Nagapetyan v. Farmers Insurance Exchange CA2/5

Filed 6/22/23 Nagapetyan v. Farmers Insurance Exchange CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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8.1115(b). This opinion has not been certified for publication or ordered published for
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
SARGIS SAM NAGAPETYAN, B315282
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No.
v. 20STCV41025)
FARMERS INSURANCE
EXCHANGE,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Barbara Ann Meiers, Judge. Affirmed.
Beloryan & Manukyan, Haik A. Beloryan, and Vahe
Shakhgeldyan for Plaintiff and Appellant.
Tharpe & Howell, William A. Brenner, Heather M.
McKeon, and Eric B. Kunkel for Defendant and Respondent.
Plaintiff and appellant Sargis Nagapetyan (Nagapetyan)
appeals the trial court’s order granting summary judgment to
defendant and respondent Farmers Insurance Exchange
(Farmers) on his complaint alleging, in essence, that Farmers
paid too little on his claim for over $16,000 in damages to his
seven-year-old, pre-owned Mercedes SUV. We consider whether
Nagapetyan’s evidence (or the lack thereof) in opposition to
summary judgment revealed there were triable issues of material
fact as to whether Farmers fulfilled its obligations under the
insurance policy.
I. BACKGROUND
A. The Policy and the Loss
Nagapetyan was a named insured on a Farmers car
insurance policy covering the period from February 3, 2020, to
August 3, 2020 (the Policy). One of the vehicles covered by the
Policy was Nagapetyan’s 2013 Mercedes Benz. The Policy
covered “loss to [the] insured car, its additional equipment and
any non-owned car caused by any direct, sudden and accidental
means other than collision . . . .” It excluded loss for, among
other things “wear and tear . . . .”
On April 17, 2020, Nagapetyan drove the Mercedes to work
and parked in an outdoor parking lot. When he returned to his
car after work, the driver’s side window was broken and there
was broken glass inside and outside of the vehicle. The only item
missing from the car was a pair of Ray-Ban sunglasses.
Nagapetyan called the police, but no one was available to
take a report. He placed a towel on the driver’s seat and drove
home. That night, Nagapetyan submitted a report online to the
Los Angeles Police Department.
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The next day, Nagapetyan submitted a claim for vandalism
under the Policy and reported there was broken glass on the
dashboard navigation, odometer, front seats, back seats, floors,
and hand rest. He also reported there were scratches on the
dashboard navigation, odometer, front seats, back seats, floors,
and hand rest, including the panels and door handles.
A few days later, Nagapetyan submitted a proof of loss
document to Farmers. Nagapetyan subsequently informed
Farmers he was taking the car to V.I.P. Auto Body (VIP).
Farmers received an estimate from VIP totaling
$16,208.27. The estimate, which attached photos of the car,
included costs for replacing the broken window and damaged
bezel trim on the driver’s door, as well as costs for replacing
interior components, including the trim, seats, console,
navigation display, and steering wheel.
Farmers hired Sage Forensic Investigations to inspect the
damage to the vehicle. Norm Lafave was assigned to the
inspection. Lafave was provided with the VIP estimate and
photographs. He then conducted an inspection of the car at VIP.
Farmers received a written report of Lafave’s analysis, which we
will refer to as the Sage Report.
In May 2020, Farmers sent a letter to Nagapetyan partially
denying his claim and estimating the total cost of covered
damage to be $1,311.05. Farmers’ estimate included replacing
the broken glass, a mirror cover repair/refinish, painting and
adding a clear coat to the driver’s door shell, replacing the bezel
trim on the driver’s door, and parts and labor. After applying the
$250 policy deductible, the net payment of policy benefits for
damage to the car was $1,061.05. Farmers paid that amount to
Nagapetyan on May 8, 2020. Farmers later issued a
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supplemental payment of $515.84 for additional labor hours for
the repairs.1
B. This Action
Nagapetyan filed his complaint in October 2020. He
alleged two causes of action against Farmers—breach of contract
and breach of the implied covenant of good faith and fair dealing.
In short, Nagapetyan alleged Farmers breached its obligations
under the Policy by failing to pay his entire claim for damages
and breached the implied covenant by denying him all the
benefits it owed under the Policy and conducting investigations in
an unreasonable manner.
1. Farmers’ motion for summary judgment
Farmers moved for summary judgment, asserting two
primary arguments. First, it argued Nagapetyan’s breach of
contract cause of action lacked merit because Farmers conducted
a reasonable investigation and paid him the policy benefits
reasonably owed. Second, Farmers argued Nagapetyan could not
establish a breach of the implied covenant of good faith and fair
dealing because no other policy benefits were in fact owed or,
alternatively, because a genuine dispute existed as to Farmers’
liability and bad faith does not exist where a failure to pay was
reasonable.
In support of the motion, Farmers submitted, among other
things, the VIP estimate of the cost to repair the car. The VIP
1
Farmers also paid to replace the child car seats in
Nagapetyan’s car and paid for Nagapetyan’s loss of use of his
vehicle.
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estimate included 60 line items of work that VIP asserted needed
to be done, including replacing or reinstalling various parts.
Among the over 20 parts to be replaced were four seat cushion
covers, two seat back covers, the steering wheel, the center
console compartment and armrest, a trim panel for the left front
door, trim panel moulding for the left and right front doors, and
the power window switch for the left front door. VIP’s overall
estimate included $3,343.15 in labor costs, $12,653.26 in part
replacement costs, and $210.86 in additional costs.
Farmers also submitted the Sage Report in support of its
summary judgment motion. The Sage Report’s stated purpose
was to “[i]nspect th[e] subject vehicle for glass damage into the
interior of th[e] subject vehicle and if related to a broken left front
window glass.” It concluded most of the damage presented on the
interior of the car was “pre-existing, manmade, with previous
wear and tear, and not related to flying glass impact damage.”
The Sage Report recited that, when the investigation was
conducted, broken pieces of glass were still in the vehicle and the
vehicle had yellow markups “indicating the glass damage alleged
from this incident.” It concluded the markups “were not from
glass damage” but from normal wear and tear, and represented
that many of the marked areas wiped clean and revealed no
damage at all.
The Sage Report specifically analyzed and discussed the
areas of the car that bore the aforementioned yellow markups.
For example, the report concluded damage on the right front door
panel was “not from glass contacts, but from abrasions and light
scratches.” The right front seat had “normal wear and tear only,
and no flying glass damage was present.” Scratches on the
driver’s door sill were “preexisting before this loss” because the
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area was protected by the door when closed and the marks had
an incorrect bias for glass damage. Damage to the bezel trim on
the inside of the driver’s side door, however, was possibly
consistent with glass abrading.
In connection with its summary judgment motion, Farmers
also submitted a declaration from Brian Kiesel, a Field Claims
Supervisor for Farmers, which asserted, among other things, that
Farmers believed Lafave was qualified to examine and analyze
Nagapetyan’s car; that his analysis and conclusions were
thorough, unbiased, and persuasive; and that Farmers relied on
the report in good faith to determine an appropriate response to
Nagapetyan’s claim.2
2. Nagapetyan’s summary judgment opposition
Nagapetyan argued triable issues existed as to his breach
of contract cause of action because Farmers could not prove the
damages to the interior of the car were pre-existing wear and
tear, Farmers’ belated partial payment did not extinguish his
claim, and Farmers did not pay the true value of his claim.
Nagapetyan took issue with the methods Lafave employed in
generating the Sage Report and argued the report was
insufficient because it failed to consider vandalism-related
damage other than glass damage. Nagapetyan further asserted
2
Farmers’ summary judgment paperwork also included a
copy of the letter it sent to Nagapetyan partially denying his
claim. The letter represented that Sage Investigation concluded
the cause of the damage to the interior components of the car was
“wear and tear and man-made induced damages not related to
glass breaking into the vehicle or vandalism of the vehicle.”
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he could prove the seat cushions did not have preexisting wear
and tear damage because they were replaced in February and
May 2017 (roughly three years before the window breaking
incident).
Nagapetyan’s evidence in opposition to summary judgment
included various items of documentary evidence, and declarations
from himself, his attorney, and Chris Serobyan, the president of
VIP. Among that evidence were excerpts from the rough draft of
claim supervisor Kiesel’s deposition transcript.
Serobyan’s declaration explained Nagapetyan’s vehicle
sustained damages to both its exterior and interior, including the
driver’s door, driver’s door window, wood trim bezel on the
driver’s door, vehicle seats, cushions, dashboard, steering wheel,
radio/navigation unit and center display, and front dash trim,
among other interior components. VIP submitted the estimate to
Farmers, and Farmers sent a third-party inspector to visually
inspect the car and take photographs of it. The inspector did not
perform any testing. Serobyan’s declaration did not express an
opinion or form any conclusions regarding whether the cited
damages were pre-existing or caused by the recent vehicle break-
in.
Nagapetyan also submitted his own declaration. He
declared he purchased the car as a certified, pre-owned vehicle in
January 2017. He had the car serviced on three different dates
in April and May 2017, during which the front and rear seat
cushions were replaced. On April 17, 2020, Nagapetyan parked
his car behind his office building. When he left work that
evening, he discovered his driver’s window was broken and there
was shattered glass inside and outside the vehicle. Nagapetyan
called the non-emergency police line, but there was no answer.
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Nagapetyan opened the driver’s door, and more shattered glass
fell inside the vehicle. Nagapetyan observed glass on the front
and back seats of the vehicle. He retrieved a towel from the
trunk of his car, placed it on the driver’s seat, and drove home.
Nagapetyan’s declaration did not aver, under penalty of
perjury, that all of scratches and other damage cited in the VIP
estimate did not pre-date the vehicle break-in. Instead, the
declaration only recounted elements of non-sworn
communications he had with a Farmers employee in which he
told the employee there was no prior damage to the car.
In opposing summary judgment, Nagapetyan also asserted
evidentiary objections. In particular, he objected to the Sage
Report, arguing it lacked foundation, was an inappropriate
expert opinion, and was hearsay.
3. Farmers’ reply
Farmers submitted a reply brief, along with objections to
some of Nagapetyan’s evidence. Farmers also submitted excerpts
from claim supervisor Kiesel’s deposition, during which he
testified Farmers asked its engineer “to look at the damages and
determine if it was caused by the glass, particularly in this case,
glass laying in the console the way that it is or in the act of a
vandalism. [¶] So they look at those aspects. They know that
somebody broke into the vehicle, and they look at whether or not
they feel that this could have been caused as a result of that.”
4. The trial court’s ruling
The trial court granted the motion for summary judgment.
As to the second cause of action for bad faith, the court found
Farmers established it acted in good faith by properly
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investigating Nagapetyan’s claim, including by hiring an expert
to evaluate the vehicle and relying on the information the expert
provided. The court concluded the Sage Report was admissible as
to Farmers’ state of mind and overruled Nagapetyan’s hearsay
and other objections. The court concluded Farmers made an
adequate showing in support of its contentions and Nagapetyan
did not demonstrate any disputed issue of material fact.
As to the first cause of action for breach of contract, the
court found Farmers submitted sufficient evidence to
demonstrate no reasonable juror could find Nagapetyan’s
assertions of material fact were true, thereby requiring him to
demonstrate a reasonable trier of fact could find underlying facts
in his favor. The court stated the only evidence in the record that
might offset Farmers’ evidence was the VIP estimate and
Nagapetyan’s statement in his declaration asserting he told a
Farmers employee there was no prior damage to his car. The
trial court took issue with the latter because it was not a
statement of the facts under oath, did not provide specific details,
and did not specify what “damage” meant. It concluded the fact
that Nagapetyan made the statement to the employee was proof
of nothing, and therefore not enough to meet his burden. As for
the VIP estimate, it did not satisfy Nagapetyan’s burden because
it did not identify any points of alleged harm or damage. Rather,
it simply listed items to be replaced. In reaching its decision, the
court also stated Nagapetyan had not attempted to provide an
explanation supporting his case, or hired an expert to do so.
II. DISCUSSION
Our review of the record reveals there are no triable issues
of material fact as to Nagapetyan’s breach of contract cause of
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action. Farmers met its initial burden on summary judgment by
proffering the opinion of its expert that none of the damage
Farmers declined to cover was attributable to the break-in. It
was then Nagapetyan’s burden to put forth evidence to the
contrary. Because he did not do so, summary disposition of the
claim was proper. As Nagapetyan has no breach of contract
claim as a matter of law, his claim for breach of the implied
covenant also necessarily fails, and summary judgment was
proper.
A. Summary Judgment and the Standard of Review
“[T]he party moving for summary judgment bears the
burden of persuasion that there is no triable issue of material fact
and that he is entitled to judgment as a matter of law.” (Aguilar
v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 (Aguilar).)
“Once the [movant] has met that burden, the burden shifts to the
[other party] to show that a triable issue of one or more material
facts exists as to that cause of action . . . .” (Code Civ.
Proc., § 437c, subd. (p)(1); Aguilar, supra, at 850.) A triable issue
of material fact exists where “the evidence would allow a
reasonable trier of fact to find the underlying fact in favor of the
party opposing the motion in accordance with the applicable
standard of proof.” (Aguilar, supra, at 850.) “We review the trial
court’s decision de novo, liberally construing the evidence in
support of the party opposing summary judgment and resolving
doubts concerning the evidence in favor of that party.’
[Citation.]” (Ennabe v. Manosa (2014) 58 Cal.4th 697, 705.)
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B. Nagapetyan Did Not Adduce Evidence Establishing a
Triable Issue of Material Fact
If an insurer seeks summary judgment on the ground that
a claim is excluded, and thus the relevant policy was not
breached, “‘it has “the burden . . . to prove that the claim falls
within an exclusion. [Citation.]” [Citation.] To satisfy its
burden, an insurer need not “disprove every possible cause of the
loss” and once the insurer establishes the claim is excluded, the
burden shifts to the insured to show a triable issue of material
fact exists.’ [Citation.] ‘“[A]n insured has the burden of proving
its claim falls within the scope of the policy’s basic coverage, even
where the insurer brings a motion for summary judgment.”
[Citation.]’ [Citation.] ‘Thus, when an insurer meets its initial
burden on summary judgment of showing there is no coverage
under the policy, the burden shifts to the insured to show a
triable issue of material fact as to coverage.’ [Citation.]” (Mosley
v. Pacific Specialty Ins. Co. (2020) 49 Cal.App.5th 417, 423.)
As pertinent here, the Policy (1) covered a loss caused by
any direct, sudden, and accidental means other than collision and
(2) excluded losses due to wear and tear. Farmers moved for
summary judgment (or adjudication) on the ground that it paid
the portion of Nagapetyan’s claim covered by the Policy and the
remainder of the claim was excluded. Farmers’ evidence, namely
the Sage Report, concluded “[a]ll the damage presented on the
interior of this subject vehicle was pre-existing, manmade, with
previous wear and tear, and not related to flying glass impact
damage.” This satisfied Farmer’s initial burden. Nagapetyan
does not argue otherwise.
Liberally construing the evidence that Nagapetyan
submitted, there is nothing that materially contradicts Farmers’
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evidence demonstrating it did not breach the insurance policy.
Most significantly, Nagapetyan did not establish the repair items
in the VIP estimate were all for damage that did not exist prior to
the break-in. Indeed, Nagapetyan’s declaration made no
affirmative assertions about the prior state of the car. The best
that can be said for the evidence on this point is that
Nagapetyan’s declaration recounted an unsworn statement he
made to a Farmers employee there was no prior damage to the
car.3 While an opposition to a summary judgment motion may be
supported by declarations (Code Civ. Proc., § 437c, subd. (b)(2)),
the statements in a declaration must be asserted to be true under
penalty of perjury (Code Civ. Proc., § 2015.5). Because
Nagapetyan’s declaration does not assert the status of the car
prior to the break-in under penalty of perjury, it does not
establish the fact of the car’s status. (See Truslow v. Woodruff
(1967) 252 Cal.App.2d 158, 163-164 [summary judgment correctly
granted because unsworn memorandum signed by counsel
insufficient to deny facts set forth by movant].) Nor did
Nagapetyan submit photographs or any other evidence to
establish the prior state of the car.4
3
We make our assessment without regard to the proof of loss
form in the record that Nagapetyan did not rely on in his
separate statement filed with his opposition to summary
judgment, nor in his brief filed in this court. While that form has
“none” typed in a field to list “prior damage,” the form is
incomplete because it is not notarized and does not bear the
signature of a company representative.
4
Nagapetyan did declare that his vehicle’s seat cushions
were replaced in 2017, approximately three years prior to the
break-in. While this indicates the status of those seats after their
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In addition, Nagapetyan provided no other evidence a jury
could properly rely on to find the damage Farmers declined to
cover was not pre-existing and therefore, by inference, caused by
the break-in. There was no expert declaration or other evidence
establishing a causal link between any damage and the incident.
Serobyan’s declaration also did not opine as to the cause of any of
the long list of items the VIP estimate proposed to repair.
Summary judgment on the breach of contract claim was thus
proper.
Nagapetyan nonetheless believes he successfully opposed
summary judgment because his statement in his declaration that
he told a Farmers employee there was no prior damage to the car
permits the “obvious” inference that he would testify to the same
fact at trial. He also asserts the VIP estimate permits an
inference that the listed items needed to be repaired or replaced
due to damage from the vandalism. He is wrong on both counts.
It is not reasonable to infer Nagapetyan would make a statement
under oath at trial that he conspicuously did not make in his
written declaration. Nor is it reasonable to infer that all the
damage listed in the VIP estimate was caused by the break-in
when VIP did not so opine (and was not in a position to so opine).5
replacement, it does not constitute evidence of their status
directly prior to the break-in.
5
Indeed, some of the items on the VIP estimate did not
reflect damage at all, whatever the cause. The Sage Report
states that some of the identified damage that VIP proposed to fix
in fact wiped clean when inspected; Nagapetyan introduced no
evidence to contradict this.
13
Nagapetyan also contends the Sage Report was insufficient
for a handful of reasons, including that it was limited to
assessing only the damage from flying glass rather than other
damage from the vandalism, was conclusory, and was biased due
to Sage’s working relationship with Farmers.6 We conclude, as
the trial court did, that the report was sufficient to establish the
unpaid portion of Nagapetyan’s claim was not covered by the
policy. In particular, we note that in addition to concluding
damage to the interior of the car had not been caused by flying
glass, the Sage Report concluded the damage to the interior of the
car was “pre-existing, manmade, with previous wear and tear.”
Further, Nagapetyan did not put forth any evidence undermining
the Sage Report’s conclusions. Finally, Nagapetyan’s argument
that the Sage investigation was biased is unsupported by
admissible evidence. The only evidence Nagapteyan cites in
support of this contention are the excerpts from the rough draft of
Keisel’s deposition. The rough draft of a deposition transcript,
however, “may not be used, cited, or transcribed as the certified
transcript of the deposition proceedings.”7 (Code Civ.
Proc., § 2025.540.)
6
To the extent Nagapetyan attempts to assert the Sage
Report should not have been considered at all, that argument
was forfeited by his failure to challenge the trial court’s ruling on
his objection. Contrary to Farmers’ contention, however,
Nagapetyan’s failure to preserve his objection to the Sage
Report’s admissibility does not prevent him from challenging its
significance.
7
Nagapetyan also challenges certain statements the trial
court made in reaching its ruling. Because we are concerned
14
Because no trial is needed to determine no additional
benefits were due under the insurance policy, Farmers also did
not breach the implied covenant of good faith and fair dealing.
(See Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 36
[where no benefits are due to an insured, there is no claim for
breach of the implied covenant]; see also Minich v. Allstate Ins.
Co. (2011) 193 Cal.App.4th 477, 493 [where insurer granted
judgment as a matter of law on breach of contract claim, bad
faith claim also fails]; Everett v. State Farm General Ins. Co.
(2008) 162 Cal.App.4th 649, 663 [“[b]ecause there was no breach
of contract, there was no breach of the implied covenant”].)
Summary adjudication of Nagapetyan’s implied covenant claim
was therefore also correct.
with the trial court’s ultimate ruling and not its reasoning, we do
not address those arguments.
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DISPOSITION
The judgment is affirmed. Costs on appeal are awarded to
Farmers.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
BAKER, J.
We concur:
RUBIN, P. J.
MOOR, J.
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