Pallack v. California Automobile Insurance Company, et al.

(Stanley Mosk Courthouse: Dept. 735) September 4, 2026 DEPARTMENT 735 LAW AND MOTION RULINGS

California Automobile Insurance Company, et al. Defendants The Best Claims Solutions Inc., California Automobile Insurance Company, Mercury Insurance Group, and Mercury Casualty Company's Demurrers with Motions to Strike.

BACKGROUND

Plaintiff Richard Pallack (Plaintiff) filed the operative First Amended Complaint (FAC) against defendants California Automobile Insurance Company, Mercury Insurance Group, Mercury Casualty Company, The BestCo, and The Best Claims.com. Defendant The Best Claims Solutions Inc. (Best), on one hand, and Defendants California Automobile Insurance Company, Mercury Insurance Group, and Mercury Casualty Company (collectively, Mercury Defendants), on the other hand, have filed separate demurrers and motions to strike directed at the FAC.

DISCUSSION

Demurrer

1 st COA: Breach of Contract

The court agrees with the defendants that the FAC fails to plead facts sufficient to constitute a breach of contract, and the claim is uncertain. To state a cause of action for breach of contract, it is absolutely essential to plead the terms of the contract either in haec verba or according to legal effect. The FAC alleges that Plaintiff has maintained "continuous homeowners insurance policies with Defendants for more than 30 years ...," and that "Defendants have issued 3 new one year homeowners policies since Plaintiff submitted his first homeowners claim in April 2023 ...." (FAC 1.)

However, the pleading fails to allege which insurance policies are at issue in this action, which defendant is subject to which policy, what provisions were breached, how defendants breached those provisions, and the property that was covered by those policies. Without those allegations, the defendants cannot reasonably be expected to respond to the claim. Plaintiff's opposing arguments are unpersuasive. Therefore, the demurrers to the breach of contract claim are sustained with leave to amend.

2 nd COA: Breach of Implied Covenant of Good Faith and Fair Dealing (Bad Faith)

Only Best demurs to the bad faith claim. The court agrees with the defendant that the FAC has failed to state facts sufficient to constitute that claim by failing to identify the insurer and insurance policy that are at issue. Best's demurrer to the bad faith claim is sustained with leave to amend.

3 rd COA: Fraud and Misrepresentation

Generally, the elements of fraud are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity; (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage. The court agrees with Best and Mercury Defendants that the FAC fails to plead those elements with the required specificity. In California, fraud must be pled specifically; general and conclusory allegations do not suffice. This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.

A plaintiff's burden in asserting a fraud claim against a corporate employer is even greater. In such a case, the plaintiff must allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. Here, the FAC alleges that defendants, among other things, made false representations regarding claim approval, and that Plaintiff relied on the misrepresentations. (FAC, p. 8:3-21.) Such generic allegations are insufficient.

Therefore, the demurrers to the fraud claims are sustained with leave to amend.

4 th COA: Negligence/Gross Negligence

The court finds that Plaintiff has failed to articulate why Best and Mercury Defendants should be held liable under a negligence or gross negligence theory. The FAC does not allege that Best was an insurer, and Plaintiff has not disputed Best's claim that it is an adjuster. N o California case has held insurers' adjusters liable to insureds for negligence. Therefore, to the extent Best is an adjuster, it would not be liable for negligence. Plaintiff has also failed to articulate why a negligence theory should be imposed against Mercury Defendants.

Indeed, negligence is not among the theories of recovery generally available against insurers. There are limited circumstances where the litigants' relationship, which has its basis in a contract, can give rise to a tort claim. Plaintiff is already asserting fraud and breach of covenant of good faith and fair dealing against Mercury Defendants. Plaintiff has not explained why a separate negligence or gross negligence claim is necessary against those defendants. Therefore, the demurrers to the negligence/gross negligence claim are sustained without leave to amend.

5 th COA: Elder Financial Abuse

Financial abuse of an elder occurs when any person or entity takes, secretes, appropriates, or retains real or personal property of an elder adult to a wrongful use or with an intent to defraud, or both. A wrongful use is defined as taking, secreting, appropriating, or retaining property in bad faith. Bad faith occurs where the person or entity knew or should have known that the elder had the right to have the property transferred or made readily available to the elder or to his or her representative. Given the deficiencies discussed with regard to the breach of contract, bad faith, and fraud claims, the court finds that the FAC has failed to plead facts showing that the defendants engaged in financial elder abuse. Therefore, the demurrers to the financial elder abuse claim are sustained with leave to amend.

6 th COA: Elder Emotional Abuse

Plaintiff does not deny there is no cognizable emotional elder abuse claim under California law. Therefore, the demurrers are sustained without leave to amend.

7 th COA: IIED

The elements of a cause of action for intentional infliction of emotional distress are: (1) defendant engaged in extreme and outrageous conduct (conduct so extreme as to exceed all bounds of decency in a civilized community) with the intent to cause, or with reckless disregard to the probability of causing, emotional distress; and (2) as a result, plaintiff suffered extreme or severe emotional distress. Here, the IIED cause of action only alleges: "Defendants engaged in outrageous conduct with intent to cause Plaintiff severe emotional distress, financial distress, including denying benefits, retaliating by doubling premiums, and harassing a senior citizen policyholder.

Plaintiff suffered extreme emotional harm as a result." (FAC, p. 16:14-19.) Such conclusory allegations are insufficient, especially given the other deficiencies discussed above. Therefore, the demurrers to the IIED claim are sustained with leave to amend.

8 th COA: Unfair Competition

The UCL prohibits not only the deceptive conduct that was an unfair business practice but also, as an unlawful business practice, anything that can properly be called a business practice and that at the same time is forbidden by law. Prevailing plaintiffs are generally limited to injunctive relief and restitution. In the UCL context, an order for restitution is an order compelling a UCL defendant to return money obtained through an unfair business practice to those persons in interest from whom the property was taken, that is, to persons who had an ownership interest in the property or those claiming through that person.

Here, the FAC alleges that (1) "Defendants engaged in unlawful, unfair, and fraudulent business practices by misrepresenting claims handling, denying approved benefits, and retaliating against Plaintiff," and (2) "Plaintiff seeks injunctive relief and restitution under Bus. & 27 Prof. Code Sec. 17203." (FAC, p. 16:23-28.) Due to the deficiencies discussed, the court finds that Plaintiff has failed to plead facts showing that defendants misrepresented his claims, denied approved benefits, and retaliated against him.

Therefore, the demurrers to the unfair competition claim are sustained with leave to amend.

9 th COA: Unjust Enrichment/Restitution/Disgorgement

Unjust enrichment is a remedy and general principle underlying various legal doctrines; it is not a cause of action. Therefore, the demurrers to the unjust enrichment claim is sustained without leave to amend.

10 th COA: Declaratory and Injunctive Relief

The tenth COA only alleges that "Plaintiff seeks declaratory and injunctive relief compelling Defendants to cease retaliatory conduct, honor their contractual obligations, and comply with statutory duties." (FAC, p. 17:14-17.) The demurrer to the injunctive relief claim is sustained with leave to amend. The court disagrees with Mercury Defendants that the injunctive claim only seeks to redress past wrongs; as alleged, Plaintiff seeks to stop alleged, ongoing retaliatory conduct and failure to comply with statutory duties.

Nevertheless, the court finds the injunctive relief uncertain because Plaintiff fails to specify which retaliatory conduct defendants are continuing to engage in or statutes they are violating such that it will be appropriate to impose an injunction. The court also sustains with leave to amend the demurrer to the declaratory relief claim because Plaintiff has failed to plead the required elements. To qualify for declaratory relief under section 1060, plaintiffs must show their action presents two essential elements: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the rights or obligations of a party.

11 th COA: Sanctions/Abuse of Process

The FAC seeks sanctions against defendants and their counsel of record under Code of Civil Procedure sections 128.5 and 128.7. However, as Mercury Defendants argue, the request for sanctions is ordinarily brought through motions, not as separate causes of action. The FAC also claims abuse of process but fails to plead facts establishing the requisite elements for that claim. To establish a cause of action for abuse of process, a plaintiff must plead two essential elements: that the defendant (1) entertained an ulterior motive in using the process and (2) committed a willful act in a wrongful manner. For those reasons, the court sustains the demurrer the sanctions claim without leave to amend but sustains the abuse of process claim with leave to amend.

12 th, 13 th, and 14 th COA: Punitive, Treble, and Brandt Damages

A separate cause of action for punitive damages does not exist. Instead, a claim for punitive damages is merely an additional remedy that is dependent on a viable cause of action for an underlying tort. Treble damages are also only a remedy under the statute Plaintiff cites in the thirteenth COA. (FAC, p. 18:18-24, citing Civil Code section 3345.) Brandt damages, like the others, are also only remedies not causes of action. Therefore, the demurrer to those claims is sustained without leave to amend.

Strike

The motions to strike are moot in light of its ruling on the demurrers.

CONCLUSION

The demurrers are sustained with leave to amend as to the following: first cause of action for breach of contract claim, second cause of action for bad faith, third cause of action for fraud and misrepresentation, fifth cause of action for financial elder abuse, seventh cause of action for intentional infliction of emotional distress, eighth cause of action for unfair competition, tenth cause of action for declaratory and injunctive relief, and eleventh cause of action (abuse of process claim only).

The demurrers are sustained without leave to amend as to the following: fourth cause of action for negligence/gross negligence, sixth cause of action for elder emotional abuse, ninth cause of action for unjust enrichment, eleventh cause of action (sanctions claim only), twelfth cause of action for punitive damages, thirteenth cause of action for treble damages, and fourteenth cause of action for Brandt damages.

The motions to strike are denied as moot. Plaintiff is ordered to file and serve the Second Amended Complaint within 30 days. Defendants to give notice.

Case Number: 25STCV31438 Hearing Date: September 4, 2026 Dept: 735 Motion to Compel Defendant Yan-Lin Kaye's Further Responses to Special Interrogatories, Set One.

BACKGROUND

Plaintiff Supply & Demand, Inc. filed this action against, among others, defendant Yan-Lin Kaye. On March 17, 2026, Plaintiff served its Special Interrogatories, Set One, on Kaye to which Kaye served responses on April 20, 2026. In the moving papers, Plaintiff alleges that Kaye provided objection-only responses to Special Interrogatories Nos. 1, 2, 3, 6, and 9. Following Plaintiff's April 24, 2026, meet and confer letter, the parties met and conferred by telephone on May 4, 2026. Plaintiff agreed to narrow certain defined terms and to extend the deadline to file supplemental responses to June 3, 2026.

Kaye did not serve any responses by June 3, 2026; thus, Plaintiff proceeded with filing the instant Motion. Kaye subsequently served responses on August 24, 2026, the same day as her opposition was filed, to all of the Special Interrogatories. Based on the supplemental responses, Plaintiff does not seek further responses to the Special Interrogatories. Accordingly, Plaintiff's motion is moot.

SANCTIONS

Plaintiff requests sanctions in the amount of $5,644.50 as follows: $2,782.50 for 3.5 hours spent preparing the Motion and $2,862.00 for 3.6 hours spent preparing the Reply, at a billing rate of $795. Kaye argues that sanctions are not warranted because her objection-only responses were justified. Although the Motion is denied as moot, the Court finds that sanctions are warranted because Kaye did not provide further responses until the Motion was filed and an opposition was due. Moreover, Kaye's opposition does not