Abari v. State Farm Fire & Casualty Co.

• Decision Date: 03 October 1988
• Citation: 205 Cal.App.3d 530,252 Cal.Rptr. 565
• Court: California Court of Appeals Court of Appeals
• Parties: Nasser F. ABARI, Plaintiff and Appellant, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant and Respondent. Civ. B031374.

Page 565

252 Cal.Rptr. 565

205 Cal.App.3d 530

Nasser F. ABARI, Plaintiff and Appellant, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant and Respondent.

Civ. B031374.

Court of Appeal, Second District, Division 3, California.

Oct. 3, 1988.

As Modified Oct. 26, 1988.

Review Denied Dec. 21, 1988.

Patrick E. Catalano and Thomas F. Maxwell, San Francisco, for plaintiff and appellant.

Knapp, Petersen & Clarke, Barry Bartholomew, Kathryn A. Albarian and Robert B. Marquez, Universal City, for defendant and respondent.

KLEIN, Presiding Justice.

Plaintiff and appellant Nasser F. Abari (Abari) appeals an order of dismissal following the sustaining of a demurrer to his second amended complaint against defendant and respondent State Farm Fire and Casualty Company (State Farm).

Because Abari failed to file suit within one year of discovering the loss, the order is affirmed.

FACTUAL & PROCEDURAL BACKGROUND

On January 23, 1985, Abari filed his initial complaint against State Farm and others, alleging various causes of action. The trial court sustained State Farm's demurrer with leave to amend. A first amended complaint followed. State Farm's demurrer to that pleading was likewise sustained with leave to amend.

On June 19, 1987, Abari filed a second amended complaint, which is the operative pleading here. The complaint contained causes of action for breach of contract, bad faith, breach of fiduciary duty, intentional and negligent misrepresentation, constructive Abari alleged in relevant part: Beginning August 15, 1978, his home at 3367 Rambla Pacifico in Malibu was insured under a State Farm all risks policy. In the latter part of 1979, Abari noticed cracks within the house, next to the fireplace, in the living room wall, and on the kitchen counter, as well as in the driveway. The problems progressively worsened. In September 1984, Abari returned to live in the house, after having rented it out for several years. At that time, Abari observed new cracks, as well as widening of the earlier cracks. Abari thus became aware he had sustained a loss manifested by subsidence and cracking of the insured dwelling. Around September 1984, or within several months thereafter, Abari became aware he was entitled to benefits pursuant to his State Farm policy from conversations with neighbors who had suffered similar losses. In January 1985, Abari consulted an attorney regarding the matter. On January 21, 1985, a claim was submitted to State Farm.

fraud, negligence, conspiracy, and tortious interference with, and inducement to breach, contract.

Copies of the one year policies which took effect August 15, 1978, and November 20, 1980, were appended as exhibits to the complaint. ¹

State Farm demurred on the ground, inter alia, each cause of action was barred by the one-year commencement of suit provision set forth in the policy. The provision provides: "SUIT. No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with, and unless commenced within 12 months next after inception of the loss."

The matter was heard August 21, 1987. The trial court held the breach of contract, breach of covenant of good faith and fair dealing, and unfair practices causes of action were barred by the one-year commencement of suit provision in the policy, and further, that Abari had abandoned the other causes of action. State Farm's demurrer was sustained without leave and the action was dismissed. Reconsideration was denied, and Abari appealed.

CONTENTIONS

Abari contends: (1) the one year contractual time limitation is tolled under the discovery rule; (2) the policy in effect in 1979 did not contain the one year limitation; (3) the contractual limitation does not apply to the bad faith and unfair practices counts; and (4) the complaint stated facts tolling any time limitation.

DISCUSSION

1. Standard of appellate review.

The function of a demurrer is to test the sufficiency of a pleading by raising questions of law. (Buford v. State of California (1980) 104 Cal.App.3d 811, 818, 164 Cal.Rptr. 264.) The allegations are regarded as true, and are liberally construed with a view to attaining substantial justice. (Shaeffer v. State of California (1970) 3 Cal.App.3d 348, 354, 83 Cal.Rptr. 347; King v. Central Bank (1977) 18 Cal.3d 840, 843, 135 Cal.Rptr. 771, 558 P.2d 857.)

The reviewing court is not concerned with a plaintiff's possible inability to prove the allegations, but only that the party may be entitled to some relief. (Highlanders, Inc. v. Olsan (1978) 77 Cal.App.3d 690, 697, 143 Cal.Rptr. 679; Alcorn v. Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 496, 86 Cal.Rptr. 88, 468 P.2d 216.)

2. Policy contained one-year commencement of suit provision.

As indicated, Abari appended copies of the August 15, 1978, and November 20, 1980, policies to the complaint. In his opening brief, Abari contended the one-year provision was not part of the 1978 policy.

We granted State Farm's request to augment the clerk's transcript with a complete copy of the 1978 policy. Contrary to In his reply brief, Abari appears to have abandoned the contention.

Abari's contention, the policy contains the one-year commencement of suit provision.

We treat the subject policy as having been pled in its entirety. (Helix Land Co. v. City of San Diego (1978) 82 Cal.App.3d 932, 937, 147 Cal.Rptr. 683.)

3. Abari failed to state facts to toll the running of the commencement of suit provision.

Preliminarily, Abari's belated discovery in 1984 that his homeowners' policy might afford coverage is without import. "It is the occurrence of some ... cognizable event rather than knowledge of its legal significance that starts the running of the statute of limitations." (McGee v. Weinberg (1979) 97 Cal.App.3d 798, 804, 159 Cal.Rptr. 86.)

Abari submits the trial court should have rejected State Farm's argument that the cracks in 1979 put Abari on notice of subsidence. Abari urges on appeal "[t]he cracks may have been so small that no reasonable person would be put on notice of a subsidence problem."

It is conceivable the cracks were trivial, so that Abari was not alerted to the gravity of the damage. However, the complaint lacks such an allegation. As set forth ante, Abari merely pled he discovered the cracks in 1979; the cracks worsened over time; and upon reentering the property in 1984, after being an absentee landlord, he observed further damage.

The subject complaint was Abari's third attempt to state a cause of action against State Farm. In the earlier demurrers, State Farm called attention to Abari's failure to plead when the damage arose. Abari had ample opportunity to plead his best case, as nearly two and one half years elapsed between the initial and second amended complaints.

Because the record compels the conclusion that Abari was on notice beginning in 1979, the sustaining of the demurrer without leave was a proper exercise of the trial court's discretion. ²

Subsequently, Abari filed a declaration in support of the motion for reconsideration stating when he noticed the cracks in 1979, he believe...