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Bruce Newland et al v. Superior Court of Placer County

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Placer)


July 22, 2011

BRUCE NEWLAND ET AL., PETITIONERS,
v.
SUPERIOR COURT OF PLACER COUNTY, RESPONDENT; PROGRESSIVE MARATHON INSURANCE COMPANY, REAL PARTY IN INTEREST.

(Super. Ct. No. SCV18066)

The opinion of the court was delivered by: Blease , Acting P. J.

Newland v. Superior Court

CA3

NOT TO BE PUBLISHED

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

Petitioners Bruce and Jenne Newland seek mandate review of a commissioner's decision granting summary adjudication in favor of real party in interest Progressive Marathon Insurance Company (Progressive) on petitioners' punitive damages claim. (Code Civ. Proc., § 437c, subd. (m)(1).)*fn1

Petitioners brought this bad faith action against Progressive and others*fn2 following the denial of petitioners' automobile insurance claim. Petitioners' complaint alleged various causes of action and sought, among other things, punitive damages.

Progressive moved for summary adjudication on petitioners' punitive damages claim on the ground petitioners had "no evidence of conduct, knowledge or ratification by a Progressive 'managing agent.'" Petitioners "object[ed] to the appointment of a court commissioner to hear [the] matter for all purposes" and argued the motion was barred pursuant to section 437c, subdivision (f)(2), which prohibits a party from moving for summary judgment "based on issues asserted in a prior motion for summary adjudication and denied by the court, unless that party establishes to the satisfaction of the court, newly discovered facts or circumstances or a change of law supporting the issues reasserted in the summary judgment motion." Alternatively, petitioners claimed triable issues of fact existed on the issue of punitive damages.

Commissioner Margaret Wells, the regularly scheduled law and motion bench officer at the Placer County Superior Court, overruled petitioners' objection to the appointment of a commissioner as untimely based on Placer County Local Rule 20.2(b) (rule 20.2(b)), which provides:

"When the regularly scheduled law and motion calendar is heard by a Commissioner, the parties must file written notice indicating whether or not they stipulate to the Commissioner. Failure to file such notice of stipulation or non-stipulation at least five (5) court days prior to the hearing date for the motion will be deemed a stipulation to the Commissioner for all purposes other than trial."

The commissioner explained that she had "been the regularly scheduled law and motion bench officer in this court since at least 2005," and she "ha[d] heard and decided several motions in this matter without any objection from either party." Accordingly, the commissioner found petitioners "are deemed to have stipulated to this Commissioner." The commissioner rejected petitioners' assertion that the motion was barred pursuant to section 437c, subdivision (f)(2) "as the issue raised in this motion was not raised in the earlier motion for summary adjudication . . . ." Finally, the commissioner granted summary adjudication on petitioners' punitive damages claim, finding that petitioners "failed to present any evidence that a managing agent of [Progressive] ratified, or even knew of, the alleged oppressive or malicious conduct by Investigator [Greg] Jackson or Claims Adjuster [Kelly] Dobbins."

Petitioners seek a writ of mandate. We granted an alternative writ to review the propriety of the order granting summary adjudication and stayed the proceedings pending filing of opposition and further order of this court.

Petitioners argue: (1) the summary adjudication order is void because "they did not stipulate to a court commissioner acting as a temporary judge for the specific matter as required," and rule 20.2(b) constitutes "an unconstitutionally overbroad delegation of judicial power"; (2) the motion was barred pursuant to section 437c, subdivision (f)(2) because it essentially was a renewal by Progressive of an earlier motion; and (3) summary adjudication was improper on the merits because Progressive failed to meet its burden of producing evidence to support its motion in the first instance, and petitioners raised triable issues of fact "concerning the involvement, concurrence and ratification of the claims decisions of the claims adjuster and special investigator by . . . the applicable 'managing agents.'"

We shall reject petitioners' first two arguments, but shall conclude that Progressive failed to meet its burden of showing petitioners' punitive damages claim had no merit. Accordingly, we will issue a peremptory writ of mandate directing the trial court to vacate its order granting summary adjudication of petitioners' punitive damages claim.

FACTUAL AND PROCEDURAL BACKGROUND

On September 11, 2003, Mr. Newland reported to Progressive that his family's 2001 S80 Volvo had been stolen from their driveway. He also advised Progressive that the car was locked and the alarm was set at the time the car was taken.

Petitioners' claim was assigned to Senior Claims Representative Kelly Dobbins. Dobbins' investigation of petitioners' claim disclosed that: the S80 Volvo was not a commonly stolen car; it had a computer chip inside the key that corresponded to a computer chip inside the ignition, meaning "you must have the key to steal the car"; there were two sets of keys to the car, both of which were accounted for; the car had been for sale at the time it was stolen; and petitioners' $1,350 monthly car payments ($750 for the Volvo and $600 for a second car) represented a large portion of their $6,000 monthly take home pay. Dobbins suspected "possible fraud" and requested assistance from the Special Investigations Unit (SIU). SIU representative Greg Jackson was assigned to petitioners' claim.

On September 22, 2003, the car was recovered. Jackson inspected the car and noted there were no visible signs of forced entry or ignition tampering. The front seats and speakers were missing, but the stereo, heating and air conditioning units, and air bags were intact. Mr. Newland suggested someone at Turner Volvo, the dealership from which they purchased the car, may have been involved in the theft because of the car's security system. Dobbins contacted Turner Volvo and learned the car came with three keys -- two standard keys and one valet key. Mr. Newland denied ever receiving a valet key.

On September 30, 2003, Jackson obtained recorded statements from petitioners. During his interview of Mr. Newland, Jackson told Mr. Newland the facts of the theft made no sense. Among other things, there was no evidence of forced entry, the keys were accounted for, and the stereo and air bags were intact. Jackson suggested that petitioners or one of their friends may have taken the car. Mr. Newland indicated he may have been mistaken about locking the car on the night it was taken. Jackson treated Mr. Newland in a "mocking [and] demeaning" manner, and appeared to get a "sick thrill out of the way he was treating [Mr. Newland]."

During his interview of Mrs. Newland, Jackson again suggested petitioners or one of their friends stole the car, which Mrs. Newland found very offensive. Jackson bullied Mrs. Newland, had a "cocky air about him," and invaded her personal space, which intimidated and humiliated her.

On October 2, 2003, Mrs. Newland advised Jackson that someone at Turner Volvo told her that they "would put the valet key in the wallet that holds the [owner's] manual" and suggested there may have been a valet key inside the glove box. The salesperson who sold petitioners the car recalled providing petitioners with three keys. He would never put a key in the glove box. In the 20 years he had worked at Turner Volvo, he had never sold a new car without a valet key.

On October 13, 2003, after discussing the claim with her branch manager Eric Schnitzler, Dobbins decided to schedule attorney-conducted examinations of petitioners under oath. The examinations were conducted on November 10, 2003, by an attorney retained by Progressive. While petitioners were being examined under oath, Jackson and Dobbins passed notes, whispered back and forth, and acted smug.

On December 18, 2003, Regional Claims Manager Mindy Sauer, Schnitzler, Jackson, Dobbins, and others "roundtabled" petitioners' claim. While Sauer was the only individual at the meeting who could decide to deny the claim, everyone agreed the claim should be denied. Counsel concurred in the decision, and on January 9, 2004, petitioners were advised their claim had been denied on the grounds that a covered loss had not occurred, and that petitioners had misrepresented facts and/or made fraudulent statements in presenting the claim.

On July 3, 2005, petitioners filed the instant action asserting various causes of action, including breach of the implied covenant of good faith and fair dealing. As relevant here, petitioners alleged that "[i]n breaching the implied covenant of good faith and fair dealing. . . . [d]efendants acted with fraud, malice and/or oppression in violation of Civil Code Section 3294. . . . by failing to thoroughly investigate the claim; by intentionally accusing [p]laintiffs of making fraudulent statements in [the] face of facts clearly demonstrating that no false statements were ever made; by determining to retain legal counsel for the sole purpose of furthering the unfair, arbitrary and unsupported denial of [p]laintiffs' claim; and by failing and refusing to consider the multitude of facts that established that the very basis for [d]efendants' original denial of the claim was in fact false and erroneous." Petitioners further alleged that all such conduct "was done with the advance knowledge and/or ratification and/or authorization of management level agents or employees of [d]efendants, and/or with their subsequent ratification and approval."

A few days after petitioners filed their complaint, defendants removed the case to federal district court. Once there, defendants moved for summary adjudication on petitioners' punitive damages claim, arguing the evidence did not support a finding that defendants engaged in "malice, oppression, or fraud." The district court denied the motion. It concluded that "punitive damages may be proper when an insurer badgers and mocks the insured," citing Egan v. Mutual of Omaha Ins. Co. (1979) 24 Cal.3d 809, 821, and found that "Jackson, arguably badgered [petitioners]. . . . [by] repeatedly accus[ing] [them] of stealing and vandalizing their own car." Thereafter, the district court remanded the case to state court, finding it lacked subject matter jurisdiction over the matter as defendants failed to establish the amount in controversy exceeded $75,000 at the time of removal. (28 U.S.C. §§ 1332(a) and 1447(c).)

Back in state court, Progressive filed a motion to compel responses to supplemental interrogatories. Commissioner Wells, the regularly scheduled law and motion bench officer, denied the motion. At no time did petitioners object to a commissioner hearing or disposing of the motion.

Thereafter, Progressive's co-defendants moved for summary judgment on the ground petitioners' insurance contract was with Progressive and not with any of the moving parties. The day before the motion was scheduled to be heard, the commissioner issued a tentative ruling granting the motion. The next day, immediately prior to the hearing on the motion, petitioners filed an "Objection to Appointment of Court Commissioner for All Purposes." The commissioner overruled the objection as untimely, citing rule 20.2(b). Turning to the merits, the commissioner adopted the tentative ruling granting summary judgment as to the moving parties.

Later, Progressive, the sole remaining defendant, moved for summary adjudication of petitioners' punitive damages claim, arguing that "[p]laintiffs have no evidence of conduct, knowledge or ratification by a Progressive 'managing agent.'" Petitioners again objected to the matter being heard by a commissioner, and the commissioner again overruled the motion as untimely. She also rejected petitioners' contention that the motion was barred pursuant to section 437c, subdivision (f)(2), finding "the issue raised in this motion was not raised in the earlier motion . . . ." As for the merits, the commissioner agreed with Progressive that petitioners "failed to present any evidence that a managing agent of [Progressive] ratified, or even knew of, the alleged oppressive or malicious conduct by Investigator Jackson or Claims Adjuster Dobbins." She further concluded that "[p]laintiff has [sic] not offered any evidence that supervisors of Dobbins and Jackson participated in or ratified the allegedly objectionable conduct of Dobbins and Jackson."

DISCUSSION

I

Petitioners Implicitly Consented To The Commissioner For All Purposes Except Trial

Petitioners contend the order granting summary adjudication on their punitive damages claim is void because they "objected to and did not stipulate to" a commissioner acting as a temporary judge for that "particular proceeding." They further contend that rule 20.2(b) on which the trial court based its ruling that petitioners' objection to the commissioner was untimely "is an unconstitutionally overbroad delegation of judicial power, and cannot serve as a substitute for consent to the Court Commissioner for specific matters." Progressive responds that petitioners "made an implied stipulation to Commissioner Wells['] performance of judicial functions in law and motion in this case by failing to object prior to the first law and motion hearing," and that rule 20.2(b) "is within the Constitutional limits of assigning a temporary judge to hear a cause on [the] stipulation of the parties litigant . . . ." Progressive is correct.

A subordinate judicial officer may serve as a temporary judge only upon the stipulation of the "parties litigant." (Cal. Const., art. VI, § 21; § 259, subd. (d).)*fn3 The stipulation may be express or implied by the parties' conduct. (Foosadas v. Superior Court (2005) 130 Cal.App.4th 649, 652 (Foosadas); In re Horton (1991) 54 Cal.3d 82, 91 (Horton) [and cases cited therein].)*fn4

Here, rule 20.2(b) provides:

"When the regularly scheduled law and motion calendar is heard by a Commissioner, the parties must file written notice indicating whether or not they stipulate to the Commissioner. Failure to file such notice of stipulation or non-stipulation at least five (5) court days prior to the hearing date for the motion will be deemed a stipulation to the Commissioner for all purposes other than trial."

Commissioner Wells "has been the regularly scheduled law and motion bench officer [at the Placer County Superior Court] since at least 2005." Prior to deciding the subject motion for summary adjudication, the commissioner, acting as a temporary judge, decided a motion to compel discovery in petitioners' favor, without objection from either party. Accordingly, under rule 20.2(b), petitioners are deemed to have stipulated to the commissioner "for all purposes other than trial."

Relying on this court's decision in Foosadas, petitioners contend they must stipulate to a commissioner serving as a temporary judge for each "particular proceeding" or, in this case, motion. Because they did not stipulate to a commissioner serving as a temporary judge for "this summary adjudication," petitioners assert the commissioner's order granting the motion is void.

In Foosadas, we held that a defendant did not impliedly stipulate under a local rule to a commissioner serving as a temporary judge at his preliminary hearing by participating in proceedings that involved only the exercise of subordinate judicial duties. (130 Cal.App.4th at pp. 653, 655.) The rule at issue was memorialized in a plaque located outside the courtroom which read: "'A Commissioner has been appointed by the San Joaquin County Superior Court to act as a temporary judge in all matters heard in both Department T-1 and T-2. All parties and their attorneys are deemed to have stipulated to a Commissioner acting as a temporary judge unless an oral or written objection is made in open court prior to the commencement of the first hearing on the matter.'" (Id. at p. 653, italics omitted.)*fn5 We found that "[t]he trial court's attempt to create a rule that a party must object to the participation of a commissioner prior to the first hearing on a case, whether or not the hearing involves the performance of subordinate judicial duties not requiring a stipulation, is without legal foundation." (Id. at p. 655.) Rather, we held that "[a] subordinate judicial officer may serve as a temporary judge only upon the . . . . express or implied stipulation that the particular proceeding may be conducted by a temporary judge." (Id. at p. 652, italics added.)

Unlike Foosadas, the first hearing at issue here, Progressive's motion to compel, did not involve the exercise of subordinate judicial duties. (See, e.g., § 259 [listing subordinate judicial duties that may be performed by court commissioners subject to the court supervision; deciding contested motions to compel discovery not among those listed]; Gov. Code, § 72190 et seq. [same].)*fn6 More broadly, hearing and disposing of law and motion matters rarely, if ever, involves the performance of subordinate judicial duties. (See, e.g., § 259; Gov. Code, § 72190 et seq.) Petitioners do not contend otherwise. Thus, Foosadas is factually distinguishable from the present action.

Nevertheless, petitioners, relying on the above italicized language, assert that a party is required to stipulate to a commissioner's assignment for each and every "particular proceeding." Petitioners read our decision in Foosadas without regard to the factual context in which it was made.

As previously discussed, the issue before us in Foosadas was whether a party could be deemed to have stipulated to a commissioner serving as a temporary judge in "all matters" heard in specified departments of the superior court by participating, without objection, in hearings involving subordinate judicial duties. (Id. at pp. 652-653.) When considered in context, it is plain that the "particular proceeding" language relied on by petitioners here was in reference to a proceeding in which a commissioner serves as a temporary judge, and not one involving subordinate judicial duties. Contrary to petitioners' suggestion, we did not hold that a party can never be deemed to have stipulated to a commissioner serving as a temporary judge in future proceedings as provided for in a local rule. That question, however, was addressed in Walker v. San Francisco Housing Authority (2002) 100 Cal.App.4th 685 (Walker).

Walker involved Superior Court of San Francisco County, Local Rule 8.14(D), which stated: "'A party is deemed to stipulate that all matters heard in the Discovery Department may be heard and disposed of by a Commissioner, acting as a temporary judge, by failing to file an objection in writing within thirty (30) days after the first pleading is filed in the action by that party . . . .'" (100 Cal.App.4th at p. 691.) In that case, the defendant answered the complaint and failed to file an objection. (Ibid.) The court found the defendant "[t]herefore, . . . is deemed to have stipulated to [the] Commissioner['s] jurisdiction to hear the various discovery matters in this case." (Ibid.)

Unlike Walker and the present action, none of the cases cited by petitioners involved a local rule similar to that at issue here. (See Reisman v. Shahverdian (1984) 153 Cal.App.3d 1074, 1087, 1092, 1094-1097; Rooney v. Vermont Investment Corp. (1973) 10 Cal.3d 351, 359-360, 372; International Jet Ski Boating Assn. v. Superior Court (1991) 232 Cal.App.3d 112, 116; Aetna Life Ins. Co. v. Superior Court (1986) 182 Cal.App.3d 431, 435-437.) Those cases stand for the unremarkable proposition that a commissioner may not serve as a temporary judge absent a stipulation by the parties litigant, and in the absence of a local rule providing otherwise, such a stipulation extends only until the stipulated cause is decided. (Ibid.)

Petitioners' contention that rule 20.2(b) is unconstitutionally overbroad because it "allows for general reference to a court commissioner to act as a temporary judge on all matters, including those in excess of the authority provided by the Constitution, and [section] 259[, subdivision] (d), without the express consent of both parties for those matters in excess of the constitutional authority" lacks merit.

"'A facial challenge to the constitutional validity of a statute or ordinance considers only the text of the measure itself, not its application to the particular circumstances of an individual. [Citation.] "'To support a determination of facial unconstitutionality, voiding the statute as a whole, petitioners cannot prevail by suggesting that in some future hypothetical situation constitutional problems may possibly arise as to the particular application of the statute . . . . Rather, petitioners must demonstrate that the act's provisions inevitably pose a present total and fatal conflict with applicable constitutional prohibitions.'" [Citations.]' [Citation.]" (California Teachers Assn. v. State of California (1999) 20 Cal.4th 327, 338.) As we shall explain, petitioners have failed to make such a showing here.

The applicable constitutional prohibition is article VI, section 21 of the California Constitution, which provides that a subordinate judicial officer may serve as a temporary judge only upon the stipulation of the parties litigant. (Cal. Const., art. VI, § 21.) Contrary to petitioners' assertion, such a stipulation need not be express; it may be implied. (Foosadas, supra, 130 Cal.App.4th at p. 652; Horton, supra, 54 Cal.3d at p. 91.)

Rule 20.2(b) clearly states that "[w]hen the regularly scheduled law and motion calendar is heard by a Commissioner, the parties must file written notice indicating whether or not they stipulate to the Commissioner. Failure to file such notice of stipulation or non-stipulation at least five (5) court days prior to the hearing date for the motion will be deemed a stipulation to the Commissioner for all purposes other than trial." (Italics added.) Petitioners are deemed to have been familiar with rule 20.2(b), which had been in effect since January 1, 2007. (See Gov. Code, § 68070; Mann v. Cracchiolo (1985) 38 Cal.3d 18, 29 [so long as local rules are not contrary to higher authority, they have the force and effect of law]; see also Local Rules of Placer County Superior Court, rule 20.2(b).) Petitioners do not contend otherwise. Thus, petitioners were deemed to know that by failing to file a notice of non-stipulation at least five days prior to the first law and motion hearing (here, the hearing on Progressive's motion to compel), they would be deemed to have stipulated to the commissioner "for all purposes other than trial." Had they not wanted to do so, they could have filed a notice of non-stipulation prior to the hearing in accordance with rule 20.2(b). They did not. Petitioners do not explain, and we fail to see, how the reference to a commissioner for "all purposes other than trial," as opposed to some subset of that, such as discovery, renders rule 20.2(b) unconstitutional, where rule 20.2(b) is clear, petitioners are deemed to have been aware of the same, and petitioners had an opportunity to object to the commissioner's assignment.

To the extent petitioners claim they did not have sufficient notice that the regularly scheduled law and motion calendar was heard by the commissioner, the claim is not supported in the record.*fn7 Rule 20.2(b) advises parties that the law and motion calendar may be heard by a commissioner. Moreover, as noted by the trial court, Commissioner Wells "has been the regularly scheduled law and motion bench officer in this court since at least 2005."*fn8 Furthermore, petitioners engaged local counsel who should have been familiar with both the local rules and the fact that Commissioner Wells was the regularly scheduled law and motion bench officer.*fn9

Accordingly, the commissioner properly heard and disposed of Progressive's motion for summary adjudication.

II

Progressive's Motion for Summary Adjudication Was Not Barred By Section 437c

Petitioners next contend that Progressive's motion for summary adjudication on petitioners' punitive damages claim was barred by section 437c, subdivision (f)(2) because Progressive previously filed a motion for summary adjudication on the same claim, which was denied. Progressive responds that petitioners' procedural challenge is without merit because the present motion for summary adjudication "presents a discrete issue" from its prior motion. As we shall explain, section 437c, subdivision (f)(2) does not apply.

Section 437c, subdivision (f)(2) provides:

"A motion for summary adjudication may be made by itself or as an alternative to a motion for summary judgment and shall proceed in all procedural respects as a motion for summary judgment. However, a party may not move for summary judgment based on issues asserted in a prior motion for summary adjudication and denied by the court, unless that party establishes to the satisfaction of the court, newly discovered facts or circumstances or a change of law supporting the issues reasserted in the summary judgment motion." (Italics added.)

Section 437c, subdivision (f)(2) addresses motions for summary judgment made after a summary adjudication motion has been denied by "the court." The use of the article "the" signifies a particular court, namely the court that denied the prior motion for summary adjudication. Had the Legislature intended to preclude successive motions without regard to the court in which the motions were made, it would have used the indefinite article "a." By failing to do so, the Legislature indicated its intent to preclude multiple or successive motions made in the same court.

Assuming for argument's sake that section 437c, subdivision (f)(2) does apply where the prior motion was brought in a different court, it nevertheless is inapplicable here because the federal district court that denied the motion later determined it lacked subject matter jurisdiction over the case thereby rendering its prior ruling void.

In remanding the case to state court, the district court found defendants "had not met their burden of establishing that the amount in controversy at the time of removal was in excess of $75,000." (Italics added.) Accordingly, the district court's prior order denying defendants' motion for summary adjudication on petitioners' punitive damages claim is null and void ab initio. (See People v. Lara (2010) 48 Cal.4th 216, 225.) Accordingly, Progressive was not barred by section 437c, subdivision (f)(2) from bringing its motion for summary adjudication of petitioners' punitive damages claim.

III

Progressive Failed To Meet Its Burden Of Showing That Petitioners' Punitive Damages Claim Had No Merit

In the event we conclude, as we have, that Progressive's motion for summary adjudication was properly before Commissioner Wells and was not barred by section 437c, subdivision (f)(2), petitioners contend the trial court erred in granting summary adjudication on its punitive damages claim because "Progressive failed to meet its burden [of] producing evidence to support its motion in the first instance." We agree.

A defendant is entitled to summary adjudication on "one or more claims for damages" if he establishes "there is no merit to [the claim], as specified in Section 3294 of the Civil Code . . . ." (§ 437c, subd. (f)(1).) A defendant establishes a claim has no merit by showing that an element of the claim cannot be established. (§ 437c, subd. (p)(2).) To do so, a defendant must show that the plaintiff does not possess, and cannot reasonably obtain, needed evidence. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854.) To meet its burden, a defendant must present evidence; he may not simply point out that the plaintiff does not possess, and cannot reasonably obtain, needed evidence. (Id. at pp. 854-855.) "Once the defendant . . . has met that burden, the burden shifts to the plaintiff . . . to show that a triable issue of one or more material facts exists . . . ." (§ 437c, subd. (p)(2).) We review an order granting summary adjudication de novo. (Miller v. Department of Corrections (2005) 36 Cal.4th 446, 453.)

To recover punitive damages, a plaintiff must prove by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice. (Civ. Code, § 3294, subd. (a).) "[P]unitive damages cannot be awarded against a corporation for conduct of an employee unless a corporate officer, director, or managing agent had knowledge of the employee's unfitness and disregarded the rights of others (or authorized/ratified the conduct or committed the act of oppression)." (Myers v. Trendwest Resorts, Inc. (2007) 148 Cal.App.4th 1403, 1436; Civ. Code, § 3294, subd. (b).)

Here, Progressive argued petitioners' punitive damages claim had no merit because petitioners had "no evidence of conduct, knowledge or ratification by a Progressive 'managing agent.'" More particularly, Progressive claimed that even assuming Jackson and Dobbins' conduct was malicious or oppressive, "neither Jackson nor Dobbins [were] 'managing agents' of Progressive," and petitioners failed to "offer any evidence that there was any knowledge or ratification of this alleged conduct by anyone else at Progressive." The commissioner agreed, finding petitioners "failed to present any evidence that a managing agent of [Progressive] ratified, or even knew of, the alleged oppressive or malicious conduct by Investigator Jackson or Claims Adjuster Dobbins." For purposes of the instant petition, petitioners do not dispute that Dobbins and Jackson were not managing agents of Progressive. Rather, they contend that even if Jackson and Dobbins were not managing agents of Progressive, defendants failed to meet their burden of establishing that petitioners cannot show a managing agent of Progressive was aware of or ratified Jackson or Dobbins' conduct.

In support of its claim that petitioners cannot show that a managing agent at Progressive knew of or ratified Jackson and Dobbins' malicious or oppressive conduct, Progressive relied solely on petitioners' deposition testimony. That testimony indicated that petitioners personally had no reason to believe that anyone at Progressive was aware of Jackson or Dobbins' conduct. Where, as here, there was no reason to believe that petitioners were present when Dobbins or Jackson's conduct and tactics were discussed with or otherwise disclosed to managing agents at Progressive, such evidence was insufficient to shift the burden to petitioners to establish a triable issue of material fact. (See, e.g., Hagen v. Hickenbottom (1995) 41 Cal.App.4th 168, 187 (Hagen); Villa v. McFerren (1995) 35 Cal.App.4th 733, 749.) Hagen is particularly instructive here.

In that case, the grandchildren of the decedent sued to set aside the decedent's trust based on allegations that the decedent's cousin (Hickenbottom) had exerted undue influence over the decedent. (Hagen, supra, 41 Cal.App.4th at p. 172.) Hickenbottom moved for summary judgment on various grounds, including that the grandchildren's theories were barred by a privilege to speak the truth. (Id. at p. 174.) The trial court adopted Hickenbottom's argument and granted summary judgment against petitioners as to all causes of action based upon the defense of truth. (Id. a p. 179.) On appeal, Hickenbottom refined her argument, claiming "that in support of her motion for summary judgment she had sufficiently shown both an 'affirmative defense of truth' and (in light of Union Bank v. Superior Court (1995) 31 Cal.App.4th 573 [37 Cal.Rptr.2d 653]) that the grandchildren had 'offered no evidence whatsoever that [Hickenbottom] did or said anything wrong . . . .'" (Ibid.) The court of appeal reversed, concluding that "Hickenbottom neither demonstrated the legal validity of a complete affirmative 'defense of truth' in this case nor made a showing sufficient . . . to require the grandchildren, as plaintiffs, to put on a prima facie factual case at the summary judgment stage." (Ibid.) The court noted that in Union Bank, the court held that a summary judgment motion could be granted when a moving defendant relies on a plaintiff's factually devoid interrogatory responses. (Id. at p. 185.) In distinguishing Union Bank, the court observed that there, the defendant "requested admissions and, by written interrogatories, called upon the plaintiffs to substantiate any refusal to admit by stating all facts on which the refusal was based. The plaintiffs presumably had no less than the full 30 days provided by statute (Code Civ. Proc., § 2030, subd. (h)) in which to file written responses to these interrogatories, a period which should have been ample to permit a response 'as complete and straightforward as the information reasonably available to the responding party permits' as required by the discovery act." (Id. at p. 186.) In contrast, Hickenbottom relied on the grandchildren's own deposition testimony in support of her argument that the appellant grandson "'has offered no evidence whatsoever that [Hickenbottom] did or said anything wrong.'" (Id. at p. 185.) The court explained: "Any arguable inability the [grandchildren] might have experienced, at deposition, to provide direct evidence of undue influence would have been explicable . . . inasmuch as the plaintiffs almost certainly would not have been present. In this light it is notable, given the probability that Hickenbottom is the only surviving percipient witness to much of what she did or did not do to influence the decedent's estate-planning decisions, that Hickenbottom submitted no declaration of her own. . . . And Hickenbottom . . . for whatever reason apparently did not employ discovery tactics--such as legitimately founded state-all-facts interrogatories--more likely in these circumstances to lead to a well-founded conclusion that the grandchildren could not establish their case." (Id. at p. 187.)

The same is true here. Progressive relied solely on petitioners' deposition testimony that they personally had no reason to believe that anyone at Progressive knew of Jackson or Dobbins' oppressive conduct. However, there was no reason to believe that petitioners would have been privy to such information. In particular, there was no reason to believe petitioners would have been present when Dobbins or Jackson's tactics in general or their handling of petitioners' claim in particular were discussed with or otherwise disclosed to managing agents of Progressive such as Branch Claims Manager Eric Schnitzler or Regional Claims Manager Mindy Sauer. Moreover, Progressive failed to submit the declarations of Schnitzler, Sauer or any of its other employees who were in a position to know whether managing agents of Progressive knew of, participated in, or ratified Dobbins or Jackson's conduct.

Accordingly, Progressive failed to meets its burden of proof as the moving party to show petitioners' punitive damages claim had no merit, and thus, the trial court erred in granting summary adjudication on that issue.

DISPOSITION

The petition is granted. Let a peremptory writ issue directing the respondent court to vacate its order in case No. SCV-18066 granting Progressive's motion for summary adjudication on petitioners' punitive damages claim. The previously issued stay is vacated upon finality of this opinion. Petitioners shall recover their costs. (Cal. Rules of Court, rule 8.493(a)(1)(A)).)

We concur: ROBIE , J. MAURO , J.


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