Judge Randolph M. Hammock, Case Number: 23STCV08337, Date: 2025-05-13 Tentative Ruling

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If the interested parties wish to submit on the tentative ruling, they should call the judicial assistant together prior to the date of the scheduled hearing.

5110 Washington, LLC, et al. v. Scottsdale Insurance Company, et al.

DEFENDANT W. BROWN & ASSOCIATES PROPERTY AND CASUALTY INSURANCE SERVICES’ MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, SUMMARY ADJUDICATION

MOVING PARTY: Defendant W. Brown & Associates Property and Casualty Insurance Services

RESPONDING PARTY(S): Plaintiffs 5110 Washington, LLC and Harma Hartouni

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiff 5110 Washington, LLC, owned and operated an apartment building at 5110-5120 W. Washington Blvd, Los Angeles, CA. Plaintiff Harma Hartouni is the sole member of Plaintiff 5110. Plaintiffs allege they obtained an insurance policy on the property through Defendant Scottsdale Insurance Company. Defendant B&B Premier Insurance Solutions, Inc., and its manager, Defendant David Kern, obtained the policy for Plaintiffs with the assistance of Defendant W. Brown & Associates Property and Casualty Insurance Services. Plaintiffs allege they informed Defendants that 5110 needed insurance including liability from claims and risks inherent in owning an apartment business renting to tenants.

In January 2021, a tenant sued 5110 for bodily injury and property damage, among other things. Despite timely tendering a defense and indemnity under the policy, Defendant Scottsdale denied coverage. Plaintiffs allege they were therefore forced to settle the action. In the First Amended Complaint, Plaintiffs assert causes of action for (1) breach of liability insurance contract, (2) breach of covenant of good faith and fair dealing, (3) insurance malpractice, (4) breach of fiduciary duty, and (5) breach of statutory duties.

Defendant W. Brown & Associates now moves for summary judgment. Plaintiffs opposed.

Defendant’s Motion for Summary Judgment is CONTINUED under CCP § 437c(h).

At the hearing, the court and parties will discuss a reasonable timeline for completing the outstanding discovery and continue this MSJ hearing date accordingly.

Moving party is ordered to give notice.

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

Plaintiffs ask this court to take judicial notice of the following:

Exhibit A: Habitational Liability Application 2019;

Exhibit B: Habitational Liability Applications 2020;

Exhibit C: Surplus Lines Notice re Scottsdale Policy;

Exhibit D: California Dept. Insurance Surplus Lines Broker License for Brian English;

Exhibit E: Feb. 21, 2019, Invoice “Sold to 5110 Washington, LLC.”

Defendant objects to the request, arguing they “are neither the proper subject for judicial notice nor relevant to the issues presented in Defendant’s Motion.”

Here, the court will take judicial notice of the existence of these documents and the “facts that can be deduced, and/or clearly derived from, [their] legal effect, such as the names and dates contained in the document, and the legal consequences of the document. [Citations].” (Julian Volunteer Fire Co. Assn. v. Julian-Cuyamaca Fire Prot. Dist. (2021) 62 Cal. App. 5th 583, 600.) This court does not, however, take judicial notice “of the truth of specific factual representations within” the documents. (Id.)

II. Evidentiary Objections

Pursuant to CCP § 437c(q), the Court only rules upon objections asserted against evidence which the Court deems to be material to the disposition of this motion, as follows:

Defendant’s objections numbered 1 through 11 are OVERRULED.

A. Allegations in the FAC

Defendant W. Brown & Associates moves for summary judgment of the First Amended Complaint against it.

Plaintiff 5110 Washington owned and operated an apartment building at 5110-5120 W. Washington Blvd., Los Angeles, CA. (FAC ¶ 8.) Plaintiff Harma Hartouni is 5110 Washington’s sole member. (Id. ¶ 2.) Since early 2017, Plaintiffs used Defendants David Kern and Acrisure Premier Insurance Solutions, Inc., as their insurance brokers. (Id. ¶ 41.) Plaintiffs “requested liability insurance covering any alleged claims arising out of or connected with the operation of the apartment building and its tenant-occupants” and informed Defendants that they “needed broad liability coverage for such operations.” (Id.)

To assist Plaintiffs in obtaining coverage, Defendants Kern and Brown contacted Defendant W. Brown & Associates “to act as a sub agent” for Plaintiffs. (Id. ¶ 43.) Plaintiffs allege that Brown then “placed the insurance with Scottsdale…inserting the information Acrisure gave it.” (Id. ¶ 44.) Brown allegedly “knew the [Plaintiffs] had requested coverage for their landlord-tenant business, including protection against for the risk of claims by tenants for interference with occupancy related conduct, as well as negligent conduct related to its property.” (Id.) With the assistance of Kern, Acrisure, and W. Brown, Plaintiffs obtained a “Comprehensive Commercial General Liability Insurance Policy” and its renewal from Scottsdale. (Id. ¶ 12.) Plaintiffs allege that Kern, Acrisure, and W. Brown “acted as dual agents of” Scottsdale and Plaintiffs. (Id. ¶ 43.)

In January 2021, tenants of the property “filed an action seeking damages for bodily injury, property damage, and ‘personal injury’ against” 5110 and its manager. (Id. ¶ 14.) 5110 tendered the defense and indemnity to its insurer, Scottsdale. (Id. ¶ 15.) Scottsdale, however, denied coverage based on the “Habitability Exclusion” in the Policies. (Id. ¶ 23.) Scottsdale maintains that it “owe[s] no obligations to 5110” based on that lawsuit. (Id. ¶ 15.)

Plaintiff now brings this action against Brown, Acrisure, and Kern for negligence in procuring the policies from Scottsdale, contending that Defendants did not retain the coverage Plaintiffs requested.

B. No Triable Issues Currently Exist

1. Defendant’s Burden

At issue in this motion are the causes of action for negligence (third) and a violation of the UCL (fifth). For purposes of this motion, the issue(s) underlying these causes of action appear to be the same. The following analysis applies to both.

The burden begins with Defendant to show that “one or more elements of a cause of action . . . cannot be established.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 853. Defendant contends that the negligence cause of action fails because Plaintiffs cannot establish that Defendant breached any duty owed to it, and the UCL claim similarly fails because there was no unfair conduct.

Defendant presents the following material facts: In February of 2018, David Kern of Acrisure, sought from Brian English of Brown, property and general liability coverage for the Property. (SSUMF 4.) English forwarded to Kern an application from Scottsdale, which Kern then had completed with Plaintiffs. (SSUMF 5.) Kern forwarded the completed form to English, who in turn sent it back to Scottsdale. (SSUMF 6.) Scottsdale then approved the application and bound coverage effective February 27, 2018. (SSUMF 7.) In 2019, the parties renewed the policy using the same process. (SSUMF 8-10.)

Brown never spoke to Plaintiffs during this process. (SSUMF 11.) Brown’s only communications regarding Plaintiffs’ Policies was through David Kern at Acrisure. (SSUMF 12.)

These facts demonstrate, argues Defendant, that the “only coverage Brown could have known was sought came to it by way of Acrisure,” and “[i]f Plaintiffs sought anything additional or different than a property or general liability policy, such desire was never conveyed to Brown.” (Mtn. 6: 2-4.)

Put simply, because Defendant never communicated directly with Plaintiffs, they could not breach any duty owed to them. They were merely following the instructions of Acrisure and Kern. Considering this evidence, Defendant has met its initial burden to establish the absence of any breach of duty.

2. Plaintiffs’ Burden

This switches the burden to Plaintiffs to show via specific facts that a triable issue of material facts exists. (§ 437c(o)(2).) Plaintiffs argue that Defendant—who “is what is known in the insurance industry as an insurance wholesaler and surplus lines broker”—“had a duty to prevent harm to” Plaintiffs. (Opp. 1: 26.) Plaintiffs argue that “Scottsdale was a non-admitted insurer and Kern could not legally place such insurance.” (Opp. 8: 15-16.) Thus, the only way for Plaintiffs to obtain coverage from Scottsdale was through a “licensed surplus lines broker” like Brown. Plaintiffs maintain that Defendant breached a duty owed either as a “subagent” of Kern/Acrisure or “as a known and intended beneficiary of the requested coverage Brown was procuring.” (Opp. 2: 1-2.)

Based on a review of Plaintiffs’ responding separate statement and evidence, it appears that the material facts in this motion are undisputed. Plaintiff claims, however, the fact that it never spoke with Brown is “disputed.” (See SSDMF 11.) But the evidence cited in support does not demonstrate a genuine dispute.

First, Plaintiffs cite the Declaration submitted by Plaintiff Hartouni. But nowhere in that declaration does Plaintiff ever state that he communicated with Brown or English. (See Hartouni Decl., generally.) Rather, it confirms that all of his communications went through Kern/Acrisure, who then communicated with Brown/English. (Id. ¶¶ 2-6.)

Second, Plaintiff highlights an invoice for payment from Brown to Acrisure, which Plaintiff says evidences “there was a relationship between Brown and 5110.” (Opp. 1: 16.) The invoice reflects that Brown’s services were “sold to” 5110 Washington. (RJN, Exh. E.) But the “bill to” reflects B&B Premier Insurance Solutions, which is alleged to be Acrisure’s “dba.” (FAC 4.) Thus, while this might establish a “relationship” between Plaintiffs and Brown, it does not demonstrate that any breach occurred. If anything it evidences a relationship between Acrisure and Brown, not Plaintiffs and Brown.

Thus, it appears there exists no triable issue on any “independent breach” by Defendant, because Defendant never communicated with Plaintiffs. Moreover, Plaintiffs have provided no authorities clearly holding that Kern/Acrisure’s negligence (if any) can be imputed on Defendant Brown as a “subagent” or intended beneficiary under these undisputed facts. “[O]ther than when handling an insured's money, a broker's duty—whether or not phrased as a fiduciary duty—is no greater than the duty to use reasonable care and diligence in procuring insurance.” (Mark Tanner Constr. v. Hub Internat. Ins. Servs. (2014) 224 Cal. App. 4th 574, 586.)

Thus, Kern and Acrisure, as the direct agent for Plaintiffs, owed a duty to use reasonable care. Assuming that Brown as a “subagent” owed the same duty, there is no evidence here that they breached that duty.

Accordingly, Defendant is entitled to judgment as a matter of law.

C. Continuance under CCP Section 437c(h)

In the event the court is inclined to grant this motion, Plaintiffs ask for a continuance to permit further discovery. Code of Civil Procedure section 437c(h) provides:

If it appears from the affidavits submitted in opposition to a motion for summary judgment or summary adjudication, or both, that facts essential to justify opposition may exist but cannot, for reasons stated, be presented, the court shall deny the motion, order a continuance to permit affidavits to be obtained or discovery to be had, or make any other order as may be just.

In support of a continuance, Plaintiffs represent the need to take the depositions of both English and Kern, and for further written discovery. This could reveal, for example, “testimony from Kern stating he told Brown/English that Plaintiffs desired coverage for habitability defects.” Plaintiffs also believe, at minimum, that they “will be able to obtain a declaration from Kern, raising multiple disputed facts and establishing Brown’s duty.” (Opp. 11: 16-17.)

This discovery has not taken place in part because the parties “agreed to forestall discovery until after mediation was completed” on March 24, 2025. (Hacker Decl. ¶ 10.) It was then “not possible to notice or take defendants’ depositions until Plaintiffs received and reviewed Brown’s discovery responses,” which they did on or about April 9. (Id. ¶ 14.)

Plaintiffs’ counsel, Jeffrey Hacker, attests that his wife had “major back surgery on March 21, 2025 at St. John’s Hospital in Santa Monica.” (Hacker Decl. ¶ 3.) She was confined to her bed for three weeks after the surgery and continues to be confined to the home. (Id.) Mr. Hacker is her caregiver. (Id.) Additionally, Mr. Hacker was himself scheduled to have surgery on April 28th with a 2-3 week recovery period. (Id. ¶ 5.) Mr. Hacker attests that these facts “explain[] to some degree” why the depositions have not been taken yet. (Id. ¶ 8.) Plaintiffs’ counsel states that he “believe[s] that [the parties] can complete this discovery within 60-90 days depending on [his] recuperation period.” (Id. ¶ 10.)

Here, English and Kern are the only two parties who understand what was said or known when the brokers procured the policy for Plaintiffs. To allow a full and fair resolution of the issues, it is appropriate to continue the motion for summary judgment so that further discovery can take place, including the depositions of these percipient witnesses. Trial is set not set until December 15, 2025. No party will be prejudiced by a brief continuance under these circumstances.

At the hearing, the court and parties will discuss a reasonable timeline for completing the outstanding discovery and continue this MSJ hearing date accordingly.

Dated: May 13, 2025 ___________________________________

Judge of the Superior Court

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept49@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.