Judge: Kevin C. Brazile, Case: 21STCV46937, Date: 2024-06-14 Tentative Ruling

Hearing Date: June 14, 2024

Case Name: D&M Restaurant Group, Inc. v. Everguard Insurance Services, Inc., et al.

Case No.: 20STCV40057 

Matter: Motion for Summary Judgment/Adjudication

Moving Party: Defendant First Mercury Insurance Company 

Responding Party: Plaintiff D&M Restaurant Group, Inc. 

Notice: OK

Ruling: The Motion for Summary Judgment/Adjudication is denied.

Moving party to give notice.

If counsel do not submit on the tentative, they are strongly 

encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic. 

On March 18, 2021, Plaintiff D&M Restaurant Group, Inc. filed the operative First Amended Complaint for (1) negligence, (2) breach of contract, and (3) breach of the implied covenant of good faith and fair dealing.

Plaintiff’s primary allegations are as follows.  Plaintiff owned a single business with two public rooms, one with a restaurant (“Onyx Restaurant”) and one with a bar (“Gamez Sports Bar”).  Defendant First Mercury Insurance Company (“Mercury”) issued a commercial lines policy to Plaintiff with respect to its business.  Subsequently, Plaintiff’s business was vandalized in the George Floyd riots.  Despite that the entirety of Plaintiff’s business was insured, Mercury refused to provide coverage for the bar, which it considered to be a separate, uncovered business.  

Mercury Insurance Company now seeks summary judgment or, alternatively, summary adjudication of the claim for breach of the implied covenant and of the issue of punitive damages.  Mercury contends that there was no coverage for Gamez bar, which had a different address from the premises that were insured at 118 West 5th Street in Los Angeles, CA; Plaintiff’s insurance application only specifically mentioned Plaintiff’s dba of “Onyx Lounge” and not the dba for the bar; the application failed to otherwise mention the bar; Plaintiff asked his brokers to obtain insurance in the separate name of Gamez; the application indicates a square footage for the property that is consistent with only the space for the Onyx Lounge; Mercury paid for all of Onyx’s losses; the genuine dispute doctrine precludes a bad faith claim as Mercury issued payment after a timely inspection and based on the advice of its experts; and, without a bad faith claim, there cannot be punitive damages.

The law of summary judgment provides courts “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. (2001) 25 Cal.4th 826, 843.)  In reviewing a motion for summary judgment or adjudication, courts employ a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent’s claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.”  (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.)  The moving party bears the initial burden of production to make a prima facie showing of the nonexistence of any triable issue, in which case the burden shifts to the opposing party to make a prima facie showing of the existence of a triable issue.  (Code Civ. Proc. § 437c(p)(2).)  To show a triable issue of material fact exists, the opposing party may not rely on the mere allegations or denials of the pleadings, but instead must set forth the specific facts showing that a triable issue exists as to that cause of action or a defense thereto.  (Aguilar, at p. 849.)  Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”  (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

The Motion is denied on all matters due to triable issues as to whether the bar was also insured.  This is based on the following evidence: (1) there is no separate entity that owns the bar, rather “Gamez Bar” is a dba for Plaintiff; (2) the bar and the restaurant have changed names over time only for marketing purposes; (3) at the time of the loss, the entire business was marketed as the “Onyx Lounge”; (4) there is only one lease for the entire business; (5) the entire business uses only one business license and one liquor license; (6) the address on the insurance policy is the mailing address for the entire premises and, at the time of the vandalism, was the only entrance for the entire business; (7) the address supposedly associated with only the Gamez Bar, 500 S. Spring Street, is the address for a separate entrance, which was not in use at the time of the vandalism; (8) Plaintiff’s principal has testified that when he communicated figures such as revenues upon which the insurance premium would be based, these included the figures for the bar; (9) Plaintiff’s insurance agent, Cliff Zeigler, confirmed that the limits and figures provided included the bar; and (10) a July 2019 underwriting inspection included several photos of both the outside and inside of the bar area, which were labeled.   

The objections are overruled.

Moving party to give notice.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic. 

Case Number: 21STCV46937    Hearing Date: June 14, 2024    Dept: 20

Tentative Ruling

Judge Kevin C. Brazile

Department 20