Judge: Shirley K. Watkins, Case: 22STCV21419, Date: 2023-01-31 Tentative Ruling

If ALL parties submit on the tentative, then no appearance is necessary unless some other matter (i.e., Case Management Conference) is on calendar. It is not necessary to call the court to request oral argument. Oral argument is permitted on all tentative rulings.

Case Number: 22STCV21419    Hearing Date: January 31, 2023    Dept: T

            [TENTATIVE] ORDER:  Defendant California Automobile Insurance Company’s Demurrer to the Complaint is OVERRULED.

Defendant Mercury Insurance Group’s Demurrer to the Complaint is SUSTAINED WITHOUT LEAVE TO AMEND. 

            Defendants California Automobile Insurance Company and Mercury Insurance Group’s Request for Judicial Notice is GRANTED.

Introduction

            Defendants California Automobile Insurance Company (CAIC) and Mercury Insurance Group (Mercury) (collectively, Defendants) demurred to Plaintiff Justin Bass’ (Plaintiff) Complaint’s three causes of action (COA) for breach of contract, breach of the implied covenant of good faith and fair dealing and bad faith. 

            Procedure

            Defendants argued that the Opposition was untimely filed/served.  The Opposition is required to be filed/served nine court days prior to the hearing date of January 31, 2023, which is January 18, 2023.  The Court file reflects that the Opposition was filed on January 13, 2023 and the Proof of Service (POS) showed electronic service on the same date.  Since the Opposition was filed/served before the January 18, 2023 deadline, the Opposition is timely filed/served.

Defendants mistakenly rely upon the original hearing date of December 9, 2022, scheduled in Department 28.  At the December 9, 2022, the action was transferred out and the hearing was rescheduled for the instant hearing date.  Because the action was transferred resulting in a continued hearing date, the deadline for the Opposition followed the instant hearing date.  The Opposition is timely filed/served.

Defendants requested judicial notice (RJN) of the Policy identified as policy no. CAHP0000095415.  Plaintiff expressly alleged that the Policy at issue is referenced by policy no. CAHP0000095415.  (Compl. par. 10:)  When a contract relates to a complaint, the court may take judicial notice of the contract in ruling on a demurrer.  (Ascherman v. General Reinsurance Corp. (1986) 183 Cal.App.3d 307, 310.)  Because Plaintiff’s claims are based upon policy no. CAHP0000095415, Defendants’ RJN is GRANTED.

            Discussion 

            Defendants argued that the three COAs are time-barred by the one-year statute of limitations (SOL) stated in the Policy.  (Wetzel v. Lou Ehlers Cadillac Group Long Term

Disability Ins. Program (9th Cir. 2000) 222 F.3d 643, 647-648; Velasquez v. Truck Ins. Exch.

(1991) 1 Cal.App.4th 712, 721.)  Defendants asserted that the SOL accrued when the claim was allegedly denied in January 2020.  (See Compl. par. 24.) However, Defendants misconstrued the facts alleged in paragraph 24.  The allegation stated that Defendant “arbitrarily denied ALE [Alternative Living Expenses] payments for November and December 2019, but approved such payments for the month of January 2020.”  The claim at issue, although inclusive of ALE payments, also included repairs for the water damage and was not limited to ALE payments.  Plaintiffs further alleged that they incurred more than $20,000 in out-of-pocket ALE.  (Compl. par. 23.)  The $20,000+ ALE expenses are only a portion of the entire $182,671.69 in special damages sought.  There is no allegation in paragraph 24 that the entire claim was denied.  Because Defendants’ SOL argument is based upon a misinterpretation of the factual allegations, Defendants’ argument is insufficient to show that the entire action is “clearly and affirmatively” time barred.  (Lee v. Henley (2015) 61 Cal.4th 1225, 1232.)  Defendants’ SOL argument is unpersuasive. 

            Defendants then argued that subsequent denial letters dated February 24, 2020, April 10, 2020, and December 21, 2020, were issued by CAIC (Suppl Inouye Decl. Exhs. B-D.)  These allegations are not found in the body of the Complaint and correspondence between parties are not judicially noticeable facts.  The Court did not and cannot consider these newly alleged facts within the Reply to determine the demurrer because they are not alleged within the Complaint and not judicially noticeable. 

Mercury argued that they did not issue the Policy and that they are not the insurer.  Mercury argued that the Policy was issued by CAIC.  Plaintiff alleged that both Defendants were the insurers.  (Compl. pars. 2 & 10.)  However, Plaintiff’s allegation is contradicted by the Policy/Declaration Page attached to Defendants’ RJN.  The terms of the Policy/Declaration Page expressly stated that CAIC is the insurer and contracting party.  There is no reference to Mercury as being the insurer or contracting party.  Plaintiff argued that the letter head of the Policy/Declaration Page identified Mercury.  However, Plaintiff’s argument misconstrued the identification in the letter head.  The letter head only stated “Mercury Insurance.”  The letter head did not identify “Mercury Insurance Group.”  Mercury is not seen as the insurer per the contract.  Because Plaintiff’s argument misconstrued the facts found in the letter head of the Policy/Declaration Page, Plaintiff’s argument is unpersuasive.

Mercury’s Demurrer is SUSTAINED WITHOUT LEAVE TO AMEND. 

CAIC’s Demurrer is OVERRULED.  Answer shall be filed within 20 days.

            IT IS SO ORDERED, ____________________ TO GIVE NOTICE.