Judge Thomas D. Long, Case 20STCV28704 2022-08-04 Tentative Ruling

On July 29, 2020, Plaintiff Brian Kennedy filed this action against Defendants United States Liability Insurance Company Inc. (“USLI”) and Schifrin Gagnon & Dickey Inc.

On May 25, 2022, Schifrin Gagnon & Dickey Inc. (“Defendant”) filed a motion for summary judgment, or in the alternative, summary adjudication.

Defendant’s request for judicial notice of the Complaint, Answer, and Quitclaim Deed is granted.

USLI issued Plaintiff commercial property insurance for the vacant commercial property located at 15430 Roscoe Boulevard, Van Nuys, California 91406 that provided coverage for vandalism and theft, subject to several exclusions including one for the loss of copper and damage to the property resulting from the theft or attempted theft of copper (“Copper Exclusion”). (Undisputed Material Facts “UMF” 1, 12-15, 99, 101.) Sometime between October 25, 2019 and December 3, 2019, the property was broken into and vandalized. (UMF 103.) The property’s interior walls were cut, interior glass partitions were broken, the inside was vandalized with graffiti, and human feces were present in multiple areas. (UMF 2.)

USLI retained Defendant as an independent adjustor to investigate the claim. (UMF 105.) Defendant’s adjuster, Telma Dorcey, conducted an initial site inspection on January 3, 2020, and she took 137 photographs and a video recording. (UMF 3.) She stated that she could not inspect the lobby bathrooms because they were dark due to lack of electrical wiring, some tiles were cracked, and feces were present on the floors, and clean-up was necessary before her inspection could be completed. (UMF 6, 18.) She then prepared a 21-page Estimate and loss analysis dated February 5, 2020, which provided a total Replacement Cost Value (“RCV”) of $54,321.89, a total depreciation amount of $812.49, and an Actual Cost Value (“ACV”) of $53,509.40. (UMF 4.) The Estimate tabulated a net claim in the initial amount of $48,509.40 after subtracting the $5,000 policy deductible. (UMF 4.) The Estimate specifically noted that the claim did not include “theft of electrical components, wiring or stolen plumbing components.” (UMF 5.) It also stated, ““This estimate represents our scope and estimate for repair of the damages that were visible at the time of our inspection.” (UMF 17.) USLI paid $48,509.40 to Plaintiff on February 5, 2020. (UMF 4.)

Plaintiff attempted to clean the bathrooms, notified Dorcey that clean-up was completed, and submitted an invoice for cleaning expenses. (UMF 7.) USLI’s initial payment included a reimbursement for Plaintiff’s anticipated cleaning expenses, and the reimbursement exceeded the cleaning invoice Plaintiff subsequently submitted to Defendant. (UMF 8.) Dorcey performed a second inspection on February 14, 2020, and took an additional 26 photographs. (UMF 7, 9.) She prepared a Supplemental Estimate dated February 20, 2020, which provided an additional RCV of $1,177.18, an additional depreciation amount of $30.22, and an additional ACV of $1,146.96. (UMF 9.) USLI issued a supplemental payment of $1,146.96 on February 21, 2020 and closed Plaintiff’s claim. (UMF 9-10.)

For each claim in the complaint, the defendant moving for adjudication must satisfy the initial burden of proof by showing that one or more elements of a cause of action cannot be established or that there is a complete defense to a cause of action. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520 (Scalf).) Then the burden shifts to the plaintiff to show that a triable issue of material fact exists as to that cause of action or a defense. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf, supra, 128 Cal.App.4th at p. 1520.) 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, 162-163.)

Only the fourth cause of action for negligence misrepresentation is brought against Defendant. “The elements of negligent misrepresentation are (1) a misrepresentation of a past or existing material fact, (2) made without reasonable ground for believing it to be true, (3) made with the intent to induce another’s reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage.” (Ragland v. U.S. Bank National Assn. (2012) 209 Cal.App.4th 182, 196.) “Although a false promise to perform in the future can support an intentional misrepresentation claim, it does not support a claim for negligent misrepresentation.” (Stockton Mortgage, Inc. v. Tope (2014) 233 Cal.App.4th 437, 458.)

Plaintiff alleges two categories of misrepresentations: (1) “On various dates between January 3, 2020 and February 6, 2020, [Defendant] represented to Plaintiff that Plaintiff needed to clean the Property before the Property could be inspected and before Plaintiff’s loss could be adjusted”; and (2) “On various dates between February 6, 2020 and February 21, 2020, [Defendant] represented that its initial estimate of the loss was preliminary, that the loss would be revised, and that USLIC would be in contact with Plaintiff when it reached a final resolution of the claim.” (Complaint ¶¶ 61, 63.)

Defendant argues that Plaintiff cannot demonstrate that Defendant misrepresented any past or existing material fact related to Plaintiff’s claimed loss. (Motion at p. 8.)

Plaintiff alleges that during Dorcey’s January 3, 2020 inspection of the property, she “refused to inspect certain areas of the Property at that time allegedly due to the presence of biohazardous waste, which [Defendant] requested to be cleaned before reinspection of the Property.” (Complaint ¶ 24.) Plaintiff therefore procured cleaning services at a cost of $5,500.00. (Id. at ¶ 24.) Dorcey reinspected the property on February 15, 2020. (Id. at ¶ 29.)

Defendant provides evidence supporting the need to clean certain areas of the property. (See UMF 6.) Dorcey declares that the lobby bathrooms were dark, the tile flooring was cracked, shatter pieces of sinks were on the floor, and the floors were soiled with human feces, “which created an overpowering stench in the bathrooms and made the bathrooms’ floors slippery and treacherous to traverse.” (Dorcey Decl. ¶ 11.) She therefore determined that it was unsafe to enter and conduct an up-close visual examination. (Ibid.) Plaintiff’s associate testified in deposition that the bathrooms were damages “because when the homeless got in there[,] there was no running water so they would use the toilets and piss everywhere and crap everywhere. So it stunk pretty bad in those bathrooms.” (Sarco Decl., Ex. X [“Carlson Depo.”] at p. 67.) He was present during Dorcey’s inspection, and he testified that she “couldn’t finish all of the inspection because the building was so damaged,” and the bathrooms were “the one area [Dorcey] didn’t want to go into you know because of the smell and the way everything looked.” (Id. at pp. 85-86, 129.) A painting contractor who inspected the property also testified that there was feces “everywhere.” (Sarco Decl., Ex. W [“Davidson Depo.”] at pp. 29-30.)

Defendant has shown that Dorcey’s representation was true and there was no misrepresentation about the need to clean areas of the property before reinspection. In doing so, Defendant has met its initial burden of showing that Plaintiff cannot establish the required element of a misrepresentation.

In opposition, Plaintiff argues that Defendant’s contention is merely an appeal to Dorcey’s credibility, and whether the second inspection was “reasonably required”—as specified in Plaintiff’s insurance policy with USLI—is a factual issue. (Opposition at pp. 8-9.) But Plaintiff does not cite any evidence disputing the condition of the property. Instead, Plaintiff argues the inspection process was a “sham” and “[c]leaning a portion of the premises involved no economic benefit to plaintiff whatsoever, only a detriment.” (Id. at p. 8.) Plaintiff attacks the “cursory” nature of Dorcey’s second inspection and her assumption that the piping was copper. (Id. at p. 9.)

Plaintiff also cites a January 2, 2020 email from USLI’s claims examiner directing Dorcey, “You will need to be very specific in your use of the words vandalism and theft. They are two different actions. Theft or attempted theft is not vandalism.” (Opposition at p. 9; White Decl., Ex. 6 at p. 1.) Dorcey responded with a January 8, 2020 letter explaining, “Graffiti and broken glass are being considered as vandalism or malicious mischief as there appears no underlying reason or intent other than to create destruction,” and, “Damage to the building caused for the purpose of stealing building fixtures, electrical wiring or components is considered theft, along with the theft of the fixtures and wires and copper pipes.” (White Decl., Ex. 6 at p. 4.) Plaintiff faults this letter for not cleanly distinguish between theft or attempted theft of copper fixtures versus non-copper fixtures, and Plaintiff believes that during the initial inspection, “Dorcey had concluded that graffiti and broken glass were the only damages resulting from vandalism.” (Opposition at p. 10.) None of this raises a disputed fact regarding the condition of certain areas of the property and the need to clean it before Dorcey could inspect those areas. Plaintiff’s disagreement with the nature of the inspection, the assessment of the fixtures, and the amount of the insurance payment do not make Dorcey’s statement false.

Plaintiff alleges that during a February 6, 2020 phone call, Dorcey assured Plaintiff’s associates that the Estimate was only a preliminary estimate, she would reinspect the property after clean-up was completed, and USLI would then complete its coverage analysis and issue a further payment. (Complaint ¶ 28.) On February 21, 2020, Dorcey wrote that she documented that the debris was cleared from the property, she reported the additional inspection and sent a revised estimate to USLI, and “You will be contacted directly by the insurance examiner regarding the resolution of this claim.” (Id. at ¶ 30.) Plaintiff refrained from performing any repairs in reliance on the statements that USLI would further investigate and consider future payments and adjustments to the claim. (Id. at ¶ 31.)

It is undisputed that there was a second inspection and a Supplemental Estimate. (UMF 7, 9.) It is also undisputed that USLI issued a further payment. (UMF 9; Berry Decl. ¶ 6.) Thus, the February 6, 2020 statements were not misrepresentations.

Regarding the February 21, 2020 statement, “You will be contacted directly by the insurance examiner regarding the resolution of this claim,” Defendant argues this is a non-actionable future promise of performance. (Motion at p. 11.) Defendant relies on Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 158 (Tarmann), in which a defendant insurer promised to pay for repairs upon their completion, which was a promise to perform at some future time. (Motion at p. 11.) This case differs from Tarmann because here, Defendant did not make a promise about its own future performance. Instead, Dorcey represented that the insurance examiner for USLI would contact Plaintiff. (See Berry Decl. ¶ 1; White Decl., Ex. 4 [“Berry Depo.”] at p. 212.) Regardless of the actor, however, Dorcey’s statement nevertheless is one about future action, which is not actionable as a negligent misrepresentation. (Tarmann, supra, 2 Cal.App.4th at p. 158 [“‘[P]redictions as to future events, or statements as to future action by some third party, are deemed opinions, and not actionable fraud.’ [Citation.]”].)

Defendant has met its initial burden of showing that Plaintiff cannot establish the required element of a misrepresentation of a past or existing material fact.

In opposition, Plaintiff cites Dorcey’s deposition testimony, in which she stated she did not recall if the insurance examiner ever did contact Plaintiff. (Opposition at pp. 11-13; see Dorcey Depo. at pp. 195, 203-206.) Her lack of knowledge of what actually occurred after her promise is not evidence of her state of mind when she made the statement. Plaintiff also argues that Defendant “misrepresented the nature of USLI’s state of mind and USLI’s intentions and instructions, which it knew at the time” and therefore it was a statement of existing fact. (Opposition at p. 14.) But Plaintiff cannot, and does not, raise a triable issue disputing that “You will be contacted directly by the insurance examiner regarding the resolution of this claim” is a nonactionable statement as to future action by a third party.

Defendant has met its burden, and Plaintiff has failed to show the existence of triable issues of fact regarding the falsity of Defendant’s statements and whether they are statements of past or existing material fact.

Defendant seeks summary adjudication with respect to damages occurring from a December 18, 2020 fire. (Motion at pp. 11-12.) Defendant argues that Plaintiff could not have sustained any loss and cannot recover damages from Defendant because Plaintiff did not own the property at that time. (Id. at p. 12.)

“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 [as specified in Civil Code section 3294], or an issue of duty.” (Code Civ. Proc., § 437c, subd. (f)(1).) Civil Code section 3294 governs the availability of punitive damages. There is no authority for adjudication of a portion of or limitation on Plaintiff’s damages.

In reply, Defendant attempts to reframe this issue as one seeking adjudication of whether Defendant owed a duty. (Reply at pp. 9-10.) That is not the ground raised in the notice of motion or argued in the motion. (See Motion at pp. 2-3 [Notice of Motion: “As to Plaintiff’s claim for damages related to the fire that occurred at the subject property in December 2020, the material facts are undisputed and [Defendant] is entitled to summary adjudication as a matter of law that Plaintiff could not have sustained any damage resulting from the fire to the property because Plaintiff no longer owned the property at the time of the fire.”].)

The motion for summary judgment, or in the alternative, summary adjudication is GRANTED. Defendant Schifrin Gagnon & Dickey Inc. is ordered to file a proposed judgment within 10 days.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are encouraged to appear remotely and should be prepared to comply with Dept. 48’s new requirement that those attending court in person wear a surgical or N95 or KN95 mask.

Hon. Thomas D. Long

Judge of the Superior Court