Opinion
NOT TO BE PUBLISHED
APPEAL from the judgment of the Superior Court of Los Angeles. No. KC 046648 Robert Dukes, Judge.
Stoll, Nussbaum & Polakov and Robert J. Stoll for Plaintiff and Appellant.
Luce, Forward, Hamilton & Scripps, Peter H. Klee, Charles A. Danaher and Seth M. Friedman for Defendant and Respondent.
RUBIN, J.
Grace Rivera appeals from the summary judgment dismissing her complaint for breach of contract and fraud against State Farm Mutual Automobile Insurance Company. We reverse and remand.
FACTS AND PROCEEDINGS
In November 2002, appellant Grace Rivera was injured in a car accident. She went to a hospital emergency room after the accident. The emergency room physician examined and then released her, telling her to see her own doctor for follow up care.
Respondent State Farm Mutual Automobile Insurance Company was the automobile liability insurer for Vera Overton, the driver who caused the accident. In December 2002, appellant submitted a claim against Overton’s insurance policy. Informing respondent’s claims handler that her injuries from the accident continued to hurt, appellant told the handler she needed to see a doctor; appellant alleges the handler replied that respondent would not pay her medical bills until she had finished treating with her doctor, but respondent would reimburse her for all her medical costs when her treatment ended.
In January 2003, appellant began treating at Casas Medical Clinic. But for respondent’s promise to pay all her medical bills, appellant asserts she would have sought less expensive, and probably less effective, medical care. The clinic suggested she hire a lawyer, and referred her to attorney J.B. Casas (apparently no relation to the clinic). Attorney Casas asked her to send him everything she could concerning the accident and her injuries.
In May 2003, appellant’s physical therapy ended. In October 2003, attorney Casas submitted an itemized demand letter to respondent seeking payment of more than $5,000 for appellant’s medical costs. Respondent rejected most of the demand, particularly appellant’s insistence for payment of her physical therapy at the clinic begun six weeks after the accident. Respondent offered instead $1,750 in settlement of appellant’s claims for one week’s lost wages and her emergency room care. (Respondent had already paid appellant for the property damage to her car.) Appellant rejected respondent’s settlement offer. Upon the case’s failure to settle, attorney Casas suggested appellant retain another lawyer for any additional legal representation.
In November 2003, appellant’s new lawyer, who is also her counsel on appeal, sued Overton for appellant’s injuries from the accident. (LASC case No. KC043147 / CIT04C2858.) In June 2005, appellant and her attorney attended a mandatory settlement conference in the personal injury action. Appellant alleges that in a hallway conversation outside the courtroom during the settlement conference, respondent’s representative, Linda Winiecki, told appellant’s attorney that respondent had never intended to pay appellant’s medical bills.
The court sustained respondent’s objection to the declaration by appellant’s attorney discussing Winiecki’s statement. Curiously, respondent does not on appeal try to use the court’s ruling to its advantage to argue we should disregard the statement’s very existence; to the contrary, its moving papers accept for the purposes of summary judgment that appellant alleges Winiecki made such a statement. Respondent instead argues Winiecki’s statement is inadmissible as evidence of intent to defraud because it occurred during litigation and therefore, under the litigation privilege, is not actionable (Civ. Code, § 47.) Cases establish that the litigation privilege may limit liability for a statement without affecting the statement’s evidentiary use for other purposes. (See Oren Royal Oaks Venture v. Greenberg, Bernhard, Weiss & Karma, Inc. (1986) 42 Cal.3d 1157, 1168; Shade Foods Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 915.) Hence, although respondent appears to be correct about the litigation privilege barring liability for Winiecki’s statement, the actionability of her purported statement is not the purpose for which appellant uses it, rendering the litigation privilege ungermane. Appellant instead offers the statement as evidence of other actionable intent – here, respondent’s scheme to defraud appellant when it promised to pay appellant’s medical bills two-and-a-half years earlier. And on that point, the record contains the deposition of appellant’s attorney (offered into evidence by respondent) in which he testified respondent made clear to him that it never intended to pay appellant’s medical bills.
In July 2005, appellant filed her complaint against respondent that began the proceedings at issue in this appeal. The complaint alleged respondent’s representative Maria Catherman had falsely promised that respondent would pay all of appellant’s medical bills from the accident. Appellant sued respondent for breach of contract, and sued Catherman and respondent for fraud. A few days after appellant filed her complaint against respondent, her personal injury trial against Overton began. The trial ended in a mistrial, however, amidst appellant’s accusations of judicial bias.
Appellant also sued Catherman for breach of contract, but the court sustained Catherman’s demurrer to that cause of action. The court also sustained respondent’s and Catherman’s demurrers to appellant’s cause of action for infliction of emotional distress. Appellant does not challenge those rulings on appeal.
Respondent moved for summary judgment. In support of its motion, respondent noted that appellant’s cause of action for breach of contract rested on promissory estoppel principles by which appellant sought to prevent respondent from disavowing its purported promise of paying all her medical bills. Respondent asserted that for promissory estoppel to apply, appellant needed to show she reasonably relied to her detriment on respondent’s promise; appellant had admitted, however, that her pain would have compelled her eventually to seek medical care regardless of anything respondent said and that, indeed, she had started medical treatment before contacting respondent. Furthermore, respondent asserted as a matter of law that appellant could not rely on respondent’s statements after she hired a lawyer. As for appellant’s cause of action for fraud, respondent asserted appellant’s evidence of misrepresentations required greater specificity to be viable. During discovery appellant had conceded that claims handler Maria Catherman named in the complaint was not the handler to whom appellant spoke, and in fact appellant did not know the name of respondent’s representative who had purportedly promised respondent would pay all of appellant’s medical bills.
Catherman also moved for summary judgment, but her motion became moot when the court dismissed her as a defendant two months after she filed her motion. Appellant has not challenged on appeal Catherman’s dismissal.
Appellant opposed summary judgment. She argued her reliance on what respondent’s representatives told her was a triable issue because she would have sought different (meaning less expensive) treatment from what she elected at Casas Medical Clinic but for respondent’s promise to pay all her medical bills. Furthermore, she asserted she never retained attorney Casas, thereby undermining respondent’s contention that her hiring counsel legally precluded detrimental reliance. She noted she had not signed a retainer agreement for Casas, never met him, and never paid him. Her deposition testimony in which she testified she had “retained” him was her layperson’s label for a legal conclusion unsupported by facts, and therefore not binding on her.
In further opposition to summary judgment, she argued her claim for fraud was sufficiently specific. She conceded she had testified in her deposition that she could not name respondent’s representative who had promised to pay her bills. But she asserted her lack of recall was not fatal because she learned some months later that the representative was named Marji Sorley. Appellant explained she belatedly deduced Sorley’s name when she recognized Sorley’s voice and speaking style during Sorley’s deposition.
The court granted respondent’s motion for summary judgment. Because appellant had misidentified Catherman for Sorley in her complaint, the court rejected appellant’s cause of action for breach of contract. The court noted that the pleadings establish the boundaries of materiality in a motion for summary judgment. Finding that her complaint’s allegations were binding, the court reasoned that the complaint’s breach of contract allegation that Catherman promised appellant that respondent would pay her medical bills made anyone else’s promises immaterial. Relying on the rule that a court may not grant or deny summary judgment based on matters not raised in the pleadings, the court found appellant must live with her misidentification of Catherman. The court stated:
“Instead of proffering any evidence of reliance on representations or promises made by Catherman, as alleged in the operative complaint, Plaintiff now alleges that she relied on statements made by one Marji Sorley. However, Sorley is nowhere mentioned in the [first amended complaint]. Since the pleadings serve as the ‘outer measure of materiality’ in an MSJ, the motion may not be granted or denied on issues not raised by the pleadings [], namely, any purported representations made by Sorley on behalf of State Farm.”
The court took a different tack toward appellant’s cause of action for fraud. There, the court accepted appellant’s belated identification of Sorley as the person to whom she spoke. The court did so because the complaint’s allegations for fraud stated Catherman and others had fraudulently promised respondent would pay all her medical bills. The court dismissed the fraud claim, however, because appellant offered no evidence that Sorley had the authority to bind respondent to such a promise, which was necessary to state a claim for promissory fraud. The court entered judgment for respondent. This appeal followed.
DISCUSSION
1. Breach of Contract
Appellant’s cause of action for breach of contract misidentified Maria Catherman as respondent’s representative who appellant alleged had promised respondent would pay all of appellant’s medical bills. When respondent moved for summary judgment, the court noted the parties’ pleadings established the boundaries of materiality for summary judgment. The court also concluded that the complaint’s allegations were binding on appellant. (Valerio v. Andrew Youngquist Construction (2002) 103 Cal.App.4th 1264, 1271.) Because the complaint identified only Catherman as speaking for respondent on the contract claim, and appellant conceded she had no evidence she had spoken to Catherman about a promise to pay her bills, the court held appellant’s cause of action for breach of contract failed for lack of evidence. Furthermore, although aware of appellant’s belated identification of Sorley, the court refused to allow appellant to amend her complaint to add Sorley’s name because appellant waited until after respondent had filed its motion for summary judgment to do so. Given that the court’s refusal meant the complaint contained no allegations about Sorley in support of breach of contract, the court deemed appellant’s evidence of her conversations with Sorley as immaterial, and thus unable to create a triable issue of material fact.
Generally speaking, a party cannot create a triable issue of material fact by contradicting her deposition testimony. (D’Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 21-22; Foxborough v. Van Atta (1994) 26 Cal.App.4th 217, 222 fn. 3.) But the rule is not ironclad. If a party offers a reasonable explanation for changing her testimony, it may submit evidence discovered since its deposition to create a triable issue. (Scalf v. D.B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1521-1523, 1524-1525; Niederer v. Ferreira (1987) 189 Cal.App.3d 1485, 1503.) That exception is particularly apt here. First, in identifying Sorley as the person who promised respondent would pay her medical bills, appellant did not actually contradict her deposition testimony in the sense of, for example, saying a red light was green. (Compare Leasman v. Beech Aircraft Corp. (1975) 48 Cal.App.3d 376, 381-382 [plaintiff tried to change her deposition testimony and interrogatory responses that she had suffered no physical injury in accident].) In other words, her belated identification of Sorley did not disavow her concession that her complaint wrongly named Catherman. Nor did her belated identification contradict her deposition testimony that at the time of her deposition she did not know the name of respondent’s representative. Her identification of Sorley was newly acquired information that she did not have when she was deposed. To the extent a trier of fact might be inclined to disbelieve appellant’s explanation on how she figured out Sorley’s name, that disbelief goes to the evidence’s weight, but not its materiality. (Scalf v. D.B. Log Homes, Inc., supra, at p. 1522; Price v. Wells Fargo Bank (1989) 213 Cal.App.3d 465, 482.)
The second reason the exception applies here involves respondent’s impedence of appellant’s discovery of the representative’s name. Respondent’s representatives logged their phone calls with appellant. Thus, respondent knew to whom appellant spoke. Appellant attempted to subpoena respondent’s claims file involving appellant’s accident, but respondent successfully moved to quash the subpoena arguing the file was protected consumer information of its insured, Vera Overton. Respondent also refused to let its witness, Linda Winiecki (who was senior enough to have represented respondent at the mandatory settlement conference), disclose during her deposition the names of respondent’s employees who spoke to appellant if Winiecki needed to look to the claims file to provide the names. Thus, respondent kept secret from appellant the identities of respondent’s representatives and then used its success at hiding that information to defeat appellant’s cause of action for breach of contract because appellant could not name those representatives – names, which of course, respondent already knew.
We conclude the trial court abused its discretion in failing either (1) to accept for summary judgment purposes the belated identification of the State Farm representative; or (2) to allow appellant to amend her complaint to add the correct State Farm representative.
Respondent additionally argues summary judgment was proper because appellant’s cause of action for breach of contract rested on promissory estoppel, which requires reliance on the promise. (Drennan v. Star Paving Co. (1958) 51 Cal.2d 409, 413; Smith v. City and County of San Francisco (1990) 225 Cal.App.3d 38, 48.) Respondent contends appellant did not rely on respondent’s purported promise to pay all her medical bills because, according to respondent, appellant had decided to seek medical care before respondent made any such promise. Respondent’s contention misconstrues appellant’s medical care decisions. Appellant acknowledges her pain likely would have compelled her to seek some type of medical treatment regardless of anything respondent promised. But, what care she could afford was tied to respondent’s promise to pay all her medical bills. Without respondent’s promise, she asserts she would have sought less expensive (even if less effective) treatment than almost five months of physical therapy. This evidence may not be believable but it creates a triable issue of reliance.
Respondent also contends appellant could not have reasonably relied on any of respondent’s promises after she retained a lawyer. Appellant asserts respondent promised in December 2002 to pay all her medical bills. She further asserts she first contacted attorney Casas after she started physical therapy in January 2003 at Casas Medical Clinic. Moreover, respondent’s representatives testified they would not have spoken directly to appellant if they had known she had retained counsel, and evidence shows they spoke to her repeatedly through the spring of 2003. Thus a triable issue exists as to whether or when appellant retained attorney Casas, and when any retention extinguished the reasonableness of appellant’s continuing to rely on respondent’s promise to pay all her medical bills.
During oral argument, respondent’s counsel suggested, perhaps inadvertently, a clarity that does not exist in the record about the number and timing of appellant’s phone conversations with respondent’s representatives and her retention of counsel. Appellant declared she spoke to respondent’s representative between five and fifteen times before seeking care at Casas Medical Clinic. Only after starting treatment at the clinic did she contact attorney Casas.
We, of course, express no opinion on the truthfulness of appellant’s claim that respondent promised to pay all her medical bills.
2. Cause of Action for Fraud
Unlike appellant’s cause of action for breach of contract where the court refused to entertain appellant’s evidence involving Marji Sorley, the court permitted appellant to offer evidence about Sorley in support of her fraud cause of action. The court allowed the evidence because appellant’s complaint alleged Catherman or others had defrauded her. (In alleging breach of contract, appellant named only Catherman and had not used the phrase “or others.”) By allowing the evidence, the court undermined respondent’s argument that it was entitled to summary dismissal of the fraud claim because appellant could not identify who misled her.
Although the court allowed evidence of Sorley’s fraud, the court found Sorley’s misrepresentations were not actionable because appellant offered no evidence that Sorley had the authority to bind respondent. Appellant correctly notes respondent’s motion for summary judgment did not make an issue of Sorley’s authority. Since respondent did not argue Sorley lacked the authority to bind respondent, appellant had no reason to join the issue in its opposition to summary judgment by offering evidence to show her authority was a triable fact. The court’s fixing on that issue when respondent had not relied on it denied appellant the opportunity to offer evidence that such authority existed. Appellant thus correctly complains that the court erred in granting summary judgment on a ground that respondent’s motion had not stated.
Respondent’s claim that it raised the issue of Sorley’s lack of authority to bind respondent is unavailing. Respondent’s motion for summary judgment cited Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, in passing. The passage from Tarmann that respondent quoted mentions among several things the requirement of the speaker’s authority to bind the corporation. (Tarmann, at p. 157 [“The requirement of specificity in a fraud action against a corporation requires the plaintiff to allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.”].) But respondent’s discussion of Tarmann did not argue Sorley lacked authority to bind respondent; indeed, why would it since respondent refused to identify to whom appellant spoke.
The court’s citation to Goldrich v. Natural Y Surgical Specialties, Inc. (1994) 25 Cal.App.4th 772, in its minute order granting summary judgment does not support a different result. Goldrich stands for the proposition that a plaintiff must plead fraud with specificity – who said what. (See Goldrich, at p. 782.) The section of Goldrich cited by the court does not discuss a representative’s authority to bind a corporation. Undoubtedly, the speaker’s authority must exist, and just as surely a plaintiff must prove its existence if challenged, but respondent did not assert such authority was missing here when moving for summary judgment. (Snukal v. Flightways Manufacturing, Inc. (2000) 23 Cal.4th 754, 779-780.)
Separate from the court’s finding that appellant offered no evidence Sorley had the authority to bind respondent, respondent contends summary judgment was proper because appellant lacked evidence of the other elements of fraud. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638 [elements of fraud are “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.”].) Respondent’s contention is unavailing because these elements involved triable issues. For example, respondent notes appellant could not remember during her deposition the names of respondent’s representatives to whom she spoke. Thus, according to respondent, her fraud claim lacked specificity as to the speaker. However, as we have noted, appellant has a reasonable response setting forth a triable issue notwithstanding her deposition testimony. Respondent also asserts appellant cannot show reliance on respondent’s purported promises. But, as we explained in discussing promissory estoppel, triable issues exist as to that issue, too.
3. Complaint Does Not Allege Bad Faith
According to respondent, appellant is suing it for how it handled appellant’s liability claim against its insured, Vera Overton. Respondent contends appellant’s complaint is thus a thinly disguised third party claim for bad faith by an insurer. As respondent correctly notes, Moradi-Shalal v. Fireman’s Fund Ins. Companies (1988) 46 Cal.3d 287 bars such claims.
Moradi does not create complete legal immunity for insurers, however, against third party claims. A third party may still state a cause of action for violation of traditional common law principles that do not rest on a duty of good faith between the insurer and third party. Thus, although a third party may not sue an insurer for negligent infliction of emotional distress in how the insurer handled the third party’s claim against the insurer’s policyholder because such a lawsuit presupposes the insurer was obligated to take the third party’s interests into account in handling the claim, the third party may state a cause of action for breach of contract or fraud because they rest on legal duties other than good faith. (See Coleman v. Republic Indemnity Ins. Co. (2005) 132 Cal.App.4th 403, 406; Choy v. Redland Ins. Co. (2002) 103 Cal.App.4th 789, 801-802.) Perhaps indicative of how little import respondent attached to its bad faith argument, it relegated its discussion of the point in its motion for summary judgment to a single footnote in the motion’s introduction. The court did not rely on the theory in granting summary judgment. We conclude the common law allegations here are not akin to third party bad faith actions and are not legally barred.
4. Post-Judgment Events Involving the Underlying Personal Injury Lawsuit
On May 7, 2008, judgment was apparently entered in appellant’s favor in her personal injury lawsuit against Overton. We asked the parties to submit supplemental letter briefs discussing the effect of that judgment on this appeal. Respondent asserts the personal injury judgment, which respondent stated it will pay on Overton’s behalf, makes this appeal moot. According to respondent, that judgment establishes the amount of appellant’s reasonable medical expenses. Furthermore, according to respondent, appellant is collaterally estopped from challenging the amount of the award. Appellant disagrees, arguing that despite her recovery from Overton for her personal injuries she remains entitled to prejudgment interest and fraud damages in this lawsuit against respondent.
Appellant seems to concede the personal injury judgment fixes the amount of reasonable medical bills as the measure of at least that part of her contract and fraud claims. She does not take the position that her causes of action against respondent were predicated on respondent’s agreement to pay unreasonable medical bills.
The parties’ letter briefs do not create a sufficient record for us to decide the merits of their competing assertions about the effect of the personal injury judgment on this action. In remanding, we presume the parties will bring the personal injury judgment to the trial court’s attention for that court’s determination in the first instance of the collateral estoppel effect on appellant’s present claims against respondent.
DISPOSITION
The judgment is reversed and remanded. Appellant to recover her costs on appeal.
WE CONCUR: COOPER, P. J., FLIER, J.
Respondent also argues on appeal that Winiecki’s statement, arising out of a settlement conference, is inadmissible under Evidence Code section 1152 [offers to compromise]. (See also Evid. Code, § 1115 et seq. [statements at mediation].) This objection was not made in the trial court, the record is not adequate for us to review the issue, and respondent’s argument has been waived. (Code of Civ. Proc., § 437c, subd. (b)(5).) We do not address it.