Court Opinion

ID: 5118782
Source: CourtListenerOpinion
Date Created: 2021-10-15 19:02:44.373439+00
Date Added: 2024-06-11T08:22:09.552461
License: Public Domain

Filed 10/15/21
                             CERTIFIED FOR PUBLICATION

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                              THIRD APPELLATE DISTRICT
                                            (Siskiyou)
                                               ----

 MARISSA JANNEY, as Successor in Interest, etc.,                  C089534

                 Plaintiff and Appellant,                (Super. Ct. No. SCCVCV15-
                                                                    1149-1)
         v.

 CSAA INSURANCE EXCHANGE,

                 Defendant and Respondent.

      APPEAL from a judgment of the Superior Court of Siskiyou County, JoAnn M.
Bicego, Judge. Affirmed.

        The O’Connor Law Firm and Timothy J. O’Connor for Plaintiff and Appellant.

      Coddington, Hicks & Danforth, R. Wardell Loveland, and Min K. Kang for
Defendant and Respondent.

        Peggy Baltar’s home in Siskiyou County was destroyed by a wildfire in September
2014. She ultimately had a new house built on the same property. Her insurer, CSAA
Insurance Exchange (CSAA), paid the full amount charged by her contractor for

                                                1
construction of the new house. Baltar sued for breach of contract and breach of the
implied covenant of good faith and fair dealing. According to Baltar, CSAA breached
the insurance policy by, among other things, failing to provide her with a complete and
accurate estimate for replacing the original house, which would have provided her with a
budget for the construction of the new house; without such a budget, she claims, she was
forced to build a cheaper house than the one destroyed by the fire. She claims this, and
other asserted breaches of the policy, amounted to bad faith and entitled her to punitive
damages. The trial court granted CSAA’s motion for summary judgment and entered
judgment in favor of the company. Baltar appeals.1 We affirm.
                                     BACKGROUND
       In September 2014, Baltar’s house in Weed was destroyed by the Boles Fire. The
homeowners policy she purchased from CSAA insured her against such an occurrence.
                                Relevant Policy Provisions
       The policy’s declarations page set out the following coverages in section I:
$219,800 for the dwelling (Coverage A), $22,600 for other structures (Coverage B),
$164,900 for personal property (Coverage C), and $87,920 for loss of use (Coverage D).
The policy also included an endorsement providing limited home replacement cost
coverage. This endorsement increased the coverage limits for the dwelling and other
structures to “150% of the respective amounts” noted above if certain conditions were
met.2 The endorsement further provides: “Coverage is limited to the amount reasonably
necessary to repair or replace the dwelling and other ‘building structures,’ but does not

1       Baltar passed away in April 2019, after the trial court’s summary judgment ruling
but before judgment was entered. Baltar’s daughter, Marissa Janney, was substituted into
the action as Baltar’s successor in interest and filed a timely notice of appeal. For ease of
reference, we refer to the contentions raised in this appeal as being raised by Baltar.
2      There is no assertion these conditions were not met in this case.

                                             2
include any costs required to replace, rebuild, stabilize or otherwise restore or protect the
land.” Thus, the policy limits for repair or replacement of the dwelling and other
structures was increased to $329,700 and $33,900, respectively, limited by the
“reasonably necessary” qualification noted above.
       The policy’s loss settlement provisions relating to repair or replacement of the
dwelling and other structures provide:
       “Covered property losses are settled as follows: [¶] . . . [¶]
       “b.    ‘Building structures’ under Coverage A or B at ‘replacement cost’ without
deduction for depreciation, subject to the following:
       “(1)   . . . we will pay the cost of repair or replacement, without deduction for
depreciation, but not exceeding the smallest of the following amounts:
       “(a)   The limit of liability under this policy applying to the ‘building structure’;
       “(b)   The ‘replacement cost’ of that part of the ‘building structure’ damaged for
equivalent construction and use on the same premises; or
       “(c)   The amount actually and necessarily spent to repair or replace the damaged
‘building structure.’ ”
       Paragraph 4 of this subdivision further provides that CSAA would “pay no more
than the ‘actual cash value’ of the damage until actual repair or replacement is completed
and costs incurred.”
       Additional relevant policy provisions will be set forth in the discussion portion of
this opinion. For now, we simply note the policy also covered loss of “trees, shrubs,
plants or lawns” up to “5% of the limit of liability that applies to the dwelling,” as well as
“the reasonable expense incurred” by the policyholder for debris removal.
                          CSAA’s Initial Handling of Baltar’s Claim
       On September 16, 2014, the day after Baltar’s house was destroyed, she submitted
a claim to CSAA. The company immediately acknowledged the claim and assigned a
large loss claim adjuster to handle the matter. Three days later, after certain payments

                                              3
were made to Baltar for loss of personal property, CSAA’s large loss specialist, Rick
McMullen, met with Baltar and inspected the property.
       On September 22, Baltar notified CSAA that she had moved into a rental home,
requiring payment of a security deposit in addition to monthly rent beginning October 1.
The following day, CSAA paid Baltar additional sums for loss of personal property and
also advanced her the security deposit for the rental home.
       On September 24, McMullen completed a valuation report, estimating the actual
cash value of the destroyed house to be $108,355.44. This valuation was based on square
footage and other basic details of the structure. Three days later, CSAA paid Baltar and
her lienholder $107,355.44 (estimated actual cash value, minus Baltar’s $1,000
deductible).
       About a week later, CSAA paid Baltar the balance of the policy limit for loss of
personal property. Additional loss of use payments (totaling six months of rent, minus
the amount advanced for the security deposit) were made in October.
       Thus, about a month after the loss of her home, Baltar was paid the policy limit of
$164,900 for loss of personal property, as well as the estimated actual cash value of the
dwelling, plus loss of use payments allowing her to move into and pay rent at the rental
home for six months.
                          Competing Reconstruction Estimates
       CSAA also consulted with Cronic Disaster Services (Cronic), a licensed general
contractor located in Redding, to prepare a reconstruction estimate for Baltar’s destroyed
house. Cronic submitted the requested estimate in November 2014. On a page titled
“Summary for dwelling,” the estimate listed $180,984.39 as the replacement cost value.
This valuation was based on a “Line item total” of $145,095.55, plus materials sales tax
of $5,724.78, plus $30,164.06 in overhead and profit. However, various line items did
not list the estimated cost for that item, but were instead simply designated “OPEN
ITEM” or “AS OCCURRED.” Thus, as Matthew Williams, the large loss specialist who

                                             4
took over Baltar’s claim in May 2016, admitted during his deposition, Cronic would
“[m]ore than likely” have charged more than $180,984.39 to rebuild Baltar’s house.
Nevertheless, Williams understood that Cronic had agreed to rebuild the house for that
price, “subject to [the] open items that would be paid as incurred.”
       On November 21, 2014, CSAA sent Baltar a letter following up on a previous
phone conversation and informing her that the policy entitled her to “the actual cash
value of [the] damaged building,” which had already been paid, “along with the
opportunity to make further claim for replacement cost.” The letter attached the Cronic
estimate described above and stated: “As discussed, our payment has been based upon an
agreed price [of] $180,984.39 with Cronic who is a member [of] our Direct Repair
Network. They have indicated their willingness to assist you in the reconstruction of the
home if you so desire.” The letter advised Baltar that she had the right to choose another
contractor, but also noted that “reconstruction costs will vary by contractor and increased
costs for equivalent construction are not in themselves grounds for adjustment in the
amount necessary to repair the home.” The letter continued: “Please review the estimate
to assure its accuracy. If you believe something has been over looked please contact us
immediately so that we may address your concerns. Additionally it is possible that the
contractor may identify supplemental issues during the actual repair that will require
additional work and payment.”
       About a week later, CSAA paid Baltar an additional $53,061.30 for replacement
of the dwelling, $21,322.81 for replacement of other structures, and $13,037.58 for debris
removal. Thus, by the end of the year, CSAA had paid Baltar a total of $160,416.74 for
the dwelling ($180,984.39 total replacement cost value estimated by Cronic, minus
depreciation of $19,567.65, minus the $1,000 deductible). The payments for replacement
of other structures and debris removal were also based on Cronic’s estimate.
       In May 2015, Baltar entered into a contract with a different contractor, J. Carleton
Company, to build her a new house on the same property for $260,000. Rather than

                                             5
confer with CSAA regarding whether the company considered this amount reasonably
necessary to replace the original dwelling, Baltar retained the services of Robert
Ellenberg, a licensed public adjuster with Unity Adjustments, to have her own
replacement cost estimate prepared. As Ellenberg explained in his declaration: “I
retained an estimator, Victor Romero of Construction First, to work with Ms. Baltar’s
contractor John Carleton to calculate a more complete replacement cost estimate for Ms.
Baltar’s home. Ms. Baltar’s contractor checked and corrected the estimate, and
authorized me to submit the estimate to CSAA under his company name.” This estimate
listed $346,998.57 as the replacement cost value of the dwelling, more than $17,000
above the policy limit for the dwelling coverage.
       Ellenberg submitted the estimate to CSAA in August 2015. He wrote in the cover
letter: “The first measure of what is to be established in determining what an insured
may be due under the terms of their policy is almost never properly calculated‒THE
REPLACEMENT COST for what they actually had.” After noting that Baltar’s policy
entitled her to “the smallest” of various amounts, one being the cost of replacing the
structure using equivalent construction, Ellenberg continued: “Determining the
Replacement Cost as defined in the policy can only be done by an accurate and in depth
determination of the specifications to which the building was built. This must include all
aspects of a project that would be necessary to rebuild the home as it existed at the time
of the fire AND VERIFIED BY A LICENSED CONTRACTOR WHO WOULD CARRY
OUT THE REPLACEMENT IF IT WERE BEING DONE. This might be totally different
than the replacement choice which the insured makes. The amount actually spent is an
entirely separate measure of what might be due under the terms of the policy.”
       The following month, Baltar and various other policyholders retained counsel to
assist them in recovering under their respective policies. Baltar’s attorney and CSAA
agreed to a tolling of the statute of limitations to allow the company “to continue working

                                             6
with Unity Adjustments to resolve the claims instead of escalating . . . immediately to a
litigation posture.”
       Thereafter, between December 2015 and March 2016, CSAA sent Baltar and her
attorney a series of letters asking for additional information, including the construction
plans for the replacement house. These requests were apparently forwarded to Ellenberg,
who explained in his declaration: “I did not provide Ms. Baltar’s Carleton contract to
CSAA while the replacement home was under construction because I was waiting for an
answer from CSAA on the replacement cost estimate.”
       Meanwhile, CSAA reviewed the Romero estimate internally but did not inform
Baltar or Ellenberg that it had done so. In an April 2016 e-mail from McMullen to large
loss supervisor Gabby Martinez, McMullen provided a comparison of the competing
estimates and concluded certain items in the Romero estimate were unnecessary and
other items were not covered within the dwelling coverage, resulting in an adjusted
replacement cost total of $227,611.93. Williams also reviewed the Romero estimate and
concluded it “exceeded the scope of work that was reasonably related to the subject loss”
and that both “the scope of work and prices reflected in the estimate . . . [were] not
reasonable or necessary to rebuild [Baltar’s] home after the Boles Fire.”
       Completion of the New Home and Payment of Actual Construction Costs
       Between January 2015 and March 2016, CSAA paid Baltar a total of $6,523.75 for
the creation of construction plans for the new home and an additional $11,820 for loss of
use while it was being constructed. After the initial contract with J. Carleton Company
was entered into in May 2015, the price of that contract was adjusted downward by two
change orders, ultimately resulting in a revised contract amount of $252,688.
       The house was completed and a certificate of occupancy was issued in May 2016.
As mentioned, Williams was assigned to take over the claim that month. On May 26,
Williams sent Ellenberg a letter listing the total payments CSAA had made up to that
date: $179,978.07 for the dwelling, $164,900 for personal property, $16,620 for loss of

                                              7
use, and $21,322.81 for other structures. Williams asked Ellenberg to provide “a current
status of the rebuild of the home” and to notify him “if there is anything outstanding for
this loss.”
       Williams also spoke with someone at Unity Adjustments on June 3 and was
informed the construction of the replacement house was complete. Three days later, he
sent another letter to Ellenberg.3 This letter stated: “We believe the rebuild of the
insured’s home has been completed. At your earliest convenience, please provide us with
the verification of the completed rebuild, including but not limited to; paid permit fees,
paid architect, engineering and plan fees, photos of both the interior and exterior of the
home showing the status of the rebuild, a signed Certificate of Completion from the
contractor and insured, and a final paid invoice showing the amount the insured paid for
the work done on the home.”
       Receiving no response from Ellenberg, Williams sent follow-up letters requesting
the same information on June 22, July 22, August 19, September 15, and October 14.
Ellenberg responded on October 27, attaching various invoices from J. Carleton
Company, as well as the change orders indicating the revised contract amount of
$252,688. Williams responded on November 23, informing Ellenberg that CSAA was
reviewing these documents.
       On December 6, Williams wrote to Ellenberg seeking clarification regarding the
total amount Baltar was claiming for loss of the dwelling. Apparently, in the meantime,
Ellenberg had a conversation with another CSAA employee, large loss specialist
Nicholaus Gorman, and stated Baltar was seeking $260,856.86. Williams asked
Ellenberg whether this amount was for the dwelling alone or for other structures as well,

3      The same day, CSAA paid Baltar an additional $1,277.19 for loss of other
structures, the balance of the policy limit listed on the declarations page for this category
of coverage.

                                              8
and if the latter, how much was requested for each. Williams noted the documents
Ellenberg submitted showed the revised contract price for the new house was $252,688
and asked him to explain “the difference between the revised contract and the amount
you are seeking.” Williams also asked for additional breakdowns of “any code upgrade
work that may have been needed for the re-build,” as well as the contractor’s “broken
down estimate” for the project, and “the total [Baltar] paid in the separate receipts that
were submitted” because certain receipts were difficult to read. Receiving no response,
Williams sent a follow-up letter on December 22 seeking the same information.
       On January 17, 2017, Ellenberg responded and confirmed the amount Baltar paid
J. Carleton Company for the new house was $255,088. He provided no additional
breakdowns, but noted CSAA should have the replacement cost estimate previously
submitted. Three days later, Williams wrote back, explaining that CSAA did have the
Romero estimate of $346,998.57, but the company did not have any “estimate or contract
from the contractor who completed the work.” Williams again asked for an explanation
as to why the amount Baltar paid was more than the revised contract amount listed at
$252,688.
       On February 16, another follow-up letter requesting the same information was sent
to Ellenberg, who responded by e-mail indicating that CSAA should contact the
contractor directly to obtain the requested information. CSAA did so and eventually
obtained additional information. On May 12, Williams wrote a letter to Ellenberg
acknowledging receipt of the information and advising him that it was being reviewed.
       Based on the information provided by J. Carleton Company, CSAA determined it
owed Baltar an additional $60,771.26 for the dwelling and $11,300 for other structures.4

4      The $11,300 amount brought the amount paid for other structures to the policy
limit of $33,900, reflected on the declarations page modified by the replacement cost
coverage endorsement. The $60,771.26 amount paid for the dwelling was calculated as

                                              9
These amounts were paid on July 18. On August 17, CSAA also paid an additional
$24,250.01 for code upgrade expenses.
       On September 1, Williams sent a letter to Baltar listing the total payments CSAA
had made up to that date: $264,999.34 for the dwelling, $164,900 for personal property,
$16,620 for loss of use, and $33,900 for other structures. Williams asked Baltar to let
him know if there were any outstanding issues that CSAA needed to address in order to
conclude the claim. Monthly follow-up letters conveying the same information were sent
to Baltar between September 2017 and July 2018.
       No outstanding issues were identified by Baltar until June 22, 2018, when she
testified at her deposition that certain landscaping and nursery invoices had not been paid.
CSAA reviewed the invoices and determined it owed an additional $12,095.80. This
amount was paid on July 11.
       On August 3, Williams sent another letter to Baltar listing the total payments
CSAA had made up to that date. Williams again asked Baltar to let him know if there
were any outstanding issues that CSAA needed to address in order to conclude the claim.
Follow-up letters conveying the same information were sent to Baltar on August 31 and
September 28.
       No additional outstanding issues were identified by Baltar until December 2018,
when she responded to CSAA’s motion for summary judgment and claimed for the first
time that CSAA owed additional amounts for debris removal. We describe this claim in
greater detail below.

follows: $255,088 (amount Baltar paid J. Carleton Company for both the dwelling and
other structures), minus $33,900 (amount CSAA paid Baltar under the other structures
coverage), plus $13,037.58 (for debris removal), plus $6,523.75 (for plans and permits),
equals a total dwelling replacement cost of $240,749.33. This amount minus the
$179,978.07 already paid to Baltar under the dwelling coverage equals $60,771.26.

                                            10
                      The Lawsuit and Summary Judgment Motion
        As previously mentioned, Baltar sued CSAA for breach of contract and breach of
the implied covenant of good faith and fair dealing, seeking punitive damages for the
latter alleged breach. Her operative second amended complaint was filed in October
2016.
        CSAA moved for summary judgment in October 2018. CSAA argued it did not
breach its contract with Baltar as a matter of law because the undisputed evidence
established that it “paid all amounts due under the policy.” CSAA argued that, “[w]ith
the exception of the Romero Estimate generated after [Baltar] was in contract with [J.
Carleton Company], all expenses covered by the policy and submitted to CSAA for
reimbursement have been paid.” CSAA further argued “the Romero Estimate does not
support a claim for additional policy benefits” because the policy expressly limited Baltar
to “the smallest of various amounts, including ‘the amount actually and necessarily spent
to repair or replace the damaged “building structure.” ’ ” Because CSAA paid Baltar the
amount she paid J. Carleton Company to build the new house, nothing more was owed
under the dwelling coverage.
        Turning to Baltar’s bad faith cause of action, CSAA argued it “acted reasonably in
the handling of [her] claim,” noting it paid her the policy limit for the personal property
and the other structures coverages, and further paid all amounts submitted by Baltar for
loss of use. With respect to the dwelling coverage, CSAA explained it initially paid
Baltar the estimated actual cash value of the destroyed house, then supplemented that
amount based on the Cronic estimate of the replacement cost value, and further
supplemented that amount when Baltar finally revealed the amount she “actually and
necessarily spent to replace the building structure.” CSAA argued: “If [Baltar] thought
some aspect of her claim had not been paid, CSAA had no idea because [she] and her
representatives accepted CSAA’s payments and have not requested additional payment.
Indeed, when [Baltar] was deposed in this lawsuit, she testified that certain landscaping

                                             11
expenses had not been reimbursed. When CSAA was informed of that testimony, it
reviewed those invoices and issued payment within 30 days. Nothing further has been
submitted to CSAA for review or consideration.”
       CSAA additionally argued that even if it was found to have breached the insurance
contract, it did not do so in bad faith as a matter of law because there was a “genuine
dispute” over the existence of coverage or the amount owed. Nor, CSAA argued, was
Baltar entitled to punitive damages, there being no oppression, fraud, or malice as a
matter of law.
             Baltar’s Summary Adjudication Motion and Opposition Filing
       About a week after CSAA’s summary judgment motion was filed, Baltar filed a
motion for summary adjudication of five identified issues of duty. These can be
condensed to the following: (1) whether CSAA had a duty to advise Baltar of the all
available coverage under the policy, including the full amount of replacement cost
coverage available under the policy based on CSAA’s estimate of the replacement cost;
and (2) whether CSAA had a duty to adjust any replacement cost estimate submitted on
Baltar’s behalf and provide that adjusted estimate to Baltar, notifying her of any increase
in the replacement cost coverage available under the policy.
       Baltar also filed an opposition to CSAA’s motion for summary judgment, arguing
“CSAA breached the policy and acted in bad faith in at least three major respects:
(A) CSAA deprived . . . Baltar of the benefits of the contract by insisting on an
unreasonable lowball estimate of the cost to replace [her] lost home; (B) CSAA failed to
pay the amounts due under the separate landscaping . . . coverage in the Policy until July
2018, despite knowing about the landscaping losses no later than November 2014; and
(C) CSAA still to this day has not paid most of the debris removal costs incurred by Ms.
Baltar.”
       With respect to the first claimed breach, Baltar argued the Cronic estimate was so
“unreasonably low” that she was required to retain Unity Adjustments to prepare a more

                                            12
accurate replacement cost estimate, and “[w]hen CSAA would not acknowledge the full
amount of available coverage, [she] was forced to economize on the rebuild because she
could not afford to fully replace her house.” Baltar argued CSAA’s handling of the
replacement cost estimate “breached the contract and also amounted to bad faith” because
CSAA “failed to establish an agreed on scope of loss[,] . . . deprived [her] of benefits
under the Policy[, and] . . . violated industry standards and [title] 10 [California Code of
Regulations] [section] 2695.4[ subdivision ](a) [and] . . . [title] 10 [California Code of
Regulations] [section] 2695.9.”
       With respect to the delayed payment of landscaping costs, Baltar argued CSAA
had sufficient information from which to determine the total amount of her landscaping
loss in November 2014, and Baltar’s expert would “testify that failure to pay promptly is
a breach of the contract, that unreasonable delay in payment is a breach of the carrier’s
duty of good faith, and that CSAA’s delay in payment for landscaping in this case was
unreasonable given the information CSAA had about . . . Baltar’s landscaping loss.”
Turning to the claimed failure to pay the total amount owed for debris removal, she
argued: “CSAA still has not paid the amounts owed for debris removal. On November
26, 2014[,] CSAA’s records indicate CSAA issued a check for $13,037.58 to Ms. Baltar
based on the Cronic estimate for debris removal. The actual debris removal bill from the
City of Weed was $62,008.29. Ms. Baltar’s public adjuster submitted this information to
CSAA along with the replacement cost estimate no later than August 2015. CSAA still
has not paid the $48,970.71 remainder of the debris removal bill.”
       Baltar additionally argued the genuine dispute doctrine did not shield CSAA from
bad faith liability, and CSAA’s bad faith entitled her not only to punitive damages, but
also damages for emotional distress, attorney fees, public adjuster fees, costs of bringing
the lawsuit, and interest.

                                             13
                                       CSAA’s Reply
       In reply, CSAA argued Baltar did not set forth specific facts showing a triable
issue of material fact with respect to either of her causes of action. Noting that Baltar
was not entitled to more than the actual cash value of the destroyed house until she
replaced it, CSAA argued Baltar neither alleged nor offered any evidence to show she did
not receive an appropriate actual cash value amount immediately after the loss. Nor did
Baltar offer any evidence disputing the fact that she thereafter received the full amount
actually spent to replace the house. Addressing Baltar’s argument that she was forced to
build a less expensive house than the one she could have built had CSAA adjusted the
Romero estimate and provided her with that adjusted replacement cost amount, CSAA
responded by noting Baltar testified in her deposition “that the home she had before the
fire was essentially the same as the home that she rebuilt.” CSAA also noted the new
house “was larger than her previous home by over 500 square feet” and characterized her
arguments that CSAA “forced down the cost and quality of [her] rebuild” such that “she
did not and could not rebuild what she had before the fire” as “disingenuous.”
       With respect to landscaping and debris removal, CSAA argued these expenses
were not owed until they were incurred and brought to CSAA’s attention. CSAA argued
the receipts Baltar submitted for landscaping “were unclear, and CSAA’s request for
clarification was ignored.” “At worst,” the company argued, “the landscaping expenses
were inadvertently overlooked, and paid by CSAA once the oversight was brought to the
adjuster’s attention.” With respect to the City of Weed’s debris removal bill, CSAA
argued Baltar “does not have a personal claim for those expenses” as a matter of law
because the undisputed evidence established that the city waived personal liability of the
property owners for debris removal. Thus, “the amount to be paid is an issue between
CSAA and the City of Weed.”

                                             14
                                    Trial Court’s Ruling
       The trial court granted summary judgment in favor of CSAA.5 With respect to
payment of amounts due under the dwelling coverage, the trial court concluded CSAA
produced undisputed evidence showing it paid the amount actually and necessarily spent
to replace the destroyed house under measure (c) of the relevant loss settlement
provision. In reaching this conclusion, the trial court rejected Baltar’s argument that
CSAA was nevertheless “required to determine replacement cost under measure (b)”
even “after she entered into a written contract to rebuild her home and while construction
was in progress.” The trial court also explained that the letter Ellenberg sent to CSAA
along with the Romero estimate “did not put CSAA on notice that Ms. Baltar was
dissatisfied with the contract she had entered into with J. Carleton Company or that she
had concerns that the contract would not ultimately provide her with a home substantially
similar to the home she had lost.” Nor did Baltar produce any evidence that she brought
any such concerns to CSAA’s attention during the construction of the new home.
“Rather,” the trial court continued, “the evidence establishes that [Baltar] and/or her
representatives purposely withheld the construction contract from CSAA until after
construction was complete. The evidence also established that Ms. Baltar’s new home
was significantly larger than her original home but that CSAA nevertheless paid for the
costs of construction without objection.” The trial court concluded CSAA satisfied its
obligations under the policy as a matter of law by paying the amount actually and
necessarily spent to replace the house, i.e., the smallest of the three measures set forth in
the policy’s loss settlement provision.

5      The trial court also sustained various objections CSAA made to Baltar’s evidence.
Where relevant to the claims raised in this appeal, we address these evidentiary rulings in
the discussion portion of the opinion.

                                              15
       With respect to the asserted delayed payment of landscaping costs and failure to
pay the full amount for debris removal, the trial court also concluded there was no breach
of contract as a matter of law. The trial court concluded: “The undisputed evidence
establishes that CSAA paid actual cash value [for the landscaping loss] and that they
were not advised that Ms. Baltar had incurred replacement costs for landscaping until she
was deposed in this case. Upon thereafter receiving receipts from the landscaper and
nursery, CSAA issued payment consistent with those receipts.” As for debris removal,
the trial court explained undisputed evidence established that the City of Weed informed
Baltar that she was responsible to pay only the amount of “ ‘insurance proceeds
designated for debris removal.’ ” Thus, Baltar was required to pay only the $13,037.58
she received from CSAA for debris removal. The trial court noted, however, that should
Baltar be required to pay more than that for debris removal, “there may still be amounts
due for debris removal under the policy.”
       Finally, having found no breach of contract as a matter of law, the trial court
concluded Baltar’s bad faith cause of action also failed as a matter of law on these
undisputed facts.
       This appeal followed.
                                       DISCUSSION
                                              I
                               Summary Judgment Principles
       We begin by summarizing several principles that govern the grant and review of
summary judgment motions under section 437c of the Code of Civil Procedure.
       “A defendant’s motion for summary judgment should be granted if no triable issue
exists as to any material fact and the defendant is entitled to a judgment as a matter of
law. [Citation.] The burden of persuasion remains with the party moving for summary
judgment. [Citation.]” (Kahn v. East Side Union High School Dist. (2003) 31 Cal.4th
990, 1002-1003 (Kahn); Code Civ. Proc., § 437c, subd. (c).) Thus, a defendant moving

                                             16
for summary judgment “bears the burden of persuasion that ‘one or more elements of’ the
‘cause of action’ in question ‘cannot be established,’ or that ‘there is a complete defense’
thereto. [Citation.]” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850; Code
Civ. Proc., § 437c, subd. (o)(2).) Such a defendant also “bears the initial burden of
production to make a prima facie showing that no triable issue of material fact exists.
Once the initial burden of production is met, the burden shifts to [plaintiff] to
demonstrate the existence of a triable issue of material fact.” (Laabs v. City of Victorville
(2008) 163 Cal.App.4th 1242, 1250.)
       On appeal from the entry of summary judgment, “[w]e review the record and the
determination of the trial court de novo.” (Kahn, supra, 31 Cal.4th at p. 1003.) “While
we must liberally construe plaintiff’s showing and resolve any doubts about the propriety
of a summary judgment in plaintiff’s favor, plaintiff’s evidence remains subject to careful
scrutiny. [Citation.] We can find a triable issue of material fact ‘if, and only if, the
evidence would allow a reasonable trier of fact to find the underlying fact in favor of the
party opposing the motion in accordance with the applicable standard of proof.’
[Citation.]” (King v. United Parcel Service, Inc. (2007) 152 Cal.App.4th 426, 433; see
also Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 163.)
                                              II
                                          Analysis
       Baltar contends the trial court erred in granting CSAA’s summary judgment
motion because there are material factual disputes concerning: (A) whether CSAA
breached the insurance policy by failing to provide a complete and accurate estimate of
the cost to replace the original house or adjust Baltar’s replacement cost estimate, failing
to timely pay for landscaping, and failing to pay the full amount for debris removal; and
(B) whether any of these alleged failures amounted to bad faith on the part of the
insurance company. We address each argument in turn and conclude summary judgment
was properly granted in this case.

                                              17
                                              A.
                                 Breach of Contract Claim
       In order to prevail against CSAA for breach of contract, Baltar must establish the
following elements: (1) the existence of the contract, (2) Baltar’s performance or excuse
for nonperformance, (3) CSAA’s breach, and (4) resulting damages. (Oasis West Realty,
LLC v. Goldman (2011) 51 Cal.4th 811, 821.) CSAA argued below, and the trial court
agreed, that Baltar could not establish the third element, breach of the insurance policy,
because the undisputed evidence established that it “paid all amounts due under the
policy.” We agree.
                                              1.
                              Preliminary Evidentiary Matter
       Before addressing Baltar’s specific arguments regarding CSAA’s purported
breaches of the policy, we first address her assertion that the trial court erred in sustaining
most of CSAA’s objections to the declaration of her expert, Everette Lee Herndon.
Contrary to her argument on appeal, the trial court’s evidentiary rulings did not amount to
“wholesale rejection” of the Herndon declaration. Instead, 21 of 32 specific objections
were sustained in whole or in part. Baltar’s opening brief, however, does not specifically
address any of these 21 evidentiary rulings or offer any reasoned argument or citation to
authority targeted towards any specific ruling.
       Rather, citing McCleery v. City of Bakersfield (1985) 170 Cal.App.3d 1059, Baltar
argues “[e]xpert testimony is often appropriate to determine the reasonableness of
conduct in cases where industry principles and practices are beyond the knowledge of a
layperson.” She also cites the general proposition, set forth in Garrett v. Howmedica
Osteonics Corp. (2013) 214 Cal.App.4th 173, that expert declarations offered in
opposition to a summary judgment motion must be construed more liberally than those
offered in support of such a motion. We take no issue with these general propositions.
However, as our colleagues at the Fifth Appellate District explained in Summers v. A.L.

                                              18
Gilbert Co. (1999) 69 Cal.App.4th 1155: “There are limits to expert testimony, not the
least of which is the prohibition against admission of an expert’s opinion on a question of
law.” (Id. at p. 1178.) Much of Herndon’s declaration amounts to legal conclusions with
respect to what Herndon believed was required of CSAA under the policy. “ ‘[T]he
meaning of the [insurance] policy is a question of law about which expert opinion
testimony is inappropriate. [Citations.]’ [Citations.]” (Id. at p. 1180, quoting Cooper
Companies v. Transcontinental Ins. Co. (1995) 31 Cal.App.4th 1094, 1100.)
       “It is appellant’s ‘burden on appeal to affirmatively challenge the trial court’s
evidentiary ruling, and demonstrate the court’s error.’ [Citation.]” (Salas v. Department
of Transportation (2011) 198 Cal.App.4th 1058, 1074.) Although Baltar claims
generally that the trial court erred in sustaining CSAA’s objections to the Herndon
declaration, her opening brief does not identify distinct evidentiary rulings or provide
legal argument tailored to the grounds upon which CSAA’s evidentiary objections were
sustained. She has therefore “failed to carry [her] burden to affirmatively show error in
the trial court’s rulings on the evidentiary objections. . . . In arguing only generalities,
[Baltar has not provided] ‘argument and citations to authority as to why the trial court’s
evidentiary rulings were wrong.’ [Citation.] ‘We are not required to search the record to
ascertain whether it contains support for [her] contentions.’ [Citation.]” (Ibid.)
       Baltar’s challenge to the trial court’s evidentiary rulings is therefore forfeited.6

6      To the extent Baltar’s reply brief attempts to make up for this shortcoming by
pointing out two specific paragraphs from Herndon’s declaration that she believes should
not have been excluded from evidence, she is too late. (Eyford v. Nord (2021) 62
Cal.App.5th 112, 126 [“arguments made in a reply brief for the first time are too late”].)

                                              19
                                              2.
                  CSAA’s Handling of the Replacement Cost Estimates
       Baltar argues disputed issues of material fact exist with respect to whether CSAA
breached the insurance policy by failing to provide a complete and accurate estimate of
replacement cost or adjust Baltar’s replacement cost estimate. We are not persuaded.
       As stated previously, the loss settlement provisions of Baltar’s policy entitled her
to recover the “ ‘replacement cost’ ” of the dwelling “subject to the following: [¶] (1) . . .
we will pay the cost of repair or replacement, without deduction for depreciation, but not
exceeding the smallest of the following amounts: [¶] (a) The limit of liability under this
policy applying to the ‘building structure’; [¶] (b) The ‘replacement cost’ of that part of
the ‘building structure’ damaged for equivalent construction and use on the same
premises; or [¶] (c) The amount actually and necessarily spent to repair or replace the
damaged ‘building structure.’ ”
       In Conway v. Farmers Home Mut. Ins. Co. (1994) 26 Cal.App.4th 1185 (Conway),
the court interpreted an identical provision. The court first explained, relying on Hess v.
North Pacific Ins. Co. (1993) 122 Wash.2d 180 [859 P.2d 586], that “the genesis” of such
provisions was the recognition that an insured covered by a traditional policy, providing
only for payment of actual cash value of the property, “ ‘might not be made whole
because of the increased cost to repair or to rebuild. Thus, replacement cost coverage
became available. . . .’ [Citation.]” (Conway, at p. 1189.) The court also adopted the
Hess court’s interpretation of the various measures of loss settlement:
       “ ‘ “The first measure, of course, limits the amount available for replacement to
policy limits, while the second relates to a theoretical or hypothetical measure of loss:
that is, the replacement cost of rebuilding the identical structure as one limit of the
company’s liability. This particular limitation does not require repair or replacement of
an identical building on the same premises, but places that rebuilding amount as one of
the measures of damage to apply in calculating liability under the replacement cost

                                              20
coverage. The effect of this limitation comes into play when the insured desires to
rebuild either a different structure or on different premises. In those instances, the
company’s liability is not to exceed what it would have cost to replace an identical
structure to the one lost on the same premises. Although liability is limited to rebuilding
costs on the same site, the insured may then take that amount and build a structure on
another site, or use the proceeds to buy an existing structure as the replacement, but
paying any additional amount from his or her own funds.
       “ ‘ “Finally, the third limitation of liability strengthens the requirement that
liability of the company does not exist until repair or replacement is made. The purpose
of this limitation is to limit recovery to the amount the insured spent on repair or
replacement as yet another measure of the loss liability of the insurer. This third
valuation method is intended to disallow an insured from recovering, in replacement cost
proceeds, any amount other than that actually expended.” [Citation.]’ ” (Conway, supra,
26 Cal.App.4th at p. 1190, fn. & italics omitted; see also Everett v. State Farm General
Ins. Co. (2008) 162 Cal.App.4th 649, 658.)
       Thus, Baltar’s policy entitled her to the smallest of the following three measures
for the loss of her dwelling: (1) the policy limit, (2) the replacement cost for equivalent
construction and use on the same premises, and (3) the amount actually and necessarily
spent to replace the dwelling.
       There is no dispute as to the policy limit: $329,700. There is also no dispute that
Baltar spent $255,088 to replace the damaged home.7 There is a dispute over the second
potential loss settlement measure, the replacement cost. As set forth in greater detail
above, CSAA initially estimated the replacement cost to be $180,984.39, subject to

7      Although the record suggests a portion of this amount went to replace other
structures, CSAA accepts this as the amount Baltar actually and necessarily spent to
replace the dwelling.

                                              21
increases for various open line items in the estimate. Not satisfied with that estimate,
Baltar commissioned a second replacement cost estimate, which resulted in a replacement
cost measure of $346,998.57. CSAA’s large loss specialist, McMullen, later compared
the competing estimates and adjusted the replacement cost measure to $227,611.93.
However, these disputed amounts for the replacement cost are immaterial to the ultimate
issue of whether CSAA owes Baltar additional money under the policy for replacement
of the dwelling. This is because Baltar’s replacement cost estimate exceeds the policy
limit for the dwelling, making it the greatest of the potential loss settlement measures,
and the policy expressly limits her recovery to the smallest of the three amounts. In
theory, this policy provision limited her to the adjusted replacement cost measure of
$227,611.93 since that was the smallest of the three loss settlement measures. However,
CSAA ultimately paid Baltar the greater amount that she actually and necessarily spent to
replace the home.
       Stated simply, CSAA did not insist on paying Baltar the smaller adjusted
replacement cost amount calculated by McMullen and instead paid her the greater
amount she actually spent replacing the home. We agree with the trial court’s conclusion
that she is not entitled to more than this as a matter of law. Again, the “ ‘ “third valuation
method is intended to disallow an insured from recovering, in replacement cost proceeds,
any amount other than that actually expended.” [Citation.]’ ” (Conway, supra, 26
Cal.App.4th at p. 1190.) There is no dispute that Baltar received the amount she actually
expended.
       Nevertheless, Baltar argues she is entitled to more because CSAA employed an
“illegal scheme” to reduce the amount she actually expended on the replacement home.
In support of this argument, she relies on two insurance regulations, California Code of
Regulations, title 10, sections 2695.4 and 2695.9.
       The first of these regulations provides in relevant part: “Every insurer shall
disclose to a first party claimant or beneficiary, all benefits, coverage, time limits or other

                                              22
provisions of any insurance policy issued by that insurer that may apply to the claim
presented by the claimant. When additional benefits might reasonably be payable under
an insured’s policy upon receipt of additional proofs of claim, the insurer shall
immediately communicate this fact to the insured and cooperate with and assist the
insured in determining the extent of the insurer’s additional liability.” (Cal. Code Regs.,
tit. 10, § 2695.4, subd. (a).) Baltar argues CSAA violated this provision by providing her
with a “lowball” replacement cost estimate that “excluded entire categories of reasonable
and necessary costs,” thereby “refusing to advise [her] of the full amount of measure (b)”
and concealing “available dwelling benefits.”
       The second cited regulation provides in relevant part: “If losses are settled on the
basis of a written scope and/or estimate prepared by or for the insurer, the insurer shall
supply the claimant with a copy of each document upon which the settlement is based.
The estimate prepared by or for the insurer shall be in accordance with applicable policy
provisions, of an amount which will restore the damaged property to no less than its
condition prior to the loss and which will allow for repairs to be made in a manner which
meets accepted trade standards for good and workmanlike construction. The insurer shall
take reasonable steps to verify that the repair or rebuilding costs utilized by the insurer or
its claims agents are accurate and representative of costs in the local market area. If the
claimant subsequently contends, based upon a written estimate which the claimant
obtains, that necessary repairs will exceed the written estimate prepared by or for the
insurer, the insurer shall: [¶] (1) pay the difference between its written estimate and a
higher estimate obtained by the claimant; or, [¶] (2) if requested by the claimant,
promptly provide the claimant with the name of at least one repair individual or entity
that will make the repairs for the amount of the written estimate. The insurer shall cause
the damaged property to be restored to no less than its condition prior to the loss and
which will allow for repairs in a manner which meets accepted trade standards for good
and workmanlike construction at no additional cost to the claimant other than as stated in

                                              23
the policy or as otherwise allowed by these regulations; or, [¶] (3) reasonably adjust any
written estimates prepared by the repair individual or entity of the insured’s choice and
provide a copy of the adjusted estimate to the claimant.” (Cal. Code Regs., tit. 10,
§ 2695.9, subd. (d).)
       Baltar argues this provision “required CSAA to adjust the estimate submitted by
Ms. Baltar [(i.e., the Romero estimate)] and send back a copy of the adjusted estimate, or
to pay the estimate (at least up to policy limits). Instead of following the required
approach, CSAA simply refused to consider the estimate or communicate with Ms.
Baltar’s public adjuster about it.” Baltar argues CSAA’s failure to comply with both
provisions caused her to “fear she would not be able to recover enough from CSAA to
replace her house,” which resulted in her “build[ing] a less costly replacement house than
she was entitled to build under the contract.”
       We agree the $180,984.39 total amount listed in the Cronic estimate was not
sufficient to enable Baltar to build an identical replacement home on the same property.
This is revealed by the estimate itself, which left various line items open. However, the
letter CSAA sent to Baltar, with this estimate attached, accurately informed her that she
was not entitled to more than the actual cash value of the house until the house was
replaced, at which point she would be entitled to recover the replacement cost from
CSAA. The actual cash value had already been paid. The letter informed Baltar that
CSAA was also paying her the amount listed in the Cronic estimate, that Cronic had
agreed to rebuild her home for that price (subject to the open items in the estimate), and
that CSAA would make additional payments for necessary “additional work” identified
by the contractor during the rebuild. The letter further informed Baltar that she was
entitled to choose a different contractor to build the replacement home, but that she
would not automatically be entitled to additional payments solely because her chosen
contractor charged more for equivalent construction.

                                             24
       No reasonable insured would have read this letter as a hardline replacement cost
offer. Nor do we agree with Baltar that this letter and the attached estimate amounted to
concealment of available benefits under the policy in violation of California Code of
Regulations, title 10, section 2695.4.
       CSAA then paid Baltar the difference between the amount already paid under the
dwelling coverage and the amount listed in the Cronic estimate, essentially an advance on
the replacement cost since Baltar was not entitled to that amount until the house was
replaced. Thereafter, Baltar entered into a contract with a different contractor, J. Carleton
Company, to replace the house, ultimately for $255,088. She kept this information from
CSAA and instead submitted the Romero estimate listing $346,998.57 as the replacement
cost value. The letter sent to CSAA, with this estimate attached, acknowledged that
Baltar was entitled to only “the smallest” of the replacement cost amounts, one of those
amounts being “[t]he amount actually spent” by Baltar to replace the house. CSAA
repeatedly asked for the details of the actual construction contract and was ignored. And
when the amount Baltar actually spent to replace the house was finally revealed, that
amount was promptly paid by CSAA. On these undisputed facts, we cannot conclude
CSAA breached the insurance policy.
       Nor did CSAA violate California Code of Regulations, title 10, section 2695.9,
subdivision (d). As stated previously, this subdivision begins: “If losses are settled on
the basis of a written scope and/or estimate prepared by or for the insurer, . . .” (Ibid.)
That is not how losses were settled in this case. Instead, they were settled based on the
amount Baltar actually and necessarily spent to replace the house. To be sure, had CSAA
insisted on paying only the amount listed in the Cronic estimate, or the adjusted amount
of $227,611.93, this subdivision would apply. Because it does not, we need not
determine whether CSAA’s conduct would have satisfied its provisions.
       Finally, the notion that Baltar was forced to “build a less costly replacement house
than she was entitled to build under the contract” is belied by the record. Even if CSAA

                                              25
had done precisely what Baltar claims it was required to do under the regulations she
cites, i.e., supply her with a more complete replacement cost estimate in the first instance
or adjust the Romero estimate she submitted and provide her with the adjusted amount to
inform her “of the upper limit on the funds available for rebuilding” (SR Internat.
Business Ins. Co. Ltd. v. World Trade Center Properties, LLC (S.D.N.Y. 2006) 445
F.Supp.2d 320, 333), this would not have entitled Baltar to more than she received from
CSAA under the dwelling coverage. This is because CSAA did adjust the Romero
estimate and came to an adjusted amount of $227,611.93. Had CSAA provided Baltar
with this amount, there is no reason to think she would have built a more expensive
replacement house. The opposite is true. She either would have built a cheaper
replacement house, staying within that adjusted replacement cost budget, or she would
have built the same house she ultimately built in the hope of receiving her actual
construction costs.
       In other words, the only way Baltar would have potentially been entitled to more
under the dwelling coverage is if (1) the hypothetical adjusted replacement cost estimate
was more than the amount Baltar ultimately spent on the replacement house, and (2)
based on that upper limit of available replacement funds, Baltar actually spent a greater
amount to build the replacement house. Only then would the smallest of the three
amounts provided for in the policy’s loss settlement provisions have been the adjusted
replacement cost estimate Baltar claims she was entitled to receive from CSAA.
       However, there is no evidence in this record suggesting that CSAA was required
to adjust the Romero estimate to somewhere between the $255,088 that Baltar actually
spent and the $329,700 policy limits. None of the declarations submitted by Baltar in
opposition to summary judgment support such a conclusion, even if we view Herndon’s
declaration in its entirety, as Baltar urges us to do. The closest Baltar comes is her own
declaration, in which she states that she “did not have enough money to make the new
house as nice as the old house,” specifically pointing out that the house she lost in the fire

                                             26
was “framed out of redwood,” had “granite counter tops in the kitchen and bathroom,”
and had nicer cabinets, windows, and tile work. She also admits, however, that the
replacement house she had built is “a little bit bigger than the old house.” CSAA’s
evidence, undisputed by Baltar, establishes the replacement house was actually
significantly larger than the original house. Baltar was entitled to build a larger
replacement house. But her insurance policy did not require CSAA to pay for a
replacement house that was both significantly larger and also “as nice” as the original
house.
         We conclude Baltar’s evidence does not create a triable issue of material fact with
respect to whether her insurance policy entitled her to more than she actually spent to
build the replacement house. It did not.
                                               3.
                           Delayed Payment of Landscaping Costs
         Baltar also argues there is a material factual dispute with respect to whether CSAA
breached the insurance policy by failing to timely pay for landscaping costs. CSAA
argues “any delayed payment was mere oversight and an honest mistake” and the amount
owed was promptly paid in full “upon notice of the additional costs for landscaping.” We
conclude the undisputed facts support CSAA’s position in this regard.
         Baltar’s policy entitled her to additional coverage for “trees, shrubs, plants or
lawns, on the ‘residence premises.’ ” The policy provides: “The limit of liability for this
coverage shall not exceed 5% of the limit of liability that applies to the dwelling as
shown in the Declarations for Coverage A for all trees, shrubs, plants and lawns nor more
than $500 for any one tree, shrub or plant, including expense incurred for removal.”
         As Baltar accurately observes, it is undisputed that CSAA’s contractor, Cronic,
estimated the landscaping loss to be $7,111.06 in November 2014. She also notes that
CSAA’s large loss specialist, Williams, testified in his deposition that CSAA considered
such losses payable upon occurrence of the loss rather than upon replacement. CSAA

                                               27
concedes in this appeal that this amount should have been paid in November 2014.
However, when the matter was brought to CSAA’s attention during Baltar’s deposition,
Williams immediately reviewed the landscaping receipts she provided and CSAA paid
her $12,095.80 for the landscaping loss. There is no evidence in this record suggesting
this delay in payment was anything other than inadvertent. Nor is there any evidence that
the full amount owed was not ultimately, albeit belatedly, paid by CSAA. Moreover, the
undisputed facts also reveal that Baltar is at least partially to blame for the length of the
delay in payment. CSAA repeatedly sought information from Baltar regarding the
replacement of her home. Baltar ignored these requests until October 2016. However,
because many of the receipts she ultimately provided were difficult to read, CSAA asked
Baltar to supply the total amounts paid on the various receipts submitted. That was also
ignored. Had Baltar provided CSAA with the requested information at any time before
2018, the record strongly suggests they would have been immediately paid.
       In any event, we need not determine whether CSAA’s inadvertent delay in
payment of landscaping losses amounted to a breach of the insurance policy because
Baltar has presented no evidence that she suffered any damages as a result of the alleged
breach. Her appellate argument that she suffered damages is not evidence of damage
suffered. (See Fuller v. Tucker (2000) 84 Cal.App.4th 1163, 1173 [“Argument of
counsel is not evidence.”].)
                                              4.
                                   Debris Removal Costs
       Baltar further argues there is a material factual dispute regarding whether CSAA
breached the insurance policy by failing to pay the full amount for debris removal. In
response, CSAA points out that Baltar was paid $13,037.58 for debris removal in
November 2014, based on the Cronic estimate, and argues there is no evidence that she
incurred additional costs for debris removal. CSAA acknowledges the Romero estimate
lists $62,008.29 as the amount charged by the City of Weed for debris removal, but

                                              28
argues this does not “indicate if the amount listed was actually incurred, expended or
billed to [Baltar].” In any event, CSAA argues Baltar is “not personally liable for any
amounts incurred by the City for debris removal from her property” because the city
informed all property owners they were required to pay only the amount they received
from their respective insurers that was specifically “ ‘designated for debris removal.’ ”
       The city attorney’s office later confirmed “the City of Weed has waived any
request for the cost of debris removal [from property owners] in excess of the insurance
proceeds that are specifically for debris removal.” Accordingly, CSAA argues, the
undisputed evidence establishes that Baltar was paid $13,037.58 for debris removal and
that was the only amount she was required to pay the city for debris removal. The trial
court agreed with this reasoning in granting summary judgment with respect to this issue.
We do the same.
                                               B.
                                       Bad Faith Claim
       Finally, Baltar argues disputed issues of material fact exist with respect to whether
any of the foregoing alleged failures amounted to bad faith on the part of CSAA. She is
mistaken.
       “ ‘The covenant of good faith and fair dealing is implied in law to assure that a
contracting party “refrain[s] from doing anything to injure the right of the other to receive
the benefits of the agreement.” [Citation.] In essence, the covenant is implied as a
supplement to the express contractual covenants, to prevent a contracting party from
engaging in conduct which (while not technically transgressing the express covenants)
frustrates the other party’s rights to the benefits of the contract.’ ” (Fraley v. Allstate Ins.
Co. (2000) 81 Cal.App.4th 1282, 1291-1292 (Fraley).)
       “In a bad faith case, the ‘primary test is whether the insurer withheld payment of
an insured’s claim unreasonably and in bad faith. [Citation.] Where benefits are
withheld for proper cause, there is no breach of the implied covenant.’ [Citation.] It is

                                               29
well established that ‘bad faith liability cannot be imposed where there “exist[s] a
genuine issue as to [the insurer’s] liability under California law.” [Citation.]’ [Citation.]
‘[A] court can conclude as a matter of law that an insurer’s denial of a claim is not
unreasonable, so long as there existed a genuine issue as to the insurer’s liability.’
[Citation.]” (Fraley, supra, 81 Cal.App.4th at p. 1292, italics omitted.)
       In Fraley, our colleagues at the Fourth Appellate District held competing repair
and replacement cost estimates created “a genuine dispute regarding [the insurer’s]
contractual obligations,” explaining: “Where the parties rely on expert opinions, even a
substantial disparity in estimates for the scope and cost of repairs does not, by itself,
suggest the insurer acted in bad faith. Despite the ‘ “special relationship” ’ [citation]
between an insurer and its insureds, an insurer ‘may give its own interests consideration
equal to that it gives the interests of its insured[s].’ [Citation.] [¶] The record reveals
that [the insurer] handled the [the insureds’] claim reasonably, by retaining experts and
investigating, paying the undisputed actual cash value of the loss and proceeding to
appraisal on the disputed portion of the claim, replacement cost. Moreover, [the insurer]
promptly paid the replacement cost appraisal award after the [insureds] purchased
another home. We agree with the trial court that their bad faith claim fails as a matter of
law.” (Fraley, supra, 81 Cal.App.4th at p. 1293.)
       Similarly, here, there was a genuine dispute with respect to the amount it would
cost to rebuild Baltar’s home on the same property. We have already described the
competing replacement cost estimates and decline to repeat ourselves here. However, as
also explained previously, Baltar was not entitled to more than the actual cash value of
the dwelling until she actually replaced the structure. CSAA paid her that amount. The
company then paid Baltar the amount she actually and necessarily expended to replace
the dwelling. We have already concluded this was all she was entitled to receive under
the express terms of the policy. We now conclude CSAA did not violate the implied
covenant of good faith and fair dealing by providing Baltar with what she felt was an

                                              30
“unreasonably low” replacement cost estimate. As Fraley makes clear, CSAA was
entitled to rely on its own replacement cost estimate rather than accept Baltar’s much
higher estimate.
       Nor are we persuaded by Baltar’s argument that bad faith liability arises from
“CSAA’s refusal to comply with California law and nationally recognized fair claim
handling practices.” In making this argument, she refers us to the portion of her brief
arguing that CSAA violated California Code of Regulations, title 10, sections 2695.4 and
2695.9. We have already concluded CSAA did not violate section 2695.4 of these
regulations and section 2695.9 did not apply on these facts because CSAA did not insist
on settling Baltar’s claim based on the replacement cost estimate, but rather paid her the
higher amount she actually spent on the replacement home.
       With respect to CSAA’s denial of payment for debris removal in excess of the
$13,037.58 paid in November 2014, here too there was a genuine dispute. Indeed, we
have already concluded no further payment is owed unless and until Baltar demonstrates
she has expended or is obligated to expend more than that amount for debris removal. At
the very least, there was a genuine dispute over whether CSAA owed additional amounts
for debris removal.
       Finally, with respect to the admitted late payment of landscaping costs, the
undisputed facts establish the late payment was inadvertent and the full amount owed was
paid immediately upon discovery of the oversight. We have already concluded Baltar has
not provided evidence that she suffered damages from this alleged breach of contract.
Nor has she provided evidence of any cognizable injury in tort. To the extent she claims
CSAA’s alleged bad faith in this regard entitles her to punitive damages, the undisputed
facts establish the delay in payment was not intentional, let alone done with malicious
intent, fraudulent motive, or conscious disregard for the rights of others. (Taylor v.
Superior Court (1979) 24 Cal.3d 890, 894-895.)

                                             31
       To the extent she claims entitlement to “fees and costs incurred to enforce the
contract,” citing Brandt v. Superior Court (1985) 37 Cal.3d 813, that case held: “When
an insurer’s tortious conduct reasonably compels the insured to retain an attorney to
obtain the benefits due under a policy, it follows that the insurer should be liable in a tort
action for that expense. The attorney’s fees are an economic loss‒damages‒proximately
caused by the tort. [Citation.] These fees must be distinguished from recovery of
attorney’s fees qua attorney’s fees, such as those attributable to the bringing of the bad
faith action itself. What we consider here is attorney’s fees that are recoverable as
damages resulting from a tort in the same way that medical fees would be part of the
damages in a personal injury action.” (Id. at p. 817.) But here, bringing suit against
CSAA to recover benefits under the policy was not reasonably compelled by CSAA’s
allegedly tortious delay of payment of landscaping costs. All Baltar had to do was notify
CSAA that these costs had not yet been paid. As soon as she did so, they were promptly
paid. On these undisputed facts, Baltar is not entitled to Brandt fees even if she were to
prove a bad faith delay of payment.8
       In sum, CSAA’s settlement of the dwelling coverage did not violate the implied
covenant of good faith and fair dealing. Nor did the company’s failure to pay more for
debris removal than Baltar established she was obligated to pay for such removal. And
finally, we need not determine whether CSAA’s delay in payment of landscaping costs
amounted to bad faith because “a bad faith action” requires the plaintiff “to establish
actual financial loss” and Baltar “cannot show [she] suffered any cognizable injury in
either contract or tort.” (Emerald Bay Community Assn. v. Golden Eagle Ins. Corp.
(2005) 130 Cal.App.4th 1078, 1096.)

8      Baltar also sought emotional distress damages, but concedes on appeal that her
entitlement to such damages “likely died with her.”

                                              32
                                    DISPOSITION
       The judgment is affirmed. CSAA is entitled to costs on appeal. (Cal. Rules of
Court, rule 8.278(a)(1) & (2).)

                                                 /s/
                                                HOCH, J.

We concur:

 /s/
MAURO, Acting P. J.

 /s/
DUARTE, J.

                                           33