Opinion
B205345
8-29-2008
STEVEN EDWARD BOYER, Plaintiff and Appellant, v. DANIEL J. WELLS, Defendant and Respondent.
Bradley & Bradley, Elizabeth Franco Bradley and Elizabeth L. Bradley for Plaintiff and Appellant. Tharpe & Howell, Christopher S. Maile and Eric B. Kunkel for Defendant and Respondent.
Not to be Published
Plaintiff and appellant Steven Edward Boyer appeals from a grant of summary judgment entered in favor of defendant and respondent Daniel J. Wells (Wells). A fire destroyed appellants home and appellant sued Fire Insurance Exchange (Fire Insurance) and its authorized agent Wells after being denied insurance benefits under his policy of homeowners insurance issued by Fire Insurance. Appellant alleged that Wells negligently failed to warn appellant that his premium was due and his policy would lapse absent timely payment and negligently failed to secure a policy that provided for full replacement cost over time. The trial court granted summary judgment, ruling that Wells owed no duty to warn and that appellant suffered no damages under his replacement cost policy. It further declined appellants request to expand the theory supporting his duty to warn claim, sustained Wellss objection to a document containing a statement made by Wells and denied appellants continuance request.
We affirm. As a matter of law, Wells owed no duty to warn appellant to pay his premium or risk cancellation of his policy. Further, the undisputed evidence showed that appellant suffered no damages, as the cost to replace his house was covered by his policy. Alternatively, Wells owed no duty to appellant to procure a different type of policy. Finally, the trial court acted within its discretion in refusing to consider appellants new theory or permit him to amend to add a new theory at the time of the summary judgment motion, in excluding Wellss statement and in denying a continuance of the motion.
FACTUAL AND PROCEDURAL BACKGROUND
Wells had been an agent for Fire Insurance for over 20 years. In 1998, appellant contacted Wells to obtain homeowners insurance for his residence located in Escondido, California. Appellant requested a policy that would provide for full replacement cost over time. After appellant provided Wells with the necessary information, Fire Insurance issued a homeowners insurance policy (policy) to appellant in October 1998.
Appellant renewed the policy annually through October 2004. On the declarations page, the policy provided: "This policy will continue for successive policy periods, if: (1) we elect to continue this insurance, and (2) if you pay the renewal premium for each successive policy period as required by our premiums, rules and forms then in effect." The policys replacement cost limits increased during each successive policy period, and by November 2005, appellants dwelling and personal property coverage totaled $352,500. Appellant did not pay the premium when it became due on October 22, 2005, and on November 1, 2005, Fire Insurance mailed a notice stating that the policy was out of force because of the nonpayment.
A fire destroyed appellants residence on November 11, 2005 and appellant was arrested on that date.
Every week, Wells would receive a report from Fire Insurance advising him of policies for which the premium had not been paid. On November 14, 2005, Wells received a report which identified appellants policy as one for which a premium was owing. The same day, Wells sent a letter to appellant at his home address advising him of the need to pay the premium to avoid a lapse in coverage. Wells sent this letter as a courtesy; sending this type of notice was not one of his job responsibilities and he had never before sent a similar notice to appellant. At one point in 2001, however, Wells had called appellant to warn him that his premium payment was late and his policy was about to lapse. At the time he sent the November 2005 letter, Wells knew that appellant was in jail and had tried unsuccessfully to contact him there; Wells had no other address by which to contact appellant except for his home address.
On November 18, 2005, Fire Insurance sent a letter to appellant advising him that his policy had been cancelled as of October 22, 2005 for nonpayment of premium. Appellant did not receive any previous notice from Fire Insurance regarding its intent to cancel his policy. When Wells sent a notice to appellant, he knew that the policy was in a "grace period" until November 18, 2005—meaning that if appellant paid his premium on or before that date, the policy would remain in effect; if appellant failed to pay his premium by that date, the policy would cancel retroactively to the renewal date of October 22, 2005. Ultimately, Wells reported the claim on appellants behalf and Fire Insurance denied the claim.
In February 2007, appellant filed a first amended complaint (complaint) against Fire Insurance and Wells, alleging causes of action for breach of contract, negligence, breach of the implied covenant of good faith and fair dealing and injunctive relief for violations of the Business and Professions Code. The two negligence causes of action against Wells alleged that he failed to warn appellant that his insurance premium had not been paid for the period beginning October 22, 2005, and that he failed to use due care in securing that the policy would provide for full replacement cost in the event of a loss. Appellant later dismissed all causes of action against Wells except those for negligence.
Wells moved for summary judgment in May 2007 on the grounds that Wells owed no duty to appellant either to warn appellant of the need to pay the policys premium to avoid a lapse in coverage or to alter the policys level of coverage absent a request to do so, and, alternatively, that the undisputed evidence established he did not breach any duty owed to appellant. Appellant opposed the motion, arguing that triable issues of fact existed as to whether Wells owed a duty to act reasonably in notifying him that his premium was due and whether the damage to the residence exceeded his policy limits.
As part of the evidence submitted in opposition to the motion, appellant attached to a declaration of counsel one page of a Fire Insurance claims log reporting a telephone call from Wells stating "Agent Dan Wells called to clarify the coverage on this account; agent stated that due to his negligence, the insured coverage lapse [sic] and it should not have . . . ." Wells objected to the evidence as hearsay and the trial court sustained the objection.
Appellant also attached excerpts from the deposition of Mark Blaha (Blaha), the claim adjuster, as well as an itemized estimate of repairs that he prepared. Blahas written estimate provided that the replacement cost for appellants home was $337,357, though in his deposition Blaha stated that his estimate did not account for unforeseeable reconstruction costs. Blaha further stated that he considered the home to be a "total loss" after he performed an evaluation of the damage. He further stated: "Policies have stated amounts of coverage and if the loss exceeds that amount plus any extensions, then it would be considered a total loss."
The trial court heard the summary judgment motion on November 14, 2007. With respect to whether there was a triable issue of fact concerning the replacement cost, appellant asserted that Blahas testimony that the home was a "total loss" showed Wells breached his duty to procure a replacement value as requested. Alternatively, appellant requested a brief continuance to provide an estimate from a third party contractor "in the $ 500,000 range." The trial court denied the continuance request, finding that any evidence appellant sought to submit was available to him prior to the hearing. Following the hearing, the trial court issued its ruling granting summary judgment in favor of Wells. It ruled that Wells owed no duty to appellant to warn of unpaid premiums. With respect to the failure to warn, the trial court further found that appellant could not seek to impose a duty on Wells to explain how the policy would be affected by nonpayment of premiums, as that theory was not alleged in the complaint. On appellants other claim, the trial court ruled that "assuming any duty was owed plaintiff, plaintiff cannot establish he has or will sustain any damages as a result of the limits which were procured for the policy" because the undisputed evidence showed the cost of repair was within the policy limits.
The trial court thereafter entered judgment in favor of Wells and this appeal followed. On November 14, 2007, the trial court granted summary adjudication in favor of Fire Insurance, and the remaining causes of action were set for trial on June 30, 2008. We denied appellants petition for writ of supersedeas seeking to stay trial pending disposition of this appeal.
DISCUSSION
Appellant challenges the trial courts grant of summary judgment, its denial of leave to amend, its exclusion of a document reflecting a statement made by Wells and its denial of his continuance request. Applying the appropriate standard of review applicable to each challenge, we find no error.
I. The Trial Court Properly Granted Summary Judgment.
A. Standard of Review.
We review a grant of summary judgment de novo. (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142; Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843-857.) The general rule is that summary judgment is appropriate where "all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. . . ." (Code Civ. Proc., § 437c, subd. (c).) We consider "`all of the evidence set forth in the [supporting and opposition] papers, except that to which objections have been made and sustained by the court, and all [uncontradicted] inferences reasonably deducible from the evidence." (Artiglio v. Corning Inc. (1998) 18 Cal.4th 604, 612.) "In independently reviewing a motion for summary judgment, we apply the same three-step analysis used by the superior court. We identify the issues framed by the pleadings, determine whether the moving party has negated the opponents claims, and determine whether the opposition has demonstrated the existence of a triable, material factual issue." (Silva v. Lucky Stores, Inc. (1998) 65 Cal.App.4th 256, 261.) If there is no triable issue of material fact, "we affirm the summary judgment if it is correct on any legal ground applicable to this case, whether that ground was the legal theory adopted by the trial court or not, and whether it was raised by defendant in the trial court or first addressed on appeal." (Jordan v. Allstate Ins. Co. (2007) 148 Cal.App.4th 1062, 1071.)
B. As a Matter of Law, Wells Owed No Duty to Appellant to Warn Him That He Had Not Paid His Insurance Policy Premium.
According to the complaint, Wells was "a captive agent of [Fire Insurance] and as such [Fire Insurance] is his principal." In American Internat. Specialty Lines Ins. Co. v. Continental Casualty Ins. Co. (2006) 142 Cal.App.4th 1342, 1363, the court explained how an insurance agent differs from an insurance broker: "As statutorily defined, an `"[i]nsurance broker" means a person who, for compensation and on behalf of another person, transacts insurance other than life with, but not on behalf of, an insurer. (Ins. Code, § 33.) In contrast, an `"[i]nsurance agent" means a person authorized, by and on behalf of an insurer, to transact all classes of insurance other than life insurance. (Ins. Code., § 31.)" Generally, an insurance broker, unlike an insurance agent, is the insureds agent. (Marsh & McLennan of Cal., Inc. v. City of Los Angeles (1976) 62 Cal.App.3d 108, 117.)
Both insurance agents and insurance brokers owe duties to insureds. (See Paper Savers, Inc. v. Nacsa (1996) 51 Cal.App.4th 1090, 1095 [insurance agents]; Eddy v. Sharp (1988) 199 Cal.App.3d 858, 865 [insurance brokers].) Summarizing the scope of an insurance agents duties, the court in Jones v. Grewe (1987) 189 Cal.App.3d 950, 954, stated: "Ordinarily, an insurance agent assumes only those duties normally found in any agency relationship. This includes the obligation to use reasonable care, diligence, and judgment in procuring the insurance requested by an insured. [Citation.] The mere existence of such a relationship imposes no duty on the agent to advise the insured on specific insurance matters. [Citations.] `An agent may point out to [the insured] the advantages of additional coverage and may ferret out additional facts from the insured applicable to such coverage, but he is under no obligation to do so; nor is the insured under an obligation to respond. [Citation.]" (Accord, Kurtz, Richards, Wilson & Co. v. Insurance Communicators Marketing Corp. (1993) 12 Cal.App.4th 1249, 1257 ["an insurance agent has a duty to use reasonable care, diligence, and judgment in procuring the insurance requested by its client"].)
In his third cause of action, appellant alleged that Wells knew or should have known that appellant had not timely paid his premium by the October 22, 2005 due date, Wells knew or should have known appellants policy would be cancelled in the event of nonpayment, Wells did not contact appellant at any time to warn him that his premium had not been paid and, as a proximate result of Wellss failure to warn, appellant did not have the opportunity to protect himself from default and Fire Insurance cancelled his policy. Wells premised his motion for summary judgment as to this cause of action on the ground that he owed no duty to appellant as a matter of law to warn him to pay his premium. The trial court agreed, ruling that Wells "was not responsible for informing plaintiff that his policy had lapsed, and was further not responsible for informing plaintiff when his policy payments were due. Given the requirements in the Insurance Code which require the insurer to give notice of termination, the agent is not under an additional duty to provide notice. Kotlar v. Hartford Fire Ins. Co., 83 Cal.App.4th 1116, 1123 (2000)."
The applicable Insurance Code provisions obligate an insurer—not an insurance agent—to provide notice of renewal. Insurance Code section 678, subdivision (a)(1), provides in pertinent part that "[a]t least 45 days prior to policy expiration, an insurer shall deliver to the named insured or mail to the named insured at the address shown in the policy, either of the following: [¶] (1) An offer of renewal of the policy contingent upon payment of premium as stated in the offer . . . ." Upon an insureds nonpayment of premium, however, the insurer may mail a notice of cancellation of the policy no less than 10 days prior to the effective date of the cancellation. (Ins. Code, §§ 676, 677.2, subd. (c).) Any notice of cancellation must be mailed to the named insured at the address shown in the policy. (Ins. Code, § 677, subd. (a).)
In Kotlar v. Hartford Fire Ins. Co. (2000) 83 Cal.App.4th 1116, 1123 (Kotlar), the court held that an insurance broker owes no duty to an insured to notify the insured of the insurers intent to cancel a policy for nonpayment of premium. There, the insured acknowledged there was no decisional authority for the imposition of a duty to notify on the part of an insurance broker, but asked the court to create such a duty. The court declined, reasoning "[i]n light of our holding [Insurance Code] section 677.2 imposes a duty on the insurer to notify the named insureds of its intent to cancel the policy we see no purpose in judicially imposing such a duty on a broker. [¶] Furthermore, the relationship between an insurance broker and its client is not the kind which would logically give rise to such a duty. The duty of a broker, by and large, is to use reasonable care, diligence, and judgment in procuring the insurance requested by its client. [Citation.]" (Kotlar, supra, at p. 1123.) The court noted that a brokers obligation to use reasonable care could not be construed to encompass the duty to notify the insured of the insurers intent to cancel the policy, particularly when the broker also acts for an agent of the insurer with respect to the policy. (Ibid.)
Whether a duty of care exists is a question of law for the court. (Butcher v. Truck Ins. Exchange (2000) 77 Cal.App.4th 1442, 1451; Fitzpatrick v. Hayes (1997) 57 Cal.App.4th 916, 920.) We agree with the trial court that Wells, as an insurance agent, owed no duty to appellant to warn appellant that he needed to pay his premium or risk cancellation of his policy. We find no basis to depart from Kotlar, supra, 83 Cal.App.4th 1116. Indeed, this case exemplifies the situation discussed in Kotlar involving an insurance agent, rather than a broker, with duties to both the insurance company and the insured. (Id. at p. 1123.) Though appellant attempts to distinguish Kotlar on the ground that the insurance broker in that case did not have a relationship with the insured, the fact that Wells and appellant may have had a preexisting relationship does not expand the nature of Wellss duties to appellant. (See Jones v. Grewe, supra, 189 Cal.App.3d at p. 856 ["that an insured has purchased insurance from an insurance agent for several years and followed his advice on certain insurance matters is insufficient to imply the existence of a greater duty"].)
Nor do we find any basis for the imposition of the duty rejected in Kotlar by reason of the other authorities cited by appellant which address the duty to inform insureds about particular policy terms. Generally, "an insurance agent does not have a duty to volunteer to an insured that the latter should procure additional or different insurance coverage. . . . The rule changes, however, when—but only when—one of the following three things happens: (a) the agent misrepresents the nature, extent or scope of the coverage being offered or provided [citation], (b) there is a request or inquiry by the insured for a particular type or extent of coverage [citation], or (c) the agent assumes an additional duty by either express agreement or by `holding himself out as having expertise in a given field of insurance being sought by the insured [citation]." (Fitzpatrick v. Hayes, supra, 57 Cal.App.4th at p. 927, fn. omitted.) The duty appellant seeks to impose here does not involve any misrepresentation on the part of Wells, any request by appellant for notification or any expertise professed by Wells. The authorities cited by appellant that address the duties of insurance agents involve one of the specified exceptions to the general rule. (See Free v. Republic Ins. Co. (1992) 8 Cal.App.4th 1726, 1730 [negligence cause of action stated when insured alleged he contacted insurance agent every year specifically to inquire whether his policy was sufficient to cover the rebuilding of his home and insurance agent always responded affirmatively, and policy was ultimately inadequate to cover rebuilding costs]; Eddy v. Sharp, supra, 199 Cal.App.3d at p. 864 [triable issue of fact whether insurance agent misrepresented the terms of a policy by omitting to provide information about certain exclusions]; Westrick v. State Farm Insurance (1982) 137 Cal.App.3d 685, 692-693 [insurance agent owed duty to explain limiting provisions of policy, excluding coverage for certain vehicles, where insured telephoned agent to secure coverage for new vehicles and was told only that information about the vehicles would not be necessary].) Appellants other authorities address the duties owed by insurers, not insurance agents. (See Davis v. Blue Cross of Northern California (1979) 25 Cal.3d 418, 428-429; Ramirez v. USAA Casualty Ins. Co. (1991) 234 Cal.App.3d 391, 397-398; Wells v. John Hancock Mut. Life Ins. Co. (1978) 85 Cal.App.3d 66, 70-72.)
Moreover, appellant failed to demonstrate a triable issue of fact as to whether Wells had voluntarily assumed a duty of care by proffering evidence that Wells had once previously called him to tell him that his premium payment was late and his homeowners insurance policy was about to lapse. "[I]t is settled law that one `who, having no initial duty to do so, undertakes to come to the aid of another—the "good Samaritan"—has `a duty to exercise due care in performance and is liable if (a) his failure to exercise care increases the risk of such harm, or (b) the harm is suffered because of the others reliance upon the undertaking. [Citations.]" (Artiglio v. Corning Inc., supra, 18 Cal.4th at p. 613.) But it is equally well settled that "`[t]he duty of a "good Samaritan" is limited. Once he has performed his voluntary act he is not required to continue to render aid indefinitely. [Citations.]" (Id. at p. 615; accord, Browne v. Turner Construction Co. (2005) 127 Cal.App.4th 1334, 1348 ["A Good Samaritan does not enslave himself eternally to the beneficiary of his undertaking merely by once rendering aid"].) Evidence that once in 2001 Wells notified appellant about his late premium payment was too limited an undertaking to support the creation of a voluntarily-assumed duty.
Finally, we decline appellants invitation to create a new duty on the part of insurance agents to warn that a policy premium is due. "`[W]hether, and the extent to which a new duty is recognized is a question of public policy. [Citation.] [Citation.]" (Butcher v. Truck Ins. Exchange, supra, 77 Cal.App.4th at p. 1451.) We are guided by the courts analysis in Fitzpatrick v. Hayes, supra, 57 Cal.App.4th 916, where the court declined to create a new duty on the part of insurance agents to inform insureds about the availability of personal umbrella coverage. The court reasoned: "The factors cited by appellants in favor of such an expanded duty, e.g., the longtime relationship between them and their agent, the generally superior knowledge of the agent regarding coverages, the agents review of the policies issued, etc., were almost all present in the authorities discussed above in which the courts have steadfastly refused to find any such enlarged duty." (Id. at p. 929.) Likewise, we cannot conclude that those factors would support the creation of new duty to warn about upcoming policy premiums. Nor would any public policy be served by creating a duty to warn on the part of insurance agents, particularly when the imposition of such a duty "could expose [the agent] to liability greater than faced by his principal the insurer" and potentially subject the agent to conflicting loyalties to the insurer and the insured. (Sanchez v. Lindsey Morden Claims Services, Inc. (1999) 72 Cal.App.4th 249, 253.)
For these reasons, the trial court properly granted summary judgment as to appellants duty to warn claim. (See Artiglio v. Corning Inc., supra, 18 Cal.4th at p. 614 [absence of duty supports summary judgment against negligence claim].)
C. The Undisputed Evidence Showed That One or More Elements of Appellants Claim That Wells Failed to Procure Replacement Cost Coverage Could Not Be Established.
Appellants second cause of action against Wells alleged that Wells negligently failed to obtain replacement cost coverage for appellants residence. In pertinent part, appellant alleged: "Based on the oral representation of WELLS that the policy offered by FIRE would fully protect the home he bought, that said policy would provide 100% coverage for the costs of repairs and/or replacement of the improvements to the property including any and all increases in costs of repair or rebuilding in the event of a loss, PLAINTIFF purchased the policy, and continued to renew the same. [¶] . . . PLAINTIFFs expectation that he was completely covered for the replacement cost of the structures, regardless of the policy limits was reasonable. PLAINTIFF should have been able to rely on WELLS representation of coverage without independently verifying the accuracy of those representations by examining the relevant policy provisions."
In support of his summary judgment motion, Wells offered uncontradicted evidence that the limits of appellants replacement cost policy had increased over time, such that a total of $352,000 in coverage was available at the time appellant sustained his loss. In opposition, appellant submitted his declaration in which he stated: "When I bought the homeowners policy from WELLS, I told him I wanted a full replacement value policy. He said the limits would be increased from time to time to afford for the increase in replacement cost, but I would have to pay increases in premium such policy required. Over the years, the policy limits were raised from time to time, and I believed I was being protected by such increases." He also offered Blahas repair estimate of $337,356.22, which accounted for appellants $2,500 deductible. Before the motion was heard, appellant submitted excerpts from Blahas deposition in which he explained that he considered appellants residence to be a "total loss" after he did an evaluation of the damages. He further explained a "total loss" generally exceeds policy limits plus any extensions. Nonetheless, he stood by his $337,357 estimate of the total damage, stating that he had adjusted the loss to the best of his ability while acknowledging that there may be some losses for which he was unable to account. Blaha stated: "I typically tell my customer, `Ive got this 85 to 90 percent correct, but if Ive missed something, Im willing to come back out here and address those issues that we feel weve missed."
Contrary to appellants assertion and Wellss response on appeal, the trial court did not exclude this evidence. Rather, it found Blahas testimony insufficient to create a triable issue of fact.
In its order granting summary judgment, the trial court ruled: "[A]ssuming any duty was owed plaintiff, plaintiff cannot establish he has or will sustain any damages as a result of the limits which were procured for the policy. Plaintiff estimated the repair cost for the property was $337,365.22, while the amount of available coverage was $352,000. Plaintiff did not present an estimate or any specific evidence demonstrating the cost of repair would be greater than those amounts." We find no basis to disturb this conclusion. (See generally Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at pp. 850-851 [moving defendant entitled to summary judgment where it shows an essential element of the plaintiffs cause of action does not exist].)
Appellant contends that Blahas testimony that appellants home was a "total loss" was sufficient to create a triable issue of fact as to whether the loss exceeded the policy limits. But Blaha testified that his "total loss" characterization was based exclusively on the allowance for unknown costs within his itemized valuation estimate. He stated: "There are always incurred costs that I cannot foresee: temporary fencing, temporary toilets, engineering costs, permitting that we allow the customer to incur those costs, and if they increase the value of the loss we pay it for them." Neither Blahas testimony, nor any other evidence, pointed to any particular cost not included in Blahas estimate that would or may be incurred in the rebuilding of appellants home.
"A party cannot avoid summary judgment by asserting facts based on mere speculation and conjecture, but instead must produce admissible evidence raising a triable issue of fact. [Citation.]" (LaChapelle v. Toyota Motor Credit Corp. (2002) 102 Cal.App.4th 977, 981; see also Knapp v. Doherty (2004) 123 Cal.App.4th 76, 99 ["`Speculation, however, is not evidence that can be utilized in opposing a motion for summary judgment"].) Appellant proffered no evidence of rebuilding costs exceeding his policy limit. Rather, he suggests that the inference to be drawn from Blahas testimony is that there will be rebuilding costs that will ultimately exceed the $352,000 policy limit. But as explained in Waschek v. Department of Motor Vehicles (1997) 59 Cal.App.4th 640, 647: "`When opposition to a motion for summary judgment is based on inferences, those inferences must be reasonably deducible from the evidence, and not such as are derived from speculation, conjecture, imagination, or guesswork. [Citation.]" Blahas testimony that there are generally unforeseen rebuilding costs was too speculative to require the court to infer that there would be such costs in this case. Where evidence of damages is speculative and would not allow a trier of fact to find with reasonable certainty the existence of damages by a preponderance of the evidence, summary judgment is proper. (Kids Universe v. In2Labs (2002) 95 Cal.App.4th 870, 887 [though evidence suggested that unestablished Web site would have been viable, it failed to demonstrate that a triable controversy existed as to a reasonable certainty that the site would have made a profit].)
Even if Blahas testimony had been sufficient to create a triable issue of fact as to the existence of damages, summary judgment would have been equally proper on the ground that Wells owed no duty to appellant to procure any additional coverage. (See, e.g., Salazar v. Southern Cal. Gas Co. (1997) 54 Cal.App.4th 1370, 1376 ["Although the trial court may grant summary judgment on one basis, this court may affirm the judgment under another"].) The general rule is that an insurance agent does not have a duty to advise an insured to obtain additional or different insurance. (Fitzpatrick v. Hayes, supra, 57 Cal.App.4th at p. 927; Jones v. Grewe, supra, 189 Cal.App.3d at p. 955.) An insurance agent may be held to owe such a duty, however, where there are facts warranting the imposition of a special or greater duty. (Free v. Republic Ins. Co., supra, 8 Cal.App.4th at p. 1729; Jones v. Grewe, supra, at p. 955.) Thus, one exception to the general rule occurs when an insured requests a particular type or extent of coverage. (Fitzpatrick v. Hayes, supra, at p. 927.) Here, however, the undisputed evidence established that the only general rule and not one of its exceptions should apply.
According to appellants declaration, at the time he purchased the policy in 1998, he told Wells he "wanted a full replacement value policy." Wells responded that limits would be increased over time with corresponding premium payment increases; appellant "believed [he] was being protected by such increases." Appellant attached the most recent version of his policy to his declaration, effective October 2003 through October 2004. The policy page captioned "Forms of Coverage for Dwellings" described six various forms of coverage available. The first type of coverage contained the heading "GUARANTEED REPLACEMENT COST COVERAGE WITH FULL BUILDING CODE UPGRADE PAYS REPLACEMENT COST WITHOUT REGARD TO POLICY LIMITS . . . ." Boxes next to the fourth and sixth types of coverage were checked, indicating that appellant had selected, respectively, "REPLACEMENT COST COVERAGE PAYS REPLACEMENT COSTS UP TO POLICY LIMITS" and "BUILDING CODE UPGRADE—ORDINANCE AND LAW COVERAGE PAYS, UP TO LIMITS SPECIFIED IN YOUR POLICY, ADDITIONAL COSTS REQUIRED TO BRING THE DWELLING `UP TO CODE." Appellant signed the bottom of this policy page.
Appellants isolated inquiry at the time he obtained his policy was inadequate to create a triable issue of fact as to whether Wells was under a greater duty to advise appellant regarding the scope of his coverage. Appellants evidence is akin to that in Fitzpatrick v. Hayes, supra, 57 Cal.App.4th at page 928, where the insured stated "only that he `relied on [the insurance agent] to advise me concerning adequate coverage, and he led me to believe that the automobile coverage that was previously carried was fine," and the court determined that "[n]otably lacking from this conclusory statement is any allegation concerning any sort of specific inquiry from him to [the insurance agent] much less specific advice in the opposite direction." (See also Jones v. Grewe, supra, 189 Cal.App.3d at p. 956 ["an insureds request for `sufficient coverage and an agents assurance that the policy provided `adequate coverage do not, in and by themselves, imply an `expanded principal-agent relationship. Such an exchange usually occurs within the context of the general principal-agent relationship"].) Appellants evidence stands in sharp contrast to the allegations supporting the imposition of a greater duty in Free v. Republic, supra, 8 Cal.App.4th at page 1729, where the insured contacted his insurance agents every year for 10 years to inquire whether the coverage limits of his policy were adequate to rebuild his home and on each occasion the agents responded affirmatively.
Evidence that appellants policy plainly explained the nature of his coverage further served to demonstrate that there was no basis to impose a greater duty on Wells. "`A reasonable person will read the coverage provisions of an insurance policy to ascertain the scope of what is covered. [Citation.] (Hallmark Ins. Co. v. Superior Court [(1988)] 201 Cal.App.3d [1014,] 1019.) `"`It is a general rule that the receipt of a policy and its acceptance by the insured without an objection binds the insured as well as the insurer and he cannot thereafter complain that he did not read it or know its terms. It is a duty of the insured to read his policy." [Citations.] (Hackethal v. National Casualty Co. (1987) 189 Cal.App.3d 1102, 1112, italics in original.) Generally the insured is `bound by clear and conspicuous provisions in the policy even if evidence suggests that the insured did not read or understand them. (Sarchett v. Blue Shield of California (1987) 43 Cal.3d 1, 15.)" (Malcom v. Farmers New World Life Ins. Co. (1992) 4 Cal.App.4th 296, 304, fn. 6 (Malcom).) Applying this principle, the Malcom court affirmed a grant of summary judgment, holding that an insurer and its agent owed no duty to advise the insured about a policys suicide provision and its effect on coverage where the insured asked the agent what effect his treatment for depression might have on his application but "[t]he record contained no evidence suggesting [the insured] asked [the insurer] for coverage for all suicide-related death or asked [the insurer] whether the policies would cover suicide-related death. Neither did the record contain evidence suggesting [the insured] sought clarification of the suicide provision after receiving the policies." (Id. at p. 304, fn. omitted; see also Hadland v. NN Investors Life Ins. Co. (1994) 24 Cal.App.4th 1578, 1588, 1589 [affirming a grant of nonsuit in favor of an insurance company on an insureds fraud claim, finding that any reliance on an insurance agents representations was unjustified as a matter of law because the insureds, "having failed to read the policy and having accepted it without objection, cannot be heard to complain it was not what they expected"].)
Here, the undisputed evidence demonstrated that five years after appellant obtained a policy and asked for a "full replacement value policy," he signed a policy expressly providing for full replacement cost coverage up to policy limits. There was no evidence that appellant sought clarification from Wells after receiving the policy at any time during those five years. (See Malcom, supra, 4 Cal.App.4th at p. 304; cf. Everett v. State Farm General Ins. Co. (2008) 162 Cal.App.4th 649, 662 [insurance agents summary adjudication motion properly granted on negligence claim where insurer notified insured that guaranteed replacement cost coverage had been eliminated and insured renewed policy without contacting agent to inquire as to whether policy still provided sufficient coverage].) In view of the evidence offered below, summary judgment on the second cause of action was proper on the ground that there was no triable issue as to damages and would have been proper on the ground that Wells owed no duty to appellant as a matter of law to procure or to advise appellant to procure coverage beyond that provided by the policy.
II. The Trial Court Properly Exercised Its Discretion in Connection With Rulings Related to the Summary Judgment Motion.
A. The Trial Court Properly Denied Leave to Amend.
In his opposition to the summary judgment motion, appellant for the first time contended that his third cause of action for negligence was premised not only on the theory that Wells owed a duty to warn him to pay his premium, but also that he owed a duty to explain the consequences of nonpayment—that is, that his policy would lapse and be cancelled retroactively to a date preceding his loss. The trial court ruled that the latter theory was not pled in the complaint and therefore could not serve as the basis for the cause of action.
Although appellant never sought leave to amend his complaint to add this theory, the parties have characterized the trial courts failure to consider the theory in opposition to summary judgment as the denial of leave to amend. "`[T]he trial court has wide discretion in allowing the amendment of any pleading [citations], [and] as a matter of policy the ruling of the trial court in such matters will be upheld unless a manifest or gross abuse of discretion is shown. [Citations.] [Citation.]" (Record v. Reason (1999) 73 Cal.App.4th 472, 486.)
Here, the trial court properly exercised its discretion in declining to permit appellant to amend his complaint in opposition to Wellss summary judgment motion. As comprehensively summarized in Tsemetzin v. Coast Federal Savings & Loan Assn. (1997) 57 Cal.App.4th 1334, 1342-1343: "The burden of a defendant moving for summary judgment only requires that he or she negate plaintiffs theories of liability as alleged in the complaint. A `moving party need not ". . . refute liability on some theoretical possibility not included in the pleadings." [Citation.] [Citation.] `"[A] motion for summary judgment must be directed to the issues raised by the pleadings. The [papers] filed in response to a defendants motion for summary judgment may not create issues outside the pleadings and are not a substitute for an amendment to the pleadings." [Citation.] [Citations.]" (Accord, Oakland Raiders v. National Football League (2005) 131 Cal.App.4th 621, 648 [because a summary judgment motion is directed to the issues raised by the pleadings, "[a] `plaintiff cannot bring up new, unpleaded issues in his or her opposing papers"].)
In his complaint, appellant alleged that Wells was negligent for failing to warn "that his homeowners policy premium had not been paid for the renewal policy" and that as a proximate result of such failure appellant "did not have the opportunity to protect himself from default . . . ." The duty allegedly breached was thus to warn appellant of the need to pay his premium, not any duty to advise appellant of the consequences of nonpayment. Appellant offered no reason at the hearing or in his opposition why he had not included this theory initially. Under these circumstances, the trial court properly exercised its discretion in declining to consider a new theory in opposition to the summary judgment motion or in allowing leave to amend. (See, e.g., Lewinter v. Genmar Industries, Inc. (1994) 26 Cal.App.4th 1214, 1223 [where complaint alleged failure to warn of a manufacturing defect in boat, the plaintiff could not avoid summary judgment by showing a failure to warn based on postmanufacture discovery of the defect].)
Although the trial court indicated that appellants unpleaded theory was distinguishable from Kotlar, supra, 83 Cal.App.4th 1116, in our view the same limitations on an insurance agents duty expressed in Kotlar would apply to the duty to advise of the consequences of nonpayment absent any facts giving rise to a special or greater duty on the part of Wells.
B. The Trial Court Properly Excluded Wellss Statement.
In opposition to the summary judgment motion, appellant attached to his counsels declaration a document described as "Page 18 of 34 of FIRE Claims Log documenting a telephone call of November 28, 2005 between WELLS and Jasonia McClinton: `AGENT DAN WELLS . . . STATED THAT DUE TO HIS NEGLIGENCE, THE INSURED COVERAGE LAPSE [sic] AND IT SHOULD NOT HAVE." Wells objected to the document on the ground of hearsay (Evid. Code, § 1200 et seq.) and the trial court sustained the objection. We review any ruling by the trial court as to the admissibility of evidence for an abuse of discretion. (Dart Industries, Inc. v. Commercial Union Ins. Co. (2002) 28 Cal.4th 1059, 1078.)
Evidence Code section 1200, the hearsay rule, provides that "evidence of a statement that was made other than by a witness while testifying at the hearing and that is offered to prove the truth of the matter stated[]" is inadmissible. Appellant contends that the trial court abused its discretion in excluding Wellss statement because it fell within a statutory exception to the hearsay rule as a party admission. The relevant exception, Evidence Code section 1220, provides: "Evidence of a statement is not made inadmissible by the hearsay rule when offered against the declarant in an action to which he is a party in either his individual or representative capacity, regardless of whether the statement was made in his individual or representative capacity." In order to be considered a party admission under Evidence Code section 1220, "the statement must assert facts which would have a tendency in reason to prove some portion of the proponents [cause of action], or to rebut some portion of the party declarants [defense]." (Estate of Anderson (1997) 60 Cal.App.4th 436, 441.)
Appellant also contends that the statement was admissible under Evidence Code sections 1222 and 1224, but those provisions involve the admission of statements made by a declarant other than the party against whom liability is sought to be imposed. "The rule is that `"`whatever is said by an agent, either in the making of a contract for his principal, or at the time, and accompanying the performance of any act, within the scope of his authority, . . . of the particular contract or transaction in which he is then engaged, is, in legal effect, said by his principal, and admissible as evidence . . . . But declarations or admissions by an agent, of his own authority, and not accompanying the making of a contract, or the doing of an act, in behalf of his principal, . . . are not binding upon his principal . . . and are not admissible . . . ." [Citation.] [Citation.]" (Dart Industries, Inc. v. Commercial Union Ins. Co., supra, 28 Cal.4th at p. 1077.)
Here, Wellss statement that appellants coverage lapsed "due to his negligence" was properly excluded because it had no tendency to establish the element of duty found to be lacking by the trial court. Wellss statement was nothing more than a legal conclusion, which does not constitute evidence capable of creating a triable issue of fact precluding summary judgment. (See Benavidez v. San Jose Police Dept. (1999) 71 Cal.App.4th 853, 864, 865 [declaration opining that officers were "grossly negligent" and established a "special relationship" with the plaintiffs drew legal conclusions that did not constitute competent evidence to oppose summary judgment]; Martinez v. County of Los Angeles (1996) 47 Cal.App.4th 334, 347, 348 [declaration opining that officers actions were not objectively reasonable and that officers training rose to the level of "deliberate indifference to the misuse of deadly force" inappropriately drew legal conclusions and for that reason was not considered in opposition to summary judgment motion].) As aptly stated in Hoover Community Hotel Development Corp. v. Thomson (1985) 167 Cal.App.3d 1130, 1137: "A bare conclusion of law is simply not sufficient even though uncontradicted to support a motion for summary judgment nor to create a triable issue of fact when filed in opposition to such a motion. [Citations.]" Because Wellss statement was incompetent as evidence to oppose the summary judgment motion, the trial court properly exercised its discretion in sustaining Wellss objection. (Id. at p. 1136 ["all statements in opposition to a motion for summary judgment which are incompetent as evidence must be disregarded"].)
C. The Trial Court Properly Denied Appellants Continuance Request.
At the hearing on the summary judgment motion, when the trial court indicated it was inclined to find that Blahas "total loss" testimony was insufficient to create a triable issue as to damages, appellant for the first time requested a continuance of the motion to present a different construction estimate showing an approximate $500,000 replacement cost. The trial court denied appellants request; it found no basis to continue the motion given that the evidence appellant sought to present was previously available and known to him, and appellant offered no reason why he had not submitted the evidence earlier.
Code of Civil Procedure section 437c, subdivision (h), "mandates a continuance of a summary judgment hearing upon a good faith showing by affidavit that additional time is needed to obtain facts essential to justify opposition to the motion. [Citations.] Continuance of a summary judgment hearing is not mandatory, however, when no affidavit is submitted or when the submitted affidavit fails to make the necessary showing under section 437c, subdivision (h). [Citations.] Thus, in the absence of an affidavit that requires a continuance under section 437c, subdivision (h), we review the trial courts denial of appellants request for a continuance for abuse of discretion. [Citation.]" (Cooksey v. Alexakis (2004) 123 Cal.App.4th 246, 253-254.)
Appellant did not submit an affidavit in connection with his continuance request. Nor did he contest the fact that he was aware of the construction estimate approximately six months before the hearing. He sought a continuance to provide the omitted evidence because he did not realize that the trial court would find Blahas testimony inadequate to create a triable issue of fact. Under these circumstances, the trial court acted well within its discretion in denying the continuance request. (E.g., Cooksey v. Alexakis, supra, 123 Cal.App.4th at p. 257 [continuance request may be denied on the ground of lack of diligence in obtaining evidence to oppose motion]; FSR Brokerage, Inc. v. Superior Court (1995) 35 Cal.App.4th 69, 76 [continuance request properly denied where the moving party had adequate time to secure additional evidence and offered no justification for failing to do so earlier]; Hartenstine v. Superior Court (1987) 196 Cal.App.3d 206, 221 [continuance request properly denied where the moving party sought to obtain a document that should have been attached to his complaint].)
DISPOSITION
The judgment is affirmed. Wells is entitled to his costs on appeal.
We concur:
ASHMANN-GERST, J.
CHAVEZ, J.