Judge: Douglas W. Stern, Case: 22STCV21732, Date: 2023-01-11 Tentative Ruling

Case Number: 22STCV21732    Hearing Date: January 11, 2023    Dept: 68

Michael Mata vs. Voyager Indemnity Insurance Company, Case No. 22STCV21732

MOVING PARTY:                Defendant Voyager Indemnity Insurance Company

RESPONDING PARTY:      Plaintiff Michael Mata

MOTION:                               Demurrer to First Amended Complaint

I. BACKGROUND

A. Factual

            This case arises out of Defendant’s denial of Plaintiff’s insurance claim to recover underinsured motorist policy benefits for bodily injuries. Plaintiff’s First Amended Complaint alleges three causes of action for (1) Breach of Contract; (2) Breach of the Covenant of Good Faith and Fair Dealing; and (3) Declaratory Relief.

            In June 2019, Plaintiff leased a 2017 Hyundai Elantra from Fair Titling Trust under their Fair Weekly Agreement for use in the Fair Weekly Membership program for Uber drivers. (FAC ¶ 1.) The vehicle was insured by Fair Title Trust and underwritten and issued by Voyager. (FAC ¶ 2.) The policy issued by Voyager provides that certain types of bodily injury coverage are excluded, including “Bodily injury sustained by an insured while occupying any auto that is rented or leased to that insured for use as a public or livery conveyance.” (FAC ¶ 9, Ex. 1.) In a different section of the policy, public or livery conveyance is defined as “the transporting of people and/or goods for hire, such as by a taxi service, motor carrier, transportation network company or delivery service.” (FAC ¶ 7, Ex. 1.)

            Plaintiff filed this action after Defendant denied bodily injury coverage based on the public or livery conveyance exclusion because Plaintiff leased the vehicle for use as an Uber. (FAC ¶¶ 17-19.) Plaintiff alleges that the public and livery conveyance exclusion is not plain, clear, or conspicuous in general and as it applies to Plaintiff’s case. (FAC ¶ 18.) Defendant disagrees, and it demurs as to all three of Plaintiff’s causes of action.

B. Procedural

This action was originally filed by Plaintiff on July 5, 2022. Plaintiff filed his First Amended Complaint on September 29, 2022. Defendant filed this Demurrer on November 1, 2022. Plaintiff filed his opposition on December 29, 2022. Defendant filed its reply on January 4, 2023.

II. MOVING PARTY’S GROUNDS FOR THE DEMURRER

            Defendant demurs to all three causes of action in the First Amended Complaint on the basis that they fail to state facts sufficient to maintain a cause of action against Defendant.

III. ANALYSIS

A. The Demurrer

As a general matter, in a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleading alone, and not the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint’s properly pleaded or implied factual allegations. (Id.) The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)

Where a demurrer is sustained, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a pleading can be amended successfully. (Id.; Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, “[i]f there is any reasonable possibility that the plaintiff can state a good cause of action, it is error to sustain a demurrer without leave to amend.” (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245).

1. First Cause of Action for Breach of Contract; Second Cause of Action for Breach of the Covenant of Good Faith and Fair Dealing; and Third Cause of Action for Declaratory Relief

Defendant argues that all three of Plaintiff’s causes of action fail because the insurance coverage contract at issue excludes bodily injury coverage for vehicles that are rented for the purpose of “public livery or conveyance,” i.e., which Defendant argues includes the use of the car as an Uber. (FAC, Ex. 1.)

            The main disagreement between the parties is whether the bodily injury exclusion is conspicuous, plain, and clear. Provisions of insurance policies which take away or limit coverage must be “conspicuous, plain and clear” to be enforceable. (De May v. Interinsurance Exchange of Auto. Club of Southern Calif. (1995) 32 Cal.4th 1133, 1137.) “When the facts are undisputed, as they are deemed to be on a ruling on a demurrer, the interpretation of a contract, including whether an insurance policy is … sufficiently conspicuous, plain, and clear, is a question of law.” (Hervey v. Mercury Casualty Co. (2010) 185 Cal.App.4th 954, 962-963.)

            “It is a general rule that the receipt of a policy and its acceptance by the insured without an objection binds the insured as well as the insurer and he cannot thereafter complain that he did not read it or know its terms. It is a duty of the insured to read his policy.” (Chase v. Blue Cross of California (1996) 42 Cal.App.4th 1142, 1155; see also Fields v. Blue Shield of California (1985) 163 Cal.App.3d 570, 578 [insured has duty to read policy and is bound by all of its clear and conspicuous provisions]; Malcom v. Farmers New World Life Ins. Co. (1992) 4 Cal.App.4th 296, 304, fn. 6 [“insured is ‘bound by clear and conspicuous provisions in the policy even if evidence suggests that the insured did not read or understand them.’”].) To be conspicuous, an exclusion “must be placed and printed so that it will attract the reader’s attention.” (Haynes v. Farmer Insurance Exchange (2007) 32 Cal.4th 1198, 1204.)

            Here, it is evident from the terms of the insurance policy that bodily injury coverage is excluded when the vehicle is being used for the purposes of a taxi service or transportation network company. Though the policy itself does not explicitly say that those include Uber, it would falls into one of those categories. It is not necessary to list the names of the companies that provide that excluded service. Additionally, the exclusion is not placed or printed in any irregular way that would justify nonenforcement. Even if Plaintiff did not know that his policy contained that exclusion, he is still bound by its terms. As such, Plaintiff cannot maintain causes of action related to a breach of contract when there has been no breach.

Accordingly, Defendant’s demurrer as to Plaintiff’s First Amended Complaint is sustained without leave to amend.