Opinion ID: 721571
Heading Depth: 3
Heading Rank: 2

Heading: Personal Injury Coverage

Text: 73 Stanford claims that the personal injury coverage is ambiguous in that the definitions in the policy create an internal inconsistency that renders the policy self-defeating. We reject this claim. 74 In Fragomeno v. Insurance Company of the West, Inc., 255 Cal.Rptr. at 113, the underlying lawsuit was an unlawful detainer action against the insured. The insurance policy provided coverage only for those sums which the insured shall become legally obligated to pay as damages because of [personal] injury.... Id. Personal injury was defined in the policy as injury arising out of wrongful entry or eviction, or other invasion of the right of private occupancy. Id. Based on these provisions, the court held that the insurer was obligated to defend and indemnify the [insured] for any act constituting an invasion of the right of private occupancy which incurs tort liability as opposed to contract liability. Id. 255 Cal.Rptr. at 114 (emphasis added). 75 The court stated that in determining whether the underlying lawsuit sounds in contract or in tort the gravamen of the facts giving rise to the right to recovery must be examined. Id. 255 Cal.Rptr. at 116. If the right arises from the breach of a lease provision occurring while the lease was still in effect, then the right has its inception in contract. Id. On the other hand, if the right is based upon a civil wrong such as possession of property by a trespasser ab initio, or by a holdover tenant as a resulting trespasser, or by an encroacher then the right ... has its inception in tortious conduct. Id. Because the right to possession emanated from the breach of a lease while the lease was still in effect, the court held that the underlying lawsuit was based in contract and that the insurance policy did not give rise to a duty to defend. Id. 255 Cal.Rptr. at 117. 76 The relevant language of the policies in the present case is identical to that in Fragomeno. Thus, under Fragomeno, a claim for personal injury arising out of wrongful entry or eviction, or other invasion of the right of private occupancy is covered only if it sounds in tort. As previously stated, liability in the underlying lawsuits is premised on the existence of the purchase agreements. The underlying lawsuits therefore sound in contract, as opposed to tort, and are not covered under the policy. 77 Stanford claims that reliance on Fragomeno is misplaced because that case neither addressed, nor resolved, the ambiguity issue. We disagree. 78 The parties' agreement in Fragomeno that the policy covered only tort as opposed to contract liability is not significant because, as the court noted, it was well established in California that the policy's legally obligated to pay language limited coverage to tort liability. 255 Cal.Rptr. at 114. Furthermore, when a policy's insuring agreement provides coverage only for those sums the insured becomes legally obligated to pay, the solid line of California authority restricts coverage to tort liability without reference to the individual policy language in dispute. See Haralambos, 241 Cal.Rptr. at 430; Turlock, 216 Cal.Rptr. at 800; Devonshire, 155 Cal.Rptr. at 875; Chamberlain, 931 F.2d at 1365. 79 Stanford's reliance on Martin Marietta Corp. v. Insurance Co. of North America, 40 Cal.App.4th 1113, 47 Cal.Rptr.2d 670 (1995) is misplaced. In Martin Marietta, the issue was whether policy language insuring Martin Marietta's liability for wrongful entry or eviction, or other invasion of the right of private occupancy provided coverage for actions brought by the Government which sought to require Martin Marietta to remediate groundwater and other contamination emanating from the landfill and other sites. Id. 47 Cal.Rptr.2d at 672. There was no contract at issue in the case. Instead, the action was based upon alleged violations of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601 et seq. (CERCLA), the Resource, Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq. (RCRA), and similar statutes and theories. 80 After reviewing California case law, the court concluded: 81 [U]nder California law, the language wrongful entry or eviction, or other invasion of the right of private occupancy is limited to tort claims relating to the invasion of an interest in real property.... [P]ersonal injury coverage is not determined by the nature of the damages sought in the action against the insured, but by the nature of the claims made against the insured in that action. 82 Id. 47 Cal.Rptr.2d at 677 (emphasis added). 83 The court held that the policy term other invasion of the right of private occupancy was ambiguous and therefore must be construed against the insurer. Id. 47 Cal.Rptr.2d at 681. 84 In the present case, in contrast to Martin Marietta, all of the claims in the underlying lawsuits are based upon and dependent upon the existence of a contract. Without a contract, there would be no basis for the claims. The underlying claims are therefore contract claims, not tort claims. The other invasion of the right of private occupancy language does not change this result. 85 Furthermore, the other invasion of the right of private occupancy language is limited to tort claims. Id. 47 Cal.Rptr.2d at 677. Because the underlying lawsuits do not contain any tort claims, the language other invasion of the right of private occupancy is inapplicable and cannot be construed to impose a duty to defend upon Maryland. See id. 86 Stanford also contends that the policy cannot cover wrongful eviction of a tenant or purchaser which is always a breach of contract and at the same time forbid[ ] coverage for any breach of contract. Therefore, Stanford claims that the policy is ambiguous. We are not persuaded. 87 The policy defines personal injury as including wrongful entry or eviction or other invasion of the right of private occupancy. Wrongful entry clearly refers to torts in the nature of trespass. Fibreboard Corp. v. Hartford Acc. & Indem. Co., 16 Cal.App.4th 492, 20 Cal.Rptr.2d 376, 388 (1993). Although wrongful eviction can refer to eviction of a tenant or purchaser and be based in contract, it can also refer to an action that is not based in contract as, for example, the eviction of a trespasser. See, e.g., Frank v. Kizer, 213 Cal.App.3d 919, 261 Cal.Rptr. 882, 885 (1989) (hospital threatened to evict a patient as a trespasser); King v. Oakmore Homes Ass'n., 195 Cal.App.3d 779, 241 Cal.Rptr. 140, 143 (1987) (co-tenant's right to evict a trespasser); Kohler v. Bristow, 131 Cal.App.2d 692, 281 P.2d 352, 355 (1955) (trespassers evicted by landowner). 88 Just as one can be liable for tortiously entering property, as in trespass, one can also be liable for tortiously evicting another from property if the other had some right to be there. Thus, Stanford's claim that wrongful eviction is always a breach of contract and that the policy contains an inherent ambiguity fails. 89