1

Filed 9/10/24 Seto v. CSAA Insurance Group CA1/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or 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 TWO

SHACUAN SHARON SETO,

Individually and as Successor in 

Interest, etc., et al.,

Plaintiffs and Appellants,

v.

CSAA INSURANCE GROUP et al.,

Defendants and Respondents.

A166351 & A166573

(San Francisco County 

Super. Ct. No. CGC16554402)

These consolidated appeals1 arise from an action filed against an 

insurer and an attorney by several related parties: Stephen K. Lee (Father), 

the three eldest of Father’s six children, and two family-owned property

management companies: Stephen K. Lee Enterprises (SKLE) and Golden 

Prosperities Management Company, LLC (GPMC).

2 Plaintiffs claimed the 

insurer and attorney engaged in bad faith, malpractice, and other wrongs 

1 Plaintiffs filed two notices of appeal: one from the judgment

(A166351), and one from a postjudgment order denying a motion to tax costs

(A166573). We granted a request to consolidate the appeals under docket 

No. A166351. Because we reverse the judgment, we vacate the costs order as 

a matter of course and dismiss the appeal of the motion to tax costs as moot.

2 Father died while this action was pending. The trial court accepted 

the parties’ stipulation to substitute his eldest child, Shacuan Sharon Seto—

already a plaintiff in her own right—as a plaintiff in her capacity as Father’s 

successor in interest. 
2

while defending them in a personal injury action by Marthe Schreiber. 

Schreiber was a tenant of a property originally developed by Father, jointly 

owned at the time of the accident by all six of his children, and formerly or 

presently managed by SKLE and GPMC. Plaintiffs claim the insurer and 

attorney entered into a partial settlement of the Schreiber action over their 

objection that secured the release of all six Lee siblings and SKLE but left 

Father and GPMC, whom the insurer did not consider to be covered by its 

policies, exposed to liability. That ongoing exposure harmed the elder 

siblings by obliging them to pay for Father’s and GPMC’s ongoing defense.

The trial court granted summary judgment on three bases: Father and 

GPMC’s exclusion from the settlement did not cause the siblings or GPMC 

any harm; Father and GPMC were not insureds, so they had no standing to 

pursue claims against CSAA; and the release included in a family settlement 

agreement (FSA) concerning various intrafamilial property disputes bars

plaintiffs’ claims. 

We reverse as to all plaintiffs except SKLE, which plaintiffs’ complaint 

alleges is “dissolved,” and which is thus unable to file suit. As for the stillexistent parties, we conclude that defendants failed to establish as a matter 

of law that the reference in the release to the “related persons and entities” of 

the younger siblings includes the insurer and attorney that represented all 

six siblings in the Schreiber action. We further conclude that there are 

triable factual disputes as to whether the elder siblings’ claimed obligation to 

pay for GPMC’s defense amounts to cognizable harm and that, while

plaintiffs did not raise a triable dispute as to whether Father or GPMC were 

insureds under the policies as written, the insurer’s motion failed to address 

plaintiffs’ causes of action for policy reformation and negligence by the 

insurer’s captive agent in failing to procure a policy covering Father and 
3

GPMC, which could establish standing. We therefore reverse the summary 

judgments except as to SKLE.

BACKGROUND

This appeal involves three distinct sets of facts or proceedings: (1) the 

personal injury action Schreiber filed in 2013 against Father, his six children, 

GPMC, and SKLE; (2) the 2015 FSA resolving disputes between the six 

siblings, which contains the release at issue; and (3) this action, filed in 2016 

by the three elder siblings (Shacuan Sharon Seto, Gordon Lee, and Patricia 

Lum), Father, GPMC, and SKLE against David Samuelson and CSAA, the 

attorney and insurer responsible for representing the siblings and related 

parties in connection with the partial settlement in the Schreiber action.

3 We 

summarize the relevant aspects of each below.

I. The Schreiber Action

Schreiber’s personal injury action led to an appeal decided in 2020 by 

our colleagues in Division One. (Schreiber v. Lee (2020) 47 Cal.App.5th 745 

(Schreiber).) As that opinion details, Schreiber was seriously injured in 2013 

when she fell through a skylight Father had built in her apartment’s deck. 

(Id. at p. 748.) Father had originally owned and developed the property but 

transferred ownership to his six children in the 1980s. (Id. at p. 749.) 

Beginning in the 1980s, SKLE managed the property. (Id. at pp. 749–750.) 

In 2005, GPMC took over that function. (Ibid.) GPMC was a member-owned 

3 This action involves two policies, one issued by CSAA Fire & Casualty 

Insurance Company and one by CSAA Insurance Exchange. To defend the 

Schreiber action, CSAA retained Samuelson and his law firm, Bennett, 

Samuelson, Reynolds, Allard, Cowperthwaite & Gelini PC. No distinction 

between the CSAA entities, or between Samuelson and his firm, is relevant 

on appeal. For simplicity, we refer to the insurers collectively as CSAA and 

the attorney defendants collectively as Samuelson.
4

management company; Father and the six siblings served as board members, 

while siblings Gordon and Peter Lee handled day-to-day operations. (Ibid.) 

As of the filing of Schreiber’s initial complaint in September 2013, the 

property was insured by two CSAA policies: a primary policy with a limit of 

$1,000,000 that, as written, covered only Peter Lee, but which CSAA agreed 

was meant to cover all six siblings and SKLE, and an umbrella policy with a 

limit of $3,000,000 that covered only Peter Lee. Schreiber’s initial complaint

named Father and SKLE as alleged owners of the property and Peter Lee as 

its manager. 

CSAA retained Samuelson to defend its insureds Peter Lee and SKLE 

and to provide Father a “courtesy defense.” Samuelson induced Schreiber’s 

counsel to file an amended complaint in November 2013 that removed Father 

as a defendant, given his transfer of the property to his children in the 1980s. 

The amended complaint added the remaining siblings as defendants in their 

roles as property owners and corrected pleading errors not relevant here.

In September 2014, Schreiber offered, pursuant to Code of Civil 

Procedure4 section 998, to settle the entire action for the $4 million combined 

limit of the two insurance policies. Two months later, Schreiber filed a 

second amended complaint (SAC) renaming Father as responsible for the 

property’s design, build, and management and substituted GPMC for a Doe

defendant. CSAA agreed to defend all six siblings and SKLE but declined to 

defend GPMC or to provide a further courtesy defense to Father. Father

demanded litigation indemnification from GPMC based on a provision in 

GPMC’s operating agreement. 

In July 2015, Schreiber moved for leave to file a third amended 

complaint (TAC) that was to add allegations that Father and the siblings had 

4 All undesignated references are to the Code of Civil Procedure.
5

failed to insure or capitalize GPMC and ignored its corporate formalities, 

making it their alter ego.5

Schreiber extended the deadline to accept her section 998 offer until 

September 10, 2015—the date set for a mediation of the case. The elder 

siblings allege they urged Samuelson to accept the section 998 offer or 

otherwise arrange a global settlement covering all defendants. But at the 

mediation held while Schreiber’s motion for leave to file the TAC was still 

pending, Samuelson negotiated a stipulation for partial settlement of the 

action. Under the stipulation, CSAA would pay Schreiber $2.5 million to 

release all six siblings and SKLE—i.e., the parties it considered insureds 

under the primary policy—but not Father and GPMC. After learning of the 

settlement provided for by the stipulation, the elder siblings opposed its 

consummation because it excluded Father and GPMC.

In opposing the present motions for summary judgment, plaintiffs 

submitted evidence that Samuelson entered into the partial settlement 

stipulation without allowing the elder siblings to be present during the 

negotiations, and without discussing it with them or providing them a copy 

until after he signed the partial settlement agreement on their behalf—even 

though he knew it was inconsistent with the elder siblings’ direction to secure 

a settlement that covered all the named defendants. In addition, despite the 

imminent deadline for disclosure of experts in the Schreiber action,

Samuelson negotiated the additional purported agreement of the “settling 

defendants” “not to share their experts with the non-settling defendants or to 

disclose the identity of their experts . . . .” This term, agreed to without their 

5 We take judicial notice of the trial court docket in the Schreiber 

action, as contained in this court’s records for Schreiber v. Lee (A149969) 

solely for the purpose of establishing that Schreiber filed her motion for leave 

to file a TAC in July 2015, and that it was granted on September 17, 2015.
6

knowledge or consent, required the elder siblings to urgently seek new 

experts to support Father’s and GPMC’s defense.

On September 18, 2015, Schreiber filed the TAC adding allegations that 

GPMC was the Lees’ alter ego. On September 30, Samuelson signed a 

declaration representing a conflict of interest had arisen after the mediation. 

The conflict, he declared, did not “endanger[] the settlement from being 

consummated” but precluded his representation of all six siblings. Samuelson 

further declared CSAA was seeking separate counsel for the elder and younger 

siblings and, on that basis, requested a continuance of the then-impending 

trial in the Schreiber action. 

On October 28, Schreiber and her counsel executed a formal release 

pursuant to the stipulation for settlement. On October 29, the elder siblings 

wrote the new attorney retained by CSAA to “communicate that we do not 

agree with the settlement that [Samuelson] secretly negotiated . . . at the . . .

mediation.” They noted their concern that the new attorney planned “to 

proceed with the settlement on behalf of the insurer and against our interests,” 

and asked him to “cease all efforts to move forward with the settlement.” On 

October 30, Samuelson associated new counsel into Schreiber to represent the 

elder and younger siblings but did not substitute out of the case. 

At CSAA’s direction, in November 2015, the younger siblings’ new 

counsel filed an application for a determination that the partial settlement had 

been in good faith. (§ 877.6.) Father and GPMC contested the application, 

which the trial court denied, in part because of the elder siblings’ lack of

consent to the settlement. 
7

Thereafter, the Schreiber action continued to trial against Father and 

GPMC.6 The elder siblings, aware of Father’s demand for indemnification 

from GPMC and the TAC’s allegations that GPMC was their alter ego, paid

for Father’s and GPMC’s defense. In 2016, a jury awarded Schreiber over 

$2.6 million in damages against Father and GPMC. It allocated 12 percent of 

the fault to Schreiber, 54 percent to Father, 16 percent to GPMC, and 

18 percent, collectively, to the siblings. By special verdicts, the jury found 

Father not liable as a director of GPMC but liable as an individual for 

negligence in building the deck.

After the verdict, Father and GPMC moved to offset the $2.5 million

paid in the partial settlement. (Schreiber, supra, 47 Cal.App.5th at p. 750.) 

The trial court denied the motion, offset only that portion of the settlement 

attributable to economic damages, and entered judgment against Father and 

GPMC for their respective fault-based shares of Schreiber’s noneconomic 

damages. (Ibid.) In 2020, Division One affirmed the judgment against 

Father but held that the settlement entitled GPMC to an offset reducing its 

liability to $0. (Id. at pp. 750, 755–761 [explaining basis for offset].)

II. The FSA

In November 2015—two months after the execution of the partial 

settlement agreement and six months before the start of the 2016 trial—the 

six siblings, Father, GPMC, SKLE, and related entities executed the FSA.

The FSA is a complicated, multi-part, 17-page agreement that has dozens of 

clauses concerned primarily with structuring several complex transactions to 

resolve pending disputes over multiple Lee family properties and trusts, 

which had an estimated total market value of over $80 million. The disputes 

6 Thus, implicitly confirming that the settlement remained in effect as 

to the six siblings and SKLE.
8

had, over the past decade, split the family into two factions: Group A (as 

defined in the FSA), which included the elder three siblings, Father, GPMC, 

and SKLE, and Group B, which included the three younger siblings. 

Samuelson and CSAA did not participate in the mediation that yielded the 

FSA, were not involved in its drafting or negotiation, and are not identified 

by name in the agreement. 

The FSA provided for the settlement of 10 civil actions and probate 

petitions pending between the siblings for partition and other relief regarding

jointly owned properties and trusts (the “Subject Actions”). The FSA also 

provided for the parties to exchange their respective interests in seven 

family-owned properties (the “Exchange Properties”) and other 

considerations so that each property would be owned fully by Group A or 

Group B. To achieve that goal, the FSA structured a total of five multimillion-dollar transactions—loans, options, sales, and an Internal Revenue 

Code section 1031 property exchange—among the parties. The FSA also 

noted that some parties thereto were also parties to the pending Schreiber

action, as well as another separate action not relevant to this appeal.

The FSA stated the parties’ intent to resolve “all of the disputes, 

claims, and causes of action between them including any facts that were or 

could have been alleged in any of the Actions and Petitions referenced . . .

above,” including “any matter arising out of the . . . construction, . . . 

ownership, operation, management, repair and/or maintenance of any 

property formerly owned by any member of Group A, Group B, or any 

combination thereof . . . (the ‘Released Matters’).”

The FSA included a mutual general release pursuant to Civil Code 

section 1542. Each member of Group A released “each and every member of 

Group B, and his, her, or its Related Persons or Entities, from any and all 
9

past, present, and future Claims whether asserted or not asserted in the 

Subject Actions, whether known or unknown, . . . that arise out of, relate to, 

or have any connection whatsoever with the Released Matters, the LLCs, the 

Exchange Property, . . . and all matters that were raised, or could have been 

raised, in the Subject Actions.” Group B similarly released Group A and its 

“Related Persons or Entities.”

As defined, “Related Persons or Entities” included “insurers” and 

“attorneys” of both individual and business-entity parties to the FSA. The 

FSA defined “Claims” to include “any and all allegations of breach of contract, 

. . . breach of covenant of good faith and fair dealing, any other form of 

contractual liability, any common law . . . [action for] breach of fiduciary 

duty, breach of trust, negligence, . . . [or] any other form of tort liability.”

III. The Present Action

In September 2016—10 months after executing the FSA and one month 

after the Schreiber jury verdict—plaintiffs, who are all members of Group A,

filed this action against CSAA and Samuelson. Plaintiffs asserted causes of 

action against Samuelson for breach of fiduciary duty and malpractice and 

against CSAA for breach of contract and of the covenant of good faith and fair 

dealing, negligence, reformation of the policies to insure Father and GPMC, 

and a declaration of plaintiffs’ right to coverage for the Schreiber action. 

Plaintiffs claimed CSAA and Samuelson’s failure to include Father and 

GPMC in the Schreiber settlement left Father and GPMC exposed to liability, 

which damaged the siblings by forcing them to pay for Father’s and GPMC’s 

defense. Plaintiffs also alleged Samuelson signed the Schreiber settlement 

stipulation on their behalf despite knowing it was inconsistent with their 

express instructions, failed to promptly declare a conflict of interest arising 

from his representation of all six siblings despite their different settlement 
10

positions, and sought to finalize the settlement without the elder siblings’

consent and over their express objections.

In 2017, the trial court stayed this action pending resolution of the 

Schreiber appeal. In 2021 the court lifted the stay, and Samuelson and CSAA 

moved for summary judgment or adjudication on three primary bases, which

applied to differing sets of plaintiffs. Each defendant sought summary 

judgment as to all plaintiffs based on the release in the FSA, on the theory 

that plaintiffs, as members of Group A, released CSAA and Samuelson as 

“Related Persons or Entities” of Group B (i.e., the younger siblings). Each 

defendant sought summary judgment as to the three elder siblings on the 

basis that Father’s and GPMC’s exclusion from the Schreiber settlement did 

not cause the siblings any economic harm cognizable as damages. Finally, 

CSAA sought summary judgment against Father and GPMC on the ground

that they were not insureds and thus have no standing to pursue claims

against CSAA.

7 (The latter two grounds were complementary: In CSAA’s 

view, Father and GPMC may have suffered damages, but they were not 

insureds, while the elder siblings were insureds, but did not suffer damages.) 

The court granted the motions on all three primary bases, resulting in 

summary judgments in favor of all defendants against all plaintiffs.

DISCUSSION

“[T]he party moving for summary judgment bears the burden of 

persuasion that there is no triable issue of material fact and that he is 

entitled to judgment as a matter of law.” (Aguilar v. Atlantic Richfield Co.

(2001) 25 Cal.4th 826, 850 (Aguilar).) A defendant seeking summary 

7 As discussed below, CSAA also sought summary judgment as to 

certain plaintiffs and summary adjudication of certain claims on grounds the 

trial court did not reach. 
11

judgment bears an initial burden of producing evidence to show, as to each 

cause of action, that the plaintiff cannot establish an element thereof or 

contest a complete defense thereto. (§ 437c, subd. (p)(2).) “Summary 

judgment law in this state . . . require[s] a defendant moving for summary 

judgment to present evidence, and not simply point out that the plaintiff does 

not possess, and cannot reasonably obtain, needed evidence.” (Aguilar, at 

p. 854, fn. omitted.) If a defendant makes that prima facie showing, “the 

burden shifts to the plaintiff . . . to show that a triable issue of one or more 

material facts exists” as to the cause of action or defense. (§ 437c, 

subd. (p)(2).) To bear that burden, a plaintiff must set forth “specific facts 

showing that a triable issue of material fact exists.” (Ibid.) We review a 

summary judgment de novo. (Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 

1348.) We decide independently whether, viewing the evidence in the light 

most favorable to the nonmoving party, “the facts not subject to triable 

dispute warrant judgment for the moving party as a matter of law.” (Ibid.; 

Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768.)

1. Defendants Have Not Established the Release Unambiguously

Applies to Claims Against the Siblings’ Joint Insurer and 

Attorney

The trial court’s one basis for granting summary judgment in favor of 

both defendants against all plaintiffs was that the release in the FSA barred 

the claims. In so holding, the court relied on three passages in the FSA—the 

release, the clause defining “related persons or entities” to include “insurers” 

and “attorneys,” and a provision stating the parties had agreed to an 

allocation of potential liabilities in the Schreiber action. Neither defendant 

offered any supporting extrinsic evidence of the meaning of the release or the 

negotiation of the FSA, in which they played no part. 
12

On appeal, the parties dispute the effect of defendants’ lack of extrinsic 

evidence. Plaintiffs quote dicta in Neverkovec v. Fredericks (1999)

74 Cal.App.4th 337, 349 (Neverkovec) suggesting that a defendant seeking 

summary judgment as a third party beneficiary of a release cannot make a 

prima facie showing based solely on the text of the release that identifies a 

class of persons or entities that includes the defendant. Neverkovec suggests 

a defendant must offer extrinsic evidence of the release’s circumstances and 

negotiation to show the parties truly intended to release any defendant 

satisfying the definition of the class of released entities. (Ibid.) Defendants 

counter by citing Rodriguez v. Oto (2013) 212 Cal.App.4th 1020 (Rodriguez), 

which rejects Neverkovec’s dicta and holds that a defendant can make a 

prima facie showing based solely on the text of a release naming a category of 

entities that unambiguously includes the defendant. (Rodriguez, at p. 1031.)

We need not resolve that dispute. The language of the release, read in 

context, does not unambiguously apply to claims brought by Group A against 

CSAA and Samuelson in their roles as insurer and attorney for Group A—as 

compared to in their capacity representing Group B. This ambiguity means 

that under both Neverkovec and Rodriguez, defendants’ exclusive reliance on 

the text of the release was insufficient to make a prima facie showing. This

conclusion requires reversal of the summary judgment.

Releases “ ‘are governed by the generally applicable law of contracts.’ ” 

(Rodriguez, supra, 212 Cal.App.4th at p. 1029, quoting Neverkovec, supra,

74 Cal.App.4th at p. 348.) Whether a third party like CSAA or Samuelson

can raise a release as a defense depends on whether the contracting parties 

intended to benefit a class of persons including that third party. (Hess v. 

Ford Motor Co. (2002) 27 Cal.4th 516, 524 (Hess).) “Ascertaining this intent 

is a question of ordinary contract interpretation.” (Ibid.) To answer it, we 
13

interpret the contract “to give effect to the mutual intention of the parties as 

it existed at the time of contracting.” (Civ. Code, § 1636.) That intent “is to 

be ascertained from the writing alone, if possible” (id., § 1639), but a contract 

“may be explained by reference to the circumstances under which it was 

made, and the matter to which it relates” (id., § 1647). “However broad may 

be the terms of a contract, it extends only to those things which it appears 

that the parties intended to contract” (id., §1648). (See Hess, at p. 524, 

quoting Civ. Code, §§ 1636, 1639, 1647, 1648.)

The release states that each member of Group A, which includes each 

plaintiff here, releases each “member of Group B and his, her, or its Related 

Persons or Entities” from all “past, present, and future Claims . . . .” The 

release similarly states the converse: each member of Group B releases each 

“member of Group A and his, her, or its Related Persons or Entities.” The 

FSA defines “Related Persons or Entities” to include the “insurers” and 

“attorneys” of any member of Group A or Group B. Assuming for argument’s 

sake that plaintiffs’ claims have some “connection . . . with the Released 

Matters [or] . . . the Exchange Property,” and fall within the FSA’s definition 

of “Claims,”8 the dispositive question is whether Samuelson and CSAA’s 

“relation to” Group B means they are protected from claims by Group A based 

8 The FSA defines “Released Matters” as those “arising out of the . . . 

construction, . . . ownership, . . . management, [etc.] of any property formerly 

owned by any member of Group A, Group B, or any combination thereof.”

That includes 71 Water Street, San Francisco, where Schreiber lived and 

which the siblings owned. The FSA also defines “Exchange Properties” to 

include that property.

The FSA defines “Claims” by type of claim, to include claims for “breach 

of contract, . . . breach of fiduciary duty, . . . negligence, . . . [and] any other 

form of tort liability,” and by subject matter, to include claims related to 

“defective design and/or defective construction . . . in any of the Exchange 

Properties,” e.g., the defective skylight in 71 Water Street. 
14

on alleged breaches of duties arising out of their “relation to” Group A. In 

other words, the FSA unambiguously releases two types of claims: (1) those 

brought by Group A against Group B and its related entities, and (2) those 

brought by Group B against Group A and its related entities. But nothing 

about the text of these releases suggests that they are releasing claims by 

Group A against their own related entities or claims by Group B against their 

own related entities.

Here, CSAA and Samuelson were the insurer and attorney in Schreiber 

for all six siblings—i.e., for members of Group A and Group B. Defendants 

rely on that joint representation to support their argument that the “Group A 

releases Group B” aspect of the FSA means that plaintiff members of 

Group A cannot bring any claims against CSAA and Samuelson. But this 

argument ignores the dynamics of the claims: Group A members are 

bringing the action against defendants in their capacity representing 

Group A, not Group B. The text of the FSA does not appear to encompass 

such a release. 

The circumstances in which the FSA was negotiated further undermine 

defendants’ view that a reasonable person in the younger siblings’ position 

would have understood the language of the release to apply to the elder 

siblings’ claims against Samuelson and CSAA. The siblings drafted and 

reached agreement on the FSA in October or November 2015, weeks after the 

Schreiber mediation at which, plaintiffs allege, Samuelson engaged in acts 

that furthered the interests of CSAA by seriously breaching his duty of 

loyalty to plaintiffs.9 Samuelson’s alleged conduct included signing a 

9 Whether Samuelson and CSAA breached duties owed to the elder 

siblings is of course disputed; the undisputed facts surrounding the FSA’s 

negotiation are the occurrence of the mediation in the Schreiber action, the 
15

settlement on plaintiffs’ behalf without their consent—a settlement that 

barred him from disclosing to his own clients the names of experts he had 

retained for them in the impending Schreiber trial, so that plaintiffs had to 

urgently seek new experts to testify on behalf of their family-owned business 

and father. Between the September 10, 2015 Schreiber mediation and the 

execution of the FSA in November 2015, Samuelson declared a conflict in his 

representation of plaintiffs, yet maintained that the settlement entered into

contrary to their prior instructions should be consummated over their express 

objections, even as the trial court gave Schreiber leave to amend her 

complaint to allege that GPMC was the siblings’ alter ego, thereby reexposing the siblings to personal liability.

Plaintiffs’ evidence of the circumstances of the FSA’s negotiation 

permits an inference that, as the siblings finalized the FSA, which included 

separate reference to the Schreiber action, they were keenly, freshly aware of 

plaintiffs’ potential claims against Samuelson and CSAA such that, had 

plaintiffs agreed to release their claims against Samuelson and CSAA in the 

FSA, the parties would have drafted the release to explicitly say so. On 

defendants’ view, plaintiffs, as members of Group A, instead conveyed an 

intent to dismiss serious misconduct claims against their own attorney and 

insurer solely by agreeing to release Group B’s “Related Persons or Entities.” 

Yet defendants contend plaintiffs did so in a mediation in which Samuelson 

and CSAA played no part and which had the primary purpose of structuring 

a complex series of financial transactions to resolve intrafamilial property 

disputes. (See Vahle v. Barwick (2001) 93 Cal.App.4th 1323, 1329 [reversing 

summary judgment based on release in part because “it strikes us as unusual 

content of the partial settlement, and the elder siblings’ objections to 

Samuelson’s and CSAA’s conduct in that regard. 
16

that a personal injury settlement would include a release of an attorney 

malpractice claim. One would expect to see explicit language regarding such 

a release”].) 

Given the parties’ failure to name Samuelson and CSAA in the release, 

despite plaintiffs’ known potential claims against them, we cannot agree that 

its language, read in light of its circumstances, applies unambiguously to 

those claims. (See, e.g., Vahle v. Barwick, supra, 93 Cal.App.4th at p. 1329 

[holding “ ‘all other persons’ ” in release was ambiguous in light of failure to 

expressly name party’s former attorney, who was subject to known potential 

malpractice claim]; Appleton v. Waessil (1994) 27 Cal.App.4th 551, 556 

[finding “ ‘all persons’ ” ambiguous because, had parties intended release to 

apply to other driver in accident, who was a named defendant, he “could have 

been specifically named in . . . the release”].)

Because the text of the release is ambiguous and defendants offered no 

extrinsic evidence of its negotiation, defendants did not make a prima facie 

showing of entitlement to summary judgment. (See Rodriguez, supra,

212 Cal.App.4th at p. 1031 [“If a contract expressly and unambiguously

grants rights to a class including the person now seeking to enforce it, proof 

of the contract makes out the third party’s threshold case,” italics added];

Neverkovec, supra, 74 Cal.App.4th at p. 349 [third party seeking summary 

judgment based on release must show parties intended to release him, which 

usually requires extrinsic evidence of intent].) 

2. There Is a Triable Factual Dispute Whether GPMC’s Exclusion

From the Settlement Caused the Elder Siblings Economic Harm 

The trial court also granted summary judgment in favor of both 

defendants, as to the three sibling plaintiffs, on the basis that the exclusion of 

Father and GPMC from the partial settlement did not cause those plaintiffs 

any economic harm cognizable as damages. The court noted that the siblings 
17

themselves did not end up owing Schreiber money—either directly or by way 

of imputed liability for GPMC’s negligence—after GPMC secured an offset 

reducing its liability to $0, which left only Father liable to Schreiber. 

(Schreiber, supra, 47 Cal.App.5th at p. 750.) The court further relied on 

evidence that the elder siblings had not paid any money directly to Father or 

GPMC and were not personally obliged to indemnify Father under the 

indemnification clause in GPMC’s operating agreement. 

The trial court nonetheless erred in granting summary judgment

against the elder siblings because it did not address plaintiffs’ evidence that, 

after Schreiber amended her complaint to allege that GPMC was the siblings’ 

alter ego, the elder siblings incurred out-of-pocket costs to pay for GPMC’s 

defense and thus avoid potential personal liability. Defendants contend that 

the elder siblings’ decision to pay for GPMC’s and Father’s defense was 

gratuitous, not an economic cost imposed by GPMC’s and Father’s exclusion 

from the settlement. As to Father, we agree that the elder siblings have cited 

no evidence giving rise to a triable factual dispute as to whether they owed a 

legal, as opposed to filial, obligation to indemnify him. But as to GPMC, 

defendants are mistaken. They have not explained why, let alone proven 

beyond triable factual dispute that, the costs incurred by the elder siblings to 

ensure the defense of a company claimed to be their alter ego did not 

constitute economic costs due to GPMC’s exclusion from the partial 

settlement.

10

Defendants assert on appeal that plaintiffs have admitted they paid 

nothing as a result of the Schreiber action, but defendants cite only Sharon 

10 In finding there is a triable factual dispute as to damages, we express 

no opinion as to whether or not such expenses were covered by the policy or 

are noninsurable as a matter of public policy, which were not arguments 

raised before the trial court or on appeal.
18

Seto’s deposition testimony that she did not pay any money to Father’s trust, 

and Gordon Lee’s deposition testimony that he did not recall personally 

making out-of-pocket payments related to the Schreiber action. But two 

attorneys—each of whom represented all three elder siblings, Father, and 

GPMC—declared that the elder siblings incurred expenses to retain their law 

firm to represent Father and GPMC in Schreiber after the partial settlement, 

as well as expenses for expert witnesses and an appeal bond in Schreiber.

11 

At minimum, there is thus a triable factual dispute whether the elder 

siblings incurred such expenses. The summary judgment cannot be affirmed 

on the basis of a lack of economic harm to the elder siblings.

3. CSAA Did Not Show an Entitlement to Judgment Against 

Father and GPMC on the Basis That They Were Not Insureds

The trial court granted summary judgment for CSAA, as to the claims 

of Father and GPMC, on the basis that those two plaintiffs were not named 

insureds on either policy at issue and thus lacked “standing” to sue CSAA. 

But in so ruling, the court failed to address the cause of action alleging 

CSAA’s vicarious liability for failing to ensure coverage for all “owners or 

their management companies and their respective partners and/or members” 

and the cause of action seeking reformation of the policies to name Father 

11 CSAA objected to portions of the attorneys’ declarations on several

grounds, including hearsay and lack of personal knowledge. Because the 

trial court did not rule on these objections, CSAA correctly notes that they

are preserved for appeal. (Reid v. Google, Inc. (2010) 50 Cal.4th 512, 516–

517, 534.) But CSAA has not made any argument on appeal that the trial 

court erred in not sustaining its objections as to the relevant parts of the 

declarations. Preserving an issue for appeal is not the same as showing error 

on appeal, thus the trial court’s failure to rule on CSAA's objections requires 

us to presume the objections were overruled and the evidence admitted. (Id.

at p. 534.)
19

and GPMC as insureds. The summary judgment in favor of CSAA as to 

Father and GPMC was thus erroneous.12

The trial court’s failure to address the reformation and negligence 

causes of action is unsurprising given CSAA’s failure to submit related 

evidence in support of judgment. While CSAA’s notice of motion stated that 

“[Father] and [GPMC] cannot establish prima facie . . . causes of action or 

claims against [CSAA] because they are not insureds under the two 

insurance policies,” and “[t]here is nothing to indicate or even suggest the 

requisite mistake for policy reformation” (capitalization removed), CSAA 

submitted no evidence to substantiate its assertion. 

In its memorandum of points and authorities, CSAA addressed the 

reformation cause of action in an unsupported single-sentence argument: 

“Nor is there anything to show or even suggest that a mistake had somehow 

been made by some person at some point in time to add [Father] or GPMC to 

the policies or to otherwise make a prima facie claim for policy reformation.”

CSAA did not address the negligence cause of action at all. Nor did CSAA set 

forth as an undisputed material fact that plaintiffs had failed, in response to 

discovery requests, to identify evidence supporting their reformation or 

negligence claims. A defendant cannot secure summary adjudication merely 

12 Nor can we direct a summary adjudication of Father’s and GPMC’s 

other causes of action against CSAA: The only basis for the ruling as to all 

causes of action was Father and GPMC’s asserted lack of standing as 

insureds; if the reformation and/or negligence causes of action succeed, that 

bar will vanish. As this court held 45 years ago, “the negligent omission of an 

intended insured on a policy . . . is the basis for a cause of action by the 

intended insured who, foreseeably, has been damaged by the omission”; such 

a party can state a cause of action “for both negligence and reformation.” 

(Jackson v. Aetna Life & Casualty Co. (1979) 93 Cal.App.3d 838, 840, 847–

848; see also American Surety Co. of New York v. Heise (1955) 136 Cal.App.2d 

689, 696.)
20

by asserting a lack of evidence. (Aguilar, supra, 25 Cal.4th at p. 854 

[defendant moving for summary judgment must “present evidence, and not 

simply point out that the plaintiff does not possess, and cannot reasonably 

obtain, needed evidence”].) Thus, the trial court lacked authority to grant 

summary adjudication as to those causes of action—or, as a result, to grant 

summary judgment in CSAA’s favor as to Father and GPMC.

Plaintiffs further contend that granting summary judgment for CSAA 

as to Father on the basis that he was not an insured was error for an 

additional reason. It is undisputed that, at the outset of the Schreiber action, 

CSAA provided Father a “courtesy defense,” which resulted in Father’s 

omission from the FAC. But Schreiber renamed Father in the SAC, at which 

point CSAA declined to defend him. Citing Mosier v. Southern California 

Physicians Ins. Exchange (1998) 63 Cal.App.4th 1022 (Mosier), plaintiffs 

contend that once an insurer undertakes to provide a “courtesy defense,” it 

owes the courteously defended party the same duties as an insured. CSAA 

attempts to distinguish Mosier on its facts, noting the benefit to Father of the 

initial dismissal and asserting, “That Schreiber later re-named him as 

defendant in a different capacity as a builder/developer rather than as an 

owner (like the actual insureds) does not obligate CSAA . . . to defend the 

non-insured for every new, different claim that may be pled against him.”

But CSAA cites no authority for this proposition, and Mosier remains 

unhelpful, as it involved alleged misconduct during a courtesy defense, not 

the discontinuance of such a defense. (Mosier, supra, 63 Cal.App.4th at 

pp. 1028–1037.) It is axiomatic that the party moving for summary judgment

“bears the burden of persuasion that there is no triable issue of material fact 

and that he is entitled to judgment as a matter of law.” (Aguilar, supra,

25 Cal.4th at p. 850.) That principle obliged CSAA to cite authority 
21

establishing as a matter of law that it was entitled to terminate Father’s 

courtesy defense in the manner it did. CSAA’s failure to do so is an 

independent reason why the summary judgment in its favor as against 

Father must be reversed.

4. CSAA’s Alternative Arguments Justify Affirmance Only of the

Summary Judgment as to SKLE, Which Is Dissolved

CSAA also defends the summary judgment—either in whole or as to 

certain claims or parties—by reiterating arguments that it raised below, but 

the trial court did not reach.13 The only one with merit is that the judgment 

should be affirmed as against SKLE, the partnership, which is dissolved and 

thus lacks standing to sue. (J.C. Peacock, Inc. v. Hasko (1960)

184 Cal.App.2d 142, 151–152 [“an action brought in the name of a 

nonexistent plaintiff, natural or artificial, is a nullity”].) CSAA notes that the 

introductory part of plaintiffs’ own complaint identifying the parties in this 

action states that SKLE “was a general partnership, now dissolved, engaged 

in the business of leasing and managing [71 Water Street].” Plaintiffs’ reply 

brief does not dispute that point, so plaintiffs have implicitly conceded it. 

(Campbell v. Ingram (1918) 37 Cal.App. 728, 732 [if appellant “has not 

deigned to reply” to respondent’s argument, we may assume appellant deems 

it “unanswerable”].)

13 On appeal, CSAA also makes two arguments not made below: that 

plaintiffs’ insurance bad faith cause of action fails because there was a 

genuine dispute as to coverage, while their negligence cause of action fails 

because negligence is “not a cognizable legal theory against an insurer in a 

bad faith action.” But CSAA has not explained why we should consider these 

new theories for the first time on appeal. We will do so only if a new theory 

raises a pure legal question that “could not be altered by the presentation of 

additional evidence.” (In re Marriage of Priem (2013) 214 Cal.App.4th 505, 

511.)
22

The other alternative arguments fail. The first is that “res judicata”—

by which CSAA evidently means issue preclusion14—bars plaintiffs’ causes of 

action. CSAA contends plaintiffs have litigated “(1) all their respective 

liabilities to Schreiber, (2) the scope of liability of Father . . . and (3) their 

liabilities with respect to each other,” so there is no basis for their claims that 

they have “suffered economic harm due to any conduct by [CSAA]” or “are 

exposed to potential indemnification claims by Father.” But the Schreiber

opinion determined only the defendants’ liabilities to Schreiber, including 

their vicarious or imputed liability for the fault of others, and how those 

issues affected the offsets to which Father and GPMC were entitled. 

(Schreiber, supra, 47 Cal.App.5th at pp. 750–751, 758–761.) CSAA and 

Samuelson were not parties to Schreiber, and the parties to that action did 

not assert cross-claims. The duties and liabilities of the Schreiber defendants 

to one another were thus not at issue. As a result, the dispositive issues in 

this action were not “actually litigated and necessarily decided” in Schreiber 

(DKN Holdings LLC v. Faerber, supra, 61 Cal.4th at p. 825), including 

whether the policies at issue should be reformed to cover Father or GPMC; 

14 Claim preclusion, formerly known as res judicata, “ ‘prevents 

relitigation of the same cause of action in a second suit between the same 

parties or parties in privity with them’ ”; it applies “if a second suit involves: 

(1) the same cause of action (2) between the same parties (3) after a final 

judgment on the merits in the first suit.” (DKN Holdings LLC v. Faerber 

(2015) 61 Cal.4th 813, 824.) Claim preclusion is plainly inapplicable here, as 

defendants do not claim to have been parties to or in privity with any party to 

the Schreiber action. Issue preclusion, formerly known as collateral estoppel,

“prohibits the relitigation of issues argued and decided in a previous case, 

even if the second suit raises different causes of action.” (DKN Holdings 

LLC, at p. 824.) It applies “(1) after final adjudication (2) of an identical issue 

(3) actually litigated and necessarily decided in the first suit and (4) asserted 

against one who was a party in the first suit or one in privity with that 

party.” (Id. at p. 825.) 
23

whether the partial settlement in Schreiber caused the elder siblings 

economic harm by compelling them to pay for GPMC’s defense, and whether 

the release in the FSA applies to plaintiffs’ claims here. 

CSAA also contends it is entitled to summary adjudication of plaintiffs’ 

claim for punitive damages (§ 437c, subd. (f)(1)) because plaintiffs cannot 

recover actual damages and their causes of action all fail. Moreover, CSAA 

argues that plaintiffs failed to demonstrate a triable dispute as to their 

ability to prove, by clear and convincing evidence, that CSAA engaged in 

fraud, oppression, or malice. But CSAA’s motion did not raise or offer 

evidence to support of these arguments. Nor has CSAA developed an 

argument on appeal as to why, if plaintiffs’ allegations are proven—including 

that CSAA representatives participated with Samuelson in negotiating a 

settlement without their insureds’ knowledge, participation, or consent—

CSAA could not be found liable for punitive damages. 

DISPOSITION

The summary judgments in favor of all defendants against plaintiffs 

Shacuan Sharon Seto, individually and as successor in interest to decedent 

Stephen K. Lee, Gordon Lee, Patricia Lum, and Golden Prosperities 

Management Company are reversed. The summary judgments in favor of all 

defendants against plaintiff Stephen K. Lee Enterprises are affirmed. The 

order denying plaintiffs’ motion to tax costs is vacated. Plaintiffs shall 

recover their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(2).)
24

_________________________

DESAUTELS, J.

We concur:

_________________________

RICHMAN, ACTING P.J.

_________________________

MILLER, J.

Seto, Individually and as Successor in Interest, etc., et al. v. CSAA et al.

(A166351 & A166573)