Rafeiro v. American Employers' Ins. Co.

Decision Date24 March 1970
Citation5 Cal.App.3d 799,85 Cal.Rptr. 701
CourtCalifornia Court of Appeals Court of Appeals
PartiesMary L. RAFEIRO, Plaintiff and Appellant, v. AMERICAN EMPLOYERS' INSURANCE COMPANY, a corporation, Defendant and Respondent. Civ. 25730.

Danaher, Fletcher, Gunn & Ware, Leonard Ware, Philip S. DeCaro, Palo Alto, for plaintiff and appellant.

Frederick Mahan, San Francisco, for defendant and respondent.

SIMS, Associate Justice.

Plaintiff property owner has appealed from a summary judgment in favor of her contractor's insurer in an action entitled 'Complaint for Indemnity' in which she sought to recover from the insurer the amount of a judgment together with costs and interest she had previously secured against the insured contractor. (See Ins.Code, § 11580.) The facts, with one exception hereinafter noted, are not disputed. Each party made a motion for a summary judgment. The resolution of the controversy turns upon the proper interpretation of the terms of the policy of comprehensive liability insurance issued to the contractor by the insurer, and the determination of whether the loss suffered by the plaintiff for which she recovered the prior judgment represents a liability of the contractor for which the insurer undertook to furnish indemnity. It is concluded, for the reasons set forth below, that the trial court properly resolved this controversy in favor of the defendant and that the judgment must be affirmed.

The Record

A pretrial conference was held after the insurer had filed its answer to plaintiff's complaint 1, and the case was regularly set for trial. Twenty days before the day set for trial the plaintiff filed her notice of motion for summary judgment. No declaration was filed in support of this motion, but the plaintiff filed points and authorities in support of her position that once the prior judgment was admitted the insurer was liable.

The defendant insurer immediately countered with its notice of motion for summary judgment. It was supported by the declaration of the insurer's attorney which summarized, and requested the trial court to consider, certain depositions on file in the prior action which had been conducted in the same superior court. It was further supported by points and authorities to which were appended copies of the judgment, the court's memorandum decision, the findings of fact and conclusions of law, the pretrial conference order, the plaintiff's trial brief, and the trial brief of the contractor, all as filed in the prior action, and a copy of the insurance policy. Subsequently the defendant filed the declaration of the president of the contracting corporation with relation to the nature of the damages involved in the prior action.

The plaintiff filed a declaration and further points and authorities, and after the defendant replied, the court rendered the judgment from which plaintiff has appealed.

No objection was made to the records of the prior action which were produced by the defendant. The trial court could, and this court may, properly take judicial notice of those proceedings. (See, Evid.Code, § 452, subd. (d), and § 453; and Escobedo v. Travelers Ins. Co. (1961) 197 Cal.App.2d 118, 121--122, 17 Cal.Rptr. 219.) Plaintiff's objections to the sufficiency of the declaration of the contractor's president, and the question of the sufficiency of her declaration to raise a question of fact are discussed below. From this record the following facts appear:

The pretrial order in the prior action states: 'The contentions of the plaintiff are as follows: 'That on August 23, 1962, the plaintiff contracted with defendant Wentz Construction Company under which the defendant was obligated to build the plaintiff two separate apartment buildings consisting of approximately 40 units on her land in Palo Alto for the price of $355,000.00; that during the years 1963--1964 the plaintiff discovered there were certain conditions on the property which consisted of either a claim of unsuitable materials or unworkmanlike construction. * * *' Following a recital of specific complaints, the order states, 'With regard to all the matters above, the plaintiff seeks damages for the cost of repairs and replacement and/or diminution in the market value of the two apartment buildings.'

In her trial brief the plaintiff asserted, '* * * the heart of the case is essentially this: Are the materials and labor provided by the defendant corporation in conformity with recognized standards of workmanship and materials? If they prove on analysis to be in conformity, then plaintiff is not entitled to recover. If, on the other hand, the materials and workmanship as related to the specific items in dispute are not in conformity, then plaintiff is entitled to recover.' After reviewing the defects in the electrical heaters, the roofs, the hot water heaters, and the flooring of the brief continues as follows:

'5. Diminution of Market Value.

'Floyd Lowe, an experienced and qualified realtor as well as Inheritance Tax Appraiser, was called to establish the extent of property damage suffered as a result of the conditions to which the previous discussion more particularly refer. On the basis of a hypothetical question which included all the defective conditions to which witnesses had already referred, Lowe testified that in his opinion the property suffered a diminution in market value equivalent in amount to at least twice the costs of repair or replacement.'

Defendant took the position that the plaintiff could not recover for diminution in value because an award sufficient to correct the alleged defects would make her whole, and because the witness' testimony did not in fact establish any such damages.

The court's memorandum decision awarded specific sums for specific defects without any allowance for diminution in value, and directed the plaintiff to prepare findings and judgment. The findings recite: '2. That defendant negligently and carelessly selected, used and installed unsuitable materials and provided unworkmanlike services in the construction of said buildings; as a direct and proximate result thereof plaintiff suffered property damage to the apartment buildings in the following particulars: * * *' The particulars are set forth in the margin. 2 A paragraph numbered '3' and reading, 'As a direct and proximate result of the negligent and careless construction of the two apartment buildings by defendant herein plaintiff suffered diminution in the market value of said buildings in the aggregate sum of $13,400.00' was stricken out by the judge, and the following paragraphs were renumbered. Further paragraphs '3' and '4' authorize recovery of the total sum, $13,400, on the respective theories of implied and express warranty. Judgment followed for that sum.

Summary Judgment

'Numerous decisions have discussed the law of summary judgments, and the rules relating thereto are well settled. The matter to be determined by the trial court in considering such a motion is whether the defendant (or the plaintiff) has presented any facts which give rise to a triable issue. The court may not pass upon the issue itself. Summary judgment is proper only if the affidavits in support of the moving party would be sufficient to sustain a judgment in his favor and his opponent does not by affidavit show such facts as may be deemed by the judge hearing the motion sufficient to present a triable issue. The aim of the procedure is to discover, through the media of affidavits, whether the parties possess evidence requiring the weighing procedures of a trial. In examining the sufficiency of affidavits filed in connection with the motion, the affidavits of the moving party are strictly construed and those of his opponent liberally construed, and doubts as to the propriety of granting the motion should be resolved in favor of the party opposing the motion. Such summary procedure is drastic and should be used with caution so that it does not become a substitute for the open trial method of determining facts. (Citations.) Thus, the trial court was justified in granting the motion here only if the declarations filed in support of it, strictly construed, contain facts sufficient to entitle the defendants to judgment, and those of the plaintiffs, liberally construed, show that there was no issue of fact to be tried.' (Stationers Corp. v. Dun & Bradstreet, Inc. (1965) 62 Cal.2d 412, 417, 42 Cal.Rptr. 449, 452, 398 P.2d 785, 788.)

Plaintiff insists that within the foregoing principles it was error to deny her a summary judgment on the basis of her declaration in which she stated, 'That as a direct result of the defects in the construction of the Newell Apartments, as more particularly described in the Judgment rendered by the Superior Court of the State of California for the County of Santa Clara in Action No. P 8547, the Newell Apartments suffered a diminution of market value in an amount equal to, if not more than, but certainly not less than, the proved reasonable cost of repairs as evidenced by the prior Judgment.'

She points out that as an owner of real property she was competent to testify concerning the value of her property. (See Holmes v. Southern Cal. Edison Co. (1947) 78 Cal.App.2d 43, 53, 177 P.2d 32; Watterson v. Knapp (1939) 35 Cal.App.2d 283, 289, 95 P.2d 154; and Witkin, Cal. Evidence (2d ed.1966) § 403, p. 361.) 3 Statements of contrary purport in the declaration of the contractor's president which was filed in this action, were not effective to controvert plaintiff's declaration because he did not allege that he could so testify (see House v. Lala (1960) 180 Cal.App.2d 412, 416, 4 Cal.Rptr. 366), nor does his declaration set forth his qualifications to appraise the respective market value of the apartments with and without the defects. (See Sooy v. Kunde (1947) 80 Cal.App.2d 347, 355, 181 P.2d 758; Witkin, op. cit., § 423, p. 381.)

Plaintiff's approach misses the mark. The issue in this case...

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