Judge Stephanie M. Bowick, Case Number: 22STCV25664, Date: 2025-02-27 Tentative Ruling

Judge: Stephanie M. Bowick, Case: 22STCV25664, Date: 2025-02-27 Tentative Ruling

CASE NAME: Tihan Shemesh, et al. v. State Farm General Insurance Company

CASE NUMBER: 22STCV25664

DATE FILED: 08/08/2022

TRIAL DATE: 05/13/2025

CALENDAR NUMBER: 9

PROCEEDING: Motion for Summary Judgment Or, In the Alternative, Summary Adjudication

MOVING PARTY: Defendant State Farm General Insurance Company

OPPOSITION: Plaintiffs Tihan Shemesh and Rozalin Shemesh

REPLY: Yes

TENTATIVE RULING

After full consideration of the papers and evidence filed and inferences reasonably drawn therefrom, Defendant State Farm General Insurance Company’s Motion for Summary Judgment Or, In the Alternative, Summary Adjudication is DENIED in its entirety.

STATEMENT OF THE CASE

This is a breach of contract action. In the First Amended Complaint (“FAC”), Plaintiffs Tihan Shemesh and Rozalin Shemesh (collectively, “Plaintiffs”) bring suit against Defendant State Farm General Insurance Company (“Defendant”) alleging the following causes of action:

Plaintiffs allege that Defendant denied a claim for water damage in breach of the homeowner’s insurance policy issued to Plaintiffs by Defendant (the “Policy”).

Defendant filed the instant Motion for Summary Judgment Or, In the Alternative, Summary Adjudication (the “Motion”).

GROUNDS FOR MOTION

Pursuant to Code of Civil Procedure section 437c, Defendant moves for summary judgment on the grounds that none of Plaintiffs’ claims have merit and that there are no triable issues of material fact as to any of Plaintiffs’ claims (ISSUE NO. 1).

In the alternative, Defendant moves for summary adjudication of the following “causes of action and issues” on the ground the claims have no merit and there are no triable issues of material fact:

ISSUE NO. 2: Whether the Efficient Proximate Cause Doctrine restores coverage;

ISSUE NO. 3: Whether Plaintiffs can create a triable issue through speculation of conjecture;

ISSUE NO. 4: Plaintiffs’ Second Cause of Action on the basis Defendant’s conduct was reasonable as a matter of law;

ISSUE NO. 5: Plaintiffs’ Second Cause of Action on the basis of the Genuine Dispute Doctrine

ISSUE NO. 6: Whether Plaintiffs can establish a claim for emotional distress damages; and

Objection to Plaintiffs’ Exhibit 104, Portions of Richard Nelles’ Deposition

The Court cannot rule on Defendant’s Objection No. 5 because the Court could not find any portions of any Glenn Nahmias deposition filed by Plaintiffs.

DISCUSSION

Notice of the motion and supporting papers shall be served on all other parties to the action at least 81 days before the time appointed for hearing. If the notice is served by mail, the required 81-day period of notice shall be increased by 5 days if the place of address is within the State of California, 10 days if the place of address is outside the State of California but within the United States, and 20 days if the place of address is outside the United States. If the notice is served by facsimile transmission, express mail, or another method of delivery providing for overnight delivery, the required 81-day period of notice shall be increased by two court days.

“The motion shall be supported by affidavits, declarations, admissions, answers to interrogatories, depositions, and matters of which judicial notice shall or may be taken.” (Code Civ. Proc., § 437c(b)(1).)

Code of Civil Procedure section 437c, subdivision (b)(1) further prescribes that:

The supporting papers shall include a separate statement setting forth plainly and concisely all material facts that the moving party contends are undisputed. Each of the material facts stated shall be followed by a reference to the supporting evidence. The failure to comply with this requirement of a separate statement may in the court's discretion constitute a sufficient ground for denying the motion.

Here, Defendant provides the required separate statement. The Motion was timely filed and served, and will be heard more than 30 days prior to trial. The Court finds the Motion timely and properly before the Court.

The motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. In determining if the papers show that there is no triable issue as to any material fact, the court shall consider all of the evidence set forth in the papers, except the evidence to which objections have been made and sustained by the court, and all inferences reasonably deducible from the evidence, except summary judgment shall not be granted by the court based on inferences reasonably deducible from the evidence if contradicted by other inferences or evidence that raise a triable issue as to any material fact.

(1) A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages, as specified in Section 3294 of the Civil Code, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs. A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.

(2) A motion for summary adjudication may be made by itself or as an alternative to a motion for summary judgment and shall proceed in all procedural respects as a motion for summary judgment. A party shall not move for summary judgment based on issues asserted in a prior motion for summary adjudication and denied by the court unless that party establishes, to the satisfaction of the court, newly discovered facts or circumstances or a change of law supporting the issues reasserted in the summary judgment motion.

The purpose of the law of summary judgment 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.) In analyzing motions for summary adjudication, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent's claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.” (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.)

A defendant or cross-defendant has met that party’s 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, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action. 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. The plaintiff or cross-complainant shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.

The California Supreme Court in Aguilar, supra, laid down the requisite burden for the party moving for summary judgment:

From commencement to conclusion, the moving party bears the burden of persuasion that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. There is a genuine issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof. Initially, the moving party bears a burden of production to make a prima facie showing of the nonexistence of any genuine issue of material fact. If he carries his burden of production, he causes a shift: the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a genuine issue of material fact. How each party may carry his burden of persuasion and/or production depends on which would bear what burden of proof at trial. Thus, if a plaintiff who would bear the burden of proof by a preponderance of evidence at trial moves for summary judgment, he must present evidence that would require a reasonable trier of fact to find any underlying material fact more likely than not.

The court must “view the evidence in the light most favorable to the opposing party and accept all inferences reasonably drawn therefrom.” (Hinesley, supra, 135 Cal.App.4th at 294; Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389 (Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”).) A motion for summary adjudication must be denied where the moving party's evidence does not prove all material facts, even in the absence of any opposition, (Leyva v. Sup. Ct. (1985) 164 Cal.App.3d 462, 475), or where the opposition is weak. (Salasguevara v. Wyeth Labs., Inc. (1990) 222 Cal.App.3d 379, 384, 387.)

“[I]n ruling on a motion for summary judgment, a trial court must consider all the evidence submitted, except the court may ignore evidence not disclosed in moving party's separate statement of undisputed facts.” (San Diego Watercrafts, Inc. v. Wells Fargo Bank, N.A. (2002) 102 Cal.App.4th 308, 315.) However, the court may in its discretion look to evidence outside the separate statement, subject to due process concerns. (Id. at 315-317.)

A moving defendant has two means by which to shift the burden of proof to the plaintiff to produce evidence creating a triable issue of fact. (Brantley v. Pisaro (1996) 42 Cal.App.4th 1591, 1598.) “The defendant may rely upon factually insufficient discovery responses by the plaintiff to show that the plaintiff cannot establish an essential element of the cause of action sued upon.” (Id. (citing Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 590).) “Alternatively, the defendant may utilize the tried and true technique of negating (‘disproving’) an essential element of the plaintiff's cause of action.” (Id. (citing Chevron U.S.A., Inc. v. Superior Court (1992) 4 Cal.App.4th 544, 552-553, disapproved of on other grounds by Camargo v. Tjaarda Dairy (2001) 25 Cal.4th 1235); see Code Civ. Proc., § 437c(p)(2).)

Defendant moves for summary judgment on the ground that the Policy unambiguously excludes coverage for Plaintiffs’ claimed loss. (Motion, pp. 13-21.)

Plaintiffs contend that there are triable issues of fact as to (1) whether Defendant breached the express terms of the Policy by failing to cover Plaintiffs’ claimed loss; and (2) whether Defendant’s investigation of Plaintiffs’ claim and failure to pay the claim constitutes a breach of the covenant of bad faith and fair dealing. (See Opposition at pp. 6-15.)

All of Plaintiffs’ claims seek to recover against Defendant for its alleged breach of the Policy due to Defendant’s denial of Plaintiffs’ claim for water damage (hereafter, the “Claim”). (FAC, ¶¶ 4-20.)

There is no dispute that the alleged Policy is a homeowner’s insurance policy with policy number 71-G1-F786-1 provided by Defendant as Exhibit 1. (Plaintiffs’ Response to Defendant’s SSUMF No. 1.)

There is no dispute that the Claim was reported to Defendant on March 28, 2022. (Plaintiffs’ Response to Defendant’s SSUMF No. 2.)

The Policy, under “SECTION 1 – LOSSES NOT INSURED,” provides, in pertinent part, as follows:

1. We will not pay for any loss to the property described in Coverage A that is caused by one or more of the items below, regardless of whether the loss occurs abruptly or gradually, involves isolated or widespread damage, arises from natural or external forces, or occurs as a result of any combination of these:

f. wear, tear, decay, marring, scratching, deterioration, inherent vice, latent defect, or mechanical breakdown;

“When determining whether a particular policy provides a potential for coverage and a duty to defend, [California courts] are guided by the principle that interpretation of an insurance policy is a question of law.” (Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 18 (citing AIU Ins. Co v. Superior Court (1990) 51 Cal.3d 807, 818 [AIU]).) “The rules governing policy interpretation require us to look first to the language of the contract in order to ascertain its plain meaning or the meaning a layperson would ordinarily attach to it.” (Id. (citing Civ. Code, § 1638; Reserve Insurance Co. v. Pisciotta (1982) 30 Cal.3d 800, 807); see Civ. Code, § 1638 [“The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity.”].)

“‘The ‘clear and explicit’ meaning of these provisions, interpreted in their ‘ordinary and popular sense,’ unless ‘used by the parties in a technical sense or a special meaning is given to them by usage’ ([Civ. Code, § 1644]), controls judicial interpretation. ([Civ. Code, § 1638].)’” (Id. (quoting AIU, supra, 51 Cal.3d at 821-822; Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264-1265).)

“A policy provision will be considered ambiguous when it is capable of two or more constructions, both of which are reasonable.” (Id. (citing Bay Cities Paving Grading, Inc. v. Lawyers' Mutual Insurance Co. (1993) 5 Cal.4th 854, 867).) “But language in a contract must be interpreted as a whole, and in the circumstances of the case, and cannot be found to be ambiguous in the abstract.” (Id. (citing Bank of the West, supra, 2 Cal.4th at 1265).)

[….] The fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties. (Civ. Code, § 1636.) If contractual language is clear and explicit, it governs. (Civ. Code, § 1638.) On the other hand, “[i]f the terms of a promise are in any respect ambiguous or uncertain, it must be interpreted in the sense in which the promisor believed, at the time of making it, that the promisee understood it.” (Id., § 1649; see AIU, supra, 51 Cal.3d at p. 822.) This rule, as applied to a promise of coverage in an insurance policy, protects not the subjective beliefs of the insurer but, rather, “the objectively reasonable expectations of the insured.” (AIU, supra, at p. 822.) Only if this rule does not resolve the ambiguity do we then resolve it against the insurer. (See AIU, supra, at p. 822.)

In summary, a court that is faced with an argument for coverage based on assertedly ambiguous policy language must first attempt to determine whether coverage is consistent with the insured's objectively reasonable expectations. In so doing, the court must interpret the language in context, with regard to its intended function in the policy. (Producers Dairy Delivery Co. v. Sentry Ins. Co. (1986) 41 Cal.3d 903, 916-917 & fn. 7….) This is because “language in a contract must be construed in the context of that instrument as a whole, and in the circumstances of that case, and cannot be found to be ambiguous in the abstract.” (Id., at p. 916, fn. 7, italics added; cf. Civ. Code, § 1641.)

These well-established precepts of insurance coverage guide us in our determination of whether a particular policy requires a liability insurer to defend a lawsuit filed by a third party against the insured. It has long been a fundamental rule of law that an insurer has a duty to defend an insured if it becomes aware of, or if the third party lawsuit pleads, facts giving rise to the potential for coverage under the insuring agreement. (Gray [v. Zurich Insurance Co. (1966) 65 Cal.2d 263] at p. 276; see also Montrose Chemical Corp. v. Superior Court [(1993) 6 Cal.4th 287] at p. 295.) This duty, which applies even to claims that are “groundless, false, or fraudulent,” is separate from and broader than the insurer's duty to indemnify. (Gray, supra, 65 Cal.2d at pp. 273-275.) However, “ 'where there is no possibility of coverage, there is no duty to defend ....' ” (Fire Ins. Exchange v. Abbott (1988) 204 Cal.App.3d 1012, 1029…].) Gray and its progeny have made it clear that the determination whether the insurer owes a duty to defend usually is made in the first instance by comparing the allegations of the complaint with the terms of the policy. Facts extrinsic to the complaint give rise to a duty to defend when they reveal a possibility that the claim may be covered by the policy. (Gray, supra, 65 Cal.2d at p. 276; La Jolla Beach & Tennis Club Inc. v. Industrial Indemnity Co. (1994) 9 Cal.4th 27, 44… [test is whether underlying action for which defense is sought potentially seeks relief within policy terms].)

Conversely, where the extrinsic facts eliminate the potential for coverage, the insurer may decline to defend even when the bare allegations in the complaint suggest potential liability. (Saylin v. California Ins. Guarantee Assn. (1986) 179 Cal.App.3d 256, 263…; State Farm Mut. Auto. Ins. Co. v. Flynt (1973) 17 Cal.App.3d 538, 548-549….) This is because the duty to defend, although broad, is not unlimited; it is measured by the nature and kinds of risks covered by the policy. (Gray, supra, 65 Cal.2d at p. 274; ….)

“The insurer's defense duty is obviated where the facts are undisputed and conclusively eliminate the potential the policy provides coverage for the third party's claim.” (Palp, Inc. v. Williamsburg National Ins. Co. (2011) 200 Cal.App.4th 282, 289 (citing Waller, supra, 11 Cal.4th at 19); see VierraMoore, Inc. v. Continental Cas. Co. (E.D. Cal. 2013) 940 F.Supp.2d 1270, 1278.)

Thus, “[i]nterpretation of an insurance contract, including the resolution of contractual ambiguities, is a matter of law, and thus can be decided on summary judgment when facts are undisputed.” (VierraMoore, Inc., supra, 940 F. Supp. at 1279 (citing Barnett v. State Farm Gen. Ins. Co. (2011) 200 Cal.App.4th 536, 543); see Waller, supra, 11 Cal.4th at 24 [“…the duty to defend issue involves a question of law based on undisputed facts.”]; Hervey v. Mercury Cas. Co. (2010) 185 Cal.App.4th 954, 962–963 [“When the facts are undisputed, ... the interpretation of a contract, including whether an insurance policy is ambiguous or whether an exclusion or limitation is sufficiently conspicuous, plain, and clear, is a question of law.”].)

In Montrose, supra, the California Supreme Court restated “the familiar principles governing adjudication of the insurer's duty to defend” as follows:

In Horace Mann Ins. Co. v. Barbara B. (1993) 4 Cal.4th 1076… observed: “[A] liability insurer owes a broad duty to defend its insured against claims that create a potential for indemnity. (Gray v. Zurich Insurance Co. [supra, 65 Cal.2d 263 (Gray)]. As we said in Gray, 'the carrier must defend a suit which potentially seeks damages within the coverage of the policy.' (Id. at p. 275….) Implicit in this rule is the principle that the duty to defend is broader than the duty to indemnify; an insurer may owe a duty to defend its insured in an action in which no damages ultimately are awarded. [Citations.]” (Horace Mann, supra, 4 Cal.4th at p. 1081.)

“The determination whether the insurer owes a duty to defend usually is made in the first instance by comparing the allegations of the complaint with the terms of the policy. Facts extrinsic to the complaint also give rise to a duty to defend when they reveal a possibility that the claim may be covered by the policy. (Gray, supra, 65 Cal.2d at p. 276.)” (Horace Mann, supra, 4 Cal.4th at p. 1081.) As one Court of Appeal has put it, “[f]or an insurer, the existence of a duty to defend turns not upon the ultimate adjudication of coverage under its policy of insurance, but upon those facts known by the insurer at the inception of a third party lawsuit. [Citation.] Hence, the duty 'may exist even where coverage is in doubt and ultimately does not develop.' [Citation.]” (Saylin v. California Ins. Guarantee Assn. (1986) 179 Cal.App.3d 256, 263….)

The defense duty is a continuing one, arising on tender of defense and lasting until the underlying lawsuit is concluded (Lambert v. Commonwealth Land Title Ins. Co. (1991) 53 Cal.3d 1072, 1077, 1079…), or until it has been shown that there is no potential for coverage…. Imposition of an immediate duty to defend is necessary to afford the insured what it is entitled to: the full protection of a defense on its behalf. (See Signal Companies, Inc. v. Harbor Ins. Co. (1980) 27 Cal.3d 359, 367….

“[T]he insurer need not defend if the third party complaint can by no conceivable theory raise a single issue which could bring it within the policy coverage.” (Gray, supra, 65 Cal.2d at 276, fn. 15; accord, Montrose Chemical Corp., supra, 6 Cal.4th at 301.) This rule “cannot reasonably be understood to refer to anything beyond a bare ‘potential’ or ‘possibility’ of coverage as the trigger of a defense duty.” (Montrose Chemical Corp., supra, 6 Cal.4th at 301; see id. [“…California courts have used the terms “possibility” and “potential” interchangeably….”].)

“Any doubt as to whether the facts establish the existence of the defense duty must be resolved in the insured's favor.” (Id. at 299-300 (citing United Pacific Ins. Co. v. McGuire Co. (1991) 229 Cal.App.3d 1560, 1567; CNA, supra, 176 Cal.App.3d at 605, fn. 1; Eichler Homes, Inc. v. Underwriters at Lloyd's, London (1965) 238 Cal.App.2d 532, 538); see Horace Mann Ins. Co., supra, 4 Cal.4th at 1081 (citing CNA, supra, 176 Cal.App.3d at 605, fn. 1 [“Any doubt as to whether the facts give rise to a duty to defend is resolved in the insured's favor.”].)

While Defendant contends that “[t]he evidence conclusively shows that the claimed damage was caused by perils expressly excluded under the Policy, namely wear and tear, deterioration,” (Motion at p. 15), the Court finds that Defendant fails to sustain its burden for purposes of the instant Motion to demonstrate that Plaintiffs’ claimed damages were caused by perils expressly excluded by Policy, namely, wear and tear and/or deterioration.

First, after ruling on Plaintiffs’ evidentiary objections, the Court finds that Defendant’s evidence is insufficient to make a prima facie showing of no triable issue of material fact regarding whether the damages at issue were caused by perils expressly excluded by Policy, including “long-term water intrusion and damage, including rot, corrosion, and biological growth around windows and doors.” (Motion at p. 15 (citing Defendant’s SSUMF Nos. 5-6; Richard Nelles Decl., ¶¶ 12-14, Ex. 2).)

In moving for summary judgment/adjudication, Defendant relies on the observations and findings of claims specialist Joshua Noriega, the claim file provided as Defendant’s Exhibit 2, and the expert testimony in the declarations of Lola Hogan and George Clay Mitchel. (Motion at pp. 9-12, 15-21; see id. at pp 22-32.)

Yet, Defendant has not provided any competent, admissible evidence as to what claims specialist Joshua Noriega observed during the investigation. (See, e.g., Defendant’s SSUMF Nos. 4-7.)

The Court also agrees with Plaintiffs that Defendant’s Exhibit 2 is plagued by double hearsay and is inadmissible based on the briefing and evidence filed. (See, e.g., Mackey v. Board of Trustees of California State University (2019) 31 Cal.App.5th 640, 656 (citing Aguilar, supra, 25 Cal.4th at 856; Brown v. Ransweiler (2009) 171 Cal.App.4th 516, 525–526) [“Although a trial court does not ‘try’ the case or weigh the evidence at summary judgment, it does consider the competency of evidence presented.”]; id. at 657 (quoting Bozzi v. Nordstrom, Inc. (2010) 186 Cal.App.4th 755, 761, 111) [“‘The same rules of evidence that apply at trial also apply to the declarations submitted in support of and in opposition to motions for summary judgment. Declarations must show the declarant's personal knowledge and competency to testify, state facts and not just conclusions, and not include inadmissible hearsay or opinion.’”]; Perry v. Bakewell Hawthorne, LLC (2017) 2 Cal.5th 536, 538 [“… section 437c, subdivision (d) requires that affidavits and declarations submitted in summary judgment proceedings ‘set forth admissible evidence.’”].)

Exhibit 2 contains multiple extrajudicial statements made by multiple individuals, labeled in Exhibit 2 as “Performers,” none of whom are Mr. Nelles. While Mr. Nelles attests in his declaration that, as the Team Manager for the team responsible for handling Plaintiffs’ claim, he supervises the claim specialists and oversees the investigation of claims in the Southern California area, (Richard Nelles Decl., ¶ 1), he also testified during his deposition that he did not have any personal involvement with the Claim. (Plaintiffs’ Ex. 104, p. 7.)

The Law Revision Commission Comments for Evidence Code section 1271 provide that:

Section 1271 requires the judge to find that the sources of information and the method and time of preparation of the record “were such as to indicate its trustworthiness.” Under the language of Code of Civil Procedure Section 1953f, the judge must determine that the sources of information and method and time of preparation “were such as to justify its admission.” The language of Section 1271 is more accurate, for the cases hold that admission of a business record is not justified when there is no preliminary showing that the record is reliable or trustworthy. E.g., People v. Grayson, 172 Cal.App.2d 372, 341 P.2d 820 (1959) (hotel register rejected because “not shown to be true and complete”).

“The chief foundation of the special reliability of business records is the requirement that they must be based upon the first-hand observation of someone whose job it is to know the facts recorded. . . . But if the evidence in the particular case discloses that the record was not based upon the report of an informant having the business duty to observe and report, then the record is not admissible under this exception, to show the truth of the matter reported to the recorder.” McCormick, Evidence § 286 at 602 (1954), as quoted in MacLean v. City & County of San Francisco, 151 Cal.App.2d 133, 143, 311 P.2d 158, 164 (1957).

Applying this standard, the cases have rejected a variety of business records on the ground that they were not based on the personal knowledge of the recorder or of someone with a business duty to report to the recorder. Police accident and arrest reports are usually held inadmissible because they are based on the narrations of persons who have no business duty to report to the police. MacLean v. City & County of San Francisco, 151 Cal.App.2d 133, 311 P.2d 158 (1957); Hoel v. City of Los Angeles, 136 Cal.App.2d 295, 288 P.2d 989 (1955). They are admissible, however, to prove the fact of the arrest. Harris v. Alcoholic Bev. Con. Appeals Bd., 212 Cal.App.2d 106, 23 Cal.Rptr. 74 (1963). Similar investigative reports on the origin of fires have been held inadmissible because they were not based on personal knowledge. Behr v. County of Santa Cruz, 172 Cal.App.2d 697, 342 P.2d 987 (1959); Harrigan v. Chaperon, 118 Cal.App.2d 167, 257 P.2d 716 (1953).

Section 1271 will continue the law developed in these cases that a business report is admissible only if the sources of information and the time and method of preparation are such as to indicate its trustworthiness. [7 Cal.L.Rev.Comm. Reports 1 (1965)].

Additionally, even if Exhibit 2 may be made admissible pursuant to Evidence Code section 1271, this does not mean that hearsay statements made by the “Performers” are rendered admissible as each layer of multiple hearsay must be analyzed separately. (See, e.g., Zanone v. City of Whittier (2008) 162 Cal.App.4th 174, 192 [“Moreover, the summaries, even if they had been established as business records, themselves contained hearsay statements regarding the employees reasons for leaving for which no exception had been established.”]; Alvarez v. Jacmar Pacific Pizza Corp. (2002) 100 Cal.App.4th 1190, 1205 [“[w]hen multiple hearsay is offered, an exception for each level of hearsay must be found in order for the evidence to be admissible”]; People v. Ayers (2005) 125 Cal.App.4th 988, 994-995; Evid. Code, § 1201 [“statement within the scope of an exception to the hearsay rule is not inadmissible on the ground that the evidence of such statement is hearsay evidence if such hearsay evidence consists of one or more statements each of which meets the requirements of an exception to the hearsay rule”].)

Here, the Court agrees with Plaintiffs that the declaration of Richard Nelles is insufficient to render Exhibit 2 admissible and, assuming, arguendo, that Exhibit 2 was admissible pursuant to Evidence Code section 1201, Defendant has not established that the extrajudicial statements by the “Performers” or others are admissible as those statements are also hearsay. (See People v. Reyes (1974) 12 Cal.3d 486, 503 [“Whether the conclusion is based upon observation of an act, condition or event or upon sound reason or whether the person forming it is qualified to form it and testify to it can only be established by the examination of that party under oath. . .”].)

The Court also notes that, “[i]n considering the evidence presented by the parties in the summary judgment motion, the court ‘strictly scrutinize[es]’ the declarations submitted by the moving party and ‘liberally constru[es]’ those offered by the opposing party, and it ‘resolv[es] any evidentiary doubts or ambiguities in [the opposing party's] favor.’” (Santa Clara Valley Water District v. Century Indemnity Company (2023) 89 Cal.App.5th 1016, 1035 (quoting Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768).)

For these reasons, the Court finds that Exhibit 2 is not admissible evidence that may be used in support of Defendant’s Motion.

For the same reasons, the Court agrees with Plaintiffs that the expert testimony contained in the declarations of Lola Hogan and George Clay Mitchel are also inadmissible because they are based on Exhibit 2. (See Lola Hogan Decl., ¶ 5; George Clay Mitchel Decl., ¶ 3.)

Moreover, the testimony of Lola Hogan and George Clay Mitchel are also based on other documents that are either not sufficiently identified, (see Hogan Decl. at ¶ 5 [attesting that opinions based on unidentified “correspondence between State Farm and Plaintiffs”]), or constitute inadmissible hearsay. (See Clay Mitchel Decl. at ¶ 3 [attesting that opinions based on unidentified “Statements from Plaintiffs' public adjuster Glenn Nahmias].) As explained by the California Supreme Court in People v. Sanchez (2016) 63 Cal.4th 665: “When any expert relates to the jury case-specific out-of-court statements, and treats the content of those statements as true and accurate to support the expert's opinion, the statements are hearsay.” (Id. at 686; see Fernandez v. Alexander (2019) 31 Cal.App.5th 770, 779 (quoting Bozzi, supra, 186 Cal.App.4th at 761 [“‘The same rules of evidence that apply at trial also apply to the declarations submitted in support of and in opposition to motions for summary judgment. Declarations must show the declarant's personal knowledge and competency to testify, state facts and not just conclusions, and not include inadmissible hearsay or opinion.’”].)

Additionally, the Court rejects Defendant’s suggestions that Plaintiffs’ own retained professionals warrant judgment as a matter of law in Defendant’s favor. (See Motion at pp. 16-17; Defendant’s SSUMF Nos. 13-18, 26-29.)

The Court agrees with Plaintiffs that the testimony of Carlos Montes relied on by Defendant is insufficient to sustain its burden for purposes of the instant Motion. (See Defendant’s SSUMF Nos. 16-18, 26-29 (citing Defendant’s Exs. 23-28); see also id. at No. 45.)

The Court agrees with Plaintiffs that Defendant’s evidence does not demonstrate that Carlos Montes concluded that the claimed damage was caused by “wear and tear” as those terms are defined by the Policy’s exclusions. (See Defendant’s SSUMF No. 27.) Rather, Defendant’s evidence indicates that Mr. Montes merely stated that he observed “drywall damage and staining, cracking” in the den area. (Defendant’s Ex. 26, p. 58.) This is insufficient to establish for purposes of the instant Motion that the claimed damage was due to “long-term water intrusion and damage, including rot, corrosion, and biological growth around windows and doors.” Indeed, Defendant’s own evidence indicates that Mr. Montes could not tell how long the water damage had existed prior to his arrival, and that he did not observe any active water activity, (Defendant’s SSUMF No. 28 (citing Defendant’s Ex. 27, pp. 66-67), which suggests a triable issue as to whether the claimed damage was caused by “long-term water intrusion and damage, including rot, corrosion, and biological growth around windows and doors.” (Motion at p. 15 (citing Defendant’s SSUMF Nos. 5-6; Richard Nelles Decl., ¶¶ 12-14, Ex. 2).)

The Court also agrees with Plaintiffs that the testimony of Glenn Nahmias relied on by Defendant is insufficient to sustain its burden for purposes of the instant Motion. (See Defendant’s SSUMF Nos. 13-15 (citing Defendant’s Exs. 20-21).) Mr. Nahmias did not make any reference to seals, and his testimony cited by Defendant does not compel the conclusion that the claimed damage is excluded by the Policy.

Since Defendant is the one moving for summary judgment/adjudication, Defendant is the one that bears the initial burden of persuasion to show that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law, and therefore the Court rejects Defendant’s suggestions that it is entitled to summary judgment or adjudication on the basis that Plaintiffs have not produced evidence to refute Defendant’s claims that the claimed damage is not covered under the Policy. (See, e.g., Motion at p. 16 (citing Defendant’s SSUMF Nos. 11, 46, 20, 48); id. at p. 17 [“¿In this case, there is no evidence that the direct force of wind damaged the structure causing an opening in the roof or walls through which rain entered.”]; id. at p. 19 [“¿There is no evidence that wind-driven rain, as defined and limited under the Policy, was the predominant cause of the loss.”].)

In sum, Defendant has not provided sufficient competent, admissible evidence to sustain its burden for purposes of the instant Motion to show that Plaintiffs’ claimed damages were indeed caused by perils expressly excluded by the Policy. (See Perry, supra, 2 Cal.5th at 538 [“… section 437c, subdivision (d) requires that affidavits and declarations submitted in summary judgment proceedings ‘set forth admissible evidence.’”].)

In any event, the Court finds that Plaintiffs would sustain their burden to show the existence of a triable issue of fact as to whether the claimed damage is covered by the Policy.

In their separate statement of additional material facts in opposition to the Motion, Plaintiffs, citing to the deposition testimony of Mr. Richard Nelles, (Plaintiffs’ Ex. 104), and the deposition of Glenn Nahmias filed by Defendant as Defendant’s Exhibit 22, assert that windblown rain is a covered loss under the Policy. (Plaintiffs’ SSAMF No. 1.) Defendant does not dispute that windblown rain is a covered loss under the Policy. (Defendant’s Response to Plaintiffs’ SSAMF No. 1.)

In their separate statement of additional material facts in opposition to the Motion, Plaintiffs, citing to the deposition testimony of Mr. Richard Nelles, (Plaintiffs’ Ex. 104), assert that (1) Defendant’s investigation confirmed that the origin of the claimed loss was water intrusion via windows; (2) the Policy did not specifically exclude damage to the structure caused by windblown rain; and (3) Plaintiffs’ public adjuster advised that the claimed damage was caused by wind coming into the house through the windows. (Plaintiffs’ SSAMF Nos. 4-6.) Defendant does not dispute these facts either.

The Court finds these undisputed facts sufficient to create a triable issue as to whether Defendant breached the Policy by failing to pay the Claim.

Plaintiffs also cite to additional evidence, filed by Defendant, indicating that the claimed damage was caused by windblown rain rather than, as Defendant contends, wear, tear, or deterioration caused over a long period of time, or other peril excluded by the Policy. (See, e.g., Plaintiffs’ SSAMF No. 7 (citing Defendant’s Ex. 11 at pp. 41-42); id. at No. 9 (citing Defendant’s Ex. 21, p. 35); see also Defendant’s SSUMF No. 13.)

Based on all the foregoing, the Court finds that there exists a genuine issue of material fact as to whether the claimed damage is covered by the Policy and whether Defendant breached the Policy by denying the Claim.

The arguments raised with respect to Defendant’s motion for summary adjudication of Issue Nos. 2 and 3 were also part of Defendant’s motion for summary judgment. For the same reasons discussed above pursuant to Defendant’s motion for summary judgment, the Court DENIES Defendant’s motion for summary adjudication of Issue No. 2 and Issue No. 3.

In addition, Defendant’s motion for summary adjudication of Issue No. 2 and Issue No. 3 is procedurally improper and lacks merit because “[a] motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Code Civ. Proc., § 437c(f)(1).) The Court cannot grant summary adjudication of these issues because granting summary adjudication of these issues would not completely dispose of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.

Defendant moves for summary adjudication of the Second Cause of Action on the grounds that (1) no bad faith claim can exist without a breach of contract; (2) Defendant acted reasonably and good faith; (3) Plaintiffs have not presented evidence of unreasonable conduct; and (4) the Genuine Dispute Doctrine bars the claim. (Motion at pp. 21-26.)

Since, as discussed above, the Court finds that Defendant is not entitled to judgment as a matter of law as to the First Cause of Action, the Court rejects Defendant’s argument that it is entitled to summary adjudication of the Second Cause of Action on the ground that no bad faith claim can exist without a breach of contract. (Motion at pp. 21-22.)

In arguing that it is entitled to summary adjudication of the Second Cause of Action on the ground that it acted reasonably and good faith, Defendant again relies on inadmissible evidence, including Defendant’s Exhibit 2, the expert testimony of Ms. Hogan, and the observations of Mr. Noriega. (Motion at pp. 22-24.)

As discussed above, Defendant has failed to provide any competent, admissible evidence as to what claims specialist Joshua Noriega observed during the investigation, Defendant’s Exhibit 2 contains inadmissible double hearsay, and the Court cannot consider the declarations of Defendant’s experts Lola Hogan and George Clay Mitchel because their opinions are based upon inadmissible hearsay. (Sanchez, supra, 63 Cal.4th at 686.)

Thus, for the same reasons discussed above, namely, that Defendant has not provided sufficient competent, admissible evidence to sustain its burden for purposes of the instant Motion, the Court also rejects Defendant’s argument that it is entitled to summary adjudication of the Second Cause of Action on the ground that it acted reasonably and good faith.

For the same reasons discussed above, the Court rejects Defendant’s argument it is entitled to summary adjudication of the Second Cause of Action because “¿Plaintiffs have not offered any expert testimony or substantive evidence to challenge State Farm's findings or to demonstrate ¿hat the damage was caused by a covered peril,” or shown that Defendant acted unreasonably with respect to the claim. (Motion at pp. 24-25.)

Defendant is the one moving for summary judgment/adjudication and therefore Defendant bears the initial burden of persuasion to show that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law.

Defendant again relies on the declarations of Lola Hogan and George Clay Mitchel, and as discussed, the Court does not find that Ms. Hogan’s or Mr. Mitchel’s asserted opinions constitute competent, admissible evidence.

Defendant’s argument that it is entitled to adjudication of the Second Cause of Action on the ground that it is barred by the Genuine Dispute Doctrine is based on the same arguments and evidence raised with respect to Defendant’s arguments that it is entitled to adjudication of the Second Cause of Action on the grounds that the evidence (or lack thereof) shows that Defendant acted reasonably with respect to the Claim. (Motion at p. 26.)

Accordingly, for the reasons already discussed above with respect to Defendant’s other arguments in support of its motion for summary adjudication of the Second Cause of Action, the Court rejects Defendant’s argument that it is entitled to adjudication of the Second Cause of Action on the ground that it is barred by the Genuine Dispute Doctrine.

Accordingly, for all the foregoing reasons, the Court DENIES Defendant’s motion for summary adjudication of the Second Cause of Action (Issues Nos. 4 & 5).

Defendant moves for summary adjudication of Plaintiffs’ claims for emotional distress on the grounds that (1) Plaintiffs have not incurred economic loss caused by Defendant sufficient to maintain a claim for emotional distress damages, reasoning that Plaintiffs’ losses were caused by damage excluded from coverage under the Policy; and (2) Plaintiffs “have ¿not provided sufficient evidence of significant emotional distress directly caused by State Farm's conduct,” reasoning that “Plaintiffs ¿have not sought any medical treatment, counseling, or professional assistance for emotional distress related to State Farm's handling of their claim.” (Motion at pp. 27-29.)

“In first party cases… the insured may seek damages for emotional distress resulting from the insurance company's unreasonable withholding of policy benefits and any abusive or coercive conduct in so doing.” (Jordan v. Allstate Ins. Co. (2007) 148 Cal.App.4th 1062, 1079 (citing Cates Construction, Inc. v. Talbot Partners (1999) 21 Cal.4th 28, 43–44); see Waters v. United Services Auto. Assn. (1996) 41 Cal.App.4th 1063, 1069–1070 (citing Garvey v. State Farm Fire & Casualty Co. (1989) 48 Cal.3d 395, 399, fn. 2) [“‘First party’ insurance policies provide coverage for loss or damage sustained by the insured (e.g., life, disability, health, fire, theft and casualty insurance). ‘Third party’ insurance policies provide coverage for liability of the insured to another (e.g., comprehensive general liability, directors and officers liability and errors and omissions insurance).”].)

As explained by the California Supreme Court in Gourley v. State Farm Mut. Auto. Ins. Co. (1991) 53 Cal.3d 121:

…we have allowed the insured to recover in tort for emotional distress damages flowing from the insurer's breach. In so doing, however, we recognized that the bad faith action is not a suit for personal injury, but rather “relates to financial damage.” ([Crisci v. Security Ins. Co. of New Haven, Conn. (1967) 66 Cal.2d 425] at p. 432) Nonetheless, we determined that “mental suffering constitutes an aggravation of damages when it naturally ensues from the act complained of.” (Id. at p. 433.) We emphasized that “[s]uch awards are not confined to cases where the mental suffering award was in addition to an award for personal injuries; damages for mental distress have also been awarded in cases where the tortious conduct was an interference with property rights without any personal injuries apart from the mental distress.” (Ibid.)

In [Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566], we further explained the nature of a bad faith action—i.e., that it is an action for the interference with property rights, not personal injury. (9 Cal.3d at p. 580.) We observed that damages for emotional distress are compensable as incidental damages flowing from the initial breach, not as a separate cause of action: “[Because] we are concerned with mental distress resulting from a substantial invasion of property interests of the insured and not with the independent tort of intentional infliction of emotional distress, we deem [the requirements of outrageous conduct and severe emotional distress] to be inapplicable.” (Ibid.) Thus, once the threshold requirement of economic loss is met, the insured need not show additional loss or injury to recover damages for his mental distress as long as such damages were proximately caused by his insurer's breach of the implied covenant. (See Sprague v. Equifax, Inc. (1985) 166 Cal.App.3d 1012, 1029-1031….)

(Id. at 128; see Waters, supra, 41 Cal.App.4th at 1074 [“Under Gruenberg, therefore, emotional distress damages are recoverable in a first party bad faith case only when the insured establishes financial loss (in Gruenberg, the insured suffered lost earnings, was forced out of business, incurred legal fees in defending suits by creditors he was unable to pay because he could not rebuild his business, and incurred medical expenses). Then, and only then, may the insured recover for emotional distress damages as well as the pecuniary loss.”].)

Here, the Court finds that Defendant fails to meet its burden for purposes of the instant Motion to demonstrate that Plaintiffs have not incurred economic loss sufficient to maintain a claim for emotional distress damages. Defendant’s argument is premised on the contentions that:

¿While Plaintiffs have incurred out-of pocket expenses for repairs to their property, these expenses are not attributable to any wrongful conduct by State Farm (UMF No. 58; Exh. 11). Rather, they result from the underlying property damage caused by excluded perils under the Policy. Furthermore, Ms. Hogan, an insurance industry expert, concluded that State Farm acted reasonably and in good faith throughout the claims process. (Hogan Decl., ¶ 6 (f).) Ms. Hogan's analysis supports the position that Plaintiffs' economic losses were not caused by any bad faith conduct on State Farm's part.

¿Plaintiffs admitted to spending approximately $40,000 to $50,000 on repairs, including drywall work, electric work, windows, and curtains. (UMF No. 29-30, 52; .). However, Plaintiffs have provided no evidence that these expenses were caused by State Farm's conduct. Instead, these costs resulted from the property damage itself, which is not covered under the Policy due to the applicable exclusions. Plaintiffs have not demonstrated that State Farm's denial of the claim was wrongful or that it caused them additional financial harm beyond the underlying loss.

However, as discussed above, the Court finds that Defendant fails to meet its burden for purposes of the instant Motion to show that Defendant is entitled to judgment as a matter of law with respect to either the First or Second Causes of Action, and the burden is on Defendant as the moving party, not Plaintiffs as the opposing parties, to show the nonexistence of a triable issue of material fact. Thus, the Court rejects Defendant’s argument that it is entitled to summary adjudication on the issue of emotional distress on the basis that “Plaintiffs have provided no evidence that these expenses were caused by State Farm's conduct” or because “Plaintiffs have not demonstrated that State Farm's denial of the claim was wrongful or that it caused them additional financial harm beyond the underlying loss.” (Motion at p. 28.)

Similarly, the Court rejects Defendant’s arguments that, “¿[e]ven assuming arguendo that Plaintiffs have demonstrated some financial loss, they have not provided sufficient evidence of significant emotional distress directly caused by State Farm's conduct,” (id.), that “¿Plaintiffs have not established a causal connection between their alleged emotional distress and State Farm's conduct,” (id.), or that “¿Plaintiffs must provide evidence showing that their distress was directly and primarily caused by State Farm's alleged bad faith, which they have failed to do.” (Id. at p. 29.)

While Plaintiffs will bear the burden of proof at trial, for purposes of summary adjudication, Defendant, as the moving party, bears the burden of persuasion that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law.

The Court finds Defendant’s evidence is insufficient to sustain its burden for purposes of the instant Motion to demonstrate that it is entitled to judgment as a matter of law with respect to the emotional distress claims.

Defendant relies on Plaintiffs’ discovery responses and Plaintiffs’ deposition testimony. (Motion at pp. 27-28 (citing Defendant’s SSUMF No. 29-30, 35, 37, 52-53, 57-58; Exs. 10 & 11 [Plaintiff Tihan Shemesh Deposition Excerpts].)

Yet, Plaintiffs’ discovery responses do not establish for purposes of the instant Motion that Plaintiffs’ emotional distress claims have no merit.

As an initial matter, to shift the burden based on factually insufficient discovery responses, the moving defendant must show that plaintiff cannot reasonably obtain evidence to prove a cause of action, which is more than simply arguing that there is an absence of evidence. (Gaggero v. Yura (2003) 108 Cal.App.4th 884, 891.) Here, Defendant fails to do so.

In any event, in his discovery responses, Plaintiff Tihan Shemesh did not admit that no conduct by Defendant caused him emotional distress or to incur attorney’s fees. (Defendant’s Ex. 32 at Request Nos. 12, 14.) Moreover, Defendant’s evidence indicates that Plaintiffs are paying their attorneys a contingency fee. (Defendant’s Ex. 17 [Deposition of Rozalin Shemesh], p. 33.) As discussed above, the Court finds that Defendant fails to meet its burden for purposes of the instant Motion to show that Defendant is entitled to judgment as a matter of law with respect to either the First or Second Causes of Action.

In Plaintiff Tihan Shemesh’s responses to form interrogatories, he responded that, while he did not suffer from any emotional disability before the “incident,” he suffered emotional distress because of the “incident.” (Defendant’ Ex. 30 at 6.1-6.7. 10.2.)

The Court notes that Defendant does not cite to any discovery responses by Plaintiff Rozalin Shemesh.

Nowhere in Plaintiffs’ deposition excerpts cited by Defendant do Plaintiffs testify that they did not suffer any financial loss or emotional distress due to the denial of their Claim, (see Defendant’s Exs. 10-19), and Defendant does not provide any legal authority to conclude that, to overcome a motion for summary adjudication of a claim for emotional distress, Plaintiffs must provide evidence that they sought medical treatment, counseling, or professional assistance for the emotional distress. Gruenberg, supra, 9 Cal.3d at 580 did not hold as such, and again, as the moving party, Defendant bears the initial burden of persuasion.

For all the reasons discussed above, the evidence cited by Defendant is insufficient to sustain its burden to demonstrate that they are entitled to judgment as a matter of law as to Plaintiffs’ emotional distress claims.

Finally, Defendant moves for summary adjudication of Plaintiffs’ claims for punitive damages on the grounds that (1) Ms. Hogan concluded that Defendant’s “conduct was not only appropriate, but exceeded the standard of care…”; and (2) “¿Plaintiffs present absolutely no affirmative evidence of ill will, malice, oppression or fraudulent intent by State Farm.” (Motion at pp. 29-32.)

A motion for summary adjudication may be granted as to a claim for punitive damages even though it does not dispose of an entire cause of action. (Code Civ. Proc., § 437c(f)(1); Catalano v. Superior Court (2000) 82 Cal.App.4th 91, 92 (citing DeCastro West Chodorow & Burns, Inc. v. Superior Court (1996) 47 Cal.App.4th 410, 421) [“It is settled… that a claim for punitive damages is one of the substantive areas which is properly the subject of a motion for summary adjudication.”].)

To recover punitive damages, a plaintiff must prove “by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice….” (Civ. Code, § 3294(a).)

Malice is conduct “intended by the defendant to cause injury to plaintiff, or despicable conduct that is carried on by the defendant with a willful and conscious disregard for the rights or safety of others.” (Civ. Code, § 3294(c)(1).) “Oppression” means “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.” (Civ. Code, § 3294(c)(2).) “Fraud” is “an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” (Civ. Code, § 3294(c)(3).)

In ruling on a motion for summary adjudication of a claim for punitive damages, the trial court “should apply the standard of clear and convincing evidence, since that is the standard plaintiffs would ultimately have to meet in proving entitlement to punitive damages.” (Aquino v. Superior Court (1993) 21 Cal.App.4th 847, 854 (citing Looney v. Superior Court (1993) 16 Cal.App.4th 521, quoting Anderson v. Liberty Lobby, Inc. (1986) 477 U.S. 242, 254-255).) Thus, in ruling on a motion for summary adjudication of a claim for punitive damages, the court determines “whether the plaintiff has established a substantial probability of prevailing on the claim for punitive damages.” (Id. at 854-857, 860.)

“As the California Supreme Court long ago explained: ‘Exemplary or punitive damages are not recoverable as matter of right. Their allowance rests entirely in the discretion of the jury, and they may be awarded only where there is some evidence of fraud, malice, express or implied, or oppression.’” (Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1052 (quoting Clark v. McClurg (1932) 215 Cal. 279, 282).) “But the issue may be resolved on summary judgment, giving due regard to the higher proof standard.” (Id. at 1053.)

While the clear and convincing evidentiary standard is a stringent one, it does not impose on a plaintiff the obligation to prove a case for punitive damages at summary judgment. However, where the plaintiff's ultimate burden of proof will be by clear and convincing evidence, the higher standard of proof must be taken into account in ruling on a motion for summary judgment or summary adjudication, since if a plaintiff is to prevail on a claim for punitive damages, it will be necessary that the evidence presented meet the higher evidentiary standard. But as with a judgment of nonsuit, summary judgment on the issue of punitive damages is proper only when no reasonable jury could find the plaintiff's evidence to be clear and convincing proof of malice, fraud or oppression.

(Id. at 1053 (internal citations and quotations omitted); see Basich v. Allstate Ins. Co. (2001) 87 Cal.App.4th 1112, 1119 (quoting Reader's Digest Assn. v. Superior Court (1984) 37 Cal.3d 244, 252) [“Summary judgment should be granted ‘unless it appears that actual malice may be proved at trial by clear and convincing evidence ....’”].)

When evaluating evidence concerning punitive damages for a motion for summary judgment or adjudication, “the evidence and all inferences that reasonably can be drawn from it must meet the higher standard” of “clear and convincing evidence.” (Basich, supra, 87 Cal.App.4th at 1119.)

However, the court “should not engage in weighing conflicting evidence, making credibility determinations, or drawing inferences from facts in assessing whether a plaintiff has made a sufficient showing of a prima facie case of entitlement to punitive damages.” (Id. at 856 (citing Looney, supra, 16 Cal.App.4th at 539).) “However, in order to give effect to the statutory language requiring opposing affidavits to be considered along with supporting ones, any uncontradicted evidence presented in opposition should be considered to fill in any blank areas in the plaintiff's showing, in order to give the court as complete a factual picture as possible.” (Id.) “The court must also take care to distinguish between evidentiary facts and argument or hyperbole presented by counsel.” (Id.)

Here, the Court rejects Defendant’s argument that it is entitled to summary adjudication of Plaintiffs’ claims for punitive damages on the basis of Ms. Hogan’s conclusion that Defendant’s “conduct was not only appropriate, but exceeded the standard of care…,” (Motion at pp. 29-31), because, as discussed above, Ms. Hogan’s declaration is not competent, admissible evidence.

The Court also rejects Defendant’s argument that it is entitled to summary adjudication of Plaintiffs’ claims for punitive damages on the basis that “Plaintiffs present absolutely no affirmative evidence of ill will, malice, oppression or fraudulent intent by State Farm.”

Defendant provides no legal or factual basis to conclude for purposes of the instant Motion that it is entitled to judgment as a matter of law as to Plaintiffs’ punitive damages claims because “[a]ny ¿disagreement with the claim decision falls far short of the egregious conduct required for punitive damages.” (Motion at p. 32.)

Based on the undisputed facts, (see, e.g., Plaintiffs’ SSAMF Nos. 1, 4, 5-6, 18-19, 22, 35), Plaintiffs’ evidence, (Plaintiffs’ Exs. 102-104), and Defendant’s evidence relied on by Plaintiffs, (see Plaintiffs’ SSAMF Nos. 7, 9-10, 22 (citing Defendant’s Exs. 5, 11, 21)), the Court fails to find that no reasonable jury could find in favor of Plaintiffs on the punitive damages claims.