Preview
1 GLADSTONEWEISBERG, ALC
2 Gene A. Weisberg, SBN 91544
gweisberg@gladstoneweisberg.com
3 Anthony DiPietra, SBN 235994
adipietra@gladstoneweisberg.com
4 300 Corporate Pointe, Suite 400
Culver City, CA 90230
5 Tel: (310) 821-9000 • Fax: (310) 943-2764
6 Attorneys for Defendant
7 California Capital Insurance Company
8
9 SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 FOR THE COUNTY SONOMA
11
12 RMB REAL ESTATE ) CASE NO. SCV-267840
GLADSTONEWEISBERG, ALC
13 INVESTMENTS 2, LLC, A California )
limited liability company, ) [Assigned to the Hon. Bradford DeMeo]
)
14 Plaintiff, )
) CALIFORNIA CAPITAL INSURANCE
15 vs. ) COMPANY’S OBJECTIONS TO
) TENTATIVE STATEMENT OF
16 CALIFORNIA CAPITAL ) DECISION
INSURANCE COMPANY and DOES )
17 1-7, DATE )
) Date Action Filed: February 22, 2021
18 Defendants. ) Trial Date: October 7, 2022
) (Phase 1)
19
Oral Argument: November 30, 2022
20 TIME: 3:00 p.m.
CTRM: 17
21
22
23 In preparation for oral argument scheduled for November 30, 2022, and pursuant
24 to California Rules of Court Rule 3.1590(g), Defendant California Capital Insurance
25 Company submits its summary of objections to the Court’s October 31, 2022, Tentative
26 Statement of Decision.
27
28
60703 20221128 Obj to Tent Statement of Decision.docx 1
CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE
STATEMENT OF DECISION
1 1. OBJECTIONS TO TENTATIVE RULING
2 For the reasons explained in more detail below, California Capital objects to the
3 tentative ruling on the following grounds:
4 1. California Capital objects to the tentative ruling to the extent that it does
5 not apply the 24 consecutive month limit by its interpretation of how the
6 “period of restoration” definition applies rather than applying them as
7 separate provisions, as written in the policy.
8 2. California Capital objects to the tentative ruling because it does not apply
9 the limit of insurance language in the Increased Period of Restoration
10 additional coverage, instead finding that the 24 consecutive month limit of
11 insurance does not apply despite the limit of insurance reference in the
12 policy language.
GLADSTONEWEISBERG, ALC
13 3. California Capital objects to the tentative ruling to the extent it refers to a
14 “period of restoration subsection” in the policy that does not exist.
15 4. California Capital objects to the tentative ruling because the of the
16 conclusion that the policy is ambiguous to the extent that conclusion is
17 based on a determination that there may have been another way to state the
18 policy language.
19
20 2. THE INCREASED PERIOD OF RESTORATION ADDITIONAL
21 COVERAGE IS SUBJECT TO THE BUSINESS INCOME COVERAGE’S
22 24 CONSECUTIVE MONTH LIMIT OF INSURANCE
23 In listing the various amendments to the Businessowners Special Property
24 Coverage Form (BP 00 02) (“Businessowners Form”) that the CIG Property Plus
25 endorsement form, form 03-411 (08/12), is making, the CIG Property Plus form states, in
26 part, with regard to Business Income coverage, as follows:
27
28
60703 20221128 Obj to Tent Statement of Decision.docx 2
CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE
STATEMENT OF DECISION
A.5 Additional Coverages.
1
The following coverages are added to or replaced in your
2 policy, but do not increase the Limits of Insurance for
Coverage a., Buildings and Coverage b. Business personal
3 property.…
4 This section of the CIG Property Plus endorsement replaces the Business Income
5 Additional coverage stated in the Businessowners Form. By stating the endorsement
6 “replaces” specified paragraphs in the Businessowners Form, there is a clear statement
7 that the language in that form has no effect, having been replaced by the language in the
8 CIG Property Plus form. The Property Plus endorsement states:
9 Item (1) paragraph 3, is replaced by the following:
10 The only difference between the original Item (1) paragraph 3 and the replacement
11 paragraph is the original 12 consecutive months after the date of direct physical loss or
12 damage limit of insurance is replaced with a 24 consecutive months limit of insurance.
GLADSTONEWEISBERG, ALC
13 The policy is clear that the paragraph stated in the CIG Property Plus form replaces the
14 paragraph in the Businessowners Form, doubling that limit of insurance.
15 The next change the CIG Property Plus form makes to the Business Income
16 Additional Coverage in the Businessowners Form is to add “Item (3)”, which adds
17 “Increased Period of Restoration” coverage that does not exist in the Businessowners
18 Form. The “f. Business Income” Additional Coverage in the Businessowners Form
19 includes “(1) Business Income” and “(2) Extended Business Income”. The CIG Property
20 Plus form adds “(3) Increased Period of Restoration” to the Business Income Additional
21 Coverage provision. It was not created as a separate Additional Coverage, along with
22 Debris Removal, Preservation of Property, Fire Department Service Charge, etc. Instead,
23 it was added as part of the “Business Income” Additional Coverage that already existed in
24 the Businessowners Form. As such, it must be read as part of the Business Income
25 Additional Coverage, not as a separate coverage.
26 The Increased Period of Restoration portion of the Business Income coverage
27 states that:
28
60703 20221128 Obj to Tent Statement of Decision.docx 3
CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE
STATEMENT OF DECISION
[t]he limit of insurance that applies to coverage under this
1 endorsement includes any loss arising from any increased
period required to repair or reconstruct the property to comply
2 with the minimum standards of any ordinance or law, in force
at the time of the loss, that regulates the construction or
3 repair, or requires the tearing down of any property.
4
5 By referencing the “limit of insurance that applies to coverage under this
6 endorsement”, this added coverage provision expressly states it is part of the Business
7 Income limit of insurance that applies. This provision must be referencing some limit of
8 insurance in the endorsement, as every provision in a contract must be given meaning.
9 California Civil Code § 1641 (“The whole of a contract is to be taken together, so as to
10 give effect to every part, if reasonably practicable, each clause helping to interpret the
11 other”).
12 The only “limit of insurance” to which this added paragraph reasonably can be
GLADSTONEWEISBERG, ALC
13 referencing is the 24 consecutive months limit of insurance stated in the “(1) Business
14 Income” coverage because the Increased Period of Restoration added coverage is a type
15 of Business Income coverage. The policyholder is not, and would not, argue that the limit
16 of insurance that should apply is the $25,000 limit of insurance in the added Interruption
17 of Service coverage (added Item 4), or the $100,000 Newly Acquired Structures (Item 5)
18 coverage, as both of them would provide a lower limit of insurance than the 24
19 consecutive month limit.
20 Because the endorsement drafters did not intend to cover Interruption of Service or
21 Newly Acquired Structures for 24 consecutive months, but instead for a stated dollar
22 limit, those dollar limits were stated in the endorsement that added those coverages. The
23 Increased Period of Restoration added coverage did not state a specific dollar limit. That
24 does not mean there is no limit of insurance. The provision expressly states that there is a
25 limit when its reference to “the limit of insurance that applies to coverage under this
26 endorsement” makes it clear that there is a limit of insurance that applies.
27 The tentative ruling (p. 8, lines 13-14) refers to a “‘period of restoration’
28 subsection”. The policy contains no “‘period of restoration’ subsection’. It has a “period
60703 20221128 Obj to Tent Statement of Decision.docx 4
CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE
STATEMENT OF DECISION
1 of restoration” definition contained within section H, the “Property Definitions” section
2 in the Businessowners Form (page 22 of that form). As stated at the top of the first page
3 of the Businessowners Form:
4 Other words and phrases that appear in quotation marks have
special meaning. Refer to Section H –Property Definitions.
5
6 The “period of restoration” definition expressly does not include the increased
7 time required to comply with any ordinance or law that regulates construction or repair.
8 The Increased Period of Restoration added coverage supersedes this limitation in the
9 definition. The added coverage does not refer to that definition directly. Instead, it refers
10 to the “limit of insurance that applies to coverage under this endorsement.” That must be
11 a reference to the paragraph directly above it, (1) Business Income, which references both
12 the “period of restoration” defined term and the 24 consecutive months after the date of
GLADSTONEWEISBERG, ALC
13 direct physical loss or damage. There is nothing in the Increased Period of Restoration
14 coverage that directs that the 24 consecutive months limit of insurance should be
15 disregarded. Therefore, it is not proper to give that contract language no effect.
16 While the tentative ruling, at page 8, lines 17-19, refers to “the 24-month ‘period
17 of restoration”, the policy has no “24-month ‘period of restoration’”. The “period of
18 restoration” definition states the “special meaning” of that term. That definition contains
19 no 24-month limitation. This is why the amended Business Income coverage paragraph
20 refers to business income sustained “during the ‘period of restoration’ and that occurs
21 within 24 consecutive months …” [Emphasis added.] These are two separate
22 requirements, which is why the conjunction “and” is used.
23 As the Court correctly pointed out in the tentative ruling, “In interpreting the
24 policy language, the court first looks to the ‘ordinary and popular sense’ of the words
25 used. [Citations omitted.]” “And” means:
26 used as a function word to indicate connection or addition
especially of items within the same class or type — used to
27 join sentence elements of the same grammatical rank or
function.
28
60703 20221128 Obj to Tent Statement of Decision.docx 5
CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE
STATEMENT OF DECISION
1 Merriam-Webster.com. In the tentative ruling’s analysis of the words used in the
2 insurance policy, the conjunction “and”, between “period of restoration” and “24
3 consecutive months”, was not considered. By not considering “and”, the policy’s
4 meaning was changed from the only reasonable interpretation. There is no ambiguity. The
5 Business Income coverage’s limit of insurance includes both the “period of restoration”,
6 including the portion related to the time required to comply with ordinances and law, and
7 24 consecutive months after the physical damage occurs.
8 The Increased Period of Restoration, which by its terms added coverage for the
9 construction time needed to comply with ordinances or law, is not limited by that portion
10 of the “period of restoration” definition. But neither the rest of that definition, nor the 24
11 consecutive month limitation, is eliminated. The court correctly notes that “Logically, an
12 ‘Increased Period of Restoration’ must be increased from something.” The policy terms
GLADSTONEWEISBERG, ALC
13 increase it from the lack of coverage for the time it takes to comply with applicable
14 construction ordinances and law to providing coverage for that time. By the terms of the
15 Increased Period of Restoration additional coverage, that is the purpose of the provision.
16 The tentative ruling states that “The change in paragraph H eliminating the
17 exception of any increased period required due to the enforcement of any ordinance or
18 law that regulates the construction, use, or repair, or requires the tearing down of any
19 property from the definition of ‘period of restoration’ takes care of including such
20 coverage in the ‘period of restoration.’” While changing the “period of restoration”
21 definition and also specifically stating that the limit of insurance includes any loss arising
22 from any increased period required to repair or reconstruct to comply with applicable
23 ordinances or laws may result in some overlap, doing so makes the policy more clear. It
24 does not create an ambiguity. The Business Income coverage provision in the CIG
25 Property Plus form provides that business income loss sustained during the period of
26 restoration, as that term is defined as the endorsement modifies it, “and that occurs within
27 24 consecutive months after the date of direct physical loss or damage”, is insured.
28
60703 20221128 Obj to Tent Statement of Decision.docx 6
CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE
STATEMENT OF DECISION
1 The “Increased Period of Restoration” paragraph that follows does not add
2 coverage. It adds a provision that states that the “limit of insurance that applies to
3 coverage under” the CIG Property Plus endorsement includes any loss arising from the
4 increased period needed to comply with construction ordinances and law. As noted, the
5 “limit of insurance” that applies to this increased period includes two elements, the first
6 being the “period of restoration” time, which begins 72 hours after the time of direct
7 physical loss or damage and ends, where the property is repaired or rebuilt, on the date
8 when the property “should be repaired, rebuilt or replaced with reasonable speed and
9 similar quality.” The second element is business income “that occurs within 24
10 consecutive months after the date of direct physical loss or damage.” The “Increased
11 Period of Restoration” paragraph does not state that “we [California Capital] will pay”
12 for anything more or different from the Business Income paragraph’s agreement that “we
GLADSTONEWEISBERG, ALC
13 will only pay for loss of Business Income” sustained during the “period of restoration”
14 and “that occurs within 24 consecutive months after the date of direct physical loss or
15 damage.” It accentuates that the “limit of insurance” includes any increased time to
16 comply with ordinances or law. It does not state that it changes that limit.
17 Courts have expressly held policy provisions setting forth a coverage limitation
18 based on a specific time frame are enforceable and unambiguous. See Shaw Mortg. Corp.
19 v. Peerless Ins. Co., 615 F. Supp. 2d 1172 (S.D. Cal. 2009). In Shaw, the District Court
20 expressly discussed a policy endorsement that increased the limit on an additional
21 coverage for loss of business income from 12-months to 15-months. Like the California
22 Capital policy, the policy in that case afforded coverage for the actual loss sustained
23 subject to a time limit. Id. at 1178. The Court rejected the argument that the change
24 affected the available coverage, explaining:
25 This provision simply expands the coverage period for
business Income loss. Nothing in this provision eliminates the
26 “Period of Restoration” limitation or other requirements for
recovery.
27
28
60703 20221128 Obj to Tent Statement of Decision.docx 7
CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE
STATEMENT OF DECISION
In summary, the Policy language clearly limits the recovery
1 of business income loss to the “Period of Restoration.” The
period of recovery ends either when the Period of Restoration
2 ceases or upon the expiration of the 15–month period set forth
in the Platinum Endorsement, whichever comes first.
3
4 As a result, the court also held that “[b]ecause there is no ambiguity in the [p]olicy
5 on these points, the insured’s expectation of coverage does not come into play.” Id.
6 Since the Shaw decision, other District Courts have applied California law to
7 reject arguments similar to those that Plaintiff made in this case. For example, the
8 decision in SH Premium, Inc. v. Travelers Cas. Ins. Co. of Am., 2013 WL 12131729, at *6
9 (C.D. Cal. Apr. 8, 2013), is instructive. There, the Court held there was no ambiguity in
10 the policies it was evaluating in the three cases it discussed, Shaw, SH Premium and
11 CIMCO Communications, Inc. v. National Fire Insurance. Co. of Hartford, 407 Ill. App.
12 3d 32, 37 (2011). Instead, the Court found that the 12-month limit it was considering “is
GLADSTONEWEISBERG, ALC
13 most reasonably interpreted to act as an outside limit on what Defendant will pay for
14 claims of lost business income and extra expenses. [¶] Consequently, the Court finds that
15 the Policy, read as a whole, is not ambiguous …” SH Premium, 2013 WL 12131729, at
16 *6-7.
17 The California Capital policy, when read as a whole, is not ambiguous. While
18 there may have been other ways to amend the policy to accomplish the same result, that
19 does not mean the method California Capital used was not clear and unambiguous. When
20 the word “and”, between “period of restoration” and “24 consecutive months”, is given
21 effect, there is no ambiguity that the “24 consecutive months” limit must be applied to the
22 Increased Period of Restoration related to complying with construction ordinances or
23 laws. There is no requirement that the Business Income coverage’s 24 consecutive month
24
25
26
27
28
60703 20221128 Obj to Tent Statement of Decision.docx 8
CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE
STATEMENT OF DECISION
1 coverage limit be given no effect when providing coverage for the time it takes to comply
2 with construction ordinances or law.
3
4 DATED: November 28, 2022 Respectfully submitted,
5 GLADSTONEWEISBERG, ALC
6
7 BY: /s/Gene A. Weisberg
GENE A. WEISBERG
8 ANTHONY DiPIETRA
Attorneys for Defendant California Capital
9 Insurance Company
10
11
12
GLADSTONEWEISBERG, ALC
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
60703 20221128 Obj to Tent Statement of Decision.docx 9
CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE
STATEMENT OF DECISION
AFFIDAVIT AND DECLARATION OF PROOF OF SERVICE
1
I am over the age of eighteen years and not a party to the within action. I am
2 employed by GladstoneWeisberg, ALC, whose business address is: 300 Corporate Pointe,
Suite 400, Culver City, CA 90230.
3
On November 28, 2022, I filed electronically the following document:
4
CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO
5 TENTATIVE STATEMENT OF DECISION
6 A copy of this filing will be sent to the following parties by operation of the
Court’s electronic filing system:
7
8 Russell F. Rowen, Esq. Attorneys for Plaintiff
Eric D. McFarland, Esq.
9 Alexandra Peery, Esq.
THOMPSON, WELCH, SOROKO &
10 GILBERT, LLP
3950 Civic Center Drive, Suite 300
11 San Rafael, CA 94903
Tel: 415/448-5000
12 Fax: 415/448-5010
GLADSTONEWEISBERG, ALC
russ@twsglaw.com
13 eric@twsglaw.com
alex@twsglaw.com
14
For EService Use:
15 service@twsglaw.com
16
17 lfZ1l (State) I declare under penalty of perjury under the laws of the State of California
that the foregoing is true and correct.
18
Executed on November 28, 2022, at Los Angeles, California.
19
20
/s/ Gail Bromberg
21 GAIL BROMBERG
22
23
24
25
26
27
28
60703 20221128 Obj to Tent Statement of Decision.docx 10
CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE
STATEMENT OF DECISION
Preview
1 GLADSTONEWEISBERG, ALC 2 Gene A. Weisberg, SBN 91544 gweisberg@gladstoneweisberg.com 3 Anthony DiPietra, SBN 235994 adipietra@gladstoneweisberg.com 4 300 Corporate Pointe, Suite 400 Culver City, CA 90230 5 Tel: (310) 821-9000 • Fax: (310) 943-2764 6 Attorneys for Defendant 7 California Capital Insurance Company 8 9 SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 FOR THE COUNTY SONOMA 11 12 RMB REAL ESTATE ) CASE NO. SCV-267840 GLADSTONEWEISBERG, ALC 13 INVESTMENTS 2, LLC, A California ) limited liability company, ) [Assigned to the Hon. Bradford DeMeo] ) 14 Plaintiff, ) ) CALIFORNIA CAPITAL INSURANCE 15 vs. ) COMPANY’S OBJECTIONS TO ) TENTATIVE STATEMENT OF 16 CALIFORNIA CAPITAL ) DECISION INSURANCE COMPANY and DOES ) 17 1-7, DATE ) ) Date Action Filed: February 22, 2021 18 Defendants. ) Trial Date: October 7, 2022 ) (Phase 1) 19 Oral Argument: November 30, 2022 20 TIME: 3:00 p.m. CTRM: 17 21 22 23 In preparation for oral argument scheduled for November 30, 2022, and pursuant 24 to California Rules of Court Rule 3.1590(g), Defendant California Capital Insurance 25 Company submits its summary of objections to the Court’s October 31, 2022, Tentative 26 Statement of Decision. 27 28 60703 20221128 Obj to Tent Statement of Decision.docx 1 CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE STATEMENT OF DECISION 1 1. OBJECTIONS TO TENTATIVE RULING 2 For the reasons explained in more detail below, California Capital objects to the 3 tentative ruling on the following grounds: 4 1. California Capital objects to the tentative ruling to the extent that it does 5 not apply the 24 consecutive month limit by its interpretation of how the 6 “period of restoration” definition applies rather than applying them as 7 separate provisions, as written in the policy. 8 2. California Capital objects to the tentative ruling because it does not apply 9 the limit of insurance language in the Increased Period of Restoration 10 additional coverage, instead finding that the 24 consecutive month limit of 11 insurance does not apply despite the limit of insurance reference in the 12 policy language. GLADSTONEWEISBERG, ALC 13 3. California Capital objects to the tentative ruling to the extent it refers to a 14 “period of restoration subsection” in the policy that does not exist. 15 4. California Capital objects to the tentative ruling because the of the 16 conclusion that the policy is ambiguous to the extent that conclusion is 17 based on a determination that there may have been another way to state the 18 policy language. 19 20 2. THE INCREASED PERIOD OF RESTORATION ADDITIONAL 21 COVERAGE IS SUBJECT TO THE BUSINESS INCOME COVERAGE’S 22 24 CONSECUTIVE MONTH LIMIT OF INSURANCE 23 In listing the various amendments to the Businessowners Special Property 24 Coverage Form (BP 00 02) (“Businessowners Form”) that the CIG Property Plus 25 endorsement form, form 03-411 (08/12), is making, the CIG Property Plus form states, in 26 part, with regard to Business Income coverage, as follows: 27 28 60703 20221128 Obj to Tent Statement of Decision.docx 2 CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE STATEMENT OF DECISION A.5 Additional Coverages. 1 The following coverages are added to or replaced in your 2 policy, but do not increase the Limits of Insurance for Coverage a., Buildings and Coverage b. Business personal 3 property.… 4 This section of the CIG Property Plus endorsement replaces the Business Income 5 Additional coverage stated in the Businessowners Form. By stating the endorsement 6 “replaces” specified paragraphs in the Businessowners Form, there is a clear statement 7 that the language in that form has no effect, having been replaced by the language in the 8 CIG Property Plus form. The Property Plus endorsement states: 9 Item (1) paragraph 3, is replaced by the following: 10 The only difference between the original Item (1) paragraph 3 and the replacement 11 paragraph is the original 12 consecutive months after the date of direct physical loss or 12 damage limit of insurance is replaced with a 24 consecutive months limit of insurance. GLADSTONEWEISBERG, ALC 13 The policy is clear that the paragraph stated in the CIG Property Plus form replaces the 14 paragraph in the Businessowners Form, doubling that limit of insurance. 15 The next change the CIG Property Plus form makes to the Business Income 16 Additional Coverage in the Businessowners Form is to add “Item (3)”, which adds 17 “Increased Period of Restoration” coverage that does not exist in the Businessowners 18 Form. The “f. Business Income” Additional Coverage in the Businessowners Form 19 includes “(1) Business Income” and “(2) Extended Business Income”. The CIG Property 20 Plus form adds “(3) Increased Period of Restoration” to the Business Income Additional 21 Coverage provision. It was not created as a separate Additional Coverage, along with 22 Debris Removal, Preservation of Property, Fire Department Service Charge, etc. Instead, 23 it was added as part of the “Business Income” Additional Coverage that already existed in 24 the Businessowners Form. As such, it must be read as part of the Business Income 25 Additional Coverage, not as a separate coverage. 26 The Increased Period of Restoration portion of the Business Income coverage 27 states that: 28 60703 20221128 Obj to Tent Statement of Decision.docx 3 CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE STATEMENT OF DECISION [t]he limit of insurance that applies to coverage under this 1 endorsement includes any loss arising from any increased period required to repair or reconstruct the property to comply 2 with the minimum standards of any ordinance or law, in force at the time of the loss, that regulates the construction or 3 repair, or requires the tearing down of any property. 4 5 By referencing the “limit of insurance that applies to coverage under this 6 endorsement”, this added coverage provision expressly states it is part of the Business 7 Income limit of insurance that applies. This provision must be referencing some limit of 8 insurance in the endorsement, as every provision in a contract must be given meaning. 9 California Civil Code § 1641 (“The whole of a contract is to be taken together, so as to 10 give effect to every part, if reasonably practicable, each clause helping to interpret the 11 other”). 12 The only “limit of insurance” to which this added paragraph reasonably can be GLADSTONEWEISBERG, ALC 13 referencing is the 24 consecutive months limit of insurance stated in the “(1) Business 14 Income” coverage because the Increased Period of Restoration added coverage is a type 15 of Business Income coverage. The policyholder is not, and would not, argue that the limit 16 of insurance that should apply is the $25,000 limit of insurance in the added Interruption 17 of Service coverage (added Item 4), or the $100,000 Newly Acquired Structures (Item 5) 18 coverage, as both of them would provide a lower limit of insurance than the 24 19 consecutive month limit. 20 Because the endorsement drafters did not intend to cover Interruption of Service or 21 Newly Acquired Structures for 24 consecutive months, but instead for a stated dollar 22 limit, those dollar limits were stated in the endorsement that added those coverages. The 23 Increased Period of Restoration added coverage did not state a specific dollar limit. That 24 does not mean there is no limit of insurance. The provision expressly states that there is a 25 limit when its reference to “the limit of insurance that applies to coverage under this 26 endorsement” makes it clear that there is a limit of insurance that applies. 27 The tentative ruling (p. 8, lines 13-14) refers to a “‘period of restoration’ 28 subsection”. The policy contains no “‘period of restoration’ subsection’. It has a “period 60703 20221128 Obj to Tent Statement of Decision.docx 4 CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE STATEMENT OF DECISION 1 of restoration” definition contained within section H, the “Property Definitions” section 2 in the Businessowners Form (page 22 of that form). As stated at the top of the first page 3 of the Businessowners Form: 4 Other words and phrases that appear in quotation marks have special meaning. Refer to Section H –Property Definitions. 5 6 The “period of restoration” definition expressly does not include the increased 7 time required to comply with any ordinance or law that regulates construction or repair. 8 The Increased Period of Restoration added coverage supersedes this limitation in the 9 definition. The added coverage does not refer to that definition directly. Instead, it refers 10 to the “limit of insurance that applies to coverage under this endorsement.” That must be 11 a reference to the paragraph directly above it, (1) Business Income, which references both 12 the “period of restoration” defined term and the 24 consecutive months after the date of GLADSTONEWEISBERG, ALC 13 direct physical loss or damage. There is nothing in the Increased Period of Restoration 14 coverage that directs that the 24 consecutive months limit of insurance should be 15 disregarded. Therefore, it is not proper to give that contract language no effect. 16 While the tentative ruling, at page 8, lines 17-19, refers to “the 24-month ‘period 17 of restoration”, the policy has no “24-month ‘period of restoration’”. The “period of 18 restoration” definition states the “special meaning” of that term. That definition contains 19 no 24-month limitation. This is why the amended Business Income coverage paragraph 20 refers to business income sustained “during the ‘period of restoration’ and that occurs 21 within 24 consecutive months …” [Emphasis added.] These are two separate 22 requirements, which is why the conjunction “and” is used. 23 As the Court correctly pointed out in the tentative ruling, “In interpreting the 24 policy language, the court first looks to the ‘ordinary and popular sense’ of the words 25 used. [Citations omitted.]” “And” means: 26 used as a function word to indicate connection or addition especially of items within the same class or type — used to 27 join sentence elements of the same grammatical rank or function. 28 60703 20221128 Obj to Tent Statement of Decision.docx 5 CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE STATEMENT OF DECISION 1 Merriam-Webster.com. In the tentative ruling’s analysis of the words used in the 2 insurance policy, the conjunction “and”, between “period of restoration” and “24 3 consecutive months”, was not considered. By not considering “and”, the policy’s 4 meaning was changed from the only reasonable interpretation. There is no ambiguity. The 5 Business Income coverage’s limit of insurance includes both the “period of restoration”, 6 including the portion related to the time required to comply with ordinances and law, and 7 24 consecutive months after the physical damage occurs. 8 The Increased Period of Restoration, which by its terms added coverage for the 9 construction time needed to comply with ordinances or law, is not limited by that portion 10 of the “period of restoration” definition. But neither the rest of that definition, nor the 24 11 consecutive month limitation, is eliminated. The court correctly notes that “Logically, an 12 ‘Increased Period of Restoration’ must be increased from something.” The policy terms GLADSTONEWEISBERG, ALC 13 increase it from the lack of coverage for the time it takes to comply with applicable 14 construction ordinances and law to providing coverage for that time. By the terms of the 15 Increased Period of Restoration additional coverage, that is the purpose of the provision. 16 The tentative ruling states that “The change in paragraph H eliminating the 17 exception of any increased period required due to the enforcement of any ordinance or 18 law that regulates the construction, use, or repair, or requires the tearing down of any 19 property from the definition of ‘period of restoration’ takes care of including such 20 coverage in the ‘period of restoration.’” While changing the “period of restoration” 21 definition and also specifically stating that the limit of insurance includes any loss arising 22 from any increased period required to repair or reconstruct to comply with applicable 23 ordinances or laws may result in some overlap, doing so makes the policy more clear. It 24 does not create an ambiguity. The Business Income coverage provision in the CIG 25 Property Plus form provides that business income loss sustained during the period of 26 restoration, as that term is defined as the endorsement modifies it, “and that occurs within 27 24 consecutive months after the date of direct physical loss or damage”, is insured. 28 60703 20221128 Obj to Tent Statement of Decision.docx 6 CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE STATEMENT OF DECISION 1 The “Increased Period of Restoration” paragraph that follows does not add 2 coverage. It adds a provision that states that the “limit of insurance that applies to 3 coverage under” the CIG Property Plus endorsement includes any loss arising from the 4 increased period needed to comply with construction ordinances and law. As noted, the 5 “limit of insurance” that applies to this increased period includes two elements, the first 6 being the “period of restoration” time, which begins 72 hours after the time of direct 7 physical loss or damage and ends, where the property is repaired or rebuilt, on the date 8 when the property “should be repaired, rebuilt or replaced with reasonable speed and 9 similar quality.” The second element is business income “that occurs within 24 10 consecutive months after the date of direct physical loss or damage.” The “Increased 11 Period of Restoration” paragraph does not state that “we [California Capital] will pay” 12 for anything more or different from the Business Income paragraph’s agreement that “we GLADSTONEWEISBERG, ALC 13 will only pay for loss of Business Income” sustained during the “period of restoration” 14 and “that occurs within 24 consecutive months after the date of direct physical loss or 15 damage.” It accentuates that the “limit of insurance” includes any increased time to 16 comply with ordinances or law. It does not state that it changes that limit. 17 Courts have expressly held policy provisions setting forth a coverage limitation 18 based on a specific time frame are enforceable and unambiguous. See Shaw Mortg. Corp. 19 v. Peerless Ins. Co., 615 F. Supp. 2d 1172 (S.D. Cal. 2009). In Shaw, the District Court 20 expressly discussed a policy endorsement that increased the limit on an additional 21 coverage for loss of business income from 12-months to 15-months. Like the California 22 Capital policy, the policy in that case afforded coverage for the actual loss sustained 23 subject to a time limit. Id. at 1178. The Court rejected the argument that the change 24 affected the available coverage, explaining: 25 This provision simply expands the coverage period for business Income loss. Nothing in this provision eliminates the 26 “Period of Restoration” limitation or other requirements for recovery. 27 28 60703 20221128 Obj to Tent Statement of Decision.docx 7 CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE STATEMENT OF DECISION In summary, the Policy language clearly limits the recovery 1 of business income loss to the “Period of Restoration.” The period of recovery ends either when the Period of Restoration 2 ceases or upon the expiration of the 15–month period set forth in the Platinum Endorsement, whichever comes first. 3 4 As a result, the court also held that “[b]ecause there is no ambiguity in the [p]olicy 5 on these points, the insured’s expectation of coverage does not come into play.” Id. 6 Since the Shaw decision, other District Courts have applied California law to 7 reject arguments similar to those that Plaintiff made in this case. For example, the 8 decision in SH Premium, Inc. v. Travelers Cas. Ins. Co. of Am., 2013 WL 12131729, at *6 9 (C.D. Cal. Apr. 8, 2013), is instructive. There, the Court held there was no ambiguity in 10 the policies it was evaluating in the three cases it discussed, Shaw, SH Premium and 11 CIMCO Communications, Inc. v. National Fire Insurance. Co. of Hartford, 407 Ill. App. 12 3d 32, 37 (2011). Instead, the Court found that the 12-month limit it was considering “is GLADSTONEWEISBERG, ALC 13 most reasonably interpreted to act as an outside limit on what Defendant will pay for 14 claims of lost business income and extra expenses. [¶] Consequently, the Court finds that 15 the Policy, read as a whole, is not ambiguous …” SH Premium, 2013 WL 12131729, at 16 *6-7. 17 The California Capital policy, when read as a whole, is not ambiguous. While 18 there may have been other ways to amend the policy to accomplish the same result, that 19 does not mean the method California Capital used was not clear and unambiguous. When 20 the word “and”, between “period of restoration” and “24 consecutive months”, is given 21 effect, there is no ambiguity that the “24 consecutive months” limit must be applied to the 22 Increased Period of Restoration related to complying with construction ordinances or 23 laws. There is no requirement that the Business Income coverage’s 24 consecutive month 24 25 26 27 28 60703 20221128 Obj to Tent Statement of Decision.docx 8 CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE STATEMENT OF DECISION 1 coverage limit be given no effect when providing coverage for the time it takes to comply 2 with construction ordinances or law. 3 4 DATED: November 28, 2022 Respectfully submitted, 5 GLADSTONEWEISBERG, ALC 6 7 BY: /s/Gene A. Weisberg GENE A. WEISBERG 8 ANTHONY DiPIETRA Attorneys for Defendant California Capital 9 Insurance Company 10 11 12 GLADSTONEWEISBERG, ALC 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 60703 20221128 Obj to Tent Statement of Decision.docx 9 CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE STATEMENT OF DECISION AFFIDAVIT AND DECLARATION OF PROOF OF SERVICE 1 I am over the age of eighteen years and not a party to the within action. I am 2 employed by GladstoneWeisberg, ALC, whose business address is: 300 Corporate Pointe, Suite 400, Culver City, CA 90230. 3 On November 28, 2022, I filed electronically the following document: 4 CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO 5 TENTATIVE STATEMENT OF DECISION 6 A copy of this filing will be sent to the following parties by operation of the Court’s electronic filing system: 7 8 Russell F. Rowen, Esq. Attorneys for Plaintiff Eric D. McFarland, Esq. 9 Alexandra Peery, Esq. THOMPSON, WELCH, SOROKO & 10 GILBERT, LLP 3950 Civic Center Drive, Suite 300 11 San Rafael, CA 94903 Tel: 415/448-5000 12 Fax: 415/448-5010 GLADSTONEWEISBERG, ALC russ@twsglaw.com 13 eric@twsglaw.com alex@twsglaw.com 14 For EService Use: 15 service@twsglaw.com 16 17 lfZ1l (State) I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. 18 Executed on November 28, 2022, at Los Angeles, California. 19 20 /s/ Gail Bromberg 21 GAIL BROMBERG 22 23 24 25 26 27 28 60703 20221128 Obj to Tent Statement of Decision.docx 10 CALIFORNIA CAPITAL INSURANCE COMPANY’S OBJECTIONS TO TENTATIVE STATEMENT OF DECISION