Opinion
Case No. CV 98-3394 RJK
December 20, 2000
ORDER GRANTING DEFENDANT ALLSTATE INSURANCE COMPANY'S MOTION FOR SUMMARY JUDGMENT AGAINST PLAINTIFFS LAWRENCE AND LORRAINE FIRST
On November 27, 2000, Defendant Allstate Insurance Company ("Defendant," or "Allstate") filed a motion for summary judgment against Plaintiffs Lawrence and Lorraine First ("Plaintiffs," or "the Firsts"). Plaintiffs opposed the motion. The Court heard oral argument on December 18, 2000 and, having considered the papers, pleadings, and records on file herein, the Court grants the motion.
STATEMENT OF FACTS
The following facts are not disputed. The Firsts are Allstate policyholders who suffered property damage to their home as a result of the 1994 Northridge earthquake on January 17, 1994.
The Dennises received a total of $408,746.42 from Allstate pursuant to a Cash Settlement and Release Agreement which Plaintiffs signed on June 18, 1994.
On May 1, 1998, the Firsts joined several other plaintiffs in the instant suit against Allstate and Allstate's contractors, alleging fraud in the adjustment of claims following the earthquake.
Plaintiffs specifically allege claims for: (1) RICO violations, 18 U.S.C. § 1961-1968; (2) Negligence; (3) Negligent Misrepresentation: (4) Intentional Misrepresentation; (5) Breach of the Covenant of Good Faith and Fair Dealing; and (6) Breach of Contract.
STANDARD
Summary judgment is proper if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A fact is material only if it is relevant to a claim or defense and its existence might affect the suit's outcome. See T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Assoc., 809 F.2d 626, 630 (9th Cir. 1987). The court must view the facts and draw inferences in the manner most favorable to the non-moving party. See Chaffin v. United States, 176 F.3d 1208, 1213 (9th Cir. 1999).The moving party bears the burden of demonstrating the absence of a genuine issue of material fact for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). [T]he burden on the moving party may be discharged by `showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986); see Musick v. Burke, 913 F.2d 1390, 1394 (9th Cir. 1990). To demonstrate that the non-moving party has no evidence, the moving party must affirmatively show the absence of such evidence in the record, either by deposition testimony, the inadequacy of documentary evidence or by any other form of admissible evidence. See Celotex, 477 U.S. at 322. The moving party has no burden to negate or disprove matters on which the opponent will have the burden of proof at trial. See id. at 325.
A non-moving party's allegation that factual disputes persist between the parties will not automatically defeat an otherwise properly supported motion for summary judgment. See Fed.R.Civ.P. 56(e) (non-moving party "may not rest upon the mere allegations or denials of the adverse party's pleadings, but . . . must set forth specific facts showing that there is a genuine issue for trial.). "[A] mere `scintilla' of evidence will be insufficient to defeat a properly supported motion for summary judgment; instead, the nonmoving party must introduce some `significant probative evidence tending to support the complaint.'" Fazio v. City and County of San Francisco, 125 F.3d 1328, 1331 (9th Cir. 1997), quoting Anderson, 477 U.S. at 249, 252. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.
DISCUSSION
This Court previously made the following rulings in Campanelli v. Allstate Ins. Co., a related action:
(1) The Court declines to abstain from deciding the motions pending the California Supreme Court decision in Vu v. Prudential Prop. Cas. Ins. Co. Campanelli v. Allstate Ins. Co., 85 F. Supp.2d 980, 986 (C.D. Cal. 2000) (Kelleher, J.) ("In any event — whether the Vu opinion would control the result or not — this Court is not prepared to wait upon the California Supreme Court. This Court has an obligation to decide the cases on its docket, resorting to abstention only in truly exceptional circumstances."); Campanelli v. Allstate Ins. Co., No. CV 98-7185 RJK, 2000 WL 231824, *6 (C.D. Cal. Feb. 8, 2000) (Kelleher, J.) (same);
(2) The one-year limitations period contained in the insurance polices as well as in California Insurance Code Section 2071 governs the plaintiffs' state as well as RICO claims. Campanelli v. Allstate Ins. Co., 85 F. Supp.2d 980, 984 (C.D. Cal. 2000) (Kelleher, J.) ("[t]he [Plaintiffs'] lawsuit for bad faith. tortious conduct, and breach of contract emanates from the policy itself. The lawsuit seeks redress for damages caused by Allstate's conduct during the adjustment of the [Plaintiffs'] property damage claim. Accordingly, the [Plaintiffs'] action is `on the policy.' and therefore subject to the one-year time bar."); Campanelli v. Allstate Ins. Co., 97 F. Supp.2d 1211, 1214 (C.D. Cal. 2000) (Kelleher, J.) ("Despite RICO's inherent four-year limitations period, a one-year time bar applies to the RICO claim in this case. The contract of insurance between Allstate and [Plaintiffs] specifically provides for a one-year time bar . . . Since Allstate and the [Plaintiffs] contracted for a `reasonable' limitations period under California law, any claim arising under that policy would be measured against the one-year time bar. . . . [A]ll of the Plaintiffs' claims — including the RICO claim — arise out of their respective policies of insurance."); and
(3) Senate Bill 1899, reviving 1994 Northridge earthquake claims barred by a statute of limitations defense, does not preclude summary judgment on that ground before the effective date of the enactment on January 1, 2001. Campanelli v. Allstate Ins. Co., No. CV 98-7185 RJK, 2000 WL 1639701, *3 (C.D. Cal. Oct. 17, 2000) (Kelleher, J.) ("Most notably, however, SB 1899 does not apply to claims that have been litigated to finality in any court of competent jurisdiction" before the effective date . . . . SB 1899 does not become effective until January 1, 2001. Meanwhile, the Noahs' claims are subject to summary judgment. . . . Summary judgment constitutes a final adjudication on the merits."). It is against this backdrop that the Court now examines the motion for summary judgment before it.
A. The One-Year Limitations Period Began to Run On The Day Of The 1994 Northridge Earthquake.
Plaintiffs contend that the limitations period did not begin running until their alleged discovery of the true extent of earthquake damage in 1998. However, "[t]his district has found, that in the case of an earthquake, the limitations period begins to run on the date the earthquake occurs." Vashistha v. Allstate Ins. Co., 989 F. Supp. 1029, 1032 (C.D. Cal. 1997). In a case specifically involving the 1994 Northridge earthquake, this district held that:
The standard for determining the date of loss is objective — when a reasonable person would be aware of damage which `deviat[es] from what a reasonable person would consider normal wear and tear. In the context of a loss caused by a single catastrophic event such as an earthquake, the date of loss can only be the date of that event. At that time, a reasonable person would be aware of the facts which might give rise to a claim where any noticeable damage exists as the cause would be known not to be `wear and tear.'
Sullivan v. Allstate Ins. Co., 964 F. Supp. 1407, 1411-12 (C.D. Cal. 1997).
And, in any event, Lawrence First admitted at deposition that he subjectively was aware that they had suffered damage to their home as a result of the earthquake immediately thereafter. (Def. App. Ex. In Supp. Mot. Summ. J. Re: First ("First App."), Ex. B at 78:14-84:19.). To the extent Plaintiffs contend that they did not discover additional earthquake damage until 1998, "they cannot rely on later discovered damages arising from the same cause of loss to save their claims." Sullivan, 964 F. Supp. at 1414.
B. The One-Year Limitation Period Was Tolled From The Time Plaintiffs Submitted Their Claim To Allstate Until They Were Paid In Settlement Thereof.
Plaintiffs also contend that the one-year limitations period remained tolled after Plaintiffs submitted their claims to Allstate because Allstate never gave Plaintiffs a formal written notice of the denial of their claim per Aliberti v. Allstate Ins. Co., 74 Cal.App.4th 138, 145-46 (1999).
Aliberti holds that the one-year limitations period is equitably tolled from the time the insured files a timely notice, pursuant to policy notice provisions, to the time the insurer formally denies the claim in writing. Aliberti v. Allstate Ins. Co., 74 Cal.App.4th 138, 145-46 (1999) (citing Prudential-LMI Com. Ins. v. Superior Court, 51 Cal.3d 674, 678 (1990). However, Aliberti expressly speaks to denials — not settlements — of claims.
The underlying purpose of a notice such as the one required in Aliberti is to alert the insured to the fact that his claim has been closed, thus ending the equitable tolling, so that he may pursue any litigation against the insurer within the statutory period. In the case at hand, the Firsts reviewed and signed a Cash Settlement and Release Agreement which expressly indicated that the payment was in full and final settlement of the Firsts' claim. (First App., Exs. B at 254:11-255:17, 256:17-257:11; H; K at 45:21-46:14.). Moreover, Lawrence First testified that he took the "cash-out" even though he was not "happy with it" because he "wanted to be done with Allstate." (First App., Ex. B at 254:11-13.). Lawrence First further testified that his Allstate agent, Tom Fewless, or some other Allstate representative, told him sometime in 1995 that he needed to sue Allstate within a year regarding damages that were allegedly not covered by the settlement. (First App., Ex. B at 67:1-20.). In addition, Lawrence First received a letter from Allstate in 1995 or 1996 which he understood to be saying, "Too bad. You're not getting any money. You settled. You're done." (First App., Ex. B at 68:22-69:3, 296:7-297:4.). Thus, there is ample evidence that the Firsts had knowledge that their claim had been closed and that they had one year within which to bring suit against Allstate regarding any outstanding disputes therewith.
C. Allstate Is Not Estopped From Asserting The One-Year Statute of Limitations Defense.
Finally, Plaintiffs contend that Allstate is estopped from asserting the one-year statute of limitations because it (1) failed to comply with the disclosure requirements of the Fair Claims Settlement Practices Regulations; and (2) concealed the true extent of the damage to Plaintiffs' home through fraudulent engineering reports.
1. The Fair Claims Settlement Practices Regulations notice provision does not apply to claims settled by payment.
The Fair Claims Settlement Practices Regulations requires insurers to inform insureds about applicable time limits relative to their claims. See Cal. Code Regs., tit. 10, § 2695.7(b)(1). Failure to do so may estop the insurer from asserting the statute of limitations defense. See Spray, Gould Bowers v. Associated Int'l Ins. Co., 71 Cal.App. 4th 1260 (1999). However, this requirement expressly does not apply where a claim is settled by payment:
Except where a claim has been settled by payment, every insurer shall provide written notice of any statute of limitation or other time period requirement upon which the insurer may rely to deny a timely claim.
Cal. Code Reg., tit 10, § 2695.7(f) (emphasis added).
It is undisputed that Plaintiffs' claim was settled by payment. Allstate is not estopped from asserting the statute of limitations defense on this ground.
2. Plaintiffs have failed to raise any triable issues of material fact as to whether Allstate is estopped from asserting the statute of limitations because of fraudulent concealment.
Alternatively, Plaintiffs contend that Allstate is estopped from asserting the statute of limitations because it concealed the true extent of the damage to Plaintiffs' property through inadequate investigation and fraudulent engineering reports. This argument is based on the same facts as another, similar contention Plaintiffs make; namely, that the statute of limitations was equitably tolled during the time that Allstate concealed the true extent of damages from Plaintiffs through fraudulent engineering reports.
In order to evoke estoppel, Plaintiffs must establish the following: (1) the party to be estopped was apprised of the facts; (2) the other party was ignorant of the true state of facts; (3) the party to be estopped intended that its conduct be acted upon; and (4) the other party reasonably relied on the conduct to its detriment. American Cas. Co. v. Baker, 22 F.3d 880, 892 (9th Cir. 1994). Where any one of the elements of equitable estoppel is absent, the claim must fail. Id. In order to establish fraudulent concealment, Plaintiffs must prove (1) the substantive elements of fraud; and (2) an excuse for late discovery of the facts. Community Cause v. Boatwright, 124 Cal.App.3d 888, 900 (1981).
To the extent Plaintiffs rely on general references to the purported fraudulent scheme allegedly perpetrated by Shadowbrook and/or Western States, or to allegations that certain engineers' reports prepared by Western States under subcontract with Shadowbrook had been issued under the stamp of architects and/or engineers who had never inspected Plaintiffs' property, the Court found in Smith v. Allstate Ins. Co. that the former was inadmissible as "bad acts" evidence in the absence of specific, particularized evidence linking the alleged scheme to the individual plaintiff, and that the latter was not per se evidence of fraud.
There is no evidence of any fraudulent concealment or reliance thereon in the case at hand. Plaintiffs contend that even though their own engineering firm informed them that the house needed to be lifted off the slab and repoured, they did not feel such repairs were necessary because the Shadowbrook Engineering Report ("Report") did not reference such repairs, and they gave far more credence to the Report because Shadowbrook was "sent directly from Allstate." (Decl. Mark Brifman In Opp'n. To All Seven of Def. Mot. For Summ. J. ("Brifman Decl."), Ex. 1 at 177:3-13; 196:14-17; 198:1-13.). However, the Repair Recommendations section of the Report recommends that the Firsts "[r]eplace damaged concrete slab." (Brifman Decl., Ex. 2.). Further, Lawrence First testified that their former contractor, Albright Associates, also recommended that the Firsts remove the entire existing structure and foundation at a projected cost of $315,916,00. (Def. Reply In Supp. Mot. Summ. J. Re: First ("First Reply"), Ex. D.). Although Allstate paid the Firsts enough money to cover such repairs, Lawrence First testified that he elected to repair the slab using a cheaper "saw cut" method recommended by their new contractor, Pacific Hillside. (First Reply, Ex. A at 97:20-99:17, 106:6-13.). Because the record is devoid of any evidence of fraudulent concealment and of Plaintiffs' reliance thereon, Plaintiffs' estoppel and tolling arguments both fail.
DISPOSITION
IT IS HEREBY ORDERED that Defendant's motion for summary judgment against Plaintiffs Lawrence and Lorraine First be granted.
IT IS FURTHER ORDERED that counsel for Defendant submit a Judgment to this effect in accordance with the Local Rules.
IT IS SO ORDERED.
ORDER GRANTING DEFENDANT ALLSTATE INSURANCE COMPANY'S MOTION FOR SUMMARY JUDGMENT STERKLE
On November 27, 2000, Defendant Allstate Insurance Company ("Defendant," or "Allstate") filed a motion for summary judgment against Plaintiff Gary Sterkle ("Plaintiff," or "Sterkle"). Plaintiff opposed the motion. The Court heard oral argument on December 18, 2000 and, having considered the papers, pleadings, and records on file herein, the Court grants the motion.
STATEMENT OF FACTS
The following facts are not disputed. Sterkle is an Allstate policyholder who suffered property damage to his home as a result of the 1994 Northridge earthquake on January 17, 1994.
Sterkle received a total of over $115,000 from Allstate in payment of his claim for earthquake damages. On April 23, 1994, Allstate issued Sterkle a check in the amount of $1,550.00. On July 7, 1994, Allstate issued Sterkle a check in the amount of $80,694.25 and a second check in the amount of $15,495.00. On August 20, 1994, Allstate issued Lucero another check in the amount of $20,418.30.
On May 1, 1998, Sterkle joined several other plaintiffs in the instant suit against Allstate and Allstate's contractors, alleging fraud in the adjustment of claims following the earthquake.
Plaintiffs specifically allege claims for: (1) RICO violations, 18 U.S.C. § 1961-1968; (2) Negligence; (3) Negligent Misrepresentation: (4) Intentional Misrepresentation; (5) Breach of the Covenant of Good Faith and Fair Dealing; and (6) Breach of Contract.
STANDARD
Summary judgment is proper if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A fact is material only if it is relevant to a claim or defense and its existence might affect the suit's outcome. See T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Assoc., 809 F.2d 626, 630 (9th Cir. 1987). The court must view the facts and draw inferences in the manner most favorable to the non-moving party. See Chaffin v. United States, 176 F.3d 1208, 1213 (9th Cir. 1999).The moving party bears the burden of demonstrating the absence of a genuine issue of material fact for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). [T]he burden on the moving party may be discharged by `showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986); see Musick v. Burke, 913 F.2d 1390, 1394 (9th Cir. 1990). To demonstrate that the non-moving party has no evidence, the moving party must affirmatively show the absence of such evidence in the record, either by deposition testimony, the inadequacy of documentary evidence or by any other form of admissible evidence. See Celotex, 477 U.S. at 322. The moving party has no burden to negate or disprove matters on which the opponent will have the burden of proof at trial. See id. at 325.
A non-moving party's allegation that factual disputes persist between the parties will not automatically defeat an otherwise properly supported motion for summary judgment. See Fed.R.Civ.P. 56(e) (non-moving party "may not rest upon the mere allegations or denials of the adverse party's pleadings, but . . . must set forth specific facts showing that there is a genuine issue for trial.). "[A] mere `scintilla' of evidence will be insufficient to defeat a properly supported motion for summary judgment; instead, the nonmoving party must introduce some `significant probative evidence tending to support the complaint.'" Fazio v. City and County of San Francisco, 125 F.3d 1328, 1331 (9th Cir. 1997), quoting Anderson, 477 U.S. at 249, 252. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.
DISCUSSION
This Court previously made the following rulings in Campanelli v. Allstate Ins. Co., a related action:
(1) The Court declines to abstain from deciding the motions pending the California Supreme Court decision in Vu v. Prudential Prop. Cas. Ins. Co. Campanelli v. Allstate Ins. Co., 85 F. Supp.2d 980, 986 (C.D. Cal. 2000) (Kelleher, J.) ("In any event — whether the Vu opinion would control the result or not — this Court is not prepared to wait upon the California Supreme Court. This Court has an obligation to decide the cases on its docket, resorting to abstention only in truly exceptional circumstances."); Campanelli v. Allstate Ins. Co., No. CV 98-7185 RJK, 2000 WL 231824. *6 (C.D. Cal. Feb. 8, 2000) (Kelleher, J.) (same);
(2) The one-year limitations period contained in the insurance polices as well as in California Insurance Code Section 2071 governs the plaintiffs' state as well as RICO claims. Campanelli v. Allstate Ins. Co., 85 F. Supp.2d 980, 984 (C.D. Cal. 2000) (Kelleher, J.) ("[t]he [Plaintiffs'] lawsuit for bad faith, tortious conduct, and breach of contract emanates from the policy itself. The lawsuit seeks redress for damages caused by Allstate's conduct during the adjustment of the [Plaintiffs'] property damage claim. Accordingly, the [Plaintiffs'] action is `on the policy,' and therefore subject to the one-year time bar."); Campanelli v. Allstate Ins. Co., 97 F. Supp.2d 1211, 1214 (C.D. Cal. 2000) (Kelleher, J.) ("Despite RICO's inherent four-year limitations period, a one-year time bar applies to the RICO claim in this case. The contract of insurance between Allstate and [Plaintiffs] specifically provides for a one-year time bar. . . . Since Allstate and the [Plaintiffs] contracted for a `reasonable' limitations period under California law, any claim arising under that policy would be measured against the one-year time bar. . . . [A]ll of the Plaintiffs' claims — including the RICO claim — arise out of their respective policies of insurance."); and
(3) Senate Bill 1899, reviving 1994 Northridge earthquake claims barred by a statute of limitations defense, does not preclude summary judgment on that ground before the effective date of the enactment on January 1, 2001. Campanelli v. Allstate Ins. Co., No. CV 98-7185 RJK, 2000 WL 1639701, *3 (C.D. Cal. Oct. 17, 2000) (Kelleher, J.) ("Most notably, however, SB 1899 does not apply to claims that have been litigated to finality in any court of competent jurisdiction" before the effective date . . . . SB 1899 does not become effective until January 1, 2001. Meanwhile, the Noahs' claims are subject to summary judgment. . . . Summary judgment constitutes a final adjudication on the merits."). It is against this backdrop that the Court now examines the motion for summary judgment before it.
A. The One-Year Limitations Period Began To Run On The Day of The 1994 Northridge Earthquake.
Plaintiff contends that the limitations period did not begin running until his alleged discovery of the true extent of earthquake damage in 1998. However, "[t]his district has found. that in the case of an earthquake. the limitations period begins to run on the date the earthquake occurs." Vashistha v. Allstate Ins. Co., 989 F. Supp. 1029, 1032 (C.D. Cal. 1997). In a case specifically involving the 1994 Northridge earthquake, this district held that:
The standard for determining the date of loss is objective — when a reasonable person would be aware of damage which `deviat[es] from what a reasonable person would consider normal wear and tear. In the context of a loss caused by a single catastrophic event such as an earthquake, the date of loss can only be the date of that event. At that time, a reasonable person would be aware of the facts which might give rise to a claim where any noticeable damage exists as the cause would be known not to be `wear and tear.'
Sullivan v. Allstate Ins. Co., 964 F. Supp. 1407, 1411-12 (C.D. Cal. 1997).
And, in any event, Sterkle admitted at deposition that he subjectively was aware that he had suffered damage to his home as a result of the earthquake immediately thereafter. (Def. App. Ex. In Supp. Mot. Summ. J. Re: Sterkle ("Sterkle App."), Ex. B at 59:5-61:23, 123:10-15.). To the extent Plaintiff contends that he did not discover additional earthquake damage until 1998, "[he] cannot rely on later discovered damages arising from the same cause of loss to save [his] claims." Sullivan, 964 F. Supp. at 1414.
B. The One-Year Limitation Period Was Tolled From The Time Plaintiff Submitted His Claim To Allstate Until He Was Paid In Settlement Thereof.
Plaintiff also contends that the one-year limitations period remained tolled after Plaintiff submitted his claim to Allstate because Allstate never gave Plaintiff a formal written notice of the denial of his claim per Aliberti v. Allstate Ins. Co., 74 Cal.App.4th 138, 145-46 (1999).
Aliberti holds that the one-year limitations period is equitably tolled from the time the insured files a timely notice, pursuant to policy notice provisions, to the time the insurer formally denies the claim in writing. Aliberti v. Allstate Ins. Co., 74 Cal.App.4th 138, 145-46 (1999) (citing Prudential-LMI Com. Ins. v. Superior Court, 51 Cal.3d 674, 678 (1990). However, Aliberti expressly speaks to denials — not settlements — of claims.
The underlying purpose of a notice such as the one required in Aliberti is to alert the insured to the fact that his claim has been closed, thus ending the equitable tolling, so that he may pursue any litigation against the insurer within the statutory period. In the case at hand, Sterkle received approximately $115,000.00 from Allstate in settlement of his claim. Sterkle deposited all of the checks he received from Allstate upon receipt, and did not tell anyone that he did not agree to accept the amount in full settlement of his claims. (Sterkle App., Ex. B at 158:1-11.) Further, Sterkle testified that when he received the estimate from Allstate, he went through the claim report and made sure that all of the damages he noted were included therein, and that he could not think of anything that was left out. (Sterkle App., Ex. 158:12-20.) Hence, the evidence establishes that Sterkle had knowledge that the checks he received were in full and final payment for the damages to his home.
C. Allstate Is Not Estopped From Asserting The One-Year Statute of Limitations Defense.
Finally. Plaintiff contends that Allstate is estopped from asserting the one-year statute of limitations because it (1) failed to comply with the disclosure requirements of the Fair Claims Settlement Practices Regulations; and (2) concealed the true extent of the damage to Plaintiff's home through fraudulent engineering reports.
1. The Fair Claims Settlement Practices Regulations notice provision does not apply to claims settled by payment.
The Fair Claims Settlement Practices Regulations requires insurers to inform insureds about applicable time limits relative to their claims. See Cal. Code Regs., tit. 10, § 2695.7(b)(1). Failure to do so may estop the insurer from asserting the statute of limitations defense. See Spray, Gould Bowers v. Associated Int'l Ins. Co., 71 Cal.App.4th 1260 (1999). However, this requirement expressly does not apply where a claim is settled by payment:
Except where a claim has been settled by payment, every insurer shall provide written notice of any statute of limitation or other time period requirement upon which the insurer may rely to deny a timely claim.
Cal. Code Reg., tit 10, § 2695.7(f) (emphasis added).
It is undisputed that Plaintiffs' claim was settled by payment. Allstate is not estopped from asserting the statute of limitations defense on this ground.
2. Plaintiff has failed to raise any triable issues of material fact as to whether Allstate is estopped from asserting the statute of limitations because of fraudulent concealment.
Alternatively, Plaintiff contends that Allstate is estopped from asserting the statute of limitations because it concealed the true extent of the damage to Plaintiff's property through inadequate investigation and fraudulent engineering reports. This argument is based on the same facts as another, similar contention Plaintiff makes; namely, that the statute of limitations was equitably tolled during the time that Allstate concealed the true extent of damages from Plaintiff through fraudulent engineering reports.
In order to evoke estoppel, Plaintiff must establish the following: (1) the party to be estopped was apprised of the facts; (2) the other party was ignorant of the true state of facts; (3) the party to be estopped intended that its conduct be acted upon; and (4) the other party reasonably relied on the conduct to its detriment. American Cas. Co. v. Baker, 22 F.3d 880, 892 (9th Cir. 1994). Where any one of the elements of equitable estoppel is absent, the claim must fail. Id. In order to establish fraudulent concealment, Plaintiff must prove (1) the substantive elements of fraud; and (2) an excuse for late discovery of the facts. Community Cause v. Boatwright, 124 Cal.App.3d 888, 900 (1981).
To the extent Plaintiff relies on general references to the purported fraudulent scheme allegedly perpetrated by Shadowbrook and/or Western States, or to allegations that certain engineers' reports prepared by Western States under subcontract with Shadowbrook had been issued under the stamp of architects and/or engineers who had never inspected Plaintiff's property, the Court found in Smith v. Allstate Ins. Co. that the former was inadmissible as "bad acts" evidence in the absence of specific, particularized evidence linking the alleged scheme to the individual plaintiff, and that the latter was not per se evidence of fraud.
There is no evidence of any fraudulent concealment or reliance thereon in the case at hand. Sterkle testified at deposition that he could not identify one item of earthquake damage that he had repaired that was not compensated for by Allstate. (Sterkle App., Ex. B at 157:7-10.). In fact, Sterkle testified that he did not know if he had been underpaid by Allstate and, as far as he knows, it is possible that he might have been paid properly or even overpaid by Allstate. (Sterkle App., Ex. B at 198: 1-22.). Sterkle further testified that he believed that his house had been fully repaired except for the cracks that were filled by epoxy injection, as recommended by Allstate. (Def. Reply In Supp. Mot. Summ. J. Re: Sterkle ("Sterkle Reply"), Ex. A at 89:12-20, 90:2-12; 93:1-15.). However, Sterkle admitted that Lancer, the contractor he independently hired, also recommended the same method for repairing the cracks. (Sterkle Reply, Ex. A at 93:16-94:6; 164:24-165:24.). Moreover, the estimates provided by Lancer were "pretty much the same" as Allstate's. (Sterkle Reply, Ex. A at 94:7-19; 124:7-22.). Because the record is devoid of any evidence of fraudulent concealment (and Plaintiff's reliance thereon), Plaintiff's estoppel and tolling arguments both fail.
DISPOSITION
IT IS HEREBY ORDERED that Defendant's motion for summary judgment against Plaintiff Gary Sterkle be granted.
IT IS FURTHER ORDERED that counsel for Defendant submit a Judgment to this effect in accordance with the Local Rules.
IT IS SO ORDERED.
ORDER GRANTING DEFENDANT ALLSTATE INSURANCE COMPANY'S MOTION FOR SUMMARY JUDGMENT AGAINST PLAINTIFFS PAUL AND CHERYL LOCHER
On November 27, 2000, Defendant Allstate Insurance Company ("Defendant," or "Allstate") filed a motion for summary judgment against Plaintiffs Paul and Cheryl Locher ("Plaintiffs," or "the Lochers"). Plaintiffs opposed the motion. The Court heard oral argument on December 18, 2000 and, having considered the papers, pleadings, and records on file herein, the Court grants the motion.
STATEMENT OF FACTS
The following facts are not disputed. The Lochers are Allstate policyholders who suffered property damage to their home as a result of the 1994 Northridge earthquake on January 17, 1994.
On October 11, 1994, Allstate issued a check to the Lochers in the amount of $129.057.60 in payment of their claim for earthquake damages. This check contained the notation, "Close AA." On December 2, 1994, Allstate issued the Lochers another check in the amount of $13,052.20. This check contained the notation, "Close Supplement AA."
On May 1, 1998, the Lochers joined several other plaintiffs in the instant suit against Allstate and Allstate's contractors, alleging fraud in the adjustment of claims following the earthquake.
Plaintiffs specifically allege claims for: (1) RICO violations, 18 U.S.C. § 1961-1968; (2) Negligence; (3) Negligent Misrepresentation: (4) Intentional Misrepresentation; (5) Breach of the Covenant of Good Faith and Fair Dealing; and (6) Breach of Contract.
STANDARD
Summary judgment is proper if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A fact is material only if it is relevant to a claim or defense and its existence might affect the suit's outcome. See T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Assoc., 809 F.2d 626, 630 (9th Cir. 1987). The court must view the facts and draw inferences in the manner most favorable to the non-moving party. See Chaffin v. United States, 176 F.3d 1208, 1213 (9th Cir. 1999).The moving party bears the burden of demonstrating the absence of a genuine issue of material fact for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). [T]he burden on the moving party may be discharged by `showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986); see Musick v. Burke, 913 F.2d 1390, 1394 (9th Cir. 1990). To demonstrate that the non-moving party has no evidence, the moving party must affirmatively show the absence of such evidence in the record, either by deposition testimony, the inadequacy of documentary evidence or by any other form of admissible evidence. See Celotex, 477 U.S. at 322. The moving party has no burden to negate or disprove matters on which the opponent will have the burden of proof at trial. See id. at 325.
A non-moving party's allegation that factual disputes persist between the parties will not automatically defeat an otherwise properly supported motion for summary judgment. See Fed.R.Civ.P. 56(e) (non-moving party "may not rest upon the mere allegations or denials of the adverse party's pleadings, but . . . must set forth specific facts showing that there is a genuine issue for trial.). "[A] mere `scintilla' of evidence will be insufficient to defeat a properly supported motion for summary judgment; instead, the nonmoving party must introduce some `significant probative evidence tending to support the complaint.'" Fazio v. City and County of San Francisco, 125 F.3d 1328, 1331 (9th Cir. 1997), quoting Anderson, 477 U.S. at 249, 252. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.
DISCUSSION
This Court previously made the following rulings in Campanelli v. Allstate Ins. Co., a related action:
(1) The Court declines to abstain from deciding the motions pending the California Supreme Court decision in Vu v. Prudential Prop. Cas. Ins. Co. Campanelli v. Allstate Ins. Co., 85 F. Supp.2d 980, 986 (C.D. Cal. 2000) (Kelleher, J.) ("In any event — whether the Vu opinion would control the result or not — this Court is not prepared to wait upon the California Supreme Court. This Court has an obligation to decide the cases on its docket, resorting to abstention only in truly exceptional circumstances."); Campanelli v. Allstate Ins. Co., No. CV 98-7185 RJK, 2000 WL 231824, *6 (C.D. Cal. Feb. 8, 2000) (Kelleher, J.) (same);
(2) The one-year limitations period contained in the insurance polices as well as in California Insurance Code Section 2071 governs the plaintiffs' state as well as RICO claims. Campanelli v. Allstate Ins. Co,. 85 F. Supp.2d 980, 984 (C.D. Cal. 2000) (Kelleher, J.) ("[t]he [Plaintiffs'] lawsuit for bad faith, tortious conduct, and breach of contract emanates from the policy itself. The lawsuit seeks redress for damages caused by Allstate's conduct during the adjustment of the [Plaintiffs'] property damage claim. Accordingly, the [Plaintiffs'] action is `on the policy,' and therefore subject to the one-year time bar."); Campanelli v. Allstate Ins. Co., 97 F. Supp.2d 1211, 1214 (C.D. Cal. 2000) (Kelleher, J.) ("Despite RICO's inherent four-year limitations period, a one-year time bar applies to the RICO claim in this case. The contract of insurance between Allstate and [Plaintiffs] specifically provides for a one-year time bar. . . . Since Allstate and the [Plaintiffs] contracted for a `reasonable' limitations period under California law, any claim arising under that policy would be measured against the one-year time bar. . . . [A]ll of the Plaintiffs' claims — including the RICO claim — arise out of their respective policies of insurance."); and
(3) Senate Bill 1899, reviving 1994 Northridge earthquake claims barred by a statute of limitations defense, does not preclude summary judgment on that ground before the effective date of the enactment on January 1, 2001. Campanelli v. Allstate Ins. Co., No. CV 98-7185 RJK, 2000 WL 1639701, *3 (C.D. Cal. Oct. 17, 2000) (Kelleher, J.) ("Most notably, however, SB 1899 does not apply to claims that have been litigated to finality in any court of competent jurisdiction" before the effective date . . . . SB 1899 does not become effective until January 1, 2001. Meanwhile, the Noahs' claims are subject to summary judgment. . . . Summary judgment constitutes a final adjudication on the merits."). It is against this backdrop that the Court now examines the motion for summary judgment before it.
A. The One-Year Limitations Period Began To Run On The Day of The 1994 Northridge Earthquake.
Plaintiffs contend that the limitations period did not begin running until their alleged discovery of the true extent of earthquake damage in 1998. However, "[t]his district has found, that in the case of an earthquake. the limitations period begins to run on the date the earthquake occurs." Vashistha v. Allstate Ins. Co., 989 F. Supp. 1029, 1032 (C.D. Cal. 1997). In a case specifically involving the 1994 Northridge earthquake, this district held that:
The standard for determining the date of loss is objective — when a reasonable person would be aware of damage which `deviat[es] from what a reasonable person would consider normal wear and tear. In the context of a loss caused by a single catastrophic event such as an earthquake, the date of loss can only be the date of that event. At that time, a reasonable person would be aware of the facts which might give rise to a claim where any noticeable damage exists as the cause would be known not to be `wear and tear.'
Sullivan v. Allstate Ins. Co., 964 F. Supp. 1407, 1411-12 (C.D. Cal. 1997).
And, in any event, Paul Locher admitted at deposition that he subjectively was aware that they had suffered damage to their home as a result of the earthquake immediately thereafter. (Def. App. Ex. In Supp. Mot. Summ. J. Re: Locher ("Locher App."), Ex. B at 47:17-20.). To the extent Plaintiffs contend that they did not discover additional earthquake damage until 1998, "they cannot rely on later discovered damages arising from the same cause of loss to save their claims." Sullivan, 964 F. Supp. at 1414.
B. The One-Year Limitation Period Was Tolled From The Time Plaintiffs Submitted Their Claim To Allstate Until They Were Paid In Settlement Thereof.
Plaintiffs also contend that the one-year limitations period remained tolled after Plaintiffs submitted their claims to Allstate because Allstate never gave Plaintiffs a formal written notice of the denial of their claim per Aliberti v. Allstate Inc. Co., 74 Cal.App.4th 138, 145-46 (1999).
Aliberti holds that the one-year limitations period is equitably tolled from the time the insured files a timely notice, pursuant to policy notice provisions, to the time the insurer formally denies the claim in writing. Aliberti v. Allstate Ins. Co., 74 Cal.App.4th 138, 145-46 (1999) (citing Prudential-LMI Com. Ins. v. Superior Court, 51 Cal.3d 674, 678 (1990). However, Aliberti expressly speaks to denials — not settlements — of claims.
The underlying purpose of a notice such as the one required in Aliberti is to alert the insured to the fact that his claim has been closed, thus ending the equitable tolling, so that he may pursue any litigation against the insurer within the statutory period. In the case at hand, the Lochers received two checks in settlement of their claim. It was apparent from the notations on the face of the checks that their claim was being closed. Moreover, Paul Locher testified at deposition that the contractor they had hired prepared an estimate between $100,000 and $150,000; that it reached an agreement with Allstate regarding the cost of repairs; and that Allstate paid for the total amount agreed upon except for the deductible. (Def. Reply In Supp. Mot. Summ. J. Re: Locher ("Locher Reply"), Ex. A at 73:13-74:12.). Paul Locher further testified that he and his wife were satisfied with the agreement that their contractor reached with Allstate. (Locher Reply. Ex. A at 79:2-21.). Thus, there is evidence that the Lochers had knowledge that their claim had been closed in accordance with the settlement negotiated and ultimately reached between Allstate and their contractor.
C. Allstate Is Not Estopped From Asserting The One-Year Statute of Limitations Defense.
Finally, Plaintiffs contend that Allstate is estopped from asserting the one-year statute of limitations because it (1) failed to comply with the disclosure requirements of the Fair Claims Settlement Practices Regulations; and (2) concealed the true extent of the damage to Plaintiffs' home through fraudulent engineering reports.
1. The Fair Claims Settlement Practices Regulations notice provision does not apply to claims settled by payment.
The Fair Claims Settlement Practices Regulations requires insurers to inform insureds about applicable time limits relative to their claims. See Cal. Code Regs., tit. 10, § 2695.7(b)(1). Failure to do so may estop the insurer from asserting the statute of limitations defense. See Spray, Gould Bowers v. Associated Int'l Ins. Co., 71 Cal.App.4th 1260 (1999). However, this requirement expressly does not apply where a claim is settled by payment:
Except where a claim has been settled by payment, every insurer shall provide written notice of any statute of limitation or other time period requirement upon which the insurer may rely to deny a timely claim.
Cal. Code Reg., tit 10, § 2695.7(f) (emphasis added).
It is undisputed that Plaintiffs' claim was settled by payment. Allstate is not estopped from asserting the statute of limitations defense on this ground.
2. Plaintiffs have failed to raise any triable issues of material fact as to whether Allstate is estopped from asserting the statute of limitations because of fraudulent concealment.
Alternatively, Plaintiffs contend that Allstate is estopped from asserting the statute of limitations because it concealed the true extent of the damage to Plaintiffs' property through inadequate investigation and fraudulent engineering reports. This argument is based on the same facts as another, similar contention Plaintiffs make; namely, that the statute of limitations was equitably tolled during the time that Allstate concealed the true extent of damages from Plaintiffs through fraudulent engineering reports.
In order to evoke estoppel, Plaintiffs must establish the following: (1) the party to be estopped was apprised of the facts; (2) the other party was ignorant of the true state of facts; (3) the party to be estopped intended that its conduct be acted upon; and (4) the other party reasonably relied on the conduct to its detriment. American Cas. Co. v. Baker, 22 F.3d 880, 892 (9th Cir. 1994). Where any one of the elements of equitable estoppel is absent, the claim must fail. Id. In order to establish fraudulent concealment, Plaintiffs must prove (1) the substantive elements of fraud; and (2) an excuse for late discovery of the facts. Community Cause v. Boatwright, 124 Cal.App.3d 888, 900 (1981).
To the extent Plaintiffs rely on general references to the purported fraudulent scheme allegedly perpetrated by Shadowbrook and/or Western States, or to allegations that certain engineers' reports prepared by Western States under subcontract with Shadowbrook had been issued under the stamp of architects and/or engineers who had never inspected Plaintiff's property, the Court found in Smith v. Allstate Ins. Co. that the former was inadmissible as "bad acts" evidence in the absence of specific, particularized evidence linking the alleged scheme to the individual plaintiff, and that the latter was not per se evidence of fraud.
There is no evidence of any fraudulent concealment or reliance thereon in the case at hand. Paul Locher testified that to the best of his knowledge, the Shadowbrook Engineering Report ("Report") was not false. (Locher App., Ex. B at 119:7-9.). In fact, Paul Locher testified that Harry Booth solicited him to sue Allstate by telling him that an engineer probably had not looked at his house. (Locher App., Ex. B at Tr. 109:8-25; 110:5-7.). Mr. Locher admitted that his only complaint in this lawsuit is that he is concerned about what Booth told him. (Locher App., Ex. B at 141:12-17.). Paul Locher further conceded that not even Booth told him that the content of the Report was false. (Locher App., Ex. B at 142:1-4.). Because the record is devoid of any evidence of fraudulent concealment and of Plaintiffs' reliance thereon, Plaintiffs' estoppel and tolling arguments both fail.
DISPOSITION
IT IS HEREBY ORDERED that Defendant's motion for summary judgment against Plaintiffs Paul and Cheryl Locher be granted.
IT IS FURTHER ORDERED that counsel for Defendant submit a Judgment to this effect in accordance with the Local Rules.
IT IS SO ORDERED.
ORDER GRANTING DEFENDANT ALLSTATE INSURANCE COMPANY'S MOTION FOR SUMMARY JUDGMENT AGAINST PLAINTIFF STEVE LUCERO
On November 27, 2000, Defendant Allstate Insurance Company ("Defendant," or "Allstate") filed a motion for summary judgment against Plaintiff Steve Lucero ("Plaintiff," or "Lucero"). Plaintiff opposed the motion. The Court heard oral argument on December 18, 2000 and, having considered the papers, pleadings, and records on file herein, the Court grants the motion.
STATEMENT OF FACTS
The following facts are not disputed. Lucero is an Allstate policyholder who suffered property damage to his home as a result of the 1994 Northridge earthquake on January 17, 1994.
Lucero received a total of $51,705.94 from Allstate in payment of his claim for earthquake damages. On December 2, 1994, Allstate issued Lucero a check in the amount of $35,494.21, a second check in the amount of $8,096.73, and a third check in the amount of $6,960.00. On April 17, 1995, Allstate issued Lucero another check in the amount of $1,155.00.
On May 1, 1998, Lucero joined several other plaintiffs in the instant suit against Allstate and Allstate's contractors, alleging fraud in the adjustment of claims following the earthquake.
Plaintiffs specifically allege claims for: (1) RICO violations, 18 U.S.C. § 1961-1968; (2) Negligence; (3) Negligent Misrepresentation: (4) Intentional Misrepresentation; (5) Breach of the Covenant of Good Faith and Fair Dealing; and (6) Breach of Contract.
STANDARD
Summary judgment is proper if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A fact is material only if it is relevant to a claim or defense and its existence might affect the suit's outcome. See T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Assoc., 809 F.2d 626, 630 (9th Cir. 1987). The court must view the facts and draw inferences in the manner most favorable to the non-moving party. See Chaffin v. United States, 176 F.3d 1208, 1213 (9th Cir. 1999).The moving party bears the burden of demonstrating the absence of a genuine issue of material fact for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). [T]he burden on the moving party may be discharged by `showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986); see Musick v. Burke. 913 F.2d 1390, 1394 (9th Cir. 1990). To demonstrate that the non-moving party has no evidence, the moving party must affirmatively show the absence of such evidence in the record, either by deposition testimony, the inadequacy of documentary evidence or by any other form of admissible evidence. See Celotex, 477 U.S. at 322. The moving party has no burden to negate or disprove matters on which the opponent will have the burden of proof at trial. See id. at 325.
A non-moving party's allegation that factual disputes persist between the parties will not automatically defeat an otherwise properly supported motion for summary judgment. See Fed.R.Civ.P. 56(e) (non-moving party "may not rest upon the mere allegations or denials of the adverse party's pleadings, but . . . must set forth specific facts showing that there is a genuine issue for trial.). "[A] mere `scintilla' of evidence will be insufficient to defeat a properly supported motion for summary judgment; instead, the nonmoving party must introduce some `significant probative evidence tending to support the complaint.'" Fazio v. City and County of San Francisco, 125 F.3d 1328, 1331 (9th Cir. 1997), quoting Anderson, 477 U.S. at 249, 252. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.
DISCUSSION
This Court previously made the following rulings in Campanelli v. Allstate Ins. Co., a related action:
(1) The Court declines to abstain from deciding the motions pending the California Supreme Court decision in Vu v. Prudential Prop. Cas. Ins. Co. Campanelli v. Allstate Ins. Co., 85 F. Supp.2d 980, 986 (C.D. Cal. 2000) (Kelleher, J.) ("In any event — whether the Vu opinion would control the result or not — this Court is not prepared to wait upon the California Supreme Court. This Court has an obligation to decide the cases on its docket, resorting to abstention only in truly exceptional circumstances."); Campanelli v. Allstate Ins. Co., No. CV 98-7185 RJK, 2000 WL 231824, *6 (C.D. Cal. Feb. 8, 2000) (Kelleher, J.) (same);
(2) The one-year limitations period contained in the insurance polices as well as in California Insurance Code Section 2071 governs the plaintiffs' state as well as RICO claims. Campanelli v. Allstate Ins. Co., 85 F. Supp.2d 980, 984 (C.D. Cal. 2000) (Kelleher, J.) ("[t]he [Plaintiffs'] lawsuit for bad faith. tortious conduct, and breach of contract emanates from the policy itself. The lawsuit seeks redress for damages caused by Allstate's conduct during the adjustment of the [Plaintiffs'] property damage claim. Accordingly, the [Plaintiffs'] action is `on the policy,' and therefore subject to the one-year time bar."); Campanelli v. Allstate Ins. Co., 97 F. Supp.2d 1211, 1214 (C.D. Cal. 2000) (Kelleher, J.) ("Despite RICO's inherent four-year limitations period, a one-year time bar applies to the RICO claim in this case. The contract of insurance between Allstate and [Plaintiffs] specifically provides for a one-year time bar. . . . Since Allstate and the [Plaintiffs] contracted for a `reasonable' limitations period under California law, any claim arising under that policy would be measured against the one-year time bar. . . . [A]ll of the Plaintiffs' claims — including the RICO claim — arise out of their respective policies of insurance."); and
(3) Senate Bill 1899, reviving 1994 Northridge earthquake claims barred by a statute of limitations defense, does not preclude summary judgment on that ground before the effective date of the enactment on January 1, 2001. Campanelli v. Allstate Ins. Co., No. CV 98-7185 RJK, 2000 WL 1639701, *3 (C.D. Cal. Oct. 17, 2000) (Kelleher, J.) ("Most notably, however, SB 1899 does not apply to claims that have been litigated to finality in any court of competent jurisdiction" before the effective date . . . . SB 1899 does not become effective until January 1, 2001. Meanwhile, the Noahs' claims are subject to summary judgment. . . . Summary judgment constitutes a final adjudication on the merits."). It is against this backdrop that the Court now examines the motion for summary judgment before it.
A. The One-Year Limitations Period Began to Run On The Day Of The 1994 Northridge Earthquake.
Plaintiff contends that the limitations period did not begin running until his alleged discovery of the true extent of earthquake damage in 1998. However. "[t]his district has found, that in the case of an earthquake, the limitations period begins to run on the date the earthquake occurs." Vashistha v. Allstate Ins. Co., 989 F. Supp. 1029, 1032 (C.D. Cal. 1997). In a case specifically involving the 1994 Northridge earthquake, this district held that:
The standard for determining the date of loss is objective — when a reasonable person would be aware of damage which `deviat[es] from what a reasonable person would consider normal wear and tear. In the context of a loss caused by a single catastrophic event such as an earthquake, the date of loss can only be the date of that event. At that time, a reasonable person would be aware of the facts which might give rise to a claim where any noticeable damage exists as the cause would be known not to be `wear and tear.'
Sullivan v. Allstate Ins. Co., 964 F. Supp. 1407, 1411-12 (C.D. Cal. 1997).
And, in any event, Lucero admitted at deposition that he subjectively was aware that he had suffered damage to his home as a result of the earthquake immediately thereafter. (Def. App. Ex. In Supp. Mot. Summ. J. Re: Lucero ("Lucero App."), Ex. E at 76:4-77:11.). To the extent Plaintiff contends that he did not discover additional earthquake damage until 1998, "[he] cannot rely on later discovered damages arising from the same cause of loss to save [his] claims." Sullivan, 964 F. Supp. at 1414.
B. The One-Year Limitation Period Was Tolled From The Time Plaintiff Submitted His Claim To Allstate Until He Was Paid In Settlement Thereof.
Plaintiff also contends that the one-year limitations period remained tolled after Plaintiff submitted his claim to Allstate because Allstate never gave Plaintiff a formal written notice of the denial of his claim per Aliberti v. Allstate Ins. Co., 74 Cal.App.4th 138, 145-46 (1999).
Aliberti holds that the one-year limitations period is equitably tolled from the time the insured files a timely notice, pursuant to policy notice provisions, to the time the insurer formally denies the claim in writing. Aliberti v. Allstate Ins. Co., 74 Cal.App.4th 138, 145-46 (1999) (citing Prudential-LMI Com. Ins. v. Superior Court, 51 Cal.3d 674, 678 (1990). However, Aliberti expressly speaks to denials — not settlements — of claims.
The underlying purpose of a notice such as the one required in Aliberti is to alert the insured to the fact that his claim has been closed, thus ending the equitable tolling, so that he may pursue any litigation against the insurer within the statutory period. In the case at hand, Lucero is a licensed real estate broker who, as evidence by way of numerous written correspondence establishes, actively negotiated a settlement with Allstate — including threatening legal action; rejecting a check from Allstate as insufficient; rejecting Allstate's assessment of the damage after a "comparative analysis" of the damage to his neighbor's home; and rejecting Allstate's first settlement offer — pursuant to which he received over $50,000 in settlement payments. (Lucero App., Exs. G-N.) There is no question that Lucero had knowledge that his claim was closed pursuant to the settlement he reached with Allstate.
C. Allstate Is Not Estopped From Asserting The One-Year Statute of Limitations Defense.
Finally, Plaintiff contends that Allstate is estopped from asserting the one-year statute of limitations because it (1) failed to comply with the disclosure requirements of the Fair Claims Settlement Practices Regulations; and (2) concealed the true extent of the damage to Plaintiffs' home through fraudulent engineering reports.
1. The Fair Claims Settlement Practices Regulations notice provision does not apply to claims settled by payment.
The Fair Claims Settlement Practices Regulations requires insurers to inform insureds about applicable time limits relative to their claims. See Cal. Code Regs., tit. 10, § 2695.7(b)(1). Failure to do so may estop the insurer from asserting the statute of limitations defense. See Spray, Gould Bowers v. Associated Int'l Ins. Co., 71 Cal.App.4th 1260 (1999). However, this requirement expressly does not apply where a claim is settled by payment:
Except where a claim has been settled by payment, every insurer shall provide written notice of any statute of limitation or other time period requirement upon which the insurer may rely to deny a timely claim.
Cal. Code Reg., tit 10, § 2695.7(f) (emphasis added).
It is undisputed that Plaintiffs' claim was settled by payment. Allstate is not estopped from asserting the statute of limitations defense on this ground.
2. Plaintiff has failed to raise any triable issues of material fact as to whether Allstate is estopped from asserting the statute of limitations because of fraudulent concealment.
Alternatively, Plaintiff contends that Allstate is estopped from asserting the statute of limitations because it concealed the true extent of the damage to Plaintiffs' property through inadequate investigation and fraudulent engineering reports. This argument is based on the same facts as another, similar contention Plaintiff makes; namely, that the statute of limitations was equitably tolled during the time that Allstate concealed the true extent of damages from Plaintiff through fraudulent engineering reports.
In order to evoke estoppel, Plaintiff must establish the following: (1) the party to be estopped was apprised of the facts: (2) the other party was ignorant of the true state of facts; (3) the party to be estopped intended that its conduct be acted upon; and (4) the other party reasonably relied on the conduct to its detriment. American Cas. Co. v. Baker, 22 F.3d 880, 892 (9th Cir. 1994). Where any one of the elements of equitable estoppel is absent, the claim must fail. Id. In order to establish fraudulent concealment, Plaintiff must prove (1) the substantive elements of fraud; and (2) an excuse for late discovery of the facts. Community Cause v. Boatwright, 124 Cal.App.3d 888, 900 (1981).
To the extent Plaintiff relies on general references to the purported fraudulent scheme allegedly perpetrated by Shadowbrook and/or Western States, or to allegations that certain engineers' reports prepared by Western States under subcontract with Shadowbrook had been issued under the stamp of architects and/or engineers who had never inspected Plaintiffs' property, the Court found in Smith v. Allstate Ins. Co. that the former was inadmissible as "bad acts" evidence in the absence of specific, particularized evidence linking the alleged scheme to the individual plaintiff, and that the latter was not per se evidence of fraud.
There is no evidence of any fraudulent concealment or reliance thereon in the case at hand. Lucero testified at deposition that he did not rely on the Shadowbrook Engineering Report ("Report") in making his repairs, and does not recall providing that Report to his contractor. (Def. Reply In Supp. Mot. Summ. J. Re: Lucero ("Lucero Reply"), Ex. B at 237:12-238:2.) The various reports by Lucero's contractor show no indication that they relied on the Shadowbrook Report. (Lucero Reply, Exs. F-I.) Moreover, evidence establishes that Lucero believed Allstate's estimate of repairs was inaccurate at the time he agreed to the settlement, yet failed to bring this lawsuit until 1998. For instance, Lucero's letter dated October 5, 1994 accuses Allstate of being "well aware of the inaccuracies with respect to the cost of repair." (Lucero App., Exs. H.). In addition, Lucero writes in his October 24, 1994 letter that "[a]lthough the settlement offer is less than what was estimated by the contractor, he has agreed to work within the cost confines imposed by your settlement proposal." (Lucero App., Exs. I, E at 209:5-213:10.). Because the record is devoid of any evidence of fraudulent concealment (and Plaintiff's reliance thereon), Plaintiff's estoppel and tolling arguments both fail.
DISPOSITION
IT IS HEREBY ORDERED that Defendant's motion for summary judgment against Plaintiff Steve Lucero be granted.
IT IS FURTHER ORDERED that counsel for Defendant submit a Judgment to this effect in accordance with the Local Rules.
IT IS SO ORDERED.
ORDER GRANTING DEFENDANT ALLSTATE INSURANCE COMPANY'S MOTION FOR SUMMARY JUDGMENT AGAINST PLAINTIFFS DEAN AND DOROTHY DENNIS
On November 27, 2000, Defendant Allstate Insurance Company ("Defendant," or "Allstate") filed a motion for summary judgment against Plaintiffs Dean and Dorothy Dennis ("Plaintiffs," or "the Dennises"). Plaintiffs opposed the motion. The Court heard oral argument on December 18, 2000 and, having considered the papers, pleadings, and records on file herein, the Court grants the motion.
STATEMENT OF FACTS
The following facts are not disputed. The Dennises are Allstate policyholders who suffered property damage to their home as a result of the 1994 Northridge earthquake on January 17, 1994.
The Dennises received over $45,000 from Allstate in payment of their claim for earthquake damages. On April 26, 1994, Allstate issued the Dennises one check in the amount of $25,692.47 and another check in the amount of $6,298.00.
On May 1, 1998, the Dennises joined several other plaintiffs in the instant suit against Allstate and Allstate's contractors, alleging fraud in the adjustment of claims following the earthquake.
Plaintiffs specifically allege claims for: (1) RICO violations, 18 U.S.C. § 1961-1968; (2) Negligence; (3) Negligent Misrepresentation: (4) Intentional Misrepresentation; (5) Breach of the Covenant of Good Faith and Fair Dealing; and (6) Breach of Contract.
STANDARD
Summary judgment is proper if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A fact is material only if it is relevant to a claim or defense and its existence might affect the suit's outcome. See T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Assoc., 809 F.2d 626, 630 (9th Cir. 1987). The court must view the facts and draw inferences in the manner most favorable to the non-moving party. See Chaffin v. United States, 176 F.3d 1208, 1213 (9th Cir. 1999).The moving party bears the burden of demonstrating the absence of a genuine issue of material fact for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). [T]he burden on the moving party may be discharged by `showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986); see Musick v. Burke, 913 F.2d 1390, 1394 (9th Cir. 1990). To demonstrate that the non-moving party has no evidence, the moving party must affirmatively show the absence of such evidence in the record, either by deposition testimony. the inadequacy of documentary evidence or by any other form of admissible evidence. See Celotex, 477 U.S. at 322. The moving party has no burden to negate or disprove matters on which the opponent will have the burden of proof at trial. See id. at 325.
A non-moving party's allegation that factual disputes persist between the parties will not automatically defeat an otherwise properly supported motion for summary judgment. See Fed.R.Civ.P. 56(e) (non-moving party "may not rest upon the mere allegations or denials of the adverse party's pleadings, but . . . must set forth specific facts showing that there is a genuine issue for trial.). "[A] mere `scintilla' of evidence will be insufficient to defeat a properly supported motion for summary judgment; instead, the nonmoving party must introduce some `significant probative evidence tending to support the complaint.'" Fazio v. City and County of San Francisco, 125 F.3d 1328, 1331 (9th Cir. 1997), quoting Anderson, 477 U.S. at 249, 252. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.
DISCUSSION
This Court previously made the following rulings in Campanelli v. Allstate Ins. Co., a related action:
(1) The Court declines to abstain from deciding the motions pending the California Supreme Court decision in Vu v. Prudential Prop. Cas. Ins. Co., Campanelli v. Allstate Ins. Co., 85 F. Supp.2d 980, 986 (C.D. Cal. 2000) (Kelleher, J.) ("In any event — whether the Vu opinion would control the result or not — this Court is not prepared to wait upon the California Supreme Court. This Court has an obligation to decide the cases on its docket, resorting to abstention only in truly exceptional circumstances."); Campanelli v. Allstate Ins. Co., No. CV 98-7185 RJK, 2000 WL 231824, *6 (C.D. Cal. Feb. 8, 2000) (Kelleher, J.) (same);
(2) The one-year limitations period contained in the insurance polices as well as in California Insurance Code Section 2071 governs the plaintiffs' state as well as RICO claims. Campanelli v. Allstate Ins. Co., 85 F. Supp.2d 980, 984 (C.D. Cal. 2000) (Kelleher, J.) ("[t]he [Plaintiffs'] lawsuit for bad faith, tortious conduct, and breach of contract emanates from the policy itself. The lawsuit seeks redress for damages caused by Allstate's conduct during the adjustment of the [Plaintiffs'] property damage claim. Accordingly, the [Plaintiffs'] action is `on the policy,' and therefore subject to the one-year time bar."); Campanelli v. Allstate Ins. Co., 97 F. Supp.2d 1211, 1214 (C.D. Cal. 2000) (Kelleher, J.) ("Despite RICO's inherent four-year limitations period, a one-year time bar applies to the RICO claim in this case. The contract of insurance between Allstate and [Plaintiffs] specifically provides for a one-year time bar. . . . Since Allstate and the [Plaintiffs] contracted for a `reasonable' limitations period under California law, any claim arising under that policy would be measured against the one-year time bar. . . . [A]ll of the Plaintiffs' claims — including the RICO claim — arise out of their respective policies of insurance."); and
(3) Senate Bill 1899, reviving 1994 Northridge earthquake claims barred by a statute of limitations defense, does not preclude summary judgment on that ground before the effective date of the enactment on January 1, 2001. Campanelli v. Allstate Ins. Co., No. CV 98-7185 RJK, 2000 WL 1639701, *3 (C.D. Cal. Oct. 17, 2000) (Kelleher, J.) ("Most notably, however, SB 1899 does not apply to claims that have been litigated to finality in any court of competent jurisdiction" before the effective date . . . . SB 1899 does not become effective until January 1, 2001. Meanwhile, the Noahs' claims are subject to summary judgment. . . . Summary judgment constitutes a final adjudication on the merits."). It is against this backdrop that the Court now examines the motion for summary judgment before it.
A. The One-Year Limitations Period Began To Run On The Day Of The 1994 Northridge Earthquake.
Plaintiffs contend that the limitations period did not begin running until their alleged discovery of the true extent of earthquake damage in 1998. However, "[t]his district has found, that in the case of an earthquake, the limitations period begins to run on the date the earthquake occurs." Vashistha v. Allstate Ins. Co., 989 F. Supp. 1029, 1032 (C.D. Cal. 1997). In a case specifically involving the 1994 Northridge earthquake, this district held that:
The standard for determining the date of loss is objective — when a reasonable person would be aware of damage which `deviat[es] from what a reasonable person would consider normal wear and tear. In the context of a loss caused by a single catastrophic event such as an earthquake, the date of loss can only be the date of that event. At that time, a reasonable person would be aware of the facts which might give rise to a claim where any noticeable damage exists as the cause would be known not to be `wear and tear.'
Sullivan v. Allstate Ins. Co., 964 F. Supp. 1407, 1411-12 (C.D. Cal. 1997).
And, in any event, Dean Dennis admitted at deposition that he subjectively was aware that they had suffered damage to their home as a result of the earthquake immediately thereafter. (Def. App. Ex. In Supp. Mot. Summ. J. Re: Dennis ("Dennis App."), Ex. B at 42:17-44:9.). To the extent Plaintiffs contend that they did not discover additional earthquake damage until 1998, "they cannot rely on later discovered damages arising from the same cause of loss to save their claims." Sullivan, 964 F. Supp. at 1414.
B. The One-Year Limitation Period Was Tolled From The Time Plaintiffs Submitted Their Claim To Allstate Until They Were Paid In Settlement Thereof.
Plaintiffs also contend that the one-year limitations period remained tolled after Plaintiffs submitted their claims to Allstate because Allstate never gave Plaintiffs a formal written notice of the denial of their claim per Aliberti v. Allstate Ins. Co., 74 Cal.App.4th 138, 145-46 (1999).
Aliberti holds that the one-year limitations period is equitably tolled from the time the insured files a timely notice, pursuant to policy notice provisions, to the time the insurer formally denies the claim in writing. Aliberti v. Allstate Ins. Co., 74 Cal.App.4th 138, 145-46 (1999) (citing Prudential-LMI Com. Ins. v. Superior Court, 51 Cal.3d 674, 678 (1990). However, Aliberti expressly speaks to denials — not settlements — of claims.
The underlying purpose of a notice such as the one required in Aliberti is to alert the insured to the fact that his claim has been closed, thus ending the equitable tolling, so that he may pursue any litigation against the insurer within the statutory period. In the case at hand, the Dennises received two checks in settlement of their claim. While it is questionable whether the notations on the checks alone were sufficient to put the Dennises on notice that their claim was closed, Dean Dennis testified at deposition that cracks began to reappear on his home after the repairs had been completed but that he did not contact Allstate because "[t]here was a lot of publicity about this one-year time limit thing" and he "assumed that that boat had sailed." (Dennis App, Ex. B at 81:20-82:2.). Thus, there is evidence that the Dennises had knowledge that their claim had been closed and that they had one year within which to bring suit against Allstate regarding any outstanding disputes therewith.
C. Allstate Is Not Estopped From Asserting The One-Year Statute of Limitations Defense.
Finally, Plaintiffs contend that Allstate is estopped from asserting the one-year statute of limitations because it (1) failed to comply with the disclosure requirements of the Fair Claims Settlement Practices Regulations; and (2) concealed the true extent of the damage to Plaintiffs' home through fraudulent engineering reports.
1. The Fair Claims Settlement Practices Regulations notice provision does not apply to claims settled by payment.
The Fair Claims Settlement Practices Regulations requires insurers to inform insureds about applicable time limits relative to their claims. See Cal. Code Regs., tit. 10, § 2695.7(b)(1). Failure to do so may estop the insurer from asserting the statute of limitations defense. See Spray, Gould Bowers v. Associated Int'l Ins. Co., 71 Cal.App.4th 1260 (1999). However, this requirement expressly does not apply where a claim is settled by payment:
Except where a claim has been settled by payment, every insurer shall provide written notice of any statute of limitation or other time period requirement upon which the insurer may rely to deny a timely claim.
Cal. Code Reg., tit 10, § 2695.7(f) (emphasis added).
It is undisputed that Plaintiffs' claim was settled by payment. Allstate is not estopped from asserting the statute of limitations defense on this ground.
2. Plaintiffs have failed to raise any triable issues of material fact as to whether Allstate is estopped from asserting the statute of limitations because of fraudulent concealment.
Alternatively, Plaintiffs contend that Allstate is estopped from asserting the statute of limitations because it concealed the true extent of the damage to Plaintiffs' property through inadequate investigation and fraudulent engineering reports. This argument is based on the same facts as another, similar contention Plaintiffs make; namely, that the statute of limitations was equitably tolled during the time that Allstate concealed the true extent of damages from Plaintiffs through fraudulent engineering reports.
In order to evoke estoppel, Plaintiffs must establish the following: (1) the party to be estopped was apprised of the facts; (2) the other party was ignorant of the true state of facts; (3) the party to be estopped intended that its conduct be acted upon; and (4) the other party reasonably relied on the conduct to its detriment. American Cas. Co. v. Baker, 22 F.3d 880, 892 (9th Cir. 1994). Where any one of the elements of equitable estoppel is absent, the claim must fail. Id. In order to establish fraudulent concealment, Plaintiffs must prove (1) the substantive elements of fraud; and (2) an excuse for late discovery of the facts. Community Cause v. Boatwright, 124 Cal.App.3d 888, 900 (1981).
To the extent Plaintiffs rely on general references to the purported fraudulent scheme allegedly perpetrated by Shadowbrook and/or Western States, or to allegations that certain engineers' reports prepared by Western States under subcontract with Shadowbrook had been issued under the stamp of architects and/or engineers who had never inspected Plaintiffs' property, the Court found in Smith v. Allstate Ins. Co. that the former was inadmissible as "bad acts" evidence in the absence of specific, particularized evidence linking the alleged scheme to the individual plaintiff, and that the latter was not per se evidence of fraud.
There is no evidence of any fraudulent concealment or reliance thereon in the case at hand. Dean Dennis testified at deposition that he checked the Shadowbrook Engineering Report ("Report") against his own list of damages, and that he could not identify anything that was missed by the Report. (Decl. Mark Brifman In Opp'n. To All Seven of Def. Mot. For Summ. J. ("Brifman Decl."), Ex. 14 at 121:14-122:8.). And although Plaintiffs claim that there were inaccuracies in the Report, Dean Dennis' testimony indicates a lack of reliance thereon. Specifically, Dean Dennis testified that the Report was inaccurate in that it identified needed repairs to side property line walls, even though his property had no side walls. (Brifman Decl., Ex. 14 at 127:7-11.) Since there were no side walls to be repaired in the first place, the Dennises suffered no damages from the Report's alleged inaccuracy regarding same. Further, Dean Dennis testified that the Report indicated that the floor in the family room area was "stepped up," when it actually was sunken. (Brifman Decl., Ex. 14 at 127:19-128:9.) However. Dean Dennis also testified that he has not felt the need to do anything about the leveling of the floor, and that "whether this is an inaccurate diagram or not has not affected any of the repair that [he] did or would have done to [his] property." (Brifman Decl., Ex. 14 at 128:10-25.). Because the record is devoid of any evidence of fraudulent concealment and of Plaintiffs' reliance thereon, Plaintiffs' estoppel and tolling arguments both fail.
DISPOSITION
IT IS HEREBY ORDERED that Defendant's motion for summary judgment against Plaintiffs Dean and Dorothy Dennis be granted.
IT IS FURTHER ORDERED that counsel for Defendant submit a Judgment to this effect in accordance with the Local Rules.
IT IS SO ORDERED.
ORDER GRANTING DEFENDANT ALLSTATE INSURANCE COMPANY'S MOTION FOR SUMMARY JUDGMENT AGAINST PLAINTIFF AGUSTIN GARIBAY
On November 27, 2000, Defendant Allstate Insurance Company ("Defendant," or "Allstate") filed a motion for summary judgment against Plaintiff Agustin Garibay ("Plaintiff," or "Garibay"). Plaintiff opposed the motion. The Court heard oral argument on December 18, 2000 and, having considered the papers, pleadings, and records on file herein, the Court grants the motion.
STATEMENT OF FACTS
The following facts are not disputed. Garibay is an Allstate policyholder who suffered property damage to his home as a result of the 1994 Northridge earthquake on January 17, 1994.
Garibay received a total of "about thirty-eight, thirty-nine thousand dollars" from Allstate in payment of his claim for earthquake damages. On May 2, 1994, Allstate issued Garibay one check in the amount of $39,171.56 and another check in the amount of $9,609.09.
On May 1, 1998, Garibay joined several other plaintiffs in the instant suit against Allstate and Allstate's contractors, alleging fraud in the adjustment of claims following the earthquake.
Plaintiffs specifically allege claims for: (1) RICO violations, 18 U.S.C. § 1961-1968; (2) Negligence; (3) Negligent Misrepresentation: (4) Intentional Misrepresentation; (5) Breach of the Covenant of Good Faith and Fair Dealing; and (6) Breach of Contract.
STANDARD
Summary judgment is proper if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A fact is material only if it is relevant to a claim or defense and its existence might affect the suit's outcome. See T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Assoc., 809 F.2d 626, 630 (9th Cir. 1987). The court must view the facts and draw inferences in the manner most favorable to the non-moving party. See Chaffin v. United States, 176 F.3d 1208, 1213 (9th Cir. 1999).The moving party bears the burden of demonstrating the absence of a genuine issue of material fact for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). [T]he burden on the moving party may be discharged by `showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986); see Musick v. Burke, 913 F.2d 1390, 1394 (9th Cir. 1990). To demonstrate that the non-moving party has no evidence, the moving party must affirmatively show the absence of such evidence in the record, either by deposition testimony, the inadequacy of documentary evidence or by any other form of admissible evidence. See Celotex, 477 U.S. at 322. The moving party has no burden to negate or disprove matters on which the opponent will have the burden of proof at trial. See id. at 325.
A non-moving party's allegation that factual disputes persist between the parties will not automatically defeat an otherwise properly supported motion for summary judgment. See Fed.R.Civ.P. 56(e) (non-moving party "may not rest upon the mere allegations or denials of the adverse party's pleadings, but . . . must set forth specific facts showing that there is a genuine issue for trial.). "[A] mere `scintilla' of evidence will be insufficient to defeat a properly supported motion for summary judgment; instead, the nonmoving party must introduce some `significant probative evidence tending to support the complaint.'" Fazio v. City and County of San Francisco, 125 F.3d 1328, 1331 (9th Cir. 1997), quoting Anderson, 477 U.S. at 249, 252. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.
DISCUSSION
This Court previously made the following rulings in Campanelli v. Allstate Ins. Co., a related action:
(1) The Court declines to abstain from deciding the motions pending the California Supreme Court decision in Vu v. Prudential Prop. Cas. Ins. Co. Campanelli v. Allstate Ins. Co., 85 F. Supp.2d 980, 986 (C.D. Cal. 2000) (Kelleher, J.) ("In any event — whether the Vu opinion would control the result or not — this Court is not prepared to wait upon the California Supreme Court. This Court has an obligation to decide the cases on its docket, resorting to abstention only in truly exceptional circumstances."); Campanelli v. Allstate Ins. Co., No. CV 98-7185 RJK, 2000 WL 231824, *6 (C.D. Cal. Feb. 8, 2000) (Kelleher. J.) (same);
(2) The one-year limitations period contained in the insurance polices as well as in California Insurance Code Section 2071 governs the plaintiffs' state as well as RICO claims. Campanelli v. Allstate Ins. Co., 85 F. Supp.2d 980, 984 (C.D. Cal. 2000) (Kelleher, J.) ("[t]he [Plaintiffs'] lawsuit for bad faith. tortious conduct, and breach of contract emanates from the policy itself. The lawsuit seeks redress for damages caused by Allstate's conduct during the adjustment of the [Plaintiffs'] property damage claim. Accordingly, the [Plaintiffs'] action is `on the policy,' and therefore subject to the one-year time bar."); Campanelli v. Allstate Ins. Co., 97 F. Supp.2d 1211, 1214 (C.D. Cal. 2000) (Kelleher, J.) ("Despite RICO's inherent four-year limitations period, a one-year time bar applies to the RICO claim in this case. The contract of insurance between Allstate and [Plaintiffs] specifically provides for a one-year time bar. . . . Since Allstate and the [Plaintiffs] contracted for a `reasonable' limitations period under California law, any claim arising under that policy would be measured against the one-year time bar. . . . [A]ll of the Plaintiffs' claims — including the RICO claim — arise out of their respective policies of insurance."); and
(3) Senate Bill 1899, reviving 1994 Northridge earthquake claims barred by a statute of limitations defense, does not preclude summary judgment on that ground before the effective date of the enactment on January 1, 2001. Campanelli v. Allstate Ins. Co., No. CV 98-7185 RJK, 2000 WL 1639701, *3 (C.D. Cal. Oct. 17, 2000) (Kelleher, J.) ("Most notably, however, SB 1899 does not apply to claims that have been litigated to finality in any court of competent jurisdiction" before the effective date . . . . SB 1899 does not become effective until January 1, 2001. Meanwhile, the Noahs' claims are subject to summary judgment. . . . Summary judgment constitutes a final adjudication on the merits."). It is against this backdrop that the Court now examines the motion for summary judgment before it.
A. The One-Year Limitations Period Began To Run On The Day Of The 1994 Northridge Earthquake.
Plaintiff contends that the limitations period did not begin running until his alleged discovery of the true extent of earthquake damage in 1998. However, "[t]his district has found. that in the case of an earthquake, the limitations period begins to run on the date the earthquake occurs." Vashistha v. Allstate Ins. Co., 989 F. Supp. 1029, 1032 (C.D. Cal. 1997). In a case specifically involving the 1994 Northridge earthquake, this district held that:
The standard for determining the date of loss is objective — when a reasonable person would be aware of damage which `deviat[es] from what a reasonable person would consider normal wear and tear. In the context of a loss caused by a single catastrophic event such as an earthquake, the date of loss can only be the date of that event. At that time, a reasonable person would be aware of the facts which might give rise to a claim where any noticeable damage exists as the cause would be known not to be `wear and tear.'
Sullivan v. Allstate Ins. Co., 964 F. Supp. 1407, 1411-12 (C.D. Cal. 1997).
And, in any event, Garibay admitted at deposition that he subjectively was aware that he had suffered damage to his home as a result of the earthquake "the same day the earthquake happened." (Def. App. Ex. In Supp. Mot. Summ. J. Re: Garibay ("Garibay App."), Ex. B at 45:12-15.). To the extent Plaintiff contends that he did not discover additional earthquake damage until 1998, "[he] cannot rely on later discovered damages arising from the same cause of loss to save [his] claims." Sullivan, 964 F. Supp. at 1414.
B. The One-Year Limitation Period Was Tolled From The Time Plaintiff Submitted His Claim To Allstate Until He Was Paid In Settlement Thereof.
Plaintiff also contends that the one-year limitations period remained tolled after Plaintiff submitted his claim to Allstate because Allstate never gave Plaintiff a formal written notice of the denial of his claim per Aliberti v. Allstate Ins. Co., 74 Cal.App.4th 138, 145-46 (1999).
Aliberti holds that the one-year limitations period is equitably tolled from the time the insured files a timely notice, pursuant to policy notice provisions, to the time the insurer formally denies the claim in writing. Aliberti v. Allstate Ins. Co., 74 Cal.App.4th 138, 145-46 (1999) (citing Prudential-LMI Com. Ins. v. Superior Court, 51 Cal.3d 674, 678 (1990). However, Aliberti expressly speaks to denials — not settlements — of claims.
The underlying purpose of a notice such as the one required in Aliberti is to alert the insured to the fact that his claim has been closed, thus ending the equitable tolling, so that he may pursue any litigation against the insurer within the statutory period. In the case at hand, Garibay received two checks in settlement of his claim. While it is questionable whether the notations on the checks alone were sufficient to put Garibay on notice that his claim was closed, Garibay testified at deposition that when he told his Allstate agent that the settlement amount was not going to be enough to repair the damage, he was told "[j]ust to fix it and it should be enough." (Garibay App, Ex. B at 60:22-24.). Thus, there is evidence that Garibay knew or should have known from the Allstate agent's statement that Allstate had concluded his claim and was not going to pay him any additional amounts.
C. Allstate Is Not Estopped From Asserting The One-Year Statute Of Limitations Defense.
Finally, Plaintiff contends that Allstate is estopped from asserting the one-year statute of limitations because it (1) failed to comply with the disclosure requirements of the Fair Claims Settlement Practices Regulations; and (2) concealed the true extent of the damage to Plaintiff's home through fraudulent engineering reports.
1. The Fair Claims Settlement Practices Regulations notice provision does not apply to claims settled by payment.
The Fair Claims Settlement Practices Regulations requires insurers to inform insureds about applicable time limits relative to their claims. See Cal. Code Regs., tit. 10, § 2695.7(b)(1). Failure to do so may estop the insurer from asserting the statute of limitations defense. See Spray, Gould Bowers v. Associated Int'l Ins. Co., 71 Cal.App.4th 1260 (1999). However, this requirement expressly does not apply where a claim is settled by payment:
Except where a claim has been settled by payment, every insurer shall provide written notice of any statute of limitation or other time period requirement upon which the insurer may rely to deny a timely claim.
Cal. Code Reg., tit 10, § 2695.7(f) (emphasis added).
It is undisputed that Plaintiffs' claim was settled by payment. Allstate is not estopped from asserting the statute of limitations defense on this ground.
2. Plaintiff has failed to raise any triable issues of material fact as to whether Allstate is estopped from asserting the statute of limitations because of fraudulent concealment.
Alternatively, Plaintiff contends that Allstate is estopped from asserting the statute of limitations because it concealed the true extent of the damage to Plaintiff's property through inadequate investigation and fraudulent engineering reports. This argument is based on the same facts as another, similar contention Plaintiff makes; namely, that the statute of limitations was equitably tolled during the time that Allstate concealed the true extent of damages from Plaintiff through fraudulent engineering reports.
In order to evoke estoppel, Plaintiff must establish the following: (1) the party to be estopped was apprised of the facts; (2) the other party was ignorant of the true state of facts; (3) the party to be estopped intended that its conduct be acted upon; and (4) the other party reasonably relied on the conduct to its detriment. American Cas. Co. v. Baker, 22 F.3d 880, 892 (9th Cir. 1994). Where any one of the elements of equitable estoppel is absent, the claim must fail. Id. In order to establish fraudulent concealment, Plaintiff must prove (1) the substantive elements of fraud; and (2) an excuse for late discovery of the facts. Community Cause v. Boatwright, 124 Cal.App.3d 888, 900 (1981).
To the extent Plaintiff relies on general references to the purported fraudulent scheme allegedly perpetrated by Shadowbrook and/or Western States, or to allegations that certain engineers' reports prepared by Western States under subcontract with Shadowbrook had been issued under the stamp of architects and/or engineers who had never inspected Plaintiff's property, the Court found in Smith v. Allstate Ins. Co. that the former was inadmissible as "bad acts" evidence in the absence of specific, particularized evidence linking the alleged scheme to the individual plaintiff, and that the latter was not per se evidence of fraud.
There is no evidence of any fraudulent concealment or reliance thereon in the case at hand. Garibay testified at deposition that he received the Shadowbrook Engineering Report ("Report") a long time after he settled his claim, and that he did not rely on anything that was in the Report to do the repairs. (Decl. Mark Brifman In Opp'n. To All Seven of Def. Mot. For Summ. J. ("Brifman Decl."), Ex. 10 at 74:16-19; 75:8-18; 77:24-78:24.). Garibay further testified that both before and after he settled the claim with Allstate back in 1994, he knew the settlement amount was not enough to pay for the repairs, but nonetheless did not bring suit against Allstate until 1998. (Brifman Decl., Ex. 10 at 39:11-14; 60:3-21; 83:17-25; 116:19-25.). Because the record is devoid of any evidence of fraudulent concealment and of Plaintiff's reliance thereon, Plaintiff's estoppel and tolling arguments both fail.
DISPOSITION
IT IS HEREBY ORDERED that Defendant's motion for summary judgment against Plaintiff Agustin Garibay be granted.
IT IS FURTHER ORDERED that counsel for Defendant submit a Judgment to this effect in accordance with the Local Rules.
IT IS SO ORDERED.