Copelan v. Infinity Ins. Co.
359 F. Supp. 3d 926
| C.D. Cal. | 2019Background
- Lowenthal was driving a rental insured by Infinity; Copelan's leased car was insured by Liberty Mutual after a two-car collision.
- Liberty Mutual repaired Copelan’s vehicle, paid ~ $16,000, and was reimbursed by Infinity on subrogation.
- Copelan obtained a $10,000 small‑claims judgment for diminished value (based on a Wreck Check report referencing "stigma" damages) and sought recovery from Infinity/Lowenthal.
- Infinity initially denied stigma‑based diminished value because the policy does not cover stigma damages, but later paid the state‑court judgment after appellate developments, exceeding policy limits.
- Lowenthal sued Infinity for breach of contract, breach of the implied covenant of good faith and fair dealing, and UCL violations; Infinity moved for summary judgment and Lowenthal did not oppose the motion.
- The court denied Lowenthal’s ex parte application to file a second amended complaint and granted Infinity’s motion for summary judgment in full.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Infinity breached the insurance contract by refusing to pay diminished value | Lowenthal contends Infinity wrongly refused payment for diminished value (stigma) | Infinity argues policy excludes stigma damages; repair‑related physical‑damage diminished value was paid | Court: No breach — claim is for stigma damages which policy excludes; Infinity paid repair‑related damages and the judgment was paid |
| Whether Infinity violated the implied covenant of good faith and fair dealing | Lowenthal argues denial amounted to bad faith | Infinity contends its denial was reasonable and with proper cause given policy language, and it ultimately paid | Court: No bad faith — withholding was reasonable and benefits were not withheld (payment made) |
| Whether Lowenthal can obtain UCL injunctive relief or restitution | Lowenthal seeks injunctive relief and restitution for unlawful/unfair practices re: diminished value claims | Infinity argues adequate legal remedies exist and UCL equitable relief is not appropriate here | Court: UCL relief denied — adequate remedy at law exists; injunctive/restitution relief not warranted |
| Whether punitive damages are available | Punitive damages sought as consequence of the substantive claims | Infinity asserts punitive damages cannot stand if substantive claims fail | Court: Denied — punitive damages fail because the underlying claims fail |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (nonmoving party must show evidence to create genuine dispute)
- Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099 (85 Fed. R. Civ. P. 56 burden framing at summary judgment)
- Goodstein v. Continental Casualty Co., 509 F.3d 1042 (diminution in value alone may not constitute covered property damage)
- Carson v. Mercury Insurance Co., 210 Cal. App. 4th 409 (distinguishing repair‑related diminished value from stigma damages)
- Hanson v. Prudential Ins. Co. of America, 783 F.2d 762 (denial of benefits alone does not establish bad faith)
- Paulson v. State Farm Mut. Auto. Ins. Co., 867 F. Supp. 911 (payment beyond policy limit bars recovery)