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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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 ...

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