Judge: Jon R. Takasugi, Case: 23STCV10612, Date: 2024-06-27 Tentative Ruling

Case Number: 23STCV10612    Hearing Date: June 27, 2024    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendant’s motion for summary judgment is GRANTED.

           On 5/11/2023, Plaintiff Arpin Manousadjian (Plaintiff) filed suit against Farmers Group, Inc. and Farmers Insurance Exchange, alleging: (1) breach of contract; and (2) breach of the implied covenant of good faith and fair dealing.

           On 3/25/2025, Plaintiff dismissed Farmers Group, Inc. from the action.

           Now, Farmers Insurance Exchange (Defendants) moves for summary judgment, or, in the alternative, summary adjudication of Plaintiff’s Complaint.

Discussion

           Defendant argues that summary judgment is appropriate here because the undisputed evidence establishes that there was no coverage for the alleged loss here (i.e., the collapse of a balcony wall due to water intrusion damage) as a matter of law.

           Here, Defendant issued Farmers Smart Plan Home® policy number 32810-87-42 (Policy) to Plaintiff Arpin Manousadjian and David Manousadjian[1] of Montebello. The Policy explained:

For a lower premium, this Farmers Smart Plan Home® policy offers less coverage than is available in the Farmers Next Generation® Homeowners product. If you qualify under Farmers® underwriting guidelines, you may be eligible to purchase enhanced coverage in the Next Generation Homeowners product for an additional premium. You may contact your Farmers® agent for additional details.

           (COE, Ex. 1 at FIE 000741.)

           The Policy further provides:

6. Building structure - means a structure which is a building that is fully enclosed with walls and a roof. A roof or wall does not include a temporary roof or wall structure or any kind of temporary tarp, sheeting or other covering, unless it has been installed temporarily due to recent damage covered by this policy and then only for a reasonable amount of time to repair the recent damage.

           The Insuring Agreement provides:

Section I - Loss or Damage Insured

Coverage A (Dwelling), Coverage B (Separate Structures), and Coverage C (Personal Property)

We insure accidental direct physical loss or damage to that property described in Section I - Types of Property Insured….

 …

Loss or damage to property is caused by perils (causes of loss or damage). This policy does not insure loss or damage to covered property directly or indirectly caused by, arising out of, or resulting from the excluded causes of loss or damage set forth in Section I - Uninsured Types of Loss or Damage and Excluded Causes of Loss or Damage, whether the excluded cause of loss or damage occurs on or away from the residence premises.

We do not provide Loss of Use or any Extensions of Coverage for any uninsured type of loss or damage or any excluded cause of loss or damage, unless specifically provided otherwise

           (COE, Exh. 1 at FIE 000750.)

The Policy contain these relevant extensions of coverage:

           Section I - Extensions of Coverage

We will insure you for the Extensions of Coverage as described below except as otherwise shown in the Declarations. Unless otherwise expressly stated, the following Extensions of Coverage are subject to all the policy terms, exclusions, deductibles, and conditions, including without limitation the terms and limitations of any uninsured loss or damage or excluded cause of loss or damage set forth in Section I - Uninsured Loss or Damage and Excluded Causes of Loss or Damage and in any other Extension of Coverage.

1.     Limited Water Coverage

a.     We provide limited coverage for accidental, direct, distinct, and demonstrable, physical water damage of covered property from direct contact with water, but only if the water results from:

…

(2) hail, rain, snow, or sleet entering a building structure through an opening in the roof or wall of a building structure, and only if the opening is first caused by damage from the direct force of the following:

i.                fire;

ii.              lightning;

iii.            explosion resulting from combustion (other than nuclear explosion);

iv.            riot or civil commotion;

v.              aircraft or vehicles;

vi.            vandalism or malicious mischief;

vii.           collapse of a building structure or structural part of the building structure;

viii.         falling objects;

ix.            wind;

x.              hail;

xi.             theft or attempted theft.

…

10. Collapse of Building Structure or Structural Part of the Building Structure.

We cover loss or damage to covered property caused by collapse of a building structure or any structural part of the building structure, or of a patio cover, carport cover, deck, or the like, attached to the exterior of the building structure. The collapse must be a direct result of:

a.     weight of ice, snow, sleet, or rain that collects on a roof;

b.     weight of persons, animals, personal property, or equipment; or

c.     defective methods or materials used in construction, repair, remodeling, or renovation, but only if the collapse occurs in the course of such construction, repair, remodeling, or renovation.

The collapse must be a sudden, abrupt, and accidental, actual and complete falling down of the building structure or of a structural part of the building structure, or of a patio cover, carport cover, deck, or the like, attached to the exterior of the building structure. A structural part of a building structure means a part of the building structure, which if it fell down, would threaten the structural integrity of the building structure. Substantial impairment of a building structure or structural part of a building structure, or of a patio cover, carport cover, deck or the like attached to the exterior of the building structure, without a sudden, abrupt and accidental, actual and complete falling down is not a collapse. Collapse does not mean imminent or threatened collapse. Collapse does not include bending, sagging, bowing, leaning, movement, settling, cracking, bulging, shrinkage, heaving or expansion, whether natural or otherwise, of the building structure or a structural part of the building structure, or of a patio cover, carport cover, deck or the like attached to the exterior of the building structure, unless an actual and complete falling down has occurred. This Collapse Extension of Coverage does not apply to separate structures which are not building structures.

For purposes of this Extension of Coverage only, a building structure means a structure with at least one wall, but fully covered by a roof.

This is not additional insurance. All loss or damage in this Extension of Coverage is subject to the applicable Coverage A, B, or C stated limit or any Special Limits on Certain Personal Property.

           (COE, Ex. 1 at FIE 00759.)

           The Policy then sets forth these uninsured losses and excluded causes of loss or damage:

Section I - Uninsured Loss or Damage and Excluded Causes of Loss or Damage

A. Uninsured Types of Loss or Damage.

We do not insure property covered by this policy, provide Loss of Use coverage or extend coverage in any Extensions of Coverage, for any loss or damage consisting or composed of any of the uninsured types of loss or damage listed below, whether on or off the residence premises, however caused, whether the loss or damage occurred immediately or over time, or is the result of, a natural or man-made activity, condition, or event, except as may be stated otherwise.

Uninsured types of loss or damage are never covered regardless of whether any acts, omissions, or decisions of any persons, group, organization, association, or governmental body, or any other cause of loss or event contributes concurrently, or in any combination or sequence, to cause the uninsured type of loss or damage, except as may be stated otherwise.

Uninsured types of loss or damage can occur in combination with insured loss or damage. If any uninsured type of loss or damage does occur in combination with or in sequence to insured loss or damage, the uninsured type of loss or damage is not covered. If the insured loss or damage and uninsured loss or damage cannot be physically segregated from each other for any reason, including by way of example but not limited to what perils caused the loss or damage or the extent or timing of the loss or damage caused by individual perils, then none of the loss or damage will be insured by this policy.

1.     Water Damage

We do not insure loss or damage which consists of, is composed of or which is water damage, except as covered in Section I - Extensions of Coverage, Limited Water Coverage or unless if caused by fire or lightning.

…

3. Construction Defect

We do not insure loss or damage that is a construction defect in the dwelling or a separate structure, except as covered in Section I - Extensions of Coverage, Collapse of Building Structure or Structural Part of the Building Structure, or unless if by fire or lightning.        

4. Inherent Vice or Latent Defect.

We do not insure loss or damage that is an inherent vice or latent defect in covered property

…

                     B. Excluded Causes of Loss or Damage

                     Except as provided elsewhere in this policy, we do not:

a.     insure property covered by this policy;

b.     provide Loss of Use coverage; or

c.     extend coverage in any Extensions of Coverage;

for loss or damage that directly or indirectly is caused by, arises out of, or results from, any of the excluded causes of loss or damage listed below, whether the loss or damage occurs on or away from the residence premises. Acts or omissions of persons or other causes or other events can cause, contribute to, combine with, or aggravate any of the excluded causes of loss or damage to cause loss or damage. Loss or damage caused by an excluded cause of loss or damage is not covered, regardless of any acts, omissions, or decisions of any persons, group, organization, association, or governmental body or any other causes or other events that aggravate or contribute concurrently, or in any combination or sequence, with the excluded cause of loss or damage.

If covered and excluded causes of loss or damage each cause loss or damage to property such that the resulting damage is indistinguishable, except as to the timing or sequence of the causes of the damage, then none of the loss or damage is insured by this policy.

Excluded Causes of Loss or Damage are excluded whether they are, or are the result of, natural or man-made activities, conditions, or events. Excluded Causes of Loss or Damage apply to exclude the loss or damage arising from, or as a result of, the excluded activity, condition, or event, whether the loss or damage is direct or indirect, or immediate or consequential.

           (COE Exh. 1.)

I.               Breach of Contract

           In support of its contention that there was no covered loss under the Policy, Defendant submitted the following facts:

-        On about February 3, 2023, a portion of the balustrade surrounding the second-floor exterior balcony at the insured property suddenly fell down. (SS 2.)

-        The balcony itself is still intact. (SS 3.)

-        Plaintiff reported the incident to Farmers on February 6, 2023, and asked Farmers to pay for repairs. (SS 4.)

-        The Farmers claims representative assigned to the claim, Leo Hernandez, immediately contacted the insured and Service Master and arranged for Service Master to inspect the property and take photos. (SS 5.)

-        The insured declined to allow Service Master to inspect her property and asked Mr. Hernandez to refrain from doing anything, which he did. (SS 6.)

-        On February 14, 2023, Mr. Hernandez received a call from Jake Corbin of So Cal Restoration Pros, a mitigation contractor, advising that Plaintiff had asked him to look at her balcony. Mr. Corbin took many photos of the insured property and balcony area, and sent Mr. Hernandez 28 photos from his inspection (SS 7.)

-        On February 14, 2023, after he had spoken to Mr. Corbin and carefully examined the photos he received from So Cal Restoration, Mr. Hernandez communicated with Plaintiff by phone and by letter to tell her that the loss was not covered because the investigation revealed a partial collapse of portions of the balcony caused by wear and tear, rot and water damage. (SS 8.)

-        Wear and tear, rot, water damage and collapse are all uninsurable under the Policy. (SS 9.)

-        Farmers hired Jonathan Glassman of Exponent, a structural engineer, to speak to the Plaintiff, inspect the balcony, take photos, and provide an opinion as to the cause of the loss, and as to Plaintiff’s contention that the loss was caused by the weight of rain. Mr. Glassman concluded: “The failure of the railing along the south portion of the subject balcony was the result of long-term deterioration of the sheathing and wood framing due to repeated wettings from water intrusion.” (SS 11.)

-        Mr. Glassman researched the history of the rainfall in the vicinity of Plaintiff’s property, and concluded that “Rainfall from any particular storm event was not a significant factor contributing to the failure.” (SS 12.)

Taken together, Defendant’s evidence supports a reasonable inference that the loss alleged is not covered.

Plaintiff alleges that “the loss was abrupt and sudden. The balcony collapsed. Property damage is covered under the insurance policy. The balcony collapsed, and the damage to the balcony was abrupt and sudden. Plaintiff believes that the loss was caused by the weight of rain which collected on the building. There were heavy rains in the months leading up to the balcony collapse.” (Complaint ¶ 10.)

Defendant’s evidence supports a reasonable inference that the patio/cover balcony is still standing, and that there was only a sudden falling of the front portion of the balustrade wall. The “collapse” provision of the Policy requires an “actual and complete falling down of the building structure or of a … patio cover ….” As further explained in the policy:

Substantial impairment of a building structure or structural part of a building structure, or of a patio cover, carport cover, deck, or the like, attached to the exterior of the building structure, without a sudden, abrupt, and accidental, actual and complete falling down is  a collapse. Collapse does not mean imminent or threatened collapse. Collapse does not include bending, sagging, bowing, leaning, movement, settling, cracking, bulging, shrinkage, heaving, or expansion, whether natural or otherwise, of the building structure or a structural part of the building structure, or of a patio cover, carport cover, deck, or the like, attached to the exterior of the building structure, unless an actual and complete falling down has occurred.

           (COE, Exh. 1.)

           Moreover, Defendant’s evidence supports a reasonable inference that, even assuming there was a total collapse, that the alleged loss would still not be covered under the policy. Coverage is limited under the Smart Plan Home policy, so that a complete and actual, sudden and accidental collapse will only be covered if it is a “direct result” of one of these conditions:

a. weight of ice, snow, sleet, or rain that collects on a roof;

b. weight of persons, animals, personal property, or equipment; or

c. defective methods or materials used in construction, repair, remodeling, or renovation, but only if the collapse occurs in the course of such construction, repair, remodeling, or renovation.

Here, Defendant submitted evidence that a structural engineer inspected the balcony and concluded that “rainfall from any particular storm event was not a significant factor contributing to the failure.” (SS 12.)

Finally, Defendant submitted evidence that a portion of the balustrades around the deck at Plaintiff’s home fell as a result of long-term deterioration of the sheathing and wood framing due to repeated wettings from water intrusion. (SS 8.) Deterioration is an excluded loss under the policy, as is loss caused by water except where it was caused by the melting of a build up of ice on the roof or “hail, rain, snow, or sleet entering a building structure through an opening in the roof or wall of a building structure, and only if the opening is first caused by damage from the direct force of … [various perils including fire, lightning, collapse, falling objects, windstorm, hail].” (COE Ex. 1 at 000753.)

Accordingly, the burden shifts to Plaintiff to disclose a triable issue as to the breach of contract claim.

In opposition, Plaintiff submitted evidence to show that the collapse of the balustrade of the balcony constitutes a total collapse under the policy, and that the collapse was caused by the weight of rain collected on the balcony. 

More specifically, Plaintiff submitted evidence that:

o   The balcony fell into pieces and collapsed. (RSS No. 2.)

o   Defendant’s assertion that the loss was covered by excluded perils is based solely on an inspection by their expert, which took place over nine months after the loss occurred. The broken wood framing of the balcony and balustrades has been exposed to the weather, including rain, for nine months. The discoloration that Defendant’s expert found during the inspection, which he claims shows that the damage was due to long-term deterioration, took place after the loss.

o   The collapse was due to the weight of rain which collected on the building.

Property insurance may be written on an “open peril” (formerly “all risk”) basis, covering all losses not expressly excluded in the policy; or on a “named perils” (or “specified perils”) basis, covering physical loss from certain causes only (e.g., fire, windstorm, hail). (See Garvey v. State Farm Fire & Cas. Co. (1989) 48 Cal.3d 395, 406.)

Here, Coverage A of the Policy states: “We insure accidental direct physical loss or damage to that property described in Section I - Types of Property Insured… This policy does not insure covered property for the types of loss or damage described in Section I - Uninsured Loss or Damage and Excluded Causes of Loss or Damage.” (PAF #16.) This is analogous to the language used in other “all risk” insurance policies. (See EOTT Energy Corp. v. Storebrand Int'l Ins. Co. (1996) 45 Cal.App.4th 565, 569 (“[A]ll risks of direct physical loss or damage occurring during the [policy period] from any external cause,” except as specifically excluded).)

Because the Policy was an “all risk” policy, the burden on the insured in this situation is usually minimal, typically requiring proof only that the insured suffered a “direct physical loss” (or “accidental direct physical loss”) while the policy was in effect (See Central Nat'l Ins. Co. v. Sup.Ct. (Spindt) (1992) 2 Cal.App.4th 926, 932.) The burden then shifts to the insurer to prove that the loss was caused by an excluded peril. (Garvey, supra, 48 Cal.3d 395, 406.)

Here, the policy specifically covers the collapse of “a building structure or any structural part of the building structure.” (PAF #22 [emphasis added].) Plaintiff’s pictures indicate a complete collapse of the balustrades. Given that the balustrades are a structural part of the building structure, the Court agrees there is at least a triable issue of material fact as to whether or not there was a covered “collapse” under the Policy.

However, the policy (as is relevant here) only covers collapses which are the direct result of the “weight of ice, snow, sleet, or rain that collects on a roof.” Here, Plaintiff claims that the collapse was “due to the weight of rain which collected on the building.” However, the only evidence cited in support is Exhibit 6 which are Plaintiff’s own supplemental responses to Defendant’s Special Interrogatories. Plaintiff’s own contention that he “believes” that the loss was caused by the weight of the rain which collected on the building is insufficient to meet Plaintiff’s burden. While Plaintiff submitted evidence that Governor Newsom declared a state of emergency on 1/4/2023 related to severe winter storms related to a series of atmospheric river systems in California, Plaintiff has not submitted any evidence to actually show a causal relationship between these storms and the collapse of the balcony.

Similarly, Plaintiff argues that there was no signs of wear and tear prior to the collapse, and there were no cracks or water stains on the balcony prior to the collapse. However, the only support for these contention are Plaintiff’s own Supplemental Special Interrogatory responses in which Plaintiff asserts, without additional support:

The loss was abrupt and sudden. The balcony collapsed. Plaintiff takes care of the house. The house members did not use the balcony often. There were no signs of wear and tear prior to the collapse. There were no cracks or water stain on the balcony prior to the collapse.

           (Supplemental Response to Interrogatory No. 6)

Wear and tear, rot, and water damage are not covered under the Policy. Plaintiff’s personal belief, unsupported by any additional evidence, that the balcony collapses due to the weight of rain collected on the building is insufficient to support a reasonable inference that it did so. This is especially true given that Defendant submitted expert testimony based on an actual inspection of the property concluding that “Rainfall from any particular storm event was not a significant factor contributing to the failure.”

Accordingly, while Plaintiff has submitted evidence which could support a reasonable inference that there was a collapse within the meaning of the policy, Plaintiff has not submitted evidence that could support a reasonable inference that the collapse was caused by a covered cause, i.e., “weight of ice, snow, sleet, or rain that collects on a roof.”

Accordingly, Plaintiff has not met his burden of proof to disclose a triable issue of material fact as to this cause of action.

II.             Breach of Implied Covenant of Good Faith and Fair Dealing 

In order to establish a breach of the implied covenant of good faith and fair dealing, a plaintiff must prove a withholding of benefits actually due, and that the carrier withheld these benefits unreasonably and without proper cause. (Love v. Fire Ins. Exchange (1990) 221 Cal.App.3d 1136, 1151-52.) As the California Supreme Court has explained:

 It is clear that if there is no…[coverage under the policy], there can be no action for breach of the implied covenant of good faith and fair dealing because the covenant is based on the contractual relationship between the insured and the insurer.

(Waller v. Truck Ins. Exchange (1995) 11 Cal.4th 1, 36.)

Given the Court’s conclusion that there is no triable issue as to the breach of contract claim, there is necessarily no triable issue as to the breach of the implied covenant claim.  

Based on the foregoing, Defendant’s motion for summary judgment is granted.

It is so ordered.

Dated:  June    , 2024

   Hon. Jon R. Takasugi
   Judge of the Superior Court

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