Reply Reply To Opposition To Demurrer To Crosscomplaint

Reply

Cal. Super. - 2nd Dist.January 9, 2017

Electronically FILED by Superio| NN O N n e BA W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 I ERIC LAWTON (SBN 053958) Law Offices of ERIC LAWTON A Professional Corporation 12400 Wilshire Blvd. Suite 400 Los Angeles, California 90025 Tel: 310.319.5409 Fax: 310.394.8359 elawton @ericlawtonlaw.com Attorney for Plaintiff and Cross Defendant ACTION ROOFING, INC. ACTION ROOFING, INC., a California corporation Plaintiff, Vv. APPLIED UNDERWRITERS, INC., a Nebraska corporation, APPLIED UNDERWRITERS CAPTIVE RISK ASSURANCE COMPANY, INC. an Iowa corporation, APPLIED RISK SERVICES, INC., a Nebraska corporation, APPLIED RISK SERVICES OF NEW YORK, INC., a New York Corporation, CALIFORNIA INSURANCE COMPANY, a California corporation, VENTURE PACIFIC INSURANCE SERVICES, INC. a California Corporation, UNITED AGENCIES, INC., a California corporation and DOES 1 through 50, inclusive, Defendants. APPLIED UNDERWRITERS, INC., APPLIED UNDERWRITERS CAPTIVE RISK ASSURANCE COMPANY, INC,, APPLIED RISK SERVICES, INC., CALIFORNIA INSURANCE COMPANY Cross-Complainants V. ACTION ROOFING, INC. Cross-Defendant Court of California, County of Los Angeles on 02/14/2019 03:31 PM Sherri R. Carter, Executive Officer/Clerk of Court, by R. Sanchez,Deputy Clerk SUPERIOR COURT FOR THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES Case No. BC646108 Assigned to Hon. Maureen Duffy-Lewis, Dept. 38 PLAINTIFF AND CROSS-DEFENDANT ACTION ROOFING, INC.’S REPLY MEMORANDUM TO OPPOSITION TO DEMURRER TO CROSS-COMPLAINT Date: February 20, 2019 Time: 9:30 a.m. Dept: 38 Reservation ID: 181002353681 -1 Complaint filed: 1/09/2017 Trial Date: 11/12/2019 1 ACTION ROOFING, INC.’S REPLY TO OPPOSITION TO DEMURRER AN nn BA W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 MEMORANDUM OF POINTS AND AUTHORITIES Plaintiff and Cross-Defendant Action Roofing, Inc. ("Action Roofing") respectfully submits its Reply to the opposition papers of Cross-Complainants Applied Underwriters Captive Risk Assurance Company, Inc. ("AUCRA") and California Insurance Company (CIC), (collectively “Cross-Complainants’) and requests that the demurrer to the cross- complaint be sustained without leave to amend. The opposition is a blatant attempt to confuse the court with misleading and deceptive arguments about rate filing statutes which have been rejected by the California Department of Insurance and all California appellate cases cited in the moving papers of the demurrer and motion to strike (“moving papers”), as to which this court has already taken judicial notice. As shown in the moving papers, Cross- Complainants are precluded by judicial estoppel and issue preclusion from even making these arguments, and their misleading reference to a purported Federal Court “ruling” was, in reality, an interim order with no final disposition which is of no binding effect in this case. Cross-Complainants’ attempt to obfuscate the issues and mislead this court must be disregarded. The Reinsurance Participation Agreement ("RPA") that was part of the EquityComp program discussed in the Shasta Linen and Nielsen decisions and held to be void, is identical to the RPA in the SolutionOne program that is at issue herein, which is likewise void for the same reasons’. Both the EquityComp program and the SolutionOne program include this identical RPA, which is an illegal side agreement that was not submitted to and approved by the California Insurance Commissioner in violation of insurance code section 11658. It's not very "amazing" that Action is seeking to strike down its participation in the SolutionOne Program (and its supposed “profit sharing”) because that program has been found to be a complete sham by the California Insurance Commissioner and the appellate courts of California and other states across the nation. Cross-Complainants’ attempt to distinguish the Shasta Linen decision fails. The findings in the precedential Shasta Linen decision have collateral estoppel effect for the reasons set forth in the moving papers and the Preclusion Order. Separate and apart from its collateral estoppel effect, Shasta Linen is directly on 1 See, “Preclusion Order” by Chief Administrative Law Judge Kristin L. Rosi, entered on December 1, 2017 In the Matter of the Appeal of Action Roofing, Inc., Department of Insurance Administrative Hearing Bureau no. AHB-WCA-16-13, (attached to Action Roofing's moving papers as Exhibit 2), to which this court has already taken judicial notice in its order dated 7/31/2018, attached as Exhibit 1 to moving papers) 28 - -1- - ACTION ROOFING, INC.'S REPLY TO OPPOSITION TO DEMURRER AN nn BA W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 point, the decision should be followed by this Court and the demurrer should be sustained without leave to amend. Cross-Complainants’ discussion on judicial notice is likewise misplaced. The Evidence Code states that judicial notice may be taken of the official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States. Cal.Evid. Code § 452 (c¢). "[R]ecords, reports and orders of administrative agencies" are ‘official acts," of which a court may take judicial notice." Rodas v. Spiegel (2001) 87 Cal.App.4th 513, 518, as modified. Under Evidence Code Section 452(c), the trial court may take judicial notice of the records and files of a state administrative board. Fowler v. Howell (1996) 42 Cal. App. 4th 1746, 1750. It is appropriate for this Court to take judicial notice of the Shasta Linen case and the findings made in that case because the identical issues are involved in this case, and in fact, this court has already done so. Cross-Complainants’ arguments on judicial notice are moot because, as Action Roofing pointed out in the demurrer and motion to strike moving papers, (“moving papers”) in this court’s July 31, 2018 Order, (Exhibit 1 to moving papers) in this case this Court has already taken Judicial Notice of Shasta Linen and the Preclusion Order, pursuant to Evidence Code §§ 450, 451, 452, 453 and 457, of the following official acts of the legislative, executive and judicial departments of the State of California: I. Insurance Commissioner, Dave Jones’ precedential decision and order In the Matter of the Appeal of Shasta Linen Supply, Inc., (“Shasta Linen”) California Department of Insurance Administrative Hearing Bureau case no. AHB-WCA-14-13 before Insurance Commissioner of the State of California dated January 21, 2016, (copy attached to Plaintiff’s Complaint as Exhibit 5). In Shasta Linen, the Insurance Commissioner found the RPA between Shasta Linen and AUCRA (identical to the RPA in this case) was a "collateral agreement" within the meaning of Reg. section 2268 because it modified and supplanted the terms of the CIC policies and therefore it should have been filed with, and approved by, the Insurance Department before it became effective. (Shasta Linen, at pp. 1, 46, 53, 58.) The Insurance Commissioner also found the failure to do so rendered the RPA void as a matter of law. (Id. at p. 65.) The Insurance Commissioner emphasized insurance code section 11658's "na mandatory language that an unfiled policy or endorsement " 'shall not be issued by an insurer’ - -2- - ACTION ROOFING, INC.'S REPLY TO OPPOSITION TO DEMURRER AN nn BA W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 " and that "issuing an unapproved policy or endorsement ‘is unlawful." " (Shasta Linen, at p. 65, italics added.) 2. “Order Taking Official Notice; Notice Regarding the Preclusive Effect of the Shasta Linen Decision” (the “Preclusion Order”) by Chief Administrative Law Judge Kristin L. Rosi, entered on December 1, 2017 In the Matter of the Appeal of Action Roofing, Inc., Department of Insurance Administrative Hearing Bureau no. AHB- WCA-16-13, (Exhibit 2 to Action Roofing's moving papers.) The Preclusion Order (Exhibit 2 to moving papers), ruled that under the Doctrines of Exhaustion of Judicial Remedies and Collateral Estoppel, Cross-complainants (Respondents therein) are precluded from relitigating the findings of facts and legal conclusions made in Shasta Linen, including but not limited attempted enforcement of the unlawful RPA, thus barring the allegations of the First Cause of Action of the Cross-Complaint herein. The CALJ ruled in the Preclusion Order with regard to Action Roofing’s administrative appeal and several others, “The Reinsurance Participation Agreements at issue are identical in all material respects to_the RPA in Shasta Linen and the circumstances surrounding Respondents’ failure to file the RPA, including its impact on the filed rates and guaranteed cost policies are identical in all cases.” The CALJ thus ruled that, by operation of collateral estoppel and the precedential effect of Shasta Linen, Respondents (Cross-Complainants here) are barred from further argument on the findings of fact and relitigation of questions of law decided in Shasta Linen. Furthermore, regardless of its collateral estoppel effect, the Shasta Linen decision should be followed by this Court because the reasoning is sound and is a precedential decision. The California Administrative Adjudication Bill of Rights provisions concerning precedential decisions codified the practice of several agencies, including the Department of Insurance, to designate important decisions, such as Shasta Linen, as precedential. See Cal. Gov't Code § 11425.60. Precedential decisions are entitled to deference from the courts. Alvarado v. Dart Container Corp. of Calif. (2018) 4 Cal.5th 542, 557. As the Supreme Court explained in Alvarado regarding agency interpretation: “[A] court that is exercising its independent judgment should certainly take the agency’s interpretation into consideration, having due regard for the agency’s expertise and special competence, as well as any reasons the agency - -3- - ACTION ROOFING, INC.'S REPLY TO OPPOSITION TO DEMURRER AN nn BA W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 may have proffered in support of its interpretation, and if the court is persuaded, it may, of course, adopt the agency’s interpretation as its own. Alvarado, supra, 4 Cal.5th at 558-559 (emphasis added). The analysis in the Shasta Linen decision is based on sound legal principles and should be followed by this Court. The Nielsen Court used this reasoning in concluding: “... we find (the Shasta Linen decision’s) analysis persuasive on the prohibition of unfiled “collateral” or “side-agreements.” Under the plain language of section 11658 and Regulations section 2268, defendants were required to file the delegation clause and arbitration provision with the Insurance Commissioner because these provisions were collateral side agreements that materially modified the earlier approved CIC policies.” Id. at 1116. The same principles apply here. The identical RPA that was found to be void in the Shasta Linen case is involved in this case. Shasta Linen should be followed in this case and the demurrer should be sustained. Concurrently with this Reply, Action Roofing has requested that this court take judicial notice of two recent Insurance Commissioner precedential decisions that apply to these issues and are persuasive in this case. In both Matter of the Appeal of Adir International, LLC. from the Decision of The Travelers Property Casualty Company of America and Matter of the Appeal of Davidson Hotel Company, LLC from the Decision of The Travelers Property Casualty Company of America, attached to the supplemental request for judicial notice as Exhibits 3 and 4, the California Insurance Commissioner found (1) that Travelers Property Casualty Company of America's filed rating plan violated Insurance Code sections 11658 and 11735, as well as California Code of Regulations, title 10, section 2268; (2) that Travelers' Side Agreements constituted endorsements that must be filed and approved pursuant to Insurance Code section 11658. Travelers violated section 11658 by failing to file those Side Agreements; (3) Travelers’ Side Agreements constitute collateral agreements that were required to be filed and attached and made part of the policy pursuant to California Code of Regulations, title 10, section 2268. Travelers violated California Code of Regulations, title 10, section 2268 by failing to attach its Side Agreements to Appellant's policies; (4) Travelers’ LRARO endorsement and subsequent filing of its Side Agreement does not extinguish its Insurance Code violations; (5) Travelers' use of the unfiled Side Agreements in violation of Insurance Code section 11658 and Regulation section 2268 _ 4- Lo ACTION ROOFING, INC.'S REPLY TO OPPOSITION TO DEMURRER AN nn BA W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 resulted in a misapplication of Travelers' filed rating plan. Travelers failed to properly attach its retrospective rating plan to Appellant's policy as required by Insurance Code section 11735, subdivision (e), as well as section 11658 and (6) Because the Side Agreements applied unfiled terms, conditions, obligations and supplementary rate information, contravening Insurance Code sections 11658 and 11735, as well as Regulation section 2268, the Side Agreements were held to be unenforceable and void as a matter of law. The unfiled Side Agreements were held to violate public policy and the Insurance Commissioner found no compelling reason to enforce them. (See Exhibits 3 and 4 to Supplemental Request for Judicial Notice). In the instant case, as in the Adir International, Davidson Hotel Company, Shasta Linen and Neilsen cases, Cross-Complainants failed to properly file their RPA with the California Department of Insurance in violation of law and regulations, their RPA violates public policy and the Insurance Commissioner found no compelling reason to enforce them, and the RPA is, therefore, unenforceable and void as a matter of law. Furthermore, Cross-Complainants fail in their attempt to distinguish Nielson Contractors, Inc. v. Applied Underwriters, Inc. (2018) 22 Cal. App.5th 1096, again claiming that case dealt with the EquityComp program, not the SolutionOne program and, also, that it involved the decision of whether the arbitration provisions were enforceable. Notably, Cross-Complainants fail to show any differences between the Action Roofing SolutionOne RPA herein, and the EquityComp RPA’s in Shasta Linen or Nielsen. On the contrary, the Preclusion Order specifically found that the unlawful RPA in the Shasta Linen EquityComp program and the RPA in Action Roofing’s SolutionOne program are identical. They are equally void and against California public policy. As stated in the Nielsen decision: Several months before this complaint was filed, in June 2016, the California Insurance Commissioner (Insurance Commissioner) issued an administrative decision in a case involving a different insured (Shasta Linen Supply, Inc.) that had challenged the same EquityComp insurance program offered by these same defendants. (Matter of Shasta Linen Supply, Inc., Decision & Order, dated June 20, 2016, File No. AHB-WCA-14-31 (Shasta Linen).) In the 70- page decision, the Insurance Commissioner found the RPA to be unlawful - -5- - ACTION ROOFING, INC.'S REPLY TO OPPOSITION TO DEMURRER AN nn BA W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 and void as a matter of law for various reasons, including that it had not been filed and approved by the Insurance Department before it was issued. (Ibid.) In reaching this conclusion, the Insurance Commissioner also found the governing administrative regulations require workers' compensation insurers to obtain approvals for “side agreements,” including arbitration provisions that differ from the dispute resolution provisions in a previously approved insurance policy. (Id. at p. 43; See Regs., § 2268.) Nielsen, supra, 22 Cal.App.5th at 1103. Furthermore, the Nielsen decision specifically held that: "[W]e determine these provisions are unenforceable. Generally, “ “ “a contract made in violation of a regulatory statute is void.” * ” (citations) Although there are exceptions to this rule if the unenforceability would result in unjust enrichment, forfeiture, or other form of unfair outcome (see Malek, at pp. 70-71, 16 Cal.Rptr.3d 687), none of these factual circumstances are present here. Id. (emphasis added) In a recent California Court of Appeal decision recently certified for publication, Luxor Cabs, Inc. v. Applied Underwriters Captive Risk Assurance Company (2018) 30 Cal.App.5th 970 (“Luxor Cabs”), the California Court of Appeal again concluded that both the delegation clause and the arbitration provision in the RPA were void and therefore unenforceable because they each separately constituted an “endorsement” to the Policy which was not properly vetted and approved as required by California Insurance Code Section 11658. Id. at 100-101. The same principles that led the First and Fourth Districts of the California Court of Appeal in Nielsen and Luxor Cabs to conclude that the RPA’s arbitration provisions were void also leads to the conclusion that the RPA in the SolutionOne program is void and unenforceable. Next, despite AUCRA's and CIC's arguments to the contrary, Action Roofing has not relied upon any improper "evidence" outside the pleadings. A demurrer can challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian v. Mercury Ins. Co. (2004) 116 CA4th 968, 994. The term “Face of the - -6- - ACTION ROOFING, INC.'S REPLY TO OPPOSITION TO DEMURRER AN nn BA W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 complaint” includes matters shown in exhibits attached to the complaint and incorporated by reference; or in a superseded complaint in the same action. Frantz v. Blackwell (1987) 189 Cal. App. 3d 91, 94; Barnett v. Fireman's Fund Ins. Co. (2001) 90 CA4th 500, 505 (“we rely on and accept as true the contents of the exhibits and treat as surplusage the pleader’s allegations as to the legal effect of the exhibits”); George v. Automobile Club of Southern Calif. (2011) 201 Cal.App.4th 1112, 1130 (“trial court was not required to credit plaintiff’s allegations that extrinsic evidence ‘renders the insurance contract at issue here ambiguous’ where language of policy attached to complaint showed otherwise). Action Roofing's demurrer relies on the pleadings, the contents of the exhibits to the pleadings and to matters judicially noticed and is asking the Court to apply collateral estoppel and the law and analysis set forth in the decisions in Shasta Linen, Nielsen, Luxor Cabs and the Preclusion Order. Finally, the illegality of the RPA at issue in this case can be decided as a matter of law and Cross-complainants’ lengthy discussion about saving illegal contracts can be ignored. There are no factual issues that must be evaluated here because it is undisputed that the RPA in this case was not properly filed, vetted or approved as required by California Insurance Code Section 11658 before it was issued to Action Roofing. This case is clearly distinguishable from Asdourian v. Araj (1985) 38 Cal.3d 276 and other cases cited by Cross-complainants to attempt salvage their unlawful RPA agreement. In Asdourian, for example, the California Supreme Court held that a contractor was not barred from recovering compensation for work performed on remodeling contracts because he entered and performed the contracts in his own name rather than in the name of his licensed sole proprietorship. The Court concluded that Plaintiff substantially complied with the license requirement of the Contractors License Law and that he should not be denied compensation for his work. Id. at 294. Here, there is no issue of substantial compliance, and no analysis of facts are required for this court to determine that the RPA is void and therefore unenforceable as a matter of law and public policy because it constituted an “endorsement” to the insurance policy which was not properly vetted and approved as required by Insurance Code Section 11658. - -7- - ACTION ROOFING, INC.'S REPLY TO OPPOSITION TO DEMURRER AN nn BA W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 CONCLUSION As shown above and in the moving papers, each of Cross-Complainants' allegations in the First Cause of Action have been previously litigated by Cross-Complainants, considered and rejected in recently published decisions by the California Courts of Appeal, in precedential administrative decisions and orders issued by the California Insurance Commissioner, and in administrative orders issued by the Chief Administrative Law Judge of the California Department of Insurance Administrative Hearing Bureau in an Administrative Appeal between these same parties, all of which have been judicially noticed by this Court in its July 31,2018 Order (Exhibit 1 to moving papers). For the foregoing reasons, Cross-Complainants are precluded in this case, by the doctrines of exhaustion of judicial remedies and collateral estoppel, from raising or arguing the factual and legal issues decided by the Commissioner in Shasta Linen. (Preclusion Order, Exh. 2, p. 14), and therefore are precluded from raising or arguing the issues of enforcement of the RPA on which the First Cause of Action of the Cross-Complaint is based. This court has alreadv taken Judicial Notice - which is mandatory - of the preclusive effect of Shasta Linen and the Preclusion Order and thus Shasta Linen's findings of fact and conclusions of law are conclusively presumed: i.e.. the facts and conclusions of law must be accepted and no evidence can be offered to dispute it. [Witkin, Cal Evid. 5 Jud Notice §3 (2012)] California public policy protects unsuspecting consumers from predatory insurance carriers who attempt to sell insurance products that have not been approved by the Department of Insurance. There are no factual issues that must be evaluated here because it is undisputed that the RPA was not properly vetted and approved as required by California Insurance Code Section 11658 before it was issued to Action Roofing. A contract made in violation of a regulatory statute is void. (Nielsen, supra) This court has already taken judicial notice of the Shasta Linen decision, in which the Insurance Commissioner found the RPA to be unlawful and void as a matter of law for various reasons, including that it had not been filed and approved by the Insurance Department before it was issued. This court has already taken judicial notice of the Preclusion Order”, Exhibit 2 to moving papers, which specifically found that the unlawful RPA in the Shasta Linen - -8- - ACTION ROOFING, INC.'S REPLY TO OPPOSITION TO DEMURRER AN nn BA W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 EquityComp program and the RPA in Action Roofing’s SolutionOne program are identical, and which ruled that under the doctrines of Doctrines of Exhaustion of Judicial Remedies and Collateral Estoppel, Cross-complainants are precluded from relitigating the findings of facts and legal conclusions made in Shasta Linen, including but not limited attempted enforcement of the unlawful RPA, thus barring the allegations of the First Cause of Action of the Cross-Complaint herein. The RPA on which the First Cause of Action is based is void, unlawful and unenforceable. Cross-Complainants cannot amend to cure this foundational defect. For the foregoing reasons and the reasons set forth in its moving papers, Action Roofing respectfully requests that its demurrer to the first cause of action of the cross- complaint be sustained without leave to amend. Respectfully submitted, Dated: February 11, 2019 Law Offices of ERIC LAWTON A Professional Corporation By: Eric Lawton ERIC LAWTON, ESQ. Attorney for Plaintiff and Cross-Defendant ACTION ROOFING, INC. - -9- - ACTION ROOFING, INC.'S REPLY TO OPPOSITION TO DEMURRER AN nn BA W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 PROOF OF SERVICE State of California, ) County of Los Angeles) I am employed in the county aforesaid; I am over the age of 18 years and not a party to the within action; my business address is 12400 Wilshire Blvd., Suite 400, Los Angeles, CA 90025. [x] On February 11, 2019, I served the following document(s) entitled: PLAINTIFF AND CROSS-DEFENDANT ACTION ROOFING, INC.’S REPLY TO OPPOSITION TO DEMURRER TO CROSS-COMPLAINT on the interested parties in this action as follows: SEE ATTACHED SERVICE LIST BY MAIL: By placing a true copy thereof enclosed in separate sealed envelopes with postage thereon fully paid as per the custom and practice of the mail room to be placed in the United States mail at Los Angeles, California, addressed as above. I am "readily familiar" with this firm's practice for collection and processing of correspondence for mailing with the United States Postal Service. Said correspondence is deposited with the U.S. Postal Service on the same day in the ordinary course of business. I am aware that upon motion of party served, service is presumed invalid if the postal cancellation date or postage meter date is more than one day after date of deposit for mailing as declared herein. BY OVERNIGHT COURIER: The foregoing document was placed in separate sealed envelopes designated as priority overnight (delivery by next business morning) with delivery fees paid or provided for and addressed as stated on the attached service list. I deposited such envelope in the Courier’s collection box at 12400 Wilshire Blvd., Los Angeles, CA 90025. BY FAX: I transmitted the foregoing document by facsimile to the party/parties identified on the attached service list at the facsimile number(s) indicated therein. Such transmission(s) was/were verified as complete and without error. BY EMAIL: I transmitted a copy of the foregoing document(s) via email to the addressee(s). BY PERSONAL SERVICE: One Legal Attorney Service personally delivered a true and correct copy of the foregoing document(s) by hand to the office of I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on February 11, 2019 at Los Angeles, California. Eric Lowtovv Eric Lawton -10- - ACTION ROOFING, INC.'S REPLY TO OPPOSITION TO DEMURRER AN nn BA W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 ACTION ROOFING, INC. v. APPLIED UNDERWRITERS. INC, et al. LASC Case No. BC646108 SERVICE LIST Spencer Y. Kook, Esq. (SBN 205304) Attorneys for Defendants & Cross-Complainants skook @mail.hinshawlaw.com CALIFORNIA INSURANCE COMPANY, James C. Castle, Esq. (SBN 235551) APPLIED UNDERWRITERS, INC.; jcastle @mail.hinshawlaw.com APPLIED UNDERWRITERS CAPTIVE HINSHAW & CULBERTSON LLP RISK ASSURANCE COMPANY, INC; 633 West Fifth Street, 47thFloor APPLIED RISK SERVICES, INC.; Los Angeles, CA 90071-2043 APPLIED RISK SERVICES of NEW Telephone: 213-680-2800 YORK, INC. Facsimile: 213-614-7399 Joseph Campo, Esq. (SBN 1500035) Attorneys for Defendants LEWIS BRISBOIS BISGAARD UNITED AGENCIES, INC. AND & SMITH LLP VENTURE PACIFIC INS. SERVICES, IN 633 West 5" Street, Suite 4000 Los Angeles, CA 9007 Tel: (213)250-1800 Fax: (213)250-7900 Joe.Campo@lewisbrisbois.com - -11- - ACTION ROOFING, INC.'S REPLY TO OPPOSITION TO DEMURRER