Building Permit Consultants, Inc. v. Mazur, B170797.

Citation122 Cal.App.4th 1400,19 Cal.Rptr.3d 562
Decision Date07 October 2004
Docket NumberNo. B170797.,B170797.
CourtCalifornia Court of Appeals
PartiesBUILDING PERMIT CONSULTANTS, INC., Plaintiff and Appellant, v. David MAZUR et al., Defendants and Respondents.
19 Cal.Rptr.3d 562
122 Cal.App.4th 1400
BUILDING PERMIT CONSULTANTS, INC., Plaintiff and Appellant,
v.
David MAZUR et al., Defendants and Respondents.
No. B170797.
Court of Appeal, Second District, Division 3.
October 7, 2004.

[19 Cal.Rptr.3d 564]

[122 Cal.App.4th 1403]

James S. Link; Law Offices of Michael Anatole and Michael Anatole, Calabasas, for Plaintiff and Appellant.

Law Offices of Louis J. Khoury, Louis J. Khoury, Los Angeles; Law Offices of Nairie A. Balian and Nairie A. Balian, Pasadena, for Defendant and Respondent, David Mazur.

Shea Stokes & Carter and Jeffrey J. Leist, Los Angeles, for Defendant and Respondent, Chapin, Shea, McNitt & Carter.

Gordon & Rees LLP, Peter Schwartz and Jeffrey A. Evans, Los Angeles, for Defendant and Respondent, Truck Insurance Exchange.

Reed Smith LLP, James C. Martin, Lorenzo E. Gasparetti and Benjamin G. Shatz, Los Angeles, for Defendant and Respondent, Crosby, Heafey, Roach & May.

Berger & Kahn, Sherman M. Spitz, Irvine, and Ryan C. Tuley, Marina del Rey, for Defendant and Respondent, Berger Kahn.

[122 Cal.App.4th 1404]

CROSKEY, J.


The appellant, Building Permit Consultants, Inc. (BPC), appeals from a judgment entered after the defendants' several demurrers to the first amended complaint (hereafter, FAC) were all sustained without leave to amend. Among other things, the trial court concluded that BPC's multiple claims allegedly arose from and were based upon a voidable contract to provide public insurance adjuster services that were regulated and licensed by the Department of Insurance pursuant to Insurance Code sections 15006, 15007 and 15008.1 Since BPC did not (and, in fact, could not) allege that it possessed the required license, and that failure has been raised and asserted as a defense to the enforcement of BPC's contract, the trial court concluded that the contract was void and all of the claims alleged by BPC necessarily failed.

After a review of the contract, which was attached as an exhibit to BPC's FAC, and the relevant Insurance Code provisions, we are satisfied that the trial court properly sustained the defendants' demurrers. We therefore will affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND2

The defendant and respondent, David Mazur, is the owner of two developed parcels of real property at 1233 and 1237 N. Fuller Avenue, Los Angeles, California (hereafter, the property). The property allegedly sustained some damage in the 1994 Northridge earthquake. Mazur, however, failed to make sufficient timely claim(s) to his insurer, the defendant and respondent, Truck Insurance Exchange (Truck).3

19 Cal.Rptr.3d 565

On July 27, 1997, Mazur entered into a written agreement with BPC entitled "Agreement For Litigation Support Services" (hereafter, the agreement). Under the terms of the agreement, Mazur retained "BPC to render the hereinafter described services in connection with [Mazur's] claim for insurance proceeds resulting from the damage or destruction to [Mazur's property]. . . ."

Specifically, the relevant provisions of the agreement stated:"(a) [Mazur] will retain the services of an attorney to litigate, arbitrate and/or negotiate

122 Cal.App.4th 1405
Mazur's] claim with the insurance carrier. [¶] (b) [Mazur] retains BPC to support the attorney retained by [Mazur] by providing the following services: [¶] (i) BPC at the direction of [Mazur's] attorney will obtain the information and/or reports that the said attorney deems prudent or necessary to support [Mazur's] insurance claim. [¶] (ii) BPC will retain the services of a general building construction contractor and/or engineers (e.g.civil, structural, soil) and/or other consultants (which may include BPC), to prepare appropriate cost estimates, reports, plans and/or such other data and/or information that the attorney deems prudent or necessary [¶] (c) BPC is not responsible for the contents of any report a consultant prepares on [Mazur's] behalf. BPC shall not be held liable for the negligence or intentional misconduct of any consultant retained pursuant to the terms of this Agreement. [¶] (d) Subject to BPC's prior written approval of the fee agreement between [Mazur] and the attorney, BPC will pay the costs and expenses charged to [Mazur] by said attorney on the terms agreed to by [Mazur]. [¶] (e) BPC shall not be responsible for the representation of [Mazur] in the event that [Mazur's] insurer files a cross-complaint or separate action against [Mazur]."

Under the terms of the agreement, Mazur agreed that BPC would be entitled to receive 27-1/2 percent of the net amount of all sums paid to Mazur by Truck on all portions of Mazur's claim after the date of the agreement. All costs and expenses incurred by BPC4 would be deducted from the gross recovery from Truck and repaid to BPC, but would not be included in the recovery for purposes of calculating BPC's 27-1/2 percent share. This was a contingency arrangement and in the event of no recovery from Truck, then BPC would receive nothing (i.e., even the costs and expenses incurred by BPC would not have to be repaid). BPC was, however, to be fully paid out of first monies received from Truck even if this did not leave sufficient funds for Mazur to repair the earthquake damage to the property that had served as the basis for the claim.5

[19 Cal.Rptr.3d 566

122 Cal.App.4th 1406

It is not clear from the record what, if any, services were performed by BPC on Mazur's behalf, but it alleges that it provided some "funds" and, as a result, Truck "reopened" Mazur's claim. Truck retained a law firm to represent its interests, the defendant and respondent Berger, Kahn, Shafter, Moss, Figler, Simon & Gladstone (hereafter, Berger).6

On or about April 4, 2002, Mazur's earthquake claim was allegedly settled with Truck and the settlement proceeds were paid to Mazur.7 BPC was neither involved in the settlement discussions nor informed as to the fact or terms of the settlement. Although BPC had, under the terms of the agreement, a lien right on any such proceeds and, allegedly had served notice of such right on Berger (who allegedly acknowledged such notice), nothing was ever paid in satisfaction of such lien.

As a result, on December 2, 2002, BPC filed its original complaint in this matter. In that pleading it alleged causes of action against Mazur, and all of the other defendants, for (1) breach of contract, (2) fraudulent concealment, (3) negligent concealment, (4) breach of equitable lien, (5) imposition of constructive trust, (6) conversion and (7) negligence. BPC did not attach a copy of the agreement to its original complaint nor did it characterize its contractual relationship as a provider of services. Rather, BPC generally alleged only that under its contract with Mazur it had agreed to "provide funds for the purpose of helping Mazur in Mazur's pursuit of insurance proceeds for damage to Mazur's real property, resulting from the 1994 earthquake in the Los Angeles area."

The several defendants, including Mazur, responded to this complaint with demurrers which, among other things, asserted that BPC had failed to attach a copy of the agreement in order to avoid the very issue of voidability that is now before us. The trial court sustained the demurrers with leave to amend on April 28, 2003.

122 Cal.App.4th 1407

On May 7, 2003, BPC filed the FAC again alleging Mazur's claim for breach of contract, conversion and a common count for money had and received. Against Berger, it alleged a count for promissory fraud, intentional and negligent interference with contract, a common count for money had and received and conversion. Against Chapin and Crosby, BPC alleged counts for intentional and negligent interference with contract and conversion together

19 Cal.Rptr.3d 567

with a count for money had and received.

Mazur and the other defendants again demurred. The principal objection that they asserted was that the agreement was now before the court and plainly demonstrated that it was a contract for services (not the mere "providing of funds") and that the services described in the agreement fell under the provisions of sections 15006-15008 which define, and require the Department of Insurance's regulation and licensure of, public insurance adjusters. The other defendants joined Mazur in this argument and raised two other issues. They contended that the action against the several attorneys failed to comply with Civil Code section 1714.10 (requiring a court order before filing an action charging an attorney for conspiring with a client) and Civil Code section 47, subdivision (b) (the litigation privilege).

On June 26, 2003, the trial court sustained these demurrers, on all three grounds, without leave to amend. On August 18, 2003, the court dismissed the FAC and entered judgment.8 BPC thereafter filed this timely appeal.

122 Cal.App.4th 1408
ISSUES RAISED

As BPC expressly states in its opening brief, "the pivotal and controlling question" presented in this matter is whether the FAC, and the agreement attached thereto as an exhibit, demonstrate that the services that BPC agreed to provide, and which serve as the fundamental basis for all of its claims, fall afoul of the provisions of sections 15006, 15007 and 15008. If they do, then the agreement is void and all of BPC's claims against all defendants, other than the promissory fraud claim, necessarily fail.

BPC contends that the services called for in agreement are not subject to the

19 Cal.Rptr.3d 568

Department of Insurance's regulation and license requirements and that the agreement is legal. BPC insists that the statute, when properly construed, should only be applied to one "who directly represents or acts on behalf of the insured in the negotiation or settlement of a claim" (italics added) and nothing alleged in the FAC reflects that BPC did any such acts.

The defendants, on the other hand, argue that the plain language of section 15007, which defines a "public insurance...

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