[00:00:08] Speaker 01:
Good morning, Your Honours and may it please the court.

[00:00:10] Speaker 01:
My name is Natalie Suri.

[00:00:11] Speaker 01:
I represent Jonathan and Ariel Barbie in this matter.

[00:00:15] Speaker 01:
I'd like to reserve two minutes for rebuttal.

[00:00:18] Speaker 01:
At your clock.

[00:00:19] Speaker 01:
Thank you.

[00:00:20] Speaker 01:
This case is about whether an insurance company can keep a case open for adjustment and closed at the same time for limitations.

[00:00:29] Speaker 01:
And I'll address and focus on three points.

[00:00:31] Speaker 01:
First is the legal line that California draws between insurer-driven requests, please reconsider my case, and insured-driven reopening and active adjustment.

[00:00:43] Speaker 01:
Next, I'll talk about how State Farm here itself kept the case or the claim open

[00:00:49] Speaker 01:
up until October of 2022, which would make the June filing more than timely, comfortably timely.

[00:00:56] Speaker 01:
And lastly, at a minimum, the timing of the denial or the adjustment period should have been a question that should have been left for a jury determination, not something that should have been ruled on summary judgment.

[00:01:08] Speaker 01:
Turning to the law, there is no dispute between both parties that Insurance Code Section 2071

[00:01:13] Speaker 01:
and the case of Prudential supply the baseline rule.

[00:01:18] Speaker 01:
And that's the one year limitation period is equitably told from the point in time that the insured gives notice to the insurance company until the time that the insurance company then denies or otherwise completes its investigation.

[00:01:32] Speaker 01:
The point of the rule is practical and it's fairness based.

[00:01:35] Speaker 01:
It allows the insured to give the insurance company the opportunity to investigate the case before rushing to the courthouse to file a lawsuit.

[00:01:44] Speaker 01:
On the flip side, it allows the insurance company to properly investigate fully and thoroughly before being met with unnecessary lawsuits.

[00:01:54] Speaker 01:
The cases of Singh and Eshoo

[00:01:57] Speaker 01:
Answer the follow-up question.

[00:01:59] Speaker 01:
So what happens after that initial denial?

[00:02:02] Speaker 01:
Singh takes that framework and it applies it to a very narrow set of facts.

[00:02:06] Speaker 01:
The case of Singh deals with, and just very briefly, it deals with the situation where the insureds were put on notice about transients living in the home and causing property damage.

[00:02:22] Speaker 01:
And they knew about that because there were vandalism claims earlier.

[00:02:25] Speaker 01:
And the city even stepped in at some point and said, you need to remedy the situation before we come in.

[00:02:31] Speaker 01:
And they did nothing about it, and then a fire erupted.

[00:02:35] Speaker 01:
So they opened a claim with the insurance company, and the insurance said, well,

[00:02:39] Speaker 01:
We don't have coverage for this case because you breached the policies.

[00:02:42] Speaker 01:
You breached your duties under the policy.

[00:02:45] Speaker 00:
I mean, I take it you're about to get to this, but can I just ask you, if we didn't have Eshoo, if all we had was Singh, would you lose under the rule of Singh?

[00:02:57] Speaker 01:
I don't think so, Your Honor, because I think Singh is very specific.

[00:03:02] Speaker 01:
And I'd like to point to a specific page number.

[00:03:06] Speaker 01:
It's page 145 of that court record.

[00:03:09] Speaker 01:
And it says, beginning a new period of equitable tolling based merely on a request for consideration would be anomalous.

[00:03:18] Speaker 01:
And the word request is italicized.

[00:03:21] Speaker 01:
And I think that the court did that to make clear that that's the fact pattern that they're dealing with in that case.

[00:03:28] Speaker 01:
They're dealing with a request from an insured that was

[00:03:33] Speaker 01:
essentially not acted upon.

[00:03:34] Speaker 01:
I mean, they took the request because they have a duty of good faith to their insureds, they looked at it again and turned back and said, well, we looked at it again and we're relying back on the first denial letter that we sent to you and outlined in multiple bullet points why we're not going to cover this case and that's because you breached your duties under the policy.

[00:03:53] Speaker 00:
The reason for the denial is different, but you got, for both claims, similar denial letters that expressly referenced the limitations period and said this denial letter starts the one-year limitations period, right?

[00:04:08] Speaker 01:
I disagree to an extent, Your Honor.

[00:04:10] Speaker 01:
Yes, we did receive two denial letters in this case, one in March, one in October.

[00:04:17] Speaker 01:
But the first one was a partial denial letter.

[00:04:20] Speaker 01:
And the partial denial letter said that there is an exclusion under your policy under wear, tear, and corrosion, but the resulting water damage to the home is covered.

[00:04:31] Speaker 01:
That's a partial denial letter.

[00:04:32] Speaker 01:
The second denial letter that came in October after the adjustment period

[00:04:37] Speaker 01:
relies on a different basis for the denial and it says this is not covered because it's not due to accidental direct physical loss.

[00:04:47] Speaker 01:
And I think the variance between the two denial letters is also telling in our case that there was an actual adjustment period between denial one and denial two because the reasoning for the denial are now different.

[00:05:00] Speaker 01:
So to directly respond to Your Honor's question, I think that Singh was really focused on a very narrow set of facts.

[00:05:08] Speaker 01:
And I think they meant to emphasize that they're dealing with a request for reconsideration, not necessarily a situation where a request was made.

[00:05:19] Speaker 04:
What about the Miglior case?

[00:05:21] Speaker 04:
Isn't that essentially of the variety that you're saying this one is?

[00:05:26] Speaker 01:
The Miglior case, Your Honor,

[00:05:29] Speaker 01:
which the appellee cites in their brief, was a limitations issue that actually went to the jury.

[00:05:36] Speaker 01:
This is a case where summary judgment was filed and it was denied.

[00:05:40] Speaker 01:
And the questions, there were three questions that the jury got to decide whether the limitations period.

[00:05:48] Speaker 04:
But the opinion says a statement of willingness to reconsider does not render a Don Nile equivocal.

[00:05:56] Speaker 04:
I'm sorry, Your Honor.

[00:05:58] Speaker 04:
The opinion says a statement of willingness to reconsider does not render a denial equivocal.

[00:06:17] Speaker 01:
So in my reading of Megalior dealt with a situation where it was insurance aftershocks

[00:06:27] Speaker 01:
And when the appellant was trying to apply the supplemental, the statute that came out that was, oh gosh, it's not in front of me now.

[00:06:45] Speaker 01:
The 30.9 statute that came out, he said that it didn't apply to aftershock.

[00:06:49] Speaker 01:
So I think that the ruling in Miglior is actually supportive in our case because one,

[00:06:56] Speaker 01:
It actually went to a jury, and a jury was allowed to ultimately decide whether the king was adjusted, readjusted, and the court.

[00:07:05] Speaker 04:
But you're suggesting that Singh was a case in which there was a request for a reconsideration, but there was no actual reconsideration.

[00:07:19] Speaker 04:
And I'm saying that Miglior was a case in which

[00:07:22] Speaker 04:
Again, neither the fact that respondent invited further input from appellant or that she obtained a supplemental report is conclusive of the determination whether the earlier letter was an unequivocal denial.

[00:07:36] Speaker 04:
So that seems to be the same circumstance.

[00:07:39] Speaker 01:
Yes, Your Honor.

[00:07:39] Speaker 01:
And again, that was something that a jury was able to hear based on the evidence and decide based on the facts that were presented that to them that was an unequivocal denial.

[00:07:48] Speaker 01:
The facts that we have here are greatly vary from the facts in Megalore, the facts in Sing,

[00:07:55] Speaker 01:
and all the cases that the defense, Marcellus, that the defense relies on.

[00:07:59] Speaker 01:
And that's because we have this, number one, we have a partial denial.

[00:08:03] Speaker 01:
It's not even a complete denial.

[00:08:05] Speaker 01:
A partial denial saying, we're not going to cover for the pipe that caused the water loss, but we're going to cover for the resulting water damage.

[00:08:11] Speaker 01:
Right?

[00:08:12] Speaker 01:
And then we have this letter that the appellee claims it's a partial denial.

[00:08:15] Speaker 00:
Why does it matter that it's a partial denial?

[00:08:17] Speaker 00:
I mean, it's a denial of the part that you're now suing about, right?

[00:08:23] Speaker 00:
So why does it matter that they granted a different part?

[00:08:27] Speaker 01:
Well, it matters, Your Honor, because it's not necessarily... So the denial is where tear corrosion only excludes coverage for the source of the loss, so let's say the pipe itself.

[00:08:37] Speaker 01:
But the resulting damage is the damage that there was the main discrepancy about.

[00:08:41] Speaker 01:
So that's why it matters essentially, because it's not even a complete denial of the claim, because the Barbies are seeking to obtain benefits

[00:08:49] Speaker 01:
for the resulting damage to the floors, to the walls, to the kitchen, to the cabinets, that wasn't denied in the March 5, 2022 letter.

[00:08:57] Speaker 01:
That denial came in October when they said, well, this case is denied due to accidental direct physical loss, which is one of the, it's the loss, it's the section in which the appellate or the plaintiffs or the insurance would have to prove to the insurance company that this is a covered loss before they get it.

[00:09:14] Speaker 04:
I'm not understanding.

[00:09:14] Speaker 04:
You're saying that because they,

[00:09:16] Speaker 04:
The original letter granted part of it, it didn't deny the other part of it.

[00:09:21] Speaker 01:
That's exactly what the letter says, Your Honor.

[00:09:24] Speaker 01:
It's March 5 letter says that this is a partial denial due to wear tear corrosion, but the resulting damage is covered.

[00:09:33] Speaker 04:
Right, so it was a partial denial.

[00:09:35] Speaker 04:
Correct.

[00:09:35] Speaker 04:
But then you just said that they didn't actually deny that partial later.

[00:09:40] Speaker 01:
Then later in October, the denial says, we've completed our investigation, and this is an accidental direct physical loss, which is a different basis for the denial.

[00:09:49] Speaker 01:
So the resulting water damage then in October 3 is now being accounted for.

[00:09:54] Speaker 01:
So there is this period in time between March and October where there is a lot of adjustment and activity in this case.

[00:10:03] Speaker 01:
And I have it laid out.

[00:10:03] Speaker 01:
So after the March 5 letter goes out to the insureds,

[00:10:08] Speaker 01:
They get a check issued on March 9.

[00:10:10] Speaker 01:
They get a second check issued on March 31.

[00:10:14] Speaker 01:
On March 31, there is a note in the file that says claims still pending mitigation estimate from Surf Pro.

[00:10:20] Speaker 01:
Then a re-inspection occurs on June 7.

[00:10:24] Speaker 01:
Then on July 14, State Farm requests additional information from Service Master to further investigate discrepancies.

[00:10:32] Speaker 01:
July 29, another check gets issued.

[00:10:35] Speaker 01:
August 11, another note saying that the claim is pending.

[00:10:39] Speaker 01:
Then we have, again on August 11, there's a 40-day status letter and we put this as a footnote in our reply brief because I think it's very important.

[00:10:46] Speaker 01:
The only time an insurance company sends 40-day status letters is when the case is pending.

[00:10:51] Speaker 01:
They are not required to send status letters on a closed claim.

[00:10:55] Speaker 01:
So a status letter gets sent out on August 11.

[00:10:58] Speaker 01:
September 9, we have a note saying there's a status letter sent on the claim.

[00:11:02] Speaker 01:
Then on September 23, we have an entry saying that coverage A appears resolved but cabinetry is being reviewed under a separate claim, again indicating that aspects of the loss are under active claim handling.

[00:11:14] Speaker 01:
Then we take the deposition of State Farm's person most knowledgeable who testifies that as of September 23,

[00:11:22] Speaker 01:
The claim is an open assignment review.

[00:11:24] Speaker 01:
Then we have the denial letter on October 13.

[00:11:27] Speaker 01:
This is essentially when State Farm says, okay, we've completed our investigation and this is the, and again, the different reasons saying that there's no accidental direct physical loss.

[00:11:40] Speaker 01:
This is the first communication that actually looks like a denial where between the time, at the very least, Your Honors, between the time of- But the first letter said it was a denial.

[00:11:51] Speaker 01:
The first letter said it was a partial denial, but the resulting damage was covered.

[00:11:55] Speaker 03:
Right.

[00:11:57] Speaker 01:
So it was a partial denial.

[00:11:58] Speaker 01:
It was a partial denial.

[00:12:00] Speaker 03:
So your argument seems to me more like an equitable estoppel argument, like not the typical tolling argument, because it sounds to me that makes this case more difficult, because it's not

[00:12:19] Speaker 03:
Brightline case it sounds to me like you're saying they yeah, they said it was a doubt but then they kept doing all these things which which was saying that It didn't put us on notice that we Should sue like they were leading you along and

[00:12:42] Speaker 03:
leading your clients along thinking that they didn't have a cause of action yet because there wasn't a final denial and they were giving all these signals that

[00:12:50] Speaker 03:
You know, we're still looking at it, and here's a pending notice, and they have the file open.

[00:12:56] Speaker 03:
So it sounds more like an equitable estoppel argument.

[00:12:59] Speaker 03:
Is that what you're making?

[00:13:00] Speaker 01:
Your Honor, respectfully, no.

[00:13:03] Speaker 01:
We are making the argument that this is an equitable tolling argument.

[00:13:09] Speaker 01:
And one of the cases I think is prudential, they differentiate why

[00:13:13] Speaker 01:
a stopple and equitable tolling very vastly and why equitable tolling would encompass more broad situations and if we look at the reason in a shoe, the court held that

[00:13:28] Speaker 01:
the same tolling principles from Prudential would apply to a reopened period and in this situation it's a little unique because as I mentioned this was a partial denial on the 31st saying that we're not covering the pipe but we're covering everything else and then we have the actual denial letter in October that

[00:13:46] Speaker 01:
okay, now we're done investigating the case.

[00:13:48] Speaker 01:
So that period between the time that adjustments and inspections and re-investigations continued, that period should be equitably told because there was still the anticipation that, okay, we're working to try to resolve this case.

[00:14:05] Speaker 01:
And this is exactly one of the factors that Prudential considered in its five factors that

[00:14:10] Speaker 01:
It's important so that you don't want hasty lawsuits.

[00:14:13] Speaker 01:
If you could settle the case and the insurance company can get it right, then that's the outcome that we want.

[00:14:18] Speaker 01:
We don't want to have to file lawsuits or have to have the insured file lawsuits just so they prevent this

[00:14:24] Speaker 01:
procedural time limitation trap.

[00:14:27] Speaker 01:
And although OSHU took this reasoning in the Northridge earthquake claims, it did state specifically on page 762 that the legislature enacted section 340.9 granting insured the second bite at the one-year apple.

[00:14:44] Speaker 01:
We should construe and apply this one-year period in the same way as the initial one-year period in insurance code section 2071.

[00:14:52] Speaker 01:
So the court itself took it upon them to make it known that it's not limited to the earthquake context.

[00:14:59] Speaker 01:
And even then, courts have since read issue that way.

[00:15:02] Speaker 01:
The court in Gaylord versus Nationwide Mutual Insurance Company

[00:15:09] Speaker 01:
cited issue for the proposition that, and I'll quote, an insured's request to an insurer to reconsider a denial will not toll a limitations period, but an insurer's agreement to reopen and reinvestigate can toll that limitations period.

[00:15:23] Speaker 01:
What are you quoting from?

[00:15:25] Speaker 01:
I'm quoting from Gaylord versus Nationwide, and this is at page 1111.

[00:15:32] Speaker 01:
And they are citing to a shoe on pages 762 to 763 and this is not an earthquake case this has to do with livestock.

[00:15:40] Speaker 00:
It's also not a California state court case right that was a federal district court.

[00:15:45] Speaker 01:
It's a federal yes it's a federal district court.

[00:15:48] Speaker 01:
But the line that you take from both of these cases is that seeing

[00:15:52] Speaker 01:
stands for the proposition that the tolling period isn't going to start all over again just because an insured keeps asking to reconsider, reconsider, because then we could have this open-ended timing where insurance companies are going to be reluctant to even agree to reopen a claim because it's just going to continue to prolong.

[00:16:08] Speaker 04:
In this instance, they said, we'll reconsider if you get us more information.

[00:16:16] Speaker 04:
Did they ever tell the Barbies that they were reconsidering?

[00:16:21] Speaker 01:
Their conduct told them that they were reconsidering.

[00:16:24] Speaker 04:
I think they said we were reopening, we were reconsidering, anything like that.

[00:16:27] Speaker 01:
No, Your Honour, they didn't in writing say anything.

[00:16:29] Speaker 04:
So what was their, but their contract was internal, but what about externally?

[00:16:34] Speaker 04:
In other words, what did they communicate to the Barbies?

[00:16:37] Speaker 01:
The Barbies, the impression that the Barbies had is that their insurance company is investigating the case, they're opening their home.

[00:16:43] Speaker 04:
How do they get that impression is what I'm asking.

[00:16:45] Speaker 01:
because they're asking for information.

[00:16:47] Speaker 01:
They're coming to the home.

[00:16:49] Speaker 01:
They're investing.

[00:16:51] Speaker 01:
They're sending status letters.

[00:16:53] Speaker 01:
And their claim notes indicate that the case is open.

[00:16:56] Speaker 01:
The case is pending.

[00:16:57] Speaker 01:
It's open.

[00:16:57] Speaker 01:
It's open.

[00:16:58] Speaker 01:
It's consistently showing in the record that the case has been open up until October.

[00:17:03] Speaker 04:
So with that in mind, Your Honor, I think, and with all the false... What's strange about this case, and I guess it's true of any limitations period, but they did keep telling you that the limitations period was starting at X time.

[00:17:16] Speaker 04:
Right?

[00:17:16] Speaker 04:
And you had time to file after all this happened and didn't.

[00:17:22] Speaker 04:
Right?

[00:17:22] Speaker 04:
There was another six months or something, even at when they were done, done, done, done.

[00:17:30] Speaker 04:
Is that right?

[00:17:31] Speaker 01:
Yes, Your Honor, it is right.

[00:17:32] Speaker 01:
Even when they were done, done, done in October, there was still some time to file a lawsuit.

[00:17:37] Speaker 01:
But at the end of the day, when an insurance company is investigating, reinvestigating, and giving the insured the impression that, OK, my claim is still open, that's what stops the clock.

[00:17:49] Speaker 01:
I understand that.

[00:17:52] Speaker 04:
It sounds like it's more of a lawyer problem, frankly.

[00:17:58] Speaker 01:
Well, Your Honor, did I pass my time?

[00:18:01] Speaker 03:
You went over.

[00:18:03] Speaker 01:
Oh, I went over?

[00:18:04] Speaker 01:
OK.

[00:18:04] Speaker 03:
You went over three minutes.

[00:18:05] Speaker 01:
OK.

[00:18:05] Speaker 03:
I'll give you some rebuttal time.

[00:18:07] Speaker 01:
Thank you so much.

[00:18:07] Speaker 03:
You're welcome.

[00:18:22] Speaker 02:
Good morning, Your Honor.

[00:18:23] Speaker 02:
Cheryl Orr on behalf of Appellee State Farm General Insurance Company.

[00:18:28] Speaker 02:
The summary judgment was properly granted and the dismissal of the complaint should be affirmed.

[00:18:32] Speaker 02:
Okay.

[00:18:34] Speaker 02:
This case is clearly within the rule of Prudential LMI.

[00:18:40] Speaker 02:
There was an unequivocal denial.

[00:18:43] Speaker 02:
And I need to really go back and try to set the record straight because there was a lot of... Well, she seems to be concentrating on the second claim, so why don't we do that?

[00:18:51] Speaker 02:
Right.

[00:18:51] Speaker 02:
The first claim was unequivocally denied on January 7, 2022.

[00:18:55] Speaker 02:
And it recited the one-year contractual limitations period and said the one-year period referred to begins to run

[00:19:02] Speaker 02:
as of the date of this letter.

[00:19:04] Speaker 02:
It couldn't be any clearer.

[00:19:07] Speaker 03:
I don't think we're talking about the first claim.

[00:19:09] Speaker 03:
We're talking about the second claim.

[00:19:11] Speaker 02:
Okay, the second claim.

[00:19:12] Speaker 02:
Second claim.

[00:19:14] Speaker 02:
A partial denial letter was sent on March 5, 2022.

[00:19:17] Speaker 02:
The letter advised Mr. Barbee of the contractual limitations period

[00:19:21] Speaker 02:
and stated that it started the running as of the date of that letter.

[00:19:26] Speaker 02:
Well, of course, I mean, that's not binding, right?

[00:19:29] Speaker 02:
It's a legal question.

[00:19:30] Speaker 02:
Now, what was not discussed, on March 31, 2022, State Farm issued its last payment to Barbie of 40920.

[00:19:40] Speaker 02:
That letter stated, State Farm has completed its investigation of this claim and believes that all covered damages have been paid.

[00:19:48] Speaker 02:
We consider this claim closed as of the date of this letter.

[00:19:54] Speaker 02:
Again, the letter gave notice of State Farm's final adjustment of the claim and the period

[00:20:00] Speaker 02:
of the statute of limitations started commencing under Prudential LMI, that date for that claim.

[00:20:06] Speaker 04:
But after that, they came back and re-inspected the resident at one residence.

[00:20:12] Speaker 02:
At the request of the Barbies Council.

[00:20:16] Speaker 02:
Right.

[00:20:17] Speaker 02:
After that date, they did not pay another

[00:20:20] Speaker 02:
payment to Barbies.

[00:20:23] Speaker 02:
They reissued a settlement check, but under the Garolla case that we cited in our brief, a reissuance of a settlement check that apparently got lost or wasn't cashed isn't another payment of the claim.

[00:20:34] Speaker 02:
And that was the ADPL issue that was addressed in the March 31, 2022 letter.

[00:20:42] Speaker 02:
Date Farm did not pay anything else and they did not engage in any negotiations.

[00:20:48] Speaker 02:
They had closed that file and said the file was closed as of that date.

[00:20:52] Speaker 02:
But a request came in, letter of representation for Barbie's council.

[00:20:59] Speaker 02:
And the insurance company has to respond to that.

[00:21:01] Speaker 03:
So your position is that the statute of limitations ran March 31, 2023.

[00:21:12] Speaker 03:
And they didn't file a suit until June 2nd, 2023.

[00:21:16] Speaker 02:
Well, they had one day extra because there was a delay.

[00:21:22] Speaker 02:
The claim was made a day late after it happened, so it would have expired on March 30th.

[00:21:28] Speaker 03:
Okay, but essentially they sued three months after the statute of limitations.

[00:21:33] Speaker 02:
Correct.

[00:21:34] Speaker 02:
And there was nothing in this file that shows the State Farm did anything to lead anyone on, either the Barbies Council or Barbies.

[00:21:44] Speaker 02:
After they closed the file, then they received the request, and the Barbies Council asked for State Farm to re-inspect the property.

[00:21:53] Speaker 04:
And during that re-inspection... Did they do anything else besides re-inspect it?

[00:21:57] Speaker 04:
I thought you said they had.

[00:21:58] Speaker 02:
Well, what they did is the claims note reflect that they had the inspection and then the attorney asked State Farm's examiner at the inspection, will you consider additional information?

[00:22:18] Speaker 02:
And they said, yeah, we'll consider additional information if there's any new information.

[00:22:22] Speaker 02:
And they confirmed that there were no more pictures

[00:22:25] Speaker 02:
no more videos, no additional evidence that was in the hands of ServPro.

[00:22:33] Speaker 02:
And they received nothing more from the Barbies Council.

[00:22:37] Speaker 04:
What about this 40-day notice?

[00:22:38] Speaker 04:
I don't even know.

[00:22:39] Speaker 04:
What is the 40-day notice?

[00:22:40] Speaker 02:
The 40-day notice is a stray remark in the claims file.

[00:22:44] Speaker 02:
And I will point out that this issue was raised for the first time in the reply brief.

[00:22:50] Speaker 02:
And it was not an issue that was... But what is it and what happened?

[00:22:54] Speaker 02:
I don't know.

[00:22:55] Speaker 04:
Do they send a notice to the board?

[00:22:57] Speaker 02:
I can't tell you.

[00:22:57] Speaker 02:
There's no evidence in this record of what that letter was or if it even related to this claim.

[00:23:03] Speaker 02:
I can't tell you.

[00:23:03] Speaker 02:
There's a stray note in the claims file.

[00:23:06] Speaker 02:
It wasn't the subject of litigation.

[00:23:08] Speaker 04:
It seems pretty clear that some internal... If you looked at the internal records alone, you would think you had an open claim.

[00:23:14] Speaker 02:
But this is the function of the way that they administer in the house claims.

[00:23:21] Speaker 02:
They have an electronic claims handling system.

[00:23:24] Speaker 02:
Anytime there's a voicemail, a telephone, a letter, it gets recorded

[00:23:29] Speaker 02:
in the ECS system, so they have to open the file that's already claimed to log it in, and they put it in, and they say, okay, is there anything else that happens?

[00:23:39] Speaker 02:
And the claim that there were any additional payments or any negotiations with the Barbies Council is just unfounded on this record.

[00:23:46] Speaker 02:
There's nothing in the claims file that reflects that.

[00:23:49] Speaker 02:
They were willing to go to inspect the property at the request of the Barbies Council, and there's nothing unreasonable.

[00:23:55] Speaker 02:
In fact, it was more than reasonable for State Farm to do that.

[00:23:58] Speaker 02:
But they were provided no additional information that changed the outcome.

[00:24:03] Speaker 02:
It didn't reflect on anything.

[00:24:04] Speaker 02:
And this case does not warrant a departure from the rule and prudential LMI.

[00:24:10] Speaker 02:
There's nothing that distinguishes this case.

[00:24:14] Speaker 02:
There was never an argument made in the trial court that this was an estoppel case or a waiver case or anything like that.

[00:24:22] Speaker 02:
Those arguments were not made in the opposition brief.

[00:24:25] Speaker 02:
They were not submitted in any form in the separate statement with any supporting evidence.

[00:24:31] Speaker 02:
And even that claims note, the 40-day note, was not mentioned in the separate statement.

[00:24:36] Speaker 02:
It wasn't mentioned in the opposition brief.

[00:24:38] Speaker 02:
And it only came up for the first time in this reply brief.

[00:24:42] Speaker 02:
So this is the first time the state farm is addressing it during this oral argument, which is not the appropriate standard.

[00:24:51] Speaker 02:
You can't create a tribal issue of material fact in the Court of Appeal by speculating about evidence that was not presented in the trial court.

[00:25:01] Speaker 02:
That is not the rule of summary judgment.

[00:25:05] Speaker 02:
As far as Singh goes, there's nothing that distinguishes this case from Singh.

[00:25:10] Speaker 02:
Again, the misrepresentation of what happened that was presented.

[00:25:15] Speaker 03:
Can I, under California law, have California courts treated Eshoo as kind of a one-time event that allowed these Northridge earthquake claims to be

[00:25:30] Speaker 02:
Considered separately than the ordinary round-the-mill insurance claim because three forty point nine was a revival statute It revived the statute of limitations for only Northridge earthquake claim.

[00:25:42] Speaker 02:
This is not a Northridge earthquake claim It's not governed by three forty point nine a shoe doesn't apply as she was very limited has it ever been extended to cover another situation or with the legislature have to enact a

[00:25:56] Speaker 02:
Yeah, they would have to enact another revival statute because Section 2071 of the Insurance Code has been in place since, I think, 1949.

[00:26:08] Speaker 02:
And that one-year statute of limitation has been recognized under Prudential LMI since 1990.

[00:26:14] Speaker 02:
A shoe addressed the second ethical tolling period in 1998.

[00:26:19] Speaker 02:
And the Supreme Court of California has not taken any steps to change that rule, that a willingness

[00:26:27] Speaker 02:
to reconsider a willingness to accept new information does not mean that the final adjudication or adjustment of the claim didn't happen.

[00:26:36] Speaker 02:
It doesn't nullify that prior unequivocal.

[00:26:40] Speaker 04:
The number 13th letter says we have completed our investigation and the evaluation of our loss and have determined there was no accidental direct or physical loss.

[00:26:52] Speaker 04:
That certainly sounds like until then they were investigating and evaluating.

[00:26:57] Speaker 02:
Well, but if you look at the claims file notes, the only reason they sent that was to finally close this out because they hadn't heard back from the Barbies Council.

[00:27:06] Speaker 02:
And they had already denied the claim for ADPL in the March 31, 2022 letter.

[00:27:13] Speaker 02:
That was for the kitchen cabinet.

[00:27:16] Speaker 02:
All of this relates to the kitchen cabinet.

[00:27:19] Speaker 02:
In the March 31, 2022 letter, they provided an additional payment of 402.90 cents for some damage that Serve Pro did to the base plates of the kitchen cabinets.

[00:27:35] Speaker 02:
But in the prior letter, March 9, State Farm denied coverage for the kitchen cabinets because they said there was no accidental physical loss of the kitchen cabinets, which were two rooms from where the location, the laboratory was located.

[00:27:49] Speaker 02:
and they said the kitchen cabinets, the upper kitchen cabinets were not damaged by the overflow of the toilet and they told the Barbies that in March 9 and then they issued one more payment for the damaged toe kicks on March 31 and they said the claim is closed, no ADPL.

[00:28:08] Speaker 04:
The October 31st letter doesn't refer to the earlier one as a denial or state when

[00:28:18] Speaker 04:
It does not.

[00:28:22] Speaker 02:
But the claim had already been denied.

[00:28:24] Speaker 02:
Again, this was a request for the reopening of the file and there was no new evidence.

[00:28:31] Speaker 02:
No new evidence was presented.

[00:28:34] Speaker 02:
When they went to inspect the property, the property was the same as it was when they inspected it before.

[00:28:39] Speaker 02:
The council for Barbie presented no new information and Servo had no information that.

[00:28:44] Speaker 04:
But anyone who didn't know anything more about the history of all this would think that that letter, the October 13th letter was the denial letter.

[00:28:52] Speaker 04:
There's no indication otherwise.

[00:28:55] Speaker 04:
It doesn't refer to an earlier denial.

[00:28:57] Speaker 04:
It doesn't refer to an earlier limitation state.

[00:29:02] Speaker 04:
And it says we've completed our investigation and evaluation and have determined

[00:29:09] Speaker 02:
Well, I think that one could look at this court's decision in Wagner versus Federal Emergency Management Agency 1988 decision and it says responding to further inquiries about the case has no impact on the running of the limitations period.

[00:29:32] Speaker 02:
And this court also back in 1969 in the Claremont aircraft case said supplying subsequent oral or written explanation of its denial of the claim did not vitiate the prior final denial.

[00:29:45] Speaker 02:
So even though the

[00:29:48] Speaker 02:
this additional letter was sent, it didn't vitiate the prior denial of the first claim and it didn't vitiate the prior denial of the kitchen cabinets that was reiterated.

[00:30:00] Speaker 04:
What was the date of the first, what you're saying is the first denial, March 31st?

[00:30:05] Speaker 02:
There was a

[00:30:08] Speaker 02:
March 5 was the partial denial.

[00:30:11] Speaker 02:
Then there was a subsequent letter on March 9 that they dealt with the kitchen cabinets and it made the payment subject to the deductible.

[00:30:19] Speaker 02:
And then there was the third letter, March 31, 2022.

[00:30:23] Speaker 02:
All of those letters recited the contractual limitations period and said that it was running as of that date.

[00:30:31] Speaker 02:
And then the last one said, March 31, saying, we're going to close this file.

[00:30:34] Speaker 02:
We've paid all the covered damages have been paid.

[00:30:38] Speaker 02:
And there were no other damages paid.

[00:30:41] Speaker 02:
Let me be clear.

[00:30:42] Speaker 02:
There was a re-issuance of a prior settlement check that was paid with the March 9 letter because Mr. Barbee said he didn't receive it.

[00:30:50] Speaker 02:
There were no new payments and there were no negotiations.

[00:30:54] Speaker 02:
There was some argument in the reply bridge.

[00:30:56] Speaker 02:
There were some negotiations.

[00:30:57] Speaker 02:
There were no negotiations.

[00:30:58] Speaker 02:
All it was is they agreed to go to the re-inspection and to be provided with information and the Barbies Council did not provide any additional information.

[00:31:10] Speaker 02:
There was no new information that would have changed the outcome and did change the outcome.

[00:31:18] Speaker 02:
I would submit that they are asking and they admit that they're only asking for a second equitable tolling period because they waived or forfeited any rights regarding equitable estoppel or waiver because none of that was argued in the trial court and they can't argue it for the first time on appeal and they didn't even argue it in their opening or reply brief.

[00:31:47] Speaker 02:
And the Anshu case, interestingly, only dealt with 340.9.

[00:31:52] Speaker 02:
And that Gaylord case that was cited by them in the reply brief, in that case, it is pure dicta that the court mentioned the Anshu case because it was an initial equitable tolling case.

[00:32:07] Speaker 02:
The question was, did Prudential LMI apply?

[00:32:10] Speaker 02:
And the question was, when was the final letter, denial letter, given because it didn't

[00:32:17] Speaker 04:
I think in that case there was a question about... So once again, what are you saying is the final denial letter?

[00:32:22] Speaker 02:
Well, with respect to the first claim, it's January 7th, then there was a February 10th letter that didn't make any difference.

[00:32:31] Speaker 02:
And then with respect to this second claim, we submit that the March 31, 2022 is the outside date of

[00:32:39] Speaker 02:
the final adjustment of the claim, because then they said, this is all we are going to pay for covered damages, and we are closing our file as of this date.

[00:32:51] Speaker 02:
They never changed from that position.

[00:32:53] Speaker 04:
But it doesn't include the language about the limitations period.

[00:32:57] Speaker 04:
There's no notice of a limitations period in this letter.

[00:33:00] Speaker 04:
No, but they said- Isn't that required into California law?

[00:33:02] Speaker 04:
No.

[00:33:04] Speaker 04:
It seems to be routinely done.

[00:33:06] Speaker 02:
It is routinely done, but it's not required.

[00:33:12] Speaker 02:
Again, a willingness to reconsider and a statement by the insurance company that it will reconsider evidence is not a reopening of the client file under the California authorities.

[00:33:25] Speaker 02:
It does not create a second equitable tolling period under Singh, under Lamari, or I'm sorry, Marcellus, or Migliori.

[00:33:33] Speaker 02:
But it wasn't just a request.

[00:33:34] Speaker 04:
I mean, they did do some activity and they did refer to it as a reconsideration.

[00:33:42] Speaker 02:
I don't believe that they referred in the claims note that it was a reconsideration.

[00:33:45] Speaker 04:
Well, in the October letter, well, maybe it was not a reconsideration, an investigation and evaluation.

[00:33:58] Speaker 04:
They did a re-inspection and we've completed our investigation and evaluation of a loss.

[00:34:08] Speaker 04:
So they certainly are treating it as,

[00:34:11] Speaker 04:
That was part of their investigation and evaluation.

[00:34:15] Speaker 02:
And I think that if you look at the Pennsylvania case, I forget the name off the top of my head, that we cited in our brief that was also cited as authority in the Singh case.

[00:34:26] Speaker 02:
In that case, the claims people met with the insureds to discuss the claim.

[00:34:33] Speaker 02:
And it was not found that that meeting with the insureds to discuss the claim constituted a reopening or any

[00:34:42] Speaker 02:
any act that actually vitiated or negated the prior denial.

[00:34:47] Speaker 02:
So our position is if State Farm goes out of its way to respond, as it must because the Department of Insurance says you have to respond to an inquiry, and they respond to the Barbies Council inquiry, and they say, okay, we'll come out

[00:35:02] Speaker 02:
But it's documented in the claims file that we came out and we told you that we're not paying the kitchen cabinet.

[00:35:07] Speaker 02:
We already told you we denied the claim for the kitchen cabinets.

[00:35:10] Speaker 02:
We're not gonna, but we'll consider additional evidence.

[00:35:14] Speaker 02:
They were given no additional evidence.

[00:35:17] Speaker 02:
So it doesn't reopen the prior denial.

[00:35:20] Speaker 02:
They've already have enough information to know that this claim has been denied in March of 2022.

[00:35:26] Speaker 02:
They have counsel that represents them less than three weeks later.

[00:35:31] Speaker 02:
And their counsel had sufficient time to file a lawsuit within the statute of limitations as to both claims.

[00:35:39] Speaker 02:
And they failed to do that.

[00:35:41] Speaker 02:
That is not State Farm's fault.

[00:35:44] Speaker 02:
They had sufficient information in their hands to know that State Farm had denied this claim, and they needed to file a lawsuit.

[00:35:57] Speaker 03:
All right.

[00:35:57] Speaker 03:
Thank you, counsel.

[00:35:58] Speaker 02:
Thank you.

[00:35:59] Speaker 03:
You went over too.

[00:36:00] Speaker 02:
Oh, I'm sorry.

[00:36:00] Speaker 03:
Thank you very much.

[00:36:02] Speaker 03:
I'll give you two minutes.

[00:36:09] Speaker 01:
Thank you, your honor.

[00:36:12] Speaker 01:
I'll address a few of the points.

[00:36:17] Speaker 01:
First, counsel said nothing distinguishes this case from saying I obviously disagree with that.

[00:36:23] Speaker 01:
And one of the points that were made that were addressed is, well, it doesn't refer to an earlier, the October denial letter doesn't refer to an earlier denial or a limitations date, and that is correct.

[00:36:38] Speaker 01:
If we're really comparing this case to Singh, which is what the Pelley's trying to do, in Singh, and we could look at, let's see what page this is, page 139.

[00:36:53] Speaker 01:
when they were asked to reconsider the case.

[00:36:57] Speaker 01:
The insurance company said, by a letter dated March 22, Allstate again denied the claim.

[00:37:05] Speaker 01:
The March 22 letter told the plaintiffs that, and I'll quote, after reconsideration of your claim, Allstate respectfully informs you that the position taken in the November 9, 1994 correspondence to you remains unchanged and no policy benefits can be afforded.

[00:37:21] Speaker 01:
That letter had explained in detail the reasons for denial.

[00:37:25] Speaker 01:
and answered plaintiff's request for reconsideration point by point.

[00:37:29] Speaker 01:
The October letter does not refer back to any other denial, not the March 5 one, not what counsel just suggested that there were letters with the checks that were issued in May.

[00:37:40] Speaker 01:
That simply didn't happen in our case.

[00:37:42] Speaker 01:
And then

[00:37:45] Speaker 01:
Council represented countless times over and over again that there were no new information, nothing new came, nothing, nothing, nothing, just an inspection and no other photos, but the record reflects otherwise.

[00:37:57] Speaker 01:
If I could direct Your Honor's attention to the fourth volume of the record, there is a notation on page eight,

[00:38:09] Speaker 01:
51 that says on July 29 another check or sorry on July 14

[00:38:18] Speaker 01:
Additional information was requested to further investigate discrepancies.

[00:38:23] Speaker 01:
And then there is, earlier than that, on June 7, or, oh my, I'm so sorry, I'm mixing these up.

[00:38:30] Speaker 01:
There is a July claim note that reflects new documents, including dry logs, were submitted and being actively reviewed.

[00:38:37] Speaker 01:
And that's on page 851 of the fourth volume of the record.

[00:38:41] Speaker 01:
Then there is the, there is a second note,

[00:38:49] Speaker 01:
On September 23, that says that the cabinetry is being reviewed under a separate claim.

[00:38:59] Speaker 01:
Cabinetry is being reviewed under a separate claim, again indicating that aspects of the loss were under active claim handling.

[00:39:08] Speaker 01:
This doesn't refer to an earlier denial.

[00:39:10] Speaker 01:
It was only partially denied, as indicated in the March 5 letter, saying that the resulting damages are still going to be covered.

[00:39:18] Speaker 01:
And then there is this adjustment period.

[00:39:20] Speaker 01:
There is the 40-day status letter.

[00:39:22] Speaker 04:
I don't understand that point.

[00:39:24] Speaker 04:
The damages that were not going to be covered were not the damages we're talking about now.

[00:39:30] Speaker 01:
And this is a very important point, Your Honor, so I really want to make sure that it's understood.

[00:39:34] Speaker 01:
So there is an exclusion under the policy that excludes losses from wear, tear, deterioration, corrosion, whatnot.

[00:39:41] Speaker 01:
But under that exclusion, it says, however, we ensure for the resulting damage to the loss.

[00:39:47] Speaker 01:
And the resulting damage are the damages that the plaintiffs, the appellants in this case, were seeking reimbursement for.

[00:39:53] Speaker 01:
The damages that the water caused to the home, to the bathroom, to the kitchen, to the cabinets, wherever it was damaged.

[00:39:58] Speaker 01:
I thought that's the part that was... That was not the part that was denied.

[00:40:03] Speaker 01:
All right.

[00:40:04] Speaker 01:
I understand that.

[00:40:05] Speaker 01:
What was denied was the actual source of what the water came out of.

[00:40:09] Speaker 01:
So that's what triggers the investigation and the adjustment period from the insurance company.

[00:40:16] Speaker 01:
that the wear tear deterioration corrosion exclusion that was cited in the March 5 letter doesn't trigger a further investigation on that respect, but that's when the insurance company now needs to decide how big is this loss?

[00:40:29] Speaker 01:
What is the discrepancies?

[00:40:31] Speaker 01:
What are the estimates saying?

[00:40:32] Speaker 01:
What is appellant's expert saying?

[00:40:34] Speaker 01:
What are our experts saying?

[00:40:36] Speaker 01:
And these are the discrepancies that were... As to the covered loss or as to the non-covered loss?

[00:40:40] Speaker 01:
As to the covered loss.

[00:40:41] Speaker 04:
So that's what we're arguing about?

[00:40:43] Speaker 04:
We're arguing about the amount of the covered loss?

[00:40:46] Speaker 01:
The argument or the discrepancy and the claim activity between the time between May up until October was the discrepancy about the covered loss.

[00:40:57] Speaker 01:
They sent two checks and one plaintiff's expert is saying you didn't afford enough

[00:41:04] Speaker 01:
It's inadequate to cover for the actual losses.

[00:41:07] Speaker 01:
State Farm is saying, no, this is what we have based on this information.

[00:41:11] Speaker 01:
This is adequate to cover for the losses.

[00:41:13] Speaker 01:
So this is the dispute between this period of time as to, did we pay enough money to these insureds to cover this loss?

[00:41:22] Speaker 01:
so different than Singh, I can't even explain, because Singh was just not even a covered boss.

[00:41:27] Speaker 01:
They didn't even get to the point of investigation.

[00:41:30] Speaker 00:
Singh dealt with a situation where... You read us a passage on page 145 of Singh, and then the paragraph immediately before the one that you read says, if the carrier's conduct after denying coverage expressly waives the one-year limit, which I take it you're not suggesting happened here,

[00:41:48] Speaker 00:
or induces the policyholder to forbear from filing suit.

[00:41:54] Speaker 00:
The doctrines of waiver and estoppel will avoid injustice.

[00:41:56] Speaker 00:
So what in all this correspondence would you point to to say that, to say induced your client to forbear from filing suit?

[00:42:07] Speaker 01:
all of the claim activity, Your Honor.

[00:42:09] Speaker 01:
It's not about what is written, it's the conduct of the insurance company.

[00:42:14] Speaker 01:
They have a duty for good faith to negotiate and resolve fully, thoroughly, and completely look at and investigate claims before they ultimately give their final coverage decision.

[00:42:26] Speaker 03:
But you've never once argued a stoppile or waiver.

[00:42:30] Speaker 03:
You've continued to argue tolling.

[00:42:33] Speaker 01:
Your honor, because I believe it's the case issue, and I wish I had it in front of me, distinguishes the estoppel in the waiver from equitable.

[00:42:41] Speaker 03:
But Judge Miller just read, distinguishes it.

[00:42:44] Speaker 03:
I don't know what case that was.

[00:42:46] Speaker 03:
You were reading that.

[00:42:46] Speaker 01:
That was from Singh.

[00:42:47] Speaker 01:
That was Singh, your honor.

[00:42:48] Speaker 01:
And if I may just... I know I'm...

[00:43:05] Speaker 01:
When you need to find something, you can't find it.

[00:43:08] Speaker 01:
But there was a very

[00:43:12] Speaker 01:
significant discussion in a shoe about how they differentiated the equitable tolling from the stopple.

[00:43:20] Speaker 01:
And even in that case, the court looked at it and said, no, this doesn't qualify for a stopple.

[00:43:27] Speaker 01:
This is a pure equitable tolling question.

[00:43:30] Speaker 01:
And the rationale in a shoe is in line with what we're presenting or suggesting today.

[00:43:37] Speaker 01:
And just finally, just from a policy perspective, by affirming the district court would put insureds in a very difficult position.

[00:43:46] Speaker 01:
If an insurance company can say we're still investigating, we're doing this, we're doing that, we're sending 40-day status letters as is required for open claims and then... Was your opponent correct that you have no, the only evidence of that is a notation but you don't actually have the letter, the record?

[00:44:05] Speaker 01:
I have to check, I would think that it's in the record.

[00:44:09] Speaker 01:
I don't have the pin site to it, but I do have the notation.

[00:44:12] Speaker 04:
You maintain that there is no letter in the record.

[00:44:14] Speaker 01:
No, I disagree.

[00:44:15] Speaker 01:
I would disagree.

[00:44:16] Speaker 01:
I just don't have the pin site for your honor, unfortunately, at this point.

[00:44:20] Speaker 01:
And anything that's indicated in the claim notes is actually an act that has happened.

[00:44:24] Speaker 01:
Insurance companies are not allowed to put claim notes of things that have not happened.

[00:44:30] Speaker 01:
And the 40-D status letter indication is actually on

[00:44:34] Speaker 01:
in the record volume four, page 850.

[00:44:39] Speaker 01:
So on a policy perspective, if you allow the insurance company to do all this conduct, adjusting of a claim, and then turn around and say, well, the limitations period passed, then you're doing exactly what Prudential, our Supreme Court, was trying to preclude, to have insureds going and filing lawsuits before an adjustment of a claim is done.

[00:44:59] Speaker 01:
And this is a situation that

[00:45:02] Speaker 01:
my office and just insurance in general are running across because it seems like the equitable tolling, the way that the insurance companies are tying it to the Singh rationale is almost like a limitations track.

[00:45:14] Speaker 03:
Maybe you should take them at their word when they say the statute of limitations is running from today.

[00:45:22] Speaker 01:
Your Honor, but again, in this case, and it's unique, it was a partial denial letter.

[00:45:27] Speaker 01:
So even there, there was vagueness and ambiguity.

[00:45:30] Speaker 01:
OK, is the statute of limitations?

[00:45:32] Speaker 01:
If I wanted to pursue this case for the pipe itself, is my statute on that aspect of my claim running from today, or is the resulting water damage running from today?

[00:45:41] Speaker 01:
It's a partial denial letter.

[00:45:42] Speaker 01:
And that's what distinguishes, I think, the facts of this case from any of the cases that have been cited by the appellee.

[00:45:51] Speaker 03:
All right.

[00:45:51] Speaker 03:
He's gone way over, but thank you very much.

[00:45:55] Speaker 03:
Thank you.

[00:45:55] Speaker 03:
Thank you for your argument Barbie versus State Farm will be submitted