Judge Marcella O. Mclaughlin, Case 37-2022-00044176-CU-IC-CTL 2024-02-23 Tentative Ruling

Judge: Marcella O. Mclaughlin, Case: 37-2022-00044176-CU-IC-CTL, Date: 2024-02-23 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - February 22, 2024

02/23/2024 01:30:00 PM C-72 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Marcella O McLaughlin

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Civil - Unlimited Insurance Coverage Summary Judgment / Summary Adjudication (Civil) 37-2022-00044176-CU-IC-CTL PACHALL VS STATE FARM GENERAL INSURANCE COMPANY [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Summary Judgment and/or Adjudication, 11/30/2023

The motion for summary adjudication is DENIED.

A. State Farm's request for judicial notice is denied as unnecessary to the court's resolution of this motion. See County of San Diego v. State of California (2008) 164 Cal.App.4th 580, 613 fn. 29.

B. Both parties objected to the other side's evidence. ROA 53, 64. Although neither party provided a proposed order – as expressly required by CRC 3.1354(c) – the court rules on the evidentiary objections as follows: With respect to plaintiff's objections, the court sustains objections 1, 2, 3, 5, 6, 8, and 9. Objection 10 is sustained as to the second, third, and fourth sentences in the challenged paragraph. Objection 13 is sustained as to 'State Farm's records indicate that the residence was constructed in 1962[.]' The remaining objections are overruled.

With respect to State Farm's objections, the court sustains objections 2, 6, and 8. Objection 4 is sustained as to the second and third sentences in the challenged paragraph. Objection 5 is sustained as to the sentence beginning with the phrase 'Ms. Grey seemed more interested....' The remaining objections are overruled.

C. The motion for summary adjudication of issue 1 is denied.

'Every contract contains an implied covenant of good faith and fair dealing providing that no party to the contract will do anything that would deprive another party of the benefits of the contract.' Digerati Holdings, LLC v. Young Money Entertainment, LLC (2011) 194 Cal.App.4th 873, 885. To establish an insurer's 'bad faith' liability, the insured must show that the insurer has (1) withheld benefits due under the policy, and (2) that such withholding was 'unreasonable' or 'without proper cause.' Major v. Western Home Ins. Co. (2009) 169 Cal.App.4th 1197, 1211.

Here, there are triable issues of material fact regarding (i) whether the loss was covered by plaintiff's homeowners' policy such that State Farm breached the policy by withholding benefits; and (ii) whether State Farm acted unreasonably and in bad faith by failing to conduct a thorough investigation of the claim. See Mariscal v. Old Republic Life Ins. Co. (1996) 42 Cal.App.4th 1617, 1623 ('A trier of fact may find that an insurer acted unreasonably if the insurer ignores evidence available to it which supports the claim. The insurer may not just focus on those facts which justify denial of the claim.'); see also Ghazarian v. Magellan Health, Inc. (2020) 53 Cal.App.5th 171, 187 ('The reasonableness of an insurer's Calendar No.: Event ID: TENTATIVE RULINGS

3052328 52 CASE NUMBER: CASE TITLE: PACHALL VS STATE FARM GENERAL INSURANCE COMPANY 37-2022-00044176-CU-IC-CTL conduct is typically a question of fact[.]'). The evidence that creates these triable issues includes: (i) the declarations of Gerald Newlin, Bonita Pachall, Christopher Pachall, and Moises Hernandez; (ii) the depositions of Carolyn Johnson Grey, Bonita Pachall, Moises Hernandez, and Steven MkKan; (iii) Ex. 1; and (iv) Ex. J.

D. The motion for summary adjudication of issue 2 is denied. As set forth above, there is a triable issue of material fact regarding whether acted in bad faith. Moreover, '[a]n insurer's bad faith denial of a claim can support a cause of action for financial elder abuse.' Strawn v. Morris, Policy & Purdy, LLP (2019) 30 Cal.App.5th 1087, 1102.

E. The motion for summary adjudication of issue 3 is denied.

A corporate employer may be liable for punitive damages when an officer, director, or managing agent of the corporation authorizes, ratifies, or personally commits acts of oppression, fraud, or malice. Civ.

Code § 3294(b). A managing agent is someone who exercises 'substantial discretionary authority over significant aspects of a corporation's business. White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 577. The key inquiry concerns the employee's authority to 'change or establish corporate policy.' CRST, Inc. v. Superior Court (2017) 11 Cal.App.5th 1255, 1273.

In this case, State Farm has failed to carry its initial burden of production to make a prima facie showing that Gerald Newlin is not its managing agent. Code Civ. Proc. § 437c(p)(2). Newlin's statement in paragraph 25 of his declaration that he is 'not an officer or director of State Farm' and does not have 'the level of authority necessary to determine corporate policy for State Farm' is conclusory. See Davis v. Kiewit Pacific Co. (2013) 220 Cal.App.4th 358, 369-70. The declaration does not contain a sufficient description of Newlin's job duties and responsibilities and the nature and extent of his authority and discretion as Team Manager, as well as his exercise of that authority and discretion, to support a reasonable inference that he did not exercise substantial discretionary authority over significant aspects of State Farm's business. White, 21 Cal.4th at 577.

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