Case studies and results details

San Diego Superior Court Grants Summary Judgment in Lemon Law Case

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The San Diego Superior Court granted summary judgment in a lemon law case handled by Robert M. Scherk and Scott J. Loeding. The case involved an Arctic Cat all-terrain vehicle sold by Sette Sports Center, Inc. Mr. Scherk and Mr. Loeding represented both Arctic Cat, Inc. and Sette.

Plaintiff Kevin Schaefer filed suit in San Diego Superior Court for violation of the Song-Beverly Consumer Warranty Act, which provides that when a manufacturer cannot repair consumer goods after a reasonable number of attempts, it must either replace the defective product or refund the consumer’s money. He named as defendants Arctic Cat, Inc., the manufacturer of the ATV; Sette Sports Center, Inc., the retail seller of the ATV, and Cornerstone United, Inc., a company that issued an extended service contract to the original buyer.

In June of 2009, Sette listed the slightly used 2009 Arctic Cat ATV on E-Bay Motors which Sette had taken in trade from the original owner. The E-Bay listing stated “Buyer responsible for vehicle pick-up or shipping” and that the Arctic Cat ATV was located in Owatonna, Minnesota. Mr. Schaefer submitted the winning bid on or about June 11, 2009, and a Bill of Sale was prepared by Sette to reflect the sale of the Arctic Cat ATV to the plaintiff. The Bill of Sale did not contain any provision requiring Sette to deliver the ATV to the plaintiff in California. Nor did the Bill of Sale contain any freight or shipping charge by Sette. Sette did not pay any shipping charges for the ATV; those charges were paid by Mr. Schaefer. He arranged for a trucking company to pick up the ATV from Sette in Minnesota and transport it to San Diego County.

Mr. Schaefer claimed that after several months of use of the ATV, he had problems with it and brought it to an Arctic Cat authorized repair facility in San Diego County, but that the ATV could not be and was not properly repaired.

After significant written discovery and a number of depositions, Arctic Cat and Sette filed a Motion for Summary Judgment, arguing that, despite Mr. Schaefer taking possession of the ATV in San Diego County, the Bill of Sale and the fact that the plaintiff had the ATV picked up in Minnesota, established that he had actually purchased the ATV in Minnesota, and because the Song-Beverly Act applies only to vehicles purchased in California, the defendants were entitled to summary judgment.

The plaintiff opposed the defendants’ Motion for Summary Judgment, arguing that there were questions of fact as to whether the ATV was sold or purchased in California. He also argued that as an active member of the U.S. Navy, he was entitled to the benefit of a statute amending the Song-Beverly Act to provide additional protections to military personnel stationed in California at the time of purchase of the vehicle in question. The court granted the defendants’ Motion for Summary Judgment, agreeing with their arguments that to determine whether the ATV was sold in Minnesota or California for purposes of the Song-Beverly Consumer Act, the court must follow the Uniform Commercial Code, which governs when and where the title passes between a seller and buyer.

The court also agreed that the contract between the plaintiff and the retailer, Sette Sports Center, did not require Sette to deliver the ATV to a destination in California, and that because the plaintiff was responsible for shipping, pursuant to the UCC and applicable case law, the ATV was, as a matter of law, sold in Minnesota and not California, making the Song-Beverly Consumer Warranty Act inapplicable, and the defendants thereby entitled to summary judgment.

LASC Grants Summary Judgment in Breach of Contract and Bad Faith Case

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The Los Angeles Superior Court granted summary judgment to an insurer in a breach of contract and bad faith case handled by Nancy N. Potter. The plaintiffs, apartment owners, sued the insurer after their 100 year-old Los Angeles apartment building suffered a major sewage leak. The insurer retained a mechanical engineer who inspected the pipe and concluded that it was old and completely corroded. The insurer denied coverage for the sewer line repairs and replacement based on the exclusions applicable to underground pipe, excavation, lack of maintenance, wear and tear, and pollution.

The apartment owners sued the insurer, primarily arguing that the loss was “sudden and accidental” and should have been covered. Ms. Potter filed a Motion for Summary Judgment showing that the loss was to non-covered pipes and land, and that pollution was excluded from coverage. She also presented the mechanical engineer’s opinion as to the age of the pipe, and excerpts of the deposition of a tenant who had been complaining about the sewer odor for four months, before the plaintiffs claimed the loss occurred, to demonstrate that the issue was caused by an ongoing lack of maintenance.

The court found that the plaintiffs’ opposition evidence of a sudden and accidental loss was insufficient, that the loss was not covered and, therefore, the denial of the claim did not breach the insurance contract and was not in bad faith.

Superior Court Grants Summary Judgment in Personal Injury Action against City

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William T. DelHagen, Paul R. Flaherty and Adrian J. Barrio successfully represented the City of Moreno Valley and one of its employees, Mosallam Almasri, in a personal injury action brought by the employee of independent contractor Riverside Construction Company.

The city hired Riverside to perform storm drain improvements and street lane widening. The plaintiff, the superintendent of construction for Riverside, suffered debilitating injuries when he was struck by a truck operated by Cesar Rosales, an employee of the defendant and cross-complainant Pipeline Carriers, Inc. At the time of the accident, the plaintiff was standing in the middle of the street, engaged in the task of performing pre-construction measurements. Mr. Almasri was on the scene at the time of the accident, but he did not direct the plaintiff’s activities in any way and was essentially an onlooker.

The plaintiff argued that the city and Mr. Almasri failed to ensure that Riverside and its employees, including the plaintiff, complied with applicable Cal-OSHA regulations pertaining to traffic control at or near the job site.

The Superior Court for the County of San Bernardino granted the city and Mr. Almasri’s Motion for Summary Judgment on the basis of the “Privette” doctrine and the California Supreme Court’s recent decision in Seabright v. US Airways, Inc., 52 Cal.4th 590 (2011). The court found that, under Seabright, neither the city nor Mr. Almasri owed the plaintiff a duty of care to ensure workplace safety. The court noted that, by hiring an independent contractor, the city implicitly delegated to the contractor any tort law duty it owed to the contractor’s employee, the plaintiff, to ensure workplace safety. That implicit delegation included any tort law duty the city owed to the plaintiff to comply with applicable statutory or regulatory safety requirements.

In addition, the court found that the city did not “affirmatively contribute” to the plaintiff’s injuries and, further, that Mr. Almasri was immune from personal liability by virtue of his status as a public employee.

LASC Grants Summary Judgment to Insurance Brokerage Corporation and its CEO

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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…”

Defense Verdict for Insurance Company in Breach of Contract and Bad Faith Case

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Michael J. Nunez represented Nevada Direct Insurance Company in a suit brought by a claimant after she was involved in an automobile accident with one of Nevada Direct’s insureds. After a two day bench trial, the District Court found for the defense on all counts.

Following the accident, the claimant had engaged in pre-suit negotiations with Nevada Direct and then ultimately filed a personal injury suit. After initiation of the personal injury suit, Nevada Direct filed and prevailed in a declaratory relief action based on lack of cooperation from its insureds. Nevada Direct was also represented by Murchison & Cumming in the declaratory relief action. The plaintiff then proceeded to obtain default judgments against the insureds in the personal injury lawsuit and initiated the current lawsuit under theories of breach of contract, promissory estoppel and third party bad faith.

The basis for the claims were that Nevada Direct did not disclose to the claimant that it was not receiving cooperation from its insureds and that it did not disclose that it had any reservations of rights. The claimant asserted that the pre-suit negotiations misled the claimant and gave rise to the various claims. The claimant also asserted she was a judgment creditor of Nevada Direct after obtaining default judgments against the insureds based on the recent Nevada Supreme Court case of Gallegos v. Malco Enterprises of Nevada.

The third party bad faith claim was dismissed prior to trial by way of a Motion to Dismiss and a defense verdict was obtained on the remaining claims at trial.

Jury Returns Defense Verdict and Court Grants Dismissal for Defendants in Personal Injury Case

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Gregory A. Sargenti successfully represented defendants Hands Together and the National Pediatric Support Services in an Orange County Superior Court personal injury case.

Plaintiff Rocio Marquez sued the two defendants following an August 12, 2008 accident that occurred at a preschool on property operated by National Pediatric Support Services under its contract with Hands Together. The plaintiff claimed to have sustained significant orthopedic injuries to her lower back and left knee as a result of a negligently cleaned spill of water. The plaintiff submitted to over a year of treatment and claimed a future surgery was required to repair her injured left knee. The defendants claimed Rocio Marquez was, or should have been, aware of the open and obvious condition and are therefore not legally liable for her claimed injuries.

On the first day of trial, the court granted an Order of Dismissal filed by the defense on behalf of Hands Together. After three days in trial, the jury retired to deliberate for under three hours before returning a defense verdict finding that National Pediatric Support Services’ conduct was not a substantial factor in causing the plaintiff’s claimed injuries.

Court Grants Motion to Dismiss Chipotle Restaurant in Personal Injury Case

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William D. Naeve and Terry L. Kesinger successfully defended a Chipotle Mexican Grill restaurant in a serious bodily injury claim originally filed in a California state court.

Although the complaint did not itself allege the dollar amount of damages the plaintiff sought to recover from the defendant, Mr. Naeve nevertheless removed the case to Federal Court by taking advantage of a relatively new revision to the removal statutes. These revisions permit removal in diversity cases if a defendant can make a good faith showing that the amount in controversy likely exceeds the $75,000 “case in controversy” minimum required to trigger removal jurisdiction. Since the plaintiff’s complaint did not allege a dollar amount of damages sought to be recovered, the Murchison & Cumming attorneys demonstrated to the court that the case could have a value in excess of $75,000. The plaintiff’s lawyer argued to remand the case back to state court. United States District Court Judge Virginia Phillips refused and the case remained venued in Federal Court.

The defense then propounded pointed discovery and demanded that the plaintiff and her lawyer participate in the pre-trial procedures required in Federal Court litigation. Thereafter, the plaintiff refused to participate in most of these procedures and failed to submit timely responses to discovery requests. In light of the plaintiff’s refusal to follow these pre-trial rules, the defense drafted and filed a motion asking Judge Phillips to dismiss the case.

The court granted the motion and dismissed the plaintiff’s case against Chipotle.

Court Finds in Favor of Manufacturer in Insurance Case

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The Orange County Superior Court found in favor of Murchison & Cumming’s client, an appliance manufacturer, in an insurance litigation case. Friedrich W. Seitz and Todd A. Chamberlain represented the defendant. The client was sued by an insurance company for declaratory relief and breach of contract.

In 2007, the insurance company and the manufacturer entered into a settlement and release agreement resolving a series of bad faith lawsuits against the insurer for its failure to defend the manufacturer in multiple toxic tort cases in Pennsylvania. The settlement agreement expressly applied to the manufacturer and all current subsidiaries and contained an indemnity provision in favor of the insurer. When a former subsidiary of the manufacturer was later sued in an Orange County toxic tort case, the insurer contended that the agreement had released that claim and that the manufacturer was obligated to indemnify the insurer for the costs it incurred in defending the former subsidiary under the indemnity provision. The defendant filed a cross-complaint against the insurer for declaratory relief and breach of contract.

The court found the plaintiff’s reading of the agreement tortured and convoluted and that the defendant’s interpretation of the agreement was supported by common sense, consistent with the mutual intent of the parties. The court also awarded the defendant $367,000 in damages and costs against the insurer.

LASC Grants Summary Judgment to Insurance Broker in Malpractice Case

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The Los Angeles Superior Court granted summary judgment in favor of Murchison & Cumming’s insurance broker client. Jean M. Lawler, Nancy N. Potter and Daniel G. Pezold represented the defendant.

An attorney and his wife contracted with a construction company to perform a major demolition and remodeling on their San Marino home. Immediately after the demolition, the City of San Marino shut down the job due to lack of proper permits. Suit resulted and the contractor’s insurer denied coverage. Ultimately, the contractor settled with the couple, and assigned his claims against his insurer and the insurance broker to them. In their subsequent suit against the broker and insurer, the couple alleged that the broker was supposed to provide an insurance policy which would cover any liability and any claim that might be asserted against the contractor.

The defense brought a Motion for Summary Judgment showing that the contractor had never asked for a policy which would cover any liability, and that the insured was satisfied with the policy which the insurance broker had procured.

Court Grants Intervention and Motion to Set Aside Default in General Liability Case

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In December 2011, Judge Rita Miller of the Los Angeles Superior Court granted defense Motions to Intervene on behalf of a suspended corporation and set aside the default that had been entered against the suspended corporation. Gina Bazaz represented the suspended corporation’s insurance company and Lisa D. Angelo prepared and argued the motions.

Several years ago, the plaintiff filed an action for personal injuries against a suspended corporation. When no responsive pleading was received from the suspended corporation, the plaintiff obtained a default. The suspended corporation’s insurance company was never notified of the initial litigation and was notified for the first time of the case when the plaintiff served the insurance company with a conformed copy of the court’s entry of default. Upon receipt of the notice of default and underlying case, the insurance company filed a Motion for Leave to Intervene on behalf of the suspended corporation and to set aside the default that had been entered. The court granted both the Motion for Leave and subsequent motions to intervene and set aside the default.