Court Opinion

ID: 9862515
Source: CourtListenerOpinion
Date Created: 2023-09-25 01:17:10.569295+00
Date Added: 2024-06-11T11:25:42.902831
License: Public Domain

MILLER, J., Dissenting.
I respectfully dissent. I would affirm the trial court’s denial of Fire Insurance Exchange’s (Fire Insurance) motion for summary judgment.
DISCUSSION
A. Standard of Review
The independent standard of review is applied to the trial court’s order denying Fire Insurance Exchange’s (Fire Insurance) motion for summary judgment. (Baroco West, Inc. v. Scottsdale Ins. Co. (2003) 110 Cal.App.4th 96, 99 [1 Cal.Rptr.3d 464] (Baroco) [Fourth Dist., Div. Two].) Specifically, the record is independently examined “ ‘in order to determine whether triable issues of fact exist to reinstate the action. [Citation.]’ [Citations.]” (Principal Life Ins. Co. v. Peterson (2007) 156 Cal.App.4th 676, 681 [67 Cal.Rptr.3d 584].) This court analyzes the record following the same three-step process as the trial court. First, the court identifies the issues raised by the pleadings. Second, the court determines whether Fire Insurance showed that the Bourguignons could not prevail on any theory raised by the pleadings. Third, if Fire Insurance has met its burden, then the court considers whether the Bourguignons have raised a triable issue of fact. {Ibid.) In reviewing the order, this court must strictly construe Fire Insurance’s supporting documents, while liberally construing the Bourguignons’ supporting documents. {Baroco, at p. 99.) All doubts must be resolved in the Bourguignons’ favor. {Ibid.)
*398B. Analysis
1. Step One: Identifying Issues Raised by the Pleadings
a) Complaint
In the Bourguignons’ first amended complaint against Fire Insurance, the Bourguignons alleged that Fire Insurance breached its contract with the Bourguignons. Specifically, the Bourguignons alleged that Fire Insurance breached its contract by (1) not promptly providing the Bourguignons with a copy of their policy; (2) failing to promptly conduct a fair and complete investigation into the facts and circumstances of the claims asserted against the Bourguignons; (3) refusing to provide a defense for the Bourguignons; (4) not allowing the Bourguignons to choose their own attorney; and (5) limiting the payment of attorney’s fees to $125 per hour. In regard to the specific policy language, the Bourguignons contended that Fire Insurance agreed to defend them against allegations of “property damage” and “personal injury”; the Bourguignons claimed that the Parsonses’ cause of action for trespass (encroaching on the Parsonses’ property) qualified as an action for “property damage” and “personal injury.”
b) Motion for Summary Judgment
In its motion for summary judgment, Fire Insurance argued that it did not breach its contract with the Bourguignons because it had no duty to defend them. In its first argument, Fire Insurance asserted that it has no duty to defend against a suit that cannot result in an award of damages. Fire Insurance claimed that the Parsonses’ requests for equitable relief did not constitute damages. Second, Fire Insurance asserted that none of the Parsonses’ causes of actions concerned “bodily injury” or “property damage.” Fire Insurance argued that an interest in an easement or leasehold did not constitute tangible property for purposes of “property damage.” Third, Fire Insurance asserted that the policy only covered property damage caused by accidents, and the Bourguignons’ encroachment was intentional, i.e., not an accident.
2. Step Two: Fire Insurance’s Burden
I now analyze whether Fire Insurance has met its burden of showing that the Bourguignons failed to allege a triable issue of fact regarding Fire Insurance’s purported breach.
a) Relevant Law
“[W]hen the case turns on the interpretation or application of the terms of an insurance policy, [the court] review[s] the terms of the policy to determine *399whether the insurer owed the insured a duty to defend. A duty to defend arises when the claim creates any potential for indemnity or coverage. ‘The determination of whether the duty to defend arises is made by comparing the terms of the policy with the allegations of the complaint and any known extrinsic facts, and any doubt as to whether the facts create a duty to defend is resolved in favor of the insured. [Citation.]’ ” (Baroco, supra, 110 Cal.App.4th at p. 100, fns. omitted.)
b) Remedy
Fire Insurance contends that it does not have a duty to defend against equitable claims, and therefore, it could not have breached its contract because the Parsonses only sued the Bourguignons for equitable relief. I disagree.
“ ‘Every person who suffers detriment from the unlawful act or omission of another, may recover from the person in fault a compensation therefor in money, which is called damages.’ [Citation.] The subject matter of an action and the issues involved are determinable from the facts alleged rather than from the title of the pleading or the character of damage recovery suggested in connection with the prayer for relief. [Citations.]” (Buxbom v. Smith (1944) 23 Cal.2d 535, 542 [145 P.2d 305]; see also Weber v. Superior Court (1945) 26 Cal.2d 144, 148 [156 P.2d 923] [“ ‘The subject matter of an action and the issues involved are determinable from the facts pleaded, rather than from the title or prayer for relief.’ ”].)
When a party constructs a permanent building, which encroaches upon the land of another, the trespass is considered permanent, and causes of action for damages and injunctive relief accrue. (Troeger v. Fink (1958) 166 Cal.App.2d 22, 26 [332 P.2d 779].) “Indeed, with respect to trespass, the law is clear that ‘. . . damages may be recovered for annoyance and distress, including mental anguish, proximately caused by a trespass.’ [Citation.]” (Gonzales v. Personal Storage, Inc. (1997) 56 Cal.App.4th 464, 475 [65 Cal.Rptr.2d 473].)
The Parsonses sued the Bourguignons for trespass, i.e., encroaching on their property. Based upon the facts alleged, the Parsonses could be awarded damages. Therefore, Fire Insurance is not entitled to summary judgment on this point.
Moreover, in their prayer for relief on the trespass action, the Parsonses requested (1) an injunction, (2) punitive damages, (3) costs and attorney’s fees, and (4) “other relief the court finds just and proper.” Consequently, although the prayer for relief is not controlling, I find further support for my opinion in the Parsonses’ prayer, because the Parsonses did not foreclose on *400the possibility of obtaining an award of legal damages, e.g., “other relief the court finds just and proper.”
Additionally, while the Parsonses allege an action for trespass, I note that a large portion of the trespass action also alleges that the Bourguignons engaged in fraud. To the extent that the cause of action could be separated into two causes of action, one for trespass, and a second for fraud, I note that legal damages are also available following a finding of fraud. (Civ. Code, § 1709.)
c) Property Damage
Fire Insurance asserted that none of the Parsonses’ causes of actions concerned “bodily injury” or “property damage.” Therefore, Fire Insurance argued that it did not breach its duty to defend the Bourguignons because the Parsonses’ lawsuit does not involve bodily injury or property damage. I disagree.
The insurance policy obligates Fire Insurance to “pay those damages which an insured becomes legally obligated to pay because of bodily injury, property damage or personal injury resulting from an occurrence to which this coverage applies. ... [f] ... [f] At [Fire Insurance’s] expense and with attorneys of [its] choice, [it] will defend an insured against any covered claim or suit.” The insurance policy defines “property damage” as “physical injury to or destruction of tangible property covered by this policy and resulting loss of use.” “ ‘[Tjangible property’ ... is meant to exclude intangible economic interests and property rights. It has been defined in its plain and ordinary sense as limited to property having physical substance apparent to the senses, including real estate. [Citations.]” (Borg v. Transamerica Ins. Co. (1996) 47 Cal.App.4th 448, 457 [54 Cal.Rptr.2d 811] (Borg).)
In the Parsonses’ second amended cross-complaint, they allege that they “have been damaged by being denied [(1)] clear title, and [(2)] the use and enjoyment [of] the property they purchased . . . .” The Parsonses further allege that they “will be irreparably] harmed by the continued existence of the Bourguignon[s’] home on their property and will be denied the full use and value thereof because it cannot be developed, sold, or improved with [the] encroachment and cloud on title.”
I interpret the Parsonses’ second amended cross-complaint as alleging that the Parsonses have suffered a direct physical encroachment onto their real property; and the physical encroachment is an injury to their property, which has resulted in a loss of use. (See Borg, supra, A1 Cal.App.4th at pp. 457-458 [reaching a similar conclusion].) Therefore, in my opinion, the Parsonses’ *401lawsuit involves “property damage.” Accordingly, Fire Insurance is not entitled to summary judgment on this point.
d) Accident
Fire Insurance asserts that the insurance policy only covered property damage caused by accidents, and the Bourguignons’ encroachment was intentional, i.e., not an accident. Therefore, Fire Insurance contends that it is not bound to defend the Bourguignons. I disagree.
“Under California law, the word ‘accident’ in the coverage clause of a liability policy refers to the conduct of the insured for which liability is sought to be imposed on the insured. [Citations.]” (Delgado v. Interinsurance Exchange of Automobile Club of Southern California (2009) 47 Cal.4th 302, 311 [97 Cal.Rptr.3d 298, 211 P.3d 1083] (Delgado).) “[A]n injury-producing event is not an ‘accident’ within the policy’s coverage language when all of the acts, the manner in which they were done, and the objective accomplished occurred as intended by the actor. [Citations.]” (Id. at pp. 311-312.) For example, “ ‘[w]hen a driver intentionally speeds and, as a result, negligently hits another car, the speeding would be an intentional act. However, the act directly responsible for the injury—hitting the other car—was not intended by the driver and was fortuitous. Accordingly, the occurrence resulting in injury would be deemed an accident.’ [Citations.]” (Id. at p. 316.)
“This concept of fortuity is basic to insurance law. [Citation.] Insurance typically is designed to protect against contingent or unknown risks of harm [citation], not to protect against harm that is certain or expected. [Citation.] In other words, such insurance generally protects against risks of loss rather than certainties of loss. [Citations.]” (Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 17 [44 Cal.Rptr.2d 370, 900 P.2d 619].)
The Bourguignons may have acted “intentionally,” in that their act of building their house was knowing and voluntary; however, there is ample support in the record for a finding that their conduct was executed without the objective of encroaching on the Leaches’/Parsonses’ property. The Parsonses’ second amended complaint alleges that the Parsonses became aware of the cloud on their title in April 2003, when the Parsonses bought the property from the Leaches. However, the Parsonses allege that they did not become aware of the encroachment until May 2004, because “[a]ll building records, plans, and public notices indicate that the structure on [the Bourguignons’ property] is on the property line, not over it.” If the Parsonses knew of the cloud on the title, but it was not clear for a year that the Bourguignons’ house was on the Parsonses’ property, then there is reason to believe that the Bourguignons also were unaware that their home was on the Parsonses’ *402property. Consequently, the record provides support for the conclusion that the Bourguignons did not have the objective to encroach on the Parsonses’ property, and therefore, the encroachment was an accident because the Bourguignons’ objective was to build on their own property, and that objective was allegedly not accomplished. (See A.B.C. Builders, Inc. v. American Mut. Ins. Co. (1995) 139 N.H. 745, 748-750 [661 A.2d 1187] [reaching a similar conclusion regarding an encroachment being an accident]; see also Haynes v. American Cas. Co. (1962) 228 Md. 394, 399 [179 A.2d 900] [same].)
In sum, there is support in the record for the conclusion that the Bourguignons’ objective was to build on their own property, i.e., not to encroach; therefore, I would affirm the trial court’s ruling that Fire Insurance was not entitled to summary judgment on the issue of whether the encroachment constituted a covered occurrence under the policy.
The majority relies on the theory that a “mistake of fact” does not create an accident, and therefore, the Bourguignons’ mistake regarding their property line does not make their encroachment an accident. I am not persuaded by the majority’s reasoning. The Bourguignons’ failure to take the proper precautions, e.g., conduct a thorough title search and/or conduct a property survey, which likely would have prevented the “mistake,” does not prove that the Bourguignons’ objective was to encroach on their neighbors’ property. The Parsonses’ allegations that (1) the Bourguignons sought to file a lot line adjustment; (2) the plans and permits showed the residence being built within the property lines; and (3) it took over a year for the Parsonses to discover the encroachment, negates, in my mind, an argument that the Bourguignons had an objective to build on the Parsonses’ property. (See Cross v. Zurich General Acc. & Liability Ins. Co. (7th Cir. 1950) 184 F.2d 609, 611 [similar conclusion].)
As presented ante, our Supreme Court has explained that “ ‘[w]hen a driver intentionally speeds and, as a result, negligently hits another car, the speeding would be an intentional act. However, the act directly responsible for the injury—hitting the other car—was not intended by the driver and was fortuitous. Accordingly, the occurrence resulting in injury would be deemed an accident.’ [Citations.]” (Delgado, supra, 47 Cal.4th at p. 316.) In my opinion, the Bourguignons’ construction of the house is akin to the speeding driver, i.e., it was done intentionally; however, the encroachment—the act directly responsible for the injury—was not intended or expected, and therefore the encroachment is akin to the act of hitting the other car.
I would not call the collision with the other car a “mistake of fact” because the speeding driver mistakenly believed that the other car was not there, or *403mistakenly believed he would not strike the other car, et cetera. Rather, because the collision was not expected, it is labeled an accident; the same is true in the instant case—the encroachment was not expected, and therefore, it was an accident.
e) Conclusion
In sum, I would affirm the trial court’s denial of Fire Insurance’s summary judgment motion because Fire Insurance has not negated the Bourguignons’ claim for breach of contract.
A petition for a rehearing was denied February 22, 2010, and the petition of real parties in interest for review by the Supreme Court was denied April, 22, 2010, S180839.