Lennox Carwash, Inc. v. Amco Insurance Company

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAY 28 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT LENNOX CARWASH, INC., a Delaware No. 24-1975 corporation, D.C. No. 2:23-cv-03746-RGK-JPR Plaintiff - Appellant, v. MEMORANDUM* AMCO INSURANCE COMPANY, Defendant - Appellee.

Appeal from the United States District Court for the Central District of California R. Gary Klausner, District Judge, Presiding Argued and Submitted May 21, 2025 Pasadena, California Before: GRABER, WARDLAW, and JOHNSTONE, Circuit Judges.

Plaintiff Lennox Carwash, Inc., timely appeals from the summary judgment entered in favor of Defendant AMCO Insurance Company. Reviewing de novo, Barton v. Off. of Navajo, 125 F.4th 978, 982 (9th Cir. 2025), we affirm.

1. Plaintiff’s breach-of-contract claim is premised on AMCO’s refusal to cover losses that Plaintiff experienced in (a) December 2018 (“2018 loss”) and (b) September 2019 (“2019 loss”).

1.a. The insurance policy requires any action against AMCO to be brought “within 1 year after . . . the direct physical loss or damage occurred.” Under California law, such clauses are “equitably tolled from the time the insured notifies the insurer of the claim,” Marselis v. Allstate Ins. Co., 16 Cal. Rptr. 3d 668, 669 (Ct. App. 2004), until the insured receives notice from the “[insurer] that coverage was denied,” Prudential-LMI Com. Ins. v. Superior Ct., 798 P.2d 1230, 1242 (Cal.), as modified (Dec. 13, 1990). The record evidence gives rise to a rebuttable presumption that the coverage-denial letter that AMCO sent on February 24, 2022, was “received in the ordinary course of mail.” Cal. Evid. Code § 641. By contrast, the record does not contain sufficient rebuttal evidence. See Colleen M. v. Fertility & Surgical Assocs. of Thousand Oaks, 34 Cal. Rptr. 3d 439, 448 (Ct. App. 2005) (“Without at least some evidence of the mail handling and routing procedures in the office the fact the attorney was never aware of the documents does not rebut the presumption they were received.”). Therefore, we must assume that the denial letter was delivered by—and the tolling period ended on—March 1, 2022. See id. (discussing the effect of the presumption); Dandino, Inc. v. U.S. Dep’t of Transp., 729 F.3d 917, 921 (9th Cir. 2013) (calculating presumptive delivery dates); 39 C.F.R. § 121, App. A (2021) (providing delivery estimates). And Plaintiff did not

1.b. The policy also required Plaintiff to “[c]ooperate with [AMCO] in the investigation or settlement of [a] claim.” In California, an insurer can defend against a breach-of-contract claim by asserting that the insured breached a cooperation clause in the insurance contract if the insurer was substantially prejudiced thereby. Brizuela v. CalFarm Ins. Co., 10 Cal. Rptr. 3d 661, 670 (Ct. App. 2004). Uncontested evidence shows that, on several occasions, AMCO asked Plaintiff for documentation and information pertaining to the 2019 loss. But nothing in the record suggests that Plaintiff ever followed up with any of the relevant material. AMCO has thus established substantial prejudice as a matter of law. See Am. Int’l Specialty Lines Ins. Co. v. Cont’l Cas. Ins. Co., 49 Cal. Rptr. 3d 1, 18 (Ct. App. 2006) (noting that cooperation clauses serve to allow an insurer to “secure all the information material to its rights and obligations”); Bainbridge, Inc. v. CalFarm Ins. Co., No. D042362, 2004 WL 2650892, at *3 (Cal. Ct. App. Nov. 22, 2004) (explaining that an insurer is substantially prejudiced when it does not receive the information needed to process the claim or “to determine the

3. As Plaintiff acknowledges, Plaintiff’s claims for declaratory relief and for punitive damages must fall with its breach-of-contract and bad-faith claims. See Opening Br. at 40 (“To the extent [t]his Court reverses the order below as to . . . the breach of contract claim, Lennox is entitled to a reversal of the summary judgment order as to the judicial declaration . . . .”); id. at 41 (“[T]o the extent this Court reinstates the bad faith claim, Lennox is also entitled to a reversal of the summary judgment order as to punitive damages.”).

AFFIRMED.