Judge: Theresa M. Traber, Case: 20STCV16189, Date: 2025-05-20 Tentative Ruling
Case Number: 20STCV16189 Hearing Date: May 20, 2025 Dept: 47
Tentative Ruling
Judge Theresa M. Traber, Department 47
HEARING DATE: May 20, 2025 TRIAL DATE: July
1, 2025
CASE: Gary Peterson et al. v. State Farm
General Ins. Co. et al.
CASE NO.: 20STCV16189 
MOTION
FOR SUMMARY ADJUDICATION
MOVING PARTY: Defendant State Farm General Insurance Co.
RESPONDING PARTY(S): Plaintiffs Gary
Peterson and Robin Barton-Peterson
CASE
HISTORY:
·
04/28/20: Complaint filed.
·
06/26/20: First Amended Complaint filed.
STATEMENT
OF MATERIAL FACTS AND/OR PROCEEDINGS:
This is a breach of contract and negligence case. Plaintiffs contend that
Defendants failed to pay the entirety of Plaintiffs’ insurance claims following
the loss of their home in the Woolsey Fire, and mishandled Plaintiffs’
insurance coverage.
Defendant State Farm General
Insurance Co., Inc. moves for summary adjudication on Plaintiffs’ demand for
punitive damages.
TENTATIVE RULING:
Defendant’s Motion for Summary
Adjudication is DENIED.
DISCUSSION:
Defendant State Farm General
Insurance Co., Inc. moves for summary adjudication of Plaintiffs’ demand for
punitive damages.
Legal Standard
The function of a motion for
summary judgment or adjudication is to allow a determination as to whether an
opposing party can show evidentiary support for a pleading or claim and, if
not, to enable an order of summary dismissal without the need for trial. (Aguilar
v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) Code of Civil
Procedure Section 437c(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.) “The function of the pleadings in
a motion for summary judgment is to delimit the scope of the issues; the
function of the affidavits or declarations is to disclose whether there is any
triable issue of fact within the issues delimited by the pleadings.” (Juge
v. County of Sacramento (1993) 12 Cal.App.4th 59, 67, citing FPI
Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 381-82.)
As to each claim as framed by the
complaint, the defendant moving for summary judgment must satisfy the initial
burden of proof by presenting facts to negate an essential element, or to
establish a defense. (Code Civ Proc. § 437c(p)(2); Scalf v. D. B. Log Homes,
Inc. (2005) 128 Cal.App.4th 1510, 1520.) Courts “liberally construe the
evidence in support of the party opposing summary judgment and resolve doubts
concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide,
Inc. (2006) 39 Cal.4th 384, 389.) The lack of opposition by a plaintiff is
not grounds to grant a motion for summary judgment if a defendant cannot meet
their initial burden of proof. (See Thatcher v. Lucy Stores, Inc. (2000)
79 Cal.App.4th 1081, 1087.)
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 that cause of action
or a defense thereto. To establish a triable issue of material fact, the party
opposing the motion must produce substantial responsive evidence. (Sangster
v. Paetkau (1998) 68 Cal.App.4th 151, 166.)
Plaintiffs’ Evidentiary Objections
Plaintiffs
object to portions of the Declaration of John Grubaugh in support of the Motion
on the grounds of lack of personal knowledge and hearsay. Plaintiffs’
objections are OVERRULED. The witness is competent to testify as to the
contents of the records. The records are not hearsay, as they are subject to
the business record exception on their face (see Evid Code § 1271) and the
statements described therein are not being offered for the truth of their
contents.
Defendant’s Evidentiary Objections
Defendants
object to portions of the Declarations of Samuel Bruchey, Gary Peterson, and
Tony Mark in support of the Opposition. The Court rules on these objections as
follows:
Objection No. 1: SUSTAINED
as lacking foundation and personal knowledge and an improper opinion. (Evid
Code §§ 400, 403, 702, 801-802.)
Objection No. 2: SUSTAINED.
The exhibits lack authentication. (Evid. Code § 1400.)
Objection No. 3: OVERRULED.
The statements are not expert opinions and do not lack foundation.
Objection No. 4: SUSTAINED
as irrelevant. Expert valuations of other properties do not tend to prove
whether Defendant acted with malice or oppression as to Plaintiffs and
therefore are not relevant to this motion.
Requests for Judicial Notice
Defendants
request that the Court take judicial notice of (1) the First Amended Complaint
in this action; (2) the Court’s October 25, 2023 Ruling on Submitted Matter as
to Plaintiffs’ Motion for Summary Adjudication; and (3) the Court’s April 19,
2023 Ruling on Submitted Matter as to Defendant’s Motion for Summary
Adjudication. While it is not strictly necessary to request judicial notice of
the Court’s own records for the case at hand, Defendant’s requests are GRANTED
pursuant to Evidence Code section 452(d) (court records).
Procedural History
Plaintiffs are
the owners of a large property in Trancas Canyon, Malibu, which comprised a
primary dwelling with ocean and mountain views and multiple accessory
structures, both residential and commercial in nature. (See First Amended
Complaint ¶¶ 7-9.) Plaintiffs held a homeowner’s insurance policy issued by
Defendants which covered, inter alia, additional expenses incurred by
the policyholders to maintain their standard of living following a loss of
their residence for up to 24 months. (FAC ¶ 19.) Plaintiffs commenced this
action on April 28, 2020, alleging that Defendant failed to pay the full amount
of coverage contemplated by the policy. (See generally FAC.)
Both sides of this action sought
judicial determinations as to the duties imposed by the language of the policy
by way of motions for summary adjudication. On April 19, 2023, the Court issued
a ruling on Defendant’s motion for summary adjudication regarding whether Defendant
was obligated to pay only for additional living expenses actually incurred. (April
19, 2023 Ruling on Matter Taken Under Submission.) The Court denied Defendant’s
motion, finding that while the plain language of the Policy supported Defendant’s
interpretation, Plaintiffs had demonstrated a triable issue of fact as to
whether Defendant was equitably estopped from asserting that argument.
Six months later, on October 25,
2023, the Court issued a ruling on Plaintiffs’ Motion for Summary Adjudication,
which sought a determination as to the fundamental issue in the case: whether
Defendant had a duty to include portions of Plaintiffs’ property other than the
primary dwelling structure in calculating the proper amount of Additional
Living Expenses to provide. (October 25, 2023 Ruling on Matter Taken Under
Submission.) Plaintiffs asserted that the entire property should be included in
the calculation, while Defendant stood on their position that only the primary
dwelling was relevant. (Id.) The Court categorically rejected
Defendant’s argument, finding it illogical and contradicted by the express
language of several provisions of the Policy. (Id. pp. 6-7.) However,
the Court also declined to adopt Plaintiffs’ maximalist interpretation as
conflicting with the purpose of the Policy to maintain a standard of living
rather than reimburse for business losses. (Id. pp. 7-8.) Instead, the
Court concluded that the Additional Living Expenses provision required
Defendant to include not only the dwelling structure itself, but also the
grounds of the property and other structures excluding rental units and
commercial properties where Plaintiffs did not reside. (Id. p.9.) On
that basis, the Court granted Plaintiffs’ Motion for Summary Adjudication to
that limited extent as to the issue of duty.
Punitive Damages
Defendant
moves for summary adjudication of Plaintiffs’ claim for punitive damages on the
basis that Plaintiffs cannot establish by clear and convincing evidence that
Defendant acted with malice, oppression, or fraud, and on the alternative basis
that Plaintiffs cannot establish ratification of any such conduct by an
officer, director, or managing agent.
1.
Malice, Oppression, or Fraud
Defendant’s primary argument is
that Plaintiffs cannot establish by clear and convincing evidence that any of
Defendant’s conduct was undertaken with malice, oppression, or fraud.
Punitive damages are available
against a defendant whose conduct is proven by clear and convincing evidence to
be malicious, fraudulent, or oppressive. (Civ. Code § 3294(a).) “Malice” means
conduct “intended by the defendant to cause injury to the plaintiff or
despicable conduct which is carried on by the defendant with a willful and
conscious disregard of 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).) “[D]espicable’ is a powerful term that refers to circumstances
that are ‘base,’ ‘vile,’ or ‘contemptible.’” (College Hosp. Inc. v. Superior
Court (1994) 8 Cal.4th 704, 725.) For punitive damages claims in the summary
judgment context, the Court “view[s] the evidence presented through the prism
of the substantive clear and convincing evidentiary burden.” (Butte
Fire Cases (2018) 24 Cal.App.5th 1150, 1158.) In so doing, the Court
examines the evidence produced to determine whether a jury could find in the
party’s favor under the “clear and convincing” standard. (See Spinks v.
Equity Residential Briarwood Apartments (2009) 1717 Cal.App.4th 1004,
1053.) The Court does not weigh evidence or make credibility determinations,
and plaintiffs are not required to prove their entitlement to punitive damages
at summary judgment. (American Airlines, Inc. v. Sheppard, Mullin, Richter
& Hampton (2002) 96 Cal.App.4th 1017, 1049.)
Defendants assert that their
conduct could not be characterized as malicious, fraudulent, or oppressive, but
offer no actual evidence tending to show that Plaintiffs could not establish
these facts by clear and convincing evidence. Bare recitations of the factual
record with conclusory characterizations of their conduct are not sufficient. Defendant
must produce evidence, and not merely point out through argument, that
Plaintiffs do not possess and cannot reasonably obtain needed evidence. (Aguilar
v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854.) A vague citation to
general principles that evidence of bad faith does not per se prove malice,
fraud, or oppression is not sufficient. (See Mock v. Michigan Millers Mutual
Insurance Co. (1992) Further, Defendant’s citation to Plaintiffs’ response
to a “state all facts” interrogatory regarding punitive damages is not
sufficient to carry Defendant’s burden on summary adjudication. (See Separate
Statement of Undisputed Material Fact No. 32, Defendant’s Exh. 35 No. 7.) While
“factually devoid” discovery responses can be a basis to grant summary
adjudication, Plaintiffs’ response does not fall below that threshold because
the response, although it restated the factual averments of the Amended
Complaint, is substantial and factually detailed such that it does not support
the inference that Plaintiffs cannot reasonably obtain needed evidence. (Union
Bank v. Superior Court (1995) 31 Cal.App.4th 573, 590 [short conclusory
discovery responses are factually devoid and can support granting summary
adjudication because they support an inference that no supporting evidence can
be obtained].
As a final matter, Defendant
contends that the Court’s refusal to adopt Plaintiffs’ expansive interpretation
of the Policy precludes an award of punitive damages. Not so. As it is
Defendant’s conduct which is relevant to an award of punitive damages, the
proper inquiry is whether Defendant acted with malice, fraud, or oppression in
adopting its minimalist position—a position which the Court emphatically
rejected in October 2023. As the issue of punitive damages was not before the
Court on that motion, the Court’s rejection of Defendant’s argument does not
establish that Plaintiff is entitled to punitive damages. Certainly, a finding
that Defendant’s interpretation was wrong is not in itself sufficient to
establish malice, fraud, or oppression. However, such a finding is plainly a
prerequisite, and, therefore, the Court’s ruling to that effect does not
preclude an award of punitive damages.
For these reasons, the Court finds
that Defendant has not carried its burden to demonstrate that Plaintiffs cannot
establish by clear and convincing evidence that Defendant acted with malice,
fraud, or oppression. Even if the Court were to credit Defendant with
satisfying its burden and shifting to Plaintiffs the obligation to demonstrate
a triable issue of fact, the Court would deny summary adjudication based on
Plaintiffs’ evidentiary showing.
Although Plaintiffs emphasize the Court’s rulings rejecting certain
positions advanced by Defendant (e.g., Opp. at pp. 13-14), their
evidence of Defendant’s misconduct goes well beyond a flawed policy
interpretation. Indeed, Plaintiffs offer
evidence that Defendant revoked its approval to lease the Cliffside
Drive property Plaintiffs wanted to rent in Malibu, because of the lessor’s
requirement that Plaintiffs rent their own furniture, without bothering to
investigate how much this would have cost. (Opp. at pp. 4-5.) Plaintiffs also demonstrated Defendant’s
efforts to manipulate and then impose a unjustifiably low cap on the applicable
rental value for replacement housing by, inter alia: calculating the
rental value based on a four-bedroom house when Defendant knew the main house
had six; rejecting the revised rental-value analysis done by ALE Solutions,
Defendant’s temporary housing vendor, based on comparable six-bedroom homes; relying
on a State Farm claims representative with no background in real estate or
familiarity with Southern California real property; withholding from ALE
Solutions crucial information about Plaintiffs’ property that enhanced its
value; rejecting any reliance on rental value appraisals offered by Plaintiffs
and withholding them from ALE Solutions; and ultimately instructing ALE
Solutions to withdraw their assistance from Plaintiffs. (Opp., pp. 4-7 and evidence cited
therein.) The Court agrees with Plaintiffs
that this evidence raises a triable issue as to whether they will be able to
show by clear and convincing evidence that Defendant acted with malice, fraud
and/or oppression by consciously disregarding Plaintiffs’ rights, providing
false and misleading information to Defendant’s housing vendor whose job it was
to find temporary housing for Plaintiffs, and unfairly minimizing the proper
“fair rental value” of replacement housing to deny Plaintiffs their rightful
benefits under the policy.
2.
Ratification
Defendant argues in the alternative
that Plaintiffs cannot establish that any malicious, fraudulent, or oppressive
conduct was ratified by a corporate officer, director, or managing agent.
Punitive damages may arise against
an employer for the conduct of an employee when it is established that an
officer, director, or managing agent either commit the act themselves, or
ratify the act. (White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 572; College
Hospital, Inc. v. Superior Court (1994) 8 Cal.4th 704, 726.) An
officer, director, or managing agent is an individual who exercises
“substantial discretionary authority over decisions that ultimately determine
corporate policy.” (White, supra, 21 Cal.4th at 577-78.)
Defendant asserts that Plaintiffs
cannot establish ratification by an officer, director, or managing agent of
conduct which would be malicious, fraudulent, or oppressive. In asserting this
argument, Defendant relies solely on Plaintiffs’ response to a “state all
facts” interrogatory pertaining to punitive damages generally. (See Motion at
pp. 13-14, citing SSUMF No. 32.) The Court is hesitant to conclude that a
discovery request which does not specifically seek information regarding
ratification but instead broadly references punitive damages in general is
sufficient to reach this issue. To the extent that the interrogatory is germane
to this question, Plaintiff’s substantial, lengthy, and detailed response is
not analogous to the curt, boilerplate response which is considered “factually
devoid” because it supports the inference that no responsive evidence exists.
(See Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 590.)
The Court therefore does not find that Defendant has demonstrated that
Plaintiffs cannot establish that Defendant’s conduct was ratified by an
officer, director, or managing agent.
Because
Defendant has not carried its burden on either of its arguments on the issue of
punitive damages, Defendant is not entitled to summary adjudication of
Plaintiffs’ claim for those punitive damages.
CONCLUSION:
Accordingly,
Defendant’s Motion for Summary Adjudication is DENIED.
Moving
Party to give notice.
IT IS SO ORDERED.
Dated: May 20, 2025 ___________________________________
Theresa
M. Traber
Judge
of the Superior Court
Any party may submit on the
tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day
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order which modifies the tentative ruling in whole or in part.