Grebow v. Fire Insurance Exchange CA2/2 ( 2023 )

Filed 4/21/23 Grebow v. Fire Insurance Exchange CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not
certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been
certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
ARTHUR GREBOW et al., B320267
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No.
v. 20STCV49903)
FIRE INSURANCE EXCHANGE,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Los Angeles
County, Michael P. Linfield, Judge. Affirmed.
Grebow & Rubin and Arthur Grebow for Plaintiffs and
Appellants.
Woolls Peer Dollinger & Scher, Gregory B. Scher and Hugh
Douglas Galt for Defendant and Respondent.
______________________________________
In this insurance coverage action concerning the theft of certain
personal property, plaintiffs and appellants Arthur Grebow and Helen
Grebow (collectively plaintiffs) appeal from the summary judgment
entered in favor of defendant and respondent Fire Insurance Exchange
(FIE) (erroneously sued as Farmers Insurance Exchange). We affirm
the judgment.
FACTUAL BACKGROUND
Plaintiffs own a home in Tarzana, California. The home was
burglarized on February 22, 2020. Sterling silver with an estimated
value of $85,079.90, watches with an estimated value of $16,265, and
jewelry with an estimated value of $2,512 were among the items stolen.
None of the stolen items were recovered.
The policy
FIE issued to plaintiffs a homeowners policy that was in effect at
the time of the theft. The policy provided coverage for, among other
things, loss of personal property (Coverage C) up to a stated limit of
$1,171,500. The policy prescribed special limits on certain types of
personal property: “Special limits of insurance apply to certain types of
personal property. The limits shown below do not increase the
Coverage C stated limit. The limit for each numbered group is the total
limit for any one loss event for all property in that group. The lowest
applicable special limit shall apply to personal property that falls into
more than one group.”
As relevant here, section I.8 of the policy prescribed a $3,000
limit on theft of silverware: “8. Silverware, gold ware,
platinumware and pewter ware. [¶] $3,000 limit on theft of
silverware, gold ware, platinumware and pewter ware. This includes
articles for which any such metal represents the principal value.”
Section I.3 of the policy provided, subject to certain
exceptions, contents replacement cost coverage for specified
types of personal property under Coverage C: “3.
Contents Replacement Cost – Coverage C. [¶] a. If
the Declarations or renewal notice indicates that Contents
Replacement Cost coverage applies, then covered loss or
2
damage to covered personal property, except for those types
of personal property described in subsection c. below, will
be settled at replacement cost without deduction for
depreciation for an amount that is reasonably necessary to
repair or replace the damaged property, but for no more
than the smallest of the following: [¶] (1) any stated limit
of insurance under this policy that applies to the property;
[¶] (2) the replacement cost of that part of the property
damaged for equivalent manufacture or construction with
materials of like kind and quality, determined as of the
time of loss; [¶] (3) the reasonable amount actually and
necessarily spent to repair or replace damage to the
property; or (4) [¶] the loss to the interest of the insured in
the property.”
Subsection b. of section I.3 excepts from the policy’s contents
replacement cost settlement provisions certain types of personal
property listed in subsection c.: “b. We will pay no more than the
actual cash value of the property at the time of loss until actual
repair or replacement is completed. Except for those types of personal
property described in subsection c. below, you may collect any
additional amount on a replacement cost basis. To do so the property
must have been repaired or replaced in accordance with and subject to
Section I – Property Conditions, Replacement Cost Settlement.”
Antiques are among the types of personal property
listed in subsection c. of section I.3 of the policy and are
therefore excepted from the policy’s general contents
replacement cost settlement provisions. Subsection c.
states that antiques (and other listed personal property)
will be settled as specified in subsection d.: “c. Covered
loss or damage to the following types of personal property,
whether or not attached to buildings or any structure will
be settled as shown below in subsection d: [¶] . . . [¶]
(5) antiques, including by way of example but not limited to
furniture, metalware, tools toys, and bric a brac . . . .”
3
Subsection d. states that antiques (and other types of
property listed in subsection c.) are subject to any limit of
insurance applicable to such property under the policy: [¶]
“d. The covered types of personal property shown above in
subsection c. will be settled for no more than the smallest of
the following: [¶] (1) actual cash value; [¶] (2) fair
market value; [¶] (3) any stated limit or other limit of
insurance under this policy that applies to the property; or
[¶] (4) the reasonable amount actually and necessarily
spent to repair or replace loss or damage to the property.”
Plaintiffs’ claim
Plaintiffs reported the theft to FIE on February 24, 2020. In
March 2020, FIE sent plaintiffs a check in the amount of $8,593.29 as
payment for the stolen personal property.
On March 16, 2020, plaintiffs sent FIE a list of the stolen
personal property and their estimated value. The stolen property
included Tiffany silverware manufactured in 1910 with an estimated
value of $85,079.90 and several jewelry pieces with an estimated value
of $14,722.94, bringing the total estimated value of the stolen property
to $99,801.84. Plaintiffs claimed the stolen items were antiques
covered under the policy’s contents replacement cost coverage.
FIE’s claims adjuster, Tiffany Johnson, informed plaintiffs on
March 24, 2020, that although the stolen items had a replacement cost
value of $99,801.84, the stated policy limits for jewelry and silverware
applied, and FIE would reimburse plaintiffs for these items only in the
amount of $8,593.29. Plaintiffs disagreed with FIE’s determination
and the parties were unable to resolve the dispute.
PROCEDURAL HISTORY
Plaintiffs filed this action against FIE on December 31, 2020,
alleging breach of contract and tortious breach of insurance contract.
FIE filed its answer on February 8, 2021.
The parties filed cross-motions for summary judgment, which
were both heard on February 15, 2022. The trial court denied
4
plaintiffs’ motion and granted FIE’s motion. Judgment was entered in
FIE’s favor, and this appeal followed.
DISCUSSION
I. Standard of review
The standard of review for an order granting or denying a motion
for summary judgment is de novo. (Aguilar v. Atlantic Richfield Co.
(2001) 25 Cal.4th 826, 860.) The trial court’s stated reasons for
granting summary adjudication are not binding on the reviewing court,
which reviews the trial court’s ruling, not its rationale. (Kids’ Universe
v. In2Labs (2002) 95 Cal.App.4th 870, 878.)
II. Applicable legal principles
“ ‘Interpretation of an insurance policy is a question of law and
follows the general rules of contract interpretation. [Citation.] “The
fundamental rules of contract interpretation are based on the premise
that the interpretation of a contract must give effect to the ‘mutual
intention’ of the parties. ‘Under statutory rules of contract
interpretation, the mutual intention of the parties at the time the
contract is formed governs interpretation. [Citation.] Such intent is to
be inferred, if possible, solely from the written provisions of the
contract. [Citation.] The “clear and explicit” meaning of these
provisions, interpreted in their “ordinary and popular sense,” unless
“used by the parties in a technical sense or a special meaning is given
to them by usage” [citation], controls judicial interpretation.’ ” ’ ” (TRB
Investments, Inc. v. Fireman’s Fund Ins. Co. (2006) 40 Cal.4th 19, 27.)
Policy provisions must be interpreted in context, giving effect to every
part of the policy with “ ‘each clause helping to interpret the other.’ ”
(Palmer v. Truck Ins. Exchange (1999) 21 Cal.4th 1109, 1115 (Palmer).)
If the language of the policy is clear and explicit, it governs.
(Foster-Gardner, Inc. v. National Union Fire Ins. Co. (1998) 18 Cal.4th
857, 868.) “ ‘ “A policy provision will be considered ambiguous when it
is capable of two or more constructions, both of which are reasonable.”
[Citations.] The fact that a term is not defined in the policies does not
make it ambiguous. [Citations.] Nor does “[d]isagreement concerning
the meaning of a phrase,” or “ ‘the fact that a word or phrase isolated
5
from its context is susceptible of more than one meaning.’ ” [Citation.]
“ ‘[L]anguage in a contract must be construed in the context of that
instrument as a whole, and in the circumstances of that case, and
cannot be found to be ambiguous in the abstract.’ ” ’ ” (Powerine Oil
Co., Inc. v. Superior Court (2005) 37 Cal.4th 377, 390–391 (Powerine).)
The insured bears the burden of bringing a claim within the basic
scope of coverage of a policy’s insuring agreement, and a court will not
indulge a forced interpretation of the insuring agreement to bring a
claim within the scope of its coverage. (Waller v. Truck Ins. Exchange,
Inc. (1995) 11 Cal.4th 1, 16.)
III. Replacement cost coverage
Plaintiffs contend section I.3.c.(5) of the policy extends
guaranteed contents replacement cost coverage for “antiques” including
“metalware” and that their stolen silverware are antiques covered
under this provision.
The purpose of replacement cost coverage, such as that provided
by section I.3.c.(5), is “to compensate the insured for the shortfall in
coverage that results from rebuilding [or replacing damaged items]
under a policy that pays only for actual cash value (i.e., reflecting
property in a depreciated condition).” (Croskey et al., Cal. Practice
Guide: Insurance Litigation (The Rutter Group 2022) ¶ 6:359.1.)
“Under a replacement cost policy, the measure of indemnity is the
amount it would cost the insured to repair, rebuild or replace the
damaged property, without any deduction for depreciation.” (Id. at
¶ 6:359.2.) Replacement cost coverage “necessarily places the insured
in a better position than payment of actual cash value, since there is no
deduction for depreciation.” (Id. at ¶ 6:359.1.)
“There are three main forms of replacement cost coverage:
replacement cost, extended replacement cost and guaranteed
replacement cost.” (Croskey et al., Cal. Practice Guide: Insurance
Litigation, supra, ¶ 6:359.2.) Replacement cost coverage provides for
the cost to repair or replace the damaged property up to the stated
policy limit. (Id. at ¶ 6:359.3.) “Extended replacement cost coverage
provides indemnity up to a specified percentage (e.g., 10%) or specific
6
dollar amount above the policy limit.” (Id. at ¶ 6:359.4, italics omitted.)
Guaranteed replacement cost coverage covers the full cost to repair or
replace the damaged property, without regard to the stated policy limit.
(Id. at ¶ 6:359.5.)
Section I.3.c.(5) provides replacement cost coverage, and not, as
plaintiffs contend, guaranteed replacement cost coverage for their
stolen silverware.1 There is no language in section I.3.c.(5) or
elsewhere in the policy that guarantees replacement cost coverage in
excess of the applicable policy limits. (Compare Everett v. State Farm
General Ins. Co. (2008) 162 Cal.App.4th 649, 659–660 [policy included
no language guaranteeing replacement cost coverage] with Desai v.
Farmers Ins. Exchange (1996) 47 Cal.App.4th 1110, 1116 [policy stated,
“ ‘If a Replacement Cost provision forms a part of this policy, we
guarantee that the limits of insurance meet the replacement cost
requirements’ ”].)
The policy contains no language that increases the stated limit
for silverware, even if such items may be classified as antiques under
section I.3.c. To the contrary, section I.3.d. of the contents replacement
cost section of the policy expressly states that “[t]he covered types of
personal property shown above in subsection c. [which includes
antiques] will be settled for no more than the smallest of the following:
[¶] (1) actual cash value; [¶] (2) fair market value; [¶] (3) any stated
limit or other limit of insurance under this policy that applies to the
property; or [¶] (4) the reasonable amount actually and necessarily
spent to repair or replace loss or damage to the property.” (Italics
added.) Section I.3.e. states that “[t]he Coverage C stated limit is the
most we will pay regardless of the number of items of personal property
which are involved in a loss event.” The policy’s introductory language
for property insurance coverage similarly states that “[s]ettlements,
1In this appeal, plaintiffs do not challenge application of the
$5,000 policy limit to their claim for theft of antique jewelry and
watches.
7
including replacement cost settlements, and coverages under this
policy, are subject to the limits of insurance stated herein.” The stated
policy limit for theft of silverware is $3,000. FIE paid plaintiffs the
stated limit for those items.
Section I.3.c. contains no language that supersedes any policy
limit applicable to silverware. That section must therefore be read
together with subsection 8 under section I, Coverage C (Personal
Property) of the policy, which imposes a $3,000 total limit on theft of
silverware. (Palmer, supra, 21 Cal.4th at p. 1115 [insurance policy
provisions must be interpreted in context, giving effect to every part of
the policy].)
Subsections 3.c.(5) and 3.d. of section I, read together with the
other provisions of the policy, are not ambiguous. Under the plain
language of the policy, FIE’s obligation to indemnify plaintiffs for the
theft of their silverware is subject to the policy limit applicable to those
items of personal property, regardless of the antique nature of those
items. (Powerine, supra, 37 Cal.4th at pp. 390–391.)
Applying the policy limit for silverware to plaintiffs’ theft claim
does not, as plaintiffs contend, improperly conflate personal property
coverage with replacement cost coverage. Replacement cost coverage is
a subset of the personal property coverage afforded under the policy.
The policy’s personal property coverage (Coverage C) insures “personal
property owned or used by an insured anywhere in the world.” That
coverage applies to all of plaintiffs’ personal property, including
antiques. The policy’s contents replacement cost coverage expressly
states that it applies only to property that comes within Coverage C.
The contents replacement cost coverage for antiques further states that
“any stated limit or other limit of insurance under this policy that
applies to the property” will apply if that amount is smaller than the
actual cash value, fair market value, or amount actually spent to
replace the property. FIE did not breach the insurance contract or act
in bad faith by reimbursing plaintiffs for the theft of their antique
silverware in the amount of the $3,000 limit applicable to silverware.
8
We reject plaintiffs’ contention that their stolen silverware falls
exclusively into the “antiques” category of personal property covered
under the policy and is not subject to the $3,000 policy limit applicable
to “silverware.” The plain language of the policy contemplates that
certain types of property may fall into multiple categories of covered
personal property to which different policy limits may apply. In such
cases, the “Special limits on Certain Personal Property” provision
under Coverage C of the policy expressly states that “the lowest
applicable special limit shall apply to personal property that falls into
more than one group.”
Cordner v. United States (9th Cir. 1982) 671 F.2d 367 and Joslin
v. United States (10th Cir. 1981) 666 F.2d 1306, which plaintiffs cite as
support for their position, are inapposite. Those cases address whether
gold and silver coins should be considered “money” and valued for tax
purposes at their face value, or whether the coins should be classified
as “property” and valued at their higher “numismatic” value, i.e., fair
market value in excess of their face value. (Cordner, supra, 671 F.2d at
p. 367; Joslin, supra, 666 F.2d at p. 1307.) The courts in both cases
held that the higher numismatic value applied, given the value of the
coins to collectors, or the intrinsic worth of their contents. (Cordner, at
p. 367; Joslin, at p. 1307.) Neither Cordner nor Joslin involved the
measure of indemnity under a property insurance policy or
interpretation of a policy provision extending contents replacement cost
coverage.
Plaintiffs’ stolen silverware is covered under the contents
replacement cost coverage for antiques provided in sections I.3.c.(5) and
I.3.d. of the policy and is subject to the $3,000 special limit on
silverware specified in section I.8. The trial court did not err by
granting summary judgment in FIE’s favor.
9
DISPOSITION
The judgment is affirmed. Fire Insurance Exchange is awarded
its costs on appeal.
NOT TO BE PUBLISHED.
LUI, P. J.
We concur:
ASHMANN-GERST, J.
HOFFSTADT, J.
10