Diana Pitinyan and Khachatur Sagryan v. Mid-Century Insurance Company

Marine Saakian in the amount of $33,338.86, consisting of $30,300.39 in principal, $13,556.31 in interest through July 16, 2026, less $11,100 in payments received, plus $582.16 in court costs, with interest continuing to accrue thereafter at the rate of $8.30 per day. IV. CONCLUSION AND ORDER The Court GRANTS Plaintiff's motion to enforce the settlement agreement. Judgment shall be entered in favor of Plaintiff Interinsurance Exchange of the Automobile Club and against Defendant Marine Saakian in the amount of $33,338.86, consisting of $30,300.39 in principal, $13,556.31 in interest through July 16, 2026, less $11,100 in payments received, plus $582.16 in court costs, with interest continuing to accrue thereafter at the rate of $8.30 per day. Plaintiff to give notice. Dated: August 28, 2026 JARED D. MOSES JUDGE OF THE SUPERIOR COURT

PART AND DENYING IN PART DEFENDANT'S MOTION FOR SUMMARY ADJUDICATION I. INTRODUCTION Plaintiffs Diana Pitinyan and Khachatur Sagryan ("Plaintiffs") filed this action against Defendant Mid-Century Insurance Company ("Mid-Century" or "Defendant") arising from Mid-Century's handling of Plaintiffs' insurance claim following a July 20, 2024, water loss at their residence. Plaintiffs allege causes of action for: (1) breach of contract; (2) bad faith denial of insurance claim; (3) unfair business practices; and (4) breach of the covenant of good faith and fair dealing.

Plaintiffs subsequently dismissed the second cause of action as duplicative of the fourth cause of action. On May 12, 2026, Mid-Century filed the instant motion for summary adjudication, seeking adjudication of Plaintiffs' fourth cause of action for breach of the covenant of good faith and fair dealing, third cause of action for unfair business practices, and claim for punitive damages. On July 24, 2026, Plaintiffs filed an opposition. On August 17, 2026, Mid-Century filed a reply. II. 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.) CCP Section 437c(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. (CCP Sec. 437c(p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.) 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.) 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.) III. ANALYSIS Covenant of Good Faith and Fear Dealing and UCL Claim "A 'breach of the implied covenant of good faith and fair dealing involves something beyond breach of the contractual duty itself' and it has been held that '[b]ad faith implies unfair dealing rather than mistaken judgment.

. . .'" (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1394 (quoting Congleton v. National Union Fire Insurance Co. (1987) 189 Cal.App.3d 51, 59).) Generally, "absent an assignment of rights or a final judgment, a third-party claimant may not bring a direct action against an insurance company on the contract because the insurer's duties flow to the insured." (Harper v. Wausau Insurance Co. (1997) 56 Cal.App.4th 1079, 1086.) However, an exception exists where the contract was expressly made for the benefit of the third party. (See id. at 1086-87.)

In such a cause, the third-party beneficiary may enforce the promises directly made for him. (See id. at 1087.) The third-party beneficiary may also have a right to enforce the contract as it extends to implied covenants. (See Northwestern Mutual Insurance Co. v. Farmers' Insurance Group (1978) 76 Cal.App.3d 1031, 1042.) To establish a breach of the covenant of good faith and fair dealing for insurance claims, the plaintiff must establish: (1) benefits due under the policy must have been withheld; and (2) the reason for withholding benefits must have been unreasonable or without proper cause. (Love v.

Fire Insurance Exchange (1990) 221 Cal.App.3d 1136, 1151.) Mid-Century argues Plaintiffs cannot establish that it acted unreasonably because a genuine dispute existed regarding whether the July 20, 2024, water loss caused the claimed damage to Plaintiffs' tile flooring. Mid-Century contends it retained independent experts who concluded that the condition of the tile resulted from faulty installation rather than the water loss. Mid-Century further argues that it continued to reevaluate its position by providing Plaintiffs' competing expert reports to its consultants for review. (Motion, pp. 12-17.)

Mid-Century has met its initial burden. The burden therefore shifts to Plaintiffs to establish a triable issue of material fact as to whether Mid-Century's investigation and withholding of benefits were unreasonable or without proper cause. In opposition, Plaintiffs argue Mid-Century is not entitled to rely on the genuine dispute doctrine because it failed to conduct a fair and thorough investigation. Plaintiffs contend Mid-Century's adjuster, Terence Jenkins, had already determined that the tile damage would not be covered before any expert inspected the flooring.

Plaintiffs further argue Mid-Century's subsequent investigation was incomplete because its consultants were not provided with relevant moisture and dry-out information and did not perform destructive or other testing to resolve the conflicting evidence concerning the tile. (Opposition, pp. 11-17.) Plaintiffs further argue that Mid-Century's subsequent investigation was incomplete. According to Plaintiffs, Jenkins did not provide consultant Ron Cade with information concerning the duration of the moisture exposure, ServiceMaster's photographs and meter readings, or the substantive dry-out history before Cade rendered his initial opinion.

Plaintiffs also contend neither Cade nor Mid-Century's engineer, Ian Mellor, performed destructive testing or other testing sufficient to resolve the conflicting evidence concerning the tile. Plaintiffs rely additionally on the declaration of claims-handling expert Neal Bordenave, who opines that Mid-Century's handling of the claim fell below generally accepted claims-handling standards. (Opposition, pp. 12-14.) In reply, Mid-Century argues Plaintiffs do not dispute that two independent experts concluded the tile condition resulted from installation defects rather than the water loss.

Mid-Century contends Jenkins's statement reflected, at most, a preliminary impression and was not a coverage denial. Mid-Century further argues that the ultimate coverage determination was made only after the expert investigations were completed and that it repeatedly submitted Plaintiffs' competing expert reports to its consultants for reconsideration. Mid-Century therefore maintains that the record establishes a genuine dispute concerning causation as a matter of law. (Reply, pp. 1-6.) The Court finds that Plaintiffs have demonstrated a triable issue of material fact as to whether Mid-Century's investigation and denial of benefits were reasonable.

Although Mid-Century presents evidence that it retained consultants who concluded the claimed tile damage resulted from installation deficiencies rather than the water loss, the genuine dispute doctrine does not relieve an insurer of its obligation to thoroughly and fairly investigate, process, and evaluate an insured's claim. A genuine dispute exists only where the insurer's position is maintained in good faith and on reasonable grounds. (Wilson v. 21st Century Ins. Co. (2007) 42 Cal.4th 713, 723.)

Here, Plaintiffs present evidence that Mid-Century's adjuster, Terence Jenkins, expressed his belief that the tile damage would not be covered before any expert had investigated the damage. Jenkins acknowledged in his deposition that he made some statement that he did not believe the tiles would be covered and that, at that time,

no expert had yet investigated the tile damage. (SSMF, P. 46; Jenkins Depo., 44:24-45:3.) Plaintiffs also present evidence that Mid-Century's subsequent consultant was not initially provided with certain information concerning moisture exposure and dry-out history, and that neither consultant performed destructive testing. (SSMF, P. 50.) Plaintiffs' claims-handling expert further opines that Mid-Century's investigation and handling of the claim fell below generally accepted claims-handling standards. (SSMF, P. 65; Bordenave Decl., P.P. 47-50.)

Viewing this evidence in the light most favorable to Plaintiffs, a reasonable trier of fact could conclude that Mid-Century reached its position concerning the tile damage before completing a thorough and fair investigation and that its subsequent investigation was undertaken to support that position. Conversely, a trier of fact could accept Mid-Century's position that Jenkins merely expressed a preliminary opinion and that Mid-Century reasonably relied on the opinions of its consultants in ultimately denying coverage.

The Court cannot resolve these competing inferences on summary adjudication. Given that triable issues remain as to whether Mid-Century acted unreasonably in its investigation and handling of Plaintiffs' insurance claim, triable issues likewise remain as to Plaintiffs' UCL claim, which is based on the same alleged claims-handling conduct. Given that the Court finds triable issues of material fact as to whether Mid-Century acted unreasonably in its investigation and handling of Plaintiffs' insurance claim, triable issues likewise remain as to Plaintiffs' UCL claim, which is based on the same alleged claims-handling conduct.

Thus, summary adjudication as to the fourth cause of action for breach of the implied covenant of good faith and fair dealing and the UCL claim is DENIED. Punitive Damages Mid-Century argues Plaintiffs cannot establish malice, oppression, or fraud. It contends that even if its investigation was unreasonable, such conduct is insufficient to support punitive damages. (Motion, pp. 21-23.) Mid-Century has met its initial burden of showing that Plaintiffs cannot establish entitlement to punitive damages.

The burden therefore shifts to Plaintiffs to demonstrate a triable issue of material fact. In opposition, Plaintiffs argue Mid-Century's alleged predetermination of the tile claim, inadequate investigation, failure to pay certain benefits, SIU referral, and termination of living expenses demonstrate a conscious disregard of Plaintiffs' rights. (Opposition, pp. 18-21.) The Court finds that Plaintiffs have not demonstrated a triable issue as to punitive damages. As discussed above, Jenkins's statements concerning the tile coverage before an expert investigation, together with the alleged deficiencies in Mid-Century's subsequent investigation, are sufficient to create a triable issue as to whether Mid-Century acted unreasonably in handling Plaintiffs' claim.

However, an unreasonable or inadequate investigation, without more, does not establish malice, oppression, or fraud. Here, the evidence does not demonstrate that Mid-Century intentionally sought to injure Plaintiffs or engaged in despicable conduct with a willful and conscious disregard of their rights. Rather, the record reflects that Mid-Century investigated the claim, retained consultants to evaluate the disputed tile damage, considered Plaintiffs' competing expert reports, and paid benefits under the policy.

While a trier of fact could find that Mid-Century's investigation was inadequate or its coverage determination unreasonable, that evidence does not rise to the heightened showing required for punitive damages. Thus, summary adjudication as to Plaintiffs' claim for punitive damages is GRANTED. IV. CONCLUSION AND ORDER The Court DENIES Defendant's motion for summary adjudication as to the breach of implied covenant of good faith and fair dealing and the UCL claim, and GRANTS as to punitive damages.

Defendant is to give notice. Dated: August 28, 2026 JARED D. MOSES JUDGE OF THE SUPERIOR COURT | Home -->)" -->