Judge: Kevin C. Brazile, Case: 22STCV25978, Date: 2023-01-11 Tentative Ruling

Hearing Date: January 11, 2023

Case Name: Sarkisyan v. Kemper Insurance Company, et al.

Case No.: 22STCV15692 

Matter: Demurrer; Motion to Strike

Moving Party: Defendant Kemper Insurance Company

Responding Party: Plaintiff Arman Sarkisyan

Notice: OK

Ruling: The Demurrer is overruled.

The Motion to Strike 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 October 7, 2022, Plaintiff Arman Sarkisyan filed the operative Second Amended Complaint (“SAC”) against Defendant Kemper Insurance Company for (1) breach of the implied covenant of good faith and fair dealing, (2) breach of contract, and (3) declaratory relief.  This is an action relating to Defendant’s alleged failure to pay insurance benefits for Plaintiff’s vehicle accident.

1. Demurrer

Defendant Kemper Insurance Company demurs to all causes of action for uncertainty and failure to state sufficient facts.

When considering demurrers, courts read the allegations liberally and in context, and “treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” (Serrano v. Priest (1971) 5 Cal.3d 584, 591.)  “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.”  (Hahn v. Mirda¿(2007) 147 Cal.App.4th 740, 747.)  It is error “to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment.”  (Aubry v. Tri-City Hospital Dist.¿(1992) 2 Cal.4th 962, 967.)

Defendant argues that the SAC is a sham because “[t]he original pleading established that the disputed amount allegedly owed was for towing and other expenses not the vehicle’s ACV. In subsequent iterations of his pleading, including the SAC, Sarkisyan NOW claims that this amount IS for the ACV.”

Under the so-called “sham pleading” rule, the Court may take judicial notice of the prior pleadings where “a party files an amended complaint and seeks to avoid the defects of a prior complaint either by omitting the facts that rendered the complaint defective or by pleading facts inconsistent with the allegations of prior pleadings.”  (Owens v. Kings Supermarket (1988) 198 Cal.App.3d 379, 383-384.)  That is, “plaintiffs are precluded from amending complaints to omit harmful allegations, without explanation, from previous complaints to avoid attacks raised in demurrers or motions for summary judgment.”  (Deveny v. Entropin, Inc. (2006) 139 Cal.App.4th 408, 425.)  “ ‘Allegations in the original pleading that rendered it vulnerable to demurrer or other attack cannot simply be omitted without explanation in the amended pleading.  The policy against sham pleadings requires the pleader to explain satisfactorily any such omission.’ ”  (Id. at pp. 425-426.)  

Here, the sham pleading doctrine is inapplicable.  The Complaint’s original request for damages was seemingly partially premised on the ACV of the vehicle.  Whether the ACV is lower or whether the damages also include towing costs is a factual question. 

Defendant next argues that the SAC fails because the subject insurance policy is not sufficiently pled.  This lacks merit as the policy number is referenced, which is sufficient to apprise Defendant of the policy’s provisions.  

Defendant further argues that sufficient facts have not been pled to indicate that the subject vehicle is entitled to coverage.  

The SAC seems to be sufficient to the extent it attaches a declarations page indicating collision coverage for the ACV of the vehicle.  The SAC also alleges the subject vehicle—  which was new—fell into the policy’s grace period.  Whether any of this is true is a factual issue.

Defendant also argues that no facts have been pled to indicate that Defendant was timely notified of the loss or that coverage was unreasonably withheld.  

“A covenant of good faith and fair dealing is implied in every insurance contract. [Citations.] The implied promise requires each contracting party to refrain from doing anything to injure the right of the other to receive the agreement's benefits. To fulfill its implied obligation, an insurer must give at least as much consideration to the interests of the insured as it gives to its own interests. When the insurer unreasonably and in bad faith withholds payment of the claim of its insured, it is subject to liability in tort. And an insurer cannot reasonably and in good faith deny payments to its insured without fully investigating the grounds for its denial.” [Citation.] (Frommoethelydo v. Fire Ins. Exchange (1986) 42 Cal.3d 208, 214–215.)  Indeed, in Egan v. Mutual of Omaha Ins. Co. (1979) 24 Cal.3d 809, our Supreme Court emphasized that, in order to protect the interests of the insured, it was “essential that an insurer fully inquire into possible bases that might support the insured's claim.”  (Id. at p. 819.)

The Demurrer is overruled because the SAC pleads that Defendant refused to issue payment without a basis; despite numerous inquiries, Defendant refused to respond to any of Plaintiff’s messages; and Plaintiff is still unaware why payment was refused.  (SAC ¶ 21.)

In sum, the Demurrer is overruled.  The Request for Judicial Notice is granted.  An answer should be filed within twenty days.  

2. Motion to Strike 

Defendant seeks to strike the SAC’s references to punitive damages.

The Motion is denied because (1) the SAC pleads that Linda Trahan might be a managing agent to the extent she unilaterally rejected Plaintiff’s claim (see Major v. W. Home Ins. Co. (2009) 169 Cal.App.4th 1197), and (2) the SAC indicates Trahan intentionally decided to deny Plaintiff’s claim without basis and that she intentionally ignored Plaintiff thereafter, knowing there would be an injury.  (See SAC ¶¶ 21-21.)  

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.