2013-00138382-CU-BC

Vista De Santa Barbara Ass vs. Financial Pacific Insurance

Nature of Proceeding: Hearing on Demurrer to First Amended Complaint

Filed By: Yang, Jason

Defendant Owen & Company dba Owen Dunn Insurance Services’ demurrer to
Plaintiffs’ first amended complaint is ruled upon as follows.

This is an action arising out of the failure to defend two insurance claims (the
“Association Action” and the “Graves Action”) filed by Plaintiffs Vista de Santa Barbara
Associates, LLC and Vista de Santa Barbara Associates’ (collectively “Plaintiffs”). The
Association Action was filed on November 25, 2008. The Graves Action was filed on
October 28, 2011. Defendant is the insurance broker for the insurance policies.

Plaintiff alleges a single cause of action against Defendant for professional negligence
(11th COA). Plaintiff alleges that Defendant failed to obtain appropriate and complete
general liability coverage for Plaintiffs as a member of the mobilehome park industry.
The initial complaint was filed January 15, 2013.

Defendant demurs to the professional negligence cause of action on the grounds that
it is barred by the statute of limitations.

The applicable statute of limitations is two years. (CCP 339.) Defendant contends
that Plaintiffs suffered appreciable damage on December 23, 2008 when it tendered
the defense of the Association Action and began incurring substantial attorneys’ fees
and costs. Defendant contends that at the very latest, Plaintiffs should have known
about the alleged malpractice by January 28, 2009 when coverage for the Association
Action was denied. Although the Graves Action claim was denied on June 26, 2012,
Defendants contend that Plaintiffs should have known about the alleged malpractice
by January 28, 2009 when coverage for the Association Action was denied.

Plaintiffs allege that the following three insurance policies were procured: Policy No.
172915D (August 3, 2008 through August 2, 2009), Policy No. 17291E (August 3,
2009 through August 2, 2010) and Policy No. 172915F (August 3, 2010 through
August 2, 2011). (FAC paras 7-9.)

In opposition, Plaintiffs contend the cause of action is not time barred because
Plaintiffs have alleged successive acts of negligence. Specifically, Plaintiffs argue that
as of January 28, 2009, the statute of limitations for Policy Nos. 17291E and 172915F
could not have run because Owen had not yet recommended or procured those
policies and they were not effective until August 3, 2009 and August 3, 2010
respectively. Plaintiffs argue that while the negligence relating to Policy No.
172915D and the denial of the Association Action may be barred, the Graves Action is
not barred because it was not filed until October 28, 2011 and was denied on June 26,
2012 (within the 2 year statute of limitations).

The Court agrees with Plaintiffs that as currently pled, the Graves Action is not barred
by the statute of limitations. Accordingly, the demurrer is OVERRULED.

Defendant shall file and serve and answer by no later than October 28, 2013.

The minute order is effective immediately. No formal order pursuant to CRC Rule
3.1312 or further notice is required.