Unpublished Disposition, 911 F.2d 737 (9th Cir. 1990)

No. 89-55468.

United States Court of Appeals, Ninth Circuit.

Before JAMES R. BROWNING and PREGERSON, Circuit Judges, and McKIBBEN, District Judge^** 

MEMORANDUM^*** 

Bruce Armbruster appeals the summary judgment of the district court in favor of State Farm Mutual Automobile Insurance Company (State Farm) on his complaint claiming intentional and negligent infliction of emotional distress and breach of California Civil Code section 1714. We affirm.

Originally, the district court's jurisdiction was based on 28 U.S.C. § 1331.¹  However, since Appellant does not appeal his federal claim, the only remaining issues for this court are the pendent state claims. In construing California law, this court is bound to follow the law of California as determined by statute or supreme court rulings. Hillery v. Rushen, 720 F.2d 1132, 1138 n. 5 (9th Cir. 1983). Furthermore, this court must follow the decision of an intermediate state court unless other persuasive authority convinces it that the state supreme court would decide otherwise. Richardson v. United States, 841 F.2d 993, 996 (9th Cir.), modified on other grounds, 860 F.2d 357 (1988). This court reviews de novo the granting of a motion for summary judgment. Banks v. Bethlehem Steel Corp., 870 F.2d 1438, 1441 (9th Cir. 1989).

II. INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS

Armbruster argues that State Farm's delay in payment and the misrepresentations of a State Farm agent to Armbruster's father regarding the scope of a release form constituted intentional infliction of emotional distress. Armbruster, as a third-party claimant, retains the right to sue insurers for intentional infliction of emotional distress. Moradi-Shalal v. Fireman's Fund Ins. Cos., 46 Cal. 3d 287, 305, 758 P.2d 58, 68-69, 250 Cal. Rptr. 116, 127 (1988). The elements of intentional infliction of emotional distress are: outrageous conduct by the defendant, intent to cause emotional distress, severe or extreme emotional distress, and actual and proximate cause. Fletcher v. Western Nat'l Life Ins. Co., 10 Cal. App. 3d 376, 394, 89 Cal. Rptr. 78, 88 (1970).

An alleged delay in payment does not satisfy the requirement that outrageous conduct be " 'so extreme as to exceed all bounds of that usually tolerated in a civilized community.' " Ricard v. Pacific Indem. Co., 132 Cal. App. 3d 886, 894, 183 Cal. Rptr. 502, 507 (1982) (quoting Cervantez v. J.C. Penney Co., 24 Cal. 3d 579, 593, 595 P.2d 975, 983, 156 Cal. Rptr. 198, 206 (1979)); see Taylor v. California State Auto. Ass'n, 194 Cal. App. 3d 1214, 1223, 240 Cal. Rptr. 107, 113 (1987); Schlauch v. Hartford Accident & Indem. Co., 146 Cal. App. 3d 926, 936, 194 Cal. Rptr. 658, 664-65 (1983). Furthermore, Armbruster, who was fourteen years old at the time of the accident, has failed to show that he had any knowledge of the alleged misrepresentation made by an agent of State Farm to Armbruster's father regarding the nature and scope of the written release. Therefore, any such misrepresentations could not have been the proximate cause of any emotional distress suffered by Armbruster.

III. NEGLIGENT INFLICTION OF EMOTIONAL DISTRESS

Armbruster also seeks to recover for negligent infliction of emotional distress. To recover under this theory, there must first be a duty of care and its breach. Taylor, 194 Cal. App. 3d at 1223, 240 Cal. Rptr. at 113. Armbruster has shown no such duty.

Insurers have no general to exercise due care in conducting settlement negotiations with third-party claimants. Beckham v. Safeco Ins. Co., 691 F.2d 898, 904 (9th Cir. 1982). Armbruster's reliance on Moradi-Shalal to recover on a negligence theory is misplaced. In Moradi-Shalal, the California Supreme Court held there is no private right of action for breach of California Insurance Code section 790.03(h). The court held, however, that third parties may sue for "remedies against insurers in appropriate common law actions, based on such traditional theories as fraud, infliction of emotional distress, and [contract claims]. Punitive damages may be available in actions not arising from contract, where fraud, oppression or malice is proved." Moradi-Shalal, 46 Cal. 3d at 304-05, 758 P.2d at 69, 250 Cal. Rptr. at 127 (emphasis added) (citation omitted). Nothing in Moradi-Shalal extends the remedies to third-party claims for the type of negligent conduct complained of by Armbruster.

IV. CAUSE OF ACTION UNDER CAL.CIV.CODE Sec. 1714

Armbruster also seeks to recover under section 1714 of the California Civil Code. This section states, "Every one is responsible, not only for the result of his willful acts, but also for an injury occasioned to another by his want of ordinary care or skill...." Armbruster claims a private right of action to enforce this section.

This provision, enacted to codify the unwritten common law, Li v. Yellow Cab Co., 13 Cal. 3d 804, 814, 532 P.2d 1226, 1233, 119 Cal. Rptr. 858, 865 (1975), does not include a private right of action or create a substantive theory of liability. Amaya v. Home Ice, Fuel & Supply Co., 59 Cal. 2d 295, 299 n. 2, 379 P.2d 513, 514 n. 2, 29 Cal. Rptr. 33, 34 n. 2 (1963), overruled on other grounds, Dillon v. Legg, 68 Cal. 2d 728, 441 P.2d 912, 69 Cal. Rptr. 72 (1968).

State Farm requests fees and costs for defending this appeal. See Fed. R. App. P. 38. An appeal is frivolous and sanctions are appropriate "if the result is obvious, or the arguments of error are wholly without merit." Wilcox v. Commissioner, 848 F.2d 1007, 1009 (9th Cir. 1988). In the exercise of our discretion we decline to impose sanctions in this case.

AFFIRMED.