Judge: Stephanie M. Bowick, Case: 2302107, Date: 2023-12-07 Tentative Ruling

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Case Number: 2302107    Hearing Date: December 7, 2023    Dept: 19

Defendant Vivian Ta’s (“Moving Defendant’s”) unopposed Demurrer to the Complaint is SUSTAINED in its entirety, without leave to amend.

Counsel for Moving Defendant to lodge a proposed order in accordance with these rulings.

Counsel for Moving Defendant to give notice and submit a [Proposed] Judgment of dismissal within 5 (five) court days. 

STATEMENT OF THE CASE

This case arises out of an alleged breach of an insurance contract.  Plaintiff is the owner of Golden Horse Century LLC and a commercial condominium unit located at 2095 S. Atlantic Blvd, Unit K, Monterey Park, CA 91754 (the “Property”).  (Compl. ¶1.)  Plaintiff entered into a commercial lease agreement with Defendant Hanh Ti Bich Nguyen to rent the Property.  (Id. ¶20.) 

Nguyen acquired a commercial liability insurance policy from Defendant State Farm General Insurance Company (“State Farm”), that listed Plaintiff as an additional insured.  (Id. ¶22.)  Nguyen provided Plaintiff with a certificate of liability insurance identifying Defendant Vivian Ta as an authorized representative for State Farm.  (Id. ¶23, Exh. 2.)  The certificate of liability insurance also lists Plaintiff as the certificate holder.  (Id.)  The certificate of liability insurance states it confers no rights upon the certificate holder and that the certificate of insurance does not constitute a contract between the authorized representative and the certificate holder.  (Id.)   

On February 1, 2020, Plaintiff discovered the Property had sustained water damage.  (Id. ¶24.)  At this time, Nguyen had also abandoned the Property.  (Id.)  Over nine months later, on November 12, 2020, Plaintiff made an insurance claim with Ms. Ta.  (Id. ¶27.)  Plaintiff claims that the State Farm policy provides for coverage for some or all of the property damage in the Property.  (Id. ¶29.)   

The operative complaint alleges claims for (1) breach of contract, (2) negligence and (3) insurance bad faith.

Defendant Vivian Ta (“Moving Defendant”) demurs to the Complaint.    

GROUNDS FOR DEMURRER

Moving Defendant demurs to the entire complaint on grounds it fails to state facts sufficient to constitute a cause of action.  Moving Defendant argues that the contract and bad faith insurance claims fail because there is no contract between Moving Defendant and Plaintiff.  Moving Defendant also demurs to the negligence claim because Moving Defendant argues it owed no duty to Plaintiff to prevent the alleged harm Plaintiff claims to have suffered in his Complaint. 

MEET/CONFER 

Code Civ. Proc. § 430.41 requires that before the filing of a demurrer the moving party “shall meet and confer in person or by telephone” with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.  (Code Civ. Proc. § 430.41(a).)  The parties are to meet and confer at least five days before the date the responsive pleading is due. (Code Civ. Proc. § 430.41(a)(2).)  Thereafter, the moving party shall file and serve a declaration detailing their meet and confer efforts. (Code Civ. Proc. § 430.41(a)(3).)  Moving Defendant submits the Declaration of Eduardo M. Osorio, which shows defense counsel attempted to meet and confer by telephone but counsel for Plaintiff did not return his call.  Defense counsel also sent a letter outlining the grounds for the demurrer, to which Plaintiff also failed to respond.  This satisfies the meet and confer requirements of Code Civ. Proc. § 430.41.

DISCUSSION

A demurrer for sufficiency tests whether the complaint states a cause of action.  (Hahn v. Mirda (2007) 147 Cal. App. 4th 740, 747.)  When considering demurrers, courts read the allegations liberally, with a view to substantial justice between the parties.  (Code Civ. Proc, § 452; Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 601.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice.  (Donabedian v. Mercury Ins. Co. (2004) 116 Cal. App. 4th 968, 994.)  “We treat the demurrer as admitting all material facts properly pleaded but not contentions, deductions or conclusions of fact or law. We accept the factual allegations of the complaint as true and also consider matters which may be judicially noticed.”  (Mitchell v. California Department of Public Health (2016) 1 Cal.App.5th 1000, 1007.)  “The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.”  (Hahn, 147 Cal.App.4th at 747.) “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff's proof need not be alleged.” (C.A. v. William S. Hart Union High School District (2012) 53 Cal.4th 861, 872.)  

1. First Cause of Action: Breach of Contract

Moving Defendant argues there is no contract between Plaintiff and Moving Defendant, and accordingly, there can be no breach of contract claim.  The Court agrees.

Plaintiff’s breach of contract claim against Moving Defendant relates to an insurance policy issued to Nguyen by State Farm, for which Plaintiff was listed as an additional insured.  (Compl. ¶22.)  It is not alleged that Moving Defendant was a party to the insurance policy.  Only a party to a contract can be liable for damages caused by a breach of that contract. (See, e.g., Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186 (stating that plaintiff must prove the existence of a contract to prevail on breach of contract claim).) 

Further, under California law, an insurance agent, like Moving Defendant, cannot be held liable for breach of contract and breach of the implied covenant of good faith and fair dealing because they are not a party to the insurance contract.  (Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566, 576; Henry v. Associated Indemnity Corp. (1990) 217 Cal.App.3d 1405, 1416-1417.)

Additionally, to overcome a demurrer, a cause of action for breach of contract must set forth the contract between the parties with sufficient certainty to show that the plaintiff has a right to performance by the defendant.  In California, there are two accepted methods of pleading a written contract with sufficient certainty: (1) the contract may be pled by either setting forth the terms of the contract verbatim or by attaching a copy of the written agreement, or (2) each term of the contract may be stated according to its legal effect.  (Construction Protection Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4^th 189, 198-199.)

Here, the Complaint does not attach the policy, reference it by its policy number, or state the terms of the policy with sufficient certainty.  Nor does the Complaint allege the legal effect of the policy.  As a result, the Court cannot determine whether the policy was even in effect at the time of the alleged incident and which provisions of the policy are alleged to have been breached. 

Accordingly, the demurrer to the first cause of action is SUSTAINED as to Moving Defendant.

2. Second Cause of Action:  Negligence

Plaintiff alleges that Moving Defendant was “negligent in the handling, processing and investigating insurance claims related to covered losses.”  (Compl. ¶42.)  But Plaintiff has not alleged any facts that would support a finding that Moving Defendant had a duty to handle, process, and investigate insurance claims. 

The Complaint alleges that Nguyen provided Plaintiff with a certificate of liability insurance that identified Moving Defendant as the “contact and authorized representative for [State Farm].”  (Id. ¶23.)  But there are no facts to suggest that as the contact and authorized representative, Moving Defendant was charged with the personal duty to handle, process or investigate Plaintiff’s claim. 

In addition, an insurance agent acting on behalf of an insurance company is generally not personally liable to the insured for negligence committed within the scope of his employment. (Lippert v. Bailey (1966) 241 Cal.App.2d 376, 382; see also Sanchez, 72 Cal.App.4th at 254-255.)  Liability for an insurance agent’s acts performed within the scope and with full disclosure of the agency relationship rests with the principal, the insurance company.  (Id.)  There is no allegation here that Moving Defendant was acting outside the scope of her agency relationship with State Farm. 

Accordingly, the demurrer to the second cause of action is SUSTAINED.

3. Third Cause of Action: Bad Faith Insurance

As with a breach of contract claim, a claim for breach of the covenant of good faith and fair dealing cannot be asserted against a defendant that is not a party to the contract.  (Gruenberg v. Aetna, Ins. Co., 9 Cal.3d at 576 (“Obviously, the non-insurer defendants were not parties to the agreement for insurance; therefore, they are not, as such subject to an implied duty of good faith and fair dealing.”)  Further, “California courts have refused to extend the liability for bad faith, the predominant insurer tort, to agents and employees of the insurer.”  (Sanchez v. Lindsey Morden Claims Services, Inc. (1999) 72 Cal.App.4^th 249, 254-255.)  Here, as discussed above, Plaintiff has not alleged Moving Party is a party to the insurance policy. 

Accordingly, the demurrer to the third cause of action is SUSTAINED.

C. Leave to Amend

Where the defect raised by a demurrer is reasonably capable of cure, leave to amend is routinely and liberally granted to give the plaintiff a chance to cure the defect in question.  (Velez v. Smith (2006) 142 Cal.App.4th 1154, 1174.)  The burden is on the complainant to show the Court that a pleading can be amended successfully. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) 

Plaintiff has not filed an opposition, and accordingly, has not met its burden to show that the Complaint can be amended successfully.