1 Filed 1/29/21 CERTIFIED FOR PARTIAL PUBLICATION *

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

GINA CHU et al.,

Plaintiffs and Appellants,

v.

OLD REPUBLIC HOME PROTECTION COMPANY, INC.,

Defendant and Respondent. B302792

(Los Angeles County Super. Ct. No. 19STCV26689)

APPEAL from a judgment of the Superior Court of the County of Los Angeles, Michelle Williams Court , Judge.
Affirmed. Hee Sung Yoon, self

- represented litigan t and for Gin a Chu,
Plaintiff s and Appellant s

. Claytor Law Group, James D. Claytor for Defendant and Respondent.

* Pursuant to California Rules of Court, rules 8.110 0 and 8. 1110, this opinion is certified f or publication with the exception of Discussion Parts C.3 through D.2 I. INTRODUCTION

Plaintiffs 1 appeal from the trial court’s order dismissing with prejudice their claims against defendant 2 for breach of the implied coven ant of good faith and fair dealing ( bad faith claim) and violation of the Unfair Competition Law ( Bus. & Prof. Code, § 17200 et seq. ( UCL claim ) )

. Acc ording to plaintiffs, because the contract on which they sued i s regulated under the Insuran ce Code

, 3 inc luding the U nfair Insurance Practices Act (§ 790 et seq.)

, it should be considered insurance for purposes of tort liability and their complaint thus adequately stated a bad faith
claim . Plaintiffs also argue that the alleged violations of the regulations promulgated under section 790.03 were sufficient to

state a UCL claim . We affirm.

II. FACTUAL BACKGROUND 4

Plaintiffs o wne d a condominium in Los Angeles. On an unspecified date, defendant issued to plaintiffs a “Home
Protection Plan” pursu ant to which defendant agreed to “provide

1 Plaintiff Hee Sung Yoon is an attorney who appeared as a self

- represented litigant and on behalf of plaintiff Gina Chu in the trial court.

2 Defendan t is Old Republic Home Protection Company, Inc.

3 All further statutory references are to the Insurance Code, unless otherwise indicated.

4 The facts are taken from the operative first amended complaint.3

service for cover ed systems and appliances [within the condominium] reported as malfunctioning during the term of the [contract] . . . .” 5 During the effective period of the c ontract, 6 the
condominium’s heating, v entilation, a nd air

- conditioning (HVAC) system became inoperable. Plaintiffs notified defendant of the problem , but defendant would “not allow [p]laintiffs to retain their own contractor to repair the HVAC [s]ystem.” I nstead, defendant engaged its own l i censed HVAC c ontractor to perform the repairs. That c ontractor replaced the ai r condenser on the roof, but failed to inform plaintiffs about the cause of the problem or the repairs that were needed. As a result, plaint iffs were
unaware that defendant’s c ontractor had replaced the air
condenser w ith a system that was incompatible with the air
handler inside the condominium

. The “ mis

- matched” air condenser “caused physical damage to the air handler,” resulting
in freon leaks.
In December 2017, plaintiffs discovered th at their repaired HVAC system was not properly heating their condominium. They called defendant’s c ontractor who informed them that the system needed f

reon. In June 2018, plaintiffs noticed that the HVAC system was not properly cooling their condominium. They

5 As explained below, defendant is licensed and regulated under the Insurance Co de as a “home protection company” and the warranty contract that it issued to plaintiff s is referred to as a “home protection contract.” (§ 12740, subds. (a) & (b).)

6 The effective date and duration of the contract were not specified in the first amend ed complaint.4

once again called defendant’s contractor w ho informed them that the system needed additional freon due to a leak. After p laintiffs first made a claim under their home owner’s insurance policy 7 for the breakdown of their HVAC system, the y retained th eir own contractor who confirmed that there was a
leak in the HVAC system. In July 2019, plaintiffs retained a
second contractor w ho agreed that the system had a leak and further advised that the entire system needed to be replaced. The repl acement cost of the HVAC system was $8,984.

III. PROCEDURAL BACKGROUND

In August 2019, plaintiffs filed the operative first amended complaint that asserted four causes of action against defendant:
the fourt h cause of action for breach of contract; the fifth cause o f
action , the bad faith claim ; 8 the sixth cause of action , the UCL
claim ; and the seventh cause of action for negligence.
D efendant demurr ed to each of the four causes of action asserted against i t . In support of its demurrer to the bad fait h claim, defe ndant argued that i t was licensed only as a home protection company

— not as an insurance company

— and
therefore could not be sued in tort for bad faith

. As to the UCL claim, defendant argued that it was based on alleged violations of

7 In addition to suing defendant, plaintiffs also sued the company that issued their homeowner’s insurance policy.

8 Plaintiffs erroneously alleged two “fourth” causes of action. We will refer to the secon d of the “fourth” causes of actio n, the bad fai th claim, as the fifth cause of action.5

r egulation s promulgated under section 790.03 which did not apply to home protection co mpan ies

. The trial court conducted a hearing on November 1, 2019, and following arguments, took the matter under submission. The court then issued a written ruling that overrul ed the demurrer to the fourth and seventh causes of action for breach of contract and negligence. On the fifth cause of action , the bad faith claim , the
court concluded that a home protection contract is not an insurance policy and thus sustained the demurr er without le ave to amend.
On the sixth cause of action , the UCL claim , the trial court
ruled: “The unfair business practices alleged are violations of regulations which apply to insurers. Defendant is not an insurer.
The demurrer is sustained. Leave to amend will not be granted unless plaintiff can establish that facts exist sufficien t to state a cause of action. [Citation.] Plaintiff [s have] the burden of establishing in what manner it would be possible to amend the complaint. [Citation.]”
On Nov ember 5, 2019 , plaintiffs filed a request for dismissal without prejudice of the fourth and seventh causes of
action for breach of contract and negligence, a nd the dismissal of
those claims was entered the following day. On
December 3, 2019, at plaintiffs ’ request , th e trial court ordered
the fifth a nd sixth causes of action for bad faith and violation of the UCL dismissed with prejudice. On December 5, 2019, plaintiffs filed a notice of appeal from the judgment of dismissal entered after the order sustai ning
the demu rrer.6 IV. DISCUSSION

A. Standard of Review

“In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long

- settled rules. ‘We treat the demurrer as admitting all material facts properly pleaded,
but not cont entions, dedu ctions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.’ ( Serrano v. Priest (1971) 5 Cal.3d 584, 591 . . .

. ) Further, we give the complaint a reasonable interpretation, reading it as a w hole and its parts in their context. ( Speegle v. Board of Fire Underwriters (1946) 29 Cal.2d 34, 42 . . . .) When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. (See Hill v.
Miller (1 9 66) 64 Cal.2 d 757, 759 . . . .) ” ( Blank v. Kirwan (1985)
39 Cal.3d 311, 318 .)

B. Statutory Scheme Regulating Home Protection Companies

In the mid

- 1970s , companies in California began marketing contracts to service and repair certain components or syst ems of
reside ntial structures

, usually in conjunction with real estate
brokers. (Legis. Counsel’s Dig., Sen. Bill No. 2222 (1977

– 1978 Reg. Sess.) ; Sen. Bill No. 2222 (1977

– 1978 Reg. Sess.) , Ch. 1203, Legis. Findings; Cal. Dept. of Ins., Enrolled Bill Rep. on Sen. Bill
No. 2222 (1977

– 1978 Reg. Sess.) .) “The vast majority of such contracts [had] not been executed as insurance contracts and the overwhelming majority of companies offering such contracts [had] been doing business in a capacity other than, and [had] been7

qu alified other than, as admitted insurers.” (Sen. Bill No. 2222 (1977

– 1978 Reg. Sess.) , Ch. 1203, Legis. Findings.) But “[n]o specific form of state regulation of this evolving industry” existed
in California

. ( Ibid. ) “On May 3, 1978, the A ttorney Gener al issued an opinion that companies offering such contracts were transacting insurance, and the issuance of that opinion . . . produced uncertainty for the beneficiaries of such existing contracts and for those engaged in or related to this in dustry .” (Se n. Bill No. 2222 (1977

– 1978 Reg. Sess.) , Ch. 1203, Legis. Findings.) Because there were more than 100,000 contracts to provide such repair services in force at the time of the Attorney General’s opinion, the
L egislature deemed it necessary to enact a new regulatory scheme within the Department of Insurance “for the qualification, control and functioning” of t he industry. ( Ibid .)
The initial draft of the senate bi ll that would enact that regulatory scheme stat ed that it would provide for the regulation
of persons engaged in the sale of home maintenance contracts “ as insurers

, subject to specified provisions of the Insurance Code. Specifically, [the bill] would (1) define home protection insurance as a class of insurance authorized to be trans acted in this state

. . . .” (Sen. Bill No. 2222 (1977

– 1978 Reg. Sess. ) as introduced
June 7, 1978 , i talics added.) That initial version also amended
section 100

— which specified the classes of insurance in the

state

— to include a class of “ [ h ] ome protecti on ” insurance

. (Sen. Bill No. 2222 (1977

– 1978 Reg. Sess. ) as introduced June 7, 1978.) It also defined home protection insurance as “ insurance against the cost of repair or replacement of structural components o r appliances of a home necessitated by wear and tear or inherent defect of any such structural component or appliance, or8

necessitated by the failure of an inspection to detect the likelihood of any such loss, but shall not include insurance against consequential damages arising from the failure of any
structur al component or appliance of a home.” ( Ibid. , i talics
added .)
The final version of the bill, Senate Bill No. 2222 (1977

– 1978 Reg. Sess.) (Senate Bill No. 2222) , however, deleted the
references to insurers and insur ance, and instead referred to home maint enance or warranty contracts as “home protection
contracts.” (Sen. Bill No. 2222, approved and filed Sept

. 26, 1978, Sen. Final Hist. (1977

– 1978 Reg. Sess.) p. 994.) Th e final version
also added Part 7 to Division 2 of the Insurance Code

,

co mmencing with section 12740. (Sen. Bill No. 2222, approved and filed Sept

. 26, 1978, Sen. Final Hist. (1977

– 1978 Reg. Sess.) p. 994.) That new section defined a home protection contract as “any contract or agreement whereby, for a predetermined fee, a

pe rson undertak es for a specified period of time, to repair or replace all or any part of a ny component, system or appliance of a home necessitated by wear and tear, deterioration or inherent defect, or by the failure of any inspection to detect the likeliho od of any suc h loss. [¶] Such contract shall provide for a system of service for effectuating such repair or replacement and shall not include protection against consequential damage from the failure of any component, system or appliance.” (§ 12740.) T h e s ection
al so defined a “ home protection compan y ” as “any person licensed pursuant to this part which issues home protection contracts.” ( Ibid .) Newly enacted s ection 12742 provided that “[h]ome protection contracts and home protection companies, and a ll
matters in cident to or concerned with such contracts and9

companies, shall be exclusively subject to an d regulated by the provisions of this part [namely, Part 7, “Home Protection” ] and, except as provided in [s]ection 12743, shall not be governed by

any other provis ion of this code.” Newly enacted s ection 12743

s pecified the provisions of the Insurance C ode applicable to home protection contracts and companies, including section 790 “relating to [ u ] nfair [ p ] ractices

. ” Section 12743 further explained
th at the term “ ‘ Insurer ’ ” means a “home protection c ompany” and “‘Policy’ or ‘insurance’ [means a] home protection contract.” (§ 12743, subd. (j).) The enrolled bill report on Senate Bill No. 2222 issued by the Department of Insurance recommended that the governor sig n the final version of the bill

. (Cal. Dept. of Ins., Enrolled Bill
R ep . for Sen. Bill No. 2222 (1977

– 1978 Reg. Sess.) p. 2.) A mong other things

, the report explained that Senate Bill No. 2222 “would create a regulatory scheme for home warran ty contracts, and would specify that they are not considered to be ‘insurance’ and that they are subject only to certain other provisions of the
Insurance Code.” (Cal. Dept. of Ins., Enrolled Bill R ep . for Sen. Bill No. 2222 (1977

– 1978 Reg. Sess.) p. 1 .)

C. Bad Faith Claim

1. Legal Principles R e: Insurance Bad Faith

“[I]t is well established that a covenant of good faith and fair dealing is implicit in every contract. [Citations.] The essence of the implied covenant is that neither party to a contr act will do

a nything to injure the right of the other to receive the benefits of
the contract. [ Citations.] [¶] Because the covenant of good faith10

and fair dealing essentially is a contract term that aims to
effectuate the contractual intentions of the parties, ‘com pensation for its breach has almost always been limited to contract rather than tort remedies.’ [Citations.] At present, this court recognizes only one exception to that general rule: tort remedies are
available for a breach of the covenant in cases inv olving insurance policies. [Citations.] In the insurance policy setting, an insured may recover damages not otherwise available in a contract action, such as emotional distress damages resulting
from the insurer ’ s bad faith conduct [citation ] and punitiv e damages if there has been oppression, fraud, or malice by the
insurer [citation]. ” ( Cates Construction, Inc. v. Talbot Partners (1999) 21 Cal.4th 28

, 43

– 44 ( Cates ) .)

2. Ana logy to Insurance

Plaintiffs contend that because home protectio n contracts f all within the Insurance Code’s definition of insurance, and companies that issue insurance can be liable in tort for breach of the implied covenant, their fifth cause of action stated a claim for insurance bad faith. In support of that concl usion, they c ite the Attorney General’s 1978 opinion that home protection contracts qualify as insurance under the Code, thereby suggesting that the Code’s definition controls the issue of whether home protection companies are liable for tortious breach of the implied covenant. As an initial matter, the Attorney General’s 1978 opinion was subsequently addressed

— and effectively superseded

— by the statutory scheme enacted in response to it. As the history of that scheme shows, the Legislature purposely refra ined from

cat egorizing home protection contracts as traditional insurance11

and provided that only certain of the regulatory provisions of the Insurance Code would apply to such contracts. Thus, plaintiffs’ reliance on the Attorney General’s opinion to show that home

pr otection contracts are insurance is misplaced. Moreover, as plaintiffs acknowledge, whether a contract qualifies as insurance under the Insurance Code for regulatory purposes is not dispositive of the tort liability issue. As the court
in Ca tes, supra , 2 1 Cal.4th 28 observed, “the inclusion of a particular contract in the Insurance Code for regulatory purposes does not require its classification as insurance for other purposes.” ( Id. at p. 51.) Instead, when analyzing whether a given type o f contract co nstitutes insurance for purposes of tort liability, courts “must evaluate whether policy considerations recognized in common law support the availability of tort remedies in the context of [that type of contract].” ( Id. at p. 52.)
T he court in Cates expl ained that “tort recovery is considered appropriate in the insurance policy setting because such contracts are characterized by elements of adhesion and unequal bargaining power, public interest and fiduciary responsibility.” ( Ibid. ) Here, a n evaluation of the policy considerations underlying tort liability in the traditional insurance context demonstrates that home protection contracts are not sufficiently analogous to insurance to support the imposition of tort liability.

a. Adhesion and Unequal Barg aining Power

There is nothing in the record to suggest that sellers and buyers of residential property who enter into home protection contracts lack meaningful bargaining power. To the contrary, t he12

statutory scheme that regulate s home prot ection contra cts indicates that they “have in most instances been concluded in relation to the transfer of residential properties . . . .” (Sen. Bill
No. 2222 (1977

– 1978 Reg. Sess.) , Ch. 1 203, Legis. Findings,

p. 981.) 9 As such, they are incidental to th e negotiation of a sales contract in which the buyer and seller are ordinarily bargaining

at arms

- length with relatively equal bargaining power. Further, parties to a residential sales negotiation can conclude that transaction without also entering into a home protect ion contract. As a result

, such contracts do not appear to be the product of disparate bargaining power that would otherwise support the imposition of tort remedies.

b. Fiduciary Responsibility and Public Interest

As acknowledged by the court in Cate s, supra , 21 Cal.4th 28, “a principal basis for recognizing tort liability in the context of liability insurance [is] the insurer’s assumption of the insured’s defense and settlement negotiations of third party claims [citations] . . .

, ” whic h responsibil ities give rise to fiduciary or quasi

- fiduciary obligations on the part of the insurer. ( Id. at

p. 56.) In the context of home protection contracts, those types of responsibilities do not arise on the part of the companies that
issue them. Home protecti on companies do not undertake the

9 P rior to 1978, home protection contracts had “largely been sold to sellers of residential properties for the benefit of the purchasers,” a practice which suggests tha t those contracts were intended t o enhance the marketability of the seller’s property. (Cal. Dept. of Ins., Enrolled Bill Rep. on Sen. Bill 2222 (1977

– 1978 Reg. Sess.) p. 2.)13

quasi

- fiduciary responsibilities of defending homeowners or settling claims against them; instead, their duties to homeowners are limited to the repair, or if necessary, the replacement of specifically covered home systems or appliances. T he absence of such quasi

- fiduciary policy considerations also supports the
conclusion that home protection companies should not be subject to additional tort remedies for breaches of their repair and replacement obligations u nder home pro tection contracts.
In Cates, supra , 21 Cal.4th 28, the court also explained that tort remedies are available in the insurance policy context
because they fu r ther the public interest. T he court observed that “insurance is a ‘quasi

- public’ ser vice” ( id. at p. 54) because
i nsureds seek “protection against calamity,” not mere commercial advantage ( i d. at p. 53 [“the typical insurance policy protects an insured against accidental and generally unforeseeable losses caused by a calamitous or catastr ophic event s uch as disability, death, fire, or flood”] )

. They therefore purchase insurance protection against such events primarily for peace of mind and security. ( Id. at p. 44.) Unlike insurance polic i es that protect against calamity or catastrophe

, the home prot ection contracts at issue promise to repair or replace covered home systems, such as plaintiffs’ HVAC

s ystem, or appliances, such as refrigerator s , oven s , or water heater s . Although, by obtaining the benefits of such a contract as part of a h ome purchase, a homeowner may procure a degree of economic protection against repair or replacement costs, it is not the same protection against the economic dilemma an insured faces after a catastrophic loss or accident. In the latter scenario, the impos ition of tort remedies is necessary to induce the insurer’s performance of its defense and indemnity obligations or14

to compensate fully the insured for an insurer’s bad faith breach of the implied covenant. By contrast, if a home protection company breach es its contra ctual duty to repair or replace a covered system or appliance that malfunctions, contract damages
would seem to compensate the homeowner adequately for the type of damages contemplated by the part ies at the time of contracting

— in other words

— r epair or repl acement costs.

c. Consequences of Allowing Tort Recovery

In Cates, supra , 21 Cal.4th 28, the court, in evaluating whether tort liability should be imposed upon a commercial surety company, also considered the practical consequences of imp osing tort re medies in the context of those types of surety contracts. ( Id. at pp. 57

– 59.) As defendant notes, consideration of such consequences in the contex t of home protection contracts demonstrates that treating home protection companies as
insurers

— liable in to rt as well as contract

— could have adverse financial consequences similar to those the Legislature sought to
avoid in 1978. In response to the Attorney General’s opinion that home protection companies should be treated as insurers, the Departm ent of Insura nce expressed concern about the financial impact of licensing such companies as regulated insur ers. It
estimated that the financial requirements that would be imposed on such companies as ins urers would drive the majority of them
out of busin ess. Plainti ff s nevertheless urge us to impose additional tort liability on these companies. W e decline and
instead conclude that home protection companies are not15

sufficiently analogous to traditional insurers to warrant tort
remedies.

3. Violations o f Section 790 as Bad Faith

P laintiffs argue that because home protection companies are subject to section 790 and some of the regulations promulgated thereunder, they should be subject to bad faith tort liability for violations of those regulations. But , as we expla in above, the fact that the Insurance Code may regulate a company is not dispositive of whether that company should be subject to the same tort liability as traditional insurance companies. Rather, that issue is determined based on the policy
consideratio ns set forth in Cates

, supra , 21 Cal.4th 28 and regardless of whether home protection companies are subject to certain Insurance Code regulations

.

4

. Judicial Estoppel

Plaintiffs next contend that defendant is barred under the
doctrine of judicial esto ppel from denying that home protection contracts constitute insurance for purpose of bad faith liability. According to plaintiffs, in Campion v. Old Republic Home Protection Co., Inc. (S.D. Cal. 2012) 861 F.Supp.2d 1139 ( Campion ), defendant s uccessfully a dvocated the position that its home protection contracts were consistent with the concept of insurance. Plaintiffs therefore conclude that, because defendant benefitted from that position in the Campion case, it cannot take an inconsistent po sition on the insurance issue in this action.16 a. Background

In opposition to the demurrer, plaintiffs cited the federal district court ruling in Campion, supra , 861 F.Supp.2d 1139 and argued that the court in that case “reached the same conclusion [th at] the Attor ney General” reached in 1978, i.e., home protection contracts are insurance. In its reply, defendant distinguished Campion and argued that “the issue of whether a [h]ome [p]rotection [p]lan was ‘ [ i ] nsurance’ was not before the [c]ourt in Camp ion ; rather, the issue was whether a [h]ome [p]rotection [p]lan was a ‘good’ or ‘service’ within the meaning of [the Consumers Legal Remed ies Act (Civil Code section 1 75 0 et

seq. ( the Act ) ) ] ,” such that home protection companies were subject to liability f

or alleged vio lations of that Act. At oral argument, following a colloquy regarding the legal sufficiency of plaintiffs’ bad faith claim, their counsel asserted as follows: “Now, what’s interesting about [ Campion ] is, in [that

case , defendant] was sued u nder [the Act] , and there [is] a line of cases, including some Supreme Court authority, that [has] held that insurance is neither a good nor service. So [insurance policies are] not subject to [the Act] . And, in [ Campion

, defendant] argued, ‘We’re not su bject to the [ the Act] because what we essentially issue[] are . . . insurance policies.’ So we have a situation where [defendant], in one case, saying ‘We issue insurance policies,’ and now in this case, they [are] saying, ‘Just kidding. What we issue[] [are] not ins urance policies at all,’ and I do have [defendant’s] brief in [the Campion ] case where [defendant] said, ‘Hey, [defendant is] an insurance [company]
under

. . . section 22, and the Attorney General agreed with [defendant] . . . ,’ and now [de fendant] take[ s] a completely17

inconsistent position, and I can provide further briefing on that [judicial estoppel issue ] if the court would like.” In response, the trial court indicated that it did not need further briefing. Defendant’s counsel then sta ted “if [plain tiffs’ counsel is] arguing judicial estoppel in this case, I [have] not seen that before and would, therefore

, have some difficulty with replying on the fly as to that argument, and [to] the brief that [plaintiffs’ counsel represents] was bef ore the court [in Campion ] and [counsel is also] making representations about things outside
of the record.” Following those comments, the trial court took the matter under submission without further argument or briefing. The
court then issued its final ruling on the demurrer without expressly addressing plaintiffs’ belated claim of judicial estoppel.

b. Forfeiture

Defendant maintains that plaintiffs forfeited their judicial estoppel argument by failing to timely or adequately raise it in opposition to the demurre r. We agree.

“ The forfeiture rule generally applies in all civil and criminal proceedings. [Citations.] The rule is designed to advance efficiency and deter gamesmanship. As we explained in People v. Simon (2001) 25 Cal.4th 1082 . . . : ‘“‘“ The purpo se of the general doctrine of waiver [or forfeiture] is to encourage a defendant to bring errors to the attention of the trial court, so that they may be corrected or avoided and a fair trial had

. . . . ”’ [Citation.] ‘“ No procedural princi ple is more fa miliar to this
Court than that a constitutional right, ” or a right of any other sort, “ may be forfeited in criminal as well as civil cases by the18

failure to make timely assertion of the right before a tribunal having jurisdiction to determine it. ” . . .’ [Citation.] [¶] ‘ The rationale for this rule was aptly explained in Sommer v. Martin (1921) 55 Cal. App. 603 at page 610 . . . : “‘ In t he hurry of the trial many things may be, and are, overlooked which would readily
have been rectified ha d attention be e n called to them. The law casts upon the party the duty of looking after his legal rights and of calling the judge ’ s attention to any infringement of them. If any other rule were to obtain, the party would in most cases be
careful to be si lent as to his objections until it would be too late to obviate them, and the result would be that few judgments would stand the test of an appeal. ’”’ [Citation.] ” (Fn. omitted; [ ci tations].) ’ [Citation.]” ( Keener v. Jeld

- Wen, Inc . (2009) 46
Cal.4th 24 7, 264.)
Plai n tiffs cited and argued the decision in Campion, supra

, 861 F.Supp.2d 1139 in their opposition, but did not make any argument based on the doctrine of judicial estoppel. It was not until the end of oral argument that they raised the issue, b ased in part o n documents outside the record on the demurrer. And, although plaintiffs sought leave to brief the issue, the trial court denied leave and did not consider the estoppel issue in its final ruling. Moreover, defendant objected to the timing o f the judicial estoppel argument and claimed prejudice from the late notice of the contention, including the fact that plaintiffs were relying on
documents that had not been served or filed with the court. Under these circumstances, neither the trial cour t nor defendan t ’s counsel had an adequate opportunity to consider or address the estoppel argument. And, plaintiffs make no attempt to excuse their delay in raising the issue or otherwise address the prejudice that would have resulted from the belated dis closure.19

We t h erefore conclude that they have forfeited the contention on appeal.

D

. UCL Claim

1. Legal Principles

The UCL “ defines ‘unfair competition’ to include ‘any unlawful, unfair or fraudulent business act or practice.’ ( [ Bus. &
Prof. Code ] § 17200.) Its c overage is ‘sweeping, embracing “‘anything that can properly be called a business practice and that at the same time is forbidden by law.’”’ [Citations.] It governs ‘anti

- competitive business practices’ as well as injuries to

consumers, an d has as a maj o r purpose ‘the preservation of fair business competition.’ [Citations.] By proscribing ‘any unlawful’ business practice, ‘ [Business and Professions Code] section 17200
“borrows” violations of other laws and treats them as unlawful practice s’ that the un f air competition law makes independently actionable. [Citations.] “However, the law does more than just borrow. The statutory language referring to ‘any unlawful, unfair or fraudulent’ practice (italics added) makes clear that a practice

m ay be deemed u n fair even if not specifically proscribed by some
other law. ‘Because Business and Professions Code section 17200 is written in the disjunctive, it establishes three varieties of unfair competition

— acts or practices which are unlawful, or

un fair, or fraud u lent. “In other words, a practice is prohibited as ‘unfair’ or ‘deceptive’ even if not ‘unlawful’ and vice versa.”’ [ Citations.] ” ( Cel

- Tech Communications, Inc. v. Los Angeles Cellular Telephone Company (1999) 20 Cal.4th 163, 180.)20 2. An alysis

Relyi ng on Zhang v. Superior Court (2013) 57 Cal.4th 364, plaintiffs contend that because violations of section 790 .03 and the regulations promulgated thereunder can be the basis of a n unlawful business practice under the UCL, the sixth cause of

a ction stated a claim for relief. Plaintiffs generally alleged in the sixth cause of action that defendant’s “business practices of processing claims in violation of [section 790 et seq.] and [ the ] regulations promulgated thereunder constitute[d] an unlawf ul
and unfair business practice[] in violation of [the UCL].” T he only specific regulatory violation s mentioned in the complaint

, however, were in connection with the fifth cause of action for bad
faith

, which alleged that defendant violated various provi sions of
Calif ornia Code of Regulations, title 10, section 2695.9 (regulation 2695.9)

. We thus consider whether regulation 2695.9 applies to defendant such that a violation of its provisions
constitute s an unfair business practice.

“‘ Generally , the same rules of const ruction and interpretation which apply to statutes govern the interpretation
of rules and regulations of administrative agencies .’ [Citation.] ‘The fundamental rule of interpretation is to ascertain the intent of the agency issuing the regu lation so as t o effectuate the purpose of the law.’ [Citation.] ‘In order that legislative intent be given effect,’ a regulation, like a statute, ‘should be construed with due regard for the ordinary meaning of the language used and in harmony with the w hole system of law of which it is a part.’ [Citation.]” ( Hoffman v. Smithwoods RV Park, LLC (20 09) 179 Cal.App.4th 390, 399.)21 As we discuss above, section 12743 specified the provisions of the Insurance Code applicable to home protection contracts
and c ompanies, incl uding section 790. The Insurance Commissioner has promulgated regulations at Code of Regulations, T itle 10, Chapter 5, Subchapter 7.5, that apply to the “handling or settlement of all claims.” ( Cal. Code Reg s ., tit. 10, § 2695.1 , subd. (b)

. ) These regul ations purport to apply to home protection contracts and home protection companies. ( Cal

. Code Regs., tit. 10, § 2695.1

. ) Indeed, California Code of Regulations, title 10, sections 2695.3 to 2695.7 regulate the conduct of all regulated insu rers and licen sees, including home protection companies. 10 California Code of Regulations, title 10

,

s ections 2695.8 to 2695.11, however, by their express terms, apply only to particular classes of insurance. ( Cal. Code Reg s ., tit. 10, §§ 2695.81

– 2695.85. ) For example

, California Code of Regulations, title 10

, section 2695.8 sets forth “Additional Standards Applicable to Automobile Insurance” and the regulations that follow, sections 2695.81 to 2695.85, have no apparent applicability to home protection co ntracts. 11 ( Ca l. Code

10 California Code of Regulations, title 10, section 2695.3 is entitled “File an d Record Documentation ; ” section 2695.4 is enti tled “Representation of Policy Provisions and Benefits ; ” section 2695.5 is entitled “Duties upon Receipt of Communications ; ” section 2695.6 is entitled “Training and Certification ; ” and section 2695.7 is entit led “Standards for Prompt, Fair a nd Equitable S ettlements

. ”

11 For instance, California Code of Regulations, title 10, section 2695.85 requires that “ [e] very insurer that issues automobile liability or collision insurance policies shall provide22

Reg s ., tit. 10, §§ 2695.81

– 2695.85.) Thus, the organization of these regulations suggest s that regulation 2695.9 does not apply to all insurers and licensees under the Insurance Code. ( Upland Police Officers Assn. v. City of Upland (2003) 11 1 Cal .App.4th 1294, 1304 [“‘[W]e do not construe statutes in isolation, but
rather read every statute “ with reference to the entire scheme of law of which it is part so that the whole may be harmonized and
retain effectiveness. ” [Citation.] ’”].) Regulation 26 95.9 is entitled “Additional Standards Applicable to First Party Residential and Commercial Property Insurance Policies” and subdivision (a) provides: “When a
residential or commercial property insurance policy provides for the adjustment an d settlement o f first party losses based on replacement cost, the following standards apply:

. . . .” ( Cal. Code Reg s ., tit. 10, § 2695 .9, subd. (a) , i talics added.) The term “property insurance policy” is not defined in California Code of Regulations, t itle 10, sect ion 2695.2. S ection 10087, subdivision (a) provides: “As used in this chapter [Chapter 8.5, Earthquake Insurance], ‘policy of residential property insurance’ shall mean a policy insuring individually owned residential structures [ and ]
indiv idually owned condominium units . . . . A policy that does not include any of the perils insured against in a standard fire policy shall not be included in the definition of ‘policy of residential property insurance.’” Section 2071 sets forth the
standar d form for fir e insurance, and provides that the policy shall insure “against all LOSS BY FIRE, LIGHTNING AND BY
REMOVAL FROM PREMISES ENDANGERED BY THE PERILS INSURED AGAINST IN THIS POLICY, EXCEPT AS

the named insured(s) with an Auto Body Repa ir Consumer Bi ll of Rights

. . . .”23

HEREINAFTER PROVIDED

. . . .” By contrast, section 12 762
lists the required contents of a “home protection contract,” and lists no specific perils associated with the contract. Although the definition for property insurance policy set forth at section 10087 is limited to its use in chapter 8.5, other provis ions of the
In surance Code also refer to section 10087’s definition of “ ‘policy of residential property insurance

. ’ ” (See

, e.g. , §§ 396, subd. (f), 790.031, 1625.5
, 1763.1, 10104, subd. (a).) We thus conclude that a home protection contract is not a “pro perty insuranc e policy.” Because a home protection contract is not a “property insurance policy ,” regulation 2695.9 does not apply to defendant. Further, because plaintiffs’ UCL claim is premised on their contention that defendant violated various subpar ts of regulati on 2695.9, th at claim fails as a matter of law.24 V. DISPOSITION

The judgment is affirmed. Defendant is awarded costs on appeal.

KIM, J.

We concur:

RUBIN, P. J.

BAKER, J.1 Chu et al. v. Old Republic Home Protection Comp any

B302792

RU BIN, P. J., Concurring:

I agree with the majority decision, which I have signed. I write separately for a limited reason. The court’s opinion discusses a number of policy considerations and market factors that may have supported the Legisl ature’s decisi on to amend the Insurance Code in 1978. Our present analysis of the statutory scheme primarily relies on legislative, administrative and judicial precedents that are for the most part over 20 years old, some much older. For example, the Att orney General’ s opinion was issued in 1978. The Legislature’s response was to enact in the same year Insurance Code section 12740 et seq. Two of the substantive provisions of
that law are sections 12742 and 12743. The former has never been amended; the latter was las t amended in 1981. Our opinion also relies on a 1999 commercial surety bond case, Cates Construction, Inc. v. Talbot Partners (1999) 21 Cal.4th 28. It may be time for the Legislature to consider the relationship between
insurance and home w arranty contra cts in light of present day economic realities and the manner in which home warranty contracts are currently marketed and utilized.

RUBIN, P. J.