Judge Gail Killefer, Case 22STCV09172 2022-10-13 Tentative Ruling

MOVING PARTIES: Defendants, Interinsurance Exchange of the Automobile Club and ACSC Management Services, Inc.

PROCEEDING: Defendants’ Demurrer to the Complaint; Motion to Strike Portions of Complaint

Tentatie: Moving Defendants’ demurrer is sustained, without leave to amend. Having sustained Moving Defendants’ demurrer, the motion to strike is moot. Defendants are to provide notice.

Background

This premises liability action arises in connection with the apartment located at 6655 Obispo Avenue, Apt. 255, Long Beach, California 90805 (the “Subject Property”). Bruce Gayfield, Orpha Gayfield, and Vicki Wilson (“Plaintiffs”) lived in the Subject Property as lessees of 3101 E. Artesia Apartments, LLC., Amusement Industry Inc. DBA Westland Real Estate Group (“Owner Defendants”).

Plaintiffs allege they were insured for losses sustained at the premises by Defendant, Interinsurance Exchange of the Automobile Club (“AAA”) and its subsidiary, Defendant ACSC Management Services, Inc. (“ACSC”). Plaintiffs allege they retained a renters’ policy with AAA throughout their lease for the Subject Property.

Plaintiffs allege the Subject Property became subjected to an endemic roach infestation, defective structures, and was exposed to an ongoing water intrusion issue which created mold and mildew. Plaintiffs further allege they complained of these conditions to Owner Defendants, but no repairs or clean were made.

Also, Plaintiffs allege they reported their losses to AAA, which did not inform Plaintiffs of any available benefits. On June 7, 2021, Plaintiffs hired an alleged expert who instructed Plaintiffs to vacate the Subject Property, and on July 1, 2021, Plaintiffs informed Owner Defendants they would be moving out. Plaintiffs allege after AAA received notice of the loss, AAA did not inspect or investigate the premises for any of the alleged covered losses as part of their renters’ policy. Plaintiffs allege the ongoing defects and conditions caused them lasting health problems throughout their tenancy.

Plaintiffs’ operative Complaint alleges ten causes of action as follows: (1) breach of express and implied contract against all Defendants; (2) Breach of the Implied Covenant of Good Faith and Fair Dealing against all Defendants; (3) breach of express and implied warranty of habitability against Owner Defendants; (4) nuisance and trespass against Owner Defendants; (5) negligence —premises liability against Owner Defendants; (6) negligence, negligent supervision, negligent management against Owner Defendants; (7) violation of the consumer legal remedies act against Owner Defendants; (8) intentional infliction of emotional distress against all Defendants; (9) fraud, negligent misrepresentation and concealment against all Defendants; and (10) violation of Business & Professions Code §17200 against all Defendants.

AAA and ACSC (“Moving Defendants”) now demur to the first, second, eighth, ninth, and tenth causes of action of the Complaint on the grounds that each fails to allege facts sufficient to state a cause of action. Defendants also moves to strike portions of the Complaint. Plaintiffs oppose both motions.

Moving Defendants request judicial notice of the following in support of their demurrer:

I. A copy of Policy No. CHO 152110554 for the effective policy period of April 26, 2020 to April 26, 2021, issued by defendant Interinsurance Exchange of the Automobile Club to named insured Bruce Gayfield. (Exh. 1).

Defendants’ request is granted. The existence and legal significance of these documents are proper matters for judicial notice. (Evid. Code § 452(c), (d), (h).) However, the court may not take judicial notice of the truth of the contents of the documents. (Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.) Documents are only judicially noticeable to show their existence and what orders were made. The truth of the facts and findings within the documents are not judicially noticeable. (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 885.)

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (CCP § 430.30(a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) The court “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. . . .” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525 (Berkley).) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (CCP § 452; see also Stevens v. Sup. Ct. (1999) 75 Cal.App.4th 594, 601.) “When a court evaluates a complaint, the plaintiff is entitled to reasonable inferences from the facts pled.” (Duval v. Board of Trustees (2001) 93 Cal.App.4th 902, 906.)

The general rule is that the plaintiff need only allege ultimate facts, not evidentiary facts. (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550.) “All that is required of a plaintiff, as a matter of pleading, even as against a special demurrer, is that his complaint set forth the essential facts of the case with reasonable precision and with sufficient particularity to acquaint the defendant with the nature, source and extent of his cause of action.” (Rannard v. Lockheed Aircraft Corp. (1945) 26 Cal.2d 149, 156-157.) “[D]emurrers for uncertainty are disfavored and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Mahan v. Charles W. Chan Ins. Agency, Inc. (2017) 14 Cal.App.5th 841, 848, fn. 3 (Mahan), citing Lickiss v. Fin. Indus. Regulatory Auth. (2012) 208 Cal.App.4th 1125, 1135.) In addition, even where a complaint is in some respects uncertain, courts strictly construe a demurrer for uncertainty “because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.)

Demurrers do not lie as to only parts of causes of action where some valid claim is alleged but “must dispose of an entire cause of action to be sustained.” (Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119.) “Generally it is an abuse of discretion to sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment.” (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.)

Moving Defendants first contend ACSC is AAA’s attorney-in-fact and, as such, the “Complaint does not include any specific allegations as to ACSC’s purported conduct or any facts supporting their conclusory allegations that Defendants ‘operate in joint venture as one entity.’ ... There are no allegations regarding a contract between [AAA] and ACSC showing a joint interest, sharing or profits and losses, and a joint right of control as required to support their unfounded allegations.” (Demurrer, 12, citing Complaint ¶3.) Moving Defendants also contend Plaintiffs allege no facts showing ACSC to be a party to any contract, sufficient to establish a claim for breach of contract or any contracting covenants against ACSC. (Demurrer, 12-13.)

In opposition, Plaintiffs also refer to the Complaint, ¶ 3, in asserting that the “Court must take these facts as true” of an alleged joint venture between AAA and ACSC. (Opposition, 3.) Plaintiffs also point to ACSC’s function as AAA’s attorney-in-fact as affirming “both Defendants did contract for insurance with Plaintiffs.” (Opposition, 4-5.)

In reply, Moving Defendants correctly cite Ins. Code §§ 1303, 1305 to explain a “reciprocal insurance exchange’s attorney-in-fact merely executes the exchange’s contracts; it is not a party to them itself.” (Reply, 5.) Moving Defendants also correctly contend that any such contentions or legal conclusions of a joint venture between Moving Defendants is not admitted as true at the demurrer stage. (Id.) Moving Defendants also point to the renters’ policy agreement itself which defines the insurer to only include AAA. (Reply, 6; RJN. Exh. 1.)

Given the foregoing, the court finds a lack of sufficient factual allegations against ACSC as a party to a contract or an insurer under the relevant statutes. Plaintiffs’ insistence that such contentions or conclusions be admitted as true is an incorrect inquiry at this demurrer stage, and asks this court to change its analysis entirely. This court’s review of the Complaint and the judicially noticed exhibit shows Plaintiffs do not allege sufficient facts to show ACSC was a party to a contract or acted towards Plaintiffs in any way other than to execute the renters’ policy as AAA’s attorney-in-fact.

Accordingly, Moving Defendants’ demurrer as to all claims against ACSC is sustained.

A demurrer may be made on the ground that “[t]here is a defect or misjoinder of parties.” (CCP § 430.10(d).)

CCP § 379 provides that multiple persons may be joined in one action against them if either of the following applies:

“(1) Any right to relief jointly, severally, or in the alternative, in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all these persons will arise in the action; ¿or

(2) A claim, right, or interest adverse to them in the property or controversy which is the subject of the action.”

CCP § 430.10(d) allows a party to demur to a pleading on the grounds that there is a defect or¿misjoinder¿of parties.¿

Here, AAA contends “the torts alleged against each defendant were not jointly committed but rather allegedly occurred by the defendants acting independently of each other.” (Demurrer, 13.) AAA contends the claims against AAA only involve claims for Plaintiffs’ renters policy benefits, whereas the allegations against Owner Defendants arise “out of their alleged failure to maintain the building in a safe, habitable condition.” (Id.) Lastly, AAA contends claims against AAA “necessitates the introduction of evidence of insurance in contravention of Evidence Code section 1155 and applicable case law. Evidence of insurance coverage coupled with scrutiny of the conduct of [AAA], the only insurer defendant in this case, in investigating Plaintiffs’ loss would be inherently prejudicial to the Exchange.” (Demurrer, 14.)

In opposition, Plaintiffs explain, “Plaintiffs allege separate claims against these Demurring Defendants and the owners, which claims are pled in the alternative. Moreover, the liability of all Defendants arises out of a series of occurrences, i.e., water intrusion, and questions of fact common to all Defendants will arise in the action.” (Opposition, 5.)

In reply, Moving Defendants reaffirm “Plaintiffs do not actually identify a single common question of law or fact that will arise...Plaintiffs’ causes of action against Defendants arise out of [AAA’s] alleged wrongful denial of Plaintiffs’ claim for policy benefits. [AAA’s] coverage decision is governed by the contractual terms of Plaintiffs’ Policy. Whether the property was not habitable due to negligence by the owner is entirely irrelevant...” (Reply, 7.) The court agrees.

Moving Defendants further correctly reassert “Plaintiffs completely ignore the fact that trial of the bad faith case against [AAA] would necessitate the introduction of evidence in contravention of Evidence Code section 1155 and applicable case law.” (Id.)

The court agrees with Moving Defendants’ contentions that claims over AAA’s coverage decision do not share common questions of law or fact with the habitability action against the Owner Defendants, even if the series of events which precipitated these claims is the same. Further, the court also agrees with Moving Defendants regarding the potential for the introduction of prejudicial evidence of insurance in the trial of claims against AAA. As such, the court finds AAA has been improperly joined in this matter.

As the court has found a misjoinder of parties in this matter, Moving Defendants’ demurrer to the Complaint is sustained.

Having sustained Moving Defendants’ demurrer, the court now finds Moving Defendants’ motion to strike moot.

Moving Defendants’ demurrer is sustained, without leave to amend. Having sustained Moving Defendants’ demurrer, the motion to strike is moot. Defendants are to provide notice.

[1] Defendants submits the declaration of their attorney, Kayla E. Berlin (“Berlin”) to demonstrate that they has fulfilled its statutory meet and confer obligations pursuant to CCP § 430.41 prior to bringing the instant demurrer. Berlin attests that on June 24, 2022, counsel sent Plaintiffs’ counsel a meet and confer letter outlining the alleged deficiencies in Plaintiff’s Complaint. (Berlin Decl. ¶ 3.) Berlin attests Plaintiffs’ counsel later responded to the correspondence stating she disagreed and would not be amending the Complaint. (Berlin Decl. ¶ 4.) As such, Berlin’s Declaration is sufficient for purposes of CCP § 430.41.