Opinion ID: 2585557
Heading Depth: 3
Heading Rank: 1

Heading: Gunderson

Text: In Gunderson, the Court of Appeal concluded that disputes involving the loss of use of an easement or obstruction of an easement involve only pure rights in property or intangible rights in property. ( Gunderson, supra, 37 Cal.App.4th at p. 1119, 44 Cal.Rptr.2d 272.) Gunderson held that a homeowners liability insurance policy did not require the insurer to defend or indemnify the insureds in an easement action because there was no claim of a tangible property loss. ( Ibid. ) The insureds in Gunderson purchased land believing they owned an easement. The plaintiff, who owned the servient estate, filed a complaint to quiet title, for declaratory relief, for fee title, and for injunctive relief to enjoin the insureds from using her property. ( Id. at p. 1110, 44 Cal.Rptr.2d 272.) The defendants tendered the defense to their liability insurer, which had issued a homeowners liability insurance policy that defined property damage to include `physical injury to or destruction of tangible property, including loss of its use.' ( Id. at p. 1117, 44 Cal.Rptr.2d 272.) The insurer refused to defend the action on the ground that the complaint alleged no tangible property damage, excusing it from any defense obligation. ( Ibid. ) The trial court agreed with the insurer. It concluded that the undisputed facts established no ambiguity in the complaint to alert the insurer to a duty to defend. In disputes involving the right to use or obstruction of an easement, an intangible property right, it found no potential for coverage under the liability insurance policy. ( Id. at p. 1112, 44 Cal.Rptr.2d 272.) On appeal, the insureds claimed potential insurance coverage existed on a loss of use theory. ( Gunderson, supra, 37 Cal. App.4th at p. 1117, 44 Cal.Rptr.2d 272.) According to the insureds' theory, if the plaintiff in the underlying easement action had lost, her land would have been encumbered by an easement that would have restricted her use of her tangible property. ( Ibid. ) The Gunderson court, however, disagreed with the insureds and affirmed the trial court decision. ( Id. at p. 1119, 44 Cal.Rptr.2d 272.) The court reasoned that the plaintiffs failure to allege physical damage to any tangible property that sat on the alleged easement (e.g., to a fence that crossed the property) eliminated any claim for a tangible property loss that would have given rise to a potential for liability coverage. ( Ibid. ) Gunderson emphasized that a dispute over use of an easement, always considered intangible property, simply did not involve damage to tangible property. ( Ibid. ) The court observed that the lawsuit alleged only nonphysical injuries from the [plaintiffs] assertion of adverse claims to the easement, including depreciation of the value of [the plaintiffs] property.... `Understood in its plain and ordinary sense, `tangible property' means `property (as real estate) having physical substance apparent to the senses' [citation]. To construe the explicit words `tangible property' to include intangible economic interests and property rights requires a strained and farfetched interpretation, doing violence to the plain language of the policies. Such an interpretation would rewrite the policies to fasten on the insurers a liability they have not assumed. [Citations.]' Thus, pure rights in property, such as those claimed to have been lost by [the plaintiff] in her underlying complaint, are by definition not the kind of physical damage or injury to tangible property necessary to trigger coverage under the Policy provisions. [Citation.] ( Id. at p. 1119, 44 Cal.Rptr.2d 272.) Other states that have considered the question have also concluded that general liability insurance policies do not provide coverage for intangible property loss. (See, e.g., Columbia Nat. Ins. v. Pacesetter Homes, Inc. (1995) 248 Neb. 1, 532 N.W.2d 1, 6, 8; Guelich v. American Protection Ins. Co. (1989) 54 Wash.App. 117, 119, 772 P.2d 536.)