Judge: Robert B. Broadbelt, Case: 19STCV35158, Date: 2022-09-08 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: 19STCV35158    Hearing Date: September 8, 2022    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTIES:             Defendants Liberty Mutual Fire Insurance Company, John Morris, and Gloria Tibbets

RESPONDING PARTY:       Plaintiff Roya Ranjbari

Demurrer to First Amended Complaint

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

BACKGROUND

On October 1, 2019, plaintiff Roya Ranjbari (“Plaintiff”) filed this action against defendants Liberty Mutual Fire Insurance Company (“Liberty Mutual”), John Morris (“Morris”), and Gloria Tibbets (“Tibbets”) (collectively, “Defendants”), alleging three causes of action for (1) breach of contract, (2) tortious breach of the implied covenant of good faith and fair dealing, and (3) violation of Business and Professions Code section 17200, et seq.

Plaintiff filed the operative First Amended Complaint against Defendants on July 1, 2022.  The First Amended Complaint asserts four causes of action for (1) breach of contract, (2) tortious breach of the implied covenant of good faith and fair dealing, (3) violation of Business and Professions Code section 17200, et seq., and (4) negligent misrepresentation.

REQUEST FOR JUDICIAL NOTICE

The court grants Defendants’ request for judicial notice as to exhibits 1, 2, and 4.  (Evid. Code, § 452, subd. (d); Greenspan v. LADT LLC (2010) 191 Cal.App.4th 486, 525 [trial court properly took judicial notice of final arbitration award under Evidence Code section 452, subdivision (d)].) 

The court denies Defendants’ request for judicial notice as to exhibit 3.  (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882 [“Courts may not take judicial notice of allegations in affidavits, declarations and probation reports in court records because such matters are reasonably subject to dispute and therefore require formal proof”].)

DISCUSSION

The court overrules Liberty Mutual’s demurrer to Plaintiff’s first cause of action for breach of contract because it states facts sufficient to constitute a cause of action since Plaintiff sufficiently alleges that Liberty Mutual breached the terms of the policy by failing to comply with its terms, and caused Plaintiff damage.  (Code Civ. Proc., § 430.10, subd. (e); FAC ¶¶ 48, 50.)  Liberty Mutual argues that the arbitrator’s determination that it did not owe benefits to Plaintiff establishes that Plaintiff cannot allege facts sufficient to constitute this cause of action.  However, Liberty Mutual did not explain how the arbitrator’s award has preclusive effect, or explain how the award would otherwise require the court to find that Plaintiff cannot allege the elements required for this cause of action.  Although it is possible that Plaintiff might be precluded by the arbitrator’s award from alleging facts or claims that have been decided by the arbitrator’s award under the doctrines of claim preclusion or issue preclusion, Liberty Mutual has not asserted those legal doctrines or provided any analysis establishing that those doctrines, and each of their requirements, are applicable to this cause of action.

The court overrules Liberty Mutual’s demurrer to Plaintiff’s second cause of action for breach of the implied covenant of good faith and fair dealing because it states facts sufficient to constitute a cause of action, because, as set forth above, Liberty Mutual did not (1) assert the legal doctrines of claim or issue preclusion, or (2) provide the court with any analysis establishing that the arbitration award is binding on this court and has preclusive effect.  (Code Civ. Proc., § 430.10, subd. (e).)

The court overrules Liberty Mutual’s demurrer to Plaintiff’s third cause of action for unfair competition in violation of  Business and Professions Code section 17200, et seq. because it states facts sufficient to constitute a cause of action.  (Code Civ. Proc., § 430.10, subd. (e).)  First, as set forth above, Liberty Mutual did not explain how the arbitration award is binding on this court, or otherwise demonstrate that the doctrines of claim or issue preclusion, or their requirements, apply here.  Second, Liberty Mutual argues that Plaintiff, again, bases this cause of action entirely on the allegation that Liberty Mutual violated Insurance Code section 790.03, since Plaintiff alleges that Liberty Mutual’s conduct “constitute[s] a violation of various statutes and regulations governing the conduct of insurers in the State of California, including Insurance Code section 790.03 subdivision (h) and various regulations….”  (FAC ¶ 77.)  While “a litigant may not rely on the proscriptions of section 790.03 as the basis for a[n] [unfair competition] claim[,]” a plaintiff may allege an unfair competition cause of action against an insurer that has engaged in conduct that violates both the Unfair Insurance Practices Act and obligations imposed by other statutes or common law.  (Zhang v. Superior Court (2013) 57 Cal.4th 364, 384.)  Here, Plaintiff has also alleged that Liberty Mutual “violated the common law, among other statues and provisions” by its conduct, and therefore has not asserted this claim based on the sole alleged violation of Insurance Code section 790.03.  (FAC ¶ 74.)  The court therefore overrules the demurrer on this cause of action.

The court sustains Morris and Tibbets’s demurrer to Plaintiff’s fourth cause of action for negligent misrepresentation because (1) the court did not grant Plaintiff leave to add this new cause of action, and instead granted Plaintiff leave to amend her third cause of action only, and (2) it fails to state facts sufficient to constitute a cause of action since Plaintiff fails to allege misrepresentations of fact with the particularity required by California law, and instead alleges generally that Morris and Tibbets “made material misrepresentations…regarding” certain subjects (FAC ¶ 85).  (Code Civ. Proc., § 430.10, subd. (e); RJN Ex. 4, May 10, 2022 order, p. 7:2-4; Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates, Inc. (2004) 115 Cal.App.4th 1145, 1154; West v. JPMorgan Chase Bank (2013) 214 Cal.App.4th 780, 793 [applying specificity requirement to fraud and negligent misrepresentation causes of action].)

The burden is on the plaintiff “to articulate how it could amend its pleading to render it sufficient.”  (Palm Springs Villas II Homeowners Assn., Inc. v. Parth (2016) 248 Cal.App.4th 268, 290.)  To satisfy that burden, a plaintiff “must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading.”  (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.)  Here, Plaintiff requests leave to amend.  However, Plaintiff has not explained how amendment will change the legal effect of her pleading as to the fourth cause of action for negligent misrepresentation against Morris and Tibbets.  The court therefore denies Plaintiff leave to amend as to this cause of action.

ORDER

            The court overrules defendant Liberty Mutual Fire Insurance Company’s demurrer to plaintiff Roya Ranjbari’s first, second, and third causes of action.  (Code Civ. Proc., § 430.10, subd. (e).)

            The court sustains defendant John Morris and Gloria Tibbets’s demurrer to Plaintiff’s fourth cause of action for negligent misrepresentation without leave to amend.  (Code Civ. Proc., § 430.10, subd. (e).)

The court orders defendants John Morris and Gloria Tibbetts to lodge and serve a proposed judgment of dismissal within 10 days of the date of this order. (Code Civ. Proc., § 581, subd. (f)(1).)

The court sets an Order to Show Cause re dismissal (after sustaining demurrer without leave to amend) as to defendants John Morris and Gloria Tibbetts for hearing on ____________________, at 11:00 a.m.

The court orders defendants John Morris and Gloria Tibbetts to give notice of this order.

IT IS SO ORDERED.

DATED:  September 8, 2022

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court