Judge: Maurice A. Leiter, Case: 22STCV24750, Date: 2025-02-11 Tentative Ruling

Case Number: 22STCV24750    Hearing Date: February 11, 2025    Dept: 54

Hearing Date: February 11, 2025

Department 54, Judge Maurice A. Leiter

Motion to Vacate Order Denying Summary Adjudication

Moving Party: Plaintiffs Zia Abhari and Donya Entertainment, Inc.

Responding Party: Defendants Farmers Group, Inc. and Truck Underwriters Association

T/R:      PLAINTIFFS’ MOTION IS DENIED.

PLAINTIFFS TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

The Court considers the moving papers, opposition, and reply.

BACKGROUND

On August 1, 2022, Plaintiffs Zia Abhari and Donya Entertainment, Inc. sued Defendants Farmers Insurance Exchange, Truck Insurance Exchange, Farmers Underwriters Association, Truck Underwriters Association and Farmers Group, Inc., asserting causes of action for intentional and negligent breach of fiduciary duty and aiding and abetting breach of fiduciary duty. Plaintiffs allege Defendants breached their fiduciary duties to Plaintiffs by failing to inspect the premises of the business Plaintiff purchased. Plaintiffs allege that had Defendants properly inspected the premises, they would have seen contaminated water intrusion defects that later led to the closing of the business.

On February 1, 2022, Plaintiff Zia Abhari filed a complaint in San Bernardino against Defendants Bacon-up Corporation, Mazyar Yaghoubian, Farmers Insurance Exchange, Framers Underwriters Association and Farmers Group Inc., asserting causes of action for fraudulent concealment, negligent misrepresentation, and intentional misrepresentation. In this complaint, Abhari alleges the Defendants misrepresented and concealed the water intrusion defect. On February 16, 2023, the San Bernardino Action was consolidated with the Los Angeles Action.

ANALYSIS

Plaintiff moves to vacate the Court’s October 16, 2024 order denying Plaintiff’s motion for summary adjudication. Plaintiff asserts that the Court erred in denying the motion because the Court’s tentative misidentified the responding party and because the tentative ignored the applicable law and evidence.

That the Court’s tentative listed the responding party as Defendants Farmers Insurance Exchange and Truck Insurance Exchange rather that as Defendants Farmers Group, Inc. and Truck Underwriters Association does not change the result of the motion. The Court considered the correct opposition and found that the opposition showed a triable issue of fact.

The Court will not reconsider the facts and law of the motion. Plaintiff has not filed a motion for reconsideration and there is no indication that anything new or different has occurred since the Court’s October 16, 2024 ruling.

Plaintiff’s motion is DENIED.

Hearing Date: February 11, 2025

Department 54, Judge Maurice A. Leiter

Motion for Summary Judgment, or in the alternative, Motion for Summary Adjudication

Moving Party: Defendants Farmers Insurance Exchange, Truck Insurance Exchange and Frieda Swedelson, joined by Farmers Group, Inc. and Truck Underwriters Association

Responding Party: Plaintiffs Zia Abhari and Donya Entertainment, Inc.

T/R: DEFENDANTS’ MOTION IS DENIED AS MOOT.

DEFENDANTS TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

The Court considers the moving papers, opposition, and reply.

BACKGROUND

On August 1, 2022, Plaintiffs Zia Abhari and Donya Entertainment, Inc. filed a complaint under case no. 22STCV24750 against Defendants Farmers Insurance Exchange, Truck Insurance Exchange, Farmers Underwriters Association, Truck Underwriters Association and Farmers Group, Inc. asserting causes of action for intentional and negligent breach of fiduciary duty and aiding and abetting breach of fiduciary duty. Plaintiffs allege Defendants breached their fiduciary duties to Plaintiffs by failing to inspect the premises of the business Plaintiff purchased. Plaintiffs allege that had Defendants properly inspected the premises, they would have seen contaminated water intrusion defects that later led to the closing of the business.

On February 1, 2022, Plaintiff Zia Abhari filed a complaint in San Bernardino against Defendants Bacon-up Corporation, Mazyar Yaghoubian, Farmers Insurance Exchange, Framers Underwriters Association and Farmers Group Inc., asserting causes of action for fraudulent concealment, negligent misrepresentation and intentional misrepresentation. In this complaint, Abhari alleges the Defendants misrepresented and concealed the water intrusion defect. On February 16, 2023, the San Bernardino Action was consolidated with the Los Angeles Action under case no. 23STCV03400.

On February 5, 2025, Plaintiff filed several requests for dismissal. Plaintiff dismissed Defendant Farmers Group, Inc. from 23STCV03400; Defendant Truck Insurance Exchange from 22STCV24750; Defendant Swedelson from 22STCV24750; Defendant Farmers Insurance Exchange from 22STCV24750 and 23STCV03400; and Defendant Farmers Underwriters Association from 23STCV03400.

ANALYSIS

“In moving for summary judgment, a ‘plaintiff . . . has met’ his ‘burden of showing that there is no defense to a cause of action if’ he ‘has proved each element of the cause of action entitling’ him ‘to judgment on that cause of action.’”  (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849 (as modified (July 11, 2001).)  The plaintiff “must present evidence that would require a reasonable trier of fact to find any underlying material fact more likely than not—otherwise, he would not be entitled to judgment as a matter of law, but would have to present his evidence to a trier of fact.”  (Id., at 851, original italics.)

Once the plaintiff has met that burden, the burden shifts to the defendant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.  (CCP § 437c(p)(1).)  “There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.”  (Aguilar, supra, 25 Cal.4th at 850.)  The defendant “shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.”  (CCP § 437c(p)(1).)

Defendants Farmers Insurance Exchange, Truck Insurance Exchange and Swedelson move for summary judgment of the claims for breach of fiduciary duty under 22STCV24750 and Defendant Farmers Insurance Exchange moves for summary judgment of the claims for misrepresentation under 23STCV03400. As stated, on February 5, 2025, Plaintiffs dismissed Farmers Insurance Exchange, Truck Insurance Exchange and Swedelson from 22STCV24750 and Farmers Insurance exchange from 23STCV03400. The motion is DENIED as MOOT.

Hearing Date: February 11, 2025

Department 54, Judge Maurice A. Leiter

Motion for Summary Judgment, or in the alternative, Motion for Summary Adjudication

Moving Party: Defendants Farmers Group, Inc. and Truck Underwriters Association, joined by Defendants Farmers Insurance Exchange, Truck Insurance Exchange and Frieda Swedelson

Responding Party: Plaintiffs Zia Abhari and Donya Entertainment, Inc.

T/R:      DEFENDANTS’ MOTION FOR SUMMARY ADJUDICATION OF CLAIMS BROUGHT BY PLAINTIFF DONYA IS DENIED.

DEFENDANTS’ MOTION SUMMARY FOR ADJUDICATION OF CLAIMS BROUGHT BY PLAINTIFF ABHARI IS GRANTED.

DEFENDANTS TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

The Court considers the moving papers, opposition, and reply.

BACKGROUND

On August 1, 2022, Plaintiffs Zia Abhari and Donya Entertainment, Inc. filed a complaint under case no. 22STCV24750 against Defendants Farmers Insurance Exchange, Truck Insurance Exchange, Farmers Underwriters Association, Truck Underwriters Association and Farmers Group, Inc. asserting causes of action for intentional and negligent breach of fiduciary duty and aiding and abetting breach of fiduciary duty. Plaintiffs allege Defendants breached their fiduciary duties to Plaintiffs by failing to inspect the premises of the business Plaintiff purchased. Plaintiffs allege that had Defendants properly inspected the premises, they would have seen contaminated water intrusion defects that later led to the closing of the business.

On February 1, 2022, Plaintiff Zia Abhari filed a complaint in San Bernardino against Defendants Bacon-up Corporation, Mazyar Yaghoubian, Farmers Insurance Exchange, Framers Underwriters Association and Farmers Group Inc., asserting causes of action for fraudulent concealment, negligent misrepresentation and intentional misrepresentation. In this complaint, Abhari alleges the Defendants misrepresented and concealed the water intrusion defect. On February 16, 2023, the San Bernardino Action was consolidated with the Los Angeles Action under case no. 23STCV03400.

On February 5, 2025, Plaintiff filed several requests for dismissal. Plaintiff dismissed Defendant Farmers Group, Inc. from 23STCV03400; Defendant Truck Insurance Exchange from 22STCV24750; Defendant Swedelson from 22STCV24750; Defendant Farmers Insurance Exchange from 22STCV24750 and 23STCV03400; and Defendant Farmers Underwriters Association from 23STCV03400.

EVIDENCE OBJECTIONS

“In granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion.” (CCP § 437c(q).) Defendants’ objections to the Abhari Declaration are OVERRULED.

ANALYSIS

“In moving for summary judgment, a ‘plaintiff . . . has met’ his ‘burden of showing that there is no defense to a cause of action if’ he ‘has proved each element of the cause of action entitling’ him ‘to judgment on that cause of action.’”  (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849 (as modified (July 11, 2001).)  The plaintiff “must present evidence that would require a reasonable trier of fact to find any underlying material fact more likely than not—otherwise, he would not be entitled to judgment as a matter of law, but would have to present his evidence to a trier of fact.”  (Id., at 851, original italics.)

Once the plaintiff has met that burden, the burden shifts to the defendant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.  (CCP § 437c(p)(1).)  “There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.”  (Aguilar, supra, 25 Cal.4th at 850.)  The defendant “shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.”  (CCP § 437c(p)(1).)

A. Intentional and Negligent Breach of Fiduciary Duty

The elements for a breach of fiduciary duty cause of action are “the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach.” (Thomson v. Canyon (2011) 198 Cal.App.4th 594, 604.) 

Defendants Farmers Group, Inc. (“FGI”) and Truck Underwriter’s Association (TUA) assert that they did not owe Plaintiffs a fiduciary duty when determining whether to issue the policy because Plaintiffs were applicants rather than insureds. Defendants also assert Defendants did not owe Plaintiffs a fiduciary duty to inspect the premises.

Defendants argue that the Plaintiffs were not “insureds” at the time they solicited a quote and applied for the policy or during the underwriting process, because neither Farmers Insurance Exchange (“FIE”) nor Truck Insurance Exchange (“TIE”) had agreed to accept them as insureds at that time. (Vivolo Dec., ¶ 3.) Defendants represent that one does not become an insured, i.e., “subscriber,” until the insurance contract becomes effective, which does not occur until that party agrees to the terms and conditions of the subscription agreement and pays the premium. (Giles Dec., ¶¶ 4-5.) That means neither FGI nor TUA acted as the Plaintiffs’ attorney-in-fact while the Plaintiffs were applicants/prospective insureds.

Defendants also contend that nowhere in either the Subscription Agreement Notices or the Subscription Agreements did the Defendants assume or agree to a duty to inspect the property to be insured and disclose any defects found, including the water intrusion defect in issue here. Instead, Defendants’ duties extended no further than executing the insurance contracts and exchanging them with the other subscribers, consistent with the reciprocal nature of an exchange. The duty Plaintiffs claim consequently exceeds the express duties created by the Subscription Agreements.

In opposition, Plaintiffs present evidence showing that the insurance underwriting risk assessment guidelines for FGI and for TUA required FGI and TUA to make certain that the subject location was in "good condition", and that the plumbing at the subject location would "accommodate" the subject restaurant's "business operations". Plaintiffs assert that the person performing the fiduciary attorney-in-fact task of insurance underwriting risk assessment for both FGI and TUA, merely assumed, without a verifying physical inspection, that the plumbing of the subject location was operationally fit, when in fact it was not fit, but defective. Plaintiff argues that an inspection would have revealed significant plumbing defects at the subject location which resulted in forcing the closure of the subject restaurant business. This is sufficient to create a triable issue of fact as to breach of fiduciary duty.

The motion for summary judgment is DENIED. The motion for summary adjudication of the claims for negligent and intentional breach of fiduciary duty is DENIED.

B. Intentional Misrepresentation

Defendants move for summary adjudication of the claim for intentional misrepresentation as against Defendant FGI. As stated, on February 5, 2025, Plaintiff dismissed Defendant FGI from 23STCV03400. This aspect of the motion is DENIED as MOOT.

C. Aiding and Abetting Breach of Fiduciary Duty

Defendants argue that the claim for aiding and abetting breach of fiduciary duty fails because Defendants did not breach a fiduciary duty to Plaintiffs. Plaintiffs have established a triable issue of fact as to whether Defendants breached a fiduciary duty to Plaintiffs.

The motion for summary adjudication of the cause of action for aiding and abetting breach of fiduciary duty is DENIED.

D. Standing

Defendants assert Abhari does not have standing to bring these claims because Plaintiff Donya is the signatory and party to the insurance contracts, not Abhari. Abhari does not address this in opposition.

The motion for summary adjudication of claims brought by Abhari is GRANTED.