Judge: Stephen P. Pfahler, Case: 20CHCV00305, Date: 2022-09-21 Tentative Ruling

Case Number: 20CHCV00305    Hearing Date: September 21, 2022    Dept: F49

Dept. F-49

Date: 9-21-22

Case # 20CHCV00305

Trial Date: 7-24-23

 

MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, SUMMARY ADJUDICATION

 

MOVING PARTY: Defendant, Allstate Insurance Company

RESPONDING PARTY: Plaintiffs, Adela Mercado, et al.

 

RELIEF REQUESTED

Motion for Summary Judgment/Summary Adjudication

·         1st Cause of Action: Negligence

·         3rd Cause of Action: Negligent Performance of an Undertaking

 

 

SUMMARY OF ACTION

Plaintiffs Adela Mercado, et al. are all resident homeowners with the common areas governed by Defendant San Francisco Townhouse Association (“HOA”). On an unspecified date prior to January 10, 2019, Defendant HOA hired Defendant Imperial Roofing, Inc. to conduct certain unspecified repairs on the roofs of the Plaintiffs’ townhomes. On January 10, 2019, a roofer allegedly started a fire on the roof while conducting repairs, which led to the arrival of the fire department. The subsequent efforts of the fire department led to water damage within the units.

 

Following the submission of water damage claims by certain Plaintiffs to their insurers, including Defendant Allstate Insurance Company (“Allstate”), the plaintiffs discovered insufficient insurance coverage for said property casualty. Plaintiff Adela Mercado specifically alleges insurance agent Ira Hart (“Hart”), on behalf of Defendant Allstate, either recommended insufficient insurance coverage and/or failed to obtain the requested policy coverage. Plaintiffs Jorge and IIdeliza Ochoa allege insurance agent Vivian Garcia failed to obtain sufficient coverage with Defendant Farmers Group, Inc. Plaintiff Francisco Munoz alleges improper underinsurance with Defendant Interinsurance Exchange of the Automobile Club via agent David Castaneda.

 

Plaintiff Hyun Sook Lim, a former owner, joins the action for losses sustained in the sale of the unit caused by the damage.

 

On May 18, 2020, Plaintiffs filed a complaint for negligence, negligent hiring/retention, negligent entrustment, and negligent performance of an undertaking. On September 16, 2020 and September 18, 2020, Plaintiffs dismissed Ira Hart, and Kookmin Best Insurance Co., Ltd.

 

On September 21, 2020, Plaintiffs filed their first amended complaint for negligence, negligent hiring/retention, and negligent performance of an undertaking. On October 26, 2020, Defendant Allstate Insurance Company answered the first amended complaint.

 

On March 3, 2021, the court sustained the demurrer to the first amended complaint. On March 23, 2021, Plaintiffs filed their second amended complaint for Negligence, Negligent Hiring/Retention, and Negligent Performance of an Undertaking. On April 26, 2021, Plaintiffs dismissed Ulloa with prejudice. On May 5, 2021, Imperial Roofing, Inc. answered the second amended complaint. On May 11, 2021, Allstate answered the second amended complaint. On July 30, 2021, Fire Insurance Exchange answered the second amended complaint.

 

On August 25, 2021, the court overruled the demurrer and denied the motion to strike to the second amended complaint filed by HOA. On the same day and in connection with the demurrer filed by Automobile Club of Southern California, the court overruled the demurrer in part as to the first cause of action and sustained it in part as to the third cause of action without leave to amend. On September 3, 2021, HOA answered the second amended complaint. On September 9, 2021, Automobile Club of Southern California answered the second amended complaint.

 

On November 12, 2021, Plaintiffs voluntarily dismissed Farmers Group, Inc.

 

On February 8, 2022, Plaintiff voluntarily dismissed the third cause of action against Fire Insurance Exchange.

 

On May 11, 2022, Imperial Roofing, Inc. filed a cross-complaint against Anchor Prime Builders, Inc.

 

On May 13, 2022, HOA filed a cross-complaint

 

On July 1, 2022, Allstate filed the instant motion for summary judgment or, in the alternative, summary adjudication. On September 7, 2022, Plaintiffs filed their opposition. On September 16, 2022, Allstate filed its reply.

 

RULING Motion for Summary Judgment: GRANTED.

 

1st Cause of Action: Negligence

 

Allstate moves for summary adjudication as to the first cause of action for negligence because there is no triable issue of material fact that Allstate agent Hart, and by extension Allstate, had a duty to counsel Plaintiff Adela Mercado regarding the sufficiency of her coverage limits.

 

“[A]n action for negligence must allege (1) the defendant's legal duty of care towards the plaintiff, (2) the defendant's breach of that duty, (3) injury to the plaintiff as a proximate result of the breach, and (4) damage to the plaintiff.” (Jones v. Grewe (1987) 189 Cal. App. 3d 950, 954.)

 

“Duty, being a question of law, is particularly amenable to resolution by summary judgment.” (J.L. v. Children’s Inst., Inc. (2009) 177 Cal. App. 4th 388, 396.)

 

“A ‘failure to deliver the agreed-upon coverage’ case is actionable, unlike the ‘failure to recommend’ cases … An insurance agent has an ‘obligation to use reasonable care, diligence, and judgment in procuring insurance requested by an insured.’” (Desai v. Farmers Ins. Exchange (1996) 47 Cal.App.4th 1110, 1119; Nowlon v. Koram Ins. Center, Inc. (1991) 1 Cal.App.4th 1437, 1447 [“A broker's failure to obtain the type of insurance requested by an insured may constitute actionable negligence and the proximate cause of injury”].)

 

“The general rule in cases of this sort is still that articulated by now-Justice Kennard in Jones. It is that, as a general proposition, an insurance agent does not have a duty to volunteer to an insured that the latter should procure additional or different insurance coverage. … The rule changes, however, when—but only when—one of the following three things happens: (a) the agent misrepresents the nature, extent or scope of the coverage being offered or provided (as in Free, Desai and Nacsa), (b) there is a request or inquiry by the insured for a particular type or extent of coverage (as in Westrick), or (c) the agent assumes an additional duty by either express agreement or by ‘holding himself out’ as having expertise in a given field of insurance being sought by the insured (as in Kurtz).”

 

(Fitzpatrick v. Hayes (1997) 57 Cal.App.4th 916, 927.)

 

Here, Allstate contends that it did not owe a special duty as proscribed under Fitzpatrick to Plaintiff for the following reasons. First, Allstate argues that Hart did not make any misrepresentations regarding the insurance coverage that was sold to Plaintiff. (Motion at pg. 14.) Instead, based on Plaintiff’s deposition testimony, Hart represented that he would provide her with the best coverage that would give her everything that she needed. (UMF Nos. 40-41; Macarr Decl. ¶ 10, Exh. 19 [Plaintiff’s Depo. Tr. at 67:23-68:21; 94:23-95:3]; Bermudez Decl. ¶ 9.) Allstate reasons that an affirmative misrepresentation must be made for the duty to be created, and a representation that a coverage offered is “the best” does not constitute an affirmative misrepresentation. (Motion at pp. 14-15, relying on Vulk v. State Farm General Ins. Co. (2020) 69 Cal. App. 5th 243, 255.)

 

Second, Allstate argues that Plaintiff did not request Hart to provide a particular kind or amount of coverage. (Motion at pg. 15.) While Hart assured Plaintiff of the adequacy of the proposed insurance coverage, Plaintiff never specifically required full replacement cost coverage or 100$ replacement coverage. (UMF Nos. 28-30, 38-39; Macarr Decl. ¶ 10, Exh. 19 [Plaintiff’s Depo. Tr. at 44:4-9; 51:8-13; 51:20-52:18; 52:20- 25; 53:16-24, 54:1-19; 62:19-63:1]; Macarr Decl. ¶¶ 2, 3, Exhs. 2, 4 [Plaintiff’s Response to SROG No. 17]; Bermudez Decl. ¶¶ 7-8.) In fact, Allstate points to the fact that Plaintiff did not ask about the extent of coverage provided by her insurance policy. (UMF No. 35; Macarr Decl. ¶ 10, Exh. 19 [Plaintiff’s Depo. Tr. at 44:10-16].) Moreover, Plaintiff did not request for an inspection of her condominium unit or for any estimates as to the cost of restoring her property. (UMF Nos. 33-34; Macarr Decl. ¶ 10, Exh. 19 [Plaintiff’s Depo. Tr. at 37:3-6; 58:25-59:8]; Bermudez Decl. ¶ 11.) Thus, Allstate reasons that Plaintiff’s request for “sufficient” insurance coverage or the representation that the insurance coverage is “adequate” does not equate to a specific type or amount. (Motion at pp. 15-17, relying on Jones, supra, 189 Cal. App. 3d at 956.)

 

Third, Alllstate argues that Hart did not hold himself out as an expert. (UMF No. 16; Macarr Decl. ¶ 10, Exh. 19 [Plaintiff’s Depo. Tr. at 47:19-23; 48:6-10; 48:18-49:3; see also 59:23-60:19]; Hart Decl. ¶ 2; Bermudez Decl. ¶ 2.) Also, Hart is not a specialist with regard to any type of insurance coverage. (UMF No. 15; Hart Decl. ¶ 2; Bermudez Decl. ¶ 2.) Moreover, Plaintiff lacked any knowledge of Hart’s expertise and did not inquire as to his experience as an insurance agent. (UMF Nos. 12-14; Macarr Decl. ¶ 10, Exh. 19 [Plaintiff’s Depo. Tr. at 30:7-10; 33:21-25; 34:5-7; 35:4-14]; Hart Decl. ¶ 7; Bermudez Decl. ¶ 12.) Thus, Allstate asserts that Plaintiff lacks sufficient evidence to show that Hart held himself out as an expert to warrant the imposition of a special duty.

 

Based on the evidence presented, the Court finds that Allstate has met its burden in showing that there is no triable issue of material fact regarding the issue of whether Allstate owed Plaintiff a special duty under Fitzgerald. The burden now shifts to Plaintiff present sufficient evidence to establish that there is a triable issue of material fact on this issue.

 

In opposition, Plaintiff first argues that Hart and Kelly Bermudez (“Bermudez”) misrepresented the nature, extent, or scope of the coverage being offered. (Opposition at pg. 5.) In support of this argument, Plaintiff relies on her deposition testimony where she answered in the affirmative to the question of whether the insurance coverage offered was represented to restore the entirety of Plaintiff’s condominium unit in the event of a total loss. (Plaintiff’s Response No. 30; Keusseyan Decl. ¶ 9, Exh. C, Plaintiff’s Deposition, at 55:14-56:16.) However, further in her deposition testimony, Plaintiff clarifies that “I didn’t ask if it’s going to restore everything, but I told [Bermudez], I said, this coverage will cover everything that I explained to you that need covered, not only my home, but also my vehicles. She said, ‘yes.’”  (Keusseyan Decl. ¶ 9, Exh. C, Plaintiff’s Deposition, at 56:25-57:5.) Plaintiff then proceeds to list the various items that were discussed as to whether they would be covered by the proposed insurance policy. (Keusseyan Decl. ¶ 9, Exh. C, Adela Mercado Deposition, at 57:6-58:7.) Ultimately, the discussion of a scenario of total loss was admittedly never discussed. (Keusseyan Decl. ¶ 9, Exh. C, Plaintiff’s Deposition, at 58:8-13.) “Absent an affirmative misrepresentation, the general rule is that ‘an insurance agent does not have a duty to volunteer to an insured that the latter should procure additional or different insurance coverage. (Sheahan v. State Farm Gen. Ins. Co. (2020) 442 F. Supp. 3d 1178, 1187.) Because Plaintiff’s evidence fails to show that Hart or Bermudez made an affirmative misrepresentation regarding whether the policy would sufficiently cover an event of a total loss, the Court declines to find that a special duty has been imposed on this basis.

 

Second, Plaintiff argues that the evidence shows that she requested specific coverage for her condominium unit because she specifically asked whether the insurance policy would cover specific items. (Opposition at pp. 6-7; Keusseyan Decl. ¶ 9, Exh. C, Plaintiff’s Deposition, at 56:25-58:7.) However, the Court finds this equally unpersuasive because Plaintiff’s statement that the insurance would provide coverage in the event that Plaintiff “lose[s] everything inside” is too vague to qualify as a specific request. Such a statement would be synonymous with asking for full coverage, and a request for full coverage has been found not to create a special duty. (See Ahern v. Dillenback (1991) 1 Cal. App. 4th 36, 40.) Thus, Plaintiff’s evidence fails to support that a triable issue of material fact exists as to whether Plaintiff requests specific coverage to create a special duty owed to her by Allstate.

 

And third, Plaintiff contends that Hart and Bermudez held themselves out as experts. (Opposition at pp. 7-9.) In support of this contention, Plaintiff testified in her deposition that she trusted Hart and Bermudez as experts and referred to them on more than one occasion as experts; Bermudez did not correct Plaintiff. (Plaintiff’s Response Nos. 14. 16, 18, 37-38; Keusseyan Decl. ¶ 9, Exh. C, Plaintiff’s Depo. at 35:1 5 -36:6; 38:7-11; 40:13-41 :13; 50 :4-52:18; 54: 8 -5 8:7; 60 :7-19; 67 :23-69.-2.) Plaintiff argues that her reliance was reasonable under the circumstances (Opposition at pg. 9, relying on B.L.M. v. Sabo & Deitsch (1997) 55 Cal.App.4th 823, 847.) The Court disagrees that Plaintiff’s reliance was reasonable. Based on the facts presented to the Court, it is clear that Plaintiff had a subjective belief that Hart and Bermudez were experts because they were in the business of selling insurance. (See Keusseyan Decl. ¶ 9, Exh. C, Plaintiff’s Depo. at 38:3-11.) The mere fact that Plaintiff referred to them as experts in her discussion prior to signing up for the policy does not establish that Hart and Bermudez held themselves out to be experts. (See Keusseyan Decl. ¶ 9, Exh. C, Plaintiff’s Depo. at 40:13-41:6.) As in Kurtz, the insurance brokers held themselves out to having specific expertise on the Medicare provisions of the Tax Equity and Fiscal Responsibility Act of 1982. (Kurtz, supra, 12 Cal.App.4th at 1255, 1257-1258.) In this case, there is no evidence to suggest that Hart and Bermudez held themselves out to be experts in the field of insurance coverage for condominiums, let alone homeowners’ insurance. This is further undermined by the fact that Plaintiff bundled her homeowners’ insurance policy with an automobile insurance policy, evidencing that Hart and Bermudez sell a wide range of insurance policies. Thus, Plaintiff has failed to meet her burden on this issue as well.

 

Based on the foregoing, because Plaintiff has failed to submit sufficient evidence to show that there is a triable issue of material fact as to whether Allstate owed her a special duty, the motion for summary adjudication is granted as to the first cause of action.

 

3rd Cause of Action: Negligent Performance of an Undertaking

 

Allstate moves for summary adjudication of the third cause of action for negligent performance of an undertaking challenges on the ground that it lacks merits. Allstate further challenges the subject cause of action on grounds that the no such cause of action exists in the insurance context.

 

Negligent undertaking is also referred as “Good Samaritan” law. (Artiglio v. Corning Inc. (1998) 18 Cal.4th 604, 614.)

 

“[A] negligent undertaking claim of liability to third parties requires evidence that: (1) the actor undertook, gratuitously or for consideration, to render services to another; (2) the services rendered were of a kind the actor should have recognized as necessary for the protection of third persons; (3) the actor failed to exercise reasonable care in the performance of the undertaking; (4) the actor's failure to exercise reasonable care resulted in physical harm to the third persons; and (5) either (a) the actor's carelessness increased the risk of such harm, or (b) the actor undertook to perform a duty that the other owed to the third persons, or (c) the harm was suffered because either the other or the third persons relied on the actor's undertaking.”

 

(Paz v. State of California (2000) 22 Cal.4th 550, 559.)

 

“The negligent undertaking theory of liability permits damages for personal injury or property damage, not economic losses.” (State Ready Mix, Inc. v. Moffatt & Nichol (2015) 232 Cal.App.4th 1227, 1235.)

 

Here, Allstate argues that Plaintiff is unable to either establish that Hart “failed to exercise reasonable care in performance of the undertaking” or that this failure resulted in “physical harm.” (Motion at pg. 22.) As stated above, there is no triable issue of material fact regarding whether Allstate owed a duty to Plaintiff. Further, it is evident that Plaintiff did not suffer any physical harm. (UMF No. 58; Macarr Decl. ¶ 3, Exh. 5 [Plaintiff’s Response to FROG 6.1]; ¶¶ 2, 3, Exhs. 1, 3 [Plaintiff’s Response to RFA No. 12].) Moreover, as the court noted previously, “[n]othing in the pleadings alleges a claim based on actual damage to the roof or inside the townhouse unit itself.” (See August 25, 2021 Minute Order at pg. 3.)

 

Thus, based on this evidence, the court finds that Allstate has met its burden in showing that there is no triable issue of material fact regarding the third cause of action. Consequently, the burden now shifts to Plaintiff to show that there is a triable issue of material fact as to whether she sustained physical harm to support the third cause of action.

 

In opposition, Plaintiff fails to raise any substantive argument in opposition to this issue. Instead, Plaintiff claims in her response to Allstate’s separate statement that she has suffered physical harm that manifested from emotional distress in the forms of “serious stress, emotional anguish, biting of nails, having to sleep on the floor with no dishes, stress of waiting for permits.” (Plaintiff’s Response No. 58; Mercado Dep. 92:20-93.) However, this is unconvincing because Plaintiff’s injuries are characteristic of psychological mental anguish, as opposed to physical injuries, because the evidence does not show that Plaintiff has not experienced a “nervous shock or paroxysm, or a disturbance of the nervous system.” (See Fuentez v. Perez (1977) 66 Cal.App.3d 164, 168-169.) Therefore, Plaintiff has failed to meet her burden.

 

Based on the foregoing, the motion for summary adjudication is granted as to the third cause of action.

 

Allstate to give notice to all parties.