FILED | Superior Cour of California unty of Los Angeles} Nov 302022 7 ‘Sherri R, Caster, Enocuyie OffierClerk By ie A eal Deputy Pe Orcas Gaver 5 SUPERIOR COURT OF THE STATE OF CALIFORNIA 6 FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT | 7 FRANTIC, INC., CASE NO.: 21STCV21403 8 Plaintiff, (EERHE4eFIVE] ORDER RE: MOTION 9 FOR SUMMARY JUDGMENT vs. 10 Date: November 30, 2022 1, [CERTAIN UNDERWRITERS AT LLOYD'S, Time: 8:30 a.m. LONDON SUBSCRIBING TO POLICY Dept. 56 NUMBER B1333ECB190291, er al., iy tel Ebene) at ala 3 Defendants. | MOVING PARTY: Defendant Certain Underwriters at Lloyd’s, London Subscribing to Policy Number B1333ECB190291 (“Moving Defendant”) RESPONDING PARTY: Plaintiff Frantic, Inc., “Professionally known as” the band | 19. [Metallica (“Plaintit”) (Complaint, 4 1.) 2 ‘The Court has considered the moving, opposition and reply papers. B22 23 24 2s21 2 23 24 28 BACKGROUND This action arises out of a dispute over insurance coverage. On June 6, 2021, Plaintiff filed the Complaint in this matter, alleging: (1) breach of contract; (2) tortious breach of the implied covenant of good faith and fair dealing; and (3) declaratory relief. In relevant part, the Complaint alleges: Plaintiff began an eight-show tour in September 2019. (Complaint 42.) Plaintiff was scheduled to perform six concerts in South America beginning on April 15, 2020. (/d) Plaintiff had to reschedule these concerts as a result of travel restrictions related to the COVID-19 pandemic that were imposed both in the U.S. and abroad. (See Complaint § 2, 19.) Before beginning the tour, Plainti purchased an insurance policy (the| “Policy”) from Moving Defendant. (Complaint 3.) After the South America shows were postponed, Plaintiff filed a claim to recover their losses. (/d.) Moving Defendant denied coverage based on a restrictive interpretation of the policy. (Jd.) Moving Defendant also failed to adequately investigate Plaintiff's insurance claim. (Comp’aint $f 4, 22.) Moving Defendant filed a motion for summary judgment on the grounds that Plaintiff cannot establish the requisite elements for each cause of acticn alleged in the Complaint. REQUEST FOR JUDICIAL NOTICE Moving Defendant's Request for Judicial Notice and Plaintiff's Request for Judicial Notice are GRANTED. The Court takes judicial notice of Plaintiff’s Exhibit B with the exception of the first page of the exhibit. The Court takes judicial notice of Plaintiff's Exhibits20 a 2 23 24 25 A, C, and E as to the existence of the documents but not as to the truth of their contents. (See Ragland v. U.S. Bank National Assn. (2012) 209 Cal.App.4th 182, 193-94.) EVIDENTIARY OBJECTIONS Plaintiff's objections to the Declaration of Katherine Proctor (“Proctor Decl.”) numbers 1-5 are OVERRULED. Plaintiff's objection to the Declaration of Alan Norris (“Norris Decl.) i SUSTAINED. Plaintiff's objections to the Declaration of William Mullen (“Mullen Decl.”) numbers 1-2 are OVERRULED. Moving Defendant’s objection to the Declaration of Bill Tannenbaum (“Tannenbaum Decl.”) number 2 is SUSTAINED. Moving Defendant's objections to the Tannenbaum Declaration numbers 1 and 3 are OVERRULED. Moving Defendant’s objections to the Declaration of Jeffrey L. Schulman (“Schulman Decl.”) numbers 4-5 are SUSTAINED. DISCUSSION The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) California Code of Civil Procedure (“CCP”) section 437c, subdivision (c) requires the trial judge to grant summary judgment if all the evidence submitted, and all inferences reasonably deducible from the evidence and uncontradicted by other inferences or evidence, show that there is no triable issue as to any‘material fact and that the moving party is entitled to judgment as a matter of law. (Adler v Manor Healthcare Corp. (1992) 7 Cal.App-4th 1110, 1119.) As to each claim as framed by the complaint, the defendant moving for summary judgment must satisfy the initial burden of proof by presenting facts to negate an essential element, or to establish a defense. (CCP § 437c, subd. (p)(2); Scalf'v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.) Courts liberally construe the evidence in support of the party opposing summary judgment and resolve doubts conce-ning the evidence in favor of that party. (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.) Once the defendant has met that burden, the burden shifts to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68 Cal. App.4th 151, 166.) Moving Defendant's Evidence The Policy, which was entered into in August 2019, provided coverage to Plaintiff for cancellations, abandonment and non-appearances for the period between August 28, 2019 and April 28, 2020. (See Undisputed Material Fact (“UMF 1; Norris Decl. § 5, Exhibit 5.) The Policy contains the following provisions: 1.1 The Underwriters will indemnify the Insured for their Ascertained Net Loss arising from the Insured Event(s) being necessarily Cancelled, Abandoned, Postponed, Interrupted, Curtailed or Relocated. Provided that:21 2 23 24 28 1.1.1 the necessary Cancellation, Abandonment, Postponement, Interruption, Curtailment or Relocation is the sole and direct result of one or more of the Perils, as more fully described in 3 belo and 1.1.2 such Peril is stated in the Schedule to be insured; and 1.1.3 the cause of such Peril is beyond the control of: a) the Insured; and b) each and every Insured Person; and ¢) in respect of 3.5 below the Insured, the Instred Person and each and every other Participant. 1.1.4 the Peril which is the sole and direct cause of the necessary Cancellation, Abandonment, Postponement, Interruption, Curtailment or Relocation occurs during the Period of Insurance. (Norris Decl., Exhibit 5 at § 11) Included among the covered events (“Perils”) are: 3.3 TRAVEL DELAY as a result of travel arrangements being irrevocably altered, resulting in the inability of any Insured Person to be at the Venue, provided always that such travel arrangements shall have been made so as to provide adequate time for arrival prior to the Insured Event, 3.5 ALL OTHER PERILS not specifically limited or excluded elsewhere in this Insurance. (Id. at § 3.) ‘The Policy lists exclusions that preclude coverage for any loss directly or indirectly arising out of, contributed to by, or resulting from events including “any Communicable Disease or fear or threat thereof, unless: 8.15.1 such Communicable Disease infects an Insured Person and such infection of an Insured Person is the sole and direct cause of the necessary Cancellation, Abandonment, Postponement, Interruption, Curtailment or Relocation of any Insured Event; or20 aa 2 2B 24 25 8.15.2 the Venue is closed by or under the order of any government or public or local authority as a sole and direct result of a Communicable Disease which originates and manifests itself within the confines of the Venue. (Id. at § 8.15.) ‘The Policy defines “Communicable Disease” as “any disease capable of being transmitted from an infected person or species to a susceptible host, either directly or indirectly.” (id. at § 4.4.) On May 14, 2020, Plaintiff initiated a coverage claim (the “Claim”) for losses stemming from the cancellation of the South American shows. (See UMF 10.) The May 14, 2020 communication states that the cancellations stemmed from “Live Nation’s suspension of all global tours on 12 March 2020." (UMF 11.) On May 19, 2020, the Claim was submitted on Moving Defendant's electronic claims file system; the submission identifies “Coronavirus” under the loss details category. (UMF 12; Proctor Decl., Exhibit 2.) ‘Acedrding to the Center for Disease Control (“CDC”), COVID-19 is a disease caused by a virus named SARS-CoV-2 that was discovered in Wuhan, China in December 2019. (RIN, Exhibit 28,) COVID-19 is a respiratory virus that spreads through droplets that disperse when someone infected breathes, coughs, sneezes, or speaks. (/d.; see also RIN, Exhibit 29.) ‘On March 18, 2020 and March 19, 2020, the countries where Plaintiff was scheduled to perfcrm, Argentina, Chile and Brazil, issued emergency travel restrictions in response to the spread of the COVID-19 virus. (See Exhibit 14.) During the month of March 2020. Plaintiff's Person Most Knowledgeable, Tom DiCioccio, was a party to email threads discussing the21 2 2B 24 25 postponement of Plaintiff's South America shows in light of various restrictions on public gatk-erings being implemented by the countries’ governments and the inability to acquire work visas for Plaintiff's bandmembers in light of these restrictions. (See Exhibits 31-32.) The adjuster handling Plaintif's Claim found that the Communicable Disease Exclusion precluded recovery for the shows’ cancellations and that neither of the exceptions applied. (See Proctor Decl. 12.) The adjuster determined that none of cancellations was caused by a member| of Metallica bein, fected with COVID-19. (See UMF 17.) The adjuster determined that the seccnd exception to the Communicable Disease Exclusion did not apply to Plaintiff's Claim beceuse of her understanding that the COVID-19 virus origirated in Wuhan, China and the cancellations were part of a global tour suspension rather than a response to a virus that, orig nated and manifested in any particular venue where Plaintiff was scheduled to play a concert, (See Proctor Decl. 12.) First Cause of Action: Breach of Contract The elements of a cause of action for breach of contract are: (1) existence of a contract; (2) plaintiff s performance or excuse for nonperformance; (3) defendant's breach; and (4) resulting damages to the plaintiff. (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cc -App-4th 1150, 1173.) An insurer seeking summary judgment on the ground that its insurance policy excludes Plaintiffs? insurance claim has the burden of proving that Plaintiffs’ claim falls within an exclnsion in the policy. (Roberts v. Assurance Co. of America (2008) 163 Cal.App.4th 1398,21 22 23 24 25 1406.) To satisfy its burden, an insurer need not disprove every possible cause of the loss and once the insurer establishes the claim is excluded, the burden shifts to the insured to show a triable issue of material fact exists. (Medina v. GEICO Indemnity Co. (2017) 8 Cal.App.sth 251, 259.) Interpretation of an insurance policy is a question of law and follows the general rules of contract interpretation. (Brown v, Mid-Century Ins. Co. (2013) 215 Cal.App.4th 841, 851.) The rules governing policy interpretation require courts to look first to the language of the contract in| order to ascertain its plain meaning or the meaning a layperscn would ordinarily attach to it. (id.) The mutual intention of the parties governs the interpretation of the policy, which is inferred, if possible, solely from the written provisions of the contract. (Jd.) The “clear and explicit” meaning of these provisions, interpreted in their “ordinary and popular sense,” unless used by the parties in a technical sense or a special meaning is given to them by usage, controls judicial interpretation. (/d.) Insurance coverage is interpreted broadly so as to afford the greatest possible protection tothe insured, while exclusionary clauses are intepreted narrowly against the insurer. (MacKinnon v. Truck Ins. Exchange (2003) 31 Cal-4th 635, 648.) ‘The doctrine of efficient proximate cause is the preferred method for resolving first party insurance disputes involving losses caused by multiple risks or perils, at least one of which is covered by insurance and one of which is not. (Julian v. Hartford Underwriters Ins. Co. (2005) 35 Cal.4th 747, 753-54.) In determining whether a loss is within an exception in a policy, where| there is a concurrence of different causes, the efficient cause--the one that sets others in motion— is the cause to which the loss should be attributed, though the other causes may follow it, and5 20 a 2 2B 24 25 operate more immediately in producing the disaster. (Sabella v. Wisler (1963) 59 Cal.2d 21, 31- 32.) The fact that an excluded risk contributed to the loss does not preclude coverage if such a risk was a remote cause of the loss. (Garvey v, State Farm Fire & Casualty Co. (1989) 48 Cal.3d 395, 403.) A policy cannot extend coverage for a specified peril, then exclude coverage for a loss caused by a combination of the covered peril and an excluded peril, without regard to whether the covered peril was the predominant or efficient proximate cause of the loss. (Vardanyan v. AMCO Ins. Co. (2015) 243 Cal.App.4th 779, 796.) The question of what caused the loss is generally a question of fact. (State Farm Fire & Casualty Co. v. Von Der Lieth (1991) 54 Cal.3d 1123, 1131-32.) Ifthe facts are undisputed, the question then becomes whether there is proximate cause as a matter of law. (Mission National Ins. Co. v. Coachella Valley Water Dist. (1989) 210 Cal.App.34 484, 493.) Where an insurer satisfies its burden of showing a loss was caused by an excluded peril, the burden shifts to the plaintiff to show the existence of a triable issue of material fact on that issue. (Alex R. Thomas & Co. v. Mutual Service Casualty Ins. Co, (2002) 98 Cal.App-4th 66, 67.) Alternatively, the plaintiff may articulate a realistic possibility the loss was caused by a covered peril. (/d.) Moving Defendant argues that Plaintiff cannot establish that Moving Defendant breached the Policy because under the Communicable Disease Exclusion, Plaintiff was precluded from recovering losses from the cancellations because the COVID-19 pandemic caused the show cancellations. Based on the foregoing evidence, the Court finds that Moving Defendant has met its burden to show that the proliferation of the COVID-19 caused the cancellations and that it falls under the Communicable Disease Exclusion.21 2 23 24 25 Plaintiff argues that Moving Defendant's reading of the Policy’s terms is overly broad and argues that there are triable issues of fact as to the efficient proximate cause of the cancellations. The Court is not persuaded by Plaintiff's arguments. Plaintiff has not presented evidence to raise a triable issue of fact as to whether either of the exceptions to the Communicable Exclusion applies. First, Plaintif?'s argument that the Communicable Disease Exclusion is ambiguous or inapplicable because none of its bandmembers felt threatened or fearful of COVID-19 does not set forth a reasonable alternative interpretation of the provision, as the provi jon does not require that the policyholders feel fearful or threatened. Second, Plairtiff’s evidence does not call into question the temporal or geographic origins of the COVID-| 19 virus. Nor does Plaintiff introduce an ambiguity regarding the meaning of “originates” or “manifests,” or provide evidence of reported cases of COVID-19 at the venues where Plaintiff’ was scheduled to play or that any reported cases at a particular venue caused any of the shows? respective cancellations. Moreover, Plaintiff has not introduced evidence to raise a triable issue of fact that the COVID-19 virus was not the efficient proximate cause of the cancellations. Plaintiff argues that the lenguage providing that the exclusions preclude coverage for losses “directly or indirectly arising out of, contributed to by, or resulting from” the exclusion impermissibly abridges the efficient proximate cause doctrine. (See Vardanyan v. AMCG Ins. Co, (2015) 243 Cal. App.4th 779, 796.) In interpreting insurance policies, however, courts enforce overbroad exclusions to the extent that they apply to losses proximately caused by the peril explicitly named therein. (See Julian v. Hartford Underwriters Ins. Co. (2005) 35 Cal.4th 747, 753-56.) Here, Plaintiff has not introduced evidence to controvert Moving Defendant's evidence that the travel -10-20 21 2 2B 24 25 restrictions which caused the concert cancellations were a direct response to the burgeoning COVID-19 pandemic. The evidence submitted by Moving Defendant demonstrates that the COVID-19 pandemic spurred the travel restrictions to South America and restrictions on public gatherings. The COVID-19 pandemic was therefore the efficient proximate cause 0: the concerts’ cancellations. (Vardanyan v. AMCO Ins. Co., supra, at 243 Cal.App.4th 796.) ‘The Court therefore GRANTS the Motion to the first cause of action. Second Cause of Action A claim for breach of the implied covenant of good faith and fair dealing cannot be mairtained unless benefits are due under the policy at issue. (Hovannisian v. First Am. Title Ins. Co. (2017) 14 Cal.App.Sth 420, 437.) In light of the Court’s ruling on the first cause of action, the Court GRANTS the Motion to the second cause of action. Third Cause of Action The third cause of action seeks a declaration that the cancellations were covered under the Policy. In light of the Court’s ruling on the first cause of action, the Court GRANTS the ‘Motion to the third cause of action. ‘Moving party is ordered to give notice of this ruling. In consideration of the current COVID-19 pandemic situation, the Cour: strongly encourages that appearances on all proceedings, including this one, be made by Me20 21 2 23 24 25 LACourtConnect if the parties do not submit on the tentative. If you instead intend to make an| appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to SMC_DEPTS6@lacourt.org stating your intention to appear in person. The Court will then inform you by close of business that day of the time your hearing will be held. The time set for the hes 1g may be at any time during that scheduled hearing day, or it may be necessary to schedule the hearing for another date if the Court is unable to accommodate all personal appearances set on that date. This rule is necessary to ensure that adequate precautions can be taken for proper social distancing. Parties who intend to submit on this tentative must send an email to the Court a SMC_DEPTS6@lacourt.org as directed by the instructions provided on the court website at wwwlacourt.org. If the department does not receive an emai’ and there are no appearances at thd hearing, the motion will be placed off calendar. 12+