Case 2:20-cv-03240-MEMF-AGR Document 69 Filed 02/24/23 Page 1 of 15 Page ID #:2391

1 O, JS-6 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 Case No.: 2:20-cv-03240-MEMF(AGRx) 11 BAHRAM JARRAHI,

12 Plaintiff, ORDER GRANTING DEFENDANT’S

MOTION FOR SUMMARY JUDGMENT

13 v. [ECF NO. 48] 14 15 FOREMOST INSURANCE COMPANY

GRAND RAPIDS, MICHIGAN,

16 Defendant. 17

18 19 20 Before the Court is the Motion for Summary Judgment filed by Defendant Foremost 21 Insurance Company, Grand Rapids, Michigan. ECF No. 48. For the reasons set forth below, the 22 Court GRANTS Foremost’s Motion for Summary Judgment. 23 24 25 26 27 / / / 28 / / /

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1 I. Background1 2 A. Factual Background 3 Plaintiff Jarrahi (“Jarrahi”) owns a mobile home located in Calabasas, California. 3AC ¶ 1. 4 He obtained mobile home insurance coverage from Defendant Foremost Insurance Company, Grand 5 Rapids, Michigan (“Foremost”), which was in effect from August 4, 2016, to August 4, 2017 (the 6 “Policy”). Id. ¶ 8. On February 17, 2017, two trees fell on Jarrahi’s property during a rainstorm, after 7 which rainwater entered the mobile home. Id. ¶ 9. Jarrahi reported the damage to Foremost the 8 following day. Id. ¶ 10. The issues presented in this case are whether the policy benefits that 9 Foremost paid to Jarrahi were sufficient to cover the damages caused by the falling trees on his 10 property and whether the policy benefit payment was consistent with the insurance coverage that 11 Jarrahi obtained. 12 B. Procedural History 13 On March 9, 2020, Jarrahi filed this action in the Superior Court of Los Angeles County, 14 seeking damages, injunctive relief, and reformation of the insurance contract. ECF. No. 1-1. On 15 April 7, 2020, Foremost removed the action to federal court. ECF. No. 1. On August 9, 2021, Jarrahi 16 filed a Third Amended Complaint advancing the following causes of action: (1) Breach of Contract; 17 (2) Breach of Implied Covenant of Good Faith and Fair Dealing; and (3) Violation of California’s 18 Unfair Competition Law, CAL. BUS. & PROF. CODE § 17200, et seq. (“UCL”). See generally 3AC. 19 Foremost filed an Answer to the Third Amended Complaint on August 23, 2021. ECF. No. 45. 20 Foremost filed the instant Motion for Summary Judgment on November 15, 2021. ECF. No. 48 21 (“Motion” or “MSJ”). On February 10, 2022, by an Order of the Chief Judge, this case was 22 reassigned to this Court. ECF. No. 58. The matter was fully briefed on February 11, 2022. ECF. Nos. 23 57 (“Opp’n”), 59 (“Reply”). On February 11, 2022, Foremost filed Objections to Jarrahi’s 24 25 26

27 1 Unless otherwise indicated, the factual allegations listed below come from the Third Amended Complaint, 28 ECF No. 44 (“Third Amended Complaint” or “3AC”) and Defendant’s Statement of Uncontroverted Facts, ECF No. 48-1 (“Foremost SUF”).

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1 Opposition. ECF No. 60 (“Foremost Objections”).2 Oral argument was held on July 14, 2022. ECF. 2 No. 63. Following the hearing, the Court took this matter under submission. ECF No. 68. 3 II. Applicable Law 4 Summary judgment should be granted if “the movant shows that there is no genuine dispute 5 as to any material fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 6 56(a). Material facts are those that may affect the outcome of the case. Nat’l Ass’n of Optometrists & 7 Opticians v. Harris, 682 F.3d 1144, 1147 (9th Cir. 2012) (citing Anderson v. Liberty Lobby, Inc., 8 477 U.S. 242, 248 (1986)). A dispute is genuine “if the evidence is such that a reasonable jury could 9 return a verdict for the nonmoving party.” Liberty Lobby, 477 U.S. at 248. 10 Under Rule 56(a), a court also has authority to grant partial summary judgment, or 11 “judgment on less than the entire case.” 10B Charles Alan Wright & Arthur R. Miller, Federal 12 Practice and Procedure § 2737 (4th ed. 2022) (citing FED. R. CIV. P. 56(a)). Under Rule 56(g), a 13 court that “does not grant all the relief requested by the motion . . . may enter an order stating any 14 material fact . . . that is not genuinely in dispute and treating the fact as established in the case.” FED. 15 R. CIV. P. 56(g). 16 A court must view the facts and draw inferences in the manner most favorable to the non- 17 moving party. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962); Chevron Corp. v. Pennzoil 18 Co., 974 F.2d 1156, 1161 (9th Cir. 1992). “A moving party without the ultimate burden of 19 persuasion at trial—usually, but not always, a defendant—has both the initial burden of production 20 and the ultimate burden of persuasion on a motion for summary judgment.” Nissan Fire & Marine 21 Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir. 2000). To carry its burden of production, the 22 moving party must either: (1) produce evidence negating an essential element of the nonmoving 23 party’s claim or defense; or (2) show that there is an absence of evidence to support the nonmoving 24 party’s case. Id. 25 Where a moving party fails to carry its initial burden of production, the nonmoving party 26 has no obligation to produce anything, even if the nonmoving party would have the ultimate burden 27 28 2 The Court has reviewed Foremost’s Objections and rules as follows: Objections No. 1, 5–7, and 10–13 are sustained. Objection No. 2–4 and 8–9 are overruled.

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1 of persuasion at trial. Id. at 1102–03. In such cases, the nonmoving party may defeat the motion for 2 summary judgment without producing anything. Id. at 1103. However, if a moving party carries its 3 burden of production, the burden shifts to the nonmoving party to produce evidence showing a 4 genuine dispute of material fact for trial. Liberty Lobby, 477 U.S. at 248–49. Under these 5 circumstances, the nonmoving party must “go beyond the pleadings and by [its] own affidavits, or 6 by the depositions, answers to interrogatories, and admissions on file, designate specific facts 7 showing that there is no genuine issue for trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) 8 (internal quotation marks omitted). If the nonmoving party fails to produce enough evidence to 9 create a genuine issue of material fact, the motion for summary judgment shall be granted. Id. at 10 322 (“Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and 11 upon motion, against a party who fails to make a showing sufficient to establish the existence of an 12 element essential to that party’s case, and on which that party will bear the burden of proof at 13 trial.”). 14 A party cannot create a genuine issue of material fact simply by making assertions in its 15 legal papers. S.A. Empresa de Viacao Aerea Rio Grandense v. Walter Kidde & Co., 690 F.2d 1235, 16 1238 (9th Cir. 1982). Rather, there must be specific, admissible evidence identifying the basis for 17 the dispute. See id. “If a party fails to properly support an assertion of fact or fails to properly 18 address another party’s assertion of fact . . . the court may . . . consider the fact undisputed.” FED. R. 19 CIV. P. 56(e)(2). The Court need not “comb the record” looking for other evidence; it is only 20 required to consider evidence set forth in the moving and opposing papers and the portions of the 21 record cited therein. Id. 56(c)(3); Carmen v. S.F. Unified Sch. Dist., 237 F.3d 1026, 1029 (9th Cir. 22 2001). The Supreme Court has held that “[t]he mere existence of a scintilla of evidence . . . will be 23 insufficient; there must be evidence on which the jury could reasonably find for [the opposing 24 party].” Liberty Lobby, 477 U.S. at 252. To carry its ultimate burden of persuasion on the motion, 25 the moving party must demonstrate that there is no genuine issue of material fact for trial. Nissan 26 Fire, 210 F.3d at 1102; Celotex Corp., 477 U.S. at 323. 27 28

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1 III. Findings of Fact3 2 The Court finds that the following material facts are established for trial under FED. R. CIV. 3 P. 56(a) and FED. R. CIV. P. 56(g): Jarrahi owns a mobile home located at 23777 Mulholland 4 Highway, Space 79, in Calabasas. Foremost SUF ¶ 1. Jarrahi obtained mobile home insurance from 5 Foremost for the period of August 4, 2016, to August 4, 2017. Id. ¶ 2. The Policy contained the 6 following exclusions: 7 Section 1 – Exclusions 8 We do not insure loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any 9 sequence to the loss. * * * 10 11. Loss caused by: a. Wear and tear, marring, scratching,deterioration, . . . 11 . . . 12 c. Mold, mildew, or other fungi, . . . . . . 13 . . . e. Settling, cracking, shrinkage, bulging or expansion, including resulting cracking of 14 pavements, patios, foundations, walls, floors, roofs or ceiling. . . . 15 15. Loss caused by leakage from rain, sleet or snow or its resulting damage whether or 16 not wind-driven. 17 Id. ¶ 29.4 The Policy also contains a provision stating that an insured may not bring a legal action 18 against the company more than one year after the loss occurs.5 Id. ¶ 3. 19 On February 17, 2017, two trees on Jarrahi’s property fell during a heavy rainstorm. Id. ¶ 4. 20 Jarrahi reported the loss to Foremost on February 18, 2017. Id. ¶ 5. On February 27, 2017, Foremost 21 sent claims adjuster Joshua Erickson to the mobile home to perform an inspection. Id. ¶ 6. On March 22 2, 2017, Erickson sent Jarrahi a check in the amount of $974.30 to cover repairs for damages caused 23 24 25 3 All findings of fact are taken from Foremost’s Statement of Uncontroverted Facts. See generally Foremost

SUF.

26 4 In the Foremost SUF, Foremost assigns the number 29 to two different facts. This refers to the first of those. See infra note 13. The Foremost SUF No. 29 contains some minor errors in its quotation of the Policy. The 27 Court has quoted from the Policy itself. ECF 48-5, Ex. 1 at ECF page number 45, 47. 5 Jarrahi purports to dispute this fact. However, he offers no evidence that challenges whether or not the 28 insurance policy in question actually contains such provision. The information Jarrahi does offer is neither material nor gives rise to a genuine dispute of material fact.

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1 by the fallen trees, minus the deductible.6 Id. ¶ 7. See ECF. No. 48-5, Ex. 4. Foremost hired Kevin 2 Cox of SPC Geotechnical, Inc., a professional engineer registered with the State of California, to 3 determine the source of the water that leaked into the mobile home during the storm.7 ECF. No. 48-1 4 ¶ 8. Cox performed his inspection on March 17, 2017, and provided Foremost with his opinion in a 5 written report regarding the cause of the water intrusion. Id. ¶ 9. He opined that, on the date of the 6 storm, wind-driven rain entered the unit laterally through openings in the side of the mobile home 7 where the wood trim had warped due to long term moisture exposure. Id. The report also noted that 8 there was evidence of long-term water intrusion through a vent pipe.8 Id. 9 On March 2, 2018, about a year later, Jarrahi contacted Foremost and spoke to Scott Orange, 10 a supervisor of Erickson, and informed Orange that he had new information about his claim.9 Id. ¶ 11 10. That same day, Orange emailed Jarrahi, stating, “I will reopen your claim file and assign a local 12 adjuster to meet with you for a re-inspection with your contractor present.” Declaration of Bahram 13 Jarrahi, ECF No. 57-1 (“Jarrahi Decl.”), Ex. 7 (“March 2, 2018 Orange Email”). Orange assigned 14 Gustavo Delgado to the claim, and Delgado performed a third inspection of the mobile home on 15 March 12, 2018. Foremost SUF ¶ 11. After investigating the new information, on April 10, 2018, 16 17 18 6 Foremost claims that Mr. Erickson sent Jarrahi a check that indeed covered repairs for damages caused by the fallen trees. Jarrahi disputes the amount of his claims. The dispute, however, is not material to the Court’s 19 decision. Nevertheless, the Court adjusts the language of Foremost SUF ¶ 7 to reflect the extent to which there is no genuine dispute over this fact. 20 7 Foremost includes nearly identical statements in ¶ 8 of the Foremost SUF. However, ¶ 8 in its Issue 2 section contains the following introductory phrase: “At Plaintiff’s request.” Jarrahi disputes that he agreed to 21 Foremost hiring a Geotechnical engineer, insisting that he only agreed to the hiring of a structural engineer to determine the source of the water leakage. ECF No. 57-5 (“Jarrahi SUF Opp’n”) ¶ 8. The Court does not find 22 this distinction material to its decision but has adjusted the language here to reflect the extent to which there is no genuine dispute over this fact. Jarrahi offers additional information to dispute the remainder of the 23 statement; however, such information is neither material nor creates a genuine dispute of material fact. 24 8 The language the Court supplies here combines the Foremost SUF “Issue 1” and “Issue 2” iterations of this fact. And though Jarrahi claims this fact to be in genuine dispute, Jarrahi SUF Opp’n ¶ 9, the evidence in the 25 record does not appear to raise a genuine dispute as to whether evidence of long-term water intrusion through a vent pipe exists. 26 9 Jarrahi purports to dispute this fact, contending that Orange agreed to reopen Jarrahi’s claim and to send a structural engineer to determine the cause of his loss. Jarrahi SUF Opp’n ¶ 10. However, this additional 27 information does not dispute the fact that Jarrahi contacted Foremost and informed Orange that he had new information about his claim. As a result, the Court overrules this objection. Moreover, the Court will include 28 the additional information that Jarrahi has offered, as the evidence provided makes clear that such information cannot be disputed.

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1 Delgado sent a letter to Jarrahi, advising that coverage was denied for the interior water damage.10 2 Id. ¶ 12. 3 The April 10, 2018 letter also informed Jarrahi that the Policy contained a one-year limitation 4 for filing suit, and that the claim was now closed.11 Id. ¶ 13. Jarrahi immediately replied with a letter 5 purportedly written by a contractor named Jeff Davani of Arina Builders. Id. ¶ 14. At Delgado’s 6 request, Cox reviewed, considered, and addressed Davani’s assertions, but advised that he could find 7 no factual basis for changing his conclusions.12 Id. ¶ 15. 8 On June 6, 2018, one year and three months after the date of loss, Jarrahi sent Delgado a 9 report by an engineer, Casey Hemmatyar. Id. ¶ 16. Delgado arranged immediately for a reinspection 10 of the property with both engineers on July 3, 2018, although that appointment had to be rescheduled 11 by Jarrahi. Id. ¶ 29.13 12 The fourth inspection of Jarrahi’s home took place on July 13, 2018, with Jarrahi, Delgado, 13 Cynthia Veal (Delgado’s supervisor), Cox, and Hemmatyar. Id. ¶ 17.14 Delgado found some further 14 covered damage (displaced planks in the balcony caused by the fallen trees), readjusted the claim, 15 and sent an additional check to Jarrahi. Id. ¶ 18. A separate letter was also sent to Jarrahi on July 20, 16 2018, advising that no coverage was available for the interior water damage and any cracking.15 Id. ¶ 17 18 19 20 10 Despite the differing language, the Court views “Issue 1” and “Issue 2” of the fact assigned number 12 as having substantially the same meaning. Therefore, the Court adopts the language from the “Issue 1” section. 21 Additionally, although Jarrahi claims this fact to be in genuine dispute, he offers no evidence in support of his contention. Jarrahi SUF Opp’n ¶ 12. Moreover, the additional information he offers in his objections to this 22 fact are irrelevant. 11 Although Jarrahi claims this fact to be in genuine dispute, he offers no evidence in support of his 23 contention. Jarrahi SUF Opp’n ¶ 13. Moreover, the additional information he offers in his objections to this 24 fact are irrelevant. 12 Jarrahi purports to dispute this fact. Jarrahi SUF Opp’n ¶ 15. However, the information he offers is 25 irrelevant and does not contradict the language Foremost offers. 13 Like before, in the Foremost SUF, under the “Issue 2” section, Foremost assigns the number 29 to two 26 different facts. This refers to the second of those. See supra note 3. 14 For the majority of the sentences in this paragraph, there appears to be a discrepancy between the number 27 Foremost assigned to each fact between the “Issue 1” and “Issue 2” sections of ECF. Foremost SUF. The Court uses the numbers assigned to the facts as they are written in the “Issue 1” section. 28 15 Jarrahi purports to dispute this fact. Jarrahi SUF Opp’n ¶ 19. However, the information he offers is irrelevant and does not create a genuine dispute of material fact.

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1 19. The July 20, 2018 letter again reminded Jarrahi that there was a one-year limitation on the time 2 to bring a lawsuit.16 Id. ¶ 20. 3 In September 2018, Jarrahi sent an addendum prepared by Hemmatyar to Foremost. Delgado 4 forwarded the addendum to Cox for his review and response. Id. ¶ 21. On October 16, 2018, 5 Delgado sent Cox’s response to Jarrahi, along with a copy of his previous July 20, 2018 denial 6 letter.17 Id. ¶ 22. 7 On June 21, 2019, a letter with the heading “Demand for Policy Limit” was served on 8 Foremost by an attorney, Matthew Huzaineh. Id. ¶ 23. The letter from Huzaineh acknowledged the 9 one-year suit limitation as discussed in the July 20, 2018 letter and advised that Jarrahi intended to 10 file suit on July 19, 2019.18 Id. ¶ 24. On July 5, 2018, Delgado acknowledged receipt of Huzaineh’s 11 letter and clarified some erroneous information in that letter regarding a second claim that had been 12 denied on July 20, 2017, which involved one or more plumbing leaks.19 Id. ¶ 25. On July 22, 2019, 13 Delgado sent a letter advising that he had reviewed and considered Huzaineh’s demand and 14 responded, “At this time, we respectfully decline to reopen this claim or consider payment of 15 supplemental claims in relation to the loss.”20 Id. ¶ 26. The July 22, 2019 letter reminded Huzaineh 16 of the one-year suit limitation in the policy.21 Id. ¶ 27. 17 This lawsuit was filed on March 9, 2020.22 Id. ¶ 28. 18

19 16 Jarrahi purports to dispute this fact. Jarrahi SUF Opp’n ¶ 20. However, the information he offers is 20 irrelevant and does not create a genuine dispute of material fact. 17 Jarrahi purports to dispute this fact. Jarrahi SUF Opp’n ¶ 22. However, the information he offers is 21 irrelevant and does not create a genuine dispute of material fact. 18 Jarrahi purports to dispute this fact. Jarrahi SUF Opp’n ¶ 24. However, the information he offers is 22 irrelevant and does not create a genuine dispute of material fact. 19 Jarrahi purports to dispute this fact, contending that his deadline to file suit was one year from the date the 23 claim was denied, which he argues was July 22, 2019. Jarrahi SUF Opp’n ¶ 25. However, as the Court 24 discusses infra Section III.b.i.1, the Court finds that the date of denial was July 20, 2018. 20 Jarrahi purports to dispute this fact. Jarrahi SUF Opp’n ¶ 26. However, the information he offers is 25 irrelevant and does not create a genuine dispute of material fact. 21 Jarrahi purports to dispute this fact. Jarrahi SUF Opp’n ¶ 27. However, the information he offers is 26 irrelevant and does not create a genuine dispute of material fact. 22 Jarrahi purports to dispute this fact, contending that the lawsuit was originally filed on December 20, 2019, 27 but agrees that the instant lawsuit was filed on March 9, 2020. Jarrahi SUF Opp’n ¶ 28. Neither party disputes that the first action was filed on December 27, 2019, against non-insuring entities and dismissed with 28 prejudice after a Motion to Dismiss was granted and Jarrahi did not file an amended complaint. Mot. at 1; see also Jarrahi v. Farmers Ins. Co., 2:20-cv-00983-CJC(GJSx), ECF No. 9.

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1 IV. Discussion 2 Foremost contends that the Court should (1) grant summary judgment because the Policy’s 3 one-year suit provision bars the lawsuit entirely, or, alternatively, (2) grant partial summary 4 judgment because there is no evidence of fraud, oppression, or malice to support punitive damages. 5 In the case before us, Jarrahi has the ultimate burden of persuasion on each of his claims. In the 6 pending Motion, Foremost has the initial burden of production and ultimate burden of persuasion. 7 A. The Policy’s one-year suit provision bars the lawsuit entirely. 8 Jarrahi argues that the Court should deny summary judgment because (1) the issues presented 9 are inherently factual in nature so as to require denial of summary judgment, and (2) plaintiff’s 10 claims were equitably tolled until July 5, 2019, because Foremost kept Jarrahi’s claim open until 11 July 22, 2019, the date of the final denial letter. Opp’n at 20–24. 12 i. The fact that the issues presented are inherently factual in nature does not 13 necessitate denial of summary judgment. 14 Jarrahi argues that because the issues presented are inherently factual in nature, the Court 15 must deny summary judgment. Opp’n at 20. However, Jarrahi presents no additional explanation nor 16 citations in support of his argument. As discussed previously, summary judgment should be granted 17 if “the movant shows that there is no genuine dispute as to any material fact and the movant is 18 entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a). The fact that an issue is factual in 19 nature does not automatically result in denial of summary judgment—rather, there must be a genuine 20 dispute of material fact. As a result, the Court rejects Jarrahi’s contention that summary judgment 21 should be denied on this ground. 22 ii. Jarrahi’s claims were only equitably tolled until July 20, 2018. 23 Jarrahi further contends that his claims were equitably tolled by: (1) Foremost reopening the 24 claim; (2) equitable estoppel; (3) waiver; (4) late discovery of a latent defect; and (5) Foremost’s 25 failure to fully investigate the claim. Opp’n at 20–25.23 26 27 28 23 The parties appear to agree that the contractual limitations period impacts the breach of contract and related tort claims equally.

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1. Foremost’s reopening of the claim only equitably tolled Jarrahi’s 1 claims to July 20, 2018. 2 Jarrahi contends that Foremost’s decision to reopen and reconsider his claim equitably tolled 3 his claims under the instant lawsuit until July 2019. This case centers on the Policy’s one-year 4 limitation on the filing of a lawsuit. As an initial matter, “[s]uch a policy provision requiring that an 5 action be commenced within 12 months after the inception of the loss has been repeatedly upheld as 6 a reasonable limitation which manifests no undue advantage and no unfairness as to the period of 7 time.” Lawrence v. W. Mut. Ins. Co., 251 Cal. Rptr. 319, 322 (Ct. App. 1988). The California 8 Supreme Court has deemed it “proper” to toll such one-year suit provisions “from the time an 9 insured gives notice of the damage to his insurer, pursuant to applicable policy notice provisions, 10 until coverage is denied.” Prudential-LMI Com. Ins. v. Superior Court, 798 P.2d 1230, 1242 (Cal. 11 1990). However, equitable tolling does not apply to any reconsideration period. Singh v. Allstate Ins. 12 Co., 73 Cal. Rptr. 2d 546, 549–54 (Ct. App. 1998) (concluding that “the justifications for equitable 13 tolling are absent, once the carrier has initially denied the claim,” and therefore do not apply to 14 reconsideration of a claim). 15 In the instant case, the one-year suit provision was equitably tolled from February 18, 2017— 16 the day that Jarrahi reported his loss to Foremost—to March 2, 2017—the day that Foremost sent its 17 claim outcome letter stating, “We’ve completed the adjustment of our loss and we are closing your 18 claim.” ECF No. 48-5 (“Foremost Exhibits”), Ex. 4 (“March 2, 2017 Claim Outcome Letter”), at 4- 19 4. Foremost concedes that the one-year limitation was equitably tolled again when Foremost 20 reopened Jarrahi’s claim on March 2, 2018. See Reply at 2. However, the tolling of the limitation 21 period ended on July 20, 2018, when Foremost again sent Jarrahi a letter partially denying coverage 22 and stating, “While we welcome any additional information you may wish to provide, the claim will 23 not be reopened unless we notify you of such in writing.” Foremost Exhibits, Ex. 11 (“July 20, 2018 24 Claim Outcome Letter”), 11-2. 25 Jarrahi contends that his claim remained open (or at the very least was reopened) after July 26 20, 2018. In support of his contention, he points to language allegedly found in the July 20, 2018 27 Claim Outcome Letter, in which Foremost states, “We are also in the process of reviewing your 28

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1 request from your letter and will follow-up with you once our review is completed.” Declaration of 2 Bahram Jarrahi, ECF No. 57-1 (“Jarrahi Decl.”), Ex. 14. However, the Court finds it clear, based on 3 a comparison of the two pages in this exhibit, that these pages come from different letters. As a 4 result, the Court finds that Foremost did not represent that it was in the process of reviewing a 5 request from Jarrahi in its July 20, 2018 Claim Outcome Letter. Rather, the letter explicitly stated 6 that the claim was closed and would not be reopened unless written notice was provided. July 20, 7 2018 Claim Outcome Letter, 11-2. 8 Jarrahi further alleges that the following indicated that his claim still remained open until 9 July 5, 2019: (1) an August 2, 2018 email from Delgado inviting him to provide new information 10 related to the claim;; (2) several October 2018 emails from Delgado noting Foremost was reviewing 11 reports that Jarrahi submitted in support of his claim and was preparing a response; (3) a July 5, 12 2019 letter from Delgado acknowledging receipt of Jarrahi’s demand letter; and (4) a July 22, 2019 13 letter from Delgado advising that Foremost “respectfully decline[d] to reopen this claim or consider 14 payment of supplemental claims in relation to the loss.” Opp’n at 12–14. However, as discussed 15 previously, equitable tolling does not apply to the reconsideration period, and, at best, these 16 documents show only that Foremost was considering Jarrahi’s request for reconsideration of its 17 decision on his claim.24 See Singh, 73 Cal. Rptr. 2d at 549–54. Indeed, as the California Court of 18 Appeal in Singh reasoned, 19 Once a claim has been made, the carrier has pursued its investigation, and the claim 20 has been denied, the policies behind allowing equitable tolling have been fulfilled. The carrier’s right to notice, and its ability to investigate and marshal any evidence it may 21 need to defend, have been preserved. The insured has been provided at least some 22 23 24 24 Jarrahi argues that the reopening and reconsideration of a claim tolls the revived one-year period to bring a claim, citing Ashou v. Liberty Mut. Fire Ins. Co., 41 Cal. Rptr. 3d 819, 828 (Ct. App. 2006). However, Ashou 25 is distinguishable because it involved considering whether equitable tolling specifically applies to the one- year period set forth in Code of Civil Procedure section 340.9. See id. at 828–30. The Ashou court further 26 distinguished the facts of Ashou from Singh, noting that in Ashou, “between the insurer’s initial denial of the claim and the insured’s request for reconsideration, the Legislature found the insurance industry’s response to 27 [a large earthquake] to have been so inadequate that it was necessary to enact blanket legislation allowing suits on earthquake claims that would otherwise have been time-barred.” Id. at 830. The Court finds that the 28 situation presented in the instant case is more analogous to that in Singh, where “little had changed between the insurer’s initial denial of the claim and the insured’s request for reconsideration.” Id.

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grounds, upon the denial, before being required to sue the carrier. Thereafter, however, 1 the enforcement of the one-year limit works no injustice to either party. 2 . . . 3 The “reconsideration” period was not required to enable the insurer to receive notice 4 of the claim and to investigate the claim so as to preserve its rights to defend, if it ultimately denied the claim. The “reconsideration” period did not come before 5 plaintiffs had reason to know of their right to sue, or the expiration of the limitation in which to do so. Plaintiffs were aware of the right to sue, and of potential grounds, before 6 any request for reconsideration. The justifications for equitable tolling are absent, once 7 the carrier has initially denied the claim. The policies supporting the shortened limitation period are then fully applicable, and no reason for further tolling exists. 8 . . . 9 If insurance companies were saddled with the situation that whenever [they] 10 reconsidered an earlier decision it would inaugurate a new limitations period, 11 companies would be reluctant to offer policy holders the luxury of a second evaluation. 12 Singh, 73 Cal. Rptr. 2d at 550–51, 553 (quoting Falk v. Fed. Ins. Admin., 1983 Ins. L. Rep. (CCH) 13 929, 930 (N.D. Cal. 1981)). 14 Here, Foremost’s July 20, 2018 Claim Outcome Letter made clear that it would not reopen 15 Jarrahi’s claim unless Jarrahi was given written notice. Foremost never provided such notice. Even 16 assuming that Foremost was considering granting reconsideration of its decision, equitable tolling 17 would not apply to any such reconsideration period. As a result, the Court finds that Jarrahi’s claim 18 was only equitably tolled until July 20, 2018. 19 2. Equitable estoppel does not apply. 20 Jarrahi further argues that Foremost should be equitably estopped from asserting the statute 21 of limitations defense to his claims. Opp’n at 24–25. Equitable estoppel arises when an insurance 22 carrier “induces the policyholder to forbear from filing suit.” Singh, 73 Cal. Rptr. 2d at 552. In order 23 to establish equitable estoppel, the party seeking estoppel must ordinarily prove four elements: 24 (1) the party to be estopped must know the facts; (2) he must intend that his conduct 25 shall be acted upon, or must so act that the party asserting the estoppel had the right to believe that it was so intended; (3) the party asserting the estoppel must be ignorant of 26 the true state of facts; and, (4) he must rely upon the conduct to his injury. 27 28

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1 Spray, Gould & Bowers v. Assoc. Int’l Ins. Co., 84 Cal. Rptr. 2d 552, 556 (Ct. App. 1999). Foremost 2 contends that Jarrahi fails to prove the third element, that he was “ignorant of the true state of facts.” 3 Mot. at 5. In its July 20, 2018 Claim Outcome Letter, Foremost reminded Jarrahi of the one-year suit 4 limitation and clearly stated, “We’ve completed the adjustment of your loss and we are closing your 5 claim. While we welcome any additional information you may wish to provide, the claim will not be 6 reopened unless we notify you of such in writing.” July 20, 2018 Claim Outcome Letter. During the 7 hearing on this motion, however, counsel for Foremost conceded that Foremost had previously 8 reopened Jarrahi’s claim several times without formally notifying Jarrahi of this in writing. As a 9 result, despite Foremost’s representation that “the claim will not be reopened unless we notify you of 10 such in writing,” Foremost’s past practice of reopening claims without a formal writing could have 11 led Jarrahi to reasonably believe that Foremost had reopened his claim again until July 5, 2019. The 12 Court therefore concludes that a genuine dispute exists as to whether Jarrahi was “ignorant of the 13 true state of facts”—namely, that his claims were only equitably tolled until July 20, 2018. 14 However, the Court finds that the second element for equitable estoppel cannot be met. There 15 is no evidence whatsoever that Foremost intended for Jarrahi to miss his deadline to file suit or that it 16 acted in a way such that Jarrahi “had the right to believe” that it so intended; rather, Foremost 17 repeatedly reminded Jarrahi of the one-year suit limitation in its communications with him, including 18 its July 20, 2018 Claim Outcome Letter. See Foremost Exhibits, Ex. 13 (“April 10, 2018 Claim 19 Outcome Letter”); July 20, 2018 Claim Outcome Letter; Foremost Exhibits, Ex. 12 (“October 16, 20 2018 Claim Outcome Letter”). As a result, the Court finds that equitable estoppel does not apply. 21 3. Foremost did not waive the one-year contractual limitation. 22 “[A] waiver exists whenever an insurer intentionally relinquishes its right to rely on the 23 limitations provision.” Prudential-LMI Com. Ins., 798 P.2d at 1240. An insurer who “expressly 24 extends the one-year suit provision during its claim investigation . . . waives its right to raise a 25 timeliness defense to the insured’s action.” Id. Here, there is no evidence suggesting that Foremost 26 intentionally waived the Policy’s one-year contractual limitation. Jarrahi neither cited to such 27 evidence in his Opposition nor offered any during the hearing on this matter. As a result, the Court 28 finds that Foremost did not waive the Policy’s one-year contractual limitation.

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4. Jarrahi provides no evidence of latent defects to support tolling 1 of the limitation period. 2 Jarrahi contends that his late discovery of latent defects tolls the limitation period. 3 The Supreme Court of California, in considering a similar one-year limitation for a cause of 4 action involving fire insurance policies, defined the “inception of the loss” as “that point in 5 time when appreciable damage occurs and is or should be known to the insured, such that a 6 reasonable insured would be aware that his notification duty under the policy has been 7 triggered.” Id. at 1238. Jarrahi has provided no evidence of latent defects aside from 8 conclusory statements that they exist. In fact, one of the expert reports he cites to in support 9 of his contention clearly states: “The discovery of hidden or latent defects is beyond the 10 scope of this reconnaissance report.” ECF No. 57-2, Ex. 1 (“Azizisefat Report”). Although 11 another expert states in a conclusory fashion, “There is latent hidden damage, that requires 12 further investigation as the damage is in the structure is [sic] hidden from our sight,” ECF 13 No. 57-3 ¶ 5, “[t]he mere existence of a scintilla of evidence is insufficient to demonstrate a 14 genuine issue of material fact.” Liberty Lobby, 477 U.S. at 252. This conclusory statement 15 does not constitute sufficient evidence on which a jury could reasonably find that a latent 16 defect existed. Id. As a result, the Court finds that no late discovery of latent defects exists to 17 support Jarrahi’s contention that the limitation period was tolled. 18 19 5. Failure to investigate the claim does not toll the contractual limitation period. 20 Finally, Jarrahi contends, without citing to any legal support, that Foremost’s failure 21 to investigate the cause of the water intrusion tolls the one-year contractual limitation. As an 22 initial matter, Foremost has submitted various pieces of evidence demonstrating that it 23 investigated and reviewed Jarrahi’s claims and multiple requests for reconsideration. April 24 10, 2018 Claim Outcome Letter; July 20, 2018 Claim Outcome Letter; October 16, 2018 25 Claim Outcome Letter. Nonetheless, an insurer’s incomplete investigation is not grounds for 26 tolling or reopening the limitation period. Tolling runs during the investigation period and 27 ends once the insurance company issues a denial. 28

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1 As a result, the Court concludes that Jarrahi’s claims were only equitably tolled until 2 July 20, 2018. As a result, Jarrahi had at most until July 20, 2019, to file his suit. Because 3 Jarrahi waited until March 9, 2020, to file this action, however, the Policy’s one-year 4 limitation period bars this suit entirely.25 5 V. Conclusion 6 In light of the foregoing reasons, the Court hereby ORDERS as follows: 7 1. The Motion for Summary Judgment is GRANTED in full; and 8 2. The Motion for Partial Summary Judgment is DENIED as MOOT. 9 10 11 12 IT IS SO ORDERED. 13 14 Dated: February 24, 2023 ___________________________________ 15 MAAME EWUSI-MENSAH FRIMPONG 16 United States District Judge 17 18 19 20 21 22 23 24 25

26 25 Even if the Court were to consider Jarrahi’s first lawsuit filed on December 20, 2019, to be the operative 27 lawsuit for purposes of asserting his claims within the statutory limitation period, that lawsuit was also filed too late. Because the Court grants the Motion for Summary Judgment in full on the basis of the statutory 28 limitation period, the Court need not consider Foremost’s request for Partial Summary Judgment on the basis that there is no evidence of fraud, oppression, or malice to support punitive damages.

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