M&F Fishing v. Sea-Pac Ins. Managers CA4/1

California Court of Appeal·Decided July 7, 2016·No. D067804·Unpublished

Opinion

Filed 7/7/16 M&F Fishing v. Sea-Pac Ins. Managers CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE

STATE OF CALIFORNIA

M&F FISHING, INC. et al., D067804 Plaintiffs and Appellants, v. (Super. Ct. No. GIC826796)

SEA-PAC INSURANCE MANAGERS, INC. et al.,

Defendants and Respondents.

APPEAL from a judgment of the Superior Court of San Diego County, Ronald L.

Styn, Judge. Affirmed.

Webb & Carey and Patrick D. Webb for Plaintiffs and Appellants.

Sheppard, Mullin, Richter & Hampton, Matthew W. Holder, Travis J. Anderson and Karin Dougan Vogel for Defendants and Respondents.

This case is before this court for a third time. In 2012, we reversed a $3.5 million restitution judgment in M&F Fishing, Inc. v. Sea-Pac Insurance Managers, Inc. (2012)

202 Cal.App.4th 1509 (M&F Fishing) and unambiguously limited the right of plaintiffs M&F Fishing, Inc. (M&F) and C&F Fishing, Inc. (C&F) (together plaintiffs) to obtain restitution, if any, from defendants Sea-Pac Insurance Managers, Inc. dba Sea-Pac Insurance Services, Raleigh, Schwartz & Powell, Inc., Brown & Brown of Washington, Inc. (B&B Washington), a subsidiary wholly owned by Brown & Brown, Inc. (B&B) and Sharon Edmondson (Edmondson) (together defendants) in connection with the placement of marine insurance by defendants.

Rather than retry their claim under California's Unfair Competition Law (Bus. & Prof. Code, § 17299 et seq.), plaintiffs on remand instead unsuccessfully attempted to avoid the law of the case. For example, plaintiffs took the position that our reversal in M&F Fishing allegedly was unqualified, giving them the right to start anew. Thus, plaintiffs twice sought to amend their complaint following remand, including with a proposed 100-page first amended complaint (FAC) in which they asserted no less than 11 causes of action against defendants. When the court properly denied plaintiffs leave to amend on both occasions, plaintiffs next voluntarily dismissed their UCL claim without prejudice and then argued they could retry the case on their "damage" claims, despite the lack of any such active claims in their complaint. After more than 12 years of litigation, it is time for this case to end.

As we discuss, we independently conclude plaintiffs' complaint had no remaining viable causes of action once they voluntarily dismissed their UCL claim. As such, we affirm the judgment in favor of defendants.

FACTUAL AND PROCEDURAL OVERVIEW1 In their complaint, plaintiffs asserted a UCL claim on their own behalf and on behalf of all others similarly situated based on defendants' alleged violations of various provisions of the Insurance Code. Plaintiffs also asserted causes of action for negligence per se2 and declaratory relief.

In particular, plaintiffs alleged that defendants violated various Insurance Code provisions because they sold plaintiffs commercial marine insurance by a nonadmitted insurer without the required special lines' surplus lines broker license. As we previously explained in M&F Fishing, an insurer seeking to transact insurance business in California generally must be "admitted" for that purpose (Ins. Code, § 24). (M&F Fishing, supra, 202 Cal.App.4th at p. 1514.) To become admitted, an insurer must obtain a "certificate of authority" from the Insurance Commissioner (Ins. Code, § 700, subd. (a)). (M&F Fishing, at p. 1514.)

As we noted in M&F Fishing, most marine insurance was placed by "nonadmitted" insurers. (M&F Fishing, supra, 202 Cal.App.4th at p. 1515.) Because nonadmitted insurers do not have a license to transact insurance business in California (Ins. Code, § 1776), placements by nonadmitted carriers are effected by a class of

1 Portions of this factual and procedural summary are derived from our previous opinion in this case.

2 Defendants contend negligence per se is not a separate cause of action but rather is an evidentiary doctrine that creates a presumption of negligence based on a statutory violation. (See, e.g., Evid. Code, § 669, subd. (a).) We agree.

specially licensed insurance brokers who are regulated by California's surplus line law (Ins. Code, § 1761, subd. (a)). (M&F Fishing, at p. 1515.)

Edmondson placed marine insurance for plaintiffs from 1996 to 2003. Because that insurance included nonadmitted carriers, Edmondson also was required to have a special lines' surplus lines license (Ins. Code, § 1760.5). However, neither Edmondson nor the brokerage firms where she worked possessed such a license during most times relevant in this case.

For years during the relevant time period, Edmondson without incident placed marine insurance for plaintiffs with both admitted and nonadmitted carriers. However, when one of the nonadmitted insurers became insolvent and stopped paying claims, plaintiffs were sued by two seamen who had been injured in separate incidents while working on plaintiffs' fishing boats. In response, each plaintiff filed a separate but related lawsuit against defendants seeking damages (as opposed to restitution, which plaintiffs sought in their UCL claim). (See M&F Fishing, Inc. v. Sea-Pac. Ins. Managers, Inc. (Super. Ct. San Diego County, No. GIC 826767); see also C&F Fishing Ltd. v. Sea-Pac Ins. Managers, Inc. (Super. Ct. San Diego County, No. GIC 826768).) Ultimately, both cases were settled for more than $6 million by the errors and omissions carrier for B&B Washington, with a carve out in the releases for the "claims, causes of action and damages alleged [in the instant case]."

The record shows plaintiffs in 2007 voluntarily dismissed their second cause of action for negligence, after defendants moved for summary adjudication based on the releases in case Nos. GIC 826767 and GIC 826768.

In 2008, plaintiffs moved to amend their complaint to add 84 new plaintiffs and 82 "nominal [d]efendants," and to assert new claims based on defendants' alleged "fraud" in connection with the settlement of case No. GIC 826767. The court denied plaintiffs' motion, ruling the trial date was then "rapidly approaching" and it was not procedurally appropriate for plaintiffs to assert new claims in this case based on fraud in connection with the settlement of another case.

At about the same time the court denied their motion for leave to amend their complaint in the instant case, plaintiff M&F filed a motion to set aside the dismissal in case No. GIC 826767. Plaintiffs argued the dismissal was invalid because defendants fraudulently induced them to settle. However, M&F withdrew its motion before the hearing.

A few months later, M&F filed a "new action" against defendants and others that included a fraud-based claim in connection with their dismissal of case No. GIC 826767. (M&F Fishing, Inc. v. Sea-Pac Insurance Managers, Inc. (Super. Ct. San Diego County, case No. 37-2008-00098694).) In October 2010, defendants filed an anti-SLAPP motion to plaintiff's fifth amended complaint in the "new" action. Defendants alleged Code of Civil Procedure section 425.16, the anti-SLAPP statute, applied because the wrongful conduct that gave rise to the operative complaint involved allegedly false verifications

submitted in response to a request for documents in a civil action (i.e., petitioning activity).

Rather than oppose the defendants' anti-SLAPP motion, M&F voluntarily dismissed its fifth amended complaint. The record shows M&F then subsequently moved to set aside that dismissal under Code of Civil Procedure section 473 "based upon the client's mistaken attempt to reinstate the claims of the Second Amended Complaint" in the "new" action (i.e., case No. 37-2008-00098694). (Italics added.)

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