Judge: Walter P. Schwarm, Case: 30-2020-01176411, Date: 2022-09-20 Tentative Ruling

Defendant’s (Amtrust North America, Inc.) Demurrer to Second Amended Complaint by Defendant Amtrust North America, Inc. (Demurrer), filed on 4-27-22 under ROA No. 63, is SUSTAINED.

“A demurrer tests the pleading alone, and not the evidence or the facts alleged. . . . To the extent there are factual issues in dispute, however, this court must assume the truth not only of all facts properly pled, but also of those facts that may be implied or inferred from those expressly alleged in the complaint. [Citations.]” (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 459.) Code of Civil Procedure section 452, states, “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” Perez v. Golden Empire Transportation Transit District (2012) 209 Cal.App.4th 1228, 1238, provides, “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant. [Citations.]” C.A. v. William S. Hart Union High School District (2012) 53 Cal.4th 861, 872 (C.A.), provides, “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged. [Citation.]”

Hoffman v. Smithwoods RV Park, LLC (2009) 179 Cal.App.4th 390, 400 (Hoffman), explains “ ‘In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules. “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” ’ [Citations.] In addition to the complaint's allegations, we consider matters that must or may be judicially noticed. [Citations.] We also consider the complaint's exhibits. [Citations.]”  Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 282 (Kim), states, “When a plaintiff attaches a written agreement to his complaint, and incorporates it by reference into his cause of action, the terms of that written agreement take precedence over any contradictory allegations in the body of the complaint. ‘If facts appearing in the exhibits contradict those alleged, the facts in the exhibits take precedence.’ [Citations.]”

The Demurrer challenges the second and fourth causes of action contained in Plaintiff’s (4300 Campus Drive LLC) Second Amended Complaint, filed on 3-10-22 under ROA No. 50, pursuant to Code of Civil Procedure section 430.10, subdivisions (b) and (e). (Demurrer; 3:1-14.)

Second Cause of Action (Breach of Written Contract) and Fourth Cause of Action (Breach of Covenant of Good Faith and Fair Dealing):

Maxwell v. Dolezal (2014) 231 Cal.App.4th 93, 97-98, “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. [Citations.]”

Major v. Western Home Ins. Co. (2009) 169 Cal.App.4th 1197, 1209, states, “Moreover, to establish the insurer's ‘bad faith’ liability, the insured must show that the insurer has (1) withheld benefits due under the policy, and (2) that such withholding was ‘unreasonable’ or ‘without proper cause.’  [Citation.] The actionable withholding of benefits may consist of the denial of benefits due [citation]; paying less than due [citation]; and/or unreasonably delaying payments due [citation]”

Gruenberg v Aetna Insurance Company (1973) 9 Cal.3d 566, 576 (Gruenberg), states, “Obviously, the non-insurer defendants were not parties to the agreements for insurance; therefore, they are not, as such, subject to an implied duty of good faith and fair dealing.” (See also, Filippo Industries, Inc. v. Sun Insurance Company of New York (1999) 74 Cal.App.4th 1429, 1442-1443.)

The Demurrer states, “Even if Plaintiff were an insured and even if it were entitled to coverage, the SAC would be defective because Plaintiff has no standing to sue ANA, a stranger to the policy.” (Demurrer; 8:2-3.)

The SAC bases the second and fourth causes of action on an insurance policy (Policy) issued by Defendant to Defendant—Lewis Roofing Inc. (LRI). (SAC, ¶¶ 11 and 12.)  The SAC attaches a copy of the Certificate of Liability Insurance (Certificate) and the Policy. (SAC, ¶ 11 and Exhibits B and C.)  The SAC pleads, “Defendant AmTrust issued to Defendant LRI a commercial general liability insurance policy with policy number EN115730300 (hereinafter the ‘Policy’). Plaintiff was named as an ‘additional insured’ and was insured under the Policy. (Attached hereto as Exhibit B is a true and correct copy of the Certificate of Insurance with blanket additional insureds – Owners, Lessees or contractors; Attached here as Exhibit C is a true and correct copy of the Policy.)” (SAC, ¶ 11.)

Under the section on page one of Exhibit B, entitled “INSURER(S) AFFORDING COVERAGE,” the Certificate lists “AmTrust International Underwriters Limited” as the insurer. (SAC, ¶ 11.)  The Certificate does not list Defendant as the insurer.

As to the Policy, the Policy documents refer to “AmTrust International Underwriters, DAC” as the insurer. (SAC, ¶ 11 and Exhibit C.) Under the section entitled “POLICYHOLDER NOTICE – SERVICE OF PROCESS,” the policy states service of process for any suit shall be made upon the Secretary of AmTrust International Underwriters, DAC at 59 Maiden Lane, 6th Floor, New York, NY 10038. (SAC, ¶ 11 and Exhibit C.)

Plaintiff’s proof of service of the summons and complaint in this case, filed on 8-24-21 under ROA No. 21, states that “Amtrust North America Inc a Delaware Corporation” was served at 2710 Gateway Oaks Drive, Suite 150N, Sacramento, CA 95833.

Plaintiff has not adequately alleged that Defendant was the issuer of the Policy which is the basis for Plaintiff’s second and fourth causes of action. Rather, it appears another entity, “AmTrust International Underwriters Limited” or “AmTrust International Underwriters, DAC,”  issued the Policy. Thus, the SAC does not adequately plead that Defendant is liable under the policy issued by another entity.

Therefore, the court SUSTAINS Defendant’s (Amtrust North America, Inc.) Demurrer to Second Amended Complaint by Defendant Amtrust North America, Inc. (Demurrer), filed on 4-27-22 under ROA No. 63, with 14-days leave to amend from the date of service of the court’s ruling. (City of Stockton v. Superior Court (2007) 42 Cal.4th 730, 747.)

Defendant is to give notice.