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  • HANFORD FREUND & COMPANY ET AL VS. HOMELAND INSURANCE COMPANY OF NEW YORK, ET AL SUBROGATION/INSURANCE document preview
  • HANFORD FREUND & COMPANY ET AL VS. HOMELAND INSURANCE COMPANY OF NEW YORK, ET AL SUBROGATION/INSURANCE document preview
  • HANFORD FREUND & COMPANY ET AL VS. HOMELAND INSURANCE COMPANY OF NEW YORK, ET AL SUBROGATION/INSURANCE document preview
  • HANFORD FREUND & COMPANY ET AL VS. HOMELAND INSURANCE COMPANY OF NEW YORK, ET AL SUBROGATION/INSURANCE document preview
  • HANFORD FREUND & COMPANY ET AL VS. HOMELAND INSURANCE COMPANY OF NEW YORK, ET AL SUBROGATION/INSURANCE document preview
  • HANFORD FREUND & COMPANY ET AL VS. HOMELAND INSURANCE COMPANY OF NEW YORK, ET AL SUBROGATION/INSURANCE document preview
  • HANFORD FREUND & COMPANY ET AL VS. HOMELAND INSURANCE COMPANY OF NEW YORK, ET AL SUBROGATION/INSURANCE document preview
  • HANFORD FREUND & COMPANY ET AL VS. HOMELAND INSURANCE COMPANY OF NEW YORK, ET AL SUBROGATION/INSURANCE document preview
						
                                

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Co ON HH FW NHN — See Be ee DH vn —F BW VY KS S&S 17 FILE Superior Court of Galiforni: County of San Francisco SEP 12 2019 CLERWOF THE COURT BY: wa Cen Bene — Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO, CIVIC CENTER COURTHOUSE HANFORD FREUND & COMPANY, a California corporation, and POWELL STREET PARTNERS, LLC, a California Limited Liability Company, Plaintiffs, v. HOMELAND INSURANCE COMPANY OF NEW YORK, a Minnesota corporation, HUB INTERNATIONAL INSURANCE SERVICES, INC., a California corporation, DOROTHY MCCORKINDALE, a California resident, KRISTIN KOKETSU, a California resident, and DOES 1 through 10, inclusive, Defendants. Case No. CGC-18-568623 The Hon. Ethan P. Schulman Dept. 302 ORDER GRANTING PLAINTIFFS’ MOTION FOR SUMMARY. ADJUDICATION Date: August 28, 2019 Time: 9:30 a.m. Dept.: 302 -l- ORDER GRANTING PLAINTIFFS’ MOTION FOR SUMMARY ADJUDICATION— oe ert nun FF WB WY 10 ORDER Plaintiffs Hanford Freund & Company and Powell Partners, LLC’s motion for summary adjudication is granted. The court concludes that provision 2.b of the Loss Occurrence Limit of Liability Endorsement to the policy is not effective because the defendant failed to provide plain, clear and conspicuous notice to plaintiffs of the potential reduction in coverage stemming from that portion of the endorsement. The court rejects plaintiffs’ argument that the endorsement changed the policy into a “valued” policy. Under the Insurance Code, a policy is either “open” or “valued.” (Ins. Code § 410; see George v. Automobile Club of Southern Calif. (2011) 201 Cal.App.4th 1112, 1129 [rejecting argument that automobile policy that did not show on its face an agreement to value insured vehicle at $25,000, but instead left the value to be ascertained in case of loss, was valued policy].) An “open policy” is one in which the value of the insured property is “left to be ascertained in a case of loss,” and thus is not determined until after a loss occurs. (Ins. Code § 411; see Doan v. State Farm Gen. Ins. Co. (2011) 195 Cal.App.4th 1082, 1093 fn. 7.) A “valued policy” is one “which expresses on its face an agreement that the thing insured shall be valued at a specified sum.” (Ins. Code § 412). Here, the endorsement provides that recovery “will not exceed the lesser of” four separate formulas to calculate the loss. Such language shows that the value would not be determined until after the loss. Therefore, the policy is open and Insurance Code §§ 2052, 2053, and 2056 do not apply to this case. (See George v. Automobile Club of Southern California, 201 Cal.App.4th at 1129; Elliano v. Assurance Co. of America (1975) 45 Cal.App.3d 170, 180 [policy which did not contain clause stating that parties had fixed the value of insured’s interest in insured building or structure was not a valued policy]; Nat’ Union Fire Ins. Co. of Pittsburgh, Pa. v. California Cotton Credit Corp. (9th Cir. 1935) 76 F.2d 279, 286 [“the term ‘not exceeding’ in a policy of insurance denotes that uncertainty of amount which is the chief characteristic distinguishing an open from a valued policy”].) 2- ORDER GRANTING PLAINTIFFS” MOTION FOR SUMMARY ADJUDICATIONoOo errr Dn nH F&F Ww NH Yb NY NY NY N NY WY a a a ie It is a long-standing general principle applicable to insurance policies that an insurance company is bound by a greater coverage in an earlier policy when a renewal policy is issued but the insured is not notified of the specific reduction in coverage. [citations]... “[A]n insurer when renewing a policy may not change the terms of the policy, without first notifying the insured ....” (Fields v. Blue Shield of California (1985) 163 Cal.App.3d 570, 579 [insurer’s failure to notify insured “by a clear, conspicuous notice in an expected place that coverage he originally had was now totally withdrawn” required granting insured’s motion for directed verdict as to compensatory damages]; Davis v. United Services Auto. Assn. (1990) 223 Cal.App.3d 1322, 1333 [insurer failed to provide plain, clear and conspicuous notice of its intent to exclude losses caused by contractor negligence]; see also Al/state Ins. Co. v. Fibus (9th Cir. 1988) 855 F.2d 660, 663 [reversing summary judgment for insurer where amendatory endorsement replacing language in “Limits of Liability” section of policy did not conspicuously notify insured of a reduction in coverage].) Defendants have not cited any authority that limits this renewal- notification rule to situations where the insured is an unsophisticated individual consumer rather than, as here, a commercial party represented by an insurance broker. Insureds are even less likely to read renewal policies than original policies. Therefore, it is not enough that the new exclusion is “plain and clear” and appears in a “conspicuous” place in the renewal policy. Some form of specific notice separate from the policy is required to direct the insured’s attention to the change. (See Sorensen v. Farmers Ins. Exch. (1976) 56 Cal.App.3d 328, 334.) “But neither the prevalence of endorsements in the industry nor our recognition that they may validly modify an insurance policy diminishes an insurer’s burden in notifying insureds of reductions in otherwise reasonably expected coverage.” (Haynes v. Farmers Ins. Exchange (2004) 32 Cal.4th 1198, 1208.) In this case, plaintiffs demonstrate that neither plaintiffs nor HUB was given plain, clear, and conspicuous notice that the endorsement was being added, thereby potentially reducing the amount of coverage available under the excess policy. (Falvey Dec., 5; 3. ORDER GRANTING PLAINTIFFS’ MOTION FOR SUMMARY ADJUDICATIONoO Ont KH nH F&F WN No Ww ON Bw Ye ee Be eB ee ek BRRBRRBBRRSESCFERABEBHEAS McCorkindale Dec., {{ 9-16.) The documents that defendant adduces fail to show such notice. (See McCorkindale Dec., Ex. 3 at 52 and Ex. 4 at 59; Miles Dec., Ex. 1 at 7, Ex. 2 at 15, Ex. 3 at 27, Ex. 4 at 39 and Ex. 5 at 50.) IT IS SO ORDERED. parep.Sepr. (I, Zol 4 Pca p Gof’ ——— At ETHAN P. SCHULMAN JUDGE OF THE SUPERIOR COURT 4. ORDER GRANTING PLAINTIFFS’ MOTION FOR SUMMARY ADJUDICATIONCm XA Ane wN Ee RYN YN YN NN KY Be Be ee we ee ew ewe old A A FYB YH F&F SO we NI DH FF YW NH FS SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN FRANCISCO HANFORD FREUND & COMPANY, et al., Case No. CGC-18-568623 Plaintiffs, CERTIFICATE OF MAILING v. (CCP 1013a (4) ) HOMELAND INSURANCE COMPANY, et al., Defendants. I, Sean Kane, Deputy Clerk of the Superior Court of the County of San Francisco, certify that I am not a party to the within action. On September 12, 2019, I served the attached ORDER GRANTING PLAINTIFFS’ MOTION FOR SUMMARY ADJUDICATION by placing a copy thereof in a sealed envelope, addressed as follows: Philip L. Pillsbury, Esq. Richard Randal Crispen, Esq. Eric K. Larson, Esq. SHEPPARD, MULLIN, RICHTER PILLSBURY & COLEMAN LLP & HAMPTON LLP 600 Montgomery Street, Suite 3100 : 501 West Broadway, 19" Floor San Francisco, CA 94111 San Diego, CA 92101-3598 Bruce T. Smyth, Esq. Randy M. McElvain, Esq. Jeffrey A. Charlston, Esq. WESTON & MCELVAIN LLP CHARLSTON, REVICH & WOLLITZ LLP 1960 East Grand Avenue, Suite 400 1925 Century Park East, Suite 320 E] Segundo, CA 90245 Los Angeles, CA 90067Co eo YN DH FF BW HY no N NN Be Be Be Be ee ee eB BeRERRBKRRSERWAARTSRAS and, I then placed the sealed envelopes in the outgoing mail at 400 McAllister Street, San Francisco, CA 94102 on the date indicated above for collection, attachment of required prepaid postage, and mailing on that date following standard court practices. Dated: September 12, 2019 T. Mag (ln? By: Séah Kane, Deputy Clerk