Judge: Melissa R. Mccormick, Case: "Ozawa v. Nationwide Mutual Insurance Company, et al.", Date: 2023-08-03 Tentative Ruling

Defendant Nationwide Mutual Insurance Company’s Demurrer to Complaint

Defendant Nationwide Mutual Insurance Company demurs to the third, fourth, fifth and sixth causes of action in the complaint filed by plaintiffs Norman Ozawa, Christine Ann Ozawa, and “the Ozawa Revocable Inter-Vivos Trust Dated January 22, 1992.”  For the following reasons, defendant’s demurrer is sustained in part and overruled in part.

In ruling on a demurrer, a court must accept as true all allegations of fact contained in the complaint.  Blank v. Kirwan (1985) 39 Cal.3d 311, 318.  A demurrer challenges only the legal sufficiency of the affected pleading, not the truth of the factual allegations in the pleading or the pleader’s ability to prove those allegations.  Cundiff v. GTE Cal., Inc. (2002) 101 Cal.App.4th 1395, 1404-05.  Questions of fact cannot be decided on demurrer.  Berryman v. Merit Prop. Mgmt., Inc. (2007) 152 Cal.App.4th 1544, 1556.  Because a demurrer tests only the sufficiency of the complaint, a court will not consider facts that have not been alleged in the complaint unless they may be reasonably inferred from the matters alleged or are proper subjects of judicial notice.  Hall v. Great W. Bank (1991) 231 Cal.App.3d 713, 718 n.7.

Plaintiffs’ third cause of action alleges violation of the Unruh Civil Rights Act, Civil Code section 51.  Plaintiffs allege defendant discriminated against them based on “age, race and/or descent.”  Complaint ¶ 65.  Plaintiffs further allege defendant “treated Plaintiffs deplorably and with total disrespect . . . motivated in part by the discriminatory animus toward Plaintiffs because of their age, race, and/or descent.”  Id. 

To state a claim for violation of the Unruh Civil Rights Act, a plaintiff must allege:  (i) the defendant denied or aided or incited a denial of full and equal accommodations, advantages, facilities, privileges, or services in a business establishment; (ii) a substantial motivating reason for the defendant’s conduct was its perception of the plaintiff’s sex, race, color, religion, ancestry, national origin, disability, or medical condition; (iii) the plaintiff was harmed; and (iv) the defendant’s conduct was a substantial factor in causing plaintiff’s harm.  See Cal. Civ. Code §§ 51, 52(a); CACI 3060.

Plaintiffs’ complaint does not allege sufficient facts from which to infer that a substantial motivating factor for defendant’s alleged conduct was its perception of plaintiffs’ age, race, and/or descent.  The Complaint alleges defendant had an established practice and policy that deprived elderly people, Japanese-Americans, and “others that [defendant] perceive as not having sufficient experience relative to the mechanics of the claim process and necessary repairs to a structure” of equal services that defendant provides to “younger, Caucasian claimants,” and that defendant treated plaintiffs disrespectfully and rudely.  Complaint ¶¶ 64, 66.  Plaintiffs’ conclusory allegations do not allege sufficient facts demonstrating a discriminatory motivating reason for defendant’s alleged conduct.  Defendant’s demurrer to the third cause of action is sustained with leave to amend.

Plaintiffs’ fourth cause of action alleges financial elder abuse.  Plaintiffs allege defendant engaged in financial elder abuse against plaintiffs Norman Ozawa, who plaintiffs allege became an elder effective October 1, 2020, and Christine Ozawa, who plaintiffs alleged became an elder effective November 25, 2022, by, inter alia, not paying benefits due under the policy and refusing to release and retaining monies due to plaintiffs.  Complaint ¶ 76.  Plaintiffs allege the claim remains open.  Complaint ¶ 5.

The elements of a cause of action for financial elder abuse are:  (i) the defendant took and/or retained the plaintiff’s property; (ii) the plaintiff was 65 years or older at the time of the conduct; (iii) the defendant took and/or retained the plaintiff’s property for a wrongful use, with the intent to defraud, and/or by undue influence; (iv) the plaintiff was harmed; and (v) the defendant’s conduct was a substantial factor in causing the harm.  Welf. & Inst. Code § 15610.30(a); CACI 3100.  Retention of policy benefits may provide the basis for a financial elder abuse claim.  See Johnson v. Allstate (S.D. Cal. May 23, 2013) 2013 WL 2285361 (denying motion to dismiss elder abuse claim under homeowner’s policy, and holding “[i]f Plaintiff was legally entitled to the insurance money at that time, such money was personal property within the meaning of the elder abuse claim and retention of this personal property is a potential violation of California’s financial elder abuse statute”).  Elder abuse causes of action must be pleaded with particularity.  See Covenant Care, Inc. v. Superior Court (2004) 32 Cal.4th 771, 790.

The complaint alleges sufficiently specific facts to state this claim at this juncture.  The complaint alleges defendant retained monies due to plaintiffs under an insurance contract (Complaint ¶¶ 16, 76) by undue influence (Complaint ¶ 44 [“Defendants . . . were threatening to withhold further payments for substitute housing”), plaintiffs were 65 years or older during a portion of the relevant time period (Complaint ¶¶ 5, 76), and plaintiffs were harmed as a result of defendant’s alleged conduct (Complaint ¶ 45).  Defendant’s demurrer to the fourth cause of is overruled.

Plaintiffs’ fifth cause of action alleges intentional infliction of emotional distress.  Plaintiffs allege defendant inflicted emotional distress by making an “inadequate structure payment” several months after the investigation should have been completed, making no accommodations for plaintiffs, failing to respond to claim communications, and underestimating repair costs.  Complaint ¶¶ 81-85.  Plaintiffs allege that as a result of defendant’s conduct plaintiffs have lost sleep and constantly worry about their financial situation.  Complaint ¶¶ 81-84.

To state a claim for intentional infliction of emotional distress, a plaintiff must allege:  (i) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (ii) the plaintiff’s suffering severe or extreme emotional distress; and (iii) actual and proximate causation of the emotional distress by the defendant’s outrageous conduct.  Hughes v. Pair (2009) 46 Cal.4th 1035, 1050-51.  “A defendant’s conduct is ‘outrageous’ when it is so ‘extreme as to exceed all bounds of that usually tolerated in a civilized community.’  And the defendant’s conduct must be ‘intended to inflict injury or engaged in with the realization that injury will result.’”  Id.  The complaint must also plead specific facts that establish severe emotional distress resulting from defendant’s conduct.”  Michaelian v. State Comp. Ins. Fund (1996) 50 Cal. App. 4th 1093, 1114.

“The law intervenes only where the distress inflicted is so severe that no reasonable man could be expected to endure it.  The intensity and duration of the distress are factors to be considered in determining the severity.”  Fletcher v. Western Life Ins. Co. (1970) 10 Cal.App.3d 376, 397.  “Discomfort, worry, anxiety, upset stomach, concern, and agitation” as the result of defendant’s conduct do not constitute emotional distress of “such substantial quality or enduring quality that no reasonable [person] in civilized society should be expected to endure it.”  Hughes, 46 Cal.4th at 1050-51.

“[D]elay or denial of insurance claims is not sufficiently outrageous to state a cause of action for intentional infliction of emotional distress.”  Coleman v. Republic Indem. Ins. Co. of Calif. (2005) 132 Cal.App.4th 403, 417 (finding unfair settlement practices including “misleading a claimant as to the applicable statute of limitations” and “directly advising a claimant not to obtain the services of an attorney” did not constitute outrageous conduct); cf. Hailey v. California Physician’s Serv. (2007) 158 Cal.App.4th 452, 453 (holding that insurer’s obtaining information entitling it to rescind policy, but deliberately failing to do so until after insured suffered serious illness or injury constitutes outrageous conduct).

The complaint does not allege facts demonstrating, inter alia, extreme and outrageous conduct by defendant or severe or plaintiffs’ extreme emotional distress sufficient to state a claim for intentional infliction of emotional distress.  Defendant’s demurrer to the fifth cause of action is sustained with leave to amend.

Plaintiffs’ sixth cause of action alleges violation of Penal Code sections 484 and 496.  Plaintiffs allege defendant fraudulently appropriated money and by false and fraudulent representations or pretenses induced plaintiffs to pay defendant money.  Complaint ¶ 92. 

Penal Code section 496(a) states:  “Every person who buys or receives any property that has been stolen or that has been obtained in any manner constituting theft or extortion, knowing the property to be so stolen or obtained, or who conceals, sells, withholds, or aids in concealing, selling, or withholding any property from the owner, knowing the property to be so stolen or obtained, shall be punished by imprisonment in a county jail for not more than one year, or imprisonment pursuant to subdivision (h) of Section 1170.”  Penal Code section 484 defines theft as, inter alia, the fraudulent appropriation of money or property by false pretenses.  Cal. Pen. Code § 484(a); see also Bell v. Feibush (2013) 212 Cal.App.4th 1041, 1048.  The elements of theft by false pretenses: (1) the making of a false pretense or representation by the defendant, (2) the intent to defraud the owner of his property, and (3) actual reliance by the owner upon the false pretense in parting with his property.  People v. Fujita (1974) 43 Cal.App.3d 454, 467.  Penal Code section 496(c) authorizes a civil action, recovery of attorney’s fees and costs, and treble damages for any plaintiff “when property has been obtained in any manner constituting theft.”  Siry Investment, L.P. v.  Farkhondehpour (2022) 13 Cal.5th 333, 361.

The complaint does not allege sufficient facts demonstrating an alleged false pretense or representation made by defendant, defendant’s intent to defraud, or plaintiffs’ reliance.  Defendant’s demurrer to the sixth cause of action is sustained with leave to amend.

Should plaintiffs desire to file an amended complaint addressing the issues in this ruling, plaintiffs must file and serve it by August 14, 2023.

Plaintiffs’ request for leave to file an amended complaint to add allegations pursuant to Civil Code section 3345, made in plaintiff’s unauthorized “supplemental opposition” to defendant’s demurrer, is denied without prejudice to plaintiff filing and serving a motion for leave to file an amended complaint, a stipulation and a proposed order, or some other appropriate mechanism for seeking leave to amend a complaint. 

Defendant Nationwide Mutual Insurance Company to give notice.

Defendant Nationwide Mutual Insurance Company’s Motion to Strike

Defendant Nationwide Mutual Insurance Company moves to strike portions of the complaint filed by plaintiffs Norman Ozawa, Christine Ann Ozawa, and “the Ozawa Revocable Inter-Vivos Trust Dated January 22, 1992.”  For the following reasons, defendant’s motion to strike is denied.

Defendants move to strike allegations that defendant violated Penal Code section 550, allegations that defendant engaged in discrimination, allegations that defendant engaged in elder abuse, all references to three individuals who are not named defendants, and plaintiffs’ punitive damages allegations.

A court may strike out any irrelevant, false, or improper matter inserted in any pleading or strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule or an order of the court.  Cal. Civ. Proc. Code § 436.  “Irrelevant” matters include:  allegations not essential to the claim, allegations neither pertinent to nor supported by an otherwise sufficient claim or a demand for judgment requesting relief not support by the allegations of the complaint.  Cal. Civ. Proc. Code § 431.10(b).

Defendant asserts the court should strike numerous lines from the complaint because the allegations are irrelevant or otherwise lack merit.  A motion to strike is not intended to be used as a “procedural ‘line item veto’ for the civil defendant.”  PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1683.

Defendant’s motion is the type of disfavored “‘line item veto’” motion to strike addressed in PH II.  In addition, portions of defendant’s motion are moot in light of the court’s concurrent order sustaining in part defendant’s demurrer to the complaint with leave to amend. 

Defendant to give notice.

Case Management Conference

The trial is scheduled for October 21, 2024 at 9:00 a.m. in Department C13.

Clerk to give notice.