AMCO Insurance Company v. Cameron Kiefer

Case 2:20-cv-10360-JVS-SK Document 56 Filed 02/18/22 Page 1 of 8 Page ID #:958

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. 2:20-cv-10360 JVS (SKx) Date February 18, 2022

Title AMCO Insurance Co. v. Cameron Kiefer et al.

Present: The James V. Selna, U.S. District Court Judge

Honorable

Lisa Bredahl Not Present

Deputy Clerk Court Reporter

Attorneys Present for Plaintiffs: Attorneys Present for Defendants:

Not Present Not Present

Proceedings: [IN CHAMBERS] Order Regarding Motion for Summary Judgment

Plaintiff AMCO Insurance Company (“AMCO”) filed a motion for summary

judgment. Dkt. No. 40; see Mot., Dkt. No. 40-1. Defendants Deron Kiefer (“Kiefer”)

and Cynthia McGruder (“McGruder”) (collectively, “Defendants”) opposed the motion.

Opp’n, Dkt. No. 49. AMCO responded. Reply, Dkt. No. 54.

After the Court posted its tentative order, Defendants filed a request for hearing.

Dkt. No. 55. The Court considered the arguments raised by the Defendants and finds that

oral argument would not be helpful in this matter. Fed. R. Civ. P. 78; L.R. 7-15.

For the following reasons, the Court GRANTS the motion for summary judgment

in full. As a matter of law, the bodily injury liability limits in the Policy are $25,000 per

person and $50,000 per accident. The Court directs AMCO to file a proposed judgment

within seven days of entry of this order.

I. BACKGROUND

This case concerns a dispute over the terms of an insurance policy. AMCO issued

Personal Auto Policy No. PPA 0070833653-1 (“Policy”) to named insureds McGruder

and Kiefer, which was in effect from December 15, 2017 to December 15, 2019.1 See

1 The parties occasionally refer to “Cynthia Kiefer” as opposed to “Cynthia McGruder.” As the

parties do not dispute that this is the same individual, the Court will refer to “McGruder” throughout for

ease of understanding.

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. 2:20-cv-10360 JVS (SKx) Date February 18, 2022

Title AMCO Insurance Co. v. Cameron Kiefer et al.

Statement of Uncontroverted Facts (“SUF”), Dkt. No. 50, ¶ 11; 2018–2019 Policy,

McClain Decl., Ex. A, Dkt. No. 40-11; 2017–2018 Policy, McClain Decl., Ex. B, Dkt.

No. 40-12. Kiefer is a licensed insurance agent and broker with over 34 years of

experience. SUF ¶ 3. Since 2005, he has been the owner, president, and CEO of Gold

Mountain Insurance. Id. ¶ 4. Since at least 2017, Gold Mountain had written agency

appointment agreements granting it the authority to transact business on behalf of several

insurance companies, including AMCO. Id. ¶¶ 5–6.

On December 15, 2017, Gold Mountain submitted an application through AMCO’s

web-based interface, “AgentCenter,” requesting coverage for the Defendants. Id. ¶ 13.

After Kiefer input information about the vehicles and the requested coverage, AMCO

sent a price quote. Id. ¶¶ 14–15. AMCO maintains that it sent a more detailed summary

of the coverages that Kiefer accepted, which he denies. Id. ¶ 16. The Policy issued by

AMCO lists “bodily injury” liability limits of $25,000 per person and $50,000 per

accident. Id. ¶ 20; 2017–2018 Policy at 4; 2018–2019 Policy at 3. However, Kiefer

maintains that he “requested, ordered, and applied for” liability limits of $250,000 per

person and $500,000 per accident. Id. ¶ 21; Kiefer Decl., ¶¶ 14, 11, 22. AMCO asserts

that it mailed a policy to Kiefer, SUF ¶ 24, but Kiefer denies ever receiving the Policy or

any Declarations pages in the mail prior to the accident. Id. ¶ 36. On December 15,

2018, Kiefer renewed the Policy. Id. The parties similarly disagree about the limits on

the renewed Policy. Id.

The parties agree that Gold Mountain’s files do not contain a hard copy of an

application, the Policy, or a Declarations page. SUF ¶ 18. The parties also agree that

Gold Mountain’s files do not contain any documentation confirming the requested bodily

injury liability limits. Id. ¶ 19. Kiefer, through Gold Mountain, used AgentCenter to

make multiple changes to the vehicles and coverage on the Policy unrelated to the

liability limits at issue. Id. ¶¶ 27, 28, 30. AMCO asserts that it immediately mailed a

hard copy of the Policy reflecting each change to the Defendants, id. ¶ 33, while

Defendants deny ever receiving any mailed documentation of coverage. Id. ¶ 36. The

parties agree that neither Gold Mountain nor the Defendants took any action to confirm

the “bodily injury” liability limits for the Policy beyond completing the online

application. Id. ¶ 37. Kiefer submitted a declaration that he believed that the policies

bodily injury liability limits were $250,000 per person and $500,000 per accident at all

times the Policy was valid until AMCO informed them otherwise in April or May of

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. 2:20-cv-10360 JVS (SKx) Date February 18, 2022

Title AMCO Insurance Co. v. Cameron Kiefer et al.

2019. Kiefer Decl. ¶¶ 22–24; see also McGruder Decl., Dkt. No. 53.

On February 8, 2019, Cameron Kiefer, the Defendants’ son, was involved in an

automobile accident in which he was allegedly driving. SUF ¶ 1. Subsequently, a

complaint was brought in Ventura Superior County Superior Court (“the Solis

Complaint”), naming the Defendants and alleging that they were legally liable for injuries

resulting from the accident. Id. The Kiefers tendered defense of the Solis Complaint to

AMCO, and AMCO is defending them subject to a reservation of rights. Id. ¶ 2. After

the accident, the parties disputed the amount of the coverage provided by the Policy.

AMCO brought this action seeking a declaratory judgment that the liability limits of the

Policy for bodily injury coverage are $25,000 per person and $50,000 per accident. See

Compl., Dkt. No. 1.

II. LEGAL STANDARD

Summary judgment is appropriate where the record, read in the light most

favorable to the nonmovant, indicates “that there is no genuine dispute as to any material

fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see

also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Summary adjudication, or

partial summary judgment “upon all or any part of [a] claim,” is appropriate where there

is no genuine dispute as to any material fact regarding that portion of the claim. Fed. R.

Civ. P. 56(a); see also Lies v. Farrell Lines, Inc., 641 F.2d 765, 769 n.3 (9th Cir. 1981)

(“Rule 56 authorizes a summary adjudication that will often fall short of a final

determination, even of a single claim . . . .”) (internal quotation marks omitted).

Material facts are those necessary to the proof or defense of a claim, and are

determined by referring to substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 248 (1986). In deciding a motion for summary judgment, “[t]he evidence of the

non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.”

Anderson, 477 U.S. at 255.2

2 “In determining any motion for summary judgment or partial summary judgment, the Court

may assume that the material facts as claimed and adequately supported by the moving party are

admitted to exist without controversy except to the extent that such material facts are (a) included in the

‘Statement of Genuine Disputes’ and (b) controverted by declaration or other written evidence filed in

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. 2:20-cv-10360 JVS (SKx) Date February 18, 2022

Title AMCO Insurance Co. v. Cameron Kiefer et al.

The moving party has the initial burden of establishing the absence of a material

fact for trial. Anderson, 477 U.S. at 256. “If a party fails to properly support an assertion

of fact or fails to properly address another party’s assertion of fact . . ., the court may . . .

consider the fact undisputed.” Fed. R. Civ. P. 56(e)(2). Furthermore, “Rule 56[(a)]

mandates the entry of summary judgment . . . against a party who fails to make a showing

sufficient to establish the existence of an element essential to that party’s case, and on

which that party will bear the burden of proof at trial.” Celotex Corp., 477 U.S. at 322.

Therefore, if the nonmovant does not make a sufficient showing to establish the elements

of its claims, the Court must grant the motion.

The Court has only relied on admissible evidence in the determination of the

outcome of this motion. When the order cites evidence to which the parties have

objected, the objection is impliedly overruled. Additionally, the Court declines to rule on

objections to evidence upon which it did not rely.

III. DISCUSSION

The plain language of the Policy states that the liability limits for “bodily injury”

are $25,000 per person and $50,000 per accident. See 2017–2018 Policy at 4; 2018–2019

Policy at 3. Under California law, “[w]hen a court is reviewing claims under an

insurance policy, it must hold the insured bound by clear and conspicuous provisions in

the policy even if evidence suggests that the insured did not read or understand them.”

Sarchett v. Blue Shield of California, 43 Cal. 3d 1, 14–15 (1987). The insurer does have

the burden of making coverage limitations “conspicuous, plain and clear.” Haynes v.

Farmers Ins. Exchange, 32 Cal. 4th 1198, 1204 (2004). Thus, policyholders may be

charged with constructive knowledge of clear and conspicuous provisions of an insurance

policy, even if the policy holder has not read the policy. See Hadland v. NN Investors

Life Ins. Co., 24 Cal App. 4th 1578, 1586 (1994); Malcolm v. Farmers New World Life

Ins. Co., 4 Cal. App. 4th 296, 304 n.6 (1992).

Here, the coverage limits at issue are clearly displayed in a conspicuous and

understandable manner on the Declarations page, under the header “Insured Vehicles and

Schedule of Coverages,” and in proximity to descriptions of the other components of the

opposition to the motion.” L.R. 56-3.

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. 2:20-cv-10360 JVS (SKx) Date February 18, 2022

Title AMCO Insurance Co. v. Cameron Kiefer et al.

coverage. This easily qualifies as conspicuous, plain, and clear to the layperson. Thus,

the Defendants may be charged with constructive knowledge of the liability limits as

written in the Policy. Nevertheless, the Defendants present several arguments that they

suggest support their contention that the liability limits are higher.

A. Agents of AMCO

First, Defendants argue that because Gold Mountain was an Appointed Agent of

AMCO, it had the authority to bind AMCO, including at the time that the Policy was

entered into.3 Opp’n at 5–6. Thus, the Defendants seek to impute Gold Mountain’s

knowledge of the alleged request for higher liability limits to AMCO and hold AMCO

responsible for any errors made by Gold Mountain when it submitted that request. Opp’n

at 7. While Gold Mountain was an Appointed Agent of AMCO at the time, that does not

have as sweeping an impact as Defendants contend.

California law distinguishes between agents, who act on behalf of the insurer, and

brokers, who act on behalf of the insured. Kruppe v. Mercury Ins. Co., 123 Cal. App. 4th

924, 930 (2004). However, “there is no absolute dichotomy” between the two roles. Id.

To act as an insurance agent, an individual must have a valid license, Cal. Ins. Code §

1631, and be authorized to transact business on the insurer’s behalf, as evidenced by a

notice of agency appointment filed with the California Department of Insurance. Cal Ins.

Code. § 1704(a). It is well established law that when “an insurance agent is the agent for

several companies, and either selects the company with which to place the insurance or

picks an insurer at the insured’s direction, the insurance agent is the agent of the insured,

not the insurer.” Mercury Ins. Co. v. Pearson, 169 Cal. App. 4th 1064, 1073 (2008); see

Eddy v. Sharp, 199 Cal. App. 3d 858, 865 (1988); Bonaparte v. Allstate Ins. Co., 49 F.3d

486, 488–89 (9th Cir. 1994).

The agency appointment agreement between AMCO and Gold Mountain grants

Gold Mountain the authority to “solicit applications for personal lines insurance and

3 The parties do not dispute that Kiefer was acting on behalf of Gold Mountain when he

submitted an application for the Policy. Thus, the Court refers to Gold Mountain as the Appointed Agent

and entity that submitted the request to AMCO to distinguish from the action taken by the Defendants,

who requested that Gold Mountain procure coverage on their behalf.

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. 2:20-cv-10360 JVS (SKx) Date February 18, 2022

Title AMCO Insurance Co. v. Cameron Kiefer et al.

bonds, deliver and countersign policies and endorsement thereon, deliver bonds, collect

premiums for transmission to [AMCO], and to bind [AMCO] temporarily to permit

transmission of applications for insurance and endorsements to company for approval and

processing or disapproval.” See Independent Agency Agreement, Dkt. No. 52-3, at 2.

Notably, this only grants Gold Mountain the authority to temporarily bind AMCO while

it processes an application and determines whether to issue a policy. Id. The agency

appointment agreement also makes clear that Gold Mountain is “an independent

contractor for all purposes” and “is free to exercise its own judgment as to persons from

whom to solicit insurance or bonds as well as the manner, time, and place of solicitation.”

Id.

Here, it is undisputed that Gold Mountain had agency appointment agreements

with multiple insurers, and could have chosen to place the policy with another insurer.

See SUF ¶¶ 5, 10; Dkt. Nos. 52-2, 52-3. This is consistent with Gold Mountain acting as

a broker on behalf of the insured, the Defendants. The Court holds as a matter of law that

an agency relationship did not exist between AMCO and Gold Mountain or Kiefer for the

purposes of submitting the application for the Policy. See Troost v. Estate of DeBoer,

155 Cal. App. 3d 289, 299 (1984) (holding that the determination of agency relationship

is question of law where essential facts are undisputed); Isenberg v. California

Employment Stabilization Comm’n, 30 Cal. 2d 34, 41 (1947) (“[I]f the essential facts are

not in conflict the question of the legal relations arising therefrom is a question of law.”).

Because Gold Mountain was not acting as an agent of AMCO when submitting the

application for the Policy, any error or omission by Gold Mountain may not be imputed

to AMCO. Thus, the Court rejects Defendants’ arguments that Gold Mountain’s

knowledge should be imputed to AMCO, or that AMCO is liable for any errors

committed by Gold Mountain while procuring a Policy on behalf of the Defendants.

B. Triable Issue of Fact as to Requested Limits

Next, Defendants argue that there is a triable issue of fact as to whether the

Defendants requested the higher limits when applying for the Policy. Opp’n at 9–11.

They assert that there is nothing in writing to dispute their belief that the liability limits

were $250,000 per individual and $500,000 per accident at all times. Opp’n at 9. They

also contend that because their other policies had those higher limits, that suggests that

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. 2:20-cv-10360 JVS (SKx) Date February 18, 2022

Title AMCO Insurance Co. v. Cameron Kiefer et al.

they would have requested higher limits for this Policy. Opp’n at 10–11. AMCO

disputes the contention that there are any disputes of material fact. Reply at 10–12.

The Court agrees with AMCO. Even if all of the facts asserted by the Defendants

are true, they are not material to the determination of the terms of the Policy. Just

because the Defendants may have intended to purchase a policy with higher limits,

consistent with their prior coverage from other insurers, that does not bind AMCO. As

discussed above, if Gold Mountain made an error when transmitting the request, that

error may not be imputed to AMCO. The Defendants’ personal beliefs as to the terms of

the Policy do not change the terms of the written Policy. Because the bodily injury

liability limits were clear and conspicuous, the Defendants may be charged with

constructive knowledge of the Policy terms, even if they never read the Policy and

honestly believed that the limits were higher.

Thus, the Court holds that there are not any material disputes of fact as to the terms

of the Policy.

C. Reformation

Finally, Defendants suggest that the Court should use its equitable powers and

reform the policy to reflect the higher liability limits. Opp’n at 11–12. Under California

law, a contract may be reformed either for “a mutual mistake of the parties, or a mistake

of one party, which the other at the time knew or suspected.” Cal. Civil Code § 3399.

Defendants are unable to show a mutual mistake of the parties because there is no reason

to suspect that AMCO intended to issue a Policy with higher limits as all of their

documents are to the contrary. As discussed above, if the mistake was made by Gold

Mountain, that cannot be imputed to AMCO because was not acting as its agent for these

purposes. Alternatively, Defendants could argue that the unilateral mistake was made by

Gold Mountain acting on their behalf. However, there is no reason to suspect that

AMCO knew or should have known that Gold Mountain may have made a mistake,

particularly when they repeatedly issued revised updated versions of the Policy that

consistently reflected the lower limits. The facts in the record do not support the

Defendants’ reformation argument. See Bonaparte, 49 F.3d at 488–89 (upholding

summary judgment for insurer on reformation theory where there was no factual basis for

a claim of mutual mistake or unilateral mistake that was known or suspected by the

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. 2:20-cv-10360 JVS (SKx) Date February 18, 2022

Title AMCO Insurance Co. v. Cameron Kiefer et al.

insurer).

Thus, the Court holds that reformation would not be appropriate here.

IV. CONCLUSION

For the foregoing reasons, the Court GRANTS AMCO’s motion for summary

judgment in full.4 As a matter of law, the bodily injury liability limits in the Policy are

$25,000 per person and $50,000 per accident. The Court directs AMCO to file a

proposed judgment within seven days of entry of this order.

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Initials of Preparer lmb

4 The Court also notes that the Defendants appear to request that the Court grant summary

judgment sua sponte in their favor. See Opp’n at 7. The undisputed material facts support the opposite

conclusion. Thus, the request is denied.

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