[00:00:01] Speaker 02:
And Mr. Rand Lewis, you're remote, but you may proceed.

[00:00:09] Speaker 01:
Yes, good morning, Your Honor.

[00:00:11] Speaker 01:
May it please the Court, Timothy Rand Lewis, on behalf of the Appellants.

[00:00:16] Speaker 01:
I appreciate the Court's granting my request to appear remotely at the proceedings today.

[00:00:22] Speaker 01:
I would like to reserve five minutes of my time at a minimum for rebuttal.

[00:00:30] Speaker 01:
This case presents several issues.

[00:00:33] Speaker 01:
The primary issue, which will resolve all the other issues, is the fact that the District Court had no jurisdiction over this case to begin with.

[00:00:43] Speaker 01:
The case was filed.

[00:00:45] Speaker 01:
There was no complete diversity of citizenship between the plaintiff and the defendants, specifically Letitia Poems and the Poems Insurance Agency.

[00:00:57] Speaker 01:
The District Court

[00:00:59] Speaker 01:
made an erroneous ruling when it determined that Pomes was a sham defendant and dismissed her and the insurance agency from the case.

[00:01:10] Speaker 01:
The facts and the allegations of the complaint established that the insurance agent and agency, excuse me, and Ms.

[00:01:21] Speaker 01:
Pomes acted as the plaintiff Infanzon's insurance broker

[00:01:27] Speaker 01:
consulted with him, instructed him on the appropriate insurance policy to obtain, and further indicated that they would assist him with any claims and any issues that he had with the policy going forward.

[00:01:45] Speaker 01:
The district court ignored that, relied solely upon a self-serving declaration by Ms.

[00:01:50] Speaker 01:
Poems that stated that she was only a

[00:01:53] Speaker 01:
an agent for Allstate, which declaration was contradicted by her license with the California Department of Insurance that established that she is an agent and a broker.

[00:02:05] Speaker 01:
So the district court's error in determining that there was complete diversity of citizenship.

[00:02:13] Speaker 04:
What were the substance of the allegations against her?

[00:02:17] Speaker 01:
The substance of the allegations against her were that she failed to

[00:02:23] Speaker 01:
provide appropriate assistance with the policy that she had indicated to Mr. Infanzon that she would.

[00:02:30] Speaker 01:
She failed to provide assistance with his claim when the accident occurred, which she had represented that she would also do.

[00:02:42] Speaker 01:
Because there was no complete diversity of jurisdiction, excuse me, of citizenship,

[00:02:46] Speaker 01:
the district court never had jurisdiction over the case and it should have been remanded back to the district court.

[00:02:51] Speaker 04:
Were there substantive allegations in the complaint about her refusal or inability or reluctance or just shining him off?

[00:03:05] Speaker 01:
I don't recall the specific allegations that were in the complaint at this time, Your Honor.

[00:03:11] Speaker 01:
I do know that there were allegations that

[00:03:15] Speaker 01:
when he was involved in this accident, he did reach out to the POMS agency for assistance with submitting his uninsured motorist claim.

[00:03:25] Speaker 01:
And if I recall correctly, I believe there was basically no response whatsoever, despite their prior representations that they would be available to assist him.

[00:03:35] Speaker 04:
I may be mistaken, but I thought at some point he was directed to, you know, file a claim with a, what do they call them, a claims adjuster?

[00:03:47] Speaker 01:
He did file the claim with the claim suggestor and he did proceed, obviously, with the UM claim directly with Allstate.

[00:03:59] Speaker 01:
However, there are allegations in the complaint that the representations by POMS to be available for assistance were not correct.

[00:04:13] Speaker 01:
They were not complied with.

[00:04:16] Speaker 04:
So her failure to provide assistance was what, a negligence claim?

[00:04:23] Speaker 01:
I believe negligence was one of the causes of action against her.

[00:04:32] Speaker 03:
So what duty did she owe apart from her role in the company as an agent to sustain a negligence claim?

[00:04:42] Speaker 01:
She had a duty to the

[00:04:46] Speaker 01:
to Mr. Infanzon to comply with her her representations, to comply with her obligations and provide him with the services that she had indicated she would provide, which is not only obtaining him an appropriate insurance policy that would provide him the coverage that was necessary, but also to provide him with the assistance with any claims or any

[00:05:13] Speaker 01:
other issues that he may have with the policy during the period that he was insured.

[00:05:21] Speaker 04:
All of this took place under his uninsured motorist coverage.

[00:05:26] Speaker 01:
Is that correct?

[00:05:26] Speaker 01:
That is correct.

[00:05:28] Speaker 01:
That is correct.

[00:05:28] Speaker 04:
What your claim is, is that she didn't advise him to take more coverage for uninsured motorist protection?

[00:05:37] Speaker 04:
Is that what the claim is?

[00:05:39] Speaker 01:
No, that is not the claim.

[00:05:41] Speaker 01:
The claim is that

[00:05:46] Speaker 01:
I'm sorry.

[00:05:46] Speaker 01:
I'm trying to pull up the complaint right now while we're speaking.

[00:05:54] Speaker 01:
The claim is that with regard to the insurance agent, she was obligated to assist him

[00:06:08] Speaker 01:
with any claims he had under the policy and to communicate with him.

[00:06:14] Speaker 04:
I thought you just said when you began that she failed to provide him with the correct policy that would protect his interests.

[00:06:25] Speaker 01:
I don't believe I said that.

[00:06:26] Speaker 01:
If I did, I misspoke.

[00:06:28] Speaker 01:
What I indicated was that the allegations of the complaint were that she was

[00:06:33] Speaker 01:
acting as his broker to advise him and represent him as to what the best insurance policy would be for him to obtain the coverage necessary and also to provide him with appropriate protection as needed.

[00:06:51] Speaker 01:
There's not an allegation that she did not provide or that he did not obtain an appropriate policy with the appropriate levels.

[00:06:59] Speaker 04:
Did he ask for a particular type of policy?

[00:07:03] Speaker 01:
He relied upon her expertise to provide him with the information as to what type of policy he should obtain.

[00:07:11] Speaker 01:
But again, there was no issue with regard to the policy limits or anything of that nature with regard to Ms.

[00:07:19] Speaker 01:
Bones.

[00:07:22] Speaker 01:
Moving on from the jurisdictional issue, assuming, arguing that the District Court did have jurisdiction,

[00:07:30] Speaker 01:
When it ruled upon the summary judgment motion, it ignored several tribal issues of fact, which mandated that the motion be denied.

[00:07:41] Speaker 01:
The primary issue is the district court determined that it was undisputed that the insurance company requested medical authorizations from Mr. Infanzon and that he never provided those authorizations.

[00:07:55] Speaker 01:
However, that fact was expressly disputed by Mr. Infanzon's evidence.

[00:08:02] Speaker 02:
Did he actually provide the medical authorization forms?

[00:08:07] Speaker 01:
They were never requested, to my knowledge, and the declaration of Mr. Infanzon's counsel, which was submitted in opposition to the summary judgment motion, specifically indicated that those were never requested throughout the entire proceedings.

[00:08:24] Speaker 01:
There was never any follow up by Allstate requesting them or asking where they were.

[00:08:30] Speaker 01:
And in fact, Allstate's claim file reflects that the insurance company had all of his medical information and the adjuster had reached out and contacted his doctors directly to get all of his billing information.

[00:08:52] Speaker 01:
So there was a tribal issue on that, whether or not those medical authorizations were provided, which mandated that the district court deny the motion.

[00:09:04] Speaker 01:
Additionally, there was a tribal issue as to whether the fact that the primary adjuster on the file

[00:09:12] Speaker 01:
stopped working on it and did absolutely nothing for a period of 71 days after Mr. Infanzon's counsel requested that she have her supervisor start communicating directly with Mr. Infanzon's counsel and handling the matter.

[00:09:32] Speaker 01:
She essentially stopped working on the file

[00:09:37] Speaker 01:
and did absolutely nothing for 71 day period.

[00:09:40] Speaker 01:
Allstate never notified Mr. Infanzon that there was any issue with regard to the adjuster, ever provided him with any information as to why there was absolutely nothing going on during that 71 day period.

[00:09:52] Speaker 01:
So there was an unreasonable delay and Allstate provided the declaration of that adjuster who indicated she had quote unquote personal issues that required her to take the time off.

[00:10:06] Speaker 01:
But again, that's a disputed issue of fact that mandated that the motion be denied.

[00:10:13] Speaker 01:
Also, there was no genuine dispute over the

[00:10:18] Speaker 01:
amount of damages Mr. Infanzon was required.

[00:10:22] Speaker 01:
All states adjuster was improperly claiming that Mr. Infanzon is a Medi-Cal recipient, which he was not, and that the Howell factors applied to reduce the amount of damages he was entitled to claim.

[00:10:36] Speaker 02:
So did you want to save five minutes?

[00:10:41] Speaker 01:
I do.

[00:10:42] Speaker 01:
I just let me wrap up briefly and then I'll save whatever time I have left.

[00:10:48] Speaker 01:
move on to the sanctions issue.

[00:10:49] Speaker 01:
The sanctions issue we set out quite thoroughly in our briefing, but I do want to stress two points.

[00:11:00] Speaker 01:
One, the amount that was excessive that was clearly established by the fact that all state initially requested a total of $4,000 in the motion to compel and then the magistrate judge

[00:11:18] Speaker 01:
awarded multiple times that amount and also the fact that the when reading the magistrate judges order in its entirety in the tone and tenor of the order.

[00:11:33] Speaker 01:
It was clearly intended to punish Mr. Infanzon's counsel for what the magistrate judge believed to be insolence and failure to comply with his order to provide unredacted medical records when, in fact, the district court judge's order, Judge Cronstad's order, indicated that the records could be provided in a redacted form.

[00:11:58] Speaker 01:
And with that, I would reserve my remaining time for rebuttal.

[00:12:02] Speaker 01:
Thank you.

[00:12:03] Speaker 02:
All right, thank you, counsel.

[00:12:11] Speaker 00:
Good morning.

[00:12:12] Speaker 00:
May it please the court, Scott Spislawski for Appellees.

[00:12:15] Speaker 02:
Good morning.

[00:12:18] Speaker 00:
I'd just first like to ask if the panel has any questions for me or if there are any arguments by counsel that you'd like me to address.

[00:12:25] Speaker 02:
Well, the medical authorization issue, from your perspective, what are the undisputed facts?

[00:12:34] Speaker 00:
All state adjusters submitted a declaration attesting to the fact that she sent the medical authorization form to Infanzon's counsel.

[00:12:43] Speaker 00:
That was a fact that was stated in our separate statement of undisputed facts, which went unrebutted.

[00:12:50] Speaker 00:
Infanzon did not submit a statement of genuine issues under the rules and informed by the district court.

[00:12:58] Speaker 00:
The district court was not required to look any further than the separate statement.

[00:13:04] Speaker 00:
to determine those undisputed facts.

[00:13:06] Speaker 00:
The court was well within its right to conclude that that was unrebutted.

[00:13:13] Speaker 04:
So let me ask you this.

[00:13:15] Speaker 04:
Council started off with the removal and the district court's dismissal of the agent as an improperly named defendant solely for the purposes of destroying diversity.

[00:13:31] Speaker 04:
What's your response to his argument?

[00:13:35] Speaker 00:
The court found that Infanzon failed to present any evidence to show that there was a broker or any kind of special relationship.

[00:13:46] Speaker 00:
The only evidence presented by the time of the hearing on the motion to remand was a declaration from the agent who said, I never served as a broker.

[00:13:57] Speaker 00:
I've always been an all-state agent, a sales agent.

[00:14:01] Speaker 00:
I did not have a contract with Mr. Infanzon.

[00:14:06] Speaker 00:
And so that evidence went unrebutted at the time that the court ruled on the motion.

[00:14:15] Speaker 00:
They didn't present any evidence to show any kind of special relationship, any kind of evidence to show that she acted instead as a broker rather than a disclosed alteration.

[00:14:25] Speaker 04:
So they didn't present any evidence that she had a broker's license and that, you know, although she was hanging her hat as a

[00:14:34] Speaker 04:
As an agent, she also had a broker's license and had the authority to act as a broker.

[00:14:40] Speaker 00:
The only thing that they submitted was a printout from, and I can't remember which website, but it listed broker, it said broker agent on the printout.

[00:14:53] Speaker 00:
But that doesn't mean she was serving as Mr. Imphenzon's broker.

[00:14:57] Speaker 00:
It means that maybe she could theoretically act as a broker in some other capacity.

[00:15:04] Speaker 00:
for some other client, but that doesn't mean she acted as a broker for Mr. Infanzon, and that's important because she explained that she was a sales agent at all times.

[00:15:14] Speaker 00:
She held herself out as a sales agent with an all-state email address, with a business card, and at all times represented herself as an all-state agent, not as a broker.

[00:15:25] Speaker 00:
So that allegation, and it's nothing more than an allegation, was never supported by Mr. Infanzon.

[00:15:32] Speaker 03:
I'm curious, the settlement from the arbitration proceedings for $50,000, there was no release of claims provision in that settlement agreement?

[00:15:45] Speaker 03:
Or was there?

[00:15:47] Speaker 00:
Well, that's a good question.

[00:15:48] Speaker 00:
I mean, initially, we had requested a release if the Zanz Council objected to that.

[00:15:56] Speaker 00:
And so we agreed you don't have to sign a release.

[00:16:00] Speaker 00:
paid the money that he was demanding under the policy.

[00:16:04] Speaker 00:
And that was it.

[00:16:05] Speaker 03:
I mean, we wouldn't be here if there had been a release of claim setting.

[00:16:08] Speaker 00:
That's correct.

[00:16:09] Speaker 00:
If there was a release, well, if there was a release of all claims, which would include any kind of claim for breach or bad faith or anything, if he did in fact sign a release at that time, which Allstate did not require.

[00:16:22] Speaker 04:
The $50,000 was the policy limit.

[00:16:24] Speaker 00:
That's correct.

[00:16:24] Speaker 04:
For uninsured motorist coverage.

[00:16:26] Speaker 00:
That's correct, Your Honor.

[00:16:33] Speaker 03:
What about Council's contention that Allstate only asked for $4,000 for sanctions and the magistrate brought it up to $38,000?

[00:16:42] Speaker 03:
What happened there?

[00:16:44] Speaker 00:
Yeah, and that's that long detailed history spanning a six month period when I initially filed the request for for sanctions.

[00:16:52] Speaker 00:
It was at that time only $4,000, but over that six month period I then had to file successive motions for reconsideration, a request for

[00:17:01] Speaker 00:
independent discovery conference I respond to and an order to show cause why Infant Zones Council should not be reported to the state bar.

[00:17:09] Speaker 00:
There were all these events that took place over a six month period.

[00:17:13] Speaker 00:
So by the time that we got to the Magistrate Judge's order, Allstate had already spent over $40,000.

[00:17:20] Speaker 00:
And to support that, I submitted redacted fee statements, fee statements that showed all the time that I spent or that any of my associates spent in connection with really trying to get basic discovery responses, documents, and a privilege log, which were never provided.

[00:17:38] Speaker 00:
And so we supported that by saying, look, look, and I acknowledged the question.

[00:17:43] Speaker 00:
I understand that this is a large amount, but it is the amount that all state incurred

[00:17:49] Speaker 00:
paid and should never have had to pay in the first place to deal with the intransigence, the lengthy period of time that it took us to get simple discovery, simple questions like, I want the documents to support your claim.

[00:18:03] Speaker 00:
Tell me the facts that support your claim.

[00:18:05] Speaker 00:
If you're claiming attorney's fees, give me the basis for that.

[00:18:09] Speaker 00:
You're withholding documents on privilege?

[00:18:11] Speaker 00:
I'd like a privilege log.

[00:18:12] Speaker 00:
I'd like to be able to know what you're withholding.

[00:18:15] Speaker 04:
What did they produce at the early meeting conference where you're supposed to exchange documents under the rules?

[00:18:23] Speaker 00:
Nothing, Your Honor.

[00:18:24] Speaker 00:
They did not provide anything pursuant to Rule 26.

[00:18:29] Speaker 00:
My recollection is I did not get a statement, disclosure, initial disclosure statement, nor did I receive any documents.

[00:18:37] Speaker 00:
So I had to serve discovery, and I served it early, thankfully.

[00:18:41] Speaker 00:
But it took six months.

[00:18:43] Speaker 00:
to be able to get responses to discovery.

[00:18:46] Speaker 00:
And that was only after they had violated the Magister judges numerous orders.

[00:18:50] Speaker 00:
The Magister gave them benefit of doubt over and over and over and over again, multiple times to cooperate, multiple times to just give basic discovery responses.

[00:19:01] Speaker 03:
So did you ever find out what other damages Mr. Infanzon was claiming from this accident?

[00:19:10] Speaker 00:
No.

[00:19:11] Speaker 00:
In fact, that was one of the additional basis that we moved for summary judgment on the remaining bad faith claim is because there was no evidence that of any damages resulting from anything that all state did.

[00:19:23] Speaker 00:
That's a finding that the district court made that went on rebutted and not even addressed on appeal.

[00:19:30] Speaker 00:
That was an essential element for their cause of action for breach of the implied covenant of good faith and fair dealing.

[00:19:36] Speaker 00:
No evidence of actual any damages.

[00:19:38] Speaker 00:
They didn't submit, in response to our summary judgment, they submitted only counsel's declaration.

[00:19:44] Speaker 00:
They never even submitted a declaration from Mr. Impton's on attesting to the fact that, OK, here are the damages I'm claiming.

[00:19:51] Speaker 00:
It was never addressed.

[00:19:53] Speaker 00:
And so that was additional basis that we moved for summary judgment.

[00:20:02] Speaker 02:
No further questions.

[00:20:03] Speaker 00:
OK.

[00:20:04] Speaker 00:
Thank you.

[00:20:04] Speaker 00:
I'll just submit on the briefs then, Your Honor.

[00:20:05] Speaker 00:
Thank you so much.

[00:20:06] Speaker 02:
Thank you, counsel.

[00:20:10] Speaker 02:
Was there time left?

[00:20:12] Speaker 02:
Okay, yes.

[00:20:13] Speaker 02:
Okay, you have three minutes.

[00:20:18] Speaker 01:
Thank you, Your Honor.

[00:20:19] Speaker 01:
Just like to make a couple of quick points and in reference to the question regarding whether there was a release of claims that was signed when the underlying policy limits were paid.

[00:20:34] Speaker 01:
The reason why there was no release of claims signed is California Code of Regulations section 11 580.2 subsection H specifically states that

[00:20:48] Speaker 01:
and insured is entitled to recover under uninsured motorist coverage without being required to sign any release.

[00:20:57] Speaker 01:
So Mr. Infanzon's settlement of the underlying UM claim was not subject to a release.

[00:21:07] Speaker 01:
And one of the allegations of the complaint was that all states demand that he sign a release before they would release the

[00:21:17] Speaker 01:
the policy coverage or the policy limits was in bad faith.

[00:21:26] Speaker 01:
And with regard to the sanctions, as we set forth in our reply brief and further to Council's argument that they provided the court with

[00:21:41] Speaker 01:
detailed invoices of time.

[00:21:43] Speaker 01:
Those invoices established that with regard to the order to show cause that the magistrate judge had set, Councils spent or billed a total of 3.1 hours, but the magistrate judge's order awarded them 13.9 hours.

[00:22:02] Speaker 01:
So clearly, the order was excessive, and it was not supported by any competent evidence, and it should be reversed.

[00:22:12] Speaker 01:
And with that, I thank you for your time.

[00:22:14] Speaker 01:
And again, I thank you for permitting me to appear remotely for today's proceedings.

[00:22:19] Speaker 02:
All right.

[00:22:19] Speaker 02:
Thank you very much, Council.

[00:22:21] Speaker 02:
Infant Sans versus Allstate Insurance Company will be submitted.