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1 DAY LAW OFFICES
Montie S. Day, ¹073327
2 Attorneys at Law
1235 Casa Palermo Circle
3 Henderson, Nevada S9011
1 el. (208) 280-3766 C~erlt;of th SUPenor
4 Email. msdayesqQaaol corn
Attorney for Plaintiff George Mardikian puTY CLERK
5
SUPERIOR COURT OF Tl-IE STATE OF CALI1 ORN A
COUN1 Y OF SAN MATEO
GEORGE MARDIKIAN, )
) CASE NO. CIV 517132
Plaintiff, )
10 ) PLAINTIFF'S TRIAL BRIEF
vs )
11 )
WAWANESA GENERAL )
12 INSURANCE COMPANY, a )
corporation, and DOES 1 through 50, ) Date November 12, 2013
13 inclusive, ) Time. 9:00 A.M.
) Dept: TBA
14 Defendants. ) (Unlimited Junsdiction)
) Filed. October 3, 2012
15 Trial Date: November 12, 2013
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PI,AINTII:F'S TRIAL 13RIFF
TABLE OF CONTENTS
3 I INTRODUCTION ESSENTIAL FACTS
4 II DEFENDANT'S POSITION
5 III THE TERMS OF TI-IE CONTRACT (InterpretatIon of the Contract)
6 IV. THE APPLICABLE LAW ON fHE INSTANT TRANSACTION
7 V WAWANESA'S CONTINUING BAD FAITH
8 VI CONCLUSION
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PI.AINTIII"S TRIAL BRIFF
I. INTRODUCTION TO ESSENTIAL I ACTS
PlaintiffGeorge Mardikian ("Mardikian" or -'plainti ff"')purchased an automobile insurance
4 policy from the defendant Wawanesa General Insurance Company ("Wawanesa" or "defendant") on
5 or about August 2005. Mardkkian performed all the terms and conditions of the pohcy paying more
6 than $ 13,000 00 in premiums over the years Such pohcy was in effect as of February 20, 2012
7 Wawanesa issued the policy, willfullyaccepted all premiums when paid by Mardikian, and obhgated
8 itself to perform the terms and conditions of such pohcy, including the implied covenant of good
9 faith and fair dealing, and to pay the benefits under the policy
10 In December of 2011, Mardikian, who had been searclung and seeking to purchase a umque
11 vehicle, namely a 1964 Cadillac Eldorado 2 door convertible (hereinafter referred to as the
12 "Vehicle"), eventually located a unique buy on such a vehicle The Vehicle was m the midst of
13 restoration, with significant restoration costs already incurred, and many parts to complete the
14 restoration were available from the seller Mardhkian estimated that by spendmg approximately
15 $ 4,000.00-6,000.00. the restoration could be completed, with the resultmg Vehicle worth
16 approximately $ 48,000.00. The seller,however, did not realize the uniqueness of the situation and
17 value of the Vehicle
18 Mardikian, located in South San Francisco, negotiated the purchase of the Velucle, as well
19 as the restoration parts, from the seller, Holt Auto Sales, of Lansing, Miclngan. A contract was
20 entered mto for the purchase of the Vehicle as well as the paints, which were packed within the car,
21 by agreeing to pay $ 1,520 00 for the "Vehicle", $ 2.980.00 for the "Parts", and agreeing that
22 shipping to South San Francisco through Holt would cost no more than $ 1,125 00 1 he expressed
23 condition of the written contract was that "Allcars are shipped F.O.B. Lansing Ml" This was
24 material —as Mardikian resided in South San Francisco and the Vehicle was located in Lansing, MI
25 (Declaration of Mardikian, Para 5, and 6 Mardikian would, of course, as part of the contract,
26 have to pay for the costs of shipping, while, under the expressed terms of the contract, ie
27 "F.O.B. Lansing, MI", Holt had to perform the contract by placing the Vehicle in the hands
28 of the shipper. The seller agreed to ship the car to Mardikian in South San Francisco at a cost
PLAINTIFF'S TRIAI. I3RIIII'
1 of no more than $ 1,125.00.
2 The contract was not "performed" with respect to the seller's obligation until February
3 14, 2012 when the seller "shipped" the Vehicle Mardikian had, on January 27, 2012 made final
4 payment to the seller; completing his performance under this executory contract, such being in the
5 amount of $ 1,125 00, brmging Maidikian's acquisition costs to a total of $ 5,625.00 ($ 1,520 00+
6 $ 2,980 00+ $ 1,125.00)
7 Under the terms of the Wawanesa msurance pohcy purchased in 2005, Mardikian had
8 coverage for "newly acquired vehicles" and the pohcy provided that comprehensive coverage for a
9 "newly acquired auto" begins on the date you become the owner" ifyou ask to insure it within
10 "30 days after you become the owner."
11 Mardikian, an attorney, believed he became the owner of the Vehicle on January 27, 2012
12 when he completed his performance under the executory contract I
On February, 7) 212
0
13 pursuant to the terms of the pohcy, (and within 30 days of January 27. 2012) Mardikian gave
14 Wawanesa timely notice of the "newly acquired vehicle'", and asked to msure it The newly
15 acquired vehicle was damaged in transit, apparently while being driven by the transport truck
16 operator on February 20, 2012.
17 The vehicle eventually was shipped to South San Francisco. It was dehvered to a repair
18 shop. Plaintiff obtainedestimatesfortherepairs forthedamage causedbythefire, theestimates
19 only to restore it to the "pre-fire condition". These estimates total $ 26,598 66 Actually, at this time
20 it appears that there was more damage as the engme was destroyed due to the fire, and the vehicle
21 should be considered a '"total loss".
22 Planitiffbelieved the seller, shipper or other responsible parties would fully cover the losses.
23 Thus Plamtiff believed there was no need to mitially submit a claim to Wawanesa However, the
24 seller Holt Auto Sales denied any responsibility, pointing out Mardikian became the owner on
25 February 14,2012, the date the Vehicle was placed in the hands of the shipper and trucking
26 company. According to the seller, February 14, 2012 was the date that ownership and
27
'egally, he was wrong as the Vehicle was "F 0 B Lansing, MI", discussed supra
PLAINTIFF'S TRIAL BRII:I'
1 responsibility for the loss transferred, as that was the date seller performed the terms of the contract,
2 Rules ofPro fessional Conduct and the Vehicle was placed on the truck (shipper) pei the purchase
3 contract.—
On March 29, 2012, having deteimined that no other painty was going to take responsibility
5 for the full extent of the loss, Mardikian telephoned Wawanesa to file a claim, explaimng that the
6 Vehicle was being transported when it caught fire, and submitted the claim for damages
7 With the exposure to the potential liability of up to $ 50,000 00 or more, the claim was
8 immediately referred to the claims adjustor's supervisor, and on Apnl 26, 2012, was referred to
9 "SIU" as a fraudulent claim Wawanesa referred the matter to a "private investigator" who touts
10 his business as "fraudulent claims" investigation for insurance carriers, and then Wawanesa refused
11 to deal with Mardikian directly, and requested Mardil«an to deal only with the "private
12 mvestigator" and Wawanesa's attorneys Mardikian did not wish to deal with contractors and
13 persons other than Wawanesa, as it was Wawanesa who had issued the pohcy Wawanesa then
14 refened the matter to Mr Doug Wood, an attorney,'ho specializes m represenimg msurance
15 companies, , ttocon d uc t ann "Examination
xamin Under Oath" of Mardikian. Mardikian contuiued to
16 cooperate submittin~ to the "Exammation Under Oath", providing Wawanesa documents, and
17 responding to questions relatmg to the transaction
18 With respect to the purchase of the Vehicle, Mardikian answered honestly each question
19 asked of him, and the purchase documents were reviewed Mardikian explained that in his mmd he
20 purchased the car when he completed his performance under the contract, makmg the final payment
21 on January 27, 2012, and also explained that the Vehicle was not placed by the seller with the
22 shipper until February14,2012 Mardikianrephed
23 "Q So as far you were concerned, when was it that you considered the purchase—
considered yourself to have purchased the vehicle~
24
25 '-
This position is consistent with the intent of the contract, and is correct. as a matter of law
Mr Douglas Wood, though an attorney, acted in the capacity of and as a claims
2/ representative/adjustor with respect to his Investigation" of the claim, before demal of the claim
as it is the duty of the nisurance company to conduct the investigation of the claim and to comply
with the requirements of the Insurance Code and Code of Regulations
PLAINTII"F'STRIALBRIEF
A Right. Well, that's a question open for interpretation The date the vehicle left the
dealer was February 14th That's when risk of loss transferred from the dealer to the shipper
So I don't know ifyou want to consider that the date I took. possession I don't consider the
date I took possession until the date it arrived here in South San Francisco
Q. Okay. Let's take it one step at a time.
The date you agreed with the seller that the car was yours, you purchased the car, when was
thaV
A. I would say January 27th
Q Why that date?
A. It's the purchase date mdicated on the documents
Q Which documents?
A The Citi charge card "
Examination Under Oath, 43:3-25
9 On July 30, 2012, Douglas Wood, Attorney. wrote a letter to Mardikian which stated
10 "Wawanesa General Insurance Company's previous oral notice to you of its decision to deny your
11 claim and rescind your entire pohcy effective February 22, 2012, and the reasons for that decision"
12 The reasons given and the basis of denial and the termination the policy mcluded alleged
13 concealment and misrepresentation of "3 The "purchase date" and "The statement that the
14 "purchase date" was January 27, 2012 because that was the date the credit card charge (payment) was
15 made" According to Wawanesa, one becomes an "owner" of a Vehicle when an executory, but
16 uncompleted and unperformed contract is created, and regardless of performance.
17 The evidence well estabhshes that Wawanesa not only breached the contract, but breached
18 the covenant of good faith and fair dealing, includmg, but, not limited to, refusal and failing to
19 maintain "claim manuals" and procedures for a fair and good faith investigation of the claims
20 defined by California Insurance Code as "unfair clamis practices", systematically retaming bias
21 contracting claims adjustors, investigators, purported experts and attorneys for the purpose of
22 rendering bias evaluations and opinions for the purpose of denying the claims, and most of all, not
23 givmg equal consideration to the mterest ofthe insured as it does its own financial niterest, a practice
24 and pohcy admitted by Wawanesa's managmg officials (See Declaration of Bennmg) The fact is
25 that Wawanesa has already been found in bad faith by a Jury for the same type of conduct it displays
26 in this case
27 In this case, Wawanesa's breach of the covenant of good faith aiid fair deahng is contmuing
28 in its litigation action and conduct, notwithstanding its contmued duty to act in good faith For
PLAINTIFF'S TRIAL BRIEI'
1 example the "covenants of good faith and fair deahng" continue even to this date, with the duties
2 of a proper investigation giving equal consideration to the mterest of the msured as is given to the
3 insurer„and this covenan t o f 0
goo d faith
a contmues even through trial and up to the time of the
4 ~udgment. 8'Azure v 8'estern Tztle Insurazzce Company (1985) 40 Cal 3d 870
II. DEFENDANT'S POSITION
6 The defendant's primary position is that the insured did not insure the vehicle within 30 days
7 after becoming an "owner", and according to the defendant, a person becomes the owner of property
8 when they enter mto an executory contract to purchase property, regardless oof the "incidents" of
9 ownership. This appears to be their final position, after all other fraudulent attempts to deny the
10 claim and harass the plaintiffhas failed Defendant argues that was no coverage as Mardikian did
11 not timely ask to insure the Vehicle witliin 30 days, pursuant to the "Newly Acquired Auto"
12 provision of the policy, and then claims that Mardikian's position that he actually became the
13 "owner" on February 14, 2012 must fail Defendant claims that Mardikian became the owner of
14 the vehicle on December 20, 2011 —notwithstanding he had no rights to possession on such date,
15 had no possession of the vehicle, and in fact had no evidence of title or ownership, and
16 notwithstanding the fact that the seller, per the contract, had not rehnquished possession of the
17 vehicle or completed the contract
18 A. The Law
19 In an attempt to control the abuses by the insurance companies, the Legislature passed
20 Calrforma Insurance Code Section 79003 (Prohibitmg unfair or deceptive acts or practices),
21 defining unfair methods of competition and unfair and deceptive acts or practices ui the business oi
22 insurance This is intended to make illegal the unfair claims settlement practices includmg, but not
23 limited to "(1) Misrepresenting to claimants pertment facts or insurance policy provisions relatmg
24 to any coverage at issue, (3) Failing to adopt and implement reasonable standards for the
25 prompt investigation and processing of claims arising under insurance po i ''cies,5, Not
26 attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in
27 >vhich liability has become reasonably clear, (13) Failing to provide promptly a reasonable
28 explanation of the basis relied on in the insurance policy, in relation to the facts or applicable
PI.AINTIFF'S TRIAL BRIBI'
1 law, for the denial of a claim or for the offer of a compromise settlement, " The Cahfornia
'
2 Insurance Commission
C as a d op t e d
regulations m an attempt to require the insurance companies to
3 act m good faith and deal fairly with the consumer and insureds
4 The California judicial system has imposed upon the msurance industry the heightened duty
5 under the "covenant of good faith and fair dealmg", mcluding, but not hmited to,
6 The refusal of the insurer to give the interest of the insured at least as much consideration as
it gives its own interest extends to the msurer who unreasonab.y an m a ai
7 payment of claims from the insured. Silberg v California Life Ins Co (i974) ll Cal 3d
8
The covenant of good faith is read into contracts and is part of the contract Therefore, a
breach of the covenant of good faith will always result ma breach of the contract areau
ck Co v Security Pacific Business CreditInc 222 Cal App 3d1371
10
A party violates the covenant ifit subjectively lacks belief in the validity of its act or if its
conduct is objectively unreasonable Careau d'c Co v Security Pacific Business Credit Inc
222 Cal App 3rd 1371, Carma Developers (Califoinia) Inc V Marathon Development
12 California, Inc (Siip Court) 2 Cal 4h 342
The courts give emphasis to the reasonable expectations of the insured and willlook beyond
the four corners of the policy to determine whether the insurer isliable for bad faith
14 conduct. "'In short, the insurance company may not ignore its insured and then see
refuge in the fine print of its policy.'" ( Terzian v Cahfornia Cas Indem Exch (1974) 42
Cal App 3d 942, 950 ) Barney v Aetna Casualty and Security Co, 1985 Cal App 3rd 966
16 In tins case, Wawanesa wants tins Court to disregard its unethical and unfair claims practices
17 by ignoring requirements of fairness and equitable claims settlement practices mandated by
18 California statutes (Ins Code Section 790 3), as well as any covenant of good faith and fair dealing
19 imposed by the Supreme Court of the State of Cahfornia Wawanesa would hke the Co urt to
20 ignore that it has no "claim manuals", a practice which is defined by Code of Insurance Code
21 Section 790 3 as an "unfair claim practice" The defendant would essentially request tliis Court not
22 to consider that Wawanesa made absolutely no attempt to fairly investigate the claim, but instead
23 chose to deny the claim and attempt to require Mardikian to forgo and abandon the claim by its
24 pattern of unfair claims practices, and ignored evidence which would support the claim,
25 immediately accusing Mardikian of fraud without any facts and even hiring purported mvestigators
26 to suggest Mardikian was guilty of fraud and/or arson When this failed, defendant used bias
27 experts, mvestigators and even attorneys to improperly investigate the claim This systemic and
28 general bad faith practice of Wawanesa has not gone unnoticed and is documented from past
PI.AINTIFI"S 1 RIAL BR ILF
1 conduct.
In this case, the defendant Wawanesa desires the Court to also ignore the law regarding the
3 issue of "Owner", a term which is not defined m the insurance policy This case has a significant
4 impact upon consumers who regularly contract for the purchase of automobiles and still have
5 no "ownership" of said automobile Essentially, Wawanesa's argument, ifaccepted by the Court,
6 would not be consistent with the common understanding of "ownerslnp" The argument is
7 ridiculous and is a manufactured issue without any basis Wawanesa desires this Court to conclude
8 that entering into an "Executory Contract" is the same as "Ownership" and represents ownersliip
9 of property, not merely an executory contract to acquire an ownership interest in the property, when
10 such is not the law and would disregard the common sense "incidents of ownership" of property
11 The law makes a distinction with respect to the effect of any contract, and specifically in Cnul
12 Code Section 1661, provides that. "An executed contract is one, the object of which is fully
13 performed. All others are executory." It has been decided by the Supreme Court more than 100
14 years ago that one who enters nito contract with another whereby it is agreed that he shall own
15 certain personal property on performance ofcertain conditions has entered into "executory contract",
16 and accordmgly, has no complete ownersliip either general or special m the property my by viue
17 of contract until it isperformed Cardmell v Bennetl (1877) 52 Cal 476, 1877 Cal LEXIS 162
18 Although the property in Cai Cknell was a "horse", a horse was the "vehicle" of the time, and the
19 distinction between a "horse" and a "car" is not relevant In December of 2011, Mardikian and Holt
20 Auto Sales merely made an "executory contract" which was not completed by performance until
21 February 14, 2012
In the present case substantial evidence undisputably shows that as of December 20, 2011,
23 the dealer had NOT yet received any payment for the car, Mardikian had NOT yet taken possession
24 of the car, Mardikian did NOT yet consider it to be his, and Mardikian did NOT even have any
25 right to possession" on December 20. 2011, as Defendant falsely claims
26 I I I. THE TERMS OF THE CONTRACT (Interpretation of the Contract)
27 It is undisputed that the pohcy of insurance Mardikian obtained in 2005 states Mardikian has
28 and had 30 days after becoming the "Owner" to ask to msure a newly acquired vehicle, but the term
PLAINTIFF'S TR1AL BRJEF
1 "owner" is not defined in the contract, nor is there any guidance as to its meannig within the pohcy
2 There is,however, law on the subject as would apply to this case, and there is "common sense
"
3 The Court's first obligation is to determine the meanmg of Owner" as used in the msurance
4 policy, as discussed above.
5 Insurance contracts are unique in nature and purpose The insured seeks security and peace
6 of mind through protection agamst calamity I'gan v Mutual of Omaha Ins Co (1979) 24 C 3d
7 809, 819 An insurance company may not deny coverage based on either unduly restrictive policy
8 mterpretations(Delgado v Heritage Ltfe Ins Co (1984) 157 Cal App 3d262, 277-278) or standards
9 known to be improper (Moore v Ainerlcan UnitedLlfe Ins Co (1984) 150 Cal App 3d 610, 637-
10 638), and in all respect, must give equal consideration to the interest of the insured as it gives to its
11 own financial mterest. (Silberg v California Life Insurance Company 11 C 3d 452) As noted
12 above, the "implied terms" mcludmg the covenant of good faith and fair dealing are given equal
13 weight as ifwritten into the policy Careau Ck Co v Security Pacific Business Credit Inc 222 Cal
14 App 3d 1371 The covenant of good faith is read into contracts and is part of the contract
15 "While insurance contracts have special features. they are still contracts to which the ordmary
rules of contractual "
16 interpretation apply Bank ofthe 8'est v Superior Court (1992) 2 C Ah 125 l,
17 1264 "'Under statutory rules of contract interpretation, the mutual mtention of the parties at the time
18 the contract is formed governs its interpretation [Citation.] Such intent is to be inferred, ifpossible,
19 solely from the written provisions of the contract [Citation ]' Cornniunity Redevelopment Agency
20 v Aetna Casualty d'cSurety Co (1996) 50 Cal App 4th 329, 338, quoting Moni'rose Chemical Corp
21 v Admiral Ins Co. (1995) 10 C 4th 645, 666-667. "To yield their meaning, the provisions of a pohcy
22 must be considered m their full context. [Citations ] Where it isclear, the language must be read
23 accordingly [Citations ] Where it is not, it must be read m conformity with what the insurer believed
24 the insured understood thereby at the time of formation [citations] and, ifit remains problematic, m
25 the sense that satisfies the msured's objectively reasonable expectations [citations] "
(Buss v
26 Superior Court (1997) 16 C 4th 35, 45)
27 "'It is,of course, well estabhshed that an msurer has a right to limit the policy coverage in
28 plain and understandable language, and isat hberty to hmit the character and extent of the risk it
PLAINTIFI"'STRIAL BRIEI'
1 undertakes to assume tcitations] '"Hackethal v National Casualty Co (1987) 189 Cal App 3d
2 1102, 1109 In analyzing the extent of the exclusion from liabihty. there are the rules to be applied
3 in the interpretation of msurance policies. These are: (1) Any ambiguity or uncertainty in an
4 insurance policy is to be resolved against the insurer (2) Ifsemantically perniissible, the contract
5 willbe given such construction as willfairly achieve its manifest object of securing indemnity to the
6 insured for the losses to which the insurance relates (3) Any reasonable doubt as to uncertain
7 language will be resolved against the insurer whether that doubt relates to the peril insured
8 against or other relevant matters. Continenlal Cas Co v Phoenix Conslr Co (1956) 46 C2d
9 423, 437-438 (4) The policy should be read as a layman would read it and not as it might be
10 analyzed by an attorney or an insurance expert Hobson v Mutual Benefit H CkA Assn (1950)
11 99Cal App2d330,333 (5) Anexclusionaryclausemustbeconspicuous,plainandclear Gray
12 v Zurich Insurance Co. (1966) 65 Cal 2d 263, 273 and must be construed strictly against the
13 insurer and liberally in favor of the insured Paramount Properties Co v Transamerica Title
14 Ins Co (1970) 1 Cal 3d562, 569, Briizkmann v LzbertyMitzial etc Ins Co (1965) 63 Cal2d41,
15 45
16 Ifthe insurer uses language which is uncertain, any reasonable doubt willbe resolved
17 against it. The familiar rule is that any ambiguities in an msurance policy must be read agamst the
18 insurer and ui favor of coverage. Bareno v Employeis Life Ins Co (1972) 7 Cal 3d 875, 878,
19 Szlerg v CalzforntaLife Insurance Company 11 Cal 3d452, AIUIns Co v Superior Court(1990)
20 51 Cal 3d 807, 822 Moreover, msurance coverage is "mterpreted broadly so as to afford the
21 greatest possible protection to the insured, [whereas] exclusionary
.. clauses are interpreted narrowly
22 against the insurer" White v H~esternTilleIns Co (1985) 40Cal 3d870, 881 Thisrule mvolving
23 the mterpretation of an msurance pohcy in favor of the msured applies with particular force when
24 the coverage portion of the insurance policy would lead an insured to reasonably expect coverage
25 for the claim purportedly excluded Gray v Zzirich Insig ance Co, 65 Cal 2d 263 al pp 272-273
In the present case, totally missing from definition or discussion in the Wawanesa auto
27 msurance pohcy is the term "Owner" If the insurer uses language which is uncertain, any
28 reasonable doubt will be resolved against the Insurer. Ifsemantically permissible, the contract
PI.AINTIFI"S TRIAL BRIFF 9
1 willbe given such construction as willfairly achieve its ob]ect of securing indemnity to the msured
2 for the losses to which the insurance relates.. Wildman v Governmenl Employees 'ns Co (1957)
3 48 Col 2d 31 Query'oes anyone of common sense beheve that the average consumer beheves
4 that, for example, when they contract and order a Mercedes from Germany through a dealer in the
5 United States, pay for it, and it is being shipped from Germany say in tliree months, that they are the
6 "owner" of the vehicle on the date they signed the contract to purchase the vehicle~ Such idea is
7 preposterous. The fact of the matter is that it is nothing more than an "Executory Contract" to
8 become the owner when the Vehicle is dehvered and the contract is complete The operative word
9 is "owner"„not "contracting party to purchase a vehicle" or "contract to become the owner of a
10 vehicle". "Ownership" is simply not the same as the date of the signing of an executory contract,
11 which is what Defendant argues. How about "inteiTIet" purchases of apphances, televisions, etc
12 Do persons believe that they "own" the product when placing the order, or when the contract is
13 completed and the product received~ It is submitted that the common consumer understands the
14 concept of "mcidents of ownership", and in fact, a common phrase is that "possession is 90 10 of the
15 ownership" for personal property. Vehicles are no different.
16 Wawanesa's argument that the California Uniform Commercial Code does not apply to
17 vehicles, but mstead would be regulated by the Cahforma Vehicle Code as of December 20, 2011
18 must fail Recall the vehicle was in Michigan at all times prior to February 14, 2012, and as such,
19 the earliest date the California, Vehicle Code could possibly apply would be the date the vehicle
20 entered California (on or about February 19, 2012, as it was transported mto California)
21 Nonetheless, Cahforma Vehicle Code 460 confirms that an owner is someone who has "all the
22 incidents of ownership, mcluding legal title" Plaintiffcertainly had NO incidents of ownership on
23 December 20, 2011. He did not have legal title, the dealer had not received ANYpayment on that
24 date, and would not release the car to Plaintiff, or to a sliipper on that date.
25 It is difficultIn view of the law and common sense to believe the word "owner" is confusmg
26 or uncertain m the context of the msurance pohcy. but we know from the arguments of defendant
27 Wawanesa and its conduct, anything is possible Ifthe language is uncertam, the Court must then
28 interpret any reasonable doubt as to the meaning of the word "owner" against the Insurer,
PI.AINTIFF'S TRIAL BRIEF -10-
1 which is an issue of law for the Court, but it becomes a question of fact when considering the mtent
2 of the contracting parties
3 IV. THE APPLICABLE LAW ON THE INSTANT TRANSACTION
4 The only false representations made were those made by Wawanesa and its attorney
5 Douglas Wood acting in the capacity as a "claims agent", advismg Mardikian that
"The legal significance of "F.O B. (Freight on Board) Lansmg. Michigan" is that the point
of sale is Lansing Michigan and that the responsibility of transferring the vehicle fi'om that
point belongs to you, the you, the buyer The only mention of transportation m the
paperwork is to clarify that it was NOT part of the sale"
In actuality, "F O.B" does not mean "Freight on Board" "Unless otherwise agreed the term
10 F O.B. (which means "free on board" ) at a named place ) Cal Uniform Commerczal Code
11 Section 2019(l)(a) " The defendant fuiiher misrepresents that "ownership" of property is determuied
12 upon the making of an executory contract, regardless of performance, which is absolutely false
13 "Although the contract was in the form of a present sale, it was an executory agreement to
14 sell The fundamental difference between a sale, properly so called, and an agreement to sell is, that
15 in the former case title passes, while in the latter case it does "
not Rosenbez g Bros Ck Co v Beales,
16 56 CA 212,214, Blackivood v Cutting Packzng Co, 76 Cal 212, 215 As stated in Black@>ood,
17 supra. "Where by the agreement the vendor is to do anything to the goods for the purpose of putting
18 them into that state into which the purchaser is to be bound to accept them, or, as it issometmies
19 worded, nito a dehverable state, the performance of those things shall, m the absence of
20 circumstances mdicatmg a contrary mtention, be taken to be a condition precedent to the vesting
21 of the property.", citing Ben]amin on Sales, b 2, c 3 In the instant case, Ilolt Auto Sales was
22 requued to put the Vehicle, and restoration parts, mto a deliverable state (ie pack the parts within
23 the vehicle, physically move the vehicle to a place where a transport truck could properly load it onto
24 the transport truck, etc).
25 In O'Kelley-Ecclus Co V State of Cahfornza (1958) 160 Cal App 2d 60 at 64, the Court
26 stated
27 "The cardinal factor, according to the Uniform Sales Act, upon which the passing of
title between a seller and a buyer depends, is the mtention of the parties The parties to a
28 contract of sale may expressly stipulate as to when title shall pass and such a provision is
PLAINTIFF'S TIRIAI.BRIEI>
ordinarily given full effect as between the parties, but since the parties do not always
stipulate in such respect the courts have adopted, and the Uniform Sales Aci has provided,
certain rules for determmmg the intention of the parties (46 Am.Jur, Sales, $ 413 ) We
think the court was fully ~ustified, under the evidence, in concluding that the contract
between the parties m fact cast upon the appellant an obligation to deliver the goods at the
point designated by the customer, and thai, therefore, the question of the intent of the parties
as to the time and place where title should pass was governed by section 1739 of the Civil
Code, rule 5, readmg as follows
"Ifthe contract to sell requires the seller to dehver the goods to the buyer, or at a particular
place, .the property does not pass until the goods have been delivered to the buyer
or reached the place agreed upon."
(emphasis added)
The cardinal rule is now codified in Cahforma Uniform Commerctal Code Section 2401
(Passing of title, Reset ation for security; Limited application of this section)
(2) Unless otherwise explicitly agreed title passes to the buyer at the time and place
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1 DAY LAW OFFICES Montie S. Day, ¹073327 2 Attorneys at Law 1235 Casa Palermo Circle 3 Henderson, Nevada S9011 1 el. (208) 280-3766 C~erlt;of th SUPenor 4 Email. msdayesqQaaol corn Attorney for Plaintiff George Mardikian puTY CLERK 5 SUPERIOR COURT OF Tl-IE STATE OF CALI1 ORN A COUN1 Y OF SAN MATEO GEORGE MARDIKIAN, ) ) CASE NO. CIV 517132 Plaintiff, ) 10 ) PLAINTIFF'S TRIAL BRIEF vs ) 11 ) WAWANESA GENERAL ) 12 INSURANCE COMPANY, a ) corporation, and DOES 1 through 50, ) Date November 12, 2013 13 inclusive, ) Time. 9:00 A.M. ) Dept: TBA 14 Defendants. ) (Unlimited Junsdiction) ) Filed. October 3, 2012 15 Trial Date: November 12, 2013 16 17 18 19 20 21 22 25 27 28 PI,AINTII:F'S TRIAL 13RIFF TABLE OF CONTENTS 3 I INTRODUCTION ESSENTIAL FACTS 4 II DEFENDANT'S POSITION 5 III THE TERMS OF TI-IE CONTRACT (InterpretatIon of the Contract) 6 IV. THE APPLICABLE LAW ON fHE INSTANT TRANSACTION 7 V WAWANESA'S CONTINUING BAD FAITH 8 VI CONCLUSION 10 12 13 14 15 16 17 19 20 2] 22 23 24 25 26 27 28 PI.AINTIII"S TRIAL BRIFF I. INTRODUCTION TO ESSENTIAL I ACTS PlaintiffGeorge Mardikian ("Mardikian" or -'plainti ff"')purchased an automobile insurance 4 policy from the defendant Wawanesa General Insurance Company ("Wawanesa" or "defendant") on 5 or about August 2005. Mardkkian performed all the terms and conditions of the pohcy paying more 6 than $ 13,000 00 in premiums over the years Such pohcy was in effect as of February 20, 2012 7 Wawanesa issued the policy, willfullyaccepted all premiums when paid by Mardikian, and obhgated 8 itself to perform the terms and conditions of such pohcy, including the implied covenant of good 9 faith and fair dealing, and to pay the benefits under the policy 10 In December of 2011, Mardikian, who had been searclung and seeking to purchase a umque 11 vehicle, namely a 1964 Cadillac Eldorado 2 door convertible (hereinafter referred to as the 12 "Vehicle"), eventually located a unique buy on such a vehicle The Vehicle was m the midst of 13 restoration, with significant restoration costs already incurred, and many parts to complete the 14 restoration were available from the seller Mardhkian estimated that by spendmg approximately 15 $ 4,000.00-6,000.00. the restoration could be completed, with the resultmg Vehicle worth 16 approximately $ 48,000.00. The seller,however, did not realize the uniqueness of the situation and 17 value of the Vehicle 18 Mardikian, located in South San Francisco, negotiated the purchase of the Velucle, as well 19 as the restoration parts, from the seller, Holt Auto Sales, of Lansing, Miclngan. A contract was 20 entered mto for the purchase of the Vehicle as well as the paints, which were packed within the car, 21 by agreeing to pay $ 1,520 00 for the "Vehicle", $ 2.980.00 for the "Parts", and agreeing that 22 shipping to South San Francisco through Holt would cost no more than $ 1,125 00 1 he expressed 23 condition of the written contract was that "Allcars are shipped F.O.B. Lansing Ml" This was 24 material —as Mardikian resided in South San Francisco and the Vehicle was located in Lansing, MI 25 (Declaration of Mardikian, Para 5, and 6 Mardikian would, of course, as part of the contract, 26 have to pay for the costs of shipping, while, under the expressed terms of the contract, ie 27 "F.O.B. Lansing, MI", Holt had to perform the contract by placing the Vehicle in the hands 28 of the shipper. The seller agreed to ship the car to Mardikian in South San Francisco at a cost PLAINTIFF'S TRIAI. I3RIIII' 1 of no more than $ 1,125.00. 2 The contract was not "performed" with respect to the seller's obligation until February 3 14, 2012 when the seller "shipped" the Vehicle Mardikian had, on January 27, 2012 made final 4 payment to the seller; completing his performance under this executory contract, such being in the 5 amount of $ 1,125 00, brmging Maidikian's acquisition costs to a total of $ 5,625.00 ($ 1,520 00+ 6 $ 2,980 00+ $ 1,125.00) 7 Under the terms of the Wawanesa msurance pohcy purchased in 2005, Mardikian had 8 coverage for "newly acquired vehicles" and the pohcy provided that comprehensive coverage for a 9 "newly acquired auto" begins on the date you become the owner" ifyou ask to insure it within 10 "30 days after you become the owner." 11 Mardikian, an attorney, believed he became the owner of the Vehicle on January 27, 2012 12 when he completed his performance under the executory contract I On February, 7) 212 0 13 pursuant to the terms of the pohcy, (and within 30 days of January 27. 2012) Mardikian gave 14 Wawanesa timely notice of the "newly acquired vehicle'", and asked to msure it The newly 15 acquired vehicle was damaged in transit, apparently while being driven by the transport truck 16 operator on February 20, 2012. 17 The vehicle eventually was shipped to South San Francisco. It was dehvered to a repair 18 shop. Plaintiff obtainedestimatesfortherepairs forthedamage causedbythefire, theestimates 19 only to restore it to the "pre-fire condition". These estimates total $ 26,598 66 Actually, at this time 20 it appears that there was more damage as the engme was destroyed due to the fire, and the vehicle 21 should be considered a '"total loss". 22 Planitiffbelieved the seller, shipper or other responsible parties would fully cover the losses. 23 Thus Plamtiff believed there was no need to mitially submit a claim to Wawanesa However, the 24 seller Holt Auto Sales denied any responsibility, pointing out Mardikian became the owner on 25 February 14,2012, the date the Vehicle was placed in the hands of the shipper and trucking 26 company. According to the seller, February 14, 2012 was the date that ownership and 27 'egally, he was wrong as the Vehicle was "F 0 B Lansing, MI", discussed supra PLAINTIFF'S TRIAL BRII:I' 1 responsibility for the loss transferred, as that was the date seller performed the terms of the contract, 2 Rules ofPro fessional Conduct and the Vehicle was placed on the truck (shipper) pei the purchase 3 contract.— On March 29, 2012, having deteimined that no other painty was going to take responsibility 5 for the full extent of the loss, Mardikian telephoned Wawanesa to file a claim, explaimng that the 6 Vehicle was being transported when it caught fire, and submitted the claim for damages 7 With the exposure to the potential liability of up to $ 50,000 00 or more, the claim was 8 immediately referred to the claims adjustor's supervisor, and on Apnl 26, 2012, was referred to 9 "SIU" as a fraudulent claim Wawanesa referred the matter to a "private investigator" who touts 10 his business as "fraudulent claims" investigation for insurance carriers, and then Wawanesa refused 11 to deal with Mardikian directly, and requested Mardil«an to deal only with the "private 12 mvestigator" and Wawanesa's attorneys Mardikian did not wish to deal with contractors and 13 persons other than Wawanesa, as it was Wawanesa who had issued the pohcy Wawanesa then 14 refened the matter to Mr Doug Wood, an attorney,'ho specializes m represenimg msurance 15 companies, , ttocon d uc t ann "Examination xamin Under Oath" of Mardikian. Mardikian contuiued to 16 cooperate submittin~ to the "Exammation Under Oath", providing Wawanesa documents, and 17 responding to questions relatmg to the transaction 18 With respect to the purchase of the Vehicle, Mardikian answered honestly each question 19 asked of him, and the purchase documents were reviewed Mardikian explained that in his mmd he 20 purchased the car when he completed his performance under the contract, makmg the final payment 21 on January 27, 2012, and also explained that the Vehicle was not placed by the seller with the 22 shipper until February14,2012 Mardikianrephed 23 "Q So as far you were concerned, when was it that you considered the purchase— considered yourself to have purchased the vehicle~ 24 25 '- This position is consistent with the intent of the contract, and is correct. as a matter of law Mr Douglas Wood, though an attorney, acted in the capacity of and as a claims 2/ representative/adjustor with respect to his Investigation" of the claim, before demal of the claim as it is the duty of the nisurance company to conduct the investigation of the claim and to comply with the requirements of the Insurance Code and Code of Regulations PLAINTII"F'STRIALBRIEF A Right. Well, that's a question open for interpretation The date the vehicle left the dealer was February 14th That's when risk of loss transferred from the dealer to the shipper So I don't know ifyou want to consider that the date I took. possession I don't consider the date I took possession until the date it arrived here in South San Francisco Q. Okay. Let's take it one step at a time. The date you agreed with the seller that the car was yours, you purchased the car, when was thaV A. I would say January 27th Q Why that date? A. It's the purchase date mdicated on the documents Q Which documents? A The Citi charge card " Examination Under Oath, 43:3-25 9 On July 30, 2012, Douglas Wood, Attorney. wrote a letter to Mardikian which stated 10 "Wawanesa General Insurance Company's previous oral notice to you of its decision to deny your 11 claim and rescind your entire pohcy effective February 22, 2012, and the reasons for that decision" 12 The reasons given and the basis of denial and the termination the policy mcluded alleged 13 concealment and misrepresentation of "3 The "purchase date" and "The statement that the 14 "purchase date" was January 27, 2012 because that was the date the credit card charge (payment) was 15 made" According to Wawanesa, one becomes an "owner" of a Vehicle when an executory, but 16 uncompleted and unperformed contract is created, and regardless of performance. 17 The evidence well estabhshes that Wawanesa not only breached the contract, but breached 18 the covenant of good faith and fair dealing, includmg, but, not limited to, refusal and failing to 19 maintain "claim manuals" and procedures for a fair and good faith investigation of the claims 20 defined by California Insurance Code as "unfair clamis practices", systematically retaming bias 21 contracting claims adjustors, investigators, purported experts and attorneys for the purpose of 22 rendering bias evaluations and opinions for the purpose of denying the claims, and most of all, not 23 givmg equal consideration to the mterest ofthe insured as it does its own financial niterest, a practice 24 and pohcy admitted by Wawanesa's managmg officials (See Declaration of Bennmg) The fact is 25 that Wawanesa has already been found in bad faith by a Jury for the same type of conduct it displays 26 in this case 27 In this case, Wawanesa's breach of the covenant of good faith aiid fair deahng is contmuing 28 in its litigation action and conduct, notwithstanding its contmued duty to act in good faith For PLAINTIFF'S TRIAL BRIEI' 1 example the "covenants of good faith and fair deahng" continue even to this date, with the duties 2 of a proper investigation giving equal consideration to the mterest of the msured as is given to the 3 insurer„and this covenan t o f 0 goo d faith a contmues even through trial and up to the time of the 4 ~udgment. 8'Azure v 8'estern Tztle Insurazzce Company (1985) 40 Cal 3d 870 II. DEFENDANT'S POSITION 6 The defendant's primary position is that the insured did not insure the vehicle within 30 days 7 after becoming an "owner", and according to the defendant, a person becomes the owner of property 8 when they enter mto an executory contract to purchase property, regardless oof the "incidents" of 9 ownership. This appears to be their final position, after all other fraudulent attempts to deny the 10 claim and harass the plaintiffhas failed Defendant argues that was no coverage as Mardikian did 11 not timely ask to insure the Vehicle witliin 30 days, pursuant to the "Newly Acquired Auto" 12 provision of the policy, and then claims that Mardikian's position that he actually became the 13 "owner" on February 14, 2012 must fail Defendant claims that Mardikian became the owner of 14 the vehicle on December 20, 2011 —notwithstanding he had no rights to possession on such date, 15 had no possession of the vehicle, and in fact had no evidence of title or ownership, and 16 notwithstanding the fact that the seller, per the contract, had not rehnquished possession of the 17 vehicle or completed the contract 18 A. The Law 19 In an attempt to control the abuses by the insurance companies, the Legislature passed 20 Calrforma Insurance Code Section 79003 (Prohibitmg unfair or deceptive acts or practices), 21 defining unfair methods of competition and unfair and deceptive acts or practices ui the business oi 22 insurance This is intended to make illegal the unfair claims settlement practices includmg, but not 23 limited to "(1) Misrepresenting to claimants pertment facts or insurance policy provisions relatmg 24 to any coverage at issue, (3) Failing to adopt and implement reasonable standards for the 25 prompt investigation and processing of claims arising under insurance po i ''cies,5, Not 26 attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in 27 >vhich liability has become reasonably clear, (13) Failing to provide promptly a reasonable 28 explanation of the basis relied on in the insurance policy, in relation to the facts or applicable PI.AINTIFF'S TRIAL BRIBI' 1 law, for the denial of a claim or for the offer of a compromise settlement, " The Cahfornia ' 2 Insurance Commission C as a d op t e d regulations m an attempt to require the insurance companies to 3 act m good faith and deal fairly with the consumer and insureds 4 The California judicial system has imposed upon the msurance industry the heightened duty 5 under the "covenant of good faith and fair dealmg", mcluding, but not hmited to, 6 The refusal of the insurer to give the interest of the insured at least as much consideration as it gives its own interest extends to the msurer who unreasonab.y an m a ai 7 payment of claims from the insured. Silberg v California Life Ins Co (i974) ll Cal 3d 8 The covenant of good faith is read into contracts and is part of the contract Therefore, a breach of the covenant of good faith will always result ma breach of the contract areau ck Co v Security Pacific Business CreditInc 222 Cal App 3d1371 10 A party violates the covenant ifit subjectively lacks belief in the validity of its act or if its conduct is objectively unreasonable Careau d'c Co v Security Pacific Business Credit Inc 222 Cal App 3rd 1371, Carma Developers (Califoinia) Inc V Marathon Development 12 California, Inc (Siip Court) 2 Cal 4h 342 The courts give emphasis to the reasonable expectations of the insured and willlook beyond the four corners of the policy to determine whether the insurer isliable for bad faith 14 conduct. "'In short, the insurance company may not ignore its insured and then see refuge in the fine print of its policy.'" ( Terzian v Cahfornia Cas Indem Exch (1974) 42 Cal App 3d 942, 950 ) Barney v Aetna Casualty and Security Co, 1985 Cal App 3rd 966 16 In tins case, Wawanesa wants tins Court to disregard its unethical and unfair claims practices 17 by ignoring requirements of fairness and equitable claims settlement practices mandated by 18 California statutes (Ins Code Section 790 3), as well as any covenant of good faith and fair dealing 19 imposed by the Supreme Court of the State of Cahfornia Wawanesa would hke the Co urt to 20 ignore that it has no "claim manuals", a practice which is defined by Code of Insurance Code 21 Section 790 3 as an "unfair claim practice" The defendant would essentially request tliis Court not 22 to consider that Wawanesa made absolutely no attempt to fairly investigate the claim, but instead 23 chose to deny the claim and attempt to require Mardikian to forgo and abandon the claim by its 24 pattern of unfair claims practices, and ignored evidence which would support the claim, 25 immediately accusing Mardikian of fraud without any facts and even hiring purported mvestigators 26 to suggest Mardikian was guilty of fraud and/or arson When this failed, defendant used bias 27 experts, mvestigators and even attorneys to improperly investigate the claim This systemic and 28 general bad faith practice of Wawanesa has not gone unnoticed and is documented from past PI.AINTIFI"S 1 RIAL BR ILF 1 conduct. In this case, the defendant Wawanesa desires the Court to also ignore the law regarding the 3 issue of "Owner", a term which is not defined m the insurance policy This case has a significant 4 impact upon consumers who regularly contract for the purchase of automobiles and still have 5 no "ownership" of said automobile Essentially, Wawanesa's argument, ifaccepted by the Court, 6 would not be consistent with the common understanding of "ownerslnp" The argument is 7 ridiculous and is a manufactured issue without any basis Wawanesa desires this Court to conclude 8 that entering into an "Executory Contract" is the same as "Ownership" and represents ownersliip 9 of property, not merely an executory contract to acquire an ownership interest in the property, when 10 such is not the law and would disregard the common sense "incidents of ownership" of property 11 The law makes a distinction with respect to the effect of any contract, and specifically in Cnul 12 Code Section 1661, provides that. "An executed contract is one, the object of which is fully 13 performed. All others are executory." It has been decided by the Supreme Court more than 100 14 years ago that one who enters nito contract with another whereby it is agreed that he shall own 15 certain personal property on performance ofcertain conditions has entered into "executory contract", 16 and accordmgly, has no complete ownersliip either general or special m the property my by viue 17 of contract until it isperformed Cardmell v Bennetl (1877) 52 Cal 476, 1877 Cal LEXIS 162 18 Although the property in Cai Cknell was a "horse", a horse was the "vehicle" of the time, and the 19 distinction between a "horse" and a "car" is not relevant In December of 2011, Mardikian and Holt 20 Auto Sales merely made an "executory contract" which was not completed by performance until 21 February 14, 2012 In the present case substantial evidence undisputably shows that as of December 20, 2011, 23 the dealer had NOT yet received any payment for the car, Mardikian had NOT yet taken possession 24 of the car, Mardikian did NOT yet consider it to be his, and Mardikian did NOT even have any 25 right to possession" on December 20. 2011, as Defendant falsely claims 26 I I I. THE TERMS OF THE CONTRACT (Interpretation of the Contract) 27 It is undisputed that the pohcy of insurance Mardikian obtained in 2005 states Mardikian has 28 and had 30 days after becoming the "Owner" to ask to msure a newly acquired vehicle, but the term PLAINTIFF'S TR1AL BRJEF 1 "owner" is not defined in the contract, nor is there any guidance as to its meannig within the pohcy 2 There is,however, law on the subject as would apply to this case, and there is "common sense " 3 The Court's first obligation is to determine the meanmg of Owner" as used in the msurance 4 policy, as discussed above. 5 Insurance contracts are unique in nature and purpose The insured seeks security and peace 6 of mind through protection agamst calamity I'gan v Mutual of Omaha Ins Co (1979) 24 C 3d 7 809, 819 An insurance company may not deny coverage based on either unduly restrictive policy 8 mterpretations(Delgado v Heritage Ltfe Ins Co (1984) 157 Cal App 3d262, 277-278) or standards 9 known to be improper (Moore v Ainerlcan UnitedLlfe Ins Co (1984) 150 Cal App 3d 610, 637- 10 638), and in all respect, must give equal consideration to the interest of the insured as it gives to its 11 own financial mterest. (Silberg v California Life Insurance Company 11 C 3d 452) As noted 12 above, the "implied terms" mcludmg the covenant of good faith and fair dealing are given equal 13 weight as ifwritten into the policy Careau Ck Co v Security Pacific Business Credit Inc 222 Cal 14 App 3d 1371 The covenant of good faith is read into contracts and is part of the contract 15 "While insurance contracts have special features. they are still contracts to which the ordmary rules of contractual " 16 interpretation apply Bank ofthe 8'est v Superior Court (1992) 2 C Ah 125 l, 17 1264 "'Under statutory rules of contract interpretation, the mutual mtention of the parties at the time 18 the contract is formed governs its interpretation [Citation.] Such intent is to be inferred, ifpossible, 19 solely from the written provisions of the contract [Citation ]' Cornniunity Redevelopment Agency 20 v Aetna Casualty d'cSurety Co (1996) 50 Cal App 4th 329, 338, quoting Moni'rose Chemical Corp 21 v Admiral Ins Co. (1995) 10 C 4th 645, 666-667. "To yield their meaning, the provisions of a pohcy 22 must be considered m their full context. [Citations ] Where it isclear, the language must be read 23 accordingly [Citations ] Where it is not, it must be read m conformity with what the insurer believed 24 the insured understood thereby at the time of formation [citations] and, ifit remains problematic, m 25 the sense that satisfies the msured's objectively reasonable expectations [citations] " (Buss v 26 Superior Court (1997) 16 C 4th 35, 45) 27 "'It is,of course, well estabhshed that an msurer has a right to limit the policy coverage in 28 plain and understandable language, and isat hberty to hmit the character and extent of the risk it PLAINTIFI"'STRIAL BRIEI' 1 undertakes to assume tcitations] '"Hackethal v National Casualty Co (1987) 189 Cal App 3d 2 1102, 1109 In analyzing the extent of the exclusion from liabihty. there are the rules to be applied 3 in the interpretation of msurance policies. These are: (1) Any ambiguity or uncertainty in an 4 insurance policy is to be resolved against the insurer (2) Ifsemantically perniissible, the contract 5 willbe given such construction as willfairly achieve its manifest object of securing indemnity to the 6 insured for the losses to which the insurance relates (3) Any reasonable doubt as to uncertain 7 language will be resolved against the insurer whether that doubt relates to the peril insured 8 against or other relevant matters. Continenlal Cas Co v Phoenix Conslr Co (1956) 46 C2d 9 423, 437-438 (4) The policy should be read as a layman would read it and not as it might be 10 analyzed by an attorney or an insurance expert Hobson v Mutual Benefit H CkA Assn (1950) 11 99Cal App2d330,333 (5) Anexclusionaryclausemustbeconspicuous,plainandclear Gray 12 v Zurich Insurance Co. (1966) 65 Cal 2d 263, 273 and must be construed strictly against the 13 insurer and liberally in favor of the insured Paramount Properties Co v Transamerica Title 14 Ins Co (1970) 1 Cal 3d562, 569, Briizkmann v LzbertyMitzial etc Ins Co (1965) 63 Cal2d41, 15 45 16 Ifthe insurer uses language which is uncertain, any reasonable doubt willbe resolved 17 against it. The familiar rule is that any ambiguities in an msurance policy must be read agamst the 18 insurer and ui favor of coverage. Bareno v Employeis Life Ins Co (1972) 7 Cal 3d 875, 878, 19 Szlerg v CalzforntaLife Insurance Company 11 Cal 3d452, AIUIns Co v Superior Court(1990) 20 51 Cal 3d 807, 822 Moreover, msurance coverage is "mterpreted broadly so as to afford the 21 greatest possible protection to the insured, [whereas] exclusionary .. clauses are interpreted narrowly 22 against the insurer" White v H~esternTilleIns Co (1985) 40Cal 3d870, 881 Thisrule mvolving 23 the mterpretation of an msurance pohcy in favor of the msured applies with particular force when 24 the coverage portion of the insurance policy would lead an insured to reasonably expect coverage 25 for the claim purportedly excluded Gray v Zzirich Insig ance Co, 65 Cal 2d 263 al pp 272-273 In the present case, totally missing from definition or discussion in the Wawanesa auto 27 msurance pohcy is the term "Owner" If the insurer uses language which is uncertain, any 28 reasonable doubt will be resolved against the Insurer. Ifsemantically permissible, the contract PI.AINTIFI"S TRIAL BRIFF 9 1 willbe given such construction as willfairly achieve its ob]ect of securing indemnity to the msured 2 for the losses to which the insurance relates.. Wildman v Governmenl Employees 'ns Co (1957) 3 48 Col 2d 31 Query'oes anyone of common sense beheve that the average consumer beheves 4 that, for example, when they contract and order a Mercedes from Germany through a dealer in the 5 United States, pay for it, and it is being shipped from Germany say in tliree months, that they are the 6 "owner" of the vehicle on the date they signed the contract to purchase the vehicle~ Such idea is 7 preposterous. The fact of the matter is that it is nothing more than an "Executory Contract" to 8 become the owner when the Vehicle is dehvered and the contract is complete The operative word 9 is "owner"„not "contracting party to purchase a vehicle" or "contract to become the owner of a 10 vehicle". "Ownership" is simply not the same as the date of the signing of an executory contract, 11 which is what Defendant argues. How about "inteiTIet" purchases of apphances, televisions, etc 12 Do persons believe that they "own" the product when placing the order, or when the contract is 13 completed and the product received~ It is submitted that the common consumer understands the 14 concept of "mcidents of ownership", and in fact, a common phrase is that "possession is 90 10 of the 15 ownership" for personal property. Vehicles are no different. 16 Wawanesa's argument that the California Uniform Commercial Code does not apply to 17 vehicles, but mstead would be regulated by the Cahforma Vehicle Code as of December 20, 2011 18 must fail Recall the vehicle was in Michigan at all times prior to February 14, 2012, and as such, 19 the earliest date the California, Vehicle Code could possibly apply would be the date the vehicle 20 entered California (on or about February 19, 2012, as it was transported mto California) 21 Nonetheless, Cahforma Vehicle Code 460 confirms that an owner is someone who has "all the 22 incidents of ownership, mcluding legal title" Plaintiffcertainly had NO incidents of ownership on 23 December 20, 2011. He did not have legal title, the dealer had not received ANYpayment on that 24 date, and would not release the car to Plaintiff, or to a sliipper on that date. 25 It is difficultIn view of the law and common sense to believe the word "owner" is confusmg 26 or uncertain m the context of the msurance pohcy. but we know from the arguments of defendant 27 Wawanesa and its conduct, anything is possible Ifthe language is uncertam, the Court must then 28 interpret any reasonable doubt as to the meaning of the word "owner" against the Insurer, PI.AINTIFF'S TRIAL BRIEF -10- 1 which is an issue of law for the Court, but it becomes a question of fact when considering the mtent 2 of the contracting parties 3 IV. THE APPLICABLE LAW ON THE INSTANT TRANSACTION 4 The only false representations made were those made by Wawanesa and its attorney 5 Douglas Wood acting in the capacity as a "claims agent", advismg Mardikian that "The legal significance of "F.O B. (Freight on Board) Lansmg. Michigan" is that the point of sale is Lansing Michigan and that the responsibility of transferring the vehicle fi'om that point belongs to you, the you, the buyer The only mention of transportation m the paperwork is to clarify that it was NOT part of the sale" In actuality, "F O.B" does not mean "Freight on Board" "Unless otherwise agreed the term 10 F O.B. (which means "free on board" ) at a named place ) Cal Uniform Commerczal Code 11 Section 2019(l)(a) " The defendant fuiiher misrepresents that "ownership" of property is determuied 12 upon the making of an executory contract, regardless of performance, which is absolutely false 13 "Although the contract was in the form of a present sale, it was an executory agreement to 14 sell The fundamental difference between a sale, properly so called, and an agreement to sell is, that 15 in the former case title passes, while in the latter case it does " not Rosenbez g Bros Ck Co v Beales, 16 56 CA 212,214, Blackivood v Cutting Packzng Co, 76 Cal 212, 215 As stated in Black@>ood, 17 supra. "Where by the agreement the vendor is to do anything to the goods for the purpose of putting 18 them into that state into which the purchaser is to be bound to accept them, or, as it issometmies 19 worded, nito a dehverable state, the performance of those things shall, m the absence of 20 circumstances mdicatmg a contrary mtention, be taken to be a condition precedent to the vesting 21 of the property.", citing Ben]amin on Sales, b 2, c 3 In the instant case, Ilolt Auto Sales was 22 requued to put the Vehicle, and restoration parts, mto a deliverable state (ie pack the parts within 23 the vehicle, physically move the vehicle to a place where a transport truck could properly load it onto 24 the transport truck, etc). 25 In O'Kelley-Ecclus Co V State of Cahfornza (1958) 160 Cal App 2d 60 at 64, the Court 26 stated 27 "The cardinal factor, according to the Uniform Sales Act, upon which the passing of title between a seller and a buyer depends, is the mtention of the parties The parties to a 28 contract of sale may expressly stipulate as to when title shall pass and such a provision is PLAINTIFF'S TIRIAI.BRIEI> ordinarily given full effect as between the parties, but since the parties do not always stipulate in such respect the courts have adopted, and the Uniform Sales Aci has provided, certain rules for determmmg the intention of the parties (46 Am.Jur, Sales, $ 413 ) We think the court was fully ~ustified, under the evidence, in concluding that the contract between the parties m fact cast upon the appellant an obligation to deliver the goods at the point designated by the customer, and thai, therefore, the question of the intent of the parties as to the time and place where title should pass was governed by section 1739 of the Civil Code, rule 5, readmg as follows "Ifthe contract to sell requires the seller to dehver the goods to the buyer, or at a particular place, .the property does not pass until the goods have been delivered to the buyer or reached the place agreed upon." (emphasis added) The cardinal rule is now codified in Cahforma Uniform Commerctal Code Section 2401 (Passing of title, Reset ation for security; Limited application of this section) (2) Unless otherwise explicitly agreed title passes to the buyer at the time and place