Judge: Melvin D. Sandvig, Case: 23CHCV02136, Date: 2023-10-18 Tentative Ruling

Case Number: 23CHCV02136    Hearing Date: October 18, 2023    Dept: F47

Dept. F47

Date: 10/18/23

Case #23CHCV02136

 

MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT

 

Motion filed on 9/21/23.

 

MOVING PARTY: Plaintiff Kenneth D. Worth

RESPONDING PARTY: Defendants Certain Underwriters at Lloyd’s, London Subscribing to Policy Number 18131636; Petersen International Underwriters and Disability Management Services, Inc., now known as Davies Life & Health, Inc.

NOTICE: ok

 

RELIEF REQUESTED: An order granting Plaintiff Kenneth D. Worth leave to file a Second Amended Complaint against Defendants Lloyd’s America, Petersen International Underwriters and Disability Management Services, Inc.

 

RULING: The motion is denied.

 

SUMMARY OF FACTS & PROCEDURAL HISTORY

 

This action arises out Defendant Certain Underwriters at Lloyd’s, London Subscribing to Policy Number 18131636 (Underwriters) denial of Plaintiff Kenneth D. Worth’s (Plaintiff) disability insurance claim.  On 7/20/23, Plaintiff, representing himself, filed his original complaint for breach of contract and breach of implied covenant of good faith and fair dealing against Underwriters and Underwriter’s agents, Petersen International Underwriters (PIU) and Disability Management Services, Inc. (DMS) (collectively, Defendants).  On 7/31/23, represented by counsel, Plaintiff filed his First Amended Complaint asserting the same causes of action against the same defendants. 

 

In response to meet and confer efforts regarding defects Defendants saw in the First Amended Complaint (i.e., PIU and DMS were not proper defendants), on 9/21/23, Plaintiff filed and, presumably, served (no proof of service is attached to the motion, nor has one been separately filed) the instant motion seeking an order granting Plaintiff leave to file a Second Amended Complaint against Underwriters, PIU and DMS.  The motion was/is set for hearing on 10/18/23.  The proposed Second Amended Complaint Plaintiff seeks to file contains the following causes of action: (1) Breach of Contract, (2) Breach of Covenant of Good Faith and Fair Dealing, (3) Statutory Fraud, Civil Code 1572, (4) Common Law Fraud, (5) Intentional Infliction of Emotional Distress, (6) Conversion, (7) Negligent Misrepresentation, (8) Negligence, (9) Negligent Infliction of Emotional Distress, (10) Unfair Business Practices (B&P 17200), (11) California Insurance Code Section 703 and (12) California Consumers Legal Remedies Act, Civil Code Section 1750.  (See Motion, Ex.A)

 

On 10/5/23, the Court extended the time for Defendants to file and serve an opposition to the motion to 10/9/23 and the time for Plaintiff to file and serve a reply to 10/13/23.  (See 10/5/23 Minute Order).  On 10/9/23, Defendants filed and served an opposition to the motion.  Plaintiff has not filed a reply.

 

ANALYSIS

 

The motion fails for both procedural and substantive reasons. 

 

Procedurally, the motion suffers from the following defects.

 

The motion cites inapplicable authority.  In the notice of motion and introduction to the memorandum of points and authorities, Plaintiff cites CCP 426.50 and CCP 428.50 as the statutes under which the motion is made.  (See Motion, p.2:12-13, p.3:2-10).  CCP 426.50 applies to compulsory cross-complaints and CCP 428.50 applies to cross-complaints. 

 

Additionally, the motion does not comply requirements set forth in CRC 3.1324.  The motion does not “[s]tate what allegations in the previous pleading are proposed to be deleted, if any, and where, by page, paragraph, and line number, the deleted allegations are located” and/or

“[s]tate what allegations are proposed to be added to the previous pleading, if any, and where, by page, paragraph, and line number, the additional allegations are located” as required.  CRC 3.1324(a)(2), (3).  Also, the declaration submitted in support of the motion does not specify: “(1) The effect of the amendment; (2) Why the amendment is necessary and proper; (3) When the facts giving rise to the amended allegations were discovered; and (4) The reasons why the request for amendment was not made earlier” as required by CRC 3.1324(b).  (See Vogel Decl.).

 

Plaintiff has also failed to electronically book mark the exhibit attached to the motion.  CRC 3.1110(f)(4). 

 

On the merits, the motion also fails.

 

Plaintiff concedes that although leave to amend is usually liberally granted, it may properly be denied where the defendants can show meaningful prejudice, such as the running of the statute of limitations.  See Motion, p.3:27-p.4:3 citing Atkinson (2003) 109 CA4th 739, 761; Solit (1999) 68 CA4th 1435, 1448.

 

Defendants have presented unrefuted evidence that the 1st cause of action for breach of contract and 2nd cause of action for breach of the implied covenant of good faith and fair dealing (bad) faith asserted against Underwriters and Doe Defendants are time-barred. 

 

The subject insurance policy requires that any lawsuit concerning the Policy be brought within one year after the denial of coverage.  (See Ivimy Decl. ¶8, Ex.A).  Such time limitation provisions are valid and enforceable by courts.  See Prudential-LMI Commercial Insurance (1990) 51 C3d 674, 683-684; Lawrence (1988) 204 CA3d 565, 575; Scharff (9th Cir. 2009) 581 F3d 899, 907.

 

An insured cannot plead around the one-year limitations provision by labeling a cause of action something other than breach of contract.  Rosenberg-Wohl (2023) 93 CA5th 436, 452, review filed (August 22, 2023); Jang (2000) 80 CA4th 1291, 1301; Prudential, supra at 692.  The issue is not whether the action sounds in tort or contract, but whether it is “on the policy,” (i.e., whether the claims seek to recover policy benefits or are grounded on a failure to pay policy benefits).  Sullivan (C.D. Cal. 1997) 964 F.Supp. 1407, 1414; See also Abari (1988) 205 CA3d 530, 536; Lawrence, supra at 575; Magnolia Square Homeowners Association (1990) 221 CA3d 1049, 1063; Love (1990) 221 CA3d 1136, 1151-1153; Jang, supra at 1302-1304; Velasquez (1991) 1 CA4th 712, 722.  Here, all of the causes of action in the proposed Second Amended Complaint (SAC) seek policy benefits/coverage for the claim as damages.  As such, all of the causes of action are “on the policy.”  See Abari, supra.

 

The allegations in the proposed Second Amended Complaint as well as independent evidence show that Underwriters denied Plaintiff’s claim on 7/1/22.  (See Motion, Ex.A – proposed SAC ¶43; Ivimy Decl. ¶9, Ex.B).  The 7/1/22 denial letter began the contractual 12-month time period to bring a lawsuit.  Plaintiff missed the 7/1/23 twelve-month deadline by filing this action on 7/20/23.

 

In addition to being time-barred because they are causes of action “on the policy,” the proposed fraud causes of action (3rd, 4th and 7th) fail for other reasons.  Plaintiff alleges that misrepresentations were made in April 2018 that policy benefits would be paid.  (proposed SAC ¶¶66, 75).  DMS did not communicate with Plaintiff until after his insurance claim was submitted in July 2019.  (Ivimy Decl. ¶6).  As such, it cannot be liable for representations made in 2018.  Similarly, PIU cannot be liable for the alleged fraudulent representations because it merely issued the policy for Underwriters.  (Id. ¶¶3, 7).  Plaintiff has submitted no evidence to refute the foregoing. 

 

Additionally, Plaintiff has failed to adequately plead the elements of a fraud claim (misrepresentation, knowledge of falsity, intent to defraud, justifiable reliance and resulting damage) against corporate defendants.  See Lazar (1996) 12 C4th 631, 638, 645; Tarmann (1991) 2 CA4th 153, 157.  The claims are not pled with the requisite factual specificity. 

 

Plaintiff has also failed to plead sufficient facts to support the proposed 5th cause of action for intentional infliction of emotional distress.  In addition to being time-barred because the claim is “on the policy,” Plaintiff has not pled facts showing the type of outrageous conduct and severe emotional distress necessary to state such a claim.  See Mintz (2009) 172 CA4th 1594, 1608-1609; Coleman (2005) 132 CA4th 403, 416-417.  Here, Defendants have submitted evidence that Plaintiff’s claim was denied for the reasons set forth in the 7/1/22 letter.  (Ivimy Decl. ¶9, Ex.B).  Further, PIU was not involved in the handling of the claim and DMS did not deny it.  (Ivimy Decl. ¶¶3, 5, 6, 7).  Therefore, PIU and DMS did not commit the conduct alleged to be the basis of the claim. 

 

In addition to being a time-barred claim “on the contract,” the proposed 6th cause of action for conversion is not properly pled as the premiums Plaintiff paid for the Policy do not qualify as personal property for which a conversion claim lies.  See  Kim (2011) 201 CA4th 267, 284; PCO, Inc. (2007) 150 CA4th 384, 395. 

 

The proposed 8th cause of action for negligence is also time-barred as it is “on the policy.”  Additionally, in general, an insured cannot sue his or her insurance company for negligence. Sanchez (1999) 72 CA4th 249, 254; Everett Associates, Inc. (N.D. Cal 2001) 159 F.Supp.2d 1196, 1204.  As such, the negligence claim against Underwriters fails.  An adjuster hired by the insurance company to investigate a claim owes no duty of care to an insured claimant with whom it has no contractual relationship because the insurer, not the adjuster, has the ultimate power to grant or deny coverage, and to pay the claim, delay paying it, or deny it.  Sanchez, supra at 253-255).  Since PIU and DMS are not Plaintiff’s insurers, they did not owe him a duty which is a necessary element of a negligence claim.  See Burgess (1992) 2 C4th 1064, 1072; Sanchez, supra at 253-255; (Ivimy Decl. ¶3-8, 10). 

 

Similarly, the proposed 9th cause of action for negligent infliction of emotional distress also fails.  It is time-barred as being “on the policy” and fails for the same reasons as the negligence claim since it is a species of negligence.  Marlene F. (1989) 48 C3d 583, 588.

 

The proposed 10th cause of action for Unfair Business Practices is also time-barred because it is “on the policy.”  See Rosenberg, supra at 452.  Additionally, Plaintiff has failed to plead facts to establish that Defendants engaged in a business practice that is either unlawful, unfair or fraudulent as defined by the Unfair Competition Law.  See Albillo (2003) 114 CA4th 190, 206; Bernardo (2004) 115 CA4th 322, 351; Lavie (2003) 105 CA4th 496, 504, 508.  Further, neither PIU nor DMS made the decision to deny Plaintiff’s claim.  (Ivimy Decl. ¶¶7-8). 

 

The proposed 11th cause of action for Insurance Code 703 fails to state a claim as the statute does not provide for a private right of action.  See Insurance Code 703. 

 

The proposed 12th cause of action for Violation of the Consumer Legal Remedies Act fails because insurance is not subject to the Act.  See Fairbanks  (2009) 46 C4th 56, 59, 61; Civil Service Employees Insurance Company (1978) 22 C3d 362, 376.

 

CONCLUSION

 

The motion is denied.