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

DIVISION EIGHT

501 EAST 51ST STREET, 

LONG-BEACH-10 LLC,

 Plaintiff and Appellant,

v.

KOOKMIN BEST INSURANCE 

CO., LTD., et al.,

 Defendants and Respondents.

 B293605

 (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 & Associates, Richard E. Donahoo; Esner, Chang 

& Boyer, Stuart B. Esner and Holly N. Boyer for Plaintiff and 

Appellant.

De La Peña & Holiday, Gregory De La Peña and 

K. Anderson Franco for Defendants and Respondents.

* * * * * * * * * *
2

This is an insurance bad faith lawsuit. Plaintiff 501 East 

51st Street, Long Beach-10 LLC appeals the judgment following 

summary adjudication in favor of defendants Kookmin Best 

Insurance Co., Ltd., doing business as Leading Insurance 

Company, and Leading Insurance Group Insurance 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 parties’ insurance contract. Plaintiff sued after defendants

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 

reports on the cause of the damage. We agree with the trial court 

there is no material dispute whether defendants 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. Defendants presented 

evidence the denial of plaintiff’s claim was based on expert 

opinions that the damage to plaintiff’s building was caused by 

long-term settlement and earth movement, which was not a 
3

covered loss under the policy. The parties do not dispute that 

settlement-related damage was not covered under the policy. 

1. Facts Supporting the Summary Adjudication Motion

a. Plaintiff’s insurance claim and expert report

The subject property is a 10-unit, two-building apartment 

complex, built in 1963. Plaintiff purchased the property in 2012, 

and defendants first issued a policy insuring the property in 

2013. 

Sometime between December 31, 2015 and January 2, 

2016, an underground water main burst next to the southwest 

side of the building. Plaintiff alleged the “building moved and 

cracked because of the soil movement triggered by the pipe 

failure.” 

Plaintiff presented its claim to defendants on March 8, 

2016, claiming damage to the building caused by the ruptured 

water main. In April 2016, plaintiff provided defendants with a 

report prepared by American Geotechnical, Inc. (AGI). AGI 

performed a “limited 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 documentation of the site conditions, [and] a 

floor-level survey of the interior of the first level units . . . .” The 

investigation did not involve any subsurface investigation or soil 

testing. 

The report noted cracks in the interior walls and the 

concrete slab 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 stucco 
4

cracks.” The report noted “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 “existing building distress was 

substantially contributed to by the water main break. The water 

introduced to the soil medium appears to have triggered 

differential foundation movement causing the stress features to 

develop. Some of the distress may have pre-existed 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 plaintiff’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 construction consulting 

firm, to assist in investigating the claim. Upon J.S. Held’s 

recommendation, defendants 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 associates 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 

investigation 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 

occurred 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 west 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 purchased in 

2012. WJE noted that “[a]t some locations, particularly at the 

sound end of the main building, 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 window had been replaced with an acrylic sheet, 

as the glass for the unit had broken three times since the 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 application because the crack was no longer 

sealed. Cracks were noted throughout the interior of the 

apartment, but were predominantly in the southwest bedroom 

closest to the water leak, and the living room. The tenants 
6

reported that they had filled drywall cracks 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 interior and 

exterior cracking, and the [floor level] survey performed by [AGI],

indicate that away from the vicinity adjacent from the reported 

water supply line break location there are changes in elevation 

across the slab of the main building. The changes in elevation 

noted indicate that at least some settlement and movement of the 

building occurred prior to the water supply line break event and

subsequent 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 early 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, 

downwards towards the west, which will likely continue, and 

which is not a result of the recent water supply line break and 

subsequent running water.” 

WJE recommended that “floor finishes in Unit 1 be 

removed to investigate further the noted floor slab discontinuity 

and vertical offset. This investigation should be completed to 

determine potential extent of distress as well as to determine a 
7

repair procedure.” WJE made no recommendations on how the 

damage should be repaired. 

c. Defendants retain coverage counsel

On June 30, 2016, defendants retained Mark R. Israel of 

Daniels, Fine, Israel, Schonbuch & Lebovits, LLP to provide legal 

advice regarding coverage for the damage under the policy. 

Mr. Israel was asked to determine whether there was coverage

for plaintiff’s damages under the “efficient proximate cause” 

standard. He reviewed the policy, and the AGI and WJE reports. 

On July 27, 2016, Mr. Israel 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 covered. He noted that both 

AGI and WJE agreed there was “pre-existing, ongoing general 

settlement” of the building. 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 in 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 was undoubtedly pre-existing settlement and 

cracking at the insured location. To the extent the experts 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 recommended that “in addition to having 

your experts assess that issue, you may wish to request water 

usage records from the insured location to verify that this leak 
8

was a sudden occurrence in the December-January time frame as 

opposed to a chronic condition at the property.” 

d. Defendants seek further expert opinions

Because neither the AGI nor the WJE reports provided a 

definitive opinion that the water main break was the efficient 

proximate cause of the damage, on September 16, 2016, Mr. Koch 

requested that WJE perform additional testing. Also, on 

October 5, 2016, defendants retained Geotechnical and 

Environment Sciences Consultants, Ninyo & Moore. Ninyo & 

Moore provided a report on December 6, 2016, and on 

December 5, 2016, WJE provided a supplemental report. 

Ninyo & Moore visited the site on October 11, 2016, 

reviewed the regional geological setting and site geology, and 

conducted “subsurface 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 borings and test pits

and sent to a laboratory for testing. 

Ninyo & Moore observed numerous previously patched 

cracks in the stucco. Some of those cracks experienced “minor reopening.” They also inspected the exposed slab floor in unit 1, 

and noticed large cracks in the concrete. The “slab cracks were 

generally noted to have aged characteristics including rounded 

and worn edges,” and were filled with debris. They also noted 

that “topping slab/replacement slab” had been applied to the 

southwest bedroom floor, attempting to level the sloping floor. 

Ninyo & Moore formed the following opinion: “Based on 

our evaluation, the cracks in the walls and floor slab and the tilt 

of the floors of the subject building were caused by long-term 

differential soil movement. The soil movement that has affected 
9

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 under the eastern portion of the building. Based on 

our site observations, the settlement is related to the poor surface 

drainage conditions observed along 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 or the cracks in the building. The tenants of the 

building reportedly observed water from the leaking pipe flowing 

into the drainage channel property to the north of the subject 

site. Based on our . . . surveying around the southwest part of 

the site, surface 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 channel property adjacent to 

the subject site. . . . This suggests that water from the leaking 

pipe escaped 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 indications 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 2015 
10

and January 2016. The January bill reflected water use that was 

9,500 gallons higher than previous months. WJE 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 the bedroom. WJE used ground penetrating radar (GPR) to 

examine the conditions below the slab. “GPR surveys performed 

in several locations throughout the exposed slab revealed that the 

slab is largely unreinforced, and as a result, does not have the 

tensile strength to resist differential movement, which results in 

cracking. Some areas of the slab exhibit evidence of previous 

repairs.” 

WJE concluded that “the previous repairs to the exterior 

cracks and evidence of the slab-on-ground cracking indicates that 

the cracks initiated prior to the water supply line break of 

December 2015. Previous repairs to the exterior walls and 

interior slab also indicate that ongoing attempts to mitigate the 

long-term settlement of the building have occurred, including 

installation of a topping or leveling material in the bedroom. In

conclusion, there has been ongoing, general 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 

likely 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 supplemental report, and on December 7, 2016, Mr. Israel 

forwarded these reports to plaintiff.

On January 23, 2017, plaintiff provided defendants with a 

2012 property inspection report which had been prepared in 
11

connection with plaintiff’s purchase of the property. The report 

noted cracking and bubbling in the stucco requiring repairs and 

further evaluation, and problems with the window in unit 1. The 

window would fall out of its tracks and required further 

evaluation. The inspector also noted cracking in the drywall, and

that the slab in unit 4 is “badly cracked and feels as though the 

crack is offset. Cause of the cracking is unknown and . . . needs 

to be determined.” 

e. Defendants deny plaintiff’s claim

After reviewing all these reports, Mr. Israel prepared a 

second coverage evaluation concluding the “efficient proximate 

cause of the foundation damage 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, 2017. 

2. Plaintiff’s Facts in Opposition to Summary 

Adjudication

Plaintiff 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 defendants “acted 

unreasonably and that [their] investigation was biased.” 

Specifically, plaintiff argued that the property was in good 

condition when it was purchased and when defendants first 

extended coverage to plaintiff; WJE initially concurred with 

plaintiff’s expert that the leak caused new damage to the 

building; defendants received an initial coverage opinion that 

there was coverage under the policy that defendants did not

disclose to plaintiff; the decision to extend coverage changed 

when defendants received a higher than expected estimate to 

repair the damage; WJE changed its opinion without conducting 
12

any further investigation; new experts were hired only to “pursue 

coverage denial”; and defendants anticipated litigation, from 

which it could be inferred their denial was in bad faith. 

a. Condition of property at time of purchase 

In 2013, defendants 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 the 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 likely have been issued. He also testified that the 2013 report 

was not provided to defendants’ experts, WJE and Ninyo & 

Moore. 

b. Defendants initially decided to extend coverage

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 report, 

submit to KBIC Mr. Koch and move forward.” 

Plaintiff provided the water bills to defendants on 

August 8, 2016. That same day, Mr. Machin, the cost estimator 

with defendants’ construction consulting firm, told defendants in 

his opinion, “9,537 gallons more in the month of DecemberJanuary over the monthly average . . . is representative of enough 

water to cause the settling and deformation described.” 
13

August 10, 2016 notes in the claim file record that

Mr. Israel told defendants that if the experts 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 

that further investigation might be warranted. 

Defendants provided the water bills to WJE, and on 

August 16, 2016, WJE informed defendants that the water bills 

did not change their findings from their earlier report that preexisting settlement of the building “was likely exacerbated as a 

result of the water supply line break.” WJE also maintained that 

settlement 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 exacerbated 

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 coverage 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 use, and that the opinion was privileged. 

c. J.S. Held LLC prepares repair estimate

On July 27, 2016, defendants 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, 2016 notes in 

the claim file, Mr. Machin told defendants there were “lots of 

issues” with writing an estimate 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 the damage. 
14

On September 3, 2016, Mr. Machin provided an estimate to 

repair unit 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, 

asking him to “clarify the extent of slab replacement and 

releveling” because the estimate was “more than . . . expected and 

quite a bit 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 estimate 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 decided 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. Defendants hire new expert 

Ms. Harrer with WJE sent a proposal to perform additional 

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 further investigated. She proposed that WJE 

visually survey the exterior of the building for any noticeable 

changes since its June investigation. WJE would use GPR to 
15

determine the condition of the slab including its thickness and 

reinforcement. WJE’s investigation would not include samples or 

material testing, but these services were recommended. 

In addition to this proposal, Ms. Harrer cut and pasted 

some background information from WJE’s June report. Other 

than reviewing the water bills, and participating in the 

September 9 conference call, WJE had not performed any 

additional investigations since its June report. Nevertheless, 

the proposal phrased some matters differently than the June 

report. For example, the proposal substituted the term “may” 

for the phrase “has been” in stating that there “may have 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]xisting settlementrelated conditions were likely exacerbated as a result of the

water released due to the supply line break,” by adding, 

“however, the extent of damage, if any, caused by the January

2016, even[t] are not known at this time” to the end of the 

sentence. 

According to Ms. Bernardo, it was Mr. Koch who suggested 

that new experts be hired. On October 3, 2016, she wrote an 

email to Mr. 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 that same day, 

Mr. Koch approved the budget, writing to Ms. Bernardo, “Seems 

expensive in pursuit of coverage denial. OK for engineer.” 

e. Defendants deny claim

In December 2016, following the receipt of reports from 

WJE and Ninyo & Moore, the claim file includes notes 

indicating a “potential lawsuit” and “this file will be in 
16

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 going 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’ person most 

knowledgeable about the investigation and denial of plaintiff’s 

claim, William Walker, was instructed by counsel not to answer 

53 questions during his July 20, 2018 deposition. Specifically, he 

refused to answer “Was the denial of the claim appropriate?” 

Counsel objected that the question improperly called for expert 

opinion. 

Plaintiff’s counsel’s declaration in support of the opposition 

averred: “The refusal of Defendant to answer questions in 

deposition prevented me from obtaining essential discovery 

regarding the denial of the claim, which I would have found 

useful in preparing the opposition 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

Defendants’ 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 doctrine, 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 followed. 

DISCUSSION

“[T]he party moving for summary judgment [or 

adjudication] bears the burden of persuasion that there is no 

triable issue of material fact and that he is entitled to judgment 

as a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001)

25 Cal.4th 826, 850 (Aguilar).) “Once the [movant] has met that 

burden, the burden shifts to the [other party] to show that a 

triable issue of one or more 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 fact 
18

to find the underlying fact in favor of the party opposing the 

motion in accordance with the applicable 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 judgment statute 

was “ ‘to liberalize the granting of [summary judgment] 

motions.’ ” (Perry v. Bakewell Hawthorne, 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 novo, considering all the 

evidence set forth in the moving and opposing papers except that 

to which objections were made and sustained.” ’ ” (Yanowitz v. 

L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1037, citation omitted.)

a. Genuine dispute doctrine 

California 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 

“predominate” cause was a covered risk. (City of Carlsbad v. 

Insurance Co. of State of Pennsylvania (2009) 180 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 insurer for 
19

advancing its side of that dispute.’ . . . [¶] ‘The “genuine 

dispute” doctrine may be applied where the insurer denies a 

claim based on the opinions of experts.’ . . . Reliance on an 

expert . . . ‘will not automatically insulate an insurer from 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 were 

unreasonable[,] [or] the insurer failed to conduct a thorough 

investigation.’ ” (McCoy v. Progressive West Ins. Co. (2009) 

171 Cal.App.4th 785, 793, citations omitted.) 

Here, defendants presented evidence that there was a 

genuine dispute that the pipe rupture (a covered loss) was not the 

efficient proximate cause of the damage, and that the efficient 

proximate cause was earth movement or settlement (an excluded 

loss). Specifically, defendants presented evidence that its 

experts, WJE and Ninyo & Moore, concluded the damage to the 

building was caused by earth settlement and not the pipe 

rupture. 

Plaintiff makes much of the fact that there was evidence 

defendants initially decided the damage may have been covered, 

and only sought additional expert opinions after the estimate for 

repairs exceeded their expectations. However, plaintiff ignores 

evidence 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. Moreover, when asked to provide a repair 

estimate, Mr. Machin cautioned there were many “unknowns,” 

and further investigation was warranted. Mr. Israel similarly 
20

guarded his initial coverage evaluation, cautioning there were 

other possible causes of the damage, and that the experts should 

attempt to apportion the damage between the various causes, 

including pre-existing earth movement and the pipe rupture. 

Plaintiff also complains that WJE changed its opinion in its 

September 13 proposal, without conducting any further 

investigation. Nothing in the record supports this inference. 

WJE had participated in the September 9 conference call, where 

Mr. Machin raised concerns about his ability to write an accurate 

repair proposal based on the number of “unknowns” before 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 coverage 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 these file 

notes. Mr. Koch may have been of the opinion that defendants 

already had enough expert information 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 indisputably based on the additional expert report. As for 

the file notes, litigation often results from coverage 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 none 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 trial court 
21

aptly stated, “Initial opinions are often superseded by further 

investigation.” 

b. Section 437c, subdivision (h)

Section 437c, subdivision (h) provides: “If it appears from

the affidavits submitted in opposition to a motion for summary

judgment or summary adjudication, or both, that facts essential

to justify opposition may exist but cannot, for 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 sought 

is essential to opposing the motion’; (2) ‘The specific reasons why 

such evidence cannot be presented 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 intends 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 

general, and did not explain why the answer to any of the 
22

questions at the PMK deposition was essential to opposing the 

summary adjudication motion. The only testimony that plaintiff 

complains it was unable to obtain was an opinion about whether 

denial of the claim was “appropriate,” and we see no reason to 

conclude the PMK’s opinion, whether yes or no, would 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

IN 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.,

 Defendants and Respondents.

 B293605

 (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, was not certified for publication in the Official 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.