Kari Gerlach, et al. v. AAA Insurance Company of Southern California, et al

Case Number

24CV02179

Case Type

Hearing Date / Time

Mon, 03/03/2025 - 10:00

Nature of Proceedings

Defendant Interinsurance Exchange of the Automobile Club’s Demurrer To Plaintiffs’ Complaint

Tentative Ruling

Kari Gerlach, et al. v. AAA Insurance Company of Southern California, et al.                                                                                     

Case No. 24CV02179

           

Hearing Date: March 3, 2025                                     

HEARING:              Defendant Interinsurance Exchange of the Automobile Club’s Demurrer To Plaintiffs’ Complaint

                                                           

ATTORNEYS:        For Plaintiffs Kari Gerlach and James Gerlach: Steven C. Gambardella

                             For Defendant AAA Insurance Company of Southern California: No Appearance

                                    For Defendant Interinsurance Exchange of the Automobile Club: Tod M. Castronovo

TENTATIVE RULING:

The demurrer of Interinsurance Exchange of the Automobile Club is overruled. Interinsurance Exchange of the Automobile Club shall file and serve its answer to the complaint no later than March 17, 2025.

Background: 

This action commenced on April 18, 2024, by the filing of the complaint by plaintiffs Kari Gerlach and James Gerlach (collectively “plaintiffs”) against defendants AAA Insurance Company of Southern California (“AAA”) and Interinsurance Exchange of the Automobile Club (“the Exchange”) for: (1) Breach of Contract, (2) Breach of the Implied Covenant of Good Faith and Fair Dealing, (3) Indemnification, and (4) Declaratory Relief. [Note: While the caption of the complaint is listed as these four causes of action, the body of the complaint only sets forth Breach of Contract, Breach of the Implied Covenant of Good Faith and Fair Dealing, and Declaratory Relief.)

As alleged in the complaint:

“Commencing on or about January 6, 2020 through and including January 6, 2021, [] Defendants AAA Insurance Company of Southern California and the Interinsurance Exchange of the Automobile Club and DOES 1 through 50, for valuable consideration, issued a contract policy of insurance and a Declarations page for insurance on the PROPERTY owned by Plaintiffs Kari Gerlach and James Gerlach, and managed by their limited liability company, Beach Group, LLC. The PROPERTY is located at 3349 Cliff Drive, Santa Barbara, California 93109. (Compl., ¶ 6 & Exhs. 1, 2.) “The POLICY provided for, among other things, the defense and indemnification of the Plaintiffs in the event claims were made for bodily injury to persons on the premises of the PROPERTY.” (Ibid.)

On January 21, 2021, an action was brought against Beach Group which alleged bodily injury to a guest on the premises. (Compl., ¶ 8.) Plaintiffs timely notified defendants that the action had been filed and served. (Id. at ¶ 9.) In breach of the contractual obligations owed, defendants failed to accept plaintiffs’ tender of defense and failed to defend and indemnify plaintiffs. (Id. at ¶ 10.) The action was dismissed without payment of any money. (Id. at ¶ 11.)

Plaintiffs have incurred economic damages, by way of attorneys’ fees, litigation expenses, expert witness fees, and costs in defending the lawsuit. (Compl., ¶ 14.)

The Exchange now demurs to the first, second, and third causes of action in plaintiffs’ complaint.

Plaintiffs oppose the demurrer.

Analysis:

          Judicial Notice

“When the ground of demurrer is based on a matter of which the court may take judicial notice pursuant to Section 452 or 453 of the Evidence Code, such matter shall be specified in the demurrer, or in the supporting points and authorities for the purpose of invoking such notice, except as the court may otherwise permit.” (Code Civ. Proc., § 430.70.)

The Exchange lists, in the caption of the demurrer, that they are requesting judicial notice. They do not provide a separate request or specify under what theory they are seeking the court to judicially notice any document. Although the Exchange does not specify any document that it is requesting the court judicially notice, it is presumed that the Exchange is requesting the court to take judicial notice of the complaint in Case No. 21CV00239, as it is attached to the demurrer as Exhibit A.

“ ‘Judicial notice may not be taken of any matter unless authorized or required by law.’ ” (Evid. Code, § 450.) Matters that are subject to judicial notice are listed in Evidence Code sections 451 and 452. A matter ordinarily is subject to judicial notice only if the matter is reasonably beyond dispute. [Citation.] Although the existence of a document may be judicially noticeable, the truth of statements contained in the document and its proper interpretation are not subject to judicial notice if those matters are reasonably disputable. (StorMedia, Inc. v. Superior Court (1999) 20 Cal.4th 449, 457, fn. 9.) StorMedia stated: “ ‘In ruling on a demurrer, a court may consider facts of which it has taken judicial notice. (Code Civ. Proc., § 430.30, subd. (a).) This includes the existence of a document. When judicial notice is taken of a document, however, the truthfulness and proper interpretation of the document are disputable. [Citation.]’ ” (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113 (Fremont).)

“The hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose truthfulness or proper interpretation are disputable.” (Fremont, supra, at p. 114.)

“In short, a court cannot by means of judicial notice convert a demurrer into an incomplete evidentiary hearing in which the demurring party can present documentary evidence and the opposing party is bound by what that evidence appears to show.” (Fremont, supra, at p. 115.)

Records of the courts of any State may be judicially noticed pursuant to Evidence Code section 452, subdivision (d). Because the Exchange did not “[f]urnish[] the court with sufficient information to enable it to take judicial notice of the matter” (Evid. Code, § 453, subd. (b)), judicial notice is permissive rather than mandatory.

The court declines to take judicial notice of the complaint filed in Case No. 21CV00239. Even if the court were to take judicial notice of the document, it would not assist the Exchange because the proper interpretation of the complaint in that matter is disputable.

          Demurrer

“The rules by which the sufficiency of a complaint is tested against a general demurrer are well settled. We not only treat the demurrer as admitting all material facts properly pleaded, but also give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. (Speegle v. Board of Fire Underwriters (1946) 29 Cal.2d 34, 42.)’ (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38.)

“To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) “A demurrer is simply not the appropriate procedure for determining the truth of disputed facts.” (Ramsden v. Western Union (1977) 71 Cal.App.3d 873, 879.)

“What is important is that the complaint as a whole contains sufficient facts to apprise the defendant of the basis upon which the plaintiff is seeking relief.” (Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6.)

“The demurrer tests the pleading alone and not the evidence or other extrinsic matters which do not appear on the face of the pleading or cannot be properly inferred from the factual allegations of the complaint.” (Executive Landscape Corp. v. San Vicente Country Villas IV Assn. (1983) 145 Cal.App.3d 496, 499.)

“If the complaint states a cause of action under any theory, regardless of the title under which the factual basis for relief is stated, that aspect of the complaint is good against a demurrer. “ ‘[W]e are not limited to plaintiffs’ theory of recovery in testing the sufficiency of their complaint against a demurrer, but instead must determine if the factual allegations of the complaint are adequate to state a cause of action under any legal theory. The courts of this state have . . . long since departed from holding a plaintiff strictly to the ‘form of action’ he has pleaded and instead have adopted the more flexible approach of examining the facts alleged to determine if a demurrer should be sustained.’ ” [Citations.]” (Quelimane Co. v. Stewart Title Guaranty Co., supra, 19 Cal.4th at pp. 38-39.)

“Although a general demurrer does not ordinarily reach affirmative defenses, it “ ‘will lie where the complaint ‘ “has included allegations that clearly disclose some defense or bar to recovery.” ’ ” [Citations.] “ ‘Thus, a demurrer based on an affirmative defense will be sustained only where the face of the complaint discloses that the action is necessarily barred by the defense.’ [Citations.]” (Ivanoff v. Bank of America, N.A. (2017) 9 Cal.App.5th 719, 726.)

The Exchange’s argument is that the underlying case upon which this action is based, alleged that: “[W]hile a guest at the rental property from September 1, 2020, to September 27, 2020, and while using the property’s pool and spa[,] Tommy Botthof contracted Legionnaires’ disease due to the pool and spa being contaminated with legionella bacterium.” (Demurrer, p. 8, ll. 7-11.) The exchange further argues that there is an exclusion for bodily injury arising out of or in connection with bacteria, as reflected in Exhibit 1 to the complaint, at exclusion (n). Every other argument contained in the demurrer is dependent upon this alleged exclusion.

The Exchange attempts to improperly turn the demurrer into an evidentiary hearing. Nowhere in plaintiffs’ complaint can it be ascertained that the present action is based on failure to defend a claim that was solely based on injury caused by bacteria. The complaint only refers to the prior action involving “alleged bodily injury.” At the pleading stage, the complaint is sufficient.

Because the Exchange has not identified any defect that appears on the face of the complaint, the demurrer will be overruled.