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1 DAY LAW OFFICES
Montie S. Day, ¹073327
2 Attorneys at La>v
1235 Casa Palermo Circle
3 Henderson, Nevada S9011
Tel: (208) 280-3766
4 Email msdayesq@aol corn
Attorney for Plaintiff George Mardikian
5
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN MATEO
GEORGE MARDIKIAN, )
9 ) CASE NO. CIV 517132
Plaintiff, )
10 ) MEMORANDUMIN OPPOSITION TO
) MOTION TO SEVER THE ISSUE OF
11 ) COVERAGE AND SEPARATE TRIALS
WAWANESA GENERAL )
12 INSURANCE COMPANY, a )
corporation, and DOES 1 through 50, ) Date: March 18, 2015
13 inclusive, ) Time. 9:00 a.m.
) Dept. Law and Motion
14 Defendants ) (Unlimited Jurisdiction)
) Filed: October 3, 2012
15 Trial Date: October 19, 2015
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MEMO RE OPPOSITION TO MOTION TO SEVER
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TABLE OF CONTENTS
2 I. INTRODUCTION
3 II. THE COURT'S PRIOR CONSIDERATION AND RULING
RELATING TO THE ISSUE OF COVERAGE
4
A. The Undisputed Facts re. Summary Judgment/
Summary AdJudication
6 B The Court's Prior Consideration and Ruling on the
Motion for Summary Judgment/Summary Adjudication
7
III. AS A MATTER OF LAW THE PLAINTIFF BECAME THE
8 OWNER OF THE VEHICLE ON FEBRUARY 14, 2012
9 IV. THE ISSUE WHICH THE DEFENDANT WANTS SEVERED AND 8
A SEPARATE JURY TRIAL IS NOT EVEN A JURY ISSUE
10
V. THERE IS NO BASIS FOR SEVERANCE UNDER CODE OF
CIVILPROCEDURE SECTION 1048
12 A Interest of efficiency and economy
13 B. Convenience of the Witnesses 12
14 C. Avoidance of Prejudice 12
15 VI. RESPONSE TO ALLEGATIONTHAT THERE CAN BE NO
BREACH OF THE COVENANT OF GOOD FAITH WITHOUT
16 A BREACH OF CONTRACT
17 VII. REQUEST FOR THE IMPOSITION OF SANCTIONS 14
18 VIII CONCLUSION 15
19
20 TABLE OF AUTHORITIES
21 Table of Cases
22 Aguilar v. Atlantic Richfield Co. (2001) 25 Cal. 4'" 826 5,10
23 AIU Ins. Co. v. Superior Court (1990) 51 Cal.3d 807 10
24 Allstate vs Chmn, (1969) 271Cal.App2d 274
25 Bareno v. Employers Life Ins Co (1972) 7 Cal 3d 875 10
26 Brinkmann v. Liberty Mutual etc. Ins. Co (1965) 63 Cal.2d 41 10
27 Buss v Superior Court (1997) 16 Cal. 4th 35 9
Careau K Co. v. Security Pacific Business Credit Inc 222 Cal 13
28 App 3d 1371
1
Carma Developers (Cal.), Inc. v. Marathon Development
2 California, Inc. (1992) 2 C. 4th 342
3 Continental Cas. Co. v. Phoenix Constr. Co. (1956) 46 C 2d 423
4 Foley v Interactive Data Corporation, 47 C. 3d. 654
5 Gray v. Zurich Insurance Co. (1966) 65 Cal.2d 263
6 Haveg Corp v Guyer, Del.Supr., 211 A.2d 910, 912 (1965)
7 Hobson v Mutual Benefit H. & A. Assn. (1950) 99 Cal App.2d 330
8 Hughes v State 490 A.2d 1034, 1048 (Del,1985)
9 Love v. Fire Insurance Exchange (1990) 221 Cal App. 3"" 1136
10 Pacific Coast etc. Bank v. Roberts, 16 Cal 2d 80
11 Paramount Propeities Co. v. Transamerica Title Ins Co.
(1970) 1 Cal.3d 562
12
Schoolcraft v. Ross (1978) 81 Cal. App 3d 74
13
Schwartz v State Farm Fire & Casualty Co. (2001)
14 88 Cal. App. 4th 1329
15 Sheppard v. Morgan Keegan &, Co. (1990) 218 Cal. App 3d 61
16 Silberg v. California Life Insurance Company (1971) 11 Cal. 3d 452
17 Smith v United States, D.C.App., 406 A.2d 1262 (1979)
18 United States v. Estrada-Lucas, 651 F.2d 1261, 1263 (9th Cir.1980)
19 White v Western Title Ins. Co (1985) 40 Cal 3d 870
20 Wilkerson v. Wells Fargo Bank (1989) 212 Cal. App 3d 1217
21 WolfMachmery Company v Insurance Co of North America
(1982) 133 Cal. App.3d 324
22
23
Statutes and Regulations
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California Bus & Prof. Code Section 6068
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California Code of Civil Procedure Section 128.7
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California Code of Civil Procedure Section 437c
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Federal Rules of Civil Procedures, Rule 11
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Uniforin Commercial Code Section 2401
MEMO RE OPPOSITION TO MOTION TO SEVER
1
Uniform Commercial Code Section 2509
2
Uniform Commercial Code Section 2319
3
4 Miscellaneous
Michigan, Title and Registration Requirement Chapter 3, Section 3-1,
paragraph 3-1.1 Section 3-3, paragraph 3-3.3, and Section 3-5,
paragraph 3-5.1
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MEMO RE OPPOSITION TO MOTION TO SEVER
I. INTRODUCTION
Wawanesa General Insurance Company ("Wawanesa"), with its counsel willing to
4 filing baseless motions as a litigation tactic and with total disregard to the Business and
Professions Code Section 6068 and Code ofCivilProcedure Section 128 7, continues its bad
faith tactics by filingthe instant motion. The basis of the motion is absolutely frivolous and
7 filed in bad faith, and this Court, should on its own motion, issue an order to show cause for
the defendant's counsel to show cause why sanctions should not be imposed pursuant to
9 Code ofCivilProcedure Section 128 7 Until the State Courts begin to apply Code ofCivil
Procedure Section 128 7 as the Federal Courts do pursuant to the Federal Rules of Civil
Procedures, Rule 11, the California State judicial system will continue to be abused by such
bad faith tactics used by the insurance industry causing a waste of judicial resources
1 3 damaging not only the litigants but the public by the unwarranted and unnecessary waste of
14 judicial resources. (Discussed supra.)
15
This Court has already reviewed the arguments of the defendant in the motion for
summary judgment and/or summary adjudication based upon the material facts submitted by
the defendant with respect to the instant motion along with the argument that there is no
insurance coverage because, according to the defendant, plaintiff did not add the "newly
19 acquired automobile" to the insurance policy within 30 days of ownership of the vehicle
Defendant's motion for summary Judgment and/or summary adjudication was denied not
because there was a material factual dispute, but because upon such undisputed facts,
Wawanesa could not even establish its initial burden that the plaintiff became the
23 owner of the subject vehicle as alleged by the defendant. Further, to sever this one issue
willnot determine that Wawanesa did not breach the contract. Wawanesa had still breached
the contract in several other respects, such as refusing to refund all premiums, ab initio, upon
its election to rescind the policy, and by failing to pay UMPD coverage benefits.
27 Furthermore, it is undisputable as a matter of law that the plaintiff became the
"owner" of the vehicle on February 14, 2012.
MEMO RE OPPOSITION TO MOTION TO SEVER
1
There is absolutely no basis for the issue of coverage to be severed from the trial of
the instant action and/or there be a separate trial on the issue of coverage in any manner.
3
Based upon the facts, one trial is appropriate with the Court advising the jury that, in fact, the
4 date that the plaintiffbecame the owner of the subject vehicle was February 14, 2012, and/or
further to grant plaintiff's motion in limine to prohibit the defendant and its counsel from
arguing or suggesting the plaintifffailed to ask to add the vehicle to the policy within thirty
7 days of becoming owner, notice having been given to Wawanesa General Insurance
Company on or before February 22, 2012 (unless, of course, the defendant or its counsel can
9 present competent evidence that 8 days are more than 30 days).
10
II. THE COURT'S PRIOR CONSIDERATION AND RULING
RELATING TO THE ISSUE OF COVERAGE
12 This Court has previously considered the defendant's argument on the issue of
coverage as related to when plaintiff became the owner - i.e, on February 14, 2012 as
14 plaintiffcontends or on some (unspecified) date in December, 2011 as Wawanesa contends.
The defendant first presented its evidence plaintiff became the owner of the vehicle on
December 20, 2011. It later changed its position to an (unspecified) date in December 2011,
based upon the same evidence defendant now desires to be considered by the ~ury in a
severed and separate trial. This is the same evidence as it presented in its motion for
19 summary judgment and/or adjudication. Dissatisfied with the Court's ruling considering
material undisputed facts and the law, the defendant essentially argues it has the right to have
a jury overturn this Court's legal ruling.
22 A. The Undisputed Facts re: Summary Judgment/Summary Adjudication
23 The undisputed facts upon which the motion for summary judgment on the issue of
"no coverage" was demed, are taken from pleadings in the motion for summary judgment
24
with reference to the paragraph numbers in defendant's separate statement of facts, are
summarized as follows:
27
"DEFENDANT' UNDISPUTED MATERIALFACTS AND SUPPORTING EVIDENCE
PLAINTIFF'S RESPONSE AND SUPPORTING EVIDENCE
28
MEMO RE OPPOSITION TO MOTION TO SEVER
1. In December of 2011, Mardikian had a "Family Combination Admitted
Auto Policy," policy number FA 6734314 with Wawanesa (the
"Policy").
3
2. The Policy provides in relevant part as follows: Admitted
4 L. Newly acquired auto":
1. "Newly acquired auto" means any of the following types of
vehicles you become the owner of during the policy period:
6 a. A private passenger auto.
2. Coverage for a "newly acquired auto" is provided as described
below. Ifyou ask us to insure a "newly acquired auto" after
a specified time period described below has elapsed, any
coverage we provide for a "newly acquired auto" will begin
at the time you request the coverage
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a. For any coverage provided in this policy except Coverage
For Damage To Your Auto, a "newly acquired auto" will
have the broadest coverage we now provide or any vehicle
12 shown in the Declarations. Coverage begins on the date you
become the owner. However, for this coverage to apply to a
13
"newly acquired auto" which is in addition to any vehicle
shown in the Declarations, you must ask us to insure it within
14 30 days after you become the owner. If a "newly acquired
auto" replaces a vehicle shown in the Declarations, coverage
15
is provided for this vehicle without you having to ask us to
insure it.
16
17 c. Comprehensive Coverage for a "newly acquired auto"
begms on the date you become the owner. However, for this
18 coverage to apply, you must ask us to insure it within.
(1) 30 days aAer you become the owner ifthe Declarations
indicate that Comprehensive Coverage applies to at least one
auto. In this case, the "newly acquired auto" will have the
20 broadest coverage we now provide for any auto shown in the
Declarations.
21
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23 6. On or about December 1 9, 20 1 1, Megan Short of Holt Auto (Plaintiffs Objections
Sales executed a Certificate of Title in connection with the Eldorado, Overruled)
24 which expressly provided that the dealer "transferred ownership of (Deemed Admitted)
this vehicle to the purchaser(s) listed below."
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7. On or about December 20, 2011, Mardikian executed a Purchase (Plaintiffs Objections
Receipt regarding the Eldorado. The Purchase Receipt listed the total Overruled)
price as $ 1,520. (Deemed Admitted)
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8. On December 20, 2011, Mardikian signed the Purchase Admitted
Agreement for the Eldorado. The Purchase Agreement specified that
MEMO RE OPPOSITION TO MOTION TO SEVER
the sale of the Eldorado was contingent upon the sale of Admitted
miscellaneous 1964 Cadillac parts to aid in its restoration for $ 2,980.
2
9. Mardikian executed the Statement of Vehicle Sale on December
Admitted
20, 2011. The document stated that Mardikian agreed that he
4 purchased the vehicle, and the dealer certified that it sold the vehicle.
The purchase price was listed as $ 1,520.
5
10. Mardikian wrote two checks on December 20, 2011 for the Admitted
purchase. He wrote Check No. 104 in the amount of $ 1,520 for the
Eldorado, and Check No. 106 in the amount of $ 2,980 for restoration
parts.
13 Mardikian was unable to locate a shipping company that could Admitted
ship the Eldorado for less than $ 1,125, so he requested that Holt
9
Auto Sales arrange for shipping. On January 27, 20 1 2, Holt Auto
Sales collected $ 1,125 from the insured for shipping.
10
14. On February 14, 2012, the shipper picked up the vehicle from Admitted
Holt Auto Sales.
15. On February 20, 2012, while in transit and in the Los Angeles Admitted
area, the Eldorado sustained damage while in the possession of the
shipper.
14
16. Two days after the loss, on February 22, 2012, Mardikian Admitted
contacted Wawanesa to add the Eldorado to his Policy.
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17. Mardikian reported that he purchased the vehicle on January 27, Admitted that
2012 and that the purchase price was $ 5,625. Mardikian reported
that he purchased the
17
vehicle on January 27,
2012.
18
(Mardikian reported
that he paid the dealer
19
three separate
payments totaling
20 $ 5,625.00.)
18. Mardikian reported the loss to Wawanesa on March 29, 2012. Admitted
22 The facts above were considered as true and undisputed for the purpose of summary
23 judgment and were considered by the Court. These facts are the same facts which the
24 defendant states as the basis of the denial of insurance coverage as it did in motion for
summary adjudication.
26
B. The Court's Prior Consideration and Ruling on the Motion for Summary
27 Judgment/Summary Adjudication
28 There are essentially two circumstances in which the Trial Court may determine to
MEMO RE OPPOSITION TO MOTION TO SEVER
deny a motion for summary judgement/summary adjudication.
First, Code of Civil Procedure Section 437c(c) provides:
(c) The motion for summary Iudgment shall be granted ifall the papers submitted
show that there is no triable issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law....
(g) Upon the denial of a motion for summary judgment, on the ground that there is a
triable issue as to one or more material facts, the court shall, by written or oral order,
specify one or more material facts raised by the motion as to which the court has
determined there exists a triable controversy.
Thus, the Court may deny such as there are one or more material "fact" which is
9 disputed which require trial to create a triable controversy. A mere dispute as to a legal
conclusion is not sufficient, even ifdisputed.
Second, and importantly, the Court must deny ifthe facts, even ifundisputed, show
that the moving party fails to meet an "initialburden". In this case, the defendant must show
13
that the plaintiffcannot establish one or more elements of the cause of action. Aguilar v
14 Atlantic Richfield Co (2001) 25 Cal 4"'26, 853
15 Accordingly, this Court denied the motion for summary judgment, and stated:
16
"THEREFORE.
JUDGMENT/SUIVMARY ADJUDICATION
IT IS ORDERED
OF
MOTION
ISSUES
FOR
BY
SUEY
WAWANESA
17 GENERAL INSURANCE COMPANY AGAINST GEORGE MARDIKIAN
DENIED
18
Defendant Wawanesa General Insurance Company's Motion for Summary
19 Judgment and Alternative Motion for Summary Adjudication on the Second Cause
of Action are Denied.
20
Nature of Action
21 This is an insurance coverage and bad faith action arising from the denial of coverage
for fire damage to a newly purchased vintage 1964 Cadillac Eldorado convertible
22 vehicle while being shipped from Michigan to Plaintiff in South San Francisco,
California
23
Ruling on Objections
24
The Objections ofPlaintiffare OVERRULED in their entirety because Plaintifffailed
25 to comply with California Rules of Court, rule 3 1354(b)
26 The Merits of the Motion
Going to the merits of the Motion, however, Defendant must show that Plaintiff
27 cannot establish one or more elements of the cause of action. (Aguilar v Atlantic
Richfield Co (2001) 25 CaL4th 826, 853). Defendant essentialIy contends that
28 Plaintiff cannot establish the element of breach by asserting that Plaintiff owned the
MEMO RE OPPOSITION TO MOTION TO SEVER
-5-
vehicle in December of 2011, which would result in the fact that the vehicle was not
covered by the insurance policy. Plaintiff contends that he did not own the vehicle
until January or February of 2012, which supports denial of the instant motion
Because this material fact is disputed, the instant motion for summary
judgment/summary adjudication is Denied
Defendant failed to meet his initial burden by failing to establish that Plaintiff
owned the subject vehicle in December of 2011 with respect to both causes of
action. (CCP g 437c(p)(2), Aguilar v Atlantic Richfield Co (2001) 25 Cal.4th 826,
853-854)
For the same reason, UMF Nos. 11 and 34 are disputed. Consequently, the
instantmotion for summary judgment and motion for summary adjudication is
without merit. (CCP g 437c(p)(2); Aguilar v Atlantic Richfield Co. (2001) 25 Cal
4th 826, S50). (Emphasis added)
9
See Declaration of Montie S. Day as Exhibit A (Order)
10 As this Court ruled, defendant's contention that plaintiff became the owner of
the vehicle in December of 2011 IS WITHOUT MERIT, even based upon the
undisputed facts. The defendant essentially desires a jury trial to seek and review and
1 3
a reversal of this Court's order Ifthe evidence was sufficient to meet the burden of a
14 summary judgment motion, as the material facts were undisputed, the Court would have
been obligated to grant the motion for summary judgment-not to find that the defendant had
totally failed to meet its imtial burden that the plaintiffacquired ownership in 2011. This
1 7 should be considered the "law of the case" by this Court, the defendant having not sought
review by an appellate court In effect, Wawanesa wants a jury to overrule the Court's
1 9
decision and permit the jury to make a determination of law
20
III. AS A MATTER OF LAW THE PLAINTIFF BECAME THE
21 OWNER OF THE VEHICLE ON FEBRUARY 14, 2012
22
The defendant Wawanesa continues to breach of covenant of good faith and fair
23
dealing by claimmg the plaintiffbecame owner of the subJect vehicle on some unspecified
24
date in December of 2011, when, based upon the undisputed and/or undisputable evidence
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Plaintiffbecame owner on February 14, 2012, and then asked that the vehicle be added
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to the policy just eight days later, on February 22, 2012. The law, when applied to the
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undisputed facts even as presented by the defendant, clearly shows that plaintiffbecame the
28
owner of the vehicle on February 14, 2012. There is NOT even an issue for a jury trial
MEMO RE OPPOSITION TO MOTION TO SEVER
as to "ownership" and the Court at trial will be asked to advise the jury that the
plaintiffbecame the owner of the vehicle on February 14, 2012 as this is an issue of law.
3
The purchase contract as offered by the defendant in connection with the motion for
4 summary judgment/summary adjudication clearly reveals the written terms of the contract:
5
All cars are shipped F.O.B. Lansing, MI-HOLTAUTO SALES may arrange
shipment of the cares but assumes no responsibility or liability of carrier
6 (Transportation Company)
7 A copy of the contract referred to by defendant, taken from defendant's own motion
for summary judgment/summary adjudication and files is attached to the Declaration of
9 Montie S. Day as Exhibit B. This is an "executory contract" by its nature.
10 The cardinal rule is now codified in California Uniform Commercial Code Section
2401 (Passing of title; Reservation for security; Limited application of this section):
12
".... (2) Unless otherwise explicitly agreed title passes to the buyer at the time and
place at which the seller completes his performance with reference to the
13 physical delivery of the goods, despite any reservation of a security interest and even
though a document of title is to be delivered at a different time or place; and in
14 particular and despite any reservation of a security interest by the bill of lading
15 (a) Ifthe contract requires or authorizes the seller to send the goods to the
buyer but does not require him to deliver them at destination, title passes
16 to the buyer at the time and place of shipment; but
(b) Ifthe contract requires delivery at destination, title passes on tender there.
17 (emphasis added)
18 In actuality, Mardikian had no ownership interest or risk of loss until the seller placed
the Vehicle in the hands of the shipper pursuant to the contract. Uniform Commevcial Code
Section 2509 (Risk of loss in the absence of breach) provides that: "(I) Where the contract
requires or authorizes the seller to ship the goods by carrier (a) Ifit does not require him to
deliver them at a particular destmation, the risk of loss passes to the buyer when the goods
23 are duly delivered to the carrier even though the shipment is under reservation (Section
24 2505); but (b) Ifit does require him to deliver them at a particular destination ..."
25 Under Uniform Commercial Code Section 2319 (F.O.B. and F.A.S. terms), "(I)
Unless otherwise agreed the term F.O.B. (which means "free on board" ) at a named place,
27 even though used only in connection with the stated price, is a delivery term under which (a)
When the term is F.O.B. the place of shipment, the seller must at that place ship the goods
MEMO RE OPPOSITION TO MOTION TO SEVER
in the manner provided in this division (Section 2504) and bear the expense and risk of
putting them into the possession of the carrier; ..." (emphasis added).
3
The term "F.O.B. Lansing, MI"means that the seller, Holt Auto Sales, continues to
4 retain responsibility and ownership until the vehicle is placed in the hands of the shipper at
Lansing, Michigan, which occurred on February 14, 2012.
"But that is not all!" The seller and vehicle were located in Michigan and the sale
of the vehicle was controlled by Michigan law as well. Michigan law is consistent with the
Uniform Commercial Code with respect to the transfer of the vehicle. A copy from Chapter
3, Section 3- 1,paragraph 3- 1 ~1 Section 3-3, paragraph 3-3.3, and Section 3-5, paragraph 3-
9
5.1, Title and Registration Requirement, as reflective of the law of Michigan and pubhshed
by the office of the Secretary of State, State of Michigan, is attached to the Declaration of
Montie S Day as Exhibit C (Judicial Notice Requested) As stated:
13
"Section 3 3
14
3.3.3. Transfer of Interest.
15
.. A transfer of ownership interest in a vehicle occurs when two elements happen.
a) The purchaser either completes the assignment on the ownership document,
16 or signs the application for title (RD-109; and
b'l The purchaser takes deliverv.
17
Section 3-5
3-5.1 By Seller.
19
The transfer of interest in a vehicle occurs when the owner(s) and purchaser(s)
complete and sign the assignment on the ownership document (title, MCO/MSO,
20 ETC.) or the application for title (RD-108) and the purchaser takes deliverv."
(emphasis added)
21
The Court properly concluded that the defendant's position as to the date of ownership
22
does not even rise to a prima facie showing that the vehicle was owned by Plaintiff on any
23
date earlier than February 14, 2012.
IV. THE ISSUE WHICH THE DEFENDANT WANTS SEVERED AND
A SEPARATE JURY TRIAL IS NOT EVEN A JURY ISSUE
The issue of "ownership", based upon the undisputed facts, is NOT a jury question
27 and is to be decided by the trial court. Here, the material facts are undisputed, given the
defendant's admissions including judicial admissions that the plaintiff did not have
MEMO RE OPPOSITION TO MOTION TO SEVER
possession until February 14, 2012 pursuant to the written contract. Allstate vs Chinn, (1 969)
271 Cal App2d 274, confirms that:
"„,the question whether a party is the owner of a motor vehicle is a question of fact
to be determined by the trial court. (McClary v. Concord Ave. Motors, supra, 202
Cal. App. 2d 564.) [8] The finding that Timothy Chinn was the owner of the
Plymouth automobile was grounded upon substantial evidence that he paid for the
car, took possession of it, and considered it to be his..."
6 Thus, possession must be actuallv transferred to the buver under the law, though it
can be by delivery to a carrier which is constructive possession by the buyer, as provided
by the Uniform Commercial Code and agreements of the parties by contract.
9 The word ownership has different shades of meaning, depending on the context in
which it appears and the circumstances in which it isused. Pacific Coast etc Bank v.
Roberts, 16 Cal 2d 800 With respect to the interpretation of the policy, "To yield their
meaning, the provisions of a policy must be considered in their full context. [Citations.]
Where it is clear, the language must be read accordingly. [Citations.] Where it isnot, it
14 must be read in conformity with what the insurer believed the insured understood thereby
at the time of formation [citations] and, ifit remains problematic, in the sense that
satisfies the insured's objectively reasonable expectations [citations]." Buss v Superior
Court (1997) 16C 4th 35, 45
18 In analyzing the language of the pohcy, there are the rules to be applied in the
1 9 interpretation of insurance policies. These are: (1) Any ambiguity or uncertainty in an
insurance policy is to be resolved against the insurer. (2) Ifsemantically permissible, the
contract will be given such construction as will fairly achieve its manifest object of
securing indemnity to the insured for the losses to which the insurance relates. (3) Any
23 reasonable doubt as to uncertain language will be resolved against the i
Preview
1 DAY LAW OFFICES Montie S. Day, ¹073327 2 Attorneys at La>v 1235 Casa Palermo Circle 3 Henderson, Nevada S9011 Tel: (208) 280-3766 4 Email msdayesq@aol corn Attorney for Plaintiff George Mardikian 5 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN MATEO GEORGE MARDIKIAN, ) 9 ) CASE NO. CIV 517132 Plaintiff, ) 10 ) MEMORANDUMIN OPPOSITION TO ) MOTION TO SEVER THE ISSUE OF 11 ) COVERAGE AND SEPARATE TRIALS WAWANESA GENERAL ) 12 INSURANCE COMPANY, a ) corporation, and DOES 1 through 50, ) Date: March 18, 2015 13 inclusive, ) Time. 9:00 a.m. ) Dept. Law and Motion 14 Defendants ) (Unlimited Jurisdiction) ) Filed: October 3, 2012 15 Trial Date: October 19, 2015 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMO RE OPPOSITION TO MOTION TO SEVER (y CL J3 U Ql O TABLE OF CONTENTS 2 I. INTRODUCTION 3 II. THE COURT'S PRIOR CONSIDERATION AND RULING RELATING TO THE ISSUE OF COVERAGE 4 A. The Undisputed Facts re. Summary Judgment/ Summary AdJudication 6 B The Court's Prior Consideration and Ruling on the Motion for Summary Judgment/Summary Adjudication 7 III. AS A MATTER OF LAW THE PLAINTIFF BECAME THE 8 OWNER OF THE VEHICLE ON FEBRUARY 14, 2012 9 IV. THE ISSUE WHICH THE DEFENDANT WANTS SEVERED AND 8 A SEPARATE JURY TRIAL IS NOT EVEN A JURY ISSUE 10 V. THERE IS NO BASIS FOR SEVERANCE UNDER CODE OF CIVILPROCEDURE SECTION 1048 12 A Interest of efficiency and economy 13 B. Convenience of the Witnesses 12 14 C. Avoidance of Prejudice 12 15 VI. RESPONSE TO ALLEGATIONTHAT THERE CAN BE NO BREACH OF THE COVENANT OF GOOD FAITH WITHOUT 16 A BREACH OF CONTRACT 17 VII. REQUEST FOR THE IMPOSITION OF SANCTIONS 14 18 VIII CONCLUSION 15 19 20 TABLE OF AUTHORITIES 21 Table of Cases 22 Aguilar v. Atlantic Richfield Co. (2001) 25 Cal. 4'" 826 5,10 23 AIU Ins. Co. v. Superior Court (1990) 51 Cal.3d 807 10 24 Allstate vs Chmn, (1969) 271Cal.App2d 274 25 Bareno v. Employers Life Ins Co (1972) 7 Cal 3d 875 10 26 Brinkmann v. Liberty Mutual etc. Ins. Co (1965) 63 Cal.2d 41 10 27 Buss v Superior Court (1997) 16 Cal. 4th 35 9 Careau K Co. v. Security Pacific Business Credit Inc 222 Cal 13 28 App 3d 1371 1 Carma Developers (Cal.), Inc. v. Marathon Development 2 California, Inc. (1992) 2 C. 4th 342 3 Continental Cas. Co. v. Phoenix Constr. Co. (1956) 46 C 2d 423 4 Foley v Interactive Data Corporation, 47 C. 3d. 654 5 Gray v. Zurich Insurance Co. (1966) 65 Cal.2d 263 6 Haveg Corp v Guyer, Del.Supr., 211 A.2d 910, 912 (1965) 7 Hobson v Mutual Benefit H. & A. Assn. (1950) 99 Cal App.2d 330 8 Hughes v State 490 A.2d 1034, 1048 (Del,1985) 9 Love v. Fire Insurance Exchange (1990) 221 Cal App. 3"" 1136 10 Pacific Coast etc. Bank v. Roberts, 16 Cal 2d 80 11 Paramount Propeities Co. v. Transamerica Title Ins Co. (1970) 1 Cal.3d 562 12 Schoolcraft v. Ross (1978) 81 Cal. App 3d 74 13 Schwartz v State Farm Fire & Casualty Co. (2001) 14 88 Cal. App. 4th 1329 15 Sheppard v. Morgan Keegan &, Co. (1990) 218 Cal. App 3d 61 16 Silberg v. California Life Insurance Company (1971) 11 Cal. 3d 452 17 Smith v United States, D.C.App., 406 A.2d 1262 (1979) 18 United States v. Estrada-Lucas, 651 F.2d 1261, 1263 (9th Cir.1980) 19 White v Western Title Ins. Co (1985) 40 Cal 3d 870 20 Wilkerson v. Wells Fargo Bank (1989) 212 Cal. App 3d 1217 21 WolfMachmery Company v Insurance Co of North America (1982) 133 Cal. App.3d 324 22 23 Statutes and Regulations 24 California Bus & Prof. Code Section 6068 25 California Code of Civil Procedure Section 128.7 26 California Code of Civil Procedure Section 437c 27 Federal Rules of Civil Procedures, Rule 11 28 Uniforin Commercial Code Section 2401 MEMO RE OPPOSITION TO MOTION TO SEVER 1 Uniform Commercial Code Section 2509 2 Uniform Commercial Code Section 2319 3 4 Miscellaneous Michigan, Title and Registration Requirement Chapter 3, Section 3-1, paragraph 3-1.1 Section 3-3, paragraph 3-3.3, and Section 3-5, paragraph 3-5.1 10 14 16 17 18 20 2] 22 23 24 25 26 27 28 MEMO RE OPPOSITION TO MOTION TO SEVER I. INTRODUCTION Wawanesa General Insurance Company ("Wawanesa"), with its counsel willing to 4 filing baseless motions as a litigation tactic and with total disregard to the Business and Professions Code Section 6068 and Code ofCivilProcedure Section 128 7, continues its bad faith tactics by filingthe instant motion. The basis of the motion is absolutely frivolous and 7 filed in bad faith, and this Court, should on its own motion, issue an order to show cause for the defendant's counsel to show cause why sanctions should not be imposed pursuant to 9 Code ofCivilProcedure Section 128 7 Until the State Courts begin to apply Code ofCivil Procedure Section 128 7 as the Federal Courts do pursuant to the Federal Rules of Civil Procedures, Rule 11, the California State judicial system will continue to be abused by such bad faith tactics used by the insurance industry causing a waste of judicial resources 1 3 damaging not only the litigants but the public by the unwarranted and unnecessary waste of 14 judicial resources. (Discussed supra.) 15 This Court has already reviewed the arguments of the defendant in the motion for summary judgment and/or summary adjudication based upon the material facts submitted by the defendant with respect to the instant motion along with the argument that there is no insurance coverage because, according to the defendant, plaintiff did not add the "newly 19 acquired automobile" to the insurance policy within 30 days of ownership of the vehicle Defendant's motion for summary Judgment and/or summary adjudication was denied not because there was a material factual dispute, but because upon such undisputed facts, Wawanesa could not even establish its initial burden that the plaintiff became the 23 owner of the subject vehicle as alleged by the defendant. Further, to sever this one issue willnot determine that Wawanesa did not breach the contract. Wawanesa had still breached the contract in several other respects, such as refusing to refund all premiums, ab initio, upon its election to rescind the policy, and by failing to pay UMPD coverage benefits. 27 Furthermore, it is undisputable as a matter of law that the plaintiff became the "owner" of the vehicle on February 14, 2012. MEMO RE OPPOSITION TO MOTION TO SEVER 1 There is absolutely no basis for the issue of coverage to be severed from the trial of the instant action and/or there be a separate trial on the issue of coverage in any manner. 3 Based upon the facts, one trial is appropriate with the Court advising the jury that, in fact, the 4 date that the plaintiffbecame the owner of the subject vehicle was February 14, 2012, and/or further to grant plaintiff's motion in limine to prohibit the defendant and its counsel from arguing or suggesting the plaintifffailed to ask to add the vehicle to the policy within thirty 7 days of becoming owner, notice having been given to Wawanesa General Insurance Company on or before February 22, 2012 (unless, of course, the defendant or its counsel can 9 present competent evidence that 8 days are more than 30 days). 10 II. THE COURT'S PRIOR CONSIDERATION AND RULING RELATING TO THE ISSUE OF COVERAGE 12 This Court has previously considered the defendant's argument on the issue of coverage as related to when plaintiff became the owner - i.e, on February 14, 2012 as 14 plaintiffcontends or on some (unspecified) date in December, 2011 as Wawanesa contends. The defendant first presented its evidence plaintiff became the owner of the vehicle on December 20, 2011. It later changed its position to an (unspecified) date in December 2011, based upon the same evidence defendant now desires to be considered by the ~ury in a severed and separate trial. This is the same evidence as it presented in its motion for 19 summary judgment and/or adjudication. Dissatisfied with the Court's ruling considering material undisputed facts and the law, the defendant essentially argues it has the right to have a jury overturn this Court's legal ruling. 22 A. The Undisputed Facts re: Summary Judgment/Summary Adjudication 23 The undisputed facts upon which the motion for summary judgment on the issue of "no coverage" was demed, are taken from pleadings in the motion for summary judgment 24 with reference to the paragraph numbers in defendant's separate statement of facts, are summarized as follows: 27 "DEFENDANT' UNDISPUTED MATERIALFACTS AND SUPPORTING EVIDENCE PLAINTIFF'S RESPONSE AND SUPPORTING EVIDENCE 28 MEMO RE OPPOSITION TO MOTION TO SEVER 1. In December of 2011, Mardikian had a "Family Combination Admitted Auto Policy," policy number FA 6734314 with Wawanesa (the "Policy"). 3 2. The Policy provides in relevant part as follows: Admitted 4 L. Newly acquired auto": 1. "Newly acquired auto" means any of the following types of vehicles you become the owner of during the policy period: 6 a. A private passenger auto. 2. Coverage for a "newly acquired auto" is provided as described below. Ifyou ask us to insure a "newly acquired auto" after a specified time period described below has elapsed, any coverage we provide for a "newly acquired auto" will begin at the time you request the coverage 10 a. For any coverage provided in this policy except Coverage For Damage To Your Auto, a "newly acquired auto" will have the broadest coverage we now provide or any vehicle 12 shown in the Declarations. Coverage begins on the date you become the owner. However, for this coverage to apply to a 13 "newly acquired auto" which is in addition to any vehicle shown in the Declarations, you must ask us to insure it within 14 30 days after you become the owner. If a "newly acquired auto" replaces a vehicle shown in the Declarations, coverage 15 is provided for this vehicle without you having to ask us to insure it. 16 17 c. Comprehensive Coverage for a "newly acquired auto" begms on the date you become the owner. However, for this 18 coverage to apply, you must ask us to insure it within. (1) 30 days aAer you become the owner ifthe Declarations indicate that Comprehensive Coverage applies to at least one auto. In this case, the "newly acquired auto" will have the 20 broadest coverage we now provide for any auto shown in the Declarations. 21 22 23 6. On or about December 1 9, 20 1 1, Megan Short of Holt Auto (Plaintiffs Objections Sales executed a Certificate of Title in connection with the Eldorado, Overruled) 24 which expressly provided that the dealer "transferred ownership of (Deemed Admitted) this vehicle to the purchaser(s) listed below." 25 7. On or about December 20, 2011, Mardikian executed a Purchase (Plaintiffs Objections Receipt regarding the Eldorado. The Purchase Receipt listed the total Overruled) price as $ 1,520. (Deemed Admitted) 27 8. On December 20, 2011, Mardikian signed the Purchase Admitted Agreement for the Eldorado. The Purchase Agreement specified that MEMO RE OPPOSITION TO MOTION TO SEVER the sale of the Eldorado was contingent upon the sale of Admitted miscellaneous 1964 Cadillac parts to aid in its restoration for $ 2,980. 2 9. Mardikian executed the Statement of Vehicle Sale on December Admitted 20, 2011. The document stated that Mardikian agreed that he 4 purchased the vehicle, and the dealer certified that it sold the vehicle. The purchase price was listed as $ 1,520. 5 10. Mardikian wrote two checks on December 20, 2011 for the Admitted purchase. He wrote Check No. 104 in the amount of $ 1,520 for the Eldorado, and Check No. 106 in the amount of $ 2,980 for restoration parts. 13 Mardikian was unable to locate a shipping company that could Admitted ship the Eldorado for less than $ 1,125, so he requested that Holt 9 Auto Sales arrange for shipping. On January 27, 20 1 2, Holt Auto Sales collected $ 1,125 from the insured for shipping. 10 14. On February 14, 2012, the shipper picked up the vehicle from Admitted Holt Auto Sales. 15. On February 20, 2012, while in transit and in the Los Angeles Admitted area, the Eldorado sustained damage while in the possession of the shipper. 14 16. Two days after the loss, on February 22, 2012, Mardikian Admitted contacted Wawanesa to add the Eldorado to his Policy. 15 17. Mardikian reported that he purchased the vehicle on January 27, Admitted that 2012 and that the purchase price was $ 5,625. Mardikian reported that he purchased the 17 vehicle on January 27, 2012. 18 (Mardikian reported that he paid the dealer 19 three separate payments totaling 20 $ 5,625.00.) 18. Mardikian reported the loss to Wawanesa on March 29, 2012. Admitted 22 The facts above were considered as true and undisputed for the purpose of summary 23 judgment and were considered by the Court. These facts are the same facts which the 24 defendant states as the basis of the denial of insurance coverage as it did in motion for summary adjudication. 26 B. The Court's Prior Consideration and Ruling on the Motion for Summary 27 Judgment/Summary Adjudication 28 There are essentially two circumstances in which the Trial Court may determine to MEMO RE OPPOSITION TO MOTION TO SEVER deny a motion for summary judgement/summary adjudication. First, Code of Civil Procedure Section 437c(c) provides: (c) The motion for summary Iudgment shall be granted ifall the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.... (g) Upon the denial of a motion for summary judgment, on the ground that there is a triable issue as to one or more material facts, the court shall, by written or oral order, specify one or more material facts raised by the motion as to which the court has determined there exists a triable controversy. Thus, the Court may deny such as there are one or more material "fact" which is 9 disputed which require trial to create a triable controversy. A mere dispute as to a legal conclusion is not sufficient, even ifdisputed. Second, and importantly, the Court must deny ifthe facts, even ifundisputed, show that the moving party fails to meet an "initialburden". In this case, the defendant must show 13 that the plaintiffcannot establish one or more elements of the cause of action. Aguilar v 14 Atlantic Richfield Co (2001) 25 Cal 4"'26, 853 15 Accordingly, this Court denied the motion for summary judgment, and stated: 16 "THEREFORE. JUDGMENT/SUIVMARY ADJUDICATION IT IS ORDERED OF MOTION ISSUES FOR BY SUEY WAWANESA 17 GENERAL INSURANCE COMPANY AGAINST GEORGE MARDIKIAN DENIED 18 Defendant Wawanesa General Insurance Company's Motion for Summary 19 Judgment and Alternative Motion for Summary Adjudication on the Second Cause of Action are Denied. 20 Nature of Action 21 This is an insurance coverage and bad faith action arising from the denial of coverage for fire damage to a newly purchased vintage 1964 Cadillac Eldorado convertible 22 vehicle while being shipped from Michigan to Plaintiff in South San Francisco, California 23 Ruling on Objections 24 The Objections ofPlaintiffare OVERRULED in their entirety because Plaintifffailed 25 to comply with California Rules of Court, rule 3 1354(b) 26 The Merits of the Motion Going to the merits of the Motion, however, Defendant must show that Plaintiff 27 cannot establish one or more elements of the cause of action. (Aguilar v Atlantic Richfield Co (2001) 25 CaL4th 826, 853). Defendant essentialIy contends that 28 Plaintiff cannot establish the element of breach by asserting that Plaintiff owned the MEMO RE OPPOSITION TO MOTION TO SEVER -5- vehicle in December of 2011, which would result in the fact that the vehicle was not covered by the insurance policy. Plaintiff contends that he did not own the vehicle until January or February of 2012, which supports denial of the instant motion Because this material fact is disputed, the instant motion for summary judgment/summary adjudication is Denied Defendant failed to meet his initial burden by failing to establish that Plaintiff owned the subject vehicle in December of 2011 with respect to both causes of action. (CCP g 437c(p)(2), Aguilar v Atlantic Richfield Co (2001) 25 Cal.4th 826, 853-854) For the same reason, UMF Nos. 11 and 34 are disputed. Consequently, the instantmotion for summary judgment and motion for summary adjudication is without merit. (CCP g 437c(p)(2); Aguilar v Atlantic Richfield Co. (2001) 25 Cal 4th 826, S50). (Emphasis added) 9 See Declaration of Montie S. Day as Exhibit A (Order) 10 As this Court ruled, defendant's contention that plaintiff became the owner of the vehicle in December of 2011 IS WITHOUT MERIT, even based upon the undisputed facts. The defendant essentially desires a jury trial to seek and review and 1 3 a reversal of this Court's order Ifthe evidence was sufficient to meet the burden of a 14 summary judgment motion, as the material facts were undisputed, the Court would have been obligated to grant the motion for summary judgment-not to find that the defendant had totally failed to meet its imtial burden that the plaintiffacquired ownership in 2011. This 1 7 should be considered the "law of the case" by this Court, the defendant having not sought review by an appellate court In effect, Wawanesa wants a jury to overrule the Court's 1 9 decision and permit the jury to make a determination of law 20 III. AS A MATTER OF LAW THE PLAINTIFF BECAME THE 21 OWNER OF THE VEHICLE ON FEBRUARY 14, 2012 22 The defendant Wawanesa continues to breach of covenant of good faith and fair 23 dealing by claimmg the plaintiffbecame owner of the subJect vehicle on some unspecified 24 date in December of 2011, when, based upon the undisputed and/or undisputable evidence 25 Plaintiffbecame owner on February 14, 2012, and then asked that the vehicle be added 26 to the policy just eight days later, on February 22, 2012. The law, when applied to the 27 undisputed facts even as presented by the defendant, clearly shows that plaintiffbecame the 28 owner of the vehicle on February 14, 2012. There is NOT even an issue for a jury trial MEMO RE OPPOSITION TO MOTION TO SEVER as to "ownership" and the Court at trial will be asked to advise the jury that the plaintiffbecame the owner of the vehicle on February 14, 2012 as this is an issue of law. 3 The purchase contract as offered by the defendant in connection with the motion for 4 summary judgment/summary adjudication clearly reveals the written terms of the contract: 5 All cars are shipped F.O.B. Lansing, MI-HOLTAUTO SALES may arrange shipment of the cares but assumes no responsibility or liability of carrier 6 (Transportation Company) 7 A copy of the contract referred to by defendant, taken from defendant's own motion for summary judgment/summary adjudication and files is attached to the Declaration of 9 Montie S. Day as Exhibit B. This is an "executory contract" by its nature. 10 The cardinal rule is now codified in California Uniform Commercial Code Section 2401 (Passing of title; Reservation for security; Limited application of this section): 12 ".... (2) Unless otherwise explicitly agreed title passes to the buyer at the time and place at which the seller completes his performance with reference to the 13 physical delivery of the goods, despite any reservation of a security interest and even though a document of title is to be delivered at a different time or place; and in 14 particular and despite any reservation of a security interest by the bill of lading 15 (a) Ifthe contract requires or authorizes the seller to send the goods to the buyer but does not require him to deliver them at destination, title passes 16 to the buyer at the time and place of shipment; but (b) Ifthe contract requires delivery at destination, title passes on tender there. 17 (emphasis added) 18 In actuality, Mardikian had no ownership interest or risk of loss until the seller placed the Vehicle in the hands of the shipper pursuant to the contract. Uniform Commevcial Code Section 2509 (Risk of loss in the absence of breach) provides that: "(I) Where the contract requires or authorizes the seller to ship the goods by carrier (a) Ifit does not require him to deliver them at a particular destmation, the risk of loss passes to the buyer when the goods 23 are duly delivered to the carrier even though the shipment is under reservation (Section 24 2505); but (b) Ifit does require him to deliver them at a particular destination ..." 25 Under Uniform Commercial Code Section 2319 (F.O.B. and F.A.S. terms), "(I) Unless otherwise agreed the term F.O.B. (which means "free on board" ) at a named place, 27 even though used only in connection with the stated price, is a delivery term under which (a) When the term is F.O.B. the place of shipment, the seller must at that place ship the goods MEMO RE OPPOSITION TO MOTION TO SEVER in the manner provided in this division (Section 2504) and bear the expense and risk of putting them into the possession of the carrier; ..." (emphasis added). 3 The term "F.O.B. Lansing, MI"means that the seller, Holt Auto Sales, continues to 4 retain responsibility and ownership until the vehicle is placed in the hands of the shipper at Lansing, Michigan, which occurred on February 14, 2012. "But that is not all!" The seller and vehicle were located in Michigan and the sale of the vehicle was controlled by Michigan law as well. Michigan law is consistent with the Uniform Commercial Code with respect to the transfer of the vehicle. A copy from Chapter 3, Section 3- 1,paragraph 3- 1 ~1 Section 3-3, paragraph 3-3.3, and Section 3-5, paragraph 3- 9 5.1, Title and Registration Requirement, as reflective of the law of Michigan and pubhshed by the office of the Secretary of State, State of Michigan, is attached to the Declaration of Montie S Day as Exhibit C (Judicial Notice Requested) As stated: 13 "Section 3 3 14 3.3.3. Transfer of Interest. 15 .. A transfer of ownership interest in a vehicle occurs when two elements happen. a) The purchaser either completes the assignment on the ownership document, 16 or signs the application for title (RD-109; and b'l The purchaser takes deliverv. 17 Section 3-5 3-5.1 By Seller. 19 The transfer of interest in a vehicle occurs when the owner(s) and purchaser(s) complete and sign the assignment on the ownership document (title, MCO/MSO, 20 ETC.) or the application for title (RD-108) and the purchaser takes deliverv." (emphasis added) 21 The Court properly concluded that the defendant's position as to the date of ownership 22 does not even rise to a prima facie showing that the vehicle was owned by Plaintiff on any 23 date earlier than February 14, 2012. IV. THE ISSUE WHICH THE DEFENDANT WANTS SEVERED AND A SEPARATE JURY TRIAL IS NOT EVEN A JURY ISSUE The issue of "ownership", based upon the undisputed facts, is NOT a jury question 27 and is to be decided by the trial court. Here, the material facts are undisputed, given the defendant's admissions including judicial admissions that the plaintiff did not have MEMO RE OPPOSITION TO MOTION TO SEVER possession until February 14, 2012 pursuant to the written contract. Allstate vs Chinn, (1 969) 271 Cal App2d 274, confirms that: "„,the question whether a party is the owner of a motor vehicle is a question of fact to be determined by the trial court. (McClary v. Concord Ave. Motors, supra, 202 Cal. App. 2d 564.) [8] The finding that Timothy Chinn was the owner of the Plymouth automobile was grounded upon substantial evidence that he paid for the car, took possession of it, and considered it to be his..." 6 Thus, possession must be actuallv transferred to the buver under the law, though it can be by delivery to a carrier which is constructive possession by the buyer, as provided by the Uniform Commercial Code and agreements of the parties by contract. 9 The word ownership has different shades of meaning, depending on the context in which it appears and the circumstances in which it isused. Pacific Coast etc Bank v. Roberts, 16 Cal 2d 800 With respect to the interpretation of the policy, "To yield their meaning, the provisions of a policy must be considered in their full context. [Citations.] Where it is clear, the language must be read accordingly. [Citations.] Where it isnot, it 14 must be read in conformity with what the insurer believed the insured understood thereby at the time of formation [citations] and, ifit remains problematic, in the sense that satisfies the insured's objectively reasonable expectations [citations]." Buss v Superior Court (1997) 16C 4th 35, 45 18 In analyzing the language of the pohcy, there are the rules to be applied in the 1 9 interpretation of insurance policies. These are: (1) Any ambiguity or uncertainty in an insurance policy is to be resolved against the insurer. (2) Ifsemantically permissible, the contract will be given such construction as will fairly achieve its manifest object of securing indemnity to the insured for the losses to which the insurance relates. (3) Any 23 reasonable doubt as to uncertain language will be resolved against the i