Judge: Mark C. Kim, Case: 22LBCV00162, Date: 2022-10-11 Tentative Ruling

Case Number: 22LBCV00162    Hearing Date: October 11, 2022    Dept: S27

 SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - SOUTH DISTRICT

Moving Party:               Defendant, Wawanesa General Insurance Company

Non-Opposition:           Plaintiff, Adeyanju Ajetunmobi

Notice:                         OK

1.     Background Facts

Plaintiff, Adeyanju Ajetunmobi filed 22LBCV00162 against Defendant, Wawanesa General Insurance Company for bad faith, fraud, and related claims.  Plaintiff filed the action on 4/08/22.  Plaintiff’s allegation is that he was involved in an automobile accident with an underinsured motorist, made a claim with Wawanesa, and was subject to a bad faith failure to investigate and pay on the part of Wawanesa. 

Plaintiff and Wawanesa have ongoing arbitration proceedings concerning the amount of Plaintiff’s underinsured motorist claim.  Plaintiff moved to consolidate this action with the arbitration proceeding, and on 7/05/22, the Court denied the motion.

2.     Motion to Dismiss or Stay

At this time, Wawanesa moves to dismiss this action on the ground that it is not yet ripe unless and until the parties’ arbitration is complete.  Alternatively, it moves to stay this action pending the outcome of arbitration.

Wawanesa relies on the parties’ contract, which provides, in pertinent part, “No legal action may be brought against us until there has been full compliance with all terms of this policy.”  Notably, the parties’ policy includes an arbitration provision, which requires the parties to arbitrate any dispute over the amount to be paid in connection with an underinsured motorist claim.  Wawanesa also relies on various federal district court decisions, all of which hold that a bad faith action is premature unless and until the parties complete arbitration.  These cases, of course, are not binding on a state court; they are, however, persuasive, especially in light of the lack of any contrary authority cited by either party.

Plaintiff, in opposition to the motion, relies primarily on Maslo v. Ameriprise Auto & Home Ins. (2014) 227 Cal.App.4^th 626 (mis-cited as Maslo v. Amerirpise Auto & Home Insurance, B249271, 8 (Cal. Ct. App. Jun. 27, 2014) in the opposition papers.  In Maslo, the plaintiff sued the defendant insurance company for bad faith.  The trial court sustained the insurance company’s demurrer without leave to amend, finding the plaintiff had not fully prevailed in the arbitration, and therefore could not proceed with a bad faith action.  The Court of Appeals reversed, finding that the bad faith action could stand on its own and could be based on the insurance company’s bad faith tactics in handling the claim, regardless of the ultimate outcome of the claim. 

The important procedural distinction between Maslo and the instant case is the fact that the plaintiff in Maslo filed the action AFTER the conclusion of the parties’ arbitration proceedings.  The operative complaint was filed on 10/09/12, and the parties concluded their arbitration proceedings on 11/02/11. 

Luu v. Allstate Ins. Co., 2011 WL 3360040 (N.D. Cal. 2011), while a federal district court case, is directly on point.  In that case, the district court held that the bad faith action and the arbitration could not proceed parallel to each other because a determination of the value of the claim is the only issue in arbitration, but is also a key issue in the bad faith claim. 

The motion to dismiss is granted.  The ruling is, of course, without prejudice to Plaintiff’s right to re-file a bad faith action upon completion of the arbitration proceedings. 

Wawanesa is ordered to give notice. 

Parties who intend to submit on this tentative must call the court at 562-256-2227 indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org.  If the department does not receive a phone call indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If the parties do not submit on the tentative, they should arrange to appear remotely.

DATED:  October 11, 2022                     _____________________________________

                                                            MARK C. KIM                                                                                                                                        Judge of the Superior Court