Judge: Joseph Lipner, Case: 22STCV09882, Date: 2024-02-01 Tentative Ruling
Case Number: 22STCV09882 Hearing Date: February 1, 2024 Dept: 72
SUPERIOR COURT OF CALIFORNIA
COUNTY OF LOS ANGELES
DEPARTMENT 72
TENTATIVE
RULING
|
GEVORK & AIDA TASHCHYAN, Plaintiffs, v. STATE FARM INSURANCE CO., Defendant. |
Case No:
22STCV09882 Hearing Date: February 1, 2024 Calendar Number: 4 |
Defendant State Farm General Insurance Company (“Defendant”)
moves for summary judgment in its favor on the First Amended Complaint (“FAC”)
filed by Plaintiffs Gevork and Aida Tashchyan (“Plaintiffs”). In the
alternative, Defendant seeks summary adjudication on each cause of action and
on Plaintiff’s prayer for punitive damages.
The Court DENIES Defendant’s motion.
This is an insurance dispute.
Plaintiffs obtained a homeowners insurance policy (the
“Policy”) from Defendant on March 12, 2021. (Undisputed Material Fact (“UMF”)
1.)
In August 2021, Plaintiffs were the victims of a home
burglary, which they reported to Defendant. (UMF 2.) Defendant made a number of
payments to Plaintiffs under the Policy for covered losses that resulted from
the burglary.
Two losses remain at issue. First, Defendant did not make
any payments to Plaintiffs for damage to the wood living room floor that
Plaintiffs allege occurred when the robbers dragged a safe from the bedroom to
an auxiliary door. Second, Plaintiffs contend that Defendant improperly paid
Plaintiffs the auction rate for a damaged painting, rather than the fair market
rate, resulting in a substantially lower payout.
Plaintiffs filed this action on March 22, 2022. The
operative complaint is now the FAC, which alleges (1) breach of contract; (2)
breach of covenant of good faith and fair dealing; and (3) financial elder
abuse in violation of Welfare & Institutions Code, section 15657.
Defendant filed this motion on October 5, 2023. Plaintiffs
filed an opposition and Defendants filed a reply.
The Court sustains Plaintiffs’ third objection and overrules
Plaintiffs’ remaining objections without prejudice to Plaintiffs’ ability to
raise them at trial.
Defendant objects to Plaintiffs’ exhibits, contending that
Plaintiff never served it with the exhibits. The Court is inclined to overrule
Defendant’s first objection based on the proof of service which indicates that
Plaintiffs’ exhibits were in fact served on Defendant. But the Court invites argument if the parties
believe this to be an issue.
The Court overrules Defendant’s remaining objections without
prejudice to its ability to raise them at trial.
The purpose of a motion for
summary judgment or summary adjudication “is to provide courts with a mechanism
to cut through the parties’ pleadings in order to determine whether, despite
their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar
v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 843.) “Code of
Civil Procedure section 437c, subdivision (c), requires the trial judge to
grant summary judgment if all the evidence submitted, and ‘all inferences
reasonably deducible from the evidence’ and uncontradicted by other inferences
or evidence, show that there is no triable issue as to any material fact and
that the moving party is entitled to judgment as a matter of law.” (Adler v.
Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.)
“In ruling on the motion,
the court must consider all of the evidence and all of the inferences
reasonably drawn therefrom [citation] and must view such evidence [citations]
and such inferences [citations] in the light most favorable to the opposing
party.” (Aguilar, supra, at pp. 844-845 [quotation marks
omitted].)
“On a motion for summary
judgment, the initial burden is always on the moving party to make a prima
facie
showing that there are no triable issues of material fact.” (Scalf v. D. B.
Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.) A defendant moving for
summary judgment or summary adjudication “has met his or her burden of showing
that a cause of action has no merit if the party has shown that one or more
elements of the cause of action . . . cannot be established, or that there is a
complete defense to the cause of action.” (Code Civ. Proc., § 437c, subd.
(p)(2).)
“Once the defendant . . .
has met that burden, the burden shifts to the plaintiff . . . to show that a
triable issue of one or more material facts exists as to the cause of action or
a defense thereto.” (Ibid.) To establish a triable issue of material
fact, the party opposing the motion must produce substantial responsive
evidence. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.) “If the plaintiff cannot do
so, summary judgment should be granted.” (Avivi v. Centro Medico Urgente
Medical Center (2008) 159 Cal.App.4th 463, 467.)
Defendant contends that the damage to the living room floor
for which Plaintiff seeks payment did not result from the burglary, and
therefore was not covered by the policy.
Defendant retained JCSE Consultants (“JCSE”) to inspect the
damage to the floor. (UMF ¶ 11.) JCSE reported that there was “[g]eneral
disrepair and deterioration consistent with the age of the residence.” (UMF ¶
13.) JCSE reported that the damage the floor was likely not the result of a
safe being dragged from the bedroom to the auxiliary door because the abrasions
were isolated and were not along the direct path of travel. (UMF ¶ 15.)
Plaintiffs retained Mesopotamia Geotechnical Consultants
(“Mesopotamia”), who analyzed the damage to the floor as well, and reached the
conclusion that the scratches and abrasions on the floor had occurred recently
and were consistent with the reported robbery. (UMF ¶ 18; Defendant Exh. 4.) When
provided with the Mesopotamia letter, JCSE stated that Mesopotamia did not
explain its reasoning or provide any supplemental images or documentation. (UMF
¶¶ 19-21.) Plaintiffs also contest JCSE’s expertise.
Plaintiffs submit photographs that are timestamped as
recently as June 2, 2019 which show the undamaged wood floor. (Plaintiffs’ Exh.
D.) Moreover, a declaration submitted by Plaintiffs attests to the fact that
the floors were in good condition prior to the burglary. (12/01/2023 Taschyan Decl. ¶ 7.)
Given the direct conflict on the evidence in this regard, Plaintiffs
have demonstrated a triable issue of fact whether the floor damage resulted
from the burglary.
Plaintiffs also argue that State Farm underpaid for a
damaged painting, titled “Lady Playing Guitar,” by Ara Berberyan. Defendant
paid Plaintiffs $750.00 to cover the painting’s loss, which Defendant’s expert Corbacho
Appraisals advised Defendant to be the auction value of the painting was
$750.00. (UMF ¶ 31, 32.) Corbacho appraisals also advised State Farm that the
damage was reparable, and that the loss would be minimal if professionally
repaired. (UMF ¶ 31.)
Plaintiffs contend that the Policy
did not provide for replacement at auction value, but rather, at fair market
value. (Opposition at 2:26-4:12.) Plaintiffs provide evidence that Defendant’s
own appraiser also evaluated the painting for its fair market value, which it
determined to be over $5,000.00. (Tashchyan Decl. ¶ 13.) Plaintiffs also
contend that the artist placed the painting’s value at $20,000.00 to
$25,000.00. (Lucas Dep. at p. 35:12-19.) At his deposition, Defendant’s
adjuster Daniel Lucas testified to his belief that the Policy provides for the
replacement of art at market value. (Lucas Dep. at p. 36:19-21.) Plaintiffs
contend that Lucas also testified that he did not recognize the term ‘auction
replacement cost value,’ but do not submit that portion of the deposition.
The Court concludes that
Plaintiffs have demonstrated a triable issue of fact that Defendant paid the
wrong value for the painting. Although Defendant argues that Plaintiffs never
replaced the painting at all, this is a new argument raised for the first time in
the reply brief
The Court denies summary
adjudication on this cause of action and denies the motion for summary judgment.
“A breach of the implied covenant of good faith and fair
dealing involves something beyond breach of the contractual duty itself and it
has been held that bad faith implies unfair dealing rather than mistaken
judgment.” (Careau & Co. v. Security
Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1394.) “If the
allegations do not go beyond the statement of a mere contract breach and,
relying on the same alleged acts, simply seek the same damages or other relief
already claimed in a companion contract cause of action, they may be
disregarded as superfluous as no additional claim is actually stated … [T]he
only justification for asserting a separate cause of action for breach of the
implied covenant is to obtain a tort recovery.” (Id. at pp. 1394-1395.) To recover in tort for breach of the implied
covenant, the defendant must “have acted unreasonably or without proper cause.”
(Id. at p. 1395 [citations and
italics omitted].)
Here, State Farm paid for the loss of the painting at
auction value, rather than fair market value. Plaintiffs have submitted
evidence that there is a substantial difference between the two. Plaintiffs
have submitted evidence indicating that their policy used fair market value and
that it would be abnormal for a State Farm policy to pay out based on auction
value rather than fair market value. Thus, Plaintiffs have demonstrated a
triable issue that State Farm’s decision to use the auction value demonstrated
bad faith. The Court therefore denies summary adjudication as to this cause of
action.
(a)
“Financial abuse” of an elder or dependent adult occurs when a person or entity
does any of the following:
(1)
Takes, secretes, appropriates, obtains, or retains real or personal property of
an elder or dependent adult for a wrongful use or with intent to defraud, or
both.
(2)
Assists in taking, secreting, appropriating, obtaining, or retaining real or
personal property of an elder or dependent adult for a wrongful use or with
intent to defraud, or both.
(3)
Takes, secretes, appropriates, obtains, or retains, or assists in taking,
secreting, appropriating, obtaining, or retaining, real or personal property of
an elder or dependent adult by undue influence, as defined in Section 15610.70.
(b)
A person or entity shall be deemed to have taken, secreted, appropriated,
obtained, or retained property for a wrongful use if, among other things, the
person or entity takes, secretes, appropriates, obtains, or retains the
property and the person or entity knew or should have known that this conduct
is likely to be harmful to the elder or dependent adult.
(c)
For purposes of this section, a person or entity takes, secretes, appropriates,
obtains, or retains real or personal property when an elder or dependent adult
is deprived of any property right, including by means of an agreement, donative
transfer, or testamentary bequest, regardless of whether the property is held
directly or by a representative of an elder or dependent adult.
(Welfare & Institutions Code,
section 15610.30.)
Welfare & Institutions Code, section 15657.5 also
entitles a plaintiff to recover attorney’s fees and costs when it is proven by
clear and convincing evidence that a defendant is liable for elder financial
abuse.
“[T]he legislative history does not demonstrate an intent to
deem mere breaches of contract actionable instances of elder abuse.” (Paslay
v. State Farm General Ins. Co. (2016) 248 Cal.App.4th 639, 658 fn. 15.)
Thus, “under subdivision (b) of 15610.30, wrongful conduct occurs only when the
party who violates the contract actually knows that it is engaging in a harmful
breach, or reasonably should be aware of the harmful breach.” (Id. at p.
658.) In the insurance context, this means that an insurer must act “in
subjective bad faith” or “unreasonably” to trigger liability. (Ibid.)
Here, State Farm paid for the loss of the painting at
auction value, rather than fair market value. Plaintiffs have submitted
evidence that there is a substantial difference between the two. Plaintiffs
have submitted evidence indicating that their policy used fair market value and
that it would be abnormal for a State Farm policy to pay out based on auction
value rather than fair market value. Thus, Plaintiffs have demonstrated a
triable issue that State Farm acted unreasonably or in bad faith in choosing to
use the auction value. The Court therefore denies summary adjudication on this
cause of action.
To obtain summary adjudication as to punitive damages, a
moving party must conclusively show that it did not act with malice,
oppression, or fraud. (Fadeeff v. State Farm General Insurance Co.
(2020) 50 Cal.App.5th 94, 109; Civ. Code, § 3294, subd. (a); Code Civ. Proc., §
437c, subd. (f)(1).)
Here, State Farm paid for the loss of the painting at
auction value, rather than fair market value. Plaintiffs have submitted
evidence that there is a substantial difference between the two. Plaintiffs
have submitted evidence indicating that their policy used fair market value and
that it would be abnormal for a State Farm policy to pay out based on auction
value rather than fair market value. Thus, Plaintiffs have demonstrated a
triable issue that State Farm’s decision to use the auction value was based on
malice, oppression, or fraud. The Court therefore denies summary adjudication
as to punitive damages.