Wong v. Stillwater Ins. Co.
| Citation | 92 Cal.App.5th 1297,309 Cal.Rptr.3d 908 |
| Docket Number | A162893 |
| Decision Date | 30 June 2023 |
| Parties | Sherlene WONG, et al., Plaintiffs and Appellants, v. STILLWATER INSURANCE COMPANY, Defendant and Respondent. |
| Court | California Court of Appeals Court of Appeals |
Attorney for Plaintiffs and Appellants, Sherlene Wong, Lawrence Wong : Hershenson Rosenberg-Wohl, A Professional Corporation, David M. Rosenberg-Wohl, Oakland.
Attorney for Defendant and Respondent, Stillwater Insurance Company Smith Smith & Feeley LLP, Stephen E. Smith ; Phillip E. Smith, Newport Beach.
Richman, J. Appellants Sherlene and Lawrence Wong (the Wongs) had stored some embryos at a facility that kept them in a cryogenic tank that failed to maintain the temperature necessary to store the embryos, following which the Wongs's fertility doctor told them they should consider the embryos "compromised" and "no longer viable, and lost." The Wongs had a homeowners insurance policy with respondent Stillwater Insurance (Stillwater), a specified perils policy providing that "We insure for direct physical loss to the property described in Coverage C caused by any of the following perils," going on to list 16 specified perils. The Wongs made a claim for property damage, which Stillwater denied. The Wongs sued, and Stillwater moved for summary judgment, on two bases: the Wongs could not submit evidence of (1) "direct physical loss" or (2) that "one of the sixteen specified perils occurred." The trial court granted summary judgment. We affirm.
BACKGROUND
The General Setting1
Beginning in 2014, the Wongs pursued in vitro fertilization
, working with Aimee Eyvazzadeh, M.D., as their doctor. In 2015, the Wongs completed an in vitro fertilization (IVF) cycle, and obtained four viable embryos, one of which was implanted. As to the other three, as Dr. Eyvazzadeh put it, after discussion with the Wongs they determined to "bank the rest," which they did at Pacific Fertility Center (Pacific Fertility or PFC), a facility in San Francisco that included several cryogenic storage tanks that used liquid nitrogen to store human embryos at very low temperatures. Specifically, the embryos were stored in Tank 4, which also contained embryos belonging to other people.
On or about March 4, 2018, Tank 4 failed to maintain the temperature necessary to store embryos, as a result at least some (and possibly all) of the embryos stored in that tank partially or totally thawed.
On March 11, Pacific Fertility sent its patients, including the Wongs, an email stating that "[e]arlier this week, a single piece of equipment lost liquid nitrogen for a brief period of time," and that Pacific Fertility was "continuing to gather information."
The next month, on or about April 19, Pacific Fertility sent its patients, including the Wongs, a letter stating that "[p]reliminary findings" indicated that the temperature of Tank 4 had risen due to "a failure of the tank's vacuum seal" and that "investigations into all aspects of this incident continue."
The Wongs had a homeowners insurance policy with Stillwater that under "Coverage C" provided coverage for personal property the Wongs "owned or used" while "anywhere in the world," with policy limits for personal property of $502,720. The policy was a "specified perils" policy, the significance of which is that in order to demonstrate a covered loss the insured has "the threshold burden of proving the loss was caused by a specifically-enumerated peril ." (Croskey et al., Cal. Practice Guide: Insurance Litigation (The Rutter Group 2022) ¶ 6:253.2 (Croskey).) Specifically, the policy provided that "We insure for direct physical loss to the property described in Coverage C caused by any of the following perils," going on to list 16.2
On May 2, on behalf of the Wongs, attorney David Rosenberg-Wohl sent a letter to Stillwater making a claim under the policy, a letter that read in its entirety as follows:
Because my clients have lost three zygotes, each of which has a financial value well in excess of the personal property limits, the Wongs have a potential claim against Stillwater ... for $516,790 × 3, or $1,550,370. If each has a separate claim, the amounts double.
As is apparent, Mr. Rosenberg-Wohl's letter did not refer to any of the 16 perils.
Mr. Rosenberg-Wohl later submitted various documents to Stillwater, one of which was a printout of the March 11 email from Pacific Fertility that stated among other things that tissue "may have been impacted" but that "we do expect that some of the tissue from the tank remains viable." Another was a letter postmarked April 20, in which Pacific Fertility stated that "[p]reliminary findings" indicated it was "likely" there had been "a failure of the tank's vacuum seal," that "investigations into all aspects of this incident continue," and that Pacific Fertility had confirmed "there is viable tissue from the tank."
The Wongs's claim was assigned to Matt Maloley, senior claims examiner at Stillwater. Stillwater retained attorney Michelle Burton to evaluate the Wongs's claim, providing her a copy of the policy, the email dated March 11, the letter postmarked April 20, and Mr. Rosenberg-Wohl's letter.
On August 3, Ms. Burton sent Stillwater a letter that outlined her coverage evaluation, which among other things concluded that she "cannot ascertain from the file whether the insured's zygotes were compromised, whether they are still viable or whether there has been a determination either way." And, she further concluded, there was no evidence the claimed damage resulted from any of the 16 perils that apply to personal property as set forth in the policy.
On August 6, Maloley sent Mr. Rosenberg-Wohl a letter denying the Wongs's claim, which letter stated in pertinent part as follows:
This lawsuit followed.
The Proceedings Below
On March 5, 2019, represented by Mr. Rosenberg-Wohl, the Wongs filed a complaint naming as defendants Stillwater and Government Employees Insurance Company (GEICO). The complaint alleged five causes of action labeled (1) breach of contract, (2) negligence, (3) declaratory judgment, (4) injunctive relief/specific performance, and (5) unjust enrichment. However, within the breach of contract claim was reference to breach "of the covenant of good faith and fair dealing," and within the negligence claim was that defendants "failed to comply with is duties as a fiduciary of Plaintiffs."3 So, however inartfully, the complaint alleged, or at least referred to, seven causes of action.
On January 15, 2020, Stillwater filed a motion for summary judgment or, alternatively, summary adjudication. The fundamental argument was that the Wongs "cannot establish essential elements" of the breach of contract claim because ...
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