NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS MAY 21 2018

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

DEAN SEYMOUR and PHILIP No. 17-55293

COLAVITO,

D.C. No. Plaintiffs-Appellants, 5:15-cv-01252-DSF-JPR

v.

MEMORANDUM*

STATE FARM GENERAL INSURANCE

COMPANY and DOES, 1 through 30, inclusive,

Defendants-Appellees.

Appeal from the United States District Court for the Central District of California Dale S. Fischer, District Judge, Presiding

Submitted May 16, 2018** Pasadena, California

Before: WARDLAW, NGUYEN, and OWENS, Circuit Judges.

Plaintiffs Dean Seymour and Philip Colavito appeal from the district court’s

grant of summary judgment to defendant State Farm General Insurance Company

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). (“State Farm”) on their claims arising from a denial of coverage and from their

insurance broker’s alleged billing errors. We have jurisdiction under 28 U.S.C.

§ 1291 and review the district court’s grant of summary judgment de novo. See

Szajer v. City of Los Angeles, 632 F.3d 607, 610 (9th Cir. 2011). As the parties are

familiar with the facts, we do not recount them here. We agree with the district

court that all of Plaintiffs’ claims are time-barred, and so we affirm.

1. Plaintiffs’ claims for negligence and negligent misrepresentation are

barred by California Code of Civil Procedure section 339(1), which establishes a

two-year limitations period for claims of professional negligence, including

negligence by insurance brokers. See Hydro-Mill Co. v. Hayward, Tilton &

Rolapp Ins. Assocs., Inc., 10 Cal. Rptr. 3d 582, 589–90 (Ct. App. 2004). Plaintiffs’

professional negligence claims are based on their insurance broker’s faulty billing

practices and failure to communicate her office’s mistakes to Plaintiffs. These

professional negligence claims accrued on April 27, 2010, when the broker’s office

manager informed Plaintiffs that their Contractor’s Policy had been cancelled for

nonpayment. See id. at 595. But Plaintiffs did not file this lawsuit until June 26,

2015, after the two-year statutory limitations period had run.

State Farm is not estopped from asserting the statute of limitations as a

defense to the professional negligence claims because estoppel applies only where

the insurance-code violations are ones “upon which the [plaintiff] has relied and by

2 which he has been induced to delay the filing of a claim until after the expiration of

the statutory period.” Id. at 599 (alteration in original). Even assuming that their

broker’s office violated California’s insurance code, Plaintiffs have not alleged that

those violations “induced [them] to delay the filing” of their negligence claims. Id.

2. Plaintiffs’ claims for bad faith and breach of contract are barred by the

two-year limitations period in their Contractor’s Policy. Plaintiffs’ claims for bad

faith and breach of contract are grounded on State Farm’s denial of coverage under

the Contractor’s Policy, so the two-year limitations period applies. See Prieto v.

State Farm Fire & Cas. Co., 275 Cal. Rptr. 362, 365–66 (Ct. App. 1990). The

limitations period began to run on October 13, 2010, when Plaintiffs received the

letter from their landlords’ lawyer notifying them that their property had been sold.

See Prudential-LMI Commercial Ins. v. Superior Court, 798 P.2d 1230, 1237–38

(Cal. 1990).

The parties dispute whether Plaintiffs first notified State Farm of the

inventory sale on January 20, 2011, equitably tolling the contractual limitations

period. See Hydro-Mill, 10 Cal. Rptr. 3d at 596. Even assuming that Plaintiffs

reported the theft claim on January 20, 2011, however, the district court correctly

concluded that these claims are nonetheless time-barred due to Plaintiffs’ failure to

cooperate in the investigation of their claim. Cf. 1231 Euclid Homeowners Ass’n

v. State Farm Fire & Cas. Co., 37 Cal. Rptr. 3d 795, 802 (Ct. App. 2006); Addison

3 v. State of California, 578 P.2d 941, 943–44 (Cal. 1978) (“[A]pplication of the

doctrine of equitable tolling requires timely notice . . . to the defendant, and

reasonable and good faith conduct on the part of the plaintiff.”). After reporting

the “warehouse claim” on January 20, 2011, Plaintiffs did not respond to State

Farm’s phone calls and letter requesting additional information and documentation

of the claim. Due to Plaintiffs’ failure to cooperate, State Farm closed the claim

file on February 7, 2011. Thus, any tolling ceased on February 7, 2011, and the

two-year clock expired in November 2012—well before Plaintiffs filed this suit in

June 2015.

State Farm is not estopped from asserting the contractual limitations period

even assuming that it violated provisions of the insurance code by losing or

ignoring Plaintiffs’ January 20, 2011 theft claim. As discussed above, there is no

genuine dispute of material fact as to whether Plaintiffs cooperated with the

investigation of their claim, and so Plaintiffs’ delay in filing this coverage suit was

not the result of Plaintiffs’ reliance on State Farm’s alleged bad-faith conduct. See

Hydro-Mill, 10 Cal. Rptr. 3d at 599–600. Moreover, Plaintiffs contend that State

Farm’s misconduct began in April 2013, when it allegedly concealed that it had

lost the January 20, 2011 theft claim and then relied on the allegedly wrongful

April 30, 2010 policy cancellation as a pretext for denying coverage. As this

misconduct allegedly occurred after Plaintiffs failed to cooperate as of January

4 2011 and the resulting expiration of the two-year limitations period in November

2012, it “cannot, as a matter of law, amount to . . . estoppel.” Prudential-LMI, 798

P.2d at 1240 n.5.

AFFIRMED.

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