Case Number: KC065901    Hearing Date: July 10, 2014    Dept: J

Re: Lloyd Lee Chen v. Vincent TR Carpenter, et al. (KC065901)

DEMURRER TO FIRST AMENDED COMPLAINT; MOTION TO STRIKE

Moving Party: Defendant Farmers Insurance Exchange

Respondent: Plaintiff Lloyd Lee Chen

POS: Moving OK; Opposing OK

Plaintiff commenced this action regarding an insurance coverage dispute on 4/2/14. The First Amended Complaint, filed on 5/9/14, asserts causes of action for:

1. Breach of Contract
2. General Negligence
3. Agency

The Trial Setting Conference is set for 7/10/14.

(1) DEMURRER:

Defendant Farmers Insurance Exchange (“Defendant” or “Farmers”) demurs to Plaintiff Lloyd Lee Chen’s First Amended Complaint (“FAC”) on the grounds that the first and third causes of action fail to state a cause of action and are uncertain.

FIRST CAUSE OF ACTION FOR BREACH OF CONTRACT:

The elements of a breach of contract cause of action are: (1) the existence of a contract; (2) plaintiff’s performance or excuse for nonperformance; (3) defendant’s breach (or anticipatory breach); and (4) resulting damage. (Wall Street Network, Ltd. v. N. Y. Times Co. (2008) 164 Cal.App.4th 1171, 1178.)

Plaintiff must indicate on the face of the Complaint “whether the contract is written, is oral, or is implied by conduct.” (CCP § 430.10(g).)

“In an action based on a written contract, the plaintiff may plead the legal effect of the contract rather than its precise language.” (Ochs v. PacifiCare of Cal. (2004) 115 Cal. App. 4th 782, 795.) Pleading contracts by legal effects involves alleging the relevant terms in substance. (McKell v. Washington Mutual, Inc. (2006) 142 Cal. App. 4th 1457, 1489.)

The FAC alleges that in 2011, Plaintiff entered into a contract for the purchase of a residential real estate in Diamond Bar, California (FAC ¶ 10); Plaintiff also entered into an agreement with Good News Escrow, Inc. (“GN Escrow”) to handle the escrow and other closing services for the sale of the Diamond Bar home (Id. ¶ 11); Defendant Vincent Carpenter (“Carpenter”) was employed as an insurance agent and/or broker and held himself out as an agent and representative of Farmers (Id. ¶ 13); Plaintiff and GN Escrow contacted Carpenter requesting to purchase a homeowner’s liability insurance policy (Id. ¶ 25); in response, Carpenter provided a price quotation for the purchase of homeowner’s insurance issued by Farmers (Ibid.); Plaintiff and GN Escrow communicated to Carpenter acceptance of the insurance quotation offer (Id. ¶ 26); Carpenter and Farmers accepted an initial payment of the premium for the purchase of the homeowner’s liability insurance for the Diamond Bar home (Id .¶ 27); pursuant to the closing of the purchase of the Diamond Bar home GN Escrow did or should have issued payment for the premium charge for the homeowner’s liability insurance provided by Carpenter and Farmers (Id. ¶ 29); Plaintiff was served with notice of alleged personal injuries incurred while at the Diamond Bar home (Id. ¶ 31); Plaintiff tendered the personal injury claims to Carpenter and Farmers to be submitted for payment pursuant to the homeowner’s liability insurance (Ibid.); Carpenter and Farmers wrongfully denied Plaintiff’s claim against the homeowner’s liability insurance policy (Id. ¶ 32); and that Plaintiff has suffered damages as a result (Id. ¶ 33).

The FAC fails to allege whether the contact between Plaintiff and Farmers is written, is oral, or is implied by conduct. Moreover, the FAC fails to adequately allege the terms of the contract and/or attach a copy of the contract to the FAC. Thus, the demurrer to the first cause of action is sustained.

THIRD CAUSE OF ACTION FOR AGENCY:

CC § 2295 provides: “An agent is one who represents another, called the principal, in dealings with third persons. Such representation is called agency.” “Agency need only be generally pleaded…” and “is an averment of an ultimate fact…” (Monarrez v. Auto. Club of So. Cal. (2012) 211 Cal.App.4th 177, 187.) “The general allegation of agency is one of ultimate fact, sufficient against a demurrer.” (Kiseskey v. Carpenters’ Trust for So. Cal. (1983) 144 Cal. App. 3d 222, 230.)

The FAC alleges that Carpenter was employed as an insurance agent and/or broker and operated an insurance agency and held himself out as a representative of Farmers. (FAC ¶ 44.) The FAC does not allege that Carpenter was in fact an agent of Farmers, but only that he HELD HIMSELF OUT as a representative of Farmers. Further, it appears that allegations of an “agency” between the parties does not create an independent cause of action, but rather, a basis for vicarious liability. Thus, the demurrer to the third cause of action is sustained.

(2) MOTION TO STRIKE:

Farmers also move to strike portions of the FAC seeking attorney’s fees. Attorney’s fees are allowable only when authorized by contract, statute, or law. (CCP § 1033.5(a)(10).) Plaintiff fails to allege a contract, statute or law to support his request for attorney’s fees. Thus, the prayer for attorney’s fees is ordered stricken.

The court will hear from counsel for Plaintiff as to whether leave to amend is requested.