Filed 7/20/26 Schiffman v. The Standard Fire Ins. Co. CA2/7
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
MICHAEL SCHIFFMAN, B335663
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No.
v. 21STCV11873)
THE STANDARD FIRE
INSURANCE COMPANY,
Defendant and
Respondent.
APPEAL from a judgment of the Superior Court of
Los Angeles County, Rupert A. Byrdsong, Judge. Affirmed.
Herzog, Yuhas, Fournier & Ardell and Ian Herzog for
Plaintiff and Appellant.
Weston & Agness, Aaron C. Agness and Leo L. Ashley III
for Defendant and Respondent.
______________________________
Michael Schiffman appeals from the judgment entered
after the trial court granted summary judgment in favor of the
Standard Fire Insurance Company on Schiffman’s lawsuit
alleging breach of contract and breach of the implied covenant of
good faith and fair dealing arising from Standard Fire’s denial of
benefits under a personal articles insurance policy. The court
based its ruling on Schiffman’s refusal to submit to an
examination under oath as required by the policy. On appeal,
Schiffman contends he was excused from compliance with the
requirement he submit to an examination under oath based on
Standard Fire’s preceding material breach of the policy. We
affirm.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Insurance Policy
In 2012 Standard Fire issued Schiffman a personal articles
insurance policy, number 932853647 700 7, which was effective
from July 2, 2018 to July 2, 2019 (Policy). The Policy insured
specified works of fine art that Schiffman owned.
The Policy’s “Insuring Agreement” provides, “For payment
of premiums when due, we cover the classes of property shown on
the Declarations page, subject to all the terms of this policy.”1
The declarations page, in turn, under the heading “Class of
Property,” reads “Fine Arts – at 1743 Westridge Rd Los Angeles
CA.” The declarations page further states, “The residence
address is located at 1743 Westridge Rd Los Angeles CA . . . .”
1 Selected capitalization and boldface used in the Policy is
omitted.
2
Beneath the insuring agreement, the Policy enumerates
13 “Classes of Personal Property,” including in paragraph 7,
“Fine Arts, as scheduled, at the location described on the
Declarations page,” and in paragraph 13, “Miscellaneous
Property, not otherwise classified as described elsewhere in this
policy.” The Policy insures “the described property against risks
of direct physical loss subject to the General Exclusions and other
provisions of this policy.”
As part of its “General Conditions,” the Policy addresses
“Loss Settlement” and provides in paragraph 2.a: “Fine
Arts — For a total loss to a scheduled item, we will pay the
amount shown in the schedule for that item. That amount is
agreed to be the value of the article.” In paragraph 2.c., the Loss
Settlement provision provides for “Other Property”: “Unless
otherwise stated in this policy, the value of the property insured
is not agreed upon but will be ascertained at the time of loss. We
will not pay more than the least of the following amounts: [¶]
(1) The actual cash value of the property at the time of loss. [¶]
(2) The amount for which the property could reasonably be
expected to be repaired to its condition just before the loss. [¶]
(3) The amount for which the article could reasonably be expected
to be replaced with one substantially identical.”
Paragraph 3 of the General Conditions, titled “Your Duties
After Loss,” states in subsection (e) that “[i]n case of loss to
covered property,” the insured must, among other things, “as
often as [Standard Fire] reasonably require[s]:
[¶]. . . [¶] (3) submit to examination under oath[.]” Paragraph 7
of the General Conditions provides: “Suit Against Us. Legal
action may not be brought against us under any coverage
provided by this policy unless the insured has fully complied with
3
all the terms of this policy.” Paragraph 11 of the section contains
a “Concealment and Fraud” provision that voids the entire Policy
if, before or after a loss, an insured has “a. intentionally
concealed or misrepresented any material fact or circumstance;
[¶] b. engaged in fraudulent conduct; or [¶] c. made false
statements” relating to the insurance.
Following the last page of the Policy is an endorsement
titled, “Special Provisions Valuation” (Endorsement). The
Endorsement states, in relevant part, “The valuation of the
property insured hereunder is not agreed upon but is left to be
ascertained at the time of loss or damage covered hereunder,
unless otherwise specifically provided for in this policy. Such loss
shall be adjusted on the basis of the actual cash value of the
property at the time of loss . . . .” The Endorsement has a place
for the insured to date and sign the page. The copy in the record
has no date or signature.
B. Schiffman’s Purchase, Appraisal, and Loss of the Yombe
and Dan Pieces2
From November 2014 through early 2015 Schiffman
purchased six African art pieces from art dealer Randy Kahn for
$455,000, but he but did not take possession of them because
Kahn was supposed to find buyers for Schiffman. After the pieces
did not sell for over two years, Schiffman demanded Kahn return
the pieces to him. In late October or early November 2017, Kahn
2 Our summary of the purchase, appraisal, and loss of the
Yombe and Dan Pieces and the adjustment of Schiffman’s
insurance claim is based on the undisputed facts taken from the
evidence submitted by the parties in connection with Standard
Fire’s summary judgment motion.
4
gave Schiffman only three of the pieces: a Yombe Mask, a Yombe
seated maternity figure, and a Dan figure (Yombe and Dan
pieces).
Shortly thereafter Schiffman asked his business manager
Eddie Gonzalez to procure insurance for the three Yombe and
Dan pieces. On November 6, 2017 Gonzalez emailed an
insurance agent with a request to add the three pieces to the
Policy, stating he was having the pieces appraised and would
forward letters of appraisal to the agent. On November 7
Gonzalez emailed the agent a purported “appraisal” of the Yombe
and Dan pieces, attaching a November 6 letter from Kahn to
Schiffman titled “Fine Art Valuations.” The Kahn letter stated
the total value for the three pieces was $317,500. Standard Fire
updated the Policy’s schedule to include the Yombe and Dan
pieces, listing a November 2017 date of appraisal and an
“Amount of Insurance” for each piece. The amount of insurance
for the three pieces totaled $317,500.
Schiffman also had fellow art collector R.J. Walker seek
appraisals of the Yombe and Dan pieces from experts at Bonhams
and the Pace Gallery. A letter dated November 3, 2017 from
Bonhams valued the pieces collectively at $12,000 to $18,000 (the
Bonhams appraisal), and a letter dated November 16 from
Walker to Schiffman stated the Bonhams and Pace appraisals
valued the pieces at 10 percent of what Schiffman had paid for
them (i.e., approximately $30,000).3 Schiffman sent two emails to
3 Schiffman disputed when he received the Bonhams
appraisal. He stated in his declaration submitted in opposition to
Standard Fire’s summary judgment motion that he learned of the
Pace Gallery valuation on November 21, 2017. Schiffman also
submitted a declaration from Walker stating he requested an
5
Kahn on November 21 in which he accused Kahn of
misrepresenting the value of the artwork, demanded repayment
of $735,000 for “the African tribal art” and other art works, and
confirmed Kahn had already repaid him “$15k toward African
art.” In an email the next day, Kahn disputed the valuation of
the claimed “expert” Schiffman had consulted.
In April 2018 Schiffman allowed Kahn to take possession of
the Yombe and Dan pieces to show them to clients. Kahn failed
to sell any of the pieces over the next year and a half. During
this period, Schiffman asked Kahn to return the pieces multiple
times, but Kahn did not do so. Kahn eventually stopped
communicating with Schiffman in late November 2019.
C. The Claim, Investigation, and Lawsuit
In October 2020 Schiffman submitted a claim under the
Policy for theft by conversion of the Yombe and Dan pieces. On
October 13 Standard Fire took Schiffman’s recorded statement
regarding the claim. On October 22 Mike Marinescu, a claims
adjuster for Standard Fire, requested Schiffman provide photos of
the Yombe and Dan pieces and posed questions for Schiffman to
answer regarding his possession of the art pieces and their
appraisals. The same day, Schiffman responded with answers to
Marinescu’s questions, photos of the pieces, bank statements
relating to their purchase, and letters relating to their appraisals.
appraisal from Bonhams in December 2017 and received the
appraisal in a December 19, 2017 email, which he attached to his
declaration. Walker declared that he copied the December 19,
2017 Bonhams estimate into an email to Schiffman but
“misdat[ed] it November 3, 2017.” He attached the misdated
email to his declaration.
6
On October 26 Schiffman sent Marinescu a letter describing the
timeline for when he possessed the pieces.
On November 5, 2020 Standard Fire sought an appraisal of
the Yombe and Dan pieces’ actual cash value from Art
Conservation Associates, which provided an appraisal dated
November 9 of $15,000 for the three pieces. Standard Fire also
took a virtual recorded statement from Kahn in early
January 2021.
On January 7, 2021 Marinescu sent a letter to Schiffman
providing “a summary of [his] payment calculation,” which asked
Schiffman to “review the estimate” of $15,000 for the “Full Cost of
Repair and Replacement” of the Yombe and Dan pieces and to
contact Marinescu “[s]hould [he] have questions about any
portion of the estimate” before beginning any repairs or
replacement. The letter also recited the Endorsement, “which
confirm[ed] that the coverage on [Schiffman’s] policy [wa]s at
Actual Cash Value.” The letter further stated, “Our decision is
based upon the information and documentation we received in
connection with our investigation of this claim. If you are aware
of any new or different information or documentation that might
lead us to reconsider our decision, please contact us
immediately.” Standard Fire issued a $15,000 payment to
Schiffman between January 7 and 11, 2021.
On January 8, 2021 Schiffman emailed Marinescu to
request a “written determination of [his] claim” and to allow
Marinescu to “reconsider [his] . . . assessment.” Schiffman
recounted a telephone conversation he had with Marinescu the
day before, during which Marinescu purportedly stated that
$15,000 was the amount he “w[as] offering to satisfy the claim.”
Marinescu responded on January 11 explaining, “We have made
7
a decision to pay and we are doing that based on the contract that
you have with us. Your policy though, as I have explained
contains an Endorsement . . . , which makes this policy coverage
as Actual Cash Value.”
On January 12 and 19, 2021 attorney Christopher
Marinello, on behalf of Schiffman, emailed Marinescu and
requested a signed copy of the Endorsement. Marinescu provided
Marinello with the Bonhams appraisal and requested the signed
Endorsement from Standard Fire’s archive. On February 5
Marinescu wrote Marinello, stating, “we are still looking at
coverage but we have retained the services of an attorney that
will contact Mr. Schiffman to give Examination Under Oath
(EUO).”
On February 23, 2021 attorney Ian Herzog informed
Standard Fire that Schiffman had retained him with respect to
the claim. On March 1 Standard Fire’s attorney wrote to Herzog
requesting that Schiffman produce documents and requiring him
to sit for an examination under oath on March 22. Herzog
responded in a March 10 letter that Standard Fire’s letter was
“nothing more than an attempt to do discovery in advance of
litigation,” and further, Standard Fire’s breach of contract
relieved Schiffman of any obligation to comply with Standard
Fire’s March 1 demands. In a letter dated March 22, Standard
Fire’s attorney stated, “your client’s claim with Standard Fire
remains open,” and he again requested that Schiffman submit to
an examination under oath. Further, Standard Fire “anticipated
that the EUO will allow Standard Fire to complete its claim
investigation.” Schiffman’s attorney responded by letter dated
April 9 (enclosing a copy of the summons and complaint) that any
8
statement from Schiffman should be obtained through his
deposition.
Schiffman filed this action for damages and declaratory
relief on March 26, 2021, asserting causes of action for breach of
contract and breach of the duty of good faith and fair dealing.
Schiffman alleged Standard Fire refused to pay the agreed value
of his losses as required by the Policy and instead asserted an
erroneous coverage position based on the Endorsement to pay
only the actual cash value of the Yombe and Dan pieces.
Standard Fire breached the Policy by failing to pay the amounts
due under the Policy. It also breached the duty of good faith and
fair dealing by, among other things, unreasonably refusing to pay
for his losses, taking unreasonable positions regarding the
interpretation of the Policy, misrepresenting Policy benefits,
unreasonably refusing to conduct a thorough investigation of
Plaintiff’s claims, and failing to engage in a good faith settlement
of Schiffman’s claim.
On May 13, 2021 Standard Fire sent a letter to Schiffman’s
attorney denying any further benefits on the claim and reserving
its right to seek reimbursement based on a breach of the Policy’s
concealment and fraud provisions. The letter explained Standard
Fire had paid all benefits due under the Policy because the loss
did not occur at the Policy’s scheduled location and because
Schiffman had breached the Policy by refusing to participate in
an examination under oath. The letter further noted the Yombe
and Dan pieces had been valued in the Policy based on Kahn’s
letter despite a November 3, 2017 appraisal estimating their
value at $15,000, and it explained Standard Fire had requested
an examination to inquire about the value and alleged theft of
the pieces.
9
D. Standard Fire’s Motion for Summary Judgment
On November 18, 2022 Standard Fire filed its motion for
summary judgment or in the alternative summary adjudication.
Standard Fire argued Schiffman’s breach of contract claim failed
because he refused to submit to an examination under oath,
which was a condition precedent to receiving benefits under the
Policy.4 Further, Schiffman rendered the Policy void by violating
the Policy’s “Concealment and Fraud” provision in that he
concealed that (1) he had received $15,000 from Kahn for the
Yombe and Dan pieces, which offset his claim, and (2) he had
received the Bonhams appraisal (valuing the pieces at $12,000 to
$18,000) prior to procuring coverage for the pieces. In addition,
Standard Fire had paid the maximum recoverable amount under
the Policy because the loss did not occur at the scheduled
location, which meant the pieces were covered at actual cash
value as “Miscellaneous Property” under the policy. Schiffman’s
claim for breach of the covenant of good faith and fair dealing
also failed because there was no breach of the Policy; Schiffman
presented no facts to show Standard Fire acted unreasonably;
and Standard Fire’s policy interpretation evidenced a genuine
dispute as to coverage.
In his opposition, Schiffman argued Standard Fire
materially breached the Policy by paying only the actual cash
value of the pieces, which excused his performance of the
4 In a supporting declaration, Marinescu averred Standard
Fire had requested an examination under oath to confirm that
the Yombe and Dan pieces were not at the Policy’s described
premises at the time of loss and to investigate the use of Kahn’s
letter instead of Bonhams’ appraisal when adding the pieces to
the Policy.
10
condition precedent of submitting to an examination under oath.
Further, he did not violate the Policy’s “Concealment and Fraud”
provision because (1) the $15,000 he received from Kahn was a
nonrefundable deposit from a prospective buyer’s cancellation,
and (2) he received the Bonhams appraisal in December 2017
(after the pieces had been insured). As to Standard Fire’s policy
interpretation, the Policy contained no clear requirement that the
art pieces remain at a location to be covered as scheduled
property. With respect to the bad faith claim, a triable issue
existed as to whether Standard Fire knowingly relied on the
Endorsement and unreasonably interpreted the Policy to require
that covered pieces remain at a specified location (among other
reasons).
At the October 31, 2023 hearing on Standard Fire’s motion,
the parties focused on Schiffman’s refusal to take an examination
under oath. The trial court requested Schiffman’s attorney
provide authority for the proposition that a material breach
occurs when an insured and insurer disagree about how a claim
is processed. Schiffman’s attorney argued (without citing any
case authority) that Standard Fire had made a claims decision to
adjust the claim based on the Endorsement, constituting a
material breach of the Policy. Standard Fire’s attorney countered
that the insurer’s payment was not a material breach, pointing to
Marinescu’s February 5 letter as evidence that the claim was still
under review. At the conclusion of the hearing, the trial court
granted the summary judgment motion.
On December 14, 2023 the trial court entered judgment
against Schiffman. Schiffman timely appealed.
11
DISCUSSION
A. Standard of Review
Summary judgment is appropriate only if there are no
triable issues of material fact and the moving party is entitled to
judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c);
Regents of University of California v. Superior Court (2018)
4 Cal.5th 607, 618; Doe v. Roman Catholic Archbishop of
Los Angeles (2021) 70 Cal.App.5th 657, 668.) “‘“‘“We review the
trial court’s decision de novo, considering all the evidence set
forth in the moving and opposing papers except that to which
objections were made and sustained.”’ [Citation.] We liberally
construe the evidence in support of the party opposing summary
judgment and resolve doubts concerning the evidence in favor of
that party.”’” (Hampton v. County of San Diego (2015) 62 Cal.4th
340, 347; accord, Doe, at p. 669; Sabetian v. Exxon Mobil
Corporation (2020) 57 Cal.App.5th 1054, 1068.)
A defendant moving for summary judgment has the initial
burden of presenting evidence that a cause of action lacks merit
because the plaintiff cannot establish an element of the cause of
action or there is a complete defense. (Code Civ. Proc., § 437c,
subd. (p)(2); Aguilar v. Atlantic Richfield Co. (2001)
25 Cal.4th 826, 853; Sabetian v. Exxon Mobil Corporation, supra,
57 Cal.App.5th at p. 1068.) If the defendant satisfies this initial
burden, the burden shifts to the plaintiff to present evidence
demonstrating there is a triable issue of material fact. (Code Civ.
Proc., § 437c, subd. (p)(2); Aguilar, at p. 850; Sabetian, at
p. 1069.)
12
B. The Trial Court Did Not Err in Granting Standard Fire’s
Summary Judgment Motion
1. Breach of contract cause of action
Schiffman contends the trial court erred in granting
summary judgment on his breach of contract cause of action
because Standard Fire breached the Policy before Schiffman
refused to submit to an examination under oath. Schiffman’s
contention fails because he did not meet his burden to present
evidence of a breach by Standard Fire.
The elements of a cause of action for breach of contract are
“(1) the existence of the contract, (2) plaintiff’s performance or
excuse for nonperformance, (3) defendant’s breach, and (4) the
resulting damages to the plaintiff.” (Oasis West Realty, LLC v.
Goldman (2011) 51 Cal.4th 811, 821; accord, Bennett v. Ohio
National Life Assurance Corp. (2023) 92 Cal.App.5th 723, 729.)
Standard Fire argues Schiffman cannot satisfy the second
element because he failed to comply with the requirement under
the Policy that he submit to an examination under oath. Where
an insured “‘“seeks to recover by reason of a contract, . . . he must
show that he has complied with such contract on his part.”’”
(Brizuela v. CalFarm Ins. Co. (2004) 116 Cal.App.4th 578, 587
(Brizuela); accord, Hickman v. London Assurance Corp. (1920)
184 Cal. 524, 534 (Hickman); see Myasnyankin v. Nationwide
Mutual Ins. Co. (2024) 99 Cal.App.5th 283, 288 [“‘“An insured’s
compliance with a policy requirement to submit to an
examination under oath is a prerequisite to the right to receive
benefits under the policy.”’”].)
In Brizuela, as here, the trial court granted an insurance
company’s motion for summary judgment on the plaintiff’s causes
of action for breach of contract and breach of the covenant of good
13
faith and fair dealing arising from denial of his policy claim,
holding the plaintiff had violated the policy requirement that he
submit to an examination under oath. (Brizuela, supra,
116 Cal.App.4th at p. 582.) The Court of Appeal affirmed,
explaining, “[C]ompliance with the policy requirement for an
examination under oath is a condition precedent to any claim,
and the refusal to submit to such an examination causes a
forfeiture of any rights under the policy.” (Id. at p. 590; accord,
Hickman, supra, 184 Cal. at p. 534 [reversing judgment in favor
of insured because insured violated terms of insurance policy by
refusing to submit to examination and to produce its books and
papers, holding that “[i]f it appears that the contract has been
violated, and thus terminated by the [insured], he cannot
recover”].)
Further, an insurer need not “show prejudice before
denying policy benefits to an insured who has violated a policy
provision requiring submission to an examination under oath.”
(Brizuela, supra, 116 Cal.App.4th at p. 590; see California Fair
Plan Assn. v. Superior Court (2004) 115 Cal.App.4th 158, 159-
160, 167 [granting peremptory writ of mandate that directed trial
court to vacate order denying insurer’s summary judgment
motion where insured failed to submit to examination under
oath, despite insurer’s failure to show prejudice].) Moreover, if an
insurance policy requires the insured to submit to an
examination under oath, “it is not for the insured to inquire into
the motive actuating the company in exacting the examination,”
as long as the examination is on proper subjects of inquiry.
(Hickman, supra, 184 Cal. at p. 530; accord, Globe Indemnity Co.
v. Superior Court (1992) 6 Cal.App.4th 725, 731; see Ins. Code,
§ 2071.1, subd. (a)(2) [“An insurer may conduct an examination
14
under oath only to obtain information that is relevant and
reasonably necessary to process or investigate the claim.”].)
As discussed, paragraph 3 of the Policy’s General
Conditions required Schiffman to submit to an examination
under oath “as often as [Standard Fire] reasonably require[s],”
and paragraph 7 barred Schiffman from filing suit against
Standard Fire under the Policy unless he “fully complied with all
the terms of this policy.”5 Accordingly, Standard Fire met its
initial burden on summary judgment by presenting evidence
Schiffman forfeited his right to recover under the Policy (and file
this action) by failing to comply with the Policy’s requirement
that he submit to an examination under oath.
Schiffman contends he met his burden on summary
judgment because he presented evidence demonstrating a triable
issue of material fact that Standard Fire breached the Policy,
thereby excusing Schiffman from complying with the requirement
he submit to an examination under oath. Specifically, Schiffman
argues that Standard Fire, in its January 7, 2021 letter, as
clarified by Marinescu’s January 11 email, made a final
“underpayment of the claim” (by paying $15,000) based on the
5 Schiffman does not contend Standard Fire’s request for an
examination under oath was not reasonable. Further, in his
supporting declaration, Marinescu averred Standard Fire had
requested an examination under oath, among other things, to
investigate Schiffman’s reliance on the $317,500 valuation of the
art pieces in obtaining coverage without disclosing the Bonhams
appraisal valuing the art pieces between $12,000 and $30,000.
(See Myasnyankin v. Nationwide Mutual Ins. Co., supra,
99 Cal.App.5th at p. 288 [“‘[e]xaminations under oath are
frequently conducted under circumstances where the loss is
undocumented or suspect.’”].)
15
Endorsement, which was an “erroneous reading of its own policy.”
Schiffman points to language in the January 7 letter that advised
Schiffman that he could have his claim reviewed by the
California Department of Insurance and that provided notice of
the limitations period for filing suit. Schiffman argues, “Under
California law, notification of the suit limitation period means
that the insurer has concluded the claim either by denial or
issuance of payment.” Schiffman does not, however, cite any
authority for his blanket statement that once an insurer advises
the insured of the limitations period for filing suit, that means
the insurer has made a final decision on the claim.
Instead, Schiffman relies on case authority addressing the
tolling of the statute of limitations for an insured to file an action
against an insurer for breach of an insurance policy.6 Although
these cases are in a different context, we agree with Schiffman
that they are helpful to our analysis because they address the
circumstances under which an insurer’s denial of a claim is
sufficiently unconditional and unequivocal for an insured’s cause
6 Marselis v. Allstate Ins. Co. (2004) 121 Cal.App.4th 122,
relied on by Schiffman, does not support his contention. In
Marselis, the Court of Appeal recited the rule that “the one-year
limitations period, which begins running at the ‘inception of the
loss’ [citation], is equitably tolled ‘from the time an insured gives
notice of the damage to his insurer . . . until coverage is denied.’”
(Id. at p. 125.) The court concluded that equitable tolling did not
apply to allow the insured to reopen her claim because the
insured received “full payment on her claim” and had represented
to a government agency that her claim was no longer pending
and she expected no further recovery. (Id. at pp. 125-126.) The
court did not address under what circumstances an insurer has
breached an insurance policy by finally denying a claim.
16
of action for breach of an insurance policy to accrue. However,
they do not support Schiffman’s position: To the contrary, the
statute of limitations on an insured’s cause of action for breach of
an insurance policy is tolled only by the unconditional denial of
an insured’s claim in writing. (Doheny Park Terrace Homeowners
Assn., Inc. v. Truck Ins. Exchange (2005) 132 Cal.App.4th 1076,
1088 [“The tolling period ends . . . upon the insurer’s
unconditional denial of the insured’s claim in writing.”]; Love v.
Fire Ins. Exchange (1990) 221 Cal.App.3d 1136, 1143 [cause of
action for breach of an insurance contract accrues for purposes of
statute of limitations when the insured becomes “aware of the
factual predicate to [his or her] suit and . . . aware [his or her]
claim ha[s] been unconditionally denied”]; see Vu v. Prudential
Property & Casualty Ins. Co. (2001) 26 Cal.4th 1142, 1149 [it is
“well settled that ‘an unconditional denial of liability by the
insurer after the insured has incurred loss and made claim under
the policy gives rise to an immediate right of action’”].) Other
courts have required for equitable tolling that an insurer’s denial
be an “‘unequivocal’ denial in writing.” (Migliore v. Mid-Century
Ins. Co. (2002) 97 Cal.App.4th 592, 604; accord, Aliberti v.
Allstate Ins. Co. (1999) 74 Cal.App.4th 138, 149.)
We agree with Standard Fire that it did not unconditionally
(and unequivocally) deny Schiffman’s claim (for amounts above
$15,000) in January 2021 such that Schiffman was excused from
submitting to an examination under oath. As discussed,
Marinescu’s January 7 letter stated it was providing a “summary
of [the] payment calculation” under the Policy, and it requested
Schiffman “review the estimate provided.” Further, Standard
Fire encouraged Schiffman to contact Marinescu if he had
“questions about any portion of the estimate.” Moreover, the
17
letter explained the coverage under the Endorsement (limited to
actual cash value) but made clear its “decision” was based on the
information it had received as part of its investigation, adding, “If
you are aware of any new or different information or
documentation that might lead us to reconsider our decision,
please contact us immediately.”
It is undisputed that Schiffman contacted Marinescu by
email the next day expressing disappointment with Standard
Fire’s position and referring to Marinescu’s statement
that $15,000 was “the amount [he was] offering to satisfy the
claim.” Further, Schiffman described the $15,000 claim amount
as Standard Fire’s “initial assessment” and requested a “written
determination of [his] claim.” Less than a week later Marinello
became involved as Schiffman’s attorney, and the discussions
over Schiffman’s claim continued. Marinescu reiterated
Standard Fire’s interpretation of the Policy, worked to comply
with Marinello’s requests for documents (to obtain a signed copy
of the Endorsement) and, as early as February 5 (less than a
month after the January 7 letter), stated “we are still looking at
coverage.” In that same email, Marinescu stated Standard Fire’s
attorney would be contacting Schiffman about an examination
under oath.
Taken together, these undisputed communications do not
create a triable issue of fact that Standard Fire had
unconditionally denied Schiffman’s claim such that it materially
breached its obligations under the Policy. The fact Standard Fire
sent a $15,000 payment to Schiffman (that Schiffman did not
cash) does not convert the January 7 letter into an unconditional
denial of further benefits under the policy, especially given the
continuing discussions over coverage under the policy. (See
18
Aliberti v. Allstate Ins. Co., supra, 74 Cal.App.4th at pp. 140-142,
149 & fn. 15 [limitations period for breach of insurance policy was
tolled because insurer “never formally and unequivocally denied”
plaintiff’s claim despite initially issuing a check to the insured
that bore the notation “paid in full”].)
Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566, relied on
by Schiffman, is distinguishable. In Gruenberg, the Supreme
Court held a plaintiff adequately alleged a cause of action for
breach of the covenant of good faith and fair dealing by alleging
the defendant insurers, knowing plaintiff would not appear for an
examination under oath during the pendency of criminal charges,
willfully and maliciously conspired to deprive him of fire policy
benefits by falsely implying to investigative authorities that
plaintiff had a motive to commit arson, then using his failure to
appear at an examination under oath as a pretense to deny
coverage. (Id. at p. 575.) Gruenberg addressed only the viability
of the plaintiff’s bad faith cause of action. Further, Gruenberg
does not assist Schiffman because Schiffman’s refusal to submit
to an examination under oath was based on Standard Fire’s
alleged breach of the Policy by denying him further benefits—a
reason we have concluded did not excuse him from his failure to
appear. The court in Gruenberg observed that because the
plaintiff alleged his failure to appear at the examination was
induced by the insurers’ “conduct, in breach of their duty of good
faith and fair dealing,” the “plaintiff’s obligation to appear may
be seen as excused by defendants’ alleged breach.” (Id. at p. 578,
fn. 9; see Brizuela, supra, 116 Cal.App.4th at p. 593
[distinguishing Gruenberg from a plaintiff’s failure to appear at
an examination under oath because Gruenberg “did not involve
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an insured’s unexcused failure to attend an examination under
oath”].)7
2. Breach of the implied covenant of good faith and fair
dealing
The implied covenant of good faith and fair dealing is
“based on the contractual relationship between the insured and
the insurer.” (Waller v. Truck Ins. Exchange, Inc. (1995)
11 Cal.4th 1, 36; accord, All Green Electric, Inc. v. Security
National Ins. Co. (2018) 22 Cal.App.5th 407, 418.) “[T]he
covenant is implied as a supplement to the express contractual
covenants, to prevent a contracting party from engaging in
conduct that frustrates the other party’s rights to the benefits of
the agreement.” (Waller, at p. 36.) In the context of a claim
related to the denial of insurance benefits, “‘[T]here are at least
two separate requirements to establish breach of the implied
covenant: (1) benefits due under the policy must have been
withheld; and (2) the reason for withholding benefits must have
been unreasonable or without proper cause.’” (Mosley v. Pacific
Specialty Ins. Co. (2020) 49 Cal.App.5th 417, 435; accord, Love v.
Fire Ins. Exchange, supra, 221 Cal.App.3d at p. 1151.)
As discussed, Standard Farm’s withholding of further
benefits under the Policy was based on Schiffman’s refusal to
comply with the Policy’s requirement to submit to an
7 Because we conclude Schiffman did not present evidence
that Standard Fire breached the Policy, we do not reach
Standard Fire’s alternative arguments, including that it was not
required to pay under the Policy because the Policy only covered
loss of the art pieces at the location described in the declarations
page (i.e., at Schiffman’s home).
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examination under oath without a reasonable excuse.
Accordingly, Schiffman’s bad faith claim fails as a matter of law.
(See Brizuela, supra, 116 Cal.App.4th at pp. 594-595 [summary
judgment on bad faith cause of action properly granted where
plaintiff “never agreed to submit to an examination under oath
following his initial unexcused failure to appear”].)
DISPOSITION
The judgment is affirmed. Standard Fire is to recover its
costs on appeal.
FEUER, J.
We concur:
SEGAL, Acting P. J.
STONE, J.
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