Judge: Stephen P. Pfahler, Case: 20CHCV00305, Date: 2023-05-01 Tentative Ruling


Case Number: 20CHCV00305    Hearing Date: May 1, 2023    Dept: F49

Dept. F-49

Date: 5-1-23 c/f 2-28-23

Case # 20CHCV00305

Trial Date: 7-24-23 c/f 1-17-23

 

SUMMARY JUDGMENT

 

MOVING PARTY: Defendant, Fire Insurance Exchange

RESPONDING PARTY: Plaintiffs, Jorge and Ildeliza Ochoa

 

RELIEF REQUESTED

Motion for Summary Judgment

·         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 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, the plaintiffs discovered insufficient insurance coverage for said property casualty. Plaintiff Adela Mercado specifically alleges insurance agent Ira Hart, on behalf of Defendant Allstate Insurance, 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 July 30, 2021, Fire Insurance Exchange answered the second amended complaint.

 

On August 25, 2021, The court ruled on the demurrer of Automobile Club of Southern California to the second amended complaint as follows: overruled on the first cause of action for Negligence, and sustained the demurrer to the third cause of action for Negligent Performance of an Undertaking without leave to amend.

 

On November 12, 2021, Plaintiffs dismissed Farmers Group, Inc. and Interinsurance Exchange of the Automobile Club with prejudice. On February 8, 2022, Plaintiffs dismissed third cause of action for Negligent Performance of an Undertaking as to Fire Insurance Exchange (listed as “FIE ONLY”). On September 21, 2022, the court granted the motion for summary adjudication as to Allstate Insurance Company on the first and third causes of action for Negligence and Negligent Performance of an Undertaking.

 

On January 13, 2023, Anchor Prime Builders filed a cross-complaint for Equitable Indemnity, Contribution, Apportionment of Fault, and Declaratory Relief. On April 14, 2023, Imperial Roofing, Inc. filed a notice of automatic stay based on a Chapter 11 Bankruptcy petition filing.

 

RULING: Granted.

Defendant Fire Insurance Exchange (Fire) moves for summary judgment against plaintiffs, Jorge and Ildeliza Ochoa. Fire moves for summary judgment on grounds of no breach of any duty by the insurance agent, as policy limits were never discussed. The motion was continued from Feb 28, 2023. Given the lack of instruction barring any new filings, the court accepts the Ochoas’ submitted second opposition conforming to the new date. In the revised opposition, the Ochoas  maintain Fire undertook a specific duty to obtain the proper coverage, or misrepresented the scope of coverage, which supports the finding of triable issues of material fact. Plaintiffs also maintain the motion lacks evidentiary support, but the latest filed opposition lacks any properly formatted, separately filed evidentiary objections. (Cal. Rules Ct., rule 3.1352, 3.1354.)

 

The court electronic filing system shows no reply filed after the revised opposition. The court reserves the right to take the matter under submission should Fire present proof of a timely filed revised reply.

 

The pleadings frame the issues for motions, “since it is those allegations to which the motion must respond. (Citation.)”  (Scolinos v. Kolts (1995) 37 Cal. App. 4th 635, 640-641; FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 382-383; Jordan-Lyon Prods., LTD., v. Cineplex Odeon Corp. (1994) 29 Cal.App.4th 1459, 1472.) Fire only remains named in the first cause of action for negligence in the second amended complaint based on the alleged failure of insurance agent Vivian Garcia to obtain sufficient coverage with Farmers Group, Inc. (Fire).

 

The purpose of a motion for summary judgment or summary adjudication “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. Atl. Richfield Co. (2001) 25 Cal.4th 826, 843.)  “Code of Civil Procedure section 437c, subdivision (c), requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”  (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) 

 

“On a motion for summary judgment, the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.”  (Scalf v. D.B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.)  A defendant moving for summary judgment “has met his or her 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 . . . cannot be established.”  (Code Civ. Proc., § 437c, subd. (p)(2).)  “Once the defendant . . . has met that burden, the burden shifts to the plaintiff . . . to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.”  (Ibid.) 

 

“When deciding whether to grant summary judgment, the court must consider all of the evidence set forth in the papers (except evidence to which the court has sustained an objection), as well as all reasonable inference that may be drawn form that evidence, in the light most favorable to the party opposing summary judgment.”  (Avivi, 159 Cal.App.4th at 467; see also Code Civ. Proc., § 437c, subd. (c).)  “An issue of fact can only be created by a conflict in the evidence.  It is not created by speculation, conjecture, imagination or guesswork.”  (Lyons v. Security Pacific National Bank (1995) 40 Cal.App.4th 1001, 1041 (citation omitted).) 

 

“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; Paper Savers, Inc. v. Nacsa (1996) 51 Cal.App.4th 1090, 1096 [“In the absence of an express agreement to ensure adequate coverage or a holding out by the agent to assume greater duties otherwise implied in the agency relationship, the onus is thus squarely on the insured to inform the agent of the insurance he requires.”].)

 

“‘The general no-duty rule changes only when one of the following three things occurs: (1) the agent misrepresents the nature, extent or scope of the coverage being offered or provided; (2) there is a request or inquiry by the insured for a particular type or extent of coverage; or (3) the agent assumes an additional duty by either express agreement or by holding themself out as having expertise in a given field of insurance being sought by the insured. (Citation.) To trigger a special duty of care under the first scenario, there must be an affirmative misrepresentation. (Citation.) To trigger a special duty of care under the second scenario, an insured's request for a particular type or extent of coverage must be sufficiently ‘targeted’ or ‘specific’ before an insurance agent will be held to have undertaken an obligation to procure the coverage. (Citation.)” (Vulk v. State Farm General Insurance Company (2021) 69 Cal.App.5th 243, 254–255.)

 

The standard of care regarding the lack of any duty absent a showing of a special undertaking, misrepresentation, or specific coverage request, remains undisputed. Defendant further narrows the scope of the dispute by citing the standard regarding the insured’s responsibility for communicating insurance requirements, thereby insulating the agent from any claims based on a failure to guarantee correct coverage. (Paper Savers, Inc. v. Nacsa (1996) 51 Cal.App.4th at p. 1096.) “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”]; Kurtz, Richards, Wilson & Co. v. Insurance Communicators Marketing Corp. (1993) 12 Cal.App.4th 1249, 1257 [special duty assumed when agent held themself out as expert].)

 

Paragraph 21 of the second amended complaint alleges the fire caused property damage and the existing policy provided inadequate coverage for both real and personal property replacement—the objective of the requested coverage. Defendant denies any misrepresentation of the coverage(s) provided. The coverage limit capped personal property damage at $62,000, which Defendant contends exceeds the value of said loss. [Declaration of Matthew Long, ¶¶ 3, 5-6, Ex. A; Declaration of Gail Cooper, ¶ 4, Ex. K-L: Form Interrogatory and Response to Form Interrogatory 7.1(c) representing personal property damage to $36,967.99; Declaration of Nan Phillips; See Declaration of Eileen Keusseyan.]

 

The personal property coverage remains undisputed. Plaintiffs challenge the lack of real property coverage in case of fire. Plaintiffs rely on the claim that the statements of former agent Umama misrepresented the scope of coverage in case of a property fire. The argument depends on sections of deposition testimony cited in part by both parties. The relevant sections begin with Jorge Ochoa discussing the visit by Umana, whereby it was represented that Umana would “take care of everything,” but in “the end, she’s only asking if that contends—if we evaluate our contents and given an estimate. That’s it.” [Cooper Decl., ¶ 2, Ex. H: Deposition of Jorge Ochoa, pp. 40:19-24.] Vivian Garcia was subsequently introduced and Plaintiffs accepted Garcia as their agent. No discussions of the policy or inspections occurred with Garcia. [Id., Ochoa Depo, 42:6-44:12.] Ochoa only later understood the coverage limits upon consultation with counsel. [Id., 44:11-17.]

 

Both parties cite to the section of Ochao deposition testimony, whereby according to Jorge Ochoa, Umama represented she was “going to take care to get everything coverage; I don’t have to worry about anything… [D]on’t worry about it. You’re going to be covered. …” [Ochoa, 45:4-25.] The deposition adds to the claim via a representation by Umama regarding a specialization in home and car insurance, which were bundled. [Id., 46:4-15, 55:14-18.] In a further declaration in opposition, Ochoa reiterates the understanding that Umama would acquire a policy sufficient to cover damages in case of a loss. [Declaration of Jorge Ochoa.] The issue presented therefore addresses the scope of coverage expected and relied upon in the communications with both the originating predecessor agent, and later assigned agent at the last renewal prior to the damaging event.

 

In addition to the scope of coverage misrepresentation claim, Plaintiffs alternatively claim that Umama and Garcia represented their special skills and expertise, as part of the showing for reasonable reliance on the alleged misrepresentation. Defendant contends coverage was adequate and the representations are otherwise too vague to impose any specific basis of duty or basis of misrepresentation.

 

The limited deposition testimony regarding the understanding of coverage prior to consulting with counsel, and even the declaration in opposition provides a nebulous picture of the policy expectations. Plaintiffs represent a belief for coverage of “everything,” but Ochoa very specifically recalls Umama only asking for an estimate of the value of the contents inside the home. Such a statement at a minimum confirms the understanding that a policy for the contents of Plaintiffs’ home was forthcoming. What remains unstated is a specific factual basis of reliance that the coverage should also include the potential recovery for a destructive event originating beyond the interior of Plaintiffs’ home.

 

Given the generality of the conversation, the circumstances insufficiently support any finding of support under the request or inquiry for a particular type of coverage standard. The court also finds a lack of support for the misrepresentation standard. (Kurtz, Richards, Wilson & Co. v. Insurance Communicators Marketing Corp. (1993) 12 Cal.App.4th 1249, 1258 [Insufficient evidence of a deliberate or negligent misrepresentation].) The cases finding a basis of a special duty or misrepresented coverage depend on more factually specific communications, including a specific acceptance of the paid premium. (Vulk v. State Farm General Insurance Company, supra, 69 Cal.App.5th at pp. 257-259 [“A non-specific request for the ‘best policy’ and a general assurance of ‘full coverage’ is not the same as a specific request for and assurance of 100 percent replacement cost coverage”]; Roberts v. Assurance Co. of America (2008) 163 Cal.App.4th 1398, 1405; Jones v. Grewe (1987) 189 Cal.App.3d 950, 956–957.) Plaintiffs’ dependence on retroactive realization on inadequate coverage upon consultation with counsel will not support a finding of misrepresentation under the minimal facts of the parties communications.

 

As for the expertise standard, the court also finds no particular facts supporting a finding of expertise in “home and auto” insurance as a basis of reasonable dependence for not confirming coverage on events occurring under the control of the homeowners association. (Vulk v. State Farm General Insurance Company, supra, 69 Cal.App.5th at p. 259.) The argument seeks to impose a standard for a heightened duty of care to disclose potential coverage factors, such as common area work, which is beyond the scope of the insurance agents duty. (Fitzpatrick v. Hayes, supra, 57 Cal.App.4th at pp. 928-930.) Any conversation with Umama at the time of the initial insurance quote, and the later follow-up with Garcia after acceptance of the new policy improperly seeks to impose a standard of care not applicable to insurance agents. Neither agent was responsible for recommending additional coverage, and identification of “home and auto” expertise in no way establishes triable issues of material fact.

 

The court finds no triable issues of material fact on the subject case regarding any basis for the undertaking of a duty thereby creating a basis for negligence liability. The motion for summary judgment is therefore granted as to Fire.

 

A motion for summary judgment is currently reserved for June 6, 2023, with the trial date remaining for July 24, 2023.

 

Moving Defendant Fire to give notice.