Hovsepyan v. Geico General Ins. Co.

• Court: District Court, E.D. California
• Decided: July 21, 2022
• Docket: 2:19-cv-00899
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 RAZMIK HOVSEPYAN; SUREN No. 2:19-cv-00899-MCE-CKD HOVSEPYAN; and SHUSHANIK 12 PASKEVICHYAN, 13 Plaintiffs, ORDER 14 v. 15 GEICO GENERAL INSURANCE COMPANY; and DOES 1 through 15, 16 inclusive, 17 Defendant. 18 19 In bringing the present action, Plaintiffs Razmik Hovsepyan, Suren Hovesepyan, 20 and Shushanik Paskevichyan (collectively “Plaintiffs” unless otherwise indicated), claim 21 that Defendant GEICO General Insurance Company (“GEICO” or “Defendant”) engaged 22 in bad faith insurance practices with respect to its handling of Plaintiffs’ injury claims 23 following a collision involving an uninsured motorist. Plaintiffs’ operative First Amended 24 Complaint (ECF No. 1-3), filed in state court, asserts a single cause of action, for breach 25 of the implied covenant of good faith and fair dealing under California law. GEICO 26 subsequently removed the matter here, citing federal jurisdiction on the basis of diversity 27 of citizenship pursuant to 28 U.S.C. § 1332. 28 /// 1 Presently before this Court is Defendant’s Motion for Summary Judgment, or 2 alternatively for partial summary judgment, brought pursuant to Federal Rule of Civil 3 Procedure 56.1 According to GEICO, any disagreement here between the parties over 4 the value of Plaintiffs’ claim amounted to a legitimate difference of opinion that cannot 5 give rise to bad faith liability. Defendant further asserts that any delay in adjusting 6 Plaintiffs’ claim was not attributable to any inaction on GEICO’s part. Finally, GEICO 7 contends that the instant lawsuit is barred by the applicable statute of limitations in any 8 event. As set forth below, Defendant’s Motion is GRANTED.2 9 10 BACKGROUND 11 12 On or about February 13, 2015, a 2003 BMW 328i driven by Plaintiff Razmik 13 Hovsepyan (“Razmik”), and insured under a policy of automobile insurance issued by 14 GEICO, was involved in an automobile collision near the intersection of Folsom 15 Boulevard and Dawes Street in Sacramento, California. Razmik’s son, 17-year old 16 Suren Hovsepyan (“Suren”), and 15-year old niece, Shushanik Paskevichyan 17 (“Shushanik”), were passengers in the vehicle. 18 Razmik had just executed a left-hand turn from eastbound Folsom onto 19 northbound Dawes and was driving at around 10 miles per hour when a Dodge Ram 20 pickup operated by Nathan Domeier at a similar rate of speed pulled out of the gasoline 21 station located at the intersection, crossed the southbound lane of travel on Dawes, and 22 struck the left driver’s corner of the BMW behind the wheel well. 23 While the police were not notified, all three Plaintiffs went to the emergency room 24 later that day complaining of neck and back pain. Thereafter, Plaintiffs engaged in a 25 nearly identical course of treatment that ended about three and half months later. On

26 1 All further references to “Rule” or “Rules” are to the Federal Rules of Civil Procedure unless otherwise noted. 27

2 Having determined that oral argument would not be of material assistance, the Court submitted 28 this Motion on the briefs in accordance with E.D. Local Rule 230(g). 1 February 16, 2015, Razmik and Suren initiated a course of chiropractic treatment from 2 Dawn Fealk. D.C. Both terminated that treatment within a week of each other on 3 May 26, 2015, and June 3, 2015, respectively. Def.’s Appendix of Exhibits (“AOE”), ECF 4 No. 61-8, Ex. 11, pp. 679, 725. Shushanik, for her part, also received chiropractic 5 treatment during almost exactly the same time parameters: between February 16, 2015, 6 and June 3, 2015. Id. at p. 743. All three Plaintiffs further underwent MRI scanning 7 during the same period, and they were also seen four times by Dr. Mikhail Palatnik at All 8 Meds Medical Group. Plaintiffs were primarily diagnosed as having sustained neck and 9 back sprains as a result of the subject accident. 10 After Domeier’s insurer denied coverage, an uninsured motorist claim was 11 established by GEICO for Plaintiffs’ injuries in March of 2015. Def.’s Stmt.of Undisputed 12 Facts (“DUF”), ECF No. 61-2, No. 5. The uninsured motorist provisions of the policy 13 provide coverage in the amount of $50,000 per person/$100,000 per accident as follows: 14 [W]e will pay damages for bodily injury of an insured, caused by accident which the insured is legally entitled to recover 15 from the owner or operator of an uninsured motor vehicle, underinsured motor vehicle, or a hit-and-run motor vehicle 16 arising out of the ownership, maintenance or use of that motor vehicle. 17 18 DUF No. 1. 19 If the parties fail to agree on the amount due in uninsured motorist coverage, 20 either party may demand that the claim be arbitrated. Additionally, as a condition for 21 providing coverage, the insured must satisfy certain specific conditions, including 22 submitting to an examination by doctors chosen by GEICO and authorizing GEICO, 23 upon GEICO’s request, “to obtain medical reports and copies of records.” Id. 24 On March 31, 2015, once GEICO was notified that Plaintiffs were being 25 represented by the Gavrilov Law Corporation3 with respect to their injury claims, it sent 26 attorney Ognian Gavrilov (“Gavrilov”) a letter asking that his clients sign and return 27 3 The letter from the Gavrilov firm notifying GEICO of its representation was dated February 20, 28 2015 but not faxed to GEICO until March 19. Decl. of Fawn Harding, ECF No. 61-4, ¶ 8.o. 1 medical authorizations. No such authorizations were ever provided even though GEICO 2 sent the same forms again and despite GEICO’s multiple attempts to obtain a status 3 update as to Plaintiffs’ condition. DUF Nos. 7, 8. Plaintiffs’ counsel did tell GEICO in 4 May of 2015 that Plaintiffs were still treating. Harding Decl., ¶¶ 17-18. Indeed, 5 throughout the remainder of 2015 and early 2016 GEICO’s attempts to obtain any 6 information on the claims went largely unheeded. On September 2, 2015, and 7 November 19, 2015, GEICO personnel requested some update from counsel as to his 8 client’s status and when a demand could be expected, since GEICO’s previous inquiries 9 had gone unanswered. AOE, Ex. 3, pp. 188, 215. 10 On February 22, 2016, some nine months after Plaintiffs had completed treating 11 and more than a year following the subject accident, GEICO received uninsured motorist 12 demand letters from Gavrilov asking for an aggregate amount of $121,597 to settle the 13 three claims. DUF No. 11, AOE, Ex. 3, pp. 236-41. At that point, although GEICO had 14 still not received any authorization to obtain Plaintiffs’ complete medical records, GEICO 15 noted that Plaintiffs had stopped treating less than four months after the accident and 16 were not making any claim for future or ongoing medical treatment. See Decl. of Bill 17 Webster, ECF No. 61-7, ¶ 10.r. Consequently, GEICO responded on April 1, 2016, by 18 offering $39,047.44 to settle all three claims. AOE, Ex. 3, pp. 250-52. Although Plaintiffs’ 19 medical bills together totaled some $26,955,4 some $11,700 of that amount was for MRI 20 scans alone. Webster Decl., ¶ 10. Still, the amount offered included nearly $13,000 in 21 general “pain and suffering” damages despite the fact that GEICO had not yet even 22 received Plaintiffs’ complete medical records, let alone verification as to Plaintiffs’ current 23 symptomatology. 24 Nonetheless, by letter dated April 15, 2016, Gavrilov claimed GEICO’s offers were 25 made in bad faith and indicated he was giving the company time to increase its offer, 26 4 While Plaintiffs’ demand letter initially indicated higher numbers, Plaintiffs ultimately verified the 27 $26,955 figure in their interrogatory responses, and at arbitration both sides agreed that was the correct total for Plaintiffs’ medical specials. Consequently, while the record contains other numbers elsewhere, 28 the Court will use $26,955 for purposes of this Memorandum and Order. 1 “not doing that out of the goodness of my heart but to collect further evidence for my 2 client’s subsequent insurance bad faith claim.” AOE, Ex. 3, p. 260. While GEICO did 3 increase its aggregate offers to $41,250 on April 21, 2016 (id. at p. 261), Gavrilov did not 4 counter and instead demanded arbitration on behalf of his clients on June 8, 2016. Id. at 5 p. 268. By June 29, 2016, GEICO retained counsel, and its attorneys sent various 6 discovery requests in order to obtain basic substantiation for Plaintiffs’ claims, including 7 requests for production and interrogatories. Once arbitration proceedings were 8 commenced, GEICO was also able to subpoena medical records since Plaintiffs’ counsel 9 had never provided the authorizations needed to do so beforehand. 10 Although Gavrilov told a GEICO adjuster in August of 2016 that Plaintiffs’ 11 previously made $121,497 global settlement demand had been tendered on a “take it or 12 leave it basis” (Webster Decl., ¶ 18), Gavrilov nonetheless tendered, on September 16, 13 2016, formal Offers to Compromise under California Code of Civil Procedure § 998, 14 totaling $75,000. AOE, Ex. 4, pp. 340-42. Some two weeks later, Gavrilov rescinded his 15 § 998 demand on behalf of Suren Hovsepyan and countered with a new aggregate 16 request for $83,000. Webster Decl, ¶¶ 20, 23; AOE, Ex. 4, p. 343. GEICO had not yet 17 even had the opportunity to depose Plaintiffs at this time. 18 When GEICO did obtain Plaintiffs’ depositions on October 3, 2016, they confirmed 19 that they had completed treatment over a year beforehand and had no physical 20 limitations from the accident. DUF No. 23. They nevertheless still claimed to experience 21 some accident-related discomfort. Although GEICO felt this testimony did not warrant a 22 higher pain and suffering allowance, it claims that “in the interest of compromise,” its 23 aggregate offer to Plaintiffs was increased to $44,000 by way of statutory offers to 24 compromise issued in January of 2017. Webster Decl., ¶ 30; Decl. of Terence Phan, 25 ECF No. 61-6, ¶¶ 14-15; AOE, Ex. 17, pp. 879-89. Gavrilov replied by letter dated 26 January 31, 2007, and rejected Defendant’s offers. He urged GEICO to simply “tender 27 the amounts requested by my clients” without spelling out just what those demands 28 /// 1 were, a cryptic response given the widely divergent sums that had previously been 2 demanded as reiterated above. AOE, Ex. 4, p. 353. 3 After the parties’ attempt to agree upon an arbitrator proved unsuccessful, the 4 Hon. Brian R. Van Camp (Ret.) was appointed in June under the auspices of the 5 American Arbitration Association as provided for in GEICO’s policy. Phan Decl., ¶¶ 11- 6 13. Judge Van Camp ultimately set an evidentiary hearing for October 31, 2017. 7 Since Plaintiffs continued to voice some symptomatology at the time of their 8 depositions, GEICO states it decided to schedule independent medical evaluations prior 9 to arbitration as a tool to further assess the nature and extent of Plaintiffs’ injuries prior to 10 the arbitration, and presumably also as a defensive measure depending on the 11 examiner’s ultimate findings. GEICO accordingly made arrangements to have all three 12 Plaintiffs seen on September 26, 2017, by Dr. Vernon Fong, a fellowship trained 13 orthopedic surgeon. In subsequent reports dated October 20, 2017, Dr. Fong diagnosed 14 various neck and back strains and, in the case of Suren Hovsepyan, a shoulder 15 contusion. Dr. Fong’s examination, however, revealed no current objective findings that 16 he could attribute to the accident and he believed that any injuries attributable to the 17 accident had since resolved as to all three Plaintiffs. AOE, Ex. 9, pp. 612-25. 18 Dr Fong did, however, believe that the majority of the treatment Plaintiffs had 19 received, aside from the four visits each had had with Dr. Palatnik, were reasonable. 20 Following those findings, GEICO increased its aggregate offer for Plaintiffs’ three claims 21 to $52,955. DUF No. 30; Decl of Amber Meyer, ECF No. 61-5, ¶ 19, Phan Decl., ¶¶ 24, 22 26. This covered all of Plaintiffs’ claimed $27,000 in medical expenses and offered 23 nearly the same amount for their respective general damages. Gavrilov did not respond 24 other than to increase his evaluation of Plaintiffs’ damages to $151,955 as set forth in his 25 arbitration brief served on October 25, 2017, some six days before the hearing. AOE, 26 Ex. 13, pp. 771-78. 27 At arbitration, while both sides agreed that medical specials totaled just $27,000, 28 Plaintiffs wanted $30,000 to $50,000 each for pain and suffering despite their relatively 1 short four-month period of treatment. This put Plaintiffs’ aggregate demand at $151,955 2 as previously stated, a figure more than $50,000 over the policy limit available to cover 3 their injuries. GEICO, on the other hand, argued the claims were worth a total of 4 $52,955. Id. at p. 768. 5 In his November 30, 2017, award, Judge Van Camp awarded the three Plaintiffs a 6 total of $80,955, which represented some $14,000 and $20,000 each for general 7 damages over the amount of their aggregate medical specials of $26,944. This was not 8 even half of what Plaintiffs had requested, and about fifty percent more than GEICO’s 9 last aggregate offer. AOE, Ex. 14, p. 780-783. 10 11 STANDARD 12 13 The Federal Rules of Civil Procedure provide for summary judgment when “the 14 movant shows that there is no genuine dispute as to any material fact and the movant is 15 entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Celotex Corp. v. 16 Catrett, 477 U.S. 317, 322 (1986). One of the principal purposes of Rule 56 is to 17 dispose of factually unsupported claims or defenses. Celotex, 477 U.S. at 325. 18 Rule 56 also allows a court to grant summary judgment on part of a claim or 19 defense, known as partial summary judgment. See Fed. R. Civ. P. 56(a) (“A party may 20 move for summary judgment, identifying each claim or defense—or the part of each 21 claim or defense—on which summary judgment is sought.”); see also Allstate Ins. Co. v. 22 Madan, 889 F. Supp. 374, 378-79 (C.D. Cal. 1995). The standard that applies to a 23 motion for partial summary judgment is the same as that which applies to a motion for 24 summary judgment. See Fed. R. Civ. P. 56(a); State of Cal. ex rel. Cal. Dep’t of Toxic 25 Substances Control v. Campbell, 138 F.3d 772, 780 (9th Cir. 1998) (applying summary 26 judgment standard to motion for summary adjudication). 27 In a summary judgment motion, the moving party always bears the initial 28 responsibility of informing the court of the basis for the motion and identifying the 1 portions in the record “which it believes demonstrate the absence of a genuine issue of 2 material fact.” Celotex, 477 U.S. at 323. If the moving party meets its initial 3 responsibility, the burden then shifts to the opposing party to establish that a genuine 4 issue as to any material fact actually does exist. Matsushita Elec. Indus. Co., Ltd. v. 5 Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); First Nat’l Bank v. Cities Serv. Co., 6 391 U.S. 253, 288-89 (1968). 7 In attempting to establish the existence or non-existence of a genuine factual 8 dispute, the party must support its assertion by “citing to particular parts of materials in 9 the record, including depositions, documents, electronically stored information, 10 affidavits[,] or declarations . . . or other materials; or showing that the materials cited do 11 not establish the absence or presence of a genuine dispute, or that an adverse party 12 cannot produce admissible evidence to support the fact.” Fed. R. Civ. P. 56(c)(1). The 13 opposing party must demonstrate that the fact in contention is material, i.e., a fact that 14 might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, 15 Inc., 477 U.S. 242, 248, 251-52 (1986); Owens v. Local No. 169, Assoc. of W. Pulp and 16 Paper Workers, 971 F.2d 347, 355 (9th Cir. 1992). The opposing party must also 17 demonstrate that the dispute about a material fact “is ‘genuine,’ that is, if the evidence is 18 such that a reasonable jury could return a verdict for the nonmoving party.” Anderson, 19 477 U.S. at 248. In other words, the judge needs to answer the preliminary question 20 before the evidence is left to the jury of “not whether there is literally no evidence, but 21 whether there is any upon which a jury could properly proceed to find a verdict for the 22 party producing it, upon whom the onus of proof is imposed.” Anderson, 477 U.S. at 251 23 (quoting Improvement Co. v. Munson, 81 U.S. 442, 448 (1871)) (emphasis in original). 24 As the Supreme Court explained, “[w]hen the moving party has carried its burden under 25 Rule [56(a)], its opponent must do more than simply show that there is some 26 metaphysical doubt as to the material facts.” Matsushita, 475 U.S. at 586. Therefore, 27 “[w]here the record taken as a whole could not lead a rational trier of fact to find for the 28 non-moving party, there is no ‘genuine issue for trial.’” Id. at 587. 1 In resolving a summary judgment motion, the evidence of the opposing party is to 2 be believed, and all reasonable inferences that may be drawn from the facts placed 3 before the court must be drawn in favor of the opposing party. Anderson, 477 U.S. at 4 255. Nevertheless, inferences are not drawn out of the air, and it is the opposing party’s 5 obligation to produce a factual predicate from which the inference may be drawn. 6 Richards v. Nielsen Freight Lines, 602 F. Supp. 1224, 1244-45 (E.D. Cal. 1985), aff’d, 7 810 F.2d 898 (9th Cir. 1987). 8 9 ANALYSIS 10 11 California law provides that a covenant of good faith and fair dealing is an implied 12 term in every contract. Egan v. Mutual of Omaha Ins. Co., 24 Cal. 3d 809, 818 (1979). 13 The so called “implied covenant” imposes a burden, beyond the contract’s express 14 terms, that “neither party will do anything which will injure the right of the other to receive 15 the benefits of the agreement.” Gruenberg v. Aetna Ins. Co., 9 Cal. 3d 566, 573 (1973). 16 Since breach of the implied covenant involves more than a failure to satisfy the 17 contractual duty itself, “it has been held that ‘[b]ad faith implies unfair dealing rather than 18 mistaken judgment.’” Chateau Chamberay Homeowners Ass’n v. Associated Int’l Ins. 19 Co., 90 Cal. App. 4th 335, 345 (2001), citing Congleton v. Nat’l Union Fire Ins. Co., 20 189 Cal. App. 3d 51, 59 (1987). In the insurance context, the implied covenant goes 21 beyond literal policy requirements to defend, settle, or pay qualifying claims, and instead 22 encompasses the insurer’s obligation to act fairly and in good faith in discharging those 23 contractual responsibilities. Id. at 346, citing California Shoppers, Inc. v. Royal Globe 24 Ins. Co., 175 Cal. App. 3d 1, 54 (1985). Breach of the covenant entails a “conscious and 25 deliberate act, which unfairly frustrates the agreed common purposes [of the contract] 26 and disappoints [a party’s] reasonable expectations . . . .” Careau & Co. v. Security 27 Pacific Business Credit, Inc., 222 Cal. App. 3d 1371, 1395 (1990). 28 /// 1 A. Genuine Dispute Doctrine 2 Even if policy benefits are mistakenly withheld, an insurer’s decision in that regard 3 does not expose it to bad faith liability under the implied covenant if the decision is 4 “based on a legitimate dispute as to the insurer’s liability under California law.” 5 Tomaselli v. Transamerica Ins. Co., 25 Cal. App. 4th 1269, 1280-81 (1994). A 6 “legitimate dispute” simply means that reasonable minds could differ about the value of 7 the claim. Rappaport-Scott v. Interins. Exch. Of the Auto. Club., 146 Cal. App. 4th 831, 8 839 (2007); Chateau Chamberay, 90 Cal. App. 4th at 350-51. To trigger bad faith 9 liability for any delay or denial in the payment of policy benefits, on the other hand, “it 10 must be shown that the insurer acted unreasonably or without proper cause.” Chateau 11 Chamberay, 90 Cal. App. 4th at 347, citing Dalrymple v. United Services Auto. Ass’n, 12 40 Cal. App. 4th 497, 520 (1995). “[W]here there is a genuine issue as to the insurer’s 13 liability under the policy for the claim asserted by the insured, there can be no bad faith 14 liability imposed on the insurer for advancing its side of that dispute.” Id. (emphasis in 15 original). Bad faith, on the other hand, “implies dishonesty, fraud, and concealment.” 16 Merrit v. Reserve Ins. Co., 34 Cal. App. 3d 858, 876. 17 Here, because Plaintiffs are insureds under GEICO’s policy for purposes of their 18 entitlement to uninsured motorist benefits under the terms of the GEICO policy, these 19 precepts apply to GEICO’s adjustment of Plaintiffs’ first party claims. GEICO argues that 20 the parties’ disagreement as to the value of Plaintiffs’ injuries under its uninsured 21 motorist coverage presents just the kind of “genuine issue” identified by the case law as 22 precluding liability for breach of the implied covenant. As the Ninth Circuit has 23 recognized, “the genuine issue rule in the context of bad faith claims allows a district 24 court to grant summary judgment when it is undisputed or indisputable that the basis for 25 the insurer’s denial of benefits was reasonable—for example, where even under the 26 plaintiff’s version of the facts there is a genuine issue as to the insurer’s liability under 27 California law.” Amadeo v. Principal Mut. Life Ins. Co., 290 F.3d 1152, 1161 (9th Cir. 28 2002). Significantly for purposes of the present matter, a genuine issue can exist if “an 1 arbitrator awards substantially lower damages than Plaintiff claims.” Maynard v. State 2 Farm Mut Aut. Ins. Co., 499 F. Supp. 2d 1154, 1160 (C.D. Cal. 2007). A genuine issue 3 may also present where an insurer “relies[s] on opinions from experts while evaluating 4 the insured’s claim.” Id. 5 In the present matter, GEICO’s last offer, short of arbitration, to settle all three 6 claims was $52,955 made in October of 2017. DUF No. 30. That offer was made after 7 GEICO decided to obtain independent medical examinations given the fact that Plaintiffs 8 still claimed to experience ongoing symptomatology at the time of their depositions in 9 October of 2016 even though they had obtained no accident-related treatment since 10 June of 2015, nearly a year and a half beforehand. The offers allowed for the entirety of 11 Plaintiffs’ claimed medical specials of some $26,955, plus a roughly equal amount for 12 general damages premised on a three-month period of treatment and taking into 13 consideration the independent medical examiner’s opinion that Plaintiffs’ accident 14 related injuries had resolved. As indicated above, the only response Plaintiffs made to 15 GEICO’s offer was to demand $151,955 by way of counsel’s arbitration brief served on 16 October 25, 2017, some six days before the October 31 hearing. AOE, Ex 13, pp. 756- 17 63. 18 The nearly $100,000 discrepancy between the parties’ respective settlement 19 positions prior to the uninsured motorist arbitration are attributable to differences in their 20 valuation of general, “pain and suffering” damages. Evaluating such damages is an 21 inherently subjective process. In Holenda v. Infinity Select Ins. Co., No. CV13-07128R 22 (CWx), 2014 WL 559381 (C.D. Cal. Feb. 13, 2014), the plaintiff’s uninsured motorist 23 carrier, Infinity, offered some $20,000 in “new money” to resolve Holenda’s injury claim 24 with respect to which it had already paid $5,000 in medical payments coverage. 25 Holenda, on the other hand, argued his special damages alone exceeded $130,000. Id. 26 at *2. The arbitrator ultimately awarded only $13,534 of those claimed specials and 27 /// 28 /// 1 added an additional $57,842 in general damages for pain and suffering.5 Although the 2 aggregate amount awarded was less than ten percent of the damage figure that Holenda 3 had sought (id. at *4), he nonetheless filed a bad faith claim alleging that Infinity’s 4 handling of his claim breached the implied covenant of good faith and fair dealing. 5 After noting that withholding insurance benefits is not unreasonable if there is a 6 “genuine dispute” as to the amount of payment due, the Holenda court noted that a bad 7 faith claim can be dismissed on summary judgment if the defendant can show that such 8 a genuine dispute exists. Id. at *3-4, citing Guebara v. Allstate Ins. Co., 237 F.3d 987, 9 992 (9th Cir. 2001). Significantly, the court further recognized that identifying a genuine 10 dispute requires only a reasonable and legitimate difference in opinion; which party is in 11 fact “right” as to the disputed matter need not be decided. Id. at *4. 12 With respect to general damages in particular, Holenda recognized their 13 subjective nature, noting that “[t]ranslating pain and anguish into dollars can, at best, be 14 only an arbitrary allowance, and not a process of measurement.” Id., citing Beagle v. 15 Vasold, 65 Cal. 2d 166, 172 (1966). The court further noted that the amount to be 16 awarded for such damages is “a matter on which there legitimately may be a wide 17 difference of opinion” (id., citing Seffert v. Los Angeles Transit Lines, 56 Cal. 2d 498, 508 18 (1961)), and “are inherently subject to genuine dispute.” Id. 19 Applying these principles to the case before it, the Central District found that the 20 amount of general damages due Holenda was indeed subject to a genuine dispute, and 21 therefore barred his claim for bad faith and entitled Infinity to summary judgment. Id. 22 This Court believes Holenda’s reasoning is equally applicable to the case at bar. 23 GEICO offered approximately double the amount of Plaintiffs’ damages to resolve their 24 claims prior to arbitration, with Plaintiffs themselves arguing that they were entitled to 25 nearly six times that amount. General damages account for the difference between the 26 parties’ respective positions. 27 5 Because the applicable uninsured motorist policy limit was $50,000, the arbitrator’s actual award 28 was limited to that amount. 1 In addition, the Central District recognized the disparity between Holenda’s 2 demand and the amount of the arbitrator’s ultimate award as further demonstrating a 3 genuine dispute. Id. Here, the arbitrator’s collective award of $80,955 was considerably 4 closer to GEICO’s offer of $52,955 than the $151,955 evaluation posited by Plaintiffs. 5 This shows, like Holenda, a genuine dispute that precludes Plaintiffs’ entitlement to 6 damages for breach of the implied covenant, thereby making summary judgment in 7 GEICO’s favor proper. See also Keshish v. Allstate Ins. Co., 959 F. Supp. 2d 1226, 8 1237 (C.D. Cal. 2013), (“a substantial difference between the amount of loss a plaintiff 9 claims and the amount of loss ultimately found by an arbitrator can conclusively 10 determine that a genuine dispute existed,” citing Rappaport-Scott v. Interinsurance 11 Exchange of Auto. Club, 146 Cal. App. 4th 831, 839 (2007)) 12 Plaintiffs’ efforts to evade summary judgment are unavailing. While they argue 13 that computerized case evaluation tool employed by GEICO was somehow unfair, all 14 GEICO personnel involved in adjusting the claim attest to their own extensive training 15 and experience in the assessing bodily injury claims6 and Plaintiffs offer no more than 16 speculation and conjecture that the evaluation program was anything other than a tool to 17 assist in that process. Moreover, Plaintiffs’ argument that GEICO unduly delayed the 18 adjudication of their claim also misses the mark since claimants never authorized GEICO 19 to obtain their medical records to assist in the evaluation of their claims, making GEICO 20 unable to obtain that critical information until after formal uninsured motorist proceedings 21 were commenced in June of 2016, more than a year after claimants had finished 22 treating.7 23 /// 24

25 6 See, e.g., Decl. of Fawn Harding, ECF No. 61-4, ¶ 2; Decl. of Amber Meyer, ECF No. 61-5, ¶ 2; Decl. of Bill Webster, ECF No. 61-7, ¶ 2.

26 7 GEICO argues that claimants’ failure to provide the necessary medical authorizations also entitles them to summary judgment on claimants’ sole cause of action for breach of the covenant of good 27 faith and fair dealing. Because the court has determined in this Memorandum and Order that summary judgment is appropriate on other grounds, it need not rule on that additional argument and declines to do 28 so. 1 B. Statute of LImitations 2 Summary judgment also appears proper here for an additional reason. Under 3 California law, the statute of limitations for breach of the implied covenant of good faith 4 and fair dealing is two years. Archdale v. Am. Internat. Specialty Lines Ins. Co., 5 154 Cal. App. 4th 449, 467 n. 19 (2007). The California Supreme Court has held that a 6 cause of action accrues for statute of limitations purposes when “events have developed 7 to a point where plaintiff is entitled to a legal remedy.” Davies v. Krasna, 14 Cal. 3d 502, 8 513 (1975). “The infliction of appreciable and actual harm, however uncertain in 9 amount, will commence the statutory period . . . . [N]either uncertainty as to the amount 10 of damages nor difficulty in proving damages tolls the period of limitations.” Id. at 514. 11 Significantly, in the context of a bad faith lawsuit arising from an uninsured motorist claim 12 like this one, completion of arbitration is not a prerequisite for a bad faith claim to accrue. 13 Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 378 (9th Cir. 1997). 14 Here, correspondence from Plaintiffs’ own counsel denotes the accrual of their 15 alleged bad faith claim. By letter dated April 15, 2016, attorney Gavrilov claimed 16 GEICO’s offers to his clients were “egregious,” with the carrier “acting in bad faith.” 17 AOE, Ex. 3, p. 260. Plaintiffs further admit that they suffered immediate harm as a result 18 of the acts of bad faith identified in that letter. DUF No. 15. As such, their claim for bad 19 faith accrued by their own admission as of April 15, 2016, yet the instant lawsuit was not 20 filed until September 18, 2018, two years and five months later. Significantly, Plaintiffs 21 do not dispute that this was after the statute of limitations had expired, or oppose 22 summary judgment on that basis. Plaintiffs’ claims are thus barred by the statute of 23 limitations as well. 24 /// 25 /// 26 /// 27 /// 28 /// 1 CONCLUSION 2 3 For the reasons set forth above, Defendant GEICO’s Motion for Summary 4 | Judgment (ECF No. 61) is GRANTED in its entirety. The Clerk of Court is accordingly 5 | directed to enter judgment in GEICO’s favor and to close the file. 6 IT |S SO ORDERED. 7 g | Dated: July 21, 2022 ly Z 9 tp AOA, i □□□ ON AN Ser suo 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15