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Thomas Medeiros v. George Hills Company

January 14, 2013


(Super. Ct. No. 34-2010-00070076-CU-FR-GDS)

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

Medeiros v. George Hills Co. CA3


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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

The trial court sustained a demurrer to the previous pleading of plaintiff Thomas Medeiros with leave to amend. It also granted a motion to strike the prayer for punitive damages without leave to amend. Medeiros then filed the present pleading, which again seeks damages for the alleged negligent or intentional misrepresentation of defendant George Hills Company, Inc. (GHC)--the claims adjuster for the City of Palo Alto (the City)--in its processing of his tort claim against the City for malicious prosecution, asserting GHC falsely informed him that his claim was untimely. The trial court again sustained the demurrer of GHC, finding GHC's assertion that the claim was not timely was true in light of the facts contained in the claim form, which had omitted the timely accrual date of Medeiros's cause of action. It denied leave to amend. Medeiros filed a timely notice of appeal from the ensuing judgment of dismissal.

Medeiros contends we must reverse the trial court's ruling, because it implicitly reflects a factual determination of the scienter of GHC in making the representation (which Medeiros had alleged was either intentionally false or not made with a reasonable belief in its truth because GHC's expertise in processing claims for public entities should have led it to the fact making the claim timely). With respect to the reasonability of GHC's belief that his claim was untimely, Medeiros also argues that GHC had an independent obligation to learn of the timely accrual date of his cause of action against the City for malicious prosecution, even though he failed to include this fact in his claim. Finally, Medeiros asserts that it was error to strike his prayer for punitive damages.*fn1 We shall reverse the judgment of dismissal in part.


We assume the truth of the well-pleaded factual averments in the pleading at issue. (Fogarty v. City of Chico (2007) 148 Cal.App.4th 537, 540.) We determine their legal sufficiency de novo. (Id. at p. 542.)

The pertinent allegations are few. GHC has its principal place of business in Sacramento County. It is a licensed insurance adjuster employing those with specialized training in claims against public entities. Among its clients is the City.

In January 2008, Medeiros filed a claim with the City on one of the City's standard claim forms.*fn2 GHC responded on behalf of the City on February 7, 2008, with a letter*fn3 that enclosed a Notice of Late Claim from the City.

Medeiros alleged that GHC made a false representation in telling him that his claim was untimely. The Court of Appeal, Sixth Appellate District, had reversed his judgment of conviction in whole on August 1, 2007, and issued its remittitur on October 2, 2007. (People v. Medeiros (Aug. 1, 2007, H028934) [nonpub. opn.].) Medeiros asserted his cause of action accordingly did not in fact accrue until the latter date, making his claim timely. (White v. Lieberman (2002) 103 Cal.App.4th 210, 217 ["in a reversal" the limitations period for malicious prosecution "first begins running on the issuance of the remittitur"].) However, he relied on the misrepresentation and did not further pursue his claim. This was justifiable because he had only a high school education, he believed GHC was an independent entity that would review his claim fully and fairly, and GHC had failed to include the admonition required by statute (Gov. Code, § 911.3, subd. (a))*fn4 in its letter or the Notice of Late Claim that he should seek the advice of counsel immediately. He stated alternate counts, which he inaccurately denominated "causes of action" (Cullen v. Corwin (2012) 206 Cal.App.4th 1074, 1076, fn. 1 [commenting on the distinction between the two]), of intentional and negligent misrepresentation, both of which are species of fraud (Oakland Raiders v. Oakland-Alameda County Coliseum, Inc. (2006) 144 Cal.App.4th 1175, 1184). In the former, he alleged GHC "knew at the time of making the representation[] . . . that [it was] false because of GHC's superior knowledge in the field of claims administration." In the latter, he asserted GHC "had no reasonable ground" for believing it true for the same reason.

In ruling on GHC's first demurrer, the trial court concluded that the January 2008 claim form on its face had failed to include any facts to show that the claim of false charges was timely, and therefore a representation that the claim was untimely "cannot be considered false." Citing the requirement of factual specificity for pleading an action for fraud (see 5 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 711, p. 127 (Witkin)), the trial court also ruled the complaint alleged the scienter element (id., §§ 726, 727, pp. 142-143) in too conclusory a manner. Because this was the first challenge to the adequacy of the pleading, the court granted leave to amend.

In the demurrer at issue, the trial court first ruled that the claim form had been the basis for the prior ruling, and therefore Medeiros could not simply omit it when amending his pleading. Instead, the court could properly consider it in conjunction with the present pleading. (Medeiros does not challenge this aspect of the ruling.) There not being any other changes in the pleading, the court again ruled that GHC's assertion of untimeliness was not a misrepresentation of the facts as they appeared in the claim form. The trial court raised but did not explicitly address "[p]laintiff's theory . . . that Defendant knew or should have known that his claim against the City was ...

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