SERRANO VS BAMBOO INSURANCE SERVICES, LLC

with Plaintiffs’ depositions, all of which appear reasonable and necessarily incurred on the face of the verified memorandum and are further supported by the invoices attached to Plaintiffs’ reply. (Barry Reply Decl. ¶ 4, Ex. 2.)

Accordingly, the Court GRANTS Plaintiffs’ request for litigation costs and expenses in the requested amount of $3,237.96.

2. CASE # CASE NAME HEARING NAME SERRANO VS BAMBOO CVME2605665 INSURANCE SERVICES, DEMURRER LLC Tentative Ruling: Request for Judicial Notice Granted. Demurrer sustained on the Third (Negligent Misrepresentation) and Fifth (NIED) causes of action. Demurrer overruled on the Fourth (UCL) cause of action. Plaintiff granted 20 days leave to amend.

A general demurrer lies where the pleading does not state facts sufficient to constitute a cause of action. (C.C.P. § 430.10(e).) In evaluating a demurrer, the court gives the pleading a reasonable interpretation by reading it as a whole and all of its parts in their context. (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125.) The court assumes the truth of all material facts which have been properly pleaded, of facts which may be inferred from those expressly pleaded, and of any material facts of which judicial notice has been requested and may be taken. (Crowley v.

Katleman (1994) 8 Cal.4th 666, 672.) However, a demurrer does not admit contentions, deductions or conclusions of fact or law. (Daar v. Yellow Cab Company (1967) 67 Cal.2d 695, 713.) If the complaint fails to state a cause of action, the court must grant the plaintiff leave to amend if there is a reasonable possibility that the defect can be cured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

Negligent Misrepresentation (3rd Cause of Action) - The elements of a negligent misrepresentation cause of action are (1) a representation as to past or existing material facts; (2) falsity of the representation; (3) defendant lacks reasonable grounds to believe the truth of the representation; (4) intent to induce reliance; (5) justifiable reliance by plaintiff; and (6) injury. (National Union Fire Ins. Co. of Pittsburgh, PA v. Cambridge Integrated Services Group, Inc. (2009) 171 Cal.App.4th 35, 50; B.L.M v. Sabo & Deitsch (1997) 55 Cal.App.4th 823, 834.) A defendant who makes false statements “‘honestly believing that they are true, but without reasonable ground for such belief, ... may be liable for negligent misrepresentation ... .’ [Citations.]” (Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, 407–408.)

Negligent misrepresentation is a form of fraud. (Wong v. Stoler (2015) 237 Cal.App.4th 1375, 1388.) Therefore, it is subject to strict requirements of particularity in pleading. (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal. 3d 197, 216.) Every element of the cause of action for fraud must be alleged in the proper manner and the facts constituting the fraud must be alleged with sufficient specificity to allow defendant to understand fully the nature of the charge made.” (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.) A plaintiff must allege what was said, by whom, in what manner (i.e. oral or in writing), when, and, in the case of a corporate defendant,

under what authority to bind the corporation. (See, Goldrich v. Natural Y Surgical Specialties, Inc. (1994) 25 Cal.App.4th 772, 782.) The rationale for this “strict requirement of pleading” is not merely notice to the defendant, but because “allegations of fraud involve a serious attack on character, and fairness to the defendant demands that he should receive the fullest possible details of the charge in order to prepare his defense.” (Committee on Children’s Television, supra, 35 Cal.3d 197, 216.) However, there is an exception where a defendant is fully informed, and the facts lie more within defendant’s knowledge than plaintiff’s knowledge. (Committee on Children’s Television, supra, 35 Cal.3d at 216.)

In the present case, Plaintiffs’ negligent misrepresentation cause of action is based on an allegedly false representation by Tonya Sparks to the DOI that Plaintiffs’ receipts for their damaged property did not correspond with their contents damage list. (See, Complaint at ¶¶ 11, 21; Opposition, p. 4:1-28.)2 Sutton argues the negligent misrepresentation cause of action fails for several reasons: it is not pled with the necessary specificity; there are no allegedly false representations made to Plaintiffs; there are no allegations of past or existing material facts; and there are no facts showing Plaintiffs relied on any alleged misrepresentations. (P&AS iso Demurrer, pp. 4:1-5:16.)

“It has traditionally been the law in this state that to be liable for actionable fraud the defendant must intend his representation (or concealment) be relied upon by a particular person or persons. ... However, it is also recognized that the defendant will not escape liability if he makes a misrepresentation to one person intending that it be repeated and acted upon by the plaintiff.” (Geernaert v. Mitchell (1995) 31 Cal.App.4th 601, 605.) Ms. Sparks’ alleged statement to the DOI, presumably in response to a complaint made by Plaintiffs, appears to be a representation that she intended to be repeated to and acted upon by the Plaintiffs.

However, Sutton is correct that the allegations in the Complaint lack the necessary specificity to support a negligent misrepresentation cause of action: there are no allegations about when the representation was made, how it was made (orally or in writing); what authority Ms. Sparks had to bind Sutton; or how Plaintiffs relied on Ms. Sparks’ representation to the DOI. (See, Stansfield, supra, 220 Cal.App.3d at 73; see also, Mirkin v. Wasserman (1993) 5 Cal.4th 1082, 1088, 1091-1092 [“to state a cause of action for deceit based on a misrepresentation, [a plaintiff] must plead that he or she actually relied on the misrepresentation”].)

Therefore, Plaintiffs fail to allege sufficient facts to state a cause of action for negligent misrepresentation. Accordingly, the demurrer to this cause of action should be sustained with leave to amend.

UCL (4th Cause of Action)- The UCL, as set forth in Bus. & Prof. Code § 17200, prohibits any business act or practice that is unlawful, unfair, or fraudulent. An “unfair” practice occurs “when that practice offends an established public policy or when the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to

2 Plaintiffs also argue that adjuster Sarah Villanueva’s statements that the receipts had not been properly evaluated, and it would take too much time to reevaluate them are factual misrepresentations. (Opposition, p. 4:8-12.) However, they fail to explain how the statements are misrepresentations or how Plaintiffs relied on them. While they may be evidence of improper claims handling, these statements do not appear to be factual misstatements or to provide any support for the negligent misrepresentation cause of action.

consumers.” (Moran v. Prime Healthcare Mgmt., Inc. (2016) 3 Cal.App.5th 1131, 1150 [citation and internal quotation marks omitted].) Under the unlawful prong, the UCL borrows violations of other laws and treats them as unlawful business practices that are independently actionable under the UCL. (Smith v. State Farm (2001) 93 Cal.App.4th 700, 718.) To satisfy the fraudulent prong of the UCL, the plaintiff must show that the business practice is likely to deceive the public. (Klein v. Earth Elements (1997) 59 Cal.App.4th 965.) “[T]he act provides an equitable means through which both public prosecutors and private individuals can bring suit to prevent unfair business practices and restore money or property to victims of these practices.” (Korea Supply Co. v.

Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1150.) A cause of action for violating this statute “borrows” actionable conduct and makes it independently actionable under the unfair competition law. (Smith v. State Farm (2001) 93 Cal.App.4th 700, 718.) To assert a claim for violation of the UCL, a plaintiff need only sufficiently allege the defendant’s conduct was unlawful, unfair, or fraudulent. (See, Bus. & Prof. Code § 17200.)

Sutton first argues that Plaintiffs fail to allege any unfair, unlawful, or fraudulent conduct, and they are seeking to use the UCL as a substitute for damages under Insurance Code § 790.03, which is not allowed. (P&As iso Demurrer, pp. 5:19-6:27.) However, Plaintiffs’ UCL claim is based on Sutton’s alleged bad faith claims handling, and insurance bad faith can support a UCL claim. (Zhang v. Superior Court (2013) 57 Cal.4th 364, 383-384 [bad faith claim against insurer can support a UCL action].)

As Sutton does not challenge the bad faith cause of action asserted against it, the UCL claim is properly supported. Sutton also argues that the UCL claim fails because Plaintiffs do not seek injunctive relief or a return of premiums. (P&As iso Demurrer, p. 6:28-7:15.) However, Plaintiffs seek “restitution and injunctive relief under § 17200” in their Prayer for damages. (See, Complaint, Prayer at ¶ 4.) Therefore, Plaintiffs’ UCL is sufficiently pled, and the demurrer to this cause of action is overruled.

NIED (5th Cause of Action)- Finally, Sutton demurs to Plaintiffs’ NIED cause of action on the grounds that NIED is not an independent tort, and Sutton owes no duty to Plaintiff separate from its contract obligations. (P&As iso Demurrer, pp. 7:21-8:21.)

There is no independent tort of NIED; the tort is negligence. (Potter v. Firestone Tire & Rubber Co. (1993) 6 Cal.4th 965, 984; Burgess v. Superior Court (1992) 2 Cal. 4th 1064, 1071.) The elements of NIED are: (1) legal duty to use due care; (2) breach of such duty: (3) damages and injury; (4) cause of the resulting damage or injury. (Huggins v. Longs Drug Store (1993) 6 Cal. 4th 124, 129.) Direct victim NIED cases involve damages for serious emotional distress that results from the breach of a duty owed to the plaintiff that is assumed by the defendant or imposed as a matter of law. (Burgess, supra, 2 Cal. 4th at 1073.) Serious emotional distress exists if an ordinary, reasonable person would be unable to cope with it. (Thing v. La Chusa (1989) 48 Cal.3d 644, 668, fn 12.)

Under a “direct victim” theory of NIED, the plaintiff must establish that the defendant owed a duty that is imposed by law, was assumed by the defendant, or exists by virtue of a special relationship. (Potter, supra, 6 Cal.4th at 985.) “[U]nless the defendant has assumed a duty to plaintiff in which the emotional condition of the plaintiff is an object, recovery is available only if the emotional distress arises out of the defendant's breach

of some other legal duty and the emotional distress is proximately caused by that breach of duty. Even then, with rare exceptions, a breach of the duty must threaten physical injury, not simply damage to property or financial interests.” (Ibid.)

“[N]egligence is not among the theories of recovery generally available against insurers.” (Sanchez v. Lindsey Morden Claims Services (1999) 72 Cal.App.4th 249, 254.) Generally, an insured seeking damages for the mishandling of a claim must allege more than mere negligence. (Adelman v. Associated Int'l Ins. Co. (2001) 90 Cal. App. 4th 352, 369.) Such claims must be based on a bad faith, deliberate act rather than an honest mistake. (Id. at 369-370.) Thus, Plaintiffs have not alleged sufficient facts to support a negligence claim against Sutton. Further, to the extent they contend that Sutton’s alleged bad faith in handling their claim supports the negligence cause of action, such claim would be duplicative of the 2nd cause of action. Accordingly, the demurrer to this cause of action is sustained.

3. CASE # CASE NAME HEARING NAME MCC1900422 HAACKE VS SHEA MOTION TO BE RELIEVED AS COUNSEL Tentative Ruling: Hearing Required.