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Douglas J. Campion v. Old Republic Home Protection

March 23, 2012

DOUGLAS J. CAMPION,
PLAINTIFF,
v.
OLD REPUBLIC HOME PROTECTION
COMPANY, INC.,
DEFENDANT.



The opinion of the court was delivered by: Jan M. AdlerU.S. Magistrate Judge

ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT [DOC. NO. 79] AND DENYING PLAINTIFF'S MOTION FOR LEAVE TO FILE THE FIRST AMENDED CLASS ACTION COMPLAINT [DOC. NO. 89]

Two motions are currently pending before the Court. The first to be filed was Defendant Old Republic Home Protection Company, Inc.'s Motion for Summary Judgment on Claim for Violation of Consumer Legal Remedies Act ("CLRA") and on all Claims as to Injunctive Relief, which was filed on October 28, 2011. [Doc. No. 79.] Plaintiff Douglas J. Campion filed an opposition brief on January 6, 2012, and Defendant's reply was filed on January 13, 2012. [Doc. No. 85 & 86.]

Thereafter, on January 27, 2012, Plaintiff filed a Motion for Leave to File the First Amended Class Action Complaint. [Doc. No. 89.] Defendant opposed Plaintiff's motion on February 15, 2012, and Plaintiff's reply brief was filed on February 22, 2012. [Doc. No. 90 & 91.] A hearing was held on both motions on February 29, 2012. Francis A. Bottini, Esq. appeared on behalf of Plaintiff and Jay N. Varon, Esq. and Andrew B. Serwin, Esq. appeared on behalf of Defendant. After due consideration of the parties' briefs and oral arguments, and as set forth below, the Court GRANTS Defendant's motion for summary judgment and DENIES Plaintiff's motion for leave to file an amended complaint.

I. FACTUAL BACKGROUND

Defendant sells home warranty plans to homeowners. Complaint, ¶ 25. Plaintiff's Complaint alleges how Defendant's home warranty plans work and the plan Plaintiff purchased from Defendant (the "Plan") is incorporated by reference. Id. at ¶ 9, Ex. B. Based on the Complaint and the Plan, the following facts are undisputed. In essence, Defendant's home warranty plans provide that covered systems and appliances that become inoperable during the contract term due to normal wear and tear will be repaired or replaced at Defendant's expense, or the plan holder will be provided with payment in lieu of repair or replacement. Id. at ¶ 25, Ex. B. Defendant does not repair or replace covered systems itself, but rather maintains a network of independent contractors that it can dispatch to a plan holder's home to perform the service. Id. at ¶¶ 27-28, Ex. B. The decision to repair or replace the covered systems, as opposed to providing the plan holder with payment, rests solely with Defendant. Id., Ex. B.

Plaintiff purchased a plan from Defendant that was effective from April 26, 2007 to April 26, 2008. Id. at ¶ 9, Ex. B. In February 2008, he made a warranty claim regarding his garbage disposal. Id. at ¶ 34. After dispatching a contractor to Plaintiff's home to inspect the unit, Defendant informed Plaintiff it was denying his claim on the basis the garbage disposal was improperly installed. Decl. of Tammy H. Boggs in Supp. of Def. Old Republic Company, Inc.'s Mot. for Summ. J. on Claim for Violation of CLRA and on all Claims for Injunctive Relief ("Boggs Decl."), Ex. B (Transcript of Deposition of Douglas J. Campion ("Campion Depo.") pp. 30-36, ln. 11-12).*fn1 Plaintiff did not renew his home warranty plan when it expired. Id. at p. 27, ln. 3-15. He does not currently have a home warranty plan with Defendant and does not intend to purchase another Id. at p. 27, ln. 8-15; p. 65, ln. 12-19.

II. PROCEDURAL HISTORY

Plaintiff filed his Complaint on March 6, 2009. In it, he alleges on behalf of himself and the putative class members, Defendant fraudulently induced them to purchase warranty plans by misrepresenting that it would pay the cost of covered items under the home warranty plans when, in fact, it maintained policies, procedures and economic incentives to deny legitimate claims or to shift the majority of the costs for repair or replacement work to the policyholder. Complaint, ¶ 51 and 71. He sought to represent a class defined as:

All persons and entities in the United States who, during the period from approximately March 6, 2003, through the present (the "Class Period"), made a claim under a home-warranty plan obtained from Defendant Old Republic Home Protection Company, Inc. Excluded from the class are defendants and their parents, subsidiaries, affiliates, all governmental entities, and co-conspirators.

Id at ¶ 15. The causes of action asserted include Breach of Contract, Breach of Implied Covenant of Good Faith and Fair Dealing, Violation of Cal. Civ. Code § 1790 (CLRA), Violation of Cal. Bus. & Prof. Code § 17200 (Unfair Competition Law ("UCL")), Violation of Cal. Civ. Code § 1710(1) (Intentional Misrepresentation & Concealment), and Violation of Cal. Civ. Code § 1710(4) (False Promise).

On September 19, 2010, following a Case Management Conference, the Court entered a scheduling order, setting a deadline for any motions to amend the pleadings or add parties of November 9, 2009, and a deadline for the filing of Plaintiff's class certification motion of April 16, 2010. [Doc. No. 17.] The deadline for the filing of the class certification motion was later continued to May 28, 2010, per the parties' agreement. [Doc. No. 26.] On May 28, 2010, Plaintiff moved for leave to amend his complaint [Doc. No. 36] and also to certify a class under Fed. R. Civ. P. 23(b)(2) and (b)(3) [Doc. No. 30]. On July 17, 2010, the Court denied the motion for leave to amend, finding that even if Plaintiff had established good cause to afford him leave from the scheduling order deadline, as required by Fed. R. Civ. P. 16(b), the proposed amendment would be futile under Fed. R. Civ. P. 15(a). [Doc. No. 42.] After the conclusion of briefing on the motion for class certification, on January 6, 2011, the Court also denied that motion, finding certification was not appropriate under either Rule 23(b)(2) or (b)(3). [Doc. No. 56.] Plaintiff then filed a Motion for Reconsideration, or in the Alternative, Request for Clarification, of the Court's denial of class certification, which was denied on May 20, 2012. [Doc. No. 58 & 64.]

III. DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

A. Legal Standard

Fed. R. Civ. P. 56(a) permits a party to seek summary judgment on all or part of a claim or defense. Summary judgment is proper where the pleadings and materials demonstrate "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A material issue of fact is a question that a trier of fact must answer to determine the rights of the parties under the applicable substantive Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. The moving party bears "the initial responsibility of informing the district court of the basis for its motion." Celotex, 477 U.S. at 323. To satisfy this burden, the movant must demonstrate that no genuine issue of material fact exists for trial.

Id. at 322. Where the moving party does not have the ultimate burden of persuasion at trial, it may carry its initial burden of production in one of two ways. "The moving party may produce evidence negating an essential element of the nonmoving party's case, or, after suitable discovery, the moving party may show that the nonmoving party does not have enough evidence of an essential element of its claim or defense to carry its ultimate burden of persuasion at trial." Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1106 (9th Cir. 2000). To withstand a motion for summary judgment, the non-movant must then show that there are genuine factual issues which can only be resolved by the trier of fact. Reese v. Jefferson Sch. Dist. No. 14J, 208 F.3d 736, 738 (9th Cir. 2000). A party asserting that a fact is genuinely disputed cannot rely solely on its pleadings, but must support that assertion with affidavits, depositions, or answers to interrogatories. Fed. R. Civ. P. 56(c)(1); see also Celotex, 477 U.S. at 324. The court must review the record as a whole and draw all reasonable inferences in favor of the non-moving party. Hernandez v. Spacelabs Med. Inc., 343 F.3d 1107, 1112 (9th Cir. 2003). To avoid summary judgment, the non-moving party need not produce evidence in a form that would necessarily be admissible at trial. Celotex, 477 U.S. at 324. Unsupported conjecture or conclusory statements, however, are insufficient to defeat summary judgment. See Surrell v. Cal. Water Serv. Co., 518 F.3d 1097, 1103 (9th Cir. 2008); Hernandez, 343 F.3d at 1112. The standard applied to a motion seeking partial summary judgment is identical to the standard applied to a motion seeking summary judgment with respect to the entire case. Freescale Semiconductor, Inc. v. ChipMOS Tech., Inc., 2011 U.S. Dist. LEXIS 100978 *4 (N.D. Cal. Sept. 8, 2011)

B. The CLRA Does Not Cover Defendant's Home Warranty Plans.

Plaintiff's third cause of action alleges Defendant's conduct violates the CLRA, which prohibits specific unfair and deceptive acts and practices in a "transaction intended to result or which results in the sale or lease of goods or services to any consumer." Complaint, ¶¶ 48-56; Cal. Civ. Code § 1770. Defendant moves for summary judgment as to this claim, contending its home warranty plans are analogous to insurance, relying on Fairbanks v. Superior Court, 46 Cal. 4th 56, 61-62 (2009), in which the California Supreme Court determined life insurance is neither a good nor a service and, therefore, not covered by the CLRA. Mem. of P.&A. in Supp. of Mot. for Summ. J. ("Mot. for Summ. J."), pp. 6--9. ...


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