Filed 2/5/15 Tselevich v. Allstate Ins. CA2/3
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.


              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                DIVISION THREE


MAXIM TSELEVICH et al.,                                                  B250792

         Plaintiffs and Appellants,                                      (Los Angeles County
                                                                         Super. Ct. No. BC485650)
         v.

ALLSTATE INSURANCE COMPANY
et al.,

         Defendants and Respondents.




         APPEAL from a judgment of the Superior Court of Los Angeles County, Steven J.
Kleifield, Judge. Affirmed.
         Law Office of Mark B. Scott and Mark B. Scott for Plaintiffs and Appellants.
         MacGregor & Berthel, Gregory Michael MacGregor, Deborah A. Berthel and
Joshua N. Willis for Defendants and Respondents.
                                        _________________________
       This appeal presents a coverage issue under a homeowner’s insurance policy
issued by Allstate Insurance Company. The policy excludes losses caused by “[w]ater or
any other substance that backs up through sewers or drains” (water-damage exclusion).
The trial court concluded the water-damage exclusion was unambiguous when ruling on
Allstate’s demurrer to the first amended complaint.1 Following its ruling sustaining the
demurrer without leave to amend, the trial court entered judgment of dismissal. The
homeowners, appellants Maxim Tselevich and Preston Chiaro, contend the water-damage
exclusion does not apply as they have alleged the damage to their property was not
caused when water “backed up” through the sewer line, but when raw sewage in the
municipal sewer line “stopped flowing in the intended direction” because of a break or
offset in the main sewer line and was “diverted above the blockage to another and wholly
unintended path” through their sewer line and into their house and onto their property.
We conclude the water-damage exclusion is unambiguous and coverage under the
insurance policy is excluded. Accordingly, we affirm.
                   FACTUAL AND PROCEDURAL BACKGROUND
       1. Facts2
       Tselevich and Chiaro own a residence located at 7541 Hermes Drive in West
Hollywood, California (the residence). On December 21, 2009,3 raw sewage flowed into
the residence, “entering the first floor, through the bathroom toilet and sink, and kitchen
and bar sinks, discharging raw sewage, throughout the entire first floor.” Tselevich


1
       The demurrer was brought on behalf of Allstate Insurance Company, Allstate
Insurance Company of California, and Allstate Property and Casualty Insurance
Company (collectively, Allstate).
2
        For purposes of appellate review of the order sustaining the demurrer, we accept
as true all material facts properly pleaded, but not contentions, deductions, or conclusions
of fact or law. (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.)
3
      The complaint alleges the incident occurred on December 19, 2009, while the first
amended complaint alleges that the incident occurred two days later on December 21,
2009.

                                             2
called a plumber who responded to the emergency and stated the problem was in the City
of Los Angeles sewer main.
       Chiaro had obtained a homeowner’s insurance policy issued by Allstate. The
water-damage exclusion in the policy states: “Losses We Do Not Cover Under
Coverages A and B: [¶] We do not cover loss to the property described in Coverage A—
Dwelling Protection or Coverage B—Other Structures Protection consisting of or caused
by: [¶] . . . [¶] 2. Water or any other substance that backs up through sewers or drains.”
(Bold omitted.)
       On December 21, 2009, Tselevich called Allstate, and the Allstate representative
opened a claim.
       On January 4, 2010, Allstate conducted a field inspection of the residence.
Allstate denied the claim in a letter dated February 1, 2010 based upon the water-damage
exclusion in the policy. Litigation ensued.
       2. Proceedings
              a. Demurrer to the Complaint Sustained with Leave to Amend
       On May 31, 2012, Tselevich and Chiaro filed a complaint against Allstate. The
complaint alleged the incident as follows: “[T]here was a blockage in the Hermes
Avenue sewer main which caused raw sewage from the houses on Hermes Avenue to
flow into Tselevich’s sewer lateral and discharge sewage into the Residence and onto the
lot. The raw sewage was discharged throughout the Residence’s first floor.”
       It is alleged that when Tselevich consulted the plumbing company that previously
had repaired the plaintiffs’ sewer lateral, the plumber informed Tselevich that the
“problem was at the Hermes Drive sewer main. He then told Tselevich to call the City of
Los Angeles (‘the City’) to report the Sewer Main Damage, and make a claim to his
homeowners’ insurance company.”
       Allstate filed a demurrer and motion to strike portions of the complaint. The
demurrer was sustained with leave to amend, rendering the motion to strike moot. While
the parties addressed the coverage issue, the trial court was concerned that the plaintiffs
did not have a copy of the insurance policy and ordered Allstate to provide one.

                                              3
Although the trial court stated on the record it did not think the complaint stated a cause
of action, it gave the plaintiffs leave to amend to have the benefit of the policy to see if a
cause of action could be stated.
              b. Demurrer to the First Amended Complaint Sustained Without Leave to
                  Amend
       The first amended complaint alleged the problem with the city’s main sewer
caused raw sewage to be “diverted,” not “backed up” through the homeowners’ sewer. It
is alleged the plumber informed the Allstate adjuster that the problem occurred off the
property as “there was a blockage in the City’s main sewer, in the street, and the flow of
raw sewage was diverted from the main sewer into plaintiffs’ sewer lateral, which did not
have a backflow preventer, and then into the Residence, inundating the Property.”
       Based on Allstate’s denial of the claim, the first amended complaint alleged causes
of action for (1) declaratory relief, (2) breach of policy, (3) breach of covenant of good
faith and fair dealing, (4) insurance bad faith, (5) fraudulent concealment, suppression,
non-disclosure, (6) negligent non-disclosure, and (7) intentional infliction of emotional
distress. The insurance policy was attached to the first amended complaint, along with
the denial of coverage letter.
       Allstate filed a demurrer to the first amended complaint, asserting among other
grounds that the entire first amended complaint and all causes of action alleged therein
were barred by the water-damage exclusion in the policy.4 Relying on Cardio Diagnostic
Imaging, Inc. v. Farmers Ins. Exchange (2012) 212 Cal.App.4th 69 (Cardio Diagnostic),
in which the court construed a policy exclusion similar to the one at issue here, Allstate
contended that as a matter of law there was no coverage for the loss. The trial court
agreed with Allstate, stating that the first amended complaint “does not state a cause of
action because of the application of the [water-damage] exclusion.” The court’s order

4
       Allstate also moved on the grounds that a one-year statute of limitations in the
policy barred the claims alleged in the first amended complaint, the tort claims were not
pleaded with the requisite specificity and failed to state a cause of action, and Tselevich
lacked standing to assert these claims because he is not a named insured on the policy.

                                               4
states: “[T]he Court finds no coverage existed and as such Plaintiffs Fail to State any
Cause of Action against any Allstate Defendant.”
       The trial court entered a judgment of dismissal. This timely appeal followed.
                                       DISCUSSION
       1. Standard of Review
       The standard of review for an order sustaining a demurrer without leave to amend
is de novo. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “In reviewing the sufficiency
of a complaint against a general demurrer, we are guided by long-settled rules. ‘We treat
the demurrer as admitting all material facts properly pleaded, but not contentions,
deductions or conclusions of fact or law. [Citation.] We also consider matters which
may be judicially noticed.’ [Citation.] Further, we give the complaint a reasonable
interpretation, reading it as a whole and its parts in their context. [Citation.] When a
demurrer is sustained, we determine whether the complaint states facts sufficient to
constitute a cause of action. [Citation.] And when it is sustained without leave to amend,
we decide whether there is a reasonable possibility that the defect can be cured by
amendment: if it can be, the trial court has abused its discretion and we reverse; if not,
there has been no abuse of discretion and we affirm. [Citations.] The burden of proving
such reasonable possibility is squarely on the plaintiff.” (Ibid.)
       “To meet [their] burden of showing abuse of discretion, the plaintiff[s] must show
how the complaint can be amended to state a cause of action. [Citation.] However, such
a showing need not be made in the trial court so long as it is made to the reviewing
court.” (William S. Hart Union High School Dist. v. Regional Planning Com. (1991)
226 Cal.App.3d 1612, 1621.) As shall be shown, appellants have not met their burden.
       2. Interpretation of Insurance Policy
       Here, we must interpret an insurance policy, which is a legal question that we
review de novo. (Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 18.) Our
resolution of this case rests on the interpretation of the contract language in the water-
damage exclusion in the insurance policy, which excluded coverage for damage caused
by: “[w]ater or any other substance that backs up through sewers or drains.”

                                              5
       “ ‘While insurance contracts have special features, they are still contracts to which
the ordinary rules of contractual interpretation apply. [Citation.]’ [Citation.] ‘The goal
of contract interpretation is to give effect to the mutual intent of the parties. [Citation.] If
contract language is clear and explicit, we ascertain this intent from the written provisions
and go no further. [Citation.] Words in an insurance policy must be understood in their
ordinary sense unless given special meanings by the policy. [Citation.]’ [Citation.]”
(Golden Eagle Ins. Co. v. Insurance Co. of the West (2002) 99 Cal.App.4th 837, 845.)
       “ ‘An ambiguity arises only if “. . . there [is] more than one construction in issue
which is semantically permissible . . . .” [Citation.]’ [Citation.] In the case of an
insurance policy there must be an ‘ “uncertainty in the application of the policy language
to the facts upon which the claim of coverage is predicated.” ’ [Citation.] ‘A claim of
ambiguity cannot always be decided from the [language]. It may be latent.’ [Citation.]”
(Penn-America Ins. Co. v. Mike’s Tailoring (2005) 125 Cal.App.4th 884, 889.)
       “If there is an ambiguity, . . . it is resolved by interpreting the ambiguous
provisions in the sense the promisor (i.e., the insurer) believed the promisee understood
them at the time of formation. (Civ. Code, § 1649.) If application of this rule does not
eliminate the ambiguity, ambiguous language is construed against the party who caused
the uncertainty to exist. (Id., § 1654.) In the insurance context, we generally resolve
ambiguities in favor of coverage. [Citations.]” (AIU Ins. Co. v. Superior Court (1990)
51 Cal.3d 807, 822.) Like the trial court, we find no uncertainty or ambiguity in the
water-damage exclusion in the insurance policy.
       3. The Causes of Action Based upon the Interpretation of the Water-Damage
           Exclusion Fail as a Matter of Law
       Appellants contend the trial court erred in sustaining the demurrers to the causes
of action arising from the interpretation of the water-damage exclusion, which include
declaratory relief (first cause of action), breach of policy (second cause of action), breach
of the covenant of good faith and fair dealing (third cause of action), and insurance bad
faith (fourth cause of action). These causes of action allege that Allstate unreasonably
interpreted the water-damage exclusion, as the exclusion should be interpreted to apply

                                               6
“only to losses resulting from back ups of the insured’s sewage” caused by a blockage in
the insured’s sewer lateral within the insured’s control.
       Employing principles of construction, we begin with the language of the insurance
policy in order to ascertain the plain meaning or the meaning a layperson would
ordinarily attach to it. (Waller v. Truck Ins. Exchange, Inc., supra, 11 Cal.4th at p. 18.)
The water-damage exclusion states that a loss to the property caused by “[w]ater or any
other substance that backs up through sewers or drains” is not covered under the policy.
       The water-damage exclusion is unambiguous and is not rendered ambiguous
because appellants offer alternative constructions. A layperson would understand the
water-damage exclusion to apply when water or any other substance comes up out of a
sewer or drain due to a blockage. (See Cardio Diagnostic, supra, 212 Cal.App.4th at
p. 76; Penn-America Ins. Co. v. Mike’s Tailoring, supra, 125 Cal.App.4th at pp. 890, 892
[The exclusion for damage caused by “ ‘[w]ater that backs up from a sewer or drain’ is
facially unambiguous.”].)
              a. No Ambiguity Exists in the Water-Damage Exclusion
       Appellants maintain the term “sewer” is not defined in the policy and is
ambiguous because it could mean either the property owner’s sewer line or the city’s
main sewer line. This argument attempts to create an ambiguity by adding qualifying
words to the insurance policy. The water-damage exclusion applies if water or any other
substance backs up through sewers or drains. There is no distinction in the insurance
policy between a sewer under the insured’s control and one that is not.
       In a variation of the same argument, appellants next contend that the term “backs
up” as used in the water-damage exclusion refers only to a blockage that backed up the
insured’s own sewage through the insured’s drain or sewer. As written, water and any
other substance that backs up through a sewer or drain due to a blockage is not limited to
any one cause or location of the blockage.
       A similar argument was raised and rejected in Penn-America Ins. Co. v. Mike’s
Tailoring, supra, 125 Cal.App.4th 884. The insured argued that the back-up exclusion in
its policy did not apply if the blockage was within the insured’s premises because the

                                              7
term “sewer” applied to the public part of the sewer line and the part within the insured’s
premises is referred to as the “plumbing system.” (Id. at p. 893.) The court noted there
was no policy language that divided the sewer into parts so as to construe the
unambiguous back-up exclusion as suggested by the insured. (Ibid.)
       Here, just as in Penn-America Ins. Co. v. Mike’s Tailoring, there is no reasonable
construction of the water-damage exclusion that breaks the term “sewer” into parts for
purposes of determining a blockage or limits the exclusion only to a blockage caused by
the insured’s raw sewage. The policy exclusion is written in broad terms that the
appellants seek to narrow by presenting an unreasonable construction of this plain and
unambiguous language.
              b. The Water-Damage Exclusion Applies Because the Allegations State
                  Water or any Other Substance Backed up Through the Sewer
       Appellants next contend that they have sufficiently alleged a loss under the
insurance policy because the first amended complaint alleges raw sewage was “diverted”
and did not “back up” as there is no allegation in the first amended complaint of an
accumulation of sewage originating in their sewer that caused a blockage in which water
or any other substance backed up into their sewer or drain. Instead, “raw sewage in the
City’s sewer main, which, due to a break and/or offset in the main sewer, stopped flowing
in the intended direction, and was diverted above the blockage to another and wholly
unintended path, [to] plaintiffs’ sewer line, where it was able to simply flow into
plaintiffs’ building.” These allegations explain the blockage (in the city’s sewer main)
that caused raw sewage to back up through a sewer or drain and into their residence.
These allegations fall within the water-damage exclusion.
       In support of their distinction between water that “backs up” through a sewer or
drain, and water that is “diverted” and comes up through a sewer or drain, appellants rely
on the definition of the term “backs up” in Penn-America Ins. Co. v. Mike’s Tailoring,
supra, 125 Cal.App.4th 884. Their reliance is misplaced. Citing the dictionary definition
of “back up,” the court noted “ ‘back up’ is an intransitive verb meaning ‘to accumulate
in a congested state . . . .’ [Citation.] It also means ‘to rise and flow backward or

                                              8
overflow adjacent areas . . .’ such as ‘water checked by an obstruction.’ [Citation.]” (Id.
at pp. 892-893.) Appellants maintain that the diverted raw sewage that came up through
the sewer and damaged their property was not in a “congested state,” did not rise and
flow backward, and did not overflow. “Divert” is a transitive verb meaning to turn from
one course, direction, or objective to another. (Webster’s 3d New Internat. Dict. (1971)
p. 663, col. 1.) Here, raw sewage was diverted (checked by an obstruction), causing it to
change course and back up through a sewer or drain and into their residence.
       Appellants also rely on Cardio Diagnostic, supra, 212 Cal.App.4th 69, but that
case supports Allstate’s interpretation of the water-damage exclusion. In Cardio
Diagnostic, the court construed a policy that excluded any “ ‘loss or damage caused
directly or indirectly by . . . [w]ater that backs up or overflows from a sewer, drain or
sump.’ ” (Id. at p. 71.) The insured’s business premises and property were extensively
damaged when water overflowed from a toilet in an upstairs suite, eventually flooding the
insured’s suite. (Id. at pp. 71-72.) An investigation revealed that a sewer line blockage
caused the water in the toilet to overflow. (Id. at p. 72.) Farmers denied coverage based
upon the policy exclusion. (Ibid.)
       The insured argued the policy exclusion did not apply because the term “ ‘backs
up or overflows from’ ” means that water “must come out of the sewer or drain” and does
not include water unable to proceed down an interior drain. (Cardio Diagnostic, supra,
212 Cal.App.4th at p. 74.) The court rejected the argument, noting the insured had
focused solely on the meaning of “backs up” in the exclusion and not on the meaning of
“overflows.” (Id. at pp. 74-75.) In making this distinction, the court cited out-of-state
and federal case law that the insured relied on to highlight that the cited cases addressed
policy exclusions construing “backs up,” not “ ‘backs up or overflows.’ ” (Id. at p. 75.)
In these cases, water that “backs up” from a sewer was construed to mean water that is
checked by an obstruction and cannot flow in its usual direction.5 (Ibid.) This is

5
       Appellants cite to several of these cases in their opening brief, including an
unpublished case from the district court in Maryland (Drutz v. Scottsdale Ins. Co. (D.Md.
Feb. 28, 2012, Civ. A. No. WMN-10-3499) 2012 U.S.Dist. Lexis 25286, *7-14), a United
                                              9
consistent with California case law interpreting the term “backs up” in an insurance
policy exclusion. (See Penn-America Ins. Co. v. Mike’s Tailoring, supra,
125 Cal.App.4th at pp. 892-893.)
       The Cardio Diagnostic court noted that a layperson would understand the term
“backs up” as used in the policy exclusion to mean “water that comes up out of a sewer,
drain, or sump,” and the term “overflows” to mean water that spills over from a sewer,
drain, or sump due to a blockage. (Cardio Diagnostic, supra, 212 Cal.App.4th at p. 76.)
We agree with the Cardio Diagnostic court’s construction of the term “backs up,” as used
in the water-damage exclusion at issue here, that is, excluding from coverage property
damage caused when water or any other substance comes up out of a sewer or drain due
to a blockage.
       Here, the allegations in the initial complaint allege that a blockage in the city’s
sewer line caused raw sewage to flow into the sewer lateral and come up out of a drain
and into the residence. The first amended complaint alleges additional facts uncovered
during an investigation that the blockage in the sewer line prevented the flow of sewage
in its usual direction and the “diverted” raw sewage came up out of a sewer or drain and
into the residence.6 Accepting these allegations as true, the water-damage exclusion
applies to this claim. The trial court did not err in sustaining the demurrers to the causes



States Court of Appeals case from the Sixth Circuit (Front Row Theatre v. American
Manufacturer’s Mut. (6th Cir. 1994) 18 F.3d 1343, 1348), a Colorado Court of Appeal
case (Haines v. United Sec. Ins. Co. (1979) 43 Colo.App. 276 [602 P.2d 901, 902]), and a
Washington Court of Appeal case (Hallsted v. Blue Mountain Convalescent Ctr. (1979)
23 Wash.App. 349 [595 P.2d 574, 575-576]). These cases construed “back-up
exclusions,” in insurance policies but made no distinction between water that “backs up”
rather than water that is “diverted” through a sewer or drain.
6
       Appellants argue the trial court erred in sustaining the demurrer because there are
disputed facts alleged in the first amended complaint. As previously stated, we accept as
true the facts alleged. We do not, however, accept as true conclusions of fact or law, and
therefore disregard the numerous conclusory allegations in the first amended complaint
alleging that no back up occurred.

                                             10
of action seeking declaratory relief (first cause of action) and breach of policy (second
cause of action) because the plaintiffs did not allege a covered loss as a matter of law.
       Because no policy benefits were due, the claims for breach of the implied
covenant of good faith and fair dealing (third cause of action) and bad faith (fourth cause
of action) also cannot be maintained as a matter of law (Waller v. Truck Ins. Exchange,
Inc., supra, 11 Cal.4th at p. 35).
       4. The Fraudulent Concealment Cause of Action Is Not Sufficiently Alleged
       Appellants contend that they have sufficiently alleged a cause of action for
fraudulent concealment based upon nondisclosure of material facts. The first amended
complaint alleges that Allstate took “extraordinary measures to conceal from plaintiffs
the true facts regarding the insureds and the existing coverages under the [p]olicy, and
why the loss was not excluded” under the water-damage exclusion. Allstate and its
agents allegedly had no reasonable basis for making the representations to plaintiffs that
the loss was caused by a “backup in plaintiffs’ lateral sewer, . . . that the loss was subject
to [the water-damage exclusion], and that Allstate knew or should have known that
plaintiffs would not become aware of Allstate’s deception.”
       The elements of fraudulent concealment are: (1) concealment or suppression of
material fact, (2) duty to disclose the fact, (3) intent to conceal or suppress with intent to
defraud, (4) plaintiff must have been unaware of the fact and would not have acted in
such a manner had the plaintiff known of the concealment or suppression, and
(5) resulting damage. (Jones v. ConocoPhillips (2011) 198 Cal.App.4th 1187, 1198;
Marketing West, Inc. v. Sanyo Fisher (USA) Corp. (1992) 6 Cal.App.4th 603, 612-613.)
Liability for concealment is imposed where the defendant is in a fiduciary or other
relationship that imposes a duty of disclosure. (OCM Principal Opportunities Fund, L.P.
v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 859.)
       The allegations do not state a cause of action for fraudulent concealment as the
first element has not been sufficiently alleged. The allegations regarding concealment of
the water-damage exclusion are contradicted by the coverage denial letter attached as an
exhibit to the first amended complaint. “[T]o the extent the factual allegations conflict

                                              11
with the content of the exhibits to the complaint, we rely on and accept as true the
contents of the exhibits and treat as surplusage the pleader’s allegations as to the legal
effect of the exhibits.” (Barnett v. Fireman’s Fund Ins. Co. (2001) 90 Cal.App.4th 500,
505.) As of February 1, 2010, Allstate identified the water-damage exclusion in the
policy and the reason why the claim was denied.7
       Appellants take issue with the content of the denial of coverage letter because, as
alleged, the insurance adjuster either concealed the true cause of the damage that they
later discovered through an independent investigation, or the adjuster failed to thoroughly
investigate the true cause of the damage. As previously stated, there are no specific
allegations that Allstate or its adjuster either intentionally concealed, suppressed, or failed
to disclose any material facts later discovered by plaintiffs’ consultants regarding the
cause of the blockage on Hermes Drive. General and conclusory allegations are not
enough to plead fraudulent concealment. (See Lazar v. Superior Court (1996) 12 Cal.4th
631, 645.)8 “[E]very element of the cause of action for fraud must be alleged in full,
factually and specifically.” (Wilhelm v. Pray, Price, Williams & Russell (1986)
186 Cal.App.3d 1324, 1331.) The specificity requirement serves two purposes: (1) to
furnish the defendant with certain definite charges that can be intelligently met, and (2) to

7
        The denial of coverage letter states: “Specifically, the following facts are the basis
for this decision: Based on our conversation at the time of my inspection & subsequent
conversation with Byron at Schu[e]lke Plumbing, the sewage back-up through your drain
line was the result of a blockage in the city’s main drain line off of your property.”
Schuelke Plumbing allegedly responded to the homeowners’ call on the date of the
incident.
8
       Appellants rely on People ex rel. Sepulveda v. Highland Fed. Savings & Loan
(1993) 14 Cal.App.4th 1692, 1716, to argue that specificity is not required as these details
are matters to be addressed in discovery, not on demurrer. In that case, the court
analyzed the allegations of racketeering activity based upon mail fraud and concluded the
complaint sufficiently described the nature of the mailings and the place of mailings,
along with the time, place, and content of the fraud. This was sufficient. (Id. at pp. 1716-
1717.) In contrast, the allegations in the first amended complaint that Allstate took
“extraordinary measures” to conceal facts are devoid of any similar allegations of when,
where, to whom, and by what means extraordinary measures were taken.

                                              12
ensure the complaint is specific enough so that the court can “weed out nonmeritorious
actions on the basis of the pleadings.” (Committee on Children’s Television, Inc. v.
General Foods Corp. (1983) 35 Cal.3d 197, 216-217, superseded by statute on another
ground, as stated in Californians for Disability Rights v. Mervyn’s, LLC (2006)
39 Cal.4th 223, 227.) The fraudulent concealment cause of action in the first amended
complaint fails to meet this pleading standard, and appellants have made no showing that
this pleading defect can be cured by amendment. Accordingly, the trial court did not err
in sustaining the demurrer without leave to amend.
       5. Negligent Misrepresentation Claim Fails as a Matter of Law
       Appellants assert the demurrer to this cause of action was without merit, but they
do not specifically address why the negligent misrepresentation cause of action is
sufficiently alleged, referring collectively to their “nondisclosure claims.” The negligent
misrepresentation cause of action is based upon the denial of coverage letter, and the
allegations that Allstate knew the cause of the loss, failed to disclose the true cause of the
loss, and knew the loss would have been covered under the insurance policy.
       A claim for negligent misrepresentation based upon the failure to disclose a
material fact is similar to fraudulent concealment, but there is no requirement of intent to
deceive, only unreasonable conduct on the part of the insurer is required. (See Croskey
et al., Cal. Practice Guide: Insurance Litigation (The Rutter Group 2014) ¶ 11.41, p. 11-
16.) Based upon the allegations in the first amended complaint, appellants cannot plead
any damages arising from the denial of coverage (for whatever reason) because we have
concluded that the first amended complaint does not allege a covered loss.9 Accordingly,
the trial court did not err in sustaining the demurrer without leave to amend.



9
       Like the allegations asserting a claim for fraudulent concealment, the allegations
to support the negligent misrepresentation claim are general and conclusory. It is unclear
whether claims for negligent misrepresentation are held to the same heightened pleading
standard for fraud (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184). The
Small court held the specific pleading requirement applies to shareholder’s actions
asserting negligent misrepresentation. (Ibid.) In so holding, the Supreme Court
                                              13
       6. Intentional Infliction of Emotional Distress
       Appellants contend that Allstate’s extreme and outrageous conduct is sufficiently
alleged to state a cause of action for intentional infliction of emotional distress.
       Liability for intentional infliction of emotional distress extends only to conduct by
the insurer directed at the insured “so extreme and outrageous ‘as to go beyond all
possible bonds of decency, and to be regarded as atrocious, and utterly intolerable in a
civilized community.’ ” (Alcorn v. Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 499,
fn. 5; Coleman v. Republic Indemnity Ins. Co. (2005) 132 Cal.App.4th 403, 416-417.)
Delay or denial of insurance claims is not sufficiently outrageous to state a cause of
action. (Coleman v. Republic Indemnity Ins. Co., supra, at p. 417.) Because this cause of
action is based upon Allstate’s allegedly misrepresenting the cause of the loss in the
denial of coverage letter and denying coverage, this cause of action fails as a matter of
law.




suggested that if squarely presented with the issue, it might hold that the specific pleading
requirement applies in other negligent misrepresentation actions. (Ibid.)

                                              14
                                    DISPOSITION
      The judgment of dismissal is affirmed. Respondents are entitled to costs on
appeal.


      NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS




                                               ALDRICH, J.




We concur:




             EDMON, P. J.




             KITCHING, J.




                                          15
