This case was last updated from Los Angeles County Superior Courts on 08/17/2021 at 20:56:37 (UTC).

BENJAMIN JAVAHERI, ET AL. VS MARK SHANLEY, ET AL.

Case Summary

On 08/25/2020 BENJAMIN JAVAHERI filed a Contract - Other Contract lawsuit against MARK SHANLEY. This case was filed in Los Angeles County Superior Courts, Santa Monica Courthouse located in Los Angeles, California. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    *******1145

  • Filing Date:

    08/25/2020

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • County, State:

    Los Angeles, California

 

Party Details

Plaintiffs

BENJAMIN JAVAHERI AS THE TRUSTEE OF THE BENJAMIN LIVING TRUST

JAVAHERI BENJAMIN

Defendants and Cross Plaintiffs

SHANLEY CONSTRUCTION INC.

SHANLEY MARK

NAUTILUS INSURANCE COMPANY

AMERICAN CONTRACTORS INDEMNITY COMPANY

Cross Defendants and Plaintiffs

JAVAHERI BENJAMIN

ACME SYSTEMS INC. DBA ADVANCED HOMES

BO-MITE CONCRETE

COLONIAL ROOFING INC.

ELITE WATERPROOFING AND COATINGS

HERRERA MARVIN JOSE

JAVAHERI NATALIE

JMS DESIGN & REMOLDING INC. DBA JMS EXPRESS PLUMBING

NAUTILUS INSURANCE CORPORATION

NOVA PLASTERING INC.

PAUL BRODIE ELECTRIC

V.T. HEATING & AIR CONDITIONING INC.

Attorney/Law Firm Details

Plaintiff and Cross Defendant Attorneys

SACCUZZO JASON

EDSON ELDON

Defendant and Cross Defendant Attorneys

EDSON ELDON

HANIGAN TIM

TOOHEY JOHN H.

 

Court Documents

Memorandum of Points & Authorities

8/16/2021: Memorandum of Points & Authorities

Demurrer - without Motion to Strike

8/16/2021: Demurrer - without Motion to Strike

Request for Judicial Notice

8/16/2021: Request for Judicial Notice

Declaration - DECLARATION OF JASON P. SACCUZZO ISO X-DEFENDANT'S DEMURRER TO CROSS-COMPLAINT

8/16/2021: Declaration - DECLARATION OF JASON P. SACCUZZO ISO X-DEFENDANT'S DEMURRER TO CROSS-COMPLAINT

Answer

8/16/2021: Answer

Notice - NOTICE OF X-DEFENDANT NATALIE JAVAHERI'S DEMURRER TO SHANLEY CONSTRUCTION, INC AND MARK SHANLEY'S CROSS-COMPLAINT

8/16/2021: Notice - NOTICE OF X-DEFENDANT NATALIE JAVAHERI'S DEMURRER TO SHANLEY CONSTRUCTION, INC AND MARK SHANLEY'S CROSS-COMPLAINT

Proof of Service by Mail

8/16/2021: Proof of Service by Mail

Proof of Service by Mail

8/16/2021: Proof of Service by Mail

Request for Refund / Order

7/22/2021: Request for Refund / Order

Motion for Summary Judgment

7/23/2021: Motion for Summary Judgment

Declaration - DECLARATION DECLARATION OF AUDRI RICHARDS IN SUPPORT OF NAUTILUS INSURANCE COMPANYS MOTION FOR SUMMARY JUDGMENT AS TO THE CROSS-COMPLAINT

7/23/2021: Declaration - DECLARATION DECLARATION OF AUDRI RICHARDS IN SUPPORT OF NAUTILUS INSURANCE COMPANYS MOTION FOR SUMMARY JUDGMENT AS TO THE CROSS-COMPLAINT

Proof of Service by Substituted Service

7/23/2021: Proof of Service by Substituted Service

Separate Statement

7/23/2021: Separate Statement

Request for Judicial Notice

7/23/2021: Request for Judicial Notice

Proof of Service by Substituted Service

7/23/2021: Proof of Service by Substituted Service

Proof of Personal Service

7/15/2021: Proof of Personal Service

Answer

7/15/2021: Answer

Proof of Service by Substituted Service

7/16/2021: Proof of Service by Substituted Service

55 More Documents Available

 

Docket Entries

  • 09/19/2022
  • Hearing09/19/2022 at 10:00 AM in Department O at 1725 Main Street, Santa Monica, CA 90401; Jury Trial

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  • 09/12/2022
  • Hearing09/12/2022 at 09:30 AM in Department O at 1725 Main Street, Santa Monica, CA 90401; Final Status Conference

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  • 01/27/2022
  • Hearing01/27/2022 at 08:30 AM in Department O at 1725 Main Street, Santa Monica, CA 90401; Hearing on Demurrer - without Motion to Strike

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  • 11/17/2021
  • Hearing11/17/2021 at 08:30 AM in Department O at 1725 Main Street, Santa Monica, CA 90401; Status Conference

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  • 11/02/2021
  • Hearing11/02/2021 at 08:30 AM in Department O at 1725 Main Street, Santa Monica, CA 90401; Hearing on Motion for Summary Judgment

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  • 11/02/2021
  • Hearing11/02/2021 at 08:30 AM in Department O at 1725 Main Street, Santa Monica, CA 90401; Hearing on Motion for Summary Judgment

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  • 08/16/2021
  • DocketMemorandum of Points & Authorities; Filed by NATALIE JAVAHERI (Cross-Defendant)

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  • 08/16/2021
  • DocketAnswer; Filed by Benjamin Javaheri (Cross-Defendant)

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  • 08/16/2021
  • DocketProof of Service by Mail; Filed by Benjamin Javaheri (Cross-Defendant)

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  • 08/16/2021
  • DocketDemurrer - without Motion to Strike; Filed by NATALIE JAVAHERI (Cross-Defendant)

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60 More Docket Entries
  • 10/14/2020
  • DocketProof of Service by Substituted Service; Filed by Benjamin Javaheri (Plaintiff); Benjamin Javaheri as the Trustee of the Benjamin Living Trust Dated July 30, 2009 (Plaintiff)

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  • 10/14/2020
  • DocketProof of Service by Substituted Service; Filed by Benjamin Javaheri (Plaintiff); Benjamin Javaheri as the Trustee of the Benjamin Living Trust Dated July 30, 2009 (Plaintiff)

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  • 10/13/2020
  • DocketAnswer; Filed by Nautilus Insurance Company (Defendant)

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  • 10/01/2020
  • DocketProof of Service by Substituted Service; Filed by Benjamin Javaheri (Plaintiff); Benjamin Javaheri as the Trustee of the Benjamin Living Trust Dated July 30, 2009 (Plaintiff)

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  • 09/23/2020
  • DocketProof of Personal Service; Filed by Benjamin Javaheri (Plaintiff)

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  • 08/25/2020
  • DocketCivil Case Cover Sheet; Filed by Benjamin Javaheri (Plaintiff); Benjamin Javaheri as the Trustee of the Benjamin Living Trust Dated July 30, 2009 (Plaintiff)

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  • 08/25/2020
  • DocketComplaint; Filed by Benjamin Javaheri (Plaintiff); Benjamin Javaheri as the Trustee of the Benjamin Living Trust Dated July 30, 2009 (Plaintiff)

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  • 08/25/2020
  • DocketSummons (on Complaint); Filed by Benjamin Javaheri (Plaintiff); Benjamin Javaheri as the Trustee of the Benjamin Living Trust Dated July 30, 2009 (Plaintiff)

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  • 08/25/2020
  • DocketNotice of Case Assignment - Unlimited Civil Case; Filed by Clerk

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  • 08/25/2020
  • DocketNotice of Case Management Conference; Filed by Clerk

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Tentative Rulings

b"

Case Number: 20SMCV01145 Hearing Date: November 2, 2021 Dept: O

Case Name: Javaheri, et al. v. Shanley Construction, Inc., et al.

Case No.: 20SMCV01145

Complaint Filed: 8-25-20

Hearing Date: 11-2-21

Discovery C/O: 5-13-22

Calendar No.: 4

Discover Motion C/O: 5-30-22

POS: OK

Trial Date: 6-13-22

SUBJECT: MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE SUMMARY ADJUDICATION

MOVING PARTY: Defendant Nautilus Insurance Company

RESP. PARTY: Plaintiff Benjamin Javaheri, individually and as the Trustee of the Benjamin Living Trust dated July 30, 2009

TENTATIVE RULING

Defendant Nautilus Insurance Company’s Motion for Summary Judgment, or in the Alternative Summary Adjudication is DENIED.

I. 3rd cause of action for breach of contract—DENY

A. Applicable Law

The duty to defend is broader than the duty to indemnify. See Montrose Chemical Corp. v. Sup. Ct. (1993) 6 Cal.4th 287, 299. An insured is “entitled to a defense if the underlying complaint alleges the insured's liability for damages potentially covered under the policy, or if the complaint might be amended to give rise to a liability that would be covered under the policy.” Id. at 299. “Any doubt as to whether the facts establish the existence of the defense duty must be resolved in the insured’s favor.” Id.at 300. An insurer can only decline to defend under a policy “if the third party complaint can by no conceivable theory raise a single issue which could bring it within the policy coverage.” Id. The duty to defend is therefore triggered by the “bare potential or possibility of coverage.” Id.

“The duty to defend is determined by reference to the policy, the complaint, and all facts known to the insurer from any source.” Id. “To prevail, the insured must prove the existence of a potential for coverage, while the insurer must establish the absence of any such potential. In other words, the insured need only show that the underlying claim may fall within policy coverage; the insurer must prove it cannot. Facts merely tending to show that the claim is not covered, or may not be covered, but are insufficient to eliminate the possibility that resultant damages (or the nature of the action) will fall within the scope of coverage, therefore add no weight to the scales… Hence, the duty may exist even where coverage is in doubt and ultimately does not develop.” Id.

B. Defendant fails to establish that the Krimendahl action could not by any “conceivable theory raise a single issue which could bring it within the policy coverage” or that there was not even the “bare potential or possibility of coverage.”

“Occurrence.” Defendant Nautilus’ summary judgment motion is based on the intentional nature of the acts alleged in the Krimendahl complaint, which it claims did not satisfy the definition of “occurrence” required to trigger coverage under the Shanely policy. See Defendant’s SSUMF Nos. 3 and 4; Dec. of Richards, Ex. A, pp. 13 and 26 and Ex. B, pp. 12 and 26. However, none of the material facts identified in Defendant’s separate statement address the nature of the Krimendahl claims, what allegations in the Krimendahl complaint are allegedly “intentional,” the facts indicating there were no acts or allegations that could potentially trigger coverage and the steps taken by Nautilus to investigate whether the Krimendahl complaint could trigger coverage.

Audi Richards’ initial denial letter only indicated that Javaheri’s claim was denied, because he was not a named insured on the policy. See Dec. of A. Richards, Ex. F. Richards’ second letter stated in a conclusory manner that the Krimendahl complaint “does not allege ‘bodily injury’ or ‘property damage’ or such damages resulting from an occurred as those terms are defined.” Id. at Ex. G. Richards asserted the allegations of wrongful/illegal parking, performing grading unpermitted grading work, violation of municipal codes by smoking in a hazard area and yelling and harassing the Krimendahl plaintiffs were allegations of intentional conduct not covered as “occurrences” under the policy. Id.

Based on the evidence presented, Richards relied on the complaint allegations to determine coverage. The complaint allegations identified by Richards do not establish the complete absence of the “bare potential or possibility of coverage,” the lack of any “conceivable theory” by which the Krimendahl action could give rise to coverage or that the Krimendahl complaint could not have been “amended to give rise to a liability that would be covered under the policy.” These select allegations do not establish that the Krimendahl action could not potentially trigger coverage or that the complaint could have been amended to give rise to liability covered by the policy.

A review of the Krimendahl complaint also fails to establish the complete absence of any potential for coverage. While the FAC in the Krimendahl action clearly includes intentional conduct, such as harassment, parking, removal of a fence, the FAC alleges causes of action for private and public nuisance. A nuisance claim can be based on intentional, reckless or negligent conduct. See Lussier v. San Lorenzo Valley Water Dist. (1988) 206 Cal.App.3d 92, 100 (invasion of interest in nuisance claim “may be unintentional but caused by negligent or reckless conduct” and “worlds of nuisance and negligence overlap and the two become merely alternative legal theories” for invasion o right to undisturbed enjoyment of one’s property and land).

Nothing in the 1st and 2nd causes of action alleged in the FAC limited the Krimendahls’ nuisance causes of action to intentional conduct. See Dec. of A. Richards, Ex. C. In addition, resolving any doubts in favor of coverage, several allegations in the FAC could have potentially triggered coverage based on unintentional conduct, including the allegations that (1) Javaheri “dump[ed] large mounds of dirt on the hammerhead which obstructed the hammerhead…” (Id. at Ex. C, ¶14(D); (2) there was a broken pipe leaking contaminated wastewater into the hammerhead, creating a public safety hazard (Id. at Ex. C, ¶23(D); (3) there was a sewer line that was broken by Javaheri’s contractors, causing raw sewage to be dumped into the hammerhead (Id. at Ex. C, ¶14(E); (4) the allegation that all of the “actions set forth above” were the basis of the nuisance claims, which would have included the sewer like broken by the contractors (Id. at Ex. C, ¶¶26, 37 and 38.

These potentially negligent acts did not need to predominate the Krimendahl action to trigger Nautilus’ duty to defend. So long as there were potentially covered acts alleged, Nautilus’ duty to defend was triggered. In determining whether the duty to defend was triggered, the Court “look[s] not to whether noncovered acts predominate in the third party’s action, but rather whether there is any potential for liability under the policy.” Horace Mann Ins. Co. v. Barbara B. (1993) 4 Cal.4th 1076, 1084 (insurer could not deny duty to defend and indemnify against complaint alleging noncovered sexual misconduct and other covered misconduct, even if noncovered acts were “predominant”).

In addition, while Defendant Nautilus only reviewed the complaint to determine coverage, whether coverage was triggered should have been determined by referencing the complaint and any facts available to Nautilus once Javaheri tendered a request for coverage. See Scottsdael Ins. Co. v. MV Transportation (2005) 36 Cal.4th 643, 657 (“Thus, the insurer’s duty to defend arises whenever the third party complaint and/or the available extrinsic facts suggest…the possibility of covered claims.”) According to Plaintiff’s evidence, Shanley’s counsel informed Nautilus that written discovery had already been conducted shortly after Nautilus was informed of the Krimendahl lawsuit. Despite this information, Richards did not investigate further or request the written discovery. See Plaintiff’s Additional Material Fact Nos. 25-27, 43.

As the moving party, Defendant Nautilus fails to establish that the Krimendahl action did not trigger the potential of coverage on grounds that no covered “occurrence” was alleged. The MSJ/A on this ground must be DENIED.

Absence of allegation of bodily injury. Defendant Nautilus argues there is no coverage for emotional distress absent bodily injury. Even if this were case, this would not defeat Plaintiff’s cause of action for breach of contract. Again, there need only be a potential for coverage. Nothing in the Krimendahl FAC limited the injuries suffered to emotional distress, excluded the possibility of physical injury or precluded any potential or possibility that the Krimendahl action could involve covered injuries or damages. Defendant Nautlus’ Motion for Summary Judgment or Adjudication on this ground is DENIED.

Coverage “B.” Plaintiff fails to raise a triable issue regarding whether Defendant Nautilus breached the Shanley insurance policy based on “Coverage B” of the policy. Under “Coverage B,” Nautilus was obligated to “pay those sums that the insured becomes legally obligated to pay as damages because of ‘personal and advertising injury’ to which this insurance applies.” See A. Richards Dec., Ex, A, p. 017, Section I, Coverage B, ¶1(a). Per the policy, the “insurance applies to ‘personal and advertising injury’ caused by an offense arising out of your [Shanley’s] business but only if the offense was committed in the ‘coverage territory’ during the policy period.” Id. at p. 019, Section I, Coverage B, ¶1(b). Under the policy, “personal and advertising injury” means “injury…arising out of one or more of the following offenses…the wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor.”

Plaintiff argues “wrongful entry” has been interpreted to include trespass and nuisance. See Martin Marietta Corp. v. Ins. Co. of North America (1995) 40 Cal.app.4th 1113, 1131-1132. However, Plaintiff fails to address how the Krimendahl action satisfied the “committed by or on behalf of its owner, landlord or lessor” language. Plaintiff fails to explain how the Krimendahl action alleged a “wrongful eviction, wrongful entry, or invasion of the right of private occupancy of a room, dwelling or premises” “by or on behalf of the property’s owner, landlord or lessor.” Neither Javaheri nor Shanley were Krimendahl/Heck’s landlord or lessor, nor were they the owner of Krimendahl/Heck’s property. As such, Coverage B does not raise a triable issue of fact.

Adequacy of investigation. See discussion in connection with the 4th cause of action for breach of implied covenant of good faith and fair dealing.

II. 4th cause of action for breach of implied covenant of good faith and fair dealing—DENY

“Every contract imposes on each party an implied duty of good faith and fair dealing. Simply stated, the burden imposed is that neither party will do anything which will injure the right of the other to receive the benefits of the agreement. Or, to put it another way, the ‘implied covenant imposes upon each party the obligation to do everything that the contract presupposes they will do to accomplish its purpose.’” Chateau Chamberay Homeowners Ass'n v. Associated Intern. Ins. Co. (2001) 90 Cal.App.4th 335, 345-346.

In the insurance context, the implied covenant of good faith and fair dealing with respect to handling a claim “is not the requirement mandated by the terms of the policy itself-to defend, settle, or pay” but the requirement that the insurer must act “fairly and in good faith in discharging its contractual responsibilities.” Id. at 346. “The reasonableness of an insurer's conduct is ordinarily a question of fact, except in the exceptional instance when only one reasonable inference can be drawn from the evidence.” Mt. Hawley Insurance Company v. Lopez (2013) 215 Cal.App.4th 1385, 1424.

In California, an insurer cannot be held liable for conduct in handling a claim where a genuine dispute exists over either the existence of coverage or the amount of a particular claim and it advances its side of the dispute. See Chateau Chamberay Homeowners Ass’n, supra, 90 Cal.App.4th at 347. This is known as the “genuine dispute” rule. See Wilson v. 21st Century Co. (2007) 42 Cal.4th 713, 723.

However, “[t]he genuine dispute rule does not relieve an insurer from its obligation to thoroughly and fairly investigate, process and evaluate the insured's claim. A genuine dispute exists only where the insurer's position is maintained in good faith and on reasonable grounds. Nor does the rule alter the standards for deciding and reviewing motions for summary judgment. The genuine issue rule in the context of bad faith claims allows a trial court to grant summary judgment when it is undisputed or indisputable that the basis for the insurer's denial of benefits was reasonable—for example, where even under the plaintiff's version of the facts there is a genuine issue as to the insurer's liability under California law. On the other hand, an insurer is not entitled to judgment as a matter of law where, viewing the facts in the light most favorable to the plaintiff, a jury could conclude that the insurer acted unreasonably. Thus, an insurer is entitled to summary judgment based on a genuine dispute over coverage or the value of the insured's claim only where the summary judgment record demonstrates the absence of triable issues (Code Civ. Proc., § 437c, subd. (c)) as to whether the disputed position upon which the insurer denied the claim was reached reasonably and in good faith.” Id. at 723-724.

“While an insurance company has no obligation under the implied covenant of good faith and fair dealing to pay every claim its insured makes, the insurer cannot deny the claim without fully investigating the grounds for its denial. To protect its insured's contractual interest in security and peace of mind, it is essential that an insurer fully inquire into possible bases that might support the insured's claim” before denying it. By the same token, denial of a claim on a basis unfounded in the facts known to the insurer, or contradicted by those facts, may be deemed unreasonable. A trier of fact may find that an insurer acted unreasonably if the insurer ignores evidence available to it which supports the claim. The insurer may not just focus on those facts which justify denial of the claim.” Id. at 720-721.

“An unreasonable failure to investigate amounting to such unfair dealing may be found when an insurer fails to consider, or seek to discover, evidence relevant to the issues of liability and damages…An insurance company may not ignore evidence which supports coverage. If it does so, it acts unreasonably towards its insured and breaches the covenant of good faith and fair dealing.” Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 880.

Whether a reasonable investigation was undertaken prior to denying coverage is ordinarily a question of fact for the trier of fact. See Chateau Chamberay HOA, supra, 90 Cal.App.4th at 346. It only becomes a question of law where the evidence is undisputed and only one reasonable inference can be drawn from the evidence. Id.

Nautilus argues it is entitled to summary adjudication of the 4th cause of action for breach of the implied covenant on grounds that the 3rd cause of action for breach of contract fails. However, the 3rd cause of action for breach of contract does not fail and the request for adjudication thereof is denied.

Nautilus also argues it is entitled to summary adjudication of the 4th cause of action based on the genuine dispute doctrine. Under the high standard set by Wilson, Nautilus fails to establish its entitlement to summary adjudication based on the “genuine dispute” doctrine. Triable issues of fact remain as to whether Nautilus undertook a reasonable investigation of Javaheri’s claim prior to denying it.

As discussed in connection with the 3rd cause of action, applying the liberal standards in favor of coverage used to evaluate an insured’s claim, the Krimendahl complaint does not support Nautilus’ position that only intentional conduct was at issue. A trier of fact could conclude based on Nautilus’ own evidence that its adjuster reversed the presumptions and burdens applied to an insurer when determining whether coverage may apply, i.e. Nautilus (i) did not assess whether there was the “possibility” or “potential” for coverage, (ii) narrowly construed the factual allegations and information before it against coverage, (iii) focused only on those facts that would justify denial of the claim, (iv) ignored evidence obtained in available discovery regarding the scope of the Krimendahl action.

In addition, a trier of fact could determine based on Defendant’s additional evidence that the investigation was inadequate. Prior to denying the claim, Richards (1) did not request or review the discovery obtained by Shanley in the Krimendahl action, (2) made the decision “based on the pleadings,” (3) did not speak with Javaheri’s counsel, (4) decided to the deny coverage by the time Javaheri tendered his claim, and (5) did not interview any witnesses. See Plaintiff’s Appendix of Exhibits, Ex. D, Richards Depo, Ex. 4, 88:9-93:19, 111:51; Dec. of R. Vanis, ¶¶4, 5.

Richards also denied Javaheri’s claim on grounds that he was not named as an additional insured. See Plaintiff’s Appendix of Exhibits, Ex. D, Richards Depo, Exs. 10 and 11. However, Javaheri’s status as an additional insured was apparent from the policy and the certificate of liability insurance. Id. Nautilus also now concedes that the 2017-2018 Shanley policy contains a blanket additional insured endorsement that covers Javaheri. See Richards Dec., Ex. B, pp. 71-72.

Triable issues of fact remain as to whether Defendant Nautilus breached its implied duty of good faith and fair dealing. Defendant’s Motion for Summary Adjudication of the 4th cause of action is therefore DENIED.

III. Punitive damages—DENY

“In the usual case, the question of whether the defendant's conduct will support an award of punitive damages is for the trier of fact, since the degree of punishment depends on the peculiar circumstances of each case. But the issue may be resolved on summary judgment, giving due regard to the higher proof standard. While the clear and convincing evidentiary standard is a stringent one, it does not impose on a plaintiff the obligation to prove a case for punitive damages at summary judgment. However, where the plaintiff's ultimate burden of proof will be by clear and convincing evidence, the higher standard of proof must be taken into account in ruling on a motion for summary judgment or summary adjudication, since if a plaintiff is to prevail on a claim for punitive damages, it will be necessary that the evidence presented meet the higher evidentiary standard. Summary judgment on the issue of punitive damages is proper only when no reasonable jury could find the plaintiff's evidence to be clear and convincing proof of malice, fraud or oppression.” Johnson & Johnson v. Superior Court (2011) 192 Cal.App.4th 757, 762; Pacific Gas and Electric Company v. Superior Court (2018) 24 Cal.App.5th 1150, 1158–1159.

As the party moving for adjudication of Plaintiff’s punitive damages claim, Defendant bears the initial burden of production on Plaintiff’s punitive damages claim. See CCP §437c(f)(1) and (2); Johnson & Johnson v. Supr. Ct. (2011) 192 Cal.App.4th 757, 761. Defendant Nautilus argues punitive damages are unwarranted because the evidence establishes that it acted reasonably in denying Javaheri’s request for coverage. However, as discussed above, there is a question of fact regarding whether Nautilus’ denial of coverage was based on a reasonable, good faith investigation into Javaheri’s request. In addition, based on the undisputed facts, including Richards’ admissions regarding the extent of her investigation, a reasonable trier of fact could conclude based on the evidence presented that Nautilus’ denial of claim was in bad faith and either malicious, fraudulent or oppressive.

Case\nName: Javaheri, et al. v. Shanley\nConstruction, Inc., et al.

\n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n
\n

Case No.: 20SMCV01145

\n
\n

Complaint Filed: 8-25-20

\n
\n

Hearing Date: 11-2-21

\n
\n

Discovery C/O: 5-13-22

\n
\n

Calendar No.: 4

\n
\n

Discover Motion C/O: 5-30-22

\n
\n

POS: OK

\n
\n

Trial Date: 6-13-22

\n
\n\n

SUBJECT: MOTION FOR SUMMARY JUDGMENT, OR\nIN THE ALTERNATIVE SUMMARY ADJUDICATION

\n\n

MOVING\nPARTY: Defendant/Cross-Defendant\nNautilus Insurance Company

\n\n

RESP.\nPARTY: Defendant/Cross-Complainants\nShanley Construction, Inc. and Mark Shanley

\n\n

\n\n

TENTATIVE\nRULING

\n\n

Defendant/Cross-Defendant Nautilus\nInsurance Company’s Motion for Summary Judgment, or in the alternative, Summary\nAdjudication is DENIED.

\n\n

\n\n

For the same reasons stated in\nconnection with Nautilus’ Motion for Summary Judgment, or in the alternative,\nSummary Adjudication of Javaheri’s complaint, Nautilus’ Motion for Summary\nJudgment or in the alternative Summary Adjudication is DENIED. Triable issues of fact remain as to whether Nautilus\nbreached the Shanley policy agreement’s express provisions and implied covenant\nof good faith and fair dealing by denying Shanley’s tender of defense of the\nKrimendahl FAC and entirely failing to respond to Shanley’s tender of defense\nof Javaheri’s Cross-Complaint in the Krimendahl action. See Defendant Nautilus’ SSUMF\nNos. 3 and 4; Dec. of Richards, Ex. A, pp. 13 and 26 and Ex. B, pp. 12 and 26;\nDefendant Shanley’s Additional Material Fact Nos. 4-9. As noted by Shanley, Nautilus fails entirely\nto address its failure to respond to Shanley’s tender of defense of the\nJavaheri cross-complaint in the Krimendahl case.

\n\n

\n\n

In its\nMSJ/A of Shanley’s cross-complaint only, Nautilus separately raises several\nexclusions as grounds for denial of coverage. \nSee Nautilus MSJ of Shanley Cross-C, 0:23-28-11:1-14. Nautilus fails to cite to the location in its\nevidence of these particular exclusions in its MP&As, nor are the\nexclusions listed as material facts in the separate statement. See Luebke v. Automobile Club of Southern\nCalifornia (2020) 59 Cal.App.5th 694, 704; City of Pasadena v. Superior\nCourt (2014) 228 Cal.App.4th 1228, 1238, fn. 4 (“[t]his is the Golden Rule\nof Summary Adjudication: if it is not set forth in the separate statement, it\ndoes not exist”; Parkview Villas Assn., Inc. v. State Farm Fire &\nCasualty Co. (2005) 133 Cal.App.4th 1197, 1214 (the undisputed material\nfacts must appear in the separate statement or be disregarded).

\n\n

\n\n

Based on a\nreview of the Motion and the policy, Nautilus appears to be citing to the\nExclusions 2(a), 2(b) and 2(m) to Coverage A. \nExclusion 2(a) excludes coverage for damages for “bodily injury or\nproperty damage expected or intended from the standpoint of the insured.” See Dec. of A. Richards, Ex. B,\nShanley Policy, Section I, Coverage A, Section 2(a), p. 012. As discussed in connection with the MSJ of\nJavaheri’s complaint, Defendant Nautilus fails to establish that there was no\npotential or possibility of coverage based on its contention that only\nintentional conduct was alleged in the Krimendahl complaint.

\n\n

\n\n

Defendant\nNautilus fails to establish that Exclusion 2(b) applies to the Krimendahl\nAction. Exclusion 2(b) applies to\n“bodily injury or property damage for which the insured is obligated to pay\ndamages by reason of the assumption of a liability in a contract or agreement.” Nautilus fails to establish that Shanley’s\npotential liability in the Krimendahl Action was based on an “assumption of\nliability in a contract or agreement.” See\nDec. of A. Richards, Ex. A, Shanley Policy, Section I, Coverage A, Section\n2(b), pp. 014-017; Ex. B, Shanley Policy, Section I, Coverage A, Section 2(b),\np. 012.

\n\n

\n\n

The Krimendahl Action alleged\nliability based on Shanley’s performance of general contractor duties pursuant\nto a general contract, not a contractual assumption of liability. Id., Ex. C. The exclusion also does not apply to “insured\ncontracts,” which includes any other contract or agreement pertaining to\nShanley’s business under which he assumed tort liability to another party to\npay for “bodily injury” or “property damage” to a third person or\norganization. See Dec. of A.\nRichards, Ex. A, Shanley Policy, Section V, ¶9, p. 025; Ex. B, Shanley Policy,\nSection V, ¶9, p. 025.

\n\n

\n\n

Nautilus also fails to establish\nthat there was no potential for coverage based on Exclusion 2(m) for “damage to\nimpaired property or property not physically injured.” Exclusion 2(m) provides no coverage for “property\ndamage to impaired property or property that has not been physically injured, arising\nout of: (1) A defect, deficiency, inadequacy or dangerous condition in your\nproduct or your work; or (2) A delay or failure by you or anyone acting on your\nbehalf to perform a contract or agreement in accordance with its terms.”

\n\n

\n\n

Nautilus fails to make any showing\nthat the Krimendahl FAC did not allege physical injury to property or that there\nwas no possibility or potential that the complaint could be amended to allege\nsuch injury. Nautilus fails to identify\nthe allegations of the Krimendahl FAC it relied on to determine that the action\ndid not involve physical injury to property and could not potentially or\npossibly involve such injury. See\nDec. of A. Richards, Ex. A, Shanley Policy, Section I, Coverage A, Section 2(m),\np. 017; Ex. B, Shanley Policy, Section I, Coverage A, Section 2(m), p. 016. Based on ¶¶14 and 23 of the Krimendahl FAC,\nphysical damage to the hammerhead and to the Krimendahl property are expressly\nalleged and physical damage is reasonably inferred. Id., Ex. C, Krimendahl FAC, ¶¶14 and\n23.

\n\n

\n\n

Shanley’s Evidentiary Objection to\nEx. G to the Richards Dec. is OVERRULED. \n

\n\n

\n\n

Nautilus’ RJN is GRANTED.

\n\n

\n\n

Defendant Nautilus’ Motion for\nSummary Judgment or Adjudication of the Shanley Cross-Complaint is DENIED.

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