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LAW OFFICES OF
SCAMPINI, MORTARA & HARRIS
235 Montgomery Street, Suite 715
SAN FRANCISCO, CALIFORNIA 94104
(415) 421-8556
HAIG A, HARRIS, JR. (SBN 40494)
NEIL S. TURNER (SBN 75152)
SCAMPINI, MORTARA & HARRIS
235 Montgomery Street, Suite 715
San Francisco, California 94104
Tel: (415) 421-8556
Fax: (415) 296-9322
E-Mail: hharris@smhlaw.net
nturner(@smhlaw.ne
Attorneys for Plaintiffs Donna Falzon and Frank Falzon
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SONOMA
DONNA FALZON and FRANK FALZON CASE NO: SCV-270021
Plaintiffs,
PLAINTIFFS’ OPPOSITION TO
vs. DEFENSE COUNSEL’S MOTION TO
BE RELIEVED AS COUNSEL FOR
DEFENDANT ARTEMIO DIAZ
ARTEMIO DIAZ, Individually and Doing
Business as ARTEMIO DIAZ HVAC & Date: July 8, 2022
GENERAL CONTRACTING, et al. Time: 2:30 PM
Dept.: 17
Defendants.
Complaint filed: January 20, 2022
Trial date: None Set
INTRODUCTION
Mr. Todd A. Fischer has filed a motion to be relieved as counsel to his client, Artemio
Diaz and Artemio Diaz HVAC & General Contracting (hereinafter “Diaz”), pursuant to
Code of Civil Procedure section 284, subdivision 2, on the ground that Claims Resource
Management, Inc., third-party administrator for Developers Surety Indemnity Company,
who retained him to represent and defend Diaz, “fas pulled their insurance coverage”
from Diaz.
Plaintiffs Donna Falzon and Frank Falzon oppose counsel’s motion on the ground that
such relief of counsel at this point would constitute a violation of the Rules of Professional
Conduct, rule 1.16, subdivision (d), which provides that “A Jawyer shall not...withdraw
Plffs’ Opposition to Defense Counsel’s Motion to Be Relieved as Counsel for Defendant - 1LAW OFFICES OF
SCAMPINI, MORTARA & HARRIS
(415) 421-8556
235 Montgomery Street, Suite 715
SAN FRANCISCO, CALIFORNIA 94104
from the representation of a client...until the lawyer has taken reasonable steps to avoid
reasonably foreseeable prejudice to the rights of the client...”
As detailed below, defense counsel’s client will suffer reasonably foreseeable
prejudice to his rights if the subject motion is granted at this time.
SUMMARY OF FACTS
Plaintiff Donna Falzon (“Plaintiff”), in February, 2019, while engaged in her longtime
professional career in real estate sales, and alighting from a client’s vehicle, fractured her right hip
with complication of a torn labrum. On 18 July 2019, Plaintiff underwent her first of four
major total hip replacement surgeries.
From August 2020 to September 2020, Plaintiff was home-confined, except to attend
physical therapy at Renew Physical Therapy in Novato to learn to walk again; to stand
without losing balance/without falling; to get out of bed; out of a chair; off the commode;
and up and out of a wheelchair.
For many weeks, Plaintiff and her husband anticipated spending some days at their Russian
River vacation home, which had by the prior owner, an exterior “platform lift” installed at the front
of the entryway. The lift had never before been used by Plaintiff except to raise luggage and
groceries to the front deck. The home is built above a strect level garage with nine (9) stairs going
from street level to a front deck and front door.
In anticipation that Plaintiff would now use the lift to enter and exit Plaintiffs’ vacation
home, they engaged Diaz to inspect the lift and perform any repairs necessary so that it
could be safely used by Plaintiff. Diaz holds a B General Contractor’s license, a C-20
HVAC license and a C-43 sheet metal license.
Diaz, after trouble shooting the lift and testing it, informed Plaintiffs that it could now
be safely used.
On 24 October 2020, Diaz submitted his invoice of $625.00 to Plaintiff's husband who
then handed him a check for that amount.
PIffs’ Opposition to Defense Counsel’s Motion to Be Relieved as Counsel for Defendant - 2LAW OFFICES OF
SCAMPINI, MORTARA & HARRIS
(415) 421-8556
235 Montgomery Street, Suite 715
SAN FRANCISCO, CALIFORNIA 94104
Later that day, at about 6:00 p.m., Plaintiff attempted to use the lift. She entered the
lift, pressed the “Down” button but nothing happened. Her husband then asked her to try
again. However, this time when she pushed the “Down” button the lift suddenly dropped
three feet and came to an immediate halt causing Plaintiff to suffer severe injuries.
Following initial letters of representation to Diaz, Plaintiff's counsel was contacted by
Tim Pelton, Independent Adjuster and Third Party Administrator for Developers Surety &
Indemnity Insurance Company. A most professional and cooperative dialogue resulted in
Plaintiff's counsel being advised that there was a One-Million ($1,000,000) Dollar policy
to cover the claim. The carrier and Mr. Todd Fischer, Esq., its designated attorney assigned
to represent Diaz, requested and were given full access to have their expert consultant
inspect (and photograph) the subject platform lift. Such inspection took place over several
hours on 27 April 2021, by Morgan Griffith, P.E., in the presence of Plaintiff's counsel.
Thereafter, Plaintiffs submitted an extensive Policy Limits Settlement Demand letter
with supporting Exhibits dated 17 August 2021.
Negotiations dragged on for months, due, in part, to prior commitments of adjuster,
Tim Pelton, and, in part, due to COVID 19 pandemic fallout. Notwithstanding such delay,
the process was in good faith. Finally, an offer was made; an office conference face-to-face
with Plaintiff's counsel, Todd Fischer, Esq., defendants’s attorney, and Tim Pelton took
place on 19 January 2022. The written offer was increased but still rejected. Suit was filed
in Sonoma County Superior Court the next day on 20 January 2022, served upon Diaz on 19
February 2022.
The original Complaint alleged that Diaz was negligent in the work he performed on
the lift resulting in Plaintiff's injuries. As part of that alleged negligence the Complaint
stated that!Diaz “lacked a D-21 Machinery and Pumps Contractor license” issued by the
California Contractors State License Board. Such a license is needed to “install, remove or
repair handicap lifting and assistance equipment.”
Plaintiffs served defendant with Form Interrogatories and Special [nterrogatories
which have now been answered.
Plffs’ Opposition to Defense Counsel’s Motion to Be Relieved as Counsel for Defendant - 3LAW OFFICES OF
SCAMPINI, MORTARA & HARRIS
235 Montgomery Street, Suite 715
SAN FRANCISCO, CALIFORNIA 94104
(415) 421-8556
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On 7 March 2022, Plaintiffs served Diaz with a Notice to take his deposition on 14
April 2022, which was continued pending completion of mediation, which was scheduled
for 10 May 2022.
On 11 March 2022, three weeks after Diaz was served with the Summons and
Complaint, Tim Pelton, a claims analyst, sent a letter to Diaz quoting the following
language from his insurance policy: “This insurance does not apply to: Unlicensed Work -
‘Bodily injury’, ‘property damage’ ...arising out of ‘your work’ if ‘your work’ is or was
performed in a state without an appropriate, current and valid state contractor’s license or
registration when a state contractor’s license or registration is available or required for
the type of work that you performed or are performing in that state.” (Emphasis
added).
Based on the mere allegation in the Complaint that Diaz lacked a needed D-21 license |
to repair the platform lift, the carrier denied all coverage including its duty to defend. |
Upon stipulation and order of the Court, Plaintiffs filed a First Amended Complaint,
which now deletes that allegation.
On 21 March 2022, Todd Fischer, Esq., filed an Answer to the Complaint. Mr.
Fischer then advised Plaintiffs counsel, on 31 March 2022, that the insurance carrier had
“pulled the defense” and that he was to file a motion to withdraw as counsel for Diaz.
Diaz then retained Glenn Smith, a Santa Rosa attorney, to try and get the carrier to
reverse its position so he could have counsel to represent him in the defense of this lawsuit.
Plaintiffs claim that they paid Diaz to make repairs on their platform lift. However,
Diaz, in his verified Answers to Special Interrogatories, expressly denied making any
repairs to the platform lift.
An insurance company can only refuse to provide a defense where there is
uncontradicted evidence that facts exist for the application of an exclusion. As aforesaid,
the facts here are contradicted.
The seminal case on that issue is Gray v. Zurich Insurance Company (1966) 65 Cal. 2d
263. |
PIffs’ Opposition to Defense Counsel’s Motion to Be Relieved as Counsel for Defendant - 4Oo me YN DH HW BF YW YN
RUHR = 6
LAW OFFICES OF
SCAMPINI, MORTARA & HARRIS.
(415) 421-8556
235 Montgomery Street, Suite 715
SAN FRANCISCO, CALIFORNIA 94104
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In that case, the Court stated: “Since modern procedural rules focus on the facts of a
case rather than the theory of recovery in the complaint, the duty to defend should be fixed
by the facts which the insurer learns from the complaint, the insured, or other sources. An
insurer, therefore, bears a duty to defend its insured whenever it ascertains facts
which give rise to the potential of liability under the policy.” (/d. p. 276-277).
Here, there was only an allegation of need for a Specialty License D-21, now deleted
from the First Amended Complaint; the fact is, the facts alleged by both plaintiffs and |
defendant give rise to potential liability under the policy.
In Fire Ins. Exchange v. Jiminez (1986) 184 Cal. App. 3d 437, the Court affirmed a
declaratory relief judgment holding there was no coverage because the policy excluded
coverage where the tort took place on the insured’s business premises. In affirming the
judgment, the Court stated: “Nor does the ‘potential of liability’ secondary theory of Gray v.
Zurich Insurance Co., supra, 65 Cal. 2d 263, 277, 54 Cal. Rptr. 104, 419 P.2d 168, compel
a contrary conclusion. Unlike the situation in Gray where there was a ‘potential of liability’
by virtue of theoretical amendment to the complaint to allege negligence, here there is no
‘potential of liability’ since the uncontradicted evidence shows that Metzger was injured
at 434 Haley Street.” (/d. p. 442) (Emphasis added).
Here, as in Gray, the Plaintiffs alleged in their original Complaint that Diaz needed a
D-21 Specialty License because he repaired the lift. However, even if he did repair the lift,
that is not a basis to deny Diaz a defense because Diaz has stated under oath that he
performed no repairs on the lift and, therefore, he did not need such a license for the
work he performed. And, as aforesaid, the potential need for a D-21 Specialty License has
been deleted from Plaintiff's First Amended Complaint.
In short, the carrier has now obtained facts which give rise to the potential of liability
under the policy and therefor it has a duty to defend Diaz in this lawsuit.
|
Wher an insurer “wrongfully refuses to defend it is liable on the judgment against |
the insured.” (Gray v. Zurich Insurance, supra, 65 Cal. 2d 263, 279-280). That is true |
even if, at trial, a jury finds that Diaz did perform repairs and therefore needed a D-21
Plffs’ Opposition to Defense Counsel’s Motion to Be Relieved as Counsel for Defendant - 5oem ND Hh FWY =
S
LAW OFFICES OF
SCAMPINI, MORTARA & HARRIS
(415) 421-8556
235 Montgomery Street, Suite 715
SAN FRANCISCO, CALIFORNIA 94104
Specialty License. “Nor can we accept defendant’s argument that the duty to defend
dissolves simply because the insured is unsuccessful in his defense and because the injured
party recovers on the basis of a finding of the assured’s wilful conduct.” (Gray v. Zurich
Ins., supra, 65 Cal. 2d 263, 278).
Further, the carrier did not do its due diligence. Instead, it provided a defense
without issuing a “Reservation of Rights” letter. As a result, it has waived its right to
deny coverage, both indemnity and a defense for any judgment rendered against Diaz.
As stated in Miller v. Elite Ins. Co. (1980) 100 Cal. App. 3d 739: “Ifa liability insurer,
with knowledge of a ground of forfeiture or noncoverage under the policy, assumes and
conducts the defense of an action brought against the insured, without disclaiming liability
and giving notice of its reservation of rights, it is thereafter precluded in an action upon
the policy from setting up such ground of forfeiture or noncoverage.” (Emphasis added).
As noted above, Diaz’s deposition was originally scheduled to commence on 11 April
2022. Defense counsel asked for a short continuance which was granted.
On 13 April 2022, defense counsel informed Plaintiffs counsel that the carrier wanted
to proceed with mediation despite abandonment of Diaz. Based on this development, it was
agreed to continue Diaz’s deposition until after the completion of mediation.
On 10 May 2022, a mediation took place before Hon. Rebecca Westerfield, Ret.
Those participating in the mediation included Plaintiffs and their counsel, defense
counsel Todd Fischer, Tim Pelton, Glenn Smith, defendant's private counsel, and Robert
Clossen, coverage counsel for the carrier.
The case did not settle at the mediation, albeit some progress was made and mediation
continues.
If thecase does not settle, then Plaintiffs will go forward with the deposition of Diaz,
now Noticed for 12 July 2022, and otherwise, prepare for Trial.
Mf
Mf
Plffs’ Opposition to Defense Counsel’s Motion to Be Relieved as Counsel for Defendant - 6wo oe IN KD DH BF
LAW OFFICES OF
SCAMPINI, MORTARA & HARRIS
(415) 421-8556
235 Montgomery Street, Suite 715
‘SAN FRANCISCO, CALIFORNIA 94104
DISCUSSION
It goes without saying, that, short of trial itself, the most critical need of a defendant to
have legal counsel is when the defendant is deposed.
For Mr. Fischer to withdraw as counsel for Diaz, on the eve of defendant’s deposition,
constitutes reasonably foreseeable prejudice to the rights of his client.
In Ramirez v. Sturdevant (1994) 21 Cal. App. 4" 904, the Court stated: “A lawyer
violates his or her ethical mandate by abandoning a client (Pineda v. State Bar (1989) 49
Cal. 3d 753, 758-759, 263 Cal. Rptr. 377, 781 P.2d 1), or by withdrawing at a critical
point and thereby prejudicing the client’s case. (Rules of Professional Conduct, rule 3-
700(a)(2); Vann v. Shilleh (1975) 54 Cal. App. 3d 192, 197, 126 Cal. Rptr. 401).”
(Emphasis added).
In Vann v, Shilleh (1976) 54 Cal. App. 3d 192, the Court reversed a judgment against
defendant holding it was error to grant defense counsel’s motion to withdraw as counsel on
the eve of trial. In that regard, the Court noted: “The right of counsel to withdraw from
pending litigation is not absolute. Although Mr. Duke may well have been irked to see a
settlement that he had negotiated fail of consummation, his withdrawal, for that personal
reason on the very eve of trial was not ethical.” (/d. p. 197).
Here, it’s unethical for Todd Fischer to withdraw while settlement negotiations are still
ongoing and then deny his client any counsel to protect him at his deposition should
settlement negotiations ultimately fail.
Plaintiff requests that the motion be continued on the Court’s own motion for at least
90 days. This will give time for the following issues to be resolved: (1) a settlement which
resolves the case, (2) the carrier reverses itself and agrees to provide Diaz with a defense, or
(3) time for Diaz to retain independent counsel to protect him at his deposition.
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Mt
Plffs’ Opposition to Defense Counsel’s Motion to Be Relieved as Counsel for Defendant - 7LAW OFFICES OF
SCAMPINI, MORTARA & HARRIS
(415) 421-8556
235 Montgomery Street, Suite 715
‘SAN FRANCISCO, CALIFORNIA 94104
CONCLUSION
For all the foregoing reasons, Todd Fischer’s motion must be either denied without
prejudice or continued on the Court’s own motion until the pending issues of the carrier
reversing itself or settlement of the case.
DATED: Aine 19 2022
SCAMPINI, MORTARA & HARRIS
By: LD A. Pe ceas
HAIG A. HARRIS, JR.
NEIL S. TURNER.
Attorneys for Plaintiff
DONNA FALZON and FRANK FALZON
Piffs’ Opposition to Defense Counsel’s Motion to Be Relieved as Counsel for Defendant - 8om IY A WF YW NY
LAW OFFICES OF
SCAMPINI, MORTARA & HARRIS
235 Montgomery Street, Suite 715
SAN FRANCISCO, CALIFORNIA 94104
(415) 421-8556
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PROOF OF SERVICE
I am a citizen of the United States and an employee in the City and County of San
Francisco, State of California. I am over the age of eighteen and not a party to the within
action. My business address is that of Scampini, Mortara & Harris, 235 Montgomery
Street, Suite 715, San Francisco, California 94104.
On 19 May 2022, I caused to be served on all interested parties the following:
PLAINTIFFS’ OPPOSITION TO DEFENSE COUNSEL’S MOTION TO BE
RELIEVED AS COUNSEL FOR DEFENDANT ARTEMIO DIAZ
By: (Electronic Mail) I caused said documents(s) to be transmitted to the e-mail
address(es) of the below addressee(s):
__ (Facsimile) I sent a true copy thereof via telephone facsimile transmission to the
following number(s).
__ Federal Express) I sent a true copy thereof enclosed in a sealed envelope to be
delivered to Federal Express for overnight courier service to the office(s) of the
addressee(s).
__ (Mail) I placed a true copy thereof enclosed in a sealed envelope with postage
thereon fully prepaid. I deposited said envelope in the United States Mail in the
City and County of San Francisco, California.
___ (Hand-Delivery) I placed a true copy thereof enclosed in a sealed envelope
caused such envelope to be delivered to the offices of the addressee.
addressed to:
Todd Fischer, Esq.
FISCHER | SCHONEMAN LLP
2511 Garden Road, Suite B270
Monterey, CA 93940
Email: todd@fsllp-law.com
Glenn M. Smith
Smith Dollar PC
418 B Street
Santa Rosa, CA 95401
Email: gsmith@smithdollar.com
I am familiar with the mail collection practices of the law offices of Scampini, Mortara
& Harris, and pursuant to those practices, the envelope would be deposited with the United
States Postal Service the same day.
I declare under penalty of perjury that the foregoing is true and correct. Executed on
19 May 2022, at San Francisco, California. a
Leona Scott :
PIffs’ Opposition to Defense Counse!’s Motion to Be Relieved as Counsel for Defendant - 9
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LAW OFFICES OF SCAMPINI, MORTARA & HARRIS 235 Montgomery Street, Suite 715 SAN FRANCISCO, CALIFORNIA 94104 (415) 421-8556 HAIG A, HARRIS, JR. (SBN 40494) NEIL S. TURNER (SBN 75152) SCAMPINI, MORTARA & HARRIS 235 Montgomery Street, Suite 715 San Francisco, California 94104 Tel: (415) 421-8556 Fax: (415) 296-9322 E-Mail: hharris@smhlaw.net nturner(@smhlaw.ne Attorneys for Plaintiffs Donna Falzon and Frank Falzon SUPERIOR COURT OF CALIFORNIA COUNTY OF SONOMA DONNA FALZON and FRANK FALZON CASE NO: SCV-270021 Plaintiffs, PLAINTIFFS’ OPPOSITION TO vs. DEFENSE COUNSEL’S MOTION TO BE RELIEVED AS COUNSEL FOR DEFENDANT ARTEMIO DIAZ ARTEMIO DIAZ, Individually and Doing Business as ARTEMIO DIAZ HVAC & Date: July 8, 2022 GENERAL CONTRACTING, et al. Time: 2:30 PM Dept.: 17 Defendants. Complaint filed: January 20, 2022 Trial date: None Set INTRODUCTION Mr. Todd A. Fischer has filed a motion to be relieved as counsel to his client, Artemio Diaz and Artemio Diaz HVAC & General Contracting (hereinafter “Diaz”), pursuant to Code of Civil Procedure section 284, subdivision 2, on the ground that Claims Resource Management, Inc., third-party administrator for Developers Surety Indemnity Company, who retained him to represent and defend Diaz, “fas pulled their insurance coverage” from Diaz. Plaintiffs Donna Falzon and Frank Falzon oppose counsel’s motion on the ground that such relief of counsel at this point would constitute a violation of the Rules of Professional Conduct, rule 1.16, subdivision (d), which provides that “A Jawyer shall not...withdraw Plffs’ Opposition to Defense Counsel’s Motion to Be Relieved as Counsel for Defendant - 1LAW OFFICES OF SCAMPINI, MORTARA & HARRIS (415) 421-8556 235 Montgomery Street, Suite 715 SAN FRANCISCO, CALIFORNIA 94104 from the representation of a client...until the lawyer has taken reasonable steps to avoid reasonably foreseeable prejudice to the rights of the client...” As detailed below, defense counsel’s client will suffer reasonably foreseeable prejudice to his rights if the subject motion is granted at this time. SUMMARY OF FACTS Plaintiff Donna Falzon (“Plaintiff”), in February, 2019, while engaged in her longtime professional career in real estate sales, and alighting from a client’s vehicle, fractured her right hip with complication of a torn labrum. On 18 July 2019, Plaintiff underwent her first of four major total hip replacement surgeries. From August 2020 to September 2020, Plaintiff was home-confined, except to attend physical therapy at Renew Physical Therapy in Novato to learn to walk again; to stand without losing balance/without falling; to get out of bed; out of a chair; off the commode; and up and out of a wheelchair. For many weeks, Plaintiff and her husband anticipated spending some days at their Russian River vacation home, which had by the prior owner, an exterior “platform lift” installed at the front of the entryway. The lift had never before been used by Plaintiff except to raise luggage and groceries to the front deck. The home is built above a strect level garage with nine (9) stairs going from street level to a front deck and front door. In anticipation that Plaintiff would now use the lift to enter and exit Plaintiffs’ vacation home, they engaged Diaz to inspect the lift and perform any repairs necessary so that it could be safely used by Plaintiff. Diaz holds a B General Contractor’s license, a C-20 HVAC license and a C-43 sheet metal license. Diaz, after trouble shooting the lift and testing it, informed Plaintiffs that it could now be safely used. On 24 October 2020, Diaz submitted his invoice of $625.00 to Plaintiff's husband who then handed him a check for that amount. PIffs’ Opposition to Defense Counsel’s Motion to Be Relieved as Counsel for Defendant - 2LAW OFFICES OF SCAMPINI, MORTARA & HARRIS (415) 421-8556 235 Montgomery Street, Suite 715 SAN FRANCISCO, CALIFORNIA 94104 Later that day, at about 6:00 p.m., Plaintiff attempted to use the lift. She entered the lift, pressed the “Down” button but nothing happened. Her husband then asked her to try again. However, this time when she pushed the “Down” button the lift suddenly dropped three feet and came to an immediate halt causing Plaintiff to suffer severe injuries. Following initial letters of representation to Diaz, Plaintiff's counsel was contacted by Tim Pelton, Independent Adjuster and Third Party Administrator for Developers Surety & Indemnity Insurance Company. A most professional and cooperative dialogue resulted in Plaintiff's counsel being advised that there was a One-Million ($1,000,000) Dollar policy to cover the claim. The carrier and Mr. Todd Fischer, Esq., its designated attorney assigned to represent Diaz, requested and were given full access to have their expert consultant inspect (and photograph) the subject platform lift. Such inspection took place over several hours on 27 April 2021, by Morgan Griffith, P.E., in the presence of Plaintiff's counsel. Thereafter, Plaintiffs submitted an extensive Policy Limits Settlement Demand letter with supporting Exhibits dated 17 August 2021. Negotiations dragged on for months, due, in part, to prior commitments of adjuster, Tim Pelton, and, in part, due to COVID 19 pandemic fallout. Notwithstanding such delay, the process was in good faith. Finally, an offer was made; an office conference face-to-face with Plaintiff's counsel, Todd Fischer, Esq., defendants’s attorney, and Tim Pelton took place on 19 January 2022. The written offer was increased but still rejected. Suit was filed in Sonoma County Superior Court the next day on 20 January 2022, served upon Diaz on 19 February 2022. The original Complaint alleged that Diaz was negligent in the work he performed on the lift resulting in Plaintiff's injuries. As part of that alleged negligence the Complaint stated that!Diaz “lacked a D-21 Machinery and Pumps Contractor license” issued by the California Contractors State License Board. Such a license is needed to “install, remove or repair handicap lifting and assistance equipment.” Plaintiffs served defendant with Form Interrogatories and Special [nterrogatories which have now been answered. Plffs’ Opposition to Defense Counsel’s Motion to Be Relieved as Counsel for Defendant - 3LAW OFFICES OF SCAMPINI, MORTARA & HARRIS 235 Montgomery Street, Suite 715 SAN FRANCISCO, CALIFORNIA 94104 (415) 421-8556 ce IY DN HW BF BP He NN N NY NY NY NY NY Ne ee Se Se Se me Re Be oN A A FB YN = SF Bo we IN DH BF Bw YH KH On 7 March 2022, Plaintiffs served Diaz with a Notice to take his deposition on 14 April 2022, which was continued pending completion of mediation, which was scheduled for 10 May 2022. On 11 March 2022, three weeks after Diaz was served with the Summons and Complaint, Tim Pelton, a claims analyst, sent a letter to Diaz quoting the following language from his insurance policy: “This insurance does not apply to: Unlicensed Work - ‘Bodily injury’, ‘property damage’ ...arising out of ‘your work’ if ‘your work’ is or was performed in a state without an appropriate, current and valid state contractor’s license or registration when a state contractor’s license or registration is available or required for the type of work that you performed or are performing in that state.” (Emphasis added). Based on the mere allegation in the Complaint that Diaz lacked a needed D-21 license | to repair the platform lift, the carrier denied all coverage including its duty to defend. | Upon stipulation and order of the Court, Plaintiffs filed a First Amended Complaint, which now deletes that allegation. On 21 March 2022, Todd Fischer, Esq., filed an Answer to the Complaint. Mr. Fischer then advised Plaintiffs counsel, on 31 March 2022, that the insurance carrier had “pulled the defense” and that he was to file a motion to withdraw as counsel for Diaz. Diaz then retained Glenn Smith, a Santa Rosa attorney, to try and get the carrier to reverse its position so he could have counsel to represent him in the defense of this lawsuit. Plaintiffs claim that they paid Diaz to make repairs on their platform lift. However, Diaz, in his verified Answers to Special Interrogatories, expressly denied making any repairs to the platform lift. An insurance company can only refuse to provide a defense where there is uncontradicted evidence that facts exist for the application of an exclusion. As aforesaid, the facts here are contradicted. The seminal case on that issue is Gray v. Zurich Insurance Company (1966) 65 Cal. 2d 263. | PIffs’ Opposition to Defense Counsel’s Motion to Be Relieved as Counsel for Defendant - 4Oo me YN DH HW BF YW YN RUHR = 6 LAW OFFICES OF SCAMPINI, MORTARA & HARRIS. (415) 421-8556 235 Montgomery Street, Suite 715 SAN FRANCISCO, CALIFORNIA 94104 Pw NWN YY NHN NY Ye Fe Fe Be ea A A Fo NH = SF Owe AA In that case, the Court stated: “Since modern procedural rules focus on the facts of a case rather than the theory of recovery in the complaint, the duty to defend should be fixed by the facts which the insurer learns from the complaint, the insured, or other sources. An insurer, therefore, bears a duty to defend its insured whenever it ascertains facts which give rise to the potential of liability under the policy.” (/d. p. 276-277). Here, there was only an allegation of need for a Specialty License D-21, now deleted from the First Amended Complaint; the fact is, the facts alleged by both plaintiffs and | defendant give rise to potential liability under the policy. In Fire Ins. Exchange v. Jiminez (1986) 184 Cal. App. 3d 437, the Court affirmed a declaratory relief judgment holding there was no coverage because the policy excluded coverage where the tort took place on the insured’s business premises. In affirming the judgment, the Court stated: “Nor does the ‘potential of liability’ secondary theory of Gray v. Zurich Insurance Co., supra, 65 Cal. 2d 263, 277, 54 Cal. Rptr. 104, 419 P.2d 168, compel a contrary conclusion. Unlike the situation in Gray where there was a ‘potential of liability’ by virtue of theoretical amendment to the complaint to allege negligence, here there is no ‘potential of liability’ since the uncontradicted evidence shows that Metzger was injured at 434 Haley Street.” (/d. p. 442) (Emphasis added). Here, as in Gray, the Plaintiffs alleged in their original Complaint that Diaz needed a D-21 Specialty License because he repaired the lift. However, even if he did repair the lift, that is not a basis to deny Diaz a defense because Diaz has stated under oath that he performed no repairs on the lift and, therefore, he did not need such a license for the work he performed. And, as aforesaid, the potential need for a D-21 Specialty License has been deleted from Plaintiff's First Amended Complaint. In short, the carrier has now obtained facts which give rise to the potential of liability under the policy and therefor it has a duty to defend Diaz in this lawsuit. | Wher an insurer “wrongfully refuses to defend it is liable on the judgment against | the insured.” (Gray v. Zurich Insurance, supra, 65 Cal. 2d 263, 279-280). That is true | even if, at trial, a jury finds that Diaz did perform repairs and therefore needed a D-21 Plffs’ Opposition to Defense Counsel’s Motion to Be Relieved as Counsel for Defendant - 5oem ND Hh FWY = S LAW OFFICES OF SCAMPINI, MORTARA & HARRIS (415) 421-8556 235 Montgomery Street, Suite 715 SAN FRANCISCO, CALIFORNIA 94104 Specialty License. “Nor can we accept defendant’s argument that the duty to defend dissolves simply because the insured is unsuccessful in his defense and because the injured party recovers on the basis of a finding of the assured’s wilful conduct.” (Gray v. Zurich Ins., supra, 65 Cal. 2d 263, 278). Further, the carrier did not do its due diligence. Instead, it provided a defense without issuing a “Reservation of Rights” letter. As a result, it has waived its right to deny coverage, both indemnity and a defense for any judgment rendered against Diaz. As stated in Miller v. Elite Ins. Co. (1980) 100 Cal. App. 3d 739: “Ifa liability insurer, with knowledge of a ground of forfeiture or noncoverage under the policy, assumes and conducts the defense of an action brought against the insured, without disclaiming liability and giving notice of its reservation of rights, it is thereafter precluded in an action upon the policy from setting up such ground of forfeiture or noncoverage.” (Emphasis added). As noted above, Diaz’s deposition was originally scheduled to commence on 11 April 2022. Defense counsel asked for a short continuance which was granted. On 13 April 2022, defense counsel informed Plaintiffs counsel that the carrier wanted to proceed with mediation despite abandonment of Diaz. Based on this development, it was agreed to continue Diaz’s deposition until after the completion of mediation. On 10 May 2022, a mediation took place before Hon. Rebecca Westerfield, Ret. Those participating in the mediation included Plaintiffs and their counsel, defense counsel Todd Fischer, Tim Pelton, Glenn Smith, defendant's private counsel, and Robert Clossen, coverage counsel for the carrier. The case did not settle at the mediation, albeit some progress was made and mediation continues. If thecase does not settle, then Plaintiffs will go forward with the deposition of Diaz, now Noticed for 12 July 2022, and otherwise, prepare for Trial. Mf Mf Plffs’ Opposition to Defense Counsel’s Motion to Be Relieved as Counsel for Defendant - 6wo oe IN KD DH BF LAW OFFICES OF SCAMPINI, MORTARA & HARRIS (415) 421-8556 235 Montgomery Street, Suite 715 ‘SAN FRANCISCO, CALIFORNIA 94104 DISCUSSION It goes without saying, that, short of trial itself, the most critical need of a defendant to have legal counsel is when the defendant is deposed. For Mr. Fischer to withdraw as counsel for Diaz, on the eve of defendant’s deposition, constitutes reasonably foreseeable prejudice to the rights of his client. In Ramirez v. Sturdevant (1994) 21 Cal. App. 4" 904, the Court stated: “A lawyer violates his or her ethical mandate by abandoning a client (Pineda v. State Bar (1989) 49 Cal. 3d 753, 758-759, 263 Cal. Rptr. 377, 781 P.2d 1), or by withdrawing at a critical point and thereby prejudicing the client’s case. (Rules of Professional Conduct, rule 3- 700(a)(2); Vann v. Shilleh (1975) 54 Cal. App. 3d 192, 197, 126 Cal. Rptr. 401).” (Emphasis added). In Vann v, Shilleh (1976) 54 Cal. App. 3d 192, the Court reversed a judgment against defendant holding it was error to grant defense counsel’s motion to withdraw as counsel on the eve of trial. In that regard, the Court noted: “The right of counsel to withdraw from pending litigation is not absolute. Although Mr. Duke may well have been irked to see a settlement that he had negotiated fail of consummation, his withdrawal, for that personal reason on the very eve of trial was not ethical.” (/d. p. 197). Here, it’s unethical for Todd Fischer to withdraw while settlement negotiations are still ongoing and then deny his client any counsel to protect him at his deposition should settlement negotiations ultimately fail. Plaintiff requests that the motion be continued on the Court’s own motion for at least 90 days. This will give time for the following issues to be resolved: (1) a settlement which resolves the case, (2) the carrier reverses itself and agrees to provide Diaz with a defense, or (3) time for Diaz to retain independent counsel to protect him at his deposition. Mt Mt Plffs’ Opposition to Defense Counsel’s Motion to Be Relieved as Counsel for Defendant - 7LAW OFFICES OF SCAMPINI, MORTARA & HARRIS (415) 421-8556 235 Montgomery Street, Suite 715 ‘SAN FRANCISCO, CALIFORNIA 94104 CONCLUSION For all the foregoing reasons, Todd Fischer’s motion must be either denied without prejudice or continued on the Court’s own motion until the pending issues of the carrier reversing itself or settlement of the case. DATED: Aine 19 2022 SCAMPINI, MORTARA & HARRIS By: LD A. Pe ceas HAIG A. HARRIS, JR. NEIL S. TURNER. Attorneys for Plaintiff DONNA FALZON and FRANK FALZON Piffs’ Opposition to Defense Counsel’s Motion to Be Relieved as Counsel for Defendant - 8om IY A WF YW NY LAW OFFICES OF SCAMPINI, MORTARA & HARRIS 235 Montgomery Street, Suite 715 SAN FRANCISCO, CALIFORNIA 94104 (415) 421-8556 Nop NY NN NY = = = es I DAA BY NH |= So wm AIA DAY nn oO PROOF OF SERVICE I am a citizen of the United States and an employee in the City and County of San Francisco, State of California. I am over the age of eighteen and not a party to the within action. My business address is that of Scampini, Mortara & Harris, 235 Montgomery Street, Suite 715, San Francisco, California 94104. On 19 May 2022, I caused to be served on all interested parties the following: PLAINTIFFS’ OPPOSITION TO DEFENSE COUNSEL’S MOTION TO BE RELIEVED AS COUNSEL FOR DEFENDANT ARTEMIO DIAZ By: (Electronic Mail) I caused said documents(s) to be transmitted to the e-mail address(es) of the below addressee(s): __ (Facsimile) I sent a true copy thereof via telephone facsimile transmission to the following number(s). __ Federal Express) I sent a true copy thereof enclosed in a sealed envelope to be delivered to Federal Express for overnight courier service to the office(s) of the addressee(s). __ (Mail) I placed a true copy thereof enclosed in a sealed envelope with postage thereon fully prepaid. I deposited said envelope in the United States Mail in the City and County of San Francisco, California. ___ (Hand-Delivery) I placed a true copy thereof enclosed in a sealed envelope caused such envelope to be delivered to the offices of the addressee. addressed to: Todd Fischer, Esq. FISCHER | SCHONEMAN LLP 2511 Garden Road, Suite B270 Monterey, CA 93940 Email: todd@fsllp-law.com Glenn M. Smith Smith Dollar PC 418 B Street Santa Rosa, CA 95401 Email: gsmith@smithdollar.com I am familiar with the mail collection practices of the law offices of Scampini, Mortara & Harris, and pursuant to those practices, the envelope would be deposited with the United States Postal Service the same day. I declare under penalty of perjury that the foregoing is true and correct. Executed on 19 May 2022, at San Francisco, California. a Leona Scott : PIffs’ Opposition to Defense Counse!’s Motion to Be Relieved as Counsel for Defendant - 9