Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_10-cv-00722/USCOURTS-cand-3_10-cv-00722-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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United 

States District 

Court

For the Northern District of California 

**E-filed 06/28/2010** 

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION 

MICHAEL BOCK and LORIE BOCK,

 Plaintiffs, 

 v. 

TRAVELERS PROPERTY CASUALTY 

INSURANCE COMPANY, 

 Defendant. 

____________________________________/

No. C 10-0722 RS 

ORDER GRANTING MOTION FOR 

JUDGMENT ON THE PLEADINGS 

I. INTRODUCTION 

 This case entails a series of events flowing from some seriously flawed information. 

Plaintiffs Michael and Lorie Bock obtained a survey that showed their legal property line as running 

through their house rather than along the fence. As a result, the Bocks eventually initiated litigation 

seeking to be declared the rightful owners of all the property on their side of the fence, 

notwithstanding the actual property line. Lengthy and expensive trial and appellate proceedings 

ensued. On the eve of retrial, the Bocks discovered that the initial survey had been wrong, and that 

the property line did run along the fence after all. 

 In this action the Bocks seek to hold their homeowner’s insurance company liable for its 

refusal to provide them a defense to their neighbors’ counterclaims during the property line 

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litigation. Because the allegations of the complaint show that the insurer acted within its rights to 

deny coverage, its motion for judgment on the pleadings will be granted. 

II. BACKGROUND 

 Lori Bock purchased her home located at 415 College Avenue in Angwin, California in 

1978. At the time, and continuing into the present, a fence separated that property from 417 College 

Avenue. Michael Bock became a co-owner in 1988. 

 For reasons not disclosed in the pleadings, in 1996 Albion Surveys conducted a survey 

finding that the legal boundary between 415 and 417 College Avenue actually ran through part of 

the Bocks’ home. The Bocks disclosed this survey to the then-owner of 417 College Avenue, but 

the parties thereafter continued to treat the fence as the boundary between their properties. 

 In 2005 Brian and Gretchen Brakesman were the owners of 417 College Avenue. The 

Bocks sought and obtained the Brakesmans’ approval to build a carport up to the fence line. 

Subsequently, however, the Brakesmans had a change of heart because rainwater runoff from the 

carport roof was damaging property on their side of the fence. 

 The Bocks responded by seeking an official variance from county set back requirements. As 

part of that application, the Bocks were required to get another survey and retained Michael Brooks 

& Associates for that purpose. The Brooks survey was based in part on the Albion survey and came 

to the same conclusion. Learning of the Brooks survey, the Brakesmans then took the position that 

the Bocks had been trespassing and that the carport was an encroachment on their property. 

 The Bocks initiated suit seeking to quiet title to all the property on their side of the fence, 

based on adverse possession and on agreed-boundary principles. The Brakesmans crosscomplained, seeking damages for trespass, among other things. The Brakesmans’ cross-complaint 

generally alleged that their property had been “damaged” by the Bocks’ “entry thereon,” but it made 

no mention of damage from water runoff. 

 The Bocks promptly tendered defense of the cross-complaint to Travelers Property Casualty 

Insurance Company, the issuer of their homeowner’s policy. Within a week, Travelers rejected the 

tender, asserting that the Bocks’ intentional construction of a carport on the Brakesmans’ property 

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was not an “occurrence” within the meaning of the policy, and that it would be subject to an 

exclusion for intentional acts in any event. Although Travelers invited the Bocks to submit any 

additional information they had bearing on coverage, there is no indication they did so. 

Specifically, there is no indication that at any time prior to instituting this suit the Bocks ever told 

Travelers that the Brakesmans were contending water runoff from the carport roof had damaged 

their property. 

 The dispute between the Bocks and the Brakesmans went to trial in January of 2007. After a 

two day bench trial, the court entered judgment for the Brakesmans. In September of 2008, the 

appellate court reversed in part, and remanded for a new trial. Because the appellate opinion 

nonetheless required removal of the carport to an appropriate set back, the Bocks were asked by the 

county planning department to commission yet another survey. They hired Bryan Taylor, who 

thereafter gave the “flabbergasted” Bocks the news that the prior surveys both had been wrong, and 

that the fence indeed marked the actual property line. 

 The Bocks and the Brakesmans then settled their dispute on the eve of the retrial, with the 

Bocks giving the Brakesmans an easement over part of their driveway. The matter was re-tendered 

to Travelers prior to finalizing the settlement, but Travelers again denied coverage. As before, there 

is no indication that Travelers was ever told about the Brakesmans’ claims relating to water runoff. 

 The four years of litigation exhausted the Bocks’ financial resources. One of their prior 

attorneys has obtained a judgment lien against their home. They contend their credit rating has been 

ruined and that they are crippled financially. 

III. LEGAL STANDARD 

 A motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) is a 

“means to challenge the sufficiency of the complaint after an answer has been filed.” New.Net, Inc. 

v. Lavasoft, 356 F.Supp.2d 1090, 1115 (C.D.Cal. 2004). A motion for judgment on the pleadings is 

functionally identical to the standard applied in a motion to dismiss. Dworkin v. Hustler Magazine, 

Inc., 867 F.2d 1188, 1192 (9th Cir.1989). “Judgment on the pleadings is proper when the moving 

party clearly establishes on the face of the pleadings that no material issue of fact remains to be 

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resolved and that it is entitled to judgment as a matter of law.” Hal Roach Studios, Inc. v. Richard 

Feiner and Co., Inc., 896 F.2d 1542, 1550 (9th Cir.1990). 

IV. DISCUSSION 

 Travelers’ position is simple: the Brakesmans’ cross-complaint alleged property damage 

solely as the result of the Bocks’ encroachment on their property, and case law establishes that 

encroachment simply is not an “accident” within the meaning of liability insurance policies. 

Travelers relies on Fire Insurance Exchange v. Superior Court, 181 Cal.App.4th 383 (2010), which 

issued long after Travelers denied coverage but which expressly holds that, “[b]uilding a structure 

that encroaches onto another’s property is not an accident even if the owners acted in the good faith 

but mistaken belief that they were legally entitled to build where they did.” Id. at 390. 

 The Fire Insurance court examined a trio of decisions from this court that also involved 

encroachment claims. In two, Allstate Ins. Co. v. Salahutdin 815 F.Supp. 1309 (N.D.Cal.1992) and 

Bailey v. State Farm Ins. Co. 810 F.Supp. 267 (N.D.Cal.1992), the courts similarly concluded that 

the intentional nature of the conduct precluded coverage under liability policies that defined 

“occurrence” as an “accident.” The third decision, Allstate Insurance Co. v. Vavasour, 797 F.Supp. 

785 (N.D.Cal.1992) reached a different result by taking into account the alleged trespassers’ state of 

mind. Vavasour reasoned where the trespassers had no “inkling” they were not on their own 

property, the incursion could be considered “accidental.” Id. at 788. 

 Although the Vavasour court attempted to distinguish Salahutdin ̧ and Bailey attempted to 

distinguish Vavasour, the Fire Insurance court observed that the distinctions “can only be 

characterized as strained.” 181 Cal.App.4th at 395. The Fire Insurance court went on to conclude: 

[W]e find the reasoning of Salahutdin and Bailey to be the more persuasive and are 

in accord with principle in California that the term “accident” refers to the nature of 

the conduct itself rather than to its consequences. Vavasour stands out in singular 

contrast to the prevailing rule. 

Id. 

 Here, although the Bocks emphasize Vavasour and Travelers argues it is an outlier, the facts 

do not require a determination as to whether it represents good law. Given that the Bocks were 

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aware of the Albion survey when they began constructing their carport, they had at least an 

“inkling” that they potentially were trespassing on the Brakesmans’ property. The Bocks argue that 

their complaint against the Brakesmans alleged that they had constructed the carport on their own 

property and that it was therefore improper for Travelers to conclude that they had knowingly 

trespassed. As it turns out, of course, the Bocks had not trespassed at all, but at the time, the 

allegation that they constructed the carport on their own property was merely consistent with their 

quiet title claim, it did not somehow mean they were unaware that the Albion survey had shown the 

property line to be well inside their side of the fence. Thus, the Bocks cannot bring themselves 

within the facts of Vavasour. 

 Perhaps recognizing that case law does not support coverage for the mere act of constructing 

the carport, the Bocks’ primary argument in opposition to this motion is that had Travelers 

conducted any sort of investigation into the claims the Brakesmans were making, it would have 

discovered their complaint that the carport had been constructed in a manner that caused rainwater 

run-off that allegedly was damaging neighboring property. For purposes of this motion, Travelers 

does not dispute that if it had learned the Brakesmans were so contending, there would have been a 

duty to defend. Travelers argues, however, that it had no duty to consider anything beyond the 

contents of the Brakesmans’ pleading and any other relevant extrinsic facts already known to it. 

Travelers correctly states the law. “After receiving a tender of defense, the insurer satisfies 

its duty to investigate by considering the complaint and the terms of the policy. Although extrinsic 

facts may also give rise to a duty to defend, such facts must be known at the time of tender and must 

reveal a potential for liability.” Baroco West, Inc. v. Scottsdale Ins. Co., 110 Cal.App.4th 96, 103 

(2003). Travelers had no obligation to undertake any further inquiry that might have uncovered the 

fact that the Brakesmans were complaining about water runoff.1

 

The Bocks rely on cases such as Frommoethelydo v. Fire Ins. Exch., 42 Cal.3d 208 (1986) 

and Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. 78 Cal.App.4th 847 (2000), 

 

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 The record does not establish when the Bocks learned that water runoff was a focus of the 

Brakesmans’ complaint, although the implication is that it was the problem from the outset. If so, it 

is unclear why the Bocks’ counsel did not advise Travelers of that fact when invited to submit any 

additional information bearing on coverage. 

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for the proposition that Travelers was obligated to conduct a more active and robust investigation, 

potentially interviewing witnesses or at least the Bocks themselves. In Frommoethelydo, the insurer 

was held to have breached a duty to investigate only after it was advised there were witnesses with 

factual information undermining the insurer’s prior conclusion that the insured had submitted a false 

claim. 42 Cal. 3d at 220. In Shade Foods, the insurer conducted an incomplete investigation into a 

disputed factual matter, then ignored protests from the insurance agent that it had gotten the facts 

wrong. 78 Cal.App.4th at 881-82. The insurer also treated the matter solely as a third-party liability 

claim, without considering whether there was first party coverage. Id. Thus, while both these cases 

are consistent with the principle that an insurer may not disregard relevant extrinsic facts that it 

already possesses or that are subsequently provided to it, the Bocks have not pointed to any 

authority that would impose on Travelers a duty to do more than it did under the circumstances here. 

Accordingly, the facts alleged in the complaint herein show that Travelers had no duty to provide a 

defense for the Bocks. 

V. CONCLUSION 

 The motion for judgment on the pleadings is granted. A separate judgment will issue. 

IT IS SO ORDERED. 

Dated: 06/2 

RICHARD SEEBORG 

UNITED STATES DISTRICT JUDGE 

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