Bailhe v. Mercury Casualty Co.

Filed 1/29/07 Bailhe v. Mercury Casualty Co.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

APPEAL from a judgment of the Superior Court of Los Angeles County, Bert Glennon, Jr., Judge. Affirmed.

Law Offices of Patrick C. McGarrigle, Patrick C. McGarrigle and Philip A. Zampiello for Plaintiff and Appellant.

Hager & Dowling, Thomas J. Dowling and Jessica M. Johnson for Defendants and Respondents.

______________________________

This is a third party bad faith case against an insurer. We reject the plaintiffs claims of error and affirm a judgment in favor of the insurer.

FACTS

A.

On February 27, 1998, Jacques Bailhe and Jason Brenna had an automobile accident. In December, Bailhe sued Brenna for property damage. Brennas insurer, Mercury Casualty Company, retained counsel for Brenna (Marc Levine) and provided a defense.

Before trial, Mercury sent Bailhe two checks, one in June 1998 for $4,712.01, the other in November 1998 for $3,960.[1] The November check had a box with the following notation:

IN FULL SETTLEMENT OF P.D. CLAIMS ARISING

OUT OF AN INCIDENT ON FEBRUARY 27, 1998

On June 28, 2001, the dispute was tried to the court (Hon. Barry A. Taylor), and a judgment was rendered in favor of Bailhe in the amount of $12,109.50 ($3,767.59 for a replacement car rental, $2,179.81 for repairs to Bailhes car, $1,000 for storage, and $5,161.80 for interest on credit card) plus costs of trial. In July, Mercury delivered a check (jointly payable to Bailhe and his attorney, Edward Lear) in the full amount of the judgment, $12,109.50. This check (which was never cashed) had a box with the following notation:

IN FULL SETTLEMENT OF ALL CLAIM(S) ARISING

OUT OF INCIDENT ON FEBRUARY 27, 1998

On July 16, Bailhe filed a memorandum of costs claiming a total of $1,100. Brennas motion to tax costs was denied in November, and Mercury (in December) delivered a check (jointly payable to Bailhe and Lear) in the full amount of the costs due, $1,100. This check (which was never cashed) had the same notation quoted above.

In March 2002, Brenna served Bailhe with a demand for a signed satisfaction of judgment form. Bailhe responded with a demand for checks without the notation. In June, Brenna filed a motion to compel Bailhe to execute a satisfaction of judgment form. In July, Bailhe opposed the motion and asked for sanctions payable by Brenna, Levine and Mercury.

In July, the trial court (Hon. Gregg Marcus) denied Brennas motion, ruling that the notation constituted a restrictive endorsement that applies to settlements, not to a judgment, and that Brenna could not force Bailhe to accept Mercurys checks as written. The court found that Brennas motion had attempted to conceal the endorsement issue and, for this reason, ordered Brenna, Levine, and Mercury to pay Bailhes attorneys fees and costs ($2,650), and issued an order to show cause (to be heard on August 22) why sanctions should not be imposed against Brenna, Levine, and Mercury. On August 16, Mercury delivered a check for $17,375.87, sans notation, to Bailhe and his new attorney, Patrick McGarrigle.

On August 22, Judge Marcus heard argument on the order to show cause he had issued, then told the lawyers he thought it ought to be heard by Judge Taylor. On October 29, the order to show cause was heard by Judge Taylor, who on November 20 issued an order imposing monetary sanctions against Mercury (not Brenna or Levine), as follows: After reviewing the papers submitted, and hearing oral argument of counsel, the court determined that Mercury . . . did not comply with the courts judgment dated June 29, 2001. As a result, sanctions shall be awarded against Mercury in the amount of $5,000, to be paid to [Bailhe], and sanctions in the amount of $1,000 to be paid to the court . . . . The sanctions were paid as ordered.

B.

In April 2003, Bailhe sued Mercury, Brenna, and Levine (and Levines law firm), alleging (in his subsequently filed first amended complaint) causes of action for breach of Civil Code section 1708, negligence, violations of Business and Professions Code section 17200 et seq. (the UCL), declaratory relief, breach of an implied covenant of good faith and fair dealing, and abuse of process.[2] The gist of Bailhes suit is that Mercury acted wrongfully when it attempted to pay the judgment against Brenna with the checks bearing the notations, and when it thereafter attempted to obtain a satisfaction of judgment. Bailhe claimed Brenna and Levine were derivatively liable for Mercurys actions under section 1708 because they had approved Mercurys conduct, and that Levine was liable as Mercurys agent.

Mercury, Brenna and Levine answered, then moved for summary judgment or summary adjudication of issues, contending all of Bailhes claims were barred because his damages had been determined and paid in the underlying case. In addition, the motion challenged the negligence claims on the ground that Mercury did not have a duty to pay the judgment with checks that did not bear the notation, that Brenna could not be liable for negligence, that there was no basis for Bailhes third party claim against Mercury, and that the abuse of process claims failed because the motion to compel Bailhe to acknowledge satisfaction of the judgment had not sought any collateral advantage over Bailhe (because all amounts due had in fact been paid).

In April 2004, the trial court (Hon. Bert Glennon, Jr.) summarily adjudicated the causes of action against Mercury and Brenna for a breach of section 1708, negligence, and declaratory relief, and the cause of action against Mercury, Brenna and Levine for abuse of process. Following further briefing and testimony at a court trial, the trial court disposed of the UCL claims against Mercury and Brenna (finding the use of the notation was not prohibited by any statute and was not otherwise deceptive). By June 2005, all of Bailhes claims had been resolved against him, and a final judgment was entered on that date.

DISCUSSION

I.

In related arguments, Bailhe contends his UCL claim should not have been decided against him because the notation is an unlawful endorsement and, as such, it is unfair, deceptive, oppressive, and fraudulent. Bailhe says the trial court should have permanently enjoined Mercury from using checks with the notation. We disagree.

A.

First, Bailhe offers no legal authority to support his assertion that the text box was unlawful under any statute, and we thus consider these arguments abandoned. (Associated Builders & Contractors, Inc. v. San Francisco Airports Com. (1999) 21 Cal.4th 352, 366, fn. 2.)

B.

Second, the notation is in any event plain enough and certainly obvious, and we fail to see how anyone could be misled by it. In fact, the notation is permitted (when the statutory conditions are met) by Commercial Code section 3311 which provides, as relevant:

(a) If a person against whom a claim is asserted proves that (1) that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, (2) the amount of the claim was unliquidated or subject to a bona fide dispute, and (3) the claimant obtained payment of the instrument, the following subdivisions apply.

(b) Unless subdivision (c) applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.

(c) Subject to subdivision (d), a claim is not discharged under subdivision (b) if either of the following applies: [] (1) . . . [] (2) The claimant . . . proves that within 90 days after payment of the instrument, the claimant tendered repayment of the amount of the instrument to the person against whom the claim is asserted. . . .

(d) A claim is discharged if the person against whom the claim is asserted proves that within a reasonable time before collection of the instrument was initiated, the claimant . . . knew that the instrument was tendered in full satisfaction of the claim.[3]

We dont see how the plain and obvious notation could be misleading or deceptive under the UCL. If Bailhe wanted to avoid the possibility (however remote) of an accord and satisfaction, all he had to do was return the checks (or tender repayment) within 90 days. (Com. Code,  3311, subd. (c); In re Marriage of Thompson (1996) 41 Cal.App.4th 1049, 1058-1059.) For this reason, we summarily reject Bailhes contention that he established the existence of a deceptive practice in the underlying action (when sanctions were awarded).[4] There is not the slightest bit of evidence in the record to suggest that Mercury was using the notation to gain an unfair advantage in this case (where every cent due was paid by the checks with the notations) or in any case, and thus no basis at all for Bailhes ad hominem attacks on Mercury, to which we will not respond. (Wilner v. Sunset Life Ins. Co. (2000) 78 Cal.App.4th 952, 965 [to determine whether an insurers practice is unfair, the court must weigh the utility of the conduct against the gravity of the harm to the alleged victim by balancing the injury inflicted against the reasons and motives for the insurers conduct].)

II.

Bailhe contends his other claims should not have been adjudicated against him, but offers no legal authority to support his position. For this reason, we treat these claims as abandoned. (Associated Builders & Contractors, Inc. v. San Francisco Airports Com., supra, 21 Cal.4th at p. 366, fn. 2.) Moreover, he has in any event failed to present any evidence to show (a) that Mercury or Levine or Brenna breached any duty owed to Bailhe, or (b) that he suffered any compensable damages. For these reasons, summary judgment was proper. (Biljac Associates v. First Interstate Bank (1990) 218 Cal.App.3d 1410, 1419 [a judgment must be affirmed if it is correct on any ground asserted to the trial court, regardless of the reasons given by the trial court].)

DISPOSITION

The judgment is affirmed. Respondents are awarded their costs of appeal.

NOT TO BE PUBLISHED.

VOGEL, J.

We concur:

MALLANO, Acting P.J.

ROTHSCHILD, J.

Publication Courtesy of California free legal resources.

Analysis and review provided by Spring Valley Property line attorney.

[1] According to Bailhes brief on appeal, Brenna claimed at trial that Mercurys November 1998 check accomplished a full settlement of Bailhes claims against Brenna -- but the reporters transcript provided by Bailhe does not support this assertion and shows only that Brennas trial counsel cross-examined Bailhe about whether he had received and cashed Mercurys pretrial check. On re-direct, Bailhe testified that he did not believe the November check was supposed to be in full or final settlement of his claim against Brenna, and there is nothing in the transcript to suggest Bailhe was in any way deceived (or that he thought Mercury was trying to deceive him).

[2] Subsequent undesignated section references are to the Civil Code. Section 1708 provides that [e]very person is bound, without contract, to abstain from injuring the person or property of another, or infringing upon any of his or her rights.

[3] Because checks are negotiable instruments, the notations are governed by Commercial Code section 3311 rather than Civil Code section 1526 (Woolridge v. J.F.L. Electric, Inc. (2002) 96 Cal.App.4th Supp. 52, 59-60), and case law predating the 1992 enactment of Commercial Code section 3311 (Petroleum Collections, Inc. v. Sulser (1968) 265 Cal.App.2d Supp. 976) has been overruled by the Legislature (Woolridge v. J.F.L. Electric, Inc., supra, 96 Cal.App.4th at pp. 59-60). More to the point, there is no question in this case about whether there was an accord and satisfaction -- the only issue being whether Mercurys use of the notation was misleading or deceptive, and our answer being that it is not because Bailhe has not been able (in the trial court, in his briefs, or at oral argument) to suggest that he or anyone else has been deceived by Mercurys use of the notation.

[4] Aside from the fact that we dont believe there was any deception, there is also the fact that Judge Marcus never found that Mercurys conduct was deceptive or unlawful.