Davaloo v. State Farm Ins. Co.

• Decision Date: 30 December 2005
• Docket Number: No. B171353.,No. B171352.,B171352.,B171353.
• Citation: 135 Cal.App.4th 409,37 Cal.Rptr.3d 528
• Court: California Court of Appeals Court of Appeals
• Parties: Homie DAVALOO, Plaintiff and Appellant, v. STATE FARM INSURANCE CO., Defendant and Respondent. Maurice Abdel-Messih et al., Plaintiffs and Appellants, v. State Farm Insurance Co., Defendant and Respondent.

37 Cal.Rptr.3d 528

135 Cal.App.4th 409

Homie DAVALOO, Plaintiff and Appellant, v. STATE FARM INSURANCE CO., Defendant and Respondent.

Maurice Abdel-Messih et al., Plaintiffs and Appellants, v. State Farm Insurance Co., Defendant and Respondent.

No. B171352.

No. B171353.

Court of Appeal, Second District, Division 7.

December 30, 2005.

Law Offices of Ramin R. Younessi and Ramin R. Younessi; Law Offices of Majid Seyfi and Majid Seyfi for Plaintiffs and Appellants Homie Davaloo and Maurice and Suzie Abdel-Messih.

Robie & Matthai, James R. Robie, Craig W. Brunet and Steven S. Fleischman, Los Angeles; Crandall, Wade & Lowe and James Crandall, Irvine; LHB Pacific Law Partners and Clarke B. Holland, Emeryville, for Defendant and Respondent State Farm Insurance Company.

PERLUSS, P.J.

Code of Civil Procedure section 340.9¹ revives certain time-barred claims for policy benefits against insurers for losses caused by the January 17, 1994 Northridge earthquake and provides a cause of action on a such a claim may be commenced within one year of the statute's January 1, 2001 effective date. On December 31, 2001, at the end of section 340.9's revival period, the insureds in the instant coordinated cases, Homie Davaloo and Maurice and Suzie Abdel-Messih, filed complaints against State Farm Insurance Company purporting to seek relief for alleged damage to their properties caused by the Northridge earthquake. The complaints, prepared by the same counsel, are identically worded, with the exception of the captions, which contain the name of the plaintiff or plaintiffs and identify State Farm as the defendant.² The complaints list numerous generic allegations against "Defendants" based on the insurance company's alleged failure to pay policy benefits for Northridge earthquake damage but contain no allegations as to a particular dispute between Davaloo or the Abdel-Messihs and State Farm.³

On June 2, 2003, long after the expiration of section 340.9's revival period, Davaloo and the Abdel-Messihs filed first amended complaints in response to demurrers by State Farm, attempting to correct obvious deficiencies in their original complaints. State Farm demurred to the first amended complaints. The trial court sustained the demurrers without leave to amend, finding that, because the original complaints are devoid of factual allegations, the first amended complaints do not relate back to the filing of the original complaints and thus the actions are time-barred and not revived by section 340.9. Davaloo and the Abdel-Messihs appealed. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

1. The Original Complaints

On December 31, 2001 Davaloo and the Abdel-Messihs filed identically-worded complaints alleging causes of action for breach of contract and bad faith against State Farm for damage to their properties caused by the Northridge earthquake.⁴ Although the complaints were filed on December 31, 2001, at the end of section 340.9's revival period, they do not mention the statute, let alone allege that Davaloo's and the Abdel-Messihs' claims satisfy the requirements for revival.⁵ Each complaint alleges, "Plaintiffs suffered insured losses as a result of the earthquake and its aftershocks and made timely claims to or had contact with the Defendants in regard to their damages." Aside from the caption, the complaints do not mention the parties by name, instead referring to them generically throughout as "Plaintiff" or "Plaintiffs" and "Defendants."⁶ The complaints do not provide the address of Davaloo's or the Abdel-Messihs' property, stating only the property at issue is located in California. They do not set forth the policy limits, deductible or any other terms of the insurance policy sued upon, attach a copy of the policy or even give the policy number but merely allege the policy consists of "a written contract as orally amended." The complaints contain a multitude of allegations against "Defendants" regarding the failure to pay policy benefits for damages caused by the Northridge earthquake. No specifics are given with respect to a claim for policy benefits made by Davaloo or the Abdel-Messihs or any action taken by State Farm in response to such a claim.

State Farm filed demurrers to Davaloo's and the Abdel-Messihs' complaints, contending they were uncertain and failed to allege facts sufficient to state a cause of action for breach of contract or bad faith.

2. The First Amended Complaints

On June 2, 2003, before the hearing on State Farm's demurrers, Davaloo and the Abdel-Messihs filed first amended complaints against State Farm, again alleging causes of action for breach of contract and bad faith. (See § 472 [complaint may be amended once before hearing on demurrer without leave of court].) The body of each first amended complaint, while still similar to one another, identifies Davaloo or the Abdel-Messihs as the plaintiff or plaintiffs and State Farm as the defendant and provides the address of the property and the insurance policy number at issue, omitting the allegation the policy was amended orally. The first amended complaints again do not mention section 340.9 but allege Davaloo and the Abdel-Messihs "suffered insured losses as a result of the earthquake and its aftershocks and made timely claims to or had contact with the Defendants in regard to their damages, within one year immediately following the earthquake."

The first amended complaints contain another list of generic allegations, some repeated from the original complaints and some different, regarding State Farm's failure to pay policy benefits for damages caused by the Northridge earthquake and further provide, "While each action may not have been employed by State Farm Insurance Company in the case of this particular plaintiffs [sic], these actions as a whole constituted a pattern of practices evidencing that defendant's actions were in bad faith." As with the original complaints, the first amended complaints fail to provide any details regarding a claim for policy benefits made by Davaloo or the Abdel-Messihs or State Farm's response.

3. State Farm's Demurrers and the Trial Court's Ruling

State Farm filed demurrers to Davaloo's and the Abdel-Messihs' first amended complaints, contending they are time-barred because they were filed after section 340.9's revival period and do not relate back to the filing of the original complaints. According to State Farm, because the original complaints were "sham" pleadings lacking specific factual allegations, the amended pleadings are not based on the same set of operative facts as the original complaints and thus do not satisfy the requirements for application of the relation-back doctrine.

The trial court sustained the demurrers without leave to amend finding in each case, "The original complaint was a sham pleading not containing specific information. The first amended complaint does not relate back and is time-barred." The trial court dismissed the actions.⁷

CONTENTIONS

Davaloo and the Abdel-Messihs contend the causes of action against State Farm for breach of contract and bad faith in the original complaints were sufficient and, therefore, the trial court erred by sustaining the demurrers to the first amended complaints without leave to amend on the ground they are time-barred.

DISCUSSION

1. Standard of Review

On appeal from an order dismissing a complaint after the sustaining of a demurrer, we independently review the pleading to determine whether the facts alleged state a cause of action under any possible legal theory. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967, 9 Cal.Rptr.2d 92, 831 P.2d 317; Berger v. California Ins. Guarantee Assn. (2005) 128 Cal.App.4th 989, 998, 27 Cal.Rptr.3d 583.) We give the complaint a reasonable interpretation, "treat[ing] the demurrer as admitting all material facts properly pleaded," but do not "assume the truth of contentions, deductions or conclusions of law. [Citation.]" (Aubry, at p. 967, 9 Cal.Rptr.2d 92, 831 P.2d 317.) We liberally construe the pleading with a view to substantial justice between the parties. (§ 452; Kotlar v. Hartford Fire Ins. Co. (2000) 83 Cal.App.4th 1116, 1120, 100 Cal.Rptr.2d 246.)

"`Where the complaint is defective, "[i]n the furtherance of justice great liberality should be exercised in permitting a plaintiff to amend his [or her] complaint."'" (Aubry v. Tri-City Hospital Dist., supra, 2 Cal.4th at p. 970, 9 Cal.Rptr.2d 92, 831 P.2d 317.) Leave to amend may be granted on appeal even in the absence of a request by the plaintiff to amend the complaint. (Id. at p. 971, 9 Cal.Rptr.2d 92, 831 P.2d 317; see § 472c, subd. (a).) We determine whether the plaintiff has shown "in what manner he [or she] can amend [the] complaint and how that amendment will change the legal effect of [the] pleading." (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349, 134 Cal.Rptr. 375, 556 P.2d 737.) "[L]eave to amend should not be granted where ... amendment would be futile." (Vaillette v. Fireman's Fund Ins. Co. (1993) 18 Cal.App.4th 680, 685, 22 Cal.Rptr.2d 807.)

2. The Trial Court Properly Sustained State Farm's Demurrer to the First Amended Complaints on the Ground They Are Time-barred Because They Do Not Relate Back to the Filing of the Original Complaints

a. Pleading requirements and the relation-back doctrine

A complaint must contain "[a] statement of the facts constituting the cause of action, in ordinary and concise language." (§ 425.10, subd. (a)(1).) This fact-pleading requirement obligates the plaintiff to allege ultimate facts that "as a whole apprise[] the adversary of the factual basis of the claim. [Citations.]" (Estate of Archer (1987) 193 Cal.App.3d 238, 245, 239 Cal.Rptr. 137; see also Lim v. The.TV Corp. Internat. (2002) 99 Cal.App.4th 684, 689-690, 121 Cal.Rptr.2d 333.) When a complaint complies with the fact-pleading requirement of section 425.10, subdivision (a)(1), "`"[t]he existence of a legal right in an abstract form is never alleged...