Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of Riverside County No. RIC438945 Edward D. Webster, Judge.
Gray & Prouty and Malcolm D. Schick for Plaintiff and Appellant.
Haight Brown & Bonesteel, Valerie A. Moore and Christopher Kendrick for Defendant and Respondent.
OPINION
Gaut J.
This appeal arises from the trial court granting summary judgment in favor of defendant and respondent Century-National Insurance Company (CN). Plaintiff and appellant Employers Mutual Casualty Company (EMC) contends on appeal that the trial court erred in finding as a matter of law that a CN commercial automobile insurance policy issued to Richard Pettit doing business as Raincross Contractors (Raincross) did not provide coverage for an automobile accident involving EMC’s insured.
EMC asserts that even though Raincross was the sole named insured, the insurance benefits from the CN policy passed by operation of law to Raincross Contractors, Incorporated (Raincross Inc.), as a successor entity of Raincross. EMC claims there was a de facto merger of Raincross and Raincross Inc. Alternatively, EMC contends the trial court should have reformed the CN policy to add Raincross Inc. as an insured. EMC claims the evidence established that CN intended to insure Raincross Inc.
We conclude the trial court did not err in finding that, as a matter of law, the CN policy did not provide coverage in this matter and thus the court properly granted summary judgment in favor of CN. The judgment is affirmed.
1. Factual and Procedural Background
Richard Pettit operated a general contracting business under the fictitious business name of Raincross Contractors.
In 1996, CN issued a commercial automobile insurance policy to Raincross. Up through the time of the accident, the policy was renewed annually, with Raincross listed as the sole insured.
In 1999, Pettit formed Raincross Inc., which did the same type of contracting work as Raincross but held a different contractor’s license. Pettit was president and chief executive officer (CEO) of Raincross Inc.
In June 2000, the fictitious business name registration for Raincross expired. Nevertheless, on October 2, 2001, Raincross renewed its commercial automobile policy (2000/2001 policy), naming Raincross as the sole insured. Two vehicles, a flatbed truck and a trailer, were listed on the policy. The policy provided liability coverage only for vehicles listed on the schedule of covered autos.
The policy also afforded “nonownership liability coverage” for vehicles not owned by the insured, but used in connection with the insured’s business. In order for an individual to be covered under this provision, the individual had to be named as an insured driver on the endorsement. Brent Moffitt was included in the October 2000 endorsement list of covered drivers.
On February 2, 2001, five months after renewal of the CN policy, Pettit purchased a pickup truck. Pettit was the registered owner of the truck. When he purchased the truck, Pettit executed an Agreement to Procure Insurance form, agreeing to add the truck onto his personal auto insurance with AAA. Pettit did not add the truck to the 2000/2001 policy. Pettit permitted Moffitt to drive the truck for business purposes, since Moffitt’s vehicle had been repossessed.
On June 26, 2001, Moffitt was involved in an automobile accident. At the time, he was driving Pettit’s pickup truck to a job site. The other individuals in the accident included Jerry Burden and Silviano Lopez, a Rico Fertilizer (Rico) employee.
Burden made a claim against Lopez’s employer, Rico, for personal injuries. Rico’s insurer, EMC, settled the claim and paid Burden $183,997.27.
In December 2001, Pettit’s wife, Shawn Pettit, requested Pettit’s insurance broker, the Tracy L. Prettyman Agency (Prettyman), to add the truck to the CN policy. Prettyman submitted the request to CN and CN issued an endorsement adding the truck, effective the date of Shawn’s request.
In February 2003, EMC filed a subrogation action against Moffitt and Raincross Inc., alleging that Moffitt caused or contributed to the June 26 accident. A default judgment was entered against Moffitt and Raincross Inc. in the amount of $229,358.86.
As of November 2003, Raincross Inc. had filed for bankruptcy and its corporate status was suspended. Meanwhile, in May 2002, Pettit formed a new corporation, Sycamore Development, Inc.
As a judgment creditor, EMC brought an action against CN under Insurance Code section 11580, subdivision (b)(2), which allows an action to be brought against the insurer of a judgment debtor to recover on a judgment. EMC alleged in its complaint that, at the time of the accident, Moffitt and Raincross Inc. were insured by CN and therefore EMC was entitled to recovery from CN on the judgment.
CN filed an answer to the complaint, denying liability on the ground there was no coverage under the CN policy at the time of the accident.
EMC filed a motion for summary judgment asserting that Moffitt was in the course and scope of his employment with Raincross Inc. at the time of the accident. EMC acknowledged that the truck driven by Moffitt was owned by and registered to Pettit individually and the CN policy was issued to Pettit dba Raincross, not Raincross Inc. EMC also acknowledged the truck was not listed on the CN policy. Nevertheless EMC argued there was coverage under the nonownership provision of the policy because the truck was not owned by Raincross Inc. and, as Raincross’s successor in interest, Raincross Inc. was an insured.
CN filed a cross-motion for summary judgment asserting there was no coverage under CN’s policy because Pettit had only requested coverage of his sole proprietorship, Raincross, and had purchased “specified auto” coverage, but made no request for coverage of the truck. CN further asserted that the undisputed evidence established that reformation of the policy, adding Raincross Inc. as an additional insured, was improper because there was no evidence of mistake in the written insurance contract. Rather, the evidence established the policy conformed to the insurance renewal application submitted by Pettit.
The trial court heard both summary judgment motions on June 15, 2007, and found there was insufficient evidence that CN intended to insure Raincross Inc. Therefore reformation of the policy was thus improper. There was no coverage since the truck was not added as a covered vehicle under the policy and the nonownership liability provision was inapplicable since the insured, Pettit dba Raincross, owned the truck. Accordingly, the trial court denied EMC’s summary judgment motion and granted summary judgment in favor of CN.
2. Summary Judgment Standard of Review
On appeal from a summary judgment entered in favor of the defendant, we review the trial court’s decision de novo, applying the rule that a defendant is entitled to summary judgment if the record establishes as a matter of law that either none of the plaintiff’s asserted causes of action can prevail or the plaintiff cannot establish one or more elements. (Miscione v. Barton Development Co. (1997) 52 Cal.App.4th 1320, 1324-1325; Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 853; Code of Civil Procedure section 437c, subdivision (o).)
“The first step of the review begins with an analysis of the pleadings, because ‘[t]he pleadings define the issues to be considered on a motion for summary judgment.’ [Citation.] We next evaluate the moving defendant’s effort to meet its burden of showing that plaintiff’s cause of action has no merit or that there is a complete defense to it. Once the defendant has met that burden, the burden shifts to the plaintiff to show that a triable issue of material fact exists as to its complaint. If the filings in opposition raise triable issues of material fact the motion must be denied; if they do not, the motion must be granted [citations].” (Miscione v. Barton Development Co., supra, 52 Cal.App.4th at p. 1325; Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 850.)
“An ‘assertion . . . based solely on conjecture and speculation’ is insufficient to avoid summary judgment. [Citations.]” (Sanchez v. Swinerton & Walberg Co. (1996) 47 Cal.App.4th 1461, 1466, quoting Burton v. Security Pacific Nat. Bank (1988) 197 Cal.App.3d 972, 978.)
3. Successor Liability
Citing Westoil Terminals Co. v. Harbor Ins. Co. (1999) 73 Cal.App.4th 634, 638-639 (Westoil), EMC argues that, even though Raincross was named as the sole insured under the CN policy, the policy benefits passed to Raincross Inc. by operation of law and Raincross Inc. was an insured under the policy. EMC claims that there was a change in the form of ownership of Raincross, from a sole proprietorship to a corporation. This change in form, EMC argues, arose from a de facto merger of Raincross and Raincross Inc., which resulted in Raincross Inc. becoming owner of all of Raincross’s assets, including Raincross’s insurance policy benefits.
In Westoil, an insurance coverage case, the plaintiff sued the defendant insurance companies, claiming the defendants were required to provide the plaintiff with insurance coverage in connection with a negligent pollution claim brought against the plaintiff. The trial court granted the defendant insurers’ motion for summary judgment on the ground there was no coverage because the plaintiff, Westoil Partnership, was not a named insured. Westoil Corporation was the named insured.
The Westoil court reversed on the ground there was a de facto merger between Westoil Corporation and Westoil Partnership. This entitled the successor entity, Westoil Partnership, to the insurance benefits provided to its predecessor, Westoil Corporation. (Westoil, supra, 73 Cal.App.4th at p. 640.) In stating its holding, the Westoil court noted: “The question before us is whether the change in the form of ownership . . . from one of corporate to limited partnership ownership—with the same operations as before, under the same name, with the same equity interests and under the same control—falls within the merger exception referred to in General Accident Ins. Co. and Quemetco Inc. [v. Pacific Auto. Ins. Co. (1994) 24 Cal.App.4th 494]. We hold that it does.” (Westoil, supra, 73 Cal.App.4th at p. 640.) The Westoil court stated that, “a de facto merger passes the benefits of the insurance policies of the predecessor entity to the successor entity.” (Ibid.)
Here, EMC forfeited the successor liability theory by not asserting it in the trial court: “‘The rule is well settled that the theory upon which a case is tried must be adhered to on appeal. A party is not permitted to change his position and adopt a new and different theory on appeal. To permit him to do so would not only be unfair to the trial court, but manifestly unjust to the opposing litigant. [Citation.]’ [Citations.] ‘Application of the doctrine may often be justified on principles of estoppel or waiver.’ [Citation.] . . . Whether the rule is to be applied is largely a question of an appellate court’s discretion. [Citation.]” (Richmond v. Dart Industries, Inc. (1987) 196 Cal.App.3d 869, 874.)
We apply the rule in the instant case because “the opposing party should not be required to defend for the first time on appeal against a new theory that ‘contemplates a factual situation the consequences of which are open to controversy and were not put in issue or presented at the trial’” or during the summary judgment proceedings. (Ward v. Taggart (1959) 51 Cal.2d 736, 742.)
EMC is raising a new theory which is factual in nature and therefore should have been raised in EMC’s opposition to CN’s motion for summary judgment. In the trial court, EMC did not argue the theory of successor liability based on defacto merger as a basis of coverage. Rather, EMC acknowledged Raincross and Raincross Inc. were separate entities and argued that the policy must be reformed to add Raincross Inc. as a named insured because this is what the parties intended.
During oral argument on appeal, EMC’s attorney argued that EMC had not waived or, rather, had not forfeited, the successor liability theory since EMC had argued the theory in the trial court. EMC’s attorney cited two pages from EMC’s opposition points and authorities (pp. 5 & 12), which EMC’s attorney claimed mentioned the theory. CN’s attorney responded that these references to successor liability did not sufficiently raise the merger theory to avoid forfeiture of the theory on appeal. Also, EMC’s opposition did not cite any evidence expressly supporting the theory.
On page five of EMC’s opposition, EMC states that “Raincross Contractors, Inc., was the successor entity to the sole proprietorship owned by Pettit. There were not two separate businesses. The same vehicles and the same drivers were insured when Pettit operated his business as a sole proprietorship, and later when he operated this same business as a corporation. [¶] The CENTURY-NATIONAL policy should be reformed to show Pettit’s corporation as the named insured on the date of the accident.”
On page 12 of EMC’s opposition, EMC cites Gillis v. Sun Ins. Office, Ltd. (1965) 238 Cal.App.2d 408 (Gillis), for the proposition the CN insurance policy should be reformed to name Raincross Inc. as an insured in place of Raincross. In discussing Gillis, EMC stated in its opposition that the Gillis named-insured corporation merged with a subsequent corporation, and the Gillis court thus found the policy should have been reformed to provide coverage for the successor unnamed corporation.
In Gillis, however, the named insured corporation was defunct when the policy was issued since there had previously been an express merger under Corporations Code section 4124 (recodified as Corp. Code, § 1110). (Gillis, supra, 238 Cal.App.2d at p. 410.) Because the policy simply stated the wrong name of the insured, the Gillis court ordered the named insured changed to the entity that should have been named when the policy was issued. (Id. at p. 414.)
Gillis does not involve a de facto merger and for this reason, no doubt, EMC does not cite the case on appeal in support of EMC’s merger argument. The case is only cited in support of the reformation theory. Although EMC mentioned Raincross Inc. was a successor entity to Raincross, EMC argued this in the context of reformation, not in support of the separate theory of de facto merger.
On appeal, EMC argued both reformation, based on Gillis, supra, 238 Cal.App.2d 408,and the separate, additional theory of de facto merger, based on Westoil, supra, 73 Cal.App.4th 634. Neither the de facto merger theory nor Westoil were mentioned in the trial court in EMC’s summary judgment opposition or in EMC’s opposing separate statement of facts.
In response to CN’s objection to EMC raising the theory of de facto merger for the first time on appeal, EMC states in its appellant’s reply brief that this court has the discretion to consider a new theory on appeal when it is a matter of applying law to the undisputed facts. EMC argues there were undisputed facts that Raincross and Raincross Inc. merged by operation of law. EMC, in effect, acknowledged that the reformation and de facto merger theories are two separate theories, and then asserted in its reply brief, “alternatively,” that EMC was entitled to reformation. EMC thus essentially conceded in its reply brief that EMC failed to raise the de facto merger theory in the trial court and recognized that it was a separate alternative theory from that of reformation.
This court elects not to consider EMC’s new theory of de facto merger because it is founded on facts. Since the theory was not sufficiently raised in the trial court, the parties did not have an opportunity to fully address and investigate the underlying factual issues.
In order to find there was a de facto merger, “plaintiff would have to demonstrate: ‘(1) no adequate consideration was given for the predecessor corporation’s assets and made available for meeting the claims of its unsecured creditors; (2) one or more persons were officers, directors, or stockholders of both corporations. [Citation.]’ [Citations.] However, it is not dispositive that some of the same persons may serve as officers or directors of the two corporations. The relevant inquiries are whether the two corporations have preserved their separate identities and whether recourse to the debtor corporation is available. [Citation.]” (CenterPoint Energy, Inc. v. Superior Court (2007) 157 Cal.App.4th 1101, 1121.)
In Marks v. Minnesota Mining & Manufacturing Co. (1986) 187 Cal.App.3d 1429, the trial court provided the following checklist for determining whether there was a de facto merger: “(1) was the consideration paid for the assets solely stock of the purchaser of its parent; (2) did the purchaser continue the same enterprise after the sale; (3) did the shareholders of the seller become shareholders of the purchaser; (4) did the seller liquidate; and (5) did the buyer assume the liabilities necessary to carry on the business of the seller? [Citations.]” (Id. at p. 1436; see also Franklin v. USX Corp (2001) 87 Cal.App.4th 615, 626.)
In determining whether there is successor liability, the trial court must take into account “‘the totality of the unusual circumstances,’ because ‘we emphasize that each successor liability “case must be determined on its own facts”. . . . [Citation.]’ Considerations of fairness and equity apply. [Citation.]” (CenterPoint Energy, Inc. v. Superior Court, supra, 157 Cal.App.4th at p. 1122.)
While there is some evidence relating to these factors, since the de facto merger theory was not raised below and require factual findings, EMC has forfeited the contention on appeal. Because EMC has forfeited the issue by not properly raising it in the trial court, the theory will not be considered on appeal.
4. Reformation
EMC alternatively argues the trial court erred in granting CN’s summary judgment because EMC established that CN intended to insure Raincross Inc. and therefore the CN policy should be reformed to include Raincross Inc. as an insured.
Under Civil Code section 3399, the trial court may reform a contract, such as an insurance policy, “[w]hen, through fraud or a mutual mistake of the parties, or a mistake of one party, which the other at the time knew or suspected, a written contract does not truly express the intention of the parties.” (Civ. Code, § 3399.) Under such circumstances, the policy “may be revised on the application of a party aggrieved, so as to express that intention, so far as it can be done without prejudice to rights acquired by third persons, in good faith and for value.” (Civ. Code, § 3399; see also Hess v. Ford Motor Co. (2002) 27 Cal.4th 516, 524; see also Civ. Code, § 1639 and Shupe v. Nelson (1967) 254 Cal.App.2d 693, 699-700 (Shupe).)
Under long-standing contract law, a contract must be interpreted so as to give effect to the parties’ mutual intention as it existed at the time of entering into the contract, so far as it is ascertainable and lawful. (Civ. Code, § 1636.) The parties’ intention “‘is to be ascertained from the writing alone, if possible.’” (Hess v. Ford Motor Co., supra, 27 Cal.4th at p. 524; see also Civ. Code, § 1639.) However, “‘[a] contract may be explained by reference to the circumstances under which it was made, and the matter to which it relates’ [citations].” (Hess, supra, at p. 524; see also Civ. Code, § 1647.) The contract extends “only to those things . . . which it appears that the parties intended to contract.” (Civ. Code, § 1648.)
We recognize, of course, that “in general, appellate review of a trial court’s decision to grant or deny a summary judgment motion is on the basis of a de novo examination of the evidence before the trial court and an independent determination of its effect as a matter of law. [Citation.] This rule is applicable in the usual case, in which the questions presented upon the motion for summary judgment are matters of law not involving the exercise of judicial discretion. [Citations.] However, in the limited and exceptional circumstances where a trial court is required to exercise its discretion in passing on a . . . motion for summary judgment, and grants or denies such a motion on the basis of its equitable determination of a question as to which the exercise of judicial discretion is proper, the standard of review on appeal necessarily is whether the trial court’s decision amounted to an abuse of discretion. [Citations.]” (Centennial Ins. Co. v. United States Fire Ins. Co. (2001) 88 Cal.App.4th 105, 110-111 (Centennial).)
EMC’s request that the trial court reform the CN policy calls for an equitable determination, for which exercise of judicial discretion is proper. Reformation is an equitable remedy used “to correct a written instrument in order to effectuate a common intention of both parties which was incorrectly reduced to writing.” (Lemoge Electric v. County of San Mateo (1956) 46 Cal.2d 659, 663.) Under such circumstances, the standard of review on appeal is whether the trial court’s decision rejecting reformation of the policy and granting CN’s motion for summary judgment amounted to an abuse of discretion. (Prata v. Superior Court (2001) 91 Cal.App.4th 1128, 1135-1136.)
EMC argues that naming Raincross, and not Raincross Inc., as the insured in the 2000/2001 policy did not reflect the true intention of the parties by not naming Raincross Inc. as an insured, and therefore the policy must be reformed due to this unilateral or mutual mistake. EMC acknowledges that in order to reform the policy, EMC is required to prove the true intent by clear and convincing evidence. (Shupe, supra, 254 Cal.App.2d at p. 700.) The clear and convincing evidence rule applies only at the trial level. The standard of review on appeal of summary judgment necessarily is whether the trial court’s decision rejecting reformation and granting summary judgment amounted to an abuse of discretion. (Centennial, supra, 88 Cal.App.4th at pp. 110-111.)
Applying this standard, we conclude the trial court did not abuse its discretion in granting summary judgment. EMC did not meet its burden of proof. CN established it was undisputed that there was no coverage. The policy renewal application listed Raincross as the sole named insured and the policy accurately reflected the information contained in the application. It clearly and unambiguously reflected that Raincross was the sole insured and that the truck was not listed as an insured vehicle, and thus was not covered under the policy.
The burden shifted to EMC to refute noncoverage. EMC failed to meet its burden. EMC attempted to dispute noncoverage by arguing that the policy must be reformed but failed to provide sufficient supporting evidence.
EMC argues that incorporation of Raincross Inc. in March 1999 and expiration of Raincross’s fictitious business name registration in June 2000 shows that the parties intended that Raincross Inc., rather than Raincross, be named as an insured at the time of renewal of the policy in October 2000. While in hindsight, Pettit may have wished this had been done, there is no evidence that CN was notified of these circumstances or of such intent prior to or at the time of renewal of the policy. In EMC’s opposing separate statement, EMC acknowledges that Pettit did not make a written request to change, add or delete named insureds on the 2000/2001 policy. There is thus no basis for finding CN intended to do so.
Tracy Prettyman, Pettit’s insurance broker, testified during her deposition that apparently Raincross had incorporated, based on a letter shown to her during her deposition. Ms. Prettyman added that she did not know when incorporation had occurred. Ms. Prettyman explained that when an insured incorporates, the insured must provide notice in writing, on the insured’s new letterhead, of the change. The letter must state the corporation’s new license number and that there has been no change in ownership. Prettyman testified that if Raincross’s policy was not changed to reflect incorporation, Raincross did not do this.
EMC argues that a reasonable inference can be made that Raincross Inc. was the intended named insured based on evidence that the insured said “Raincross Contractors” was not a “dba.” EMC cites CN investigator Harry Grosdidier’s interoffice memorandum dated October 14, 2003, summarizing his interview of Shawn Pettit, Pettit’s wife. She told Grosdidier that Raincross Inc. was formed in 1994 and was not a “DBA.” The record reflects that this clearly was incorrect. Raincross Inc. was incorporated in 1999. Prior to that time, Pettit operated as Raincross, a sole proprietorship.
EMC argues the fact that CN denied coverage on the sole ground the truck was not listed as a covered vehicle and CN did not mention that Raincross Inc. was not an insured, shows that CN intended that Raincross Inc. was an insured. CN’s stated ground for rejecting coverage, however, is not determinative of CN’s intent at the time the 2000/2001 policy was renewed, particularly since CN gave a valid reason for denying coverage which was not inconsistent with the additional ground of Raincross Inc. not being named as an insured.
We also do not find persuasive EMC’s argument that CN’s acceptance and retention of the 2000/2001 policy premium payments showed that CN believed Raincross Inc. was an insured under the policy. There is no evidence that CN knew Raincross was no longer operating during the policy period and no evidence that anyone notified CN that coverage of Raincross was no longer necessary. The evidence of CN’s acceptance of the premiums, rather, indicates that CN believed that, since the policy renewal application named Raincross as the insured, that such coverage of Raincross was needed and accordingly provided.
EMC argues CN had information that would have put it on inquiry notice and therefore CN knew or should have known that Raincross Inc. should have been named as an insured rather than Raincross. As discussed above, there is no evidence of this. None of EMC’s citations to evidence establish this fact. There is evidence insurance broker, Tracy Prettyman, at some point became aware that Raincross incorporated. But since Prettyman was not acting as CN’s agent, her knowledge cannot be imputed to CN.
The Broker’s Agreement for Commercial Auto Insurance Transactions, between Prettyman and CN, clearly states that Prettyman was an independent contractor and generally had no authority to act on behalf of CN, unless authority was specifically granted in writing. Also, Gray stated in her declaration that Prettyman was not an agent of CN. Prettyman was an independent contractor for CN and, as Pettit’s broker, was Pettit’s agent. Prettyman’s acts and knowledge thus cannot be imputed to CN for purposes of establishing CN’s intent.
EMC cites to a couple of documents provided by Coral Point Insurance Services (Coral Point) to Pettit, including an insurance identification card and cover letter enclosing the 2000/2001 policy. These documents refer to the insured as Raincross Inc. but the documents were not prepared or provided by CN. Prettyman, doing business as Coral Point, was responsible for the documents.
EMC argues that CN was providing coverage for Raincross Inc.’s employees, Moffitt and Pettit, and therefore intended to also insure Raincross Inc. There is no evidence of this. The policy endorsement lists Moffitt and Pettit as insured drivers of Raincross. Moffitt and Pettit may have also been employees of Raincross Inc. but this does not establish CN intended also to provide coverage of Raincross Inc. as a named insured in the 2000/2001 policy.
While the management was the same for both Raincross and Raincross Inc. to the extent Pettit ran both companies, this in and of itself also does not establish that CN intended to insure Raincross Inc., particularly since there is no evidence CN was even aware the sole proprietorship was no longer operating or that Pettit had formed a new corporation.
EMC also cites to several documents, including a letter from CN litigation examiner, Gary McDaniel, dated January 6, 2004, referring to the insured as Raincross Inc. This evidence in no way established that Raincross Inc. was an insured in the 2000/2001 policy or that CN intended Raincross Inc. to be the named insured when the policy was renewed in 2000. CN’s litigation examiner’s post-loss conduct in 2004 is irrelevant to whether CN intended to insure Raincross Inc. in October 2000.
On the other hand, the intent and knowledge of the CN underwriter responsible for issuing the October 2000 renewal policy, Terrie Gray, was relevant and showed that CN did not intend to insure Raincross Inc. Gray stated in her declaration that the October 2000 policy declaration page correctly identified the insured as Raincross, consistent with the renewal application submitted by Pettit via his insurance broker, Prettyman. Gray said that CN never received a request to change the name of the insured, including when the policy was renewed after the accident, in October 2001.
EMC’s reliance on Gillis, supra, 238 Cal.App.2d 408, for the proposition the trial court erred in rejecting reformation of the policy, is misplaced. In Gillis, the court upheld reformation of an insurance policy adding a successor corporation as a named insured. Gillis is distinguishable in that it was undisputed that the named insured corporation had merged with another corporation and ceased to exist before issuance of the insurance policy because there had been an express merger. Here, EMC is claiming there was a de facto merger but did not argue this theory in the trial court. It thus cannot be assumed there was a merger or that the sole proprietorship no longer existed at the time of renewal of the policy. Raincross’s contractor’s license, which was separate from Raincross’s contractor’s license, had not expired and Raincross was not precluded from doing business as a sole proprietorship, even though its fictitious name registration had expired.
Because EMC failed to establish that CN intended to add Raincross Inc. as an insured in the 2000/2001 policy, the trial court did not abuse its discretion in rejecting reformation of the policy and granting summary judgment in favor of CN.
5. Disposition
The judgment is affirmed. CN is awarded its costs on appeal.
We concur: Ramirez P. J., King J.