INSURANCE-RELATED COURT CASES
Digested from case reports published online
COURT DECISIONS
Insureds fail to use thousands in insurer payments
A wildfire occurred near the home of Hovik Gharibian and Caroline Minasian. Although debris entered the home and in their swimming pool, no “burn damage” was found to the house itself. Gharibian and Minasian submitted a homeowners claim to their insurer, Wawanesa General Insurance Company.
Wawanesa ultimately paid Gharibian and Minasian more than $20,000 for professional cleaning services that they never used. Dissatisfied with the resolution of their claim, Gharibian and Minasian filed suit against Wawanesa for breach of contract and breach of the implied covenant of good faith and fair dealing.
The trial court granted Wawanesa’s motion for summary judgment, and Gharibian and Minasian appealed. Because their policy did not provide coverage for the claimed loss, Wawanesa did not breach (and could not have breached) the policy.
Without waiving its coverage defenses, Wawanesa started arranging for an expert to determine what cleaning, if any, should be conducted. In November 2019, PuroClean inspected the property and prepared an estimate ($4,308.90) of what it would cost to clean the property inside and out, including the contents of the house, doors, windows, and HVAC system. Although PuroClean was willing to do this work for the estimated price, Gharibian and Minasian did not hire PuroClean to do the work.
Gharibian hired L.Y. Environ-mental, Inc., to inspect the property and write a report. Yonan Benjamin, a certified industrial hygienist/consultant and a senior environmental engineer for L.Y. Environmental, Inc., testified that soot and ash were present at the property. Soot by itself does not physically damage a structure, and ash creates physical damage to a structure only if it is left on metal or vinyl and is then exposed to water. Benjamin did not find any evidence of rusting metal or oxidized vinyl. He further confirmed that there was no burn or heat damage at the property. Therefore, he concluded that the home could be fully cleaned by wiping the surfaces, HEPA vacuuming, and power washing the outside.
Meanwhile, Wawanesa retained industrial hygienist Clark Seif Clark (CSC) to verify what needed to be done by conducting new tests and providing its own cleaning recommendations. CSC determined that the interior of the home could be cleaned through normal processes, such as wiping with wet disposable cloths and using a HEPA vacuum to clean the attic. According to CSC the HVAC system did not warrant cleaning.
The following week, Wawanesa paid the plaintiffs $2,308.90, representing the PuroClean estimate less the $2,000 deductible. The plaintiffs did not hire professional cleaners to clean their home. Instead, they cleaned the interior and exterior of their home, including their pool, on their own.
By December 2019, the plaintiffs were not aware of any visible wildfire debris that remained either outside or inside their home. Gharibian was not aware of anything at his property that was physically damaged.
The plaintiffs then retained The Croisdale Group Inc. to estimate the cost of cleaning their house. Croisdale prepared an estimate of $35,553.10. Croisdale’s estimate included general cleaning as well as interior painting, exterior wood and stucco painting, replacement of attic insulation, swimming pool work, and cleaning the HVAC system.
Because of Croisdale’s new estimate, Wawanesa retained IAS Claim Services (IAS) to try to settle the plaintiffs’ claim. IAS reinspected the property with PuroClean and the plaintiffs’ attorney on September 18, 2020. As a concession to the plaintiffs, PuroClean agreed to revise its estimate ($20,718.09) to include disputed cleaning services. Again, PuroClean was willing to perform the quoted services at the estimated cost, but the plaintiffs did not hire PuroClean to do the work.
Later that month, based on PuroClean’s revised estimate and as a concession, Wawanesa issued supplemental checks totaling $16,409.19 to the plaintiffs. Because of the prior payment ($2,308.90) and the plaintiffs’ deductible ($2,000), this brought the total to $20,718.09—the amount of the PuroClean estimate.
Because there had been discussion of cleaning the plaintiffs’ swimming pool, on November 13, 2020, Wawanesa asked the plaintiffs to provide an estimate or invoices for pool cleaning so that it could issue reimbursement. The plaintiffs did not respond. On December 10, 2020, even though Gharibian had cleaned his pool on his own and the plaintiffs’ hygienist did not call for pool cleaning, in an effort to resolve the claim, Wawanesa paid the plaintiffs an additional $2,400 for pool cleaning, which was the amount that Croisdale had estimated for that service.
After discovery, Wawanesa moved for summary judgment against the plaintiffs and summary adjudication against the Sarkisyans. (The plaintiffs and the Sarkisyans did not know each other but, rather, the attorney who represented the plaintiffs and the Sarkisyans filed one complaint because both couples were bringing claims against Wawanesa regarding alleged wildfire debris after the same wildfire.)
Regarding the plaintiffs, Wawanesa argued that they did not meet their burden of proving that an event fell within the scope of the policy’s coverage. CSC found no evidence of physical damage; the plaintiffs’ hygienist admitted that soot and char debris do not cause physical damage, and the ash did not cause damage at the plaintiffs’ property; and Gharibian testified that he was unaware of any physical damage.
The plaintiffs appealed.
The appellate court concluded that the trial court did not err. Because of its conclusion that Wawanesa did not breach its policy because the plaintiffs did not have a covered claim, all remaining arguments raised by the parties are moot.
The judgment was affirmed. Wawanesa was entitled to costs on appeal.
Hovik Gharibian et al. v. Wawanesa General Insurance Company—Court of Appeal of the State of California, Second Appellate District, Division Two—B325859—February 7, 2025
