Judge Daniel S. Murphy, Case Number: 24STCV30988, Date: 2025-03-10 Tentative Ruling

Judge: Daniel S. Murphy, Case: 24STCV30988, Date: 2025-03-10 Tentative Ruling

Case Number: 24STCV30988 Hearing Date: March 10, 2025 Dept: 32

REBECCA GOLDFARB-DUGGAL,

Plaintiff,

ALLSTATE INSURANCE COMPANY, et al.,

Defendants.

Case No.: 24STCV30988

Hearing Date: March 10, 2025

[TENTATIVE] order RE:

defendant allstate insurance company’s demurrer to complaint (CRS# 9989)

BACKGROUND

On November 22, 2024, Plaintiff Rebecca Goldfarb-Duggal filed this action against Defendants Allstate Insurance Company (Allstate), North Light Specialty Insurance Company (North Light), and Robert Feldman (Feldman). The complaint asserts causes of action for (1) breach of contract, (2) breach of the covenant of good faith and fair dealing, (3) bad faith denial, (4) unfair business practices, (5) fraud, (6) constructive fraud, (7) unjust enrichment, (8) declaratory relief, and (9) injunctive relief.

In August 2019, Plaintiff entered into a homeowner’s insurance policy with North Light, a wholly-owned subsidiary of Allstate. (Compl. ¶¶ 5, 12.) Feldman was the broker who sold the policy to Plaintiff. (Id., ¶ 6.) In July 2020, the property suffered water damage as the result of a flood. (Id., ¶ 14.) Plaintiff initiated a claim, which was allegedly approved in August 2020. (Id., ¶ 16.) Subsequently, Allstate and North Light allegedly failed to conduct a proper investigation of the claim. (Id., ¶ 26.) Plaintiff alleges that Allstate and North Light have only offered unreasonable “lowball” offers for the claim, while simultaneously increasing Plaintiff’s renewal premium by sixfold. (Id., ¶¶ 32-33.)

On February 10, 2025, Allstate filed the instant demurrer to the complaint. Plaintiff filed her opposition on February 25, 2025. Allstate filed its reply on March 3, 2025.

LEGAL STANDARD

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.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice. (Code Civ. Proc., § 430.30, subd. (a).) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Ibid.) 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.)

MEET AND CONFER

Before filing a demurrer or a motion to strike, the demurring or moving party is required to meet and confer with the party who filed the pleading demurred to or the pleading that is subject to the motion to strike for the purposes of determining whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer. (Code Civ. Proc., §§ 430.41, 435.5.) The Court finds that Defendant has satisfied the meet and confer requirement. (See Madhok Decl.)

DISCUSSION

I. Contractual Privity

Allstate is not a party to the insurance policy, which is between Plaintiff and North Light. (See Compl., Ex. A.) Plaintiff argues that Allstate may be liable under an alter ego theory. However, the complaint contains no facts demonstrating that Allstate and North Light are alter egos (see Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 235-36) or that Allstate and North Light operate “as a single or unitary enterprise” (see Tran v. Farmers Group, Inc. (2002) 104 Cal.App.4th 1202, 1219.) The mere fact that North Light is a wholly-owned subsidiary of Allstate is insufficient. Instead, “the plaintiff must show ‘specific manipulative conduct’ by the parent toward the subsidiary which ‘relegate[s] the latter to the status of merely an instrumentality, agency, conduit or adjunct of the former.’” (Laird v. Capital Cities/Abc (1998) 68 Cal.App.4th 727, 742, quoting Institute of Veterinary Pathology, Inc. v. California Health Laboratories, Inc. (1981) 116 Cal. App. 3d 111, 119-20.) No such facts have been alleged here.

In sum, Plaintiff has failed to plead Allstate’s liability under the insurance policy. Therefore, the first three causes of action, all based on the insurance contract, fail as a matter of law. The demurrer is SUSTAINED as to the first through third causes of action.

II. Unfair Business Practices

Business and Professions Code section 17200 prohibits unlawful, unfair, or fraudulent business acts or practices. Each of the three prongs is an independent basis for relief. (Smith v. State Farm Mutual Automobile Insurance Co. (2001) 93 Cal.App.4th 700, 718.) Unlawful conduct is defined as any practice forbidden by law. (Farmers Ins. Exchange v. Superior Court (1992) 2 Cal.4th 377, 383.) UCL actions alleging unlawful conduct “borrow” from other statutes or common law causes of action outside Section 17200. (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1383.)

As discussed herein, Plaintiff has not adequately pled Allstate’s liability under the insurance policy, or Allstate’s liability for fraud. Thus, there is no underlying “unlawful” conduct upon which the UCL claim may be predicated.

The demurrer is SUSTAINED as to the fourth cause of action.

III. Fraud

“The elements of fraud that will give rise to a tort action for deceit are: ‘(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.’” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974, quoting Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) Fraud must be pleaded with specificity rather than with general and conclusory allegations. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) The specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made. (Lazar, supra, 12 Cal.4th at p. 645.)

Here, the allegations lack the requisite specificity. (See Compl. ¶¶ 12-33.) Plaintiff does not specify how each statement was made, instead using generic terms such as “informed” or “told.” Certain statements are also undated. Moreover, Plaintiff does not specify how the alleged statements were false or how Plaintiff relied on the statements. It is also unclear whether Allstate or North Light made the fraudulent statements. (See Lazar, supra, 12 Cal.4th at p. 645 [in the case of a corporate defendant, the plaintiff must “allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written”].) Thus, the fraud claims have not been adequately pled.

The demurrer is SUSTAINED as to the fifth and sixth causes of action.

IV. Unjust Enrichment

The elements for a claim of unjust enrichment are: (1) receipt of a benefit; and (2) unjust retention of the benefit at the expense of another. (Elder v. Pacific Bell Telephone Co. (2012) 205 Cal.App.4th 841, 857.) Courts have construed unjust enrichment claims as quasi-contract claims seeking restitution. (Rutherford Holdings LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 231.)

As discussed herein, the complaint fails to establish wrongdoing by Allstate. Thus, there is no basis for seeking restitution against Allstate.

The demurrer is SUSTAINED as to the seventh cause of action.

V. Declaratory Relief

“Any person interested under a written instrument . . . or under a contract . . . may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties . . . arising under the instrument or contract.” (Code Civ. Proc., § 1060.)

“A general demurrer to a declaratory relief cause of action is proper when the plaintiff does not allege facts sufficient to state the derivative claim.” (Allen v. City of Sacramento (2015) 234 Cal.App.4th 41, 54.) Here, the complaint seeks to hold Allstate liable for Plaintiff’s benefits under the insurance policy. Thus, the derivative claim is breach of contract. As stated above, Plaintiff has not pled Allstate’s liability under the contract. Accordingly, there is no controversy to adjudicate between Plaintiff and Allstate.

The demurrer is SUSTAINED as to the eighth cause of action.

CONCLUSION

Defendant Allstate’s demurrer is SUSTAINED with leave to amend.

REBECCA GOLDFARB-DUGGAL,

Plaintiff,

ALLSTATE INSURANCE COMPANY, et al.,

Defendants.

Case No.: 24STCV30988

Hearing Date: March 10, 2025

[TENTATIVE] order RE:

defendants north light specialty insurance company’s and robert feldman’s demurrer to complaint (CRS# 4248)

BACKGROUND

On February 10, 2025, North Light and Feldman filed the instant demurrer to the complaint. Plaintiff filed her opposition on February 25, 2025. Defendants filed their reply on March 3, 2025.

LEGAL STANDARD

MEET AND CONFER

Before filing a demurrer or a motion to strike, the demurring or moving party is required to meet and confer with the party who filed the pleading demurred to or the pleading that is subject to the motion to strike for the purposes of determining whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer. (Code Civ. Proc., §§ 430.41, 435.5.) The Court finds that Defendants have satisfied the meet and confer requirement. (See Madhok Decl.)

DISCUSSION

I. Bad Faith Denial

Defendants argue that Plaintiff’s third cause of action for bad faith denial of coverage is duplicative of, or interchangeable with, the second cause of action for breach of the covenant of good faith and fair dealing. Defendants argue there is no such thing as “bad faith denial,” which is simply breach of the covenant of good faith and fair dealing.

However, “[a] plaintiff may plead cumulative or inconsistent causes of action.” (Gherman v. Colburn (1977) 72 Cal.App.3d 544, 565.) “[M]odern rules of pleading generally permit plaintiffs to ‘set forth alternative theories in varied and inconsistent counts.’” (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1388.) While both counts may represent one “cause of action” under the primary rights theory, Plaintiff is entitled to assert liability through multiple alternative counts. (See Crowley v. Katleman (1994) 8 Cal.4th 666, 681; Slater v. Blackwood (1975) 15 Cal.3d 791, 796.)

The demurrer is OVERRULED as to the third cause of action.

II. Unfair Business Practices

Here, Plaintiff has pled breach of contract and breach of the covenant of good faith and fair dealing, which are common law causes of action defining “unlawful” conduct. Thus, the wrongdoing alleged in these claims may serve as the predicate for a UCL claim. Defendants argue that a UCL claim cannot be based on a violation of the Unfair Insurance Practices Act, or UIPA (Ins. Code, §§ 790 et seq.). (See Zhang v. Superior Court (2013) 57 Cal.4th 364, 369.) However, “the UIPA does not immunize insurers from UCL liability for conduct that violates other laws in addition to the UIPA.” (Ibid.) The breach of contract and implied covenant claims define wrongful conduct apart from the UIPA. Thus, the UCL claim is viable.

Defendants also argue that Plaintiff lacks standing to pursue a UCL claim. A UCL claim is actionable “by a person who has suffered injury in fact and has lost money or property as a result of the unfair competition.” (Bus. & Prof. Code, § 17204.) For pleading purposes, it must be taken as true that Plaintiff was wrongfully denied the full benefits of her insurance policy and incurred related damages such as diminution in the value of the property and the cost of obtaining inspections and estimates. (See, e.g., Compl. ¶¶ 26, 38.) This sufficiently shows that Plaintiff suffered injury in fact from Defendants’ conduct.

Lastly, Defendants argue that Plaintiff fails to plead restitution because she does not allege any money or property was taken from her. (See Lee v. Luxottica Retail North America, Inc. (2021) 65 Cal.App.5th 793, 800 [the only monetary relief available in a private UCL action is restitution]; Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1144-45 [restitution means “to return money obtained through an unfair business practice to those persons in interest from whom the property was taken, that is, to persons who had an ownership interest in the property”].) However, Plaintiff alleges that she has been unfairly forced to continue paying premiums for the open claim. (Compl. ¶ 33.) These payments represent money taken from Plaintiff as a result of Defendants’ conduct. Defendants’ factual contentions about the true cause of the open claim and increased premiums are not suitable for demurrer. (See Dem. at p. 5, fn. 8.)

In sum, Plaintiff has adequately pled a UCL claim. The demurrer is OVERRULED as to the fourth cause of action.

III. Fraud

Here, the allegations lack the requisite specificity. (See Compl. ¶¶ 12-33.) It is unclear whether North Light or Allstate made the statements. (See Lazar, supra, 12 Cal.4th at p. 645 [in the case of a corporate defendant, the plaintiff must “allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written”].) Plaintiff does not specify how each statement was made, instead using generic terms such as “informed” or “told.” Certain statements are also undated. Moreover, Plaintiff does not specify how the alleged statements were false or how Plaintiff relied on the statements. Thus, the fraud claims have not been adequately pled.

The demurrer is SUSTAINED as to the fifth and sixth causes of action.

IV. Unjust Enrichment

Defendants argue that unjust enrichment is not a cause of action and is barred in light of the existing contract claim. (See Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 793; McBride v. Boughton (2004) 123 Cal.App.4th 379, 387-88; Levine v. Blue Shield of California (2010) 189 Cal.App.4th 1117, 1138.) However, other cases have viewed unjust enrichment as an actionable claim. (See Elder, supra, 205 Cal.App.4th at p. 857; Rutherford Holdings, supra, 223 Cal.App.4th at p. 231.) Furthermore, even if unjust enrichment is not strictly a cause of action in and of itself, Plaintiff may still plead it as an alternative theory of recovery. (See Slater, supra, 15 Cal.3d at p. 796; Klein, supra, 202 Cal.App.4th at p. 1388.) Plaintiff may plead unjust enrichment as an alternative to the contract claim.

The demurrer is OVERRULED as to the seventh cause of action.

V. Declaratory Relief

“Declaratory relief operates prospectively to declare future rights, rather than to redress past wrongs.” (Canova v. Trustees of Imperial Irrigation Dist. Employee Pension Plan (2007) 150 Cal.App.4th 1487, 1497.) However, “in a dispute involving an alleged breach of contract, courts may provide declaratory relief under section 1060 if the relief sought would also govern the future conduct of the parties.” (Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th 357, 372.) “[T]he mere fact that the contract has already been breached and a cause of action therefor (one of the traditional remedies) has accrued, does not necessarily deprive the court of the power to grant declaratory relief under the law.” (Ibid., quoting Ermolieff v. R.K.O. Radio Pictures (1942) 19 Cal.2d 543, 547.)

Here, an ongoing controversy remains over Plaintiff’s entitlement to benefits under the policy and Defendants’ obligation to provide it. Plaintiff alleges that Defendants have refused to either provide the benefits demanded or issue a denial of coverage. (Compl. ¶ 84.) Plaintiff alleges that Defendants currently refuse to even investigate the claim. (Id., ¶ 29.) Thus, there is an actionable controversy over future rights despite the breach of contract claim. (See Osseous Technologies, supra, 191 Cal.App.4th at p. 372.)

The demurrer is OVERRULED as to the eighth cause of action.

CONCLUSION

Defendants North Light’s and Feldman’s demurrer is SUSTAINED as to the fifth and sixth causes of action with leave to amend and OVERRULED in all other respects.

REBECCA GOLDFARB-DUGGAL,

Plaintiff,

ALLSTATE INSURANCE
COMPANY, et al.,

Defendants.

Case No.: 24STCV30988

Hearing Date: March 10, 2025

[TENTATIVE]
order RE:

defendants’ motion to strike (CRS# 2036)

BACKGROUND

On November 22, 2024, Plaintiff
Rebecca Goldfarb-Duggal filed this action against Defendants Allstate Insurance
Company (Allstate), North Light Specialty Insurance Company (North Light), and
Robert Feldman (Feldman). The complaint asserts causes of action for (1) breach
of contract, (2) breach of the covenant of good faith and fair dealing, (3) bad
faith denial, (4) unfair business practices, (5) fraud, (6) constructive fraud,
(7) unjust enrichment, (8) declaratory relief, and (9) injunctive relief.

In August 2019, Plaintiff entered
into a homeowner’s insurance policy with North Light, a wholly-owned subsidiary
of Allstate. (Compl. ¶¶ 5, 12.) Feldman was the broker who sold the policy to
Plaintiff. (Id., ¶ 6.) In July 2020, the property suffered water damage
as the result of a flood. (Id., ¶ 14.) Plaintiff initiated a claim,
which was allegedly approved in August 2020. (Id., ¶ 16.) Subsequently,
Allstate and North Light allegedly failed to conduct a proper investigation of
the claim. (Id., ¶ 26.) Plaintiff alleges that Allstate and North Light
have only offered unreasonable “lowball” offers for the claim, while
simultaneously increasing Plaintiff’s renewal premium by sixfold. (Id.,
¶¶ 32-33.)

On February 10, 2025, Defendants
filed the instant motion to strike the complaint. Plaintiff filed her
opposition on February 25, 2025. Defendants filed their reply on March 3, 2025.

DISCUSSION

Defendants move to strike the
complaint for the same reasons articulated in their respective demurrers.
Because those arguments have been addressed in the Court’s rulings, and the
demurrers have been sustained or overruled accordingly, there is no need for a
separate motion to strike.

CONCLUSION

Defendants’ motion to strike is
DENIED as moot.