Modification: John's Grill v. Hartford Financial Services Group

JOHN'S GRILL, INC., et al.,

Plaintiffs and Appellants,

v.

THE HARTFORD FINANCIAL SERVICES GROUP, INC., et al.,

Defendants and Respondents.

No. A162709

(San Francisco Super. Ct.

No. CGC-20-584184)

California Court of Appeal

First Appellate District

Division Four

Filed January 23, 2023

ORDER MODIFYING OPINION;

NO CHANGE IN JUDGMENT

Trial Court: Superior Court of California, County of San Francisco

Trial Judge: Hon. Ethan P. Schulman

Counsel: Cotchett, Pitre & McCarthy, Nanci E. Nishimura, Brian Danitz, Andrew F. Kirtley, Julia Q. Peng, for Plaintiffs and Appellants.

Steptoe & Johnson, Anthony J. Anscombe; Wiggin and Dana, Tadhg Dooley, David R. Roth, for Defendants and Respondents.

On its own motion, this court orders that the December 27, 2022 opinion be modified as follows:

1. On page 10, in the first paragraph under subheading "1. Insurance Policy Interpretation", in the parenthetical after the first sentence of text, insert as the first citation in the parenthetical, "Yahoo Inc. v. National Union Fire Ins. Co. (2022) 14 Cal.5th 58, 67 (Yahoo);" so that the sentence and the following parenthetical read:

Because insurance policies are contracts, judicial interpretation of them, like any other contract, is a question of law. (Yahoo Inc. v. National Union Fire Ins. Co. (2022) 14 Cal.5th 58, 67 (Yahoo); AIU Ins. Co. v. Superior Court (1990) 51 Cal.3d 807, 818; Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264 ["While insurance contracts have special features, they are still contracts to which the ordinary rules of contractual interpretation apply."].)

2. On page 10, also in the first paragraph under the subheading "1. Insurance Policy Interpretation", in the parenthetical after the second and third sentences of text, insert as the second citation in the parenthetical, "; Yahoo, supra, at p. 67" so that the sentences and the following parenthetical read:

The "mutual intention of the parties at the time the contract is formed governs interpretation. [Citation.] Such intent is to be inferred, if possible, solely from the written provisions of the contract." (AIU Ins. Co., at pp. 821-822; Yahoo, supra, at p. 67.)

3. On page 10, also in the first paragraph under the subheading "1. Insurance Policy Interpretation", in the parenthetical at the end of that paragraph, insert as the concluding citations in the parenthetical, "; Yahoo, supra, at p. 67 [if policy terms " 'are ambiguous [i.e., susceptible of more than one reasonable interpretation], we interpret them to protect " 'the objectively reasonable expectations of the insured.' " [Citations.] Only if these rules do not resolve a claimed ambiguity do we resort to the rule that ambiguities are to be resolved against the insurer.' "]; Yahoo, at p. 69" so that the concluding sentence and the following parenthetical read:

Any ambiguous terms must be interpreted "in the sense [the insurer] believed [the insured] understood them at the time of formation," and ambiguities must be resolved in favor of coverage. (AIU Ins. Co., at p. 822, citing Civ. Code, § 1649; Yahoo, supra, at p. 67 [if policy terms " 'are ambiguous [i.e., susceptible of more than one reasonable interpretation], we interpret them to protect " 'the objectively reasonable expectations of the insured.' " [Citations.] Only if these rules do not resolve a claimed ambiguity do we resort to the rule that ambiguities are to be resolved against the insurer.' "]; Yahoo, at p. 69.)

4. On page 11, in the first paragraph (which begins, " "The rules for recognizing ambiguity are . . ." "), in the parenthetical after the multi-sentence quotation, insert as the second citation in the parenthetical, "; accord, Yahoo, supra, 14 Cal.5th at p. 69 ["the meaning of the word or phrase must be considered in light of its context"]" so that the parenthetical reads:

(Shell Oil Co. v. Winterthur Swiss Ins. Co. (1993) 12 Cal.App.4th 715, 737; accord, Yahoo, supra, 14 Cal.5th at p. 69 ["the meaning of the word or phrase must be considered in light of its context"].)

5. On page 11, in the second paragraph (which begins, "Insurance policies typically contain"), in the parenthetical after the second sentence of text, insert as the second citation in the parenthetical, "; accord, Yahoo, supra, 14 Cal.5th at pp. 67, 69" so that the sentence and the following parenthetical read:

The grant of coverage is generally interpreted broadly in favor of the insured to protect the objectively reasonable expectations of the insured. (AIU Ins. Co. v. Superior Court, supra, 51 Cal.3d at p. 822; accord, Yahoo, supra, 14 Cal.5th at pp. 67, 69.)

6. On page 12, in the first full paragraph (which begins, "The insurer bears the burden"), in the parenthetical after the first sentence, insert as the first citation in the parenthetical, "Yahoo, supra, 14 Cal.5th at p. 68;" so that the sentence and the following parenthetical read:

The insurer bears the burden of proving that an exclusionary clause applies. (Yahoo, supra, 14 Cal.5th at p. 68; Travelers Casualty & Surety Co. v. Superior Court (1998) 63 Cal.App.4th 1440, 1453.)

7. On page 12, also in the first full paragraph (which begins, "The insurer bears the burden"), in the parenthetical at the end of the paragraph, insert as the second citation in the parenthetical, "; accord, Yahoo, supra, at p. 68 ["When coverage is in dispute, the initial burden is on the insured . . . to prove that its claim falls within the scope of potential coverage. [Citation.] If the insured establishes that the policy provides at least the potential for coverage, the burden shifts to the insurer . . . to show the claim falls within one of the policy's exclusions."].)" so that the parenthetical reads:

(Hallmark Ins. Co. v. Superior Court (1988) 201 Cal.App.3d 1014, 1017; accord, Yahoo, supra, at p. 68 ["When coverage is in dispute, the initial burden is on the insured . . . to prove that its claim falls within the scope of potential coverage. [Citation.] If the insured establishes that the policy provides at least the potential for coverage, the burden shifts to the insurer . . . to show the claim falls within one of the policy's exclusions."].)

8. On page 28, in the first full paragraph (which begins, "Sentinel acknowledges the more expansive breadth"), after the last sentence of the paragraph, insert a parenthetical stating, "(See Yahoo, supra, 14 Cal.5th at pp. 65, 68, 71, 72 [endorsement significantly modified standard version of policy, including by removing an otherwise applicable exclusion].)" so that the sentence and the parenthetical citation read:

They modify the main body of an otherwise standardized form, thereby customizing it for purposes of the endorsement, which is an objective the parties to this insurance contract plainly had, given the tailored nature of several of the endorsements they agreed upon. (See Yahoo, supra, 14 Cal.5th at pp. 65, 68, 71, 72 [endorsement significantly modified standard version of policy, including by removing an otherwise applicable exclusion].)

9. On page 30, in the paragraph that begins on page 29 with the words, "We are prepared to accept", after the second sentence of text, insert a parenthetical stating, "(See Yahoo, supra, 14 Cal.5th at pp. 65, 68, 71, 72 [endorsement modified standard policy].)" so that the sentence and the parenthetical citation read:

But at best for Sentinel, the Policy is ambiguous when read in light of the modifications made by the Limited Fungi or Virus Coverage Endorsement. (See Yahoo, supra, 14 Cal.5th at pp. 65, 68, 71, 72 [endorsement modified standard policy].)

The modifications effect no change in the judgment.

Dated: January 23, 2023 STREETER, Acting P. J.