Judge Deirdre Hill, Case YC072410 2022-09-06 Tentative Ruling

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The court considered the moving and opposition papers. No reply papers were filed.

On October 24, 2017, Danny Trebold (self-represented) filed a complaint against Allianz Global Risks United States (AGRUS) for fraud. The “cause of action” was not attached to the complaint as is required by the form complaint at para. 8.

On December 12, 2017, plaintiff filed a First Amended Complaint, which did not have the attachment for a cause of action for fraud.

On August 28, 2018, plaintiff filed a notice of unconditional settlement along with a substitution of attorney.

On August 15, 2019, plaintiff filed a substitution of attorney. He is now representing himself. On August 20, 2019, the court granted plaintiff’s ex parte application to vacate the dismissal.

On October 8, 2019, plaintiff filed a Third Amended Complaint for fraud by concealment. On February 20, 2020, the court sustained defendant’s demurrer with leave to amend to allow plaintiff an opportunity to amend to plead a different cause of action.

On March 10, 2020, plaintiff filed a Fourth Amended Complaint for (1) general negligence, (2) bad faith, and (3) intentional tort.

On July 21, 2020, the court sustained defendant’s demurrer with leave to amend as to the 1st and 2nd cause of action because plaintiff failed to clearly allege facts against defendant and sustained without leave to amend the 3rd cause of action.

On July 31, 2020, plaintiff filed a Fifth Amended Complaint for (1) general negligence and (2) bad faith, adding defendants National Surety Corporation, Fireman’s Fund Insurance Company, and Allianz Resolution Reinsurance of America, Inc.

On February 11, 2021, the court sustained defendant’s demurrer without leave to amend as to defendants National Surety Corporation, Allianz Resolution Management, and Allianz Reinsurance of America. However, the court overruled defendant’s demurrer as to ARGUS and Fireman’s Fund.

On May 25, 2022, after being granted leave by the court, plaintiff filed a Sixth Amended Complaint. The 6AC included the same factual allegations and causes of action but reinserted National Surety Corporation as a defendant.

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. “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.” SKF Farms v. Superior Court (1984) 153 Cal. App. 3d 902, 905. “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 v. Mirda (2007) 147 Cal. App. 4th 740, 747.

Defendants demur to each of the causes of action on the ground that they fail to state sufficient facts to constitute a cause of action. As to the 1^st cause of action for negligence, defendants assert that the claim is barred by the statute of limitations. As to the 2^nd cause of action for bad faith, defendants assert that none of the defendants breached a contract with plaintiff and thus cannot be held liable for “bad faith.”

A party demurring to a pleading that has been amended after a demurrer to an earlier version of the pleading was sustained shall not demur to any portion of the amended complaint, cross-complaint, or answer on grounds that could have been raised by demurrer to the earlier version of the complaint, cross-complaint, or answer.

Defendants’ demurrer as to the causes of action in plaintiff’s 5AC was sustained as to defendant National Surety Corporation because the court found that plaintiff had not sufficiently alleged wrongdoing on the part of National Surety Corporation. However, after additional facts were made available, the court granted plaintiff leave to reinsert National Surety Corporation as a defendant. In his 6AC, plaintiff adequately pleads that National Surety Corporation was a party to the settlement at issue in this case.

Now defendants demur to the same causes of action but on different grounds. Defendants are barred from doing so. Accordingly, the demurrer is OVERRRULED. Nonetheless, the court will rule on the merits of defendants’ demurrer.

Defendants argue plaintiff’s negligence claims are barred by the statue of limitations. The

statute of limitations for negligence claims is two years. CCP § 335.1. “The discovery rule provides that the accrual date of a cause of action is delayed until the plaintiff is aware of her injury and its negligent cause…” County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal. App. 4th 292, 317.

Defendant argues that because the Treasury Department began withholding funds from plaintiff’s social security benefits in September of 2015, plaintiff should have known the facts essential to his claim no later than that date. Since plaintiff filed his original complaint on October 24, 2017, plaintiff’s claims are barred by the statute of limitations.

Plaintiff, however, pleads in his 6AC that he wasn’t aware that defendants were the cause of his social security withholding until receiving a letter from the Center for Medicare and Medicaid services. That letter, according to plaintiff, is when he was first informed that defendants had misrepresented never making Medicare payments to Plaintiff in a report filed with CMS. Plaintiff pleads in his 6AC that this letter was not received until after he had taken his complaint to the Workers Compensation Appeals Board, or around July of 2016. Plaintiff filed his original complaint with this court within two years of July of 2016, and therefore the statute of limitations does not bar his claim.

Accordingly, defendants’ demurrer as to the first cause of action is OVERRULED.

“Bad faith cases are analyzed in a three-step process: First, was there a breach at all so as to warrant contract damages? Second, was the breach unreasonable so as to warrant tort damages? Third, was the breach so egregious that there is evidence of “oppression, fraud or malice” under Civil Code section 3294, subdivision (a) so as to warrant punitive damages?” Griffin Dewatering Corp. v. Northern Ins. Co. of New York (2009) 176 Cal.App.4th 172, 194–195.

Defendants argue that plaintiff has not filed a cause of action for breach of contract and therefore the first element of the cause of action for bad faith is not met. The court can find no requirement in Griffin that a plaintiff alleging bad faith actually assert a cause of action breach of contract—only that a breach occur. Plaintiff alleges in his 6AC that he entered into a settlement agreement with National Surety Corporation in December of 2011, that Fireman’s Fund Insurance Company was the administrator, that ARGUS is liable as the parent company of both, and that defendants breached the settlement agreement by not paying his Medicare benefits.

Accordingly, defendants’ demurrer as to the second cause of action is OVERRULED.