Filed 4/2/20 ; Certified for Publication 4/16/20 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISI ON EIGHT

501 EAST 51ST STREET, LONG

- BEACH

- 10 LLC

,
Plaintiff and Appellant,

v.

KOOKMIN BEST INSURANCE CO., LTD.

, et al.

,

Defendant s and Respondents

. B2 93605

(Los Angeles County Super. Ct. No. NC061176 )

APPEAL from a judgment of the Superior Court of Los Angeles County

, Mark C. Kim , Judge. Affirmed.
Donahoo & Assoc iates, Richard E. Donahoo; Esner, Chang & Boyer, Stuart B. Esner and Holly N. Boyer for Plaintiff and Appellant. De La Peña & Holiday, Gregory De La Peñ a and
K. Anderson Franco for Defendant s and Respondents

.

* * * * * * * * * *2 This is an insurance ba d faith lawsuit. Plaintiff 501 East 51st Street, Long Beach

- 10 LLC appeals the judgment following summary adjudication in favor of defendant s Kookmin Bes t Insurance Co., Ltd., doing business as Leading Insurance Company, and Leading Insurance Group Insura nce Ltd., doing business as Leading Insurance Company, on plaintiff’s claim for breach of the covenant of good faith and fair dealing relating to the part ies’ insurance contract. Plaintiff sued after defendant s denied plaintiff’s claim for damages to its Long Beach apartment complex allegedly caused by a ruptured underground water main

. Experts hired by plaintiff and defendants provided conflicting report s on the cause of the damage. We agree with the trial court there is no material dispute whether defe ndants denied the claim in good faith based on an expert report concluding the damage was not caused by the broken water main, and affirm the judgment.
BACKGROUND
Plaintiff sued defendants for breach of the covenant of good faith and fair dealing, fraud in the inducement, breach of contract, estoppel, negligence, negligent misrepresentation, and declaratory relief based on defendants’ denial of plaintiff ’s
insurance claim. Defendants moved for summary adjudication of plaintiff’s
claim for breach of the covenant of good faith and fair dealing. Defendants argued the “genuine dispute doctrine” provided a complete defense to a finding of bad faith. Defend ants presented evidence the denial of plaintiff’s claim was based on expert opinions that the damage t o plaintiff’s building was caused by long

- term settlement and earth movement, which was not a3

covered loss under the policy. The parties do not dispute t hat
settlement

- related damage was not covered under the policy.

1. Facts Supporting the Summary Adjudic ation Motion

a. Plaintiff’s insurance claim and expert report The subject property is a 10

- unit, two

- building apartment complex, built in 1963. Plain tiff purchased the property in 2012, and defendants first issued a policy insuring the property in
201 3. Sometime between December 31, 2015 and January 2, 2016, an underground water main burst next to the southwest side of the building. Plaintiff alleg ed the “building moved and cracked because of the soil movement triggered by the pipe
failure.”
Plai ntiff presented its claim to defendants on March 8, 2016, claiming damage to the building caused by the ruptured water main. In April 2016, plaintiff pro vided defendants with a report prepared by American Geotechnical, Inc. (AGI). AGI performed a “limite d geotechnical investigation” of the property to “evaluate site conditions relating to the reported building distress following a waterline break near the south end of the building.” The scope of the evaluation was limited to “observation, photo documenta tion of the site conditions, [and] a
floor

- level survey of the interior of the first level units . . . .” The investigation did not involve any subsurfac e investigation or soil testing. The report noted cracks in the interior walls and the
concrete sla b floors of units 1 and 4. Regarding the exterior of the building, the report noted “significant cracks on the
foundation stem wall in the south side of the building near the reported water leak.” There were also “[n]umerous stucco4

cracks.” The report n oted “significant floor deformation,” with “downward tilting to the rear as well as to the right and left sides of the building. The steepest floor tilt . . . occurs at the left side of
Unit 1, close to the reported water leak.” AGI opined that “ e xistin g building distress was substantially contributed to by the water main break. The water introduced to the soil medium appears to have triggered
different ial foundation movement causing the stress features to develop. Some of the distress may have pre

- exi sted and be due to longterm soil influences as well as inadequate original design
and/or construction. [¶] Further investigation including soil sampling and testing can be performed to determine the site soil
conditions.” AGI recommended the building’ s foundation be reinforced with piers, going at least 20 feet deep, as well as repairs to the slab foundation. The preliminary cost to repair the damage, and relocate tenants, was estimated to be $258,900.77.
b. Defendants’ investigation and expert
At the time the claim was tendered, David Koch was defendants’ Property Supervisor. He was responsible for determining whether the loss was covered under pl aintiff’s policy, and to retain experts to help make that determination. Irene
Bernardo worked under Mr. Koch, administering the investigation of the claim. After receiving AGI’s report and repair estimate, defendants retained J.S. Held LLC, a construct ion consulting firm, to assist in investigating the claim. Upon J.S. Held’s recommendation, defendant s also retained Wiss, Janney, Elstner Associates (WJE) to inspect plaintiff’s property and determine the cause of the damage.5 On June 4, 2016, WJE asso ciates Ann Harrer and Adrienne Goetz conducted a site survey. John Machin, a cost estimator
with J.S. Held, and plaintiff’s representative, Alex Stamires, were also present during the site survey. WJE issued its report on June 29, 2016, detailing its
in vestigation and findings. As part of its investigation, WJE reviewed AGI’s report, and inspected the interior and exterior of the complex. WJE did not conduct any soil tests. According to the report, Mr. Stamires told WJE the water line supply break

occ urred three to four feet underground, at the southwest corner of the building. During a two

- or three

- day period, water leaked from the broken pipe, creating a mud slurry that traveled along the western façade of the building, and down a sloped
embankment away from the building.
WJE noted numerous previous repairs to the stucco on the building, at the w est and south facades, and near the water leak. Mr. Stamires informed WJE that no exterior repairs or repainting had been done since the property was pur chased in
2012. WJE noted that “ [a]t some locations, particularly at the
sound end of the main buildi ng, some of the [previously repaired] cracks have opened up

. . . . ” Unit 1 is a ground floor apartment, closest to the leak. The glass for unit 1’s win dow had been replaced with an acrylic sheet, as the glass for the unit had broken three times since th e pipe break. Sealant had been applied to a crack on the bottom of the window frame following the pipe break, and the crack had widened since its applica tion because the crack was no longer
sealed. Cracks were noted throughout the interior of the apartme nt, but were predominantly in the southwest bedroom closest to the water leak, and the living room. The tenants6

reported that they had filled drywall cra cks emanating from the corner of a closet door following the pipe leak, but that the cracks
had since widened. Also, the door to their unit was sticking, and there was “vertical offset” of the slab floor in the living room
which was not noticeable before the leak. The floor noticeably sloped to the south. WJE concluded that “ [t]he previously repaired i nterior and exterior cracking, and the [floor level] survey performed by [AGI]

, indicate that away from the vicinity adjacent from the reported
water supp ly line break location there are changes in elevation across the slab of the main building. The chang es in elevation
noted indicate that at least some settlement and movement of the building occurred prior to the water supply line break event and subseque nt running water from the broken line. However, the reopening of previously repaired cracks, presence of open cracks, observed discontinuity with vertical offset in Unit 1, and the multiple occurrences of glass breakage of the window in Unit 1 as reported by residents, indicate that there has been some movement or settlement of the building since the earl y 2016 water supply line break event. Existing settlement

- related conditions were likely exacerbated as a result of the water released due to the supply line break. However, it is of note that there has been ongoing, general settlement of the building,
d ownwards towards the west, which will likely continue, and which is not a result of the recent water supply line break and subsequent running water. ”
WJ E recommended that “ floor finishes in Unit 1 be removed to investigate further the noted floor slab di scontinuity
and vertical offset. This investigation should be completed to
dete rm ine potential extent of distress as well as to determine a7

repair proced ure. ” WJE made no recommendations on how the damage should be repaired.

c

. Defendants retain cove rage counsel On June 30, 2016, defendants retained Mark R. Israel of Daniels, Fine, Israel, Schonbuch & Lebovits, LLP to provide legal advice regarding c overage for the damage under the policy.
Mr. Israel was asked to determine whether there was coverage for plaintiff’s damages under the “efficient proxim ate cause”
standard. He reviewed the policy, and the AGI and WJE reports. On July 27, 2016, Mr. Is rael provided defendants with an opinion letter summarizing his conclusions. Under the policy, damage to the building caused by earth movement and settlement are excluded, but water damage resulting from an “accidental discharge” of water was c overed. He noted that both AGI and WJE agreed there was “pre

- existing, ongoing general
settleme nt” of the buildi ng. He noted that “there are a number of candidates for the ‘efficient proximate cause’ of loss,” but that “both experts concur that the water leak set i n motion forces that seriously exacerbated the preexisting condition of the property and likely caused new damage.” Mr. Israel ultimately concluded “damage to the insured apartment building attributable to the recent water line break is
covered

. There w as undoubtedly pre

- existing settlement and cracking at the insured location. To the extent the expert s can reasonably segregate the repair cost between the two types of damage, then coverage would exist only for damage allocable to the pipe break.” He re commended that “in addition to having your experts assess that issue, you may wish to request water

us age records from the insured location to verify that this leak8

was a sudden occurrence in the December

- January time frame as opposed to a chronic conditio n at the property. ”
d. Defendants seek further expert opinions
Because neither the AGI nor the WJ E reports provided a definitive opinion that the water main break was the efficient proximate cause of the damage, on September 16, 2016, Mr. Koch
request ed that WJE perform additional testing. Also, on
October 5, 2016, defendants retained Geotechnical an d Environment Sciences Consultants, Ninyo & Moore. Ninyo & Moore provided a report on December 6, 2016, and on
December 5, 2016, WJE provided a supplemen tal report. Ninyo & Moore visited the site on October 11, 2016

, reviewed the regional geological se tting and site geology, and
conducted “s ubsurface exploration consisting of the excavation, logging, and sampling of two hand excavated test pits and
four hand

- augered exploratory borings around the subject building. ” Soil samples were taken from the bori ngs and test pits and sent to a laboratory for testing. Ninyo & Moore observed numerous previously patched
cracks in the stucco. Some of those cracks e xperienced “minor re

opening.” They also inspected the exposed slab floor in unit 1, and noticed larg e cracks in the concrete. The “slab cracks were generally noted to have aged characteristics including rounded and worn edges,” and were fil led with debr is. They also noted that “topping slab/replacement slab” had been applied to the
southwest bedroom fl oor, attempting to level the sloping floor. Ninyo & Moore formed the following opinion : “Based on our evaluation, the cracks in the walls and floor sl ab and the tilt
of the floors of the subject building were caused by long

- term differential soil movem ent. The soil movement that has affected9

the building is attributable to settlement of soils along the west side of the building, as indicated by the low areas and contour pattern of the

. . . floor level survey

. . . , and heave of expansive clayey soil u nder the eastern portion of the building. Based on our site observations, the settlement is related to the poor surface drainage conditions observed alon g the west side of the building. Long

- term infiltration of water into the foundation soils on the

west side of the structure due to roof runoff and incident rainfall has resulted in long

- term settlement in this area. ”

“ Based on our evaluation, we conclude that the reported December 31, 2015, pipe leak did not contribute to the tilt of the building floor o r the cracks in the building. The tenants of the building reportedly observed water from the leaking pipe flowing into the drainage channel property to t he north of the subject
site. Based on our

. . . surveying around the southwest part of the site, sur face drainage in the vicinity of the reported pipe leak location would tend to flow away from the building toward the south and west into the drainage cha nnel property adjacent to the subject site

. . . . This suggests that water from the leaking pipe esca ped to the ground surface and flowed away from the building and that a significant amount of water did not infiltrate
the subsurface soils at the location of the leak. Additionally, the
tilt of the slab

- ongrade is relatively consistent from the south end of the building to the north end and cracks in the building walls were observed to be widespread across the structure

. . . . We did
not observe indicatio ns that the distress was isolated at the location of the reported pipe leak at the southwest corner of the building.

. . . ” As part of its supplemental report, WJE reviewed water bills for the subject property for the months between August 201510

and Janu ary 2016. The January bill reflected water use that was 9,500 gallons higher than previous months. W JE also inspected the exposed slab floor for unit 1, and noticed significant cracking

, and that topping cement had been added to the southwest corner
of t he bedroom . WJE used ground penetrating radar (GPR) to examine the conditions below the slab. “ GPR s urveys performed in several locations throughout the exposed slab revealed that the slab is largely unreinforced, and as a result, does not have the
tensi le strength to resist differential movement, which results in cracking. Some areas of the slab exhibi t evidence of previous repairs .”
WJE concluded that “ the previous repairs to the exterior
cracks and evidence of the slab

- on

- ground cracking indicates t hat the cracks initiated prior to the water supply line break of
December 2015. Previous repairs to t he exterior walls and interior slab also indicate that ongoing attempts to mitigate the long

- term settlement of the building have occurred, including
inst allation of a topping or leveling material in the bedroom. In conclusion, there has been ongoing, gen eral settlement of the building, downwards toward the south and west, resulting in the observed cracking in the slab and walls of Unit I, which will
likel y continue without remediation of the conditions that are causing this settlement, and which is not a result of the
December 2015 water supply line break and subsequent discharge of water.” Mr. Israel reviewed both the Ninyo & Moore report and
WJE ’s sup plemental report , and on December 7, 2016, Mr. Israel forwarded these reports to plaintiff.
On Januar y 23, 2017, plaintiff provided defendants with a 2012 property inspection report which had been prepared in11

connection with plaintiff’s purchase of the pr operty. The report noted cracking and bubbling in the stucco requiring repairs and
further evaluation , and problems with the window in unit 1. T he
window would fall out of its tracks and required further
evaluation

. The i nspector also noted cracking in the drywall , and
that the slab in unit 4 is “ badly cracked and feels as though the
crack is offset. C ause of the cracking is unknown and . . . needs
to be determined.”

e
. Defendants deny plaintiff’s claim After reviewing all these reports, Mr. Israel p repared a second coverage evaluation concluding the “efficient proximate cause of the foundation damag e was long

- term differential soil movement which cause of loss is explicitly excluded by the terms of the policy. ” Mr. Israel sent this coverage opinion to plaintiff on February 6, 201 7.
2. Plaintiff’s Facts in Opposition to Summary Adjudication
P laintiff argued there were triable issues as to whether
there was a “ genuine dispute, ” reasoning there was ample evidence from which a jury could conclude that de fendants “acted unreasonably and that [their] invest igation was biased.” Specifically, plaintiff argu e d that the property was in good condition when it was purchased and when defendants first extended coverage to plaintiff; WJE initially concurred with pl aintiff’s expert that the leak caused new damage to the building ; defendants received an initial cover age opinion that there was coverage under the policy that defendants did not disclose to plaintiff ; the decision to extend coverage changed
when defendant s received a higher than expected estimate to repair the damage ; WJE changed its opinion without condu cting12

any further investigation ; new experts were hired only to “pursue coverage denial” ; and defendants anticipated litigation, from
which it could be in ferred their de nial was in bad faith.

a. Condition of property at time of purchase In 2013, defen dants had the property inspected as part of their due diligence before issuing an insurance policy. The report, written by E&S Inspections, Inc. provided no in

- depth description of the condition of the property, but instead noted that the property was in “satisfactory” or “average” condition, and
included 11 general photographs of the building, none of which included sufficient detail to show cracking to t he building’s stucco or settlement of the building.
Mr

. Koch testified in his deposition that if the inspection revealed “apparent damage or issues

, ” an insurance policy would
not likel y have been issued. He also testified that the 2013 report was not p rovided to defendants’ experts, WJE and Ninyo &
Moore.
b. Defendants initially decided to extend c overage Claim file notes entered on July 26, 2016 by Ms. Bernardo
recorded that Mr. Israel “[j]ust completed the analysis, we will extend coverage to unit 1 only, he wanted to see previous water bill for this property first for review then finalize[] his r eport, submit to KBIC Mr. Koch and move forward.” Plaintiff provided the water bills to defendant s on August 8, 2016. That same day, Mr. Machin , the co st estimator with defendants’ construction consulting firm, told defendant s in his opinion, “9

, 537 gal lons more in the month of December

January over the monthly average

. . . is representative of enough water to cause the settling and deformation describe d.”13 August 10, 2016 notes in the claim file record that
Mr. Israel told defendant s that if the expert s agreed the water
line break caused the damage to plaintiff’s property , the next step would be to “formulate cost[s]” of repair. However, he cautioned

t hat further investigation might be warranted

. Defendants provided the water bills to WJE, and on Aug ust 16, 2016, WJE informed defendant s that the water bills did not change their findings from their earlier report that pre

existing settlement of the bui lding “was likely exacerbated as a result of the water supply line break.” WJE also maintained that

s ettlement of the building would likely continue, unrelated to the

water line break. According to Mr. Stamires, defendants did not provide plaintiff with WJE’s initial June report which stated in part,

“ Existing settlement

- related conditions were likely e xacerbated as a result of the water released due to the supply line break. ” Moreover, “ [t] he Carrier never disclosed to me the decision to extend coverag e in July 2016 ” or that they asked “Mr. Machin to prepare an estimate for repair of damages related to the loss.” Defendants also did not give Mr. Israel’s July coverage opinion to plaintiff. Mr. Israel advised defendants that the letter was for
their us e, and that the opinion was privileged.

c. J.S. Held LLC prepares repair estimate On July 27, 2016 , defendant s forwarded a copy of WJE’s
June report to Mr. Machin of J.S. Held LLC “so he can start writing estimate for unit 1.” According to July 28, 20 16 notes in the claim file, Mr. Machin told defendants there were “lots of issues” with writing an est imate for unit 1. He recommended further evaluation by the engineers, including evaluation of the slab to “get a better picture and write a report” of th e damage.14 On September 3, 2016, Mr. Machin provided an estimate to repair u nit 1 to his colleague at J.S. Held , Mr. John Gillen. The total repair costs for unit 1 were estimated to be $227,752.90. On September 5, 2016, Mr. Gillen emailed Mr. Machin,

as king him to “clarify the extent of slab replacement and releveling” because the estimate was “more tha n

. . . expected and quite a b i t more than the Insured’s estimate, so I want to be sure
before we send.” On September 8, 2016, Mr. Machin discussed the estimate with defendants, and again explained there were a lot of “unknowns” that made providing an e stimate difficult, and that WJE had not recommended the scope of work or how to repair the damage to the building. He suggested having a conference call
with defendants, Mr. Gillen, WJE

, and Mr. Israel to discuss how to proceed.
The conference call was held on September 9. Mr. Machin expressed concerns that “there is something going on [in] the middle of the building that we do not know” and that there was extensive settlement on the north side of the building, away from the pipe leak. The parties dec ided that WJE would write a proposal for further investigations so that they “can tell for sure
if all the cracks are related to [the water pipe leak] or

. . . settlement.”
d. Defendant s hire new expert
Ms. Harrer with WJE sent a proposal to perform a dditional investigations to J.S. Held on September 13, 2016. She
recommended that the floor finishes in unit 1 be removed so that
the floor could be furt her investigated. She proposed that WJE visually survey the exterior of the building for any noticeab le changes since its June investigation. WJE would use GPR to15

determine the condition of the slab including its thickness and
reinforcement. WJE’s inves tigation would not include samples or material testing, but these services were recommended.
In addit ion to this proposal

, Ms. Harrer cut and pasted some background information from WJE’s June report. Other than reviewing the water bills, and participati ng in the September 9 conference call, WJE had not performed any additional investigations since its J une report. Nevertheless, the proposal phrased some matters differently than the June report. For example, the proposal substituted the term “may”
for t he phrase “has been” in stating that there “may h a ve been

some movement or settlement of the building since the early
2016 water supply line break event .” Ms. Harrer also tempered her previous conclusion that “[e] x i st i n g s e tt l ement

related conditions were likely exacerbated as a result of the

water released due to t h e supply li n e brea k

, ” by adding,

“ howev er, the extent of damag e , if any, caused by the Jan u ary 2016, even [ t] are not known at this time ” to the end of the

sentence. According to Ms. Bernardo, it was Mr. Koc h who suggested
that ne w experts be hired. On October 3, 2016

, she wrote an email to M r. Koch asking him to approve Ninyo & Moore ’s budget of $15,000. On October 5, 2016, Mr. Koch responded by asking “Why is budget so expensive?” Later th at same day,
Mr. Koch approved the budget , writing to Ms. Bernardo, “Seems expensive in pursuit of cov erage denial. OK for engineer.”

e. Defendants deny claim In December 2016, following the receipt of reports from WJE and Ninyo & Moore, the claim fi le includes notes indicating a “potential lawsuit” and “this file will be in16

litigation.” The context for these notes was that the reports concluded the damage was not attributable to the water main break, and that the coverage attorney, Mr. Israel, was g oing to provide these reports to plaintiff.
f. Plaintiff seeks denial of motion pursuant to
Code of Civil Procedure section 437c, subdivision (h)
Plaintiff argued the motion should be denied under
section 437c, subdivision (h)

, because defendants ’ pers on most knowledgeable about the investigation and denial of plaintiff ’ s claim, William Walker, was ins tructed by counsel not to answer 53 questions during his July 20, 2018 deposition. Specifically, he
refused to answer “Was the denial of the claim approp riate?” Counsel objected that the question improperly called for expert opinion.
Plaintiff’s counse l’s declaration in support of the opposition
averred : “The refusal of Defendant to answer questions in deposition prevented me from obtaining essential d iscovery regarding the denial of the claim, which I would have found
useful in preparing the oppositio n to this motion.” “ There were other similar questions to which the PMK witness was so
instructed and refused to answer. The instruction and refusal to

answer each of the 53 questions severely limited the usefulness of the deposition and was prejudicial to Plaintiff in that facts essential to justify opposition may exist but cannot, for reasons stated, be presented. On this ground alone, per CCP §437(c)( h)
the Court should deny the motion and make any other order as may be just.”17

3. Defendants’ Reply
Def endants’ reply argued that plaintiff’s evidence did not show that defendants acted unreasonably, or refute their evidence that there was a genuine dispute . The reply did not address plaintiff’s argument that the motion should be denied pursuant to section 437c, subdivision (h).
4. Trial Court’s Ruling The trial court granted the motion, finding defendants had satisfied their burden under the genuine dispute d octrine , and that plaintiff’s opposition evidence did not raise a triable issue of
material fact

. The trial court’s ruling did not address plaintiff’s request for denial of the motion under section 437c,
subdivision (h). Plaintiff dismissed its remaining claims without prejudice, judgment was entered in favor of defendants, and this timely appeal followe d.
DISCUSSION “[T]he party moving for summary judgment [or adjudication] bears the burden of persuasion that there is no
triable issue of material fa ct and that he is entitled to judgment as a matter of law.” (

Aguilar v. Atlantic Richfield Co. (2001)
25 Cal.4th 826, 850 (

Aguilar ).) “Once the [movant] has met that burden, the burden shifts to the [other party] to show that a
triable issue of one or mo re material facts exists as to [that] cause
of action . . . .” (Code Civ. Proc., § 437c, subd. (p)(2) ; Aguilar , at

p. 850.) The party opposing summary judgment “ shall not rely upon the allegations or denials of its pleadings to show that a
triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact
exists . . . . ” (§ 437c, subd. (p)(2).) A triable issue of material fact
exists where “the evidence would allow a reasonable trier of f act18

to find the underlying fact in favor of the party opposing the motion in accordance with the appli cable standard of proof.” ( Aguilar , at p. 850.) Our Supreme Court has made clear that the purpose of the 1992 and 1993 amendments to the summary judgmen t statute was “ ‘to liberalize the granting of [summary judgment]
motions.’ ” ( Perry v. Bakewell Hawt horne, LLC ( 2017) 2 Cal.5th 536, 542; Aguilar

, supra , 25 Cal.4th at p. 854.) It is no longer called a “disfavored” remedy. “Summary judgment is now seen as a ‘particularly suitable means to test the sufficiency’ of the plaintiff’s or defendant’s case.” ( Perry, at p. 542.) On appeal, “we
take the facts from the record that was before the trial court . . . .

‘ “We review the trial court’s decision de nov o, considering all the evidence set forth in the moving and opposing papers except that to which objec tions were made and sustained.” ’ ” ( Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1037, citation omitted.)

a. Genuine dispute d octrine
Calif ornia law requires insurers to pay for covered losses caused by an insured risk. If a loss was caused by more than

one occurrence, including covered and not

- covered events, then
the insurer is liable only if the “efficient proximate cause” or the “predomi na te ” cause was a covered risk

. ( City of Carlsbad v. Insurance Co. of State of Pennsylvania (2009) 18 0 Cal.App.4th 176, 183.)

“ ‘ Before an insurer can be found to have acted in bad faith for its delay or denial in the payment of policy benefits, it must be
shown that the insurer acted unreasonably or without proper

cause

. ’ . . . ‘Where there is a genuine issue as to the insurer ’ s liability under the policy for the claim asserted by the insured, there can be no bad faith liability imposed on the ins urer for19

advancing its side of that dispute.’

. . . [¶] ‘ The “genuine dispute” doctrine may be appl ied where the insurer denies a claim based on the opinions of experts.’

. . . Reliance on an expert

. . . ‘will not automatically insulate an insurer fr om a bad faith claim based on a biased investigation.’

. . . Although an insurer may rely on experts , summary judgment on a bad faith
claim must be denied where the evidence shows ‘the insurer dishonestly selected its experts[,] the insurer ’ s experts wer e unreasonable[,] [or] the insurer failed to conduct a thorough investigation.’ ” ( McCoy v. Progressi ve West Ins. Co. (2009)
171 Cal.App.4th 785, 793, citations omitted.) Here, defendants presented evidence that there was a genuine dispute that the pi pe rupture (a covered loss) was not the efficient proximate cause of the damage, and that the efficien t

pr oximate cause was earth movement or settlement (a n excluded loss). Specifically, defendants presented evidence that its experts, WJE and Ninyo & Moor e, concluded the damage to the building was caused by earth settlement and not the pipe rupture.
Pl aintiff makes much of the fact that there was evidence defendants initially decided the damage may have been covered, and only sought additional expert op inions after the estimate for repairs exceeded their expectations. However, plaintiff ignores
evidenc e that both AGI and WJE noted extensive pre

- existing settlement damage to the building in their initial reports, and cautioned that further investigations and testing should be conducted to determine the cause of the damage and the necessary repairs. More over, when asked to provide a repair estimate, Mr. Machin cautioned there were many “unknowns,” and further investigation was warranted. Mr. Israel simil arly20

guarded his initial coverage evaluation, cautioning there were other possible causes of the damag e, and that the experts should attempt to apportion the damage between the various causes, including pre

- existing earth movement and the pipe rupture.
Pl aintiff also complains that WJE changed its opinion in its September 13 proposal, without conducting a ny further investigation. Nothing in the record supports this inference. WJE had participated in the September 9 conference call, where
Mr. Machin raise d concerns about his ability to write an accurate repair proposal based on the number of “unknowns” be fore WJE drafted its proposal. We can infer no dishonesty or
unreasonableness from these facts. Plaintiff also makes much of Mr. Koch’s email approving the $15,000 budget for an additional expert report and stating it seemed expensive “in pursuit of cov erage denial,” and the claim file notes stating litigation was anticipated. We do not find it is
reasonable to infer bad faith from the email or from the se file notes. Mr. Koch may have been of the opinion that defendants already had enough expert inform ation on which to deny the claim, and another $15,000 was too much to spend, but he approved the budget anyway, and defendants’ coverage denial was indisp utably based on the additional expert report. As for the file notes, litigation often results from co verage denial, and file notes stating the obvious are not reasonably viewed as
evidence of bad faith. We agree with the trial court’s assessment that no ne of plaintiff’s evidence raised a triable issue that this was not a genuine coverage dispute. There is no dispute that defendants based their claim denial on the final expert report, and there is no evidence that report was contrived or false. As the t rial court21

aptly stated, “Initial opinions are often superseded by further investigation.”
b. S ection 437c, s ubdivision (h) Section 437c, subdivision (h) provides: “ If it appears from
the affidavits submitted in opposition to a motion for summary judgmen t or summary adjudication, or both, that facts essential

to justify opposition may exist but cannot, f or reasons stated, be presented, the court shall deny the motion, order a continuance to permit affidavits to be obtained or discovery to be had, or make

any other order as may be just.” A party seeking continuance or
denial of a motion under section 437c , subdivision (h) must show that the facts to be obtained are essential to opposing the motion, that there is reason to believe such facts may exist, and that
additional time is needed to obtain these facts. ( Wachs v. Curry (1993) 13 Cal.App.4th 616, 623. ) The party’s supporting
declarations must show: “ (1) ‘ Facts establishing a likelihood that controverting evidence may exist and why the information sou ght is essential to opposing the motion ’ ; (2) ‘ The specific reasons why such evidence cannot be presen ted at the present time ’ ; (3) ‘ An estimate of the time necessary to obtain such evidence ’ ; and (4) ‘ The specific steps or procedures the opposing party in tends to
utilize to obtain such evidence. ’ ” ( Johnson v. Alameda County
Medical Center (2012) 205 Cal .App.4th 521, 532, italics omitted.) Here, the sum total of plaintiff’s argument on this point in the trial court was one heading, and two sentences , at the conclusion of plaintiff’s opposition brief: “Other facts may exist essential to denial, however, Defendants refused to answer
53 questions in PMK deposition. Denial is proper pursuant to
CCP 437(c)(h). ” Counsel’s supporting declaration was very

gen eral, and did not explain why the answer to any of the22

questions at the PMK deposition was essential t o opposing the summary adjudication motion. The only testimony that plaintiff complains it was unable to obtain was an opinion about whether
denial of th e claim was “appropriate,” and we see no reason to conclude the PMK’s opinion, whether yes or no, woul d be a material fact, or that it was essential to oppose the motion.
DISPOSITION The judgment is affirmed. Respondents are awarded their costs on appeal

.

GRIMES, J.

WE CONCUR:

BIGELOW, P. J.

WILEY , J.Filed 4/16/20 CERTIFIED FOR PUBLICATION

I N THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

501 EAST 51ST STREET, LONG

- BEACH

- 10 LLC

,
Plaintiff and Appellant,

v.

KOOKMIN BEST INSURANCE CO., LTD.

, et al.

,

Defendant s and Respondents

. B 2 93605

(Los Angeles County Super. Ct. No. NC061176 )

ORDER CERTIFYING OPINION FOR PUBLICATION

[No change in judgment]

THE COURT: The opinion in the above

- entitled matter filed on April 2,
2020 , wa s not certified for publication in the Off icial Reports. For good cause, it now appears that the opinion should be published in the Official Reports and it is so ordered

. There is no change in the judgment.

____________________________________________ _____ ___________ BIGELOW, P. J. GRIMES

, J. WILEY , J.