Opinion ID: 670306
Heading Depth: 2
Heading Rank: 2

Heading: Nature of Claims in Underlying Suit

Text: An insurance policy provision obligating the insurer to pay all sums which the insured shall become legally obligated to pay as damages covers only tort liability--not liability for breach of contract. Fragomeno v. Insurance Co. of the West, 207 Cal.App.3d 822, 828 (1989); Fireman's Fund Ins. Co. v. City of Turlock, 170 Cal.App.3d 988, 997-98 (1985); International Surplus Lines Ins. Co. v. Devonshire Coverage Corp., 93 Cal.App.3d 601, 610-11 (1979). To determine whether the claim against the insured sounds in contract or in tort the gravamen of the facts giving rise to the right to recovery must be examined. If the right to recover ... emanates from the breach of a lease provision ..., then the right to recover [is contractual]. Fragomeno, 207 Cal.App.3d at 830. The district court erred in concluding the fundamental nature of the negligence claim asserted against Rozet was contractual. The tenants' right to recover for negligence emanated not from a contractual provision, but from a duty imposed by statute. The underlying complaint alleged: 38. The District of Columbia Housing Code imposes a duty of reasonable care upon owners and their agents to repair defects that cause rental property to fall below code standards. 39. By permitting the existence of the indecent, unsafe and unsanitary conditions ... [the Policyholders] breached their duty of reasonable care. Towers Tenant Ass'n, Inc. v. Towers Ltd. Partnership, 563 F.Supp. 566, 571 (D.D.C.1983) (District of Columbia housing regulations impose a duty of reasonable care on a landlord, the breach of which can result in landlord liability to his tenants for negligence. In other words, a landlord has a duty to repair housing defects which cause the building to fall below code standards. (citations omitted)). California law classifies the violation of this duty as a tort. Stoiber v. Honeychuck, 101 Cal.App.3d 903, 922-23 (1980) (applicable statute requiring landlords to maintain the premises ... in safe and habitable condition imposes duty of reasonable care to avoid foreseeable injury to others and is the basis for a negligence action). The cases relied upon by the Insurers involved the violation of express contractual provisions rather than a duty imposed by statute. See, e.g., Chamberlain, 931 F.2d at 1365; Allstate Ins. Co. v. Hansten, 765 F.Supp. 614, 616 (N.D.Cal.1991); Fragomeno 207 Cal.App.3d at 831; Turlock, 170 Cal.App.3d at 992-93; Devonshire, 93 Cal.App.3d at 606-07. There is no indication the underlying suit in Home Indem. Co. v. Avol, 706 F.Supp. 728 (C.D.Cal.1989) (holding underlying claim for breach of implied warranty of habitability not covered under personal injury provision), alleged the breach of a statutory duty arising independently of the warranty of habitability implied into the lease. To the extent Avol supports the Insurers' position, it is in conflict with California law holding the statutory duty to maintain premises arises independently of any contract. 1