Judge Upinder S. Kalra, Case 19STCV19115 2022-09-08 Tentative Ruling

Judge: Upinder S. Kalra, Case: 19STCV19115, Date: 2022-09-08 Tentative Ruling

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Case Number: 19STCV19115 Hearing Date: September 8, 2022 Dept: 51

Tentative Ruling

Judge Upinder Kalra, Department 51

HEARING DATE: September 8, 2022

CASE NAME: Marcella McMahon v. California Automobile Insurance Company Formerly Known as Mercury Indemnity Company, et al.

CASE NO.: 19STCV19115

DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

MOVING PARTY: Defendant California Automobile Insurance Company

RESPONDING PARTY(S): Plaintiff Marcella McMahon

TENTATIVE RULING:

Motion for Summary Judgment is DENIED.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

On June 3, 2019, Plaintiff Marcella McMahon (“Plaintiff”) filed a complaint against Defendants California Automobile Insurance Company, formerly known as Mercury Indemnity Company, Accurate Leak Locators and Does 1 through 100. The complaint alleged four causes of action: (1) Breach of Written Contract (Policy of Insurance), (2) Negligence, (3) Breach of Implied Covenant of Good Faith and Fair Dealing, and (4) Financial Elder Abuse. The complaint alleges that the Plaintiff obtained a insurance policy for the Subject Property. This insurance policy agreed to provide coverage for loss or damage due to accidental direct physical loss. In June 2018, the Plaintiff suffered a plumbing incident that caused physical damage to the Property. The Plaintiff then had Defendant Accurate perform work on the property, but as a result of jackhammering, Accurate exposed asbestos. Plaintiff then informed Defendant CAIC/Mercury, but the claim was denied.

On August 2, 2019, Defendant California Automobile Insurance Company filed a Demurrer with a Motion to Strike, which was SUSTAINED, with leave to amend.

On August 29, 2019, Defendant Accurate Leak Locators filed an Answer.

On August 29, 2019, Defendant Accurate Leak Locators filed a Cross-Complaint.

On September 23, 2019, Plaintiff filed a First Amended Complaint.

On October 23, 2019, Defendant California Automobile Insurance Company filed a Demurrer with a Motion to Strike.

On January 6, 2020, Plaintiff filed a Second Amended Complaint.

On February 5, 2020, Defendant California Automobile Insurance Company filed an Answer.

On November 4, 2020, Defendant California Automobile Insurance Company filed a Motion for Summary Judgment.

On January 7, 2022, the Hearing for Summary Judgment occurred, where the Plaintiff’s counsel informed the Court that the Plaintiff had passed away.

On May 10, 2022, Non-party Kenneth G McMahon, the Decedent’s son, filed a motion to be Appointed as the Decedent’s Successor in Interest, which was GRANTED.

Service:

The proofs of service attached to all documents submitted by Defendant indicate that all parties were served via email or overnight delivery.

Timing:

Under CCP § 437c(a)(2), the motion shall be served at least 75 days before the time appointed for hearing, unless done by mail, which allows for an additional 5 days. The motion was served on November 4, 2020. The hearing set for the matter was January 21, 2021. As stated above, the service was due via email as well as overnight delivery. 75 days after November 4, 2020, is January 19, 2021. Therefore, the motion was timely filed.

Additionally, the motion cannot be heard less than 30 days before the date of trial. The hearing was set for January 21, 2021. Trial was initially set for July 20, 2021. Trial has since been vacated and a new date will be set. However, the motion was initially timely.

Procedural Issues:

Plaintiff contends that the Separate Statement submitted by Defendant is defective. Specifically, under Rule 3.135(d), the separate statement must identify “each cause of action, claim for damages, issue of duty or affirmative defense that is the subject of the motion,” and the supporting material facts that are not in dispute to those specific cause of action, claim, issue or affirmative defense. Here, Defendant provided the undipusted material facts, but incorporated the facts to each cause of action, via statements at the end of the separate statement. While failure to comply can be grounds for the denial of the motion, (C. Procedural Requirements—Moving Party, Cal. Prac. Guide Civ. Pro. Before Trial Ch. 10-C, d. [10:97]) the court will rule on the merits.

Plaintiff also argues that Defendant’s motion is too long. However, this claim is incorrect. Defendant’s motion is 19 pages long, excluding the notice of motion, the table of authorities, and the table of contents.

LEGAL STANDARD:

The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843). In analyzing such motions, 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). Thus, summary judgment or summary adjudication is granted when, after the Court’s consideration of the evidence set forth in the papers and all reasonable inferences accordingly, no triable issues of fact exist and the moving party is entitled to judgment as a matter of law. (CCP § 437c(c); Villa v. McFarren (1995) 35 Cal.App.4th 733, 741).

As to each claim as framed by the complaint, the party moving for summary judgment or summary adjudication must satisfy the initial burden of proof by presenting facts to negate an essential element. (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). A motion for summary judgment or summary adjudication must be denied where the moving party's evidence does not prove all material facts, even in the absence of any opposition or where the opposition is weak. (See Leyva v. Superior Court (1985) 164 Cal.App.3d 462, 475; Salesguevara v. Wyeth Labs., Inc. (1990) 222 Cal.App.3d 379, 384, 387.

Once the moving party has met the burden, the burden shifts to the opposing party to show via specific facts that a triable issue of material facts exists as to a cause of action or a defense thereto. (CCP § 437c(o)(2)). When a party cannot establish an essential element or defense, a court must grant a motion for summary adjudication. (CCP § 437c(o)(1)-(2)).

“There is a triable 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.” (Id.)

Judicial Notice:

Defendant requests that the Court take judicial notice of the following documents:

1. The Second Amended Complaint filed by Plaintiff Marcella McMahon on or about January 6, 2020.

2. The Answer filed by Defendant California Automobile Insurance Company on February 5, 2020.

The Court may take judicial notice of the existence of the records, but not the truth of matters asserted in such records. (Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1565). As a result, although the court may take judicial notice that the documents exists, the Court may not take judicial notice of the truth of the facts in the documents.

Additionally, Evidence Code only allows the Court to take judicial notice of certain types of documents. The court may take judicial notice of “official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States,” “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States,” and “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code § 452, subds. (c), (d), and (h).) The Evidence Code does not allow the Court to take judicial notice of discovery responses or parts of cases, such as depositions.

The Request for Judicial Notice is GRANTED, pursuant to Evidence Code § 452, as these are records of this court.

Evidentiary Objections:

Plaintiff’s Objections:

Declaration of Ryan Grattan:

Plaintiff objects to all but 1 paragraph of the Ryan Grattan Declaration. The objections are based on the following: Mr. Grattan does not have personal knowledge of the information – he has not interacted with the insured and has not indicated if he handled any part of the claim; he has not established he is the custodian of records; the best evidence would have been declarations from employees who prepared the claims; the declaration does not provide training, education, or experience; inadmissible hearsay; lack of foundation; best evidence rule.

Overruled: 1-15

Defendant’s Objections:

Declaration of Daina Dillabough:

Defendant objects to paragraphs 17 through 43, with each of the paragraphs separated into multiple objections. The grounds for the objections are: Argumentative, and lacks foundation, including failure to establish personal knowledge, skill, experience training and education of the witness, conclusory, improper legal opinion, improper expert opinion, constitutes hearsay, irrelevant.

Overruled: 1-63

ANALYSIS:

This Court could deny the motion on the merits pursuant to CCP § 437c((b)(1) because Defendants’ separate statement is woefully inadequate in meeting the requirements of California Rule of Court, rule 3.1350(d). Instead, the Court will deny the Motion on the merits, as set forth below.

a. Breach of Contract

“To establish a cause of action for breach of contract, the plaintiff must plead and prove (1) the existence of the contract, (2) the plaintiff’s performance or excuse for nonperformance, (3) the defendant’s breach, and (4) resulting damages to the plaintiff. [Citation.]” (Maxwell v. Dolezal (2014) 231 Cal.App.4th 93, 97-98.)

Defendant contends that Plaintiff cannot establish a breach of contract claim for two reasons. First, Plaintiff did not comply with her obligations under the policy. Second, the faulty workmanship exclusion excused performance. Even assuming Defendant satisfied their initial burden, Defendant’s contentions fail because Plaintiff has sufficiently met the burden shift by revealing triable issue of material facts as to both contentions.

Defendant first contends that under the Plaintiff’s insurance policy, any loses that are caused by “faulty, inadequate, or defective workmanship, repair, construction, renovation remodeling or maintenance” are not covered. (UMF 3, 4). This exclusion prevents coverage of third party Accurate’s work, i.e., the jackhammering that caused the asbestos ceiling tile from falling. (UMF 17, 18, 34.) The asbestos contamination was caused by Accurate; because Plaintiff selected this contractor to perform repairs, these losses are excluded from the policy. (UMF 3, 4, 9.)

Plaintiff contends that there are at least three disputed factual bases that undermine Defendant’s contentions. This court agrees. First, it is unclear whether the faulty workmanship exclusion is limited to work on the plumbing. Second, there remains a question of whether the loss was caused by the efforts of the insurance company. Third, there is a question on whether Defendant’s promise to restore the property “to no less than its condition prior to the loss” extends Defendant’s liability to consequential damages.

Defendant next argues that under the Policy, an action cannot be brought against CAIC unless full compliance with Section 1. Under Section 1, the insured must “show the damaged property” and “provide us with records and documents we request and permit us to make copies.” (UMF 5.) Defendant requested information from the Plaintiff on multiple occasions; these requests sought photographs or other information that indicate the jackhammering caused the asbestos ceiling tiles to fall. Plaintiff did not provide documentation about the damaged property. (UMF 19, 20, 26, 27, 31.)

Plaintiff argues that there is evidence that directly contradicts the Declaration of Ryan Grattan. Specifically, Plaintiff hired AEG, an environmental company, to take samples of the materials, and then had this report submitted to CAIC. (Shaver Dec. ¶¶ 5 & 6, Appendix of Exhibits Ex. 1, 3.) This report indicated that there was asbestos in the material and that the property was contaminated. Thus, because Plaintiff submitted a report to Defendant, she fulfilled her obligations under the policy.

Accordingly, Defendants’ contentions fail.

b. Breach of Implied Covenant of Good Faith and Fair Dealing

“It is well established a breach of the implied covenant of good faith is a breach of the contract [citation omitted], and that breach of a specific provision of the contract is not a necessary prerequisite to a claim for breach of the implied covenant of good faith and fair dealing.” (Carson v. Mercury Ins. Co. (2012) 210 Cal.App.4th 409, 429.) To establish a breach of good faith and fair dealing, bad faith, in an insurance context, the party must demonstrate: “(1) benefits due under the policy must have been withheld; and (2) the reason for withholding benefits must have been unreasonable or without proper cause.” (Grebow v. Mercury Ins. Co. (2015) 241 Cal.App.4th 564, 581).

Defendant argues that first, this cause of action fails because Plaintiff did not establish bad faith because of the faulty workmanship exclusion, Plaintiff did not comply with the obligations under the policy, and did not establish a breach of contract claim. Further, Defendant contends that Plaintiff cannot establish that Defendant acted in bad faith. The Court in Careau & Co. stated that for a claim of bad faith, the party must demonstrate “a failure or refusal to discharge contractual responsibilities, prompted not by an honest mistake, bad judgment or negligence but rather by a conscious and deliberate act, which unfairly frustrates the agreed common purposes and disappoints the reasonable expectations of the other party thereby depriving that party of the benefits of the agreement.” (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1395.) Defendant asserts that it acted reasonably when, after it conducted an air sampling test that indicated that no asbestos was found, it denied the policy coverage.

Again, even assuming that Defendant had met its prima facie showing, disputed issues of material fact remain. First, as stated above, there is evidence that the faulty workmanship exclusion does not apply and that Plaintiff complied wither her obligations, i.e., the June 2019 letter from CAIC to Plaintiff indicated that if she used the recommended contractor any damage would be correct and Plaintiff submitting the AEG asbestos report to CAIC, in direct contradiction to Defendant’s claim. Additionally, after Defendant stated that the investigation would not be continued because no asbestos was found, Plaintiff contends that they sent their expert’s report, the AEG report, that established that the jackhammering caused, nonetheless, Defendant ignored the evidence and, instead, refused to pay the claim. (Dec. Dillabough ¶ 27, 28.) This is sufficient to demonstrate triable issues of material fact as to whether Defendant acted in bad faith and breached the policy contract.

Conclusion

For the foregoing reasons, the Court decides the pending motion as follows:

Motion for Summary Judgment is DENIED.

Moving party to give notice.

IT IS SO ORDERED.

Dated: September 8, 2022 ___________________________________

Upinder Kalra

Judge of the Superior Court