Coach Air LLC v. Davies US, LLC, et al

However, the Court does “not accept as true contentions, deductions, or conclusions of fact or law.” (In re Ins. Installment Fee Cases (2012) 211 Cal.App.4th 1395, 1402, citing Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125.) “[T]he question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.” (Concerned Citizens of Costa Mesa, Inc. v. 32nd Agricultural Assn. (1986) 42 Cal.3d 929, 936 (citations omitted).) The complaint is also to be liberally construed. (Code of Civ. Proc. §452.)

General Demurrer A general demurrer challenges a complaint for failure to state a cause of action under Code of Civil Procedure section 430.10, subdivision (e). It is granted only where the facts alleged on the fact of the complaint fail to state a valid claim under any possible legal theory entitling the plaintiff to relief against the demurring defendant. (Sheehan v. San Francisco 49ers, Ltd. (2009) 45 Cal.4th 992, 998.)

The plaintiff may be mistaken as to the nature of the case or the legal theory on which he or she can prevail, but if the essential facts of some valid cause of action are alleged, the complaint is good against a general demurrer. (Weil & Brown, Cal. Prac. Guide: Civ. Proc. Before Trial § 7:41 (hereafter Weil & Brown), citing Quelimane Co. v. Stewart Tile Guaranty Co. (1989) 19 Cal.4th 26, 38-39.) All that is necessary as against a general demurrer is to plead facts showing that the plaintiff may be entitled to some relief.

In passing upon the sufficiency of a pleading, its allegations must be liberally construed with a view to substantial justice between the parties.” (Fundin v. Chicago Pneumatic Tool Co. (1984) 152 Cal.App.3d 951, 955; Michaelian v. State Compensation Insurance Fund (1996) 50 Cal.App.4th 1093, 1104-1105.) The complaint includes matters shown in attached exhibits and incorporated by reference. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94.) No other extrinsic evidence can be considered. (Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881.)

A demurrer predicated on a complaint’s failure to state facts sufficient to constitute a cause of action (Code of Civ. Proc. §430.10, subd. (e)) should be granted only when the facts alleged on the face of the complaint fail to state any valid claim entitled to the plaintiff or disclose a complete defense to relief. Even if a plaintiff is mistaken as to the nature of the case or the legal theory on which he/she

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could prevail, the complaint is good against a general demurrer if the essential facts allege some valid cause of action. (Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566, 572.)

Leave to Amend Courts are very liberal in permitting amendments, not only where a complaint is defective in form, but also where substantive defects are apparent: “Liberality in permitting amendment is the rule, if a fair opportunity to correct any defect has not been given.” (Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227.)

It is an abuse of discretion for the court to deny leave to amend where there is any reasonable possibility that plaintiff can state a good cause of action. (Bounds v. Superior Court (2014) 229 Cal.App.4th 468, 484 [court should grant leave to amend if in all probability plaintiff will cure defect].) However, no abuse of discretion will be found unless a potentially effective amendment is “both apparent and consistent with the plaintiff’s theory of the case.” (Camsi IV v. Hunter Technology Corp. (1991) 230 Cal.App.3d 1525, 1542.)

“Leave to amend should be denied where the facts are not in dispute and the nature of the claim is clear, but no liability exists under substantive law.” (Lawrence v. Bank of America (1985) 163 Cal.App.3d 431, 436 (emphasis added); Schonfeldt v. State of Calif. (1998) 61 Cal.App.4th 1462, 1465 [if no liability as a matter of law, leave to amend should not be granted].)

First Cause of Action for Insurance Bad Faith To establish the insurer's “bad faith” liability, the insured must show that the insurer has (1) withheld benefits due under the policy, and (2) that such withholding was “unreasonable” or “without proper cause.” (Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566, 573–574.)

In the case at hand, the Complaint alleges sufficient facts to constitute this cause of action. Specifically, the Complaint pleads that it entered into a valid, and enforceable insurance contract with Southwestern, but defendant unreasonably failed to investigate, failed to pay, and delayed paying benefits.

Southwestern argues Plaintiff never explicitly pleads that it is an “insurer” and the Complaint’s Exhibit A lists Southwestern as an “agent” only. However, at this stage of the proceedings, the court assumes the truth of all material facts that have been properly pleaded and of facts that may be inferred from those expressly pleaded. (Crowley v. Katleman, supra, 8 Cal.4th at p. 672.) In the case at hand, it is clearly inferred from the pleading, that Southwestern is an insurer.

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As to Southwestern’s argument that the one line indicating Southwestern is an “agent” contradicts the facts plead in Plaintiff’s Complaint, “[a] demurrer is simply not the appropriate procedure for determining the truth of disputed facts.” (Panterra GP, Inc. v. Kern County Superior Court (2022) 74 Cal.App.5th 697, 752) (Pantera).

In Pantera, the Court of Appeals held, “[I]t is an overstatement to say that statements in exhibits always prevail over seemingly contradictory allegations in the complaint. We think that exhibits to a complaint should be subject to the same rule as documents of which the court takes judicial notice: on demurrer, courts may not resolve a dispute as to the underlying truth of their statements or the ‘proper interpretation’ thereof.” (Id. at ftn. 13).

Second Cause of Action for Breach of Contract A cause of action for damages for breach of contract is comprised of the following elements: (1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to plaintiff. (Bushell v. JPMorgan Chase Bank, N.A. (2013) 220 Cal.App.4th 915, 921.)

At this stage of the proceedings, the Complaint pleads sufficient facts to constitute its cause of action for breach of contract. Specifically, the Complaint pleads that Plaintiff entered into two insurance agreements with Southwestern in January 2024 and November 2024. It further alleges that on December 19, 2024, Plaintiff timely submitted a claim after one of its vehicles sustained damage.

The Complaint pleads that Southwestern unreasonably and negligently delayed its investigation of the claim, including its failure to contact relevant witnesses, communicate with the repair facility retained to fix Plaintiff’s vehicle, or take any meaningful steps in good faith to evaluate Plaintiff’ s claim.

RULING 1. Southwestern’s request for Judicial Notice is GRANTED.

2. Southwestern’s demurrer is OVERRULED. Southwestern shall file an answer to the complaint within 10 days.

3. Movant to give Notice.

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