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1 SANJIV N. SINGH, A PROFESSIONAL LAW CORPORATION
Sanjiv N. Singh (SBN 193525) ELECTRONICALLY
2 1650 S. Amphlett Blvd. Suite 220 F I L E D
Superior Court of California,
3 San Mateo, CA 94402 County of San Francisco
Phone: (650) 389-2255 05/22/2020
4 Clerk of the Court
Email: ssingh@sanjivnsingh.com
A PROFESSIONAL LAW CORPORATION
BY: MADONNA CARANTO
Deputy Clerk
5
1650 S. AMPHLETT BLVD. SUITE 220
INDRAJANA LAW GROUP, A PROFESSIONAL LAW CORPORATION
SAN MATEO, CA 94402
6 Michael Indrajana (SBN 258329)
SANJIV N. SINGH
1650 S. Amphlett Blvd. Suite 220
7
San Mateo, CA 94402
8 Phone: (650) 597-0928
Email: michael@indrajana.com
9
Attorneys for Plaintiff Outerlands, Inc.
10
11
IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
12
IN AND FOR THE COUNTY OF SAN FRANCISCO
13
UNLIMITED JURISDICTION
14
15
OUTERLANDS, INC., a California Case No.: CGC-20-583996
16 Corporation
FIRST AMENDED COMPLAINT FOR:
17 Plaintiff,
18 1. BREACH OF CONTRACT;
v. 2. BREACH OF IMPLIED COVENANT
A PROFESSIONAL LAW CORPORATION
19
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OF GOOD FAITH AND FAIR
20 DEALING;
INDRAJANA LAW GROUP
TRUCK INSURANCE EXCHANGE, a
SAN MATEO, CA 94402
3. BAD FAITH DENIAL OF
21 foreign insurance exchange and DOES 1
INSURANCE CLAIM;
through 50, inclusive,
22 4. DECLARATORY RELIEF;
23 Defendants. 5. UNJUST ENRICHMENT;
6. UNFAIR COMPETITION UNDER
24 BUS. & PROF. CODE § 17200 ET SEQ.;
25 7. INJUNCTIVE RELIEF UNDER BUS. &
PROF. CODE § 17200 ET SEQ.
26
27 JURY TRIAL DEMANDED
28
OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL.
FIRST AMENDED COMPLAINT
PAGE 1 OF 20
1 Plaintiff Outerlands, Inc., a California Corporation, brings this Complaint,
2 alleging against Truck Insurance Exchange, a foreign exchange (that is part of the
3 Farmers Insurance Group)and DOES 1 THROUGH 50 (“Defendants”), as follows:
4
A PROFESSIONAL LAW CORPORATION
5 INTRODUCTION
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6 1. This is an insurance bad faith lawsuit brought by Plaintiff Outerlands, Inc., a
SANJIV N. SINGH
7 California Corporation that owns and operates the beloved, landmark restaurant
8 Outerlands located in the Outer Sunset District in San Francisco, California (hereinafter
9 “Plaintiff” or “Outerlands”) against Truck Insurance Exchange and possible Does
10 (collectively, “Defendants”). Plaintiff seeks damages stemming from Defendants’ bad
11 faith handling and denial of Plaintiff’s claim for business income loss coverage.
12 Outlerlands, in good faith, based on the language of their policy and for the reason
13 many businesses bought insurance policies with business income interruption clauses,
14 reasonably expected that Defendants would provide coverage during these
15 unprecedented times for the catastrophic loss of business income they have suffered due
16 to the stay-at-home ordinances effected statewide, including in San Francisco.
17 Defendants not only have failed to provide this coverage, but have engaged in deceptive
18 and unfair business practices to evade responsibility for doing so. At a moment in world
A PROFESSIONAL LAW CORPORATION
19 history when insurance companies should be stepping up, Defendants appear to be
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20 hiding behind procedures and conduct that appears to be bad faith and motivated only
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SAN MATEO, CA 94402
21 by profit.
22 PARTIES
23 2. At all relevant times, Plaintiff Outerlands, Inc. is a California corporation and is
24 authorized to do business and doing business in the State of California, County of San
25 Francisco. Outerlands Inc. owns, operates, manages, and controls the restaurant
26 Outerlands located in San Francisco, California.
27
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OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL.
FIRST AMENDED COMPLAINT
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1 3. Defendant Truck Insurance Exchange is, and at all relevant times was, a foreign
2 insurance exchange with its headquarters and principal place of business in Los Angeles
3 County, in the State of California. It is a part of the Farmers Insurance Group.
4 4. Plaintiff does not know the true names and capacities, whether individual,
A PROFESSIONAL LAW CORPORATION
5 associate, or otherwise, of Defendants DOES 1 through 50, and therefore designate those
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6 Defendants by such fictitious names. Each of the Defendants sued herein as a DOE is
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7 legally responsible in some manner for the events and happenings referred to herein and
8 proximately caused the injuries suffered by the Plaintiff. DOES may include other
9 underwriters, agents, or individuals who participated in decisions or ratified decisions
10 that lead to or constituted the bad faith denial and misconduct of Truck Insurance
11 Exchange outlined in this Complaint. Plaintiff will amend this Complaint accordingly to
12 allege the true names and capacities of these DOE Defendants when/if the same becomes
13 known to Plaintiff.
14 JURISDICTION AND VENUE
15 5. Jurisdiction is proper pursuant to Cal. Code Civ. Proc. §§ 410.10, 410.50, and 1060.
16 6. Venue is proper in this Court because the acts and/or omissions complained of took
17 place, in whole or in part, within San Francisco County. Both Defendants conduct business
18 extensively throughout California, marketing their insurance policies and selling their
A PROFESSIONAL LAW CORPORATION
19 insurance policies to thousands of insured businesses and consumer businesses in
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20 California.
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SAN MATEO, CA 94402
21 GENERAL ALLEGATIONS
22 7. All allegations in this Complaint are based on information and belief and/or are
23 likely to have evidentiary support after a reasonable opportunity for further
24 investigation or discovery.
25 Outerlands and Its Decision to Purchase a Farmers Policy
26 8. Plaintiff’s business, Outerlands, is a cherished restaurant of the Sunset District in
27 California. Its opening more than a decade ago catalyzed a renaissance and economic
28 rebirth of the entire neighborhood. It brought jobs to numerous Sunset residents either
OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL.
FIRST AMENDED COMPLAINT
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1 through direct employment or the opening of similar businesses nearby. The owners of
2 Outerlands have been leaders of the community. The restaurant has enjoyed significant
3 critical acclaim and financial success, featured in publications and/or media like The New
4 York Times, The San Francisco Chronicle, SF Gate, and KQED. To safeguard their business
A PROFESSIONAL LAW CORPORATION
5 and investment and living in a state such as California where unexpected business
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6 interruptions have historically occurred, Plaintiff sought business insurance coverage
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7 with business interruption coverage from Defendants and renewed a policy with such
8 coverage on August 25, 2019. Defendants marketed their insurance products to Plaintiff
9 with specific representations that they would insure against “unexpected” events closing
10 the restaurant.1
11 9. At all relevant times, and since August 25, 2014, Plaintiff has been a Farmers
12 policyholder, currently insured under Farmers’ business policy number 0605860520 (the
13 “Policy”).
14 10. The Policy is currently in full effect, providing commercial business policy
15 coverage including coverage for lost business income which occurs during the policy
16 period, which is currently from August 25, 2019, through August 25, 2020.
17 11. Plaintiff faithfully paid policy premiums to Defendants, specifically to provide
18 additional coverages including but not limited to loss of business income due to Civil
A PROFESSIONAL LAW CORPORATION
19 Authority or civil ordinances. The policy expressly states that “in return for the
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20 payment of premium,” Defendants would provide Business Income & Extra Expense
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SAN MATEO, CA 94402
21 Coverage-Civil Authority with both short term and long term coverage provisions.
22 12. Under the Policy, the relevant Civil Authority coverage reads as follows: “We will
23 pay for the actual loss of Business Income you sustain and necessary Extra Expense
24 caused by the action of civil authority that prohibits access to the described premises due
25
26
27 1
In fact, Defendants specifically market their restaurant business policies as follows: “Whatever your
28 culinary specialty, you want to keep an “OPEN” sign in your restaurant’s window — and you can help
protect your business with Farmers® coverage if the unexpected threatens to close your kitchen.”
OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL.
FIRST AMENDED COMPLAINT
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1 to direct physical loss of or damage to property, other than at the described premises,
2 caused by or resulting from any Covered Cause of Loss. [emphasis added]” The Policy
3 also appears to say that no deductibles would apply to this coverage.
4 13. The Policy specifically extends coverage to business income and extra expense
A PROFESSIONAL LAW CORPORATION
5 caused by a civil authority limiting access to Plaintiff’s restaurant.
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6 The COVID-19 Pandemic
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7 14. On or about December of 2019, the so-called pathogen SARS CoV-2 (“COVID-
8 19”) was first identified in humans in Wuhan, China.
9 15. As is now commonly know, in an unprecedented event that has not occurred in
10 more than a century, a world pandemic of global proportions then ensued. By March 11,
11 2020, the World Health Organization officially recognized the pandemic. The virus has
12 already claimed 2400 lives in the United States, and 33,500 lives as of March 29 at 12:20
13 am.
14 16. It is well recognized that the virus can be spread through person to person
15 contacts like other viruses, and some experts believe that it may also be spread by people
16 touching contaminated surfaces (so-called “fomites”) and then their face.
17 17. On February 25, 2020, the Mayor of San Francisco, London Breed, declared a state
18 of emergency.
A PROFESSIONAL LAW CORPORATION
19 18. On March 12, 2020, the Governor of the State of California Gavin Newsom
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20 banned gatherings over 250 people.
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SAN MATEO, CA 94402
21 19. On March 16, 2020, the health departments of numerous counties, including San
22 Francisco, San Mateo, and Santa Clara announced, with the City of Berkeley, a legal
23 order directing residents to shelter in place for three weeks beginning midnight March
24 17 to April 7.
25 20. By March 19, 2020, the Governor of California issued a statewide stay at home
26 order (“State of California Order”) that would be in effect until further notice and is still
27 in effect as this pandemic worsens.
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OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL.
FIRST AMENDED COMPLAINT
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1 21. As of the date of the March 16th San Francisco Ordinance, restaurants like
2 Outerlands were designated as Essential Businesses with an implicit recognition of the
3 necessity to continue to provide food to city residents. As of March 19, 2020, the State of
4 California Order recognized the food and agricultural sector as critical infrastructure
A PROFESSIONAL LAW CORPORATION
5 sectors. Outerlands, despite the challenges of substantial revenue reductions and with a
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6 reasonable expectation of business insurance to facilitate their efforts, kept its doors
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7 open to provide the exact kind of takeout food options recognized as essential by the San
8 Francisco Ordinance and State of California Order.
9 22. Indeed, the Outerlands website states:
10 To our beloved community,
11 We have temporarily suspended dining room services due to the SF Shelter-In-
12 Place Mandate. We have shifted operations to provide a takeaway menu of lunch
13 and dinner options, plus pastries, fresh bread and drinks, available Thursday
through Monday, 1-8 pm. You can use the link below to order online, or you
14
can download the Toast Takeout app to your smartphone. Once your order is
15 placed, just swing by our side door on 45th Ave for pickup! Our goal is to offer
16 nourishing food options for our neighborhood as long as we are able during this
17 time.
18 23. At the same time, the San Francisco Ordinance and State of California Order, in
A PROFESSIONAL LAW CORPORATION
19 an unprecedented manner, required necessary measures to keep people at home and off
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20
INDRAJANA LAW GROUP
the streets and out of areas of public gatherings, and thereby crippled the major source
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21 of revenue (in person dining) for these same Essential Businesses. As a direct and
22 proximate result of this Order, access to businesses like Outerlands, including Essential
23 Businesses like Outerlands, have been specifically prohibited except for very limited
24 takeout or delivery options.
25 Rapid Denial of Outerlands’ Claims In Apparent Bad Faith
26 24. In good faith, Outerlands’ owners promptly notified Defendants even before the
27 ordinances, of their concerns and the risk for loss and whether there was coverage for
28 the losses under the Policy. Defendants’ representative did not initially respond.
OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL.
FIRST AMENDED COMPLAINT
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1 25. After the San Francisco Ordinance was in effect and on the same day the State of
2 California Order was issued, Outerlands owners personally called Defendants’
3 representative who indicated already, without any analysis, that he had been informed
4 the claim under the Policy would likely be denied. On information and belief, it is
A PROFESSIONAL LAW CORPORATION
5 believed that Defendants, along with other members of the insurance industry, have
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6 been strategizing how to deny claims and mitigate their losses as early as one to two
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7 months before the issuance of the San Francisco Order and State of California Order. On
8 information and belief and based on actual communications by Plaintiff with
9 Defendants, Defendants representatives seem to already know how Defendants’ highest
10 levels of management would respond to the claims, but encouraged Plaintiff to submit
11 the claim anyway in order to get government bailout money.
12 26. Despite being told that Farmers was going to deny the claim on their Policy,
13 Plaintiff submitted the claim on March 19, 2020. Oddly, they were told they did not need
14 to submit any information to do so (e.g., revenue loss, specific dates of loss, etc.) and that
15 their agent would submit a claim regardless. During this time, in violation of state law,
16 Defendants did not make relevant Policy information readily available, and Plaintiff,
17 despite asking for a full copy of their Policy, could not obtain one. Indeed, despite
18 touting its online platform and marketing the online platform as part of its insurance
A PROFESSIONAL LAW CORPORATION
19 product, Plaintiff could not get a copy of their policy, access to critical information about
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20 their claim, or the status of the claim.
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SAN MATEO, CA 94402
21 27. Within a very short period of time, without any evidence of good faith analysis by
22 Defendants, the owners of Outerlands were called by a claim adjuster for Defendants.
23 Plaintiff’s owners reminded him that they could not access the documents or Policy
24 online. Defendants’ representative stated that he regretted to inform Plaintiff that their
25 claim would be denied, and stated that there was “no language” in the Policy to support
26 the claim. Shockingly, he stated that he too could not access the very policy which he
27 was citing to as the justification for the denial.
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OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL.
FIRST AMENDED COMPLAINT
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1 28. On March 22, 2020, just three days after submitting their claim, Outerlands was
2 informed by email that their claim under the Policy was denied. The correspondence
3 was extremely confusing, appeared to be written in a formulaic, cut-and-paste fashion,
4 and denied the claim based on an ultimately inapplicable exclusion in the Policy which
A PROFESSIONAL LAW CORPORATION
5 Defendants claimed would eliminate the operation of the Civil Authority coverage
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6 expressly provided for in their Policy. By this date, despite repeated requests, Plaintiff
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7 had still not received a copy of the Policy.
8 29. On March 24, 2020, Plaintiff had still not received a copy of the Policy.
9 30. On March 25, 2020, Plaintiff received a letter from Defendants confirming denial
10 of the claim and telling them to use the denial to “secure aid in the new bailout package
11 they are putting together in DC.” The letter purported to give them a complete copy of
12 the Policy, but it did not.
13 31. On March 26, 2020, Plaintiff notified Defendant that they had not received the
14 complete copy of the Policy.
15 32. Only after repeated requests and pleas for the Policy did Plaintiff finally receive
16 the Policy on March 27, 2020.
17 33. On information and belief and based on actual communications, Defendants’
18 conduct above was ratified, ordered, and encouraged by officers of Defendants in order
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19 to effect a strategy to rapidly deny, deflect, and minimize COVID-19 related claims and
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20 losses for Defendants.
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SAN MATEO, CA 94402
21 FIRST CAUSE OF ACTION
22 (Breach of Contract against All Defendants)
23 34. Plaintiff re-alleges and incorporates by reference the allegations contained in the
24 preceding paragraphs of this Complaint, as though fully set forth herein.
25 35. Plaintiff was insured under a valid insurance policy, the aforementioned and
26 described Policy, issued by Defendants which was in effect on the date the loss occurred.
27 36. Plaintiff paid consideration in the form of premiums for Policy, and have
28 faithfully performed all obligations required to be performed by them under the terms
OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL.
FIRST AMENDED COMPLAINT
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1 of the Policy, except to the extent performance may have been excused by, among other
2 things, Defendants’ bad faith conduct and breach of the insurance policy.
3 37. Defendants breached the terms of the contract by not providing requisite
4 documentations required for submitting claims, by prematurely and without basis or
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5 reasonable good faith analysis denying the claim, and by ultimately failing to pay and/or
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6 underpaying monies due under the contract and by forcing Plaintiff to file this action.
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7 38. Plaintiff has demanded that Defendants pay, and Defendants have declined to
8 pay, Plaintiff’s claims for damages and losses of business income and additional
9 expenses due to Civil Authority, specifically the issuance of the San Francisco Ordinance
10 and State of California Order which limited public access to Outerlands.
11 39. As a direct, proximate, and legal result of Defendants’ breach of contract, Plaintiff
12 has been, and continues to be, damaged in an amount in excess of the jurisdictional
13 limits of this Court, including but not limited to: damage suffered to their business
14 caused by the loss of business income and additional expenses created by the San
15 Francisco Ordinance and State of California Order, the loss of benefits due under the
16 contract, and consequential damages including interest on the monies Plaintiff could
17 and should have received promptly, but which they did not receive in a timely manner
18 as a result of Defendants’ breach of the contract, as well as other fees, expenses, and
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19 costs to be proven at trial.
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20 40. Plaintiff has also sustained other economic losses as a direct, proximate, and legal
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21 result of Defendants’ conduct, in an amount to be proven at trial.
22 SECOND CAUSE OF ACTION
23 (Breach of the Implied Covenant of Good Faith and Fair Dealing against All
24 Defendants)
25 41. Plaintiff re-alleges and incorporates herein by reference the allegations contained
26 in the preceding paragraphs of this Complaint, as though fully set forth herein.
27
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FIRST AMENDED COMPLAINT
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1
2 42. Plaintiff’s insurance policy at issue in this action, the aforementioned Policy,
3 contains an implied covenant of good faith and fair dealing, whereby Defendants, and
4 each of them, agreed to perform their obligations under the Policy in good faith, to deal
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5 fairly with Plaintiff, and not to unreasonably deprive Plaintiff of the benefits due under
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6 the insurance policy.
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7 43. Defendants tortiously breached the implied covenant of good faith and fair
8 dealing arising from the insurance contract by unreasonably denying or withholding
9 benefits due under the Policy, by failing to conduct fair and objective claims
10 investigation, by failing to treat Plaintiff fairly and by other conduct, including but not
11 limited to that expressly set forth in this Complaint, after accepting insurance premiums
12 from Plaintiff. On information and belief, it appears that Defendants were, and are,
13 executing a directive to deny COVID-19 claims systematically.
14 44. Despite Plaintiff’s request for coverage and demand for payment of the
15 compensation for the business disruption caused by the San Francisco Ordinance and
16 State of California Order, Defendants denied coverage and blocked access to information
17 and engaged in a continuous pattern of tortious conduct which has and will cause
18 Plaintiff continued damages. Indeed, Plaintiff is an essential business and part of the
A PROFESSIONAL LAW CORPORATION
19 critical infrastructure identified by both the San Francisco Ordinance and State of
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20 California Order. They have tried to stay open as such to meet the critical needs of
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21 residents who need food, but shoulder each and every day losses due to a lack of
22 appropriate insurance coverage.
23 45. Defendants engaged and continue to engage in the course of conduct to further
24 their own economic interest, including and in violation of their obligations to Plaintiff.
25 This conduct includes, but is not limited to that conduct alleged in this Complaint and
26 the following:
27 a. Unreasonably and unjustifiably preventing access to the Policy;
28
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FIRST AMENDED COMPLAINT
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1 b. Failing to perform competent and/or complete investigation of the request for
2 coverage;
3 c. Misrepresenting the content of the Policy to Plaintiff; and
4 d. Deliberately, unjustifiably, and unreasonably denying coverage and hiding
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5 essential information in an effort to discourage Plaintiff from pursuing their full policy
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6 and benefits in the hope that they would instead pursue a government bailout;
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7 e. Refusing to pay any or adequate insurance benefits which a reasonable person
8 would have believed Plaintiff was entitled to receive;
9 f. Failing to provide promptly a reasonable explanation of the basis relied on in the
10 insurance policy, in relation to the facts or applicable law, for the denial of Plaintiff’s
11 claims, and instead providing a boilerplate, inapplicable explanation; and
12 g. Plaintiff is informed, believe and thereon allege, that Defendants have breached
13 their duties of good faith and fair dealing owed to Plaintiff by other acts or omissions of
14 which Plaintiff is presently unaware and which will be shown according to proof at the
15 time of trial.
16 46. Without any reasonable basis for doing so, and with full knowledge and/or
17 conscious disregard of the consequences, Defendants have failed and refused to act in
18 good faith or act fairly toward Plaintiff. Furthermore, Defendants have in bad faith
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19 failed and refused to perform their obligations under the insurance policy and the laws
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20 of the State of California.
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21 47. Defendants engaged in conduct that was malicious, fraudulent, and oppressive.
22 Indeed, Defendants engaged in a scheme designed to quickly deny Plaintiff’s claim and
23 deflect them to a government bailout. Farmers unreasonably denied Plaintiff’s claim
24 without investigating the actual cause of the loss and business interruption—i.e., the
25 Civil Authority orders themselves and their multiple expressly stated policy objectives
26 including preventing overrun of the health system and the City, County and State
27 concern for surface contamination and damage and person to person transmission.
28
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FIRST AMENDED COMPLAINT
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1 48. As a direct, proximate, and legal result of said breaches of the covenants of good
2 faith and fair dealing by Farmers, Plaintiff has been damaged and continues to incur
3 each and every day, substantial and foreseeable consequential and incidental damages,
4 including loss of income and net profits, continued payroll costs for employees, costs
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5 relating to adapting their existing operations to comply with the San Francisco
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6 Ordinance and State of California Order, and other costs in an amount according to
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7 proof. Plaintiff was and will be forced to expend attorneys’ fees and costs in pursuing
8 relief to which they are entitled as a matter of law. Pursuant to Brandt v. Superior Court
9 (1985) 37 Cal.3d 813, Plaintiff is entitled to attorneys’ fees and costs reasonably incurred
10 to compel the payment of benefits due under the insurance policies.
11 49. As a further direct, proximate and legal result of the wrongful conduct of
12 Defendants, and each of them, Plaintiff has also sustained other economic damages, as
13 set forth above, and other damages in an amount to be proven at trial.
14 50. On the basis of all of the facts alleged herein, Defendants’ conduct and actions
15 were despicable, done maliciously, oppressively, and fraudulently, with the intent to
16 deprive Plaintiff of insurance benefits and to cause injury to Plaintiff. Defendants’
17 conduct and actions were further done with a willful and conscious disregard of
18 Plaintiff’s rights, thereby subjecting Plaintiff to unjust hardship and distress amid a
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19 global pandemic where Plaintiff is serving an essential and critical function. Defendants,
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20 its officers, directors, and managing agents were personally involved in the decision-
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21 making process with respect to the misconduct alleged herein and to be proven at trial,
22 as suggested already, even prior to discovery, by verbal and written communications
23 showing the appearance of a pre-planned, rapid denial of COVID-19 claims.
24 51. Plaintiff alleges on information and belief that Defendants, through their
25 representatives, officers, directors, and managing agents, authorized and ratified each
26 and every act on which Plaintiff’s allegations of punitive damages herein are based
27 upon. On that basis, pursuant to California Civil Code § 3294, Plaintiff is entitled to an
28
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FIRST AMENDED COMPLAINT
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1 award of exemplary and punitive damages in an amount adequate to make an example
2 of, and to punish and deter Defendants and each of them.
3 THIRD CAUSE OF ACTION
4 (Bad Faith Denial of Insurance Claim against All Defendants)
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5 52. Plaintiff re-alleges and incorporates by reference into this cause of action all
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6 allegations set forth in this Complaint as though fully set forth herein.
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7 53. Defendants have in bad faith failed or refused to perform their obligations under
8 the Policy and under the laws of California because Defendants have put their own
9 interests above those of Plaintiff.
10 54. Defendants denied Plaintiff’s claim in bad faith, when, among other things, when
11 Defendants (a) failed or refused to perform a fair, objective, and thorough investigation
12 of the claim as required by California Insurance Code; (b) raised coverage defenses that
13 were factually and/or legally invalid, (c) improperly denied coverage by creating unduly
14 restrictive claim interpretations on the terms of the Policy, ultimately forcing Plaintiff to
15 engage in litigation to recover the amounts due under the Policy.
16 55. On information and belief, Plaintiff alleges that there are numerous other
17 individuals, business entities, and other groups insured by Defendants who were or are
18 similarly situated by Plaintiff in that they were denied coverage using similar unlawful
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19 tactics used to deny Plaintiff’s claim coverage. At such time as Plaintiff learn the names
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20 of such parties, Plaintiff may seek leave of court to join such persons as additional
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21 plaintiffs in this action.
22 56. Based on the foregoing allegations, Plaintiff alleges Defendants have committed
23 institutional bad faith and that what Plaintiff experienced is not an isolated incident but
24 rather a systematic and organized unfair practices perpetrated against Defendants’
25 clients. The pattern of unfair practices constitutes intentional wrongful conduct that is
26 institutionalized in Defendants’ established company policy.
27 57. As a proximate result of Defendants’ bad faith conduct above, Plaintiff has
28 suffered and will continue to suffer damages. These damages include interest on the
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FIRST AMENDED COMPLAINT
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1 withheld and unreasonably delayed payments due under the policy and other special
2 economic and consequential damages, in an amount to be proven at trial.
3 58. Plaintiff was forced to retain legal counsel to obtain benefits due under its policy
4 as a result of Defendant’s bad faith conduct. As such, Plaintiff is entitled to recover from
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5 Defendants attorney fees and other reasonable costs of litigation incurred by Plaintiff in
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6 order to obtain the benefits of the policy.
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7 59. On the basis of all of the facts alleged herein, Defendants’ conduct and actions
8 were despicable, done maliciously, oppressively, and fraudulently, with the intent to
9 deprive Plaintiff of insurance benefits and to cause injury to Plaintiff. Defendants’
10 conduct and actions were further done with a willful and conscious disregard of
11 Plaintiff’s rights, thereby subjecting Plaintiff to unjust hardship and distress in the midst
12 of a global pandemic where Plaintiff is serving an essential and critical function.
13 Defendants, its officers, directors, and managing agents were personally involved in the
14 decision-making process with respect to the misconduct alleged herein and to be proven
15 at trial, as suggested already, even prior to discovery, by verbal and written
16 communications showing the appearance of a pre-planned, rapid blanket denial of
17 COVID-19 claims.
18 60. Plaintiff alleges on information and belief that Defendants, through their
A PROFESSIONAL LAW CORPORATION
19 representatives, officers, directors, and managing agents, authorized and ratified each
1650 S. AMPHLETT BLVD. SUITE 220
20 and every act on which Plaintiff’s allegations of punitive damages herein are based
INDRAJANA LAW GROUP
SAN MATEO, CA 94402
21 upon. On that basis, pursuant to California Civil Code § 3294, Plaintiff is entitled to an
22 award of exemplary and punitive damages in an amount adequate to make an example
23 of, and to punish and deter Defendants and each of them.
24 FOURTH CAUSE OF ACTION
25 (Declaratory Relief against All Defendants)
26 61. Plaintiff re-alleges and incorporates herein by reference the allegations contained
27 in the preceding paragraphs of this Complaint, as though fully set forth herein.
28
OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL.
FIRST AMENDED COMPLAINT
PAGE 14 OF 20
1 Under California Code of Civil Procedure § 1060 et seq., the Court may declare rights,
2 status, an
Preview
1 SANJIV N. SINGH, A PROFESSIONAL LAW CORPORATION Sanjiv N. Singh (SBN 193525) ELECTRONICALLY 2 1650 S. Amphlett Blvd. Suite 220 F I L E D Superior Court of California, 3 San Mateo, CA 94402 County of San Francisco Phone: (650) 389-2255 05/22/2020 4 Clerk of the Court Email: ssingh@sanjivnsingh.com A PROFESSIONAL LAW CORPORATION BY: MADONNA CARANTO Deputy Clerk 5 1650 S. AMPHLETT BLVD. SUITE 220 INDRAJANA LAW GROUP, A PROFESSIONAL LAW CORPORATION SAN MATEO, CA 94402 6 Michael Indrajana (SBN 258329) SANJIV N. SINGH 1650 S. Amphlett Blvd. Suite 220 7 San Mateo, CA 94402 8 Phone: (650) 597-0928 Email: michael@indrajana.com 9 Attorneys for Plaintiff Outerlands, Inc. 10 11 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA 12 IN AND FOR THE COUNTY OF SAN FRANCISCO 13 UNLIMITED JURISDICTION 14 15 OUTERLANDS, INC., a California Case No.: CGC-20-583996 16 Corporation FIRST AMENDED COMPLAINT FOR: 17 Plaintiff, 18 1. BREACH OF CONTRACT; v. 2. BREACH OF IMPLIED COVENANT A PROFESSIONAL LAW CORPORATION 19 1650 S. AMPHLETT BLVD. SUITE 220 OF GOOD FAITH AND FAIR 20 DEALING; INDRAJANA LAW GROUP TRUCK INSURANCE EXCHANGE, a SAN MATEO, CA 94402 3. BAD FAITH DENIAL OF 21 foreign insurance exchange and DOES 1 INSURANCE CLAIM; through 50, inclusive, 22 4. DECLARATORY RELIEF; 23 Defendants. 5. UNJUST ENRICHMENT; 6. UNFAIR COMPETITION UNDER 24 BUS. & PROF. CODE § 17200 ET SEQ.; 25 7. INJUNCTIVE RELIEF UNDER BUS. & PROF. CODE § 17200 ET SEQ. 26 27 JURY TRIAL DEMANDED 28 OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL. FIRST AMENDED COMPLAINT PAGE 1 OF 20 1 Plaintiff Outerlands, Inc., a California Corporation, brings this Complaint, 2 alleging against Truck Insurance Exchange, a foreign exchange (that is part of the 3 Farmers Insurance Group)and DOES 1 THROUGH 50 (“Defendants”), as follows: 4 A PROFESSIONAL LAW CORPORATION 5 INTRODUCTION 1650 S. AMPHLETT BLVD. SUITE 220 SAN MATEO, CA 94402 6 1. This is an insurance bad faith lawsuit brought by Plaintiff Outerlands, Inc., a SANJIV N. SINGH 7 California Corporation that owns and operates the beloved, landmark restaurant 8 Outerlands located in the Outer Sunset District in San Francisco, California (hereinafter 9 “Plaintiff” or “Outerlands”) against Truck Insurance Exchange and possible Does 10 (collectively, “Defendants”). Plaintiff seeks damages stemming from Defendants’ bad 11 faith handling and denial of Plaintiff’s claim for business income loss coverage. 12 Outlerlands, in good faith, based on the language of their policy and for the reason 13 many businesses bought insurance policies with business income interruption clauses, 14 reasonably expected that Defendants would provide coverage during these 15 unprecedented times for the catastrophic loss of business income they have suffered due 16 to the stay-at-home ordinances effected statewide, including in San Francisco. 17 Defendants not only have failed to provide this coverage, but have engaged in deceptive 18 and unfair business practices to evade responsibility for doing so. At a moment in world A PROFESSIONAL LAW CORPORATION 19 history when insurance companies should be stepping up, Defendants appear to be 1650 S. AMPHLETT BLVD. SUITE 220 20 hiding behind procedures and conduct that appears to be bad faith and motivated only INDRAJANA LAW GROUP SAN MATEO, CA 94402 21 by profit. 22 PARTIES 23 2. At all relevant times, Plaintiff Outerlands, Inc. is a California corporation and is 24 authorized to do business and doing business in the State of California, County of San 25 Francisco. Outerlands Inc. owns, operates, manages, and controls the restaurant 26 Outerlands located in San Francisco, California. 27 28 OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL. FIRST AMENDED COMPLAINT PAGE 2 OF 20 1 3. Defendant Truck Insurance Exchange is, and at all relevant times was, a foreign 2 insurance exchange with its headquarters and principal place of business in Los Angeles 3 County, in the State of California. It is a part of the Farmers Insurance Group. 4 4. Plaintiff does not know the true names and capacities, whether individual, A PROFESSIONAL LAW CORPORATION 5 associate, or otherwise, of Defendants DOES 1 through 50, and therefore designate those 1650 S. AMPHLETT BLVD. SUITE 220 SAN MATEO, CA 94402 6 Defendants by such fictitious names. Each of the Defendants sued herein as a DOE is SANJIV N. SINGH 7 legally responsible in some manner for the events and happenings referred to herein and 8 proximately caused the injuries suffered by the Plaintiff. DOES may include other 9 underwriters, agents, or individuals who participated in decisions or ratified decisions 10 that lead to or constituted the bad faith denial and misconduct of Truck Insurance 11 Exchange outlined in this Complaint. Plaintiff will amend this Complaint accordingly to 12 allege the true names and capacities of these DOE Defendants when/if the same becomes 13 known to Plaintiff. 14 JURISDICTION AND VENUE 15 5. Jurisdiction is proper pursuant to Cal. Code Civ. Proc. §§ 410.10, 410.50, and 1060. 16 6. Venue is proper in this Court because the acts and/or omissions complained of took 17 place, in whole or in part, within San Francisco County. Both Defendants conduct business 18 extensively throughout California, marketing their insurance policies and selling their A PROFESSIONAL LAW CORPORATION 19 insurance policies to thousands of insured businesses and consumer businesses in 1650 S. AMPHLETT BLVD. SUITE 220 20 California. INDRAJANA LAW GROUP SAN MATEO, CA 94402 21 GENERAL ALLEGATIONS 22 7. All allegations in this Complaint are based on information and belief and/or are 23 likely to have evidentiary support after a reasonable opportunity for further 24 investigation or discovery. 25 Outerlands and Its Decision to Purchase a Farmers Policy 26 8. Plaintiff’s business, Outerlands, is a cherished restaurant of the Sunset District in 27 California. Its opening more than a decade ago catalyzed a renaissance and economic 28 rebirth of the entire neighborhood. It brought jobs to numerous Sunset residents either OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL. FIRST AMENDED COMPLAINT PAGE 3 OF 20 1 through direct employment or the opening of similar businesses nearby. The owners of 2 Outerlands have been leaders of the community. The restaurant has enjoyed significant 3 critical acclaim and financial success, featured in publications and/or media like The New 4 York Times, The San Francisco Chronicle, SF Gate, and KQED. To safeguard their business A PROFESSIONAL LAW CORPORATION 5 and investment and living in a state such as California where unexpected business 1650 S. AMPHLETT BLVD. SUITE 220 SAN MATEO, CA 94402 6 interruptions have historically occurred, Plaintiff sought business insurance coverage SANJIV N. SINGH 7 with business interruption coverage from Defendants and renewed a policy with such 8 coverage on August 25, 2019. Defendants marketed their insurance products to Plaintiff 9 with specific representations that they would insure against “unexpected” events closing 10 the restaurant.1 11 9. At all relevant times, and since August 25, 2014, Plaintiff has been a Farmers 12 policyholder, currently insured under Farmers’ business policy number 0605860520 (the 13 “Policy”). 14 10. The Policy is currently in full effect, providing commercial business policy 15 coverage including coverage for lost business income which occurs during the policy 16 period, which is currently from August 25, 2019, through August 25, 2020. 17 11. Plaintiff faithfully paid policy premiums to Defendants, specifically to provide 18 additional coverages including but not limited to loss of business income due to Civil A PROFESSIONAL LAW CORPORATION 19 Authority or civil ordinances. The policy expressly states that “in return for the 1650 S. AMPHLETT BLVD. SUITE 220 20 payment of premium,” Defendants would provide Business Income & Extra Expense INDRAJANA LAW GROUP SAN MATEO, CA 94402 21 Coverage-Civil Authority with both short term and long term coverage provisions. 22 12. Under the Policy, the relevant Civil Authority coverage reads as follows: “We will 23 pay for the actual loss of Business Income you sustain and necessary Extra Expense 24 caused by the action of civil authority that prohibits access to the described premises due 25 26 27 1 In fact, Defendants specifically market their restaurant business policies as follows: “Whatever your 28 culinary specialty, you want to keep an “OPEN” sign in your restaurant’s window — and you can help protect your business with Farmers® coverage if the unexpected threatens to close your kitchen.” OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL. FIRST AMENDED COMPLAINT PAGE 4 OF 20 1 to direct physical loss of or damage to property, other than at the described premises, 2 caused by or resulting from any Covered Cause of Loss. [emphasis added]” The Policy 3 also appears to say that no deductibles would apply to this coverage. 4 13. The Policy specifically extends coverage to business income and extra expense A PROFESSIONAL LAW CORPORATION 5 caused by a civil authority limiting access to Plaintiff’s restaurant. 1650 S. AMPHLETT BLVD. SUITE 220 SAN MATEO, CA 94402 6 The COVID-19 Pandemic SANJIV N. SINGH 7 14. On or about December of 2019, the so-called pathogen SARS CoV-2 (“COVID- 8 19”) was first identified in humans in Wuhan, China. 9 15. As is now commonly know, in an unprecedented event that has not occurred in 10 more than a century, a world pandemic of global proportions then ensued. By March 11, 11 2020, the World Health Organization officially recognized the pandemic. The virus has 12 already claimed 2400 lives in the United States, and 33,500 lives as of March 29 at 12:20 13 am. 14 16. It is well recognized that the virus can be spread through person to person 15 contacts like other viruses, and some experts believe that it may also be spread by people 16 touching contaminated surfaces (so-called “fomites”) and then their face. 17 17. On February 25, 2020, the Mayor of San Francisco, London Breed, declared a state 18 of emergency. A PROFESSIONAL LAW CORPORATION 19 18. On March 12, 2020, the Governor of the State of California Gavin Newsom 1650 S. AMPHLETT BLVD. SUITE 220 20 banned gatherings over 250 people. INDRAJANA LAW GROUP SAN MATEO, CA 94402 21 19. On March 16, 2020, the health departments of numerous counties, including San 22 Francisco, San Mateo, and Santa Clara announced, with the City of Berkeley, a legal 23 order directing residents to shelter in place for three weeks beginning midnight March 24 17 to April 7. 25 20. By March 19, 2020, the Governor of California issued a statewide stay at home 26 order (“State of California Order”) that would be in effect until further notice and is still 27 in effect as this pandemic worsens. 28 OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL. FIRST AMENDED COMPLAINT PAGE 5 OF 20 1 21. As of the date of the March 16th San Francisco Ordinance, restaurants like 2 Outerlands were designated as Essential Businesses with an implicit recognition of the 3 necessity to continue to provide food to city residents. As of March 19, 2020, the State of 4 California Order recognized the food and agricultural sector as critical infrastructure A PROFESSIONAL LAW CORPORATION 5 sectors. Outerlands, despite the challenges of substantial revenue reductions and with a 1650 S. AMPHLETT BLVD. SUITE 220 SAN MATEO, CA 94402 6 reasonable expectation of business insurance to facilitate their efforts, kept its doors SANJIV N. SINGH 7 open to provide the exact kind of takeout food options recognized as essential by the San 8 Francisco Ordinance and State of California Order. 9 22. Indeed, the Outerlands website states: 10 To our beloved community, 11 We have temporarily suspended dining room services due to the SF Shelter-In- 12 Place Mandate. We have shifted operations to provide a takeaway menu of lunch 13 and dinner options, plus pastries, fresh bread and drinks, available Thursday through Monday, 1-8 pm. You can use the link below to order online, or you 14 can download the Toast Takeout app to your smartphone. Once your order is 15 placed, just swing by our side door on 45th Ave for pickup! Our goal is to offer 16 nourishing food options for our neighborhood as long as we are able during this 17 time. 18 23. At the same time, the San Francisco Ordinance and State of California Order, in A PROFESSIONAL LAW CORPORATION 19 an unprecedented manner, required necessary measures to keep people at home and off 1650 S. AMPHLETT BLVD. SUITE 220 20 INDRAJANA LAW GROUP the streets and out of areas of public gatherings, and thereby crippled the major source SAN MATEO, CA 94402 21 of revenue (in person dining) for these same Essential Businesses. As a direct and 22 proximate result of this Order, access to businesses like Outerlands, including Essential 23 Businesses like Outerlands, have been specifically prohibited except for very limited 24 takeout or delivery options. 25 Rapid Denial of Outerlands’ Claims In Apparent Bad Faith 26 24. In good faith, Outerlands’ owners promptly notified Defendants even before the 27 ordinances, of their concerns and the risk for loss and whether there was coverage for 28 the losses under the Policy. Defendants’ representative did not initially respond. OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL. FIRST AMENDED COMPLAINT PAGE 6 OF 20 1 25. After the San Francisco Ordinance was in effect and on the same day the State of 2 California Order was issued, Outerlands owners personally called Defendants’ 3 representative who indicated already, without any analysis, that he had been informed 4 the claim under the Policy would likely be denied. On information and belief, it is A PROFESSIONAL LAW CORPORATION 5 believed that Defendants, along with other members of the insurance industry, have 1650 S. AMPHLETT BLVD. SUITE 220 SAN MATEO, CA 94402 6 been strategizing how to deny claims and mitigate their losses as early as one to two SANJIV N. SINGH 7 months before the issuance of the San Francisco Order and State of California Order. On 8 information and belief and based on actual communications by Plaintiff with 9 Defendants, Defendants representatives seem to already know how Defendants’ highest 10 levels of management would respond to the claims, but encouraged Plaintiff to submit 11 the claim anyway in order to get government bailout money. 12 26. Despite being told that Farmers was going to deny the claim on their Policy, 13 Plaintiff submitted the claim on March 19, 2020. Oddly, they were told they did not need 14 to submit any information to do so (e.g., revenue loss, specific dates of loss, etc.) and that 15 their agent would submit a claim regardless. During this time, in violation of state law, 16 Defendants did not make relevant Policy information readily available, and Plaintiff, 17 despite asking for a full copy of their Policy, could not obtain one. Indeed, despite 18 touting its online platform and marketing the online platform as part of its insurance A PROFESSIONAL LAW CORPORATION 19 product, Plaintiff could not get a copy of their policy, access to critical information about 1650 S. AMPHLETT BLVD. SUITE 220 20 their claim, or the status of the claim. INDRAJANA LAW GROUP SAN MATEO, CA 94402 21 27. Within a very short period of time, without any evidence of good faith analysis by 22 Defendants, the owners of Outerlands were called by a claim adjuster for Defendants. 23 Plaintiff’s owners reminded him that they could not access the documents or Policy 24 online. Defendants’ representative stated that he regretted to inform Plaintiff that their 25 claim would be denied, and stated that there was “no language” in the Policy to support 26 the claim. Shockingly, he stated that he too could not access the very policy which he 27 was citing to as the justification for the denial. 28 OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL. FIRST AMENDED COMPLAINT PAGE 7 OF 20 1 28. On March 22, 2020, just three days after submitting their claim, Outerlands was 2 informed by email that their claim under the Policy was denied. The correspondence 3 was extremely confusing, appeared to be written in a formulaic, cut-and-paste fashion, 4 and denied the claim based on an ultimately inapplicable exclusion in the Policy which A PROFESSIONAL LAW CORPORATION 5 Defendants claimed would eliminate the operation of the Civil Authority coverage 1650 S. AMPHLETT BLVD. SUITE 220 SAN MATEO, CA 94402 6 expressly provided for in their Policy. By this date, despite repeated requests, Plaintiff SANJIV N. SINGH 7 had still not received a copy of the Policy. 8 29. On March 24, 2020, Plaintiff had still not received a copy of the Policy. 9 30. On March 25, 2020, Plaintiff received a letter from Defendants confirming denial 10 of the claim and telling them to use the denial to “secure aid in the new bailout package 11 they are putting together in DC.” The letter purported to give them a complete copy of 12 the Policy, but it did not. 13 31. On March 26, 2020, Plaintiff notified Defendant that they had not received the 14 complete copy of the Policy. 15 32. Only after repeated requests and pleas for the Policy did Plaintiff finally receive 16 the Policy on March 27, 2020. 17 33. On information and belief and based on actual communications, Defendants’ 18 conduct above was ratified, ordered, and encouraged by officers of Defendants in order A PROFESSIONAL LAW CORPORATION 19 to effect a strategy to rapidly deny, deflect, and minimize COVID-19 related claims and 1650 S. AMPHLETT BLVD. SUITE 220 20 losses for Defendants. INDRAJANA LAW GROUP SAN MATEO, CA 94402 21 FIRST CAUSE OF ACTION 22 (Breach of Contract against All Defendants) 23 34. Plaintiff re-alleges and incorporates by reference the allegations contained in the 24 preceding paragraphs of this Complaint, as though fully set forth herein. 25 35. Plaintiff was insured under a valid insurance policy, the aforementioned and 26 described Policy, issued by Defendants which was in effect on the date the loss occurred. 27 36. Plaintiff paid consideration in the form of premiums for Policy, and have 28 faithfully performed all obligations required to be performed by them under the terms OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL. FIRST AMENDED COMPLAINT PAGE 8 OF 20 1 of the Policy, except to the extent performance may have been excused by, among other 2 things, Defendants’ bad faith conduct and breach of the insurance policy. 3 37. Defendants breached the terms of the contract by not providing requisite 4 documentations required for submitting claims, by prematurely and without basis or A PROFESSIONAL LAW CORPORATION 5 reasonable good faith analysis denying the claim, and by ultimately failing to pay and/or 1650 S. AMPHLETT BLVD. SUITE 220 SAN MATEO, CA 94402 6 underpaying monies due under the contract and by forcing Plaintiff to file this action. SANJIV N. SINGH 7 38. Plaintiff has demanded that Defendants pay, and Defendants have declined to 8 pay, Plaintiff’s claims for damages and losses of business income and additional 9 expenses due to Civil Authority, specifically the issuance of the San Francisco Ordinance 10 and State of California Order which limited public access to Outerlands. 11 39. As a direct, proximate, and legal result of Defendants’ breach of contract, Plaintiff 12 has been, and continues to be, damaged in an amount in excess of the jurisdictional 13 limits of this Court, including but not limited to: damage suffered to their business 14 caused by the loss of business income and additional expenses created by the San 15 Francisco Ordinance and State of California Order, the loss of benefits due under the 16 contract, and consequential damages including interest on the monies Plaintiff could 17 and should have received promptly, but which they did not receive in a timely manner 18 as a result of Defendants’ breach of the contract, as well as other fees, expenses, and A PROFESSIONAL LAW CORPORATION 19 costs to be proven at trial. 1650 S. AMPHLETT BLVD. SUITE 220 20 40. Plaintiff has also sustained other economic losses as a direct, proximate, and legal INDRAJANA LAW GROUP SAN MATEO, CA 94402 21 result of Defendants’ conduct, in an amount to be proven at trial. 22 SECOND CAUSE OF ACTION 23 (Breach of the Implied Covenant of Good Faith and Fair Dealing against All 24 Defendants) 25 41. Plaintiff re-alleges and incorporates herein by reference the allegations contained 26 in the preceding paragraphs of this Complaint, as though fully set forth herein. 27 28 OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL. FIRST AMENDED COMPLAINT PAGE 9 OF 20 1 2 42. Plaintiff’s insurance policy at issue in this action, the aforementioned Policy, 3 contains an implied covenant of good faith and fair dealing, whereby Defendants, and 4 each of them, agreed to perform their obligations under the Policy in good faith, to deal A PROFESSIONAL LAW CORPORATION 5 fairly with Plaintiff, and not to unreasonably deprive Plaintiff of the benefits due under 1650 S. AMPHLETT BLVD. SUITE 220 SAN MATEO, CA 94402 6 the insurance policy. SANJIV N. SINGH 7 43. Defendants tortiously breached the implied covenant of good faith and fair 8 dealing arising from the insurance contract by unreasonably denying or withholding 9 benefits due under the Policy, by failing to conduct fair and objective claims 10 investigation, by failing to treat Plaintiff fairly and by other conduct, including but not 11 limited to that expressly set forth in this Complaint, after accepting insurance premiums 12 from Plaintiff. On information and belief, it appears that Defendants were, and are, 13 executing a directive to deny COVID-19 claims systematically. 14 44. Despite Plaintiff’s request for coverage and demand for payment of the 15 compensation for the business disruption caused by the San Francisco Ordinance and 16 State of California Order, Defendants denied coverage and blocked access to information 17 and engaged in a continuous pattern of tortious conduct which has and will cause 18 Plaintiff continued damages. Indeed, Plaintiff is an essential business and part of the A PROFESSIONAL LAW CORPORATION 19 critical infrastructure identified by both the San Francisco Ordinance and State of 1650 S. AMPHLETT BLVD. SUITE 220 20 California Order. They have tried to stay open as such to meet the critical needs of INDRAJANA LAW GROUP SAN MATEO, CA 94402 21 residents who need food, but shoulder each and every day losses due to a lack of 22 appropriate insurance coverage. 23 45. Defendants engaged and continue to engage in the course of conduct to further 24 their own economic interest, including and in violation of their obligations to Plaintiff. 25 This conduct includes, but is not limited to that conduct alleged in this Complaint and 26 the following: 27 a. Unreasonably and unjustifiably preventing access to the Policy; 28 OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL. FIRST AMENDED COMPLAINT PAGE 10 OF 20 1 b. Failing to perform competent and/or complete investigation of the request for 2 coverage; 3 c. Misrepresenting the content of the Policy to Plaintiff; and 4 d. Deliberately, unjustifiably, and unreasonably denying coverage and hiding A PROFESSIONAL LAW CORPORATION 5 essential information in an effort to discourage Plaintiff from pursuing their full policy 1650 S. AMPHLETT BLVD. SUITE 220 SAN MATEO, CA 94402 6 and benefits in the hope that they would instead pursue a government bailout; SANJIV N. SINGH 7 e. Refusing to pay any or adequate insurance benefits which a reasonable person 8 would have believed Plaintiff was entitled to receive; 9 f. Failing to provide promptly a reasonable explanation of the basis relied on in the 10 insurance policy, in relation to the facts or applicable law, for the denial of Plaintiff’s 11 claims, and instead providing a boilerplate, inapplicable explanation; and 12 g. Plaintiff is informed, believe and thereon allege, that Defendants have breached 13 their duties of good faith and fair dealing owed to Plaintiff by other acts or omissions of 14 which Plaintiff is presently unaware and which will be shown according to proof at the 15 time of trial. 16 46. Without any reasonable basis for doing so, and with full knowledge and/or 17 conscious disregard of the consequences, Defendants have failed and refused to act in 18 good faith or act fairly toward Plaintiff. Furthermore, Defendants have in bad faith A PROFESSIONAL LAW CORPORATION 19 failed and refused to perform their obligations under the insurance policy and the laws 1650 S. AMPHLETT BLVD. SUITE 220 20 of the State of California. INDRAJANA LAW GROUP SAN MATEO, CA 94402 21 47. Defendants engaged in conduct that was malicious, fraudulent, and oppressive. 22 Indeed, Defendants engaged in a scheme designed to quickly deny Plaintiff’s claim and 23 deflect them to a government bailout. Farmers unreasonably denied Plaintiff’s claim 24 without investigating the actual cause of the loss and business interruption—i.e., the 25 Civil Authority orders themselves and their multiple expressly stated policy objectives 26 including preventing overrun of the health system and the City, County and State 27 concern for surface contamination and damage and person to person transmission. 28 OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL. FIRST AMENDED COMPLAINT PAGE 11 OF 20 1 48. As a direct, proximate, and legal result of said breaches of the covenants of good 2 faith and fair dealing by Farmers, Plaintiff has been damaged and continues to incur 3 each and every day, substantial and foreseeable consequential and incidental damages, 4 including loss of income and net profits, continued payroll costs for employees, costs A PROFESSIONAL LAW CORPORATION 5 relating to adapting their existing operations to comply with the San Francisco 1650 S. AMPHLETT BLVD. SUITE 220 SAN MATEO, CA 94402 6 Ordinance and State of California Order, and other costs in an amount according to SANJIV N. SINGH 7 proof. Plaintiff was and will be forced to expend attorneys’ fees and costs in pursuing 8 relief to which they are entitled as a matter of law. Pursuant to Brandt v. Superior Court 9 (1985) 37 Cal.3d 813, Plaintiff is entitled to attorneys’ fees and costs reasonably incurred 10 to compel the payment of benefits due under the insurance policies. 11 49. As a further direct, proximate and legal result of the wrongful conduct of 12 Defendants, and each of them, Plaintiff has also sustained other economic damages, as 13 set forth above, and other damages in an amount to be proven at trial. 14 50. On the basis of all of the facts alleged herein, Defendants’ conduct and actions 15 were despicable, done maliciously, oppressively, and fraudulently, with the intent to 16 deprive Plaintiff of insurance benefits and to cause injury to Plaintiff. Defendants’ 17 conduct and actions were further done with a willful and conscious disregard of 18 Plaintiff’s rights, thereby subjecting Plaintiff to unjust hardship and distress amid a A PROFESSIONAL LAW CORPORATION 19 global pandemic where Plaintiff is serving an essential and critical function. Defendants, 1650 S. AMPHLETT BLVD. SUITE 220 20 its officers, directors, and managing agents were personally involved in the decision- INDRAJANA LAW GROUP SAN MATEO, CA 94402 21 making process with respect to the misconduct alleged herein and to be proven at trial, 22 as suggested already, even prior to discovery, by verbal and written communications 23 showing the appearance of a pre-planned, rapid denial of COVID-19 claims. 24 51. Plaintiff alleges on information and belief that Defendants, through their 25 representatives, officers, directors, and managing agents, authorized and ratified each 26 and every act on which Plaintiff’s allegations of punitive damages herein are based 27 upon. On that basis, pursuant to California Civil Code § 3294, Plaintiff is entitled to an 28 OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL. FIRST AMENDED COMPLAINT PAGE 12 OF 20 1 award of exemplary and punitive damages in an amount adequate to make an example 2 of, and to punish and deter Defendants and each of them. 3 THIRD CAUSE OF ACTION 4 (Bad Faith Denial of Insurance Claim against All Defendants) A PROFESSIONAL LAW CORPORATION 5 52. Plaintiff re-alleges and incorporates by reference into this cause of action all 1650 S. AMPHLETT BLVD. SUITE 220 SAN MATEO, CA 94402 6 allegations set forth in this Complaint as though fully set forth herein. SANJIV N. SINGH 7 53. Defendants have in bad faith failed or refused to perform their obligations under 8 the Policy and under the laws of California because Defendants have put their own 9 interests above those of Plaintiff. 10 54. Defendants denied Plaintiff’s claim in bad faith, when, among other things, when 11 Defendants (a) failed or refused to perform a fair, objective, and thorough investigation 12 of the claim as required by California Insurance Code; (b) raised coverage defenses that 13 were factually and/or legally invalid, (c) improperly denied coverage by creating unduly 14 restrictive claim interpretations on the terms of the Policy, ultimately forcing Plaintiff to 15 engage in litigation to recover the amounts due under the Policy. 16 55. On information and belief, Plaintiff alleges that there are numerous other 17 individuals, business entities, and other groups insured by Defendants who were or are 18 similarly situated by Plaintiff in that they were denied coverage using similar unlawful A PROFESSIONAL LAW CORPORATION 19 tactics used to deny Plaintiff’s claim coverage. At such time as Plaintiff learn the names 1650 S. AMPHLETT BLVD. SUITE 220 20 of such parties, Plaintiff may seek leave of court to join such persons as additional INDRAJANA LAW GROUP SAN MATEO, CA 94402 21 plaintiffs in this action. 22 56. Based on the foregoing allegations, Plaintiff alleges Defendants have committed 23 institutional bad faith and that what Plaintiff experienced is not an isolated incident but 24 rather a systematic and organized unfair practices perpetrated against Defendants’ 25 clients. The pattern of unfair practices constitutes intentional wrongful conduct that is 26 institutionalized in Defendants’ established company policy. 27 57. As a proximate result of Defendants’ bad faith conduct above, Plaintiff has 28 suffered and will continue to suffer damages. These damages include interest on the OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL. FIRST AMENDED COMPLAINT PAGE 13 OF 20 1 withheld and unreasonably delayed payments due under the policy and other special 2 economic and consequential damages, in an amount to be proven at trial. 3 58. Plaintiff was forced to retain legal counsel to obtain benefits due under its policy 4 as a result of Defendant’s bad faith conduct. As such, Plaintiff is entitled to recover from A PROFESSIONAL LAW CORPORATION 5 Defendants attorney fees and other reasonable costs of litigation incurred by Plaintiff in 1650 S. AMPHLETT BLVD. SUITE 220 SAN MATEO, CA 94402 6 order to obtain the benefits of the policy. SANJIV N. SINGH 7 59. On the basis of all of the facts alleged herein, Defendants’ conduct and actions 8 were despicable, done maliciously, oppressively, and fraudulently, with the intent to 9 deprive Plaintiff of insurance benefits and to cause injury to Plaintiff. Defendants’ 10 conduct and actions were further done with a willful and conscious disregard of 11 Plaintiff’s rights, thereby subjecting Plaintiff to unjust hardship and distress in the midst 12 of a global pandemic where Plaintiff is serving an essential and critical function. 13 Defendants, its officers, directors, and managing agents were personally involved in the 14 decision-making process with respect to the misconduct alleged herein and to be proven 15 at trial, as suggested already, even prior to discovery, by verbal and written 16 communications showing the appearance of a pre-planned, rapid blanket denial of 17 COVID-19 claims. 18 60. Plaintiff alleges on information and belief that Defendants, through their A PROFESSIONAL LAW CORPORATION 19 representatives, officers, directors, and managing agents, authorized and ratified each 1650 S. AMPHLETT BLVD. SUITE 220 20 and every act on which Plaintiff’s allegations of punitive damages herein are based INDRAJANA LAW GROUP SAN MATEO, CA 94402 21 upon. On that basis, pursuant to California Civil Code § 3294, Plaintiff is entitled to an 22 award of exemplary and punitive damages in an amount adequate to make an example 23 of, and to punish and deter Defendants and each of them. 24 FOURTH CAUSE OF ACTION 25 (Declaratory Relief against All Defendants) 26 61. Plaintiff re-alleges and incorporates herein by reference the allegations contained 27 in the preceding paragraphs of this Complaint, as though fully set forth herein. 28 OUTERLANDS, INC.. V. FARMERS GROUP INC., ET AL. FIRST AMENDED COMPLAINT PAGE 14 OF 20 1 Under California Code of Civil Procedure § 1060 et seq., the Court may declare rights, 2 status, an