Judge: Olivia Rosales, Case: 22NWCV00309, Date: 2022-12-22 Tentative Ruling

Case Number: 22NWCV00309    Hearing Date: December 22, 2022    Dept: SEC

AGUILA v. AMERICAN ZURICH INSURANCE COMPANY

CASE NO.:  22NWCV00309

HEARING:  12/22/22

JUDGE:  OLIVIA ROSALES

#6

TENTATIVE ORDER

Defendant AMERICAN ZURICH INSURANCE COMPANY’s Demurrer to Plaintiff’s First Amended Complaint is SUSTAINED with 20 days leave to amend.  

Moving Party to give Notice.

This breach of contract action was filed by Plaintiff HENRY AGUILA (pro per) (“Plaintiff”) on April 25, 2022. On June 17, 2022, the operative First Amended Complaint (“FAC”) was filed.

The FAC alleges, in pertinent part, “Plaintiff has been assigned all rights with respect to claim numbers 5630048447 and 5630043919 against Zurich (the ‘Claim’).” (FAC ¶7.) “Investel Harbor Resorts, LLC (‘Investel’) owns the property located at 3220 West Temple Pomona CA 91768 (the ‘Property’). Zurich insured the Property….” (FAC ¶8.) “Investel entered into a purchase agreement with Thee Aguila Inc. (‘TAI’) for the sale of the Property to TAI. Pursuant to the terms of the purchase agreement, if the Property suffered a loss which exceeded $10,000.00 during escrow, TAI had the right to cancel the purchase of the Property. The purchase agreement further provided that, if the loss of the repairs exceeded $10,000.00, and TAI elected not to cancel the purchase, TAI would be entitled to any insurance proceeds applicable to said loss.” (FAC ¶9.) “TAI elected not to cancel the purchase of the Property. The Property sustained two (2) major losses before the close of escrow and TAI elected not to cancel the purchase of the Property. Investel made the Claim to Zurich.” (FAC ¶10.) “Differences arose between Investel, School and TAI during the time that the Claim was being adjusted, and Investel cancelled the Claim.” (FAC ¶11.) “TAI as the assignee of the insurance proceeds to the Claim objected to the cancellation of the Claim to Zurich. Zurich cancelled the Claim and asserted a non-assignability clause in the insurance policy as a defense to TAI’s protest to the cancellation of the Claim. It is Plaintiff’s contention that the non-assignability clause in the insurance policy does not apply to the assignment of the proceeds of an insured loss.” (FAC ¶12.)

The FAC asserts the following causes of action: (1) Breach of Contract (against Zurich); (2) Breach of Covenant of Good Faith and Fair Dealing (against Zurich); and (3) Negligence (against Schoon).

Defendant AMERICAN ZURICH INSURANCE COMPANY (“Defendant”) specially and generally demurs to the first and second causes of action.

Uncertainty

Defendant specially demurs to Plaintiff’s FAC, arguing that the second and third causes of action asserted therein are fatally uncertain. “A special demurrer for uncertainty is not intended to reach the failure to incorporate sufficient facts in the pleading, but is directed at the uncertainty existing in the allegations actually made.” (Butler v. Sequeira (1950) 100 Cal.App.2d 143, 145-146.) However, demurrers will be sustained where the pleading is so bad that the defendant cannot reasonably respond, i.e., he or she cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him or her. (Khoury v. Maly’s of Calif. Inc. (1993) 14 Cal.App.4th 612, 616.)

The Court finds that the FAC contains insufficient facts to support Plaintiff’s first and second claims. In Opposition, Plaintiff admits that the FAC “is devoid of the operative dates and therefore uncertain….” (Opp. 3:15-16.)

First and Second Causes of Action – Breach of Contract and Breach of Covenant of Good Faith and Fair Dealing

“[T]he voluntary withdrawal of a damage claim by an insured arguably has the same legal consequence as the failure to file any claim at all or, after filing a claim, the failure or refusal to provide to the insurer the information necessary to adjust the claim.” (1231 Euclid Homeowners Assn. v. State Farm Fire & Casualty Co. (2006) 135 Cal.App.4th 1008, 1018.) The voluntary withdrawal of a claim effectively resolves the original claim. (Id. at 1019.)

Here, Plaintiff specifically alleges that Investel withdrew its claim. Consequently, pursuant to 1231 Euclid Homeowners Assn., Zurich’s obligations under the policy were terminated. Plaintiff has not pled facts to establish the element of “breach” necessary to maintain a breach of contract claim.

Moreover, since Plaintiff has not adequately alleged a claim for breach of contract against Zurich—as alleged, Zurich “owes no policy benefits [and]… its failure to pay such benefits cannot serve as a basis for a claim for bad faith.” (Id. at 1019-1021.)

In the interests of justice, the demurrer is SUSTAINED with 20 days leave to amend.