Martinez v. Infinity Ins. Co.

• Decision Date: 20 May 2010
• Docket Number: Case No. SACV 09-453 DOC (Ex).
• Court: U.S. District Court — Central District of California
• Parties: Maria Lidia MARTINEZ, Plaintiff(s), v. INFINITY INSURANCE COMPANY; and Does 1 to 150, inclusive, Defendant(s).

714 F.Supp.2d 1057

Maria Lidia MARTINEZ, Plaintiff(s),

v.INFINITY INSURANCE COMPANY; and Does 1 to 150, inclusive, Defendant(s).

Case No. SACV 09-453 DOC (Ex).

United States District Court,C.D. California.

May 20, 2010.

Mitra Chegini, California Lawyers Group Inc., La Habra, CA, for Plaintiff.

John D. Edson, Peter H. Klee, Luce Forward Hamilton and Scripps, San Diego, CA, for Defendants.

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT

DAVID O. CARTER, District Judge.

Before the Court is Defendant Infinity Insurance Company (“Infinity” or “Defendant”)'s Motion for Summary Judgment (the “Motion”). After considering the moving, opposing, replying, and supplementary papers, as well as the parties' oral argument, ¹ the Court GRANTS the Motion.

I. Background

Plaintiff Martinez is 59 years old and resides with her three daughters, two son in laws, and grandchildren in a home in Los Angeles. She works as a nurse assistant at the Mirada Hills Rehabilitation and Convalescent Hospital for $10.40/hour. Martinez has a social security number. Martinez claims that she and her husband separated approximately 12 years ago and that she has not seen him since. Martinez filed for bankruptcy in our about 1996.

The dispute at issue concerns a used 2001 Ford Excursion that Martinez obtained on February 1, 2003 and insured with Defendant Infinity on July 11, 2005. Martinez did not purchase the car. Instead, her best friend obtained financing, purchased, and thereafter retained title to the car, even though Martinez used the car almost exclusively. The purchase price of the vehicle was $34,770.88 and Martinez traded in her 1986 Chevy Blazer for $1,000.00 against the purchase price of the Ford Excursion. On July 11, 2005, when Martinez obtained insurance for the Ford Excursion, the application for insurance stated that the vehicle had an odometer reading of 100,048 miles.

Martinez reported the vehicle missing on June 12, 2006 and recited the following facts to officers and agents of Infinity over the course of the following months. Martinez claims that on Monday June 12, 2006, she had the day off from work and drove into downtown Los Angeles in order to purchase some special tea for relaxation purposes. She parked the car at or near 8th street and Lake street in downtown L.A. and then walked to the store where she bought the tea. After purchasing the tea, Martinez returned to discover her car missing. The time at which Martinez discovered the car was before 6 p.m., when the police report was filed. Martinez then claims to have called 9-1-1 as well as her 23 year old daughter, who immediately came and picked her up from downtown LA. After her daughter picked her up, Martinez and her daughter visited the Los Angeles Police Department, where Martinez's daughter completed a report in English. ²

Martinez's daughter called and reported the theft to Infinity the next day and filed a claim. The phone conversation was recorded. During that conversation, Martinez's daughter mentioned that her “dad” was with Martinez when the incident occurred, and repeatedly said “let me ask my dad” in response to particular questions asked by the insurance company's investigator. Martinez's daughter has since claimed that she used the word “dad” instead of “brother in law” because she was stressed at the time she made the phone call.

Martinez was informally interviewed in person by an Infinity investigator two days later. During that interview Martinez stated that she only had one set of keys for the car; thus, the car could have only been stolen by being broken into and the ignition somehow manipulated. Martinez further stated that the car had 90,000 miles on it at the time of theft, which contradicted the application for insurance filed over a year earlier, which represented that the car had 100,048 miles. Finally, Martinez claimed that her son-in-law was with her on the day of the purported theft, which was a claim Martinez did not make on the affidavit that accompanied the police report. Martinez admitted that the car was not purchased in her name and also stated that the car was serviced both by Midas and by her son-in-law, an assertion that Infinity claims is contradicted by Martinez's failure to produce maintenance records for the vehicle. Two months after the informal interview, on August 27, 2006, Martinez's friend transferred ownership of the vehicle to Martinez in an attempt to assist with Martinez's insurance claim.

Infinity requested an interview with Martinez's son-in-law, on the grounds that his testimony was necessary to corroborate Martinez's claims about the car being stolen. The son-in-law did not respond to repeated requests for deposition, only to appear for a brief interview, which he unilaterally terminated due to the nature of the questions being asked. Infinity Insurance also asked for Martinez's financial records, including proof of payments for the vehicle, in order to determine whether she would have motive to fabricate the story about the car theft in order to prevent impending financial ruin. Martinez failed to produce these records despite dozens of requests over nearly 12 months. In addition, Martinez's daughter admitted when deposed that her mother did not request any help in searching for or gathering such records. Finally, Infinity requested that Martinez submit to a formal under oath examination by Infinity's attorney. On December 5, 2006, Infinity's attorneys advised Infinity to reject Martinez's claim as a result of her non-cooperation, but it appears that Infinity gave Martinez one final chance to sit for an under oath examination, which she did on February 28, 2007.

Martinez waited several months to appear for this examination, and then delayed over four months in stipulating to the accuracy of the transcript of her interview with Infinity's attorney. During this time, Martinez retained two sets of attorneys, one of whom terminated its representation a little over a week after taking on Martinez's case. After Martinez took several months to certify and return the examination transcripts to Infinity, Infinity refused to honor the claim by a July 17, 2007 letter. On February 6, 2008, Martinez issued a demand for arbitration, which was denied.

On August 11, 2008, Plaintiff filed her state court complaint bringing causes of action for: (1) breach of written contract; (2) breach of the implied covenant of good faith and fair dealing; (3) violation of California Insurance Code § 790.03(h); and (4) bad faith denial of contract. Plaintiff filed a First Amended Complaint (FAC) in state court on November 18, 2008 that brought only two causes of action for: (1) breach of contract; and (2) breach of the implied covenant of good faith and fair dealing. Infinity filed an Answer in state court on December 19, 2008 and removed the case to this Court on December 22, 2008. The Court remanded the case on February 24, 2009 for lack of subject matter jurisdiction, on the grounds that the state court complaint did not plead an amount in controversy in excess of 75,000 dollars. Martinez thereafter responded to certain Special Interrogatories delivered by Infinity and claimed that she suffered $50,000 in emotional distress damages in addition to contract damages and attorneys' fees totaling $44,073.43. See Notice of Removal ¶ 8-9.

II. Legal Standard

Summary judgment is proper if “the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c).

The Court must view the facts and draw inferences in the manner most favorable to the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 1161 (9th Cir.1992). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact for trial, but it need not disprove the other party's case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). When the non-moving party bears the burden of proving the claim or defense, the moving party can meet its burden by pointing out that the non-moving party has failed to present any genuine issue of material fact Musick v. Burke, 913 F.2d 1390, 1394 (9th Cir.1990).

Once the moving party meets its burden, the “opposing party may not rely merely on allegations or denials in its own pleading; rather, its response must-by affidavits or as otherwise provided in this rule-set out specific facts showing a genuine issue for trial.” Fed.R.Civ.P. 56(e); see also Anderson, 477 U.S. at 248-49, 106 S.Ct. 2505. Furthermore, a party cannot create a genuine issue of material fact simply by making assertions in its legal papers. There must be specific, admissible evidence identifying the basis for the dispute. S.A. Empresa De Viacao Aerea Rio Grandense v. Walter Kidde & Co., Inc., 690 F.2d 1235, 1238 (9th Cir.1982). The Supreme Court has held that “[t]he mere existence of a scintilla of evidence ... will be insufficient; there must be evidence on which the jury could reasonably find for [the opposing party].” Anderson, 477 U.S. at 252, 106 S.Ct. 2505.

III. Discussion

Martinez brings causes of action for breach of contract and breach of the implied covenant of good faith and fair dealing.

Infinity moves for full dismissal by way of summary judgment on the following grounds. First, Infinity claims that Martinez did not comply with the requirement in the insurance contract that the insured submit to an under oath examination and provide all documents reasonably related to the insurer's investigation of the claim. Specifically, Martinez took several months to sit for an under oath examination and never provided her financials or the proof of payments...