Key Decisions

December 2012- Misrepresentations Justify Summary Judgment Ruling

(filed under: Key Decisions Archive | December 19, 2012)

Misrepresentations Justify Summary Judgment In Bad Faith Suit

Hodjat v. State Farm Mutual Automobile Insurance Company
(Cal. Ct. of App., 2d Dist.), filed October 19, 2012


Allen Hodjat owns a used car business.  He and his wife purchased a damaged BMW at an auction with the intention of repairing and selling it.  They insured the car with State Farm.  The Hodjats’ policy required them to cooperate with State Farm in any claim and provided that “[t]here is no coverage under this policy if you or any other person insured under this policy has made false statements with the intent to conceal or misrepresent any material fact or circumstance in connection with any claim under this policy.”

Hodjat reported the BMW stolen.  State Farm investigated the theft.  Hodjat and his wife submitted several statements regarding the theft and condition of the car.  They repeatedly contradicted themselves.

State Farm declined the claim because the Hodjats had failed to cooperate in the investigation and had made material misrepresentations regarding their claim.

The Hodjats sued State Farm.  State Farm moved for summary judgment, asserting that it could not be liable because it reasonably denied coverage based on the Hodjats having made material misrepresentations regarding their claim.  In opposing the motion, the Hodjats objected to State Farm’s evidence and put their objections into their separate statement.

The trial court refused to rule on the Hodjats’ objections and granted State Farm’s motion.


The Court of Appeal affirmed.

The court first addressed the Hodjats’ assertion that the trial court erred in refusing to rule on their objections to evidence submitted by State Farm in support of its motion.  California Rules of Court, rule 3.1354(b) dictates the format in which evidentiary objections must be submitted.  It states:

All written objections to evidence must be served and filed separately from the other papers in support of or in opposition to the motion.  Objections on specific evidence may be referenced by the objection number in the right column of a separate statement in opposition or reply to a motion, but the objections must not be restated or reargued in the separate statement.

Since the Hodjats’ objections did not comply with this requirement, the trial court properly refused to rule on them.  The trial court was not required to give the Hodjats leave to correct their opposition papers.

The court then turned to the merits of the motion.  It ruled State Farm met its initial burden of showing that the denial of the Hodjats’ claim was justified under the terms of the policy. State Farm presented evidence demonstrating numerous instances of material misrepresentations and several inconsistencies by the Hodjats.  According to the court, Hodjat changed the price of the BMW three times and misrepresented the extent of the damage to the car, where he had the car fixed, the amount of money he paid to have it fixed, and the last time he saw the BMW before it was stolen.  The Hodjats also failed to cooperate with State Farm’s  investigation when they failed to provide requested documentary evidence in support of their claims.

Because State Farm had met its initial burden, the Hodjats had the burden of showing a triable issue of material fact.  They accused State Farm of manipulating facts, hiring dishonest investigators, and relying on unreasonable legal advice to deny their claim.  However, they failed to provide any facts, much less citations to evidence in the record, to support these accusations.  As a result, they failed to satisfy their burden of raising a triable issue of material fact as to their claims or as to State Farm’s defenses.


This case reiterates the importance of supporting arguments with evidence in opposing a motion for summary judgment.  The Hodjats failed to show that there was evidence that would have allowed the trier of fact to accept their arguments.  The Hodjats made arguments but did not offer evidence to support the arguments.

This case also shows that when the facts are egregious enough, misrepresentations can be decided by summary judgment motion.