Judge: Gregory Keosian, Case: 22STCV14010, Date: 2022-09-29 Tentative Ruling

Case Number: 22STCV14010    Hearing Date: September 29, 2022    Dept: 61

Defendants Corbacho Appraisals and Jaime Anne Corbacho’s Demurrer to the Complaint is OVERRULED.

I.                   DEMURRER

A demurrer should be sustained only where the defects appear on the face of the pleading or are judicially noticed. (Code Civ. Pro., §§ 430.30, et seq.) A court should sustain a demurrer if a complaint does not allege facts that are legally sufficient to constitute a cause of action. (See id. § 430.10, subd. (e).) As the Supreme Court held in Blank v. Kirwan (1985) Cal.3d 311: “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. . . . Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” (Id. at p. 318; see also Hahn. v. Mirda (2007) 147 Cal.App.4th 740, 747 (“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.”))

“In determining whether the complaint is sufficient as against the demurrer … if on consideration of all the facts stated it appears the plaintiff is entitled to any relief at the hands of the court against the defendants the complaint will be held good although the facts may not be clearly stated.”  (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.)

“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616.) Such demurrers “are disfavored, and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Mahan v. Charles W. Chan Insurance Agency, Inc. (2017) 14 Cal.App.5th 841, 848.)

A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081.) The demurrer also may be sustained without leave to amend where the nature of the defects and previous unsuccessful attempts to plead render it probable plaintiff cannot state a cause of action. (Krawitz v. Rusch (1989) 209 Cal.App.3d 957, 967.)

Defendants Corbacho Appraisals and Jaime Anne Corbacho (Defendants) demurrer to the third cause of action for intentional interference with contract, on three separate grounds. First, they argue that there are no facts in the Complaint suggesting they intentionally interfered with the contract. (Demurrer at pp. 3–5.) Second, they argue that any alleged wrongdoing in the appraisal process is protected by the doctrine of arbitral immunity. (Demurrer at p. 5.) And finally, they argue that any alleged acts in collusion with state farm as protected by the agency privilege. (Demurrer at p. 6.)

The Complaint adequately pleads Defendants’ intentional interference. To prevail on a claim for intentional interference with contract, the plaintiff must show “the defendant's intentional acts designed to induce a breach or disruption of the contractual relationship.” (Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1148.) Defendants argue that because the insurance policy at issue provides for appraisers, no appraisal can disrupt the contract. (Demurrer at pp. 3–4.) But Defendants’ argument is unsupported by authority, and relies instead on characterizations of the pleadings as alleging an “unsatisfactory” but “independent and impartial appraisal.” (Demurrer at p. 4.) The Complaint, however, does not allege an impartial, unsatisfactory appraisal, but rather an appraisal that was deliberately engineered to provide State Farm a reason to refuse to pay policy benefits. (Complaint ¶ 44.) Defendants cite the case Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1137, for the proposition that appraisers should not be liable for interfering with insurance contracts pursuant to which they are appointed. But that case did not involve insurance appraisers. The court there instead held that it would not “make it a tort [for a third party] to induce [another party to initiate] potentially meritorious litigation,” because the existing tort of malicious prosecution adequately protected all relevant policy interests. (Pacific Gas & Electric Co., supra, 50 Cal.3d at p. 1137.) That case and the present case are not analogous.

Defendants next argue that they should benefit from arbitral immunity, as a clause contained in an insurance policy allowing for the appointment of an appraiser is, they claim, akin to the appointment of an arbitrator. (Demurrer at p. 5.) But the case authority that Defendants cite for this proposition involved an entirely different type of appraisal — namely one conducted under Insurance Code § 2071, in which the appraisal is conducted by a panel of appraisers and a disinterested umpire, and renders a final and binding decision. (See Lambert v. Carneghi (2008) 158 Cal.App.4th 1120, 1127.) That kind of appraisal is indeed analogous to arbitration. Defendants’ alleged conduct, however, does not resemble arbitration, and does not benefit from arbitral immunity.

Defendants finally argue that their alleged actions are privileged, as they are alleged to be agents of State Farm. (Demurrer at p. 6.) Although the Complaint specifically disclaims an agency relationship (Complaint ¶ 21), Defendants argue that the allegations that they acted at State Farm’s behest create an agency relationship, and “a manager or agent may, with impersonal or disinterested motive, properly endeavor to protect the interests of his principal by counseling the breach of a contract with a third party which he reasonably believes to be harmful to his employer's best interests.” (Aalgaard v. Merchants Nat. Bank, Inc. (1990) 224 Cal.App.3d 674, 684.) This argument is unpersuasive, however, as the Complaint does not plead facts establishing an agency relationship, as opposed to an independent contractor relationship. While independent contractors may be agents, allegations that Defendants acted for State Farm’s benefit or according to its wishes are not dispositive:

[W]hether an agency relationship has been created or exists is determined by the relation of the parties as they in fact exist by agreement or acts [citation], and the primary right of control is particularly persuasive. [Citations.] Other factors may be considered to determine if an independent contractor is acting as an agent, including: whether the ‘principal’ and ‘agent’ are engaged in distinct occupations; the skill required to perform the ‘agent's’ work; whether the ‘principal’ or ‘agent’ supplies the workplace and tools; the length of time for completion; whether the work is part of the ‘principal's’ regular business; and whether the parties intended to create an agent/principal relationship.

(Jackson v. AEG Live, LLC (2015) 233 Cal.App.4th 1156, 1184.) Defendants point to no allegations in the Complaint that would establish the existence of an agency relationship as a matter of law.

Accordingly, the demurrer is OVERRULED.