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Filed 4/8/13 Kupfer v. Mid-Century Ins. Co. CA1/5

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

KONSTANTIN KUPFER,

Plaintiff and Appellant,

v.

MID-CENTURY INSURANCE

COMPANY,

Defendant and Respondent.

A134732

(San Francisco City and County

Super. Ct. No. CGC-10-503068)

The trial court granted defendant Mid-Century Insurance Company‟s (respondent) 

motion for summary judgment in this action brought by plaintiff Konstantin Kupfer 

(appellant) asserting causes of action for breach of contract and breach of the implied 

covenant of good faith and fair dealing. We affirm.

BACKGROUND1

In December 2008, appellant submitted a claim to respondent for the theft of his 

2006 Bentley (Vehicle). Although the Vehicle was recovered, it had suffered substantial 

damage and was determined to be a total loss. Appellant‟s insurance policy defined

“replacement cost” as the cost to purchase the insured‟s vehicle or an equivalent on the 

local market.

 

1 In this appeal from the trial court‟s order granting respondent‟s motion for summary 

judgment, we view the evidence in the light most favorable to appellant. (Aguilar v. 

Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) Our factual summary reflects this 

standard of review. (See Pool v. City of Oakland (1986) 42 Cal.3d 1051, 1056, fn. 1.)
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Upon receiving notice of the claim, respondent obtained estimates of the value of 

the Vehicle by requesting Bid Enterprises to prepare an appraisal (Appraisal), and by 

obtaining a “CCC Valuation Market Report” (Report). It appears the Report was 

generated based on information about the Vehicle provided by respondent and a posttheft 

inspection of the Vehicle by Bid Enterprises; the estimated value of the Vehicle was 

$137,125. The Appraisal was based on information provided by respondent; the 

estimated value of the Vehicle was $139,981. Both the Report and Appraisal purported 

to base their value estimates on comparisons to sales of comparable vehicles.

In February 2009, based on the Report and Appraisal, respondent sent appellant a 

check for $136,125, which reflected appellant‟s $1,000 deductible. Along with the 

check, respondent sent a letter demanding an appraisal of appellant‟s loss pursuant to an 

appraisal provision in the insurance policy. That provision states, “You or we may 

demand appraisal of the loss. Each will appoint and pay a competent and disinterested 

appraiser and will notify the other of the appraiser‟s identity within 20 calendar days of 

the receipt of the written request. Each will equally share other appraisal expenses. The 

appraisers, or a judge of a court having jurisdiction will select an umpire to decide any 

differences. Each appraiser will state separately the actual cash value and the amount of 

loss. An award in writing by any two appraisers will determine the amount payable, 

which shall be binding, subject to the terms of this insurance.” Respondent‟s letter to 

appellant stated, “We have selected Bid Enterprises as our appraiser. Please call our 

office with the name, address and phone number of your appraiser. We will advise our 

appraiser and request they meet to resolve the matter.” The letter stated a final payment 

to appellant would be made “based on the outcome of the appraisal process.”

The parties had disagreements regarding the appraisal process. In April 2009, 

appellant objected to the selection of Dave Adams of Bid Enterprises as respondent‟s 

appraiser; appellant took the position that Adams was not disinterested because he had 

prepared the original Appraisal and could be called as a witness at the appraisal hearing. 

The parties also disagreed on the selection of an umpire for the appraisal panel. The 

parties agreed to file a petition with the San Mateo Superior Court requesting 
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appointment of an umpire. Appellant filed the petition in September 2009. Prior to the 

decision on the petition, the parties agreed on the appointment of Gene Roberts as 

umpire. In November 2009, the San Mateo Superior Court approved the parties‟ 

stipulation, appointed Roberts as umpire, and ordered the parties to conduct an appraisal 

“pursuant to their contract . . . with each other under Insurance Code [section] 2071 et 

seq. and any other appropriate sections.” (Italics omitted.) In December 2009, the 

umpire informed the parties that Adams would likely be disqualified from being a panel 

appraiser. In February 2010, respondent agreed to the hearing procedures and to select a 

different appraiser.

On February 16, 2010, the appraisal hearing was conducted. Five weeks later, the 

appraiser panel issued an award of $214,392, which was less than the amount requested 

by appellant but considerably more than the amount paid by respondent in February 

2009. Respondent promptly paid the balance due for the loss, and appellant accepted the 

payment.

In August 2010, appellant filed the present action for breach of contract and 

breach of the implied covenant of good faith and fair dealing. In August 2011, 

respondent filed a motion for summary judgment. In December 2011, the trial court 

granted the motion, stating in part, “The undisputed facts establish that there was a 

genuine dispute regarding the amount of [appellant‟s] claim thereby precluding liability 

for insurance bad faith.” This appeal followed.

DISCUSSION

I. Standard of Review

“ „A trial court properly grants a motion for summary judgment only if no issues 

of triable fact appear and the moving party is entitled to judgment as a matter of law. 

[Citations.] The moving party bears the burden of showing the court that the plaintiff 

“has not established, and cannot reasonably expect to establish,” ‟ the elements of his or 

her cause of action. [Citation.]” (Wilson v. 21st Century Ins. Co. (2007) 42 Cal.4th 713, 

720 (Wilson).) “ „Because this case comes before us after the trial court granted a motion 

for summary judgment, we take the facts from the record that was before the trial court 
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when it ruled on that motion. [Citation.] “ „We review the trial court‟s decision de novo, 

considering all the evidence set forth in the moving and opposing papers except that to 

which objections were made and sustained.‟ ” [Citation.] We liberally construe the 

evidence in support of the party opposing summary judgment and resolve doubts 

concerning the evidence in favor of that party. [Citation.]‟ [Citation.]” (Id. at pp. 716-

717.)

II. There is No Triable Issue as to Appellant’s Bad Faith Claim

“California law recognizes in every contract, including insurance policies, an 

implied covenant of good faith and fair dealing. [Citations.] In the insurance context the 

implied covenant requires the insurer to refrain from injuring its insured‟s right to receive 

the benefits of the insurance agreement. [Citation.] „[T]he covenant is implied as a 

supplement to the express contractual covenants, to prevent a contracting party from 

engaging in conduct that frustrates the other party‟s rights to the benefits of the 

agreement.‟ [Citation.]” (Brehm v. 21st Century Ins. Co. (2008) 166 Cal.App.4th 1225, 

1235 (Brehm).) “ „[B]reach of a specific provision of the contract is not a necessary 

prerequisite to a claim for breach of the implied covenant of good faith and fair 

dealing. . . . [E]ven an insurer that pays the full limits of its policy may be liable for 

breach of the implied covenant if improper claims handling causes detriment to the 

insured.‟ [Citations.]” (Id. at p. 1336.)

As relevant to appellant‟s claims in the present case, “an insurer‟s obligations 

extend beyond simply paying the benefits to which its insured is entitled: „[W]hen 

benefits are due an insured, “delayed payment based on inadequate or tardy 

investigations, oppressive conduct by claims adjusters seeking to reduce the amounts 

legitimately payable and numerous other tactics may breach the implied covenant 

because” they frustrate the insured‟s right to receive the benefits of the contract in 

“prompt compensation for losses.” ‟ [Citations.]” (Brehm, supra, 166 Cal.App.4th at p. 

1236; see also Rappaport-Scott v. Interinsurance Exchange of Automobile Club (2007) 

146 Cal.App.4th 831, 837 (Rappaport-Scott) [“An insurer‟s obligations under the implied 
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covenant of good faith and fair dealing with respect to first party coverage include a duty 

not to unreasonably withhold benefits due under the policy. [Citation.]”].)

Nevertheless, the “genuine dispute rule” protects insurers who maintain positions 

with respect to coverage in good faith. As the Supreme Court has explained, “an 

insurer‟s denial of or delay in paying benefits gives rise to tort damages only if the 

insured shows the denial or delay was unreasonable. [Citation.] As a close corollary of 

that principle, it has been said that „an insurer denying or delaying the payment of policy 

benefits due to the existence of a genuine dispute with its insured as to the existence of 

coverage liability or the amount of the insured‟s coverage claim is not liable in bad faith 

even though it might be liable for breach of contract.‟ [Citation.]” (Wilson, supra, 42 

Cal.4th at p. 723; accord, Brehm, supra, 166 Cal.App.4th at p. 1237; see also RappaportScott, supra, 146 Cal.App.4th at p. 837.) Nevertheless, “[t]he genuine dispute rule does 

not relieve an insurer from its obligation to thoroughly and fairly investigate, process and 

evaluate the insured‟s claim. A genuine dispute exists only where the insurer‟s position 

is maintained in good faith and on reasonable grounds. [Citation.]” (Wilson, at pp. 723-

724, fn. omitted.)

In Wilson, the Supreme Court affirmed the Court of Appeal‟s decision reversing 

the trial court‟s grant of summary judgment to an insurer, holding the insured had 

demonstrated a triable issue as to whether the insurer‟s decision to deny her claim was 

made reasonably and in good faith. (Wilson, supra, 42 Cal.4th at p. 716.) Although the 

insurer ultimately paid the full policy limits, the insured alleged she had been harmed by 

the initial bad faith denial of benefits. (Id. at pp. 719-720.) The insured had submitted 

medical evidence indicating she suffered a neck injury in an accident involving an 

underinsured motorist. (Id. at pp. 717-718.) Without contacting the insured‟s doctor or 

having its own physician review the medical records, the insurer denied the underinsured 

motorist claim on the ground that the insured‟s pain was due to a preexisting condition. 

(Id. at pp. 718-719.) Wilson concluded a jury could reasonably find that nothing in the 

materials the claims examiner reviewed justified his conclusions (id. at p. 721): “[U]nder 

the facts of this case a triable issue of fact exists as to whether it was reasonable to deny 
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[the insured‟s] claim on the grounds stated without further medical investigation.” (Id. at 

p. 723; see also Brehm, supra, 166 Cal.App.4th at p. 1239.) Wilson stated, “ „an insurer 

is not entitled to judgment as a matter of law where, viewing the facts in the light most 

favorable to the plaintiff, a jury could conclude that the insurer acted unreasonably.‟ 

[Citation.] Thus, an insurer is entitled to summary judgment based on a genuine dispute 

over coverage or the value of the insured‟s claim only where the summary judgment 

record demonstrates the absence of triable issues [citation] as to whether the disputed 

position upon which the insurer denied the claim was reached reasonably and in good 

faith.” (Wilson, at p. 724.)

The present case is distinguishable from Wilson because respondent did conduct a 

meaningful investigation of appellant‟s claim by obtaining two professional value 

estimates. Appellant argues, whether respondent “used like kind vehicles as comparables 

is in dispute,” the fact that respondent “did not include extras in [appellant‟s] car and 

valued it at a lower condition illustrate this point,” and “a reasonable inference can be 

drawn that [respondent] did not use like kind vehicles from the fact that [respondent‟s] 

original payout was only [60 percent] of the actual value of the car.” However, 

appellant‟s evidence does not provide a reasonable basis for the jury to conclude 

respondent acted unreasonably in obtaining the Report. Appellant asserts respondent 

knew the Vehicle was “extremely rare” and in “pristine” condition, but he cites only to 

evidence that he described the Vehicle in that manner in submitting his claim. Appellant 

does not explain why respondent was obligated to accept his characterization of the 

condition of the vehicle. In any event, although the Report states “Condition is 2: 

Average,” appellant cites to nothing in record explaining the significance of that and any 

likely effect on the estimate of value. And appellant‟s evidence does not suggest it was 

unreasonable for respondent to rely on the Report to account for the rarity of the Vehicle; 

the Report does state the Vehicle has the “Arnage Diamond Edition Package.” Appellant 

also asserts the Report does not account for the fact that the Vehicle was “equipped with 

an updated engine and special mascots.” But appellant‟s record citations only contain an 

assertion in his counsel‟s declaration that the Vehicle was so equipped; there are no 
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record citations to competent evidence on that point, nor is there any explanation with 

sufficient detail to permit a jury to conclude the Report was inadequate in that regard.

Furthermore, respondent did not rely on only the Report; it also requested the 

Appraisal from Bid Enterprises. The estimated value in the Appraisal was similar to the 

estimated value in the Report. Appellant cites to no portion of the Appraisal that 

allegedly misrepresents the condition or other characteristics of the Vehicle. The 

Appraisal itself indicates that the appraiser conducted its own “thorough inspection of the 

recovered remains of the [V]ehicle.” The Appraisal appears to be based on an 

assumption that all parts of the Vehicle, including the sheet metal, paint, and interior 

were in “excellent” condition. It relied on three “currently advertised comparable 

vehicles” in making an estimate of the value of the Vehicle. It is true that “an expert‟s 

testimony will not automatically insulate an insurer from a bad faith claim based on a 

biased investigation” (Chateau Chamberay Homeowners Assn. v. Associated Internat. 

Ins. Co. (2001) 90 Cal.App.4th 335, 348), but appellant has not presented facts from 

which a jury could conclude respondent should have been aware the Appraisal was 

unreliable. (See also Bosetti v. United States Life Ins. Co. in City of New York (2009) 175 

Cal.App.4th 1208, 1239, fn. omitted (Bosetti) [“When an insurer is subjectively aware 

that it has hired a biased expert, it is simply not objectively reasonable to rely on that 

expert.”].)

Although it was ultimately determined at the hearing that the Report and Appraisal 

undervalued the vehicle by approximately 60 percent, even viewing the facts in the light 

most favorable to appellant, appellant has not presented evidence from which a jury could 

conclude that respondent‟s investigation “was in any way biased, inadequate, superficial 

or otherwise unworthy of reliance by an objectively reasonable insurer.” (Bosetti, supra, 

175 Cal.App.4th at p. 1240, fn. omitted.) Stated more broadly, unlike the insured in 

Wilson, appellant has not “presented sufficient evidence for a jury to find” respondent‟s 

initial payment was “ „ “prompted not by an honest mistake, bad judgment or negligence 

but rather by a conscious and deliberate act, which unfairly frustrates the agreed common 

purposes and disappoints the reasonable expectations of the other party thereby depriving 
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that party of the benefits of the agreement.” ‟ [Citation.]” (Wilson, supra, 42 Cal.4th at 

p. 726.)

Neither has appellant presented evidence demonstrating the existence of a triable 

issue on his bad faith claim on the basis of delay. Although more than a year passed 

between submission of appellant‟s claim and his receipt of the final payment following 

the appraisal proceeding, appellant did not present evidence from which a jury could 

conclude the delay resulted from unreasonable conduct on the part of respondent. For 

example, appellant did not present evidence from which a jury could conclude that the 

positions taken by respondent were frivolous, and he did not present evidence that the 

delay was largely due to the positions taken by respondent, rather than other causes for 

which respondent was not responsible. Appellant‟s evidence merely shows there were 

genuine disputes between the parties regarding the appraisal and hearing process under 

the contract, including the selection of the umpire and respondent‟s appraiser for the 

hearing. Those disputes caused some delay, but the evidence does not demonstrate what 

portion of the delay was due to positions taken by respondent. Appellant fails to cite any 

authority supporting his argument that the resulting delay, due to relatively routine 

procedural disputes between the parties, can form the basis for his bad faith claim. The 

trial court properly concluded there was no triable issue of fact as to whether respondent 

violated its duty of good faith by causing delay.

III. There is No Triable Issue as to Appellant’s Breach of Contract Claim

Appellant contends that, even if respondent did not violate the implied covenant of 

good faith and fair dealing, respondent‟s conduct constituted breach of the insurance 

contract. (See MacGregor Yacht Corp. v. State Comp. Ins. Fund (1998) 63 Cal.App.4th 

448, 455-456.) However, appellant fails to identify the contractual provisions allegedly 

breached by respondent. Instead, appellant points to statements in respondent‟s “Field 

Claims Service Guidelines” identifying as “[u]nfair claims practices,” “[n]ot attempting 

in good faith to effectuate prompt, fair, and equitable settlements of claims” and 

“[f]ailing to settle claims promptly where liability has become apparent.” Appellant fails 

to explain how violation of those internal guidelines would constitute a breach of 
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contract. In any event, as explained previously, there is no evidence in the record from 

which a jury could conclude respondent acted in bad faith or caused unreasonable delay. 

The trial court properly concluded there was no triable issue of fact as to appellant‟s 

breach of contract claim.

DISPOSITION

The trial court‟s judgment is affirmed.

SIMONS, J.

We concur.

JONES, P.J.

NEEDHAM, J.