California Court of Appeals, First District, Fourth Division
WARWICK CALIFORNIA CORP. et al., Plaintiffs and Respondents,
APPLIED UNDERWRITERS, INC., et al., Defendants and Appellants.
Cal.Rptr.3d 323] City and County of San Francisco Superior
Court, Hon. Richard B. Ulmer, Jr., Judge. (San Francisco City
& County Super. Ct. No. CGC-16-551614)
for Appellants: Hinshaw & Culbertson LLP; Spencer Y. Kook,
Los Angeles, Travis Wall, San Francisco, Kent R. Keller, Los
for Respondents: Larry J. Lichtenegger, Carmel, and
Roxborough, Pomerance, Nye & Adreani; Nicholas P. Roxborough,
Woodland Hills, Joseph Christopher Gjonola
case arises out of a dispute over payment for workers
compensation insurance. Plaintiffs are six companies
affiliated with the Warwick Hotel chain (collectively,
Warwick). Defendants include several companies affiliated
with Applied Underwriters, Inc. (collectively, Applied). The
trial court stayed the action based on inconvenient forum as
to all plaintiffs with the exception of two Warwick companies
that are incorporated in California (the California
plaintiffs). In 2018, a court trial was held to hear the
California plaintiffs claims and Applieds cross-claim for
contract. The court found that neither side proved the
damages elements of their [257 Cal.Rptr.3d 324] claims.
Applied filed a notice of appeal from the courts statement
of decision (SOD), which is not a judgment or an appealable
order. Accordingly, we will dismiss this appeal.
Warwicks operative first amended complaint was filed in May
2016. In addition to the Applied defendants, Warwick sued
Willis of New York, Inc., which is an insurance brokerage
firm, and 50 Doe defendants. Warwick alleged nine causes of
action against various combinations of defendants, seeking
damages and equitable relief based on theories of breach of
contract, fraud and unfair business practices. As support for
these claims, Warwick alleged the following facts: Warwick
used Willis as their broker to procure workers compensation
insurance. In June 2013, Willis presented Warwick with a
quote for purchasing insurance from the Applied defendants.
Defendants made representations to Warwick about the nature
of the insurance program that was being offered to Warwick.
Based on those representations, Warwick entered into a
contract to purchase workers compensation insurance for a
three-year period, from June 14, 2013, through June 14, 2016.
One policy, issued by defendant California Insurance Company,
covered Warwick employees in California and Texas. Another
policy, issued by a different Applied defendant, covered
employees in New York and Colorado.
According to the complaint, on June 19, 2013, five days after
Warwicks insurance coverage went into effect, Applied
presented Warwick with a "Reinsurance Participation
Agreement" (RPA), which constituted an adhesion contract
and which Warwick had no choice but to accept. Thereafter,
Applied used new criteria disclosed for the first time in the
RPA to adjust claims made against the Warwick policies in a
way that significantly increased costs to Warwick.
Furthermore, Applied refused to correct the inflated invoices
and attempted to coerce Warwick to admit that the incorrect
invoices were accurate by threatening to deprive Warwick of
insurance coverage it was required by law to provide to its
employees and by charging "enormous and unconscionable
cancellation fees under the RPA."
2016, Applied filed a motion to stay this action on the
ground of inconvenient forum under Code of Civil Procedure,
section 418.10 (section 418.10). The motion was based on a
forum selection clause in the RPA, which required that claims
relating to the RPA be filed in Nebraska, where defendant
Applied Underwriters, Inc. was incorporated. ...