Opinion
B294798
04-10-2020
FRANKIE CABRAL et al., Plaintiffs and Appellants, v. PUBLIC STORAGE, Defendant and Respondent.
Law Offices of Dale E. Washington and Dale E. Washington for Plaintiff and Appellant. Keker, Van Nest & Peters, Erin E. Meyer and Christopher S. Sun for Defendant and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Los Angeles County Super. Ct. No. BC648032) APPEAL from judgment of the Superior Court of Los Angeles County, David S. Cunningham, Judge. Affirmed. Law Offices of Dale E. Washington and Dale E. Washington for Plaintiff and Appellant. Keker, Van Nest & Peters, Erin E. Meyer and Christopher S. Sun for Defendant and Respondent.
Plaintiffs Frankie and Michael Cabral commenced this action for breach of contract, insurance bad faith, conversion, and negligence after defendant Public Storage disposed of personal belongings that plaintiffs had placed in a leased storage unit. Plaintiffs appeal from summary judgment in favor of Public Storage, and also challenge the court's sustaining of a demurrer without leave to amend based on a limitations provision contained in plaintiffs' Lease Agreement. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
The Operative Complaint
Plaintiffs filed the initial complaint on January 24, 2017, against Public Storage and New Hampshire Insurance Company (New Hampshire) for breach of contract, insurance bad faith, and conversion. The court sustained Public Storage's demurrer to all three causes of action but granted plaintiffs leave to amend. Plaintiffs filed the operative first amended complaint alleging the same causes of action and adding a new cause of action for negligence. Based on a settlement agreement, the court subsequently dismissed New Hampshire from the lawsuit.
In the operative complaint, plaintiffs alleged that Frankie helped her son, Michael, rent a self-storage unit at a Public Storage facility so he could store household goods and woodworking supplies. After they arrived at a Public Storage facility in Fremont, a Public Storage manager stated the price per storage unit and told Frankie she had to choose between insurance plans ranging in coverage between $5,000 and $3,000. Frankie selected $3,000 in coverage and paid for the rental unit and insurance at the same time. When handing Frankie a lease agreement and insurance documents, the manager "indicated where to initial and where to sign in a rushed process which did not afford Frankie any opportunity to read any part of the rental agreement."
Plaintiffs alleged that New Hampshire, as the insurance company under the policy, appointed PSCC, Inc. (PSCC) as its producer and claims adjuster, and that PSCC and Public Storage "are one and the same for purposes of the wrongdoing complained of."
Around July 6, 2015, a Public Storage manager accused Michael of violating facility rules and informed plaintiffs they were prohibited access except for a supervised visit to vacate their belongings on July 10, 2015. On July 11, 2015, Public Storage employees broke into the unit, "stole whatever property had economic value and discarded the rest."
Frankie made a claim for burglary and vandalism under the storage unit insurance with PSCC. New Hampshire's claims investigators denied Frankie's claim after accepting a Public Storage manager's statement that the unit was repossessed as an eviction.
In the breach of contract cause of action, plaintiffs alleged PSCC breached the insurance agreement by failing to investigate and later denying plaintiffs' insurance claim. In the insurance bad faith cause of action, plaintiffs alleged PSSC did not comply with its duties of disclosing all benefits, inspecting claims, and creating an investigatory record of its coverage investigation.
In the conversion cause of action, plaintiffs alleged Public Storage destroyed Michael's personal property. In the final cause of action for negligence, plaintiffs alleged Public Storage had a duty to provide them "space with normal ingress and egress," which it breached by locking plaintiffs out. Plaintiffs were damaged in the amount of the loss of personal property. The Lease Agreement, Addendum, and Certificate of Storage Insurance
Attached to the operative complaint were a Lease Agreement, an Insurance Addendum, and a Certificate of Storage Insurance. The Lease Agreement stated in part: "4. APPLICABLE LAW; JURISDICTION; VENUE; TIME TO BRING CLAIMS. . . . Any claim, demand, or right of Occupant . . . that arises out of this Lease/Rental Agreement, or the storage of property hereunder (including, without limitation, claims for loss or damage to stored property) shall be barred unless Occupant commences an action . . . within twelve (12) months after the date of the act, omission, inaction or other event that gave rise to such claim, demand, right or defense." (Italics added.)
Under the Insurance Addendum, the tenant agreed to insure stored property in a rental unit and was informed that he or she may purchase insurance underwritten by New Hampshire. PSCC was identified as a producer for New Hampshire.
The Certificate of Storage Insurance provided evidence of coverage under a New Hampshire policy for all "personal property while in storage within the enclosed storage space described in the Rental Agreement." The certificate defined "'we,' 'us' and 'our'" as "the Company providing this insurance," and defined "Owner" as "the owner, landlord or operator of the self-storage facility." The certificate stated that "[n]o one may bring a legal action against us [the Company providing insurance, i.e. New Hampshire] unless there has been full compliance with all the terms of this insurance and such action is brought within two years after the date on which the physical loss or damage occurred." The Demurrer, Opposition, and Reply
In its demurrer to the conversion and negligence causes of action in plaintiffs' operative complaint, Public Storage contended the claims were barred by the 12-month limitations period set forth in the Lease Agreement. Plaintiffs' claims accrued on July 11, 2015, when Public Storage disposed of Michael's property. Based on the limitations provision, plaintiffs were required to commence a lawsuit no later than July 11, 2016. Because the initial complaint was filed on January 24, 2017, plaintiffs' claims arising from the lease were time-barred.
In their opposition to the demurrer, plaintiffs argued the limitations provision in the Lease Agreement was unenforceable because it was unconscionable, ambiguous, lacking in mutuality, and was part of an adhesion contract. The provision referred to a "claim," which was ambiguous and only applied to actions in small claims court. They also contended the Certificate of Storage Insurance was integrated into the Lease Agreement and created another ambiguity by separately setting forth a two-year limitations provision. Finally, plaintiffs argued the adhesion contract sought to abrogate their statutory rights under unlawful detainer statutes, which provided a three- or four-year statute of limitations.
Hearing and Decision on the Demurrer
Public Storage filed a reply, and the court heard argument on its demurrer. Following argument, the court sustained the demurrer without leave to amend, finding the limitation clause in the lease was valid. The court rejected plaintiffs' arguments against enforcing the clause for three reasons. First, the limitations provision was not unconscionable, and it provided a longer time to commence an action than other judicially enforced provisions. Second, the term "claim" was not ambiguous, and the Lease Agreement clearly distinguished its limitations on claims under the lease from the Certificate of Storage Insurance's limitations on insurance claims. The Lease Agreement's reference to the New Hampshire policy did not render the terms of the policy applicable to the Lease Agreement. Third, plaintiffs' did not specify a provision within the unlawful detainer statutes to establish a separate statute of limitations that could otherwise limit the application of contract law. The court also noted that it did not grant plaintiffs permission to plead a new cause of action for negligence in the amended complaint.
Public Storage's Motion for Summary Judgment
Public Storage filed a motion for summary judgment, or in the alternative, summary adjudication on the remaining causes of action for breach of contract and insurance bad faith. Public Storage argued that it could not be held liable on the causes of action because it was not contractually obligated to provide insurance coverage under the New Hampshire policy.
Public Storage submitted two employee declarations in support of its motion. According to Capri Haga, Public Storage's Senior Vice President of Risk Management, Public Storage and PSCC do not share a corporate affiliation with New Hampshire or its claims manager, Sedgwick Claims Management Services, Inc. (Sedgwick). Plaintiffs purchased an insurance policy that was underwritten by New Hampshire, not Public Storage. As part of a captive reinsurance structure, New Hampshire's risk was fully reinsured by PS Insurance Company—Hawaii, Ltd. (PS Insurance Company). PS Insurance Company and PSCC are Public Storage affiliates. The reinsurance agreement between New Hampshire and PS Insurance Company had no effect on New Hampshire's direct obligation to insureds under its policy. As the insurance broker for the policy, PSCC developed marketing strategies and materials, trained Public Storage employees on the insurance program, and provided information to tenants when they applied for the program. PSCC was not a party to plaintiff's insurance agreement with New Hampshire, has never been an insurer under the insurance program, and has never agreed to provide insurance to plaintiffs. Plaintiffs submitted an insurance claim to New Hampshire based on allegations of theft. "After determining that the goods were removed as part of a lease termination, Sedgwick . . . denied the insurance claim."
According to Daniel Zenzano, Public Storage's District Manager in charge of the Fremont facility, Public Storage terminated plaintiffs' lease after they continuously violated rules prohibiting after-hours access. Though they were reminded about the violations, plaintiffs continued to access the storage facility in the middle of the night. Public Storage removed plaintiffs' belongings as part of a lease termination.
Plaintiffs' Opposition and Public Storage's Reply
Plaintiffs conceded the Lease Agreement specified that Public Storage was not insuring their belongings, and they understood the Certificate of Storage Insurance clarified that New Hampshire provided insurance under the policy. Nevertheless, plaintiffs argued there was a triable issue of fact whether Public Storage was a "managing agent with direct liability" under New Hampshire's policy. Based on Delos v. Farmers Group, Inc. (1979) 93 Cal.App.3d 642 (Delos) and Tran v. Farmers Group, Inc. (2002) 104 Cal.App.4th 1202 (Tran), plaintiffs contended that Public Storage wielded complete control over the insurance agreement through PSCC as "managing agent" for New Hampshire.
Plaintiffs submitted a Producer's Agreement between PSCC and New Hampshire wherein PSCC agreed to provide insurance brokerage and management services for New Hampshire. As an independent contractor, PSCC had no authority outside of the express powers granted in the agreement. PSCC could process and record selections indicated on the insureds' applications for insurance; quote and issue certificates of insurance with New Hampshire's rate, rule and form filings; collect and account for premium payments; provide policy information to tenants; refer insurance claims to Sedgwick; and maintain records evidencing purchases of insurance. PSCC remained "free to exercise independent judgment as to the time, place and manner of soliciting insurance and servicing insureds."
In its reply, Public Storage agreed that it owned PSCC, but argued that plaintiffs could not establish alter ego liability through PSCC because it did not share a unity of interest with New Hampshire. Public Storage also argued that plaintiffs failed to establish that an inequitable result would follow if the court refused to impose alter ego liability, particularly when plaintiffs already settled their contract and insurance bad faith claims with New Hampshire.
The Trial Court's Ruling
The court granted summary judgment in favor of Public Storage. The court found that Public Storage met its initial burden of demonstrating that it cannot be held liable under the insurance agreement because it was not a party to the agreement. The evidence did not establish that Public Storage or any of its affiliates was anything but an insurance agent. The agency relationship between New Hampshire and PSCC could not bind Public Storage for causes of action for breach of contract or insurance bad faith because PSCC was not a party to the contract. (See Filippo Industries, Inc. v. Sun Ins. Co. (1999) 74 Cal.App.4th 1429, 1442-1444 (Filippo).) The court also found that plaintiffs had already obtained redress from New Hampshire on the two causes of action. The court entered judgment in favor of Public Storage on all four causes of action, and plaintiffs filed a timely notice of appeal.
DISCUSSION
1. Demurrer
Plaintiffs challenge the court's sustaining of Public Storage's demurrer to the conversion and negligence causes of action. On a number of grounds, they contend the Lease Agreement and its 12-month limitations provision were invalid. The contentions are unavailing.
A. Standard of Review
"We review the ruling sustaining the demurrer de novo, exercising independent judgment as to whether the complaint states a cause of action as a matter of law. [Citation.] We give the complaint a reasonable interpretation, assuming that all properly pleaded material facts are true, but not assuming the truth of contentions, deductions, or conclusions of law. [Citation.]" (Kan v. Guild Mortgage Co. (2014) 230 Cal.App.4th 736, 740.) "When a demurrer is sustained without leave to amend, 'we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. . . .' A plaintiff may show for the first time on appeal how amendment would cure the complaint's defects." (Id. at pp. 740-741.)
B. The Limitations Period is Reasonable
Plaintiffs contend the 12-month limitations provision should not be enforced because it is unreasonable. We disagree.
"'California courts accord contracting parties substantial freedom to modify the length of the statute of limitations.'" (Zamora v. Lehman (2013) 214 Cal.App.4th 193, 206.) Courts will enforce an agreed upon limitations period that is shorter than what is otherwise provided by statute if the limitations period is reasonable. (Moreno v. Sanchez (2003) 106 Cal.App.4th 1415, 1430 (Moreno).) "'Reasonable' in this context means the shortened period nevertheless provides sufficient time to effectively pursue a judicial remedy." (Ibid.) "'It is a well-settled . . . that the parties to a contract may stipulate therein for a period of limitation, shorter than that fixed by the statute of limitations, and that such stipulation violates no principle of public policy, provided the period fixed be not so unreasonable as to show imposition or undue advantage in some way. [Citations.]'" (Ibid.)
"[M]ost reported decisions upholding shortened periods involve straightforward commercial contracts plus the unambiguous breaches or accrual of rights under those contracts." (Moreno, supra, 106 Cal.App.4th at p. 1430, citing Hambrecht & Quist Venture Partners v. American Medical Internat., Inc. (1995) 38 Cal.App.4th 1532, 1548 (Hambrecht), and Capehart v. Heady (1962) 206 Cal.App.2d 386, 388 (Capehart).) In such cases, "'"the time is not so short as to work a practical abrogation of the right of action, and the action is not barred before the loss or damage can be ascertained. . . ." [Citation.]' [Citation.]" (Wind Dancer Production Group v. Walt Disney Pictures (2017) 10 Cal.App.5th 56, 73-74.)
The limitations provision in this case was clear. Plaintiffs were informed they had one year to commence an action for a claim based on lost or damaged property covered under the lease. The one-year period afforded plaintiffs adequate time to determine the damages resulting from the loss of stored property and to file a claim. The provision is not unreasonable as a matter of law. (Compare Hambrecht, supra, 38 Cal.App.4th at p. 1548 [upholding three- and six-month limitations period for breach of contract cause of action]; Capehart, supra, 206 Cal.App.2d at p. 388 [upholding three-month limitations period in lease agreement].) "[T]he fact that a contractual limitation period operates upon the claims of one party to the contract and not to the other, does not make the period unreasonable. Particularly is this so in a lease, where without such a reasonable limitation the lessor might have his property tied up for an unlimited period." (Capehart, supra, at p. 390.)
C. The Agreement and Provision are Not Unconscionable
Plaintiffs alternatively contend that the Lease Agreement and limitations provision are unconscionable. Again, we disagree.
Civil Code section 1670.5, subdivision (a) provides that a court may refuse to enforce a contract or clause if it finds as a matter of law that the "contract or any clause of the contract to have been unconscionable at the time it was made." The issue whether a contract or provision is unconscionable is a question of law. (Morris v. Redwood Empire Bancorp (2005) 128 Cal.App.4th 1305, 1316 (Morris).)
There are two approaches for determining whether a contract or provision is unconscionable. (Perdue v. Croker National Bank (1985) 38 Cal.3d 913, 925 fn. 9; Morris, supra, 128 Cal.App.4th at p. 1317.)
Under the first approach, the court determines whether the contract is "adhesive," i.e., whether it utilizes standardized language and is imposed by the party of superior bargaining strength on the subscribing party. (Morris, supra, 128 Cal.App.4th at p. 1317, fn. 5, quoting Armendariz v. Foundation Health Psychare Services, Inc. (2000) 24 Cal.4th 83, 113.) If the court makes this finding, it must then determine whether the contract was outside the "'reasonable expectations of the [weaker] part[y],'" or was "'unduly oppressive or "unconscionable."' [Citation.]" (Morris, supra, at p. 1317.) "Oppression refers not only to an absence of power to negotiate . . . but also to the absence of reasonable market alternatives." (Id. at p. 1320.)
Plaintiffs' argument fails under this approach. Even assuming the Lease Agreement constitutes an adhesion contract, plaintiffs have not alleged that the limitations period fell outside the reasonable expectations of a consumer, that the provision constitutes an oppressive term, or that they had no meaningful choice of reasonably available storage services. (See Morris, supra, 128 Cal.App.4th at p. 1320.)
Nor have plaintiffs demonstrated that it was unrealistic for them to search for another facility. (Compare Tunkl v. Regents of University of California (1963) 60 Cal.2d 92 [sick patient seeking hospital care cannot be expected to shop around to find better terms on admittance form]; Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1071 [employees may not realistically refuse a job due to an arbitration agreement].)
Plaintiffs' argument also fails under the second approach, which requires establishing both procedural and substantive unconscionability. (Morris, supra, 128 Cal.App.4th at p. 1317.) Procedural unconscionability focuses on oppression or surprise due to unequal bargaining power. (Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1245.) Substantive unconscionability refers to a provision involving terms "'that are so one-sided as to "shock the conscience," or that impose harsh or oppressive terms.' [Citation.]" (Morris, supra, at p. 1322.) In light of our finding that the provision is reasonable, a fortiori the limitations provision is not substantively unconscionable. (See Soltani v. Western & Southern Life Ins. Co. (9th Cir. 2001) 258 F.3d 1038, 1043-1044 [California is in agreement with other jurisdictions "that [a] six-month limitation provision is not substantively unconscionable"].)
Plaintiffs' contention that a reduction in the statute of limitations in and of itself establishes substantive unconscionability is unsupported by their cited authority. (See Magno v. The College Network, Inc. (2016) 1 Cal.App.5th 277, 288-291 [arbitration provision's shortened limitations period provided "another indicator of substantive unconscionability" when analyzing forum selection clause]; Penilla v. Westmont Corp. (2016) 3 Cal.App.5th 205, 221-222 [shortened arbitral limitations period was one of three provisions tending to support a finding of substantive unconscionability]; Ellis v. U.S. Security Associates (2014) 224 Cal.App.4th 1213, 1226 [shortened limitations period "would thwart one aspect of the FEHA that is critical . . . : the administrative enforcement by the DFEH itself"].)
D. Plaintiffs Have Forfeited the Remaining Contentions on the Demurrer Ruling
Plaintiffs' opening and reply briefs reassert two arguments they raised below: the limitations provision violates landlord tenant law, and the Lease Agreement contains ambiguous terms. For the first time on appeal, plaintiffs also request that we extend the contractual statute of limitations based on 20th Century Ins. Co. v. Superior Court (2001) 90 Cal.App.4th 1247.
Rather than focus on the trial court's reasons for rejecting their landlord tenant and ambiguity arguments, plaintiffs have reasserted the same arguments without applicable legal authority or meaningful analysis. We deem any asserted error regarding the judgment on these claims forfeited. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564; Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785 ["When an appellant fails to raise a point, or asserts it but fails to support it with reasoned argument and citations to authority, we treat the point as waived"].) Plaintiffs have also forfeited their request for this court to extend the limitations period. (In re Marriage of Nassimi (2016) 3 Cal.App.5th 667, 695["'"theories not raised in the trial court cannot be asserted for the first time on appeal"'"].)
With regard to the landlord tenant issue, plaintiffs state nearly verbatim the same argument they made in their opposition to the demurrer. In doing so, plaintiffs cite to a statute (Code Civ. Proc., § 1159) and cases (Schubert v. Lowe (1924) 193 Cal. 291, 295; Palm Property Investments, LLC v. Yadegar (2011) 194 Cal.App.4th 1419, 1424-1425; Drybread v. Chipain Chiropractic Corp. (2007) 151 Cal.App.4th 1063, 1072) that do not address a party's ability to contract for a shorter limitations period or otherwise discuss a statute of limitations for an unlawful detainer proceeding.
With regard to the ambiguity issue, plaintiffs have cited nothing in the Lease Agreement to support their contention that the Lease Agreement integrated the Insurance Addendum, Certificate of Storage Insurance, or any of their terms into the Lease Agreement. Plaintiffs' argument ignores the full language of the Lease Agreement's limitations provision that any "claim, demand, or right of Occupant . . . that arises out of this Lease/Rental Agreement" must be commenced within one year. That limitations provision is clearly distinct from claims arising under the New Hampshire policy, which provides that "[n]o one may bring a legal action against [New Hampshire] unless there has been full compliance with all the terms of this insurance and such action is brought within two years after the date on which the physical loss or damage occurred."
Thus, the 12-month limitations provision is reasonable and enforceable. Because plaintiffs cannot amend the complaint to bring their causes of action within the 12-month limitations period, we discern no abuse of discretion in sustaining the demurrer without leave to amend. (Das v. Bank of America, N.A. (2010) 186 Cal.App.4th 727, 745.)
2. Summary Judgment
Though plaintiffs challenge the court's summary judgment ruling, their appellate briefs do not contain citations to the record. "'"An appellate brief 'should contain a legal argument with citation of authorities on the points made. If none is furnished on a particular point, the court may treat it as [forfeited], and pass it without consideration.' [Citation.]" [Citation.] It is not the function of this court to comb the record looking for the evidence or absence of evidence to support [a party's] argument. [Citations.]' [Citations.]" (Garcia v. Seacon Logix, Inc. (2015) 238 Cal.App.4th 1476, 1489; see Cal. Rules of Court, rule 8.204(a)(1)(C).) We therefore deem their contentions forfeited.
Even if not forfeited, plaintiffs' contentions are without merit. A motion for summary judgment is properly granted if "there is no triable issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." (Code Civ. Proc., § 437c, subd. (c).) A defendant moving for summary judgment must present evidence that either conclusively negates an element of the plaintiff's cause of action or establishes that the plaintiff does not possess, and cannot reasonably obtain evidence necessary to establish an element of the claim. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 853-854.) If the defendant meets this burden, the burden shifts to the plaintiff to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto. (Code Civ. Proc., § 437c, subd. (p)(2).) We review the record de novo. (Miller v. Department of Corrections (2005) 36 Cal.4th 446, 460.) "We affirm the trial court's decision if it is correct on any ground [that] the parties had an adequate opportunity to address in the trial court, regardless of the reasons the trial court gave." (Jameson v. Pacific Gas & Electric Co. (2017) 16 Cal.App.5th 901, 909.)
As a general rule, a plaintiff may only bring causes of action for breach of an insurance contract and breach of the covenant of good faith and fair dealing against an insurer that is a party to the contract. (Tran, supra, 104 Cal.App.4th at p. 1216; Filippo, supra, 74 Cal.App.4th at p. 1443; Tri-Continent Internat. Corp. v. Paris Savings & Loan Assn. (1993) 12 Cal.App.4th 1354, 1359.) The insurer's agents and employees who are not parties to the insurance contract cannot be sued. (Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566, 576; Filippo, supra, 74 Cal.App.4th at pp. 1442-1444; Croskey et al., Cal. Practice Guide: Insurance Litigation (The Rutter Group 2019) ¶ 12:98, p. 12A-38 ["no bad faith action lies against the insurer's officers, agents and employees (e.g., adjusters, investigators, claims managers, house counsel)"].)
Here, it is undisputed that Public Storage is not a party to the insurance agreement between Frankie and New Hampshire. Though PSCC is named in the agreement, it is clearly identified as a producer and not a principal. PSCC, and by extension Public Storage, cannot be held liable under the terms of the insurance agreement or the implied covenant of good faith and fair dealing. (Filippo, supra, 74 Cal.App.4th at p. 1442 [agent not liable under insurance contract or bad faith when its signature as agent and not as principal appears on the agreement].)
"'Producer' is not a statutory term, but appears to be a term of art in the insurance industry referring to persons or firms who 'produce'—that is, generate or obtain—business for insurers. [Citation.] For our purposes, it means brokers and agents." (Krumme v. Mercury Ins. Co. (2004) 123 Cal.App.4th 924, 932, fn. 4.)
Notwithstanding the undisputed fact that Public Storage is not a party to the insurance agreement, plaintiffs contend it should be liable under an alter ego theory of liability. To establish such theory, plaintiffs must raise a triable issue that (1) there is such unity of interest and ownership that the corporate forms between Public Storage and New Hampshire cease to exist as separate entities; and (2) if the acts are treated as those of New Hampshire alone, an inequitable result will follow. (Tran, supra, 104 Cal.App.4th at p. 1219.) "'[S]ound public policy dictates that imposition of alter ego liability be approached with caution.'" (Ibid.)
Plaintiffs have not shown there is a triable issue of fact that Public Storage is an alter ego of New Hampshire. Aside from the corporate distinction between Public Storage and PSCC, the record makes clear that neither entity shares a corporate affiliation with New Hampshire. Instead, the record establishes an agency relationship whereby PSCC marketed and solicited insurance for the New Hampshire policy. (Ins. Code, §§ 31 [agent defined as "a person authorized, by and on behalf of an insurer, to transact all classes of insurance . . . on behalf of an admitted insurance company"], 35 ["transact" includes solicitation, negotiations preliminary to execution, execution of contract, and transaction of matters subsequent to execution ].) That PSCC could exercise discretion in doing so does not forge a unity of interest or ownership with New Hampshire.
To rebut this showing, plaintiffs have argued that PSCC is New Hampshire's attorney-in-fact under Delos and Tran. Plaintiffs' reliance on those cases is misplaced. Both cases analyzed alter ego theories within the context of an interinsurance exchange whereby insureds (or subscribers) pooled their premiums to insure one another, and an appointed attorney-in-fact administered the policies by setting rates, settling losses, compromising claims, and canceling contracts. (Tran, supra, 104 Cal.App.4th at p. 1208; Delos, supra, 93 Cal.App.3d at p. 652.) In both cases, the defendants were "managerial agents without whom the exchanges could not transact their business . . . . When a reciprocal insurer functions as a mere instrumentality of an attorney-in-fact in the conduct of a unified insurance business, it would be inequitable to permit the attorney-in-fact to escape liability." (Tran, supra, at p. 1220; see Delos, supra, at p. 652.) This case does not involve an appointed attorney-in-fact or an interinsurance exchange.
Finally, plaintiffs have not produced any evidence raising a triable issue as to why not imposing alter ego liability would be inequitable. Plaintiffs have settled their breach of contract and insurance bad faith causes of action with New Hampshire for its denial of plaintiffs' insurance claim, and for its alleged failure to disclose benefits and to create an investigatory record of coverage inspections. (Filippo, supra, 74 Cal.App.4th at pp. 1443-1444.) Further, even if Public Storage somehow abused its corporate privilege by having an ownership interest in PSCC and the company that reinsured New Hampshire's risk (a fact that has not been demonstrated), that fact would "'not require that a court disregard the separate identity of a corporation.'" (Webber v. Inland Empire Investments, Inc. (1999) 74 Cal.App.4th 884, 899; cf. Catholic Mutual Relief Society v. Superior Court (2007) 42 Cal.4th 358, 369 ["An essential feature of reinsurance is that it does not alter the terms, conditions or provisions of the contract of liability insurance between the direct liability insurer and its insured"].) The trial court did not err in granting summary judgment in favor of Public Storage.
DISPOSITION
The judgment is affirmed. Respondent is entitled to costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
WILLHITE, Acting P. J.
We concur:
COLLINS, J.
CURREY, J.