Opinion
D079137
01-14-2022
MICHAEL CINGARI et al., Plaintiffs and Appellants, v. MID-CENTURY INSURANCE COMPANY et al., Defendants and Respondents.
Aitken Aitken & Cohn, Richard A. Cohn, and Casey R. Johnson for Plaintiffs and Appellants. Demler, Armstrong & Rowland and James P. Lemieux for Defendants and Respondents.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Orange County No. 30-2017-00897866, Linda S. Marks, Judge. Reversed; remanded with directions.
Aitken Aitken & Cohn, Richard A. Cohn, and Casey R. Johnson for Plaintiffs and Appellants.
Demler, Armstrong & Rowland and James P. Lemieux for Defendants and Respondents.
HUFFMAN, ACTING P. J.
Michael Cingari, H. Rey Gubernick, Mark Roche, and Natural Health Sports Therapy, Inc. (NHST) (Cingari, Gubernick, Roche, and NHST collectively Appellants) appeal a judgment following the superior court's grant of Mid-Century Insurance Company's (Mid-Century) motion for summary adjudication. Cingari was injured while receiving chiropractic 1 treatment and physical therapy administered by Gubernick. Gubernick performed those services on the premises of NHST where Gubernick was a tenant. Mid-Century issued a business owners insurance policy covering NHST. Among others, Cingari sued Gubernick and NHST for his injuries. NHST tendered the defense to Mid-Century, but Mid-Century denied the tender.
After prevailing at trial against Gubernick and NHST and receiving an assignment of rights, Cingari (among others) brought suit against Mid-Century based on its denial of NHST's tender. The court granted Mid-Century's summary adjudication motion and later entered judgment in favor of Mid-Century after other claims were settled and/or dismissed. Because we conclude summary adjudication was improper on the record before us, we reverse.
As we shall explain, Cingari brought suit against a variety of other defendants, most of whom have been dismissed.
FACTUAL AND PROCEDURAL BACKGROUND
NHST operates as a physical therapy facility. Roche and Aaron Berger are the owners, officers, directors, and/or managing agents of NHST.
Mid-Century issued a business owners insurance policy to NHST and Roche effective January 19, 2013 through January 19, 2014. The insuring clause of the policy provided:
"We will pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury', ... to which this insurance applies. We will have the right and duty to defend the insured against any 'suit' seeking those damages. However, we will have no duty to defend the insured against any 'suit' seeking damages for 'bodily injury', ... to which this insurance does not apply. 2 We may, at our discretion, investigate any 'occurrence' and settle any claim or 'suit' that may result."
The policy also contained a "professional services" exclusion, which stated, that it did not apply to" 'Bodily injury' . . . due to rendering or failure to render any professional service." This specific exemption included "[m]edical. . . services treatment, advice or instruction" and "[a]ny health or therapeutic service treatment, advice or instruction."
On September 18, 2014, Cingari filed suit against Gubernick and NHST, alleging that, on September 23, 2013, he was injured while undergoing a medical examination and receiving medical care. The complaint alleged a single cause of action for "medical negligence" but was not specific about what occurred to Cingari. For example, Cingari averred that he went to NHST and Gubernick for treatment for back pain but that NHST and Gubernick "so negligently, carelessly, recklessly, wantonly, and unlawfully treated, provided medical care and examined [Cingari] so as to directly and legally cause permanent injury to [him]." The complaint also included boiler plate allegations that each defendant was the agent and employee of the other defendants and was acting within the scope of that agency and employment during the allegedly negligent acts.
Seven months later, on May 5, 2015, Roche tendered the defense of NHST to Mid-Century. Although there is no tender letter in the record, it appears that Roche forwarded Mid-Century a copy of Cingari's medical negligence complaint. On that same day, Cingari's counsel left a message for Mid-Century. 3
There is no indication in the record when NHST was served with Cingari's medical negligence complaint.
On May 11, 2015, a Mid-Century representative talked to Roche, who explained that NHST: (1) was served with the lawsuit "several months ago," (2) already had retained an attorney to defend the suit, and (3) tendered the claim to Mid-Century because the medical malpractice carrier had denied coverage.
Two days later, Roche informed Mid-Century that he "did not want [Mid-Century] to contact [Cingari's] attorney."
On May 19, 2015, NHST's attorney told Mid -Century that Gubernick, who had treated Cingari, was neither an employee nor an independent contractor of NHST. Instead, Gubernick "simply shared space" with NHST. Counsel further explained that no one at NHST knew who Cingari was, ever treated Cingari, and did not know how Cingari was injured. Like Roche, NHST's attorney told Mid-Century that he preferred that Mid-Century not contact Cingari s attorney unless it agreed "to fund the defense." Finally, counsel told Mid-Century to contact Gubernick's attorney for information concerning Cingari's injury.
In the record, there appears to be some confusion whether NHST ever told Mid-Century that Gubernick was an independent contractor.
The next day, Gubernick's attorney informed Mid-Century that his client "simply leased space" at NHST's premises to run his own chiropractic practice. In addition, Mid-Century was informed that Gubernick denied injuring Cingari during treatment. However, Gubernick's attorney would not allow Gubernick to give a statement to Mid-Century regarding his treatment of Cingari. There is no indication in the record that Mid-Century was informed on May 5, May 19, or May 20 regarding the circumstances of Cingari's treatment and alleged injuries. 4
In evaluating potential coverage of the tender, Mid-Century's representative, Mark Olson, considered the critical issue to be whether the professional services exclusion would apply if Gubernick was the only person performing the services that caused Cingari's injury. Olson also considered the impact of coverage on the belief that Gubernick was merely a tenant and not an agent of NHST. Olson even asked for a coverage opinion from Mid-Century's legal department.
Because Mid-Century is not relying on an advice of counsel affirmative defense, the opinion provided by Mid-Century's legal counsel remains privileged. (See Transamerica Title Ins. Co. v. Superior Court (1987) 188 Cal.App.3dl047, 1052-1053.)
On June 11, 2015, Mid-Century issued a written denial of NHST's tender under Cingari's medical negligence case, primarily based upon the professional services exclusion. Moreover, the letter explained Mid-Century's conclusion that "there is no factual scenario wherein the policy would apply to pay sums as damages for this loss on behalf of NHST. Either NHST has no employment or agency relationship with Dr. Gubernick, and therefore could never become legally obligated to pay sums to [Cingari] as damages, or NHST is under some theory legally liable for [Cingari's] damages, in which case coverage is excluded under section B.1.j. - Professional Services." (Bold in original.) However, Mid-Century advised NHST that if it had "any information that is contrary to the information outlined [in the denial letter], or if you have information which you believe would provide cause for [Mid-Century] to revise its position in this matter, we urge you to promptly submit such information for our review and consideration." NHST did not contact Mid-Century for over 10 months after the date of the denial letter.
On April 18, 2016, before the trial of Cingari's medical negligence case, NHST and Gubernick entered into an assignment agreement with Cingari. 5 Among other things, the assignment agreement lists Cingari's allegations regarding NHST's liability for his injuries. Specifically, the agreement states that Cingari alleges: Gubernick was the actual and ostensible agent of NHST; NHST negligently supervised Gubernick; NHST misrepresented itself and Gubernick and Cingari relied on those representations; NHST did not obtain informed consent from Cingari; and NHST acted negligently toward Cingari (including negligently maintaining equipment like treatment tables). Per the agreement, Cingari demanded $500,000 to settle all claims against Gubernick and NHST. Moreover, all parties to the agreement indicated their shared belief that the settlement demand "was fair and reasonable in light of the injuries and damages claimed by Cingari and the evidence regarding Gubernick's and [NHST's] liability and legal responsibility for causing such injuries and damages." Although the assignment agreement references a settlement demand and that NHST negligently maintained treatment tables, there is no indication in the record that anyone forwarded Mid-Century the settlement demand or information about the treatment table at the time the agreement was executed.
The assignment agreement also stated that Cingari retained the right to try the medical negligence case against Gubernick and NHST, and those two defendants would each pay Cingari $10,000 (regardless of the final amount of the judgment). Cingari, in turn, agreed not to execute any judgment he might obtain against Gubernick's or NHST's personal assets. Gubernick and NHST assigned any claims they might have against Mid-Century to Cingari with the assurance that, out of any recovery from Cingari pursuing claims against Mid-Century, Cingari was entitled to the first $100,000 then Gubernick and NHST would be reimbursed for the $20,000 they paid and any out of pocket fees and costs they incurred. In addition, 6 Gubernick and NHST would be entitled to five percent of any remaining amounts collected from Mid-Century.
The assignment agreement also concerned the assignment of rights against another insurance company that is not a party to this appeal.
Also, on April 18, 2016, trial of Cingari's medical negligence complaint began. The trial concluded two days later. On April 25, 2016, NHST's counsel wrote to Mid-Century advising that "during the trial, an issue arose regarding the claimed existence of faulty equipment, namely a chiropractic table, on [NHST's] premises." Counsel then informed Mid-Century that Cingari had demanded $500,000 to settle the matter and asked whether Mid-Century would pay that amount. NHST's attorney further cautioned that "subsequent to the timing of that demand, the judge's tentative ruling would indicate that the judgment will be in excess of your insureds' policy limits. Time is of the essence because trial counsel has informed us that the judgment will soon be entered."
This was the first time NHST was made aware of any claim involving negligently maintained treatment tables.
Two days later, Mid-Century sent an acknowledgement letter to NHST's counsel, indicating it would consider the settlement demand. That same day, Cingari submitted a proposed statement of decision to the trial court for consideration. The next day, the court signed the proposed statement of decision.
On May 4, 2016, Mid-Century's representative talked with NHST's counsel and requested more information about the allegedly faulty table. In addition, the representative asked if an amended complaint or relevant testimony was available. In response, the next day, NHST's counsel sent 7 Mid-Century the signed statement of decision and a copy of the assignment agreement.
In the statement of decision, the trial court concluded that Cingari was injured "when he was placed on a negligently maintained unstable treatment table." The statement of decision further stated:
"NHST negligently provided said table and was responsible for its maintenance. At the time of the injurious treatment, said table moved, or gave way in a manner so as to alter the intended amount of force and/or direction of force that was intended by the practitioner (Defendant Gubernick)[.] The movement of the table also altered defendant Gubernick's stance or position unexpectedly, resulting in Gubernick's weight ending up on top of [Cingari]. As such, plaintiff Cingari was injured and the negligently maintained/provided table was a legal cause of this injury, and a substantial factor in causing this injury."
The trial court further found that Gubernick was the actual and/or ostensible agent of NHST, and NHST and Gubernick were negligent in failing to obtain Cingari's informed consent before his treatment, in failing to perform a pre-treatment examination of Cingari, and in performing an "adjustment" procedure on Cingari. In addition, the court found NHST's negligence was a substantial factor in causing Cingari's injuries.
Mid-Century took no further action regarding Cingari's settlement demand.
On January 17, 2017, Cingari, Gubernick (individually and as an actual and ostensible agent of NHST), Roche (individually and as president of NHST), Berger (individually and as vice-president of NHST), and NHST sued 8 Mid-Century and other entities within Farmers Insurance Group. CNA Insurance and American Casualty, which issued a professional liability policy covering "medical incident [s]" to Berger and denied coverage for Cingari's claim, also were named as defendants.
Plaintiffs dismissed all Farmers entities except Mid-Century and Farmers Insurance Exchange from their action (Farmers Exchange). Farmers Exchange was sued as a "related entity," and the parties later agreed that any claims against Farmers Exchange also would fail because the court granted summary adjudication in favor of Mid-Century. In addition, Berger dismissed his claims against all defendants in April 2019.
On May 2, 2018, Plaintiffs dismissed their claims against CNA Insurance and American Casualty Company.
In the operative complaint, plaintiffs alleged the following eight causes of action: (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) unfair competition; (4) intentional misrepresentation; (5) negligent misrepresentation; (6) fraud; (7) declaratory relief; and (8) negligence.
Mid-Century filed a motion for summary adjudication as to the first, second, third, and seventh causes of action. In that motion, Mid-Century argued the professional services exclusion barred coverage for the claims arising from Cingari's medical negligence suit; it owed no duty to defend 9 because there was no potential for coverage; and in the absence of any coverage, it could not have acted in bad faith or committed any wrongful act.
The eighth cause of action for negligence was not alleged against Mid-Century. Rather, plaintiffs sued Martin Stuka, an insurance broker, for negligence as well as negligent misrepresentation. The causes of action for intentional and negligent misrepresentation against Mid-Century were based on a theory of vicarious liability for Stuka's alleged misrepresentations. Stuka also brought a motion for summary judgment, which the court denied. Stuka ultimately settled with plaintiffs. That settlement also resolved plaintiffs' claims based on vicarious liability against Mid-Century.
Plaintiffs also based their claims against Mid-Century on an "advertising injury" under the policy and sought punitive damages. Mid-Century successfully moved for summary adjudication as to these two issues as well. Because Cingari does not challenge the superior court's findings on these two issues on appeal, we eschew any further discussion of them.
Plaintiffs opposed the motion for summary adjudication, arguing Mid-Century had failed to adequately investigate Cingari's claim, issues of disputed material fact existed as to the potential of coverage, and Mid-Century breached its duty to settle the action within policy limits. In support of their opposition, plaintiffs submitted the declaration of their expert witness, Timothy Walker, who declared that there existed the potential for coverage under the policy and that Mid-Century breached its duties to defend, investigate, and settle Cingari's claim.
The superior court granted summary adjudication in favor of Mid-Century as to the first, second, third, and seventh causes of action. The parties subsequently agreed and entered into a stipulation that, based on the reasoning of the superior court, had Mid-Century challenged the fourth and sixth causes of action in the summary adjudication motion, the court would have granted the motion as to these causes of action as well. As such, they agreed to summary adjudication in Mid-Century's favor as to those two causes of action too. Plaintiffs then dismissed with prejudice the fifth and eight causes of action. Because all claims against Mid-Century were resolved 10 either on summary adjudication or by dismissal, the court entered final judgment in favor of Mid-Century on June 11, 2019.
The judgment also was in favor of Farmers Exchange. For purposes of this appeal only, the parties assume Farmers Exchange stands in the shoes of Mid-Century, and Farmers Exchange is a party to this appeal (Mid-Century and Farmers Exchange together referred to as Respondents).
Appellants timely appealed.
DISCUSSION
We review a motion for summary adjudication de novo. (Benson v. Superior Court (2010) 185 Cal.App.4th 1179, 1184-1185.) On appeal, we independently assess the correctness of the ruling, applying the same legal standard as the trial court to determine if there are genuine issues of material fact. (AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. (2018) 28 Cal.App.5th923, 934.) "In performing our review, we view the evidence in a light favorable to the losing party. . ., liberally construing [the] evidentiary submission while strictly scrutinizing the moving party's own showing and resolving any evidentiary doubts or ambiguities in the losing party's favor." (Serri v. Santa Clara University (2014) 226 Cal.App.4th 830, 859 (Serri).)
Here, the parties agree that the primary issue before us is whether Mid-Century had a duty to defend. if a triable issue of fact exists as to the determination of Mid-Century's duty to defend, then the trial court's grant of summary adjudication was improper. In addition, to the extent the trial court interpreted the business owner's insurance policy to find summary 11 adjudication proper and we conclude its interpretation was erroneous, the grant of summary adjudication was incorrect as well.
The four causes of action at issue here (breach of contract, bad faith, unfair competition, and declaratory relief) all hinge on whether Mid-Century had a duty to defend and/or there was a potential for coverage under the subject policy.
An insurer's duty to defend is very broad." [A]n insurer has a duty to defend an insured if it becomes aware of, or if the third party lawsuit pleads, facts giving rise to the potential for coverage under the insuring agreement. [Citations.]" (Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 19 (Waller).) The insurer must defend any claim that would be covered if it were true, even if it is "groundless, false or fraudulent." (Gray v. Zurich Ins. Co. (1966) 65 Cal.2d 263, 273.) "Implicit in this rule is the principle that the duty to defend is broader than the duty to indemnify; an insurer may owe a duty to defend its insured in an action in which no damages ultimately are awarded. [Citations.]" (Horace Mann Ins. Co. v. Barbara B. (1993) 4 Cal.4th 1076, 1081.)
" [T]he insured is entitled to a defense if the underlying complaint alleges the insured's liability for damages potentially covered under the policy, or if the complaint might be amended to give rise to a liability that would be covered under the policy." (Montrose Chemical Corp. v. Superior Court (1993) 6 Cal.4th 287, 299 (Montrose Chemical).)" '[O]nce the insured has established potential liability by reference to the factual allegations of the complaint, the terms of the policy, and any extrinsic evidence upon which the insured intends to rely, the insurer must assume its duty to defend unless and until it can conclusively refute that potential.'" (Ibid; see Ringler Associates Inc. v. Maryland Casualty Co. (2000) 80 Cal.App.4th 1165, 1186 (Ringler).) "In order to establish a duty to defend, an insured need only establish the existence of a potential for coverage; while to avoid the duty, the insurer must establish the absence of any such potential. [Citation.]" (Ringler, at p. 1186.) Doubts concerning the potential for coverage and the 12 existence of duty to defend are resolved in favor of the insured. (Montrose Chemical, at pp. 299-300.)
"[T]he determination whether the insurer owes a duty to defend usually is made in the first instance by comparing the allegations of the complaint with the terms of the policy" (Waller, supra, 11 Cal.4that p. 19) and extrinsic facts "known by the insurer at the inception of the third party lawsuit. . . ." (Gunderson v. Fire Ins. Exchange (1995) 37 Cal.App.4th 1106, 1114.) The insurer's defense duty is obviated where the facts are undisputed and conclusively eliminate the potential the policy provides coverage for the third party's claim. (Waller, at p. 19.)
"Breach of an insurer's duty to defend violates a contractual obligation and, where unreasonable, also violates the covenant of good faith and fair dealing, for which tort remedies are appropriate. [Citation.]" (Amato v. Mercury Casualty Co. (1997) 53 Cal.App.4th 825, 831.)
Here, Mid-Century's primary argument supporting the trial court's grant of summary adjudication concerns the interpretation of the subject insurance policy, specifically the professional services exclusion. To this end, Mid-Century contends that because Cingari was injured only while receiving medical services, the policy's extremely broad professional services exception applies and it had no duty to defend NHST. Appellants counter that the professional services exception only applies if NHST was the entity performing professional services. Because NHST was not treating Cingari when he was injured, Appellants maintain the professional services exclusion does not apply.
Yet, before we wade into the interpretation of professionals services exception, we must engage in a more fundamental inquiry. Mid-Century argues its policy excludes coverage for any bodily injury that occurs while 13 anyone (the insured or any third party) was performing a professional service. When Mid-Century denied NHST's tender, it asserted that "there is no factual scenario wherein the policy would apply to pay sums as damages for this loss on behalf of NHST." This assertion is critical in the instant matter for two reasons. First, Mid-Century is tacitly acknowledging it would have a duty to defend if there is potential for coverage. (See Montrose Chemical, supra, 6 Cal.4th at p. 299.) Second, Mid-Century's statement that there could be no coverage under any factual scenario suggests that it knows, at that time, how Cingari was injured. Or at the very least, despite the fact that Cingari was injured on a premises insured by Mid-Century through a general liability policy, there was no possible cause of that injury for which Mid-Century could conceivably provide coverage. Thus, we need to understand what Mid-Century knew at the time it denied coverage and whether its efforts at obtaining its information were sufficient to support its denial of the tender. Such a determination as to the latter point is essential because it is well settled that" '[b]efore an insurer may rightfully reject a tender of defense, it must investigate and evaluate the facts expressed or implied in the third party complaint as well as those which it learns from its insured and any other sources [citation].' [Citations.]" (CNA Casualty of California v. Seaboard Surety Co. (1986) 176 Cal.App.3d 598, 610; Mullen v. Glen Falls Ins. Co. (1977) 73 Cal.App.3d 163, 172-173 (Mullen).)
A potential for coverage exists under a policy whenever the facts on which the insurer's determination of noncoverage are disputed and might be resolved consistent with coverage. (Gray v. Zurich Insurance Co., supra, 65 Cal.2d at pp. 275-276 [insurer had duty to defend underlying assault action despite intentional act exclusion in policy because insured might show his conduct was excused or merely negligent].) So, here, if the facts on which 14 Mid-Century made its determination of noncoverage are disputed, the trial court erred in granting the summary adjudication motion.
Simply because an insurer believes the claims contained in a complaint are covered by an exclusion under the relevant policy does not relieve an insurer of its duty to investigate the claim. For example, in Mullen, supra, 73 Cal.App.3d at pages 172-173, the appellate court held that the insurer had a duty to defend an insured in a personal injury action even though the underlying complaint alleged injuries suffered in an intentional fight. The court determined there was a possibility that the act committed by the insured was in self-defense and thus not intended or expected within the meaning of the exclusionary clause in the policy. (Ibid.) The court further held that the insurer could not deny an insured a defense without conducting an investigation when there was a potential for liability under the policy. (Id. at p. 173.)" [A] contrary holding would force the insured to finance his own investigation and the defense of the lawsuit, and then to seek reimbursement in a second lawsuit against the insurance company. This, in turn, could not only impose an undue financial burden on persons who have purchased insurance protection, but it could deprive them of the expertise and resources available to insurance carriers in making prompt and competent investigations as to the merits of lawsuits filed against their insureds." (Id. at pp. 173-174.)
Here, on the record before us, Mid-Century's investigation of NHST's tender appears minimal. Mid-Century talked to NHST and Gubernick's attorney. Based on these conversations, Mid-Century learned that there was a landlord tenant relationship between Gubernick and NHST. NHST did not treat Cingari and did not know how Cingari was injured. Gubernick had treated Cingari but his attorney would not allow Gubernick to provide any 15 sort of statement to Mid-Century. However, it appears from Mid-Century's log regarding this case that "Gubernick denie[d] performing any treatment on [Cingari] that could have caused the alleged injury." Further, based on its conversations with Gubernick's attorney and NHST, Mid-Century knew that Cingari was injured on NHST's premises. Also, Cingari's counsel had called Mid-Century, but Mid-Century did not return counsel's call.
The underlying complaint was a generic, boilerplate, medical negligence complaint. It did not allege that NHST's general negligence had caused any injury to Cingari.
Based on this limited investigation and the reading of the underlying complaint, Mid-Century concluded that it had no duty to defend NHST because Cingari's injuries occurred during Gubernick's performance of professional services. And such services were excluded from coverage under the professional services exclusion.
In opposing the motion for summary adjudication, Appellants' expert witness (Walker), who has more than 45 years of legal experience with a significant familiarity of the insurance industry, opined that Mid-Century's investigation was not sufficient under industry standards. He noted that Mid-Century did not adequately investigate Cingari's claim, emphasizing that it did not contact Cingari's counsel despite the fact that counsel reached out to Mid-Century. Further, Walker points out that, in Mid-Century's log notes about NHST's tender, a representative admits, "I do not have all the details of the injury other than from the lawsuit and insured does not want me to contact [Cingari's] attorney." Walker concludes that "[a] competent and reasonable insurer complying with industry standards (including the regulations and statutes relating thereto) would perform an investigation in order to determine 'all the details on the injury' including the detailed facts 16 surrounding how the injury occurred or how the injury may have occurred, before denying defense to an insured based solely on the allegations in the Complaint."
Mid-Century argues that Walker's opinion does not create a triable issue of fact as to the adequacy of its investigation. To this end, it asserts that NHST's counsel "directed. . . [Mid-Century] not to speak with Cingari's counsel 'unless [Mid-Century] is agreeing to fund the defense." Thus, under Ringler, supra, 80 Cal.App.4th 1165, Mid-Century argues it "cannot be charged with knowledge of information it [was] prevented from acquiring at the direction of the insured or its attorneys."
In Ringler, supra, 80 Cal.App.4th 1165, the insured was suing its general liability insurer for breach of contract and breach of the covenant of good faith and fair dealing. (Id. at p. 1178.) In appealing the trial court's grant of summary judgment, one of the arguments the insured asserted was the insurer's alleged failure to sufficiently investigate the claims in the underlying suit to determine whether a duty to defend existed. (Id. at pp. 1183-1184.) The court noted that the insured's "own attorneys actually directed [the insurer] not to communicate with the . . . plaintiffs' counsel about the number, nature and timing of defamatory statements allegedly made by [the insured's] personnel." (Id. at p. 1184.) The court therefore rejected the argument that a further investigation would have revealed extrinsic facts sufficient to trigger a duty to defend. (Ibid.)
Here, although Mid-Century claims that NHST's counsel "directed" it not to contact Cingari's counsel, the record does not necessarily support such a strong characterization of NHST's counsel's statement. Instead, Mid-Century's own log states that NHST's attorney "would prefer" that Mid-Century not contact Cingari's attorney "unless [it] is agreeing to fund the 17 defense." A preference that one refrain from an activity is not the same as a directive. Moreover, in the instant matter, Cingari's counsel attempted to contact Mid-Century. There is no indication in Ringler that the plaintiffs' counsel reached out directly to the insurer. As such, we do not find Ringler instructive here. This is especially true on a motion for summary adjudication where we must review the evidence in a light most favorable to the losing party. (See Serri, supra, 226 Cal.App.4that p. 859.)
Mid-Century also maintains that Walker's opinion that its investigation of NHST's tender was not sufficient does not create a triable issue of fact because its "pure speculation" that "had it done more investigation, it would have learned of facts demonstrating a potential for coverage." We find this argument unpersuasive for two reasons.
First, an insurer has no duty to defend an insured where the facts are undisputed and conclusively eliminate the potential the policy provides coverage for the third party's claim. (Waller, supra, 11 Cal.4th at p. 19.) Here, without even addressing what additional information Mid-Century might have uncovered while further investigating the claim, the record presents a triable issue of fact as to whether Mid-Century could eliminate the potential that the policy provided coverage for the claimed injuries at the time it denied coverage to NHST. Mid-Century's own documents show: (1) it was aware that Cingari was injured on a premises for which it provided general liability insurance; (2) Gubernick denied performing any treatment on Cingari that would have caused his injury; (3) NHST denied any knowledge of how Cingari was injured; and (4) Mid-Century admitted multiple times in its log that its only knowledge of how Cingari was injured 18 was the underlying complaint. Yet, despite having no knowledge how Cingari was injured, Mid-Century denied NHST's tender, specifically noting, "there is no factual scenario wherein the policy would apply to pay sums as damages for this loss on behalf of NHST. Either NHST has no employment or agency relationship with Dr. Gubernick, and therefore could never become legally obligated to pay sums to [Cingari] as damages, or NHST is under some theory legally liable for [Cingari s] damages, in which case coverage is excluded under section B.1.j. - Professional Services." (Bold in original.) What is disputed and unclear on the record before us is this: How could Mid-Century know that there could be no possible coverage under its policy with NHST when it did not know how Cingari was injured?
For example, in its claims log, Mid-Century admitted: (a) it did "not have all the details on the injury other than the lawsuit" and (b) "[t]he only information on the injury comes from the lawsuit."
Second, on the record before us, for purposes of a motion for summary adjudication, we do not find it speculative to infer what Mid-Century would have discovered had it engaged in further investigation. Here, we have the benefit of Cingari's deposition testimony where he explained he was injured when a table he was lying on "collapsed and a huge guy fell on top of me." Although this deposition occurred during the instant matter and not Cingari's underlying case against Gubernick, there is nothing in the record that leads us to believe that Cingari's attorney would not have shared the same information had Mid-Century simply returned his call.
Based on the foregoing, we determine that a triable issue of fact exists regarding whether Mid-Century's investigation was sufficient to allow it to deny NHST's tender on the ground that there was no factual scenario under which Cingari's injury could be covered under the policy. At the time Mid- 19 Century denied the tender, it admitted it did not know how Cingari was injured. Moreover, he was injured on a premises that Mid-Century insured under a general liability policy. Despite not knowing or even getting a statement from someone who knew how Cingari was injured, Mid-Century denied coverage, claiming the subject policy would not provide coverage under any factual scenario. On the record before us, there is a dispute as to whether Mid-Century's statement is true. Critically, it is unclear how Mid-Century could take the position that the policy could never cover Cingari's injuries when Mid-Century did not know how Cingari was injured. The trial court thus erred in granting the motion for summary adjudication.
Although we find the existence of this triable issue of material fact warrants reversal here, we will briefly address one other argument Mid-Century raises: the negligently maintained table, even if supplied by NHST, would have no bearing on its coverage determination. According to Mid-Century, California law holds that when equipment used to perform the professional services contributes to the injury, the professional services exclusion bars coverage. Accordingly, Mid-Century urges us to follow Antles v. Aetna Casualty & Surety Co. (1963) 221 Cal.App.2d 438 (Antles). We conclude that case is not instructive here.
In Antles, supra, 221 Cal.App.2d438, the insured and defendant was a chiropractor who provided professional services to the injured party, a patient. (Id. at pp. 439-440.) The injury occurred when a heat lamp fell and burned the patient during a chiropractic treatment. (Id. at p. 440.) The heat lamp had been negligently installed by a third party, who was not named in the lawsuit. The court found that because the lamp was being actively used in the chiropractic treatment (i.e., the professional service), the injury arose 20 from the performance of a professional service and the exclusion applied. (Id. at pp. 442-443.) The court explained:
"In the present case, the lamp was the principal article or instrument used in giving the treatment, and preparatory to using it the doctor was required, in the exercise of his professional skill and judgment, to swing it from the wall to a proper place over the table and to adjust it to the proper height above the patient; and while the lamp heat was being applied, the doctor was required, in the further exercise of his professional skill and judgment, to observe the time during which the heat was applied, so that only the proper amount of heat for the specific treatment would be applied-and that a burn would not result from too much heat. Also in the present case, the doctor remained in the room while the lamp heat was being applied. As above stated, the doctor testified that the adjustment of the height of the lamp from the patient, and the matter of the length of time the patient stayed under the lamp, required his supervision in his capacity as a chiropractor. The finding of the trial court that the lamp was adjusted as a part of the doctor's professional services is supported by the evidence."
(Ibid.)
In Antles, the trial court made several findings of fact, at trial, that the appellate court found were supported by the evidence indicating that the subject lamp was an instrument of professional services. Here, the record does not contain any analogous facts pertaining to the treatment table that collapsed while Cingari was receiving treatment. We do not know if that table, like the lamp in Antles, required a chiropractor's professional skill and judgment in its use. In other words, it is a disputed question of material fact whether the negligently-maintained table was part of the professional services provided by Gubernick to Cingari. As such, we decline to follow Antles on the limited record before us. It could be that Mid-Century can show 21 that the subject treatment table is like the lamp in Antles. But that is not a question that can be answered in the context of Mid-Century's motion for summary adjudication (at least, not on the record before us).
Because we conclude that a triable issue of material fact exists and the court erred in granting Mid-Century's motion for summary adjudication, we do not address the additional issues raised in the briefs, including interpreting the subject professional services exclusion.
DISPOSITION
The judgment is reversed. The matter is remanded to the trial court with instructions to issue an order denying Respondents' motion for summary adjudication as to the first, second, third, and seventh causes of action and conduct further proceedings consistent with this opinion. Appellants are entitled to their costs on appeal.
WE CONCUR: AARON, J., DATO, J. 22