Noroski v. Century Nat. Ins. Co.
Filed 11/8/13 Noroski v. Century Nat. Ins. Co. CA4.3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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opinion has not been certified for publication or ordered published for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
FOURTH APPELLATE
DISTRICT
DIVISION THREE
DANIEL A. NOROSKI,
Plaintiff and
Respondent,
v.
CENTURY-NATIONAL INSURANCE COMPANY et al.,
Defendants and Respondents;
JIM TRAVIS TICE,
Movant and
Appellant.
G047555
(Super. Ct.
No. 30-2011-00455936)
O P I N I O
N
Appeal from an order of
the Superior Court
of
County, Jamoa A. Moberly, Judge. Reversed.
Catanzarite Law
Corporation, Kenneth J. Catanzarite and Eric V. Anderton for Movant and
Appellant.
Blank and Dahl, Jeffrey
M. Blank and Laura A. Dahl for Plaintiff and Respondent.
Haight Brown &
Bonesteel, Valerie A. Moore, Jules S. Zeman, Florence H. Gerlitz, and Blythe
Golay for Defendants and Respondents Century-National Insurance Company and
Kramer-Wilson Company, Inc.
Bryan Cave, Douglas A.
Thompson, Brendon K. Barton, and Trevor J. Allen for Defendants and Respondents
Bank of America, N.A. and ReconTrust Company, N.A.
* * *
A
series of unfortunate events led up to the controversy now before us. In November 2008, wildfires wreaked havoc in
southern California; the path of
destruction included 27995 Alpine Lane, Yorba Linda,
California (the Property). An owner of the Property, Ulrike Schneider, died
of cancer shortly thereafter in July 2009. Schneider died intestate, unmarried, and
without children. In the aftermath of
her death, acrimony arose between Schneider’s long-term, live-in boyfriend
(plaintiff Daniel A. Noroski) and Schneider’s family in Germany. A multiplicity of legal actions ensued.
This
case began with the March 2011 filing of a complaint by Noroski against four
defendants: the insurer of the Property,
Century-National Insurance Company, and its parent company, Kramer-Wilson
Company, Inc. (collectively, Century-National); Bank of America, N.A. (Bank of
America), the beneficiary of a deed of trust recorded against the Property; and
ReconTrust Company, N.A. (ReconTrust), the trustee named in the deed of trust. Basically, Noroski was dissatisfied with the
resolution of the claim that was filed with Century-National following the
destruction of the Property.
In
August 2012, Jim Travis Tice (as administrator of the Schneider estate) sought
leave to file a complaint in intervention against Noroski and the four
defendants. Tice reiterated many of
Noroski’s claims against the four defendants, but with the added wrinkle that
Schneider’s estate (and not Noroski) was the true owner of the Property and the
right to any insurance proceeds (both those already paid and those still owing).
The court denied the motion. We reverse.
The court wrongly addressed the merits of some of the claims made in
Tice’s proposed complaint in intervention rather than addressing his
application to intervene pursuant to Code of Civil Procedure section 387.
FACTS
We
distill here relevant undisputed facts (at least at the pleading stage), omitting
for now the more contentious aspects of the case. We base this recitation of facts on Noroski’s
complaint, Tice’s proposed complaint in intervention, and documents in the
record of which the court took judicial notice.
In
October 1997, a grant deed was recorded indicating that Noroski, “an unmarried
man,†received title to the Property from The Estates at Summit Chase, L.P., in
exchange for valuable consideration.
Noroski
and Schneider cohabited after approximately 1998. They never married.
In
December 2003, a quitclaim deed was recorded referencing the Property: “FOR NO CONSIDERATION, DANIEL A. NOROSKI, an
unmarried man, AS HIS SOLE AND SEPARATE PROPERTY [¶] does hereby REMISE,
RELEASE AND FOREVER QUITCLAIM to ULRIKE SCHNEIDER, an unmarried woman, as a
Joint Trustee to hold the property henceforth as [¶] Daniel A. Noroski and Ulrike Schneider, Joint Tenants†of the
Property.
In
November 2007, a deed of trust was recorded with reference to the Property. The deed of trust secured a loan in the amount
of $581,000 provided by Countrywide Bank, FSB (later acquired by Bank of
America), to Schneider and Noroski as unmarried joint tenants, with ReconTrust
acting as trustee. Signatures purporting
to be those of Schneider and Noroski appear on the deed of trust.
At
all relevant times, a homeowner’s insurance policy from Century-National
provided coverage at the Property for a variety of occurrences, including the
destruction of the Property by wildfire. On November
15, 2008, a “wildfire known as the Freeway Complex Fire†completely
destroyed the Property. A claim was submitted
to Century-National in or around December 2008. From December 2008 through October 2009,
Century-National paid the total sum of $955,146.03 to Bank of America in
connection with the claim on the Property.
Schneider
became critically ill with cancer. She
died on July 10, 2009, at
the age of 46.
PROCEDURAL HISTORY
Filed
in March 2011, Noroski’s complaint features nine causes of action. The first six causes of action pertain only
to Century-National: (1) breach of
contract; (2) tortious breach of implied covenant of good faith and fair
dealing; (3) fraud (intentional misrepresentation of fact); (4) fraud
(suppression of fact); (5) negligent misrepresentation; and (6) negligence.
fault with Century-National’s statements and conduct during the claims handling
process, as well as the ultimate compensation provided for the claim. Noroski alleges that, in contravention of the
policy and Century-National’s representations during the claims process,
Century-National “paid nothing
directly to Noroski for the loss of his home, and nothing to Noroski for the purchase of†a new property. As against Century-National, Noroski seeks
compensatory damages in excess of $5.8 million, interest, punitive damages,
attorney fees, and costs.
Noroski’s
final three causes of action pertain to Bank of America: (7) quiet title; (8) conversion; and (9)
money had and received. ReconTrust was
also named as a defendant to the quiet title cause of action. These three causes of action are based on the
allegation that Century-National paid $955,146.03 to Bank of America in
connection with the claim. Noroski
alleges that “Bank of America accepted and deposited [the $955,146.03] in its
own account, and failed to credit any of the funds to the outstanding loan
balance which was in the sum of $571,610.55 as of March 2009. The loan was thus paid off entirely by March
2009, at which point in time Bank of America had a duty to eliminate Noroski’s
loan balance, execute a request for a full reconveyance, and deliver it to
ReconTrust . . . to cause [the trust deed] to be reconveyed.†Noroski also alleges that he continued to
make payments on the loan from April 2009 to December 2009 in the aggregate
amount of $31,771.98. As against Bank of
America, Noroski seeks compensatory damages in excess of $3.5 million,
interest, statutory penalties, punitive damages, and costs. Noroski seeks a judgment quieting title in the
Property as against Bank of America and ReconTrust.
In
sum, the gist of Noroski’s complaint is:
(1) Century-National did not pay enough on the claim; (2) the
insufficient amount paid by Century-National was remitted to Bank of America
rather than Noroski; (3) Bank of America withheld the entire amount paid to it
by Century-National, even though the amount exceeded the amount owed to Bank of
America by Noroski; and (4) Bank of America and ReconTrust failed to convey
clear title of the Property to Noroski even though the loan secured by the deed
of trust had been paid off (and then some).
Interests
affiliated with the Schneider estate bungled their initial attempts to
intervene in the instant action. First,
on January 5, 2012, Erika
Schneider (Ulrike’s mother) and Wolfgang Schneider (Ulrike’s brother) filed a
motion to intervene. This motion was
denied without prejudice on January
27, 2012. Erika Schneider
filed a second motion to intervene on February
9, 2012. It was denied without
prejudice on March 9, 2012.
Tice
moved ex parte on June 13, 2012
for leave to intervene, and this application was denied without prejudice on June 13, 2012. Tice moved to intervene on July 6, 2012, but withdrew this motion
on August 27.
Finally,
on August 27, 2012, Tice filed
the noticed motion for leave to file a complaint in intervention that is at
issue on this appeal. In his notice of
motion and memorandum of points and authorities, Tice argued the court should
grant leave to intervene based both on principles of mandatory intervention (§ 387,
subd. (b)) and permissive intervention (§ 387, subd. (a)). Tice lodged a proposed complaint in
intervention along with the motion.
Noroski’s
complaint indicates he “became the sole owner of the . . . Property
on July 10, 2009, when the
joint tenancy of Ulrike Schneider in the . . . Property
passed to Noroski.†Tice’s proposed complaint
in intervention, on the other hand, alleges Schneider “was the sole owner†of
the Property “and the party in interest for the recovery of funds owed and dueâ€
on the insurance policy.
name="_ftnref3" title="">[3]
Tice
reiterates the claims made by Noroski against Century-National in causes of action
for (1) breach of contract, (2) tortious breach of implied covenant of good
faith and fair dealing, (3) fraud (intentional misrepresentation of fact), (4)
fraud (suppression of fact), (5) negligent misrepresentation, and (6)
negligence. Of course, the causes of
action are tailored to allege wrongs committed against Schneider rather than
Noroski. Tice also includes a cause of
action for intentional infliction of emotional distress against
Century-National; a similar action initially appeared in Noroski’s complaint
but was dismissed with prejudice months earlier.
As
with Noroski’s complaint, causes of action for quiet title, conversion, and
money had and received are included in Tice’s proposed complaint in
intervention. The factual allegations in
these causes of action are similar, with two important distinctions. First, Tice asserts that Schneider’s estate
(not Noroski) is the sole current owner of the Property. Second, Tice includes Noroski as a defendant
to the three causes of action, alleging the possibility that Noroski had
actually received some of the insurance money paid to Bank of America (e.g., “which
sums Intervenor believes may have been improperly paid in whole or in part to
NOROSKIâ€).
The
proposed complaint in intervention also includes three new causes of action against
Noroski, Century-National, and Bank of America:
(11) financial elder and dependent adult abuse; (12) declaratory relief;
and (13) an accounting. The dependent
abuse claim asserts that Schneider was unable to protect her rights at the end
of her life as she was taken advantage of by defendants (including Noroski) in
various ways. The declaratory relief
claim nicely sums up Tice’s position, in that he “seeks a declaration and
judgment that all of the Policy proceeds due and payable are payable to the
Estate as against any claims by NOROSKI, that the Estate has sole title to the
. . . Property, that amounts held by BANK OF AMERICA are payable solely to
[Tice] and if already paid to NOROSKI then BANK OF AMERICA must pay [Tice] and
seek reimbursement or not from NOROSKI . . . .†The proposed complaint in intervention prays
for unspecified compensatory damages, special damages, statutory damages,
punitive damages, attorney fees, costs, and declaratory relief.
On
September 21, 2012, the
court denied Tice’s motion to intervene by way of a minute order, which did not
explain the ruling. When asked to
explain the basis for the denial at the hearing, the court replied “[i]t’s a
statute of limitations issue.†Tice
appealed the order in a timely fashion.
DISCUSSION
An
order denying leave to intervene is appealable and is reviewed under the
deferential abuse of discretion standard. (Noya v.
A.W. Coulter Trucking (2006) 143 Cal.App.4th 838, 841-842.) “Intervention is mandatory (as of right) or
permissive. A nonparty has a right
under . . . section 387, subdivision (b) to intervene in a
pending action ‘if the person seeking intervention claims an interest relating
to the property or transaction which is the subject of the action and that
person is so situated that the disposition of the action may as a practical
matter impair or impede that person’s ability to protect that interest, unless
that person’s interest is adequately represented by existing parties.’†(Hodge
v. Kirkpatrick Development, Inc. (2005) 130 Cal.App.4th 540, 547, fn.
omitted; see § 387, subd. (b) [application for mandatory intervention must
also be “timelyâ€].)
title="">[4]
Tice
asserts both an ownership interest in the Property and an interest in the proceeds
from the insurance claim made as a result of the destruction of the Property in
the November 2008 fire. The gravamen of
the proposed complaint in intervention, therefore, falls squarely within the
parameters of mandatory intervention, in that Tice “claims an interest relating to the property or transaction which is
the subject of the action.†(§ 387,
subd. (b), italics added.)
name="_ftnref5" title="">[5]
Complaint in Intervention
Based
on the opposition memoranda filed at trial and Century-National’s appellate brief,
the primary argument for refusing Tice’s claim of mandatory intervention is the
purported lack of merit of the causes of action in the proposed complaint in
intervention. According to respondents,
it is self-evident that the December 29, 2003 quitclaim deed (of which the
court took judicial notice)
name="_ftnref7" title="">[7]
created a joint tenancy between Noroski and Schneider. It is black letter law in California that a
joint tenancy features the right of survivorship. (Estate
of Mitchell (1999) 76 Cal.App.4th 1378, 1385.) Therefore, according to respondents, Tice has
no interest in the Property because Noroski took sole ownership of the Property
as of the date of Schneider’s death.
This is sound logic so far as it goes.
But Tice claims the quitclaim deed (which is not exactly a model of
clarity) actually deeded the entire Property to Schneider: “The only conveyance made by the deed is from
. . . Noroski to Ulrike Schneider with no interest in the title held for the
benefit of . . . Noroski and no interest in the property being transferred to .
. . Noroski. An individual cannot hold
property as joint tenants for two persons.
Additionally, based upon the face of the quitclaim deed’s language there
is no unity of interest . . . , no unity of time . . . , and no unity of title
. . . .†It does not appear the court
intended to rule on the merits of Tice’s claim to the Property by denying the
motion to intervene.
Tice
also seeks damages from Century-National, Bank of America, and Noroski based on
harm Schneider allegedly suffered as a result of the fire and the claims
handling process. The parties offer
dueling citations to case law for their respective positions. According to Tice, the Schneider estate owns all
(or at least some) of the proceeds from the Century-National insurance policy
and damages claims against the defendants because “[i]t is a principle of long standing
that a policy of fire insurance does not insure the property covered thereby,
but is a personal contract indemnifying the insured against loss resulting from
the destruction of or damage to his interest in that property.†(Russell
v. Williams (1962) 58 Cal.2d 487, 490.) In other words, even if the Property was transferred
to Noroski at Schneider’s death, Schneider still is entitled to at least some
of the insurance proceeds because the Property was destroyed before Schneider’s
death. Respondents, on the other hand,
claim that the right to payment under the insurance policy is property of the
joint tenancy, and therefore Noroski.
Century-National notes that “the proceeds of joint tenancy property, in
the absence of contrary agreement, retain the character of the property from
which they are acquired.†(
Cal.App.2d 577, 580.) Once again,
it does not appear that the court intended to rule on the merits of these
contentions in denying the motion to intervene.
Century-National
also raised statute of limitations
defenses to the causes of action naming it as defendant in the proposed
complaint in intervention. Insurance
Code section 2071, subdivision (a), sets forth “the standard form of fire
insurance policy for†California. Under
the heading “Suit,†the standard form provides that “[n]o suit or action on
this policy for the recovery of any claim shall be sustainable in any court of
law or equity . . . unless commenced within 12 months next after inception of
the loss.†(Ins. Code, § 2071,
subd. (a).) This one-year limitations
period on insurance actions has “‘long been recognized as valid in
California.’†(Prudential-LMI Com. Insurance v. Superior Court (1990) 51
Cal.3d 674, 683.) The
Century-National policy at issue in this case includes a similar clause: “Suit must be filed within one year after the
date of loss.†According to the policy, “[d]ate
of loss means the date, during the policy period, that damage to property covered
by the policy is sustained and manifested.â€
The
Property was destroyed November 15, 2008, which (according to
Century-National’s analysis) suggests that the statute of limitations for a
lawsuit against Century-National ordinarily would expire on November 15, 2009.
year after the date of loss. “[A] cause
of action for or against a person is not lost by reason of the person’s death,
but survives subject to the applicable limitations period.†(§ 377.20, subd. (a).) “If a person entitled to bring an action dies
before the expiration of the applicable limitations period, and the cause of
action survives, an action may be commenced before the expiration of the later
of the following times: [¶] (a) Six months after the person’s death. [¶]
(b) The limitations period that would have been applicable if the person
had not died.†(§ 366.1.) Thus, according to Century-National, Schneider’s
estate was entitled to an extension of the statute of limitations under section
366.1 (perhaps to January 10, 2010),
but not through 2012 (when the various efforts at intervention were made in
this action).
Tice
asserted a variety of theories to avoid a statute of limitations defense (e.g.,
the record is unclear as to when claims were submitted and denied, the statute
of limitations should not begin running until denial of the claim occurs, Noroski’s
filing of his complaint was in effect a filing of Schneider’s claims, the
delayed discovery rule should apply, equitable tolling should apply). (See Prudential-LMI
Com. Insurance v. Superior Court, supra,
51 Cal.3d at pp. 684-700 [discussing these theories].) The court, however, denied the motion to
intervene on statute of limitations grounds (even though a statute of
limitations defense was not raised by Noroski, Bank of America, or ReconTrust).
Motion on Statute of Limitations Grounds
The
court abused its discretion by denying Tice’s motion to intervene on the basis
that Tice’s claims against Century-National were barred by the statute of
limitations. By ruling on the merits of
Tice’s claims against Century-National, the court put the cart before the
horse. A statute of limitations defense
against a proposed intervener’s claims typically should be entertained after
intervention occurs. (See
Water & Power (1988) 199 Cal.App.3d 819, 824 [statute of
limitations defense addressed on demurrer; “it is clear that the trial court,
by its ruling on the motion to intervene, did not intend to foreclose defendant
from raising the defense of the statute of limitations and apparently excluded
such a consideration from the concept of a ‘timely application’â€];
(1985) 166 Cal.App.3d 678, 680, 685 [judgment affirmed after demurrer
sustained to complaint in intervention on statute of limitations grounds];
Cal.App.3d 174, 176-178 [judgment against intervener on statute of
limitations grounds entered after filing of complaint in intervention and
subsequent hearing on merits].) Indeed,
one federal district court erred when it denied a motion to intervene on
statute of limitations grounds. (
July 16, 1985, No. 83-3544 1985) 1985 U.S.App.Lexis 14248) [“making the right
to intervention depend on the strength of the proposed intervenor’s case on its
merits†is error unless it is “absolutely clear†that claim is barred].)
The
intervention process should not be utilized to assess in a summary fashion the
merits of an intervener’s claims. (See
Cal.App.4th 117, 119, 125 [where buyer alleges wrongdoing by receiver in
connection with sale of defendant’s property, trial court does “not have
discretion to deny both the motion to sue [a receiver] and the motion to
intervene by summarily determining that [intervenor’s] claim lacked
meritâ€].) “An application for
intervention cannot be resolved by reference to the ultimate merits of the
claim the intervenor seeks to assert unless the allegations are frivolous on
their face.†(Turn Key Gaming, Inc. v. Oglala Sioux Tribe (8th Cir. 1999) 164
F.3d 1080, 1081; see also Oneida Indian
Nation of Wis. v. State of N.Y. (2d Cir. 1984) 732 F.2d 261, 265 [applying
same rule].)
There
are sound reasons for this rule. First,
by transforming a motion to intervene into a demurrer on the proposed complaint
in intervention, a court upends ordinary procedural protections afforded to the
proponent of a cause of action. The
proposed intervener is forced to respond with reply papers rather than opposition
papers, a distinction that could affect both the time to respond (§ 1005,
subd. (b) [at least seven court days after receiving a motion for an
opposition, versus at least four court days after receiving an opposition for a
reply]) and the page length of the memorandum of points and authorities (Cal.
Rules of Court, rule 3.1113(d) [15 versus 10 pages]). This diminution in procedural rights is
particularly troublesome in light of the potential res judicata effect of the
court’s ruling, an effect that Century-National is advocating for in this case.
Second,
it is folly to address the merits of multiple causes of action against multiple
parties in a motion to intervene (where the ruling is binary, in that the court
must grant or deny the proposed intervenor’s request to become a party to the
action) as opposed to reserving consideration of the merits until a demurrer or
other appropriate motion (where the ruling may grant relief as to certain
parties or causes of action without dismissing the entire pleading from the
action). The court did not even purport
to rule on the merits of Tice’s claims against Noroski, Bank of America, and
ReconTrust. The court’s methodology is problematic
given Tice’s facially valid claim to mandatory intervention under section 387,
subdivision (b), regardless of the validity of Tice’s claims against
Century-National.
By
this decision, we do not mean to suggest that a proposed intervener is entitled
to intervene even if their proposed complaint in intervention is clearly
“frivolous†in its entirety. (
supra, 164 F.3d at p. 1081; see also
Cal.App.2d 545, 554 [“It would be a queer rule indeed that would require a
court to permit any one to delay and impede a legal proceeding when he has no
possible chance of gaining by his interventionâ€].) For instance, an ex-husband may not intervene
in an ex-wife’s quiet title action when title was already litigated to a
conclusion as between the former spouses in a different action, and the attempt
at intervention was really an attempt to relitigate a final judgment. (Muller
v. Robinson (1959) 174 Cal.App.2d 511, 512-513, 515-516.) And in a bank liquidation action in which
potential claimants are subject to specific statutory claims procedures that
act as a “substantive condition precedent†to participation in the liquidation
action, a claimant who demonstrably did not submit a claim cannot intervene in
the action, particularly at a juncture in the liquidation process that would
cause further delay of the distribution to those with cognizable claims. (In re
Yokohama Specie Bank, supra, 86
Cal.App.2d at pp. 546-551, 553-555.)
Indeed, in some cases, the statute of limitations may be clearly
dispositive as to the entire proposed complaint in intervention such that it
justifies denial of the motion to intervene.
(See, e.g., Nat’l Trust v. FHA
(W. Dist. Kent. Aug. 13, 2010, No. 3:10-CV-7-H) 2010 U.S. Dist. LEXIS 83080;
App. Md. 1993) 627 A.2d 550, 555.) We
merely hold that Tice’s proposed complaint in intervention was not eligible for
summary treatment.
name="_ftnref11" title="">[11]
There
is no alternative ground to affirm the court’s order, as the court’s ruling did
not address any aspects of section 387, subdivision (b). The court did not find that Noroski
“adequately represented†Tice’s interests or that “the disposition of the
action [will not] as a practical matter impair or impede [Tice’s] ability to
protect [the Schneider estate’s] interest.â€
(§ 387, subd. (b).) Our
review of the record (as well as our consideration of the related probate case
mentioned above) suggests that Noroski has taken positions directly adverse to
the Schneider estate, thereby requiring Tice to participate in this action if
he hopes to protect the estate’s interest.
The court did not address whether Tice submitted a “timely applicationâ€
to intervene. (See, e.g.,
Berkeley (1986) 178 Cal.App.3d 90, 109 [“no excuse for the tardiness
of this application for intervention, since the Coalition had been involved in
the lawsuit from the outsetâ€].)
name="_ftnref12" title="">[12] This may be a closer question, but much of
the delay in bringing a cognizable application to intervene relates to a
lengthy dispute over the appointment of an administrator of the estate, a delay
that can be attributed in part to Noroski.
Regardless, there was no justification cited by the court for its denial
of the motion to intervene outside its view that Tice’s claims against
Century-National were not filed within the statute of limitations.
Based
on his claim to an interest in the Property and the insurance proceeds, Tice
was entitled to mandatory intervention under section 387, subdivision (b). We therefore reverse the court’s order. We offer no view on the merits of Tice’s
various causes of action, including the question of whether Tice’s claims
against Century-National are barred by the statute of limitations.
DISPOSITION
The
order denying intervention is reversed. Tice’s
pending request for judicial notice is denied.
In the interests of justice, the parties shall bear their own costs on
appeal.
IKOLA,
J.
WE CONCUR:
BEDSWORTH,
ACTING P. J.
ARONSON, J.
further statutory references are to the Code of Civil Procedure unless
otherwise indicated.
March 2012, Noroski dismissed with prejudice an intentional infliction of
emotional distress cause of action against Century-National that was initially
included in the complaint.
