Judge: Robert B. Broadbelt, Case: 18STCV00237, Date: 2022-08-02 Tentative Ruling

Tentative rulings are sometimes, but not always, posted. The purpose of posting a tentative ruling is to to help focus the argument. The posting of a tentative ruling is not an invitation for the filing of additional papers shortly before the hearing.

Case Number: 18STCV00237    Hearing Date: August 2, 2022    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                Defendant Anya Neveleva (“Defendant”)

RESPONDING PARTY:       Plaintiff Granite State Insurance Company (“Plaintiff”)

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

The court considered the moving, opposition, and amended reply papers filed in connection with this motion.  

JUDICIAL NOTICE

The court grants defendant Anya Neveleva’s request for judicial notice.  (Evid. Code, § 452, subd. (d).)  The court denies Defendant’s request to take judicial notice of her Answer made in her reply.  (Reply, 5:7-8.)  

The court grants plaintiff Granite State Insurance Company’s request for judicial notice.  (Evid. Code § 452, subd. (d).)

While the court has granted the parties’ requests for judicial notice, the court notes that it does not take notice of the truth of the matters stated therein.  (Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.)

EVIDENTIARY OBJECTIONS 

The court rules on Plaintiff’s evidentiary objections, filed July 19, 2022, as follows:

The court sustains Objections Nos. 1-3, 5-6, 15, 17.

The court overrules Objections Nos. 4, 7-14, 16, 18.

The court overrules Defendant’s evidentiary objections, filed July 29, 2022.

LEGAL STANDARD

The purpose of a motion for summary judgment or summary adjudication “is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.”  (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.)  “Code of Civil Procedure section 437c, subdivision (c), requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”  (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.)

“On a motion for summary judgment, the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.”  (Scalf v. D.B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.)  A defendant or cross-defendant moving for summary judgment or summary adjudication “has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to the cause of action.”  (Code Civ. Proc., § 437c, subd. (p)(2).)  “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 the cause of action or a defense thereto.”  (Code Civ. Proc., § 437c, subd. (p)(2).)  “If the plaintiff cannot do so, summary judgment should be granted.”  (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467.)  “When deciding whether to grant summary judgment, the court must consider all of the evidence set forth in the papers (except evidence to which the court has sustained an objection), as well as all reasonable inferences that may be drawn from that evidence, in the light most favorable to the party opposing summary judgment.”  (Id. at p. 467; Code Civ. Proc., § 437c, subd. (c).)

DISCUSSION

1.     First Cause of Action for Quasi-Contractual (Implied Contractual) Indemnity; Fourth Cause of Action for Equitable Indemnity

Implied contractual indemnity is “viewed simply as ‘a form of equitable indemnity.’”  (Prince v. Pacific Gas & Electric Co. (2009) 45 Cal.4th 1151, 1157.)  “The elements of a cause of action for indemnity are (1) a showing of fault on the part of the indemnitor and (2) resulting damages to the indemnitee for which the indemnitor is contractually or equitably responsible.”  (Expressions at Rancho Niguel Assn. v. Ahmanson Developments, Inc. (2001) 86 Cal.App.4th 1135, 1139.)  “Equitable indemnity principles govern the allocation of loss or damages among multiple tortfeasors whose liability for the underlying injury is joint and several.”  (Ibid.)  “[A]n implied contractual indemnity claim, like a traditional equitable indemnity claim, is subject to the American Motorcycle rule that a party’s liability for equitable indemnity is based on its proportional share of responsibility for the damages to the injured party.”  (Prince, supra, 45 Cal.4th at p. 1165.)

The court finds that Defendant has met her of showing that the first cause of action for implied contractual indemnity and the fourth cause of action for equitable indemnity have no merit because Defendant has shown that an element of the causes of action (an underlying injury for which liability is joint and several) cannot be established.  Defendant argues that Jerry Ledger (“Ledger”), Barry Halajian (“Halajian”), and Benchmark Insurance Company (“Benchmark”) cannot be considered injured parties on the ground that each benefitted from Defendant’s conduct.  The court finds that Defendant has met her burden of proving that the injury to Ledger, who is alleged to have been the injured party in Plaintiff’s Complaint (Compl., ¶ 55), was not caused by Defendant.  It is undisputed that Ledger, employed by Halajian, was injured during the scope of his employment.  (UMF No. 20.)  Following the decision rendered by the arbitrator which found that Halajian was covered for worker’s compensation in relation to Ledger’s injuries, Plaintiff and Benchmark negotiated a settlement of Ledger’s coverage dispute.  (UMF Nos. 30-31; Smith Decl., Ex. A, Arbitrator Decision, 6:6-8.)  Defendant presents the settlement agreement, wherein it was agreed that Plaintiff would make settlement payments that included attorney fees and structured settlement payments as set forth in the agreement.  (Smith Decl., Ex. B, Addendum “A” to Compromise and Release, p. 3; Smith Decl., Ex. B, Exhibit “D” to C&R, § J, ¶ 2, subd. (a).)  Further, it is “[u]ndisputed that Ledger was paid” by both Plaintiff and Benchmark pursuant to this settlement.  (Pl. Response to UMF No. 31.)  Defendant has therefore presented evidence that she and Plaintiff did not jointly cause an injury to Ledger, who received coverage and payments from Plaintiff and Benchmark following the parties’ settlement.

  The court finds that Plaintiff has not met its burden to show that a triable issue of material fact exists as to the element of an underlying injury for which liability is joint and several.  First, the court notes that Plaintiff presents various legal arguments to contend that the indemnity causes of action do not require a finding that the parties be joint tortfeasors.  The court acknowledges, as Plaintiff argues, that the doctrine is expansive and “not limited to ‘the old common term “joint tortfeasor”’” in that it “can apply to acts that are concurrent or successive, joint or several, as long as they create a detriment caused by several actors.”  (BFGC Architects Planners, Inc. v. Forcum/Mackey Construction, Inc. (2004) 119 Cal.App.4th 848, 852.)  This language, however, does not negate the requirement that there be a joint injury to another.  The court also acknowledges that equitable indemnity may be applied in cases “between insurance carriers when one carrier seeks reimbursement of the amounts it has paid to an insured.”  (The Travelers Indemnity Co. of Connecticut v. Navigators Specialty Ins. Co. (2021) 70 Cal.App.5th 341, 364.)  This situation, however, is inapplicable, as Plaintiff does not appear to argue that it is seeking a reimbursement of the amounts it paid to an insured by another insurance carrier, and instead is seeking reimbursement from Defendant, an insurance broker.  (UMF No. 1 [Defendant is an insurance broker licensed in California and does business as Encore Commercial Insurance Services, a retail insurance agent].)  Finally, the court notes Plaintiff’s reliance on Fireman’s Fund Insurance Company v. Haslam (1994) 29 Cal.4th 1347.  There, the Court explained that, because an insurance agent may be held liable for loss if that agent induces its principal to assume coverage on which his principal suffers a loss, so too may an insurance company recover damages paid in settlement of an insured’s claim “incurred as a result of its agent’s negligent acts.”  (Fireman’s Fund Ins. Co. v. Haslam (1994) 29 Cal.4th 1347, 1354-1355.)  The Haslam Court appeared to give weight to the agency relationship between the agent and insurance company, stating that the trial court properly entered judgment against the agent upon the jury’s finding that the settlement amount paid was solely attributable to the agent’s breach of duty.  (Id. at p. 1355.)  The basis of liability was that the agent “breached duties directly to his principal” which caused its loss.  (Id. at pp. 1355-1356.)  Here, Plaintiff has not alleged or argued that the existence of a comparable agency relationship could impose liability on Defendant. 

Accordingly, a cause of action for indemnity is based on “a detriment caused by several actors” and therefore requires Plaintiff to identify a harm caused by both Plaintiff and Defendant.  (BFGC Architects Planners, Inc., supra, 119 Cal.App.4th at p. 852 [“The doctrine applies only among defendants who are jointly and severally liable to the plaintiff” and requires “a detriment caused by several actors”].)  “The test for indemnity is thus whether the indemnitor and indemnitee jointly caused the plaintiff’s injury.”  (AmeriGas Propane, L.P. v. Landstar Ranger, Inc. (2010) 184 Cal.App.4th 981, 989.)

The court finds that Plaintiff has not met its burden to show that a triable issue of material fact exists as to whether a third party was jointly injured by Plaintiff and Defendant.  Plaintiff argues that Ledger “did not know where he would get his worker’s compensation benefits, or whether he would get them” for over four years.  (Opp., 9:23-24.)  Plaintiff contends that this harm was expressed in the parties’ settlement agreement, which stated that the parties expended costs in litigating coverage and that Ledger wished “to resolve the case for a lump sum certain in light of the risk he may not see any compensation due to continued litigation for many more years.”  (Smith Decl., Ex. B, Addendum “A” to Compromise & Release, p. 2.)  This is insufficient to establish that Plaintiff and Defendant jointly harmed Ledger.  That there may have been a delay in Ledger’s obtaining of coverage is not a cognizable harm.  It is undisputed that Ledger received coverage and payments from Plaintiff and Benchmark pursuant to the settlement agreement.  (UMF No. 31.)  Plaintiff has failed to present evidence establishing that Ledger was harmed as a result of Plaintiff and Defendant’s conduct.

The court therefore grants Defendant’s motion for summary adjudication as to the first cause of action for quasi-contractual (implied contractual) indemnity and fourth cause of action for equitable indemnity.

2.     Fifth Cause of Action for Contribution

“‘Contribution is the right to recover from a co-obligor.’”  (Graphic Arts Mutual Ins. Co. v. Time Travel Internat., Inc. (2005) 126 Cal.App.4th 405, 415.)  “In situations where two or more parties are jointly liable on an obligation and one of them makes payment of more than his share, the one paying possesses a new obligation against the others for their proportion of what he has paid for them.”  (Morgan Creek Residential v. Kemp (2007) 153 Cal.App.4th 675, 684.)

The court finds that Defendant has met her burden of showing that the fifth cause of action for contribution has no merit because Defendant has shown that an element of the cause of action (that Defendant is jointly liable on an obligation) cannot be established.  For the reasons set forth above, the court finds that Defendant has met her burden of showing that she did not cause injury to Ledger and therefore cannot be considered a co-obligor from whom Plaintiff can recover.  (UMF No. 31 [establishing that Ledger was paid pursuant to the settlement agreement].)

The court finds that Plaintiff has not met its burden to show that a triable issue of material fact exists as to the element of a joint obligation.  For the reasons set forth above, the court finds that Plaintiff has failed to introduce evidence establishing that Defendant harmed Ledger such that Defendant is jointly liable on an obligation to Ledger.  (See UMF No. 31; Smith Decl., Ex. B, Addendum “A” to Compromise & Release, p. 2.)

The court therefore grants Defendant’s motion for summary adjudication as to the fifth cause of action for contribution.

3.     Seventh Cause of Action for Negligence

“The elements of any negligence cause of action are duty, breach of duty, proximate cause, and damages.”  (Peredia v. HR Mobile Services, Inc. (2018) 25 Cal.App.5th 680, 687.)

The court finds that Defendant has not met her burden of showing that the seventh cause of action for negligence has no merit because Defendant has not shown that the element of duty cannot be established.  Duty is a question of law for the court.  (Kesner v. Superior Court (2016) 1 Cal.5th 1132, 1142.)  In determining whether a defendant will be held liable to a third person not in privity of contract, courts weigh the following factors: (1) the extent to which the transaction was intended to affect the plaintiff, (2) the foreseeability of harm to him, (3) the degree of certainty that the plaintiff suffered injury, (4) the closeness of the connection between the defendant’s conduct and the injury suffered, (5) the moral blame attached to the defendant’s conduct, and (6) the policy of preventing future harm.  (Biakanja v. Irving (1958) 49 Cal.2d 647, 650.)  Foreseeability is, in particular, “a critical factor in the analysis.”  (Ericson v. Federal Express Corp. (2008) 162 Cal.App.4th 1291, 1300.)

First, although Defendant contends that she did not know that the application for Halajian was going to be transmitted to Plaintiff, “the transaction of applying for an insurance policy is intended to benefit the insurer as well as the insured….”  (Century Surety Co. v. Crosby Insurance, Inc. (2004) 124 Cal.App.4th 116, 128; Def. Material Fact No. 9.)  Thus, even if Defendant did not know that Plaintiff would be the entity receiving the application, the transmission of the application was intended to affect the insurer, i.e., Plaintiff. 

Second, “harm from misrepresentations in an insurance applications” can be foreseeable.  (Century Surety Co., supra, 124 Cal.App.4th at p. 128.)  It is foreseeable that the decision to use an incorrect address on an application could result in the insurer being unable to directly communicate with the insured and therefore affect an insured’s policy.  (Def. Material Fact No. 5 [stating that Defendant suggested that Halajian permit Encore to receive his mail]; Neveleva Decl., ¶ 4.) 

Third, the evidence establishes that the arbitrator determined that Halajian was covered for workers’ compensation by Plaintiff in relation to Ledger’s injuries, and that Plaintiff subsequently executed a settlement agreement and made payments to Ledger.  (UMF No. 31; Smith Decl., Ex. A, Arbitration Decision, 6:6-8.)  The court notes that Defendant contends that Plaintiff could have avoided risk by sending the cancellation notice to all addresses listed on the policy, but this argument does not negate Plaintiff’s harm in making payments based on an insurance policy it attempted to cancel. 

Fourth, the court disagrees that the moral blame is to be attributed to Plaintiff based on its failure to send two cancellation notices.  (See Mot., 12:19-24.)  Defendant concedes that she advised Halajian to have the policy-related mail sent to Encore; any injury stemming from Plaintiff’s inability to directly communicate with Halajian based on the representation that Halajian’s address was Encore’s address is attributable to Defendant, not Plaintiff.  (Def. Material Fact No. 5; Neveleva Decl., ¶ 4.) 

Finally, “imposing liability on insurance brokers for misrepresentations in insurance applications would act as a deterrent in preventing future harm.”  (Century Surety Co., supra, 124 Cal.App.4th at p. 129.)  

For the reasons set forth above, the court finds that Defendant has not met her burden of showing that she did not owe a duty to Plaintiff as a matter of law.

The court therefore denies Defendant’s motion for summary adjudication as to the seventh cause of action for negligence on the ground that Defendant did not owe a duty to Plaintiff. 

The court finds that Defendant has not met her burden of showing that the seventh cause of action for negligence has no merit because Defendant has not shown that the affirmative defense of the bar of the two year statute of limitations cannot be established.  (Code Civ. Proc., § 339, subd. (1) [the statute of limitations for “[a]n action upon a contract, obligation or liability not founded upon an instrument of writing” is two years].)  Defendant contends that (1) Plaintiff was on notice of the alleged wrongful conduct that is the basis of this suit and (2) Plaintiff incurred and paid attorney’s fees and costs in litigating the action in Fresno Superior Court in 2014 (Def. Material Fact No. 34).      

The court finds that Defendant has not established that Plaintiff’s alleged notice of Defendant’s placement of her address instead of Halajian’s mailing address on the application renders this cause of action barred by the statute of limitations.  “When damages are an element of a cause of action, the cause of action does not accrue until the damages have been sustained.”  (City of Vista v. Robert Thomas Sec. (2000) 84 Cal.App.4th 883, 886.)  Although Defendant contends that Plaintiff was on notice of Defendant’s conduct, Defendant has not presented evidence that demonstrates that each of the elements of Plaintiff’s negligence cause of action had accrued.  In particular, the court finds that Defendant’s evidence does not establish, as Defendant argues, that damages had been accrued.  First, the Complaint filed by Plaintiff in Fresno County Superior Court (Case No. 4CECG0340), while establishing that Plaintiff filed suit on November 13, 2014, does not establish when Plaintiff paid attorney’s fees incurred in that action .  (Def. RJN, Ex. B.)  Second, Plaintiff’s discovery responses similarly do not establish when Plaintiff began to pay attorney’s fees.  Special Interrogatory number 30 asks “the amount of attorney’s fees and costs [Plaintiff] incurred litigating the coverage dispute in the Los Angeles and Fresno Superior Courts.”  (Smith Decl., Ex. E, Special Interrogatories, Set One, No. 30, 24:20-21.)  In its answers, Plaintiff stated that the attorney’s fees and costs incurred and paid in connection with the coverage dispute totaled $765,226.85.  (Smith Decl., Ex. E, Special Interrogatories, Set One, No. 30, 24:26-27.)  While this interrogatory establishes that Plaintiff has incurred attorney’s fees, Defendant has failed to introduce evidence establishing on what dates attorney’s fees were incurred or paid, and whether those payments were made longer than two years prior to the filing of its Complaint. Accordingly, Defendant has failed to establish that Plaintiff’s negligence cause of action accrued more than two years prior to the filing of its Complaint.

The court therefore denies Defendant’s motion for summary adjudication as to the seventh cause of action for negligence on the ground of the bar of the statute of limitations.

ORDER

The court grants defendant Anya Neveleva’s motion for summary adjudication as to the first cause of action for quasi-contractual (implied contractual) indemnity, fourth cause of action for equitable indemnity, and fifth cause of action for contribution alleged in the Complaint filed by Granite State Insurance Company.

The court denies defendant Anya Neveleva’s motion for summary adjudication as to the seventh cause of action for negligence.

The court orders defendant Anya Neveleva’s to give notice of this ruling.

IT IS SO ORDERED.

DATED:  August 2, 2022

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court