Mel H. Binning, Inc. v. Safeco Ins. Co. of Am.

—Plaintiff appeals from judgment of the Alameda County Superior Court of dismissal of the action after sustaining of the demurrer to the third amended complaint.

Issue Presented

Does the third amended complaint state a cause of action in fraud?

Record

On March 12, 1976, plaintiff filed a third amended complaint for damages in which it was alleged that on or about September 17, 1976, plaintiff suffered a serious fire at its leased premises caused by a defective coffee maker made and distributed by the defendants Brewmatic Company, Farmer Brothers Coffee Company, and Custom Coffee Plan. In the first six causes of action, theories were set forth upon which the liability of these three defendants to plaintiff was predicated. In the seventh, eighth and ninth causes of action, plaintiff alleged theories of liability to respondent Safeco Insurance Company of America, insurer of the other defendants and respondent herein. In these causes of action, plaintiff alleged that after the fire, it had to choose between closing down its business or continuing business at a loss. The first alternative would lose customers and result in prohibitive start-up costs should the business be…