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California Case Law Update

INSURANCE COVERAGE

Medina v. Geico Indemnity Company, 2017 WL 5101878 (17 Cal. Daily Op. Serv. 1174)

Facts:

Leigh Anne Flores was involved in an accident while she was driving a van provided to her by her employer, Pacific Bell. This van was provided to her to perform her duties, but she used it for both personal and business purposes. At the time of the vehicle accident, Flores was on her way to perform a personal errand.

As a result of the accident, Javier Medina sued both Flores and Pacific Bell. In that action, the trial court found Pacific Bell, who self-insured the van, not vicariously liable because Flores was not acting in the course and scope of her employment at the time of the collision. In a subsequent arbitration involving only Medina and Flores, the arbitrator awarded Medina over a half-million in damages.

Flores also had insurance coverage for her personal vehicle through GEICO Indemnity Company. The GEICO policy provided coverage for her use of a “non-owned” vehicle, but not if the non-owned vehicle was “furnished for [her] regular use.” Flores tendered defense to GEICO, but it refused to defend or indemnify her. Flores assigned her rights against GEICO to Medina in exchange for a covenant not to execute against her personal assets.

GEICO brought a summary judgment motion based on the fact there was no coverage. The trial court granted this motion, finding as a matter of law there was no coverage under the non–owned auto clause since Floes had nearly unlimited use of the Van. On appeal, Medina argued the van was not furnished for Flores’s regular use at the time and place of the accident because it was furnished to her primarily for business use and she was on a personal errand at the time of the collision.

Holding:

The Court of Appeal affirmed the judgment finding that under the circumstances of the case, since Flores was able to use the van for both business and personal reasons, her use of the van at the time of the accident was not a departure from its customary use, the van was furnished to her for her regular use. There is no coverage under the GEICO policy.
RIGHT TO REPAIR ACT

Blanchette v. Superior Court, 2017 WL 541939 (17 Cal. Daily Op. Serv. 1302)

Facts:

On February 2, 2016, Blanchette served the builder of his home and 28 other in his neighborhood with a notice of claim. This notice of claim set forth alleged defects in all 28 homes and used the language of Civil Code section 896. This code section sets forth building standards, the violation of which give rise to actionable claims against homebuilders.

GHA responded on February 23, 2016, asserting the construction defects set forth in Blanchette’s claim were not alleged with reasonable detail as required by Civil Code section 910(a); nonetheless GHA offered to inspect the homes. Blanchette responded on February 26, 2016 asserting GHA’s response was untimely and excused him and the other homeowners from any obligations under the act.

Blanchette filed a construction defect class action against GHA. GHA responded by moving to stay the action until Blanchette satisfied the prelitigation requirements of the Right to Repair Act. Blanchette opposed the motion on the grounds GHA had not timely responded to his notice of claims. The trial court agreed with GHA that Blanchette’s notice of claim lacked detail sufficient to trigger GHA’s obligations under the act. The action was stayed pending completion of the notice and inspection procedures required by the Right to Repair Act. Blanchette was ordered to serve a new notice of claims. Blanchette filed a petition for writ of mandate in which he challenged the trial court’s order.

Holding:

The Court of Appeal held as a matter of first impression, builder’s failure to respond to notice of claim within 14 days released homeowner from the requirements of the right to Repair Act, even though notice of claim was insufficient on its face. GHA’s failure to timely acknowledge Blanchette’s notice of claim and resolve the issue of specificity relieved Blanchette of any further obligations under the act.

CIVIL PROCEDURE

Hamilton v. Orange County Sheriff’s Department, 2017 WL 591412 (17 Cal. Daily Op. Serv. 1420)

Facts:

Defendant Orange County Sheriff’s Department (“Sheriff”) filed a motion for summary judgment (“MSJ”) setting the hearing date for January 30, 2015. This hearing date was four days after the scheduled trial date. The Sheriff then moved ex parte and the court continued the trial date to March 2, 2015, so the MSJ could be timely heard.

On December 1, 2014, plaintiff served depositions notices for the witnesses providing sworn declarations in support of the MSJ. These depositions were set for December 12, 2014. These notices were objected by the Sheriff as unilaterally noticed and due to defense counsel’s trial calendar. Emails were exchanged between plaintiff and defense counsel between December 29, 2014 and January 12, 2015, but plaintiff was unable to schedule the necessary depositions.

Plaintiff and defense then agreed to a stipulation to continue the hearing on the MSJ motion and trial date for two months. The stipulation cited three bases for good cause for the continuance, including potentially successful settlement negotiations, inability to timely complete the depositions, and conservation of costs due to potential settlement. Subsequently, Plaintiff did not file an opposition to the MSJ. However, the court would not sign the stipulation granting the continuance. After a hearing on the unopposed motion, the MSJ was granted. Plaintiff timely appealed from the judgment.

Holding:

The Court of Appeal overturned the trial court’s ruling based on an abuse of discretion. The appeals court found sufficient diligence of plaintiff’s part in pursuing the necessary discovery to oppose the motion. Although, plaintiff was not optimally diligent, the relatively minor lack of diligence did not justify the substantial injustice the court’s order created. The appeals court recognized the trial courts are under the pressure to process cases within the timelines required by the trial Court Delay Reduction Act. However, the trial courts must abide by the guiding principle of deciding cases on their merits rather than on procedural deficiencies.

ABOUT THE AUTHOR: Jillian Fairchild specializes in insurance defense, personal injury, professional liability, and general civil litigation. Contact her at 858-263-4065 or jfairchild@tysonmendes.com.