Reversing a trial court's decision, a California appellate courthas ruled that a motor vehicle exclusion in a homeowner's insurancepolicy barred coverage of claims against the insured homeowner andhis wife after he accidentally ran over his granddaughter with hispickup truck.

TheCase

After Jose Bautista accidentally ran over his two year oldgranddaughter with his pickup truck in his driveway, his insurancecarrier, Farmers Insurance Exchange, sought a declaration that itwas not obligated to provide coverage under the homeowner'sinsurance policy it had issued with respect to the resulting actionthat alleged, among other things, that Mr. Bautista's wife hadnegligently supervised their granddaughter. The insurer argued thatthe motor vehicle exclusion in the homeowner's policy precluded anypotential coverage because all of the claims in the action aroseout of Mr. Bautista's use of a motor vehicle.

The trial court denied Farmers' motion for summary adjudication,finding that the motor vehicle exclusion in the policy did notapply. The dispute reached the court of appeal.

The Homeowner'sInsurance Policy

The policy provided personal liability coverage in the amount of$300,000 per occurrence under Coverage E, which stated:

We pay those damages which an insured becomes legally obligatedto pay because of bodily injury … resulting from an occurrence towhich this coverage applies.

The policy excluded from Coverage E bodily injury that:

7. results from the ownership, maintenance, use, loading orunloading of … b. motor vehicles….”

The AppellateCourt's Decision

The appellate court rejected the trial court's ruling.

In its decision, the court of appeal explained that the coverageissue turned on whether Mr. Bautista's alleged negligent operationof his truck and Ms. Bautista's alleged negligent supervision ofher granddaughter were dependent or independent concurrentproximate causes of the girl's fatal injuries. It then decided thatMs. Bautista's alleged negligent supervision of her granddaughterallowed her to become exposed to the specific hazard created by thearrival of Mr. Bautista in his truck. None of the alleged negligentsupervision existed “independently of [Mr. Bautista's] use … of thevehicle,” the appeals court added.

Therefore, the appellate court ruled, the trial court had erredin finding that Ms. Bautista's alleged negligent supervision of hergranddaughter existed independently of the “use” of a motorvehicle. Her alleged negligence “was sufficiently related to [Mr.Bautista's] use of the vehicle and 'part of a course ofuninterrupted conduct' that it fell within the motor vehicleexclusion.” Farmers had no liability under the homeowner'sinsurance policy as a matter of law and was entitled to summaryadjudication on its complaint and the Bautistas' cross-complaintthat it had no duty to indemnify or defend the Bautistas in theunderlying action, the appellate court concluded.

The case is Farmers Ins. Exchange v. Superior Court,No. B248324 (Cal.Ct.App. Oct. 28, 2013). Attorneys involvedinclude: Archer Norris, Limor Lehavi, Mariyetta A. Meyers–Lopez;Greines, Martin, Stein & Richland, Robert A. Olson and Feris M.Greenberger for Petitioner; Louis G. Fazzi and Fernando J. Bernheimfor Real Parties in Interest.

FC&S LegalComment

Cases from other jurisdictions have reached similar conclusions.See, e.g., Bartow v. Homesite Ins. Co., Inc., No.09–2061 (D.N.J. Dec. 29, 2009) (automobile exclusion in homeowner'sinsurance policy applied because alleged negligent supervision byfather, who ran over his toddler son with his SUV, was not “awholly independent, discrete, act … that would constitute a dualcause of” the toddler's death, and the father's alleged “failure tomonitor the toddler's whereabouts is inextricably tied to [thefather's] manipulation of the vehicle”); Phoenix Ins. Co. v.Churchwell, 785 N.E.2d 392 (Mass.Ct.App. 2003) (“it would bedifficult to separate [the mother's] negligent supervision claim”of failing to place a child, subsequently injured in a caraccident, into a proper child restraint seat, from the insured's“operation of her motor vehicle and to hold that [the child's]injuries did not arise out of the operation of a motor vehicle, arisk not covered by the homeowner's policy”); Austin Mut. Ins.Co. v. Klande, 563 N.W.2d 282 (Minn.Ct.App. 1997) (“theinsureds' alleged negligent supervision of the child [who wasinjured when a motorcycle in the garage fell on him] was not adivisible concurrent cause of the accident, such as would implicatecoverage under insureds' homeowner policy notwithstanding the motorvehicle exclusion,” but rather was “so intertwined with andintimately connected to the insureds' ownership and use of themotorcycle it cannot be said that the claim arose independently ofthe motorized vehicle related cause”).