Associated Indus. Ins. Co. v. Bandari

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ASSOCIATED INDUSTRIES INSURANCE COMPANY, INC. v. ROBERT BANDARI DBA L.A. ART CABINETRY ET AL.

No. 2:22-cv-05477-CAS-ASx

United States District Court, C.D. California

August 10, 2023

Present: The Honorable CHRISTINA A. SNYDER

CIVIL MINUTES - GENERAL

Proceedings (IN CHAMBERS) - PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT (Dkt. 50, filed on May 5, 2023)

I. INTRODUCTION

On August 4, 2022, plaintiff Associated Industries Insurance Company, Inc. (“AIIC”) brought suit against Robert Bandari dba L.A. Art Cabinetry (“Bandari”) and Does 1 through 20. Dkt. 1. AIIC issued a commercial general liability policy to Bandari, numbered XN1063077-05 (the “policy”). The policy provided coverage to Bandari for all sums up to a limit of $1,000,000 per occurrence of bodily injury or property damage that Bandari becomes legally obligated to pay. While this policy was in effect, an underlying claim arose after the injury of one of Bandari's customers on March 16, 2022. AIIC sought declaratory relief that (1) it has no duty to defend Bandari; and (2) no duty to indemnify Bandari with respect to the underlying claim. AIIC also requests that it be awarded its costs incurred in this action.

On September 28, 2022, Bandari answered the complaint and filed a counterclaim against AIIC, Customer Care Insurance Services, Inc., and Builders & Tradesmen's Inc., dba Unitas Insurance Services. Dkts. 16, 17. Bandari brought claims of relief for (1) promissory estoppel and waiver against AIIC; (2) breach of contract against AIIC; (3) breach of the covenant of good faith and fair dealing against AIIC; (4) promissory fraud against AIIC; and (5) negligence against Customer Care and Builders, Id.

On October 19, 2022, AIIC brought a motion to dismiss Bandari's counterclaim. Dkt. 25. While that motion was pending, Bandari and AIIC filed a joint stipulation to dismiss Bandari's counterclaim in its entirety without prejudice, and for the Court to grant AIIC leave to file a first amended complaint. Dkt. 33. On November 18, 2022, the Court granted the parties' joint stipulation and denied AIIC's motion to dismiss Bandari's counterclaim as moot. Dkt. 34.^[1]

On November 29, AIIC filed an amended complaint against Bandari. Dkt. 37 (“FAC”). The FAC brings the same claims and seeks the same relief as the original complaint. The FAC adds further factual allegations relating to third party litigation of the underlying claim, which is discussed in detail below.

On May 5, 2023, AIIC brought the instant motion for summary judgment. Dkt. 50 (“Mot.”). On May 26, 2023, Bandari filed an opposition. Dkt. 61 (“Opp.”). On June 9, 2023, AIIC filed its reply. Dkt. 63 (“Reply”).

On June 26, 2023, the Court held a hearing. The Court permitted Bandari to file a supplemental brief attaching his initial insurance application to support his arguments relating to the application. Bandari filed the supplemental material on July 3, 2023. Dkt. 72 (“Bandari's Supp.”). AIIC filed a responsive brief on July 10, 2023. Dkt. 74 (“AIIC's Supp”).

Having carefully considered the parties' arguments and submissions, the Court finds and concludes as follows.

II. BACKGROUND

Unless otherwise noted, the Court references only facts that are uncontroverted and to which evidentiary objections, if any, have been overruled^[2]

A. AIIC issued commercial general liability policy to Bandari

AIIC is a Florida-based corporation engaged in the business of issuing insurance policies, including the one at issue in this case. See FAC ¶ 4. Robert Bandari lives in Los Angeles, California, and does business under the name L.A. Art Cabinetry. Id. Bandari makes cabinets, cases, sashes, doors, trims, nonbearing partitions and other items of “finish carpentry” by cutting, surfacing, joining, gluing and fabricating wood or other products to provide a functional surface. Dkt. 61-3 (“Statement of Disputed Facts” or “SDF”), ¶ 21. Bandari also places, erects, and finishes such cabinets and millwork in structures. Id. ¶ 23.

AIIC issued a commercial general liability policy to Bandari as an individual. The policy, numbered XN1063077-05, was renewed by the parties and was in effect from April 1, 2021 to April 1, 2022. The policy provided coverage to Bandari for all sums up to a limit of $ 1,000,000 per occurrence that the insured becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which the insurance applies. Id. ¶¶ 9. 16. The policy also contained endorsement number GL990186 0317 entitled “EXCLUSION - UNLICENSED CONTRACTORS,” (emphasis original) which reads as follows:

This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE FORM

A. The following is added to Paragraph 2. Exclusions:

This insurance does not apply to:

“Bodily injury” or “property damage” arising out of “your work” if you or the contractor(s) performing the work on your behalf out of which the “bodily injury” or “property damage” arose was not a “validly licensed contractor” at the time the work was performed.

B. The following definition is added to the Definitions section:

“Validly licensed contractor” means a person or organization with a license in good standing in the jurisdiction in which the work was performed that permits the person or organization to perform the type of work out of which the “bodily injury” or “property damage” arose, whether or not a license was required to perform the work.

But if no such license was available in the jurisdiction, then this exclusion does not apply.

See SDF ¶ 13; Dkt. 54-8 (“Insurance Policy”).

B. Occurrence of injury at Bandari's shop leads to litigation

On March 16, 2022, nonparty Oshin Shabani visited Bandari's cabinet shop. SDF ¶ 1. At the time of Shabani's visit, Bandari was using a Powermatic table saw to manufacture stairs for a project with an estimated value between $5,000 and $7,000. Id. ¶ 3. Earlier in the morning, Bandari had removed the blade safety cover from the table saw to clean dust out of it and forgot to replace it. Id. ¶ 5. Shabani began to assist Bandari with cutting the wood on the table saw. Id. ¶ 6. Shabani's hand got too close to the blade and he cut off several fingers and part of a thumb. Id. AIIC's insurance coverage was in effect on the date of Shabani's accident. Id. ¶ 8.

On August 25, 2022, Shabani sued Bandari in Los Angeles Superior Court for personal injury and premises liability. Id. ¶ 11. Bandari tendered the defense of that action to AIIC, which agreed to provide a defense to Bandari under a reservation of rights. Id. ¶ 12.

C. Bandari is not a licensed contractor in California

In California, the Contractors State License Board (“CLSB”) licenses and regulates contracting work and the construction industry through approximately 44 different classifications. Aside from B-l general and B-2 remodeling contracting licenses, see Cal. Bus. & Prof. Code § 7055, two specialty licenses are relevant to this litigation: the Class C-5 and C-6 licenses. The C-5 class defines a “framing and rough carpentry” contractor as one who “performs any form work, framing or rough carpentry necessary to construct framed structures; installs or repairs individual components of framing systems and performs any rough carpentry or associated work, including but not limited to the construction or installation of: sub-flooring, siding, exterior staircases and railings, overhead doors, roof decking, truss members, and sheathing.” Cal. Code Regs. tit. 16, § 832.05. The C-6 class defines a “cabinet, millwork and finish carpentry” contractor as one who “makes cabinets, cases, sashes, doors, trims, nonbearing partitions and other items of ‘finish carpentry' by cutting, surfacing, joining, gluing and fabricating wood or other products to provide a functional surface,” and who “also places, erects, and finishes such cabinets and millwork in structures.” Id. § 832.06.

Here, it is undisputed by the parties that Bandari has not held any contractor's license issued by the state of California. SDF ¶ 2.

III. REQUEST FOR JUDICIAL NOTICE

Federal Rule of Evidence 201 permits a court to take judicial notice of facts that are either “(1) generally known within the territorial jurisdiction of the trial court; or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b); see also Mullis v. U.S. Bankr. Court for Dist. of Nevada. 828 F.2d 1385, 1388 n.9 (9th Cir. 1987).

Here, plaintiff requests that the Court take judicial notice of the following documents:

(1) Complaint filed by Shabani against in Los Angeles County Superior Court, entitled Oshin Shabani v. Robert Bandari, et. al. Case No. 22STCV27796 (Dkt. 53, Request for Judicial Notice “RJN,” Ex. 1);

(2) First Amended Complaint in the instant litigation brought by AIIC against Bandari (RJN Ex. 2);

(3) “A true and correct copy of the Contractors State License Board Description of Classifications and opening page” of the Contractors State License Board” website (RJN Ex. 3); and (4) “A true and correct copy of the California Department of Insurance License Details of Armen Margaryan” (Dkt. 68, RJN Ex. 4).

Defendant appears to oppose plaintiff s request for judicial notice on the basis that the request is “not relevant to [the] issues in this case,” and the documents “contain hearsay statements for which there is no exception.” Dkt. 61-1. However, a court may take judicial notice of “matters of public record” as well as “records and reports of administrative bodies.” Mack v. S. Bay Beer Distributors, Inc., 798 F.2d 1279, 1282 (9th Cir. 1986); see e.g.. Love v Marriott Ownership Resorts, Inc., No. 20-CV-07523-CRB, 2021 WL 1176674, at *3 (N.D. Cal. Mar. 29, 2021) (taking...