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Hyde Mulvihill APC Lawyers
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Cynthia Coulter Mulvihill, SBN 171909 Attorneys for Plaintiff: RC SUPERIOR COURT FOR THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES –CENTRAL DISTRICT
Comes now Plaintiff RC and alleges against the Defendants, and each of them, as follows: 1. At the time of the incidents alleged herein, Plaintiff RC was 61 years old. She is a resident of the State of California, County of Los Angeles. Her usual residence address is Alhambra. 2. RC’ 90-year old mother, DM, lived with her at THE HOME. 3. RC and DM lived at THE HOME for 25 years. 4. RC is now a U.S. Citizen, but was born outside of the United States. Her native language is Spanish. RC speaks Spanish fluently, but English with great difficulty. 5. On September 27, 2004, RC appointed her daughter, MC, a durable power of attorney to act on her behalf in this matter. A true and correct copy of the appointment is attached hereto as Exhibit “A” and incorporated herein by references. 6. Defendant NEIGHBORHOOD SPIRIT PROPERTY & CASUALTY (NEIGHBORHOOD SPIRIT (FARMERS’ INSURANCE)) is a California licensed insurance company and an admitted property and casualty insurance carrier in the State of California. Its NAIC Number is 10317. It is located at 4680 Wilshire Boulevard, Los Angeles, CA 90010. 7. RC does not know the true names and capacities of the Defendants sued herein as DOES 1 through 100, inclusive, and therefore sues such Defendants by such fictitious names. RC will amend this complaint when such names have been ascertained. RC is informed and believes, and based thereon alleges, that each of these DEFENDANTS is responsible in some manner for the occurrences herein alleged, in that RC’ damages, as hereinafter alleged, were legally caused by the acts of such DEFENDANTS and each of them. 8. At all times herein mentioned, each of the DEFENDANTS, including the fictitiously named DEFENDANTS, were and are the agents and employees of each of the remaining DEFENDANTS, and were acting within the course and scope of such agency and employment while performing the acts complained of herein. 9. On or about May 6, 2003, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) issued to RC a renewal of Homeowner’s policy, No. 915 219 XXX. A true and correct copy of this policy and renewal is attached hereto as Exhibit “B” and made a part hereof by this reference as if fully stated herein. 10. In October 2003, the roof at the home was newer. The house had been painted within the last two years or so, and it had been newly carpeted in the last few years as well. 11. On or about October 25, 2003, while NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX was in full force and effect, the above-described dwelling house and personal property therein located at THE HOME were partially destroyed by an accidental electrical fire. 12. In accordance with the terms of NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, MC gave notice of the fire to NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) on October 26, 2003. 13. On October 26, 2003, MC informed NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) that the Fire Department had informed her mother that the property was uninhabitable. 14. On October 27, 2003, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) employee Jonathan Crook (“CROOK”) contacted Plaintiff and told her that he was an employee and special agent of NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) who would adjust the fire damage claim under the terms of NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX. 15. On October 27, 2003, MC spoke with NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) adjuster Jonathan Crook (“CROOK”) and explained the circumstances of the fire to CROOK. CROOK took a recorded statement from MC on October 27, 2003. 16. On October 27, 2003, CROOK recommended to MC that she retain J.J. Cherokee to evaluate the contents and pack out the damaged personal property. MC agreed with CROOK, and retained J.J. Cherokee. 17. CROOK of NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) set an inspection of THE HOME for 10:00 a.m. on October 28, 2003. On October 27, 2003, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) called MC and told her that the inspection was scheduled for the next day. MC told NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) that because of her work schedule, she would not be available until after 12:00 p.m. on October 28, 2003. 18. On October 28, 2003, at 10:00 a.m. CROOK inspected the personal property. CROOK determined the total value of the personal property loss and restoration would be around $45,000. Thereafter, CROOK set the reserve for personal property damage at $45,000. 19. On October 28, 2003, CROOK inspected the house at THE HOME and estimated the dwelling damage to be around $50,000. Thereafter, CROOK set the initial reserves at $50,000. 20. NEIGHBORHOOD SPIRIT (FARMERS INSURANCE)’S claims handling files have a section on every claim note to indicate the language of the person talking with NEIGHBORHOOD SPIRIT (FARMERS INSURANCE). However, no place in NEIGHBORHOOD SPIRIT (FARMERS INSURANCE)’S claims handling files indicates that RC did not speak English. 21. Because she was not fluent in English, RC asked that her daughter, MC, be allowed to attend the October 28, 2003, inspection and meeting. MC works full time, but she did arrange to take time off to attend the meeting with CROOK and THE CONTRACTOR. However, because of her work schedule, MC was not able to attend the meeting at the start. CROOK and THE CONTRACTOR were unwilling to wait for MC to attend the meeting. 22. RC was present, but MC was unable to attend the meeting because she was at work. 23. On October 28, 2003, CROOK and the THE CONTRACTOR representative met with RC. RC told CROOK she wanted to obtain the bids of three qualified contractors. 24. At the October 28, 2003, meeting CROOK told RC that THE CONTRACTOR was on NEIGHBORHOOD SPIRIT (FARMERS INSURANCE)’S preferred contractor list. CROOK told RC that THE CONTRACTOR was a reputable contractor that had been in business for more than 30 years, without any complaints. 25. CROOK’S representation was false. THE CONTRACTOR had only been in business since June 10, 1991, or only twelve years at the time of the incident. RJM, the Responsible Managing Officer of THE CONTRACTOR, has only been a California Licensed Contractor since June 17, 1987. No other individual ever associated with THE CONTRACTOR has an early California Licensed Contractor date. This information was readily available to NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) at the California Contractor’s State License Board website, www.cslb.ca.gov. It was not readily available to RC, who did not own a computer; was not familiar with using the Internet; and was, at the time she executed the contract, was standing in front of her burned-out home. 26. RJM, the Responsible Managing Officer of THE CONTRACTOR, was cited by the California State Contractors’ license board while using individual License Number 00XXXXX. CROOK did not disclose this to RC. This information was readily available to NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) at the California Contractor’s State License Board website, www.cslb.ca.gov. It was not readily available to RC, who did not own a computer; was not familiar with using the Internet; and was, at the time she executed the contract, was standing in front of her burned-out home. 27. As the manager Responsible Managing Officer of A Different Class B California Licensed Contractor 00XXXXXX, RJM and A Different Class B California Licensed Contractor were the subject of Complaint S 1999 XXXXXX, for the following: (a) Violation of Business & Professions Code §7107, Abandonment without legal excuse of any construction; (b) Violation of Business & Professions Code §7113, Exceeded contract amount; (c) Violation of Business & Professions Code §7115, Failure to Comply with Contractor’s License law; (d) Violation of Business & Professions Code §7159, Home Improvement Contract violations; (e) Violation of Business & Professions Code §7117.5, contracted with an inactive license; (f) Violation of Business & Professions Code §7117B, License personnel violation; (g) Violation of Business & Professions Code §7097, other license suspension; (h) Violation of Business & Professions Code §7198, other license revocation; (i) Violation of Business & Professions Code §7121, Association with a disciplined licensee; (j) Violation of Business & Professions Code §7121.5, a Qualifier prohibited against association. CROOK did not disclose this to RC. This information was readily available to NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) at the California Contractor’s State License Board website, www.cslb.ca.gov. It was not readily available to RC, who did not own a computer; was not familiar with using the Internet; and was, at the time she executed the contract, was standing in front of her burned-out home. 28. CROOK told RC that he had special knowledge of THE CONTRACTOR’S qualifications when he made the October 28, 2003, representation to her at THE HOME. As her insurance adjuster, CROOK had a relationship of trust and confidence with RC that she relied on. RC is informed and believes that CROOK made the representation about THE CONTRACTOR’S qualifications with reckless disregard for the truth, which was readily available to NEIGHBORHOOD SPIRIT (FARMERS INSURANCE). 29. At the October 28, 2003, meeting CROOK orally told RC that if she used THE CONTRACTOR to make repairs to her house, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) would guarantee THE CONTRACTOR’S work. However, if CROOK orally told RC that if she chose any other contractor, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) would not guarantee the work of another contractor. 30. RC understood CROOK’S use of the word “guaranty” to mean that NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) would make sure that THE CONTRACTOR’S work was completed in a good and workmanlike manner, to the standards of a Class B Contractor making home repairs in Southern California; and that her property would be restored as closely as possible to its pre-fire condition. 31. CROOK told RC that she needed to sign the repair contract with THE CONTRACTOR immediately. Because NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) told RC that they would guarantee the work of THE CONTRACTOR, RC signed a Work Authorization with THE CONTRACTOR. A true and correct copy of the Work Authorization is attached hereto as Exhibit “C”. 32. When RC signed the work authorization, she called MC and told her that she had done so. During that conversation, MC and RC agreed that because NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) was guaranteeing THE CONTRACTOR’S work, they had assurances that the work would be completed as promised and that THE HOME would be restored as closely as possible to its pre-fire condition. 33. The Work Authorization states, in relevant part, “The undersigned property owner(s) RC authorize and direct THE CONTRACTOR . . . to proceed to make repairs to our property at THE HOME and to restore the property as closely as possible to its condition before the damage occurred. Description of the work to be done and materials to be used or installed, and the cost thereof will be as per agreed scope of work as submitted to and approved by the Insurance Company [bold emphasis added; underlined portion in original, with “RC” hand written]. “Insurance Co. Or Adjusting Firm Farmers Insur. Group.” [underlined portion in original, with “Farmers Insur. Group handwritten]. (Exhibit C, page 1). THE CONTRACTOR faxed a copy of the work authorization to CROOK at NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) on October 29, 2003. 34. On or around October 29, 2003, CROOK prepared a draft of repair estimates. On November 4, 2003, CROOK prepared a computer generated repair estimate showing estimated repairs to the property. CROOK faxed that estimate to RJM and THE CONTRACTOR, but did not provide it to RC until after THE CONTRACTOR’S work was completed. A true and correct copy of the computer generated Repair Estimate is attached hereto as Exhibit “D”. 35. THE CONTRACTOR provided a bid for repairs to CROOK of NEIGHBORHOOD SPIRIT (FARMERS INSURANCE), but not to RC. A true and correct copy of the bid provided by THE CONTRACTOR to NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) is attached hereto as Exhibit “E”. 36. THE CONTRACTOR’S bid for repairs, differs from CROOK’S repair estimate greatly. The following is just a partial list of the differences: (a) The CROOK estimate for Repairs to Bedroom 1 has a Replacement Cash Value of $11,957.67 (Exhibit D, page 2-3); the THE CONTRACTOR bid for Bedroom 1 was $360.59 (Exhibit E, page 3, page 9). (b) The CROOK estimate for Repairs to the Living Room has a Replacement Cash Value of $4,157.55 (Exhibit D, page 4-5); the THE CONTRACTOR bid for the Living Room was $1,016.33 (Exhibit E, page 3, page 9). (c) The CROOK estimate for Repairs to the Dining Room has a Replacement Cash Value of $3,274.85 (Exhibit D, page 4-5); the THE CONTRACTOR bid had nothing for the Dining Room. (d) The CROOK estimate for the Repairs to a Closet has a Replacement Cash Value of $3,543.31 (Exhibit D, page 6); the THE CONTRACTOR bid had nothing for the Closet. (e) The CROOK estimate for Repairs to a wall that was destroyed has a Replacement Cash Value of $3,559.04 (Exhibit D, page 7); the THE CONTRACTOR bid had nothing for the missing wall. (f) The CROOK estimate for Repairs to the Hallway has a Replacement Cash value of $2,788.96 (Exhibit D, page 8-9); the THE CONTRACTOR bid has $394.11 for the Hallway (Exhibit E, page 3, page 8). (g) The CROOK estimate for Repairs to the Bathroom has a Replacement Cash Value of $1,185.18 (Exhibit D, page 9-10); the THE CONTRACTOR bid has $0 (Exhibit E, page 3, page 7.) (h) The CROOK estimate for Repairs to the Kitchen has a Replacement Cash Value of $36,633.85 (Exhibit D, page 10-11); the THE CONTRACTOR bid has $4,969.12 (Exhibit E, page 3; page 6). 37. Because CROOK and NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) provided the estimate to THE CONTRACTOR but not to RC or MC, neither RC or MC (who have no construction background or experience) had any idea what repairs THE CONTRACTOR was supposed to make. 38. Because CROOK and NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) obtained the bid for repairs from THE CONTRACTOR, but that bid was not given to RC and MC, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) and CROOK knew that THE CONTRACTOR’S work was not what NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) had determined needed to be completed on the home. RC and MC did not know what work was supposed to have been done. 39. Because CROOK and NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) expressly, orally promised that NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) would guaranty the work of THE CONTRACTOR, RC and MC reasonably and justifiably relied on and expected that THE CONTRACTOR’S work would be completed and that the property would be restored as closely as possible to its condition before the October 25, 2003 fire. 40. On December 15, 2003, CROOK inspected the home and determined that all of THE CONTRACTOR’S work on the home was completed, even though the carpet had not been installed yet, and RC’ kitchen appliances were in her yard, not in her home. 41. On December 18, 2003, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) issued a check for $62,372.08 as payment for THE CONTRACTOR’S work. The check was made payable jointly to THE CONTRACTOR and NEIGHBORHOOD SPIRIT (FARMERS INSURANCE). NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) gave that check directly to a messenger sent by THE CONTRACTOR. Thereafter, THE CONTRACTOR forged RC’ signature and cashed that check. 42. On December 18, 2003, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) gave THE CONTRACTOR a check for $3,000, made payable to RC only, for RC’ Adjusted Living Expenses. THE CONTRACTOR did not negotiate this check, but also did not give the check to RC for several months, which prevented RC from being able to negotiate it. 43. In or around December 2003, MC notified NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) that the repairs to the property were not done in a good and workmanlike manner, and that the property had not been restored to the condition that it was before the fire. 44. On or about January 7, 2004, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) talked with the City of Alhambra and learned that THE CONTRACTOR had not obtained permits needed for the construction work at THE HOME. 45. On January 7, 2004, even though NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) knew (1) that the repairs had not been completed in a good and workmanlike manner and (2) that THE CONTRACTOR had forged RC signature on a check, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) asked THE CONTRACTOR to continue working on the property. 46. Payment on the forged check of $62,372.08 check was stopped by NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) on or around January 2004. 47. NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) did not recommend that RC retain a different qualified contractor to complete the work that was unsatisfactory. NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) never offered to pay for a different qualified contractor to complete the work that was unsatisfactory. 48. Even though NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) knew (1) that the repairs had not been completed in a good and workmanlike manner and (2) that THE CONTRACTOR had forged RC signature on a check, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) issued a replacement check for the forged December 18, 2003 that was still made payable to THE CONTRACTOR, as well as RC. 49. NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) stopped adjusting the property damage claim on December 18, 2003, even though it knew (1) that the repairs had not been completed in a good and workmanlike manner; (2) that the repairs had been made without a permit from the City of Alhambra; and (3) that RC’ appliances were in her yard, not her house; and (4) that the carpeting had not been replaced in RC’ home. 50. The replacement check of $62,372.08 issued by NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) to THE CONTRACTOR and RC has never been negotiated. NEIGHBORHOOD SPIRIT (FARMERS INSURANCE)’S checks expire within six months of issuance. This check is now ‘stale’ and cannot be negotiated. Therefore, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) has not paid anything at all due under the Dwelling Portion of NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX. 51. RC has asked NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) to pay for repairs so that the property can be restored to its pre-fire condition, but NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) refuses to pay that sum. NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) has not, in fact, paid anything at all under the Dwelling Portion of the claim. 52. RC has obtained a repair estimate from a reputable contractor that repair and restoration of her property will actually cost in excess of $100,000. Among other things, THE CONTRACTOR removed a fireplace from a load-bearing wall in her living room. The fireplace was not supposed to be removed at all, and in removing the fireplace, the load-bearing elements were not replaced. Therefore, as a result of the fire, the current replacement costs of the dwelling exceeded the value of $97,000 stated on the declarations page. 53. RC eventually reached a settlement with THE CONTRACTOR and RJM for $100,000. The settlement was subject to a Good Faith Application, which NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) opposed. RC finally received the full settlement amount in March 2005. 54. THE HOME, has been uninhabitable and remains uninhabitable to this day. RC settled her case against RJM and THE CONTRACTOR so she would have the money to make repairs so that the property would be habitable. However, she does not have enough money to make repairs so that the property was in substantially the same condition that it was in before the October 25, 2003 fire. 55. In addition, RC has been delayed in make repairs because her mother, DM, is quite ill. MC has not been able to help RC with arranging for repairs because she is pregnant with twins. The pregnancy has been difficult, and her doctor ordered her to remain in bed for a month. 56. NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) has made the following payments to RC: (a) $1,000.00 Personal Property (contents), issued October 31, 2003 to RC (b) $3,000 Adjusted Living Expense, issued December 18, 2003 to RC (c) $7,247.08 Adjusted Living Expense, issued January 7, 2004, issued to RC (d) $30,565.85 Personal Property (contents), issued May 11, 2004 to RC (e) $343.03 Personal Property (contents), issued July 27, 2004, issued to RC and Jeffrey Pop (f) $34,389.73 Personal Property (contents) issued March 2, 2004 to RC and J.J. Cherokee. (g) $5,809.20 Adjusted Living Expense, issued January 7, 2004 to Execustay by Marriott 57. NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) also issued a check for $62,372.08 payable to RC and THE CONTRACTOR. That was fraudulently negotiated, and payment on the check was stopped. Another check was issued, but never negotiated. That check can no longer be executed. Therefore, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) has paid nothing under the Dwelling Portion of its coverage. 58. On December 18, 2003, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) sent a letter to RC that misrepresented the terms of her policy. The letter was sent by CROOK, and claimed that NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX contained a “CALIFORNIA HOMEOWNERS ENDORSEMENT” which limited the coverage under the policy. A true and correct copy of the December 18, 2003, letter is attached hereto as Exhibit “F”. 59. NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX actually has the following Declarations of Coverage, as provided for on the Declarations page of the Policy (Exhibit “B”): A. Dwelling or Mobile Home $97,000 B. Separate (Other) Structures $9,700 C. Personal Property $67,900 D. Loss of Use $19,400 Deductible $500 60. The limits of the coverage set forth in the Declarations Page are increased by the “HOMEOWNERS ENHANCEMENT PLUS” (Form S9904A) Coverage purchased by RC. The limits of coverage under than endorsement are to a maximum of 100% of the coverages on the Declarations Page, and therefore are: A. Dwelling or Mobile Home $194,000 B. Separate (Other) Structures $19,400 C. Personal Property $135,800 D. Loss of Use $38,800 Deductible $500 61. Insurance NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX has the following relevant provisions (Form HO-3 4-84) with all relevant endorsements (Form E6266A), amending endorsements (Form E6266A and J6192A), and supplemental provisions (H768 Ed. 9-87) and Special Provisions (H6170) which are set forth below. 62. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, the agreement is, “AGREEMENT* We will provide the insurance described in this policy in return for the premium and compliance with all applicable provisions of this policy.” 63. RC alleges that NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) breached the AGREEMENT provision of Insurance NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX by failing to provide the insurance that was described in Insurance NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX. 64. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, relevant definitions include, “DEFINITIONS* In this policy, “you” and “your” refer to the “named insured” shown in the Declarations and the spouse if a resident of the same household. “We,” “us” and “our” refer to the Company providing this insurance . . .” --and-- “3. “insured*” means you and residents of your household who are: a. your relatives . . . “ 65. In this action, RC is the named insured of NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX. DM, RC’ 90-year old mother, who lived with her at THE HOME in Alhambra, California, is also an insured of NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX. 66. NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) is the “we” “us” and “our” referred to in NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX. 67. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, insured locations are, “4. “insured location*” means: a. the residence premises; b. the part of other premises, other structures and grounds used by you as a residence and: (1) which is shown in the Declarations . . . c. any premises used by you in connection with a premises in 4a or 4b above . . .” 68. In this action, the “insured location” is THE HOME, California. 69. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, an occurrence is, “5. “occurrence*” means an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in . . . b. property damage.*” 70. In this action, the “occurrence” was the fire that took place on October 25, 2003 at or around 8:00 a.m. at THE HOME, California. 71. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, property damage is, “6. “property damage*” means physical injury to, destruction of, or loss of use of tangible property.” 72. In this action, the “property damage” was the damage to the real property and personal property that resulted from the fire and subsequent firefighting efforts at THE HOME, California on or around October 25, 2003. 73. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, the residence premises is, “8. “residence premises*” means: a. the one family dwelling, other structures, and grounds or; or b. that part of any other building; where you reside and which is shown as the “residence premises*” in the Declarations.” 74. In this action, the “residence premises” is the same as the “insured location” and is THE HOME, California. 75. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, there is coverage for a dwelling damaged in a fire, “SECTION I – PROPERTY COVERAGES COVERAGE A – Dwelling* We cover: 1. the dwelling on the residence premises* shown in the Declarations, including structures attached to the dwelling . . .” 76. In this action, the “residence premises” is covered by COVERAGE A – Dwelling, PROPERTY COVERAGES under NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX. 77. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, materials and supplies are insured, “2. materials and supplies located on or next to the* residence premises used to construct, alter or repair the dwelling or other structures on the* residence premises.” 78. In this action, the materials and supplies located on or next to the residence premises that were used to construct, alter and repair the dwelling or other structures on the residence after the fire were covered by COVERAGE A – Dwelling, PROPERTY COVERAGES under NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX. 79. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, materials and supplies are insured, “COVERAGE C – Personal Property* We cover personal property owned or used by an insured* while it is anywhere in the world . . .” 80. In this action, the personal property of RC and DM that was damaged or destroyed in the fire that took place on October 25, 2003 at or around 8:00 a.m. at THE HOME, California was insured under COVERAGE C – Personal Property, under NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX. 81. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, Loss of Use is insured, “COVERAGE D – Loss Of Use* The limit of liability for Coverage D is the total limit for all the coverages that follow. 1. If a loss covered under this Section makes that part of the residence premises* where you reside not fit to live in, we cover, at your choice, either of the following . . . a. Additional Living Expense*, meaning any necessary increase in living expenses incurred by you so that your household can maintain its normal standard of living; or b. Fair Rental Value*, meaning the fair rental value of that part of the residence premises* Payment under a or b will be for the shortest time required to repair or replace the damage . . . 3. If a civil authority prohibits you from use of the residence premises* as a result of direct damage to neighboring premises by a Peril Insured Against in this policy, we cover Additional Living Expense or Fair Rental Value loss as provided under 1 and 2 above for no more than two weeks. The periods of time under 1, 2 and 3 above are not limited by expiration of this policy.” 82. In this action, the fire that occurred on October 25, 2003, made the residence premises unfit to live in. The subsequent repairs to the property, which were done without permits, so a Certificate of Occupancy has never been issued. Therefore, residence premises remains uninhabitable because a civil authority says that the property is uninhabitable. RC and DM, as the insureds under the policy, are the individuals entitled to the Adjusted Living Expenses. 83. Although the property has been uninhabitable since October 25, 2003, and remains uninhabitable to this date, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) stopped making Adjusted Living Expense payments to RC and DM on or about December, 2003. 84. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, Debris Removal is insured, “ADDITIONAL COVERAGES* 1. Debris Removal*. We will pay your reasonable expense for the removal of: a. Debris of covered property if a Peril Insured Against that applies to the damaged property causes the loss . . . This expense is included in the limit of liability that applies to the damaged property. If the amount to be paid for the actual damage to the property plus the debris removal expense is more than the limit of liability for the damaged property, an additional 5% of that limit of liability is available for debris removal expense. . .” 85. In this action, the fire that occurred on October 25, 2003, caused debris that needed to be removed. Therefore, that is covered under NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX. 86. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, Reasonable Repairs are insured, “2. Reasonable Repairs. * In the event that covered property is damaged by an applicable Peril Insured Against, we will pay the reasonable cost incurred by you for necessary measures taken solely to protect against further damage. If the measures taken involve repair to other damaged property, we will pay for those measures only if that property is covered under this policy and the damage to that property is caused by an applicable Peril Insured Against. This coverage*: a. does not increase the limit of liability that applies to the covered property b. does not relieve you of your duties, incase of a loss to covered property, as set forth in Section I Condition 2.d.” 87. In this action, the fire that occurred on October 25, 2003, resulted in reasonable repairs that needed to be made to protect THE HOME and the personal property at the property. Therefore, that is covered under NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX. 88. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, Trees, Shrubs and Other Plants are insured, “2. Tress, Shrubs and Other Plants*. We cover trees, shrubs, plants or lawns, on the residence premises*, for loss caused by the following Perils Insured Against: . . . Fire . . .” The limit of liability for this coverage will not be more than 5% of the limit of liability that applies to the dwelling, or more than $500 for any one tree, shrub or plant . . . This coverage is additional insurance. 89. In this action, the fire that occurred on October 25, 2003, resulted in the loss of landscaping at THE HOME. Therefore, that is covered under NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX. 90. NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) has breached this portion of its insuring agreement because it did not provide any coverage for the loss of landscaping.
91. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, Theft, is insured, “SECTION I – PERILS INSURED AGAINST COVERAGE A – DWELLING and COVERAGE B – OTHER STRUCTURES* We insure against risks of direct loss to property described in Coverages A and B only if that loss is a physical loss to property . . . b. Theft* in or to a dwelling under construction, or of materials and supplies for use in the construction until the dwelling is finished and occupied . . .” 92. As described herein, RC and DM were the victim of a theft by services promised to be performed, which were not performed, committed by the contractor recommended by NEIGHBORHOOD SPIRIT (FARMERS INSURANCE). However, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) has refused to adjust this claim. 93. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, Personal Property, is insured, “COVERAGE C – PERSONAL PROPERTY* We insure for direct physical loss to property described in Coverage C* caused by a peril listed below unless the loss is excluded in Section I – Exclusions. “1. Fire or lightning . . . * 7. Smoke*, meaning sudden and accidental damage from smoke . . . 9. Theft*, including attempted theft and loss of property from a known location when it is likely that the property has been stolen. This peril does not include loss caused by theft: a. committed by an insured*; b. in or to a dwelling under construction, or of materials and supplies for use in the construction until the dwelling is finished and occupied.” 94. As described herein, RC and DM were the victim of a theft by services promised to be performed, which were not performed, committed by the contractor recommended by NEIGHBORHOOD SPIRIT (FARMERS INSURANCE). However, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) has refused to adjust this claim. 95. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, Exclusions, has the following Conditions, “SECTION I – CONDITIONS* 1. Insurable Interest and Limit of Liability*. Even if more than one person has an insurable interest in the property covered, we will not be liable in any one loss: a. to the insured* for more than the amount of the insured’s* interest at the time of loss; b. for more than the applicable limit of liability.” 96. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, has the following limits of liability under the policy, as modified by Form S9904A: Dwelling, $194,000; Separate (Other) Structures, $19,400; Personal Property, $135,800; Loss of Use, $38,800. 97. NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) has denied the existence of the HOMEOWNERS ENHANCEMENT PLUS provided by Form S9904A. 98. NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) made misrepresentations and false and misleading statements to RC that the limits of her insurance coverage were half of what those actually were under the terms of the HOMEOWNERS ENHANCEMENT PLUS. 99. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, Exclusions, has the following Duties after Loss: “2. Your Duties After Loss*. In case of a loss to covered property, you* must see that the following are done: c. give prompt notice to us or our agent . . . “ 100. MC, on behalf of her mother RC, gave NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) notice of the loss under Insurance NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX within 26 hours of the loss. 101. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, Exclusions, has the following Duties after Loss: “d. (1) protect the property from further damage;” 102. On October 27, 2003, Jonathan Crook, a claims adjuster employed by NEIGHBORHOOD SPIRIT (FARMERS INSURANCE), recommended that RC retain J.J. Cherokee to remove personal property from the residence premises and restore the personal property that could be restored. RC did so. 103. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, Exclusions, has the following Duties after Loss: “a. make reasonable and necessary repairs to protect the property . . .“ 104. RC retained J.J. Cherokee to remove the personal property and restore it, to the extent that it could be removed and restored. 105. On October 28, 2003, Jonathan Crook, on behalf of NEIGHBORHOOD SPIRIT (FARMERS INSURANCE), recommended that RC retain THE CONTRACTOR to make repairs to the dwelling. RC did so. 106. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, Exclusions, has the following Duties after Loss: “a. keep an accurate record of repair expenses . . . “ 107. RC is informed and believes that J.J. Cherokee kept records of its repair expenses. She believes that those records were accurate. 108. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, Exclusions, has the following Duties after Loss: “e. prepare an inventory of damages personal property showing the quantity, description, actual cash value and amount of loss. Attach all bills, receipts and related documents that justify the figures in the inventory . . .” 109. RC is informed and believes that J.J. Cherokee prepared She believes that those records were accurate. 110. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, Exclusions, has the following Duties after Loss: “f. as often as we reasonably require: (1) show the damaged property; (2) provide us with records and documents we request and permit us to make copies; and (3) submit to examination under oath, while not in the presence of any other insured*, and sign the same; g. send to us, within 60 days after our request, your signed, sworn proof of loss which sets forth, to be best of your knowledge and belief: (1) the time and cause of the loss; (2) the interest of the insured* and all others in the property involved and all liens on the property; (3) other insurance which may cover the loss; (4) changes in the title or occupancy of the property during the term of the policy; a. specifications of damaged buildings and detailed repair estimates; b. the inventory of damaged personal property described in 2e above; c. receipts for additional living expenses incurred and records that support the fair rental value loss. . .” 111. RC complied with all of the proof of loss requirements and inventory requirements as required by NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) 112. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX has the following Loss Settlement obligations: “2. Loss Settlement*. Covered property losses are settled as follows: a. (1) Personal property; (2) Awnings, carpeting, household appliances, outdoor antennas, and outdoor equipment, whether or not attached to buildings; and (3) Structures that are not buildings; at actual cash value at the time of loss but not more than the amount required to repair or replace.” 113. RC and DM had personal property; a awnings, carpeting and household appliances that were covered under NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX. However, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) has not paid the total Loss Settlement RC was entitled to under NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX. 114. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, has the following Loss Settlement obligations for damage to the Dwelling: “b. Buildings under coverage A or B at replacement cost without deduction for depreciation, subject to the following: (1) If, at the time of loss, the amount of insurance in this policy on the damaged building is 80% or more of the full replacement cost of the building immediately before the loss, we will pay the cost to repair or replace, after application of deductible and without deduction for depreciation, but not more than the least of the following amounts: (a) the limit of liability under this policy that applies to the building; (b) the replacement cost of that part of the building damaged for like construction and use on the same premises; or (c) the necessary amount actually spent to repair or replace the damaged building.” 115. RC and DM had building damage coverage under NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX. However, NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) has not paid for ANY of the building damage that RC suffered as a result of the occurrence. 116. In NEIGHBORHOOD SPIRIT (FARMERS INSURANCE) Policy No. 915 219 XXX, |
