Court Opinion

ID: 8482193
Source: CourtListenerOpinion
Date Created: 2022-11-08 08:01:35.077609+00
Date Added: 2024-06-11T16:49:37.538226
License: Public Domain

Filed 11/7/22
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                SECOND APPELLATE DISTRICT

                        DIVISION EIGHT

JUDY RANDLE,                           B304970

       Plaintiff and Appellant,        Los Angeles County
                                       Super. Ct. No. BC579987
       v.

FARMERS NEW WORLD LIFE
INSURANCE COMPANY,

       Defendant and Respondent.

     APPEAL from a judgment of the Superior Court of Los
Angeles County. Stuart M. Rice, Judge. Reversed and
remanded.
     Shernoff Bidart Echeverria, William M. Shernoff, Travis M.
Corby and Cooper Johnson for Plaintiff and Appellant.
     Gordon Rees Scully Mansukhani, Margaret M. Drugan,
Asim K. Desai, Matthew G. Kleiner and Andrea K. Williams for
Defendant and Respondent.

                    __________________________
                              SUMMARY
        Plaintiff Judy Randle sued Farmers New World Life
Insurance Company (defendant or Farmers) for breach of
contract, breach of the covenant of good faith and fair dealing,
and punitive damages in connection with a policy insuring the
life of her ex-husband. The trial court granted summary
judgment for defendant on those claims, concluding it was
undisputed that the ex-husband remained the owner of the policy
until he died, and that he had changed the beneficiaries on the
policy, reducing his ex-wife’s interest from 100 percent to
25 percent. Because the trial court failed to consider the terms of
a divorce decree affecting ownership of the policy, and because
defendant’s agent repeatedly assured plaintiff, up to and after
the ex-husband’s death, that plaintiff remained the sole
beneficiary, we conclude disputed issues of material fact prevent
summary judgment.
        Accordingly, we reverse the judgment and remand for
further proceedings.
                                FACTS
1.      The Background
        In 1992, plaintiff and her then-husband, Alan McConnell,
procured a policy insuring Mr. McConnell’s life. The Farmers
policy would pay a death benefit of $250,000 and named plaintiff
as the sole beneficiary. The insurance broker that obtained the
policy for the couple was Hebson Insurance Agency, Inc.
(Hebson). Hebson was owned by Mark Hebson, who was “an
appointed agent with Farmers New World Life,” and had been
since 1972.
        In 2004, plaintiff and Mr. McConnell divorced and entered
into a stipulated divorce judgment (the divorce decree). The
agreement in the divorce decree gave plaintiff “[a] beneficial

                                 2
interest of one-quarter (1/4) of” the Farmers policy.
Mr. McConnell was required to maintain the policy for plaintiff’s
benefit “to the extent of her one-quarter beneficial interest,” and
was free to name any beneficiaries “as to his remaining 3/4ths
interest.” Plaintiff and Mr. McConnell were responsible for
paying premiums for their respective interests in the policy. If
either party decided to discontinue paying premiums, the divorce
decree stated he or she “shall forfeit [her or his] ownership” as to
his or her interest in the policy.
       Specifically, as relevant here, the divorce decree stated:
“If [Mr. McConnell] decides to discontinue paying the premium
on his three-quarter (3/4th) interest, then he shall forfeit his
ownership as to his three-quarter (3/4th) interest. He shall notify
[plaintiff] in writing and assign the policy to [plaintiff] if she
chooses to pay the premiums. If [plaintiff] should not so choose,
then the policy shall lapse. If [plaintiff] does choose to accept the
three-quarter (3/4th) interest, then [plaintiff] shall be free to
name any beneficiaries she chooses.”
       In 2006, Mr. McConnell submitted a form to defendant,
requesting a change in beneficiary. The form was signed by
Mr. McConnell on May 4, 2006, and included with it were partial
pages of the divorce decree. The requested change added the
couple’s three sons, so that plaintiff and their sons would each be
25 percent beneficiaries of the policy. The request form stated
that “[t]his change of beneficiary shall take effect only when
recorded by the Company, but when so recorded, whether the
Insured be living or not, shall relate back to and take effect as of
the date of this designation.” The insurance policy itself stated
that the change “must be signed by the owner and sent to us.
The change will take effect on the date it was signed . . . .”

                                  3
       Defendant stamped Mr. McConnell’s 2006 request “Update
Only” and “Not Registered,” because it did not include the
complete divorce judgment. Defendant’s internal procedures at
that time required it to obtain a complete copy of a divorce
judgment when processing a change of beneficiary form for a
policy owner when divorce was involved. Specifically, under that
procedure, defendant would send a letter requesting the spouse’s
signature and/or a photocopy of the certified divorce decree or
other court-approved document. Mr. McConnell never gave a
certified copy of the entire divorce decree to defendant. No one
ever told plaintiff that Mr. McConnell had submitted the
beneficiary change request to defendant.
       In 2008, plaintiff began paying all the premiums on the
policy. (She did so through a company of which she was the sole
owner.)
       From 2008 until after Mr. McConnell died in 2014, plaintiff
believed she was the sole beneficiary under the policy. According
to Mark Hebson, in 2008 Mr. McConnell was not paying
premiums, which were being paid from the accumulation account
in the policy. Mr. Hebson told plaintiff (because she was paying
premiums for her one-quarter interest and Mr. McConnell was
not paying any premiums) that the policy was going to lapse for
nonpayment, as there was no money left in the accumulation
account. Plaintiff told Mr. Hebson she would make the premium
payments if she were maintained as the 100 percent beneficiary.
He advised her that it was possible for her to remain the
beneficiary “when she’s not the owner of the policy.” (Mr. Hebson
had never seen the divorce decree.) Mr. Hebson told plaintiff that
she did not need to become the listed owner to ensure she
remained the sole beneficiary because Farmers would notify
Hebson if the beneficiary were changed.

                                4
       On April 11, 2014, Mr. McConnell died. A few days later,
plaintiff informed defendant of his death, and “was told again
that she was the only beneficiary under the Policy.” On April 16,
2014, plaintiff submitted a claim for 100 percent of the policy
benefits.
       On April 18, 2014, defendant told plaintiff for the first time
that “there was a dispute that she was the 100% policy
beneficiary.” Defendant told plaintiff Mr. McConnell had
submitted a beneficiary change in 2006, to add the couple’s
three sons as beneficiaries, “but the request was not accepted or
registered, because Farmers requested the full divorce decree and
[Mr. McConnell] never sent it.”
       On April 23, 2014, one of the couple’s sons provided
defendant with a complete copy of the divorce decree.
       During April, May and June, defendant indicated several
times that it was a neutral stakeholder and might or would
interplead the funds if plaintiff and her sons could not resolve the
dispute on their own. Andrew LaMance, Farmers’s claims
examiner who decided how the claim should be paid out, later
testified he wrote to plaintiff in May and again in June, stating if
Farmers did not receive a signed agreement from all parties, “we
will initiate the process of interpleading the funds . . . .”
       On May 20, 2014, Mr. Hebson wrote to plaintiff, stating:
“On several occasions over the past years, you have contacted my
office to verify the primary beneficiary on file at Farmers New
World Life. It was confirmed that it was you and you continued
to pay the premiums until [Mr. McConnell’s] time of death.” One
of those occasions was on March 5, 2013, when Hebson faxed her,
on defendant’s letterhead, that “Farmers New World Life does
not show any change in the Beneficiaries.”

                                  5
       Hebson’s office manager, Alice Brooks, also knew that
Mr. McConnell stopped paying premiums on the policy, and
plaintiff started paying all the premiums, in 2008. Her
understanding was that by making all the premium payments,
plaintiff was taking over Mr. McConnell’s interest in the policy.
According to Ms. Brooks, plaintiff informed her that she
(plaintiff) had an agreement, a divorce decree, with
Mr. McConnell concerning the policy, and she (Ms. Brooks) “knew
that [plaintiff] agreed to pick up [Mr. McConnell’s] portion of the
premium for his interest in the policy.”
       In June 2014, Mr. LaMance received a letter from
plaintiff’s counsel, advising Farmers that plaintiff intended to
petition the court for an order determining the rightful
beneficiary and requesting Farmers make no further
determinations until the court made a ruling.
       Mr. LaMance later testified he knew plaintiff was paying
the premiums, and that “[t]here was a discrepancy between a
third-party document [the divorce decree] and the four corners of
a policy contract.”
       Then, on August 11, 2014, defendant paid the policy
proceeds to plaintiff and her three sons, as designated in the 2006
request for change of beneficiary.
2.     The Litigation
       In April 2015, plaintiff filed a complaint against defendant
and Hebson. She alleged causes of action for breach of the
covenant of good faith and fair dealing and breach of contract
against defendant; a claim for promissory estoppel against
defendant and Hebson; and a claim for professional negligence
against Hebson.
       The complaint alleged, among other things, that on
April 22, 2014, plaintiff sent defendant a detailed letter

                                6
explaining she was the owner of the policy pursuant to the
divorce decree, and she had been assured on multiple occasions
by both defendant and Hebson that she remained the 100 percent
beneficiary; that defendant was given a copy of the divorce decree
on April 23, 2014; the divorce decree “clearly confirmed that
[plaintiff] was the rightful owner of the Policy after she began
paying 100% of the Policy [premiums] in September 2008”; and
defendant breached its duty of good faith and fair dealing by
notifying her numerous times that she was the sole beneficiary
and then, after Mr. McConnell’s death, informing her she was
not, thus preventing her from filing a change in beneficiary form
that would name her as sole beneficiary.
       Hebson moved for summary judgment on plaintiff’s claim
for professional negligence. (The parties stipulated to the
striking of the promissory estoppel claim against Hebson.) The
trial court granted Hebson’s motion, and we affirmed the
judgment for Hebson, concluding an insurance broker has no
duty, “for the duration of a life insurance policy, to advise clients
how to protect their interests in those policies.” (Randle v.
Farmers New World Life Ins. Co. (May 18, 2018, B276579)
[nonpub. opn.].)
       Then, in January 2019, defendant moved for summary
judgment or summary adjudication of issues. Defendant
contended plaintiff could not establish a breach of contract
because she was never the owner of the policy, and her actions
“post-2008” were inconsistent with being a policy owner; there
was no assignment of the policy to her that bound defendant; and
there was no writing between Mr. McConnell and plaintiff
evidencing an assignment as required by the divorce decree.
Defendant pointed out several terms of the policy, in addition to
the “Change of Beneficiary” provision (quoted ante, at p. 3).

                                  7
      The policy provision on “Change of Owner” stated: “The
owner may name a new owner by notifying us in writing while
the insured is alive. When we receive acceptable signed notice,
the change will take effect on the date the notice was signed.”
The policy provision on “Assignments” stated: “The owner may
assign this policy. We are not bound by an assignment unless
duplicate signed forms are filed with us. We are not responsible
for the validity of an assignment. The rights of the owner and
the beneficiary are subject to the rights of the assignee.”
      Further, defendant contended that without a viable breach
of contract claim, there could be no claim for breach of the
covenant of good faith and fair dealing, and there was no
evidence of malice, fraud or oppression to support a punitive
damages claim.
      In her opposition, plaintiff contended defendant was
vicariously liable for the conduct of its agent, Hebson, and was
charged with notice of whatever information Hebson learned
from plaintiff. Plaintiff contended she was the 100 percent
beneficiary of the policy because the 2006 change form was never
effectuated; she became the full owner of the policy in 2008,
ending any rights Mr. McConnell had to control the beneficiary;
defendant acted in bad faith by unreasonably denying plaintiff
the full policy benefits; and factual questions precluded summary
judgment of her punitive damages claim.
      In April 2019, the trial court granted defendant’s motion
for summary adjudication of the claims for breach of contract,
breach of the covenant of good faith and fair dealing, and
punitive damages. The court concluded the “undisputed facts
establish that McConnell remained the owner of his life
insurance policy at all relevant times,” observing that the policy’s
“explicit requirements for changing ownership were never met.”

                                 8
The court found “the undisputed facts show that McConnell’s
submission of the signed form was sufficient to effectuate a
change in the beneficiary pursuant to the terms of the policy,
even though he never submitted the full divorce judgment upon
Farmers’s request pursuant to its internal procedure.” After that
request, “neither McConnell nor [plaintiff] made any further
requests for such a change,” and “[t]hese undisputed facts
conclusively establish that Farmers distributed the policy
proceeds pursuant to the terms of the policy.” The claims for
breach of the covenant of good faith and fair dealing and punitive
damages likewise failed.
       The court denied summary adjudication of plaintiff’s cause
of action for promissory estoppel. In August 2019, the court held
a bench trial on that issue, and concluded plaintiff failed to
establish her claim. Plaintiff does not challenge that finding.
       In February 2020, the trial court entered judgment in
defendant’s favor, and plaintiff filed a timely notice of appeal.
                            DISCUSSION
1.     The Standard of Review
       A defendant moving for summary judgment must show
“that one or more elements of the cause of action . . . cannot be
established, or that there is a complete defense to the cause of
action.” (Code Civ. Proc., § 437c, subd. (p)(2).) Summary
judgment is appropriate where “all the papers submitted show
that there is no triable issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law.” (Id.,
subd. (c).)
       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

                                 9
536, 542.) It is no longer called a “disfavored” remedy. (Ibid.)
“Summary judgment is now seen as ‘a particularly suitable
means to test the sufficiency’ of the plaintiff’s or defendant’s
case.” (Ibid.) 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.)
2.    Applicable Legal Principles
      a.     Defendant’s “law of the case” contention
      We begin with a preliminary, but significant, principle. As
we have explained, in an earlier opinion we affirmed the trial
court’s grant of summary judgment in favor of plaintiff’s
insurance broker, Hebson, on plaintiff’s claim for professional
negligence. Her claim was based on Hebson’s alleged failure to
advise her, after her divorce, that it was necessary to change the
ownership of the policy to ensure that she would remain the sole
beneficiary. We found that the broker had no duty to advise
plaintiff how to protect her beneficial interest in the policy,
absent special circumstances, of which there were none. (Randle
v. Farmers New World Life Ins. Co., supra, B276579 [“A client
cannot, merely by telling her broker about changed
circumstances after her divorce, impose on the broker a duty to
give what amounts to legal advice about how best to protect her
interests, unless the broker has held himself out as a life
insurance expert.”].)
      In the case now before us, plaintiff contends Farmers “is
vicariously liable for, and charged with the knowledge of, its
appointed agent.” It is undisputed that Hebson was defendant’s
agent, and had been since 1972. Farmers contends it “cannot be

                                10
held vicariously liable for Hebson’s acts because this Court
already found that Hebson did not act negligently or breach any
duty it owed to [plaintiff],” and under the law of the case rule, we
may not reexamine that issue.
       Defendant’s premise is mistaken. Law of the case has no
application here. Our opinion held Hebson was not liable for
professional negligence as plaintiff’s insurance broker. We did
not hold that Hebson was not negligent. We did not address any
issue about defendant’s liability for the negligence of Hebson, its
agent. There was no issue before us about whether defendant
had constructive knowledge of what Hebson knew. We held only
that Hebson as an insurance broker did not owe plaintiff any
duty to protect her interest in the policy as she alleged. Finding
Hebson had no personal liability for professional negligence
based on the absence of any duty to the plaintiff is entirely
different from determining whether Hebson’s actions or
knowledge as defendant’s agent were binding on or imputed to
defendant.
       In O’Riordan v. Federal Kemper Life Assurance Co. (2005)
36 Cal.4th 281, the insurance agent’s knowledge was imputed to
the insurer; “ ‘[a]s a general rule, an agent has a duty to disclose
material matters to his or her principal, and the actual
knowledge of the agent is imputed to the principal.’ ” (Id. at
p. 288; Civ. Code, § 2332 [“As against a principal, both principal
and agent are deemed to have notice of whatever either has
notice of, and ought, in good faith and the exercise of ordinary
care and diligence, to communicate to the other.”]; see also Loehr
v. Great Republic Ins. Co. (1990) 226 Cal.App.3d 727, 734 [finding
a licensed independent insurance agent was an agent of the
insurer, and “[a]s such, his acts and omissions as agent were
binding on [the insurer]” and distinguishing Eddy v. Sharp

                                11
(1988) 199 Cal.App.3d 858; “[t]he court in Eddy was concerned
with whether the defendant insurance agent or broker in
question owed any duties to the consumer plaintiff. The case did
not address the issue of whether the defendant’s acts or
omissions were binding on the carrier, or even whether the
defendant in fact was an agent of the carriers he dealt with, as
opposed to being an independent insurance broker.”].) The same
is true here.
       b.    The issue of policy ownership
       The trial court granted summary judgment based on the
terms of the policy, without regard to any other evidence or to
case precedents on policy ownership. As mentioned, the court
held plaintiff’s argument that Mr. McConnell forfeited his
ownership to her failed as a matter of law, because the policy’s
requirements for changing ownership were not met. This was
error.
       The legal principle to be applied is this: “[O]nce the true
ownership of the policy is brought home to the insurance
company, whether that ownership is established by taking out
the policy in the name of the owner, or by assignment, or by
contract or gift, the company is bound to recognize the rights of
the lawful owner.” (Morrison v. Mutual Life Ins. of New York
(1940) 15 Cal.2d 579, 587 (Morrison), italics added.) “The
question is whether at the time the company paid the proceeds to
the insured, it had such knowledge or notice of plaintiff’s
ownership of the policy as to require a recognition of plaintiff’s
rights.” (Ibid., italics added.)
       Further, Morrison found it was “untenable” to exclude
evidence of conversations with the insurer’s agent on the ground
the proffered evidence “was inconsistent with the provisions of
the policy, and an attempt to show rights in a manner not

                                12
permitted by the provisions of the [insurance] agreement.”
(Morrison, supra, 15 Cal.2d at p. 588.) The court explained:
“Despite the provisions of the policy specifying the manner in
which ownership of the policy may be established, and the general
provision that no agent has authority to make representations or
waive any provisions of the policy, properly authorized agents of
the company, or agents with apparent authority, may charge the
company with notice.” (Ibid., italics added.)
      Thus, Morrison establishes two pertinent legal points:
(1) The insurance policy’s requirements for changing ownership
do not control over the provisions of a contract (here, the divorce
decree) of which the insurer has notice, and (2) the question is
whether, when it paid out the proceeds, Farmers “had such
knowledge or notice of plaintiff’s ownership of the policy as to
require a recognition of plaintiff’s rights.” (Morrison, supra,
15 Cal.2d at pp. 587, 588.) Here, as to the issue of notice, there
are material factual disputes, as summarized below.
      Of course, the facts here and in Morrison are different, but
the principles are the same. Morrison involved a husband who,
unbeknownst to his wife, had surrendered the insurance policy of
which she was the beneficiary for its cash surrender value.
(Morrison, supra, 15 Cal.2d at p. 581.) The plaintiff wife
contended she became the owner of the policy by virtue of a
contract with her husband. (Id. at p. 586.) The undisputed
evidence showed that, as between the plaintiff and her husband,
she was the actual owner, and she would prevail if they were
contending between themselves for the proceeds of the policy.
(Id. at pp. 586–587.) This evidence was not enough to show that
the insurance company had knowledge or notice of plaintiff’s
ownership of the policy. But other evidence, improperly excluded
by the trial court, tended to establish the wife’s right to recover,

                                 13
so the judgment for the insurance company was reversed. (Id. at
pp. 587–589.) The improperly excluded evidence included
conversations with the insurance company’s agent in which the
agent assured plaintiff that her husband could not get the
insurance money without her signature. (Id. at p. 588.)
       Other case precedents are less to the point, but confirm
that, despite insurance policy requirements, contrary provisions
in a subsequent contract between the policy owner and a
beneficiary may control in some circumstances. In Life Insurance
Co. of North America v. Cassidy (1984) 35 Cal.3d 599, an ex-wife
was not entitled to the proceeds of a life insurance policy,
notwithstanding a beneficiary designation on file with the
company. Her designation as beneficiary “was superseded as of
the date the parties entered into a marital settlement agreement
which comprehensively disposed of all the rights and obligations
between them.” (Id. at p. 602.) And in Mutual Life Ins. Co. v.
Franck (1935) 9 Cal.App.2d 528, a husband purported to change
the beneficiary of life insurance policies from his ex-wife to his
second wife, after an agreement and a decree of divorce that
directed him to “constitute his [first] wife sole, irrevocable
beneficiary of [two life insurance] policies and pay all premiums
thereon.” (Id. at p. 531.) The court affirmed judgment for the
first wife. The court cited another case for the principle that “a
subsequent agreement of the insured in consideration of a
settlement of property rights in contemplation of a divorce by the
terms of which he covenants to make her sole, irrevocable
beneficiary of the policy, vests her with an equitable interest
therein which may not be defeated without her consent.” (Id. at
p. 534.)
       Defendant says this case is distinguishable from Morrison
because “undisputed facts show that [plaintiff] was never the

                                14
owner of the [p]olicy” and never had the legal authority to change
the beneficiary designation; and there is no admissible evidence
supporting plaintiff’s ownership claim. Defendant is mistaken on
both points.
       For one thing, the only “undisputed facts” defendant cites
are the policy terms, and Morrison makes clear that policy terms
are not conclusive. And, contrary to defendant’s contention, there
is admissible evidence creating material factual disputes. We
agree with defendant that the court properly sustained its
hearsay objections to portions of plaintiff’s declaration concerning
her conversations with Mr. McConnell about his forfeiture of his
interest in the policy and his assurances he had not changed the
beneficiaries. But there is other evidence from which a factfinder
could reasonably infer that plaintiff was the owner of the policy
and that defendant was on notice of that fact before it paid out
the proceeds.
        The divorce decree stated that “[i]f [Mr. McConnell]
decides to discontinue paying the premium on his three-quarter
(3/4th) interest, then he shall forfeit his ownership as to his
three-quarter (3/4th) interest. . . .” (Italics added.) There was
evidence plaintiff was paying the premiums, Farmers knew she
was doing so, and, before it paid out the proceeds of the policy,
Farmers knew the terms of the divorce decree and knew “[t]here
was a discrepancy between a third-party document [the divorce
decree] and the four corners of a policy contract.” This evidence
creates a material dispute as to whether defendant was on notice
of a legitimate claim by plaintiff and nevertheless paid out the
proceeds without regard to her claim.
       Defendant also points out there was no evidence
Mr. McConnell notified plaintiff in writing that he was assigning
his ownership interest to her, as stated in the divorce decree.

                                15
(The decree, after stating that if Mr. McConnell discontinues
premium payments, he “shall forfeit his ownership,” further
provides that “[h]e shall notify [plaintiff] in writing and assign
the policy to [plaintiff] if she chooses to pay the premiums.”)
Defendant is correct, but the point is irrelevant. That provision
of the decree is clearly for plaintiff’s protection, and her failure to
insist on a writing has no bearing on Mr. McConnell’s forfeiture
of his ownership as a result of failing to pay the premiums.
       Defendant also points to the policy provision that it is not
bound by an assignment “unless duplicate signed forms are filed
with us.” This is likewise irrelevant; the pertinent point, as
established in Morrison, is whether, at the time defendant paid
out the proceeds, “it had such knowledge or notice of plaintiff’s
ownership of the policy as to require a recognition of plaintiff’s
rights.” (Morrison, supra, 15 Cal.2d at p. 587.) As to that point,
as we have discussed, there are material factual disputes.
       In sum, the trial court granted summary judgment without
acknowledging the principle that an insurance policy’s
requirements for changing ownership do not control over the
provisions of a contract of which the insurer has notice, and
without regard to material factual disputes on that point.
       c.    The change of beneficiary issue
       The trial court also concluded that Mr. McConnell had
changed the beneficiaries in 2006 in accordance with the terms of
the policy, which provides that a change in beneficiary is effective
on the date it is signed, and that neither Mr. McConnell nor
plaintiff made any further requests for a change. These
undisputed facts, the court said, “conclusively establish that
Farmers distributed the policy proceeds pursuant to the terms of
the policy.”

                                  16
       That conclusion, too, entirely omits consideration of the
evidence that Farmers, and its agent Hebson, repeatedly assured
plaintiff that she was the sole beneficiary of the policy, up to and
even after Mr. McConnell’s death. We reach the same conclusion
as the Morrison court, where the issue was, as here, whether the
insurer had notice of the plaintiff’s rights. The court found that if
responsible agents of the insurer “stated on behalf of the
company that the insured could not surrender the policy without
the consent of plaintiff beneficiary, and plaintiff thereafter relied
upon such statement, the company is certainly estopped to deny
those representations as to plaintiff’s rights under the policy.
Had it not been for these assurances, plaintiff might at that time
have taken the necessary steps to regain possession of the policy,
or to establish her rights thereunder.” (Morrison, supra,
15 Cal.2d at pp. 588–589.)
       On a final note, the parties argue at length about
Mr. McConnell’s intent in 2006, when he sent his beneficiary
change request but then failed to send the complete divorce
decree required under defendant’s procedures. We see no
evidentiary basis to infer any particular intent on
Mr. McConnell’s part. He may have been forgetful or confused or
vindictive or he may have decided not to proceed—we will never
know, and any inference drawn from his conduct is speculative.
       There are material disputed facts bearing on whether
Farmers negligently paid the proceeds of the policy to recipients
not entitled to those proceeds, thus breaching the contract of
insurance. Summary adjudication was therefore improper.
Because of its erroneous ruling on the breach of contract claim,
the trial court did not independently assess plaintiff’s claims for
breach of the covenant of good faith and fair dealing and punitive

                                 17
damages, so we need not address the propriety of summary
adjudication of those claims.
                          DISPOSITION
       The judgment is reversed. The cause is remanded to the
trial court with instructions to vacate its order granting summary
adjudication for defendant on plaintiff’s claims for breach of
contract, breach of the covenant of good faith and fair dealing,
and punitive damages, and to enter a new order denying
summary adjudication. Plaintiff shall recover her costs on
appeal.

                        GRIMES, J.

      WE CONCUR:

                        STRATTON, P. J.

                        HARUTUNIAN, J.*

*     Judge of the San Diego Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.

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