Jeffrey A. Kaplan v. Catlin Specialty Insurance Company, et al.

E. Whitaker Judge of the Superior Court [1] $5671.50 challenged - 1,835 in entries reasonably incurred - $660 already reduced = $3,176.50.

DEPARTMENT | 207 | HEARING DATE | September 3, 2026 | CASE NUMBER |

| MOTION | Demurrer to First Amended Complaint | MOVING PARTY | Defendant Catlin Specialty Insurance Company | OPPOSING PARTY | Plaintiff Jeffrey A. Kaplan | MOTION This case arises from a dispute concerning defective construction and a denied insurance claim. The operative First Amended Complaint ("FAC") brought by Plaintiff Jeffrey A. Kaplan against Defendants Catlin Specialty Insurance Company ("Catlin"); Finton Construction, Inc. ("Finton"); Arriaga USA, Inc ("Arriaga"); Baltazar Construction, Inc. ("Baltazar"); Masco Corporation ("Masco"); and Northridge Floor Corporation ("Northridge") alleges four causes of action for (1) breach of contract (against Catlin); (2) tortious breach of contract (against Catlin); (3) breach of contract (against Finton, Arriaga, Baltazar, and Northridge); and (4) negligence (against Finton, Arriaga, Baltazar, and Northridge).

Catlin now demurs to the first and second causes of action alleged against it for failure to state sufficient facts pursuant to Code of Civil Procedure section 430.10, subdivision (e). Plaintiff opposes the demurrer and Catlin replies.

ANALYSIS 1. DEMURRER "It is black letter law that a demurrer tests the legal sufficiency of the allegations in a complaint." (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.)

In testing the sufficiency of a cause of action, a court accepts "[a]s true all material facts properly pled and matters which may be judicially noticed but disregard contentions, deductions or conclusions of fact or law. [A court also gives] the complaint a reasonable interpretation, reading it as a whole and its parts in their context." (290 Division (EAT), LLC v. City & County of San Francisco (2022) 86 Cal.App.5th 439, 450 [cleaned up]; Hacker v. Homeward Residential, Inc. (2018) 26 Cal.App.5th 270, 280 ["in considering the merits of a demurrer, however, "the facts alleged in the pleading are deemed to be true, however improbable they may be"].)

Further, in ruling on a demurrer, a court must "liberally construe" the allegations of the complaint "with a view to substantial justice between the parties." (See Code Civ. Proc., Sec. 452.) "This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant." (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.)

In summary, "[d]etermining whether the complaint is sufficient as against the demurrer on the ground that it does not state facts sufficient to constitute a cause of action, the rule is that if on consideration of all the facts stated it appears the plaintiff is entitled to any relief at the hands of the court against the defendants the complaint will be held good although the facts may not be clearly stated, or may be intermingled with a statement of other facts irrelevant to the cause of action shown, or although the plaintiff may demand relief to which he is not entitled under the facts alleged." (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.)

A. FAILURE TO STATE A CAUSE OF ACTION i. First Cause of Action - Breach of Contract "To prevail on a cause of action for breach of contract, the plaintiff must prove (1) the contract, (2) the plaintiff's performance of the contract or excuse for nonperformance, (3) the defendant's breach, and (4) the resulting damage to the plaintiff." (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.)

Here, Plaintiff alleges: 10. CATLIN SPECIALTY issued Commercial General Liability Policy No. GLA-92680- 0412 to Plaintiff with a policy period of 10/3/2008 to 3/31/2014 (the "Wrap Policy") (See attached Exhibit "A"). The Wrap Policy provided various coverages limited to a Designated Project (described as a 39,000 sq. ft. single family home) at the Designated Premises located at 620 Stone Canyon Road, Los Angeles, California 90077. At all times relevant herein, Plaintiff and all of the Defendants were insureds under the Policy.

11. The Policy includes endorsement CAGL 413 0807 "EXTENDED PRODUCTS - COMPLETED OPERATIONS HAZARD ENDORSEMENT, which provides coverage for property damage arising from completed operations at the project.

12. In 2022, Plaintiff contacted a claims representative of CATLIN SPECIALTY to notify Defendant that the Project was experiencing forms of property damage, specifically that (1) the master deck and other surface patios were showing signs of deterioration and/or effervescence and (2) that there were serious sound attenuation issues, i.e. various noises were flowing from one room to another. Following notice of these claims, CATLIN SPECIALTY investigated these issues.

13. On October 10, 2023, CATLIN SPECIALTY denied coverage for the Claim.

14. As a result of Defendant's breach of its obligations under the Policy, Plaintiff has been and will be improperly forced to bear the costs of remediating the damage caused by the effervescence and the sound attenuation issues. [...]

17. CATLIN SPECIALTY owed Plaintiff the duty to reasonably, quickly and fairly adjust the loss under the implied covenant of good faith and fair dealing contained in every insurance contract. Due to the damage to the project, Plaintiff was injured, which injury was assured and covered by the policy issued by CATLIN SPECIALTY.

18. Plaintiff has duly performed all conditions required under the Policy, except any that were excused or waived by CATLIN SPECIALTY'S breaches and/or other conduct.

19. The aforesaid conduct of CATLIN SPECIALTY constitutes material breaches of the Policy obligations.

20. As a direct and proximate result of CATLIN SPECIALTY'S breaches of contract, Plaintiff has suffered damages in an amount to be-determined at trial, but in any event in an amount greater than the jurisdictional minimum of this Court. (FAC P.P. 10-14, 17-20.)

Thus, Plaintiff alleges the existence of a contract; Plaintiff's performance under the contract; Catlin's breach; and Plaintiff's resulting damages. Catlin demurs on the grounds that the FAC does not identify any policy provision requiring Catlin to pay. Specifically, the policy provides coverage as follows: We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. (Ex. A to FAC ["General Liability Coverage Form"] at p. 1.)

Thus, the policy obligates Catlin to effectively indemnify and defend Plaintiff against liability claims from third parties, but there is no provision obligating Catlin to pay Plaintiff for his own property damage incurred. In opposition, Plaintiff argues that he has also sued the subcontractors as defendants in this lawsuit, and therefore Catlin is obligated to pay those sums.

While the Court agrees the policy generally covers Plaintiff's "employees," it also provides "none of these employees [...] are insureds for [...] property damage to property owned, occupied or used by [...] you." " (General Liability Coverage Form [Ex. A] at p. 9.)

Plaintiff also points to the Separation of Insureds clause on page 12 of the policy. That provision provides: 7. Separation Of Insureds Except with respect to the Limits of Insurance, and any rights or duties specifically assigned in this Coverage Part to the first Named Insured, this insurance applies: a. As if each Named Insured were the only Named Insured; and b. Separately to each insured against whom claim is made or "suit" is brought. (General Liability Coverage Form at p. 12.)

But the treatment of each insured as separately insured does not grant Plaintiff the right to trigger wrap coverage with respect to property damage on his own property by initiating suit against his own subcontractors, which is in contravention of the plain language of page 9. Therefore, the Court sustains Catlin's demurrer to the first cause of action.

ii. Second Cause of Action - Tortious Breach of Contract "Implied in every contract is a covenant of good faith and fair dealing. The implied covenant prevents one side from unfairly frustrating the other's right to receive the benefits of the agreement actually made. The covenant does not impose substantive terms beyond those of the contract. A plaintiff claiming breach must allege the defendant's wrongful conduct was contrary to the contract's purpose and the parties' legitimate expectations." (Cordoba Corp. v. City of Industry (2023) 87 Cal.App.5th 145, 156.)

However, tort recovery for a breach of the implied covenant of good faith and fair dealing is generally only available in cases involving an insurance contract, where an independent duty arises from principles of tort law, or where there has been a bad faith denial of the existence of or liability under the breached contract. (Freeman & Mills, Inc. v. Belcher Oil Co. (1995) 11 Cal.4th 85, 102.)

Otherwise, "a breach of the implied covenant of good faith is a breach of the contract" although "breach of a specific provision of the contract is not ... necessary" to a claim for breach of the implied covenant of good faith and fair dealing[.]" (Thrifty Payless, Inc. v. The Americana at Brand, LLC (2013) 218 Cal.App.4th 1230, 1244.)

Here, the bad faith denial of an insurance policy is alleged: 22. The Policy contains an implied covenant of good faith and fair dealing requiring, inter alia, that CATLIN SPECIALTY act in good faith and deal fairly with Plaintiff and take no action to interfere with Plaintiff's' rights to receive benefits which they reasonably expected to receive under the Policy. CATLIN SPECIALTY has tortiously breached that implied covenant of good faith and fair dealing, as hereinabove alleged, in that it, among other things: (a) Wrongfully, intentionally and in bad faith refused to honor its obligations to afford coverage for Plaintiffs' loss as a result of the faulty construction and associated damages; (b) Fraudulently misrepresented and falsely promised that it would provide coverage to Plaintiff under the Policy for claims for, inter alia, property damage when it had no intention of doing so; (c) Wrongfully, intentionally and in bad faith forced Plaintiffs to incur the expense, of filing the within action to recover benefits owing under the Policy; and (d) Wrongfully, intentionally and in bad faith placed its own interests above those of Plaintiffs.

23. As a direct, proximate and foreseeable result of the aforesaid intentional and wrongful conduct, Plaintiff has suffered damages in an amount to be determined at trial, but in any event in an amount greater than the jurisdictional minimum of this Court.

24. In order to recover the Policy benefits sought herein, and as a result of CATLIN SPECIALTY'S bad faith and tortious breach of contract, Plaintiff has been and will be forced to incur attorneys' fees, and related expenses and costs.

25. Plaintiff is informed and believes, and on that basis allege, that CATLIN SPECIALTY engaged in the aforesaid conduct: (a) with a willful and conscious disregard of Plaintiff's rights; (b) with the intent to injure Plaintiff; and (c) in order to subject Plaintiff to cruel and unjust hardships in disregard of their rights such as to constitute oppression, fraud and malice under California Civil Code Section 3294. By reason of the foregoing, Plaintiff is entitled to recover damages from CATLIN SPECIALTY for the sake of example and to punish and deter CATLIN SPECIALTY in a sum to be determined by the trier of fact. (FAC P.P. 22-25.)

However, the facts underlying the alleged bad faith breach are the same as the defective first cause of action. Because, as discussed above, Plaintiff has not adequately alleged any provision of the policy warranting coverage that Catlin has denied, Plaintiff has similarly not alleged any bad faith denial of such coverage. Therefore, the Court sustains Catlin's demurrer to the second cause of action.

2. LEAVE TO AMEND A plaintiff has the burden of showing in what manner the complaint could be amended and how the amendment would change the legal effect of the complaint, i.e., state a cause of action. (See The Inland Oversight Committee v. City of San Bernardino (2018) 27 Cal.App.5th 771, 779; PGA West Residential Assn., Inc. v. Hulven Int'l, Inc. (2017) 14 Cal.App.5th 156, 189.)

A plaintiff must not only state the legal basis for the amendment, but also the factual allegations sufficient to state a cause of action or claim. (See PGA West Residential Assn., Inc. v. Hulven Int'l, Inc., supra, 14 Cal.App.5th at p. 189.)

Moreover, a plaintiff does not meet his or her burden by merely stating in the opposition to a demurrer or motion to strike that "if the Court finds the operative complaint deficient, plaintiff respectfully requests leave to amend." (See Major Clients Agency v Diemer (1998) 67 Cal.App.4th 1116, 1133; Graham v. Bank of America (2014) 226 Cal.App.4th 594, 618 [asserting an abstract right to amend does not satisfy the burden].)

Here, Plaintiff argues there is an additional "Cross Suits Amendment" that was omitted from Exhibit A to the FAC, which provides as follows: This insurance does not apply to any claim, demand, civil action, cross claim, arbitration indemnity claim, or other action or proceeding, or to any claim within any action or proceeding, arising out of, relating to, or seeking damages or other relief for any "Bodily Injury," "Property Damage," "Personal or Advertising Injury," or on any other basis, that is brought by, or on behalf of, or by right of any insured identified in the declarations or policy as a Named Insured against another Named Insured.

However, this exclusion does not apply to "Property Damage" arising from claims or "suits" brought by Jeffery A. Kaplan as a Named Insured against another Named Insured, or "Property Damage" arising from any "Products-Completed Operations Hazards" brought by any Named Insured against another Named Insured. (Pahl Decl. P. 7.)

Thus, Plaintiff has alleged facts he could add to the complaint to cure the deficiencies identified above. Catlin argues in reply that granting leave to allege the Cross Suits Amendment clause would be futile because the above provision is an exemption to an exemption, but it cannot itself create a basis for a claim. At a minimum, however, the additional language is sufficient to create an ambiguity as to whether the parties' intent was for the policy to cover claims like those brought by Plaintiff against the subcontractors herein, that requires extrinsic evidence, precluding resolution at the pleadings stage.

CONCLUSION AND ORDER For the reasons stated, the Court sustains Catlin's demurrer to the first and second causes of action with leave to amend, and orders Plaintiff to file and serve a Second Amended Complaint on or before September 18, 2026.

Further, the Court will enter the proposed Order lodged on August 6, 2026 in conformity with the ruling. Catlin shall provide notice of the Court's ruling and file the notice with a proof of service forthwith.

DATED: September 3, 2026 ______/s/_____________________ Michael E. Whitaker Judge of the Superior Court Case Number: 26SMCV01660 Hearing Date: September 3, 2026 Dept: 207 TENTATIVE RULING DEPARTMENT | 207 | HEARING DATE | September 3, 2026 | CASE NUMBER | 26SMCV01660 | MOTION | Protective Order | MOVING PARTY | Defendant Yvonne Bonita Hatherill | OPPOSING PARTY | Plaintiff Shahrokh Cohen | MOTION This case arises from a dispute concerning a motor vehicle collision. On March 25, 2026, Plaintiff Shahrokh Cohen ("Plaintiff") filed suit against Defendant Yvonne Bonita Hatherill ("Defendant") alleging a single cause