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Steven Kvilhaug et al v. Fire Insurance Exchange


December 28, 2010


APPEAL from the Superior Court of San Bernardino County. Ben T. Kayashima, Judge. (Retired judge of the San Bernardino Super. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) Affirmed. (Super.Ct.No. CIVRS700545)

The opinion of the court was delivered by: Miller J.

Kvilhaug v. Fire Ins. Exchange



California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.


While appellants Steven and Sara-Lynne Kvilhaug were on vacation, their home was flooded when the water line to their refrigerator broke. ACR Services, Inc. (ACR) was called to the home and undertook to dry out the home. ACR utilized a "high heat method" which resulted in extensive additional damages to the home and personal property therein.

ACR subsequently filed suit against appellants seeking recompense for its services. Appellants cross-complained against ACR and their home insurance company, Fire Insurance Exchange (Fire), for negligence and declaratory relief. Appellants additionally filed claims solely against Fire for breach of contract, breach of an implied duty of good faith and fair dealing, punitive damages, indemnity, and contribution. Appellants subsequently entered into a settlement of all claims between it and ACR, and dismissed their sixth cause of action for contribution. Fire filed a motion for summary adjudication as to all causes of action, which the trial court granted. The trial court granted summary judgment and entered judgment against appellants.

On appeal, appellants contend the court erred in sustaining Fire's evidentiary objections to portions of the declarations submitted by appellants in support of their opposition to Fire's motion for summary judgment. Furthermore, appellants maintain that the court erred in granting summary adjudication on each of their causes of action against Fire because material triable issues of fact remained. We affirm the judgment.


On June 28, 2006, while appellants were on vacation in Mexico, their neighbor, Tracie Mohler, discovered that appellants' home was flooded when she went to feed their pets. Mohler looked in the Yellow Pages for a company that could remedy the damage; she found and called ACR. ACR's advertisement indicated it would bill the homeowners' insurance company directly. Mohler then called Shannon Brumley, appellant Sara-Lynne Kvilhaug's*fn1 sister. Brumley arrived at appellants' home at approximately 9:45 a.m. An employee of ACR arrived thereafter.

Brumley signed two documents given her by ACR's employee: One was a "Notice of Hazard and Release of Liability"; the other was an "Emergency Services Agreement" that read "I hereby agree that ACR may perform the emergency services described in this document and its attachments."

Fire's employee agreed to pay any reasonable amount for the use of a "high heat method" of drying out the home at ACR's recommendation. That method resulted in extensive damages to the home and personal property therein. Fire eventually paid appellants a total of $22,741.46, itemized as follows: $5,019.73 for damages to the home; $6,719.30 for emergency services performed by ACR; $868.89 for ACR's removal of the flooring in the garage; and $10,133.54 for replacement of damaged shutters, a microwave door, and other overlooked damages. One of Fire's employees declared that "[e]ven though damages resulting from the dryout process utilized by ACR were not covered under the policy, in an attempt to reach a resolution to the claim, FIRE agreed to pay for some non-covered damages that were not caused by the water loss, including damages to [appellants'] window shutters and microwave." Appellants and ACR settled their reciprocal claims against one another with ACR paying $75,000 in damages to appellants and ACR taking nothing.



In ruling upon the motion for summary judgment, the court sustained some of Fire's objections to portions of the declarations of Brumley, Sara Lynn, and David B. Dimitruk submitted by appellants in opposition. Appellants contend the court erred in sustaining the objections.*fn2

"A motion for summary judgment must be decided on admissible evidence in the form of affidavits, declarations, admissions, answers to interrogatories, depositions and matters of which judicial notice may be taken. [Citation.] . . . [¶] 'Personal knowledge and competency must be shown in the supporting and opposing affidavits and declarations. [Citations.] [¶] 'The affidavits must cite evidentiary facts, not legal conclusions or 'ultimate' facts. [Citation.] [¶] 'Matters which would be excluded under the rules of evidence if proffered by a witness in a trial as hearsay, conclusions or impermissible opinions, must be disregarded in supporting affidavits. [Citation.]'" (Guthrey v. State of California (1998) 63 Cal.App.4th 1108, 1119-1120.)

We do not disturb evidentiary rulings made by the trial court in connection with a motion for summary judgment in the absence of an abuse of discretion. (Carnes v. Superior Court (2005) 126 Cal.App.4th 688, 694; Walker v. Countrywide Home Loans, Inc. (2002) 98 Cal.App.4th 1158, 1169.) The trial court's exercise of discretion is to be impartial, guided and controlled by fixed legal principles. (In re Robert L. (1993) 21 Cal.App.4th 1057, 1066.) Such discretion is abused only when it is exercised in a capricious or arbitrary manner, or the ruling exceeds the bounds of reason. (Olsen v. Harbison (2005) 134 Cal.App.4th 278, 285.)


Fire made 18 objections to the declaration of Shannon Brumley variously predicated on hearsay (Evid. Code, § 1200),*fn3 insufficient foundation (§§ 403, 405), and lack of personal knowledge (§ 702). The trial court sustained all of the objections excepting Nos. 2 and 8, which it overruled. The trial court did not indicate on what basis or bases it sustained the objections.

Appellants contend the court erred in sustaining Fire's objections because Brumley was a percipient witness to the formation of an alleged agreement between Fire and ACR to authorize the use of the "high heat method" in drying out appellants' home, i.e., appellants maintain the hearsay rule does not bar evidence of the formation of such an agreement. The obvious relevance of Brumley's averments would be to support the contention that there was a triable issue of material fact as to whether Fire, rather than Brumley, authorized the work on the home and, thus, that ACR acted as Fire's agent. Appellants neglect to address how the court erred in ruling on each of the individual evidentiary objections.

We hold that the court acted within its discretion in sustaining Fire's objections to Brumley's declarations. Most of Brumley's statements in the sustained objections relate to the contents of telephonic conversations between the onsite ACR employee and Fire's insurance representative, conversations to which she was not a party. Brumley also recounted the contents of telephone conversations between her mother and Fire's representatives. Others related to the ACR employee's communications with Brumley as to the content and reasoning of his conversations with Fire's representative. Finally, Brumley described her interactions with Fire's representatives regarding their level of authority to authorize expenditures regarding repairs to the home and their assessments of the damage.

Brumley was patently not a percipient witness to the telephone conversations; thus, her statements regarding their contents clearly lacked foundation. Even to the extent that she was later informed by one of the parties to the conversations regarding their substance, her statements are clearly hearsay because they rely on the statements of others for the truth of the matters asserted. As to the contents of Brumley's discussions with ACR and Fire's personnel regarding the inspection and prospective expenditures by Fire to repair the damages, Brumley's statements relied on information conveyed to the individuals by their respective employers for the truth of the matters therein asserted. Thus, the statements were properly excluded as hearsay.*fn4


Fire made 45 objections (Nos. 19-63) to Sara Lynne's declaration based variously on insufficient foundation (§§ 403, 405), improper authentication (§ 1401), hearsay (§ 1200), lack of personal knowledge (§ 702), and inadmissible opinion of a lay witness (§ 800). The trial court overruled objection Nos. 28, 34, 35, 36, and 43, but sustained the remaining objections. Again, the trial court did not indicate on what basis or bases it sustained the objections.

Fire's objections Nos. 19 and 20 pertained to Sara-Lynne's reference to and assertions regarding an attached version of an insurance policy she purported to be operative at the time of the incident.*fn5 Fire objected based on lack of foundation and improper authentication. The trial court's sustainment of the objections was within its discretion because the attached policy contained no clear indications when it was purchased or when it was effective. Sara-Lynne failed to authenticate the policy in her declaration. Moreover, the listed date of May 1, 2007, on the attached policy indicated that it would not have been the effective policy on the date of the incident, July 28, 2006. Finally, the trial court found that appellants were bound by the policy they attached to the first amended cross-complaint, which they had averred "was a true and correct copy of the insurance policy that was in effect." That version of the policy was the one which Fire averred was effective at the time of the incident.

Fire's objections Nos. 20 through 22 were properly sustained on hearsay grounds because Sara-Lynne attempted to relay statements made by ACR and Fire to Brumley regarding the extent of the damages and the processes that would be used to ameliorate them. These out-of-court statements were clearly submitted for the truth of the matters asserted and were made outside of Sara-Lynne's presence. Fire's objections Nos. 24 and 25 were properly sustained because Sara-Lynne's recapitulation of discussions she had with Fire employee Mary MacDonald contained improper commentary and interpretation of MacDonald's remarks, rather than merely recounting MacDonald's statements. Fire's objections Nos. 29 through 33, 37, and 44 through 63 were properly sustained because Sara-Lynne failed to establish sufficient foundation for, and to authenticate the documents upon which she relied in making her statements. Finally, the remaining objections concerning Sara-Lynne's descriptions of the extent of the damages were properly sustained because they contained descriptions of and determinations of what she believed would be required to remedy the damages; however, Sara-Lynne failed to establish any expertise she had in making such determinations. Sara-Lynne largely offered argumentative and conclusory descriptions and interpretations of her own observations and the reports and comments of others. (Johnson v. Banducci (1963) 212 Cal.App.2d 254, 264 [affidavit defective for containing conclusions, ultimate facts, and valueless items of information]; Guthrey v. California, supra, 68 Cal.App.4th at p. 1120 [declaration objectionable because it contained opinions and conclusions rather than evidence].) Thus, the court acted within its discretion in sustaining the objections.


Fire made 17 objections (Nos. 64-80) to David B. Dimitruk's declaration based variously on relevance (§§ 210, 350, 351), insufficient foundation (§§ 403, 405), improper authentication (§ 1401), hearsay (§ 1200), lack of personal knowledge (§ 702), inadmissible opinion of a lay witness (§ 800), and misstatement of evidence (§ 1520). The trial court overruled objection No. 64, but sustained the remaining objections. Yet again, the trial court did not indicate on what basis or bases it sustained the objections.

Appellants' sole argument with regard to the impropriety of the trial's court's ruling on Fire's objections is that Dimitruk did not misstate the evidence. Appellants concede that "the paraphrasing of the extensive deposition testimony might not have been technically in the customary way (i.e., the declaration could have quoted the actual testimony) . . ."; however, they contend that his citations to the deposition testimony were adequate to permit the court to check the veracity of Dimitruk's statements against the record. Assuming that the sole basis for the trial court's ruling on Fire's objections was misstatement of the evidence, it did not abuse its discretion in so finding.

Appellants initially submitted a declaration by Dimitruk with their opposition to the motion for summary judgment on October 7, 2008. Fire filed three enumerated objections to the declaration. On October 28, 2008, appellants submitted a request to file a memorandum in opposition to the summary judgment motion in excess of the 20-page limit; appellants requested permission to file a 29-page memorandum. Appellants eventually filed a 32-page memorandum in opposition to Fire's motion for summary judgment on December 24, 2008, one day late, along with another declaration from Dimitruk. Fire filed the operative objections on January 6, 2009. On January 9, 2009, appellants filed a request that their memorandum in opposition be deemed timely filed, that the court grant them permission to extend the length of the memorandum by additional three pages, and that the court treat Dimitruk's 30-page declaration as the introduction to the memorandum. Dimitruk's declaration attempted to "summarize" 1,200 pages of deposition testimony. On the same day, appellants submitted a declaration of Dimitruk identical to that filed on December 24, 2008. On January 12, 2009, Fire filed opposition to the request for extension of time and opposed the request to exceed the previously ordered page limit. Among the grounds on which it objected, Fire objected to the declaration's summarization of the deposition testimony. (Sesma v. Cueto (1982) 129 Cal.App.3d 108, 112, fn. 1 [the better practice is to quote verbatim from the deposition transcript].) Fire also contended that incorporation of the 30-page declaration into the memorandum would convert it to a 62-page, rather than a 32-page, memorandum, grossly exceeding the page limit. (Cal. Rules of Court, rule 3.1113(e).)

At the hearing on the request on January 12, 2009, the court and plaintiff's counsel engaged in the following colloquy:

"The Court: Well, what he's trying to do here, I've previously given him permission to have 29 pages. But basically, Mr. Dimitruk, what you're asking me to look at is approximately 62 pages, not 29.

"[Plaintiffs' Counsel]: Yes, sir.

"The Court: Not 32, but 62 pages.

"[Plaintiffs' Counsel]: Yes, sir.

"The Court: I'm not going to do that. I'm just not going to do that. [¶] . . . [¶] . . . I'm not going to read 62 pages especially if, indeed, it's paraphrased as opposed to quotations. [¶] . . . [¶] If, indeed, the opposition is correct in the characterization of what you have done on your declaration, i.e., paraphrased as opposed to quoting, it's not any good."

The court reiterated, "I'm [not] going to go back and read the deposition transcript. Although you have cited certain things, they may not be correct in a sense that there may be other parts to the deposition which is contrary, and I'm not going to the trouble to do that." Counsel and the court then engaged in further discussion regarding the issue:

"The Court: Be that as it may, I'm just telling you I'm not going to read 62 pages of an opposition.

"[Plaintiffs' Counsel]: I understand.

"The Court: What's the solution?

"[Plaintiffs' Counsel]: My suggested solution is then to allow me to quote roughly about 8- or 900 pages of deposition testimony. If that's what they are going to insist upon then I should do that. I was trying to save the Court some trouble.

"The Court: When you paraphrase, you're not saving me problems because I have to read the whole transcript to see whether or not the quotation is correct.

"[Plaintiffs' Counsel]: I agree. Then I need to put the Court through the task of reading about 8- or 900 pages of deposition testimony."

The court then ordered appellants to file an amended opposition limited to 32 pages that quoted directly from the deposition transcripts, and to file a revised separate statement by January 27, 2009: "What he's going [to] do is forget about the declaration with the paraphrasing. He's going to cite you certain sections of the depo on both depos." The court instructed appellants' counsel to cite to the deposition pages so that "I don't have to read the whole transcript consisting of 600 pages. . . . I'm not going to read 600 pages of transcript."

On January 28, 2009, appellants submitted a 245-page second amended statement of undisputed material facts. On the same date they filed a two-page, fourth declaration of Dimitruk with 536 pages of attached deposition transcripts. On February 6, 2009, Fire filed an opposition to appellants' second amended statement of undisputed facts contending that appellants had failed to abide by the court's order to file a third opposition memorandum, instead, untimely filing a 245-page second amended statement of undisputed facts not authorized by the court. Fire conveyed that it intended to rely on its previously filed opposition rather than file a new one.

The court ruled that it would not consider appellants' second amended statement of undisputed material facts: "Regards to the second amended separate statement of disputed fact, apparently there had to be some confusion as to what I allowed to be filed for the third time. There is no question that it was late. It was not filed until January 28. I ordered it to be filed by the 27th. The Court rules the second amended separate statement of disputed facts will not be considered."

Appellants initially contend that the court failed to rule on Dimitruk's first declaration filed on October 7, 2008. They contend that that declaration contained references to sufficient facts to defeat the motion. We disagree. First, by filing subsequent declarations, it is apparent appellants intended those declarations to supersede the one they initially filed. Second, the court likewise never ruled on Fire's objections to Dimitruck's first declaration; thus, if the court had felt compelled to rule on the validity of Dimitruck's first declaration, it may have sustained all of Fire's objections to it. Indeed, Dimitruk's first declaration suffers from the same deficiencies which concerned Fire and the court about his subsequent declarations, i.e., Dimitruck paraphrased the deposition testimony rather than quoted from it. Thus, the court acted within its discretion to the extent that it determined that Dimitruk's third declaration was the operative document it was considering in ruling on the motion for summary judgment.

Appellants also complain that the court erred in refusing to consider all the evidence, i.e., in stating that it was unwilling to read 600 pages of deposition testimony, rather than merely quoted excerpts. In our view, the purpose of lodging a deposition transcript with the trial court must be to make it available for review by the trial court at the time of its ruling on the summary judgment motion. Thus, if a party cites one passage from a deposition, the trial court can examine the relevant portions of the deposition to determine the context of the statements. However, the trial court had no obligation to consider the depositions in their entirety. It only had to examine the excerpts that were offered in support of the summary judgment motion: "'Review is limited to those portions of the depositions which were abstracted and placed before the court in the affidavit and in the declaration filed in connection with the motion.' [Citation.]" (Sacks v. FSR Brokerage, Inc. (1992) 7 Cal.App.4th 950, 962, italics omitted.) Thus, the court did not abuse its discretion in requiring appellants to quote the relevant portions of the deposition transcripts in its memorandum/declaration and in refusing to read the deposition transcripts in their entirety.

Finally, the court did not abuse its discretion in sustaining Fire's objections to Dimitruk's declaration on the basis that he misstated the evidence. A review of Dimitruk's declaration not only reveals a failure to quote the relevant portions of the deposition transcript, but a failure to accurately paraphrase the testimony as well. Rather, Dimitruk's recapitulations of the testimony are more akin to decidedly biased interpretations in favor of his clients' legal position. For example, in item No. 20 of Dimitruk's declaration, he asserts that "ACR Services provided the dryout services to help Mr. Yambao determine what the water content was in the drywall . . . at the Kvilhaugs' residence." Fire objected to the statement in part on the basis that it misstated the evidence. And, in fact, in the portion of the deposition testimony cited to by Dimitruck, Yambao did not testify that ACR services provided the dryout services to help him determine the water content in the drywall; rather, Yambao testified that ACR helped him determine the water content, but specifically denied that they helped him determine the water content of the drywall:

"[Plaintiffs' Counsel:] Did you ask ACR to help you determine what the water content of the drywall was?

"[Yambao:] No."

Likewise, in those pages Yambao never testified as to any correlation between the dryout services and a determination of the water content of anything, including the drywall.

In item No. 21 of Dimitruk's declaration, Dimitruk declared that "On June 28, 2006, Mr. Yambao told Shannon Brumley that Fire Insurance Exchange would pay ACR for the work it would perform at the Kvilhaugs' residence." Fire objected in part on the basis that Dimitruk misstated the evidence. Again, resort to the actual deposition testimony reveals that Yambao testified he told Brumley he would review ACR's invoice for the work it performed and that Fire would pay only an amount it deemed reasonable, i.e., that it would not be obligated to pay any amount that was higher than that it deemed reasonable for that particular area. Thus, according to his deposition testimony, Yambao did not say he would definitively pay for all the work performed by ACR as insinuated in Dimitruk's declaration.

In item No. 33 of Dimitruk's declaration, Dimitruk declared that "Ms. MacDonald never asked anybody at ACR Services, Inc. whether the Aquadry equipment could cause damage to anything in the residence and the thought to ask such a question never occurred to her." Fire objected in part on the basis that the statement misstated the evidence. Again, resort to the deposition testimony itself reflects that Ms. MacDonald testified that the thought to ask ACR if there was the potential to cause damage from use of the equipment had occurred to her, that she received input from ACR regarding that possibility, and had been told by ACR that it was not "going to be an issue." Thus, MacDonald's testimony directly contradicted Dimituk's declaration.

We have selected and discussed the above three statements contained in Dimitruk's declaration and held that the trial court's ruling sustaining Fire's objections to them on the basis of misstatement of evidence was not an abuse of discretion. Appellants fail to discuss any of the statements individually, electing instead to treat them all in one substantive lump. Thus, appellants' failure to individually enumerate and discuss their claims of error with respect to each objection on each possible ground forfeits any requirement that we discuss each item in detail. (Rossiter v. Benoit (1979) 88 Cal.App.3d 706, 710-711 [where appellant complains of error but does not provide pertinent legal argument the court may treat the issue as abandoned]; OCM Principal Opportunities Fund v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 867, fn. 21.)


On appeal, we review de novo an order granting summary judgment. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 860.) The trial court must grant a summary judgment motion when the evidence shows that there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. ( c); Aguilar, at p. 843.) In making this determination, courts view the evidence, including all reasonable inferences supported by that evidence, in the light most favorable to the nonmoving party. (Code Civ. Proc., § 437c, subd. (c); Aguilar, at p. 843.) A defendant moving for summary judgment has the burden of producing evidence showing that one or more elements of the plaintiff's cause of action cannot be established, or that there is a complete defense to that cause of action. (Code Civ. Proc., § 437c, subd. (o)(2); Aguilar, at pp. 849, 850-851, 854-855.) The burden then shifts to the plaintiff to produce specific facts showing a triable issue as to the cause of action or the defense. (Code Civ. Proc., § 437c, subd. (p)(2); Aguilar, at pp. 849, 850-851.) Despite the shifting burdens of production, the defendant, as the moving party, always bears the ultimate burden of persuasion as to whether summary judgment is warranted . (Aguilar, at p. 850.)

In reviewing the propriety of an order granting summary judgment, we "apply the same three-step analysis required of the trial court. We begin by identifying the issues framed by the pleadings since it is these allegations to which the motion must respond. We then determine whether the moving party's showing has established facts which justify a judgment in movant's favor. When a summary judgment motion prima facie justifies a judgment, the final step is to determine whether the opposition demonstrates the existence of a triable, material factual issue." (Hernandez v. Modesto Portuguese Pentecost Assn. (1995) 40 Cal.App.4th 1274, 1279.) If there is no triable issue of material fact, "we affirm the summary judgment if it is correct on any legal ground applicable to this case, whether that ground was the legal theory adopted by the trial court or not, and whether it was raised by defendant in the trial court or first addressed on appeal." (Jordan v. Allstate Ins. Co. (2007) 148 Cal.App.4th 1062, 1071.)


Appellants contend that Fire was liable for the damages caused by the purported negligence of ACR because ACR was Fire's agent. Appellants maintain that whether Fire authorized ACR's services was a material issue of triable fact regarding whether it acted as Fire's agent. We disagree.

"To prevail in a negligence action, a plaintiff must show that the defendant owed a legal duty, the defendant breached that duty and the breach proximately caused injury to the plaintiff. [Citations.] 'Absent a legal duty, any injury is an injury without actionable wrong. [Citation.] "Duty, being a question of law, is particularly amenable to resolution by summary judgment. [Citation.]" [Citation.]' [Citation.]" (J.L. v. Children's Institute, Inc. (2009) 177 Cal.App.4th 388, 396.)

"Under the common law, a person can be vicariously liable for the acts of his agents and employees under the doctrine of respondeat superior. [Citation.] An independent contractor, however, is not an agent or employee. If the person hired an independent contractor--i.e., one over whom the person has no right of control as to the mode of doing the work [citation]--to perform work, the person who hired the contractor generally 'was not liable to third parties for injuries caused by the contractor's negligence in performing the work.' [Citation.]" (Orosco v. Sun-Diamond Corp. (1997) 51 Cal.App.4th 1659, 1668, quoting, 2 Witkin, Summary of Cal. Law (9th ed. 1987) Agency and Employment, § 115, p. 109, and Privette v. Superior Court (1993) 5 Cal.4th 689, 693.)

"[T]he insured who has been provided a policy's financial benefits but is unhappy with the . . . job performed by an agent of the insurer has contractual remedies against the [contractor], as well as any insurer . . . acting as a guarantor of workmanship. The insured may . . . simply find another [contractor] and require that the insurer pay for it. In this situation it is difficult to see any substantial public interest which supports any . . . tort remedy." (Rattan v. United Services Auto. Ass'n. (2000) 84 Cal.App.4th 715, 723, italics added.) When a contractor who is recommended by and whose work is guaranteed by a homeowner's insurer "fails to perform adequately, the contractor's . . . conduct alone will not support a tort claim against the insurer." (Id. at p. 717, italics added.)

Here, the undisputed evidence reflected that Brumley, not Fire, authorized the services of ACR on the Kvilhaug's home. Mohler, appellants' neighbor, found and called ACR to come to appellants' home to commence repairs. Brumley signed ACR's form authorizing the commencement of work on appellants' home. While it is clear that Fire had discussions with ACR's employees regarding the methods of restoration it would utilize, it is undisputed that Fire agreed to act as a guarantor only of payment for the services of ACR, not of the quality of its workmanship. ACR was not recommended by Fire, was not a preferred vendor of Fire, and Fire did not guarantee ACR's work. Thus, Fire had no duty with respect to appellants regarding the performance of work by ACR.

Indeed, as noted above, the evidence conclusively established the trial court's determination that "it's undisputed that [Brumley] signed the emergency services agreement, even though she now claims that she had no authority to do so. . . . The Court finds that the Kvilhaugs have not raised a triable issue of material fact with respect to ACR being an agent of Fire." Likewise, "Fire was not the liability insurer for ACR and is not responsible for any damages caused by its alleged negligence. ACR was not retained by Fire and did not have a contract with Fire. Fire only agreed to pay under the policy for the services performed by ACR."

Appellants dispute any contention that Brumley had authority to authorize work to be performed on their home. They note that they were away from home in Mexico when ACR was called and commenced work on their home. They assert that they themselves never authorized ACR's services. However, it is unclear how exactly any dispute with Brumley's authority to authorize the services translates into a per se determination that Fire necessarily had authority to and actually did authorize ACR's services. Indeed, it would seem that if anyone could more appropriately act as the appellants' agent for authorizing such services, it would be with Brumley who was related to one of them and had access to the home. Moreover, any dispute the appellants had with Brumley's authorization of the services is more appropriately taken up with Brumley or ACR, the two parties involved in that transaction.


Appellants contend that Fire breached the insurance policy by failing to pay damages caused by ACR. We agree with the trial court that appellants' insurance policy indisputably exempted coverage for damages caused by repairs.

Policy interpretation and coverage is a matter of law to be determined by the court. (Nash v. Prudential Insurance Co. of America (1974) 39 Cal.App.3d 594, 602.) Any opinions of insurance adjustors as to what is covered in the policy are inadmissible. (Chatton v. National Union Fire Insurance Co. (1992) 10 Cal.App.4th 846, 865; Jordan v. Allstate (2004) 116 Cal.App.4th 1206, 1217; Prudential Ins. Co. of America, Inc. v. Superior Court (2002) 98 Cal.App.4th 585, 603-604.)

Appellants' policy with Fire contained a section on losses not covered by the policy which read: "Faulty, inadequate or defective planning, zoning, development, surveying, siting, design, specifications, workmanship, construction, grading, compaction, maintenance, repairs, or materials, whether used in construction, remodeling, maintenance or repair of part of or all of any property . . . ."*fn6 (Italics added.) The trial court found that "[t]he exclusion within the policy refers to faulty workmanship and it is not limited to a product. The exclusion refers to faulty maintenances and repairs also. The drying out process could be considered a repair to the home to correct the flooded conditions." Although the parties semantically engage in extensive parsing interpretations with regard to the terms "workmanship" and "repairs" in the context of the policy we, like the trial court below, find both terms clearly apply to the services rendered by ACR in the instant case. Thus, we hold the trial court's determination that any damages caused by ACR to the Kvilhaug's home were not covered by its policy with Fire was correct as a matter of law.

Appellants begin their opening brief with the statement that one of defendant's insurance adjustors "admitted in his deposition in this case that if damages are caused in the 'mitigation' process of responding to a loss covered by the policy of insurance, such additional damages are also covered." As they repeatedly asserted below, they contend this "admission" was dispositive of their coverage claims and, in and of itself, compels reversal of the trial court's order granting summary judgment. However, as defendant cited and the court ordered below, the statements of an adjustor are not even admissible on the issue of the terms of an insurance policy since such contract interpretation is an issue of law to be determined by the court. (Nash v. Prudential Ins. Co. of America, supra, 39 Cal.App.3d at p. 602.) Thus, any purported "admission" by Yambao was not only not dispositive of the issue, but was not even admissible to prove that "mitigation" damages were covered under the policy.


Declaratory relief "is designed in large part as a practical means of resolving controversies, so that parties can conform their conduct to the law and prevent future litigation." (Meyer v. Sprint Spectrum L.P. (2009) 45 Cal.4th 634, 648, italics added.) "The court may refuse to [grant declaratory relief] in any case where its declaration or determination is not necessary or proper at the time under all the circumstances," (Code Civ. Proc., § 1061), and its decision to entertain an action for declaratory relief is reviewable for abuse of discretion. (Meyer, at p. 647.) This discretion is not boundless, however: "'Where . . . a case is properly before the trial court, under a complaint which is legally sufficient and sets forth facts and circumstances showing that a declaratory adjudication is entirely appropriate, the trial court may not properly refuse to assume jurisdiction . . . .' [Citation.]" (Ibid.) "'Declaratory relief operates prospectively, serving to set controversies at rest. If there is a controversy which calls for a declaration of rights, it is no objection that past wrongs are also to be redressed; but there is no basis for declaratory relief where only past wrongs are involved. Hence, where there is an accrued cause of action for an actual breach of contract or other wrongful act, declaratory relief may be denied. . . .' [Citation.]" Baldwin v. Marina City Properties, Inc. (1978) 79 Cal.App.3d 393, 407, italics added.)

The court properly granted summary adjudication on the declaratory relief cause of action because appellants sought remedy solely for claims that had already accrued, i.e., they failed to establish the need to delineate the boundaries of any future litigation. As the trial court aptly and succinctly stated, "Here, the Kvilhaugs were suing for damages resulting from ACR's negligence and their belief that Fire should have paid for those damages. Because those causes of action have already accrued, declaratory relief is inappropriate."


Appellants contend the court erred in granting summary adjudication of their fourth cause of action. We disagree.

A bad faith cause of action consists of two elements: (1) the insurer breached the contract by withholding policy benefits, and (2) the denial of the policy benefits was unreasonable. (Love v. Fire Ins. Ex. (1990) 221 Cal.App.3d 1136, 1151.)

We have held above that Fire did not breach its contract with appellants by refusing to provide policy benefits for damages caused by ACR. Thus, axiomatically, it could not have acted unreasonably in doing so because it had no obligation to pay for those damages in the first instance. Besides, as Rattan noted, a "contractor's . . . conduct alone will not support a tort claim against the insurer." (Rattan v. United Services Auto. Ass'n., supra, 84 Cal.App.4th at p. 717.)


Appellants maintain they were entitled to indemnity from Fire to the extent ACR attained a judgment against them. We disagree.

"Indemnity may be defined as the obligation resting on one party to make good a loss or damage another party has incurred. [Citation.] This obligation may be expressly provided for by contract [citation], it may be implied from a contract not specifically mentioning indemnity [citation], or it may arise from the equities of particular circumstances [citations]." (Rossmoor Sanitation, Inc. v. Pylon, Inc. (1975) 13 Cal.3d 622, 628.)

As the trial court found, appellants "were seeking indemnity from Fire in the event that ACR prevailed on its complaint against them. However, Fire has presented evidence that it paid the [appellants] for damage caused by the water loss and for ACR's work. That's in the declaration of Mary McDonald and attachments. Fire has also presented evidence that [appellants] did not pay for ACR's services. Because Fire had already paid for ACR's services, it should not be required to pay any claim for indemnity if ACR recovers against [appellants] for nonpayment." The evidence below indisputably supports the court's determination.

ACR filed suit against appellants for breach of the contract due to appellants' failure to pay it $7,593.19 for services rendered. Fire submitted declarations indicating it had paid appellants $6,719.30 for emergency services performed by ACR and $868.89 for removal of the floor from the garage: "The amount has been adjusted and agreed to by ACR." Fire repeatedly informed appellants that they were responsible for hiring contractors to repair the damages, that Fire did not guarantee their work, was not responsible for any problems that arose during the course of repairs, was not responsible for damages not directly related to the water, and that appellants were responsible for compensating the contractors directly. Appellants conceded that they did not pay ACR for its services: "It is true that [appellants] did not pay ACR but that is because of the damages ACR caused [appellants] to sustain which exceed ACR's claim." MacDonald declared that "FIRE paid [appellants] for covered damages caused by the water loss at their property, as well as for the work provided by ACR." (Italics added.) Finally, ACR and appellants had entered into a settlement with ACR and their claims against one another were dismissed with prejudice; that settlement provided that ACR pay appellants $75,000 and ACR take nothing. Thus, summary adjudication of the sixth cause of action was proper because Fire had already paid all that would be due ACR for its services and appellants had successfully defended the action by ACR against them. Furthermore, since summary adjudication of each cause of action was proper, the court's order granting summary judgment in favor of Fire was correct.


The judgment is affirmed. Respondent is awarded its costs on appeal.


We concur: /s/ McKINSTER Acting P. J. /s/ RICHLI J.

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