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Zurich American Insurance Company of Illinois v. Accuire, LLC

United States District Court, E.D. California

October 21, 2019

ZURICH AMERICAN INSURANCE COMPANY OF ILLINOIS, Plaintiff,
v.
ACCUIRE, LLC, and DOES 1 through 100, inclusive, Defendants.

          ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

          JOHN A. MENDEZ, UNITED STATES DISTRICT JUDGE

         On July 28, 2018, Zurich American Insurance Company of Illinois (“Plaintiff” or “Zurich”) filed suit against Accuire, LLC. (“Defendant” or “Accuire”), alleging breach of contract. Compl., ECF 1. Two months later, Plaintiff filed a Motion for Summary Judgment. Mot. Summ. J. (“Mot.”), ECF No. 14. Defendant failed to timely file an opposition to this motion in accordance with Local Rule 230(c). Because Plaintiff established that no genuine issues of material fact exist, the Court GRANTS Plaintiff's Motion for Summary Judgment.[1]

         I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

         Plaintiff issued a workers' compensation insurance policy to Defendant. Comp. ¶ 7. The initial premium charged for the policy was an estimate subject to adjustment based on a payroll and renumeration audit to be performed after the conclusion of the policy period. Compl. ¶ 7. Once the policy period ended, Plaintiff completed the audit and sent the results to Defendant along with demand for payment of an additional premium totaling $491, 614. Compl. ¶ 9. Defendant has not paid any portion of the amount owed. Compl. ¶ 9.

         Plaintiff filed suit against Defendant alleging that Defendant breached their written insurance contract by failing to pay the additional premium of $491, 614 owed after the payroll audit, as required by the terms of the contract. Mot. at 6. Defendant asserts the following three defenses:

1. Plaintiff's managing general agent orally promised Defendant's broker that the rates used in the audit would be the rates that were in effect at an earlier time;
2. Neither Defendant's insurance broker nor Defendant's principals read the written insurance contract that included the rates to be charged for the policy prior to accepting the written insurance contract; and
3. Defendant was improperly charged a higher than originally quoted experience modification rating when the additional premium was calculated after the payroll audit.

         Mot. at 6.

         II. OPINION

         A. Legal Standard

         A Court must grant a party's motion for summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law.” Fed. R. Civ. Proc. 56(a). The movant bears the initial burden of “informing the district court of the basis for its motion and identifying [the documents] which is believes demonstrate the absence of a genuine issue of a material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A fact is material if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Once the movant makes this initial showing, the burden rests upon the nonmoving party to “set forth specific facts showing that there is a genuine issue for trial.” Id. An issue of fact is genuine if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

         B. Analysis

         As Plaintiff establishes in its Motion for Summary Judgment, Accuire's defenses are without merit and thus, Plaintiff in entitled to judgment as a matter of law. With regard to the first defense, the written contract, by its own terms, makes clear that it was a fully integrated agreement. Exh. B to Aff. of Sheryl Totzke, ECF No. 14-4, at 60 (“. . . [T]his policy, including all endorsements forming a part thereof, constitutes the entire contract of insurance”). And under California law, the unambiguous terms of a fully integrated agreement make alleged prior statements or representations regarding different or contradictory terms inadmissible parol evidence. Masterson v. Sine,68 Cal.2d 222, ...


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