Case Name: Daniel Gunther v. Ameriprise Auto & Home Insurance Company, Inc., et al.

Case No.: 17CV311151

Motion for Summary Judgment or Summary Adjudication of Issues

Factual and Procedural Background

While shopping at defendant Costco Wholesale Corporation (“Costco”), defendant Costco Insurance Agency (“Costco Insurance”) introduced and recommended home insurance services to plaintiff Daniel Gunther (“Gunther”). (Complaint, ¶8.) On or about September 23, 2011, through defendants Costco and Costco Insurance’s insurance brokers, plaintiff Gunther entered into a contract with defendants IDS Property Casualty Insurance Company (“IDS”) and Ameriprise Auto & Home Insurance Company, Inc. (“Ameriprise”) whereby plaintiff Gunther paid premiums in exchange for home and casualty insurance, policy number HI00995579 (“Policy”), for his residence located at 516 Chinook Lane in San Jose. (Complaint, ¶9.)

Pursuant to the Policy, plaintiff Gunther purchased additional personal liability coverage in the amount of $300,000 per occurrence and up to $2,000 per person. (Complaint, ¶11.) The personal liability coverage includes coverage for personal injuries and property damage to others. (Complaint, ¶13.) Plaintiff Gunther also contracted for personal injury coverage. (Complaint, ¶12.)

During the term of the Policy, on or about August 9, 2014, plaintiff Gunther was involved in a physical altercation with Henry Pinheiro (“Pinheiro”) while visiting his girlfriend, Shirley Williams (“Williams”) at her apartment located at 130 Baroni Avenue, #47 in San Jose. (Complaint, ¶14.) Plaintiff Gunther acted in self-defense of imminent and physical attack by Pinheiro. (Complaint, ¶15.) Both men suffered physical injuries caused by Pinheiro’s unprovoked attack. (Complaint, ¶16.)

Subsequently, the Santa Clara County District Attorney’s office charged plaintiff Gunther with felony assault. (Complaint, ¶17.) On or about November 4, 2014, prior to commencement of the criminal trial, Pinheiro and his wife, Cindy Pinheiro (collectively, “Pinheiros”), filed a civil lawsuit against plaintiff Gunther and Williams alleging negligence against Williams and intentional battery against plaintiff Gunther. (Complaint, ¶18.) The Pinheiros filed a first amended cross-complaint alleging intentional infliction of emotional distress and negligent infliction of emotional distress against plaintiff Gunther and Williams. (Complaint, ¶24.) The Pinheiros sought over $35 million in damages. (Complaint, ¶21.)

Plaintiff Gunther contacted defendants Ameriprise and IDS seeking coverage for the criminal and civil actions against him but plaintiff Gunther’s requests were denied. (Complaint, ¶22.)

On or about January 26, 2016, plaintiff Gunther was tried and acquitted of all criminal charges. (Complaint, ¶25.) Plaintiff Gunther again demanded defendants Ameriprise and IDS provide insurance coverage. (Complaint, ¶26.) Defendants Ameriprise and IDS refused to insure plaintiff Gunther as required under the Policy. (Complaint, ¶¶27 and 30.)

On May 31, 2017, plaintiff Gunther filed a complaint against defendants Ameriprise, IDS, Costco, and Costco Insurance alleging causes of action for:

(1) Breach of Contract
(2) Contractual Breach of the Implied Covenant of Good Faith and Fair Dealing
(3) Tortious Breach of the Implied Covenant of Good Faith and Fair Dealing
(4) Bad Faith
(5) Deceptive Trade Practices
(6) Negligence
(7) Declaratory Relief

On September 1, 2017, defendant IDS filed an answer to plaintiff Gunther’s complaint.

On December 28, 2017, defendant IDS filed the motion now before the court, a motion for summary judgment/adjudication of plaintiff Gunther’s complaint.

I. Plaintiff Gunther’s request for judicial notice is DENIED.

In opposition to defendant IDS’s motion for summary judgment/ adjudication, plaintiff Gunther requests judicial notice of various documents. Plaintiff Gunther’s request for judicial notice is DENIED as the court does not find the documents necessary, helpful, or relevant. (See Duarte v. Pacific Specialty Insurance Company (2017) 13 Cal.App.5th 45, 51, fn. 6—denying request where judicial notice is not necessary, helpful or relevant.)

II. Defendant IDS’s motion for summary judgment is DENIED.

A. Defendant IDS’s motion for summary adjudication of plaintiff Gunther’s first cause of action for breach of contract is GRANTED.

Plaintiff Gunther’s first cause of action for breach of contract alleges, in relevant part, that defendant IDS “breached the terms of the Policy by refusing to provide [Gunther] insurance coverage pursuant to the Policy.” (Complaint, ¶49.)

In moving for summary adjudication of plaintiff Gunther’s first cause of action, defendant IDS contends it did not breach the Policy. More specifically, defendant IDS contends it did not breach the Policy because the Policy does not provide plaintiff Gunther with coverage for the claims asserted against him by the Pinheiros.

1. Duty to defend.

It is by now a familiar principle that a liability insurer owes a broad duty to defend its insured against claims that create a potential for indemnity. (Gray v. Zurich Insurance Co. (1966) 65 Cal.2d 263 (Gray).) As we said in Gray, “the carrier must defend a suit which potentially seeks damages within the coverage of the policy.” [Citation.] Implicit in this rule is the principle that the duty to defend is broader than the duty to indemnify; an insurer may owe a duty to defend its insured in an action in which no damages ultimately are awarded. [Citation.] [¶] The determination whether the insurer owes a duty to defend usually is made in the first instance by comparing the allegations of the complaint with the terms of the policy. Facts extrinsic to the complaint also give rise to a duty to defend when they reveal a possibility that the claim may be covered by the policy. [Citation.] [¶] Once the defense duty attaches, the insurer is obligated to defend against all of the claims involved in the action, both covered and noncovered, until the insurer produces undeniable evidence supporting an allocation of a specific portion of the defense costs to a noncovered claim.

(Horace Mann Ins. Co. v. Barbara B. (1993) 4 Cal.4th 1076, 1081 (Horace Mann); italics original.)

An insurer must defend any action that asserts a claim potentially seeking damages within the coverage of the policy. [Citation.] “[T]he insured need only show that the underlying claim may fall within policy coverage . . . .” [Citation.] The duty to defend begins when a potential for coverage arises, and the duty continues until the insurer proves otherwise.

(Maryland Casualty Co. v. Nationwide Ins. Co. (1998) 65 Cal.App.4th 21, 32 – 33.)

“A bare ‘potential’ or ‘possibility’ of coverage is the trigger of a defense duty.” (Montrose Chem. Corp. v. Superior Court (1993) 6 Cal.4th 287, 295 (Montrose).) “It need not be shown that coverage is likely or even ‘reasonably’ likely.” (Montrose, supra, 6 Cal.4th at pp. 299 – 300.) “Any doubt as to whether the facts give rise to a duty to defend is resolved in the insured’s favor.” (Horace Mann, supra, 4 Cal.4th at p. 1081.)

2. Potential for coverage.

“On a motion for summary judgment on the insurer’s duty to defend, the insurer must be able to negate potential coverage as a matter of law.” (Croskey, Heeseman, Ehrlich & Klee, CAL. PRAC. GUIDE: INSURANCE LITIGATION (The Rutter Group 2017) ¶7:571.8, p. 7B-22 citing Maryland Cas. Co. v. National American Ins. Co. of Calif. (1996) 48 Cal.App.4th 1822, 1832; Anthem Electronics, Inc. v. Pacific Employers Ins. Co. (9th Cir. 2002) 302 F.3d 1049, 1060.)

“Whether the insurer owes a defense depends on: the terms of the policy; the allegations of the third party’s complaint against the insured; and all facts known to the insurer from any source.” (Id. at ¶7:572, p. 7B-28 citing Montrose, supra, 6 Cal.4th at pp. 295 – 296; Griffin Dewatering Corp. v. Northern Ins. Co. of N.Y. (2009) 176 Cal.App.4th 172, 197 – 198.)

a. Terms of the Policy.

Here, the insuring clause of the Policy states, in relevant part, “[IDS] will pay all sums arising out of any one occurrence which an insured person becomes legally obligated to pay as damages because of bodily injury or property damage covered by this policy. If a claim is made or suit is brought against the insured person for liability under this coverage, [IDS] will defend the insured person at our expense, using lawyers of our choice.” (Emphasis added.)

The Policy defines “occurrence” to mean “an accident which is unexpected or unintended from your standpoint resulting in bodily injury or property damage during the policy period. It also includes repeated or continuous exposure to substantially the same general harmful conditions.” (Emphasis added.)

“Unless the term ‘accident’ is otherwise defined in the policy, it is given a commonsense interpretation—i.e., ‘an unexpected, unforeseen, or undersigned happening of consequence from either a known or an unknown cause.’” (Croskey, Heeseman, Ehrlich & Klee, CAL. PRAC. GUIDE: INSURANCE LITIGATION (The Rutter Group 2017) ¶7:44, pp. 7A-16 to 7A-17 citing Geddes & Smith, Inc. v. St. Paul-Mercury Indem. Co. (1959) 51 Cal.2d 558, 563 – 564; Delgado v. Interinsurance Exchange of the Automobile Club of Southern California (2009) 47 Cal.4th 302, 308 (Delgado).)

b. Allegations against Gunther.

IDS contends the allegations of the third party Pinheiros’ complaint against Gunther do not trigger coverage because the allegations do not involve an accident. Gunther was sued in Pinheiro v. Williams, Santa Clara County Superior Court case number 114CV272438 (“Pinheiro v. Williams”). Ultimately there were four pleadings filed in Pinheiro v. Williams in which claims were asserted against Gunther. The first pleading was the original complaint in Pinheiro v. Williams, prepared on a Judicial Council form. In the charging allegations of the first cause of action for “Intentional Tort,” the Pinheiros alleged their neighbor, Williams, invited Gunther to her residence. Thereafter, Gunther threw objects at a truck owned by the Pinheiros causing damage to the Pinheiros’ property. The complaint alleged further that Gunther punched and kicked Pinheiro causing physical injury. The complaint alleged Gunther’s conduct constituted a battery on Pinheiro and a trespass to the Pinheiros’ chattel. A second cause of action for negligence was asserted against Williams only.

In a first amended complaint (FAC), the Pinheiros clarified the first cause of action for “Intentional Tort” was directed at Gunther only but the charging allegations against Gunther remained the same with two exceptions regarding Williams. A second amended complaint (SAC) asserted one cause of action against Gunther entitled “Battery” and the charging allegations were identical to the “intentional tort” allegations of the FAC. The Pinheiros also asserted claims against Gunther and Williams by way of a cross-complaint. In their first amended cross-complaint (FAXC), the Pinheiros pleaded claims for intentional infliction of emotional distress and negligent infliction of emotional distress. The FAXC included some of the same allegations as in the SAC. The FAXC alleged, “Since battering [Pinheiro], [Gunther] has threatened to kill [Pinheiro].” The FAXC alleges Gunther moved in with Williams “for the purpose of intimidating, threatening, and causing severe emotional distress to [the Pinheiros]” and “have taunted and intimidated [the Pinheiros] for the purpose of causing [the Pinheiros] severe emotional distress both as retaliation for the civil prosecution … and the criminal prosecution of [Gunther] and for the purpose of causing [the Pinheiros] to end the civil and criminal prosecutions.”

Thus, two of the three claims (battery and intentional infliction of emotional distress) asserted against Gunther alleged intentional, not accidental, conduct. As to the third (negligent infliction of emotional distress), IDS contends the title of the claim is not dispositive. Instead, coverage will depend on whether the underlying conduct comes within the terms of the policy.

Importantly, “coverage turns not on ‘the technical legal cause of action pleaded by the third party’ but on the ‘facts alleged in the underlying complaint’ or otherwise known to the insurer. (Barnett v. Fireman’s Fund Ins. Co. [ (2001) ] 90 Cal.App.4th [500,] 510 [108 Cal.Rptr.2d 657], italics added.) A general boilerplate pleading of ‘negligence’ adds nothing to a complaint otherwise devoid of facts giving rise to a potential for covered liability. (See Michaelian v. State Comp. Ins. Fund (1996) 50 Cal.App.4th 1093, 1107 [58 Cal.Rptr.2d 133].)” (Swain v. California Casualty Ins. Co. (2002) 99 Cal.App.4th 1, 8, 120 Cal.Rptr.2d 808.) Therefore, to determine whether Gonzalez’s complaint sufficiently alleged accidental conduct that would give rise to coverage, we must look at what acts were alleged in her complaint.

(Gonzalez v. Fire Insurance Exchange (2015) 234 Cal.App.4th 1220, 1235.)

Although the third cause of action asserted against Gunther was entitled, “Negligent Infliction of Emotional Distress,” the underlying conduct on which it was based is the same conduct alleged with regard to “Intentional Infliction of Emotional Distress,” namely, threats, taunting, and intimidation. It is IDS’s position that the alleged conduct by Gunther underlying the Pinheiros’ claims were not accidental and, therefore, did not constitute an “occurrence” for which coverage would exist.

c. Facts known to IDS.

Beyond the language of the policy and the allegations by the Pinheiros, IDS also considered the police reports, witness statements, and Gunther’s own recorded statement in determining whether coverage existed under the Policy. Again, in IDS’s assessment of this information, IDS reached the conclusion that there was no potential for coverage under the Policy.

3. Delgado decision.

IDS relied and continues to rely on the Delgado decision to support its position that there was no potential for coverage under these circumstances. In Delgado, the insured (Reid) hit and kicked 17-year old Jonathan Delgado (Delgado). Delgado sued Reid alleging two causes of action. In the first, Delgado alleged Reid “in an unprovoked fashion and without any justification physically struck, battered, and kicked” Delgado. In the second cause of action, Delgado alleged Reid “negligently and unreasonably believed” he was engaging in self-defense and “unreasonably acted in self-defense when Reid negligently and unreasonably physically and violently struck and kicked” Delgado.

Reid, insured by the Interinsurance Exchange of the Automobile Club of Southern California (ACSC) pursuant to a homeowner’s policy, tendered his defense to ACSC but ACSC denied coverage on the basis that the conduct was not covered because it was not an “occurrence” which as defined as an “accident.” The court dismissed the first cause of action at Delgado’s request and the parties settled thereafter with Reid assigning claims against his insurer to Delgado. Delgado then sued ACSC for, among other things, declaratory relief and bad faith. The trial court sustained ACSC’s demurrer without leave to amend. The Court of Appeal reversed. The Supreme Court reversed the Court of Appeal.

One argument Delgado made was that an insured’s mistaken and unreasonable belief in the need for self-defense converts the assault into an accidental act. The Delgado court rejected this argument which is “based on the notion that a provocative act by the injured party turns the insured’s physical response into an accidental act. Under this view, the injured party’s provocative acts are unforeseen and unexpected from the perspective of the insured, making the insured’s responsive acts unplanned and therefore accidental, triggering the policy’s coverage for ‘an accident.’” (Delgado, supra, 47 Cal.4th at p. 314.)

The Delgado court explained, “the acts [of the insured] that must be considered the starting point of the causal series of events, not the injured party’s acts that purportedly provoked the insured into committing assault and battery on Delgado. The term “accident” in the policy’s coverage clause refers to the injury-producing acts of the insured, not those of the injured party. [Citations.] In determining whether the injury is a result of an accident, taking into consideration acts or events before the insured’s acts would be illogical and contrary to California case law.” (Id. at p. 315.)

Gunther apparently makes the same argument here. Gunther contends that, from his perspective, Pinheiro’s actions were unexpected and unforeseen and Gunther’s response (self-defense) should therefore be considered accidental. This argument is expressly rejected by the Delgado court.

Gunther also apparently seeks salvation in the following passage from the Delgado decision:

an injury-producing event is not an “accident” within the policy’s coverage language when all of the acts, the manner in which they were done, and the objective accomplished occurred as intended by the actor. [Citations.] Here, insured Reid’s assault and battery on Delgado were acts done with the intent to cause injury; there is no allegation in the complaint that the acts themselves were merely shielding or the result of a reflex action. Therefore, the injuries were not as a matter of law accidental, and consequently there is no potential for coverage under the policy. [Citation.]

(Id. at pp. 311 – 312; emphasis added.)

Gunther argues now that his actions were “reflexive.” However, this characterization of his conduct does not comport with the evidence. In Gunther’s own recorded statement, the following exchange occurred :

Gunther: … Henry [Pinheiro] comes running across the parking lot, screaming something. I have no idea because at this point I’m just pissed off. I can’t take it anymore because this guy has really decided to antagonize me tonight by spraying my truck, which he had no reason to do.
So when he ran up on me, he raised his hand. I have no idea what he was about to do. And at that point you have a choice, do you defend yourself or do you become a victim. And I decided to defend myself, because this is the third time I’ve had a run-in with this guy.
…
Det. Cruz: So he ran up to you and raised his hand?
…
Gunther: I saw one coming up. I don’t know if it was to strike. I don’t know what it was for.
Det. Cruz: So when he did that, what did you do?
…
Gunther: I hit him. … I just swung to block what he was throwing. I don’t know where I hit him. … He grabbed me. We wrestled to the ground, and at that point I’m deciding it’s a fight. … He’s fighting me. I’m fighting him back.

Although Gunther now proffers evidence that he was “defending myself the entire time,” this contradicts his earlier statement. (See Guthrey v. State of California (1998) 63 Cal.App.4th 1108, 1120—“A party cannot evade summary judgment by submitting a declaration contradicting his own prior deposition testimony.”) Moreover, the documentary evidence cited by Gunther also contradicts his statement. Gunther refers to the police report which states, in part, “Gunther told me he ‘reacted by defending himself’. Gunther hit Henry, but he could not recall where he hit Henry. He told me he ‘swung to block where Henry was throwing’. Gunther told me they both fell to the ground and they began to fight. Gunther told me he could not recall the details, but he recalled punching and kicking.” The evidence does not support Gunther’s assertion that he was merely shielding/defending himself or that his actions were reflexive.

4. Personal injury coverage.

Gunther also argues that he is entitled to coverage for “personal injury.” As Gunther points out, “For an additional premium, the definition bodily injury is amended to include personal injury coverage.” However, this additional coverage does not change the insuring clause which only obligates IDS to pay “all sums arising out of any one occurrence which an insured person becomes legally obligated to pay as damages because of bodily injury or property damage covered by this policy.” (Emphasis added.) As discussed above, an occurrence is defined as an accident and there was no accident alleged to have occurred here.

Gunther alludes to IDS’s failure to investigate as a basis for denying summary adjudication, but “there is no duty to investigate claims that are clearly excluded under the policy.” (Croskey, Heeseman, Ehrlich & Klee, CAL. PRAC. GUIDE: INSURANCE LITIGATION (The Rutter Group 2017) ¶7:588, p. 7B-35 citing Continental Cas. Co. v. City of Richmond (9th Cir. 1985) 763 F.2d 1076, 1083 – 1084.) “An insurer owes no continuing duty to investigate whether there is a potential for coverage. If, at the time of tender, the allegations of the complaint together with extrinsic facts available to the insurer demonstrate no potential for coverage, the carrier may properly deny a defense. Mere speculation by the insured about ways in which the complaint might be amended to state potentially covered claims does not create a potential for coverage.” (Id. at ¶7:588.5, p. 7B-35 citing Gunderson v. Fire Ins. Exchange (1995) 37 Cal.App.4th 1106, 1114; Travelers Cas. & Sur. Co. v. Employers Ins. of Wausau (2005) 130 Cal.App.4th 99, 110.)

IDS has adequately demonstrated that there was no potential for coverage under the Policy. Plaintiff Gunther fails to present any admissible evidence which would create a triable issue of material fact. Accordingly, defendant IDS’s motion for summary adjudication of the first cause of action in plaintiff Gunther’s complaint is GRANTED.

B. Defendant IDS’s motion for summary adjudication of plaintiff Gunther’s second, third, and fourth causes of action for contractual breach of implied covenant of good faith and fair dealing; tortious breach of implied covenant of good faith and fair dealing; and bad faith, respectively, is GRANTED.

IDS asks this court for summary adjudication of plaintiff Gunther’s second through fourth causes of action which all allege a breach of implied covenant of good faith and fair dealing based on the principle that:

It is clear that if there is no potential for coverage and, hence, no duty to defend under the terms of the policy, there can be no action for breach of the implied covenant of good faith and fair dealing because the covenant is based on the contractual relationship between the insured and the insurer. (Love v. Fire Ins. Exchange, supra, 221 Cal.App.3d 1136, 1151-1153.) As the Love court observed, its “conclusion that a bad faith claim cannot be maintained unless policy benefits are due is in accord with the policy in which the duty of good faith is [firmly] rooted.” (Id. at p. 1153.)

(Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 36.)

In view of the court’s finding above that there is no coverage as a matter of law under the circumstances, there is no breach of the implied covenant of good faith and fair dealing. Accordingly, defendant IDS’s motion for summary adjudication of the second through fourth causes of action in plaintiff Gunther’s complaint is GRANTED.

III. Defendant IDS’s motion for summary adjudication of plaintiff Gunther’s fifth cause of action for deceptive trade practices is DENIED.

Plaintiff Gunther’s fifth cause of action is entitled, “Deceptive Trade Practices,” and alleges, in relevant part, “Defendants have engaged in deceptive trade practices, including defendants’ failure to properly defend [Gunther’s] claim through false advertising that defendants would provide [Gunther] insurance coverage for the additional Personal Injury Policy premium he paid.” (Complaint, ¶68.)

IDS moves for summary adjudication of this cause of action by arguing that this claim fails because it properly denied coverage. “A defendant’s motion for summary judgment or summary adjudication ‘necessarily includes a test of the sufficiency of the complaint’ and its legal effect is the same as a demurrer or motion for judgment on the pleadings.” (Weil & Brown et al., CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2017) ¶10:52, p. 10-26 citing American Airlines, Inc. v. County of San Mateo (1996) 12 Cal.4th 1110, 1118.)

The UCL and the false advertising law “prohibit ‘not only advertising which is false, but also advertising which[,] although true, is either actually misleading or which has a capacity, likelihood or tendency to deceive or confuse the public.’ [Citation.] Thus, to state a claim under either the UCL or the false advertising law, based on false advertising or promotional practices, ‘it is necessary only to show that “members of the public are likely to be deceived.” ’ [Citations.]” (Kasky, supra, 27 Cal.4th at p. 951, 119 Cal.Rptr.2d 296, 45 P.3d 243.) This is determined by considering a reasonable consumer who is neither the most vigilant and suspicious of advertising claims nor the most unwary and unsophisticated, but instead is “the ordinary consumer within the target population.” (Lavie v. Procter & Gamble Co. (2003) 105 Cal.App.4th 496, 509–510, 129 Cal.Rptr.2d 486.) “ ‘Likely to deceive’ implies more than a mere possibility that the advertisement might conceivably be misunderstood by some few consumers viewing it in an unreasonable manner. Rather, the phrase indicates that the ad is such that it is probable that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.” (Id. at p. 508, 129 Cal.Rptr.2d 486.)

(Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 226.)

Liberally construed, plaintiff Gunther’s fifth cause of action is based upon false (or likely to deceive) advertising rather than the actual proper or improper denial of coverage. However, since plaintiff Gunther has not adequately alleged that the advertising was likely to deceive members of the public, the court will treat IDS’s argument as a motion for judgment on the pleadings to the fifth cause of action which is hereby GRANTED with 10 days’ leave to amend.

IV. Defendant IDS’s motion for summary adjudication of plaintiff Gunther’s sixth cause of action for negligence is DENIED.

In the sixth cause of action entitled “negligence,” plaintiff Gunther alleges IDS acted negligently “in the performance of [its] obligations and duties, pursuant to the Policy.” (Complaint, ¶74.)

Defendant IDS moves for summary adjudication of this cause of action by citing to Merritt v. Reserve Ins. Co. (1973) 34 Cal.App.3d 858, 880 (Merritt) for the proposition that there is no cause of action for negligent performance of an insurance contract. In this court’s review, Merritt does not stand for the proposition advanced by IDS. Instead, at the specified citation, the Merritt court wrote, “With respect to … negligent failure to initiate settlement discussions, we have seen from our review of the California cases that actionable failure to settle must encompass bad faith, that negligence alone is insufficient to support the charge.”

Gunther’s fifth cause of action incorporates earlier allegations. Specifically, at paragraph 33, Gunther alleges:

Defendants Ameriprise and IDS owed [Gunther] the following duties, among others: 1) a duty to honor the insurance Policy contract for the entire Policy duration, 2) a duty to conduct a prompt, reasonable and diligent investigation of the facts of the case to determine the validity of the claims made by Henry and Cindy Pinheiro against [Gunther], 3) a duty to evaluate Daniel’s claim fairly, 4) a duty to attempt in good faith to effectuate a prompt, fair and equitable settlement of a claim where liability is reasonably clear, 5) a duty to act promptly and reasonably in settling the claim, 6) a duty not to reject a reasonable and fair offer of settlement, 7) a duty not to put its insureds through unnecessary litigation, 8) a duty not to put its insured’s assets at risk, 9) a duty to refrain from actions that would injure [Gunther’s] ability to obtain the benefits of the insurance contract and 10) an overall duty of good faith and fair dealing.

(Emphasis added.)

At best, the particular holding in Merritt cited by IDS addresses the duties highlighted above. In light of the court’s ruling above, plaintiff Gunther’s claims for bad faith are without merit. While this disposes of most of the purported duties alleged above, it does not dispose of them all.

IDS argues further that it did not breach the Policy. However, independent of whether it was proper for IDS to deny coverage, “[a]n insurer is required to investigate all claims promptly (see Ins.C. §790.03(h)(3)).” (Croskey, Heeseman, Ehrlich & Klee, CAL. PRAC. GUIDE: INSURANCE LITIGATION (The Rutter Group 2017) ¶7:587, p. 7B-34.) The fact that IDS did not have a duty to defend or provide coverage is not enough to demonstrate that IDS did not breach its duty to conduct a prompt investigation. Defendant IDS has not met its initial burden with regard to plaintiff Gunther’s sixth cause of action for negligence.

Accordingly, defendant IDS’s motion for summary adjudication of the sixth cause of action in plaintiff Gunther’s complaint is DENIED.

V. Defendant IDS’s motion for summary adjudication of plaintiff Gunther’s seventh cause of action for declaratory relief is GRANTED.

In the seventh cause of action for declaratory relief, plaintiff Gunther asks the court for an order that defendants “provide coverage for his legal defense in the civil matter that is scheduled for trial on June 5, 2017.” In essence, plaintiff Gunther seeks a declaration that defendant IDS owes a duty to defend. For the reasons discussed above, the court finds defendant IDS does not owe plaintiff Gunther a duty to defend in this circumstance. Accordingly, defendant IDS’s motion for summary adjudication of the seventh cause of action in plaintiff Gunther’s complaint is GRANTED.

VI. Defendant IDS’s motion for summary adjudication of plaintiff Gunther’s prayer for punitive damages is GRANTED.

“A party may move for summary adjudication as to … one or more claims for damages … if that party contends … that there is no merit to a claim for damages, as specified in Section 3294 of the Civil Code. A motion for summary adjudication shall be granted only if it completely disposes of … a claim for damages.” (Code Civ. Proc. §437c, subd. (f)(1).) “Summary adjudication may also be granted as to a claim for punitive damages even though it does not dispose of an entire cause of action.” (Weil & Brown et al., CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2017) ¶10:41, p. 10-12 citing Code Civ. Proc., §437c, subd. (f)(1); Catalano v. Superior Court (2000) 82 Cal.App.4th 91, 96—“[A] claim for punitive damages is one of the substantive areas which is properly the subject of a motion for summary adjudication.”)

“[D]efendants may seek summary adjudication either that: some element of the tor claim cannot be established; or defendants’ conduct does not constitute ‘oppression, malice or fraud’ (as defined by Civ.C. §3294(c)); or plaintiff’s proof is not ‘clear and convincing’ as required by Civ.C. §3294(a).” (Id. at ¶10:42, p. 10-12.)

Here, defendant IDS apparently argues that its conduct does not amount to oppression, malice or fraud. IDS proffers evidence that after considering Gunther’s tender of Pinheiro v. Williams, IDS determined there was no potential the claim asserted against Gunther would be covered under the Policy and, accordingly, declined to defend. After IDS advised Gunther of its coverage decision, counsel for Gunther responded. IDS, through its counsel, considered Gunther’s arguments and provided timely explanation of its position.

In opposition, plaintiff Gunther takes issue with IDS’s investigative efforts. Plaintiff Gunther asserts IDS did not conduct an independent investigation and relied solely on the police investigation/ report of the incident between Gunther and Pinheiro. Even if liberally construed in plaintiff Gunther’s favor, the evidence demonstrates, at best, a failure to investigate.

Gunther does not present any evidence of fraudulent conduct nor is there any evidence of an intent by IDS to injure plaintiff Gunther. Thus, in order to obtain punitive damages, Gunther must establish that IDS is guilty of oppression or malice. Absent an intent to injure, malice and oppression both require some “despicable conduct.” (See Civil Code, §3294, subd. (c)(1) – (2).) “The adjective ‘despicable’ connotes conduct that is ‘ “… so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people.” ’ [Citation.]” (Lackner v. North (2006) 135 Cal.App.4th 1188, 1210 (Lackner).) “Punitive damages are appropriate if the defendant’s acts are reprehensible, fraudulent or in blatant violation of law or policy. The mere carelessness or ignorance of the defendant does not justify the imposition of punitive damages…. Punitive damages are proper only when the tortious conduct rises to levels of extreme indifference to the plaintiff’s rights, a level which decent citizens should not have to tolerate.” (Ibid.) In Lackner, the court held, as a matter of law, that a snowboarder who struck a skier while racing through a rest area did not engage in despicable conduct. Here, the court finds, as a matter of law, that a failure to investigate by IDS does not amount to despicable conduct.

Accordingly, defendant IDS’s motion for summary adjudication of the prayer for punitive damages in plaintiff Gunther’s complaint is GRANTED.

VII. Plaintiff Gunther’s objections to defendant’s evidence are OVERRULED.

In opposition, plaintiff Gunther asserted objections to defendant IDS’s evidence. Upon review and consideration, plaintiff Gunther’s written objections to defendants’ evidence and declarations submitted in support of defendants’ motion for summary judgment/ adjudication are OVERRULED.