Berkley National Insurance Company v. City of San Bernardino

[2] O [7] 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA [10] 11 BERKLEY NATIONAL INSURANCE ) Case No. EDCV 19-02189 DDP (SPx) COMPANY, ) 12 ) Plaintiff, ) 13 ) ORDER GRANTING PLAINTIFF’S MOTION v. ) FOR PARTIAL SUMMARY JUDGMENT 14 ) CITY OF SAN BERNARDINO, ET ) 15 AL., ) [Dkt. Nos. 23, 32] ) 16 Defendants. [17] 18 Presently before the court is Plaintiff Berkley National 19 Insurance Company (“Berkley”)’s Motion for Summary Judgment (Dkt. 20 32).1 Having considered the submissions of the parties and heard 21 oral argument, the court grants the motion and adopts the following 22 Order. 23 I. Background 24 The facts of this case are not in dispute. In 1956, the 25 entity now known as the Arc San Bernardino School of Hope (“the 26 School”) and the City entered into an agreement granting the School [27] 1 Berkley styles its motion as a cross-motion for summary [28] judgment, in light of Defendant City of San Bernardino (“the 1 the use of certain property near the City’s Municipal Water 2 Department’s Antil Reservoir. (Declaration of Genevieve Rocha, 3 Ex.1 (Dkt. 23-2).) The 1956 agreement provided that the School 4 would “surrender the property and improvements, and the whole 5 thereof, to the [City] at the expiration of [the] term or other 6 termination of [the] agreement[,] and that all improvements and 7 structures placed thereon by [the School] shall become the property 8 of the [City.]” (Id.) Additional agreements in 1959 and 1961 9 granted the School use of additional lands. (Rocha Decl., Exs. 3, 10 4.) Both agreements, in terms identical to those of the 1956 11 agreement, stated that the School would surrender the entire 12 property and any improvements to the City at the expiration or 13 termination of the respective agreements. (Id.) 14 In 1969, the parties entered into yet another similar 15 agreement. The 1969 agreement, like the prior agreements, stated 16 that ownership of all improvements and structures would pass to the 17 City upon the expiration or termination of the 1969 agreement. 18 Unlike prior agreements, however, the introductory paragraph to the 19 1969 agreement stated, “THIS AGREEMENT . . . shall cancel and 20 supersede the previous agreements . . . .” (Rocha Decl., Ex. 6.) 21 The parties subsequently amended the 1969 agreement in 1971, 1981, 22 1995, and 2011. (Rocha Decl., Exs. 9, 10, 12, 14.) The 1971 23 amendment made adjustments to the lands available to the School, 24 while the 1981, 1995, and 2011 amendments extended the term of the 25 1969 agreement. Each of the amendments made reference to the 1969 26 agreement, and no amendment made any reference to the provision of 27 the 1969 agreements granting the City ownership of any improvements 28 and structures at the termination of the agreement. Under the most 1 recent, 2011 amendment, the 1969 agreement will expire in August 2 2021. (Rocha Decl., Ex. 14.) 3 In June 2019, a main water supply pipe operated by the City 4 and its water department burst. (Declaration of Christing Luong5 Pham (Dkt. 23-1), Ex. 15 at 3.) Water flooded through an 6 agricultural farm and onto the School’s leased property, causing 7 extensive damage to the School’s property and displacing the 8 School’s operations. (Id.) At the time, the School was covered by 9 an insurance policy issued by Berkley. (Declaration of Christopher 10 E. Finkley.) Berkley has paid for the School’s losses, and, in the 11 instant action, stands in the shoes of its insured to recover 12 damages from the City. Berkley now seeks partial summary judgment 13 that the School owned, and continues to own, the property impacted 14 by the 2019 incident. 15 II. Legal Standard 16 Summary judgment is appropriate where the pleadings, 17 depositions, answers to interrogatories, and admissions on file, 18 together with the affidavits, if any, show “that there is no 19 genuine dispute as to any material fact and the movant is entitled 20 to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A party 21 seeking summary judgment bears the initial burden of informing the 22 court of the basis for its motion and of identifying those portions 23 of the pleadings and discovery responses that demonstrate the 24 absence of a genuine issue of material fact. See Celotex Corp. v. 25 Catrett, 477 U.S. 317, 323 (1986). All reasonable inferences from 26 the evidence must be drawn in favor of the nonmoving party. See 27 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 242 (1986). If the 28 moving party does not bear the burden of proof at trial, it is entitled to summary judgment if it can demonstrate that “there is an absence of evidence to support the nonmoving party's case.” Celotex, 477 U.S. at 323 . 4 Once the moving party meets its burden, the burden shifts to 5! the nonmoving party opposing the motion, who must “set forth specific facts showing that there is a genuine issue for trial.” 7! Anderson, 477 U.S. at 256. Summary judgment is warranted if a party “fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex, 11] 477 U.S. at 322. A genuine issue exists if “the evidence is such that a reasonable jury could return a verdict for the nonmoving 13] party,” and material facts are those “that might affect the outcome 14}/ of the suit under the governing law.” Anderson, 477 U.S. at 248 . There is no genuine issue of fact “[w]here the record taken as a whole could not lead a rational trier of fact to find for the 17] nonmoving party.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). 19 It is not the court’s task “to scour the record in search of a genuine issue of triable fact.” Keenan v. Allan, 91 F.3d 1275, 214-1278 (9th Cir. 1996). Counsel have an obligation to lay out their support clearly. Carmen v. San Francisco Sch. Dist., 237 F.3d 231026 , 1031 (9th Cir. 2001). The court “need not examine the entire file for evidence establishing a genuine issue of fact, where the evidence is not set forth in the opposition papers with adequate 261 references so that it could conveniently be found.” Id. IIIT. Discussion [28] 1 Berkley contends that, under the 1969 agreement and all of its subsequent amendments, the School owns various impacted buildings 31 and improvements until August 2021, at which point the agreement 4! will expire and the School will surrender the property and all improvements to the City, which will then, and only then, become the owner of all improvements and structures.* The City argues, 7!) however, that it owns the damaged property, and that the City has been the sole owner since no later than 1969. 9 “[T]he interpretation of a contract must give effect to the mutual intention of the parties .. . at the time the contract is formed ... .% E.M.M.1I. Inc. v. Zurich American Ins. Co., 32 12} Cal.4th 465, 470 (2004) (internal quotation and citation omitted). “Such intent is to be inferred, if possible, solely from the written provisions of the contract.” Id.; see also Cal. Civ. Code $ 1639. “When a dispute arises over the meaning of contract language, the first question to be decided is whether the language 17}/is ‘reasonably susceptible’ to the interpretation urged by the 18] party. If it is not, the case is over.” S. Cal. Edison Co. v. Superior Court, 37 Cal. App. 4th 839, 847 (1995). A court may, however, look to extrinsic evidence, including the conduct of the parties, to determine in the first instance whether a contract is reasonably susceptible to a party’s interpretation. Id. If so, the court must then consider all evidence in examining the intent of the parties. City of Bell v. Superior Court, 220 Cal. App. 4th 236, 248 (2013). [26] 27 . Berkley filed the same memorandum in support of both its own motion and its opposition to the City’s summary judgment motion. 28 Some of the arguments in Berkley’s memorandum are directed toward the City’s now-withdrawn arguments, and are no longer pertinent. 1 Nowhere does the 1969 agreement state that the City is the 2 owner of the subject property. Nevertheless, the City asserts that 3 the 1969 agreement “leaves no doubt” that the City is the “clear 4 owner” of the property now, owned the buildings in 2019, and 5 indeed, has owned the buildings since 1969. (Opposition at 2:7-8, 6 19.) The City reaches this conclusion by focusing on (1) the 1969 7 agreement’s provision that the agreement “shall cancel and 8 supersede the previous agreements” and (2) the supposed effect of 9 that provision in light of the original, 1956 agreement. Like the 10 1969 agreement, the 1956 agreement provided that ownership would 11 pass to the City upon the termination of that agreement. Thus, the 12 argument goes, because the 1969 agreement clearly canceled the 1956 13 agreement, the parties intended to transfer ownership to the City 14 in 1969. 15 This argument has no merit. Had the 1969 agreement stated 16 only that the 1956 agreement was no longer in effect, the City’s 17 interpretation might be reasonable. The 1969 agreement, however, 18 like its predecessors, explicitly stated that “at the expiration of 19 this term or other termination of this agreement, . . . all 20 improvements and structures placed [on the property] by [the 21 School] shall become the property of the [City].” (Rocha Decl., Ex. 22 6 at 2 (emphasis added).) The inclusion of this provision would be 23 utterly nonsensical if, as the City now asserts, the parties 24 understood the City to be the owner of the structures and 25 improvements as of that moment in 1969.3 [26] 3 Even if, as the City asserts, the 1969 agreement’s prefatory 27 cancellation of the 1956 agreement did trigger a change in ownership, the remainder of the 1969 agreement, including the 28 (continued...) 1 Although the language of the 1969 agreement alone is sufficient indication that the City’s current interpretation is unreasonable, extrinsic evidence also supports that conclusion. There is no evidence of a change in the relationship of the parties or in the School’s operations in 1969 or at any point before the 2019 flood, let alone evidence of a change of possession. Indeed, 71 San Bernardino County Assessor’s records indicate that the School 8l}is the owner of the property, and has been so since 1969. (School’s Request for Judicial Notice, Ex. B (Dkt. 25-3) at 1, 24;, Ex. D.)* Thus, although the Court agrees that the 1969 agreement 11}/}is subject to only one reasonable interpretation, it is that put forth by the School, not the City’s reading. Under the plain 13] language of the 1969 agreement and the subsequent amendments to it, the School owned the property at the time of the 2019 incident. IV. Conclusion 16 For the reasons stated above, Plaintiff’s Motion for Partial 17] Summary Judgment is GRANTED. [18] 19 °(...continued) 20 above-quoted provision, also reconveyed the property to the School. Whether since 1956 or 1969, the School clearly owned the property in 2019. [21] 29 “The City’s baseless, pro forma objection to this evidence is overruled. Courts routinely take judicial notice of public 23 records, including county records such as those maintained by county recorders and assessors. See, e.g., Alexander v. Deutsche DA Bank Nat. Tr. Co., No. 13-CV-407-MMA WVG, 2013 WL 3320455 , at *3 (S.D. Cal. July 1, 2013); Chavez v. Washington Mut. Bank, No. 25 12-CV-04393-LHK, 2013 WL 2450128 , at *4 (N.D. Cal. June 5, 2013). Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001), is 26 inapt. There, the district court improperly took judicial notice of the disputed fact that a mentally disabled person knowingly and 27 voluntarily waived his right to challenge his extradition. Here, although the City disputes the facts reflected in San Bernardino 28 County records, it provides no evidence or explanation why any such dispute is reasonable. See Fed. R. Evidence 201 (b). [2] 3 IT IS SO ORDERED. [5] 6 Dated: January 13, 2021 DEAN D. PREGERSON 7 United States District Judge