LASC Grants Summary Judgment to Insurance Brokerage Corporation and its CEO
June 28, 2012
On June 12, 2012, Los Angeles Superior Court Judge David L. Minning granted the defendants' summary judgment in a breach of contract and general negligence case handled by Dan L. Longo and Lisa D. Angelo.
The case arose from the purchase of several insurance policies for coverage concerning a new construction project located in Los Angeles, California. In August 2006, the plaintiff purchased the policies through the defendant's brokerage company. According to the complaint, the plaintiff specifically asked one of the defendant's brokers to purchase a policy that covered construction defects. The plaintiff further alleged he was repeatedly assured by the defendant's broker that one of the policies purchased for the project included extra coverage for construction defects. In June 2007, the construction project began to show signs of construction defects. The plaintiff filed a claim for defects coverage. The claim was denied because the policy did not cover construction defects. On March 24, 2010, the plaintiff sued the insurance brokerage firm and its Chief Executive Officer for breach of oral contract and general negligence. Both causes of action have two-year statutes of limitation.
During discovery, the plaintiff produced numerous documents including the original claim denial letter and emails between himself and his insurance broker discussing the denial letter. The claim denial letter was dated January 28, 2008. The emails between the plaintiff and his broker, concerning the denial letter, were dated February 4-5, 2008 and March 24, 2008.
The defendants filed a Motion for Summary Judgment on several grounds including statute of limitations. In opposition, the plaintiff argued that according to California's "discovery rule," the two-year statutes of limitation did not start to accrue until he received the March 24, 2008 email because that was the email "unequivocally" informing him that the claim was denied because it did not cover construction defects. In a three-page ruling granting summary judgment, the court held that the plaintiff’s claims were time-barred under the "discovery rule," by virtue of the February 2008 emails wherein the plaintiff wrote to the defendant's insurance broker, "this is not the policy I thought I was buying." The court reasoned, "the statute of limitations begins to run when the plaintiff suspects or should suspect that his or her injury was caused by wrongdoing..."
