Ferreira v. Homeport Ins. Co.
Filed 7/23/12
Ferreira v. Homeport Ins. Co. CA1/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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opinion has not been certified for publication or ordered published for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.
IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST
APPELLATE DISTRICT
DIVISION
THREE
EVA JEAN
FERREIRA, Individually and as Executor, etc.,
Plaintiff, Cross-defendant and
Appellant,
v.
HOMEPORT
INSURANCE COMPANY, et al.,
Defendants, Cross-complainants and
Appellants.
A129546
(Alameda County
Super. Ct. No. RG08377544)
Plaintiff
Eva Ferreira, who filed this suit as an individual and as executor of her late
husband’s estate, appeals from a final judgment for defendants Homeport
Insurance Company, Stevedore Services of America and SSA Marine. Ferreira sought damages on account of an
unpaid workers’ compensation settlement
agreement that was pending but not yet approved at the time of her
husband’s death. The case was tried to
the court, and Ferreira seeks review of two pre-trial orders that limited her
causes of action. One order sustained
without leave to amend the defendants’ demurrer to her causes of action for
breach of contract, for breach of the covenant of good faith and fair dealing,
and for declaratory relief. The other
order granted defendants summary
adjudication on Ferreira’s causes of action for negligent and intentional
infliction of emotional distress.
Defendants
cross-appeal from a judgment entered in favor of Ferreira following trial on
their cross-complaint for promissory
estoppel. The cross-complaint sought
the satisfaction by Mr. Ferreira’s estate of a lien in favor of Homeport on any
recovery in actions against third parties for his
We
affirm. The demurrer was correctly
sustained on the basis that Ferreira’s contractually related claims were barred
by the exclusive remedy provision of the Longshore and Harbor Workers’
Compensation Act (33 U.S.C. § 905(a)) (LHWCA). The entry of summary judgment on Ferreira’s
emotional distress claims was proper because the defendants’ conduct
surrounding their refusal to pay the workers’ compensation settlement fell
within the litigation privilege.
Finally, we conclude the cross-complaint was time barred under the
one-year limitations period in Code of Civil Procedure, section 366.2.
FACTUAL BACKGROUND
In July 2003, decedent Lester
Ferreira was injured while working as a longshoreman for a subsidiary of
defendant SSA Marine. Homeport is SSA
Marine’s workers’ compensation insurer.
In June
2006, Mr. Ferreira and Homeport reached an agreement in principle to resolve
his claim for workers’ compensation against SSA, along with all possible claims
he may have had for cumulative trauma over his career as a longshoreman, and
any claims for reimbursement SSA or Homeport would have against Ferreira’s
recoveries against third parties for his July 2003 injury.
Once the
U.S. Department of Labor approved the settlement, Homeport was to pay Ferreira
$370,000 over and above any compensation benefits previously paid for the 2003
injury. Ferreira was also required as
part of the settlement to assert all his possible state compensation claims for
cumulative injury and retire as a longshoreman.
Homeport agreed to withdraw any claims for subrogation or lien rights to
recovery obtained by Ferreira against the Port of Stockton or the ship involved
in the 2003 mishap. Ferreira also
assured defendants that he had not applied for social security benefits.
In the
months following the June 2006 agreement, Ferreira, with the assistance of his
counsel, tried to complete the steps needed to submit the settlement to the
U.S. Department of Labor. He retired as
a longshoreman effective November 14, 2006.
By December 2006, it was the Ferreiras’ position that Mr. Ferreira had done
all that was necessary for the settlement to be sent to the U.S. Department of
Labor for approval, with one exception.
Due to his retirement and defendants’ cessation of temporary disability
payments, Mr. Ferreira had applied for social security disability benefits. The issues surrounding possible repayment of
those benefits appear to have been resolved between the parties by February
2007.
By June
2007, the settlement appeared once again to be on track for submission to the
Department of Labor. There was a final
issue regarding the documentation needed to include a September 2003 injury
among the career compensation claims.
That documentation was complete by June 27th. But in April 2007, Mr. Ferreira was diagnosed
with pancreatic cancer, and he died on July 27th. At the time of his death, Mr. Ferreira had
not yet signed the application for approval of the settlement and it had had
not yet been submitted to the Department of Labor. An agreed provision regarding the scope of
the release set forth in the application for approval provided that: “In the event of Claimant’s death before this
filing of the Order Approving this . . . Settlement Agreement, then
the Agreement shall be null and void with no obligation of the [Defendants] to
pay any money to Claimant’s survivors, to Claimant’s heirs, or to Claimant’s
estate.” Defendants notified Mrs.
Ferreira that they would not effectuate the settlement.
PROCEDURAL
HISTORY
Mrs.
Ferreira filed this suit in March 2008.
Her complaint alleged causes of action for
promissory estoppel; breach of the implied covenant of good faith and fair
dealing; negligent and intentional infliction of emotional distress; an
unlawful business practice; and declaratory relief.
Defendants
demurrered to the complaint on the grounds that Ferreira’s entire action was
barred by the exclusive remedy provision of the LHWCA provided at 33 U.S.C.
section 905(a). The demurrers to the
causes of action for breach of contract, breach of the covenant of good faith
and fair dealing, and declaratory relief were sustained without leave to
amend. The demurrers to the other causes
of action were overruled, and Ferreira re-alleged them in a first amended
complaint. Defendants again demurred,
but the trial court overruled the demurrer in its entirety.
Defendants
answered and cross-complained asserting causes of action for promissory
estoppel and unjust enrichment. Ferreira
answered the cross-complaint. The court
denied the motion with respect to causes of action for promissory estoppel,
unjust enrichment and unlawful business practice, but granted summary
adjudication in favor of defendants on the causes of action for negligent and
intentional infliction of emotional distress.
Following a trial to the court on the remaining claims, judgment was
entered for defendants on Mrs. Ferreira’s complaint, and in her favor on the
defendants’ cross-complaint. The court
determined the cross-complaint was time-barred by section 366.2.
Defendants
were awarded costs. Plaintiff Ferreira timely appealed from the judgment,
and defendants timely cross-appealed.
DISCUSSION
A. The Ruling on Demurrer
The
trial court sustained demurrers without leave to amend directed at Ferreira’s
causes of action for breach of contract, breach of the implied covenant of good
faith and fair dealing, and declaratory relief on the basis that those causes
of action were preempted by the exclusive remedy provision in the LHWCA at 33
U.S.C. section 905 (a).
name="_ftnref2" title="">[2] The
trial court concluded that: “Because the
LHWCA provides a comprehensive system
regarding the provision and payment of benefits, including a required
method for approving settlements of such claims, state law claims seeking
enforcement of agreements to settle or resolve disputes over compensation
claims are preempted.”
Mrs.
Ferreira says the trial court was wrong because the agreement she seeks to
enforce was broader than her husband’s claim for benefits under the LHWCA, and
his LHWCA claim was just a part of a “global settlement.” According to Ferreira, the breach of contract
and related claims were based on a side agreement that falls outside the
compensation arena. The side agreement
encompassed only the “pre-submission
requirements” of Mr. Ferreira’s retirement and the cumulative injury
claims. The LHWCA workers’ compensation
settlement was a more narrow agreement that was just a portion of the “global settlement” that resolved all her
husband’s claims. As such, Mrs. Ferreira
argues that the court should have allowed her contract-based causes of action
on the side agreement to proceed. The
fundamental problem with her argument is that it conflicts with the specific
allegations of Ferreira’s complaint.
“On appeal from a judgment after a
demurrer is sustained without leave to amend, we assume the truth of the
properly pleaded factual allegations, facts that reasonably can be inferred
from those expressly pleaded, and facts of which judicial notice can be
taken. . . . We construe the pleading in a reasonable manner and
read the allegations in context. . . . We determine de novo
whether the pleading alleges facts sufficient to state a cause of
action. . . . We affirm the sustaining of the demurrer if the
pleading or matters that are judicially noticeable disclose a complete
defense. . . . We affirm the judgment if it is correct on any
ground stated in the demurrer, regardless of the trial court’s stated
reasons.” (Sygenta Crop Protection, Inc. v. Helliker (2006) 138 Cal.App.4th
1135, 1181, citations omitted.) The
specific allegations of a complaint also control over more general
assertions. (Careau & Co. v. Security Pacific Business Credit, Inc. (1990)
222 Cal.App.3d 1371, 1390.)
The allegations of the complaint do
not support Mrs. Ferreira’s claim of a side agreement that was separate and
severable from the LHWCA settlement.
While it is true that the LHWCA settlement was part of a “global
settlement” that also involved Ferreira’s claim against the Port of Stockton,
the obligations related to his career injury claims and retirement were pleaded
as conditions precedent to the defendants’ obligation to submit the LHWCA
settlement to the U.S. Department of Labor.
They did not constitute a separate side agreement that could be
independently enforced in a state court complaint. Characterization of the obligations to retire
and assert cumulative injury claims as constituting a side agreement is a legal
“conclusion of the pleaders, and cannot overcome the legal effect of the facts
from which the conclusion is attempted to be drawn.” (Bank of
America Etc. Assn. v. Radford (1936) 7 Cal.2d 205, 208.) Reading the allegations of the complaint in
context, resolution of Ferreira’s LHWCA claim was a component of a global
settlement, and the defendants’ obligation to forward the terms of the
settlement to the Department of Labor for approval was subject to conditions
precedent that Ferreira retire and submit all his possible claims for
work-related injuries. The conditions
precedent do not constitute a separate agreement that could be enforced in the
Superior Court.
Ferreira argues that her causes of
action are not preempted because there is case authority that recognizes
certain disputes relating to workers’ compensation benefits may be litigated in
a civil action. She relies principally
on Martin v. Travelers Insurance Company (1st
Cir. 1974) 497 F.2d 329. But
allowed a breach of contract action to proceed against an LHWCA insurer who
stopped payment on benefits checks issued to a claimant after a workers’
compensation award was approved by the Department of Labor. Unlike this action, Martin did not involve the determination of benefits payable under
the LHWCA, and unlike Ferreira’s, the Martin
plaintiff’s cause of action did not arise in the course of employment. The only issue in Martin was the manner and timing of the payment of a workers’
compensation award. Here, there has been
no award, and the dispute centers on the payment of the settlement of an LHWCA
claim for benefits that was never approved by the Department of Labor.
The trial court correctly sustained
the defendants’ demurrers to Ferreira’s causes of action for breach of written
contract, breach of oral contract, breach of the covenant of good faith and
fair dealing and declaratory relief without leave to amend on the grounds that
they were preempted by the exclusive remedy provision in the LHWCA at 33 U.S.C.
section 905(a).
B. Summary Adjudication
In her first amended complaint,
Ferreira charged the defendants with negligent and intentional infliction of
emotional distress due to their refusal to process and conclude the settlement
following her husband’s death. Both
causes of action were resolved in favor of defendants on summary adjudication. The trial court entered judgment on the cause
of action for negligent infliction of emotional distress on the grounds that
defendants did not owe Ferreira a duty of care to avoid inflicting emotional
harm upon her. The court granted summary
adjudication on the intentional infliction claim on the basis that defendants’ refusal
to conclude the settlement was not outrageous conduct. In addition, the trial court concluded that
defendants’ actions that gave rise to the emotional distress claims fell within
the litigation privilege. Because we
agree that defendants’ conduct was within the scope of the litigation
privilege, we affirm the grants of summary adjudication.
The appellant has the burden to
affirmatively demonstrate error. (
(2001) 90 Cal.App.4th 600, 610.) In
the absence of such a showing, we presume the order of the trial court is
correct on appeal “and all intendments and presumptions are indulged in favor
of its correctness.” (
Ferreira’s opening brief makes no argument that the trial court was
wrong when it concluded that a substantial portion of defendants’ conduct was
within the litigation privilege.
name="_ftnref3" title="">[3] That alone warrants our affirmance on this
ground.
Moreover, we conclude the trial
court’s rulings were correct. We review an order granting summary judgment de novo. (
Richfield Co. (2001) 25 Cal.4th 826, 860; Scheiding v. Dinwiddie
Construction Co. (1999) 69 Cal.App.4th 64, 69.) A defendant who moves for summary judgment
has the initial burden to show that a cause of action lacks merit because one
or more of its elements cannot be established or it is subject to an
affirmative defense. (Code Civ. Proc.,
§ 437c, subd. (o); Aguilar v. Atlantic Richfield
Co., supra, at p. 850.) If the
moving papers make a prima facie showing that justifies a judgment in the
defendant’s favor, the burden shifts to the plaintiff to show the existence of
a triable issue of material fact. (Code
Civ. Proc., § 437c, subd. (p)(2); Aguilar
v. Atlantic Richfield Co., supra, at p. 849.)
Defendant’s
motion claimed that all their actions were communicative in nature and thus
within the scope of the litigation privilege.
For well over a century, the litigation privilege, as codified in Civil
Code section 47 subdivision (b), has
applied to protect parties from possible liability on account of communications having some relation to
v. Green (1993) 4 Cal.4th 1187, 1193.)
California courts give the privilege an expansive reach, and it can
apply to immunize all possible torts except malicious prosecution. (Id.
at p. 1194.) The privilege may also
attach to communications made in administrative proceedings and those by
counsel for a party pertaining to settlement discussions. (Harris
v. King (1998) 60 Cal.App.4th 1185, 1187; Home Ins. Co. v. Zurich Ins. Co. (2002) 96 Cal.App.4th 17,
24.)
“[T]he litigation
‘privilege applies to any communication (1) made in
judicial or quasi-judicial proceedings; (2) by litigants or other participants
authorized by law; (3) to achieve the objects of the litigation; and (4) that
have some connection or logical relation to the action. [Citations.]’
[Citation.]”
(2004) 122 Cal.App.4th 1049, 1058.) There
is little doubt that each of those elements is present in this case.
In her separate statement of facts
filed in the trial court, Ferreira did not dispute that the defendants
communicated their position that they would not conclude the settlement following
her husband’s death through their counsel.
Indeed, Ferreira’s causes of action for emotional distress are premised
on communications by defendants’ counsel to her husband’s workers’ compensation
attorney. She alleges that: “when a demand for the submission of the
agreement [to the Department of Labor] was made by Plaintiff’s compensation
attorney, Defendants advised counsel that it was the position of Homeport and
SSA that the settlement was void as a result of Mr. Ferreira’s death and that
they would not be paying Mr. Ferreira’s widow the balance of the
$370,000.”
To the extent that Ferreira claims
in her reply brief that her emotional distress claims are predicated on the
defendants’ conduct in refusing to honor the settlement, not the communication
of their position, she misses the mark. “ ‘[I]f the gravamen of the action is communicative,
the litigation privilege extends to noncommunicative acts that are necessarily
related to the communicative conduct . . . . Stated another way, unless it is demonstrated
that an independent, noncommunicative, wrongful act was the gravamen of the
action, the litigation privilege applies.’ ” (Jacob B. v. County of Shasta (2007)
40 Cal.4th 948, 957.) Here, Ferreira
seeks to recover damages for the emotional distress she experienced when she
learned of defendants’ position that the settlement of her husband’s LHWCA
claim was not effective as a result of his death. The litigation privilege of Civil Code
section 47 applies in this case, and Ferreira has made no showing to the
contrary.
Ferreira’s claim that defendants
were aware of her husband’s last illness and delayed consummating the agreement
in anticipation of his death, does not change our analysis. Even if Ferreira raised a genuine dispute of
fact over whether defendants acted from an improper motive, which she did not,
the litigation privilege applies. The
privilege is absolute and applies to all publications irrespective of their
maliciousness. (Olsen v. Harbison (2010) 191 Cal.App.4th 325, 333.)
C.
Judgment on the Cross-complaint
The LHWCA provides an employer or
compensation insurer a right to obtain reimbursement of benefits paid to an
injured employee from third parties who are responsible for the employee’s
injury. (33 U.S.C. § 933(b).)
In situations when the employee brings an action against a third party,
a combination of the express provisions of the
of the paid benefits. (Peters
v. No. River Ins. Co. of Morristown, N.J. (5th Cir. 1985) 764 F.2d 306,
312; see Jones & Laughlin Steel Corp.
v. Pfeifer (1983) 462 U.S. 523, 530, fn. 5; National Metal & Steel
Corp. v. Colby Crane & Manufacturing Co. (1988) 200 Cal.App.3d 1111,
1117.)
Pursuant to 33 U.S.C. section 933(h), where the employer’s insurance
carrier has assumed the payment of the employee’s compensation, the carrier is
subrogated to all of the employer’s rights under 33 U.S.C. section 933. The employee is entitled to retain proceeds
in excess of the compensation lien. (33
U.S.C. § 933(f); Todd Shipyards v. Office of Workers Compensation (9th
cir. 1998) 139 F.3d 1309, 1312.)
As part of the global settlement,
the defendants agreed to withdraw any subrogation claim or lien they may have
had on Ferreira’s recoveries against the ship or the Port of Stockton for the
repayment of over $200,000 of workers’ compensation benefits. By cross-complaint, defendants alleged that
in reliance upon the terms of the settlement, they did not assert their rights
to recoupment from Ferreira’s recoveries against third parties. Since defendants lost their lien rights, they
sought repayment of the benefits from Mr. Ferreira’s estate under causes of
action for promissory estoppel and unjust enrichment.
At trial, Ferreira argued that the
cross-complaint was time barred by the one-year limitations period for claims
existing at the time of a party’s death as provided in section 366.2. The cross-complaint was filed on December 1,
2008. Since Mr. Ferreira died on July
27, 2007, Ferreira argued the cross-complaint was untimely. The court issued an intended statement of
decision that stated the claim for reimbursement was not time barred because it
did not exist at the time of Mr. Ferreira’s death. Ferreira objected, and the court’s final
statement of decision concluded “[t]he evidence shows that [defendants’] claim
for reimbursement did exist at the time of Mr. Ferreira’s death,
Cal.App.4th [798] and therefore the cross-complaint is time-barred, Code of
Civil Procedure [section] 366.2.”
Without citation to authority,
defendants contend that Ferreira waived her argument that the cross-complaint
was untimely because she did not adequately assert it in the trial court. We disagree.
In her trial brief filed in early January 2010, Ferreira clearly stated
her position that the cross-complaint was time barred under section 366.2. We also reject defendants’ claim that they
had no opportunity to address the specific theory relied upon by Ferreira in
arguing the applicability of this statute of limitations. The record shows the issue was extensively
briefed before the trial court.
Resolution of this issue turns on
whether, under section 366.2, defendants were required to file their claims for
repayment of benefits against Mr. Ferreira’s estate within a year of his
death. With certain exceptions that are
not relevant to this appeal, section 366.2 subdivision (a) provides: “If a person against whom an action may be
brought on a liability of the person, whether arising in contract, tort, or
otherwise, and whether accrued or not accrued, dies before the expiration of
the applicable limitations period, and the cause of action survives, an action may
be commenced within one year after the date of death, and the limitations
period that would have been applicable does not apply.”
Defendants argue that the time bar
of section 366.2 does not apply in this case because their claims for
promissory estoppel and unjust enrichment did not exist at the time of Mr.
Ferreira’s death. According to
defendants, they could not have brought their causes of action until Ferreira
filed and prosecuted her complaint in this action. We disagree.
Defendants’ argument is premised upon a mischaracterization of the right
they seek to enforce by the cross-complaint.
“The essence of a cause of action is
the existence of a primary right
and one violation of that right, i.e., it arises out of an antecedent
and a breach of such primary right
and duty by the person upon whom that duty rests. . . . The primary
of action in the legal sense. . . . ‘The cause of action is simply the obligation
sought to be enforced.’ . . . ‘The cause of action is to be
distinguished from the remedy which is the means by which the obligation or the
corresponding action is effectuated, and also from the relief sought.’
. . .
Accordingly, if the action is brought to enforce a single right violated
by the defendant, the complaint states but one cause of action regardless of
the number of types of relief sought and notwithstanding that it alleges
several theories of recovery. . . . Consonant with this latter principle is the
rule that ‘[a]ll damages arising from a single wrong, through at different
times, make but one cause of action.’ ”
(South Shore Land Co. v. Petersen
(1964) 226 Cal.App.2d 725, 739–740, citations omitted.)
The right defendants seek to enforce
is their entitlement to repayment of compensation benefits paid to Mr. Ferreira
under the LHWCA, a right they relinquished in reliance upon the global
settlement. Their cause of action
accrued upon Mr. Ferreira’s death when approval and consummation of the
settlement was no longer possible. As
alleged in the cross-complaint, “Language in the proposed settlement documents
specified that the settlement would be null and void should [Mr. Ferreira] die
before approval of the settlement.” It
is Mr. Ferreira’s death that triggered defendants’ cause of action, and not the
suit filed by Mrs. Ferreira seeking to enforce the settlement. Moreover, defendants seek to enforce the
personal liability of Mr. Ferreira for his failure to conclude the settlement and
seek the return of benefits paid to him.
The plain language of section 366.2 requires that claims against
a decedent, whether accrued or unaccrued, be filed within a year of the
decedent’s death. (Bradley v. Breen, supra, 73 Cal.App.4th 798, 803–805 (
This bar applies even when the operative pleading seeks to enforce a
claim for indemnity that has not matured at the time of the decedent’s
death. (Ibid.) Defendants rely on
867 (Yool), to argue that section
366.2 does not apply to bar claims like theirs.
But Yool is inapposite.
administrator to determine title to a decedent’s property on a theory of
resulting trust. Because an action for
resulting trust “does not implicate the personal liability of the purported
trustee,” the court of appeal concluded section 366.2 did not apply as the
action was not founded upon a debt of the decedent. (Yool,
supra, 151 Cal.App.4th. at
p. 876.) Moreover, on the facts of
that case, since the decedent trustee had not repudiated the existence of the
trust, there was no cause of action, accrued or not yet accrued, in existence
at the time of the decedent’s death. (
The Yool court distinguished
the situation before it from that before the court in Breen, supra, 73 Cal.App.4th 798.
In
action by a decedent’s alleged joint tortfeasors who cross-complained for
equitable indemnity when they were sued almost four years after his death. The court of appeal rejected their argument
that section 366.2 should not apply because it would have been impossible for
them to cross-complain against the estate within one year of the decedent’s
death because no suit was brought against them within that time. The court held that section 366.2 reflects
the Legislature’s determination that a one-year statute of limitations best
effectuates the strong public policy of expeditious and final administration of
decedent’s estates, despite the possibility that in a rare case it will
foreclose an action for indemnity. (
p. 805.) So too, here.
Defendants’
cross-complaint is more like the cross-complaint for indemnity in
As the Yool court observed,
“the court in Breen recognized that
section 366.2 ‘governs causes of action against a decedent that existed at the time of death, “whether accrued or not
accrued.” ’ [Citation.] In other
words, a cause of action that is nascent but not complete will survive, such
that a plaintiff’s rights may ripen into an actionable claim after a decedent’s
death.” (Yool, supra, 151 Cal.App.4th.
at p. 877.) Here, any claim
defendants had against Mr. Ferreira was nascent and ripened when he died. The trial court correctly concluded the
cross-complaint was barred by section 366.2 for defendants’ failure to file it
within one year of his death.
DISPOSITION
The judgment is affirmed.
Each party is to bear their own costs.
_________________________
Siggins,
J.
We concur:
_________________________
McGuiness, P.J.
_________________________
Jenkins, J.
name="_ftn1" title="">[1]
Hereafter referred to as section 366.2.
name="_ftn2" title="">[2] 33
U.S.C. section 905 (a) provides: “Employer liability; failure of employer to
secure payment of compensation. The liability of an employer [for injuries to
an employee as] prescribed in section 904 of this title shall be exclusive and
in place of all other liability of such employer to the employee, his legal
representative, husband or wife, parents, dependents, next of kin, and anyone
otherwise entitled to recover damages from such employer at law or in admiralty
on account of such injury or death, except that if an employer fails to secure
payment of compensation as required by this chapter, an injured employee, or
his legal representative in case death results from the injury, may elect to
claim compensation under the chapter, or to maintain an action at law or in
admiralty for damages on account of such injury or death. In such action the defendant may not plead as
a defense that the injury was caused by the negligence of a fellow servant, or
that the employee assumed the risk of his employment, or that the injury was
due to the contributory negligence of the employee. For purposes of this subsection, a contractor
shall be deemed the employer of a subcontractor’s employees only if the
subcontractor fails to secure the payment of compensation as required by
section 904 of this title.”
