Judge: Gary I. Micon, Case: 24CHCV00062, Date: 2025-01-02 Tentative Ruling
Case Number: 24CHCV00062 Hearing Date: January 2, 2025 Dept: F43
Dept.
F43
Date:
01-02-25
Case
# 24CHCV00062, Akopyan, et al. v. Papelyan
Trial
Date: 08-10-26
MOTION FOR LEAVE TO INTERVENE
MOVING
PARTY: Intervenor Empire Fire and Marine Insurance Company
RESPONDING
PARTIES: Plaintiffs Sargis Gasparyan and Armenui Akopyan
RELIEF
REQUESTED
Leave
to intervene and file a complaint-in-intervention.
RULING: Motion is denied,
without prejudice.
SUMMARY
OF ACTION
This
action arises out of a two-vehicle collision between Plaintiffs Sargis
Gasparyan and Armenui Akopyan (Plaintiffs) and Defendant Vrezh Papelyan
(Defendant) on October 17, 2022. Plaintiffs
filed a complaint on January 8, 2024 alleging causes of action for Motor
Vehicle and General Negligence. Defendant
filed an answer on March 13, 2024 alleging seven (7) affirmative defenses.
On
November 4, 2024, Defendant’s insurer, Empire Fire & Marine Insurance
Company (Intervenor), filed this motion for leave to file a complaint-in-intervention
for fraud against Plaintiffs and Defendant.
Plaintiffs
filed an opposition on December 18, 2024.
Intervenor
filed a reply on December 19, 2024.
SUMMARY
OF ARGUMENTS
Intervenor
argues that it has a direct and immediate interest in this case because it
insured Defendant, its complaint will not enlarge the issues, and it cannot
adequately defend itself and its interests through Defendant. Intervenor contends that this case results
from an insurance scam and that the evidence suggests the vehicle collision was
orchestrated by Plaintiffs and Defendant.
Defendant rented his vehicle for the day of the accident and obtained a
high liability limits policy for the rental.
This policy was inconsistent with Defendant’s employment, income, and
lifestyle. Defendant refuses to
cooperate with Intervenor’s investigation of this claim or the underlying
suit. The damage to the vehicles is inconsistent
with the damages alleged by the parties.
Defendant has an extensive prior criminal history involving moral
turpitude crimes and prior suspect claims involving rental claims with similar
facts as the instant case. Plaintiffs
also have a history of prior suspect claims and own a body shop where Plaintiffs’
vehicle was allegedly taken to be repaired.
Additionally, Plaintiff Gasparyan had only purchased the RV 30 days
prior to the collision with a salvage title and listed the RV for sale shortly
thereafter. Defendant’s present counsel
is not able to adequately protect Intervenor’s interests because Defendant’s
counsel cannot ethically allege fraud and collusion claims against his own
client. Without intervention,
Defendant’s fraudulent statements will not be introduced at trial.
Plaintiffs
oppose the motion on the grounds that Intervenor’s allegations are false, the
motion does not establish any risk or harm to Intervenor, Intervenor fails to present
sufficient evidence of its fraud allegations, and other remedies are available
to Intervenor such as an ability to subrogate.
Intervenor’s motion and supporting evidence do not state what exactly
has constituted Defendant’s failure to cooperate with Intervenor’s
investigation or how Intervenor could be prejudiced. Intervenor falsely alleges that Plaintiffs
purchased their RV a month prior to the accident. Plaintiff Sargis Gasparyan purchased the RV
for $24,090.00 at an auction called by Howard Brown and Sons Auto Sales on July
10, 2019 and was paid off in full at the time of purchase. (Declaration of Susy Koshkakaryan, ¶ 4, Exh.
1.) Although, the RV was registered to
Plaintiff Gasparyan’s aunt for personal reasons relating to Plaintiff Gasparyan’s
marriage, Plaintiff Gasparyan insured the RV in his name from the date of
purchase through the sale of the RV in October 2022 after the incident. (Koshkakaryan Dec., ¶ 5.)
In
reply, Intervenor reiterates the same arguments, emphasizing its motion contains
sufficient evidence to suggest fraud and collusion by Plaintiffs and
Defendant. Intervenor also contends that
granting its motion will prevent the filing of multiple actions for the same
issue especially because Intervenor will be bound by any judgment in this case.
ANALYSIS
Legal Standard
“Any
person who claims a legal or equitable interest in the property described in
the complaint may appear in the proceeding. Whether or not such person is named
as a defendant in the complaint, he shall appear as a defendant.” (Code Civ. Proc., § 1250.230.)
“[I]nsurers
may intervene in third party actions brought against their insureds in order to
protect their own interests when their insureds are unable to defend. While no case expressly considers whether
the intervening insurers are then entitled to litigate liability and damages
issues that their insureds are barred from litigating, this conclusion
necessarily follows. Indeed, there would
be no purpose in allowing an insurer to intervene in order to protect its own interests
but then limit the scope of the insurer’s defense to those issues to
which its insured . . . is limited to pursuing.” (Western Heritage Ins. Co. v. Superior
Court (2011) 199 Cal.App.4th 1196, 1207.) “The entire purpose of the intervention is to
permit the insurer to pursue its own interests, which necessarily include the
litigation of defenses its insured is procedurally barred from pursuing.” (Id. at p. 1208.)
Permissive
Intervention
Permissive intervention is available upon timely
motion to any non-party who has an interest in the matter in litigation, or an
interest in the success of either party, or against both parties. (Code
Civ. Proc., § 387, subd. (d)(2).) This
section is construed liberally in favor of intervention. (Simpson
Redwood Co. v. State of California (1987) 196 Cal.App.3d 1192, 1200.)
“[T]he trial court has discretion to permit a
nonparty to intervene where the following factors are met: (1) the proper procedures
have been followed; (2) the nonparty has a direct and immediate interest in the
action; (3) the intervention will not enlarge the issues in the litigation; and
(4) the reasons for the intervention outweigh any opposition by the parties
presently in the action.” (Reliance
Ins. Co. v. Superior Court (2000) 84 Cal.App.4th 383, 386.)
If intervention is granted, the intervenor shall
separately file a complaint
1. Intervenor’s Motion is timely.
“[I]ntervention is possible, if otherwise appropriate,
at any time, even after judgment.” (Mallick v. Superior Court (1979) 89
Cal.App.3d 434, 437.) The timeliness of
a petition to intervene is determined by the totality of the circumstances
facing the intervenor, focusing on three factors: (1) the stage of proceedings;
(2) the prejudice to other parties from the delay in seeking to intervene; and
(3) the reason for delay. (Crestwood
Behavioral Health, Inc. v. Lacy (2021) 70 Cal.App.5th 560, 574.) “Prejudice to the existing parties” caused by
delay is the most import factor. (Ibid.)
A court may deny permissive intervention as untimely
if allowing intervention would interject additional issues into the case and
impede its resolution. (See Naya v.
A.W. Coulter Trucking (2006) 143 Cal.App.4th 838, 842.) In Noya v. A.W. Coulter Trucking, the
trial court denied liability insurer’s petition to intervene because after the
insurer denied coverage to insured, the insurer took no steps to intervene in
the insured’s case until several years had passed, and a comprehensive
settlement agreement was reached. (Id.
at pp. 842-843.) Allowing the insurer to
intervene at that point would delay and impede the resolution reached by the
parties and bring in additional coverage issues. (Ibid.)
This case is still in the early stages. Plaintiffs filed this case in January 2024,
and Defendant filed an answer on March 13, 2024. The Court only recently required the parties
to conduct a settlement conference to be completed no later than May 26, 2026
with trial set for August 2026.
(12/09/24 - Minute Order.) Although
Intervenor’s motion does not directly address when Intervenor knew or suspected
Plaintiffs and Defendant committed the alleged fraud, the moving papers do not
indicate whether discovery has commenced or ended or whether any final
settlement has occurred between Plaintiffs and Defendant.
Accordingly, Intervenor’s motion is timely.
2. Intervenor followed proper procedures.
The intervenor must file a notice of motion and
attach the proposed complaint in intervention.
(Timberidge Enterprises, Inc. v. City of Santa Rosa (1978)
86 Cal.App.3d 873, 879.) The intervenor
must serve the complaint on parties who have and have not appeared. (Code Civ. Proc., § 387, subd.
(e)(2)(A)-(B).)
Intervenor filed this motion on November 4, 2024 and
attached a supporting declaration and its proposed
complaint-in-intervention. Intervenor
electronically served Plaintiffs and Defendants that same day.
Accordingly, Intervenor followed the proper
procedures for permissive intervention.
2. Intervenor has a direct and immediate
interest in this action but fails to sufficiently allege fraud.
“Generally speaking, an insurer should be allowed to
intervene in an action against its insured when the insurer may be required to
satisfy any judgment entered against the insured[.]” (Executive Risk Indemnity, Inc. v. Jones
(2009) 171 Cal.App.4th 319, 333 fn. 11.)
An insurer’s direct interest in an action is not adequately represented,
such that the insurer may be permitted to intervene, “if its insured is not
defending an action[.]” (Royal
Indemnity Co. v. United Enterprises, Inc. (2008) 162 Cal.App.4th 194, 206.)
The parties do not present evidence that Intervenor
has refused to defend Defendant.
“[A]n insurer who is on notice of an action against
its insured and refuses to defend on the ground the alleged claim is not within
the policy coverage is bound by a judgment in the action, absent fraud or
collusion, ‘as to all material findings of fact essential to the judgment of
liability [and damages] of the insured.’ [Citations.]” (Executive Risk
Indemnity, Inc., supra, 171 Cal.App.4th at p. 330.) “The converse of that rule would be that
where fraud or collusion does appear, the insurer is not bound.” (Zander v. Casualty Ins. Co. of Cal.
(1968) 259 Cal.App.2d 793, 804.)
“If collusion exists between two parties to permit
plaintiff to obtain judgment upon fictitious litigated claim, right of insurer
of one of such parties to attack fraud depends upon when it had notice of
collusion, and if it has notice before judgment, it may intervene to thwart
scheme while original action is still pending and may be barred from collateral
attack later if it does not do so, but if its knowledge reasonably comes to it
only after final judgment, fraud is subject to collateral attack in separate
suit.” (Id. at p. 806.) But the insurer would have to plead facts
constituting fraud. (Ibid.
[“Fraud must be pleaded with specificity.”].)
Fraud
A fraud or collusion claim requires allegations that
the insured has no substantial claim or chance of recovery and that the parties
permitted or will permit a judgment in the insured’s favor which is
disproportionate to his injuries. (Ibid.)
The
elements of fraud are a misrepresentation, knowledge of the misrepresentation’s
falsity, intent to defraud, justifiable reliance, and resulting damage. (Lazar v. Superior Court (1996) 12
Cal.4th 631, 638.) Fraud must be plead
with particularity with facts showing “how, when, where, to whom, and by what
means” the representation was made. (Id.
at p. 645; see also Zander v. Texaco (1968) 259 Cal.App.2d 793, 806.)
Intervenor
alleges that on October 17, 2022, Defendant rearended Plaintiffs’ 2014
Winnebago Vista 31KE RV while driving a rental vehicle because Defendant dropped
his phone, attempted to pick it up from the floor and pressed on the gas pedal
instead of the brake pedal. (Bozoghlian
Dec., ¶ 3.) The parties gave statements
at the scene to California Highway Patrol officer Karla D. Gonzalez, Badge
number 022603. (Ibid.) No injuries were reported and the officer
observed minor property damage to the rear of Plaintiffs’ RV. (Id. ¶¶ 4-5.)
Intervenor
also alleges Defendant’s history of prior suspect claims involving facts
similar to this case, an extensive prior criminal history involving moral
turpitude crimes that call into question his credibility, and that Defendant
rented the vehicle hours before the accident occurred and obtained a high
liability limits policy for the rental vehicle most likely inconsistent with
his employment, income, and lifestyle.
(Bozoghlian Dec., ¶¶ 6, 9-10.)
Intervenor also states that Defendant refuses to cooperate with
Intervenor’s investigation of Defendant’s claim and refuses to provide
statements. (Bozoghlian Dec., ¶ 7.) Further,
Intervenor alleges Plaintiffs have a history of prior suspect claims. (Bozoghlian Dec., ¶ 11.) Plaintiff Gasparyan owns the body shop where
his RV was allegedly taken to be repaired. (Bozoghlian Dec., ¶ 12.) Additionally, Intervenor alleges Plaintiff
Gasparyan purchased his RV less than 30 days before the alleged incident with a
salvage title and listed the vehicle for sale shortly after the accident. (Bozoghlian Dec., ¶ 13.) Finally, Intervenor alleges the damage to the
vehicles is inconsistent with the damages being alleged by the parties. (Bozoghlian Dec., ¶ 8.)
Although,
Intervenor has a direct and immediate interest in the outcome of this action,
Intervenor fails to allege facts or present evidence sufficient to support a
fraud claim. Intervenor does not present
the specific misrepresentations in the reporting of the accident, Plaintiffs’ and
Defendant’s statements to the adjusters or other employers, or when, where, or
how the alleged misrepresentations were made.
Accordingly, the Court finds that Intervenor fails to
sufficiently allege a fraud claim, and the Court denies Intervenor’s motion for
leave to file a complaint in intervention.
CONCLUSION
Empire Fire and Marine Insurance Company’s motion to
intervene is denied, without prejudice.
Empire Fire and Marine Insurance Company to give
notice.