Claytor vs. Honeycomb Insurance Company

Defendant Honeycomb Programs, Inc.’s request for judicial notice is DENIED. An insurance policy for Woods Cove Owners Association issued by Accredited Surety and Casualty Company Inc. is not a proper subject of judicial notice.

Demurrer to Complaint

Defendant Honeycomb Programs, Inc.’s demurrer to Plaintiffs Rex K. Claytor and Bridget Lockwood’s Complaint is SUSTAINED. (Code Civ. Proc. §430.10, subd. (e).) The Complaint fails to sufficiently allege an underlying agreement between Plaintiffs and Defendant to provide insurance to Plaintiffs. Accordingly, each of Plaintiffs’ five causes of action fail to allege facts sufficient to constitute a cause of action.

Meet and Confer

Defendant has sufficiently complied with Code Civ. Proc. §430.41, subd. (a)(1). Defendant’s counsel declares that on December 23, 2025, the parties met and conferred via telephone and were unable to resolve the issues raised in the demurrer. (See Teitcher Decl. at ¶ 9.)

COA 1: Breach of Contract

To plead a cause of action for breach of contract, Plaintiffs must allege (1) the existence of a contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff. (See Oasis West Realty LLC v. Goldman (2011) 51 Cal.4th 811, 821.) To survive a demurrer, Plaintiffs must at least plead the legal effect of an insurance agreement. (See Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 199.) Here, Plaintiffs have not alleged the legal effect of the policy, nor have they alleged that Defendant is a party to such an agreement. Accordingly, the demurrer to the First Cause of Action is SUSTAINED.

COA 2: Breach of Implied Covenant of Good Faith and Fair Dealing and COA 3: Bad Faith Denial of Insurance Claim

Plaintiffs’ Third and Fourth Causes of Action are essentially duplicative of one another. The elements of a cause of action for breach of the implied covenant of good faith and fair dealing are: (1) withholding of benefits due under an insurance policy; and (2) the reason for withholding the benefits was unreasonable or without proper cause. (See Grebow v. Mercury Ins. Co. (2015) 241 Cal.App.4th 564, 581.) Since, as discussed above, the Complaint has failed to sufficiently allege the existence of any insurance agreement, Plaintiffs have not sufficiently alleged the withholding of any benefit due under any insurance policy. Accordingly, the demurrers to the Second and Third Causes of Action are SUSTAINED.

COA 4: Constructive Fraud

“Constructive fraud is a unique species of fraud applicable only to a fiduciary or confidential relationship. [Citation.] [¶] [A]s a general principle constructive fraud comprises any act, omission or concealment involving a breach of legal or equitable duty, trust or confidence which results in damage to another even though the conduct is not otherwise fraudulent. Most acts by an agent in breach of his fiduciary duties constitute constructive fraud. The failure of the fiduciary to disclose a material fact to his principal which might affect the fiduciary’s motives or the principal’s decision, which is known (or should be known) to the fiduciary, may constitute constructive fraud. Also, a careless misstatement may constitute constructive fraud even though there is no fraudulent intent.’” (Assilzadeh v. California Federal Bank (2000) 82 Cal.App.4th 399, 415.) Here, the Complaint has failed to sufficiently allege that Defendant was in a fiduciary or confidential relationship with Plaintiffs because the Complaint does not sufficiently allege the existence of a contract of insurance. Accordingly, the demurrer to the Fourth Cause of Action is SUSTAINED.

COA 5: Declaratory Relief

To sufficiently plead a claim for declaratory relief, Plaintiffs must allege “(1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the rights or obligations of a party.” (Lee v. Silveira (2016) 6 Cal.App.5th 527, 546.) Here, Plaintiffs have failed to allege an actual controversy because the terms of the underlying insurance policy giving rise to the alleged controversy are not sufficiently alleged in the Complaint, as discussed above. Accordingly, the demurrer to Plaintiffs’ Fifth Cause of Action is SUSTAINED.