Comer vs. Mercury Insurance Company

KB Steel shall give notice of the ruling.

3 Comer vs. Mercury Insurance Company

2023-01322938 Motion for Summary Judgment and/or Adjudication

Defendant Mercury Insurance Company’s motion for summary adjudication as to Plaintiff James Comer’s first cause of action in his Second Amended Complaint (“2AC”) for breach of the covenant of good faith and fair dealing is granted.

Defendant’s request for judicial notice of Documents 1-5 is granted.

Defendant’s evidentiary objections are not compliant with CRC, Rule 3.1354(b), as Defendant objected to portions of Plaintiff’s separate statement. Objections to “undisputed material facts” as opposed to “evidence” are not proper. Indeed, some of the objections are not even to actual evidence.

Notwithstanding this, the Court declines to rule on the objections pursuant to Code Civ. Proc., § 437c(q).

“[F]rom commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) “A prima facie showing is one that is sufficient to support the position of the party in question.” (Id. at p. 851.) A defendant moving for summary judgment satisfies his or her initial burden by showing that one or more elements of the cause of action cannot be established or that there is a complete defense to the cause of action. (Code Civ.

Proc., § 437c, subd. (p)(2).) The scope of this burden is determined by the allegations of the plaintiff’s complaint. (FPI Development v. Nakashima (1991) 231 Cal.App.3d 367, 381-382 [pleadings serve as the outer measure of materiality in a summary judgment motion]; 580 Folsom Associates v. Prometheus Development Co. (1990) 223 Cal.App.3d 1, 18-19 [defendant only required to defeat allegations reasonably contained in the complaint].)

A cause of action cannot be established if the undisputed facts presented by the defendant prove the contrary of the plaintiff’s allegations as a matter of law. (Brantley v. Pisaro (1996) 42 Cal.App.4th 1591, 1597.) Alternatively, a moving defendant can show that a cause of action cannot be established by submitting evidence, such as discovery admissions and responses, that plaintiff does not have and cannot reasonably obtain evidence to establish an essential element of his cause of action. (Aguilar v.

Atlantic Richfield Co., supra, 25 Cal.4th at pp. 854-855; Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 590 [finding moving defendant may show plaintiff’s lack of evidence by factually devoid discovery responses after plaintiff has had adequate opportunity for discovery]; see Scheiding v. Dinwiddie Constr. Co. (1999) 69 Cal.App.4th 64, 80-81 [finding Union Bank rule only applies where discovery requests are broad enough to elicit all such information].) Once a defendant meets its prima facie showing, the burden shifts to the plaintiff to show by reference to specific facts the existence of a triable issue as to that affirmative defense or cause of action. (Aguilar v.

Atlantic Richfield Co., supra, 25 Cal.4th at p. 850.)

“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 party’s right to receive the benefits of the agreement actually made.” (Guz v. Bechtel Nat. Inc. (2000) 24 Cal.4th 317, 349.) The implied covenant cannot be extended to create obligations not contemplated by the contract. (Racine & Laramie v. Department of Parks and Recreation (1992) 11 Cal. App. 4th 1026, 1031-32; Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 690.)

In bad faith insurance cases, a breach of the covenant of good faith and fair dealing permits a tort recovery. (Cates Construction, Inc. v. Talbot Partners (1999) 21 Cal.4th 28, 43.)

To establish a “bad faith” claim in first party cases, it must be shown that the insurer’s delay or withholding of benefits was unreasonable, i.e., without any reasonable basis for the insurer’s position or without proper cause. (Jordan v. Allstate Ins. Co. (2007) 148 Cal. App. 4th 1062, 1072–73.) Where there is a genuine issue as to the insurer’s liability under the policy for the claim asserted by the insured, there can be no bad faith liability imposed on the insurer for advancing its side of that dispute. (Id. at 1072.)

In his lawsuit, Plaintiff alleges that Defendant’s failure to turnover to Plaintiff some of the money from Hartford (third-party tortfeasor Annette Medrano’s insurer) to reimburse Plaintiff for his diminution of value/loss of use damages constitutes bad faith.

Specifically, Plaintiff alleges in his 2AC with respect to the first cause of action, that had Mercury informed Plaintiff that its receipt of subrogation from Hartford would result in a loss of benefits (the full amount of Plaintiff’s diminished value claim), Plaintiff would have submitted his property damage claim to Hartford in a timely matter, such that he would have priority over Mercury’s subrogation claim.

(2AC, ¶ 33.) Plaintiff alleges that starting in August of 2022, Defendant breached the duties of good faith and fair dealing by concealing and misleading Plaintiff about its subrogation proceedings, and the need for Plaintiff to submit his damage claim to Hartford before 11/11/22. (2AC, ¶ 35.)

These allegations are not borne out by the evidence.

At his deposition, Plaintiff testified that the repairs to his vehicle were completed in approximately the middle of September 2022 and that he was impressed with and satisfied with the quality of the repair work. (UMF 6.) Plaintiff does not contend Mercury refused to repair the vehicle, failed to pay covered collision repair benefits, or delayed payment of those benefits. (UMF 9.)

Plaintiff additionally testified that - contrary to the allegations in the SAC that Plaintiff advised Mercury he intended to submit a diminished value claim to Hartford on 8/16/22 - when he spoke with Mercury in July and August 2022, he did not have a diminished-value claim and only asked about the topic. He retained an appraiser only after repairs were completed and did not submit a claim to Hartford until February 2023. (UMF ¶¶17-18, 25-27; PSS ¶¶ 65, 69.)

Thus, the evidence establishes, counter to Plaintiff’s arguement, that Mercury did not know that Plaintiff had an outstanding claim for diminished value that it intended to submit to Hartford. Plaintiff’s 8/16/22 inquiry does not demonstrate an existing claim, its amount, its validity, or Mercury’s knowledge that Plaintiff intended to pursue one. Plaintiff testified that at the time, he did not have a claim and, in fact, did not submit one until February 2023. (UMF 25, 26.) No legal authority is provided to support Plaintiff’s position that Defendant’s actions were unreasonable, i.e., that Defendant should have delayed its subrogation recovery until and if Plaintiff were to assert a claim with Hartford.

Plaintiff cites to Hibbs v. Allstate Ins. Co. (2011) 193 Cal.App.4th 809 and Barney v. Aetna Casualty & Surety Co. (1986) 185 Cal.App.3d 966.

Hibbs is not applicable here; the facts are distinguishable. In Hibbs, the insurer voluntarily paid for repairs to which the insured did not consent. The Court held that the insurer had no right to subrogation given that the repair shop was not due compensation and the payment made to the repair shop was voluntary. (Hibbs, supra, 193 Cal.App.4th 809 at 821.) In this case, Plaintiff consented to the repairs and testified that he was satisfied with them. (UMF ¶¶ 5-7; Plaintiff’s Ex. 1, Comer Depo. 17:8-18:12.)

Barney is also distinguishable. The insurer there negotiated a settlement, exchanging the insured’s right to file a counterclaim without her knowledge and consent. (Barney, supra, 185 Cal.App.3d at 977.) Nothing similar happened here; Defendant did nothing to prevent Plaintiff from submitting a claim with Hartford.

Plaintiff contends that the made-whole rule supports his claim, despite the evidence showing that Defendant did not withhold any benefits due under the policy. (Love v. Fire Ins. Exchange (1990) 221 Cal.App.3d 1136, 1151–1152 (to establish breach of the implied covenant it must be shown that benefits due were withheld).) (UMF 1- 7, 9; See 2AC, Ex. 1, Defendant’s Ex.

1. Comer Deposition.) In Chandler v. State Farm Mut. Auto. Ins. Co. (9th Cir. 2010) 598 F.3d 1115, The court examined the question of “whether an insurer is permitted to recoup a payout from a third-party tortfeasor’s insurance company before the insured has sued the third-party tortfeasor, and without first making the insured whole.” (Id. at 1115-1116.) (This court recognizes that Federal Court decisions are not binding on this court, but can be consulted as persuasive authority and provide guidance. (See Rubin v.

Ross (2021) 65 Cal.App.5th 153, 163.).) The Chandler court stated: Plaintiff’s position [that per the made-whole rule, his insurer, State Farm, should reimburse him for his out-of-pocket rental car costs from the proceeds that State Farm received from the third-party tortfeasor’s insurance] undermines the most fundamental public policy at play in this and other cases-the principle that the person ultimately responsible for causing the damage should pay for it. In situations like the one presented here, the imposition of an obligation on an insurer to pay the insured out of proceeds obtained as reimbursement for its outof-pocket costs in paying the policyholder’s claim would confer greater rights on the policyholder than provided in the policy and eliminate any incentive on the part of the policyholder to seek reimbursement from the tortfeasor. (Id. at 1116.)

As noted previously with respect to Defendant’s demurrer to the 2AC, Plaintiff added an allegation that Medrano was judgment proof and thus did not pursue her for compensation for his damages. Plaintiff attaches a Lexis Nexis report on Medrano to the 2AC. In opposition to the motion for summary adjudication, Plaintiff does not submit any additional evidence to support Medrano’s lack of assets which could satisfy a judgment. Nor does Plaintiff provide information as to when it was determined that Medrano was judgment proof and when Defendant was made aware of this.

Given this, there is no evidence suggesting that Defendant acted in bad faith in pursuing Hartford for subrogation. “There is nothing in any of the cases discussing the made-whole rule or the common-fund doctrine (part I, ante) that requires the insurance company to conduct an investigation before demanding repayment.” (Progressive West Ins. Co. v. Superior Court (2005) 135 Cal.App.4th 263, 282.) Furthermore, “no case imposes a duty on the ‘insurer to advise an insured of the different legal theories or statutory provisions which an insured could use to avoid policy exclusions,’” as “the insurance company is entitled to consider its own interests especially in the context of conduct it engages in after it timely pays out benefits.” (Id. at 282 [citing Love v.

Fire Ins. Exchange (1990) 221 Cal.App.3d 1136, 1148-1149].)

“The gravamen of a claim for breach of the covenant of good faith and fair dealing, which sounds in both contract and tort, is the insurer’s refusal, without proper cause, to compensate the insured for a loss covered by the policy.” (Progressive West Ins. Co. v. Superior Court (2005) 135 Cal.App.4th 263, 280 [citing Brizuela v. CalFarm Ins. Co. (2004) 116 Cal.App.4th 578, 592, 10].)

The evidence demonstrates that Plaintiff was compensated by Defendant for his losses covered by the policy. (See Love v. Fire Ins. Exchange (1990) 221 Cal.App.3d 1136, 1151–1152 (to establish breach of the implied covenant it must be shown that benefits due under the policy were unreasonably withheld).) Plaintiff has not identified any provision of the Mercury policy that required Mercury to pay the claimed diminished value damages.

Lastly, contrary to Plaintiff’s additional argument in his opposition, there is nothing to suggest that Plaintiff’s claim that Defendant failed to properly train its employees amounts to bad faith. No legal authority is cited in support of this.

Accordingly, the Court finds that there are no triable issues of material fact as to Plaintiff’s first cause of action for breach of the implied covenant of good faith and fair dealing.

Defendant shall give notice.

4 Enriquez Tapia vs. Country Villa Plaza Convalescent Center

2022-01276368 Motion to Compel Production

Defendant Santa Ana Healthcare & Wellness Centre LP’s (“Defendant”) motion to compel Plaintiff Victor E. Tapia’s (“Plaintiff”) response to request for statement of damages is granted. Defendant’s requests for monetary and terminating sanctions are denied.

Request for Statement of Damages & Monetary Sanctions In actions for personal injury or wrongful death, a plaintiff may not state the amount of its damages claim in the complaint. (Code Civ. Proc., § 425.10, subd. (b).) Instead, a separate statutory procedure is provided through CCP section 425.11, whereby “the defendant may at any time request a statement setting forth the nature and amount of damages being sought.” In response, the plaintiff may serve a statement disclosing the amount of damages sought, and the general nature of the damages sought. The plaintiff has 15 days, after the service of request, to serve the responsive statement. If the response is not served, “the defendant, on notice to the plaintiff, may petition the court in which the action is pending to order the plaintiff to serve a responsive statement.” (Code Civ. Proc., § 425.11, subd. (b).)

Section 425.11 does not provide for the recovery of an award of sanctions if the defendant brings a motion to compel the plaintiff to serve a responsive statement. (Cal. Prac. Guide Civ. Pro. Before Trial at ¶ 8:1764 [“The statute does not provide for costs and fees in connection with such motion. And, since this procedure is outside the Discovery Act, the Act’s sanctions provision (CCP § 2023.010 et seq.) cannot be utilized”] [emphasis in original].)

Here, Santa Ana Health Care has proffered uncontroverted evidence that it properly served Plaintiff with a request for statement of damages on or about 11/12/25, to which Plaintiff failed to respond. (Kraml Decl. at ¶ 2, Exh. A.) As such, the Court orders Plaintiff to provide a responsive statement within 15 days of the notice of ruling.

However, the Court declines to award the requested monetary sanctions. In its motion, Santa Ana Health Care cites CCP section 2023.030 as the statutory authority for its sanctions request. (Mot. at