DONALD G. NORRIS, A LAW CORPORATION, et al. v. GOLDEN BEAR INSURANCE COMPANY

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Court of California County of Los Angeles DEPARTMENT 729

DONALD G. NORRIS, A LAW CORPORATION, et al., vs. GOLDEN BEAR INSURANCE COMPANY. | Case No.:

Hearing Date: September 2, 2026 | Defendant Golden Bear Insurance Company's demurrer to Plaintiffs Donald G. Norris, A Law Corporation's and pro per Donald G. Norris' 1st and 2nd causes of action in their complaint is sustained without leave to amend. Defendant Golden Bear Insurance Company ("Golden Bear") ("Defendant") demurs to the 1st and 2nd causes of action alleged in Plaintiffs Donald G. Norris, A Law Corporation's ("Law Corp.") and pro per Donald G. Norris' ("Norris") (collectively "Plaintiffs") complaint ("Complaint"). (Notice of Demurrer, pg. 2; C.C.P.

Sec.430.10(e).) Request for Judicial Notice Defendant's 4/6/26 request for judicial notice of (1) the complaint filed in Brown et al. v. Norris et al., LASC Case No. 23STCV27439, and (2) the first amended complaint filed in Brown et al. v. Norris et al., LASC Case No. 23STCV27439, is granted, however, the Court does not take judicial notice of the truth of the matters asserted therein.

Background

Plaintiffs filed their operative Complaint against Defendant on February 13, 2026, alleging two causes of action: (1) breach of contract; and (2) breach of the implied covenant of good faith and fair dealing. Defendant filed the instant demurrer on April 4, 2026. Plaintiffs filed their opposition on August 19, 2026. Defendant filed its reply on August 26, 2026. Meet and Confer Before filing a demurrer, the moving party must meet and confer in person, by telephone, or by video conference with the party who filed the pleading to attempt to reach an agreement that would resolve the objections to the pleading and obviate the need for filing the demurrer. (C.C.P. Sec.430.41, emphasis added.)

Defendant's counsel declares that the parties met and conferred telephonically on March 24, 2026, and the parties were unable to resolve their differences regarding the demurrer outside of court. (Decl. of Roberto P.P.2-5.) Defendant's counsel's declaration is proper under C.C.P. Sec.430.41(a). Accordingly, the Court will consider Defendant's demurrer. Summary of Demurrer Defendant demurs to the 1st and 2nd causes of action alleged in the Complaint on the basis they fail to state facts sufficient to constitute causes of action. (Notice of Demurrer, pg. 2; C.C.P.

Sec.430.10(e) .) Legal Standard "[A] demurrer tests the legal sufficiency of the allegations in a complaint." (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (See Donabedian v. Mercury Insurance Co. (2004) 116 Cal.App.4th 968, 994 [in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents].)

For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law. (Aubry v. Tri-City Hospital District (1992) 2 Cal.4th 962, 967.) Failure to State a Claim Breach of Contract (1st COA) "To prevail on a cause of action for breach of contract, the plaintiff must prove (1) the contract, (2) plaintiff's performance of the contract or excuse for nonperformance, (3) defendant's breach, and (4) resulting damage to the plaintiff." (Richman v.

Hartley (2014) 224 Cal.App.4th 1182, 1186.) Plaintiffs allege they were insured under a policy of professional liability insurance issued by Defendant, Policy no. GAL03000436-01, for the policy period of June 5, 2023, to June 5, 2024 ("Policy"), and that policy was renewed thereafter. (Complaint P.7.) Plaintiffs allege that in 2019-2020, Baird Brown, an attorney, faced suspension, if not disbarment, by the California State Bar, and he ultimately was suspended in April 2020. (Complaint P.5.) Plaintiffs allege Brown had also been diagnosed with Parkinson's disease. (Complaint P.5.)

Plaintiffs allege Brown, and his professional corporation, Baird Brown a Prof. Law Corp. (collectively, "Brown"), sought to have Plaintiffs take over almost all his pending cases, including many "mass tort" cases, which Norris agreed to do. (Complaint P.5.) Plaintiffs allege that in 2020 the cases were transferred to Plaintiffs. (Complaint P.5.) Plaintiffs allege that in October 2023 Brown and his wife, Anne Brown (collectively, "Browns") sued Plaintiffs in Los Angeles County Superior Court, Case No.

Case No. 23STCV27439, alleging that Plaintiffs had stolen the cases that Brown had knowingly transferred to them ("Underlying Action"). (Complaint P.6.) Plaintiffs allege

that the Browns also sued Norris's office manager Michelle Pak ("Pak"), and his paralegal Taurin Robinson ("Robinson"). (Complaint P.6.) Plaintiffs allege that their Policy with Defendant provides that Golden Bear will pay on behalf of the Insured all Loss and Claims expenses in excess of the Deductible or Self-Insured Retention amount which the Insured becomes legally obligated to pay arising from any claim provided that the claim is first made against an insured during the policy period and reported during the policy period and the claim arises out of the Wrongful Acts committed by an insured. (Complaint P.7.)

Plaintiffs allege that the Policy defines a Wrongful Act as the following actual or alleged conduct by an Insured, or by any person or organization for which an Insured is legally liable and which results from the performance of Legal Services for others: 1. A negligent act, error, or omission; 2. Personal injury; or 3. Publishing. (Complaint P.7.) Plaintiffs allege that the Underlying Action alleged both a negligent act, an error or omission, and personal injury. (Complaint P.7.) Plaintiffs allege Norris tendered defense of the Action to Golden Bear within the Policy period. (Complaint P.8.)

Plaintiffs allege that Defendant denied coverage and a duty to defend by a letter dated May 14, 2024. Complaint P.8.) Plaintiffs allege that in a letter dated September 24, 2024, attorney David Welch of Enso Law, who had been engaged by Plaintiffs to represent them in the Action, set forth the grounds upon which Defendant was obligated to defend and indemnify Plaintiffs in the Underlying Action. (Complaint P.8.) Plaintiffs allege that by a letter dated October 14, 2024, Defendant nonetheless again wrongfully denied coverage and refused to defend Plaintiffs in the Underlying Action. (Complaint P.8.)

Plaintiffs allege Norris engaged the law firm of Parker Shaffie LLP as to the coverage dispute with Golden Bear. (Complaint P.9.) Plaintiffs allege that on or about January 8, 2025, on the eve of the January 25, 2025, commencement of the trial of the Underlying Action, attorney Bruce Smyth ("Smyth") of Parker Shaffie sent Golden Bear's counsel Kurt Fliegauf a comprehensive letter further establishing coverage. (Complaint P.9.) Plaintiffs allege Smyth wrote that the denials of coverage "are erroneous and the denial of defense and indemnity to Norris and its employees Taurin Robinson and Michelle Pak (collectively, "Insureds") are a breach of the insurance contract for the reasons" that were set forth set forth in the letter. (Complaint P.9.)

Plaintiffs allege Smyth further advised that "the refusal of Golden Bear to provide a defense and indemnity to the Insureds and Robinson severely prejudices their defense and the ability to successfully resolve the Action. Golden Bear must immediately provide a defense to its Insureds." (Complaint P.9.) Plaintiffs allege none of the grounds asserted by Defendant for denying coverage and its duty to defend had or have any merit. (Complaint P.10.) Plaintiffs allege that in Defendant's May 14, 2024, letter, Golden Bear contended that there is no coverage for the Insureds under the Insuring Agreement of the Policy based on the definition of a covered "Wrongful Act" because the Browns did not allege "a negligent act, error or omission" but only an intentional conspiracy to steal clients. (Complaint P.10.)

Plaintiffs allege this ground for

denying a defense and indemnity was erroneous because the complaint potentially contained claims of negligence or could be amended to make such assertions. (Complaint P.10.) Plaintiffs allege that facts known to the insurer and extrinsic to the third-party complaint that gave rise to the Underlying Action could and did generate a duty to defend, even though the face of the complaint may not have reflected a potential for liability under the policy. (Complaint P.11.) Plaintiffs allege that, here, the allegations of taking of clients could be negligent, particularly where there were substitutions of attorney forms submitted because Brown had been suspended from the Bar. (Complaint P.11.)

Plaintiffs allege that an insurer must look to the facts of the complaint and extrinsic evidence, if available, to determine whether there is a potential for coverage under the policy and a corresponding duty to defend. (Complaint P.11.) Plaintiffs allege that in his letter to Golden Bear of September 24, 2024, on behalf of the Insureds, David Welch attached extrinsic evidence, document production by the Plaintiffs bearing Production Nos. NORRIS_000001-000129, showing Brown's license suspension, Brown's agreement to the client transfers and substitutions, and emails showing Brown's approval of the substitutions. (Complaint P.11.)

Plaintiffs allege that extrinsic evidence established that at best, the Browns could show only alleged negligent acts or omissions by the Plaintiffs and Norris Law Corp.'s employees. (Complaint P.11.) Plaintiffs allege that Golden Bear alleged in its October 14, 2024, letter that the Plaintiffs' conduct was not covered under the insuring agreement because the claims asserted against them did not "result[] from the performance of Legal Services for others." (Complaint P.13.) Plaintiffs allege that it then asserted that "Legal Services," are defined in relevant part as "professional services" rendered by an insured as a lawyer (or other identified professional roles). (Complaint P.13.)

Plaintiffs allege that this assertion provided no ground for denying the duty to defend and indemnify the Plaintiffs because the entire basis of the complaint in the Underlying Action was the performance of legal services for others. (Complaint P.14.) Plaintiffs allege that the Browns asserted that Plaintiffs performed legal services for others who the Browns allege were Brown's clients. (Complaint P.14.) Plaintiffs allege the assertion by Golden Bear in the October 14, 2024, letter that the actions of Plaintiffs did not constitute services for others because the Browns were not clients of Plaintiffs and Plaintiffs did not perform any legal services for them misread the meaning of the phrase "legal services for others." (Complaint P.14.)

Plaintiffs allege that term did not require that the Browns be clients of Plaintiffs, as numerous courts have found in similar circumstances. (Complaint P.14.) Plaintiffs allege that, here, the statements giving rise to the alleged liability were made to clients. (Complaint P.14.) Plaintiffs allege Golden Bear had a duty to defend and indemnify Plaintiffs on the additional ground that the complaint contains allegations of "wrongful acts" of "personal injury" under the Policy, in particular the "misappropriation of name or likeness." (Complaint P.15.)

Plaintiffs allege that in the complaint, Plaintiffs alleged that Norris communicated to clients alleged falsehoods by misappropriating the Brown law firm letterhead (Complaint, page 7, Par. 20(g)), falsely preparing and filing court documents utilizing Brown's address, phone number,

and fax number (Complaint, page 9, Par. 23 at lines 9-17) and including in Plaintiffs' website a photograph of plaintiff Brown, a profile and description of his law practice, and a list of his most important case decisions (Complaint, page 10, par. 24 at lines 2-5). (Complaint P.15.) Plaintiffs allege the Browns alleged that Plaintiffs stole the photograph from the Brown law firm's website (Complaint, page10, par. 24, lines 8-10). (Complaint P.15.) Plaintiffs allege such allegations clearly constitute misappropriation of name and likeness which requires pleading (1) the defendant's use of the plaintiff's identity; (2) the appropriation of plaintiff's name or likeness to defendant's advantage, commercially or otherwise; (3) lack of consent; and (4) resulting injury.) (Complaint P.16.)

Plaintiffs allege all those elements were pleaded in the complaint in the Underlying Action. (Complaint P.16.) Plaintiffs allege the Underlying Action alleged causes of action against Plaintiffs which were covered under the Policy as alleged Loss and Claims expenses which the Insured became legally obligated to pay arising from claims first made against Plaintiffs during the policy period. (Complaint P.21.) Plaintiffs allege the claims arise out of the alleged Wrongful Acts committed by an insured. (Complaint P.21.)

Plaintiffs allege the claims asserted against Plaintiffs in the Action were timely reported within the Policy period by Plaintiffs. (Complaint P.22.) Plaintiffs allege none of the exclusions or purported grounds for denying coverage and the duty to defend cited by Golden Bear apply and Golden Bear breached its obligations to defend and indemnify Plaintiffs under the Policy. (Complaint P.23.) Plaintiffs allege they have duly complied with all material terms and conditions of the Policy. (Complaint P.24.)

Plaintiffs allege that as a result of Golden Bear's breaches of its obligations under the Policy, Plaintiffs were deprived of the benefits of the Golden Bear Policy, for which Plaintiffs paid substantial premiums, and Plaintiffs suffered and will continue to suffer damages, including but not limited to the defense of the Underlying Action and incurring costs and expenses in connection therewith, in an amount to be proved at trial. (Complaint P.25.) "[T]he duty to defend, although broad, is not unlimited; it is measured by the nature and kinds of risks covered by the policy." (Waller v.

Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 19.) "There is no duty to defend if there is no potential for coverage." (Alterra Excess & Surplus Ins. Co. v. Snyder (2015) 234 Cal.App.4th 1390, 1401.) "The insurer's duty to defend does not extend to claims for which there is no potential for liability coverage," such as when claims "fall outside the scope of the insuring clause." (Id., internal citations and quotation marks omitted.) "[T]he burden is on the insured to bring the claim within the basic scope of coverage." (Collin v.

American Empire Ins. Co. (1994) 21 Cal.App.4th 787, 803.) "[C]ourts will not indulge in a forced construction of the policy's insuring clause to bring a claim within the policy's coverage." (Id.) Here, the plain language of the Policy, specifically, coverage is not triggered unless the claims asserted arise out of a "Wrongful Act" committed by the insured. The Policy defines "Wrongful Act" as "a negligent act,

error, or omission," "personal injury," or "publishing" that "results from the performance of Legal Services for others." In turn, "Legal Services" is defined, in relevant part, as "professional services rendered by an Insured as . . . a lawyer." Taken together, these policy terms establish the scope of coverage: the Policy provides coverage only for errors or omissions which result from the performance of professional services for others by the insured as a lawyer. Professional liability policies, such as this one, do not provide coverage for business disputes between attorneys, as an attorney performing a business function cannot be said to be acting in his capacity as an attorney. (Transamerica Ins.

Co. v. Sayble (1987) 193 Cal.App.3d 1562, 1569; Blumberg v. Guaranty Ins. Co. (1987) 192 Cal.App.3d 1286, 1293; Johnson v. First State Ins. Co. (1994) 27 Cal.App.4th 1079.) Taken together, these policy terms establish the scope of coverage: the Policy provides coverage only for errors or omissions which result from the performance of professional services for others by the insured as a lawyer. Accordingly, Cross-Defendants' demurrer to the 1st cause of action is sustained without leave to amend.

Breach of the Covenant of Good Faith and Fair Dealing (2nd COA) When an insured has no viable claim for breach of contract, the insured's claim for breach of the covenant of good faith and fair dealing must also fail as a matter of law. (See Waller, 11 Cal.4th at pg. 36.) "[T]here can be no action for breach of the implied covenant of good faith and fair dealing" in the absence of coverage "because the covenant is based on the contractual relationship between the insured and the insurer." (Id.; see Turner v.

State Farm Fire & Casualty Co. (2001) 92 Cal.App.4th 681, 690 [affirming grant of demurrer in favor of insurer on bad faith claim where underlying suit did not trigger coverage].) Here, since Plaintiffs failed to state a claim for breach of contract, their claim for breach of the implied covenant of good faith and fair dealing must also fail. Accordingly, Defendant's demurrer to the 2nd cause of action is sustained without leave to amend.

Conclusion

Defendant's demurrer to the 1st and 2nd causes of action is sustained without leave to amend. The Court sets a hearing on an Order to Show Cause why a Judgment has not been entered on January 12, 2027 at 8:30 a.m. Moving Party to give notice. Dated: September _____, 2026 | Hon. Daniel M. Crowley

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