Judge: Mark E. Windham, Case: 22STLC01009, Date: 2023-02-15 Tentative Ruling
Case Number: 22STLC01009 Hearing Date: February 15, 2023 Dept: 26
(CCP §
437c)
TENTATIVE RULING:
Defendant United Financial Casualty Company’s Motion for
Summary Judgment, or in the alternative, Summary Adjudication, is GRANTED.
DEFENDANT IS TO FILE AND SERVE A PROPOSED JUDGMENT WITHIN 20
DAYS OF THIS ORDER.
ANALYSIS:
Plaintiff Skylar Wells (“Plaintiff”)
filed the instant action for breach of contract and bad faith denial of
insurance claim against Defendant United Financial Casualty Company (“Defendant”)
on February 16, 2022. The operative pleading is the Second Amended Complaint,
filed on August 9, 2022.
Defendant filed
the first Motion for Summary Judgment, or in the alternative, Summary
Adjudication, on September 26, 2022. The Motion was refiled on October 14,
2022. Plaintiff filed an untimely opposition on January 19, 2023. The
opposition should have been personally served by January 17, 2022. Defendant
filed a reply and evidentiary objections on January 25 and 26, 2023, respectively.
Discussion
The Second Amended Complaint alleges causes of action for
(1) breach of contract; and (2) bad faith denial of insurance claim. Plaintiff
alleges that he owns the real property located at 3345 1/2 Rowena Avenue, Los
Angeles (“the Premises”). (SAC, ¶2.) Plaintiff’s two personal property motor
vehicles (“Vehicles 1 and 2”) were parked in the garage of the Premises. (Id.
at ¶¶3-4.) On November 16, 2020, Plaintiff and Defendant entered into an
insurance policy pursuant to which Defendant agreed to provide Plaintiff
comprehensive insurance coverage up to the vehicles’ actual cash value limit. (Id.
at ¶¶6-7 and Exh. A.) On December 17, 2020, the sewer line under the Premises
backed up and overflowed into the garage where Vehicles 1 and 2 were parked. (Id.
at ¶8.) The Vehicles’ tires and wheel rims were damaged by the sewer water. (Id.
at ¶¶9-10.) Plaintiff contacted Defendant on February 24 and 25, 2021 to
initiate claims for the damages to Vehicles 1 and 2, respectively. (Id.
at ¶¶11-12.) Defendant declined to perform onsite inspections of the Vehicles.
(Id. at ¶¶13-14.) Plaintiff provided Defendant with photos and videos of
the Vehicles and itemized parts and labor estimates for the damages. (Id.
at ¶¶15-18.) Defendant acted in bad faith and breached the contract, causing
Plaintiff damages of $10,060.45. (Id. at ¶¶20-21.)
Defendant moves for summary judgment on the Second Amended
Complaint pursuant to Code of Civil Procedure section 437c. A defendant seeking
summary judgment must show either
(1) that one or more elements of the cause of action cannot be established; or (2) that there is a complete
defense to that cause of action. (Code Civ. Proc., § 437c, subd. (p)(2).)
Plaintiff is under no evidentiary burden to produce rebuttal evidence until
Defendant meets its initial moving burden. (Binder v. Aetna Life Insurance
Company (1999) 75 Cal.App.4th 832, 839-840.)
Evidentiary Objections
Defendant’s evidentiary objections to Plaintiff’s
declaration are ruled on as follows:
·
Sustained as to ¶¶7, 17-20, 37, 69, 75, 78 as to
“thereby withholding policy benefits”, 86, 94 as to “false”, 104, 105, 109,
112; and
·
Overruled as to ¶¶33, 78 as to “Between February
24 2021 and February 2, 2222, UFCC refused to make a decision”, 94 as to “I
received a letter on 8/15/22 with a denial of coverage based on failure to
attend an EUO [as to both claims]”, 102
Request for Judicial Notice
Plaintiff asks the Court to take
judicial notice of (1) Los Angeles County Department of Public Health
Inspection Report # 1 prepared by Los Angeles County Department of Public
Health on December 20, 2020 due to the sewer blackwater property loss that occurred
on December 17, 2020 at the Premises; (2) Los Angeles County Department of
Public Health Inspection Report # 2 prepared by Los Angeles County Department
of Public Health on December 20, 2020 due to the sewer blackwater property loss
that occurred on December 17, 2020 at the Premises; (3) Los Angeles County
Department of Public Health Inspection Report # 3 prepared by Los Angeles
County Department of Public Health on December 20, 2020 due to the sewer
blackwater property loss that occurred on December 17, 2020 at the Premises;
(4)-(22) various facts regarding sewer water, also known as sewer blackwater,
including facts regarding its characteristics and components.
The request is granted as to the
Los Angeles County Department of Public Health Inspection Reports pursuant to
Cal. Evidence Code section 452, subdivision (d). The request is denied as to
the sewer blackwater facts, which Plaintiff contends are “[f]acts and
propositions of generalized knowledge that are so universally known that they
cannot reasonably be the subject of dispute.” (Citing Cal. Evidence Code, §
451, subd. (f).) However, there is no showing that these facts meet that
standard.
1st Cause of Action for
Breach of Contract
Regarding the first cause of
action, the elements of a cause of action for breach of contract are (1) the
existence of the contract; (2) plaintiff’s performance or excuse for
nonperformance; (3) defendant’s breach (or anticipatory breach); and (4)
resulting damage. (Wall Street Network, Ltd. v. N. Y. Times Co. (2008)
164 Cal.App.4th 1171, 1178.)
Defendant moves for summary
adjudication of this cause of action on the grounds that Plaintiff failed to
comply with the cooperation provision in the insurance policy, thereby excusing
Plaintiff from paying benefits under the policy. This is supported by case law.
“The right to require the insured to submit to an examination under oath
concerning all proper subjects of inquiry is reasonable as a matter of law. The
contractual duty to pay policy proceeds did not arise until plaintiffs provided
the information necessary to allow [insurer] to determine whether the accident
... was covered under the terms of the policy...” (California Fair Plan
Assn. v. Superior Court (2004) 115 Cal.App.4th 158, 162 [citing Globe
Indemnity Co. v. Superior Court (1992) 6 Cal.App.4th 725, 731].)
In support of this issue,
Defendant presents evidence that the policy requires that the insured allow
Defendant to take signed and recorded statements, including sworn statements
and examinations under oath (“EUO”). (Motion, Separate Statement, Fact No. 2;
Shull Decl. ¶6, Ex. A 5-6.) Defendant hired counsel on March 4, 2022 to take
Plaintiff’s EUO. (Motion, Separate Statement, Fact No. 15; Shull Decl. ¶31 and
B 1253-1254.) On March 14, 2022, the EUO attorney sent a letter to Plaintiff
asking for a response within ten days to schedule the EUO. (Motion, Separate
Statement, Fact No. 17; Shull Decl. ¶34, Ex. C 1273- 1277.) After no response
from Plaintiff, the EUO attorney sent a second letter on April 5, 2022 asking
Plaintiff for a response within ten days to schedule the EUO and that failure
to contact defense counsel within ten days would be deemed a breach of the
insurance policy. (Motion, Separate Statement; Fact No. 18; Shull Decl. ¶35,
Ex. D 1278- 1280.) On April 18, 2022, the EUO attorney recommended to Defendant
that the claim be denied due to Plaintiff’s failure to schedule and attend the
EUO. (Motion, Separate Statement, Fact No. 19; Shull Decl. ¶36, B 1261-1266.)
Defendant denied Plaintiff’s claim on August 15, 2022. (Motion, Separate
Statement, Fact No. 22; Shull Decl. ¶43, B 1269-1272.) This evidence carries
Defendant’s initial burden of proof to show that Plaintiff cannot prove the
second and third elements of a breach of contract claim. Plaintiff can neither
show that he performed as required under the policy, nor that Defendant’s
subsequent failure to pay was a breach.
The burden now shifts to
Plaintiff to demonstrate the existence of a triable issue of material fact
regarding his fulfillment of the EUO obligation under the policy and
Defendant’s resulting obligation to pay benefits. In opposition, Plaintiff
points to his response to the EUO attorney’s April 5, 2022 letter, dated April
13, 2022. In that email, Plaintiff stated that “[r]esponse to request for
documents and examination will be provided by April 25, 2022.” (Opp., Separate
Statement, Fact No. 19; Exh. H27.) It appears that that EUO attorney did not
recognize Plaintiff’s offer to provide a response by April 25, 2022 and made a
recommendation to Defendant to deny the claim on April 18, 2022. However, any
disregard of Plaintiff’s offer to respond by April 25, 2022 is of no
consequence because there is no evidence that Plaintiff provided the promised
further response by April 25, 2022. Nor did Plaintiff otherwise contact the EOU
attorney or Defendant after the April 13, 2022 email. Defendant did not deny
the claim until August 18, 2022, which was long after Plaintiff’s obligation to
cooperate with the EOU request expired. Plaintiff, therefore, has not shown any
triable issues of material fact regarding performance of his obligations under
the insurance policy or Defendant’s subsequent breach, as required to prevail
on a cause of action for breach of contract.
The first cause of action is adjudicated
in favor of Defendant.
Second Cause of Action for
Bad Faith Denial of Insurance Claim
“[I]n a claim against an
insurance carrier, ‘there are at least two separate requirements to establish
breach of the implied covenant: (1) benefits due under the policy must have
been withheld; and (2) the reason for withholding benefits must have been
unreasonable or without proper cause.’” (Grebow v. Mercury Ins. Co.
(2015) 241 Cal.App.4th 564, 581 [citing Tilbury Constructors, Inc. v. State
Comp. Ins. Fund (2006) 137 Cal.App.4th 466, 475].) Defendant relies on the
same facts recited above to demonstrate that (1) no benefits were due under the
policy; and (2) its denial of benefit under the policy was reasonable. As
discussed above, no benefits were due because Plaintiff did not perform as
required by the policy and second, because no benefits were due, Defendant’s
denial was reasonable. Also, as discussed above, Plaintiff has not proffered
evidence of the existence of a triable issue of material fact regarding compliance
with the cooperation provision and Defendant’s obligation in the face of the
non-compliance.
Therefore, the second cause of
action is also adjudicated in Defendant’s favor.
Conclusion
Defendant United Financial Casualty Company’s Motion for
Summary Judgment, or in the alternative, Summary Adjudication, is GRANTED.
DEFENDANT IS TO FILE AND SERVE A PROPOSED JUDGMENT WITHIN 20
DAYS OF THIS ORDER.
Moving party to give notice.