Court Opinion

ID: 4580683
Source: CourtListenerOpinion
Date Created: 2020-10-26 22:04:33.091457+00
Date Added: 2024-06-11T08:47:56.590531
License: Public Domain

Filed 10/26/20
                  CERTIFIED FOR PUBLICATION

    IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
               SECOND APPELLATE DISTRICT
                      DIVISION FOUR

 TRUCK INSURANCE EXCHANGE,                B298798

         Plaintiff and Respondent,        (Los Angeles County
                                          Super. Ct. No. BC678363)
         v.

 AMCO INSURANCE COMPANY,

         Defendant and Appellant.

     APPEAL from a judgment of the Superior Court of
Los Angeles County, Richard Edward Rico, Judge. Affirmed.
     Grant, Genovese & Baratta, Lance D. Orloff for Defendant
and Appellant.
     Knapp, Peterson & Clarke, Peter J. Senuty for Plaintiff and
Respondent.
                          INTRODUCTION
       A vehicle accident caused a car to crash through a
restaurant, injuring two restaurant patrons. The patrons sued
the restaurant owner and his landlords, alleging that the
property lacked safety measures that would have protected the
patrons from this type of injury. Summary judgment was
granted for the restaurant owner but denied for the landlords,
who knew a similar accident had occurred years earlier but failed
to implement safety measures to prevent a recurrence. The
landlords settled the action with the restaurant patrons.
       The landlords’ insurer, respondent Truck Insurance
Exchange, then sued the restaurant’s insurer, appellant AMCO
Insurance Company, for equitable contribution, asserting that
AMCO wrongfully denied Truck’s request that AMCO defend and
indemnify the landlords. The “additional insured” provision in
the restaurant’s AMCO policy covered the landlords’ liability
“arising out of” the restaurant owner’s “use” of the premises.
Following a bench trial on stipulated facts and the parties’
briefing, the court found that the landlords’ liability arose from
the restaurant owner’s use of the premises and was therefore
covered under the AMCO policy. The court entered judgment for
Truck requiring AMCO to pay 50 percent of the settlement
amount and costs of defense.
       On appeal, AMCO asserts the trial court erred in finding
that the landlords’ liability “arose from” the restaurant owner’s
“use” of the premises. AMCO contends that being the mere situs
of an accident does not constitute “use” of a premises, and that
the summary judgment rulings in the underlying action required
the trial court to find that the landlords’ liability was not caused
by the restaurant owner’s use of the premises. We affirm. The

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phrase “arising from” in a general liability insurance policy
requires only a minimal causal connection, which existed here,
and the respective liability of the parties is irrelevant to the
additional insured provision. AMCO further asserts that the
trial court’s 50 percent apportionment was erroneous. AMCO did
not assert this argument in the trial court, however, so we find it
has been forfeited.
       FACTUAL AND PROCEDURAL BACKGROUND
A.     The parties
       The parties stipulated to the following facts. Kathy Awad
and Raif/Ralph Awad (the Awads) owned a commercial property
at the corner of East Wardlow Road and Orange Avenue in Long
Beach. The property was built in 1939, and the Awads bought it
in 2002. The property has a corner doorway entrance that faces
the intersection. Truck issued a business owner’s insurance
policy with the Awads as named insureds.
       In May 2007, a car accident damaged the front door and
windows of the property. The Awads repaired the building by
replacing the door and windows with a similar door and windows.
       In October 2012, Scott Bascon, dba Holé Molé Restaurant, 1
leased the property from the Awads. AMCO issued a business
owner’s insurance policy naming Bascon dba Holé Molé as the
insured. In a provision we discuss in more detail below, the
Awads as landlords were listed as additional insureds under the
AMCO policy.

      1 Throughout the record, the restaurant name is written as
Holé Molé, Hole Mole, and Holè Molè. Adopting the name
displayed on the restaurant’s sign in the photograph in the
record, we refer to it as Holé Molé unless spelled otherwise
within a quote.

                                 3
B.     The Smith action
       On June 2, 2013, Travis Smith and Dina Poppleton-Smith
were dining at Holé Molé when a car accident occurred in the
intersection of East Wardlaw Road and Orange Avenue. Two
cars collided in the intersection, and the “force of the impact
caused one of the cars to jump the curb and crash into the
restaurant.” According to the Smiths’ complaint, the vehicle
“crashed through the front doors” of Holé Molé, and continued
through the restaurant “until it stopped against the south-east
wall, striking [the Smiths] and pinning them to the wall, causing
significant injuries.”
       On November 3, 2014, the Smiths sued Holé Molé and 50
Doe defendants for negligence and premises liability. 2 They
alleged that Holé Molé “failed to take precautionary measures
and safeguard the wellbeing of its patrons.” AMCO provided a
defense to Bascon/Holé Molé pursuant to the AMCO policy.
       On August 11, 2015, the Smiths added the Awads as Doe
defendants. The Smiths asserted that following the similar
accident in 2007, the Awads should have protected the property
by reinforcing the front door frame and/or installing bollards to
prevent a vehicle from entering the property.
       The Awads tendered their defense to Truck pursuant to the
Truck policy. On December 11, 2015, Truck tendered the Awads’
indemnity and defense to AMCO. Truck cited language in the
parties’ lease in which Bascon agreed to “indemnify, hold
harmless and defend against all claims and or damages, which
may be asserted against landlord, as may be related or incidental
to Tenants [sic] operations, including and not limited to claims

     2 The Smiths later added as a defendant the driver of the
car that entered the restaurant.

                                4
and or damages asserted by its employees, customers, visitors,
etc.” AMCO denied coverage, stating, “Our client had no
responsibility for the existence or lack of existence of bollards on
the property, and has no responsibility for a vehicle losing control
on the street and crashing into the restaurant. This loss did not
arise out of our client’s use or occupancy of the premises.” On
September 23, 2016, Truck renewed its tender to AMCO,
suggesting there was a right to indemnity and defense under the
AMCO policy, and asking for a copy of the policy. AMCO again
denied coverage.
      Bascon and the Awads filed motions for summary judgment
in the Smith action. In October 2016, the court granted Bascon’s
motion, finding that the accident was not foreseeable to Bascon,
there was no evidence that Bascon had knowledge of the 2007
incident, and the lease stated that Bascon could not alter the
premises without landlord consent. The court denied the Awads’
motion. The court found that the Awads had knowledge of the
2007 accident and therefore had “moral blame for not doing
anything to prevent a similar accident from occurring.” On
behalf of the Awads, Truck settled the Smith action for $785,000.
C.    This action
      1.     Truck’s complaint
      On October 3, 2017, Truck filed this action against AMCO
for equitable subrogation, equitable indemnification, equitable
contribution, and declaratory relief. Truck asserted that the
parties’ lease required Bascon to indemnify, defend, and hold
harmless the Awads “against all claims and/or damages, which
may be asserted against [the Awads], as may be related or
incidental to [Holé Molé/Bascon’s] operations.” Truck also
alleged that the lease required the Awads to be listed as

                                 5
additional insureds on Bascon’s comprehensive general liability
insurance policy.
       Truck further alleged that Bascon’s AMCO policy included
an additional insured endorsement naming the Awads as
additional insureds. The AMCO policy stated, “Any person or
organization from whom you [Bascon] lease premises is an
additional insured, but only with respect to their liability arising
out of your use of that part of the premises leased to you.” Truck
alleged that its claims “arise out of the Hole Mole’s use of the
Property as the plaintiffs in the Smith Action would not have
been injured but for Bascon’s use of the Property as a restaurant,
and their presence on the Property as invitees of Bascon and
patrons of Hole Mole.” Truck alleged that AMCO wrongfully
denied tender of the Awads’ defense and failed to indemnify the
Awads. Truck alleged damages in the amount paid to settle the
Smith action, $785,000, as well as the cost of defending the
action, which the parties later agreed was $52,368.15. Truck also
sought its costs and attorney fees.
       2.    Truck’s contentions
       The trial court decided the issue on stipulated facts and the
arguments in the parties’ briefing. Truck argued in its briefs that
the lease for the premises stated, “Landlord shall be listed as an
additional insured on Tenant’s policy or policies of comprehensive
general liability insurance,” and “Tenant herein agrees to
indemnify, hold harmless and defend against all claims and/or
damages, which may be asserted against landlord, as may be
related to or incidental to Tenant[’]s operations; including and
not limited to claims and/or damages asserted by its employees,
customers, visitors, etc.” Truck argued that any liability of the
Awads was, at least, “incidental to” the operations of the

                                 6
restaurant. The lease therefore demonstrated that the parties’
intent was that “the insurance provided by Hole Mole to the
Awads will be primary for risks incidental to running a
restaurant and for injuries to the customers.”
       Truck further contended that the Awads were entitled to
the “additional insureds” coverage on Bascon’s AMCO policy.
The AMCO policy’s additional insured endorsement stated that
the Awads as landlords were additional insureds, and the policy
covered any “liability arising out of your [Bascon’s] use of that
part of the premises leased to you.” Truck asserted that AMCO
had a duty to defend and indemnify the Awads because the
Smiths “would not have been injured but for Bascon’s use of the
Property as a restaurant, and but for their presence on the
Property as invitees of Bascon and patrons of Hole Mole. Thus,
as a matter of undisputed facts and law, the claims arise out of
the use of the Property as a restaurant.” Truck also asserted,
“Had [the Smiths] not been present, as customers, they would not
have been injured.”
       Truck stated that AMCO denied coverage on the basis that
Bascon was not liable for the Smiths’ injuries. It argued that
AMCO erred when it “equate[d] ‘arising out of the use’ of the
Property with ‘arising out of the liability of the named insured.’
The two are not coextensive.” Truck also noted that “the Awads
were never found to be liable. Rather, Truck settled due to the
seriousness of the injuries and the risks of trial, as insurers
frequently do.” Truck further argued that “if AMCO meant for
the liability of its named insured to be the controlling limitation

                                 7
on coverage for the additional insureds, it should have clearly so
stated.” 3
        Truck asserted primarily that it was entitled to equitable
subrogation, “because it was the intent of the parties that AMCO
cover the Awads for the liability that arose out of the use of the
premises as a restaurant.” In the alternative, Truck requested
equitable indemnity, equitable contribution, and declaratory
relief.
        3.    AMCO’s contentions
        AMCO argued in its briefs that “since AMCO’s [i]nsured
tenant [Bascon] never had any connection to the alleged
dangerous condition in the owner’s building, AMCO had no duty”
to defend or indemnify the Awads. It asserted that the “AMCO
policy did not insure . . . the Awads’ liability arising out of their
building” that had no connection to Bascon’s operation of a
restaurant. AMCO stated, “Truck must first prove that AMCO
had a duty to defend the Awads in the underlying premises-
liability action . . . . If Truck were to prove that AMCO owed a
duty to defend, the burden would shift to AMCO to prove that it
had no duty to indemnify the Awads. . . .”
        AMCO contended that the Smiths’ premises liability action
was “based on the Awads’ breach of its non-delegable duty to
maintain its property free of unreasonable dangerous conditions
existing on the premises,” and the Smiths alleged that “the

      3 Truck  also asserted that a structural alteration exclusion
in the AMCO policy was not applicable, as it may have related to
a finding that the Awads were liable due to the lack of bollards or
other structures near the entry of the restaurant. The court
found that the structural alteration exception was not applicable
under the stipulated facts. The parties do not challenge the
court’s finding on this issue, and therefore we do not address it.

                                  8
Awads’ duty of care arose because they had actual knowledge of a
prior accident which created a duty of care to repair their
premises” to prevent a similar accident from recurring. Bascon
had no knowledge of the previous accident, and no duty to modify
the premises to avoid injuries from a similar accident. AMCO
also argued, “[I]t is Res Judicata that Holé Molé was not
negligent and did not own the building alleged to have a
dangerous condition,” and “the issue cannot be relitigated.”
      AMCO further asserted that the parties’ lease did not
require AMCO to indemnify the Awads. Although the indemnity
provision in the lease could be read to cover the Awads’ passive
negligence, it did not create a duty to indemnify the Awads’
active negligence. Moreover, the lease stated that indemnity of
the Awads must be “related to or incidental to [Bascon’s]
operations,” and the car accident did not meet that definition.
      AMCO also argued that the Awads were not entitled to
“additional insured” coverage under the AMCO policy. AMCO
asserted that the Awads’ liability did not arise out of Bascon’s
“use” of the premises; rather, liability arose from the Awads’
knowledge of the prior accident and their negligent
reconstruction of the property thereafter. AMCO argued, “[T]he
Awads’ liability to the [Smiths] was not in any manner or to any
degree related to Holé Molé’s use of the premises. Rather, it was
entirely premised on knowledge and actions that were taken six
years before Holé Molé ever occupied the premises.”
      AMCO asked that Truck’s complaint be dismissed with
prejudice. It also asserted that Truck’s claim for subrogation in
particular was “simply improper” under the circumstances, and
“Truck’s only proper claim here, between two primary insurers

                                9
that insure the same parties (the Awads), is equitable
contribution.”
       4.    The court’s decision
       The court issued an order on February 15, 2019, finding in
favor of Truck and ordering damages of $418,684.08. The court
explained its reasoning in an accompanying statement of
decision. The court rejected AMCO’s reasoning, stating, “AMCO’s
statement of the issue does not comport with general established
insurance law. Equitable contribution between insureds [sic]
need not be based on the comparative negligence of their
respective insureds.” As for whether the liability arose “out of”
Bascon’s use of the premises, the court stated, “The court need
not engage in extensive analysis to state the obvious. The
lawsuits by the injured patrons arose out of their being patrons of
the restaurant leased from the landlords. . . . The claims against
both the restaurant and the landlords arose out of the use of the
premises.”
       The court concluded, “[T]he court finds that the principles
of equitable contribution applies [sic] to the issues in this case.
AMCO was entitled to dispute coverage albeit wrongly. There is
no argument made regarding the appropriateness of the defense
costs or the appropriateness of settlement. The court therefore
finds that the apportionment should on in [sic] equal, 50/50 basis.
[Truck] is entitled to recover ½ of the money paid.”
       5.    AMCO’s objection
       AMCO filed an objection to the trial court’s statement of
decision. AMCO argued that “the Court’s findings critically fail
to distinguish between AMCO’s alleged duty to defend and duty
to indemnify.” Noting that the court used the phrase “potential
liability” once in the decision, AMCO asserted that a

                                10
determination of potential liability, but not actual liability,
“triggers AMCO’s duty to defend, but does not trigger AMCO’s
duty to indemnify.” Thus the court’s finding should have
determined that AMCO owed half of the $52,368.15 Truck
expended in defending the Awads—not half of Truck’s $785,000
settlement payment. AMCO also repeated its arguments that “no
part of Holè Molè’s use of the premises actually caused” the
Smiths’ damages, and in light of summary judgment in Bascon’s
favor, the Awads’ settlement “was entirely based on the Awads’
use of the premises, and NOT at all based on Holè Molè’s ‘use of
the premises.’” AMCO asked that the court modify its decision to
state that AMCO’s policy did not cover Truck’s $785,000
settlement, and AMCO owed only half of $52,368.15.
       Truck filed a written response asserting that AMCO had no
legitimate procedural basis for challenging the court’s statement
of decision with a written objection. Truck also asserted that the
court’s finding that the Awads’ liability arose out of Bascon’s use
of the premises, and therefore that the Awads were additional
insureds under the AMCO policy, “is dispositive for both defense
and indemnity.” Truck also contended that it “satisfied its
burden to show potential coverage,” so “the burden of proof
shifted to AMCO, as the non-defending insurer,” but “AMCO
offered no evidence or even argument to assist it in carrying that
burden during the trial.”
       On February 27, 2019, the court issued a short written
order overruling AMCO’s objection. The court agreed with
Truck’s contentions that AMCO wrongfully denied the duty to
defend, Truck carried its initial burden on that issue, and AMCO
failed to meet its burden.

                                11
      6.      AMCO’s motion for new trial or to vacate the
              judgment
       AMCO filed a notice of intention to move for new trial, or in
the alternative, to vacate the judgment. In its supporting
memorandum, AMCO repeated its argument that the court’s
reasoning justified a finding that AMCO had a duty to defend the
Awads based on the potential for coverage, but not a duty to
indemnify them based on actual coverage. AMCO argued that as
a result, the judgment for half of Truck’s defense expenses plus
the settlement amount was unsupported by the court’s reasoning.
AMCO reasoned that “this Court has not yet ruled on AMCO’s
duty to indemnify Truck’s $750,000 [sic] settlement.” AMCO
argued that the summary judgment in favor of Bascon in the
Smith action “establishes as a matter of law that the Awads’
liability to the Smiths was completely independent of Holè Molè’s
use of the Awads’ building.” AMCO asserted that as a result, it
had no obligation to indemnify Truck based on the additional
insured language in AMCO’s policy.
       Truck opposed AMCO’s motion, asserting that its
arguments were based on “three fallacies.” First, the court did
not find potential coverage, it found “that there was coverage.”
Second, the court in the Smith action did not address whether the
injuries to the Smiths arose out of Bascon’s use of the premises.
Third, the summary judgment in the Smith action was not
relevant to whether the Awads were additional insureds under
the AMCO policy. Truck also asserted that AMCO’s motion was
procedurally improper, and that AMCO failed to meet its burden
to show that the judgment should be set aside.
       Following a short hearing, the court denied AMCO’s
motion. The court rejected AMCO’s argument about potential

                                12
coverage as “mere wordplay” focusing on “a single word in a
single sentence” in the statement of decision, whereas the
remainder of that paragraph “makes abundantly clear the court’s
finding that a clear reading of the Amco endorsement provides
actual coverage, and not just potential coverage,” for the Smith
action. The trial court also rejected AMCO’s arguments about
the summary judgment in the Smith action, finding that any
finding of liability in the Smiths’ negligence action “is irrelevant
to equitable apportionment of the claim between” AMCO and
Truck.
       The court entered judgment for Truck in the amount of
$418,684.08—half of the cost of the settlement to the Smiths,
plus half of the costs of the Awads’ defense. The judgment also
included costs of suit and prejudgment interest. AMCO timely
appealed.
                            DISCUSSION
A.     The Awads’ liability arose out of Bascon’s use of the
       premises.
       Although AMCO asserts numerous arguments on appeal,
each relies on a single contention: The car accident that injured
the Smiths was not causally connected to Bascon’s “use” of the
leased premises; therefore the Awads did not qualify as
additional insureds under the AMCO policy, and Truck was not
entitled to equitable contribution from AMCO. Because this case
was decided on stipulated facts and “the interpretation of the
insuring agreement is a question of law, we apply de novo review
to any determinations as to that issue.” (Underwriters of Interest
Subscribing to Policy Number AXXXXXXXX v. ProBuilders
Specialty Ins. Co. (2015) 241 Cal. App. 4th 721, 727.)

                                 13
        If the Awads qualified as additional insureds under
Bascon’s AMCO policy, Truck is entitled to equitable contribution
from AMCO. Equitable contribution “‘arises when several
insurers are obligated to indemnify or defend the same loss or
claim, and one insurer has paid more than its share of the loss or
defended the action without any participation by the others.’
[Citation.] ‘The purpose of this rule of equity is to accomplish
substantial justice by equalizing the common burden shared by
coinsurers, and to prevent one insurer from profiting at the
expense of others.’” (Maryland Cas. Co. v. Nationwide Mutual
Ins. Co. (2000) 81 Cal. App. 4th 1082, 1089.)
        As noted above, the additional insured provision of Bascon’s
AMCO policy stated, “Any person or organization from whom you
lease premises is an additional insured, but only with respect to
their liability arising out of your use of that part of the premises
leased to you.” In other words, the Awads, as landlords, were
additional insureds under the AMCO policy, “but only with
respect to [the Awads’] liability arising out of [Bascon’s] use of . . .
the premises.” The Awads’ liability was not disputed; their
settlement of the Smith action is presumptive evidence of their
liability. (See Safeco Ins. Co. of America v. Superior Court (2006)
140 Cal. App. 4th 874, 880.)
        Thus, we consider whether the Awads’ liability “arose out
of” Bascon’s “use” of the premises. “California courts have
consistently given a broad interpretation to the terms ‘arising out
of’ or ‘arising from’ in various kinds of insurance provisions. It is
settled that this language does not import any particular
standard of causation or theory of liability into an insurance
policy. Rather, it broadly links a factual situation with the event
creating liability, and connotes only a minimal causal connection

                                  14
or incidental relationship.” (Acceptance Ins. Co. v. Syufy
Enterprises (1999) 69 Cal. App. 4th 321, 328 (Syufy).)
       In Syufy, a contractor, C & C, “contracted with Syufy to
upgrade the lighting and temperature controls at a theater
owned by Syufy.” (Syufy, supra, 69 Cal.App.4th at p. 324.) C & C
had a general liability policy with insurer AIC, which named
Syufy as an additional insured with respect to any liability
arising out of C & C’s work. (Ibid.) An employee of C & C sued
after being injured by a roof hatch at the theater; the employee
alleged that Syufy failed to maintain a safe closing mechanism on
the hatch, and failed to warn about the defective hatch. (Ibid.)
AIC defended Syufy as an additional insured under its policy,
and eventually funded a settlement with the employee. (Id. at p.
325.) AIC then sued Syufy and its insurer, Reliance, for
declaratory relief, indemnification, and equitable contribution.
AIC asserted that the employee’s injury did not arise out of C &
C’s work, and therefore Syufy was not an additional insured
under the AIC policy. (Ibid.) Following a summary judgment in
favor of Reliance, AIC appealed.
       The appellate court affirmed. C & C’s insurance policy with
AIC included an additional insured provision providing that
Syufy was an additional insured under the policy, “‘but only with
respect to liability arising out of “your work” for that insured by
or for you.’ The policy specified that ‘you’ and ‘your’ referred to C
& C, the named insured.” (Id. at p. 324.) AIC argued in part that
Syufy was not an additional insured under the circumstances,
because the employee was injured as he “was leaving the job site,
through a roof hatch on which C & C performed no work, and
which injured him solely because of Syufy’s negligent
maintenance.” (Id. at p. 326.) AIC asserted that “its additional

                                 15
insured endorsement would not apply to Syufy’s liability for [the
employee’s] injury under California case law interpreting the
policy term ‘arising out of,’” because the employee’s injury “was
attributable solely to Syufy’s negligent maintenance of the roof
hatch.” (Id. at p. 327.)
       The Court of Appeal rejected this contention, noting, as
quoted above, courts’ broad interpretation of the phrase “‘arising
out of.’” (Syufy, supra, 69 Cal.App.4th at p. 328.) The court
found the employee’s injury “clearly ‘arose out of’ the work he was
performing on the roof of Syufy’s building. The relationship
between the defective hatch and the job was more than
incidental, in that [the employee] could not have done the job
without passing through the hatch. The fact that the defect was
attributable to Syufy’s negligence is irrelevant, since the policy
language does not purport to allocate coverage according to
fault.” (Id. at pp. 328-329.) The court stated that when an
insurer “grants coverage for liability ‘arising out of’ the named
insured’s work, the additional insured is covered without regard
to whether injury was caused by the named insured or the
additional insured.” (Id. at p. 330.)
       The trial court below relied on Syufy in reaching its
decision, and Truck asserts that Syufy is dispositive of the issues
in this case. We agree that its reasoning compels a similar
conclusion here. The Smiths were present when the accident
occurred because they were customers of Bascon’s restaurant.
Had Bascon not been using the premises as a restaurant, the
Smiths would not have been sitting in the building when a car
crashed through it. The Smiths alleged that the property itself
was unsafe, because the Awads failed to protect invitees from the
type of harm that could occur from a car accident, and the Awads

                                16
were on notice of such a danger due to the similar 2007 accident.
“[A] minimal causal connection will suffice to trigger coverage
under an ‘arising out of’ clause.” (Vitton Construction Co., Inc. v.
Pacific Ins. Co. (2003) 110 Cal. App. 4th 762, 767 (Vitton
Construction).) That minimal causal connection was present
here.
       We are not persuaded by AMCO’s argument that “‘situs’
alone is not use of the ‘premises.’” For this proposition, AMCO
relies on Kramer v. State Farm Fire and Cas. Co. (1999) 76
Cal. App. 4th 332 (Kramer), but the comparison is not apt. In that
case, a couple, the Kramers, purchased from State Farm a
homeowners’ insurance policy for their residence, and rental
dwelling insurance policies for two rental units they owned. Mrs.
Kramer’s daughter, son-in-law, and grandchildren later sued the
Kramers, asserting that Mr. Kramer sexually abused the
grandchildren at the three insured locations, and Mrs. Kramer
knew of the abuse and failed to protect the children. (Id. at pp.
334-335.) State Farm defended the Kramers under their
homeowners’ policy, but denied coverage under the rental
policies. The case was eventually settled for the limits of the
homeowners’ policy plus a $65,000 contribution from the
Kramers.
       The Kramers then sued State Farm, alleging that it
wrongfully denied coverage under the rental policies, which
“included ‘business liability’ coverage against claims for
accidental injuries arising ‘from the ownership, maintenance, or
use of the insured premises . . . .’” (Kramer, supra, 76
Cal.App.4th p. 334.) After State Farm successfully moved for
summary judgment, the Kramers appealed. The appellate court
considered “whether, for purposes of insurance coverage, child

                                 17
molestation is an injury arising from the ‘ownership,
maintenance, or use’ of the premises on which the molestation
occurs.” (Ibid.) The court noted that with respect to insurance
policies on vehicles, there was a “general principle that injury . . .
does not arise from the ‘ownership, maintenance, or use’ of a
vehicle absent a showing that the use of the vehicle contributed
in some way to the injury, beyond merely serving as the situs for
the activity.” (Id. at p. 338.) The Kramers asserted that coverage
for a real property should not require a similar connection
between the injury and the property, but the court rejected this
contention: “[C]onstruing residential coverage to apply to any
tortious conduct occurring on the premises would in effect render
nugatory the language specifically limiting coverage to injury
arising out of the ‘ownership, maintenance, or use’ of the
property.” (Id. at p. 340.)
       Thus, the court considered “how to distinguish between an
injury which is sufficiently causally related to the ‘use’ of
residential property to warrant coverage, and a noncovered injury
in which the premises merely serve as a situs.” (Kramer, supra,
76 Cal.App.4th at p. 340.) The court found that the rental
properties were merely a situs because there was “no indication
that the [grandchildren] were exposed to any peculiar risk of
molestation due to the use of the” rental properties, and the
abuse had occurred at other locations, so the “molestations thus
could, and in fact would, have occurred even if the Kramers had
not owned, maintained, or used” the rental properties. (Id. at pp.
340-341.) The court concluded, “[T]he covered residences in this
case were merely two of several locations at which the Kramers
had custody and control of the children. The required causal
connection between the use of those particular premises and the

                                 18
tortious activity causing the injury therefore was lacking.” (Id. at
p. 341.) The court therefore affirmed the judgment in favor of
State Farm.
       Here, by contrast, there is the requisite minimal causal
connection between the property and the injuries. The Smiths
were on the premises as customers of Holé Molé. Thus, Bascon’s
“use” of the premises was the reason the Smiths were present
when the car accident occurred. Moreover, the Smiths’ theory of
liability against the Awads was that the property itself was
dangerous, in that the Awads knew that a car could crash into
the building but failed to take steps to prevent harm from such
an event. These facts are sufficient to link the “factual situation
with the event creating liability,” establishing the requisite
“minimal causal connection or incidental relationship.” (Syufy,
supra, 69 Cal.App.4th at p. 328.)
       AMCO also cites several cases interpreting vehicle
insurance policies with coverage limited to “use” of the vehicle,
which have applied the “predominating cause/substantial factor
test.” (See, e.g., State Farm Mutual Automobile Ins. Co. v.
Grisham (2004) 122 Cal. App. 4th 563, 566-567 (Grisham);
American Nat. Property and Casualty Co. v. Julie R. (1999) 76
Cal. App. 4th 134, 140 (Julie R.); R. A. Stuchbery & Others
Syndicate 1096 v. Redland Ins. Co. (2007) 154 Cal. App. 4th 796,
802 (R.A. Stuchbery).) Under this test, the “use of the vehicle
[must] be a ‘“predominating cause” or a “substantial factor” in
causing the injury.’” (Julie R., supra, 76 Cal.App.4th at p. 140.)
“Under this test, a mere ‘but for’ connection between the use of
the vehicle and the alleged injuries is insufficient to bring the
claim within the scope of coverage. ‘To hold otherwise would
convert auto liability policies into general liability policies.’” (R.

                                 19
A. Stuchbery, supra, 154 Cal.App.4th at p. 802, quoting Grisham,
supra, 122 Cal.App.4th at p. 567.)
       As Truck points out, however, the AMCO policy was a type
of general liability policy. We see no basis to construe it as
narrowly as the vehicle policies discussed in the above cases. As
the court in Syufy noted, in vehicle cases courts have taken
“pains to distinguish automobile liability insurance from general
liability insurance, and accordingly to focus on the ‘use’ of a
vehicle as a factor in the injury.” (Syufy, supra, 69 Cal.App.4th
at pp. 327-328.) No such limitation is required here.
       AMCO further asserts that the summary judgment in favor
of Bascon in the Smith action “establishes as a matter of law that
the Awads’ premises liability does not arise out of” Bascon’s use
of the premises. AMCO asserts that “under res judicata
principles, the Smith court’s judgment in favor of Holè Molè
precludes Truck’s claim” for equitable contribution. In essence,
AMCO asserts that because Bascon was not deemed liable for the
Smiths’ injuries, the Awads’ liability did not arise from Bascon’s
use of the premises. Therefore, the Awads were not additional
insureds under the AMCO policy.
       This argument is unpersuasive. First, AMCO’s additional
insured endorsement does not rely on the relative liabilities of
the parties. As the court in Syufy observed, “Insurance
companies are free to, and commonly have, issued additional
insured endorsements that specifically limit coverage to
situations in which the additional insured is faced with vicarious
liability for negligent conduct by the named insured. [Citations.]
We believe the better view is that when an insurer chooses not to
use such clearly limited language in an additional insured clause,
but instead grants coverage for liability ‘arising out of’ the named

                                20
insured’s work, the additional insured is covered without regard
to whether injury was caused by the named insured or the
additional insured.” (Syufy, supra, 69 Cal.App.4th at p. 330.)
        Here, AMCO did not write its additional insured
endorsement to bar coverage where the tenant was not at fault.
To the contrary, the endorsement references only the landlords’
liability, providing coverage “with respect to [the landlords’]
liability arising out of [the tenant’s] use” of the property. “[T]he
fact that an accident is not attributable to the named insured’s
negligence is irrelevant when the additional insured endorsement
does not purport to allocate or restrict coverage according to
fault.” (Vitton Construction, supra, 110 Cal.App.4th at pp. 767-
768 [emphasis in original]; see also Fireman’s Fund Ins.
Companies v. Atlantic Richfield Co. (2001) 94 Cal. App. 4th 842,
852-853 [“The cases which comprise the majority view . . .
specifically reject an interpretation that limits the phrase
‘liability arising out of’ to cover only vicarious liability of the
additional insured”]; Davis v. Farmers Ins. Group (2005) 134
Cal. App. 4th 100, 106-107 [“the term ‘arising out of’ links a factual
situation with the event creating liability and does not import
any particular standard of causation or theory of liability into an
insurance policy”].)
        Second, the doctrine of res judicata does not apply here.
“The claim preclusion doctrine, formerly called res judicata,”
arises when “‘a second suit involves (1) the same cause of action
(2) between the same parties (3) after a final judgment on the
merits in the first suit.’” (Kim v. Reins International California,
Inc. (2020) 9 Cal. 5th 73, 91.) Apparently recognizing this issue,
AMCO changes its argument in its reply brief to assert for the
first time that collateral estoppel or issue preclusion applies

                                21
instead, preventing “relitigation” of previously decided issues.
Even setting aside the impropriety of this belated contention, this
issue was never decided in the Smith action. The Smith court
found no triable issue of fact as to whether Bascon was liable to
the Smiths, but did not determine the issue relevant here:
whether the Awads were additional insureds under the terms of
the AMCO policy.
       Thus, we find that based on the stipulated facts, the Awads’
liability arose from Bascon’s use of the premises, the Awads were
therefore additional insureds under the AMCO policy, and Truck
was entitled to equitable contribution.
B.     AMCO forfeited its contention that the court’s contribution
       allocation was erroneous.
       AMCO asserts for the first time on appeal that the trial
court erred by apportioning AMCO’s equitable contribution at 50
percent, without prorating the award based on the parties’
respective policy limits. It argues that because Truck had a $2
million policy limit, and AMCO had a $1 million policy limit, “the
trial court should have allocated one-third of the defense and/or
indemnity expenses to AMCO, because AMCO’s policy provided
one-third of the $3 million in aggregate liability coverage
available to the Awads.”
       Truck correctly points out that AMCO did not make this
argument in any of its briefing in the trial court, and asserts that
AMCO has therefore forfeited any claim of error. In its reply
brief, AMCO asserts that because neither party requested a 50
percent allocation—Truck asked for 100 percent and AMCO
asked for zero percent—AMCO was not required to assert below
that a 50 percent allocation would be improper.

                                22
        By failing to assert below that the trial court’s allocation
was erroneous, AMCO has forfeited this contention. Despite
ample opportunity to challenge the court’s allocation in its
extensive objections to the court’s decision and motion for new
trial, AMCO never suggested to the trial court that the allocation
of contribution was erroneous. “‘[I]t is fundamental that a
reviewing court will ordinarily not consider claims made for the
first time on appeal which could have been but were not
presented to the trial court.’ . . . Such arguments raised for the
first time on appeal are generally deemed forfeited.” (Perez v.
Grajales (2008) 169 Cal. App. 4th 580, 591-592.)
                            DISPOSITION
        The judgment is affirmed. Truck is entitled to recover its
costs on appeal.
                 CERTIFIED FOR PUBLICATION

                            COLLINS, J.

We concur:

MANELLA, P. J.

WILLHITE, J.

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