Filed 9/23/19 Verducci v. AAA Northern California etc. CA1/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

MONA VERDUCCI,

Plaintiff and Appellant,

v.

AAA NORTHERN CALIFORNIA, NEVADA & UTAH INSURANCE EXCHANGE,

Defendant and Respondent.

A154514

(Sonoma County

Super. Ct. No. SCV258001)

Plaintiff Mona Verducci (Verducci or insured) appeals from a judgment dismissing her complaint against defendant CSAA Insurance Exchange (erroneously sued as AAA Northern California, Nevada & Utah Insurance Exchange) (CSAA or insurer). Verducci correctly argues the trial court erred in granting CSAA’s motion for summary adjudication to dismiss her cause of action for breach of the implied covenant of good faith and fair dealing and to strike her request for punitive damages. Accordingly, we reverse the judgment, and remand the matter with directions to the trial court to: (1) set aside the orders of August 29, 2017 and August 31, 2017; (2) enter a new order denying CSAA’s motion for summary adjudication to dismiss the cause of action for breach of the implied covenant of good faith and fair dealing and to strike the claim for punitive damages; and (3) conduct further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND

“Because this case comes before us after the trial court granted a motion for summary [adjudication], we take the facts from the record that was before the trial court when it ruled on that motion. [Citation.]” (Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1037.) We set forth below the facts necessary to resolve this appeal and in the light most favorable to Verducci as the opposing party, albeit “we must disregard any evidence to which a sound objection was made in the trial court, but must consider any evidence to which no objection, or an unsound objection, was made.” (McCaskey v. California State Automobile Assn. (2010) 189 Cal.App.4th 947, 957 (McCaskey).)

A. Background

Verducci’s residence was insured by CSAA for the period June 18, 2013 through June 18, 2014. The insurance policy provided the following coverages: dwelling $876,200 ($1,000 deductible); other structures $88,200; personal property $657,200 ($1,000 deductible); and loss of use $350,480. Pertinent to our discussion, the policy’s loss of use benefit allowed that “[i]f a loss covered . . . makes that part of the residence premises where [the insured] reside[s] uninhabitable, [the insurer] cover[s], at [the insured’s] option, either: [¶] a. Additional Living Expense, meaning any necessary and reasonable increase in living expenses incurred by [the insured] so that [the insured’s] household can maintain its normal standard of living; or [¶] b. Fair Rental Value, meaning the fair rental value of that part of the residence premises where [the insured] primarily reside[s] less any expenses that do not continue while the premises is uninhabitable. . . .” (Boldface omitted.).

In August 2013, Verducci began having problems with her 7-year-old kitchen refrigerator involving the ice maker. On November 12, Verducci discovered the refrigerator had a water leak from a defective water line. When the refrigerator was moved, “water damage” was visible on the hardwood floor, cabinetry, and baseboard in the kitchen; there was also visible damage to the hardwood and fireplace brick work in the living room.

Six days later, on November 18, Verducci reported “this loss” to CSAA. In response and on that same day, CSAA took a statement from Verducci and sent a CSAA preferred vendor to inspect the house. The vendor reportedly found “small areas of visible mold growth” on the “lower wall/floor intersection of kitchen, behind base and under edge of hardwood floors . . . .”

Three days later, on November 21, Verducci contacted CSAA with questions about the loss of the use of her kitchen during the upcoming Thanksgiving holiday and whether she could move out of the house. According to the CSAA claim adjuster who handled housing (hereinafter housing adjuster), CSAA knew the loss of use benefit applied to the claim upon learning that Verducci would not be able to use her kitchen. In response to Verducci’s call, CSAA’s senior claim adjuster assigned to the claim told Verducci she would be reimbursed for a family Thanksgiving meal out of the home if she had receipts. According to Verducci, she was informed that she would not be allowed to move out until major reconstruction began and that she had to save the policy moneys allotted to moving out for when the reconstruction work began. Verducci further averred that she was not asked any questions about her normal standard of living or whether she thought her home was habitable, nor was she told she had the option to get alternative housing under additional living expense coverage or fair rental value. Towards the end of November 2013 or very early December 2013, Verducci complained about the lack of housing both to her local CSAA office and to the Department of Insurance.

On December 3, CSAA informed Verducci that coverage would be provided only for water remediation and repair, and not for mold remediation. However, three days later, on December 6, CSAA changed its decision and informed Verducci that CSAA would extend coverage for mold remediation although mold coverage did not apply to the loss.

On December 6, CSAA asked a newly assigned contractor (suggested by Verducci) to inspect the house and submit an estimate for both water and mold remediation and repair work. Between December 6 and December 12, the new contractor inspected the property and commenced remediation work while Verducci continued to live there. The new contractor was “in and out of the house moving fans and other items.”

On December 12, Verducci learned for the first time that the remediation and repair work would require a containment zone that would block her access to the central portion of the house. According to Verducci, the containment zone completely blocked access to the kitchen, living room, and dining room. She was forced to use outside doors to obtain access to the garage, laundry room, and other rooms not accessible from the front door.

Because of Verducci’s limited access to the house due to the containment zone, and “after experiencing the noise and particulate exposure from the water drying fans,” she immediately called CSAA and again requested alternative housing; CSAA’s claim notes indicate the call was made on December 12. Verducci expressed concern about the lack of access to the kitchen, said her children were coming home for Christmas, and she “may need Hotel room for a few nights.” CSAA’s claim adjuster asked Verducci about her food expenses and told Verducci to contact another CSAA claim adjuster “and ask for housing.” Shortly thereafter, Verducci called CSAA’s housing adjuster and was told that they “had checked all the hotels listed and that there was no room at any of them because of the upcoming holidays.” However, Verducci later learned that at the time she had spoken to CSAA’s housing adjuster there were hotel rooms available.

On December 15 at approximately 7:30 p.m., Verducci checked on her laundry and, because of the containment zone, she had to use the back door to walk outside and around to get into her family room. In using the back door, she fell, breaking one ankle and spraining the other. The accident occurred “the very first time she tried to go out the back door of her home at night (around 7:30 p.m.)” and she had to use the back door because of the containment zone. The accident was caused because low light had affected her visual acuity and she was not able to see the contrast between the concrete floor and a single concrete step on which she fell. Verducci was taken to the hospital, had surgery, was prescribed medication, and was thereafter generally confined to a wheelchair for several weeks.

On December 16, Verducci contacted CSAA to inform them of her accident and that she needed wheelchair accessible housing when she left the hospital. CSAA responded by contacting a third-party housing vendor to locate wheelchair accessible lodging. Hotel accommodations were found for Verducci, her husband, and her dog; after one night Verducci’s husband and dog returned home while Verducci remained at the hotel. CSAA paid for Verducci’s hotel accommodations from December 18, 2013 through February 20, 2014. CSAA also paid for hotel accommodations for Verducci’s children from December 20, 2013 through January 4, 2014.

On January 20, 2014, CSAA’s claim adjuster wrote to Verducci to inform her of the status of her claim. The water remediation had been completed on December 26, 2013, the mold remediation had been completed on December 31, 2013, and “[m]old clearance” had been issued on January 2, 2014. Verducci was also informed that the remainder of the repair work would have to await until Verducci was sufficiently recovered from her injury as she had to approve the removal of certain personal property and she had to approve the contractor to complete the repairs. Verducci was told she was free to obtain her own contractor and submit an estimate for the repair work. The letter also informed Verducci that, from the start of the repair work, CSAA “will consider reimbursing” her the fair rental value of $6,137.50 per month, using information concerning Verducci’s “current home.”

On January 25, 2014, Verducci hired a public adjuster to assist her with her claim. The public adjuster informed CSAA that he was going to arrange for a new contractor to provide an estimate for the repair work and that he would work directly with Verducci on her housing needs and accommodations. Once there was an agreement as to the estimated cost of repairs, CSAA would issue payment for the repairs.

Starting in March 2014 and through July 2014, CSAA paid Verducci the monthly sum of $6,137.50 to rent alternative housing after she left the hotel where she had been staying since December 2013. Despite receipt of moneys for alternative housing, after she left the hotel Verducci went back to her home. At her deposition, Verducci testified that after April 2014, she “went back to the house. By then the barriers . . . [were] gone [and] all the equipment, . . . and [she] could get into the bathroom without the wheelchair, so [she] could sleep there.”

B. Current Lawsuit

Following CSAA’s payment of $164,426.45 for all outstanding covered claims, and after almost one year of not receiving any communication from Verducci, on November 9, 2015, Verducci filed this lawsuit seeking, in pertinent part, compensatory and punitive damages for breach of the implied covenant of good faith and fair dealing against CSAA. In her cause of action for breach of the implied covenant of good faith and fair dealing, Verducci alleged that CSAA had breached the implied covenant by, among other things, acting unreasonably in the handling of her claim; unreasonably refusing to pay benefits due under the insurance contract; failing to promptly communicate with her and her representatives; failing to follow claims standards imposed by law, misrepresenting her rights under the insurance contract and attempting to mislead her to prevent her from recovering all the benefits due under the insurance contract; and refusing to pay policy benefits including moneys necessary for her additional living expenses at a time when CSAA knew, or should have known, that she needed the money and/or would suffer hardship if she did not receive prompt payment. She further alleged that, in doing the enumerated acts, CSAA acted maliciously, fraudulently, and in knowing and conscious disregard of her rights, thereby justifying an award of punitive damages.

After the filing of its answer and discovery, CSAA filed a motion for summary adjudication to dismiss the cause of action for breach of the implied covenant of good faith and fair dealing and to strike the request for punitive damages, which was opposed by Verducci.

CSAA filed a memorandum of points and authorities, arguing, in pertinent part, that: (1) the evidence submitted by CSAA (excerpts of the deposition testimony of Verducci, CSAA claim adjusters, and contractor who performed remediation and repair work, and a federal district court order finding that CSAA may have overpaid the claim) demonstrated a genuine dispute existed between the parties regarding coverage and payment of benefits, thereby rendering CSAA not liable, as a matter of law, for a claim of bad faith in denying or delaying the payment of policy benefits; (2) Verducci could not demonstrate a prima facie showing that CSAA acted in bad faith in light of her factually devoid and conclusory statements made in her responses to CSAA’s special interrogatories and admissions and conclusory statements in her deposition testimony; and (3) in the absence of any facts demonstrating bad faith, a priori, CSAA could not be liable for punitive damages, and, its conduct did not warrant the imposition of punitive damages. In its separate statement of undisputed facts, CSAA relied on the same 31 undisputed facts to demonstrate there were no material issues of fact that required a trial on either the substantive cause of action or the request for punitive damages. CSAA also requested the court take judicial notice of the complaint and answer filed in this lawsuit, and the aforementioned federal district court order that had granted an unopposed joint motion of good faith settlement of $100,000, resolving CSAA’s subrogation action filed against the manufacturer and retailer of the refrigerator sold to Verducci.

Verducci filed an opposing memorandum of points and authorities, arguing that (1) the “genuine dispute doctrine” did not apply in this case; (2) CSAA’s motion had to be denied because it failed to address multiple allegations made in the complaint; and (3) punitive damages were appropriate in this case. In her separate statement of additional undisputed facts, Verducci asked the court to consider 80 statements of undisputed fact (supported by her declaration and excerpts from her deposition testimony), excerpts from CSAA’s claim notes produced during discovery, and excerpts from the deposition testimony of three CSAA claim adjusters. She also filed a response to CSAA’s separate statement of undisputed facts and an opposition to CSAA’s request for judicial notice.

CSAA filed a reply memorandum of points and authorities, a reply in support of its separate statement of undisputed facts, a response to Verducci’s separate statement of additional undisputed facts, and a reply in support of its request for judicial notice. CSAA also filed separate objections challenging Verducci’s declaration, arguing that the declaration should be stricken, in its entirety, on the grounds that it consisted exclusively of self-serving statements and conclusory opinions, lacked foundation, and contained irrelevant statements. Alternatively, CSAA asked the court to strike portions of the declaration and certain exhibits attached to the declaration on various grounds, including that the material was hearsay, ambiguous, irrelevant, immaterial, speculative, conclusory, or unduly prejudicial.

Following argument on August 11, 2017, the trial court adopted its previously published tentative ruling and granted CSAA’s motion for summary adjudication to dismiss the cause of action for breach of the implied covenant of good faith and fair dealing and to strike the request for punitive damages. The court, citing to six of Verducci’s responses to CSAA’s special interrogatories , commented that she had “not been able to identify a single piece of competent, admissible evidence in support of her claims of bad faith and contractual damage, a necessary prerequisite to stating a cause of action for insurance bad faith.” The court further found, citing to five paragraphs in CSAA’s separate statement of undisputed facts, that CSAA was entitled to relief because it had acted in good faith through the claims handling and thoroughly investigated, evaluated, and processed Verducci’s claim, treated the claim as a covered loss from the outset and provided immediate coverage for the loss, diligently inspected the home sending out a field adjuster within three days after Verducci reported the loss, and provided for mold remediation even though the leak may have been ongoing since August 2013. The court also struck Verducci’s request for punitive damages because she “failed to produce clear and convincing evidence demonstrating that . . . CSAA is guilty of oppression, fraud or malice.” The court granted CSAA’s request for judicial notice, overruling Verducci’s objections, but did not rule on CSAA’s objections to Verducci’s declaration.

The court filed two orders; one on August 29 and one on August 31. In the first order, the court stated it was granting CSAA’s motion because Verducci could not meet her burden of proving that CSAA had “acted unreasonably or without proper cause in the handling of [her] claims;” “there was a genuine dispute” concerning coverage; and Verducci could not show “by clear and convincing evidence that there was malicious, oppressive or fraudulent conduct” by CSAA. In the second order, filed on August 31, the court set forth in full its earlier tentative ruling that it had adopted following the August 11 hearing. Verducci subsequently dismissed, with prejudice, the remaining causes of action in the complaint (ante, fn. 3), and the court entered judgment in favor of CSAA on April 24, 2018. Verducci’s timely appeal ensued.

DISCUSSION

Because CSAA was granted summary adjudication in its favor, we review the record de novo to determine whether it has “ ‘conclusively negated a necessary element of [Verducci’s] case or demonstrated that under no hypothesis is there a material issue of fact that requires the process of trial.’ [Citation.] [Citation.]” (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 767.) “In performing an independent review of the granting of summary judgment, we conduct the same procedure employed by the trial court. We examine (1) the pleadings to determine the elements of the claim, (2) the motion to determine if it establishes facts justifying judgment in the moving party’s favor, and (3) the opposition ¬– assuming movant has met its initial burden – to ‘decide whether the opposing party has demonstrated the existence of a triable, material fact issue. [Citation.]’ [Citations.] We need not defer to the trial court and are not bound by the reasons in its summary [adjudication] ruling; we review the ruling of the trial court, not its rationale. [Citation.]” (Oakland Raiders v. National Football League (2005) 131 Cal.App.4th 621, 630.)

A. Admissibility of the Evidence

Before addressing the substantive issue before us, we find it appropriate to address CSAA’s arguments that (1) we should consider, as did the trial court, that Verducci’s responses to CSAA’s special interrogatories were devoid of any facts in support of her allegations of bad faith and request for punitive damages; and (2) whether the trial court erred in impliedly overruling CSAA’s hearsay objections to Verducci’s declaration.

The trial court’s reliance on Verducci’s discovery responses was misplaced. A party moving for summary judgment or adjudication may appropriately rely on an opposing party’s factually devoid and deficient discovery responses to meet its initial burden of demonstrating a prima facie showing of the nonexistence of a triable issue of material fact. (Andrews v. Foster Wheeler LLC (2006) 138 Cal.App.4th 96, 101.) However, “[w]ithout a demonstration of ‘discovery abuse,’ ” (Browne v. Turner Construction Co. (2005) 127 Cal.App.4th 1334, 1349 (Browne)), by way of “notice, a hearing, a requisite court order, or violation of the order” to compel discovery (People ex rel. City of Dana Point v. Holistic Health (2013) 213 Cal.App.4th 1016, 1030 (People ex rel. City of Dana Point)), “there is no general prohibition” precluding an opposing party from “ ‘introducing previously undisclosed evidence in opposition to a summary judgment [or adjudication] motion.’ [Citation.]” (Browne, supra, at p. 1349.) Thus, Verducci, as the party opposing summary adjudication, was not precluded from relying on facts that could have been but were not mentioned in her discovery responses.

We also see no merit to CSAA’s contention that the trial court abused its discretion by impliedly overruling CSAA’s objections to Verducci’s declaration. Verducci’s declarative statements made based on her personal knowledge regarding the impediment of the containment zone to accommodate remediation and repair work and her requests for alternative housing were nonconclusory statements, were admissible, and did not require additional support by other witnesses or experts. “[T]the sole declaration of a party opposing a summary judgment motion which raises a triable issue of fact is sufficient to deny that motion. . . . Evidence Code section 411 generally provides [that ‘the direct evidence of one witness who is entitled to full credit is sufficient for proof of any fact.’]” (Estate of Housley (1997) 56 Cal.App.4th 342, 359–360.) Additionally, the “Code of Civil Procedure section 437c, subdivision (e) does not allow a trial court to weigh the credibility of a declaration submitted by the party opposing a summary judgment [or adjudication] motion and then grant the motion, except where the declaration is facially so incredible as a matter of law that the moving party otherwise would be entitled to summary judgment.” (Estate of Housley, supra, at pp. 359–360.) Here, we cannot conclude Verducci’s declaration is facially incredible as a matter of law. To the extent CSAA attempts to cast doubt on Verducci’s declaration by asking us to consider certain excerpts of the deposition testimony of CSAA’s claim adjusters and defendant contractor’s employee, those “arguments go to the credibility and weight of the [] declaration, and thus cannot prevent it from creating a triable issue of fact. [Citation.]” (Biles v. Exxon Mobil Corp. (2004) 124 Cal.App.4th 1315, 1333.)

Additionally, Verducci’s recitation of the statements made by CSAA’s claim adjusters and defendant contractor’s employee were not barred by the hearsay rule as CSAA contends. The challenged statements were admissible as exceptions to the hearsay rule as either: (1) admissions made by a party (see Dart Industries, Inc. v. Commercial Union Ins. Co. (2002) 28 Cal.4th 1059, 1077 [insurance agent’s letter to insured was admissible as an authorized admission of a party (Evid. Code, §§ 1221, 1222), where court found agent “had agency authority to give out information about the terms of [insurance] policy”]), or (2) statements “ ‘of the declarant’s then existing state of mind [or] emotion . . . (including a statement of intent, plan, motive, design, [or] mental feeling . . .) . . . .’ (Evid. Code, § 1250, subd. (a))” (Browne, supra, 127 Cal.App.4th at p. 1335). Alternatively, the challenged statements could have been considered for the relevant non-hearsay purpose of explaining the circumstances giving rise to Verducci’s remaining in her home until she fell on December 15. (See People v. Montes (2014) 58 Cal.4th 809, 863 [“an out-of-court statement can be admitted for the non[-]hearsay purpose of showing that it imparted certain information to the hearer, and that the hearer, believing such information to be true, acted in conformity with such belief” and was relevant to an issue under dispute]; 1 Jefferson’s California Evidence Benchbook (Cont.Ed.Bar 4th ed. Feb. 2019 Update) § 1.36, p. 1-28 (rev. 3/14) [“trial judge should not sustain a hearsay objection when evidence has a relevant non[-]hearsay use, even if its probative value appears to be very slight”]; see also People ex rel. City of Dana Point, supra, 213 Cal.App.4th at p. 1030 [while the trial court may exclude evidence that has a relevant non-hearsay use under Evid. Code, § 352, that section is not applicable in the summary judgment context, which is concerned with “ ‘spotting material factual disputes, not resolving them’ ”].)

Also, the fact that Verducci may not have recalled the name of a claim adjuster or a specific date when she spoke to a specific and identified claim adjuster does not render the evidence inadmissible. (See McCaskey, supra, 189 Cal.App.4th at p. 987, fn. 24 [appellant CSAA cited “no authority requiring that a corporate agent be named before his statement may be found to satisfy the conditions for a vicarious admission;” “[i]t is true that the declaration might have been more credible if speakers had been named, but testing credibility is the function of cross-examination . . . – not summary judgment”]; Estate of Housley, supra, 56 Cal.App.4th at pp. 359–360 [court upheld denial of summary judgment based on declaration of decedent’s son that, at various unspecified times, his father had orally agreed to leave all of his property to his son].) Here, Verducci’s declaration adequately explained the circumstances that prompted her requests for alternative housing from which a reasonable inference could be drawn that, at a minimum, she made a request on November 21, three days after the loss was reported, and she made another request on December 12, three days before she fell in her home. (See Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 856 [court “may not ‘grant [ ]’ the defendants’ motion for summary judgment ‘based on inferences . . . , if contradicted by other inferences or evidence, which raise a triable issue as to any material fact’ ”].)

Lastly, Verducci’s opposition was not limited to her declaration and excerpts of her deposition. She also submitted excerpts of the depositions of CSAA’s claim adjusters, and CSAA’s claim notes that were produced during discovery, which evidence we have also considered in reaching our decision on her substantive claim we now discuss.

B. Admissible Evidence Demonstrates Triable Issue of Material Fact

Verducci’s cause of action for breach of the implied covenant of good faith and fair dealing is based on the principle that “[t]he law implies in every contract, including insurance policies, a covenant of good faith and fair dealing. ‘The implied promise requires each contracting party to refrain from doing anything to injure the right of the other to receive the agreement’s benefits. To fulfill its implied obligation, an insurer must give at least as much consideration to the interests of the insured as it gives to its own interests. When the insurer unreasonably and in bad faith withholds payment of the claim of its insured, it is subject to liability in tort.’ [Citation.]” (Wilson v. 21st Century Ins. Co. (2007) 42 Cal.4th 713, 720 (Wilson).) Thus, it has been held that a “breach of a specific provision of the contract is not a necessary prerequisite to a claim for breach of the implied covenant of good faith and fair dealing . . . . [E]ven an insurer that pays the full limits of its policy may be liable for breach of the implied covenant if improper claims handling causes detriment to the insured.” (Schwartz v. State Farm Fire & Casualty Co. (2001) 88 Cal.App.4th 1329, 1339.) For example, “ ‘ “delayed payment based on inadequate or tardy investigations, oppressive conduct by claims adjusters seeking to reduce the amounts legitimately payable and numerous other tactics may breach the implied covenant because” ’ ” such conduct frustrates the insured’s right to receive the benefits of the contract in “ ‘ “prompt compensation for losses.” ’ [Citations.]” (Brehm v. 21st Century Ins. Co. (2008) 166 Cal.App.4th 1225, 1236, quoting Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 36; see McCormick v. Sentinel Life Ins. Co. (1984) 153 Cal.App.3d 1030, 1051 [“ ‘tender of benefits . . . does not defeat [a cause] of action for insurance bad faith . . . [,] [r]ather, it merely mitigates damages’ ”].) “While an insurance company has no obligation under the implied covenant of good faith and fair dealing to pay every claim its insured makes, the insurer cannot deny the claim ‘without fully investigating the grounds for the denial.’ [Citation.] To protect its insured’s contractual interest in security and peace of mind, ‘it is essential that an insurer fully inquire into possible bases that might support the insured’s claim’ before denying it. [Citation.] By the same token, denial of a claim on a basis unfounded in the facts known to the insurer, or contradicted by those facts, may be deemed unreasonable. ‘A trier of fact may find that an insurer acted unreasonably if the insurer ignores evidence available to it which supports the claim. The insurer may not just focus on those facts which justify denial of the claim.’ [Citations.]” (Wilson, supra, at pp. 720–721.)

CSAA apparently persuaded the trial court that it was entitled to dismissal of the cause of action for breach of the implied covenant of good faith and fair dealing based on the genuine dispute doctrine. As explained by our Supreme Court in Wilson, supra, 42 Cal.4th at page 723: “[A]n insurer’s denial of or delay in paying benefits give rise to tort damages only if the insured shows the denial or delay was unreasonable. [Citation.] As a close corollary of that principle, it has been said that ‘an insurer denying or delaying the payment of policy benefits due to the existence of a genuine dispute with its insured as to the existence of coverage liability or the amount of the insured’s coverage claim is not liable in bad faith even though it might be liable for breach of contract.’ [Citation.] This ‘genuine dispute’ or ‘genuine issue’ rule was originally invoked in cases involving disputes over policy interpretation, but in recent years courts have applied it to factual disputes as well. [Citations.]” The Wilson court, however, went on to explain: “The genuine dispute rule does not relieve an insurer from its obligation to thoroughly and fairly investigate, process and evaluate the insured’s claim. A genuine dispute exists only where the insurer’s position is maintained in good faith and on reasonable grounds. [Citations.] Nor does the rule alter the standards for deciding and reviewing motions for summary judgment. ‘The genuine issue rule in the context of bad faith claims allows a [trial] court to grant summary judgment when it is undisputed or indisputable that the basis for the insurer’s denial of benefits was reasonable – for example, where even under the plaintiff’s version of the facts there is a genuine issue as to the insurer’s liability under California law. [Citation.] . . . On the other hand, an insurer is not entitled to judgment as a matter of law where, viewing the facts in the light most favorable to the plaintiff, a jury could conclude that the insurer acted unreasonably.’ [Citation.] Thus, an insurer is entitled to summary judgment based on a genuine dispute over coverage or the value of the insured’s claim only where the summary judgment record demonstrates the absence of triable issues (Code Civ. Proc. § 437c, subd. (c)) as to whether the disputed position upon which the insurer denied the claim was reached reasonably and in good faith.” (Wilson, supra, at pp. 723-–724.)

Here, the record does not show a genuine dispute allowing for the grant of summary adjudication in favor of CSAA as a matter of law. As noted, Verducci made repeated inquiries as to whether she could move out of her house commencing on November 21, three days after she reported the loss to CSAA. In response to Verducci’s requests for alternative housing, CSAA did not take the position that her house was habitable. Rather, the claim adjusters apparently attempted to dissuade Verducci from using the loss of use benefit for alternative housing by suggesting, among other things, that she postpone the use of that benefit until a later time. When Verducci insisted on using the loss of use benefit for alternative housing due to the set up of a containment zone in the house on December 12, CSAA’s housing adjuster informed her there were no hotel accommodations available due to upcoming holidays. However, alternative accommodations may well have been available because after Verducci fell in her home on December 15, necessitating hotel accommodations for when she was released from the hospital, CSAA’s third-party housing vendor was able to find a hotel room for her on December 18, well before the holidays. Under these circumstances, a jury could find that CSAA’s response that no hotel accommodations were available when Verducci inquired on December 12 lacked any factual basis and, coupled with its responses to Verducci’s earlier requests for alternative housing, demonstrated that CSAA’s conduct was “ ‘ “prompted not by an honest mistake, bad judgment or negligence but rather by a conscious and deliberate act, which unfairly frustrate[d] the agreed common purposes and disappoint[ed] the reasonable expectations of [Verducci] thereby depriving [her] of the benefits of the agreement” ’ ” (Wilson, supra, 42 Cal.4th at p. 726), and “rendering [CSAA] liable to pay compensatory damages for all detriment proximately caused by that breach (see Civ. Code, § 3333)” (Neal v. Farmers Ins. Exchange (1978) 21 Cal.3d 910, 922). Because a dispute “based on [an insurer’s] unreasonable position is not genuine,” we conclude summary adjudication was not proper in this case. (Wilson, supra, at p. 724.)

We also conclude the trial court erred in striking Verducci’s request for punitive damages. In order to justify an award of exemplary damages, the defendant must be guilty of oppression, fraud or malice. (Civ. Code, § 3294.) “When sufficiently egregious, an insurer’s intentional disregard of facts supporting a claim also meets the standard for punitive damages.” (Mazik v. Geico General Ins. Co. (2019) 35 Cal.App.5th 455, 470.) On this record whether a jury will find that CSAA’s conduct regarding its consideration of Verducci’s requests for alternative housing was sufficiently egregious to warrant an award of punitive damages cannot be resolved as a matter of law.

Given the procedural posture of this case, our determination should not be read and we express no opinion about the ultimate merits. We conclude only that CSAA failed to show Verducci should be barred as a matter of law from pursuing her cause of action for breach of the implied covenant of good faith and fair dealing and her request for punitive damages. In light of our determination, we do not address the parties’ other contentions.

DISPOSITION

The judgment is reversed. The matter is remanded to the trial court with directions to: (1) vacate its orders of August 29, 2017 and August 31, 2017, granting summary adjudication on the cause of action for breach of the implied covenant of good faith and fair dealing and striking the request for punitive damages, (2) enter a new order denying CSAA’s motion for summary adjudication to dismiss the cause of action for breach of the implied covenant of good faith and fair dealing and to strike the claim for punitive damages; and (3) conduct further proceedings. Plaintiff Mona Verducci is awarded costs on this appeal.

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Petrou, J.

WE CONCUR:

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Siggins, P.J.

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Fujisaki, J.

A154514