event ID:  TENTATIVE RULINGS

3101151 CASE NUMBER: CASE TITLE:  RUTERBUSCH VS FLASH HOME INSPECTIONS LLC [IMAGED]  37-2022-00006813-CU-PO-NC In light of the foregoing, the court denies Defendant's motion for summary judgment.

This is the tentative ruling for the hearing at 1:30 p.m. on Friday, June 28, 2024. If no party appears at the hearing, this tentative ruling will become the order of the court as of June 28, 2024. If the parties are satisfied with the court's tentative ruling or do not otherwise wish to argue the motion, they are encouraged to give notice to the court and each other of their intention not to appear, though this notice is not required.

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