Court Opinion

ID: 2790803
Source: CourtListenerOpinion
Date Created: 2015-04-01 20:02:12.923311+00
Date Added: 2024-06-11T11:28:55.895272
License: Public Domain

Filed 3/30/15 Luna v. Praetorian Ins. CA6
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                      SIXTH APPELLATE DISTRICT

ALBERTO SANCHEZ LUNA,                                                H040179
                                                                    (Santa Clara County
         Plaintiff and Appellant,                                    Super. Ct. No. 1-12-CV236311)

         v.

PRAETORIAN INSURANCE
COMPANY,

         Defendant and Respondent.

         In this appeal Alberto Sanchez Luna seeks review of an order sustaining a
demurrer without leave to amend in his action for contract-based claims against
respondent Praetorian Insurance Company and others. Luna contends that the court
erroneously found no duty to defend him against a third-party action, because the facts
alleged in that action created a potential for coverage under his commercial liability
policy with Praetorian. We disagree and therefore must affirm the judgment of dismissal.
                                                     Background
         Luna purchased the policy for his business, Alberto’s Auto Sales (Alberto’s), with
a coverage period of December 1, 2009-December 1, 2010. Among its terms was the
provision at issue, contained in the “TRUTH IN LENDING ERRORS AND
OMISSIONS COVERAGE.” In paragraph A(1) of this endorsement Praetorian promised
to pay up to $300,000 for “sums the ‘insured’ legally must pay as damages solely by
operation of Section 130, Civil Liability, of Title 1 (Truth in Lending Act) of the
Consumer Credit Protection Act (Public Law 90-321-82 Stat. 146 et seq. and as
amended) because of error or omission in failing to comply with the Act shown above.
Such act or omissions must occur during the policy period.” Paragraph A(2)
acknowledged the insurer’s “right and duty to defend any suit asking for damages
because of such error or omission. However, we have no duty to defend suits for errors
or omissions not covered by this policy.” The provision specifically excluded from
coverage “any obligation for which the ‘insured’ may be held liable due to any dishonest,
fraudulent, criminal or intentional act or acts committed by you, your partners, officers,
employees or your agents, or any party in interest acting alone or in collusion with
others.” It also excluded “any obligation for which the ‘insured’ may be held liable under
Section 112, Criminal Liability, of Title 1 (Truth in Lending Act) of the Consumer Credit
Protection Act (Public Law 90-321-82 Stat. 146 et seq. and as amended.)”
       On March 11, 2011, Stella Teixeira filed suit against Luna and Alberto’s for, in
essence, misrepresenting that the used car she was shown was in “great shape,”
increasing the price of the car on the written sales contract by $2,000 over the advertised
price, failing to disclose a $2,000 interest charge, and overcharging her for vehicle
registration fees. After buying the car in February 2010 she learned that it had frame
damage and that it had twice failed a smog test. Teixeira had to spend almost $2,000 in
repairs to the vehicle. When she complained, Luna offered to forgive the first month’s
payment; but when she skipped that payment, he repossessed the car, along with her
purse inside, which contained $500. Although the purse was returned, the money was
not.
       Teixeira’s complaint alleged breach of contract, negligent misrepresentation,
violation of the Consumers Legal Remedies Act (Civ. Code, § 1750 et seq.), violation of
the Rees-Levering Motor Vehicle Sales and Finance Act (Civ. Code, § 2981 et seq.),
unfair business practices (Bus. & Prof. Code, § 17200 et seq.) and untrue, false, and/or
misleading advertising (Bus. & Prof. Code, § 17500 et seq.). She sought damages and

                                             2
both injunctive and declaratory relief against Luna, Alberto’s, and the holder of the sales
contract. She did not, however, assert any claims under the federal Truth in Lending Act
                                       1
(TILA or Act), 15 U.S.C. 1601 et seq.
       Luna tendered the Teixeira action to Praetorian on April 14, 2011, through South
Valley Claims, Inc. (South Valley). South Valley denied the claim on behalf of
Praetorian, because Teixeira’s allegations “do not constitute either an error or [an]
omission of Section 130, Civil Liability, of Title 1 of the Consumer Protection Act.”
Throughout the correspondence over the ensuing five months Praetorian maintained that
it had no duty to defend because coverage had not been triggered. According to his
complaint, Luna paid for his own defense and apparently settled with Teixeira.
       Luna brought the instant action on November 19, 2012, naming Praetorian, South
Valley, Budget Plus Insurance Agency, and DMI Insurance Services, which Luna
believed owned Budget Plus and South Valley. In his first amended complaint, filed after
defendants demurred, he alleged breach of contract for failing to investigate and defend
him against the Teixeira action; breach of the covenant of good faith and fair dealing;
tortious interference with contract, against all defendants except Praetorian; “unfair,
unlawful and fraudulent” business practices in violation of Business and Professions
Code section 17200 for unreasonably denying coverage and a defense; breach of
fiduciary duty; and negligence. He sought declaratory relief, compensatory and punitive

1
   The express purpose of the Truth In Lending Act is “to assure a meaningful disclosure
of credit terms so that the consumer will be able to compare more readily the various
credit terms available to him and avoid the uninformed use of credit, and to protect the
consumer against inaccurate and unfair credit billing and credit card practices.”
(15 U.S.C. § 1601, subd. (a).) “Subject to certain exceptions, TILA does not ‘annul,
alter, or affect the laws of any State relating to the disclosure of information in
connection with credit transactions, except to the extent that those laws are inconsistent
with the provisions of this subchapter, and then only to the extent of the inconsistency.’
(15 U.S.C. § 1610(a)(1).) Thus, the existence of TILA does not necessarily preempt
plaintiffs’ state law claims.” (Boschma v. Home Loan Center, Inc. (2011) 198
Cal.App.4th 230, 244.)

                                              3
damages, an accounting and restitution, and a permanent injunction covering future
policies issued by the defendants.
       Defendants demurred to the first amended complaint, contending that none of the
causes of action could succeed because the language of the TILA endorsement provided
no potential coverage and thus no duty to defend against Teixeira’s action. The superior
court agreed, finding the TILA endorsement to be unambiguous in extending “only to
damages awarded solely by operation of Section 130 because of an error or omission in
failing to comply with TILA.” Teixeira had not claimed damages under this section or
alleged any error or omission in failing to comply with the Act. Accordingly, the court
found no actual coverage under the TILA endorsement.
       The court nonetheless recognized the parties’ dispute over whether a potential for
coverage existed. Luna had insisted that the facts alleged by Teixeira gave rise to a
potential for coverage and thus created a duty to defend. The court, however,
distinguishing Montrose Chemical Corp. v. Superior Court (1993) 6 Cal.4th 287
(Montrose) and Gray v. Zurich Ins. Co. (1966) 65 Cal.2d 263, noted that the TILA
endorsement was triggered not by particular facts or conduct, but by a particular statutory
claim—that is, a TILA claim for damages. Without a potential for coverage, the court
concluded, defendants could not be liable for failing to defend Luna in the underlying
action. Consequently, the court sustained the demurrer and further found that “leave to
amend would be futile.” From the ensuing judgment of dismissal on July 3, 2013, Luna
brought this timely appeal.
                                        Discussion
       Because this appeal arises from a judgment following the sustaining of a demurrer,
settled rules apply to this court’s review. A demurrer is properly sustained when the
complaint “does not state facts sufficient to constitute a cause of action.” (Code Civ.
Proc., § 430.10, subd. (e).) On appeal from the judgment of dismissal, this court
examines the complaint de novo to determine whether it alleges facts sufficient to

                                             4
constitute a cause of action. Like the trial court, we assume the truth of all properly
pleaded factual allegations, “ ‘but not contentions, deductions or conclusions of fact or
law. [Citation.] We also consider matters [that] may be judicially noticed.’ (Serrano v.
Priest (1971) 5 Cal.3d 584, 591.) Further, we give the complaint a reasonable
interpretation, reading it as a whole and its parts in their context.” (Blank v. Kirwan
(1985) 39 Cal.3d 311, 318.)
       On appeal, Luna challenges the judgment only as to the claims for breach of
contract, breach of the covenant of good faith and fair dealing, and declaratory relief, and
only with respect to Praetorian. He contends that he should have been afforded a defense
to Teixeira’s complaint under the TILA endorsement in his policy, based on the language
of the endorsement and the allegations of the third-party complaint.
       The duty to defend, of course, is broader than the duty to indemnify; the insurer
owes the insured a defense against a suit that “potentially seeks damages within the
coverage of the policy.” (Gray v. Zurich Insurance Co., supra, 65 Cal.2d at p. 276;
Montrose, supra, 6 Cal.4th at p. 295; see also Horace Mann Ins. Co. v. Barbara B. (1993)
4 Cal.4th 1076, 1081 [duty to defend may exist even if no damages ultimately are
awarded in the underlying action].) In determining the duty to defend the court
“compar[es] the allegations of the complaint with the terms of the policy. Facts extrinsic
to the complaint also give rise to a duty to defend when they reveal a possibility that the
claim may be covered by the policy.” (Horace Mann Ins. Co. v. Barbara B., supra, at
p. 1081; Montrose, supra, at p. 295.)
       Luna begins his analysis with an examination of the TILA, selectively extracting
text from section 1640 of the Act. On the premise that a violation of a state law
consistent with the TILA is by definition a TILA violation, he notes that Teixeira’s
complaint referred to Regulation Z disclosures, which are part of the regulations

                                              5
                         2
implementing the TILA. Compliance with Regulation Z is among the requirements of
Civil Code sections 2981 and 2982 (part of the Rees-Levering Motor Vehicle Sales and
                                                                                 3
Finance Act). Because Teixeira’s contract had to comply with these disclosures, and
because the law requiring them is “consistent with” the TILA, Luna concludes that a
violation of Civil Code section 2981 et seq. necessarily violates the TILA, specifically
section 130, and in this case therefore triggered Praetorian’s coverage obligation. In
other words, Luna reasons, “Statutes enable regulations. TILA enables Regulation Z. An
alleged violation of Regulation Z is a violation of TILA. California law incorporates
Regulation Z and is so consistent with TILA. Thus, an alleged violation of Regulation Z
under California law violates Section 130. . . .”
       Luna’s leaps of logic do not advance his position. That a California law on lending
disclosures is consistent with the TILA does not mean that an allegation that the state law

2
   As stated in the Code of Federal Regulations, the purpose of Regulation Z “is to
promote the informed use of consumer credit by requiring disclosures about its terms and
cost. The regulation also includes substantive protections. It gives consumers the right to
cancel certain credit transactions that involve a lien on a consumer’s principal dwelling,
regulates certain credit card practices, and provides a means for fair and timely resolution
of credit billing disputes. . . . ” (12 C.F.R. § 1026.1(b).) In California, Civil Code
section 2981 refers to “ ‘Regulation Z’ ” as “a rule, regulation or interpretation
promulgated by the Board of Governors of the Federal Reserve System (“Board” ) under
the federal Truth in Lending Act, as amended (15 U.S.C. 1601, et seq.), and an
interpretation or approval issued by an official or employee of the Federal Reserve
System duly authorized by the board under the Truth in Lending Act, as amended, to
issue the interpretations or approvals.” (Civ. Code §2981, subd. (m).)
3
   Every conditional sale contract subject to the Rees-Levering Motor Vehicle Sales and
Finance Act “shall contain the disclosures required by Regulation Z, whether or not
Regulation Z applies to the transaction.” (Civ. Code, § 2982.) Additional disclosures
required under this state legislation are listed in Civil Code section 2982.
   In Teixeira’s fourth cause of action for violation of the Rees-Levering Motor Vehicle
Sale and Finance Act she cited Civil Code section 2982 and alleged that Luna had failed
to provide those disclosures in violation of this legislation, and specifically Civil Code
sections 2981.9, 2982, 2984.

                                              6
was violated is an allegation of a TILA violation. The lower court correctly noted that
Luna had conceded that Teixeira had not asserted a TILA cause of action. The action
brought by Teixeira cannot reasonably be viewed as a claim under the TILA. Luna’s
attempt to bend Teixeira’s seven causes of action into such a claim is unavailing.
       Luna points out, however, that the endorsement does not specify that there must be
a TILA “cause of action” in order to trigger coverage. He asserts that the court failed to
construe the TILA endorsement broadly and as an objectively reasonable layperson
would have. Had the court given the proper “significance” to the words “error or
omission,” Luna argues, it would have recognized that coverage exists “when federal law
expressly incorporates consistent state law, and state law incorporates federal law,
according to the reasonable expectation of the ordinary layperson given the activity to
which the policy relates.”
       Again Luna’s argument is not logically sound, nor is it even consistent with either
the policy language or the law. “The language of a contract is to govern its interpretation,
if the language is clear and explicit, and does not involve an absurdity.” (Civ. Code
§ 1638.) “To yield their meaning, the provisions of a policy must be considered in their
full context. [Citations.] Where it is clear, the language must be read accordingly . . .
and, if it remains problematic, in the sense that satisfies the insured’s objectively
reasonable expectations.” (Buss v. Superior Court (1997) 16 Cal.4th 35, 45, italics
added.) Accordingly, the policy provisions must be “interpreted in their ‘ordinary and
popular sense,’ unless ‘used by the parties in a technical sense or a special meaning is
given to them by usage.’ ([Civ. Code] § 1644) . . . Thus, if the meaning a layperson
would ascribe to contract language is not ambiguous, we apply that meaning.” (AIU Ins.
Co. v. Superior Court (1990) 51 Cal.3d 807, 822; Bank of the West v. Superior Court
(1992) 2 Cal.4th 1254, 1264 [as in any contract, if the language of an insurance policy “is
clear and explicit, it governs”]; see also St. Paul Fire & Marine Ins. Co. v. Coss (1978)

                                              7
80 Cal.App.3d 888, 896 [“An insurance policy is a contract, and when the terms are plain
and unambiguous, it is the duty of the court to hold the parties to such contract”].)
       “A policy provision will be considered ambiguous when it is capable of two or
more constructions, both of which are reasonable. [Citation.] But language in a contract
must be interpreted as a whole, and in the circumstances of the case, and cannot be found
to be ambiguous in the abstract. [Citation.] Courts will not strain to create an ambiguity
where none exists.” (Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 18-19.)
“The courts will not indulge in a forced construction of an insurance policy so as to fasten
a liability on the insurance company which it has not assumed.” (St. Paul Fire & Marine
Ins. Co. v. Coss, supra, 80 Cal.App.3d at p. 896.)
       We do not find ambiguity in the provision at issue here. Praetorian promised to
cover Luna for damages he incurred for his “error or omission in failing to comply with”
the TILA. Contrary to Luna’s assertion that no cause of action was required for
Praetorian’s duty to defend him, the endorsement required Praetorian to defend Luna in
the event that he was sued for violating a particular law, which was identified by its name
and code section: “We have the right and duty to defend any suit asking for damages
because of such error or omission.” (Italics added.)
       The policy thus limited the insurer’s coverage and defense obligation in
third-party lawsuits to the damages recoverable by the third party as a result of the
insured’s failure to comply with section 130 of the Act. That it did not include the word
“federal” did not make the provision ambiguous. Nor did the fact that it referred to “error
or omission” mean that any error or omission that could conceivably “support” a TILA
cause of action must be covered, even if none is asserted. Reading the policy provision
as a whole and in context, we cannot simply excise the restriction to damages “solely by
operation of Section 130 . . . .” in order to engraft TILA liability onto a lawsuit that does
not seek those damages.

                                              8
       Luna maintains, however, that notwithstanding the causes of action denominated
in Teixeira’s complaint, the facts she alleged were sufficient to constitute a TILA claim,
thereby giving rise to a potential for coverage and hence a duty to defend. Relying on
Montrose, supra, 6 Cal.4th 287 and subsequent state and federal decisions, Luna
maintains that “[i]t is the alleged conduct (‘error or omission’), not a ‘cause of action,’
that triggers Praetorian’s defense obligation under the endorsement.” Montrose does not
help him, however. There the policy at issue was applicable to the insured’s conduct--
namely, the contamination of the environment arising from the manufacture of DDT, a
                 4
hazardous waste. The insurers did have a duty to defend Montrose even though the
third-party lawsuit did not specify whether Montrose’s conduct was intentional or
negligent, a question not resolved by the extrinsic evidence.
       By contrast, the policy provision under which Luna sought a defense clearly
provided specific, limited coverage for TILA claims seeking damages under section 130
and a duty to defend “any suit asking for damages because of such error or omission.”
(Italics added.) It did not offer broad coverage for conduct violating state statutes or
common law disclosure requirements regarding automobile financing.
       Luna insists, however, that a potential for coverage existed because Teixeira could
have amended her complaint to assert a TILA claim. It is true that the duty to defend
may exist even where “the precise causes of action [pleaded] by the third-party
complaint” fall outside policy coverage, if “under the facts alleged, reasonably inferable,
or otherwise known, the complaint could fairly be amended to state a covered liability.”

4
   The insurers in Montrose had promised to defend the insured against “ ‘any suit . . .
seeking damages on account of bodily injury or property damage,’ ” and to indemnify
Montrose “for ‘bodily injury or property damage . . . caused by an occurrence.’ ‘Property
damage’ was defined as ‘injury to or destruction of tangible property which results during
the policy period.’ ‘Occurrence’ was defined as ‘an accident, including continuous or
repeated exposure to conditions which results in . . . property damage neither expected
nor intended from the standpoint of the insured. . . .’ ” (Montrose, supra, 6 Cal.4th at
pp. 292-293.)

                                              9
(Scottsdale Ins. Co. v. MV Transportation (2005) 36 Cal.4th 643, 654; see, e.g., Gray v.
Zurich Ins. Co., supra, 65 Cal.2d at p. 277 [insurer not excused from defense where
underlying complaint was for intentional conduct, because it could have been amended to
allege negligent or “nonintentional” conduct].) But “the duty to defend, although broad,
is not unlimited; it is measured by the nature and kinds of risks covered by the policy.”
(Waller v. Truck Ins. Exchange, Inc., supra, 11 Cal.4th at p. 19.) The risk assumed by
Praetorian was that Luna would be liable for unintentionally violating the TILA. The
insurer did not promise to defend against allegations made under state statutes or
common law.
       “Our Supreme Court, anticipating imaginative counsel and the likelihood of artful
drafting, has indicated that a third party is not the arbiter of the policy’s coverage.
[Citations.] A corollary to this rule is that the insured may not speculate about
[unpleaded] third party claims to manufacture coverage.” (Hurley Construction Co. v.
State Farm Fire & Casualty Co. (1992) 10 Cal.App.4th 533, 538; accord, Gunderson v.
Fire Ins. Exchange (1995) 37 Cal.App.4th 1106, 1114, [insured may not speculate about
extraneous facts or ways in which the third party might amend its complaint at some
future date].) “[T]he duty to defend, and the extent of that duty, are rooted in basic
contract principles. The insured pays for, and can reasonably expect, a defense against
third party claims that are potentially covered by its policy, but no more. Conversely, the
insurer does not bargain to assume the cost of defense of claims that are not even
potentially covered.” (Scottsdale Ins. Co. v. MV Transportation, supra, 36 Cal.4th at
p. 659; cf. Hartford Cas. Ins. Co. v. Swift Distribution, Inc. (2014) 59 Cal.4th 277,
295-299 [defense under “advertising injury” policy provision properly denied where no
disparagement of competitor’s product was stated or implied in underlying suit alleging
false and misleading advertisements and patent and trademark infringement],
disapproving Travelers Property Casualty Company of America v. Charlotte Russe
Holding, Inc. (2012) 207 Cal.App.4th 969.) Here, Luna and Praetorian were free to

                                              10
“contract for any broader coverage to which they mutually agree.” (Hartford Cas. Ins.
Co. v. Swift Distribution, Inc., supra, at p. 299.) They elected instead a limited indemnity
and defense for “errors and omissions” giving rise to a third-party claim under the TILA.
       Courts in other jurisdictions have reached similar conclusions. In Tynan’s Nissan
v. Am. Hardware Mut. Ins. Co. 917 P.2d 321 (Colo.App. 1995), a TILA endorsement
resembled the one at issue here: it obligated the insurer to pay “all sums which Tynans
‘shall become legally obligated to pay as damages solely because of error or omission in
failing to comply with § 130, Civil Liability, of Title I (Truth in Lending Act) of the
Consumer Protection Act (Public Law 90-321; 82 Stat. 146, et. seq.).’ ” (917 P.2d at
p. 323.) The Colorado Court of Appeals agreed with the lower court that no coverage
was provided for the underlying lawsuit, which was brought under that state’s Uniform
Consumer Credit Code, not under the TILA. Like Luna, the insured automobile dealer
protested that it had a reasonable expectation of coverage as would an ordinary layperson.
The court rejected that argument, as the asserted expectation was “contrary to the plain
and ordinary meaning of the policy language . . . .” As that language was unambiguous,
coverage was precluded. (917 P.2d at p. 324.)
       Likewise, in Heritage Mut. Ins. Co. v. Ricart Ford, 663 N.E.2d 1009, 1013 (Ohio
App. 10 Dist. 1995) the TILA rider in a “ ‘Garage Coverage Form’ ” was made expressly
applicable to “ ‘damages solely due to Section 130, Civil Liability, of Title I (Truth in
Lending Act) of the Consumer Credit Protection Act . . . .’ ” This provision did not allow
for coverage of the Ohio Attorney General’s complaint, as that pleading did not include a
prayer for damages under section 130 of the TILA, even though it alleged a TILA
violation. As in Tynan’s, the Ohio Court of Appeals found the endorsement language to
be “clear and unambiguous” in restricting coverage to “damages ‘solely due to
Section 130.’ ” (663 N.E.2d at p. 1013.)
       The Nebraska Supreme Court reached the same result in John Markel Ford v.
Auto-Owners Ins. Co. 543 N.W.2d 173 (Neb. 1996). There the underlying complaint was

                                             11
brought by the Iowa Attorney General under the Iowa Consumer Fraud Act and the Iowa
Consumer Credit Code, seeking costs, attorney fees, and a payment to a consumer
education and litigation fund maintained by the Attorney General. The court specifically
noted that the latter statute incorporated the TILA and its regulations. The “ ‘Truth In
Lending Errors and Omissions Endorsement’ ” in the insured automobile dealer’s policy
obligated the insurer to pay “all sums which [the dealer] shall become legally obligated to
pay as damages in an action brought solely under 15 U.S.C. Sec. 1640 (Consumer Credit
Protection Act - Public Law 90-321, Title I, as amended, because of error or omission
during the policy period in complying with any requirement imposed under 15 U.S.C.,
Section 1631 et seq.” (543 N.W.2d at p. 176.) The Nebraska court rejected the dealer’s
assertion that if the endorsement language did not expressly cover the Iowa Attorney
General’s suit, then it was ambiguous and must be construed against the insurer. In the
court’s view, “[i]t cannot be maintained that the words ‘in an action brought solely under
15 U.S.C. Sec. 1640’ actually mean ‘in any action whatsoever.’ ” (Ibid.)
       TIG Insurance Company v. Joe Rizza Lincoln-Mercury, Inc., No. 00 C 5182
(2002) U.S. Dist. LEXIS 4175, 2002 WL 406982 (N.D. Ill. Mar. 14, 2002) presented the
same issue, and it not only discussed the insurer’s coverage duty but also explicitly
                                  5
addressed the defense obligation. There the insured automobile dealer was the defendant
in five separate lawsuits for which it sought a defense by the insurer. The insured’s
policy included a TILA endorsement phrased in language nearly identical to the one in
Luna’s policy. Applying state law, the district court acknowledged that the insurer’s duty
to defend in Illinois is broader than the duty to pay. However, although all five of the

5
   Luna emphasizes that an unpublished federal decision cannot be cited or relied upon in
federal court. In his reply brief, however, he acknowledges that such cases are citable
under our Rules of Court, and may even be considered as persuasive, though not
precedential, authority. (Cal. Rules of Court, rule 8.1115; In re Farm Raised Salmon
Cases (2008) 42 Cal.4th 1077, 1096, fn. 18; Landmark Screens, LLC v. Morgan, Lewis &
Bockius, LLP (2010) 183 Cal.App.4th 238, 251, fn 6.)

                                            12
underlying complaints alleged violations of the TILA, only one sought damages under
the Act; accordingly, only that one complaint was subject to the insurer’s defense
obligation. The remaining four confined their damages requests to a state consumer fraud
statute and common law fraud. Those damages, the district court ruled, were “plainly not
covered under the TILA endorsement.” (2002 U.S. Dist. LEXIS 4175, at p. 27 [WL
406982 at p. 9].) The court further rejected the argument Luna makes here, that potential
coverage exists by virtue of facts alleged in the underlying complaint: “This type of
analysis, however, is irrelevant because the TILA Endorsement is not triggered by
specified conduct or ‘facts.’ Instead, the narrow coverage provided by the Endorsement
is triggered only by a damage claim under the Truth In Lending Act. If, and only if, the
claimant seeks damage[s] under the Act is there potential coverage. Only by rewriting the
endorsement could there be potential coverage, as [the insured] contends, for a claim for
damages under the Illinois Consumer Fraud Act.” (2002 U.S. Dist. LEXIS 4175, at p. 28
[WL 406982 at p. 9].)
       Although unnecessary to our own conclusion, these consistent decisions from
other jurisdictions nonetheless offer compelling support. The procedural distinctions and
minor differences in policy language are, in our view, not material to the issues before us.
In any event, based on the express, unambiguous language in Luna’s policy, we agree
with the superior court that it did not provide coverage, actual or potential, for the wrongs
alleged in the underlying action by Teixeira. Further, Luna has not shown “ ‘in what
manner he can amend his complaint and how that amendment will change the legal effect
of his pleading.’ ” (Ferrick v. Santa Clara University (2014) 231 Cal.App.4th 1337,
1341, quoting Cooper v. Leslie Salt Co. (1969) 70 Cal.2d 627, 636.) Praetorian’s
demurrer to the first amended complaint was properly sustained without leave to amend.
                                        Disposition
       The judgment of dismissal is affirmed.

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                                  _________________________________
                                  ELIA, J.

WE CONCUR:

_______________________________
RUSHING, P. J.

_______________________________
PREMO, J.

                                    14