Judge: Jon R. Takasugi, Case: 24STCV02129, Date: 2024-05-22 Tentative Ruling

Case Number: 24STCV02129    Hearing Date: May 22, 2024    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

The Court rules as follows:

(1) SUSTAINS THE DEMURRER, WITHOUT LEAVE TO AMEND, as to Plaintiffs’ First and Second causes of action as to Liberty Mutual Insurance Company, Liberty Mutual Holding Company, Inc., and Liberty Mutual Group, Inc. and;

(2) SUSTAINS THE DEMURRER, WITH 15 DAYS LEAVE TO AMEND, as to Plaintiffs’ Fifth, Sixth, Seventh, Eighth, and Ninth causes of action as to all Liberty Defendants.

            On 1/26/2024, Plaintiffs Edward Estrada and Yun Cui (collectively, Plaintiffs) filed suit against Liberty Insurance Corporation, Liberty Mutual Insurance Company, Liberty Mutual Holding company, Liberty Mutual Group, Inc., and Daniel Kiddoo, alleging: (1) breach of contract; (2) breach of implied covenant of good faith and fair dealing; (3) breach of contract; (4) breach of fiduciary duties; (5) violation of Business and Professions Code section 17200; (6) intentional infliction of emotional distress (IIED); (7) fraud; (8) negligent misrepresentation; (9) concealment; and (10) violation of Consumer Legal Remedies Act (CLRA).

            Now, Defendant Liberty Insurance Corporation, Liberty Mutual Insurance Company, Liberty Mutual Holding Company, Inc., and Liberty Mutual Group, Inc. (collectively, Liberty Defendants) demur to the first, second, fifth, and sixth, seventh, eighth and ninth causes of action.

Discussion

            Defendants argue that Plaintiff has failed to allege sufficient facts to state claims as to the first, second, fifth, and sixth, seventh, eighth and ninth causes of action.

            As for the first cause of action, the insurance policy in question was issued by Defendant Liberty Insurance Corporation, and Plaintiff’s own Complaint alleges the Policy was “provided and underwritten by Defendant LIBERTY INSURANCE CORPORATION.” (Complaint, ¶ 2.) Accordingly, the Court agrees that Liberty Insurance Corporation is the only party that can be liable for breach, and thus Liberty Defendants’ demurrer must be sustained, without leave to amend, as to Liberty Mutual Insurance Company, Liberty Mutual Holding Company, Inc., or Liberty Mutual Group, Inc. (See, e.g., McKell v. Washington Mut., Inc. (2006) 142 Cal.App.4th 1457, 1489 (“A cause of action for breach of contract requires pleading of a contract”). A nonparty to an insurance contract cannot be liable for breach of that contract. (See, e.g., Henry v. Associated Indem. Corp. (1990) 217 Cal.App.3d 1405, 1416-17 (where “[t]here was no direct contractual relationship between [the parties],” there was no basis from which “a breach of contract action could properly spring …”)

            As to the second cause of action, as discussed above, a claim for breach of contract requires the existence of a contract between the plaintiff and the defendant. (McKell, 142 Cal.App.4th at p.1489.) Similarly, the existence of a contract is necessary to allege breach of the implied covenant of good faith and fair dealing. (See, e.g., Waller, 11 Cal. 4th at 36; Rainbow Sandals, Inc., 2014 WL 12577084 at *3.) Here, the Complaint specifically alleges that the Policy was “provided and underwritten by Defendant LIBERTY INSURANCE CORPORATION.” (Complaint, ¶ 2.) As such, Liberty Insurance Corporation is the only insurer that is a party to the contract and that could theoretically be liable for breach of the implied covenant of good faith and fair dealing. Based on the foregoing, the demurrer to Plaintiffs’ second cause of action for breach of the implied covenant of good faith and fair dealing is sustained, without leave to amend, as to Defendants Liberty Mutual Insurance Company, Liberty Mutual Holding Company, Inc., and Liberty Mutual Group, Inc.

            As for the fifth cause of action, Defendants argue that Plaintiffs’ Complaint is devoid of allegations that could show what allegedly unlawful, fraudulent, or unlawful practices they complain of. Moreover, Plaintiff do not allege what injunctive, equitable or restitutionary relief that would be available. However, even assuming they did, an adequate legal remedy precludes a party from seeking equitable relief. (See Knox v. Phoenix Leasing Inc. (1994) 29 Cal.App.4th 1357, 1365.)

            The Court agrees this claim is not pled with the requisite specificity. Liberty Defendants’ demurrer is sustained, with 15 days leave to amend, as to this claim.  

            As for the sixth cause of action, Liberty Defendants argue that Plaintiff has not alleged facts which could show extreme and outrageous conduct. While this is typically a factual determination not properly decided at the pleading stage, the Court’s conclusion that Plaintiff has failed to sufficiently allege facts which could show fraud or a violation of the Business and Professions Code section 17200, leads the Court to sustain the demurrer, with 15 days leave to amend, as to this claim as well.

            As for the seventh cause of action for fraud, Liberty Defendants argue that this claim is not alleged with requisite specificity. The Court agrees. To support this claim, Plaintiff alleges:

At the time Defendants INSURER, AGENT and Does 1 through 100, and each of them, procured the policy for Plaintiffs, and accepted Plaintiffs’ claims, they promised to properly adjust and evaluate the damages, which costs would be covered. Defendants INSURER and Does 1 through 50 assured Plaintiffs that they would pay all covered losses and damages due under the policy including losses caused by water and related damages. Defendants INSURER, AGENT and Does 1 through 100, misrepresented to Plaintiffs that Defendants INSURER, AGENT, and Does 1 through 100’s true intent was to delay, limit, restrict and undervalue insurance coverage in case of a water loss. Defendants, INSURER, AGENT and Does 1 through 100, concealed from Plaintiffs that Defendants INSURER, AGENT and Does 1 through 100, would delay, limit, reject, and fail to pay the proper values of Plaintiffs’ claims based upon improper claims handling including Defendants INSURER, AGENT and Does 1 through 100’s evaluations.” (Complaint, ¶ 75.)

 “In evaluating the existence of and extent and nature of Plaintiffs’ damages and losses at the premises, Defendants INSURER, AGENT and Does 1 through 100 on the dates stated in the factual allegations3 , misrepresented to Plaintiffs that Defendants INSURER, AGENT and Does 1 through 100 properly determined, based upon a complete, accurate or proper evaluation of the extent and nature of Plaintiffs’ losses and damages.” (Complaint, ¶ 78.)

As a result of the misrepresentation of material terms concerning policy coverage and, of the evaluation and appraisal of Plaintiffs’ losses and damages same was not disclosed and concealed and thereby misrepresented by Defendants INSURER, AGENT and Does 1 through 100, to Plaintiffs.” Complaint, ¶ 79.)

            However, the “factual allegation” section referred to by Plaintiff’s allegations does not set forth any of the alleged misrepresentations nor does it identify any dates of the alleged misrepresentations. Indeed, as noted by Liberty Defendants, “the Complaint as a whole is entirely devoid of any dates whatsoever—including the policy period, the date of the alleged loss, and the dates any allegedly fraudulent statements were made….” (Motion, 18, fn 3.) The Court agrees that Plaintiffs have failed to allege fraud with the requisite specificity.

            As for the eighth and ninth causes of action for negligent misrepresentation and concealment, the Court similarly finds that the causes of actions are not pled with the requisite specificity. The specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made.” (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal. App. 4th 780, 793.)

            Based on the foregoing, the Court: (1) sustains the demurrer, without leave to amend, as to Plaintiffs’ First and Second causes of action as to Liberty Mutual Insurance Company, Liberty Mutual Holding Company, Inc., and Liberty Mutual Group, Inc. and (2) sustains the demurrer, with 15 days leave to amend, as to Plaintiffs’ Fifth, Sixth, Seventh, Eighth, and Ninth causes of action as to all Liberty Defendants.

It is so ordered.

Dated:  May    , 2024

   Hon. Jon R. Takasugi
   Judge of the Superior Court

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