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Bita Trading, Inc. v. Nationwide Mutual Insurance Co.

United States District Court, S.D. California

February 3, 2015

BITA TRADING, INC., Plaintiff,


JEFFREY T. MILLER, District Judge.

Defendant Nationwide Mutual Insurance Company ("Nationwide"), also erroneously sued as Allied Insurance, moves for summary judgment on grounds that Plaintiff's claims are barred by the theft and entrustment provisions in the Commercial Insurance Policy issued to Plaintiff Bita Trading, Inc. ("Bita"). Bita opposes the Motion for Summary Judgment ("Motion"). For the reasons set forth below, the court grants summary judgment in favor of Nationwide and against Bita and instructs the Clerk of Court to close the file.


On May 24, 2013, Bita commenced this action in the California Superior Court, County of San Diego, by filing a form complaint alleging a single cause of action for breach of an insurance contract. On July 2, 2013 Nationwide removed the action to this court based upon diversity jurisdiction. (Ct. Dkt. 1).

In this insurance coverage action, Bita originally sought coverage under two different insurance policies issued by Nationwide. This first policy, issued to Sorrento Mesa Hand Car Wash & Spa, Inc. ("Sorrento" and the "Sorrento Policy"), as set forth in this court's January 6, 2014 Order Denying Plaintiff's Motion for Partial Summary Judgment and Granting Defendant's Motion for Summary Judgment, provided coverage to Sorrento under the Property Form at issue, and to both Sorrento and Bita under the Liability Form.[1] (Ct. Dkt. 25). As Bita's claims arose solely under the Property Form, and not the Liability Form, the court granted partial summary judgment in favor of Nationwide and against Bita.

Bita's claims arise from the following generally described conduct. Bita owns real property located on Mira Mesa Boulevard in San Diego, California. Effective August 1, 2005, Bita entered into a 35-year Ground Lease with Sorrento for the construction and operation of a car wash and related facilities. The car wash was built in 2008 and operated through early 2012. Bita and Sorrento became involved in a dispute over the property. On May 25, 2012, the Superior Court of San Diego County terminated the lease, awarded monetary relief to Bita (in the amount of $812, 873), and restored possession to Bita.[2] Bita asserts that Sorrento caused damage to the property in the amount of $750, 000. (Ct. Dkt. 14-6; Sheena Decl. ΒΆ7). Bita also represents that only the car wash portion of the business opened on June 1, 2013, and that the remaining portions of the operation, consisting of a convenience store, office and oil change facility, have not been fully repaired and have not been fully placed in service.

Bita's claims under the Bita Commercial Policy, Nationwide policy No. ACP CPP XXXXXXXXXX, arise from damages to the property first discovered by Bita's property managers, Brian Crepeau and Michele Torres, on June 29, 2012. Upon unlocking and entering the building, the property managers discovered that fixtures and property had been stolen and parts of the building damaged. As described in the San Diego Police Department crime/incident report:

Building fixtures had been completely ripped out or off of the building's exterior and interior. Electric wiring, metal piping, carpet, and ceiling covers were missing. Three large rooftop air-conditioning units were removed and stolen. Lighting fixtures, both inside and outside the building were also stolen. Thousands of dollars in damage was done to the building.

(Statement of Undisputed Material Fact ("UMF") Nos. 5, 7). There were no signs of forced entry, no windows or doors were broken, and the Deputy Sheriff had to gain access to the building by unlocking the door with a key provided by Sorrento. (UMF Nos. 8-10).

Michele Torres reported the crime to the San Diego Police Department and a report was prepared by Officer Bernard. Officer Bernard concluded that a burglary and concurrent vandalism had occurred. Nobody was ever prosecuted for the crime. (UMF 11, 12).

On October 22, 2012, Bita submitted a sworn statement for a claim in the amount of $731, 498 for a loss due to theft and vandalism. (UMF 4). The amount of the claim included replacing the stolen items and repairing the damage to the building caused by the removal of the items (including the removal of some of the car washing equipment). On December 14, 2012, Nationwide denied the claim for that portion of the loss caused by theft and/or dishonest acts of persons to whom the property was entrusted. Nationwide did provide coverage for damage to the oil storage tanks on the property as it considered such damage caused by vandalism, not related to the theft, as covered within the Business Personal Property provision. (UMF 35).

By means of the present summary judgment motion, Nationwide argues that the evidentiary record demonstrates that Bita's claims are barred by the theft and entrustment provisions in the Commercial Policy. Bita opposes the motion.


Legal Standards

Motion for Summary Judgment Standards

A motion for summary judgment shall be granted where "there is no genuine issue as to any material fact and... the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); Prison Legal News v. Lehman, 397 F.3d 692, 698 (9th Cir. 2005). The moving party bears the initial burden of informing the court of the basis for its motion and identifying those portions of the file which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). There is "no express or implied requirement in Rule 56 that the moving party support its motion with affidavits or other similar materials negating the opponent's claim." Id . (emphasis in original). The opposing party cannot rest on the mere allegations or denials of a pleading, but must "go beyond the pleadings and by [the party's] own affidavits, or by the depositions, answers to interrogatories, and admissions on file' designate specific facts showing that there is a genuine issue for trial.'" Id. at 324 (citation omitted). The opposing party also may not rely solely on conclusory allegations unsupported by factual data. Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989).

The court must examine the evidence in the light most favorable to the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962). Any doubt as to the existence of any issue of material fact requires denial of the motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). On a motion for summary judgment, when "the moving party bears the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence were uncontroverted at trial.'" Houghton v. South, 965 F.2d 1532, 1536 (9th Cir. 1992) (emphasis in original) (quoting International Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1264-65 (5th Cir. 1991), cert. denied, 502 U.S. 1059 (1992)).

General Insurance Law Principles

Ordinary rules of contract interpretation apply to insurance contracts. "The fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties. If the contractual language is clear and explicit, it governs." Bank of West v. Superior Court (Industrial Indemnity Co.), 2 Cal.4th 1254 (1992). Where exclusions are clear, plain, and conspicuous, ...

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