Opinion ID: 2585557
Heading Depth: 3
Heading Rank: 3

Heading: Actual physical damage to Parcel B

Text: The Kazis also persuaded the Court of Appeal that the Tollaksons' complaint alleged actual physical damage to the Tollaksons' own Parcel B. Indeed, the Court of Appeal erroneously interpreted the underlying complaint to allege that the Kazis had graded and trespassed on Parcel B, as well as on the land on Parcel A subject to the claimed easement. Grading and trespassing on the neighbors' land would certainly seem to be property damage under the terms of the liability policies and would, if true, probably have triggered coverage independent of the intangible property issue discussed above, at least as to the trespass and ejectment causes of action. As the insurers observe, however, the Tollaksons' complaint alleged only the intention to convert the 10-foot strip on the Kazis' own Parcel A. In other words, the only property loss claimed in the Tollakson lawsuit was that the Kazis were interfering with the Tollaksons' ability to use an easement across Kazis' own property. Nonetheless, because the Tollaksons alleged that the Kazis graded Parcel A and obstructed Parcel B's right-of-way over the Common Driveway Easement, the Kazis convinced the Court of Appeal that the Tollaksons were actually seeking to recover for physical injury to Parcel B. In turn, the Court of Appeal reasoned that the Tollaksons' complaint stated a claim that was potentially covered under the Kazis' liability insurance policies indemnifying third party property damage and personal injury. As a plain reading of the Tollaksons' underlying complaint reveals, and as defendant insurers correctly assert, however, the only property in dispute in the Tollakson lawsuit was the 10-foot strip of property on Parcel A where the Kazis built an access road to their building site in the vicinity of the Tollaksons' property boundary line. The Tollaksons' complaint alleged that the Kazis' grading of the 10-foot strip of property on Parcel A which was subject to an implied common driveway easement to Parcel B, obstructed it and interfered with their right to use Parcel A as a right-of-way to Parcel B. Nowhere did the complaint allege any physical damage to the Tollaksons' parcel, including that parcel's 10-foot strip of property that would have constituted the other half of the implied easement. Indeed, the complaint's actual words illustrate the Court of Appeal's error. As defendant insurers observe, the Tollaksons' complaint alleged only a loss of use of their implied easement over the Kazis' Parcel A as follows: [The Tollaksons] claim that there exists upon Parcel A an implied easement for a common driveway, for ingress, egress, and a right of way over and across Parcel A, parallel to the Boundary Line and for a width of not less than ten feet (the Disputed Property), all of which is appurtenant to Parcel B, and that Parcel B is the dominant tenement and Parcel A the servient tenement of such easement (hereinafter `the Common Driveway Easement'). Thus, under the Tollakson complaint, the term Disputed Property referred to the 10-foot strip of land the Kazis owned in fee simple. In addition, the complaint defined the term Common Driveway Easement to refer to the Tollaksons' easement or right-of-way over that Disputed Property. Therefore, the Tollakson complaint's definition of the Common Driveway Easement included only a portion of Parcel Athe Kazis' propertyand in no way included any portion of Parcel B. When the Tollaksons complained that the grading of Parcel A interfered with the entirety of the Common Driveway Easement, they were complaining that the Kazis' grading and construction involved Parcel A only and did not involve trespass on or destruction of any part of Parcel B. Even the trespass and ejectment allegations involved loss of use and occupation of the 10-foot strip of land that is part of Parcel A, or the Kazis' half of the alleged implied easement. [2] In sum, the Tollaksons' fundamental loss at stake here was their right to use the implied easement over Parcel A and the alleged harm they suffered because of that loss of use. The law is clear, however, that in order to trigger a duty to defend, the Tollaksons had to allege that their own physical property, including the 10-foot strip of land on their parcel that was arguably subject to an implied easement for a right-of-way, was damaged when the Kazis graded their property. Their complaint made no allegations of damage to Parcel B, and hence, there was no possibility of liability coverage for third party property damage in this lawsuit. The Court of Appeal erred in distinguishing Gunderson from the Tollakson action.