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FILED: KINGS COUNTY CLERK 06/30/2022 04:41 PM INDEX NO. 500069/2022 NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 06/30/2022 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS ------------------------------------------------------------------------X Index No.: 500069/2022 BRAGA CORPORATION, 98 Snediker Avenue Brooklyn, NY 11207, Plaintiff, REPLY AFFIRMATION IN FURTHER SUPPORT OF – against – MOTION TO DISMISS MONCON INC., 1460 Sheridan Boulevard, Bronx, New York 10459 and CERTAIN UNDERWRITERS AT LLOYDS, LONDON, 280 Park Avenue, East Tower, 25th Floor, New York, NY 10017, ------------------------------------------------------------------------X COREY M. COHEN, an attorney duly admitted to practice law before the Courts of the State of New York, duly affirms the following to be true upon information and belief: 1. I am a partner at FURMAN KORNFELD & BRENNAN LLP, attorneys for Defendant, CERTAIN UNDERWRITERS AT LLOYD’S, LONDON (“Underwriters”), in the above-captioned matter, and am fully familiar with facts and circ*mstances herein based upon the contents of the file maintained by my Firm. 2. This Reply Affirmation is submitted in support of Underwriters’ motion to dismiss the instant action pursuant to CPLR §§ 3211 (a)(1), (a)(7) or in the alternative such other and further relief as the Court deems just and proper. 3. Based upon the instant Reply Affirmation and the accompanying Memorandum of Law, this Court should grant Underwriters’ instant application due to Plaintiff BRAGA CORPORATION’s (“Braga”) failure to adequately plead a cause of action against Underwriters. Moreover, the documentary evidence attached hereto entirely disproves Braga’s specious and misleading allegations, which unquestionably proves that the instant action is without merit. 1 1 of 18 FILED: KINGS COUNTY CLERK 06/30/2022 04:41 PM INDEX NO. 500069/2022 NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 06/30/2022 PRELIMINARY STATEMENT 4. Plaintiff Braga Corporation (“Braga”) seeks a declaration that Certain Underwriters at Lloyd’ s London (“Underwriters”) are under a duty to defend and indemnify Braga as an additional insured with respect to an underlying lawsuit currently pending in the New York Supreme Court, Kings County, under Index No. 516494/2019, and styled Nelson Rodriguez v. 206 Rent Investor LLC, Prestige Construction NY LLC, Seventh Floor Services Inc., and Braga Corp. (the “Underlying Action”). However, it is clear from the allegations in Braga’s complaint, the documents referenced in that complaint, and irrefutable documentary evidence provided with the instant moving papers that, as a matter of law, Underwriters are not under a duty to defend or indemnify Braga. 5. As demonstrated herein, irrefutable documentary evidence attached to the initial moving papers prove that Braga has failed to plead a cause of action as Underwriters’ Policy clearly bars coverage for bodily injury arising out of any and all work in which Moncon acts as a subcontractor. Not only does the Policy not provide coverage for work in which Moncon act as a subcontractor, but Braga failed to meet the Additional Insured Endorsem*nt requirements by failing to produce a full written contract as required. Braga bases their entire action upon a two- page Agreement between Underwriters’ Insured, Moncon, and Braga. This agreement fails to mention the work to be performed, the premises, payment for any work, or any sort of consideration. See Cohen Aff. Ex. C. The Agreement is insufficiently detailed and materially ambiguous as to what constitutes “the Work covered by this Contract Agreement.” See id. The Agreement does not contain a description of the terms and conditions of Moncon’s work and responsibilities for the project. It is impossible to ascertain what work and responsibilities of Moncon the Agreement pertains to or where the location of the work was to take place. Braga’s 2 2 of 18 FILED: KINGS COUNTY CLERK 06/30/2022 04:41 PM INDEX NO. 500069/2022 NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 06/30/2022 basic argument is this ambiguous agreement provides for Braga to have additional insured coverage in all circ*mstances, at all locations, no matter if the agreement is related to Moncon’s work or agreement for work at the location of any incident. This overbroad interpretation of Braga’s rights fails to meet the condition precedent for additional insured coverage of being “required by written contract.” 6. Next, Underwriters’ Policy language regarding notice is clear and unambiguous. The Policy requires that Underwriters be “notified as soon as practicable of an ‘occurrence’ or an offense which may result in a claim” or “[i]f a claim is made or ‘suit’ is brought.” See Cohen Aff. Ex. E at p. 52-53. The Policy clears states that notices should be sent to “Loss Adjuster: Sovereign Claims, LLC (“Sovereign”), 55 Washington Street – Suite 720, Brooklyn New York, 11201” See Cohen Aff. Ex. E at p. 2. For some reason, Braga seeks to convince this Court that the notice provision does not require Braga to notify Underwriters through Sovereign, and instead Braga seeks to erroneously convince the Court that a tender sent to an address not provided by the Policy, constitutes proper service pursuant to the Policy’s terms. In a blatant contradiction, Braga demands to be treated as an insured under the Policy, entitled to all benefits of the Policy, while at the same time claiming that Braga does not have to abide by any of the contractually required responsibilities of the Policy. In its opposition papers, Braga admits it never provided notice to Underwriters. 7. Neither Underwriters nor Sovereign Claims, LLC received notice from Braga until April 28, 2020, over two years after the date of the loss in the Underlying Action Such an excessive delay is undeniably unreasonable under New York law. See Cohen Aff. Ex. H. When a delay in notice is greater than two years, the burden is on the entity seeking coverage to show that the carrier has not been prejudiced as a result of the delay. Braga cannot carry that burden. 3 3 of 18 FILED: KINGS COUNTY CLERK 06/30/2022 04:41 PM INDEX NO. 500069/2022 NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 06/30/2022 8. Braga’s desperate plea to take discovery in this action to determine when Moncon gave notice to Underwriters is completely unnecessary and has no impact on the Court’s ability to grant Underwriters’ instant motion to dismiss. Whether or when Moncon provided notice is of no consequence to the fact that Braga failed to comply with the Policy’s notice provisions. 9. Lastly, Policy Endorsem*nts 33 & 6 clearly exclude coverage for claims where the named insured, Moncon, performed work as a subcontractor at the project and employed direct labor. It is also clear that the Policy excludes coverage for any claims arising out of Moncon’s work as a subcontractor unless all direct labor is subcontracted out by Moncon. The Underlying Action and the tender letters from Braga indicate that Moncon did not subcontract out all the direct labor on the project since Plaintiff Rodriguez was purportedly employed by Moncon. 10. Braga’s arguments regarding the good faith and fair dealing between parties are more appropriately directed to Co-Defendant, Moncon. By making good faith and fair dealing arguments against Underwriters, Braga seeks to inappropriately insert itself as a contracting party of the Policy. Underwriters issued a policy to Moncon, where Braga is not a contracting party, and both Underwriters and Moncon agreed to include an endorsem*nt where the Policy excludes coverage for any claims arising out of Moncon’s work as a subcontractor unless all direct labor is subcontracted out by Moncon. Endorsem*nts 33 & 6 were issued on October 2, 2019, well before Underwriters first received notice from Braga on April 28, 2020. Underwriters can only provide good faith and fair dealing to other parties of a contract, and not non-parties. Moreover, Underwriters was not aware of the underlying claim against Moncon for their work as a subcontractor until after the Policy reformations were agreed to by Underwriters and Moncon. Whatever issues Braga may take with the endorsem*nts should be resolved between Braga and Moncon. 4 4 of 18 FILED: KINGS COUNTY CLERK 06/30/2022 04:41 PM INDEX NO. 500069/2022 NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 06/30/2022 11. Pursuant to Policy Endorsem*nt 33 & 6, there is no coverage under the Policy and the request by Braga for additional insured status, defense and indemnification under the Policy was therefore denied on June 2, 2020. Thus, Underwriters are under no obligation to defend or indemnify Braga, nor any other party, in the Underlying Action. 12. As demonstrated herein, in the accompanying Affirmation of Corey M. Cohen, Esq., and exhibits attached thereto, Braga has failed to plead a cause of action against Underwriters because Braga has failed to allege that Moncon was the proximate cause of Rodriguez’ accident. Moreover, documentary evidence demonstrates that Braga is not entitled to additional insured status or coverage under the Policy and the endorsem*nts attached thereto. As a matter of law, the allegations in the Complaint fail to state a cognizable cause of action against Underwriters. LEGAL ARGUMENT POINT I BRAGA’S OPPOSITION FAILS TO ESTABLISH THAT THE AGREEMENT IS A FULL, WRITTEN CONTRACT UNDER THE POLICY, AND AS SUCH THERE IS NO ADDITIONAL INSURED COVERAGE FOR BRAGA 13. Braga’s opposition fails to rectify the Complaint’s defects in their failure to state a cognizable claim against Underwriters. Braga’s conclusory assertions that the Agreement constitutes a written contract as per the Policy, is unavailing to convey additional insured coverage to Braga. Braga’s opposition does not dispute the Policy requirement that a written contract be entered into in order to gain additional insured status. Additional Insured Endorsem*nt, No. 9, CG 20 10 10 93 is indeed straightforward, providing additional insured coverage to any person or organization, “As required by written contract.” Cohen Aff. Ex. E at p. 36. Similarly straightforward, Endorsem*nt, No. 10, CG 20 38 04 13, is similarly straightforward. It also adds additional insured status to a party for whom Moncon is performing operations where Moncon has 5 5 of 18 FILED: KINGS COUNTY CLERK 06/30/2022 04:41 PM INDEX NO. 500069/2022 NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 06/30/2022 “agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy.” Cohen Aff. Ex. E at p. 37. 14. Braga attempts to gloss over the requirement that a full written contract be entered into between the parties. The fact that certain information must be included in a contract, such as what work Moncon was performing or what location the Agreement is in reference to, is axiomatic to Underwriters determination of whether additional insured coverage is available. New York Courts have consistently determined that additional insured endorsem*nts require that the Named Insured sign a written contract or agreement for an entity to qualify as an additional insured. The Agreement between Braga and Moncon fails to specify any details as to what it relates to, and Braga’s opposition similarly fails to identify where in the Agreement it states that this document relates to the accident location of the Underlying Accident. Braga seeks to gin up the existence of a valid written contract between Braga and Moncon for the Underlying Action for coverage under the Policies. 15. The consideration mentioned in the purported contract is “the premium charged” and “the Contract Agreement.” Cohen Aff. Ex. C. In Opposition to the instant application, Braga has failed to mention any premium charged to or paid by Moncon. As to the second term of consideration, “the Contract Agreement,” the lack of any further documentation or agreement supports the exact point Underwriters is making. If there is no “Contract Agreement” there is no consideration for the indemnity or insurance provisions. 16. For additional insured status to apply, the Policy requires Moncon to have entered a written contract or agreement with the putative additional insured requiring that Moncon provide additional insured to the putative additional insured and be working for that putative additional insured. See Exhibit E, p. 35-39. Further as was explained in National Abatement Corp. v. 6 6 of 18 FILED: KINGS COUNTY CLERK 06/30/2022 04:41 PM INDEX NO. 500069/2022 NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 06/30/2022 National Union Fire Ins. Co. of Pittsburgh, PA, 33 A.D.3d 570 (1st 2006), interpreting a substantially similar contractual requirement in an additional insured endorsem*nt, it was determined that there was no additional insured coverage because the alleged contract did not “exist at the time of the accident underlying this personal injury action.” There has been no showing that a valid, complete contract existed between Moncon and Braga at the time of the Underlying Action. There is no consideration for the purported contract from which Braga seeks additional insured coverage from Underwriters. Braga fails to dispute that the Agreement describes no work and contains no description of the work location. Such an open ended and vague ‘contract’ could be used multiple times without any specificity. The lack of consideration and the ambiguity of the Agreement makes it an insufficient basis for Braga to obtain additional insured coverage under the Policy. Without going any further, based solely on the documentation referenced and quoted by Plaintiff in their Complaint, and the documentary evidence attached hereto, Plaintiff has no viable cause of action in this matter. POINT II BRAGA FAILED TO COMPLY WITH THE POLICY’S NOTICE PROVISIONS, AND THE POLICY’S TERMS UNDENIABLY PRECLUDE COVERAGE FOR BRAGA A. Braga Failed to Adhere to The Policy’s Notice Provisions 17. As discussed in Underwriters’ first memorandum, the Policy provides, in relevant part, that “[y]ou must see to it that we are notified as soon as practicable of an ‘occurrence’ or an offense which may result in a claim … b. If a claim is made or ‘suit’ is brought against any insured, you must: (1) Immediately record the specifics of the claim or ‘suit’ and the date received; and (2) Notify us as soon as practicable.” See Cohen Aff. Ex. E at p. 52-53. The Policy also provides that notices should be sent to “Loss Adjuster: Sovereign Claims, LLC (“Sovereign”), 55 Washington Street – Suite 720, Brooklyn New York, 11201” See Cohen Aff. Ex. E at p. 2. 7 7 of 18 FILED: KINGS COUNTY CLERK 06/30/2022 04:41 PM INDEX NO. 500069/2022 NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 06/30/2022 18. The Underlying Action involves an accident which allegedly occurred on March 19, 2018, and the Underlying Action was filed on July 26, 2019. While Braga sent a request for additional insured coverage to Moncon’s counsel, Jason R. Finkelstein, Esq. of Cole Scholtz, P.C., on November 7, 2019 and March 12, 2020, Sovereign, and therefore Underwriters, did not receive notice of Braga’s request for coverage until two years after the alleged injury occurred in the Underlying Action. See Cohen Aff. Ex. F. 19. Here, it is undisputed that neither Underwriters nor Sovereign received notice from Braga until April 28, 2020, over two years after the date of the loss in the Underlying Action. See Cohen Aff. Ex. H. A delay that lengthy is unreasonable under New York law. 20. The Policy language regarding notice is clear and unambiguous. It contains an unambiguous requirement that prompt notice be provided to Sovereign and an unambiguous mechanism by which that notice requirement is fulfilled. For some reason, Braga seeks to convince this Court that the notice provision does not require Braga to notify Underwriters through Sovereign, and instead Braga seeks to erroneously convince the Court that a tender sent to an address not provided by the Policy constitutes proper service pursuant to the Policy’s terms. In a blatant contradiction, Braga demands to be treated as an insured under the Policy, entitled to all benefits of the Policy, while at the same time claiming that Braga does not have to abide by any of the contractually required responsibilities of the Policy. 21. It is well established that courts must read an insurance policy in its entirety and cannot rewrite a clear and unequivocal insurance policy. As the First Department in explained in Bretton v. Mutual of Omaha Ins. Co., 492 N.Y.S.2d 760, (1st Dept. 1985): “[t]aking the policy, as we must, as an integrated whole and assigning to each of its various parts its proper role in delineating the scope of coverage, it is clear that the insuring provision outlines the terms of 8 8 of 18 FILED: KINGS COUNTY CLERK 06/30/2022 04:41 PM INDEX NO. 500069/2022 NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 06/30/2022 coverage... A court, no matter how well intentioned cannot create policy terms by implication or rewrite an insurance contract. Nor should a court disregard the provisions of an insurance contract which are clear and unequivocal or accord a policy a strained construction merely because that interpretation is possible. An insurer is entitled to have its contract of insurance enforced in accordance with its provisions and without a construction contrary to its express terms.” 22. In addition to the Policy’s clear an unambiguous exclusions precluding coverage to Braga, as further discussed herein, Braga’s failure to adhere to the Policy’s requiring prompt notice and the Policy’s listed mechanism by which notice is provided requires dismissal of the Complaint. The plain language of the Policy, the applicable statutes, and case law require dismissal of Braga’s instant action because: (1) Braga clearly did not give acceptable notice to Sovereign or Underwriters of the occurrence or potential claim; and (2) Braga clearly did not give acceptable notice to Sovereign or Underwriters of the lawsuit brought against them. Despite Braga’s attempts to argue otherwise, it was required to provide notice to Underwriters by notifying Sovereign, as provided in the Policy. The Policy’s notice provision is clear and Braga’s attempt to escape its obligation to provide notice by rewriting the notice provision in the Underwriters Policy should be rejected. B. Braga’s Letter to Moncon Is Insufficient Notice to Underwriters Under the Policy 23. Braga’s letter addressed and presumably sent to Moncon does not constitute proper notice to Underwriters as required under the Policy. As explained above, per the terms of the Policy, notices are to be sent to “Loss Adjuster: Sovereign Claims, LLC, 55 Washington Street – Suite 720 Brooklyn, New York 11201.” See Cohen Aff. Ex. E at p. 3. The letters from Braga to Moncon simply do not adhere to the Policy requirements. 9 9 of 18 FILED: KINGS COUNTY CLERK 06/30/2022 04:41 PM INDEX NO. 500069/2022 NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 06/30/2022 24. Further, Braga’s attempt to use the certificate of insurance as evidence of their adherence to the Policy is misguided. While we cannot comment on the certificate of insurance Braga is referencing, as we have not been provided with it, generally speaking certificates of insurance are not evidence of coverage as they are generally issued by insurance brokers or producers, not insurers, and do not confer any rights under the Policies. See N.Y. Ins. Law § 502(c). 25. Braga’s reliance on the language of the certificate of insurance and its contention that notice to the producer/broker, Northeastern Group Ltd., satisfies its notice obligations under the Policy are inaccurate. It is well settled that a policyholder's timely notice to a producer does not constitute the notice contemplated by the [insurance] policy since a broker is normally the agent of the insured and notice to the ordinary insurance broker is not notice to the liability carrier. 26. The certificate of insurance is neither conclusive proof of the existence of a specific contract nor is it a contract, in and of itself. Furthermore, the policy's declaration page clearly states that notice is to be provided to Sovereign. There is no question of fact that Braga failed to provide timely notice of the Underlying Action to either Sovereign or Underwriters, as pursuant to the Policy. C. Braga’s Notice Requirement is Independent of Moncon’s 27. Braga’s notice obligations under the Policy are independent of and have no correlation to whether Moncon performed its separate and distinct notice obligations. Despite Braga’s attempts to convince this Court otherwise, Braga had an implied duty, independent of the named insured’s obligation, to provide notice to Underwriters of the occurrence for which it seeks coverage. A named insured's timely notice of underlying action does not satisfy the additional insured’s duty to provide timely notice of occurrence. 10 10 of 18 FILED: KINGS COUNTY CLERK 06/30/2022 04:41 PM INDEX NO. 500069/2022 NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 06/30/2022 28. Braga’s desperate plea to take discovery in this action to determine when Moncon gave notice to Underwriters is completely unnecessary and has no impact on the Court’s ability to grant Underwriters’ instant motion to dismiss. Whether or when Moncon provided notice is of no consequence to the fact that Braga failed to comply with the Policy’s notice provisions. The duty to timely notify an insurer of an occurrence and/or suit is applicable to additional insureds as well as named insureds. An insurer may deny coverage for failure to comply with the timeliness provision of the policy. Therefore, Braga’s failure to provide timely notice precludes coverage under the Policy, regardless of Moncon’s actions. 29. Despite relying heavily on Spoleta Constr., LLC v Aspen Ins. UK Ltd., 119 AD3d 1391 (4th Dept 2014), Braga misconstrues the holding and applicability of Spoletta in the instant matter, which is not on point or controlling here. In Spoletta, a contractor's letter, which was forwarded to a subcontractor’s commercial general liability insurer after the subcontractor’s employee sued it for work-related personal injuries, qualified as notice of an "occurrence" under the subcontractor's policy, which named the contractor as an additional insured. 30. The court in Spoleta hinged on the admitted fact that the insurer received the additional Insured’s notice of claim, which is not the circ*mstances presently before the court. Indeed, Braga seeks to inappropriately apply the Spoleta decision here, where there was no notice to Underwriters that Braga was seeking coverage under the policy from Braga until two years after the alleged underlying accident. See Cohen Aff., Exhibit H. Neither Underwriters nor Sovereign Claims, LLC received notice from Braga until April 28, 2020, over two years after the date of the loss in the Underlying Action Such an excessive delay is undeniably unreasonable under New York law. See Cohen Aff. Ex. H. The email correspondence from a representative of Sovereign provides that Sovereign “do not appear to have received any correspondence regarding [the 11 11 of 18 FILED: KINGS COUNTY CLERK 06/30/2022 04:41 PM INDEX NO. 500069/2022 NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 06/30/2022 Underlying Action].” Whereas in Spoleta, the insurer received timely notice of the underlying claim as it was passed onto the insurer by the named insured, Underwriters never received any notice from Braga regarding the Underlying Action. 31. Moreover, Braga’s attempts to apply Fourth Department case law of Spoleta to argue that the notice provision wording is ambiguous is misplaced. The Court of Appeals, as well as the Second Department, has applied and upheld language substantially similar to that in the instant Policy notice provisions on multiple occasions (“must see to it that we are notified as soon as practicable of an ‘occurrence’”). D. Underwriters Have Been prejudiced by Braga’s Delay in providing Notice 32. Under New York law, when an insured violates a policy’s notice provision, as Braga did here, an insurer is entitled to disclaim coverage when it suffers prejudice. See N.Y. Ins. Law §3420(c)(2). Such prejudice is established when “the failure to timely provide notice materially impairs the ability of the insurer to investigate or defend the claim. Id. Under N.Y. Ins. Law §3420(c)(2), the burden is on the person or entity seeking coverage to prove that the insurer has not been prejudiced if notice is given over two years after the time required under the policy. Braga failed to provide notice to Underwriters of its claim against the Policy for over two years and thus, the burden is upon Braga to prove that Underwriters was not prejudiced as a result of the late notice. 33. In its first Memorandum, Underwriters set forth how Braga violated the notice provisions in the Underwriters Policy and how that delay caused prejudice to Underwriters. Indeed, Underwriters were unequivocally prejudiced by Braga’s delay in notifying Underwriters of the occurrence, which served to prejudice Underwriters in its ability to properly investigate and manage this claim and attendant lawsuits. Braga’s delay in providing proper notice to Underwriters 12 12 of 18 FILED: KINGS COUNTY CLERK 06/30/2022 04:41 PM INDEX NO. 500069/2022 NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 06/30/2022 through Sovereign as required under the Policy would prejudice Underwriters’ ability to provide a defense for Braga, even if there were coverage available for Braga under the Policy. 34. Further, Underwriters were unequivocally prejudiced by Braga’s delay in notifying Underwriters of the lawsuit against them and the delay in Braga providing Underwriters with copies of all “demands, notices, summonses, or legal papers received in connection with the claim or suit,” both as required by the plain language of the Policy. Braga’s failure to fulfill their obligations under the Policy requires dismissal of the instant action as, although Underwriters are under no obligation to provide coverage for Braga, or any other party with respect to the Underlying Action, there can be no doubt that Underwriters have been severely prejudiced by the delay in notice and the developments in the Underlying Action. 35. Here, as Plaintiff Rodriguez was allegedly injured over two years prior to Underwriters receiving notice of the claim, it would be nearly impossible for Underwriters to investigate the occurrence. Any witnesses to the alleged injury would be difficult to track down, if not impossible. This inability to investigate the alleged accident and damages resulting from Braga’s failure to provide timely notice undoubtedly prejudices Underwriters. Because Braga unreasonably delayed in providing Underwriters with notice of the Underlying Action, and that delay prejudiced Underwriters, no coverage exists under the Policy. 36. Braga’s last effort to seemingly mislead the Court is to claim that Underwriters have not shown Braga had notice of the claim. However, this is not an issue that Braga needs discovery for. Braga is in possession of all materials as to when they received notice of the claim at issue. The absence of any proof or indication that Braga did not receive timely notice of the claim is telling. Braga could have settled that issue by showing they did not have notice until the Underlying Lawsuit was filed, instead Braga states Braga needs discovery to determine when 13 13 of 18 FILED: KINGS COUNTY CLERK 06/30/2022 04:41 PM INDEX NO. 500069/2022 NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 06/30/2022 Braga knew of the claim. This circular reasoning is illogical and absurd. There is no amount of discovery that is going to allow Underwriters to provide information to Braga about Braga knew and when. 37. Underwriters are under no duty to defend, indemnify or reimburse Braga, as Braga violated the notice provision of the Policy, which requires that Underwriters be “notified as soon as practicable of an ‘occurrence’ or an offense which may result in a claim” or “[i]f a claim is made or ‘suit’ is brought.” See Cohen Aff. Ex. E at p. 52-53. Neither Underwriters nor Sovereign received notice from Braga until April 28, 2020, over two years after the date of the loss in the Underlying Action. See Cohen Aff. Ex. H. Such an excessive delay is undeniably unreasonable under New York law. POINT III PLAINTIFF’S COMPLAINT FAILS TO STATE A CAUSE OF ACTION AGAINST UNDERWRITERS AND THE PLAIN LANGUAGE OF THE POLICY EXCLUDES COVERAGE FOR SUBCONTRACTOR WORK 38. Braga argues in opposition that discovery is needed to determine the authenticity of Policy Endorsem*nts 6 and 33. See opposition papers. Underwriters have submitted satisfactory documentary evidence sufficient to comply with CPLR §3211(a)(1), such that discovery is unnecessary. While the statute does not define the term “documentary evidence,” it is generally accepted that materials that are considered “documentary evidence” include documents reflecting out-of-court transactions such as mortgages, deeds, contracts, and any other papers, the contents of which are essentially undeniable. Furthermore, binding authority from the New York Court of Appeals holds that documentary evidence that may be presented under CPLR 3211(a)(1) includes an unambiguous contract that indisputably undermines the asserted causes of action. 14 14 of 18 FILED: KINGS COUNTY CLERK 06/30/2022 04:41 PM INDEX NO. 500069/2022 NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 06/30/2022 39. As contracts, insurance policies qualify as “documentary evidence” for purposes of a §3211(a)(1) motion. Furthermore, the Court may consider documents referenced in a complaint, even if the pleading fails to attach them. 40. In this instance, the language of the applicable Policy endorsem*nts, Policy Endorsem*nt 33 and Policy Endorsem*nts 6, both explicitly bar coverage for bodily injury arising out of any and all work in which Moncon acts as a subcontractor unless all direct labor is subcontracted our by Moncon. See Cohen Aff. Ex. G. The clear and unambiguous language of the Policy provides that “insurance under this Policy will not apply to any liabilities when Moncon is a sub-contractor. There will be no coverage under the Policies for any claims where Moncon was working as a sub-contractor. However, this paragraph will not apply to any claims in which Moncon is working as a sub-contractor, but has sub-contracted out all direct labor.” See Id. The term subcontractor is generally understood to mean one who assumes performance of part of a contract by providing labor or other services and not by merely furnishing materials. 41. It is clear from the face of the pleadings, the Underlying Action, the Agreement between Moncon and Braga, that Pursuant to the foregoing, Policy Endorsem*nt 33 & 6, that Moncon performed work as a subcontractor at the project and employed direct labor. It is also clear that the Policy excludes coverage for any claims arising out of Moncon’s work as a subcontractor unless all direct labor is subcontracted out by Moncon. The Underlying Action and the tender letters from Braga indicate that Moncon did not subcontract out all the direct labor on the project since Plaintiff Rodriguez was purportedly employed by Moncon. Pursuant to Policy Endorsem*nt 33 & 6, there is no coverage under the Policy and the request by Braga for additional insured status, defense and indemnification under the Policy was therefore denied on June 2, 2020. 15 15 of 18 FILED: KINGS COUNTY CLERK 06/30/2022 04:41 PM INDEX NO. 500069/2022 NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 06/30/2022 Thus, Underwriters are under no obligation to defend or indemnify Braga, nor any other party, in the Underlying Action. 42. Braga’s arguments regarding the good faith and fair dealing between parties are more appropriately directed to Co-Defendant, Moncon. Braga seeks to inappropriately insert itself as a contracting party of the Policy. In fact, Braga cites to case law standing for the proposition that “[a] party to a contract cannot unilaterally alter the contract's terms without the other party's consent” See Braga’s opposition page 21. Underwriters issued a policy to Moncon, where Braga is not a contracting party, and both Underwriters and Moncon agreed to include an endorsem*nt where the Policy excludes coverage for any claims arising out of Moncon’s work as a subcontractor unless all direct labor is subcontracted out by Moncon. Endorsem*nts 33 & 6 were issued on October 2, 2019, well before Underwriters first received notice from Braga on April 28, 2020. Underwriters can only provide good faith and fair dealing to other parties of a contract, and not non-parties. Moreover, Underwriters was not aware of this pending claim against Moncon for their work as a subcontractor until after the Policy reformations were agreed to by Underwriters and Moncon. 43. Therefore, as argued in the initial moving papers, and contrary to Braga’s assertions that the Court should permit discovery to proceed, the Complaint must be dismissed as Braga is not entitled to coverage under the Policy, as the Policy language clearly bars coverage for bodily injury arising out of any and all work in which Moncon acts as a subcontractor and Braga failed to comply with the Policy’s notice Provisions, substantially prejudicing Underwriters ability to defend the Underlying Action. 16 16 of 18 FILED: KINGS COUNTY
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JIMENEZ vs STATE FARM GENERAL INSURANCE COMPANY
Aug 26, 2024 |CVRI2304725
Demurrer on 1st Amended Complaint forJIMENEZ vs STATE FARM Insurance Coverage (Over $25,000) ofCVRI2304725 GENERAL INSURANCE DENNY JIMENEZ as to Cause(s) ofCOMPANY Action causes of action for intentionalinfliction of emotional distressTentative Ruling: Withdrawn by moving party.
Ruling
BENJAMIN BROWNING, AN INDIVIDUAL vs MOLINA HEALTHCARE, INC.
Sep 01, 2024 |CVPS2400681
Hearing re: Demurrer on 1stAmended Complaint forInsurance Coverage (OverBENJAMIN BROWNING, AN INDIVIDUAL $35,000) of BENJAMINCVPS2400681vs MOLINA HEALTHCARE, INC. BROWNING, AN INDIVIDUALby MOLINA HEALTHCARE,INC. at 8:30 AM in DepartmentPS2Tentative Ruling: Overruled.Moving party to file their answer within 20 days of this order becoming final.Responding party to provide notice pursuant to CCP 1019.5.Benjamin Browning (“Plaintiff”) received health care coverage through Molina Healthcare, Inc.(“Molina”). In October 2019, Plaintiff suffered severe back pain. Doctors placed Plaintiff on a regimenof physical therapy, epidural injunctions, and pain medication. In August 2020, Plaintiff’s pain increasedand his physician referred him to an orthopedic surgeon. The orthopedic surgeon recommended amicrodiscectomy to remove parts of Plaintiff’s damaged discs. This procedure did not bring Plaintiff anyrelief.In 2021, Plaintiff was still in pain and his physicians recommended implanting a spinal cord stimulatorto help manage his chronic back pain and reduce his reliance on opioid pain medication. In September2022, Plaintiff’s medical group, Desert Oasis Healthcare (“DOH”), denied the request of the spinalimplant. Plaintiff’s physician appealed this denial. DOH denied the appeal.In September 2023, Plaintiff’s doctors again requested approval of this procedure for Plaintiff as hisback pain increased and his condition deteriorated. DOH again denied this request. Plaintiff appealeddirectly to Molina. Molina rejected Plaintiff’s appeal. Plaintiff has been told that due to his deterioratingcondition, the treatment option sought is no longer an option.The operative pleading is the First Amended Complaint (“FAC”) it asserts the following causes of action:(1) breach of the duty of good faith and fair dealing, (2) violation of Civil Code § 3428, and (3) negligence.Molina contends the first and second causes of action fail because Plaintiff did not exhaust his remediesunder the insurance policy. It asserts that it also cannot be liable for these causes of action becauseunder Health & Safety Code § 1371.25, it cannot be held vicariously liable for a health care provider’sacts or omissions.In opposition, Plaintiff contends that it has exhausted his remedies under the insurance policy. He alsocontends that he was not required to exhaust administrative remedies because he has already sufferedharm. He argues that he is not alleging in his FAC that Molina is vicariously liable for the health careprovider’s acts or omission.DemurrerA general demurrer lies where the pleading does not state facts sufficient to constitute a cause of action.(CCP § 430.10(e).) In evaluating a demurrer, the court gives the pleading a reasonable interpretationby reading it as a whole and all of its parts in their context. (Moore v. Regents of University of California(1990) 51 Cal.3d 120, 125.) The court assumes the truth of all material facts which have been properlypleaded, of facts which may be inferred from those expressly alleged, and of any material facts of whichjudicial notice has been requested and may be taken. (Crowley v. Katleman (1994) 8 Cal.4th 666, 672.)However, a demurrer does not admit contentions, deductions or conclusions of fact or law. (Daar v.Yellow Cab Company (1967) 67 Cal.2d 695, 713.) If the complaint fails to state a cause of action, thecourt must grant the plaintiff leave to amend if there is a reasonable possibility that the defect can becured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)ExhaustionMolina contends that both the first and second causes of action fail because Plaintiff was required toexhaust remedies set forth in the insurance policy under Civil Code § 3428. Under Civil Code § 3428(a),a health care service plan or managed care entity has a duty of ordinary care to arrange for theprovisions of medically necessary health care services to its subscribers, when the service is coveredunder the plan. It shall be liable for any and all harm that is caused by the provider’s failure to exerciseordinary care resulting in the denial of care and when the subscriber has suffered substantial harm.(Civil Code § 3428(a)(1) and (2).) “Civil Code section 3428 requires subscribers to exhaust the appealsprocess with the plan before raising a claim.” (Martin v. PacificCare of California (2011) 198 Cal.App.4th1390, 1406.) Civil Code § 3428 provides an exception to this exhaustion requirement. Under Civil Code§ 3428(k)(2), exhaustion is not required where either of the following applies:(A) Substantial harm, as defined in subdivision (b), has occurred prior to the competitionof the applicable review.(B) Substantial harm, as defined, in subdivision (b), will imminently occur prior to thecompletion of the applicable review.Substantial harm is defined as “loss of life, loss of significant impairment of limb or bodilyfunction, significant disfigurement, severe and chronic physical pain, or significant financialloss.” (Civil Code § 3428(b).)Molina seeks judicial notice of Molina’s Evidence of Coverage Handbook (“EOC”) for 2022 and 2023and a letter sent by Molina to Plaintiff. Evidence Code § 451 and 452 govern requests for judicial notice.Molina cites to Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 754, to support itsrequest for judicial notice. Scott indicates that a court can take judicial notice of a contract. (Id.) Molinaargues that the EOC is part of its agreement with Plaintiff regarding insurance. As such, thesedocuments can be judicially noticed. Courts have found that the existence of a contract is not subjectto judicial notice. (Gould v. Maryland Sound Industries, Inc. (1995) 31 Cal.App.4th 1137, 1145.) “Theexistence and terms of a private agreement are not facts that are not reasonably subject to dispute andthat can be determined by indisputable accuracy. For that reason, when a party opposes the court’sconsideration of an insurance policy in the context of a demurrer, it is proper for the court to decline toconsider the content of the policy.” (The Travelers Indemnity Co. of Connecticut v. Navigators Specialty,Ins. Co. (2021 70 Cal.App.5th 341.)While the Court could take judicial notice of the EOC agreements, there appears to be no reason to doso because Plaintiff has sufficiently alleged the exception to exhaustion of remedies under Civil Code§ 3428(k)(2). At the time that Plaintiff was appealing DOC’s denial to Molina, Plaintiff was suffering fromnever ending pain, sleepless nights, no quality of life, he struggled to get out of bed, used a walker, andrisked falling every time he used the bathroom due to his back pain. (First Amended Complaint, ¶ 32.)The exception to exhaustion applies when there is substantial harm prior to completion of the applicablereview period. (Civil Code § 3428(k)(2)(A).Substantial harm includes severe and chronic physical pain.Based on Plaintiff’s allegations, it appears that he sufficiently alleges severe and chronic physical pain.This condition appears to have existed prior to the completion of the applicable review period (beforeMolina denied his appeal). As such, for pleading purposes, this argument by Molina fails. OVERRULED.Vicarious LiabilityMolina contends that the first and second causes of action fail because they cannot vicariously be liablefor the conduct of a health care provider’s acts or omissions based on Health & Safety Code § 1371.25.However, both causes of action allege that Molina itself acted improperly by directly denying Plaintiff’sappeal. (FAC, ¶¶ 38(d) and 52.) Due to this, not all the liability asserted in the first and second causesof action are based on vicarious liability. OVERRULED.
Ruling
Aug 29, 2024 |24CHCV00906
Case Number: 24CHCV00906 Hearing Date: August 29, 2024 Dept: 1 24CHCV00906 KENNETH M. STERN vs VOSS, COOK & THEL LLP Plaintiffs Motion for Rehearing Regarding Courts Undesignating Case as Related to Stern v. Barrister TENTATIVE RULING: Plaintiffs Motion for Rehearing Regarding Courts Undesignating Case as Related to Stern v. Barrister Relate Cases is DENIED. Defendants to give notice. Background of 24CHCV00906 Stern v. Voss, Cook & Thel On March 19, 2024, Kenneth M. Stern filed this action against Voss, Cook & Thel LLP and James G. Damon asserting causes of action for: (1) federal wire fraud by B. & P. 17200; (2) California state wire fraud; and (3) declaratory relief on breach of contract. The complaint alleges Plaintiff is a tenant of Barrister Executive Suites, Inc. and it attempted to wrongfully evict Plaintiff with fake Notices to Quit. On April 22, 2024, Defendants filed a Notice of Related Case involving 24CHCV00906 and 22STCV32529 Stern v. Barrister Executive Suites. On June 5, 2024, Judge Wendy Chang issued an order finding 24CHCV00906 and 22STCV32529 were related within the meaning of California Rules of Court, rule 3.300. On June 14, 2024, Plaintiff filed a peremptory challenge in 24CHCV00906, which Judge Chang accepted on June 20, 2024. In the June 20, 2024 order accepting the peremptory challenge, Judge Chang stated, in part, [t]he case [24CHCV00906] is ordered transferred to Judge Michelle Williams Court in Department 1 at Stanley Mosk Courthouse for reassignment purposes only. On June 25, 2024, Department 1 issued an order noting the acceptance of the peremptory challenge and stating the interest of justice is not served by reassigning case number 22STCV32529 to a new Judicial Officer. Therefore, this Court determines that cases 22STCV32529 and 24CHCV00906 should no longer be related. Case 24CHCV00906 is returned to Judge David B. Gelfound in Department F49, Chatsworth Courthouse, pursuant to its original assignment, for all purposes. This case is currently pending in Department F49 of the Chatsworth Courthouse with the next hearing set for September 18, 2024. Motion for Reconsideration Standard When an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circ*mstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order. The party making the application shall state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circ*mstances, or law are claimed to be shown. (Code Civ. Proc., § 1008(a).) Plaintiff Has Not Demonstrated a Basis for Reconsideration Plaintiff contends this Court improperly unrelated the two cases and lacked the authority to change the order relating the two cases made by Judge Chang. Pursuant to California Rules of Court, rule 3.300(h)(1)(A), [w]here all the cases listed in the notice are unlimited civil cases, . . . the judge who has the earliest filed case must determine whether the cases must be ordered related and assigned to his or her department. Here, 22STCV32529 was pending before Judge Chang in Department 36, who initially related the two cases. However, both cases cannot be assigned to Judge Chang due to the acceptance of a peremptory challenge in the later filed case. As acknowledged by Plaintiff, one trial judge may alter orders made by another where the prior judge is unavailable. (Mot. at 3:24-25 citing In re Marriage of Oliverez (2015) 238 Cal.App.4th 1242, 1247 (A trial court's discretion to reconsider another judge's prior ruling is necessarily narrow and usually only appropriate when the prior judge is unavailable.).) Judge Changs acceptance of a peremptory challenge in 24CHCV00906 renders Judge Chang unavailable in that action. (See e.g. Torres v. Superior Court of San Joaquin County (2023) 94 Cal.App.5th 497, 509 (Judge Thomasson had the inherent authority to review Judge Abdallah's ruling, because Judge Abdallah was unavailable once he granted the challenge aimed at him.); Geddes v. Superior Court (2005) 126 Cal.App.4th 417, 426 (Where a judge has been disqualified, the newly-assigned judge may review the ruling of the disqualified judge because the disqualified judge, having no authority to rule, is unavailable.).) The judicial administration goals of the related case rules must yield to the parties right to file a peremptory challenge. (See e.g. Rothstein v. Superior Court (2016) 3 Cal.App.5th 424, 431.) Moreover, the peremptory challenge statutes should not be used as a mechanism to effectively extend the time requirements for a peremptory challenge in the earlier filed case. (Ibid. n.3. See also The Home Ins. Co. v. Superior Court (2005) 34 Cal.4th 1025, 1032 (section 170.6 is designed to prevent abuse by parties that merely seek to . . . obtain a more favorable judicial forum.).) Department 1 had the authority to issue the order unrelating the two cases and Plaintiffs motion is DENIED. The cases shall remain as assigned by this Court on June 25, 2024.
Ruling
STACY KATE YEH VS BARRINGTON PACIFIC, LLC A CALIFORNIA LIMITED LIABILITY COMPANY
Sep 03, 2024 |20STCV42994
Case Number: 20STCV42994 Hearing Date: September 3, 2024 Dept: 48 SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT STACY KATE YEH, et al., Plaintiffs, vs. BARRINGTON PACIFIC, LLC, et al., Defendants. ) ) ) ) ) ) ) ) ) ) ) CASE NO.: 20STCV42994 [TENTATIVE] ORDER DENYING MOTION TO TAX COSTS Dept. 48 8:30 a.m. September 3, 2024 On February 13, 2024, the Court entered judgment in favor of Defendants Barrington Pacific LLC, Shores Barrington LLC, and Defendant DE Glendon LLC, and against Plaintiff Stacy Kate Yeh and Plaintiffs of all related and consolidated cases. On February 26, 2024, Defendants filed a notice of entry of judgment, reflecting service of the judgment on Plaintiffs on the same date. On March 12, 2024, Defendants filed a Memorandum of Costs. On March 29, 2024, Plaintiffs filed a motion to tax costs. Plaintiffs argue that the Memorandum of Costs is untimely. A prevailing party who claims costs must serve and file a memorandum of costs within 15 days after the date of service of the notice of entry of judgment or dismissal by the clerk under Code of Civil Procedure section 664.5 or the date of service of written notice of entry of judgment or dismissal, or within 180 days after entry of judgment, whichever is first. (California Rules of Court, rule 3.1700(a)(1).) Plaintiffs counsel contends that the Judgment was mailed by the Clerk of Court to both Plaintiffs and Defendants counsel on February 13, 2024, so Defendants Memorandum of Costs filed on March 12, 2024 is untimely. (Motion at p. 2; Shakouri Decl. ¶ 3.) The Court Clerk did not mail notice of entry of judgment when judgment was entered. The judgment was only signed and filed. [T]o qualify as a notice of entry of judgment under Code of Civil Procedure section 664.5, the clerks mailed notice must affirmatively state that it was given upon order by the court or under section 664.5 and a certificate of mailing the notice must be executed and placed in the file. (Van Beurden Ins. Services, Inc. v. Customized Worldwide Weather Ins. Agency, Inc. (1997) 15 Cal.4th 51, 64.) Defendants Memorandum of Costs, filed 15 days after service of the notice of entry of judgment, is timely. The motion to tax costs is DENIED. Moving party to give notice. Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. If all parties in the case submit on the tentative ruling, no appearances before the Court are required unless a companion hearing (for example, a Case Management Conference) is also on calendar. Dated this 3rd day of September 2024 Hon. Thomas D. Long Judge of the Superior Court
Ruling
BOGHOS TOVMASSIAN, ET AL. VS HIPPOS INSURANCE SERVICE, ET AL.
Aug 30, 2024 |23STCV10128
Case Number: 23STCV10128 Hearing Date: August 30, 2024 Dept: 32 BOGHOS TOVMASSIAN, et al., Plaintiffs, v. HIPPO INSURANCE SERVICES, et al., Defendants. Case No.: 23STCV10128 Hearing Date: August 30, 2024 [TENTATIVE] order RE: defendants motion for summary judgment BACKGROUND On May 5, 2023, Plaintiffs Boghos Tovmassian and Marguerite Tovmassian filed this action against Defendants Hippo Insurance Services (Hippo), Spinnaker Insurance Company (Spinnaker), and Patrick Hix, alleging (1) breach of insurance contract, (2) breach of the covenant of good faith and fair dealing, and (3) elder abuse. According to the complaint, Plaintiffs own a home located in Tujunga, California (the Property). (Compl. ¶ 1.) The Property was insured by a homeowners insurance policy issued by Hippo, which is owned and underwritten by Spinnaker. (Ibid.) In December 2021, the Property suffered wind and water intrusion, leading Plaintiffs to make a claim. (Ibid.) Plaintiffs allege that Defendants failed to conduct a full and fair investigation, which resulted in an insufficient payout. (Id., ¶ 3.) On April 25, 2024, Hippo and Spinnaker filed the instant motion for summary judgment. The initial hearing date was July 12, 2024. On June 28, 2024, Plaintiffs appeared for an ex parte to continue the motion for summary judgment. This ex parte was denied by the court, and Plaintiffs were instructed to include their basis for seeking a continuance in their Opposition papers. Plaintiffs did not file an opposition to the motion for summary judgment. On July 10, 2024, Plaintiff appeared for another ex parte application to continue the motion. Even though the deadline to file an Opposition had passed, the Court granted the ex parte application. At the hearing, Plaintiffs counsel advised the court that he would be filing a motion to compel by July 15, 2024, to obtain the necessary discovery to oppose the motion. To date, no motion to compel discovery has been filed with the court. Plaintiffs opposition to the motion was due on or before August 16, 2024. No opposition to the motion was filed. On August 28, 2024, Plaintiffs appeared for yet another ex parte application to continue the motion. The court denied the ex parte. 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.) 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.) 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, 381-382.) 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, subd. (p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.) 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.) 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.) DISCUSSION I. Hippos Liability a. Plaintiffs Had No Contract with Hippo To establish breach of contract, a plaintiff must show: (1) the contract existed, (2) the plaintiffs performance of the contract or excuse for nonperformance, (3) the defendants breach, and (4) the resulting damage to the plaintiff. (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.) A plaintiff cannot assert a claim for breach of contract against one who is not a party to the contract. (Tri-Continent Internat. Corp. v. Paris Savings & Loan Assn. (1993) 12 Cal.App.4th 1354, 1359.) It is undisputed that the policy was issued by Spinnaker, with Hippo as the program administrator. (Def.s Undisputed Facts (UF) 1; Carden Decl., Ex. A.) The policy was signed by Spinnakers CEO. (Ibid.) Therefore, Hippo has satisfied its initial burden by showing that it was not a party to the policy with Plaintiffs. This is sufficient to shift the burden to Plaintiffs, who do not oppose the motion or present any contrary evidence. Accordingly, Hippo is not liable for breach of contract as a matter of law. b. Hippo Cannot be Liable for the Implied Covenant The covenant of good faith and fair dealing, implied by law in every contract, exists merely to prevent one contracting party from unfairly frustrating the other partys right to receive the benefits of the agreement actually made. (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 349-50.) In the absence of a contractual relationship, no implied covenant claims may be stated. (Gulf Ins. Co. v. TIG Ins. Co. (2001) 86 Cal.App.4th 422, 430.) As discussed above, Hippo has established that it had no contractual relationship with Plaintiffs. Accordingly, Plaintiffs cannot maintain an implied covenant claim against Hippo. c. Hippo Cannot be Liable for Elder Abuse Financial abuse of an elder or dependent adult occurs when a person or entity does any of the following: takes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both. (Welf. & Inst. Code, § 15610.30.) Hippo could not have wrongfully retained Plaintiffs property (i.e., the insurance proceeds) if it was not a party to the policy and did not have any obligation to pay Plaintiffs. Therefore, the elder abuse claim fails as a matter of law. II. Spinnakers Liability a. The Claims are Time-Barred Under California law parties may agree to a provision shortening the statute of limitations, qualified, however, by the requirement that the period fixed is not in itself unreasonable or is not so unreasonable as to show imposition or undue advantage. (William L. Lyon & Associates, Inc. v. Superior Court (2012) 204 Cal.App.4th 1294, 1307, quoting Capehart v. Heady (1962) 206 Cal.App.2d 386, 388.) [A] covenant shortening the period of limitations is a valid provision of an insurance contract and cannot be ignored with impunity as long as the limitation is not so unreasonable as to show imposition or undue advantage. (Prudential-LMI Com. Ins. v. Superior Court (1990) 51 Cal.3d 674, 683.) One year was not an unfair period of limitation. (Ibid.; see also Ins. Code, § 2071(a) [imposing one-year limitations period for fire insurance claims].) The statute of limitations for actions on insurance claims is equitably tolled from the time the insured notifies the insurer of the claim until coverage is denied. (Marselis v. Allstate Ins. Co. (2004) 121 Cal.App.4th 122, 124.) The reason for the tolling rule is to avoid penalizing the insured for the time consumed by the insurer investigating the claim. (Id. at p. 125.) The running of the limitations period resumes upon the insurers denial of a claim, and no further tolling occurs, even if the insurer reconsiders its denial. (Singh v. Allstate Ins. Co. (1998) 63 Cal.App.4th 135, 142.) Here, the insurance policy provides that [n]o action can be brought against us unless . . . the action is started within one year after the date of loss. (Carden Decl., Ex. A.) The loss occurred on December 30, 2021. (Compl. ¶ 1.) Plaintiffs reported the loss to Spinnaker on January 8, 2022. (Carden Decl. ¶ 4, Ex. B.) Spinnaker issued notice of its coverage position on January 27, 2022, granting coverage on certain items and denying the rest. (Id., ¶ 5, Ex. C.) Plaintiffs did not file this action until May 5, 2023, well past the one-year limitations period, even accounting for the tolling period between January 8, 2022 and January 27, 2022. Spinnakers reopening of the claim on May 17, 2022 based on Plaintiffs request for reconsideration (Carden Decl. ¶13) did not further toll the limitations period. Therefore, Spinnaker has met its initial burden by establishing that the claims are time-barred.[1] This is sufficient to shift the burden to Plaintiffs, who do not oppose the motion or present any contrary evidence. Accordingly, Spinnaker is not liable as a matter of law. b. Spinnaker Did Not Breach the Policy There can be no breach of the insurance policy . . . [where] the undisputed evidence established that [the insurer] paid all amounts due under the policy. (Janney v. CSAA Ins. Exchange (2021) 70 Cal.App.5th 374, 390.) Here, the policy covered direct physical loss to property. (Carden Decl., Ex. A.) Spinnaker covered damage to the first-floor flooring, the only part of the Property directly damaged by the water intrusion. (Carden Decl. ¶ 14, Ex. F.) Spinnaker declined to cover the undamaged stairs and second-floor flooring. (Ibid.) Spinnaker issued payment for the covered portions. (Id., ¶¶ 5-6, Ex. C, D.) Spinnaker has met its initial burden by showing that it satisfied its obligations under the policy. This is sufficient to shift the burden to Plaintiffs, who do not oppose the motion or present any contrary evidence. Accordingly, Spinnaker is not liable for breach of contract as a matter of law for this independent reason. c. Spinnaker Could Not Have Breached the Implied Covenant [A] bad faith claim cannot be maintained unless policy benefits are due. (Love v. Fire Ins. Exchange (1990) 221 Cal.App.3d 1136, 1153.) Spinnaker could not have acted in bad faith if it correctly denied policy coverage. Furthermore, as discussed above, the claim is time-barred. Therefore, the implied covenant claim fails as a matter of law. d. Spinnaker Could Not Have Committed Elder Abuse Likewise, Spinnaker could not have wrongfully retained insurance benefits if it correctly denied them, and the claim is time-barred in any case. Therefore, the elder abuse claim fails as a matter of law. CONCLUSION The motion for summary judgment filed by Hippo and Spinnaker is GRANTED. [1] This applies to all three causes of action, not just breach of contract, because the policy states that no action may be brought outside one year. The policy does not restrict the limitations period to claims on the policy itself. Furthermore, where the essence of [a] claim[] is an attempt to recover [d]amages for failure to provide benefits under subject contract of insurance, the claim is fundamentally a claim on the policy and is thus time barred under the limitations period stated in the policy. (Magnolia Square Homeowners Ass'n v. Safeco Ins. Co. (1990) 221 Cal.App.3d 1049, 1063, quoting Lawrence v. Western Mutual Ins. Co. (1988) 204 Cal.App.3d 565, 575.)
Ruling
ROBERT GOLIGHTLY VS PACIFIC COAST SUSTAINABLE ASSETS, LLC, ET AL
Aug 26, 2024 |23STCV18472
Case Number: 23STCV18472 Hearing Date: August 26, 2024 Dept: 47 Tentative Ruling Judge Theresa M. Traber, Department 47 HEARING DATE: August 26, 2024 TRIAL DATE: March 18, 2025 CASE: Robert Golightly v. Pacific Coast Sustainable Assets, LLC. CASE NO.: 23STCV18472 MOTION TO COMPEL FURTHER RESPONSES TO SPECIAL INTERROGATORIES (SET ONE); REQUEST FOR SANCTIONS MOVING PARTY: Defendant Yajac Agriculture, LLC RESPONDING PARTY(S): Plaintiff Robert Golightly CASE HISTORY: · 10/24/22: Complaint filed. · 08/04/23: First Amended Complaint filed. STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS: This is an action for breach of contract. Plaintiff contracted with Defendants to manage and operate a farm owned by Defendants. Plaintiff alleges that he was terminated in violation of the terms of his contract. Defendant Yajac Agriculture, LLC moves to compel further responses to special interrogatories, and for sanctions. TENTATIVE RULING: Defendant Yajac Agriculture, LLCs Motion to Compel Further Responses to Special Interrogatories is GRANTED. Plaintiff is ordered to provide verified, code-compliant supplemental responses without objections within 30 days of this order. Defendants request for sanctions is GRANTED against Plaintiff and his counsel, jointly and severally. Payment is to be made within 10 days of this order. // DISCUSSION: Defendant Yajac Agriculture, LLC moves to compel further responses to special interrogatories, and for sanctions. Legal Standard Under Code of Civil Procedure section 2030.300, subdivision (a), a court may order a party to serve a further response to an interrogatory when the court finds that: (1) An answer to a particular interrogatory is evasive or incomplete[;] (2) An exercise of the option to produce documents under Section 2030.230 is unwarranted or the required specification of those documents is inadequate[; or] (3) An objection to an interrogatory is without merit or too general. The burden is on the responding party to justify any objection or failure to fully answer the interrogatories. (Fairmont Ins. Co. v. Superior Court (2000) 22 Cal.4th 245, 255.) Timing: A motion to compel further responses to interrogatories must be served within 45 days of the service of the verified response, or any supplemental verified response, or on or before any specific later date to which the propounding party and the responding party have agreed in writing. (Code Civ. Proc. § 2030.300(c).) The 45-day requirement is mandatory and jurisdictional. (Sexton v. Superior Court¿(1997) 58 Cal.App.4th 1403, 1410.) Defendant served its first set of Special Interrogatories on Plaintiff on April 1, 2024. (Declaration of Niki Kalantari ISO Mot. ¶ 2 Exh. 1.) Plaintiff served responses on May 6, 2024. (Id. ¶ 3 Exh. 2.) On June 14, 2024, the parties agreed in writing to extend the deadline to bring this motion to July 24, 2024, the date this motion was filed and served. (Id. ¶ 5 Exh. 4.) The motion is therefore timely. Meet and Confer A party making a motion to compel further responses must also include a declaration stating facts showing a reasonable and good faith attempt to resolve informally the issues presented by the motion before filing the motion. (Code Civ. Proc., §§ 2016.040, 2030.300 (b)(1).) Defendants counsel states that her office sent a meet and confer letter concerning these responses to Plaintiffs counsel on June 12, 2024. (Kalantari Decl. ¶ 4 Exh. 3.) Plaintiffs counsel responded on June 14, 2024, agreeing to extend the motion deadline while he evaluated the arguments in the letter. (Id. ¶ 5 Exh. 4.) On July 5, 2024, Plaintiffs counsel sent a further email stating that supplemental responses would be served by July 15, 2024. (Id.) No responses were served. (Id. ¶ 6.) In opposition, Plaintiff contends that Defendants counsel has misrepresented the meet-and-confer process because Plaintiffs counsel sent a follow-up email on July 20, 2024, asserting objections not made in the responses, arguing that the responses were sufficient, and accusing Defendants counsel of discovery abuse. The Court is not persuaded. Plaintiffs about-face after promising supplemental responses does not demonstrate a failure by Defendant to engage in a good faith attempt to informally resolve this dispute. The Court finds that Defendant has satisfied its statutory meet and confer obligations. Plaintiffs Untimely Opposition Defendant served and filed its motion on July 24, 2024 for a hearing on August 26, 2024. Pursuant to Code of Civil Procedure section 1005(b), Plaintiffs opposition was due nine court days before the scheduled hearing, which would place the deadline for the opposition on August 13, 2024. Plaintiffs opposition was served and filed on August 14, 2024, one day late. (See Opposition POS.) Plaintiff offers no explanation for this untimely filing. However, as Defendant served and filed a timely and substantive reply brief, the Court finds that Defendant was not prejudiced by Plaintiffs late opposition. The Court will therefore consider the merits of Plaintiffs opposition. Plaintiffs Procedural Objection Plaintiff objects to the motion as failing to specify the interrogatories for which a further response is sought in the Notice of Motion. Contrary to Plaintiffs assertion, Rule of Court 3.1345(d) only requires that the motion identify the interrogatories to which it pertains by set and number. (Cal Rule of Court 3.1345(d).) A cursory inspection of the memorandum of points and authorities attached to the Notice of Motion demonstrates that the motion concerns Special Interrogatories Set One Nos. 2, 5, 8, 11, 14, 17, 20, 23, 26, 27, 29, 32, 35, 38, 41, 44, 47, 50, 53, 56, 59, 62, 65, 68, 71, 74, 77, 80, 83, 86, 89, 92, 95, 98, 101, 104, 107, 114, 118, 121, 124, 127, 128, 131, 134, 137, 140, 143, 149-150, and 153-156. The motion is not deficient in this respect. Identification of Documents (Interrogatory No. 128) Special Interrogatory No. 128 asks Plaintiff to identify all documents relating to his response to Interrogatory No. 126, seeking all facts supporting his contention that Defendant breached its duty to account to Plaintiff, as alleged in paragraph 21(c) of the First Amended Complaint. (Defendants Exh. 1. Nos. 128, 126.) Defendants interrogatories defined identify with respect to documents to mean to state the title or caption, date, subject matter, author, addressee, all PERSON(s) to whom the document was sent, the custodian of the document, and the relevant bates number(s) where applicable. (Id. p.3:12-14.) Plaintiff responded only Banking records pertaining to PCSA. (Defendants Exh. 2. p.34:4.) Plaintiffs assertion to the contrary notwithstanding (see opposition p.4:13-17), this response is plainly inadequate. A vague reference to unspecified banking records is not a straightforward and complete response as required by Code of Civil Procedure section 2030.220(a). If, as asserted in the opposition, Plaintiff does not know and cannot, by reasonable inquiry, determine which records specifically contain the relevant information, Plaintiffs response should have so stated, as required by section 2030.220 subdivisions (b) and (c). Plaintiffs response to interrogatory No. 128 is inadequate on its face. Identification of Witnesses (Interrogatories Nos. 2, 5, 8, 11, 14, 17, 20, 23, 26, 29, 32, 35, 38, 41, 44, 47, 50, 53, 56, 59, 62, 65, 68, 71, 74, 77, 80, 83, 86, 89, 92, 95, 98, 101, 104, 107, 114, 118, 121, 124, 127, 131, 134, 137, 140, 143) Special Interrogatories Nos. 2, 5, 8, 11, 14, 17, 20, 23, 26, 29, 32, 35, 38, 41, 44, 47, 50, 53, 56, 59, 62, 65, 68, 71, 74, 77, 80, 83, 86, 89, 92, 95, 98, 101, 104, 107, 114, 118, 121, 124, 127, 131, 134, 137, 140, and 143 ask Plaintiff to identify all persons with knowledge of the facts supporting various contentions alleged in the First Amended Complaint, as referenced in the immediately-preceding interrogatories. (See, e.g., Defendants Exh. 1 No. 2.) The interrogatories required Plaintiff to state the name, last known address, contact information including telephone numbers and email addresses. (See Exh. 1. p.3:8-11.) Although Defendant named individuals in response to each interrogatory, Defendant consistently failed to provide full names and contact information for each person named. (See, e.g., Exh. 2. Nos. 2, 5, 8.) Moreover, Defendant responded to certain interrogatories, such as Interrogatories Nos. 104 and 107, by also naming unspecified representatives of Humboldt County and the State of California. (Exh. 2. Nos. 104, 107.) Defendant is entitled to straightforward and complete responses to these interrogatories, and Plaintiffs responses do not meet that standard. Defendant is entitled to further responses to these interrogatories. The Court also observes that the header of subsection 3.B of Defendants motion also references Special Interrogatory No. 27 as part of this subset. (Motion p.5:19-22.) Interrogatory No. 27 seeks identification of documents, not individuals, and is not discussed in the section of the brief in which it is referenced. The Court therefore construes the reference to Interrogatory No. 27 as an inadvertent typographical error, and will disregard that Interrogatory. Payments and Product Yields (Interrogatories Nos. 149, 150, 153-156) Special Interrogatories Nos. 149 and 150 ask Plaintiff to state his contribution to Defendant Pacific Coast Sustainable Assets in 2012 and 2013, respectively. (Defendants Exh. 1. Nos. 149-150.) Interrogatories Nos. 153 through 156 ask Plaintiff to state the product yielded in the 2012 and 2013 harvests and the sales proceeds from each. (Id. Nos. 153-156.) Rather than stating the amounts, Plaintiffs responses simply stated that the information is reflected in the Honeydew Farms financial records. (Defendants Exh. 2. Nos. 149, 150, 153-56.) Defendant contends that these responses are inadequate because the interrogatories seek straightforward numbers or dollar amounts, not a reference to documents. Defendant further argues that Plaintiffs reference to the records is inadequate because it does not constitute a proper invocation of Section 2030.230 (regarding preparation of a summary from records) and does not specify the relevant writings in sufficient detail to permit Defendant to ascertain the answer. (See Code Civ. Proc. § 2030.230.) The Court concurs. Notwithstanding Plaintiffs claims that the documents are impeccably organized, a vague reference to a folder of documents is not a sufficient response to an interrogatory asking for a straightforward dollar or numerical value. Defendant is entitled to an order compelling further responses. Sanctions Defendant also requests sanctions in the amount of $2,486.50 against Plaintiff and his counsel, jointly and severally, for the inadequate responses at issue on this motion. Code of Civil Procedure section 2023.030 authorizes the Court to impose monetary sanctions on any attorney engaging in the misuse of the discovery process by requiring that attorney to pay the reasonable expenses incurred by anyone as a result of that conduct. Code of Civil Procedure section 2030.300(d) requires the Court to impose sanctions against any party who unsuccessfully makes or opposes a motion to compel further response, unless it finds that the one subject to the sanction acted with substantial justification or that other circ*mstances make the imposition of the sanction unjust. Failure to respond or submit to an authorized method of discovery is a misuse of the discovery process for which sanctions may be imposed. (Code Civ. Proc. §§ 2023.010(d); 2023.030(a).) Sanctions are mandatory on the party or attorney or both whose failure to serve a timely response to requests for admission necessitated a motion to deem requests for admissions as admitted. (Code Civ. Proc. § 2033.280(c).) Defendant requests sanctions against Plaintiff and his counsel, jointly and severally, in the amount of $2,486.50, based on 3 hours of attorney time actually incurred at $485 per hour, plus one hour anticipated to prepare the reply papers and one hour anticipated to attend the hearing on this motion, plus $61 in filing fees. (Kalantari Decl. ¶ 7.) The Court finds the requested amount to be reasonable based on the record presented. CONCLUSION: Accordingly, Defendant Yajac Agriculture, LLCs Motion to Compel Further Responses to Special Interrogatories is GRANTED. Plaintiff is ordered to provide verified, code-compliant supplemental responses without objections within 30 days of this order. Defendants request for sanctions in the amount of $2,486.50 is GRANTED against Plaintiff and his counsel, jointly and severally. Payment is to be made within 10 days of this order. Moving Party to give notice. IT IS SO ORDERED. Dated: August 26, 2024 ___________________________________ 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 before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.
Ruling
BLACK BREWED COFFEE L.L.C. VS BERKSHIRE HATHAWAY DIRECT INSURANCE COMPANY
Aug 27, 2024 |23STCV24849
Case Number: 23STCV24849 Hearing Date: August 27, 2024 Dept: 34 Ourian Investment Corp. v. Hedley, et al. (23STCV02215) The Motion to be Relieved as Counsel brought by Putterman Law, APC, counsel for Defendant Kelly Swartz, is GRANTED, effective upon the filing of a proof of service showing service of the signed order upon the Client at the Clients last known address. Background Plaintiff Ourian Investment Corp. (Plaintiff) alleges the following: On or about April 22nd, 2021, Plaintiff and Defendant Todd Hedley (Hedley) executed and entered into Loan Agreements. Under the terms and conditions of the loan, Plaintiff was to lend Defendant Hedley at total of $150,000.00 and Defendant Hedley was required to repay Plaintiff in full. Defendant Kelly Swartz (Swartz and along with Hedley as Defendants) was received fraudulent transfers from Defendant Headley. On October 11, 2023, Plaintiff filed a complaint, asserting causes of action against Defendants and Does 1-100 for: 1. Breach of Contract; 2. Breach of Contract 3. Civil Code § 3439.04(a)(1); 4. Civil Code § 3439.04(a)(2) 5. Civil Code § 3439.05; and, 6. Fraudulent Transfers Pursuant to Common Law. A Motion to Enforce Settlement is scheduled for September 20, 2024. A Final Status Conference is scheduled for October 1, 2024 and a Jury Trial is scheduled for October 14, 2025. Discussion[1] Putterman Law, APC (Firm) seeks to be relieved as counsel of record for Defendant Swartz (Client). The court has discretion to allow an attorney to withdraw, and such a motion should be granted provided that there is no prejudice to the client and it does not disrupt the orderly process of justice. (See Ramirez v. Sturdevant (1994) 21 Cal.App.4th 904, 915; People v. Prince (1968) 268 Cal.App.2d 398.) California Rules of Court (CRC) Rule 3.1362 requires (1) a notice of motion and motion directed to the client (made on the Notice of Motion and Motion to Be Relieved as CounselCivil form (MC-051)); (2) a declaration stating in general terms and without compromising the confidentiality of the attorney-client relationship why a motion under Code of Civil Procedure § 284(2) is brought instead of filing a consent under section 284(1) (made on the Declaration in Support of Attorney's Motion to Be Relieved as CounselCivil form (MC-052)); (3) service of the notice of motion and motion, the declaration, and the proposed order on the client and on all other parties who have appeared in the case; and (4) a proposed order relieving counsel (prepared on the Order Granting Attorney's Motion to Be Relieved as CounselCivil form (MC-053)). The court may delay the effective date of the order relieving counsel until proof of service of a copy of the signed order on the client has been filed with the court. Attorney Matt Putterman (Putterman) represents that Client has materially breached the retainer agreement with [his] firm. As a result, there has been a breakdown in the attorney-client relationship. The court determines that the requirements of Rules of Court Rule 3.1362 enumerated above have been sufficiently met. Accordingly, the motion is granted, effective upon the filing of a proof of service showing service of the signed order upon the Client at the Clients last known address. [1] The motion was filed (and served electronically) on July 24, 2024, and set for hearing on August 27, 2024.
Ruling
CURTIS CROFT VS LIBERTY MUTUAL FIRE INSURANCE COMPANY, ET AL.
Aug 29, 2024 |19STCV40504
Case Number: 19STCV40504 Hearing Date: August 29, 2024 Dept: 57 The Court is granting the motion of Defendant Liberty Mutual Fire Insurance Company (Liberty) for relief under Code of Civil Procedure Section 473(b) from the Court's entry of a default against Liberty on April 30, 2024. The Court entered the default when granting Plaintiff's motion for terminating sanctions against Liberty. The Court granted the Plaintiff's motion for terminating sanctions based on the Court's view that Liberty had willfully disregarded discovery orders in this case, including, as most pertinent here, an October 18, 2023 discovery order. Having reviewed Liberty's Section 473(b) motion and the accompanying declaration of Blake Russum, one of Liberty's outside attorneys, the Court has concluded that Liberty's action that ran counter to the October 18, 2023 order was not the product of a willful disregard of the order, but rather, was rooted in a mistaken interpretation of it. Accordingly, Liberty is entitled to mandatory relief from the default under Section 473(b), which provides that "the Court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by attorneys sworn affidavit attesting to his or her mistake, inadvertence, surprise or neglect, vacate any (1) resulting default entered by the clerk . . . or (2) resulting default judgment . . . entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney's mistake, inadvertence, surprise, or neglect. The Court disagrees with Plaintiff's argument that Section 473(b) relief is not applicable to defaults entered as a discovery sanction. The caselaw is to the contrary. Plaintiff is on stronger footing in arguing that the declaration that Russum submitted in support of Liberty's Section 473(b) motion cannot be squared with the statements made by Russum's partner and fellow counsel for Liberty Norman Lau at the hearing on Plaintiff's motion for terminating sanctions. According to Plaintiff, Lau's statements manifest an intentional, strategic choice by Liberty to ignore the Court's October 18, 2023 order. The Court acknowledges that there is some tension between Russum's declaration and Lau's statements. In the end, however, the two strands can be reconciled. This harmonization has led the Court to conclude that Lau did in fact make a mistake in interpreting the October 18, 2023 order and thus Section 473(b) relief is available and must be granted. The Court stands by what it said to Lau at the hearing on the terminating sanctions motion: if Liberty did not fully understand the October 18, 2023 order, it should have sought clarification of it from the Court instead of throwing caution to the wind and taking action that the Court determined contravened the order. But the failure to seek clarification, too, was a mistake of Liberty's counsel and thus part and parcel of the basis for relief from default under Section 473(b).
Ruling
COLE FREEMAN VS STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, A BUSINESS ENTITY FORM UNKNOWN
Aug 28, 2024 |24CHCV00177
Case Number: 24CHCV00177 Hearing Date: August 28, 2024 Dept: F43 Cole Freeman vs. State Farm Mutual Automobile Insurance Company Trial Date: N/A MOTION TO STRIKE MOVING PARTY: Defendant State Farm Automobile Insurance Company RESPONDING PARTY: Plaintiff Cole Freeman RELIEF REQUESTED Motion to Strike · Portion of Paragraph 27 that requests punitive damages · Paragraph 50(a)-(c) · Portion of Paragraph 51 that requests punitive damages · Item b.(ii) of the prayer (punitive damages) RULING: Motion to strike is denied. SUMMARY OF ACTION Plaintiff Cole Freemans (Plaintiff) motorhome was vandalized and sustained water damage. Plaintiff filed this action because he alleges that Defendant State Farm Automobile Insurance Company (Defendant) would not cover the full extent of Plaintiffs losses. Plaintiffs First Amended Complaint (FAC) alleges four causes of action for (1) declaratory relief; (2) breach of contract; (3) breach of implied covenant of good faith; and (4) bad faith denial of insurance coverage. After this Court granted Defendants previous motion to strike related to Plaintiffs claim for punitive damages, Plaintiff filed his FAC on May 28, 2024. Defendant filed the present motion to strike on June 28, 2024. Plaintiff opposes Defendants motion. Defendant has again moved to strike Plaintiffs request for punitive damages and related allegations. ANALYSIS A court may strike from the complaint any irrelevant, false, or improper matter. Under CCP § 435, [a]ny party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof. Under CCP § 436(a), [t]he court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper . . . [s]trike out any irrelevant, false, or improper matter inserted in any pleading. Under CCP § 436(b), the court may [s]trike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. Punitive Damages Punitive damages are governed by Civ. Code § 3294: In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant. (Civ. Code § 3294(a).) To state a prima facie claim for punitive damages, a complaint must set forth the elements as stated in Civ. Code § 3294. (Coll. Hosp., Inc. v. Superior Court (1994) 8 Cal.4th 704, 721.) Malice is defined in the statute as 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. (Id. at 725.) Oppression is despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that persons rights. (Civ. Code § 3294(c)(2).) Fraud is defined as an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury. (Civ. Code § 3294(c)(3).) Potter v. Firestone Tire & Rubber Co. (1993) 6 Cal.4th 965, 1004 explained that punitive damages sometimes may be assessed in unintentional tort actions. Taylor v. Superior Court (1979) 24 Cal.3d 890, 894-895 noted that something more than the mere commission of a tort is always required for punitive damages. There must be circ*mstances of aggravation or outrage, such as spite or malice, or a fraudulent or evil motive on the part of the defendant, or such a conscious and deliberate disregard of the interests of others that his conduct may be called willful or wanton. Indeed, punitive damages are proper only when the tortious conduct rises to levels of extreme indifference to the plaintiffs rights, a level which decent citizens should not have to tolerate. (Lackner v. North (2006) 135 Cal.App.4th 1188, 1210 (internal quotation omitted).) The conclusory characterization of defendants conduct as intentional, willful and fraudulent is a patently insufficient statement of oppression, fraud or malice&within the meaning of section 3294. (Brousseau v. Jarrett (1977) 73 Cal.App.3d 864, 872.) It is not sufficient to allege merely that defendant acted with oppression, fraud or malice. Rather, plaintiff must allege specific facts showing that defendants conduct was oppressive, fraudulent or malicious (e.g., that defendant acted with the intent to inflict great bodily harm on plaintiff or to destroy plaintiff's property or reputation). (Croskey, et al., Cal. Prac. Guide: Insurance Litigation Ch. 13-C (Thomson Reuters, 2016) ¶ 13:197.2; and see, Anschutz Entertainment Group, Inc. v. Snepp (2009) 171 Cal.App.4th 598, 643 [allegations that defendants conduct was intentional, and done willfully, maliciously, with ill will towards Plaintiffs, and with conscious disregard for Plaintiff's rights did not satisfy specific pleading requirements].) Plaintiffs FAC alleges that his claim for punitive damages is based on verbal statements allegedly made by State Farm agents when they inspected Plaintiffs motor home. Plaintiff alleges that they acknowledged that vandalism was the cause of all of Plaintiffs claimed damages. However, Defendant argues that these allegations are not specific enough and that these allegations contradict the Partial Coverage Letter dated July 10, 2023, that State Farm sent to Plaintiff and which is attached as Exhibit 5 to Plaintiffs FAC. However, the statements in the letter are consistent with the rest of Plaintiffs allegations. Defendant also argues that Plaintiffs claim for punitive damages is based on a legal conclusion rather than specific facts that would support the claim for punitive damages. However, as Plaintiff argues in his opposition, Plaintiffs FAC contains sufficient allegations for Plaintiff to maintain a claim for punitive damages. Plaintiffs FAC lays out the conduct by Defendant that would be malicious or oppressive due to its arbitrary and unreasonable nature. (FAC, ¶ 26.) First, Defendant represented to Plaintiff that an investigation had been completed prior to his motor home even being inspected, and Defendant denied any and all coverage based on general wear and tear. (FAC, ¶ 26(a)-(b).) Then, Defendant sent inspectors in June 2023 and September 2023, who admitted that the vandals had has causes the extensive interior water damage, but Defendants only extended minimal coverage to three exterior doors without providing coverage for interior water damages. (FAC, ¶ 26(c)-(d).) After this failure to extend coverage, further attempts by Plaintiff and Plaintiffs attorney to communicate with Defendant have been met with silence. (FAC, ¶ 26(f)-(i).) Additionally, Plaintiffs alleges that Defendant breached its obligations under the policy by failing to conduct a full, prompt, and thorough investigation; by delaying investigation of Plaintiffs claim; by delaying processing the claim and payment of benefits to Plaintiff; by denying Plaintiffs claim; by failing to settle the claim within a reasonable amount of time; and by failing to communicate with Plaintiff. (FAC, ¶ 46.) Plaintiff further argues that these allegations amount to malicious and oppressive conduct. (FAC, ¶ 50.) All the foregoing allegations, when taken together, amount to conduct sufficient to meet the requirements for a claim for punitive damages based on malice or oppression. Based on the foregoing, Defendants motion to strike is denied. Moving party to give notice to all parties.
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