Procedural Posture

Appellant partnership challenged an order of the Superior Court of Los Angeles County (California), which entered judgment in favor of respondent insurance company on appellant’s claim of insurance fraud in violation of Cal. Ins. Code § 790.03, and intentional interference with protected property rights. Appellant also challenged judgment for respondent on a cross-complaint brought by respondent against appellants and others for fraud.

Table of Contents

Overview

A burglary and theft occurred at the premises of appellant partnership. Both appellant and respondent insurance company hired independent claims adjusters to investigate and document the fact and extent of the claimed loss. Respondent suspected fraud and never expressly denied or paid the claim. Appellant filed a lawsuit to recover the policy benefits and other damages, and respondent filed its cross-complaint for fraud, alleging appellants’ misrepresentation and concealment as to burglary, theft, and the amount of loss. Judgment was entered in favor of respondent and against appellant who sought review. Appellant and respondents had business lawyer draft their briefs and submitted to the court. The court found that the record showed substantial evidence of misrepresentation and concealment by appellant, that respondent did not rely on appellant, and that respondent could not recover the costs of that investigation from its insureds as damages for fraud. The court found that the trial court’s grant of leave to file a cross complaint was not an abuse of discretion. The court reversed the judgment in favor of respondent, remanded the matter for further proceedings consistent with the opinion, and ordered respondent to bear its own costs of appeal.

Outcome

The judgment against appellant partnership was reversed because there was substantial evidence to show that respondent insurer suspected fraud, began its own investigation, and did not rely on appellant’s representations. The matter was remanded for further proceedings in accordance with the views expressed in the opinion. Respondent was to bear the costs of appeal.

Appellant, the daughter of a deceased musician and composer, sought review of a judgment of the Superior Court of Los Angeles County (California), which sustained the demurrer of respondents, decedent’s managers and decedent’s spouse, in an action brought by appellant to establish her ownership rights in decedent’s music.

Overview

Appellant alleged that respondent managers concealed that decedent had never transferred any interest in a music catalog to them and that respondent managers had falsely represented that they were entitled to publish the catalog. Appellant did not become aware of these facts until 18 years after decedent’s death. Appellant further alleged that defendant managers breached their fiduciary duties to decedent. As against respondent spouse, appellant sought declaratory relief based on appellant’s claim that the catalog was an after-discovered asset belonging to her. The trial court sustained respondent managers’ demurrer on the grounds that appellants lacked the legal capacity to sue and that the action was time-barred. The court reversed, holding that appellant had standing to pursue her claims and that the discovery rule accrued her causes of action. The court further held that declaratory relief was appropriate.