Filed 10/26/20

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

TRUCK INSURANCE EXCHANGE,

Plaintiff and Respondent,

v.

AMCO INSURANCE COMPANY,

Defendant and Appellant.

 B298798

 (Los Angeles County

 Super. Ct. No. BC678363)

APPEAL from a judgment of the Superior Court of 

Los Angeles County, Richard Edward Rico, Judge. Affirmed.

Grant, Genovese & Baratta, Lance D. Orloff for Defendant

and Appellant.

Knapp, Peterson & Clarke, Peter J. Senuty for Plaintiff and 

Respondent.
2

INTRODUCTION

A vehicle accident caused a car to crash through a 

restaurant, injuring two restaurant patrons. The patrons sued 

the restaurant owner and his landlords, alleging that the 

property lacked safety measures that would have protected the 

patrons from this type of injury. Summary judgment was 

granted for the restaurant owner but denied for the landlords, 

who knew a similar accident had occurred years earlier but failed 

to implement safety measures to prevent a recurrence. The 

landlords settled the action with the restaurant patrons. 

The landlords’ insurer, respondent Truck Insurance 

Exchange, then sued the restaurant’s insurer, appellant AMCO 

Insurance Company, for equitable contribution, asserting that 

AMCO wrongfully denied Truck’s request that AMCO defend and 

indemnify the landlords. The “additional insured” provision in 

the restaurant’s AMCO policy covered the landlords’ liability 

“arising out of” the restaurant owner’s “use” of the premises. 

Following a bench trial on stipulated facts and the parties’ 

briefing, the court found that the landlords’ liability arose from 

the restaurant owner’s use of the premises and was therefore 

covered under the AMCO policy. The court entered judgment for 

Truck requiring AMCO to pay 50 percent of the settlement 

amount and costs of defense. 

On appeal, AMCO asserts the trial court erred in finding 

that the landlords’ liability “arose from” the restaurant owner’s 

“use” of the premises. AMCO contends that being the mere situs 

of an accident does not constitute “use” of a premises, and that 

the summary judgment rulings in the underlying action required 

the trial court to find that the landlords’ liability was not caused 

by the restaurant owner’s use of the premises. We affirm. The 
3

phrase “arising from” in a general liability insurance policy 

requires only a minimal causal connection, which existed here, 

and the respective liability of the parties is irrelevant to the 

additional insured provision. AMCO further asserts that the 

trial court’s 50 percent apportionment was erroneous. AMCO did 

not assert this argument in the trial court, however, so we find it 

has been forfeited.

FACTUAL AND PROCEDURAL BACKGROUND

A. The parties

The parties stipulated to the following facts. Kathy Awad 

and Raif/Ralph Awad (the Awads) owned a commercial property 

at the corner of East Wardlow Road and Orange Avenue in Long 

Beach. The property was built in 1939, and the Awads bought it 

in 2002. The property has a corner doorway entrance that faces

the intersection. Truck issued a business owner’s insurance 

policy with the Awads as named insureds. 

In May 2007, a car accident damaged the front door and 

windows of the property. The Awads repaired the building by 

replacing the door and windows with a similar door and windows. 

In October 2012, Scott Bascon, dba Holé Molé Restaurant,1

leased the property from the Awads. AMCO issued a business 

owner’s insurance policy naming Bascon dba Holé Molé as the 

insured. In a provision we discuss in more detail below, the 

Awads as landlords were listed as additional insureds under the 

AMCO policy. 

1 Throughout the record, the restaurant name is written as 

Holé Molé, Hole Mole, and Holè Molè. Adopting the name 

displayed on the restaurant’s sign in the photograph in the 

record, we refer to it as Holé Molé unless spelled otherwise 

within a quote. 
4

B. The Smith action

On June 2, 2013, Travis Smith and Dina Poppleton-Smith 

were dining at Holé Molé when a car accident occurred in the 

intersection of East Wardlaw Road and Orange Avenue. Two 

cars collided in the intersection, and the “force of the impact 

caused one of the cars to jump the curb and crash into the 

restaurant.” According to the Smiths’ complaint, the vehicle 

“crashed through the front doors” of Holé Molé, and continued 

through the restaurant “until it stopped against the south-east 

wall, striking [the Smiths] and pinning them to the wall, causing 

significant injuries.” 

On November 3, 2014, the Smiths sued Holé Molé and 50 

Doe defendants for negligence and premises liability.2 They 

alleged that Holé Molé “failed to take precautionary measures 

and safeguard the wellbeing of its patrons.” AMCO provided a 

defense to Bascon/Holé Molé pursuant to the AMCO policy. 

On August 11, 2015, the Smiths added the Awads as Doe 

defendants. The Smiths asserted that following the similar 

accident in 2007, the Awads should have protected the property 

by reinforcing the front door frame and/or installing bollards to 

prevent a vehicle from entering the property. 

The Awads tendered their defense to Truck pursuant to the 

Truck policy. On December 11, 2015, Truck tendered the Awads’ 

indemnity and defense to AMCO. Truck cited language in the 

parties’ lease in which Bascon agreed to “indemnify, hold 

harmless and defend against all claims and or damages, which 

may be asserted against landlord, as may be related or incidental 

to Tenants [sic] operations, including and not limited to claims 

2 The Smiths later added as a defendant the driver of the 

car that entered the restaurant. 
5

and or damages asserted by its employees, customers, visitors, 

etc.” AMCO denied coverage, stating, “Our client had no 

responsibility for the existence or lack of existence of bollards on 

the property, and has no responsibility for a vehicle losing control 

on the street and crashing into the restaurant. This loss did not 

arise out of our client’s use or occupancy of the premises.” On 

September 23, 2016, Truck renewed its tender to AMCO, 

suggesting there was a right to indemnity and defense under the 

AMCO policy, and asking for a copy of the policy. AMCO again

denied coverage. 

Bascon and the Awads filed motions for summary judgment 

in the Smith action. In October 2016, the court granted Bascon’s 

motion, finding that the accident was not foreseeable to Bascon, 

there was no evidence that Bascon had knowledge of the 2007 

incident, and the lease stated that Bascon could not alter the 

premises without landlord consent. The court denied the Awads’ 

motion. The court found that the Awads had knowledge of the 

2007 accident and therefore had “moral blame for not doing 

anything to prevent a similar accident from occurring.” On 

behalf of the Awads, Truck settled the Smith action for $785,000. 

C. This action

1. Truck’s complaint

On October 3, 2017, Truck filed this action against AMCO 

for equitable subrogation, equitable indemnification, equitable 

contribution, and declaratory relief. Truck asserted that the 

parties’ lease required Bascon to indemnify, defend, and hold 

harmless the Awads “against all claims and/or damages, which 

may be asserted against [the Awads], as may be related or 

incidental to [Holé Molé/Bascon’s] operations.” Truck also 

alleged that the lease required the Awads to be listed as 
6

additional insureds on Bascon’s comprehensive general liability 

insurance policy. 

Truck further alleged that Bascon’s AMCO policy included 

an additional insured endorsement naming the Awads as 

additional insureds. The AMCO policy stated, “Any person or 

organization from whom you [Bascon] lease premises is an 

additional insured, but only with respect to their liability arising 

out of your use of that part of the premises leased to you.” Truck 

alleged that its claims “arise out of the Hole Mole’s use of the 

Property as the plaintiffs in the Smith Action would not have 

been injured but for Bascon’s use of the Property as a restaurant, 

and their presence on the Property as invitees of Bascon and 

patrons of Hole Mole.” Truck alleged that AMCO wrongfully 

denied tender of the Awads’ defense and failed to indemnify the 

Awads. Truck alleged damages in the amount paid to settle the 

Smith action, $785,000, as well as the cost of defending the 

action, which the parties later agreed was $52,368.15. Truck also 

sought its costs and attorney fees. 

2. Truck’s contentions

The trial court decided the issue on stipulated facts and the 

arguments in the parties’ briefing. Truck argued in its briefs that 

the lease for the premises stated, “Landlord shall be listed as an 

additional insured on Tenant’s policy or policies of comprehensive 

general liability insurance,” and “Tenant herein agrees to 

indemnify, hold harmless and defend against all claims and/or 

damages, which may be asserted against landlord, as may be 

related to or incidental to Tenant[’]s operations; including and 

not limited to claims and/or damages asserted by its employees, 

customers, visitors, etc.” Truck argued that any liability of the 

Awads was, at least, “incidental to” the operations of the 
7

restaurant. The lease therefore demonstrated that the parties’ 

intent was that “the insurance provided by Hole Mole to the 

Awads will be primary for risks incidental to running a 

restaurant and for injuries to the customers.” 

Truck further contended that the Awads were entitled to 

the “additional insureds” coverage on Bascon’s AMCO policy. 

The AMCO policy’s additional insured endorsement stated that 

the Awads as landlords were additional insureds, and the policy 

covered any “liability arising out of your [Bascon’s] use of that 

part of the premises leased to you.” Truck asserted that AMCO 

had a duty to defend and indemnify the Awads because the 

Smiths “would not have been injured but for Bascon’s use of the 

Property as a restaurant, and but for their presence on the 

Property as invitees of Bascon and patrons of Hole Mole. Thus, 

as a matter of undisputed facts and law, the claims arise out of 

the use of the Property as a restaurant.” Truck also asserted, 

“Had [the Smiths] not been present, as customers, they would not 

have been injured.” 

Truck stated that AMCO denied coverage on the basis that 

Bascon was not liable for the Smiths’ injuries. It argued that 

AMCO erred when it “equate[d] ‘arising out of the use’ of the 

Property with ‘arising out of the liability of the named insured.’ 

The two are not coextensive.” Truck also noted that “the Awads 

were never found to be liable. Rather, Truck settled due to the 

seriousness of the injuries and the risks of trial, as insurers 

frequently do.” Truck further argued that “if AMCO meant for 

the liability of its named insured to be the controlling limitation 
8

on coverage for the additional insureds, it should have clearly so 

stated.”3

Truck asserted primarily that it was entitled to equitable 

subrogation, “because it was the intent of the parties that AMCO 

cover the Awads for the liability that arose out of the use of the 

premises as a restaurant.” In the alternative, Truck requested 

equitable indemnity, equitable contribution, and declaratory 

relief. 

3. AMCO’s contentions

AMCO argued in its briefs that “since AMCO’s [i]nsured 

tenant [Bascon] never had any connection to the alleged 

dangerous condition in the owner’s building, AMCO had no duty” 

to defend or indemnify the Awads. It asserted that the “AMCO 

policy did not insure . . . the Awads’ liability arising out of their 

building” that had no connection to Bascon’s operation of a 

restaurant. AMCO stated, “Truck must first prove that AMCO 

had a duty to defend the Awads in the underlying premisesliability action . . . . If Truck were to prove that AMCO owed a 

duty to defend, the burden would shift to AMCO to prove that it 

had no duty to indemnify the Awads. . . .” 

AMCO contended that the Smiths’ premises liability action 

was “based on the Awads’ breach of its non-delegable duty to 

maintain its property free of unreasonable dangerous conditions 

existing on the premises,” and the Smiths alleged that “the 

3 Truck also asserted that a structural alteration exclusion 

in the AMCO policy was not applicable, as it may have related to 

a finding that the Awads were liable due to the lack of bollards or 

other structures near the entry of the restaurant. The court 

found that the structural alteration exception was not applicable 

under the stipulated facts. The parties do not challenge the 

court’s finding on this issue, and therefore we do not address it. 
9

Awads’ duty of care arose because they had actual knowledge of a 

prior accident which created a duty of care to repair their 

premises” to prevent a similar accident from recurring. Bascon 

had no knowledge of the previous accident, and no duty to modify 

the premises to avoid injuries from a similar accident. AMCO 

also argued, “[I]t is Res Judicata that Holé Molé was not 

negligent and did not own the building alleged to have a 

dangerous condition,” and “the issue cannot be relitigated.”

AMCO further asserted that the parties’ lease did not 

require AMCO to indemnify the Awads. Although the indemnity 

provision in the lease could be read to cover the Awads’ passive 

negligence, it did not create a duty to indemnify the Awads’ 

active negligence. Moreover, the lease stated that indemnity of 

the Awads must be “related to or incidental to [Bascon’s] 

operations,” and the car accident did not meet that definition. 

AMCO also argued that the Awads were not entitled to 

“additional insured” coverage under the AMCO policy. AMCO 

asserted that the Awads’ liability did not arise out of Bascon’s 

“use” of the premises; rather, liability arose from the Awads’ 

knowledge of the prior accident and their negligent 

reconstruction of the property thereafter. AMCO argued, “[T]he 

Awads’ liability to the [Smiths] was not in any manner or to any 

degree related to Holé Molé’s use of the premises. Rather, it was 

entirely premised on knowledge and actions that were taken six 

years before Holé Molé ever occupied the premises.” 

AMCO asked that Truck’s complaint be dismissed with 

prejudice. It also asserted that Truck’s claim for subrogation in 

particular was “simply improper” under the circumstances, and 

“Truck’s only proper claim here, between two primary insurers 
10

that insure the same parties (the Awads), is equitable 

contribution.”

4. The court’s decision

The court issued an order on February 15, 2019, finding in 

favor of Truck and ordering damages of $418,684.08. The court 

explained its reasoning in an accompanying statement of

decision. The court rejected AMCO’s reasoning, stating, “AMCO’s 

statement of the issue does not comport with general established 

insurance law. Equitable contribution between insureds [sic]

need not be based on the comparative negligence of their 

respective insureds.” As for whether the liability arose “out of” 

Bascon’s use of the premises, the court stated, “The court need 

not engage in extensive analysis to state the obvious. The 

lawsuits by the injured patrons arose out of their being patrons of 

the restaurant leased from the landlords. . . . The claims against 

both the restaurant and the landlords arose out of the use of the 

premises.” 

The court concluded, “[T]he court finds that the principles 

of equitable contribution applies [sic] to the issues in this case. 

AMCO was entitled to dispute coverage albeit wrongly. There is 

no argument made regarding the appropriateness of the defense 

costs or the appropriateness of settlement. The court therefore 

finds that the apportionment should on in [sic] equal, 50/50 basis. 

[Truck] is entitled to recover 1⁄2 of the money paid.” 

5. AMCO’s objection

AMCO filed an objection to the trial court’s statement of 

decision. AMCO argued that “the Court’s findings critically fail 

to distinguish between AMCO’s alleged duty to defend and duty 

to indemnify.” Noting that the court used the phrase “potential 

liability” once in the decision, AMCO asserted that a 
11

determination of potential liability, but not actual liability,

“triggers AMCO’s duty to defend, but does not trigger AMCO’s 

duty to indemnify.” Thus the court’s finding should have 

determined that AMCO owed half of the $52,368.15 Truck 

expended in defending the Awads—not half of Truck’s $785,000 

settlement payment. AMCO also repeated its arguments that “no 

part of Holè Molè’s use of the premises actually caused” the 

Smiths’ damages, and in light of summary judgment in Bascon’s 

favor, the Awads’ settlement “was entirely based on the Awads’ 

use of the premises, and NOT at all based on Holè Molè’s ‘use of 

the premises.’” AMCO asked that the court modify its decision to 

state that AMCO’s policy did not cover Truck’s $785,000 

settlement, and AMCO owed only half of $52,368.15. 

Truck filed a written response asserting that AMCO had no 

legitimate procedural basis for challenging the court’s statement 

of decision with a written objection. Truck also asserted that the 

court’s finding that the Awads’ liability arose out of Bascon’s use 

of the premises, and therefore that the Awads were additional 

insureds under the AMCO policy, “is dispositive for both defense 

and indemnity.” Truck also contended that it “satisfied its 

burden to show potential coverage,” so “the burden of proof 

shifted to AMCO, as the non-defending insurer,” but “AMCO 

offered no evidence or even argument to assist it in carrying that 

burden during the trial.” 

On February 27, 2019, the court issued a short written 

order overruling AMCO’s objection. The court agreed with 

Truck’s contentions that AMCO wrongfully denied the duty to 

defend, Truck carried its initial burden on that issue, and AMCO 

failed to meet its burden. 
12

6. AMCO’s motion for new trial or to vacate the 

judgment

AMCO filed a notice of intention to move for new trial, or in 

the alternative, to vacate the judgment. In its supporting 

memorandum, AMCO repeated its argument that the court’s 

reasoning justified a finding that AMCO had a duty to defend the 

Awads based on the potential for coverage, but not a duty to 

indemnify them based on actual coverage. AMCO argued that as 

a result, the judgment for half of Truck’s defense expenses plus 

the settlement amount was unsupported by the court’s reasoning. 

AMCO reasoned that “this Court has not yet ruled on AMCO’s 

duty to indemnify Truck’s $750,000 [sic] settlement.” AMCO 

argued that the summary judgment in favor of Bascon in the 

Smith action “establishes as a matter of law that the Awads’ 

liability to the Smiths was completely independent of Holè Molè’s 

use of the Awads’ building.” AMCO asserted that as a result, it 

had no obligation to indemnify Truck based on the additional 

insured language in AMCO’s policy. 

Truck opposed AMCO’s motion, asserting that its 

arguments were based on “three fallacies.” First, the court did 

not find potential coverage, it found “that there was coverage.” 

Second, the court in the Smith action did not address whether the 

injuries to the Smiths arose out of Bascon’s use of the premises. 

Third, the summary judgment in the Smith action was not 

relevant to whether the Awads were additional insureds under 

the AMCO policy. Truck also asserted that AMCO’s motion was 

procedurally improper, and that AMCO failed to meet its burden 

to show that the judgment should be set aside. 

Following a short hearing, the court denied AMCO’s 

motion. The court rejected AMCO’s argument about potential 
13

coverage as “mere wordplay” focusing on “a single word in a 

single sentence” in the statement of decision, whereas the 

remainder of that paragraph “makes abundantly clear the court’s 

finding that a clear reading of the Amco endorsement provides 

actual coverage, and not just potential coverage,” for the Smith 

action. The trial court also rejected AMCO’s arguments about 

the summary judgment in the Smith action, finding that any 

finding of liability in the Smiths’ negligence action “is irrelevant 

to equitable apportionment of the claim between” AMCO and 

Truck. 

The court entered judgment for Truck in the amount of 

$418,684.08—half of the cost of the settlement to the Smiths, 

plus half of the costs of the Awads’ defense. The judgment also 

included costs of suit and prejudgment interest. AMCO timely 

appealed. 

DISCUSSION

A. The Awads’ liability arose out of Bascon’s use of the 

premises. 

Although AMCO asserts numerous arguments on appeal, 

each relies on a single contention: The car accident that injured 

the Smiths was not causally connected to Bascon’s “use” of the 

leased premises; therefore the Awads did not qualify as 

additional insureds under the AMCO policy, and Truck was not 

entitled to equitable contribution from AMCO. Because this case 

was decided on stipulated facts and “the interpretation of the 

insuring agreement is a question of law, we apply de novo review 

to any determinations as to that issue.” (Underwriters of Interest 

Subscribing to Policy Number A15274001 v. ProBuilders 

Specialty Ins. Co. (2015) 241 Cal.App.4th 721, 727.) 
14

If the Awads qualified as additional insureds under 

Bascon’s AMCO policy, Truck is entitled to equitable contribution 

from AMCO. Equitable contribution “‘arises when several 

insurers are obligated to indemnify or defend the same loss or 

claim, and one insurer has paid more than its share of the loss or 

defended the action without any participation by the others.’

[Citation.] ‘The purpose of this rule of equity is to accomplish 

substantial justice by equalizing the common burden shared by 

coinsurers, and to prevent one insurer from profiting at the 

expense of others.’” (Maryland Cas. Co. v. Nationwide Mutual 

Ins. Co. (2000) 81 Cal.App.4th 1082, 1089.)

As noted above, the additional insured provision of Bascon’s 

AMCO policy stated, “Any person or organization from whom you 

lease premises is an additional insured, but only with respect to 

their liability arising out of your use of that part of the premises 

leased to you.” In other words, the Awads, as landlords, were

additional insureds under the AMCO policy, “but only with 

respect to [the Awads’] liability arising out of [Bascon’s] use of . . . 

the premises.” The Awads’ liability was not disputed; their 

settlement of the Smith action is presumptive evidence of their 

liability. (See Safeco Ins. Co. of America v. Superior Court (2006) 

140 Cal.App.4th 874, 880.)

Thus, we consider whether the Awads’ liability “arose out 

of” Bascon’s “use” of the premises. “California courts have 

consistently given a broad interpretation to the terms ‘arising out 

of’ or ‘arising from’ in various kinds of insurance provisions. It is 

settled that this language does not import any particular 

standard of causation or theory of liability into an insurance 

policy. Rather, it broadly links a factual situation with the event 

creating liability, and connotes only a minimal causal connection 
15

or incidental relationship.” (Acceptance Ins. Co. v. Syufy 

Enterprises (1999) 69 Cal.App.4th 321, 328 (Syufy).)

In Syufy, a contractor, C & C, “contracted with Syufy to 

upgrade the lighting and temperature controls at a theater 

owned by Syufy.” (Syufy, supra, 69 Cal.App.4th at p. 324.) C & C 

had a general liability policy with insurer AIC, which named 

Syufy as an additional insured with respect to any liability 

arising out of C & C’s work. (Ibid.) An employee of C & C sued 

after being injured by a roof hatch at the theater; the employee 

alleged that Syufy failed to maintain a safe closing mechanism on 

the hatch, and failed to warn about the defective hatch. (Ibid.) 

AIC defended Syufy as an additional insured under its policy, 

and eventually funded a settlement with the employee. (Id. at p. 

325.) AIC then sued Syufy and its insurer, Reliance, for 

declaratory relief, indemnification, and equitable contribution. 

AIC asserted that the employee’s injury did not arise out of C & 

C’s work, and therefore Syufy was not an additional insured 

under the AIC policy. (Ibid.) Following a summary judgment in 

favor of Reliance, AIC appealed. 

The appellate court affirmed. C & C’s insurance policy with 

AIC included an additional insured provision providing that 

Syufy was an additional insured under the policy, “‘but only with 

respect to liability arising out of “your work” for that insured by 

or for you.’ The policy specified that ‘you’ and ‘your’ referred to C 

& C, the named insured.” (Id. at p. 324.) AIC argued in part that 

Syufy was not an additional insured under the circumstances, 

because the employee was injured as he “was leaving the job site, 

through a roof hatch on which C & C performed no work, and 

which injured him solely because of Syufy’s negligent 

maintenance.” (Id. at p. 326.) AIC asserted that “its additional 
16

insured endorsement would not apply to Syufy’s liability for [the 

employee’s] injury under California case law interpreting the 

policy term ‘arising out of,’” because the employee’s injury “was 

attributable solely to Syufy’s negligent maintenance of the roof 

hatch.” (Id. at p. 327.)

The Court of Appeal rejected this contention, noting, as 

quoted above, courts’ broad interpretation of the phrase “‘arising 

out of.’” (Syufy, supra, 69 Cal.App.4th at p. 328.) The court 

found the employee’s injury “clearly ‘arose out of’ the work he was 

performing on the roof of Syufy’s building. The relationship 

between the defective hatch and the job was more than 

incidental, in that [the employee] could not have done the job 

without passing through the hatch. The fact that the defect was 

attributable to Syufy’s negligence is irrelevant, since the policy 

language does not purport to allocate coverage according to 

fault.” (Id. at pp. 328-329.) The court stated that when an 

insurer “grants coverage for liability ‘arising out of’ the named 

insured’s work, the additional insured is covered without regard 

to whether injury was caused by the named insured or the 

additional insured.” (Id. at p. 330.)

The trial court below relied on Syufy in reaching its 

decision, and Truck asserts that Syufy is dispositive of the issues 

in this case. We agree that its reasoning compels a similar 

conclusion here. The Smiths were present when the accident 

occurred because they were customers of Bascon’s restaurant. 

Had Bascon not been using the premises as a restaurant, the 

Smiths would not have been sitting in the building when a car 

crashed through it. The Smiths alleged that the property itself 

was unsafe, because the Awads failed to protect invitees from the 

type of harm that could occur from a car accident, and the Awads 
17

were on notice of such a danger due to the similar 2007 accident. 

“[A] minimal causal connection will suffice to trigger coverage 

under an ‘arising out of’ clause.” (Vitton Construction Co., Inc. v. 

Pacific Ins. Co. (2003) 110 Cal.App.4th 762, 767 (Vitton 

Construction).) That minimal causal connection was present 

here. 

We are not persuaded by AMCO’s argument that “‘situs’ 

alone is not use of the ‘premises.’” For this proposition, AMCO

relies on Kramer v. State Farm Fire and Cas. Co. (1999) 76 

Cal.App.4th 332 (Kramer), but the comparison is not apt. In that 

case, a couple, the Kramers, purchased from State Farm a

homeowners’ insurance policy for their residence, and rental 

dwelling insurance policies for two rental units they owned. Mrs. 

Kramer’s daughter, son-in-law, and grandchildren later sued the 

Kramers, asserting that Mr. Kramer sexually abused the 

grandchildren at the three insured locations, and Mrs. Kramer 

knew of the abuse and failed to protect the children. (Id. at pp. 

334-335.) State Farm defended the Kramers under their

homeowners’ policy, but denied coverage under the rental 

policies. The case was eventually settled for the limits of the 

homeowners’ policy plus a $65,000 contribution from the 

Kramers. 

The Kramers then sued State Farm, alleging that it 

wrongfully denied coverage under the rental policies, which 

“included ‘business liability’ coverage against claims for 

accidental injuries arising ‘from the ownership, maintenance, or 

use of the insured premises . . . .’” (Kramer, supra, 76 

Cal.App.4th p. 334.) After State Farm successfully moved for 

summary judgment, the Kramers appealed. The appellate court 

considered “whether, for purposes of insurance coverage, child 
18

molestation is an injury arising from the ‘ownership, 

maintenance, or use’ of the premises on which the molestation 

occurs.” (Ibid.) The court noted that with respect to insurance 

policies on vehicles, there was a “general principle that injury . . .

does not arise from the ‘ownership, maintenance, or use’ of a 

vehicle absent a showing that the use of the vehicle contributed 

in some way to the injury, beyond merely serving as the situs for 

the activity.” (Id. at p. 338.) The Kramers asserted that coverage 

for a real property should not require a similar connection 

between the injury and the property, but the court rejected this 

contention: “[C]onstruing residential coverage to apply to any 

tortious conduct occurring on the premises would in effect render 

nugatory the language specifically limiting coverage to injury 

arising out of the ‘ownership, maintenance, or use’ of the 

property.” (Id. at p. 340.) 

Thus, the court considered “how to distinguish between an 

injury which is sufficiently causally related to the ‘use’ of 

residential property to warrant coverage, and a noncovered injury 

in which the premises merely serve as a situs.” (Kramer, supra, 

76 Cal.App.4th at p. 340.) The court found that the rental 

properties were merely a situs because there was “no indication 

that the [grandchildren] were exposed to any peculiar risk of 

molestation due to the use of the” rental properties, and the 

abuse had occurred at other locations, so the “molestations thus 

could, and in fact would, have occurred even if the Kramers had 

not owned, maintained, or used” the rental properties. (Id. at pp. 

340-341.) The court concluded, “[T]he covered residences in this 

case were merely two of several locations at which the Kramers 

had custody and control of the children. The required causal 

connection between the use of those particular premises and the 
19

tortious activity causing the injury therefore was lacking.” (Id. at 

p. 341.) The court therefore affirmed the judgment in favor of 

State Farm. 

Here, by contrast, there is the requisite minimal causal 

connection between the property and the injuries. The Smiths 

were on the premises as customers of Holé Molé. Thus, Bascon’s 

“use” of the premises was the reason the Smiths were present 

when the car accident occurred. Moreover, the Smiths’ theory of 

liability against the Awads was that the property itself was 

dangerous, in that the Awads knew that a car could crash into 

the building but failed to take steps to prevent harm from such 

an event. These facts are sufficient to link the “factual situation 

with the event creating liability,” establishing the requisite

“minimal causal connection or incidental relationship.” (Syufy, 

supra, 69 Cal.App.4th at p. 328.)

AMCO also cites several cases interpreting vehicle 

insurance policies with coverage limited to “use” of the vehicle, 

which have applied the “predominating cause/substantial factor 

test.” (See, e.g., State Farm Mutual Automobile Ins. Co. v. 

Grisham (2004) 122 Cal.App.4th 563, 566-567 (Grisham); 

American Nat. Property and Casualty Co. v. Julie R. (1999) 76 

Cal.App.4th 134, 140 (Julie R.); R. A. Stuchbery & Others 

Syndicate 1096 v. Redland Ins. Co. (2007) 154 Cal.App.4th 796, 

802 (R.A. Stuchbery).) Under this test, the “use of the vehicle 

[must] be a ‘“predominating cause” or a “substantial factor” in 

causing the injury.’” (Julie R., supra, 76 Cal.App.4th at p. 140.) 

“Under this test, a mere ‘but for’ connection between the use of 

the vehicle and the alleged injuries is insufficient to bring the 

claim within the scope of coverage. ‘To hold otherwise would 

convert auto liability policies into general liability policies.’” (R. 
20

A. Stuchbery, supra, 154 Cal.App.4th at p. 802, quoting Grisham, 

supra, 122 Cal.App.4th at p. 567.)

As Truck points out, however, the AMCO policy was a type 

of general liability policy. We see no basis to construe it as 

narrowly as the vehicle policies discussed in the above cases. As 

the court in Syufy noted, in vehicle cases courts have taken 

“pains to distinguish automobile liability insurance from general 

liability insurance, and accordingly to focus on the ‘use’ of a 

vehicle as a factor in the injury.” (Syufy, supra, 69 Cal.App.4th 

at pp. 327-328.) No such limitation is required here. 

AMCO further asserts that the summary judgment in favor 

of Bascon in the Smith action “establishes as a matter of law that 

the Awads’ premises liability does not arise out of” Bascon’s use 

of the premises. AMCO asserts that “under res judicata 

principles, the Smith court’s judgment in favor of Holè Molè 

precludes Truck’s claim” for equitable contribution. In essence, 

AMCO asserts that because Bascon was not deemed liable for the 

Smiths’ injuries, the Awads’ liability did not arise from Bascon’s 

use of the premises. Therefore, the Awads were not additional 

insureds under the AMCO policy. 

This argument is unpersuasive. First, AMCO’s additional 

insured endorsement does not rely on the relative liabilities of 

the parties. As the court in Syufy observed, “Insurance 

companies are free to, and commonly have, issued additional 

insured endorsements that specifically limit coverage to 

situations in which the additional insured is faced with vicarious 

liability for negligent conduct by the named insured. [Citations.] 

We believe the better view is that when an insurer chooses not to 

use such clearly limited language in an additional insured clause, 

but instead grants coverage for liability ‘arising out of’ the named 
21

insured’s work, the additional insured is covered without regard 

to whether injury was caused by the named insured or the 

additional insured.” (Syufy, supra, 69 Cal.App.4th at p. 330.) 

Here, AMCO did not write its additional insured 

endorsement to bar coverage where the tenant was not at fault. 

To the contrary, the endorsement references only the landlords’ 

liability, providing coverage “with respect to [the landlords’] 

liability arising out of [the tenant’s] use” of the property. “[T]he 

fact that an accident is not attributable to the named insured’s 

negligence is irrelevant when the additional insured endorsement 

does not purport to allocate or restrict coverage according to 

fault.” (Vitton Construction, supra, 110 Cal.App.4th at pp. 767-

768 [emphasis in original]; see also Fireman’s Fund Ins. 

Companies v. Atlantic Richfield Co. (2001) 94 Cal.App.4th 842, 

852-853 [“The cases which comprise the majority view . . . 

specifically reject an interpretation that limits the phrase 

‘liability arising out of’ to cover only vicarious liability of the 

additional insured”]; Davis v. Farmers Ins. Group (2005) 134 

Cal.App.4th 100, 106-107 [“the term ‘arising out of’ links a factual 

situation with the event creating liability and does not import 

any particular standard of causation or theory of liability into an 

insurance policy”].) 

Second, the doctrine of res judicata does not apply here. 

“The claim preclusion doctrine, formerly called res judicata,” 

arises when “‘a second suit involves (1) the same cause of action 

(2) between the same parties (3) after a final judgment on the 

merits in the first suit.’” (Kim v. Reins International California, 

Inc. (2020) 9 Cal.5th 73, 91.) Apparently recognizing this issue, 

AMCO changes its argument in its reply brief to assert for the 

first time that collateral estoppel or issue preclusion applies 
22

instead, preventing “relitigation” of previously decided issues. 

Even setting aside the impropriety of this belated contention, this 

issue was never decided in the Smith action. The Smith court 

found no triable issue of fact as to whether Bascon was liable to 

the Smiths, but did not determine the issue relevant here: 

whether the Awads were additional insureds under the terms of 

the AMCO policy.

Thus, we find that based on the stipulated facts, the Awads’ 

liability arose from Bascon’s use of the premises, the Awads were 

therefore additional insureds under the AMCO policy, and Truck 

was entitled to equitable contribution. 

B. AMCO forfeited its contention that the court’s contribution 

allocation was erroneous.

AMCO asserts for the first time on appeal that the trial 

court erred by apportioning AMCO’s equitable contribution at 50 

percent, without prorating the award based on the parties’ 

respective policy limits. It argues that because Truck had a $2 

million policy limit, and AMCO had a $1 million policy limit, “the 

trial court should have allocated one-third of the defense and/or 

indemnity expenses to AMCO, because AMCO’s policy provided 

one-third of the $3 million in aggregate liability coverage 

available to the Awads.” 

Truck correctly points out that AMCO did not make this 

argument in any of its briefing in the trial court, and asserts that 

AMCO has therefore forfeited any claim of error. In its reply 

brief, AMCO asserts that because neither party requested a 50 

percent allocation—Truck asked for 100 percent and AMCO 

asked for zero percent—AMCO was not required to assert below

that a 50 percent allocation would be improper. 
23

By failing to assert below that the trial court’s allocation 

was erroneous, AMCO has forfeited this contention. Despite 

ample opportunity to challenge the court’s allocation in its 

extensive objections to the court’s decision and motion for new 

trial, AMCO never suggested to the trial court that the allocation 

of contribution was erroneous. “‘[I]t is fundamental that a 

reviewing court will ordinarily not consider claims made for the 

first time on appeal which could have been but were not 

presented to the trial court.’ . . . Such arguments raised for the 

first time on appeal are generally deemed forfeited.” (Perez v. 

Grajales (2008) 169 Cal.App.4th 580, 591-592.)

DISPOSITION

The judgment is affirmed. Truck is entitled to recover its 

costs on appeal. 

CERTIFIED FOR PUBLICATION

COLLINS, J.

We concur:

MANELLA, P. J.

WILLHITE, J.