Judge Randy Rhodes, Case 19STCV01865 2022-10-12 Tentative Ruling

Judge: Randy Rhodes, Case: 19STCV01865, Date: 2022-10-12 Tentative Ruling

Case Number: 19STCV01865 Hearing Date: October 12, 2022 Dept: F51

Dept. F-51

Calendar #:

Date: 10-11-22

Case #: 19STCV01865

Trial Date: 7-24-23

SUMMARY JUDGMENT/SUMMARY ADJUDICATION

MOVING PARTY: Cross-Defendant Mt. Hawley Insurance Company

RESPONDING PARTY: Defendant City of Santa Clarita

RELIEF REQUESTED

Cross-Defendant Mt. Hawley’s Motion for Summary Judgment/Summary Adjudication

· Cross-Complaint 3^rd Cause of Action: Breach of Contract

· Cross-Complaint 4^th Cause of Action: Breach of the Implied Covenant of Good Faith and Fair Dealing

Cross-Defendant Mt. Hawley’s Request for Judicial Notice

· Complaint in Santana v. City of Santa Clarita, et al., LASC Case No. BC 496346

· Stipulation Withdrawing Deposition Notice in Santana v. City of Santa Clarita, LASC Case No. 19STCV01865

· Complaint in Santana v. City of Santa Clarita, LASC Case No. 19STCV01865

· First Amended Complaint (FAC) in Santana v. City of Santa Clarita, LASC Case No. 19STCV01865

· Cross-complaint in City of Santa Clarita in Santana v. City of Santa Clarita, LASC Case No. 19STCV01865

· First Amended Cross-complaint (FACC) in City of Santa Clarita in Santana v. City of Santa Clarita, LASC Case No. 19STCV01865

Defendant City’s Request for Judicial Notice

· Order Granting Motion for Summary Adjudication in Santana v. City of Santa Clarita, et al., LASC Case No. BC 496346

SUMMARY OF ACTION

Manuel Santana (Plaintiff) is trustee of the trust that owns a historical jailhouse in Santa Clarita, CA. Plaintiff initiated this action against the City of Santa Clarita (City), alleging the city damaged the jailhouse during the construction of a new library, in violation of City’s own guidelines outlined in the Seward Report. More specifically, Plaintiff alleges causes of action under theories of (1) negligence, (2) gross negligence, (3) strict liability, (4) absolute liability, (5) trespass, (6) nuisance, (7) unjust enrichment, and (8) battery.

City filed a cross-complaint against numerous cross-defendants, including Tobo Construction, Inc. (Tobo) and Mt. Hawley Insurance Company (Mt. Hawley). City alleges it made a contract with Tobo to construct the library and that Mt. Hawley insured Tobo. The first amended cross-complaint (FACC) is the operative complaint against cross-defendants and brings causes of action against Mt. Hawley for (3) breach of contract and (4) breach of the implied covenant of good faith and fair dealing.

RULING

Cross-Defendant Summary Judgment: Denied.

Cross-Defendant Summary Adjudication: Denied as to each.

Cross-Defendant Judicial Notice: Granted.

Defendant Judicial Notice: Granted.

Defendant’s Evidentiary Objections: None.

Cross-Defendant’s Evidentiary Objections: None.

Discussion

Judicial Notice

The court may take judicial notice of records of any courts of California. (Evid. Code § 452(d).)

Mt. Hawley requests the court take judicial notice of Plaintiff’s complaint and FAC in this case, Plaintiff’s complaint in another related case, a stipulation, and City’s cross-complaint and FACC. City requests the court take judicial notice of an order granting summary adjudication in a related case. All of the records that Mt. Hawley and City request to be judicially noticed are records of the Superior Court of California, County of Los Angeles, a California state court. Therefore, the court can take judicial notice of all requested records.

Summary Judgment/Adjudication Standard

In analyzing motions for summary judgment, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent's claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.” (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.) Pursuant to Code of Civil Procedure section 437c(p)(2):

“A defendant or cross-defendant has met his or her burden of showing that a cause of action has no merit if that party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to that cause of action. Once the defendant or cross-defendant has met that burden, the burden shifts to the plaintiff or cross-complainant to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. The plaintiff or cross-complainant may not rely upon the mere 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 that cause of action or a defense thereto.”

The court must “view the evidence in the light most favorable to the opposing party and accept all inferences reasonably drawn therefrom.” (Hinesley, supra, 135 Cal.App.4th at 294; Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389 [Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”].) A motion for summary judgment must be denied where the moving party’s evidence does not prove all material facts, even in the absence of any opposition, Leyva v. Sup. Ct. (1985) 164 Cal.App.3d 462, 475, or where the opposition is weak, Salasguevara v. Wyeth Labs., Inc. (1990) 222 Cal.App.3d 379, 384, 387.

“The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues and to frame the outer measure of materiality in a summary judgment proceeding.” (Hutton v. Fidelity National Title Co. (2013) 213 Cal. App. 4th 486, 493.)

It is the “Golden Rule” of summary judgment that “if it is not set forth in the separate statement, it does not exist.” (Zimmerman, Rosenfeld, Gersh & Leeds LLP v. Larson (2005) 131 Cal.App.4th 1466, 1477.) However, the court may in its discretion look to evidence outside the separate statement, but “only if the evidence presented warrants it.” (Id. at 1478.)

“A moving defendant now has two means by which to shift the burden of proof under subdivision (o)(2) of section 437c to the plaintiff to produce evidence creating a triable issue of fact. The defendant may rely upon factually insufficient discovery responses by the plaintiff to show that the plaintiff cannot establish an essential element of the cause of action sued upon. . . . Alternatively, the defendant may utilize the tried and true technique of negating (‘disproving’) an essential element of the plaintiff's cause of action.” (Brantley v. Pisaro (1996) 42 Cal.App.4th 1591, 1598; see also Code Civ. Proc., § 437c(p)(2).) A moving defendant must show that plaintiff cannot reasonably obtain evidence to prove a cause of action, which is more than simply arguing that there is an absence of evidence. (Gaggero v. Yura (2003) 108 Cal.App.4th 884, 891.)

3^rd Cause of Action: Breach of Contract

To state a cause of action for breach of contract, the plaintiff must be able to establish “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.) If a breach of contract claim “is based on alleged breach of a written contract, the terms must be set out verbatim in the body of the complaint or a copy of the written agreement must be attached and incorporated by reference.” (Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 307.) In some circumstances, a plaintiff may also “plead the legal effect of the contract rather than its precise language.” (Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198-199.)

Here, the main contention in City’s cross-claim for breach of contract against Mt. Hawley is the third element, whether Mt. Hawley breached the contract. Mt. Hawley argues that it does not have a duty to defend City. Mt. Hawley’s insurance agreement with Tobo was that Mt. Hawley “will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies” and that it has “the right and duty to defend the insured against any ‘suit’ seeking those damages.” (Mt. Hawley Separate Statement, ¶ 35.) Mt. Hawley contends that under the policy, an “additional insured” is only an insured “with respect to liability arising out of [Tobo’s] work for [the City] by or for [Tobo].” (Mt. Hawley Separate Statement, ¶ 36.) According to Mt. Hawley, the only negligent act alleged in the FAC was the City’s own failure to follow the Seward Plan, not “liability arising out of [Tobo’s] work.” If true, this negates the breach element of City’s breach of contract cross-claim.

Mt. Hawley additionally argues that two exclusions apply. The first is the Continuous or Progressive Injury and Damage (CPID) Exclusion, which precludes a duty to defend claims for bodily injury or property damage “which first existed, or are alleged to have first existed, prior to the inception date of this [p]olicy; or . . . [w]hich are, or are alleged to be, in the process of taking place prior to the inception date of this [p]olicy, even if the actual or alleged “bodily injury,” “property damage,” or “personal and advertising injury” continues during this policy period; or . . . [w]hich were caused, or are alleged to have been caused, by any defect, deficiency, inadequacy or condition which first existed prior to the inception date of this [p]olicy.” (Mt. Hawley Separate Statement, ¶ 37.) The second is the Breach of Contract (BOC) Exclusion, which states Mt. Hawley does not have a duty to defend a claim for bodily injury or property damages “arising directly or indirectly out of . . . [b]reach of express or implied contract; . . . [or] [b]reach of express or implied warranty.” (Mt. Hawley Separate Statement, ¶ 38.) Mt. Hawley argues the CPID Exclusion applies because the FAC alleges “damages occurred throughout the project from approximately 2009 and continue to this day.” (Mt. Hawley Separate Statement, ¶ 16.) Mt. Hawley argues the BOC Exclusion applies because the claims in the FAC “ar[ose] directly or indirectly out [Tobo’s] [b]reach of express or implied contract [with City.]” (Mt. Hawley Separate Statement, ¶ 28.) If these two exclusions apply, then they also negate the breach element of City’s breach of contract cross-claim. The burden shifts to City to demonstrate a triable issue of fact.

City argues Plaintiff’s claims arise out of Tobo’s work, even though Tobo is not named in the FAC, because Tobo built the library. (City Separate Statement of Additional Facts, ¶ 1-5, 21-23, 32.) Although the complaint is brought against City, the allegations that Plaintiff’s property was damaged by the failure to follow the guidelines of the Seward Report arises from the conduct of the contractors performing the work, including Tobo. Viewing the evidence in the light most favorable to City, the nonmoving party, there remains a triable issue of fact whether Mt. Hawley owed a duty to defend City, and by failing to do so, breached the contract.

City also contends that the CPID Exclusion does not apply because “alleged damage causing conduct was not continuous but potentially occurred during the policy period and that it was performed by Tobo.” City highlights that “allegations and extrinsic information show[] this was a large construction project, with different stages and construction performed over the course of the project, which would necessarily be done on different dates during the broad date range alleged by Plaintiff. . . .” (Mt. Hawley Separate Statement, ¶ 16, 20, 26, 27, 40, CMF 2, 5, 15, 21, 22, 24-27, 29-32.) As for the BOC Exclusion, City notes that Plaintiff’s claims against City are based on the alleged failure to follow the guidelines of the Seward Report, not a contract involving Tobo’s performance of the construction. (Mt. Hawley Separate Statement, ¶ 16, 17.) There are no allegations, nor is there any extrinsic evidence, that establishes that Tobo’s construction in violation of Seward Report guidelines resulted in a violation of Tobo’s contract. There also remains a triable issue of fact as to whether these contractual exclusions apply.

Therefore, summary adjudication is denied as to the 3^rd cause of action.

4^th Cause of Action: Breach of the Implied Covenant of Good Faith and Fair Dealing

“A breach of the implied covenant of good faith and fair dealing involves something beyond breach of the contractual duty itself and it has been held that bad faith implies unfair dealing rather than mistaken judgment.” (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1394.) “If the allegations do not go beyond the statement of a mere contract breach and, relying on the same alleged acts, simply seek the same damages or other relief already claimed in a companion contract cause of action, they may be disregarded as superfluous as no additional claim is actually stated.” (Ibid.) To recover . . . for breach of the implied covenant, the defendant must “have acted unreasonably or without proper cause.” (Id. at p. 1395, citations and italics omitted.)

Here, Mt. Hawley argues City does not have a claim for breach of good faith and fair dealing because Mt. Hawley denied coverage based on a straightforward application of the CPID Exclusion. (Mt. Hawley Separate Statement, ¶ 31, 33.) Applying an exclusion that the party thinks applies in order to deny coverage is not unreasonable or without proper cause, so the burden shifts to City to demonstrate a triable issue of material fact.

City contends that Mt. Hawley did not deny coverage based on a straightforward application of an exclusion, but on other grounds, including that Mt. Hawley acted deliberately in limiting its basis for denial on the complaint. (City Separate Statement of Additional Facts, ¶ 16, 17.) If Mt. Hawley did act deliberately, as City alleges, then there remains a triable issue of fact as to whether Mt. Hawley acted in good faith when viewing the evidence in the light most favorable to City.

Therefore, summary adjudication is denied as to the fourth cause of action.

Moving party to give notice.

Dept. F-51

Calendar #:

Date: 10-11-22

Case #: 19STCV01865

Trial Date: 7-24-23

SUMMARY JUDGMENT

MOVING PARTY: Cross-Defendant R.C. Becker and Son, Inc.

RESPONDING PARTY: Defendant City of Santa Clarita

RELIEF REQUESTED

Motion for Summary Judgment

· Cross-Complaint 1st Cause of Action: Breach of Contract

· Cross-Complaint 2^nd Cause of Action: Contractual Indemnity

· Cross-Complaint 5^th Cause of Action: Equitable Indemnity

· Cross-Complaint 6^th Cause of Action: Declaratory Relief for Apportionment of Fault

· Cross-Complaint 7^th Cause of Action: Equitable Contribution

· Cross-Complaint 8^th Cause of Action: Complete Indemnity under CCP § 1021.6

Request for Judicial Notice

· Complaint in Santana v. City of Santa Clarita, LASC Case No. 19STCV01865

· First Amended Complaint (FAC) in Santana v. City of Santa Clarita, LASC Case No. 19STCV01865

· Cross-complaint in City of Santa Clarita in Santana v. City of Santa Clarita, LASC Case No. 19STCV01865

· First Amended Cross-complaint (FACC) in City of Santa Clarita in Santana v. City of Santa Clarita, LASC Case No. 19STCV01865

· Becker’s Answer to FACC in City of Santa Clarita in Santana v. City of Santa Clarita, LASC Case No. 19STCV01865

· Becker’s Cross-complaint in City of Santa Clarita in Santana v. City of Santa Clarita, LASC Case No. 19STCV01865

· Complaint in Santana v. City of Santa Clarita, et al., LASC Case No. BC 496346 (Previous Action)

· City’s FACC in the Previous Action

· Plaintiff’s Request for Dismissal with Prejudice in the Previous Action

· City’s Request for Dismissal with Prejudice in the Previous Action

SUMMARY OF ACTION

In this action, City filed a cross-complaint against numerous cross-defendants, including R.C. Becker and Son, Inc. (Becker). City alleges it made a contract with Becker to construct the library. The first amended cross complaint (FACC) is operative here and brings causes of action against Becker for (2) breach of contract, (5) equitable indemnity, (6) declaratory relief for apportionment of fault, (7) equitable contribution, and (8) complete indemnity under Code Civ. Proc. section 1021.6.

RULING

Summary Judgment: Denied.

Judicial Notice: Granted.

Defendant’s Evidentiary Objections: None.

Cross-Defendant’s Evidentiary Objections: None.

Discussion

Judicial Notice

The court may take judicial notice of records of any courts of California. (Evid. Code § 452(d).)

Becker requests the court take judicial notice of Plaintiff’s complaint and FAC in this case, Plaintiff’s complaint in the Previous Action, City’s cross-complaint and FACC in this case, City’s FACC in the Previous Action, Plaintiff’s and City’s requests for dismissal with prejudice in the Previous Action, and Becker’s answer to the FACC and cross-complaint in this case. All of the records that Becker requests to be judicially noticed are records of the Superior Court of California, County of Los Angeles, a California state court. Therefore, the court can take judicial notice of all requested records.

Summary Judgment Standard

Analysis

Here, Becker presents evidence of a release that was part of the settlement of the Previous Action. (Becker Separate Statement, ¶ 22-34.) Becker also presents evidence of the dismissal of the Previous Action. (Becker Separate Statement, ¶ 35, 38-39.) If the release and dismissal apply to this action, then City cannot bring the causes of action contained in City’s FACC. The burden shifts to City to demonstrate a triable issue of fact.

City argues that despite the release, Plaintiff filed this action against City based on allegations attributable to Becker, City has a cause of action for breach of contract against Becker for failing to perform its duties under its contract with City, and the release does not contain terms that City released Becker. (City Separate Statement of Additional Facts, ¶ 1-9.) City reasons that the release and dismissal may preclude Plaintiff’s claims in this action, but the fact that Plaintiff initiated this action triggers Becker’s contractual duties. (City Separate Statement of Additional Facts, ¶ 2.) Viewing the evidence in the light most favorable to City, the nonmoving party, there remains a triable issue of fact whether the release and dismissal preclude the causes of action in the FACC.

Therefore, Becker’s motion for summary judgment is denied.

Moving party to give notice.

Dept. F-51

Calendar #:

Date: 10-12-22

Case #: 19STCV01865

Trial Date: 7-24-23

SUMMARY JUDGMENT/SUMMARY ADJUDICATION

MOVING PARTY: Cross-Defendant Landmark American Ins. Co.

RESPONDING PARTY: Defendant City of Santa Clarita

RELIEF REQUESTED

Cross-Defendant Landmark’s Motion for Summary Judgment/Summary Adjudication

· Cross-Complaint 3^rd Cause of Action: Breach of Contract

· Cross-Complaint 4^th Cause of Action: Breach of the Implied Covenant of Good Faith and Fair Dealing

· Contractual Release from Previous Agreement

Cross-Defendant Landmark’s Request for Judicial Notice

· Complaint in Santana v. City of Santa Clarita, et al., LASC Case No. BC 496346 (Previous Action)

· Plaintiff’s Dismissal with Prejudice in the Previous Action

· City’s Dismissal with Prejudice in the Previous Action

· Complaint in Santana v. City of Santa Clarita, LASC Case No. 19STCV01865

· First Amended Complaint (FAC) in Santana v. City of Santa Clarita, LASC Case No. 19STCV01865

· Cross-complaint in City of Santa Clarita in Santana v. City of Santa Clarita, LASC Case No. 19STCV01865

· First Amended Cross-complaint (FACC) in City of Santa Clarita in Santana v. City of Santa Clarita, LASC Case No. 19STCV01865

Defendant City’s Request for Judicial Notice

· Order Granting Motion for Summary Adjudication in the Previous Action

SUMMARY OF ACTION

City filed a cross-complaint against numerous cross-defendants, including Tobo Construction, Inc. (Tobo) and Landmark American Insurance Co. (Landmark). City alleges it made a contract with Tobo to construct the library and that Landmark insured Tobo. The first amended cross-complaint (FACC) is the operative complaint against cross-defendants and brings causes of action against Landmark for (3) breach of contract and (4) breach of the implied covenant of good faith and fair dealing.

RULING

Cross-Defendant Summary Judgment: Denied.

Cross-Defendant Summary Adjudication: Denied as to each.

Cross-Defendant Judicial Notice: Granted.

Defendant Judicial Notice: Granted.

Defendant’s Evidentiary Objections: None.

Cross-Defendant’s Evidentiary Objections: None.

Discussion

Judicial Notice

The court may take judicial notice of records of any courts of California. (Evid. Code § 452(d).)

Landmark requests the court take judicial notice of Plaintiff’s complaint in the Previous Action, Plainitff’s and City’s dismissal in the previous case, Plaintiff’s complaint and first amended complaint (FAC) in this case, and City’s cross-complaint and first amended cross complaint (FACC) in this case. City requests the court take judicial notice of an order from the Previous Action. All of the records that Landmark requests to be judicially noticed are records of the Superior Court of California, County of Los Angeles, a California state court. Therefore, the court can take judicial notice of all requested records.

Summary Judgment/Summary Adjudication Standard

3^rd Cause of Action: Breach of Contract

Here, the main contention in City’s cross-claim for breach of contract against Landmark is the third element, whether Landmark breached the contract. Landmark argues that it does not have a duty to defend or indemnify City because City is not an “additional insured.” Landmark’s insurance agreement with Tobo was that Landmark “will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies” and that it has “the right and duty to defend the insured against any ‘suit’ seeking those damages.” (Landmark Separate Statement, ¶ 2.) Landmark contends that under the policy, City is an additional insured “only with respect to liability for ‘bodily injury’ [or] ‘property damage’ . . . caused, in whole or in part, by . . . [Tobo’s] acts or omissions[,] . . . [t]he acts or omissions of those acting on [Tobo’s] behalf in the performance of [Tobo’s] ongoing operations[,] and/or ‘[Tobo’s] work’ defined for the additional insured. . . .” (Landmark Separate Statement, ¶ 9.) According to Landmark, the only actionable acts or omissions alleged in the FAC are the City’s own, so City is not an additional insured under the policy. Landmark’s reasoning follows that if City is not an additional insured, then Landmark does not have a duty to defend; if Landmark does not have a duty to defend, then Landmark does not have a duty to indemnify; and finally, if Landmark has neither a duty to defend nor indemnify, then the failure to do either is not a breach of contract. If true, this negates the breach element of City’s breach of contract cross-claim.

City argues Plaintiff’s claims arise out of Tobo’s work, even though Tobo is not named in the FAC, because Tobo built the library. (City Separate Statement of Additional Facts, ¶ 21, 23, 32.) Although the complaint is brought against City, the allegations that Plaintiff’s property was damaged by the failure to follow the guidelines of the Seward Report arises from the conduct of the contractors performing the work, including Tobo. Viewing the evidence in the light most favorable to City, the nonmoving party, there remains a triable issue of fact whether Mt. Hawley owed a duty to defend City, and by failing to do so, breached the contract.

Therefore, summary adjudication is denied as to the 3^rd cause of action.

4^th Cause of Action: Breach of the Implied Covenant of Good Faith and Fair Dealing

Here, Landmark argues City does not have a claim for breach of good faith and fair dealing because Landmark correctly denied City’s claim for coverage as an additional insured. Landmark also contends that if there is a genuine dispute as to whether City was covered as an additional insured, then it did not act in bad faith. Landmark asserts that there is a genuine dispute as to whether City was covered because Landmark’s opinion is that City was not covered, while City’s opinion is that City was covered.

City, on the other hand, contends that there is no genuine dispute as to whether City was covered because denial of coverage was unreasonable. (City Separate Statement of Additional Facts, ¶ 16, 17.) City alleges that Landmark should have known that City was covered by the policy when Tobo tendered the claim to Landmark. (City Separate Statement of Additional Facts, ¶ 11.) City further argues that, with the knowledge that City was covered by the policy, Landmark nevertheless denied City in bad faith. (City Separate Statement of Additional Facts, ¶ 15.) Viewing the evidence in the light most favorable to City, there remains a triable issue of fact whether City acted in bad faith.

Therefore, summary adjudication is denied as to the fourth cause of action.

Contractual Release from Previous Action

Here, Landmark presents evidence of a release that was part of the settlement of the Previous Action. (Landmark Separate Statement, ¶ 38-50.) Becker also presents evidence of the dismissal of the Previous Action. (Becker Separate Statement, ¶ 38, 51.) If the release and dismissal apply to this action, then City cannot bring the causes of action contained in City’s FACC. The burden shifts to City to demonstrate a triable issue of fact.

Therefore, summary adjudication is denied as to the release from the Previous Action.

Moving party to give notice.