Murphy v. Allstate Ins. Co.

• Citation: 147 Cal.Rptr. 565,83 Cal.App.3d 38
• Court: California Court of Appeals
• Decision Date: 21 July 1978
• Parties: John MURPHY and Maude Murphy, Plaintiffs and Appellants, v. ALLSTATE INSURANCE COMPANY, etc., et al., Defendants and Respondents. Civ. 19103.

Page 565

147 Cal.Rptr. 565

83 Cal.App.3d 38

John MURPHY and Maude Murphy, Plaintiffs and Appellants, v. ALLSTATE INSURANCE COMPANY, etc., et al., Defendants and Respondents.

Civ. 19103.

Court of Appeal, Fourth District, Division 2, California.

July 21, 1978.

Hearing Denied Sept. 27, 1978.

Portigal & Hammerton, James R. Hammerton and Mary L. Kading, Santa Ana, for plaintiffs and appellants.

Berger, Berger, Kahn & Shafton and Anthony E. Shafton, Los Angeles, for defendant and respondent Allstate Ins. Co.

OPINION

KAUFMAN, Acting Presiding Justice.

Defendant Allstate Insurance Company (Allstate or defendant) was granted summary judgment. Plaintiffs John and Maude Murphy (plaintiffs) appeal.

Plaintiffs filed no declarations in opposition to defendant's motion for summary judgment. However, defendant's motion was based on a number of declarations, several of which referred to and incorporated other documents, including plaintiffs' answers to interrogatories and a 24-page handwritten letter by Mr. Murphy to an Allstate representative setting forth in great detail many of the facts on which plaintiffs' claims against Allstate are based.

It is fundamental that the party moving for summary judgment has the burden of showing by declarations or affidavits setting forth facts admissible as evidence in a trial that the claims or defenses of the adverse party are entirely without merit on any legal theory and that if the moving party's showing is insufficient, the adverse party is not required to demonstrate the validity of his claims or defenses or even to file counterdeclarations or counteraffidavits. (Code Civ.Proc., § 437c; Rowland v. Christian, 69 Cal.2d 108, 111, 70 Cal.Rptr. 97, 443 P.2d 531; Swaffield v. Universal Ecsco Corp., 271 Cal.App.2d 147, 171, 76 Cal.Rptr. 680.) In determining whether the moving party's papers show there is no triable issue as to any material fact, the court must consider all of the admissible evidence set forth in the papers and all inferences reasonably deducible therefrom. (Code Civ.Proc. § 437c.)

Both the circumstances and the statements of the trial court establish that summary judgment was granted Allstate on the basis of two statutes of limitations. If plaintiffs' claims are not thus barred, there exist literally dozens of factual issues precluding summary judgment.

Many of the pertinent facts will appear in our discussion of the issues. It is appropriate at the outset, however, to state those facts necessary to comprehension of the contentions.

Plaintiffs' home and household furniture and furnishings were insured under a homeowner's policy of insurance issued by Allstate. On January 11, 1973, the home and certain of the household furniture and furnishings were substantially damaged by fire. Almost immediately arrangements were made with several individuals and firms for the preservation and repair of the damaged home and household furniture and furnishings. Among these persons and firms were Golden West Construction Company, Robert Rosas, and, perhaps, F. J. Hyland. The nature of the arrangements thus made, who made them, the circumstances surrounding them and the legal rights and duties flowing from them appear to be matters in dispute. Plaintiffs apparently signed some authorization forms. They allege, however, that Allstate represented it was hiring these persons and firms and that the authorization forms were required to be signed by plaintiffs so that permits could be obtained. It would appear that plaintiffs' first acquaintance with these persons and firms came through representatives of Allstate, and plaintiffs allege that Allstate represented that these persons and firms were licensed, competent and qualified to do the work for which they were engaged. In any event, Golden West Construction Company was in fact not licensed and neither it nor the other persons and firms were competent or qualified to do the work for which they were engaged, and the work of preserving, repairing and restoring the damaged property undertaken by them was so badly done that both the home and the furniture and the furnishings were further damaged. ¹

In one cause of action it is alleged that this shoddy work was caused in part by Allstate's practice of arbitrarily reducing the amounts bid by these persons and firms as the reasonable cost of the restoration and repair work.

Meanwhile, plaintiffs and Allstate were unable to agree upon the value of the property damaged and the amount of the loss, so Allstate invoked the appraisal procedure provided for in the policy pursuant to which each party was required to appoint an appraiser to evaluate the loss who, in turn, collectively, would select an umpire to whom differences between the appraisers would be submitted. On September 11, 1973, pursuant to the appraisal procedure, the amount of the fire loss was fixed at $20,569.42. On September 27, 1973, Allstate petitioned the superior court for confirmation of the appraisal "award." The same day Allstate filed in the superior court an interpleader action naming as defendants the Murphys, Prudential Insurance Company of America, Golden West Construction Company, and F. J. Hyland, alleging the amount payable as a result of the fire was $21,481.02 of which sum all but $8,163.41 had been paid to the Murphys and that the defendants in interpleader made conflicting claims to the remaining $8,163.41.

In the interpleader action the Murphys denied they had received all of the loss payable except $8,163.41 and asserted that Golden West and F. J. Hyland had no legitimate claim against any part of the loss payable, but that in fact they were Allstate's agents and that their claims were a result of their collusion with Allstate to deprive the Murphys of the moneys due them on account of the fire loss. F. J. Hyland filed a cross-complaint in the interpleader action claiming in excess of $10,000 for work done in repairing and restoring the Murphys' home. At some date not disclosed by the record, F. J. Hyland also filed an independent action against the Murphys based on the same claim.

On October 18, 1973, hearing was had on Allstate's application for confirmation of the appraisal award at the conclusion of which the court indicated its intention to confirm the award. However, because of the pending interpleader action and the dispute as to how much had been paid by Allstate and who was entitled to what further payment, it was not until April 4, 1975, that judgment was entered confirming the appraisal award. On April 29, 1975, apparently at the instigation of Allstate, the court stayed execution on the judgment confirming the award pending disposition of the interpleader action.

In the interpleader action Allstate's petition for discharge and an award of costs and attorney fees was denied without prejudice on January 14, 1975. In mid-April 1975, in the independent action by F. J. Hyland against the Murphys, the Murphys recovered judgment because F. J. Hyland was not a licensed contractor. On May 28, 1975, F. J. Hyland filed a request for dismissal of his cross-complaint in the interpleader action. Finally, on July 20, 1976, an order was made in the interpleader action for payment of $8,163.41 by Allstate to the Murphys without prejudice to their rights in the instant action which by then was pending.

The instant action was filed January 10, 1975. The first amended complaint purports to state five causes of action for fraud, conspiracy to defraud, bad faith and intentional infliction of emotional distress, and seeks both compensatory and punitive damages. On May 9, 1977, Allstate filed a motion for summary judgment or in the alternative for specification that certain issues are without substantial controversy. Its only arguable contention for full summary judgment was that plaintiffs' action was barred by a policy provision based on Insurance Code sections 2070 and 2071 requiring suit on the policy to be commenced within 12 months after the inception of the loss. It also contended that any claim for emotional distress or personal injury was barred by the one-year statute of limitations specified in Code of Civil Procedure section 340 subdivision 3. In the alternative, it requested the court to specify as being without substantial controversy all issues in each of the alleged causes of action except that for intentional infliction of emotional distress; that the appraisal award confirmed by the superior court "is valid and binding"; that the total amount of loss compensable under the insurance policy is $20,569.42; and that the appraisal award confirmed by the superior court "is not subject to impeachment or attack, and that the proceedings were conducted in accordance with law and are valid in all respects."

As previously indicated, the trial court granted the motion for full summary judgment on the basis of the statutes of limitations. It had no occasion, of course, to reach Allstate's request for the specification of issues without substantial controversy.

Applicability of Insurance Code Section 2071

As required by Insurance Code section 2070, the homeowner's policy included the standard provision set forth in Insurance Code section 2071: "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 of the requirements of this policy shall have been complied with, and unless commenced within 12 months next after inception of the loss." (Emphasis added.)

Emphasizing the words "any claim," Allstate maintains plaintiffs' action is barred because it was not commenced within 12 months after the inception of the loss. However, the words "any claim" taken together with the words "on this policy" and "within 12 months next after inception of the loss" plainly refer to a claim for a loss covered by the policy. This provision has no applicability to an action unless it is an action on the policy. (See Stockton etc. Works v. Ins. Co., 98 Cal....