Opinion
B160164.
10-23-2003
ARONOFF BROTHERS, ET AL., Plaintiffs and Appellants, v. SHERWOOD INSURANCE SERVICES, ET AL., Defendants and Respondents.
Kolod, Wager & Nolan APC, Scott M. Kolod and Darlene R. Kowalczyk for Plaintiff and Appellant. Margaret L. Parker and Shand S. Stephens for Defendant and Respondent Sherwood Insurance Services. Wilson, Kenna & Borys LLP, Timothy W. Kenna and Michael E. Mahurin for Defendant and Respondent Bolton & Company Insurance Brokers.
In this insurance coverage action, plaintiff Aronoff Brothers appeal after summary judgment was granted in favor of its insurance agent, Bolton & Company Insurance Brokers (Bolton), and the insurance wholesale broker, Sherwood Insurance Services (Sherwood), on Aronoff Brothers complaint for intentional and negligent misrepresentation. Aronoff Brothers action arises from a dispute with its excess insurance carriers over coverage for lost rental income during the period it took to repair one of the Aronoff Brothers properties in the San Fernando Valley (hereafter Canoga property) that was severely damaged after the Northridge earthquake. Aronoff Brothers also sued Bolton and Sherwood for alleged misrepresentations that its policy for property insurance covered loss of rental income actually sustained. We conclude that neither Bolton nor Sherwood made any misrepresentations to Aronoff Brothers and affirm.
The Aronoff Brothers plaintiffs include Aronoff Brothers, a California General Partnership; A.B.2, a California General Partnership; AKA Enterprises, a California Limited Partnership; Calabasas Center Group, a California Limited Partnership; D&R Properties, a California General Partnership; Kay Associates, a California Limited Partnership; La Canoga Properties, a California General Partnership; L. Aronoff & Sons, a California General Partnership; LLB Development Co., a California Limited Partnership; LES-SCO Investment Co., a Ohio General Partnership; Sunburst Industrial Development Co., a California General Partnership; and Warner Vanowen Associates, a California Limited Partnership.
The principal defendants in this case are the excess insurers. The action against these defendants is still pending. This appeal is before us because the trial courts ruling as to the claims of Bolton and Sherwood terminated the action with respect to those defendants. See also footnote 7, post.
FACTUAL AND PROCEDURAL BACKGROUND
In setting forth the facts, we follow well-established rules governing review of summary judgment motions. In doing so, we note that Bolton and Sherwood relied on the factual allegations in Aronoff Brothers complaint to support the motions. Bolton and Sherwood may rely on the complaints factual allegations, which constitute judicial admissions. (Foxborough v. Van Atta (1994) 26 Cal.App.4th 217, 222, fn. 3.) "Such admissions are conclusive concessions of the truth of a matter and effectively remove it from the issues." (Ibid.; see also 24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1211 ["Although a party cannot rely on its own pleadings on summary judgment, a party seeking or opposing summary judgment under these circumstances can rely on admissions of material fact made in the opposing partys pleadings."].)
1. Aronoff Brothers Purchased Insurance Policy through Bolton
Aronoff Brothers own numerous properties in the San Fernando Valley managed by Turnberry Property Management (Turnberry). Richard Aronoff (Aronoff) is the president of Turnberry. Aronoff was responsible for obtaining property insurance for the Turnberrry properties, which included the Canoga property.
In 1993, Aronoff obtained a $20 million property insurance policy from Bolton that included earthquake coverage for the Turnberry properties. Bolton secured the coverage through Sherwood.
The insurance policy had two layers of coverage, a primary and excess layer, with different insurance carriers insuring each layer of coverage. Three insurance carriers provided $ 10 million in primary coverage (primary policy). Associated International Insurance Company (Associated) and Agricultural Insurance Company (Agricultural) (collectively excess carriers) provided $10 million in excess insurance coverage (excess policy).
Because the excess carriers policies are identical, we refer to these policies as the "excess policy." We refer to the excess and primary policy collectively as the insurance "policy," except where clarity demands a distinction.
The excess policy covered loss of rental income from the Canoga property. The policy provided that "[w]hen this policy covers Rental value, this Company shall be liable for the Actual Loss Sustained by the Insured . . . ." Reimbursement of rental income for the Canoga property was governed, in part, by Endorsement No. 6, entitled "Building Ordinance — Increased Period of Restoration [& para;] Time Limit." That endorsement provided that if a loss were covered, coverage extended to "include the amount of actual and necessary loss you sustain during the increased period of suspension of `operations." It further referred to the time limit for coverage to repair, replace, or rebuild as the period of restoration. The period of restoration "begins with the date of direct physical loss or damage caused by or resulting from any covered cause of loss at the described premises; and [¶] . . . ends on the date when the property at the described premises should be repaired, rebuilt, or replaced with reasonable speed and similar quality."
Endorsement No. 6 provides in part: "Building Ordinance — Increased Period of Restoration [¶] Time Element [¶] If a covered cause of loss occurs to property at the premises described in the declarations, coverage is extended to include the amount of actual and necessary loss you sustain during the increased period of suspension of `operations caused by or resulting from the enforcement of any law that: [¶] 1. regulates the construction or repair of any property; [¶] 2. requires the tearing down of parts of any property not damaged by a covered cause of loss; and [¶] 3. is in force at the time of loss. [¶] The period of restoration definition is replaced by the following: [¶] `period of restoration means the period of time that: [¶] a. begins with the date of direct physical loss or damage caused by or resulting from any covered cause of loss at the described premises; and [¶] b. ends on the date when the property at the described premises should be repaired, rebuilt or replaced with reasonable speed and similar quality. [¶] `Period of restoration includes any increased period required to repair or reconstruct the property to comply with the minimum standards of any law, in force at the time of loss, that regulates the construction or repair, or requires the tearing down of any property. [¶] The expiration date of this policy will not cut short the `period of restoration. [Sic.]"
Sherwood issued a binder on the excess policy that referred to Endorsement No. 6, stating: "Time Element — Actual Loss Sustained." Other than receiving the Sherwood binder, Sherwood had no direct conversations with Aronoff regarding the scope of the coverage on the excess policy.
Aronoff stated in his declaration opposing summary judgment that Bolton assured him that Sherwood advised that although the insurance would be purchased through various insurance companies and at different layers, the primary policy and excess policy would be "following form" policies, that is, both policies would function as if Aronoff Brothers were insured by one insurance company under one policy. Aronoff understood this to mean that one insurance company would not take a position that would jeopardize coverage by another insurance company under the policy. Aronoff stated that Bolton also advised him that the excess policy covered loss of rental income actually sustained.
2. Canoga Property Sustained Earthquake Damage and Dispute Arose Over Coverage for Loss of Rental Income Under the Excess Policy
On January 17, 1994, while the policy was in effect, the Canoga property sustained damage following the Northridge earthquake. Turnberry gave notice of loss to Bolton, and Bolton notified Sherwood. Sherwood notified the primary insurance carriers. Bolton believed that once it notified Sherwood, Sherwood would determine which insurance carriers to notify.
In December 1995, the primary carriers adjuster notified Sherwood that the estimated cost to repair the Canoga property might exhaust the primary insurance coverage. Sherwood then notified the excess insurance carriers of the loss.
Aronoff Brothers received the full $10 million in coverage under its primary policy. But a dispute arose between Aronoff Brothers and the excess carriers over coverage for lost rental income from the Canoga property. Aronoff Brothers sought the actual loss in rental income for the time it took to repair the Canoga property. The excess carriers, however, took the position that based on Endorsement No. 6, the excess policy provided for loss of rental income for a reasonable period of restoration. The excess carriers determined that period to be 24 months, while Aronoff Brothers wanted 72 months in actual lost rental income.
3. Aronoff Brothers Filed Suit Against the Excess Insurance Carriers Bolton, and Sherwood
Aronoff Brothers brought an action against the excess insurance carriers to recover the lost rental income from the Canoga property, and alleged causes of action for fraud and negligent misrepresentation against Bolton and Sherwood based on alleged misrepresentations related to the scope of coverage on the excess policy. The operative second amended complaint (complaint) alleged Bolton and Sherwood made 11 misrepresentations that related to the following: (1) Bolton and Sherwood represented that the insurance policy would cover all physical loss and/or damage arising from the Northridge earthquake, including loss of rental income "from the time of the loss until the buildings were rebuilt, restored, and/or replaced"; (2) Bolton and Sherwood represented that the excess insurance carriers were solvent and reputable; (3) Bolton and Sherwood orally represented that timely notice would be provided to all insurers, including the excess insurance carriers; and (4) Bolton and Sherwood informed Aronoff Brothers that the insurance carriers ordered Bolton and Sherwood not to notify the excess carriers of the loss. Bolton and Sherwood allegedly made these misrepresentations to induce Aronoff to purchase the insurance policy. Moreover, Bolton and Sherwood acted negligently with respect to these representations and should have known that the representations were untrue and were made with the intent to induce Aronoff Brothers to rely to its detriment on the representations.
Aronoff Brothers negligent misrepresentation cause of action against Bolton and Sherwood is based on the same 11 misrepresentations.
4. Bolton and Sherwood Successfully Moved for Summary Judgment
Bolton and Sherwood answered the complaint, and then separately moved for summary judgment. The motions were essentially identical. Among the grounds raised in the motions, Bolton and Sherwood asserted that the evidence showed that neither Bolton nor Sherwood had made any false or misleading statements to Aronoff to induce him to obtain the insurance policy. To support the motions, Bolton and Sherwood presented evidence of the excess policy, testimony regarding the insurance coverage and loss notice requirements, and Aronoff Brothers admissions as set forth in the complaint. Aronoff Brothers opposed Bolton and Sherwoods motion for summary judgment by relying, for the most part, on Aronoffs declaration.
The trial court granted Bolton and Sherwoods motion for summary judgment, concluding that Aronoff Brothers had not met its burden to produce any evidence that would raise a triable issue of fact that either Bolton or Sherwood had made any misrepresentation of fact to Aronoff to induce him to buy the insurance policy. The trial court entered judgment for Sherwood on June 10, 2002, and Aronoff Brothers timely appealed. The trial court entered judgment for Bolton on March 19, 2003.
In August 2002, Aronoff Brothers filed a notice of appeal from the trial courts order granting summary judgment. Neither Aronoff Brothers nor Bolton obtained a judgment. On March 20, 2003, Bolton obtained a judgment. Although the August 2002 notice of appeal purports to appeal from the nonappealable order granting summary judgment, we may treat a notice of appeal from a nonappealable order as an appeal from a later final judgment by deeming the notice of appeal filed before judgment as filed immediately after entry of judgment. (Prison Law Office v. Koenig (1986) 186 Cal.App.3d 560, 564, fn. 4; see Cal. Rules of Court, rule 2(d)(2).) Accordingly, we deem the August 2002 notice of appeal to be a premature appeal from the March 2003 judgment.
CONTENTIONS
Aronoff Brothers contend that summary judgment in favor of Bolton must be reversed because Bolton made misrepresentations to Aronoff that (1) the excess policy would cover the actual loss of rental income from the Canoga property; (2) the excess policy would provide the same coverage as the primary policy; and (3) it gave notice of loss to the excess carriers, when, in fact, it did not do so.
Aronoff Brothers contend that summary judgment in favor of Sherwood must be reversed because Sherwood misrepresented in its insurance binder that the excess policy would cover the actual loss of rental income from the Canoga property. Aronoff Brothers further contend that Sherwood is liable under principles of agency law for misrepresentations it made to Bolton that (1) the excess policy would provide the same coverage as the primary policy; and (2) it gave timely notice to the excess carriers, when, in fact, it did not give notice to the excess carriers until the primary coverage was exhausted. Finally, Aronoff Brothers contend that the trial court erred in denying a continuance of Sherwoods motion to enable it to conduct additional discovery.
DISCUSSION
1. Summary Judgment Law and Standard of Review
A motion for summary judgment "shall be granted if all 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." (Code Civ. Proc., § 437c, subd. (c).) A triable issue of material fact exists only if "the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof." (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850, fn. omitted.) "If a party moving for summary judgment . . . would prevail at trial without submission of any issue of material fact to a trier of fact for determination, then he should prevail on summary judgment." (Id. at p. 855.)
Sherwood and Bolton, as moving parties, "bear[] the burden of persuasion that there is no triable issue of material fact and that [it] is entitled to judgment as a matter of law." (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 850, fn. omitted.) Sherwood and Bolton also bear an initial burden of production to make a prima facie showing. (Ibid.) "A prima facie showing is one that is sufficient to support the position of the party in question. [Citation.]" (Id. at p. 851.) Where, as here, the burden of proof at trial is by a preponderance of the evidence, Sherwood and Bolton "must present evidence that would require a reasonable trier of fact not to find any underlying material fact more likely than not. . . ." (Ibid.) If Sherwood and Bolton carry this burden, the burden of production shifts to Aronoff Brothers "to make a prima facie showing of the existence of a triable issue of material fact." (Id. at p. 850.) Aronoff Brothers must present evidence that would allow a reasonable trier of fact to find the underlying material fact more likely than not. (Id. at p. 852.)
In reviewing an order granting a motion for summary judgment, we independently review the record to determine whether there are triable issues of material fact. (Kids Universe v. In2Labs (2002) 95 Cal.App.4th 870, 878.) In doing so, we view the parties evidentiary submissions in a light most favorable to Aronoff Brothers as the losing party. (Ibid.) We review the ruling not the reasoning and are not bound by the trial courts stated reasons for granting summary judgment. (Ibid.)
2. The Trial Court Properly Granted Summary Judgment in Favor of Bolton on Aronoff Brothers Misrepresentation Claims
Section 1710 of the Civil Code defines both intentional fraud and negligent misrepresentation as deceit. These torts, however, involve different state-of-mind requirements. Fraud is an intentional tort. The elements are: "(1) misrepresentation; (2) knowledge of falsity; (3) intent to defraud, i.e., to induce reliance; (4) justifiable reliance; and (5) resulting damage. [Citations.]" (Cicone v. URS Corp. (1986) 183 Cal.App.3d 194, 200, fn. omitted; see also Civ. Code, § 1710, subd. 1; 5 Witkin, Summary of Cal. Law (9th ed. 1988) Torts, § 676, p. 778.) Thus, the material elements of a cause of action for fraud include the intent to deceive and scienter, which are not elements of negligent misrepresentation. (Anderson v. Deloitte & Touche (1997) 56 Cal.App.4th 1468, 1476.) Instead, " `[w]here the defendant makes false statements, honestly believing that they are true, but without reasonable ground for such belief, he may be liable for negligent misrepresentation, a form of deceit. [Citations.]" (Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, 407-408; see also Civ. Code, § 1710, subd. 2.) An essential element of both negligent misrepresentation and fraud, however, is a false statement.
Civil Code section 1710 provides, in part: "A deceit, . . . , is either: [¶] 1. The suggestion, as a fact, of that which is not true, by one who does not believe it to be true; [¶] 2. The assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true; [& para;] 3. The suppression of a fact, by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact . . . ."
Aronoff Brothers contends that the trial court erred in concluding that it could not establish that Bolton made any false statements to support its fraud or negligent misrepresentation causes of action. Aronoff Brothers argue that its claims are viable for three reasons. First, it presented evidence that Bolton misrepresented the scope of its insurance coverage by assurances that Aronoff Brothers would be entitled to recover for the actual loss of rental income sustained during the repair of the Canoga property. Second, Bolton misrepresented that having a layered policy, that is, a primary and excess policy, would not affect the scope of its coverage. Third, Bolton misrepresented that it would provide notice to the excess insurance carrier. The evidence does not support Aronoff Brothers assertions.
As a matter of law, the trial court properly granted summary judgment. (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 850 [standard of review].) The excess policy and insurance binder that Aronoff Brothers rely on state that rental value is insured for actual loss sustained. This is consistent with Aronoffs statement that Bolton represented the excess policy would cover loss of rental income actually sustained. Thus, Bolton did not make any misrepresentations regarding the coverage for rental value under the excess policy.
Because Bolton made no misrepresentations about the agreed-upon coverage, none of the cases Aronoff Brothers rely on are on point. In those cases, the insurance agent either failed to deliver the agreed-upon coverage (Desai v. Farmers Ins. Exchange (1996) 47 Cal.App.4th 1110, 1119-1120), or negligently represented the scope of the coverage (Paper Savers, Inc. v. Nasca (1996) 51 Cal.App.4th 1090, 1104-1105 [negligent explanation from agent that the endorsement was sufficient to replace all lost or damaged property regardless of the policy limits]; Clement v. Smith (1993) 16 Cal.App.4th 39, 45 [negligent oral assurances from agent that the policy would cover litigation by a specific person]; Free v. Republic Ins. Co. (1992) 8 Cal.App.4th 1726, 1729-1730 [negligent failure to respond to homeowners inquiry concerning adequacy of coverage limits to rebuild home]; Eddy v. Sharp (1988) 199 Cal.App.3d 858, 866 [agent misrepresented the terms of the insurance proposal which led to purchase of policy].)
In fact, this is not a misrepresentation case. Here, the dispute is about the interpretation of Endorsement No. 6. Aronoff Brothers contest the excess insurance carriers interpretation of that endorsement and contend it is entitled to the actual loss of rental income, not the loss of rental income for a "reasonable" period of restoration. (See, e.g., Buxbaum v. Aetna Life & Casualty Co. (2002) 103 Cal.App.4th 434, 443 [explaining general business interruption coverage extends for a reasonable period required to effect repairs].) Whether the excess carriers interpretation of Endorsement No. 6 is correct is an issue to be determined at trial and is not before us on this appeal. Aronoff Brothers, however, cannot keep Bolton in this litigation simply because at trial, the trial court may interpret Endorsement No. 6 as the excess carriers do.
In a letter from the excess carriers claims adjuster to Aronoff Brothers, the claims adjuster writes as follows: "Regarding the rental income, we call your attention to endorsement # 6, page 2 of 2 which states as follows: [¶] B. `THE PERIOD OF RESTORATION MEANS THE PERIOD OF TIME THAT: [¶] a. Begins with the date of direct physical loss or damage caused by or resulting from any cause of loss at the described premises; and [¶] b. ends on the date when the property at the described premises should be repaired, rebuilt, or repaired with reasonable speed and similar quality. [¶] `Period of Restoration includes any increased period required to repair or reconstruct to comply with the minimum standards of any Law, in force at the time or loss, that regulates the construction or repair, or requires the tearing down of any property. [¶] The policy provides for a theoretical, as opposed to an actual, time period for calculating the rental income loss. You are aware of the time line our consultants prepared for reconstruction of a building of like kind and quality on the same location. Their time line included engineering, plan check and process time through the City and totaled 14 months. Given the strict interpretation of the policy, that would be the period of interruption. Considering the turmoil and other peculiarities caused by the Northridge earthquake, we proposed a possible compromise period of 24 months, which gives you 10 extra months for failed temporary repairs, adjustment time, etc. [¶] It is the position of my principals that any time beyond the 24 month compromise would not be reimbursable under the policy."
We reject Aronoff Brothers contention that there is an issue of fact regarding Boltons misrepresentation of notice of loss to the excess carriers. Bolton made no false statement; Bolton gave notice to Sherwood. Sherwood, in turn, gave notice to the primary and excess insurance carriers.
Aronoff Brothers point out that notice to the excess insurance carriers was not timely and should have been given in January 1994, and not in December 1995. Even if this were true, the excess carriers are not asserting a late-notice defense. (See footnote No. 9, ante.) Rather, the excess carriers position is that it is not responsible for the delay in the repair of the Canoga property during the period it did not have notice of the claim. Ordinarily, during this period the excess insurance carrier would not be involved if the loss on the Canoga property did not exceed the primary coverage. In fact, it is undisputed that the parties did not anticipate that the loss would exceed the primary coverage. In any event, the excess insurance carriers position related to the delay in repair and/or demolition and restoration of the Canoga property is based upon its interpretation of the reasonable period of restoration in Endorsement No. 6 of the excess policy. The excess carriers position is that 24 months is reasonable, factoring in 14 months for rebuilding and 10 additional months for delay, beginning from the date of the earthquake. Aronoff Brothers, however, seek 72 months of rental income for the reasonable restoration period, based on the time it actually took to repair the Canoga property. This disputed issue between Aronoff Brothers and the excess carriers will be resolved at trial. But, with respect to Bolton, the undisputed evidence shows that however the issue is resolved at trial, Aronoff Brothers cannot allege that it suffered any damage by what it perceived to be a delay in notice to the excess carriers. (Cicone v. URS Corp., supra, 183 Cal.App.3d at p. 200 [stating elements of fraud]; Bily v. Arthur Young & Co., supra, 3 Cal.4th at pp. 407-408 [stating elements of negligent misrepresentation].)
As for the remaining alleged misrepresentation, that is, Boltons representation that the excess carriers were solvent, even if such a representation were made, Aronoff Brothers again has failed to raise a triable issue of fact that it can establish it suffered damages from the alleged misrepresentation. (Cicone v. URS Corp., supra, 183 Cal.App.3d at p. 200; Bily v. Arthur Young & Co., supra, 3 Cal.4th at pp. 407-408.) The evidence shows that the dispute here is not that the excess carriers cannot pay on the excess policy, but rather the amount it will pay based on its interpretation of the excess policy.
In sum, Bolton made no misrepresentations to Aronoff or Aronoff Brothers. Therefore, it cannot be found liable for fraud or negligent misrepresentation. The trial court had no choice but to grant summary judgment on these causes of action. (Code Civ. Proc., § 437c, subd. (c).)
3. The Trial Court Properly Granted Summary Judgment in Favor of Sherwood
a. Aronoff Brothers Misrepresentation Claims Fail As a Matter of Law
Seeking reversal of the summary judgment in favor of Sherwood, Aronoff Brothers appear to have all but abandoned its pleaded theory that Sherwood made misrepresentations to Aronoff Brothers, asserting only one misrepresentation directly attributable to Sherwood. Instead, Aronoff Brothers now contend Sherwoods liability is based on statements Sherwood made to Bolton acting as Aronoff Brothers agent. Neither theory raises a triable issue of material fact.
(1) Sherwood Did Not Make Any False Statements to Aronoff Regarding Insurance Coverage
Aronoff Brothers point to the insurance binder as evidence of Sherwoods false statement. The insurance binder refers to coverage for "Actual Loss Sustained." That statement is true. There is no merit to Aronoff Brothers argument that the representation on the insurance binder precludes any other limitations or exclusions listed in the policy. An insurance binder is not intended to include, nor could it include, all the provisions of the policy. (National Emblem Ins. Co. v. Rios (1969) 275 Cal.App.2d 70, 76.) Because the insurance binder was accurate, Aronoff Brothers have failed to raise a triable issue of fact.
Aronoff admits in his deposition Sherwoods brokers made no representation about the scope of insurance coverage.
(2) No Evidence of a False Statement Communicated to Bolton as Aronoff Brothers Agent
Aronoff Brothers now base Sherwoods liability on purportedly false statements it made to Bolton. These statements are: (1) the excess policy would follow the same form as the primary policy; and (2) Sherwood would give notice of loss to the excess carriers. We reject this theory of liability for several reasons.
As a preliminary matter, Aronoff Brothers suit against Sherwood is not a moving target. "`The pleadings identify the issues to be considered on a motion for summary judgment. [Citation.] The defendant must present facts to negate [an essential element of] each claim as framed by the complaint or to establish a defense." (Federico v. Superior Court (1997) 59 Cal.App.4th 1207, 1210 [emphasis added].) The fraud and negligent misrepresentation causes of action in the complaint allege that Sherwood made representations to Aronoff Brothers, not to Bolton. Sherwood relied on this pleaded theory of liability when it moved for summary judgment. Aronoff Brothers cannot change its theory simply to avoid summary judgment.
Aronoff Brothers contend this is not a new theory because it need not show that Sherwood made a direct misrepresentation as long as it can show Sherwood made a misrepresentation to Bolton, acting as its agent. In support of this position, Aronoff Brothers rely on Anderson v. Thacher (1946) 76 Cal.App.2d 50. Its reliance is misplaced. Anderson did not involve misrepresentations to an agent of a third party. Anderson filed suit against Thacher, who acted as her agent in a real estate transaction, and upon whom she relied on to her detriment. (Id. at pp. 66-68.) Andersons lawsuit is the same as the one the Aronoff Brothers have filed against Bolton, not Sherwood.
In any event, even under Aronoff Brothers agency theory of liability, summary judgment is mandated. Sherwood did not make any misrepresentations to Bolton regarding the interaction of the primary and excess policy or the loss notice requirements. Aronoff Brothers point to Boltons testimony that it "might have told" Aronoff that regardless of how many levels of insurance or how many carriers, the policy would function as if it were one policy from one insurance carrier. Even if this were so, Bolton did not testify that Sherwood made the statement. Aronoff Brothers also rely on Aronoffs declaration. Aronoff states that Bolton informed him Sherwood advised that even though the insurance would be placed with various different companies and layers, it would function as only one policy from one insurance carrier. Aronoffs statement is inadmissible hearsay. (Evid. Code, § 1200.) Even if Aronoffs statement were competent evidence, it does not raise an issue of fact. Sherwoods representation to Bolton is true. It is indisputable that the excess policy is a form following policy, and that it also covered rental income for the loss actually sustained. Aronoff Brothers dispute here is not with the representations regarding the excess policy terms, it is with the excess carriers interpretation of those terms. This cannot be the basis of a fraud or negligent misrepresentation claim because there is no false statement, an essential element of either claim. (Cicone v. URS Corp., supra, 183 Cal.App.3d at p. 200; Bily v. Arthur Young & Co., supra, 3 Cal.4th at pp. 407-408; Civ. Code, § 1710.)
Sherwood raised an objection to this testimony at the trial court in its reply brief. Sherwood, however, did not request a ruling on the objection at the time of the hearing, and the trial court failed to rule on the objections, so they are deemed waived. (Sharon P. v. Arman Ltd. (1999) 21 Cal.4th 1181, 1186, fn. 1, disapproved on other grounds by Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 853, fn. 19.) Therefore, we consider this evidence. (Swat-Fame, Inc. v. Goldstein (2002) 101 Cal.App.4th 613, 623-624.)
Aronoff Brothers also alleged that Sherwood represented that the excess carriers were solvent. Even if such a representation were made, the evidence shows that the dispute here does not involve the excess carriers inability to pay on the excess policy. (See footnote No. 9, ante.) Thus, this constitutes a preponderance of evidence that Aronoff Brothers cannot prove damages arising from this alleged misrepresentation. (Cicone v. URS Corp., supra, 183 Cal.App.3d at p. 200 [stating essential elements of intentional misrepresentation]; Bily v. Arthur Young & Co., supra, 3 Cal.4th at pp. 407-408 [stating elements of negligent misrepresentation]; Civ. Code, § 1710.)
Finally, we reject Aronoff Brothers contention that because Bolton communicated to Aronoff that Sherwood would give notice to the excess carriers, Sherwood is liable for misrepresentation. There is no evidence in the record that Sherwood and Bolton discussed notice to the excess carriers. The cited testimony simply confirms Boltons belief that Sherwood would provide notice to the excess carriers. Moreover, it is indisputable that Sherwood gave notice to the excess carriers. Thus, there was no false representation, an essential element of either Aronoff Brothers fraud or negligent misrepresentation claim. (Cicone v. URS Corp., supra, 183 Cal.App.3d at p. 200; Bily v. Arthur Young & Co., supra, 3 Cal.4th at pp. 407-408; Civ. Code, § 1710.)
Aronoff Brothers also apparently seek to hold Sherwood liable for fraudulently concealing that between January 1994 and December 1995, Sherwood did not tell Bolton that it had not notified the excess carriers. "`[T]he elements of an action for fraud and deceit based on concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage. [Citation.] [Citation.]" (Williams v. Wraxall (1995) 33 Cal.App.4th 120, 131, fn. 9; see also Civ. Code, § 1710, subd. 3.)
This cause of action fails because Aronoff Brothers cannot establish that it suffered any damage from the alleged concealment. The evidence shows that the excess carriers are not asserting a late-notice defense. (See footnote No. 9, ante.) Thus, Aronoff Brothers cannot establish an essential element of its cause of action.
Having failed to establish any triable issues regarding Sherwoods representations, Aronoff Brothers was unable to meet its burden to defeat Sherwoods summary judgment motion. Accordingly, the trial court properly granted the motion and entered judgment in favor of Sherwood. (Code Civ. Proc., § 437c, subd. (c).)
b. The Trial Court Did Not Abuse its Discretion in Denying Aronoff Brothers Request for Continuance
Aronoff Brothers contend the trial court erred in denying its request for a continuance to pursue discovery under Code of Civil Procedure section 437c, subdivision (h). Aronoff Brothers complain that this order was an abuse of discretion because it did not have an opportunity to obtain Sherwoods claim files and to depose Sherwoods broker, Fran Maliszewksi. Aronoff Brothers assert that the trial court had no discretion to deny its request for continuance under the statute. We disagree.
Code of Civil Procedure section 437c, subdivision (h) provides in part: "If it appears from the affidavits submitted in opposition to a motion for summary judgment or summary adjudication or both that facts essential to justify opposition may exist but cannot, for reasons stated, then be presented, the court shall deny the motion, or order a continuance to permit affidavits to be obtained or discovery to be had or may make any other order as may be just."
A party seeking a continuance under this section "must show: (1) the facts to be obtained are essential to opposing the motion; (2) there is reason to believe such facts may exist; and (3) the reasons why additional time is needed to obtain these facts." (Wachs v. Curry (1993) 13 Cal.App.4th 616, 623.) Because the party need not show that essential evidence does exist, only that it may exist, continuances under Code of Civil Procedure section 437c, subdivision (h) are to be liberally granted. (Bahl v. Bank of America (2001) 89 Cal.App.4th 389, 395.) The decision to grant a continuance, however, is not mandatory, but within the trial courts discretion. (Frazee v. Seely (2002) 95 Cal.App.4th 627, 633-634.)
In opposition to Sherwoods summary judgment motion, Aronoff Brothers counsel filed a declaration in which he stated that he has been requesting Sherwoods underwriting files for many months. He further stated that he had "set the deposition of Sherwoods lead underwriter, Fran Maliszewski, but had not yet been permitted to take such deposition." Counsel stated, "[q]uite obviously, the documents and testimony will undoubtedly contain information that is relevant and critical to the opposition to Sherwoods Motion."
The trial court did not abuse its discretion in concluding that this declaration does not satisfy even the minimal requirements of Code of Civil Procedure section 437c, subdivision (h). The declaration identifies no specific facts Aronoff Brothers expected to discover that would be essential in opposing the summary judgment. While the declaration identified who Aronoff Brothers sought to depose and what documents it needed, it did not identify why this discovery was relevant in opposing the motion. It is not sufficient merely to indicate further discovery is contemplated or necessary. The statute makes it a condition that the party moving for a continuance show essential "facts" to oppose the motion may exist. Aronoff Brothers failed to do so. Under these circumstances, the trial court did not abuse its discretion in refusing to grant a continuance.
DISPOSITION
The judgment in favor of Bolton is affirmed. The judgment in favor of Sherwood is affirmed. Costs on appeal are awarded to Bolton and Sherwood.
We Concur: KLEIN, P.J., and KITCHING, J.