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Gruenberg v. Aetna Ins. Co.

Supreme Court of California

June 11, 1973 ; June 11, 1973

L.A. No. 30082


 [*569]  [**1034]  [***482]    Plaintiff appeals from a judgment of dismissal entered upon an order sustaining, with leave to amend, defendants' general demurrers to plaintiff's complaint, plaintiff having thereafter declined to amend. 3

 [****3]  [*570]   Plaintiff's complaint, containing only one count, alleged in substance the following: On and after April 7, 1969, plaintiff was the owner of a cocktail lounge and restaurant business in Los Angeles known as the Brass Rail. The business premises were insured against fire loss in the aggregate sum of $ 35,000 by the three defendant insurers, Aetna Insurance Company (Aetna), Yosemite Insurance Company (Yosemite), and American Home Assurance Company (American).

In the early hours of the morning of November 9, 1969, a fire occurred at the Brass Rail. Plaintiff was notified and immediately went to the scene. While there, he became involved in an argument with a member of the arson detail of the Los Angeles Fire Department and was placed under arrest.

On November 10, 1969, defendant insurers, upon being informed of the fire, engaged the services of defendant P. E. Brown and Company (Brown). Carl Busching, a claims adjuster employed by Brown, went to the Brass Rail to investigate the fire and inspect the premises. While he was there, he stated to an arson investigator of the Los Angeles Fire Department that plaintiff had excessive coverage under his fire insurance policies.  [****4]  Eventually the premises were locked and nothing was removed until November 14, 1969, when Busching authorized the removal of the rubble and debris.

About November 13, 1969, plaintiff was charged in a felony complaint with the crimes of arson ( Pen. Code, § 448a) and defrauding an insurer ( Pen. Code, § 548). A preliminary hearing was set for January 12, 1970.

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9 Cal. 3d 566 *; 510 P.2d 1032 **; 108 Cal. Rptr. 480 ***; 1973 Cal. LEXIS 210 ****

JEROME GRUENBERG, Plaintiff and Appellant, v. AETNA INSURANCE COMPANY et al., Defendants and Respondents

Subsequent History:  [****1]  Respondents' petition for a rehearing was denied July 18, 1973.

Prior History: Superior Court of Los Angeles County, No. 9882243, John L. Cole, Judge.

Disposition: As to defendants Aetna Insurance Company, Yosemite Insurance Company and American Home Assurance Company, the judgment is reversed and the cause is remanded to the trial court with directions to overrule the demurrers and to allow said defendants a reasonable time within which to answer. As to the remaining defendants, the judgment is affirmed. Plaintiff shall recover his costs on appeal from defendants, Aetna Insurance Company, Yosemite Insurance Company, and American Home Assurance Company; the other defendants shall recover their costs on appeal from plaintiff.


insurer, fair dealing, good faith, arson, insurance company, cause of action, damages, cases, policies, failure to appear, investigate, mental distress, documents, duty of good faith, allegations, bad faith, contractual, preliminary hearing, defendants', demurrer, prudent, obligations, adjuster, parties, intentional infliction of emotional distress, insurance policy, criminal charge, conclusionary, maliciously, settlement

Civil Procedure, Responses, Defenses, Demurrers & Objections, Demurrers, Motions to Dismiss, Failure to State Claim, Pleading & Practice, Pleadings, Rule Application & Interpretation, Business & Corporate Compliance, Contracts Law, Types of Contracts, Covenants, Contracts Law, Contract Interpretation, Good Faith & Fair Dealing, Insurance Law, Liability & Performance Standards, Good Faith & Fair Dealing, General Overview, Settlements, Torts, Business Torts, Bad Faith Breach of Contract, Bad Faith & Extracontractual Liability, Payments, Motor Vehicle Insurance, Obligations, Indemnification, Coverage, Uninsured Motorists, Rejection of Coverage, Disclosure Obligations by Insureds, Materiality, Breach, Bad Faith & Extracontractual Liability, Business & Corporate Law, Duties & Liabilities, Causes of Action & Remedies, Breach of Contract, Vicarious Liability, Agency Relationships, Negligent Acts of Agents, Real Property Law, Torts, Nonperformance, Pain & Suffering, Emotional Distress, Types of Damages, Compensatory Damages, Remedies, Damages, Types of Losses, Award Calculations