Preview
Reviewed By: R. Tien
on 8/3/2020 11:47 AM
Envelope: 4699718
EFS-020
ATTORNEY OR PARTY WITHOUT ATTORNEY: STATE BAR NO.: 207345 FOR COURT USE ONLY
NAME: Kaiulani S. Lie, Esq.
FRM Name: GAGLIONE, DOLAN & KAPLAN
sTREET Appress: 11400 W. Olympic Blvd., Suite 425
city: Los Angeles state: CA ZIP CODE: 90064-1561
TeLerHone No.: (310) 231-1600 FAX NO. (310) 231-1610
eal aporess: klie@gaglionedolan.com
ATTORNEY FOR (namey: Defendant/Cross-Complainant, COLONY INSURANCE COMPANY.
SUPERIOR COURT OF CALIFORNIA, COUNTY OF SANTA CLARA
streetappress: 161 N. First St.
MaiLinc Appress: 161 N. First St.
city AND zip cope: San Jose, CA 95113
BRANCH NAME: Old Courthouse CASE NUMBER:
PLAINTIFF/PETITIONER: Paul Elias, individuall, and dba Apec Construction 18CV335946
DEFENDANT/RESPONDENT: International Insurance Company of Hannover, SE et al, U1 oFFicER
Hon. Thang N. Barrett
OTHER:
DEPT:
PROPOSED ORDER JUDGMENT (COVER SHEET) 21
NOTE: This cover sheet is to be used to electronically file and submit to the court a proposed erder judgment. The proposed order
judgment sent electronically to the court must be in PDF format and must be attached to this cover sheet. In addition, a version of the
proposed order judgment in an editable word-processing format must be sent to the court at the same time as this cover sheet and
the attached proposed order judgment in PDF format are filed.
1 Name of the party submitting the proposed order judgment:
Colony Insurance Company (Defendant/Cross-Complainant)
2. Title of the proposed erder judgment:
(Proposed) Judgment by Court Under California Code of Civil Procedure Section 437c
3. The proceeding to which the proposed order judgment relates is:
a. Description of proceeding: Defendant/Cross-Complainant Colony Insurance Company’s Motion for Summary Judgment or, in
the Alternative, Summary Adjudication on Plaintiff's First Amended Complaint
i. Date and time: June 2, 2020 — 9:00 a.m.
c. Place: Santa Clara Co. Superior Court, Old Courthouse, 161 N. 1% St., San Jose, CA 95113, Dept. 21
4. The proposed order judgment was served on the other parties in the case. Yes.
Brenda L. Hester >» /s| Brenda L. Hester
(TYPE OR PRINT NAME) (SIGNATURE OF PARTY OR ATTORNEY)
Page 4 of 2
Form Adopted for Mandatory Use PROPOSED ORDER (COVER SHEET) Cal. Rules of Court,
Judicial Council of California rules 2.252, 3.1312
EFS.020 [Rev. February 1, 2017] (Electronic Filing) www.courts.ca.gov
American
EFS-020
CASE NAME: CASE NUMBER:
Elias v. International Insurance Company of Hannover SE, et al. 18CV335946
PROOF OF ELECTRONIC SERVICE
PROPOSED ORDER JUDGMENT
1. | am at least 18 years old and not a party to this action.
a. My residence or business address is (specify):
11400 W. Olympic Blvd., Suite 425, Los Angeles, CA 90064-1561
b. My electronic service address is (specify):
brenda@gaglionedolan.com
2. | electronically served the Proposed Order Judgment (Cover Sheet) with a proposed erder judgment in PDF format attached, and a
proposed order judgment in an editable word-processing format as follows:
a. On (name of person served) (If the person served is an attorney, the party or parties represented should also be stated.):
Alan L. Martini, Esq. Michael B. Murphy, Esq.
SHEUERMAN, MARTINI, TABARI, ZENERE & GARVIN David C. Hungerford, Esq.
1033 Willow St. SEVERSON & WERSON
San Jose, CA 95125 One Embarcadero Center, Suite 2600
T: 408-288-9700 San Francisco, CA 94111
F 408-295-9900 T: 415-398-3344
E amartini@smtlaw.com F: 415-956-0439
(Attorneys for Plaintiff, Paul Elias, indi dually, and E: mbm@severson.com
dba Apec Construction) E: dch@severson.com
(Attorneys for HDI GLOBAL SPECIALTY SE, formerly
known as “INTERNATIONAL INSURANCE COMPANY OF
HANNOVER SE”)
b. To (electronic service address of person served):
amartini@smtlaw.com; mbm@severson.com; dch@severson.com
c. On (date):
August 3, 2020
(Electronic service of the Proposed Order (Cover Sheet) with the attached proposed order in PDF format and service of the
proposed order in an editable word-processing format on additional persons are described in an attachment.
| declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.
Date: August 3, 2020
Brenda L. Hester /si Brenda L. Hester
(TYPE OR PRINT NAME OF DECLARANT) (SIGNATURE OF DECLARANT)
EFS-020 [Rev. February 1, 2017] PROPOSED ORDER (COVER SHEET) Page 2 of 2
(Electronic Filing)
AmericanL
Jeffrey S. Kaplan, Esq., (SBN: 169009)
Kaiulani S. Lie, Esq. (SBN: 207345)
GAGLIONE, DOLAN & KAPLAN
11400 W. Olympic Blvd., Suite 425
Los Angeles, CA 90064
T
(310) 231-1600
F (310) 231-1610
E: jkaplan@gaglionedolan.com
E: klie@gaglionedolan.com
Attorneys for Defendant and Cross-Complainant,
COLONY INSURANCE COMPANY
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SANTA CLARA
10 (Old Courthouse)
11
12 PAUL ELIAS, individually and dba Case No.: 18CV335946
APEC CONSTRUCTION, [Judge: The Hon. Thang N. Barrett — Dept. 21]
13
14 Plaintiff,
[PROPOSED] JUDGMENT BY
15 vs. COURT UNDER CALIFORNIA CODE
OF CIVIL PROCEDURE SECTION
16 437c¢
INTERNATIONAL INSURANCE
17 COMPANY OF HANNOVER SE;
PREMIER CLAIMS MANAGEMENT, Civil — General Jurisdiction
18 LLC; COLONY INSURANCE COMPANY;
and DOES 1-25, Inclusive, Complaint Filed:
19 October 4, 2018
FAC Filed: March 6, 2019
20 Defendants.
Trial Date: None Set
21
22 AND RELATED CROSS-ACTIONS
23
24
25 Hy
26 11
27 11
W.\CASES\3900,06\PLEADINGS\PROPOSED JUDGMENT MSJ ON FAC,DOCX
28
[PROPOSED] JUDGMENT BY COURT
UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 437c
TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD:
On June 2, 2020, Defendant COLONY INSURANCE COMPANY’s (CIC) motion
for summary judgment, or in the alternative, summary adjudication on Plaintiff, PAUL
ELIAS, individually and doing business as, APEC CONSTRUCTION’s (APEC) First
Amended Complaint was heard before the Honorable Thang N. Barrett in Department
21 of this Court. All Parties to this action, through their counsel of record, tele-
phonically appeared at the hearing. After oral argument was heard on the motion, the
Court took the motion under submission.
On June 18, 2020, the Court entered an order granting summary judgment in
10 CIC’s favor on APEC’s First Amended Complaint. The grounds for the Court’s order
11 are reflected in the Court's June 18, 2020 “ORDER RE MOTION FOR SUMMARY
12 JUDGMENT/ADJUDICATION,” a true and correct copy of which is attached hereto as
13 Exhibit A.
14 IT IS ORDERED, ADJUDGED, AND DECREED that judgment shall be entered in
15 favor of CIC and against APEC in connection with APEC’s First Amended Complaint.
16 APEC shall take nothing from CIC in connection with its First Amended Complaint.
17 IT IS FURTHER ORDERED, ADJUDICATED, AND DECREED that CIC shall
18 recover from APEC its costs of suit to be determined by the Court following CIC’s filing
19 of its Memorandum of Costs.
20 IT IS SO ORDERED.
21
22 DATED: , 2020
23
24
The Hon. Thang N. Barrett
25 Judge of the Superior Court
State of California, County of Santa Clara
26
27
28 W:\CASESI3900.06\PLEADINGS\PROPOSED JUDGMENT MSJ ON FAC.DOCX
-2-
[PROPOSED] JUDGMENT BY COURT
UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 437c
XHIBIT A
Copy
F ile
JUN 18 2023
Clerk of the Court
‘Superior Court of CA County ‘of Santa Clara
BY. DEPUTY
D. O'Hare
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA
10
i PAUL ELIAS, individually and dba APEC Case No. 18CV335946
12 CONSTRUCTION,
13 Plaintiff, ORDER RE:MOTIONS FOR SUMMARY
JUDGMENT/ADJUDICATION
14
15 VS.
16
17 INTERNATIONAL INSURANCE COMPANY
18 OF HANNOVER SE, et al.
19 Defendants.
20
2t AND RELATED CROSS-ACTION.
22
23 The two motions for summary judgment filed by Defendant/Cross-Complainant Colony
24 Insurance Company came on for hearing before the Honorable Thang N. Barrett on June 2, 2020,
25 at 9:00 a.m. in Department 21. The matter having been submitted, the Court orders as follows:
26 Before the court are two separate motions for summary judgment/adjudication by Colony
27 Insurance Company (“CIC”), both filed on March 19, 2020. One is directed at the four causes of]
28
action in the FAC alleged against CIC, and the other seeks judgment/adjudication of CIC’s
1
Case No. 18CV335946
Order Re: Motions for Summary Judgment
Cross-Complaint. Plaintiff opposes both motions and the opposition to the motion directed at the
Cross-Complaint requests a continuance of that motion to allow for necessary discovery to be
completed.
Factual and Procedural Background
The case arises out of an insurance coverage dispute. Plaintiff Paul Elias dba Apec
Construction (“Plaintiff”) sued two of its insurers, International Insurance Company of Hannover
(“Hannover”) and CIC, along with Premier Claims Management, Inc. (“Premier”) for their
refusal to indemnify and defend Plaintiff in an underlying action for negligence and fraud arising
10
from the construction of and repairs to a single-family home (Brassfield v. Elias, case no.
ll
12 17CV305267). The underlying action is still ongoing.
13 In the operative First Amended Complaint (“FAC”) filed March 6, 2019 Plaintiff states
14
claims for: 1) Declaratory Relief on the Duty to Defend (against Hannover and CIC); 2)
15
Declaratory Relief on the Duty to Indemnify (against Hannover and CIC); 3) Breach of Contract
16
17
(the insurance policies, against Hannover and CIC); 4) Breach of the implied covenant of good
18 faith and fair dealing (against Hannover and CIC), and; 5) Negligent Misrepresentation (against |
19 Premier only). Plaintiff dismissed Premier on July 8, 2019.
20
On November 26, 2019 CIC filed a Cross-Complaint against Plaintiff, stating Cross-
21
Claims for 1) Rescission of insurance policy and; 2) Declaratory Relief re: rescission based on
22
23 alleged misrepresentations and nondisclosures by Plaintiff in its insurance policy applications.
24 “du
25
“eu
26
“i
27
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Case No. 18CV335946
Order Re: Motions for Summary Judgment
Discussion
I. CIC’s motion for summary judgment/summary adjudication on the Cross-Complaint
The parties have submitted a stipulation requesting that the motion directed at the Cross-
Complaint be continued “to a date to be determined by the Court.” Accordingly, CIC’s motion
for summary judgment/summary adjudication on the Cross-Complaint is continued to August 18
2020. Plaintiff may file a revised or amended opposition per code which will completely
supersede his original opposition papers. (See Code Civ. Proc., § 437c, subd. (b)(2) [an
opposition to the motion shall be served and filed not less than 14 days preceding the continued
10
date of hearing].) CIC may file a reply per code. (See Code Civ. Proc., § 437c, subd. (b)(4) [a
Il
12 teply to the opposition shall be served and filed by the moving party not less than five days
13 preceding the continued date of hearing].)
14
II. Motion for Summary Judgment/Adjudication re: Plaintiff's FAC
15
Request for Judicial Notic:
16
17 In support of this motion CIC has submitted a request for judicial notice of a copy of the
18 complaint in the underlying case, Brassfield v. Elias, case no. 17CV305267, submitted as
19 Defense exhibit 1. The request is GRANTED pursuant to Evidence Code §452(d) (court
20
records). While the complaint cannot be noticed as to the truth of its contents notice can be
2i
taken of the allegations supporting the claims against Defendant Paul Elias dba Apec
22
23 Construction (Plaintiff here) in that action. These allegations are relevant to the analysis of
24 whether CIC owed Plaintiff a duty to defend under its policy.
25 The Underlying Complaint alleges (at J1) that it arises from the “construction of a new
26
family home and separate garage... Defendants designed or constructed the residence... ina
27
manner such that the structures contain deficiencies including, but not limited to deficiencies in
28
Ere = zs
Case No. 18CV335946 -
Order Re: Motions for Summary Judgment
the architectural and structural systems, as well as product and installation defects. Defendants
also made false and misleading statements to Plaintiffs . . . and Defendants actively concealed
and covered up construction deficiencies...” It also alleges (at 4916-23) that when Paul
Brassfield acquired the subject property in Feb. 2004 the contract with Defendant (Plaintiff here)
was already in place and he was reassured by Paul Elias that he knew how to build basements
and that construction started on the residence on or about May 1, 2004 and was completed on
January 19, 2007.
The Underlying Complaint further alleges (25-40) that the first flooding of the
10
basement occurred in the winter of 2007 (damaging the baseboards, drywall and floor tile) and
11
12 that Elias claimed that the cause was the fact that the power went out and the sump pump was
13 unable to operate. Plaintiffs installed a backup generator for the pump at Elias’ suggestion and
14
paid him for repair work. The basement flooded again in the winter of 2008, again damaging the}
15
baseboard, drywall and floor tile, and this time Elias told Plaintiff the cause was “poor
16
17 engineering in the approved plans that only called for one sump pump.” Plaintiffs agreed to
18 install a second pump as well as a concrete curb and paid Elias for the work. The basement |
19 flooded again on Christmas Day 2010 (again damaging baseboard, drywall and floor tile) and
20
this time Elias told the Plaintiffs that another sump pump needed to be installed. Plaintiffs paid
21
for this work. The basement flooded a fourth time on or about December 10, 2014 and this time
22
23 Plaintiffs hired a different contractor. The new contractor eventually discovered “a gaping saw
24 cut hole. . in the basement concrete slab where raw earth was visible.” Based on this and his
25 other behavior Plaintiffs allege “that it was Defendant Elias’ common practice to knowingly and
26
purposefully perform work so that there were deficiencies in the construction in order to create a
27
need for future work/repairs that Defendant Elias could and would charge his clients for.”
28
nS
Case No. 18CV335946
Order Re: Motions for Summary Judgment
Standard on Summary Judgment/Adjudication
The pleadings limit the issues presented for summary judgment/adjudication and such a
motion may not be granted or denied based on issues not raised by the pleadings. (See
Government Employees Ins. Co. v. Sup. Ct. (2000) 79 Cal.App.4th 95, 98; Laabs v. City of
Victorville (2008) 163 Cal.App.4th 1242, 1258; Nieto v. Blue Shield of Calif. Life & Health Ins.
(2010) 181 Cal.App.4th 60, 73 [“the pleadings determine the scope of relevant issues on a
summary judgment motion.”].) The moving party bears the initial burden of production to make
10
a prima facie showing that there are no triable issues of material fact. (Aguilar v. Atlantic
11
12 Richfield Co. (2001) 25 Cal.4th 826, 850.) A motion for summary adjudication shall be granted
13 only if it completely disposes of a cause of action, an affirmative defense, a claim for damages,
14
or an issue of duty. (See CCP $437c(f}(1); McClasky v. California State Auto. Ass'n (2010) 189
15
Cal.App.4th 947, 975 [“If a cause of action is not shown to be barred in its entirety, no order for
16
17 summary judgment—or adjudication—can be entered.”]; Palm Spring Villas I! Homeowners
18 Association, Ine. y. Parth (2016) 248 Cal.App.4th 268, 288.)
19 On a motion for summary judgment/adjudication the moving party’s declarations and
20
evidence will be strictly construed in determining whether they negate or disprove an essential
21
element of a plaintiff's claim “in order to resolve any evidentiary doubts or ambiguities in
22
23 plaintiffs (or opposing party’s) favor.” (Johnson v. American Standard, Inc. (2008) 43 Cal.4th
24 56, 64, parentheses added.) While the same standards of admissibility govern both, the
25
opposition declarations are liberally construed while the moving party’s evidence is strictly
26
scrutinized. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768.) The evidence must
27
be liberally construed in support of the opposing party, resolving any doubts in favor of that
28
ss =
Case No. 18CV335946
Order Re: Motions for Summary Judgment
party. (Yanowitz v. L'Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1037.) However, a party cannot
avoid summary judgment or adjudication by asserting facts “based on mere speculation and
conjecture, but instead must produce admissible evidence raising a triable issue of fact.”
(California Bank & Trust v. Lawtor (2013) 222 Cal.App.4th 625, 631.) The opposing party may
be bound by admissions made in deposition testimony or discovery responses. (See Whitmire v.
Ingersoll-Rand Co. (2010) 184 Cal.App.4th 1078, 1087 [Where a declaration submitted in
opposition to a motion for summary judgment clearly contradicts the declarant’s earlier
deposition testimony or discovery responses, the trial court may fairly disregard the declaration
10
and ‘conclude there is no substantial evidence of the existence of a triable issue of fact.’”]}
i
12 The moving party may generally not rely on additional evidence filed with its Reply
13 papers. (See Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537-38 {The general rule of
14
motion practice . . . is that new evidence is not permitted with reply papers. This principle is
15
most prominent in the context of summary judgment motions . . .”]; see also Nazir v. United
16
Airlines, Inc. (2009) 178 Cal.App.4th 243, 252; San Diego Watercrafts, Inc. v. Wells Fargo
17
18 Bank, N.A. (2002) 102 Cal.App.4th 308, 316.)
19 “Summary judgment is properly granted when no triable issue of material fact exists and
20
the moving party is entitled to judgment as a matter of law. A defendant moving for summary
21
judgment bears the initial burden of showing that a cause of action has no merit by showing that
22
23 one or more of its elements cannot be established or that there is a complete defense. Once the
24 defendant has met that burden, the burden shifts to the plaintiff ‘to show that a triable issue of
25 one or more material facts exists as to that cause of action or a defense thereto.’ ‘There is a
26
triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to
27
find the underlying fact in favor of the party opposing the motion in accordance with the
28
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Case No. 18CV335946
Order Re: Motions for Summary Judgment
applicable standard of proof.” (Madden v. Summit View, Inc. (2008) 165 Cal.App.4th 1267,
1272 {internal citations omitted].) An opposing party will sometimes rely on circumstantial
evidence and/or inferences arising from declarations or other evidence. To defeat summary
judgment such inferences must be reasonable and cannot be based on speculation or surmise.
(McGrory v. Applied Signal Technology, Inc. (2013) 212 Cal.App.4th 1510, 1530 [‘‘a material
triable controversy is not established unless the inference is reasonable.”])
Analysi!
The primary issue on this motion is whether CIC owes Plaintiff a duty to defend Plaintiff
10
in the underlying lawsuit. “A liability insurer owes a broad duty to defend its insured against
IL
12 claims that create a potential for indemnity. [Citation.] The determination whether the insurer
13 owes a duty to defend is usually made in the first instance by comparing the allegations of the
14
compiaint with the terms of the policy. [Citation.] Facts extrinsic to the complaint also give rise
15
to a duty to defend when they reveal a possibility that the claim may be covered by the policy.
16
[Citation.] The obligation to defend, however, is not without limits. Rather, such a duty is
17
18 limited by the nature and kind of risk covered by the policy. (Citation.] The insurer does not
19 need to defend if the third party complaint can by no conceivable theory raise a single issue
20
which could bring it within the policy coverage. [Citation.]” (Michaelian v. State Comp. Ins.
21
Fund (1996) 50 Cal.App.4th 1093, 1106.)
22
23 “[I]n order to prevail on the issue of the duty to defend, the insured must prove the
24 existence of a potential for coverage, while the insurer must establish the absence of any such
25 potential. In other words, the insured need only show that the underlying claim may fall within
26
policy coverage; the insurer must prove it cannot.” (George F. Hillenbrand, Inc. v. Insurance
27
Co. of North America (2002) 104 Cal.App.4th 784, 801 [internal quotation marks omitted].)
28
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Case No. 18CV335946
Order Re: Motions for Summary Judgment
10
“Any doubts as to whether the insurer has a duty to defend must be resolved in the insured’s
favor.” (/d. at pp. 800-801.) Whether the insurer owes a defense depends on: the terms of the
policy; the allegations of the third party’s complaint against the insured; and all facts known to
the insurer from any source. (Scottsdale Ins. Co. v. MV Transp. (2005) 36 Cal.4th 643, 654;
Griffin Dewatering Corp. v. Northern Ins. Co. of N.Y. (2009) 176 Cal.App.4th 172, 197-198.)
The proper interpretation of an insurance policy is a question of law for the court. “As a
question of law, the interpretation of an insurance policy is reviewed de novo under well settled |
|
rules of contract interpretation. ‘The fundamental rules of contract interpretation are based on
10
the premise that the interpretation of a contract must give effect to the ‘mutual intention’ of the
lL
12 parties. ‘Under statutory rules of contract interpretation, the mutual intention of the parties at the
13 time the contract is formed governs interpretation. (Civ. Code $1636.) Such intent is to be
14
inferred, if possible, solely from the written provisions of the contract. (Id., $1639.) The ‘clear
15
and explicit’ meaning of these provisions, interpreted in their ‘ordinary and popular sense,’
16
unless ‘used by the parties in a technical sense or a special meaning is given to them by usage.’
17
18 (Id. $1644), controls judicial interpretation.” (EMMI, Inc. v. Zurich American Ins. Co. (2004
19 32 Cal.4th 465, 470, internal citations omitted.)
20
CIC has established through admissible evidence, primarily the underlying complaint
21
(Defense exhibit 1), the first policy it issued to Plaintiff with a policy period running from March
22
23 17, 2016 to March 17, 2017 (Defense exhibit 6), Plaintiff's verified responses to discovery
24 (Defense exhibits 7-9) and the July 5, 2017 email from Plaintiff Counsel Martini tendering the
25 claim for coverage to CIC (Defense exhibit 13), that it had no duty to defend Plaintiff in the
26
underlying litigation for three separate and independent reasons: 1) The policy does not cover
27
new residential work or repairs to such work, and the underlying complaint is clearly based on
28
Case No. 18CV335946
Order Re: Motions for Summary Judgment
11
Plaintiff's allegediy negligent construction of a new residential home and allegedly negligent
repair efforts. These efforts, including the installation of sump pumps, cannot reasonably be
construed as “remodeling work” as Plaintiff argues; 2) The policy does not cover property
damage that occurred prior to the policy period or property damage known to the insured prior to
the Policy period. The underlying complaint makes clear that the property damages allegedly
caused by Plaintiff began years before CIC’s first policy was issued and Plaintiff Paul Elias’
verified discovery responses admit that he was aware of the alleged property damages well
before CIC’s first policy was issued; 3) The policy does not provide coverage for continuous or
10
progressive property damage that first began prior to the start of the policy period, which the
I
12 underlying complaint clearly alleges and Plaintiff Paul Elias’ verified discovery responses admit
13 his knowledge of.
14
As CIC has met its initial burden to establish that it had no duty to defend Plaintiff in the
15
underlying action it has also met its initial burden to establish that it did not owe any duty to
16
17
indemnify Plaintiff. “[W]here there is no duty to defend, there cannot be a duty to indemnify.”
18 (Certain Underwriters at Lloyd’s of London v. Superior Court (2001) 24 Cal.4th 945, 958.) It
19 has further met its initial burden to establish that it did not breach the contract—the insurance
20
policy by denying coverage, and that it did not breach the implied covenant of good faith and fair
21
dealing as its denial of coverage under the March 2016 to March 2017 policy was not
22
23 unreasonable or without proper cause.
24 When the burden shifts Plaintiff is unable to raise any triable issue of material fact
25 through the declaration of Plaintiff Paul Elias or the declaration Plaintiff Counsel Alan Martini
26
(which simply authenticates attached exhibits A and B).
27
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Case No. 18CV335946
Order Re: Motions for Summary Judgment
12
Plaintiff Paul Elias’ statements in his opposing declaration as to what in his opinion
constitutes “remodeling work” as the term is used in the CIC policy are not relevant to the
court’s analysis of the policy as “a witness is incompetent to give an opinion on the meaning of
the contract language.” (DVD Copy Control Assn., Inc. v. Kaleidescape, Inc. (2009) 176
Cal.App.4th 697, 715 {because interpretation of written contract is solely a judicial function
unless the interpretation turns upon the credibility of extrinsic evidence].) Thus a triable issue of,
material fact is not raised because Mr. Elias states that in his opinion his allegedly negligent
repair efforts (including the installation of sump pumps) should be considered “remodeling
10
work” covered by the policy.
1
12 Mr. Elias also remains bound by his verified discovery responses on summary judgment
13 and his attempt to amend or qualify his admissions in his opposing declaration is disregarded by
14
the court (see Whitmire v. Ingersoll-Rand Co., supra) and therefore cannot raise a triable issue of;
15
material fact. “An admission cannot be amended or withdrawn except by leave of court after
16
17 noticed motion. . . [A]dmissions serve a function similar to pleadings in that they are aimed
18 primarily at setting a triable issue to rest. Thus, like pleadings, leave of court is required before
19 admissions may be amended or withdrawn. .. A party will be permitted to withdraw or amend
20
an admission only if the court finds: The admission resulted from ‘mistake inadvertence or
al
excusable neglect .. . and no substantial prejudice to the requesting party will result from
22
23 allowing the admission to be withdrawn or amended.” (Weil & Brown, Cal. Practice Guide:
24 Civil Procedure Before Trial (Rutter Group 2019) at §8:1386-1386.1, emphasis added, internal
25 citations omitted.)
26
Plaintiff also cannot raise a triable issue by claiming (based on the correspondence
27
between counsel submitted as exhibits A and B to the declaration of Plaintiff Counsel Mr.
28
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Case No. 18CV335946
— ° 13
Order Re: Motions for Summary Judgment
Martini) that the allegations of the complaint in the underlying action are so general and vague
that some theoretical possibility of coverage remains and precludes summary judgment. CIC has |
met its initial burden to show that its policy covering the period from March 2016 to March 2017|
does not provide coverage of the underlying litigation and when the burden shifts Plaintiff cannot
avoid summary judgment by asserting facts “based on mere speculation and conjecture, but
instead must produce admissible evidence raising a triable issue of fact.” (California Bank &
Trust v. Lawlor (2013) 222 Cal.App.4th 625, 631.)
Accordingly, CIC’s motion for summary judgment on the FAC is GRANTED.
10
Objection:
1L
12 The court notes that with the opposition to the motion directed at the FAC Plaintiff has
13 submitted objections to CIC’s evidence. These objections do not comply with Cal. Rule of Court
14
3.1354, which requires two documents to be submitted: the objections and a separate proposed
15
order on the objections, both of which must be in one of the two approved formats stated in the |
16
17 Rule. As the objections submitted do not comply with the Rule the Court will not rule on them.
18 (See Vineyard Spring Estates v. Super. Ct. (2004) 120 Cal.App.4th 633, 642 [trial courts only
19 have duty to rule on evidentiary objections presented in proper format]; Hodjat v. State Farm
20
Mutual Automobile Ins. Co. (2012) 211 Cal.App.4th I [trial court not required to rule on
21
objections that do not comply with Rule of Court 3.1354 and not required to give objecting party
22
23 a second chance at filing properly formatted papers].)
24 As Defendant CIC’s motion for summary judgment has been granted, the court does not
25
find it necessary to rule on the evidentiary objections CIC has submitted with its reply. “[T]he
26
court need only rule on those objections to evidence that it deems material to its disposition of
27
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Case No. 18CV335946
Order Re: Motions for Summary Judgment
14
1 the motion. Objections that are not ruled on are preserved for appellate review.” (CCP
);
Ly
2 |i g437e(q).)
3
U_—
Dated: b-19- le
Thang N. Barrett
Judge of the Superior Court
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Case No. 18CV335946
Order Re: Motions for Summary Judgment
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EE SUPERIOR COURT OF CALIFORNIA (Em:
COUNTY OF SANTA CLARA
DOWNTOWN COURTHOUSE
191 NorTH FIRST STREET
Vy SAN JOSE, CALIFORNIA 95113
CIVIL DIVISION JUN 1 3 2000
Superior Coy;
Jeffrey Stuart Kaplan
11400 W Olympic Blvd Ste 425 ve 6%
Los Angeles CA 90064
RE: Paul Elias vs international Insurance Company of Hannover SE et al
Case Number: 18CV335946
PROOF OF SERVICE
ORDER RE: MOTION FOR SUMMARY JUDGMENT/ADJUDICATION was delivered to the parties listed below
the above entitled case as set forth in the sworn declaration below.
If you, a party represented by you, or a witness to be called on behalf of that party need an accommodation under the American with
Disabilities Act, please contact the Court Administrator's office at (408) 882-2700, or use the Court's TOD line (408) 882-2690 or the
Voice/TDD California Relay Service (800) 735-2922.
DECLARATION OF SERVICE BY MAIL: | declare that | served this notice by enclosing a true copy in a sealed envelope, addressed to
each person whose name is shown below, and by depositing the envelope with postage fully prepaid, in the United States Mail at San Jose,
CA on June 18, 2020. CLERK OF THE COURT, by Donna O'Hara, Deputy.
cc: Alan L Martini Sheuerman Martini Tabari Zenere & Garvin 1033 Willow Street San Jose CA 95125
David Christophe Hungerford Severson & Werson One Embarcadero Center Suite 2600 SAN FRANCISCO CA
94111
= ——16___.
‘CW-9027 REV 12/08/16 PROOF OF SERVICE
PROOF OF SERVICE
STATE OF CALIFORNIA, COUNTY OF SANTA CLARA
| am employed in the County of Los Angeles, State of California. | am over the age
of 18 and not a party to the within action; my business address is: 11400 W. Olympic
Blvd., Suite 425, Los Angeles, CA 90064-1561.
On July 30, 2020, | served the foregoing document described as: [PROPOSED]
JUDGMENT BY COURT UNDER CALIFORNIA CODE OF CIVIL PROCEDURE
SECTION 437c on the interested parties in this action by placing a true copy thereof
enclosed in sealed envelopes, addressed as follows:
[SEE ATTACHED “SERVICE LIST”]
__/ BY MAIL As follows: | am "readily familiar" with the firm's practice of collection and
processing correspondence for mailing. Under that practice it would be deposited
with U.S. Postal Service on that same day, with postage thereon fully prepaid at Los
Angeles, California in the ordinary course of business. | am aware that on motion of
10 the party served, service is presumed invalid if postal cancellation date or postage
meter date is more than one day after ‘date of deposit for mailing in affidavit.
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— BY FACSIMILE On this date prior to 5:00 p.m., | transmitted the above listed
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document(s) to the interested parties at the fax numbers indicated above by using fax
13 machine number (310) 231-1610. This transmission was reported as complete
without error. A true and correct copy of the transmission report properly issued by
14 the sending fax machine is attached hereto.
15 x BY ELECTRONIC SERVICE (per Judicial Council Emergency Rule 12 Re COVID-
19) On this date, the above-listed document(s) were electronically-served on the
16 interested parties at the electronic addresses listed in the Service List attached to this
Proof of Service.
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_/ BY PERSONAL SERVICE | personally delivered the above-referenced document in
18 a sealed envelope or package to the address above.
19 __/ BY FEDERAL EXPRESS OVERNIGHT DELIVERY | personally deposited said
envelope in a Federal Express overnight delivery depository in time to be picked up
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for delivery to be made the next business day according to the information posted by
21 Federal Express at the depository.
22 | declare under penalty of perjury under the laws of the State of California that the
above is true and correct.
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Executed on July 30, 2020, at Los Angeles, California.
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25 /s/ Brenda L. Hester
Brenda L. Hester
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28 W:\CASESI3900.06\PLEADINGS\PROPOSED JUDGMENT MSJ ON FAC.DOCX
[PROPOSED] JUDGMENT BY COURT
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UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 437c
Re: Elias v. International Insurance Company, et al.
Santa Clara County Case No. 18CV335946
SERVICE LIST
Alan L. Martini, Esq. Attorneys for Plaintiff,
SHEUERMAN, MARTINI, TABARI, ZENERE PAUL ELIAS, individually and dba
& GARVIN APEC CONSTRUCTION
1033 Willow St.
San Jose, CA 95125
T: 408-288-9700
F: 408-295-9900
E amartini@smtlaw.com
Michael B. Murphy, Esq. Attorneys for Defendant,
David C. Hungerford, Esq. HDI GLOBAL SPECIALTY SE, formerly
10 SEVERSON & WERSON known as “INTERNATIONAL INSURANCE
One Embarcadero Center, Suite 2600 COMPANY OF HANNOVER SE”
11 San Francisco, CA 94111
T: 415-398-3344
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F: 415-956-0439
13 E: mbm@severson.com
E: dch@severson.com
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28 W:\CASESI3900.06\PLEADINGS\PROPOSED JUDGMENT MSJ ON FAC.DOCX
[PROPOSED] JUDGMENT BY COURT
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UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 437c
Preview
Reviewed By: R. Tien on 8/3/2020 11:47 AM Envelope: 4699718 EFS-020 ATTORNEY OR PARTY WITHOUT ATTORNEY: STATE BAR NO.: 207345 FOR COURT USE ONLY NAME: Kaiulani S. Lie, Esq. FRM Name: GAGLIONE, DOLAN & KAPLAN sTREET Appress: 11400 W. Olympic Blvd., Suite 425 city: Los Angeles state: CA ZIP CODE: 90064-1561 TeLerHone No.: (310) 231-1600 FAX NO. (310) 231-1610 eal aporess: klie@gaglionedolan.com ATTORNEY FOR (namey: Defendant/Cross-Complainant, COLONY INSURANCE COMPANY. SUPERIOR COURT OF CALIFORNIA, COUNTY OF SANTA CLARA streetappress: 161 N. First St. MaiLinc Appress: 161 N. First St. city AND zip cope: San Jose, CA 95113 BRANCH NAME: Old Courthouse CASE NUMBER: PLAINTIFF/PETITIONER: Paul Elias, individuall, and dba Apec Construction 18CV335946 DEFENDANT/RESPONDENT: International Insurance Company of Hannover, SE et al, U1 oFFicER Hon. Thang N. Barrett OTHER: DEPT: PROPOSED ORDER JUDGMENT (COVER SHEET) 21 NOTE: This cover sheet is to be used to electronically file and submit to the court a proposed erder judgment. The proposed order judgment sent electronically to the court must be in PDF format and must be attached to this cover sheet. In addition, a version of the proposed order judgment in an editable word-processing format must be sent to the court at the same time as this cover sheet and the attached proposed order judgment in PDF format are filed. 1 Name of the party submitting the proposed order judgment: Colony Insurance Company (Defendant/Cross-Complainant) 2. Title of the proposed erder judgment: (Proposed) Judgment by Court Under California Code of Civil Procedure Section 437c 3. The proceeding to which the proposed order judgment relates is: a. Description of proceeding: Defendant/Cross-Complainant Colony Insurance Company’s Motion for Summary Judgment or, in the Alternative, Summary Adjudication on Plaintiff's First Amended Complaint i. Date and time: June 2, 2020 — 9:00 a.m. c. Place: Santa Clara Co. Superior Court, Old Courthouse, 161 N. 1% St., San Jose, CA 95113, Dept. 21 4. The proposed order judgment was served on the other parties in the case. Yes. Brenda L. Hester >» /s| Brenda L. Hester (TYPE OR PRINT NAME) (SIGNATURE OF PARTY OR ATTORNEY) Page 4 of 2 Form Adopted for Mandatory Use PROPOSED ORDER (COVER SHEET) Cal. Rules of Court, Judicial Council of California rules 2.252, 3.1312 EFS.020 [Rev. February 1, 2017] (Electronic Filing) www.courts.ca.gov American EFS-020 CASE NAME: CASE NUMBER: Elias v. International Insurance Company of Hannover SE, et al. 18CV335946 PROOF OF ELECTRONIC SERVICE PROPOSED ORDER JUDGMENT 1. | am at least 18 years old and not a party to this action. a. My residence or business address is (specify): 11400 W. Olympic Blvd., Suite 425, Los Angeles, CA 90064-1561 b. My electronic service address is (specify): brenda@gaglionedolan.com 2. | electronically served the Proposed Order Judgment (Cover Sheet) with a proposed erder judgment in PDF format attached, and a proposed order judgment in an editable word-processing format as follows: a. On (name of person served) (If the person served is an attorney, the party or parties represented should also be stated.): Alan L. Martini, Esq. Michael B. Murphy, Esq. SHEUERMAN, MARTINI, TABARI, ZENERE & GARVIN David C. Hungerford, Esq. 1033 Willow St. SEVERSON & WERSON San Jose, CA 95125 One Embarcadero Center, Suite 2600 T: 408-288-9700 San Francisco, CA 94111 F 408-295-9900 T: 415-398-3344 E amartini@smtlaw.com F: 415-956-0439 (Attorneys for Plaintiff, Paul Elias, indi dually, and E: mbm@severson.com dba Apec Construction) E: dch@severson.com (Attorneys for HDI GLOBAL SPECIALTY SE, formerly known as “INTERNATIONAL INSURANCE COMPANY OF HANNOVER SE”) b. To (electronic service address of person served): amartini@smtlaw.com; mbm@severson.com; dch@severson.com c. On (date): August 3, 2020 (Electronic service of the Proposed Order (Cover Sheet) with the attached proposed order in PDF format and service of the proposed order in an editable word-processing format on additional persons are described in an attachment. | declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Date: August 3, 2020 Brenda L. Hester /si Brenda L. Hester (TYPE OR PRINT NAME OF DECLARANT) (SIGNATURE OF DECLARANT) EFS-020 [Rev. February 1, 2017] PROPOSED ORDER (COVER SHEET) Page 2 of 2 (Electronic Filing) AmericanL Jeffrey S. Kaplan, Esq., (SBN: 169009) Kaiulani S. Lie, Esq. (SBN: 207345) GAGLIONE, DOLAN & KAPLAN 11400 W. Olympic Blvd., Suite 425 Los Angeles, CA 90064 T (310) 231-1600 F (310) 231-1610 E: jkaplan@gaglionedolan.com E: klie@gaglionedolan.com Attorneys for Defendant and Cross-Complainant, COLONY INSURANCE COMPANY SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SANTA CLARA 10 (Old Courthouse) 11 12 PAUL ELIAS, individually and dba Case No.: 18CV335946 APEC CONSTRUCTION, [Judge: The Hon. Thang N. Barrett — Dept. 21] 13 14 Plaintiff, [PROPOSED] JUDGMENT BY 15 vs. COURT UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 16 437c¢ INTERNATIONAL INSURANCE 17 COMPANY OF HANNOVER SE; PREMIER CLAIMS MANAGEMENT, Civil — General Jurisdiction 18 LLC; COLONY INSURANCE COMPANY; and DOES 1-25, Inclusive, Complaint Filed: 19 October 4, 2018 FAC Filed: March 6, 2019 20 Defendants. Trial Date: None Set 21 22 AND RELATED CROSS-ACTIONS 23 24 25 Hy 26 11 27 11 W.\CASES\3900,06\PLEADINGS\PROPOSED JUDGMENT MSJ ON FAC,DOCX 28 [PROPOSED] JUDGMENT BY COURT UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 437c TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD: On June 2, 2020, Defendant COLONY INSURANCE COMPANY’s (CIC) motion for summary judgment, or in the alternative, summary adjudication on Plaintiff, PAUL ELIAS, individually and doing business as, APEC CONSTRUCTION’s (APEC) First Amended Complaint was heard before the Honorable Thang N. Barrett in Department 21 of this Court. All Parties to this action, through their counsel of record, tele- phonically appeared at the hearing. After oral argument was heard on the motion, the Court took the motion under submission. On June 18, 2020, the Court entered an order granting summary judgment in 10 CIC’s favor on APEC’s First Amended Complaint. The grounds for the Court’s order 11 are reflected in the Court's June 18, 2020 “ORDER RE MOTION FOR SUMMARY 12 JUDGMENT/ADJUDICATION,” a true and correct copy of which is attached hereto as 13 Exhibit A. 14 IT IS ORDERED, ADJUDGED, AND DECREED that judgment shall be entered in 15 favor of CIC and against APEC in connection with APEC’s First Amended Complaint. 16 APEC shall take nothing from CIC in connection with its First Amended Complaint. 17 IT IS FURTHER ORDERED, ADJUDICATED, AND DECREED that CIC shall 18 recover from APEC its costs of suit to be determined by the Court following CIC’s filing 19 of its Memorandum of Costs. 20 IT IS SO ORDERED. 21 22 DATED: , 2020 23 24 The Hon. Thang N. Barrett 25 Judge of the Superior Court State of California, County of Santa Clara 26 27 28 W:\CASESI3900.06\PLEADINGS\PROPOSED JUDGMENT MSJ ON FAC.DOCX -2- [PROPOSED] JUDGMENT BY COURT UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 437c XHIBIT A Copy F ile JUN 18 2023 Clerk of the Court ‘Superior Court of CA County ‘of Santa Clara BY. DEPUTY D. O'Hare SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA 10 i PAUL ELIAS, individually and dba APEC Case No. 18CV335946 12 CONSTRUCTION, 13 Plaintiff, ORDER RE:MOTIONS FOR SUMMARY JUDGMENT/ADJUDICATION 14 15 VS. 16 17 INTERNATIONAL INSURANCE COMPANY 18 OF HANNOVER SE, et al. 19 Defendants. 20 2t AND RELATED CROSS-ACTION. 22 23 The two motions for summary judgment filed by Defendant/Cross-Complainant Colony 24 Insurance Company came on for hearing before the Honorable Thang N. Barrett on June 2, 2020, 25 at 9:00 a.m. in Department 21. The matter having been submitted, the Court orders as follows: 26 Before the court are two separate motions for summary judgment/adjudication by Colony 27 Insurance Company (“CIC”), both filed on March 19, 2020. One is directed at the four causes of] 28 action in the FAC alleged against CIC, and the other seeks judgment/adjudication of CIC’s 1 Case No. 18CV335946 Order Re: Motions for Summary Judgment Cross-Complaint. Plaintiff opposes both motions and the opposition to the motion directed at the Cross-Complaint requests a continuance of that motion to allow for necessary discovery to be completed. Factual and Procedural Background The case arises out of an insurance coverage dispute. Plaintiff Paul Elias dba Apec Construction (“Plaintiff”) sued two of its insurers, International Insurance Company of Hannover (“Hannover”) and CIC, along with Premier Claims Management, Inc. (“Premier”) for their refusal to indemnify and defend Plaintiff in an underlying action for negligence and fraud arising 10 from the construction of and repairs to a single-family home (Brassfield v. Elias, case no. ll 12 17CV305267). The underlying action is still ongoing. 13 In the operative First Amended Complaint (“FAC”) filed March 6, 2019 Plaintiff states 14 claims for: 1) Declaratory Relief on the Duty to Defend (against Hannover and CIC); 2) 15 Declaratory Relief on the Duty to Indemnify (against Hannover and CIC); 3) Breach of Contract 16 17 (the insurance policies, against Hannover and CIC); 4) Breach of the implied covenant of good 18 faith and fair dealing (against Hannover and CIC), and; 5) Negligent Misrepresentation (against | 19 Premier only). Plaintiff dismissed Premier on July 8, 2019. 20 On November 26, 2019 CIC filed a Cross-Complaint against Plaintiff, stating Cross- 21 Claims for 1) Rescission of insurance policy and; 2) Declaratory Relief re: rescission based on 22 23 alleged misrepresentations and nondisclosures by Plaintiff in its insurance policy applications. 24 “du 25 “eu 26 “i 27 28 Case No. 18CV335946 Order Re: Motions for Summary Judgment Discussion I. CIC’s motion for summary judgment/summary adjudication on the Cross-Complaint The parties have submitted a stipulation requesting that the motion directed at the Cross- Complaint be continued “to a date to be determined by the Court.” Accordingly, CIC’s motion for summary judgment/summary adjudication on the Cross-Complaint is continued to August 18 2020. Plaintiff may file a revised or amended opposition per code which will completely supersede his original opposition papers. (See Code Civ. Proc., § 437c, subd. (b)(2) [an opposition to the motion shall be served and filed not less than 14 days preceding the continued 10 date of hearing].) CIC may file a reply per code. (See Code Civ. Proc., § 437c, subd. (b)(4) [a Il 12 teply to the opposition shall be served and filed by the moving party not less than five days 13 preceding the continued date of hearing].) 14 II. Motion for Summary Judgment/Adjudication re: Plaintiff's FAC 15 Request for Judicial Notic: 16 17 In support of this motion CIC has submitted a request for judicial notice of a copy of the 18 complaint in the underlying case, Brassfield v. Elias, case no. 17CV305267, submitted as 19 Defense exhibit 1. The request is GRANTED pursuant to Evidence Code §452(d) (court 20 records). While the complaint cannot be noticed as to the truth of its contents notice can be 2i taken of the allegations supporting the claims against Defendant Paul Elias dba Apec 22 23 Construction (Plaintiff here) in that action. These allegations are relevant to the analysis of 24 whether CIC owed Plaintiff a duty to defend under its policy. 25 The Underlying Complaint alleges (at J1) that it arises from the “construction of a new 26 family home and separate garage... Defendants designed or constructed the residence... ina 27 manner such that the structures contain deficiencies including, but not limited to deficiencies in 28 Ere = zs Case No. 18CV335946 - Order Re: Motions for Summary Judgment the architectural and structural systems, as well as product and installation defects. Defendants also made false and misleading statements to Plaintiffs . . . and Defendants actively concealed and covered up construction deficiencies...” It also alleges (at 4916-23) that when Paul Brassfield acquired the subject property in Feb. 2004 the contract with Defendant (Plaintiff here) was already in place and he was reassured by Paul Elias that he knew how to build basements and that construction started on the residence on or about May 1, 2004 and was completed on January 19, 2007. The Underlying Complaint further alleges (25-40) that the first flooding of the 10 basement occurred in the winter of 2007 (damaging the baseboards, drywall and floor tile) and 11 12 that Elias claimed that the cause was the fact that the power went out and the sump pump was 13 unable to operate. Plaintiffs installed a backup generator for the pump at Elias’ suggestion and 14 paid him for repair work. The basement flooded again in the winter of 2008, again damaging the} 15 baseboard, drywall and floor tile, and this time Elias told Plaintiff the cause was “poor 16 17 engineering in the approved plans that only called for one sump pump.” Plaintiffs agreed to 18 install a second pump as well as a concrete curb and paid Elias for the work. The basement | 19 flooded again on Christmas Day 2010 (again damaging baseboard, drywall and floor tile) and 20 this time Elias told the Plaintiffs that another sump pump needed to be installed. Plaintiffs paid 21 for this work. The basement flooded a fourth time on or about December 10, 2014 and this time 22 23 Plaintiffs hired a different contractor. The new contractor eventually discovered “a gaping saw 24 cut hole. . in the basement concrete slab where raw earth was visible.” Based on this and his 25 other behavior Plaintiffs allege “that it was Defendant Elias’ common practice to knowingly and 26 purposefully perform work so that there were deficiencies in the construction in order to create a 27 need for future work/repairs that Defendant Elias could and would charge his clients for.” 28 nS Case No. 18CV335946 Order Re: Motions for Summary Judgment Standard on Summary Judgment/Adjudication The pleadings limit the issues presented for summary judgment/adjudication and such a motion may not be granted or denied based on issues not raised by the pleadings. (See Government Employees Ins. Co. v. Sup. Ct. (2000) 79 Cal.App.4th 95, 98; Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1258; Nieto v. Blue Shield of Calif. Life & Health Ins. (2010) 181 Cal.App.4th 60, 73 [“the pleadings determine the scope of relevant issues on a summary judgment motion.”].) The moving party bears the initial burden of production to make 10 a prima facie showing that there are no triable issues of material fact. (Aguilar v. Atlantic 11 12 Richfield Co. (2001) 25 Cal.4th 826, 850.) A motion for summary adjudication shall be granted 13 only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, 14 or an issue of duty. (See CCP $437c(f}(1); McClasky v. California State Auto. Ass'n (2010) 189 15 Cal.App.4th 947, 975 [“If a cause of action is not shown to be barred in its entirety, no order for 16 17 summary judgment—or adjudication—can be entered.”]; Palm Spring Villas I! Homeowners 18 Association, Ine. y. Parth (2016) 248 Cal.App.4th 268, 288.) 19 On a motion for summary judgment/adjudication the moving party’s declarations and 20 evidence will be strictly construed in determining whether they negate or disprove an essential 21 element of a plaintiff's claim “in order to resolve any evidentiary doubts or ambiguities in 22 23 plaintiffs (or opposing party’s) favor.” (Johnson v. American Standard, Inc. (2008) 43 Cal.4th 24 56, 64, parentheses added.) While the same standards of admissibility govern both, the 25 opposition declarations are liberally construed while the moving party’s evidence is strictly 26 scrutinized. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768.) The evidence must 27 be liberally construed in support of the opposing party, resolving any doubts in favor of that 28 ss = Case No. 18CV335946 Order Re: Motions for Summary Judgment party. (Yanowitz v. L'Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1037.) However, a party cannot avoid summary judgment or adjudication by asserting facts “based on mere speculation and conjecture, but instead must produce admissible evidence raising a triable issue of fact.” (California Bank & Trust v. Lawtor (2013) 222 Cal.App.4th 625, 631.) The opposing party may be bound by admissions made in deposition testimony or discovery responses. (See Whitmire v. Ingersoll-Rand Co. (2010) 184 Cal.App.4th 1078, 1087 [Where a declaration submitted in opposition to a motion for summary judgment clearly contradicts the declarant’s earlier deposition testimony or discovery responses, the trial court may fairly disregard the declaration 10 and ‘conclude there is no substantial evidence of the existence of a triable issue of fact.’”]} i 12 The moving party may generally not rely on additional evidence filed with its Reply 13 papers. (See Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537-38 {The general rule of 14 motion practice . . . is that new evidence is not permitted with reply papers. This principle is 15 most prominent in the context of summary judgment motions . . .”]; see also Nazir v. United 16 Airlines, Inc. (2009) 178 Cal.App.4th 243, 252; San Diego Watercrafts, Inc. v. Wells Fargo 17 18 Bank, N.A. (2002) 102 Cal.App.4th 308, 316.) 19 “Summary judgment is properly granted when no triable issue of material fact exists and 20 the moving party is entitled to judgment as a matter of law. A defendant moving for summary 21 judgment bears the initial burden of showing that a cause of action has no merit by showing that 22 23 one or more of its elements cannot be established or that there is a complete defense. Once the 24 defendant has met that burden, the burden shifts to the plaintiff ‘to show that a triable issue of 25 one or more material facts exists as to that cause of action or a defense thereto.’ ‘There is a 26 triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to 27 find the underlying fact in favor of the party opposing the motion in accordance with the 28 = Case No. 18CV335946 Order Re: Motions for Summary Judgment applicable standard of proof.” (Madden v. Summit View, Inc. (2008) 165 Cal.App.4th 1267, 1272 {internal citations omitted].) An opposing party will sometimes rely on circumstantial evidence and/or inferences arising from declarations or other evidence. To defeat summary judgment such inferences must be reasonable and cannot be based on speculation or surmise. (McGrory v. Applied Signal Technology, Inc. (2013) 212 Cal.App.4th 1510, 1530 [‘‘a material triable controversy is not established unless the inference is reasonable.”]) Analysi! The primary issue on this motion is whether CIC owes Plaintiff a duty to defend Plaintiff 10 in the underlying lawsuit. “A liability insurer owes a broad duty to defend its insured against IL 12 claims that create a potential for indemnity. [Citation.] The determination whether the insurer 13 owes a duty to defend is usually made in the first instance by comparing the allegations of the 14 compiaint with the terms of the policy. [Citation.] Facts extrinsic to the complaint also give rise 15 to a duty to defend when they reveal a possibility that the claim may be covered by the policy. 16 [Citation.] The obligation to defend, however, is not without limits. Rather, such a duty is 17 18 limited by the nature and kind of risk covered by the policy. (Citation.] The insurer does not 19 need to defend if the third party complaint can by no conceivable theory raise a single issue 20 which could bring it within the policy coverage. [Citation.]” (Michaelian v. State Comp. Ins. 21 Fund (1996) 50 Cal.App.4th 1093, 1106.) 22 23 “[I]n order to prevail on the issue of the duty to defend, the insured must prove the 24 existence of a potential for coverage, while the insurer must establish the absence of any such 25 potential. In other words, the insured need only show that the underlying claim may fall within 26 policy coverage; the insurer must prove it cannot.” (George F. Hillenbrand, Inc. v. Insurance 27 Co. of North America (2002) 104 Cal.App.4th 784, 801 [internal quotation marks omitted].) 28 —————— — ———————— Case No. 18CV335946 Order Re: Motions for Summary Judgment 10 “Any doubts as to whether the insurer has a duty to defend must be resolved in the insured’s favor.” (/d. at pp. 800-801.) Whether the insurer owes a defense depends on: the terms of the policy; the allegations of the third party’s complaint against the insured; and all facts known to the insurer from any source. (Scottsdale Ins. Co. v. MV Transp. (2005) 36 Cal.4th 643, 654; Griffin Dewatering Corp. v. Northern Ins. Co. of N.Y. (2009) 176 Cal.App.4th 172, 197-198.) The proper interpretation of an insurance policy is a question of law for the court. “As a question of law, the interpretation of an insurance policy is reviewed de novo under well settled | | rules of contract interpretation. ‘The fundamental rules of contract interpretation are based on 10 the premise that the interpretation of a contract must give effect to the ‘mutual intention’ of the lL 12 parties. ‘Under statutory rules of contract interpretation, the mutual intention of the parties at the 13 time the contract is formed governs interpretation. (Civ. Code $1636.) Such intent is to be 14 inferred, if possible, solely from the written provisions of the contract. (Id., $1639.) The ‘clear 15 and explicit’ meaning of these provisions, interpreted in their ‘ordinary and popular sense,’ 16 unless ‘used by the parties in a technical sense or a special meaning is given to them by usage.’ 17 18 (Id. $1644), controls judicial interpretation.” (EMMI, Inc. v. Zurich American Ins. Co. (2004 19 32 Cal.4th 465, 470, internal citations omitted.) 20 CIC has established through admissible evidence, primarily the underlying complaint 21 (Defense exhibit 1), the first policy it issued to Plaintiff with a policy period running from March 22 23 17, 2016 to March 17, 2017 (Defense exhibit 6), Plaintiff's verified responses to discovery 24 (Defense exhibits 7-9) and the July 5, 2017 email from Plaintiff Counsel Martini tendering the 25 claim for coverage to CIC (Defense exhibit 13), that it had no duty to defend Plaintiff in the 26 underlying litigation for three separate and independent reasons: 1) The policy does not cover 27 new residential work or repairs to such work, and the underlying complaint is clearly based on 28 Case No. 18CV335946 Order Re: Motions for Summary Judgment 11 Plaintiff's allegediy negligent construction of a new residential home and allegedly negligent repair efforts. These efforts, including the installation of sump pumps, cannot reasonably be construed as “remodeling work” as Plaintiff argues; 2) The policy does not cover property damage that occurred prior to the policy period or property damage known to the insured prior to the Policy period. The underlying complaint makes clear that the property damages allegedly caused by Plaintiff began years before CIC’s first policy was issued and Plaintiff Paul Elias’ verified discovery responses admit that he was aware of the alleged property damages well before CIC’s first policy was issued; 3) The policy does not provide coverage for continuous or 10 progressive property damage that first began prior to the start of the policy period, which the I 12 underlying complaint clearly alleges and Plaintiff Paul Elias’ verified discovery responses admit 13 his knowledge of. 14 As CIC has met its initial burden to establish that it had no duty to defend Plaintiff in the 15 underlying action it has also met its initial burden to establish that it did not owe any duty to 16 17 indemnify Plaintiff. “[W]here there is no duty to defend, there cannot be a duty to indemnify.” 18 (Certain Underwriters at Lloyd’s of London v. Superior Court (2001) 24 Cal.4th 945, 958.) It 19 has further met its initial burden to establish that it did not breach the contract—the insurance 20 policy by denying coverage, and that it did not breach the implied covenant of good faith and fair 21 dealing as its denial of coverage under the March 2016 to March 2017 policy was not 22 23 unreasonable or without proper cause. 24 When the burden shifts Plaintiff is unable to raise any triable issue of material fact 25 through the declaration of Plaintiff Paul Elias or the declaration Plaintiff Counsel Alan Martini 26 (which simply authenticates attached exhibits A and B). 27 28 — — Case No. 18CV335946 Order Re: Motions for Summary Judgment 12 Plaintiff Paul Elias’ statements in his opposing declaration as to what in his opinion constitutes “remodeling work” as the term is used in the CIC policy are not relevant to the court’s analysis of the policy as “a witness is incompetent to give an opinion on the meaning of the contract language.” (DVD Copy Control Assn., Inc. v. Kaleidescape, Inc. (2009) 176 Cal.App.4th 697, 715 {because interpretation of written contract is solely a judicial function unless the interpretation turns upon the credibility of extrinsic evidence].) Thus a triable issue of, material fact is not raised because Mr. Elias states that in his opinion his allegedly negligent repair efforts (including the installation of sump pumps) should be considered “remodeling 10 work” covered by the policy. 1 12 Mr. Elias also remains bound by his verified discovery responses on summary judgment 13 and his attempt to amend or qualify his admissions in his opposing declaration is disregarded by 14 the court (see Whitmire v. Ingersoll-Rand Co., supra) and therefore cannot raise a triable issue of; 15 material fact. “An admission cannot be amended or withdrawn except by leave of court after 16 17 noticed motion. . . [A]dmissions serve a function similar to pleadings in that they are aimed 18 primarily at setting a triable issue to rest. Thus, like pleadings, leave of court is required before 19 admissions may be amended or withdrawn. .. A party will be permitted to withdraw or amend 20 an admission only if the court finds: The admission resulted from ‘mistake inadvertence or al excusable neglect .. . and no substantial prejudice to the requesting party will result from 22 23 allowing the admission to be withdrawn or amended.” (Weil & Brown, Cal. Practice Guide: 24 Civil Procedure Before Trial (Rutter Group 2019) at §8:1386-1386.1, emphasis added, internal 25 citations omitted.) 26 Plaintiff also cannot raise a triable issue by claiming (based on the correspondence 27 between counsel submitted as exhibits A and B to the declaration of Plaintiff Counsel Mr. 28 —~ Case No. 18CV335946 — ° 13 Order Re: Motions for Summary Judgment Martini) that the allegations of the complaint in the underlying action are so general and vague that some theoretical possibility of coverage remains and precludes summary judgment. CIC has | met its initial burden to show that its policy covering the period from March 2016 to March 2017| does not provide coverage of the underlying litigation and when the burden shifts Plaintiff cannot avoid summary judgment by asserting facts “based on mere speculation and conjecture, but instead must produce admissible evidence raising a triable issue of fact.” (California Bank & Trust v. Lawlor (2013) 222 Cal.App.4th 625, 631.) Accordingly, CIC’s motion for summary judgment on the FAC is GRANTED. 10 Objection: 1L 12 The court notes that with the opposition to the motion directed at the FAC Plaintiff has 13 submitted objections to CIC’s evidence. These objections do not comply with Cal. Rule of Court 14 3.1354, which requires two documents to be submitted: the objections and a separate proposed 15 order on the objections, both of which must be in one of the two approved formats stated in the | 16 17 Rule. As the objections submitted do not comply with the Rule the Court will not rule on them. 18 (See Vineyard Spring Estates v. Super. Ct. (2004) 120 Cal.App.4th 633, 642 [trial courts only 19 have duty to rule on evidentiary objections presented in proper format]; Hodjat v. State Farm 20 Mutual Automobile Ins. Co. (2012) 211 Cal.App.4th I [trial court not required to rule on 21 objections that do not comply with Rule of Court 3.1354 and not required to give objecting party 22 23 a second chance at filing properly formatted papers].) 24 As Defendant CIC’s motion for summary judgment has been granted, the court does not 25 find it necessary to rule on the evidentiary objections CIC has submitted with its reply. “[T]he 26 court need only rule on those objections to evidence that it deems material to its disposition of 27 28 i Case No. 18CV335946 Order Re: Motions for Summary Judgment 14 1 the motion. Objections that are not ruled on are preserved for appellate review.” (CCP ); Ly 2 |i g437e(q).) 3 U_— Dated: b-19- le Thang N. Barrett Judge of the Superior Court 10 ll 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 — Case No. 18CV335946 Order Re: Motions for Summary Judgment 15 EE SUPERIOR COURT OF CALIFORNIA (Em: COUNTY OF SANTA CLARA DOWNTOWN COURTHOUSE 191 NorTH FIRST STREET Vy SAN JOSE, CALIFORNIA 95113 CIVIL DIVISION JUN 1 3 2000 Superior Coy; Jeffrey Stuart Kaplan 11400 W Olympic Blvd Ste 425 ve 6% Los Angeles CA 90064 RE: Paul Elias vs international Insurance Company of Hannover SE et al Case Number: 18CV335946 PROOF OF SERVICE ORDER RE: MOTION FOR SUMMARY JUDGMENT/ADJUDICATION was delivered to the parties listed below the above entitled case as set forth in the sworn declaration below. If you, a party represented by you, or a witness to be called on behalf of that party need an accommodation under the American with Disabilities Act, please contact the Court Administrator's office at (408) 882-2700, or use the Court's TOD line (408) 882-2690 or the Voice/TDD California Relay Service (800) 735-2922. DECLARATION OF SERVICE BY MAIL: | declare that | served this notice by enclosing a true copy in a sealed envelope, addressed to each person whose name is shown below, and by depositing the envelope with postage fully prepaid, in the United States Mail at San Jose, CA on June 18, 2020. CLERK OF THE COURT, by Donna O'Hara, Deputy. cc: Alan L Martini Sheuerman Martini Tabari Zenere & Garvin 1033 Willow Street San Jose CA 95125 David Christophe Hungerford Severson & Werson One Embarcadero Center Suite 2600 SAN FRANCISCO CA 94111 = ——16___. ‘CW-9027 REV 12/08/16 PROOF OF SERVICE PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF SANTA CLARA | am employed in the County of Los Angeles, State of California. | am over the age of 18 and not a party to the within action; my business address is: 11400 W. Olympic Blvd., Suite 425, Los Angeles, CA 90064-1561. On July 30, 2020, | served the foregoing document described as: [PROPOSED] JUDGMENT BY COURT UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 437c on the interested parties in this action by placing a true copy thereof enclosed in sealed envelopes, addressed as follows: [SEE ATTACHED “SERVICE LIST”] __/ BY MAIL As follows: | am "readily familiar" with the firm's practice of collection and processing correspondence for mailing. Under that practice it would be deposited with U.S. Postal Service on that same day, with postage thereon fully prepaid at Los Angeles, California in the ordinary course of business. | am aware that on motion of 10 the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after ‘date of deposit for mailing in affidavit. 11 — BY FACSIMILE On this date prior to 5:00 p.m., | transmitted the above listed 12 document(s) to the interested parties at the fax numbers indicated above by using fax 13 machine number (310) 231-1610. This transmission was reported as complete without error. A true and correct copy of the transmission report properly issued by 14 the sending fax machine is attached hereto. 15 x BY ELECTRONIC SERVICE (per Judicial Council Emergency Rule 12 Re COVID- 19) On this date, the above-listed document(s) were electronically-served on the 16 interested parties at the electronic addresses listed in the Service List attached to this Proof of Service. 17 _/ BY PERSONAL SERVICE | personally delivered the above-referenced document in 18 a sealed envelope or package to the address above. 19 __/ BY FEDERAL EXPRESS OVERNIGHT DELIVERY | personally deposited said envelope in a Federal Express overnight delivery depository in time to be picked up 20 for delivery to be made the next business day according to the information posted by 21 Federal Express at the depository. 22 | declare under penalty of perjury under the laws of the State of California that the above is true and correct. 23 Executed on July 30, 2020, at Los Angeles, California. 24 25 /s/ Brenda L. Hester Brenda L. Hester 26 27 28 W:\CASESI3900.06\PLEADINGS\PROPOSED JUDGMENT MSJ ON FAC.DOCX [PROPOSED] JUDGMENT BY COURT 17 UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 437c Re: Elias v. International Insurance Company, et al. Santa Clara County Case No. 18CV335946 SERVICE LIST Alan L. Martini, Esq. Attorneys for Plaintiff, SHEUERMAN, MARTINI, TABARI, ZENERE PAUL ELIAS, individually and dba & GARVIN APEC CONSTRUCTION 1033 Willow St. San Jose, CA 95125 T: 408-288-9700 F: 408-295-9900 E amartini@smtlaw.com Michael B. Murphy, Esq. Attorneys for Defendant, David C. Hungerford, Esq. HDI GLOBAL SPECIALTY SE, formerly 10 SEVERSON & WERSON known as “INTERNATIONAL INSURANCE One Embarcadero Center, Suite 2600 COMPANY OF HANNOVER SE” 11 San Francisco, CA 94111 T: 415-398-3344 12 F: 415-956-0439 13 E: mbm@severson.com E: dch@severson.com 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 W:\CASESI3900.06\PLEADINGS\PROPOSED JUDGMENT MSJ ON FAC.DOCX [PROPOSED] JUDGMENT BY COURT 18 UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 437c