Judge: Elaine W. Mandel, Case: 23SMCV04230, Date: 2024-12-04 Tentative Ruling

Case Number: 23SMCV04230    Hearing Date: December 4, 2024    Dept: P

Tentative Ruling

Wasserman v. Di Nalli Construction, Case no. 23SMCV04230

Hearing date December 4, 2024

Plaintiffs’ Demurrer to General Insurance’s Complaint in Intervention

Plaintiffs sued for construction defects. Intervenor General Insurance Company of America seeks to recover $153,865.07 paid under plaintiffs’ insurance policy. Plaintiffs do not dispute the amount intervenor seeks, nor do they dispute intervenor’s entitlement to reimbursement under a first-party insurance claim.

Plaintiffs demur, arguing intervenor’s claim is not ripe under the made-whole and common-fund doctrines. Intervenor filed a late opposition, arguing the made-whole doctrine does not prevent subrogation and the common-fund doctrine does not apply. The court will consider the late-filed opposition, which is due to a calendar error. Decl. Vancho para. 5. As plaintiffs filed a reply, the late filing did not result in prejudice.

“The function of a demurrer is to test the sufficiency of the complaint as a matter of law.” Holiday Matinee, Inc. v. Rambus, Inc. (2004) 118 Cal.App.4th 1413, 1420. A complaint “is sufficient if it alleges ultimate rather than evidentiary facts,” Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550, but plaintiff must allege essential facts “with reasonable precision and with particularity sufficient to acquaint [the] defendant with the nature, source and extent” of the plaintiff’s claim. Doheny Park Terrace Homeowners Ass’n., Inc. v. Truck Ins. Exchange (2005) 132 Cal.App.4th 1076, 1099.

Plaintiffs argue intervenor failed to establish facts sufficient to bring claim in intervention, arguing the made-whole doctrine states an insurance company may not enforce a right to subrogation until the insured has been made whole. Plut v. Fireman's Fund Ins. Co. (2000) 85 Cal.App.4th 98, 104. As applied in California, the rule precludes an insurer from recovering third-party funds until the insured has been made whole. Progressive West Ins. Co. v Superior Court (2005) 135 Cal.App.4th 26.

Intervenor argues the made-whole doctrine does not prevent intervention, citing Plut, supra. Intervenor does not address Progressive West, supra, which holds an insurer generally must wait until plaintiffs have been made whole. Plaintiffs argue that, had intervenor’s insurance payouts covered the full extent of their damages, the intervenor’s claims would be ripe. But since plaintiffs claim damages in excess of the insurance payments, under Progressive West, supra, the intervenor’s claims are not ripe.

Intervenor argues the common-fund doctrine does not apply. Intervenor intervened with the specific intent to assist in obtaining recovery from defendants and incurred fees and costs. The common-fund doctrine limits an insurer’s reimbursement based on the insurer’s contributions to plaintiff’s legal fees and costs following plaintiff’s success in recovering damages. Progressive West, supra. As intervenor is actively participating in litigation, the common-fund doctrine is inapplicable. Intervenor requests leave to amend. SUSTAINED with 15 days leave to amend.