Judge: Robert B. Broadbelt, Case: 19STCV35158, Date: 2023-01-18 Tentative Ruling

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Case Number: 19STCV35158    Hearing Date: January 18, 2023    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                Defendant Liberty Mutual Fire Insurance Company

RESPONDING PARTY:       Plaintiff Roya Ranjbari

Motion to Stay Proceedings Pending Appeal

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

REQUEST FOR JUDICIAL NOTICE

The court grants Defendant’s request for judicial notice as to Exhibits 1, 2, and 4.  (Evid. Code, § 452, subd. (d).)

The court grants Defendant’s request to take judicial notice of the existence of Exhibit 3, as a declaration filed with the court, but does not take judicial notice of the allegations therein.  (Evid. Code, § 452, subd. (d); Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882 [courts may take judicial notice of the existence of each document in a court file but cannot take judicial notice of hearsay statements in decisions, or allegations in affidavits and declarations].)

DISCUSSION

Defendant Liberty Mutual Fire Insurance Company (“Defendant”) moves the court for an order staying proceedings in this action pending resolution of the appeal by plaintiff Roya Ranjbari (“Plaintiff”) of the court’s May 10, 2022 order denying Plaintiff’s petition to vacate the arbitration award.

Subject to certain exceptions, “the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order.”  (Code Civ. Proc., § 916, subd. (a).)  “The purpose of the automatic stay provision of section 916, subdivision (a) ‘is to protect the appellate court’s jurisdiction by preserving the status quo until the appeal is decided.  The [automatic stay] prevents the trial court from rendering an appeal futile by altering the appealed judgment or order by conducting other proceedings that may affect it.’”  (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 189.)  Whether a matter is considered to be embraced in or affected by a judgment or order depends on whether the proceedings “would have any effect on the ‘effectiveness’ of the appeal.”  (Ibid.)  A proceeding may affect the effectiveness of an appeal “if the possible outcomes on appeal and the actual or possible results of the proceeding are irreconcilable.”  (Id. at p. 190.)

Defendant argues that proceedings in this action are stayed pending resolution of Plaintiff’s appeal because the issue of whether Plaintiff is entitled to uninsured motorist benefits is the subject of mandatory arbitration, and until the Court of Appeal resolves the appeal relating to the arbitration award, Defendant cannot assert its defense of issue preclusion.  Plaintiff contends that this action is “operatively separate” from her uninsured motorist claim and therefore is not subject to the automatic stay provided by section 916.  Specifically, Plaintiff asserts that (1) this action concerns Defendant’s delay in investigating Plaintiff’s claim and its breach of duties owed to its insured, while (2) the underlying arbitration concerned the separate adjudication of the uninsured motorist claim.  (Opp., p. 4:5-12.)

The court finds that this action is stayed pending resolution of Plaintiff’s appeal of the court’s May 10, 2022 order and therefore grants Defendant’s motion.  (Code Civ. Proc., § 916, subd. (a).)

In the parties’ underlying uninsured motorist arbitration, Plaintiff was awarded “nothing” on her claim, and each party was ordered to bear their own costs, fees, and expenses.  (RJN Ex. 2, p. 8:5-6.)  On May 10, 2022, the court issued its order denying Plaintiff’s motion to set aside or vacate the arbitrator’s Findings and Award, from which Plaintiff appealed.  (May 10, 2022 Order, p. 7:5.) 

Although Plaintiff contends that this action is separate and distinct from her uninsured motorist claim, the court disagrees.  First, Plaintiff appears to base her claims against Defendant in this action, at least in part, on allegations that Defendant wrongfully refused to pay benefits owed to Plaintiff under her policy.  (FAC ¶ 46 [Defendant failed to comply with the requirements of the policy because it “failed to pay PLAINTIFF any benefits whatsoever”], ¶ 55 [Defendant breached the duty of good faith and fair dealing owed to Plaintiff “by ignoring facts establishing coverage for PLAINTIFF’s CLAIM,” “refused to provide any coverage,” and failed “to promptly pay any of the money benefits to which PLAINTIFF was, and is, contractually entitled”], ¶ 58, subds. (o), (q) [Defendant breached the duty of good faith and fair dealing by, inter alia, “Withholding payments from PLAINTIFF while knowing PLAINTIFF’s CLAIM for benefits under the POLICY to be valid” and “Deliberately denying benefits Defendants knew were owed under the POLICY”].)  

Second, Plaintiff’s tortious breach of the implied covenant of good faith and fair dealing claim requires a threshold determination that Defendant wrongfully withheld benefits due under her insurance policy.  (Benavides v. State Farm General Ins. Co. (2006) 136 Cal.App.4th 1241, 1250 [“an insured cannot maintain a claim for tortious breach of the implied covenant of good faith and fair dealing absent a covered loss…  If the insurer’s investigation—adequate or not—results in a correct conclusion of no coverage, no tort liability arises for breach of the implied covenant”].)

Thus, any future rulings on the merits of Plaintiff’s claims in this action could result in a conflicting decision with a ruling on Plaintiff’s appeal.  For example, if the court proceeds on the merits of this action and finds that Defendant did not breach its duties to Plaintiff because it did not owe Plaintiff any benefits under her policy, that ruling could conflict with a ruling by the Court of Appeal, if it finds that the arbitration award should have been vacated and orders the parties to proceed to arbitration on the issue of whether Plaintiff is legally entitled to recover damages pursuant to Insurance Code section 11580.2.  (Bouton v. USAA Casualty Ins. Co. (2008) 43 Cal.4th 1190, 1194 [Insurance Code section 11580.2 governs uninsured and underinsured motorist coverage claims].)

The court therefore finds that any proceedings on the issues presented by Plaintiff’s First Amended Complaint could have “an[] effect on the ‘effectiveness’” of Plaintiff’s appeal and therefore finds that this action is stayed.  (Varian Medical Systems, Inc., supra, 35 Cal.4th at p. 189; Code Civ. Proc., § 916, subd. (a).)

ORDER

            The court grants defendant Liberty Mutual Fire Insurance Company’s motion to stay proceedings pending appeal.

The court orders that this action is stayed pending completion of plaintiff Roya Ranjbari’s appeal of the court’s May 10, 2022 order denying the petition to set aside or vacate arbitration award.

The court orders that the trial scheduled for February 21, 2024, and the final status conference scheduled for September 9, 2024, are vacated, subject to being rescheduled after the stay is lifted.

The court further orders that the following hearings are vacated, subject to being rescheduled if the stay is lifted: (1) motion to compel further discovery responses to form interrogatories, scheduled for August 11, 2023; (2) motion to compel further discovery responses to requests for admission, scheduled for August 18, 2023; (3) motion to compel further discovery responses to requests for production of documents, scheduled for August 25, 2023; and (4) motion to compel further discovery responses to specially prepared interrogatories, scheduled for September 1, 2023.

The court sets a Status Conference re: appeal for _____________, 2023, at 11:00 a.m., in Department 53.

The court orders the parties to file a joint report on the status of the appeal no later than _____________, 2023.

The court orders defendant Liberty Mutual Fire Insurance Company to give notice of this ruling.

IT IS SO ORDERED.

DATED:  January 18, 2023

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court