Case Number: BC625917 Hearing Date: December 10, 2019 Dept: 50

Superior Court of California

County of Los Angeles

Department 50

DINA B. CHERNICK et al.,

Plaintiffs,

vs.

SAFECO INSURANCE COMPANY OF AMERICA, et al.

Defendants.

Case No.:

BC 625917

Hearing Date:

December 10, 2019

Hearing Time:

8:30 a.m.

[TENTATIVE] ORDER RE:

MOTION FOR SUMMARY ADJUDICATION AS TO PLAINTIFFS’ EIGHTH CAUSE OF ACTION IN THE THIRD AMENDED COMPLAINT ALLEGED AGAINST DEFENDANT TWO ELEVEN SPALDING CONDOMINIUM ASSOCIATION

Background

Plaintiffs Dina B. Chernick and Nina L. Chernick (jointly, “Plaintiffs”) filed this action on July 1, 2016 against Defendants The Liberty Company Insurance Brokers, Inc. (“The Liberty Company”), Julie Naines (“Naines”), Safeco Insurance Company of America (“Safeco”), Two Eleven Spalding Condominium Association (“Two Eleven Spalding”), and Bonnie Sugar (“Sugar”). The impetus of the lawsuit was a water incursion event in July 2014 and October 2015 at Plaintiffs’ condominium that caused damage and property loss. Plaintiffs maintained homeowner’s insurance policy with Safeco, which was brokered by The Liberty Company (for whom Naines was an agent). Two Eleven Spalding is the homeowners association to which Plaintiffs belonged as members, and Sugar owned the unit directly above Plaintiffs’ unit.

The operative Third Amended Complaint (“TAC”) was filed on June 26, 2018, asserts causes of action against Two Eleven Spalding, including the eighth cause of action for intentional interference with contract. Two Eleven Spalding now moves for summary adjudication of the eighth cause of action. Plaintiffs and Sugar oppose.

Evidence

The Court grants Two Eleven Spalding’s request for judicial notice as to Exhibits A, B, C, F, and G.

The Court rules on Two Eleven Spalding’s objections to the evidence submitted by Plaintiffs as follows:

Objection 1: sustained

Objection 2: sustained

Objection 3: sustained except to show that Safeco communicated with Plaintiffs without including Two Eleven Spalding

Objection 4: sustained

Objection 5: sustained

Objection 6: sustained

Objection 7: sustained except to show communications with Safeco and Two Eleven Spalding were copied to Plaintiffs

Objection 8: overruled as limited by Plaintiffs

Objection 9: sustained

Objection 10: sustained

Objection 11: sustained

Objection 12: sustained

Objection 13: overruled

Objection 14: sustained

Objection 15: sustained

Objection 16: sustained

Objection 17: overruled

Objection 18: sustained

Objection 19: sustained

Objection 20: overruled

Objection 21: sustained

Objection 22: sustained

Objection 23: sustained

Objection 24: overruled

Legal Standard

“[A] motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” ((Code Civ. Proc., § 437c (c).) The moving party bears the initial burden of production to make a prima facie showing that there are no triable issues of material fact. ((Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) If the moving party carries this burden, the burden shifts to the opposing party to make a prima facie showing that a triable issue of material fact exists. (Ibid.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” ((Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

When a defendant seeks summary judgment, he/she must show either (1) that one or more elements of the cause of action cannot be established; or (2) that there is a complete defense to that cause of action. ((Code Civ. Proc., § 437c(p)(2).)

Discussion

Two Eleven Spalding contends that it is entitled to summary adjudication on the intentional interference with contract cause of action because the statute of limitations has run on the claim.

The intentional interference with contract cause of action was a new cause of action added to the TAC on June 26, 2018. In support of the cause of action, Plaintiffs allege that they were party to a written contract of insurance with Safeco, that Two Eleven Spalding was aware of the contract, that Two Eleven Spalding intentionally interfered with the contract by contacting Safeco directly and providing false and misleading statements to Safeco about Plaintiffs, about the progress of the reconstruction work of Plaintiffs’ condominium unit, and about Two Eleven Spalding’s actions which caused delays in Plaintiffs’ ability to complete the reconstruction of their unit, and that as a result, Safeco ceased making payments to or on behalf of Plaintiffs for “Additional Living Expenses” (“ALE”). (TAC, ¶¶ 81-87.)

Specifically, Plaintiffs claim that a Two Eleven Spalding employee named Dirk Foster interfered by communicating with Safeco. (Two Eleven Spalding’s Undisputed Material Fact (“UMF”) 1.) On November 5, 2015, Dina Chernick wrote an email to various individuals connected to Two Eleven Spalding, in which she states, in pertinent part, the following: “I am at a loss to understand why the HOA is in direct contact with our insurer, Safeco, through Rosanne Henricks. We have not consented to the HOA’s contact with our insurer in any sort of agency, and trust that the HOA does not intend to interfere with our business relationships with our insurer. We request that all communications which the HOA believes should be made to our insurer be sent to us with the request that they be forwarded on to our insurer. If and to the extent that the HOA has any communication with our insurer which concern us or our property, we ask that we be copied on same.” (Panman Decl., ¶ 6, Ex. E.) At her deposition, Dina Chernick testified that she believed that Mr. Foster’s communications with Safeco impacted Safeco’s decision to cut the “loss of use” (or ALE) benefits off. (Panman Decl., ¶ 5, Ex. D, pp. 975:13 – 976:16.) The loss of use or ALE benefits were cut off on or about December 24, 2015. (UMF 4.[1])

Based on the foregoing, Two Eleven Spalding contends that the cause of action for intentional interference with contractual relations accrued on or about December 24, 2015. ((See Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 397 [finding that a cause of action generally accrues when it is “complete with all of its elements”].) An intentional interference with contract cause of action is subject to a two-year statute of limitations pursuant to Code of Civil Procedure section 339. (See Trembath v. Digardi (1974) 43 Cal.App.3d 834, 836 [finding that an action in tort for wrongful inducement of breach of contract is subject to a two year limitation period, as fixed by Code of Civil Procedure section 339, subdivision 1].) Therefore, the statute of limitations had run by December 2017. Because the TAC was not filed until June 2018, Two Eleven Spalding contends that the claim is barred.

Plaintiffs and Sugar argue that the claim is not barred for two separate reasons. First, Plaintiffs and Sugar argue that the intentional interference claim relates back to the filing of Plaintiffs’ original complaint, on July 1, 2016. Second, Plaintiffs and Sugar argue that the delayed discovery rule pushed the accrual date of the cause of action to mid-January 2018.

“The relation-back doctrine requires that the amended complaint must (1) rest on the same general set of facts, (2) involve the same injury, and (3) refer to the same instrumentality, as the original one.” (Norgart v. Upjohn Co., supra, at pages 408-409 [emphasis in original].) “In determining whether the amended complaint alleges facts that are sufficiently similar to those alleged in the original complaint, the critical inquiry is whether the defendant had adequate notice of the claim based on the original pleading.” ((Pointe San Diego Residential Community, L.P. v. Procopio, Cory, Hargreaves & Savitch, LLP (2011) 195 Cal.App.4th 265, 277.) Additionally, “courts should consider the strong policy in this state that cases should be decided on their merits.” ((Ibid. [internal quotations omitted].)

Two Eleven Spalding argues that relation-back does not apply because Plaintiffs’ original complaint contained no allegations that placed Two Eleven Spalding on notice that Plaintiffs sought damages for Two Eleven’s intentional interference with Plaintiffs’ contract with Safeco. In the original complaint, Plaintiffs’ causes of action against Two Eleven Spalding were limited to a cause of action for negligence and a cause of action for injury to real and personal property (Compl., ¶¶ 65, 69 [alleging liability for failing to “reasonably or properly maintain the properties . . . owned, operated, or under the control of [Two Eleven Spalding]”). These causes of action are both directed to damage to real or personal property as a result of the water intrusion events. However, the intentional interference cause of action seeks damages for the harm caused not by the water intrusion events but by an intentional act of Two Eleven Spalding that resulted in Safeco ceasing making ALE payments to Plaintiffs. (TAC, ¶ 87.) The intentional interference cause of action includes allegations that Two Eleven Spalding made intentional misrepresentations and concealments. (TAC, ¶¶ 84-86.) But the original complaint contained no allegations of misrepresentations or concealment of facts for which Two Eleven Spalding should be held liable. Therefore, although the intentional interference cause of action is based on the same general set of facts, it does not involve the same injury or the same instrumentality.

Plaintiffs and Sugar point to various paragraphs of the original complaint in support of their argument that the relation-back doctrine applies. Sugar points to paragraph 13 of the original complaint, where Plaintiffs allege, in general terms, that all of the Defendants acted as agents and co-conspirators of one another. (Compl., ¶ 13.) The Court does not find that this paragraph placed Two Eleven Spalding on sufficient notice of a potential intentional interference claim. Sugar and Plaintiffs both point to paragraph 30 of the original complaint, wherein Plaintiffs allege that Safeco’s intentional refusal to make ALE payments caused Plaintiffs harm, to paragraph 33 of the original complaint, wherein Plaintiffs allege that Two Eleven Spalding failed to complete plumbing repairs to common areas which resulted in Plaintiffs being unable “to proceed with the repair and rebuilding of the Condominium . . . .” (Compl., ¶¶ 30, 33.) The Court does not find that any of these allegations sufficiently placed Two Eleven Spalding on notice that Plaintiffs were seeking damages relating to ALE payments from Two Eleven Spalding for Two Eleven Spalding’s intentional conduct. Finally, Plaintiffs and Sugar cite paragraph 35 of the original complaint, wherein Plaintiffs allege that “[a]s the result of the negligent conduct of Defendants Sugar and the grossly negligent or bad faith intentional conduct of the HOA, and the bad faith conduct of Defendant Safeco, Nina and her minor son have been displaced from their family home and have had to find alternate living arrangements for nearly two years, causing loss of home and possessions, serious physical suffering and mental distress.” (Compl., ¶ 35.) Similarly, the Court does not find that this general and conclusory allegation placed Two Eleven Spalding on sufficient notice that it would be held liable for misrepresentations made by Two Eleven Spalding to Safeco that affected Safeco’s decision to make further ALE payments to Plaintiffs.

With regard to the discovery rule, Plaintiffs and Sugar contend that the intentional interference cause of action did not accrue until early 2018, when during discovery in this case, Plaintiffs learned about allegedly false statements made by Two Eleven Spalding to Safeco and the fact that Safeco relied on those false statements. “An exception to the general rule for defining the accrual of a cause of action–indeed, the ‘most important’ one–is the discovery rule.” ((Norgart v. Upjohn Co., supra, at p. 397.) “It postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action.” (Ibid.) “[T]he plaintiff discovers the cause of action when he at least suspects a factual basis, as opposed to a legal theory, for its elements, even if he lacks knowledge thereof—when, simply put, he at least ‘suspects . . . that someone has done something wrong’ to him, ‘wrong’ being used, not in any technical sense, but rather in accordance with its ‘lay understanding.’” ((Id. at pp. 397-398 [internal citation omitted].) “[H]e need not know the specific facts necessary to establish the cause of action; rather, he may seek to learn such facts through the process contemplated by pretrial discovery; but, within the applicable limitations period, he must indeed seek to learn the facts necessary to bring the cause of action in the first place—he cannot wait for them to find him and sit on his rights; he must go find them himself if he can and file suit if he does.” ((Id. at p. 398 [internal quotations omitted].)

Two Eleven Spalding contends that the discovery rule is not applicable here because, in November 2015, Dina Chernick had a suspicion that something wrong had been done. As set forth in her November 5, 2015 email, Dina Chernick knew that someone from the HOA had contacted Safeco directly, and she was therefore stating her objection to such direct contact and urging the HOA not “to interfere with our business relationships with our insurer.” Nevertheless, as pointed out by Plaintiffs and Sugar, nothing in the November 5, 2015 email suggests that Dina Chernick was objecting to the direct contact because of any misrepresentations made by Two Eleven Spalding. There is no evidence that, at any time in the 2015 time frame, Plaintiffs had reason to know that Two Eleven Spalding had been providing Safeco with false or inaccurate information about the progress of the condominium repairs. Two Eleven Spalding argues that Dina Chernick’s deposition testimony regarding a cause and effect relationship between the communications with Safeco and Safeco’s decision to cease the ALE payments demonstrates that she was at least aware of enough facts to discover the cause of action. However, Dina Chernick’s deposition testimony is not clear as to when Dina Chernick had that belief. There is a triable issue of fact as to whether Dina Chernick believed in December 2015 that Two Eleven Spalding’s communications with Safeco impacted the cessation of ALE payments. Accordingly, the Court finds that Plaintiffs and Sugar have raised a triable issue of fact as to whether the statute of limitations bars the eighth cause of action for intentional interference with contract.

Conclusion

Based on the foregoing, Two Eleven Spalding’s motion for summary adjudication is denied.

Plaintiffs are ordered to give notice of this ruling.

DATED: December 10, 2019 ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court

[1] The Court notes that although Plaintiffs purport to dispute UMF 4, Plaintiffs do not argue or cite any facts that create an actual dispute. (See Response to UMF 4.)