Diamond Blue Enterprises v. Gemini Ins. Co. CA2/8

Filed 4/22/13 Diamond Blue Enterprises v. Gemini Ins. Co. CA2/8 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

DIAMOND BLUE ENTERPRISES, LLC B244426 et al., (Los Angeles County Plaintiffs and Respondents, Super. Ct. No. BC 488022)

v.

GEMINI INSURANCE COMPANY,

Defendant and Appellant.

APPEAL from an order of the Superior Court of Los Angeles County, Joanne O‟Donnell, Judge. Affirmed.

Charlston, Revich & Wollitz, Howard Wollitz and Lisa Kralik Hansen for Defendant and Appellant.

Franceschi Law Corporation and Ernest J. Franceschi, Jr., for Plaintiffs and Respondents.

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The sole issue on appeal is whether a dispute regarding an insurer‟s failure to reimburse its insured for expenses incurred in litigation falls within the scope of a contractual arbitration provision. The contractual provision requires the insured and insurer arbitrate disputes over “whether coverage is provided.” We conclude a dispute over the failure to reimburse is related to coverage, but the two concepts are not the same. We therefore affirm the trial court‟s denial of the insurer‟s motion to compel arbitration. FACTUAL AND PROCEDURAL BACKGROUND Respondents Diamond Blue Enterprises, LLC, Tyrone Byrd and Don Byrd filed a complaint against defendants Murchison & Cumming, LLP, Michael McEvoy, Continental Insurance Company and Gemini Insurance Company (Gemini), the only appellant. The only causes of action asserted against Gemini were for breach of insurance contract and breach of the implied covenant of good faith and fair dealing. The gravamen of those causes of action was that Gemini refused to defend respondents as required under the policy and refused to reimburse respondents for their cost of defense. According to the complaint, Gemini eventually took over the defense of a lawsuit against respondents, but at the time Gemini began defending respondents, they had already incurred $383,805 in expenses and attorney fees. The parties‟ contract contains the following binding arbitration provision on a preprinted form that was unilaterally drafted by Gemini: “This endorsement modifies insurance provided under the following: “COMMERCIAL GENERAL LIABILITY COVERAGE PART “ELECTRONIC DATA LIABILITY COVERAGE PART “LIQUOR LIABILITY COVERAGE PART “OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE PART “POLLUTION LIABILITY COVERAGE PART “PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART “PRODUCT WITHDRAWAL COVERAGE PART “RAILROAD PROTECTIVE LIABILITY COVERAGE PART “UNDERGROUND STORAGE TANK POLICY