Judge John J. Kralik, Case Number: 22BBCV00585, Date: 2023-11-03 Tentative Ruling

Plaintiff Panos Paul Simonian (“Plaintiff”) alleges that Defendant Mercury Insurance Company (“Defendant”) failed to satisfy its contractual obligations as it relates to Plaintiff’s claims for damages and to follow the proper procedures under the insurance policy provided by Defendant to Plaintiff. Plaintiff alleges that on September 18, 2021, Plaintiff’s vehicle was insured by the policy at the time of loss and that Plaintiff timely made a claim for damages. Plaintiff alleges that on September 21, 2021, Defendant created an estimate, which the parties did not dispute in amount or extent of damages, but at some point, Defendant refused to pay for the repair of the damages.

The first amended complaint (“FAC”), filed November 18, 2022, alleges causes of action for: (1) breach of contract; and (2) bad faith.

On December 21, 2022, Defendant filed a motion to compel Plaintiff to submit his vehicle, which is subject to this action, for appraisal, pursuant to Condition 2 of his insurance policy. On March 27, 2023, the Court granted Defendant’s motion and ordered the parties to move forward to choose an umpire and complete the process contemplated by the policy.

On June 20, 2023, Plaintiff filed a motion for the Court to appoint a neutral appraisal umpire proposed by Plaintiff pursuant to Condition 2 of the insurance policy. On October 23, 2023, Defendant filed an opposition brief. On October 27, 2023, Plaintiff filed a reply brief. On November 3, 2023, the Court granted the motion and stated it would follow the procedure in CCP § 1281.6 to appoint an appraisal umpire. The Court ordered the parties to each submit a proposed list of 5 neutral appraisal umpires by November 9, 2023 and set a Status Conference re: Appointment of the Appraisal Umpire for December 5, 2023. At the December 5, 2023 Status Conference, the Court appointed Lance Coren as the appraisal umpire from Plaintiff’s list of proposed individuals.

On January 4, 2024, Plaintiff filed a motion for the Court to further appoint a neutral appraisal umpire. On March 4, 2024, Defendant filed an opposition brief. On March 8, 2024, Plaintiff filed a reply brief.

(b)(1) If the proposed neutral arbitrator complies with Section 1281.9, the proposed neutral arbitrator shall be disqualified on the basis of the disclosure statement after any party entitled to receive the disclosure serves a notice of disqualification within 15 calendar days after service of the disclosure statement.

(2) A party shall have the right to disqualify one court-appointed arbitrator without cause in any single arbitration, and may petition the court to disqualify a subsequent appointee only upon a showing of cause.

Plaintiff states that after the Court appointed Mr. Coren as the appraisal umpire, Plaintiff sent an introductory email on December 18, 2023 to Mr. Coren and the parties counsel. Plaintiff states that on December 21, 2023, Mr. Coren submitted to all parties a disclosure declaration confirming that he had no conflict with a party to the appraisal and no facts that could cause a person aware of such facts to reasonably entertain a doubt as to Mr. Coren’s impartiality pursuant to CCP § 1281.9. (Kiridjian Decl., Ex. C.) On December 22, 2023, Defendant served a notice of disqualification. (Id., Ex. D.) The disqualification notice simply states that after Mr. Coren served his disclosure statement on the parties, Defendant seeks to disqualify Mr. Coren pursuant to CCP § 1281.91(b). (Id.)

Plaintiff argues that Defendant’s disqualification of Mr. Coren was without cause. Plaintiff argues that in an effort to resolve the issues, Plaintiff again proposed the following neutral umpires (excluding Mr. Coren) who are qualified in the automotive industry:

· Daryl Johnson – He is a certified independent Automotive Appraiser/Mediator. He has served as a former Staff Appraiser for USAA and State Farm Insurance Sub-Contractor for RVEST Appraisal Inc. 2001 to 2022.

· Maxwell Janisch - He is an Automotive Value & Damage Appraiser of Memorabilia & Personal Property Appraisals involving Value/Damage Dispute Arbitrator/Umpire Automotive Expert Witness Services from 2010-2018. He is the Named Appraiser for Harley-Davidson Insurance Company.

· Todd Kennaday – He has experience as an expert witness in over 100 small claims and Superior Court cases involving claims and automotive repair procedures. He has extensive experience with the California Department of Insurance guidelines and requirements. Mr. Kennaday holds licensing as a California Department of Insurance Public Adjuster, California Department of Insurance Fair Claims Settlement Practices, Texas Department of Insurance Adjuster’s license and Certification by the Bureau of Automotive Repairs.

In opposition, Defendant argues that Mr. Coren is not a neutral umpire because he has a history with Defendant and its appraisers (specifically Bob Barney who is serving as Defendant’s appraiser in this matter) such that Mr. Coren could not be a neutral umpire, such as in a separate case entitled Kasson Hartwell v. Mercury Ins. Co. (LASC Case No. 23STCP02407). (Opp. at p.4.) Defendant argues that none of Plaintiff’s proposed umpires are neutral because they have all dealt with Defendant and/or its appraiser Mr. Barney.[1] It argues that the Court should nominate 5 arbitrators and if the parties are unable to pick an arbitrator from that list, the Court should select the umpire. In the alternative, Defendant proposes the following umpires:

(Opp. at p.8.) Defendant has not provided any evidence or curriculum vitae to show the qualification of these individuals in vehicle appraisal matters.

In reply, Plaintiff argues that the standard should not be whether Defendant and/or Mr. Barney have interacted with any of the umpires in the past as it is inevitable that Defendant and its appraiser will have dealt with the few skilled individuals qualified to be umpires in appraising vehicles in the State of California.

In its memorandum, which argues that all umpires designated by Plaintiffs should be disqualified, Defendant Mercury misreads the disqualification statutes to the extent that it could have mislead the Court. Section 1281.9 does not provide a standard for disqualification, but rather a standard for disclosure. The mere fact that any of these proposed umpires have been involved in cases involving Mercury in the past does not represent a ground for disqualification. For example, the mere fact that this Court has had cases in which Mercury was a party in the past does not require that this court be disqualified.

Thus, Mercury’s disqualification of Lance Coren represents an exercise of its right to disqualify one umpire without cause.

As the Court has previously noted, the umpires proposed by Mercury are well known to the Court who respects them, but they have no known expertise in the valuation of automobiles. Thus, they will need to come up to speed on a substantive area of expertise that is not within their previous experience while billing at rates that reflect their value as former judges. Such nominations appear inappropriate to the Court. These former judges are not practicing and qualified motor vehicle repair appraisers as required by the policy.

Plaintiff Panos Paul Simonian’s motion to further appoint an appraisal umpire is granted and Daryl Johnson is appointed as umpire.

[1] Defendant argues that Daryl Johnson served as umpire for several cases involving Mr. Barney. Defendant argues that Maxwell Janisch has already been disqualified as umpire in this matter, in addition to the fact that Mr. Barney is presently engaged as a party-appointed appraised in another proceeding with Mr. Janisch such that they are in direct opposition. Defendant also argues that Todd Kennaday too has opposed Mr. Barney as a party-appointed appraiser in numerous appraisal matters and Mr. Kennaday even recently threatened to sue Defendant in an email dated October 26, 2023. (Opp. at pp.6-7.) Mercury has not provided the Court with a copy of this alleged threat.

Superior Court of California

County of Los Angeles

Department B