This case was last updated from Los Angeles County Superior Courts on 07/19/2019 at 02:00:48 (UTC).

SYED ALI HUSAIN ET AL VS WAUSAU BUSINESS INSURANCE COMPANY

Case Summary

On 01/25/2018 SYED ALI HUSAIN filed a Contract - Insurance lawsuit against WAUSAU BUSINESS INSURANCE COMPANY. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judge overseeing this case is ELIZABETH ALLEN WHITE. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****1736

  • Filing Date:

    01/25/2018

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Insurance

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judge

ELIZABETH ALLEN WHITE

 

Party Details

Plaintiffs and Petitioners

HUSAIN SYED ALI

HUSAIN KHURSHEED

Defendants and Respondents

WAUSAU BUSINESS INSURANCE COPANY

DOES 1 TO 100

EDGEWOOD PARTNERS INSURANCE CENTER

LIBERTY MUTUAL INSURANCE COMPANY

WAUSAU BUSINESS INSURANCE COMPANY

Attorney/Law Firm Details

Plaintiff and Petitioner Attorneys

SMITH CRAIG R. ESQ.

SMITH CRAIG R.

Defendant Attorneys

NYE GARY A.

SULLIVAN SUSAN KOEHLER

 

Court Documents

DECLARATION OF JACLYN D. GROSSMAN ON BEHALF OF DEFENDANT EDGEWOOD PARTNERS INSURANCE CENTER PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE 430.41 FOR AUTOMATIC 30 DAY EXTENSION TO RESPOND TO THE COMPL

5/23/2018: DECLARATION OF JACLYN D. GROSSMAN ON BEHALF OF DEFENDANT EDGEWOOD PARTNERS INSURANCE CENTER PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE 430.41 FOR AUTOMATIC 30 DAY EXTENSION TO RESPOND TO THE COMPL

CASE MANAGEMENT STATEMENT

6/20/2018: CASE MANAGEMENT STATEMENT

CASE MANAGEMENT STATEMENT

7/2/2018: CASE MANAGEMENT STATEMENT

Minute Order

7/5/2018: Minute Order

CASE MANAGEMENT ORDER

7/5/2018: CASE MANAGEMENT ORDER

WAUSAU BUSINESS INSURANCE COMPANY AND LIBERTY MUTUAL INSURANCE COMPANY'S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION OF ATTORNEYS' FEES PURSUANT TO CAL. CIV. CODE ? 2860; DECLARATION OF TAMMY T.

9/20/2018: WAUSAU BUSINESS INSURANCE COMPANY AND LIBERTY MUTUAL INSURANCE COMPANY'S NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION OF ATTORNEYS' FEES PURSUANT TO CAL. CIV. CODE ? 2860; DECLARATION OF TAMMY T.

Opposition

10/5/2018: Opposition

Reply

10/11/2018: Reply

Order

10/18/2018: Order

Ex Parte Application

1/24/2019: Ex Parte Application

Minute Order

1/24/2019: Minute Order

Minute Order

4/11/2019: Minute Order

Notice of Change of Address or Other Contact Information

4/18/2019: Notice of Change of Address or Other Contact Information

Notice of Ruling

4/18/2019: Notice of Ruling

PROOF OF SERVICE SUMMONS

4/18/2018: PROOF OF SERVICE SUMMONS

PROOF OF SERVICE OF SUMMONS

4/18/2018: PROOF OF SERVICE OF SUMMONS

PROOF OF SERVICE SUMMONS

4/18/2018: PROOF OF SERVICE SUMMONS

NOTICE OF CASE MANAGEMENT CONFERENCE

2/22/2018: NOTICE OF CASE MANAGEMENT CONFERENCE

20 More Documents Available

 

Docket Entries

  • 05/13/2019
  • at 08:30 AM in Department 48, Elizabeth Allen White, Presiding; Hearing on Motion for Summary Judgment - Not Held - Rescheduled by Party

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  • 04/29/2019
  • at 08:30 AM in Department 48, Elizabeth Allen White, Presiding; Hearing on Motion for Summary Judgment - Not Held - Rescheduled by Party

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  • 04/18/2019
  • Notice of Change of Address or Other Contact Information; Filed by Wausau Business Insurance Company (Defendant)

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  • 04/18/2019
  • Notice of Ruling; Filed by Wausau Business Insurance Company (Defendant)

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  • 04/11/2019
  • at 08:30 AM in Department 48, Elizabeth Allen White, Presiding; Hearing on Ex Parte Application (of Defendants Wausau Business Insurance Company and Liberty Mutual Insurance Company for Order to Continue Trial Date and All Dates Attendant Thereto) - Held - Motion Granted

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  • 04/11/2019
  • Minute Order ( (Hearing on Ex Parte Application of Defendants Wausau Business...)); Filed by Clerk

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  • 04/11/2019
  • Order (Granting Ex Parte Application of Defendants Wausau Business Insurance Company and Liberty Mutual Insurance Company for Order to Continue Trial Date and All Dates Attendant Thereto); Filed by Wausau Business Insurance Company (Defendant); Liberty Mutual Insurance Company (Defendant)

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  • 04/10/2019
  • Ex Parte Application (of Defendants Wausau Business Insurance Company and Liberty Mutual Insurance Company for Order to Continue Trial Date and All Dates Attendant Thereto); Filed by Wausau Business Insurance Company (Defendant); Liberty Mutual Insurance Company (Defendant)

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  • 02/27/2019
  • at 08:30 AM in Department 48, Elizabeth Allen White, Presiding; Hearing on Motion for Protective Order

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  • 01/24/2019
  • at 08:30 AM in Department 48, Elizabeth Allen White, Presiding; Hearing on Ex Parte Application ( for Order on Stipulated Protective Order) - Held - Motion Granted

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37 More Docket Entries
  • 04/18/2018
  • Proof-Service/Summons; Filed by Syed Ali Husain (Plaintiff); Khursheed Husain (Plaintiff)

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  • 04/18/2018
  • PROOF OF SERVICE SUMMONS

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  • 04/18/2018
  • Proof-Service/Summons; Filed by Syed Ali Husain (Plaintiff); Khursheed Husain (Plaintiff)

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  • 04/18/2018
  • PROOF OF SERVICE SUMMONS

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  • 04/18/2018
  • PROOF OF SERVICE OF SUMMONS

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  • 02/22/2018
  • Notice of Case Management Conference; Filed by Clerk

    Read MoreRead Less
  • 02/22/2018
  • NOTICE OF CASE MANAGEMENT CONFERENCE

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  • 01/25/2018
  • COMPLAINI FOR: 1. BREACH OF CONTRACT; ETC

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  • 01/25/2018
  • SUMMONS

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  • 01/25/2018
  • Complaint; Filed by Syed Ali Husain (Plaintiff); Khursheed Husain (Plaintiff)

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Tentative Rulings

Case Number: BC691736    Hearing Date: April 29, 2021    Dept: 48

[TENTATIVE] ORDER RE: MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION

The Court discloses that more than five years ago, defense counsel, Susan Sullivan and Judge Seigle served on a non-profit board together. This will not affect the Court’s ability to handle this matter fairly and impartially.

On January 25, 2018, Plaintiffs Syed Ali Husain and Khursheed Husain filed this action against Defendants Wausau Business Insurance Company, Liberty Mutual Insurance Company, and Edgewood Partners Insurance Center (“EPIC”). Plaintiffs later dismissed EPIC.

On February 19, 2021, Wausau and Liberty (collectively, “Defendants”) filed this motion for summary judgment, or in the alternative, summary adjudication.

REQUEST FOR JUDICIAL NOTICE

Defendants’ Request Nos. 1-8, 11, 12, 32-35, 40-42 and A-J are granted, but the Court does not take notice of the truth of facts contained in the declarations.

EVIDENTIARY OBJECTIONS

Defendant’s Objections Nos. 1, 4, 7, 9, and 11 are sustained.

Objection No. 3 is sustained as to “Although Liberty Mutual’s defense obligation should have been determined based on the pleading that I tendered,” and is otherwise overruled.

Objection No. 12 is sustained as to “and given the fact that they had not even started looking for any attorneys,” and is otherwise overruled.

Objection Nos. 2, 5, 6, 8, 10, and 13 are overruled.

BACKGROUND FACTS

Wausau issued multiple insurance policies underwritten by “Wausau Business Insurance Company” to Mr. Husain dba McDonald’s Restaurant: policy no. YYK-Z91- 443-513-018, effective March 1, 2008 to March 1, 2009; policy no. YYK-Z91- 443-513-019, effective March 1, 2009 to March 1, 2010; and policy no. YYK-Z91- 443-513-010, effective March 1, 2010 to March 1, 2011; (Undisputed Material Facts “UMF” 88-92.) The policies do not state that Liberty issued the policies, and “Liberty Mutual” is referenced on only two pages. (UMF 93-94.) The policies contain a “No Voluntary Payments” provision in Section IV.2.d., titled “Duties In The Event Of Occurrence, Offense, Claim Or Suit,” stating: “No insured will, except at that insured’s own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent.” (UMF 96.)

On December 8, 2009, Plaintiffs filed Syed Husain and Khursheed Husain v. McDonald’s Corporation, et al., Case No. CIV 096177 in Marin County Superior Court. (UMF 1.) The first trial in that case began on August 21, 2012, and the second trial began on September 15, 2014. (UMF 15, 36.) The case settled on September 16, 2014. (UMF 37.)

Defendants opened a claim for Plaintiffs on January 10, 2014. (UMF 40-41.) On January 17, 2014, Plaintiffs’ counsel Weinstein sent a letter to Defendants that included (1) an email dated January 14, 2014 regarding the underlying action; (2) a declaration page of policy no. YYKZ91-443-513-010; (3) certified mail receipts; (4) a letter dated December 18, 2013 regarding the underlying action; (5) a letter dated October 7, 2013 regarding the underlying; and (6) a letter dated September 6, 2013 regarding the underlying action, including an amended cross-complaint filed by McDonald’s against Plaintiffs in March 2011. (UMF 42-44, 46; AMF 12.) According to Defendants, Wausau has no record of receiving any of the letters enclosed with the January 17, 2014 letter. (UMF 50.)

On February 18, 2014, Weinstein sent an email to Wausau stating that trial was set for June 2014. (UMF 51.) On March 4, 2014, Wausau sent an email to Weinstein stating that it could not make a coverage determination for the claims asserted in the underlying action without the pleadings, discovery, depositions, briefing, and court orders. (UMF 52.)

On March 14, 2014, Wausau informed Weinstein that it had retained coverage counsel. (UMF 54.) On March 21 and March 31, 2014, Wausau’s coverage counsel sent successive requests to Weinstein seeking documentation including pleadings for Wausau’s coverage evaluation. (UMF 55.) On April 7, 2014, Weinstein responded “I am endeavoring to obtain the below itemized documents from defense and/or appellate counsel.” (UMF 56.) On April 17, 2014, Wausau’s coverage counsel emailed Weinstein again asking for documents for Wausau’s review. (UMF 57.) On April 29, 2014, Weinstein advised Wausau’s coverage counsel that they had obtained the appellate record and would send a CD overnight. (UMF 58.) On May 14, 2014, Wausau’s coverage counsel sent a letter to Weinstein stating that Wausau agreed to defendant Plaintiffs for the claims asserted pursuant to a reservation of rights, but it was not responsible for fees or expenses before the tender of the cross-action. (UMF 59; see UMF 60-64.) The letter also included a form entitled “Waiver of Right to Independent Counsel,” and Plaintiffs did not return this form. (UMF 65-66.) On May 16, 2014, Weinstein told Wausau that the trial had been continued to September 2014. (UMF 67.)

In June 2014, Wausau’s coverage counsel sent three letter or emails to Weinstein requesting specific information about Plaintiffs’ independent counsel. (UMF 71-72.) After Weinstein informed Wausau that Plaintiffs were represented by three firms, Wausau stated that it still needed further information. (UMF 74-75.) On July 29, 2014, Wausau sent a letter to an attorney at one of the firms, informing him that Plaintiffs are entitled to payment for one firm, not three. (UMF 80.)

On September 21, 2015, Wausau wrote to Weinstein offering $154,427.47 to reimburse Plaintiffs for fees and costs of their defense of the cross-claims. (UMF 81.) On January 25, 2016, Wausau paid $153,437.47. (UMF 83.)

LEGAL STANDARD

For each claim in the complaint, the defendant moving for adjudication must satisfy the initial burden of proof by showing that one or more elements of a cause of action cannot be established or that there is a complete defense to a cause of action. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520 (Scalf).) Then the burden shifts to the plaintiff to show that a triable issue of material fact exists as to that cause of action or a defense. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf, supra, 128 Cal.App.4th at p. 1520.) To establish a triable issue of material fact, the party opposing the motion must produce “substantial responsive evidence.” (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 162-163.)

DISCUSSION

The complaint alleges three causes of action: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; and (3) professional negligence. The first two causes of action state that they are brought against Liberty, not Wausau, but Plaintiffs also refer to “Wausau/Liberty” in their general allegations. (See Complaint ¶ 10.) The third cause of action was brought only against dismissed defendant EPIC.

A. First and Second Causes of Action – Liberty

Defendants argue that Plaintiffs’ first two causes of action against Liberty fail because Liberty was not a party to a contract. (Motion at p. 18.) “[T]he duty of good faith and fair dealing derives from and exists solely because of the contractual relationship between the parties. [Citations.] Thus, one who is not a party to the underlying contract may not be held liable for breach of an implied covenant of good faith and fair dealing for as to him no such implied covenant exists.” (Austero v. National Cas. Co. (1976) 62 Cal.App.3d 511, 515.)

Defendants submit evidence that Wausau issued the policies to Plaintiffs, and the policies state that they are underwritten by “Wausau Business Insurance Company.” (UMF 88-92.) The policies do not state that Liberty issued them. (UMF 93.) Liberty is referenced on only two pages, where the policies state that “Wausau Business Insurance Company (Wausau), a member of the Liberty Mutual Holding Company group of insurance companies, assigned, transferred and conveyed to Employers Insurance Company of Wausau (EICOW), also a member of the Liberty Mutual Holding Company group of insurance companies . . . all of Wausau’s rights, duties, liabilities and obligations in respect to employee theft coverage provided for in the Wausau policy(ies) of insurance issued to you . . . .” (UMF 94-95; Wilson Decl., Ex. 14 at p. WAUSAU POL 245; Wilson Decl., Ex. 15 at p. WAUSAU POL 540.) Defendants have therefore met their initial burden.

Plaintiffs’ opposition does not submit evidence that Liberty was a party to the contracts. Plaintiffs argue they need the deposition of the person most knowledgeable on the relationship between Wausau and Liberty Mutual. (Opposition at p. 4.) Plaintiffs’ counsel’s declaration states Plaintiffs need to “uncover the facts concerning this issue in order to respond” to the motion. (Smith Decl. at p. 4.) The declaration does not state the “facts essential to justify the opposition that may exist.” (Code Civ. Proc., § 437c, subd. (h).) Plaintiffs’ complaint alleges Liberty “owns or is affiliated with Wausau in such a way that it is liable for the claims alleged in this case.” (Complaint, ¶ 3.) But Plaintiffs do not identify any facts, which if they exist, would make Liberty liable under the policy either as an owner or affiliate of Wausau. Unless Plaintiffs can identify such facts at the hearing, summary judgment is granted in favor of Liberty.

B. First Cause of Action – Breach of Contract

1. No Breach

Wausau first argues that Plaintiffs cannot prove it breached the contract because it has no obligation to pay pre-tender fees or costs. (Motion at pp. 19-20.) The policies contain a provision stating, “No insured will, except at that insured’s own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent.” (UMF 96.) Therefore, payments made by Plaintiffs before Wausau gave consent may be precluded from coverage. Wausau has met its initial burden.

Plaintiffs’ opposition argues that the amount of their damages cannot be divided on summary judgment, and Defendants cannot get partial summary adjudication. (Opposition at pp. 24-25.) Wausau responds that it is seeking summary adjudication of its seventh affirmative defense that Plaintiffs’ claims are barred in whole or in part to the extent they involve fees or costs incurred before the tender. (Reply at pp. 8-9.)

A defendant moving for summary judgment or adjudication on an affirmative defense must show “that there is a complete defense to the cause of action.” (Code Civ. Proc., § 437c, subd. (p)(2).) Wausau has not shown its seventh affirmative defense is a complete defense to the breach of contract cause of action. At most, Wausau has shown that it is a partial defense to the cause of action, precluding damages consisting of pre-tender fees and costs.

The motion is denied on this ground.

2. Failure to arbitrate fee dispute

Wausau next argues that this case cannot go forward until the parties arbitrate the fee dispute. (Motion at pp. 21-22.) When an insured selects independent counsel, the insurer must pay fees to the independent counsel at the rates that are actually paid by the insurer to attorneys retained by it in the ordinary course of business in the defense of similar actions. (Civ. Code, § 2860, subd. (c).) A fee dispute under this section shall be resolved through final and binding arbitration. (Ibid.)

On October 18, 2018, the Court denied Defendants’ motion to compel arbitration without prejudice to moving to compel arbitration after the bad faith and breach of contract claims are resolved. The Court found that the gravamen of the complaint was bad faith and breach of contract with the fee dispute being incidental, noting that there was a five- or eight-month delay before Defendants agreed to defend. Wausau argues that it is now apparent that Plaintiffs’ claims are not based on this delay, but are entirely dependent on whether additional attorney fees are owed. (Motion at p. 21.)

This is not a proper ground for summary adjudication as it does not entirely dispose of this cause of action. (See Code Civ. Proc., § 437c, subd. (f)(1).) Also, a motion for summary judgment is not the proper procedure to compel arbitration.

3. Damages

Wausau also argues that Plaintiffs do not have any evidence of damages because there has not been an attorney fees arbitration under Civil Code section 2860. (Motion at p. 22.) Wausau cites Wallis v. Centennial Ins. Co., Inc. (E.D. Cal. 2013) 982 F.Supp.2d 1114, in which the plaintiffs brought a claim for breach of contract based on the defendants’ delay and reduction of payments to counsel, constituting a breach of the defendants’ duty to defend under the insurance policy. (Id. at p. 1121.) After a bench trial, the court found that the plaintiffs’ claims seeking reimbursement of unpaid fees and costs were subject to Civil Code section 2860 arbitration. (Id. at pp. 1122-1123.) The court also concluded that without an arbitrator’s determination that the full fees were “reasonable and necessary,” the insurer’s withholding of the full amount of fees could not be the basis for the plaintiffs’ breach of contract and bad faith claims. (Id. at p 1123.) That case mentions in passing “delay” but does not discuss the basis for the plaintiffs’ claims against the insurer other than a dispute over the amount of fees that should have been paid. (Id. at p. 1122.)

Wausau’s argument is a different version of its argument that this dispute must be arbitrated. In its order denying the motion to compel, the Court determined that Plaintiff’s bad faith and breach of contract causes of action were based on the contention that Defendants’ delay in agreeing to defend caused Plaintiff harm and were not merely a dispute over the amount of fees to be paid. (See, e.g. Complaint ¶ 26.) Therefore, this case is distinguishable from Wallis.

Also, the court in Wallis did not grant summary judgment simply because the amount of fees to be paid needed to be arbitrated. It addressed the issue of reasonable fees on the merits, analyzed the evidence, and determined the “a substantial amount of funding” had been provided, “the deficiencies in the payments did not rise to the level of a breach of defendants’ duty under the insurance contract, and defendants did not forfeit their right to arbitrate the fee dispute.” (Wallis, supra, 982 F.Supp.2d at p. 1122.)

Wausau argues that Plaintiffs “have never specified what additional fees and costs should have been paid by Wausau” (Motion at p. 22), but it submits no evidence that Plaintiffs do not possess and cannot reasonably obtain evidence of their damages. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854.) Accordingly, summary adjudication of the first cause of action is denied.

C. Second Cause of Action – Breach of Implied Covenant

To establish a breach of the covenant of good faith and fair dealing for insurance claims, a plaintiff must establish that (1) benefits due under the policy were withheld, and (2) the reason for withholding benefits was unreasonable or without proper cause.¿¿(Love v. Fire Insurance Exchange¿(1990) 221 Cal.App.3d 1136, 1151.) The second cause of action alleges Wausau failed to conduct a prompt and thorough investigation, failed to appoint counsel, falsely asserted a conflict of interest and required Plaintiffs to hire independent counsel, took an unreasonable coverage position, and failed to act according to appropriate claims handling guidelines. (Complaint, ¶ 29.)

Wausau first argues that there is a genuine dispute regarding what, if any, additional fees and costs are covered under the policies, barring Plaintiffs’ bad faith cause of action. (Motion at pp. 23-24.) “[B]efore an insurer can be found to have acted tortiously (i.e., in bad faith), for its delay or denial in the payment of policy benefits, it must be shown that the insurer acted¿unreasonably or without proper cause.¿¿[Citations.]¿¿However, where there is a¿genuine issue¿as to the insurer’s liability under the policy for the claim asserted by the insured, there can be no bad faith liability imposed on the insurer for advancing its side of that dispute.¿¿[Citation.]”¿¿(Chateau Chamberay Homeowners Ass’n v. Associated Intern. Ins. Co.¿(2001) 90 Cal.App.4th 335, 347.)¿¿“The genuine dispute rule does not relieve an insurer from its obligation to thoroughly and fairly investigate, process and evaluate the insured’s claim.”¿¿(Wilson v. 21st Century Ins. Co.¿(2007) 42 Cal.4th 713, 723.)¿¿“[A]n 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 pp. 724.)¿¿“A genuine dispute exists only where the insurer’s position is maintained in good faith and on reasonable grounds.”¿¿(Id.¿at p. 723.)¿¿“Ordinarily, reasonableness is a factual issue to be decided by a jury.”¿¿(Fadeeff v Sate Farm General Ins. Co.¿(2020) 50 Cal.App.5th 94, 102.)

Wausau argues “there is a genuine dispute regarding what (if any) additional fees and costs incurred by [Plaintiffs] are covered by the Policies.” Wausau submits evidence that after giving Plaintiffs copies of audited invoices, it paid $153,437.47 to Plaintiffs as reimbursement for their post-tender defense fees and costs incurred in the underlying action, and until they filed this lawsuit, Plaintiff never gave Wausau information disputing specific fee reductions. (UMF 81-84.) Wausau’s letter that accompanied the payment explained how and why it arrived at the reimbursement amount, including review of invoices and limiting reimbursement to only defense fees incurred from January 2014 through February 2015. (Holmes Decl., Ex. 44.) Whether or not this evidence is sufficient to satisfy Wausau’s initial burden regarding the payment of fees and costs, the second cause of action alleges more than failure to pay fees and costs.

Wausau next argues that because it agreed to defend and paid attorney fees and costs, Plaintiffs cannot establish policy benefits were improperly withheld, and the allegation that it failed to conduct a prompt and thorough investigation is not a basis for bad faith. (Motion at p. 24.) Wausau cites Benavides v. State Farm General Ins. Co. (2006) 136 Cal.App.4th 1241. That case held that there is no tort liability for a negligent investigation if there is no covered loss. (Id. at p. 1250.) Wausau did not establish that there is no covered loss here.

Wausau then argues that it did not delay or act unreasonably in how it conducted the investigation, and that Plaintiffs’ attorneys were dilatory. (Motion at p. 25.) Wausau cites Carlton v. St. Paul Mercury Ins. Co. (1994) 30 Cal.App.4th 1450, as holding that an insurer did not act unreasonably in that case. (Motion at p. 25.) The court there held that only one inference could be drawn from the undisputed facts. (Id. at p. 1459.) Here, Wausau does not cite evidence for its assertion that its conduct was not unreasonable except to point to the 69-page docket and three appeals in the underlying case. Assuming Wausau has met its initial burden, Plaintiff submitted evidence of a delay between the time it tendered the claim in September 2013 and the time the claim was opened in January 2014, including a factual dispute about when Wausau actually received the tender. (Response to UMF 40-50.) Wausau has not shown that the facts are undisputed and that only inference to be drawn is that it did not act unreasonably.

Next, Wausau argues Plaintiffs’ misconduct factually disproves Wausau’s liability for bad faith, and Plaintiffs’ delay excuses Wausau from any liability. (Motion at p. 26.) Wausau asserts Plaintiffs delayed in tendering the claim, fabricated evidence and lied, which caused the appeals and a second trial. (Motion at p. 27.) Wausau cites to a Court of Appeal opinion that there was a “showing of apparent perjury and evidence fabrication.” (UMF 14.) “The scope of the insured’s duty of good faith and fair dealing in turn is confined by the express contractual provisions of the policy.” (Kransco v. American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4th 390, 405.) However, “[e]vidence of an insured’s misconduct may factually disprove the insurer’s liability for bad faith by showing the insurer acted reasonably under the circumstances.” (Ibid. at p. 408.) The trier of fact may decide that Plaintiffs’ conduct and delay disprove Wausau’s liability, but the Court cannot conclude as a matter of law that no reasonable jury could find Wausau liable due to Plaintiffs’ conduct.

Summary adjudication of the second cause of action is denied.

D. Punitive Damages

Defendants argue that Plaintiffs are not entitled to punitive damages because Plaintiffs do not have any evidence of malice, fraud, or oppression. (Motion at pp. 27-28.) Summary judgment law “continues to require a defendant moving for summary judgment to present evidence, and not simply point out that the plaintiff does not possess, and cannot reasonably obtain, needed evidence.” (Aguilar, supra, 25 Cal.4th at p. 854, footnote omitted.) Wausau must therefore “present evidence that the plaintiff does not possess, and cannot reasonably obtain, needed evidence—as through admissions by the plaintiff following extensive discovery to the effect that he has discovered nothing.” (Id. at p. 855.) Wausau did not cite to any such evidence.

Accordingly, summary adjudication is denied.

CONCLUSION

Liberty’s motion for summary judgment is GRANTED. Liberty is to submit a proposed form of judgment within 5 days.

Wausau’s motion for summary adjudication is DENIED.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.

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