Daily et al v. Garrett

Filing 5

ORDER signed by Chief Judge Morrison C. England, Jr on 10/5/15 ORDERING that The Bankruptcy Court's Recommendation 1 is ADOPTED IN FULL; Cross-Defendant Beach's Motion for Summay Judgment against Defendant and Cross-Complainant Garrett is GRANTED.(Mena-Sanchez, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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In re:

No. 2:14-cv-01639-MCE (BK)

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BRANTLEY JUSTIN GARRETT and
ERIN EILEEN GARRETT,

ORDER

Debtors.
_______________________________

Adv. Pro. No. 12—02719-B

JAMES DAILY AND KATHARINE
DAILY,

Case No. 12-36599-B-7 (Chapter 7)

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Plaintiffs.

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v.
BRANTLEY JUSTIN GARRETT,
Defendant.

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_______________________________

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BRANTLEY JUSTIN GARRETT,
Cross-Complainant,

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v.
BEACH & O’NEILL INSURANCE
ASSOCIATES, INC.,
Cross-Defendant.

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1

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Pending before the Court is a motion for summary judgment filed by Cross

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Defendant Beach & O’Neill Insurance Associates, Inc. (“Beach”) with respect to a cross-

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claim (and non-core proceeding) filed against Beach by Brantley Justin Garrett

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(“Garrett”). Garrett filed that cross-claim against Beach, his former insurance broker, on

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grounds that Beach failed to obtain liability insurance adequate to protect Garrett, a

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general contractor, against claims brought by James Daily and Katharine Daily (“the

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Dailys”). Those claims resulted from Garrett’s construction of the Dailys’ new single

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family home located at 10233 Sunrise Vista, Auburn, California in 2008 and 2009.

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According to the Dailys, Garrett falsely and fraudulently represented to them that he

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possessed the experience, skill, available personnel, liability insurance, and workers

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compensation insurance necessary to construct their home.

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On September 13, 2012, Garrett and his wife, Erin Eileen Garrett, instituted

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bankruptcy proceedings by jointly filing a voluntary petition under Chapter 7. On

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December 18, 2012, the Dailys timely commenced an adversary proceeding against

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Garrett seeking a determination that Garrett owed a non-dischargeable debt to them in a

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sum not less than $190,000. Garrett subsequently filed the instant cross-claim against

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Beach on January 24, 2013. That cross-claim alleged causes of action for negligence,

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breach of fiduciary duty, and equitable indemnity.

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Two separate motions to dismiss brought by Beach resulted in the elimination of

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the negligence and equitable indemnity claims, leaving only a single cause of action for

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breach of fiduciary duty remaining. Because the parent bankruptcy case has been fully

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administered, with the Chapter 7 debtor receiving a discharge on January 7, 2013, the

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case is now open solely because of the Dailys’ pending adversary proceeding and

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Garrett’s related cross-claim against Beach. As indicated above, Beach has filed a

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motion for summary judgment. Adv. Dkt. 11. On July 11, 2014, the Bankruptcy Court

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filed a Report and Recommendation (ECF No. 1, “Recommendation”) in accordance

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with 28 U.S.C. § 157(c)(1) and Federal Rule of Bankruptcy Procedure 7052.

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///
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1

R
dation recou
unts the pro
ocedural history and fa
actual back
kground of
The Recommend

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this matter, and ultimate concludes that bec
a
ely
cause the gravamen of Garrett’s b
breach of

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fid
duciary duty claim aga
y
ainst Beach actually so
ounds in pro
ofessional n
negligence, the two-

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ye statute of limitation for profess
ear
o
n
sional negl igence app
plies and ba the claim as
ars
m

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un
ntimely purs
suant to Ca
alifornia Cod of Civil P
de
Procedure section 339
9.

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After conducting a de novo review, wh ich included both Bea
c
ach’s object
tions and

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Ga
arrett’s obje
ections (EC Nos. 2, 3), the Court finds that the Recom
CF
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t
mmendation is based
n

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on an accura summar of the case and sou analysis Accordin
n
ate
ry
und
s.
ngly, IT IS H
HEREBY

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ORDERED that:

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1. The Bankrupt Court’s Recommen
tcy
ndation (EC No. 1) is ADOPTED IN FULL;
CF
s
D

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2. Cro
oss-Defend
dant Beach’ Motion fo Summary Judgment against D
’s
or
y
Defendant

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an Cross-Complainant Garrett is GRANTED
nd
t
D.
IT IS SO ORDER
S
RED.
Da
ated: October 5, 2015
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