The U.S. Court of Appeals for the Ninth Circuit, affirming a decision by the U.S. District Court for the Central District of California, has ruled that a homeowners' insurance policy did not provide coverage for claims that the insureds had trespassed and, through an agent, had intentionally damaged a community gate.
The Case
Donald and Joan Burnett alleged that Michael and Donna Zimmerman and three neighbors, Yousef, Gale, and Nafissa Maiwandi, had “encroached and trespassed upon and then destroyed” a gate to the community in which all the parties lived. Yousef Maiwandi had allegedly damaged the gate, but had told Michael Zimmerman of his plan in advance. The complaint alleged that Yousef Maiwandi had acted as the Zimmermans' agent.
The Zimmermans were covered by a “Deluxe Plus Homeowners Policy” issued by Allstate Insurance Company.
Allstate refused to defend the Burnett suit, however, and the Zimmermans sued the insurer.
The U.S. District Court for the Central District of California found in favor of the insurer, and the Zimmermans appealed.
The Allstate Policy
The Allstate policy required the insurer to:
pay damages … arising from an occurrence to which this policy applies.
The policy defined:
occurrence
as:
an accident … resulting in bodily injury or property damage.
Allstate also owed a duty under the policy to:
provide a defense
if the Zimmermans were:
sued for [covered] damages.The Ninth Circuit's Decision
The Ninth Circuit affirmed.
In its decision, the circuit court explained that Allstate's duty to defend turned on whether the Zimmermans could potentially be liable under the Burnett complaint for damages resulting from an “accident.”
Under applicable California law, the circuit court continued, an “accident” was “an unexpected, unforeseen, or undesigned happening or consequence from either a known or an unknown cause.”
Here, it ruled, the district court had correctly determined that the Burnett complaint did not seek to impose liability arising out of an “accident.” The Ninth Circuit noted that trespass was an intentional tort and that intentional acts were deemed “purposeful rather than accidental.”
Moreover, it continued, the agency allegations did not create potential liability for an “accident” necause the Burnett complaint alleged that Mr. Zimmerman had known of Yousef Maiwandi's plan and, therefore, the eventual injury was not “unexpected, unforeseen, or undesigned.”
Finally, the Ninth Circuit found that a duty to defend was not triggered by the possibility that the Burnetts might amend their complaint to allege that the Zimmermans had been negligent either by failing to warn their neighbors of Yousef Maiwandi's plan or in supervising their “agent.” The circuit court declared that “negligent” and “accidental” were “not synonymous.”
Because Mr. Zimmerman had allegedly known of Yousef Maiwandi's plan, the damage could not have been “unexpected” or “unforeseen,” the circuit court concluded.
The case is Zimmerman v. Allstate Ins. Co., No. 13–57091 (9th Cir. Feb. 11, 2016). Attorneys involved include: Scot Bernstein, Esquire, Law Offices of Scot D. Bernstein, A Professional Corporation, Folsom, CA, George E. Murphy, Suzanne M. Nicholson, Murphy, Campbell, Alliston & Quinn, Sacramento, CA, for Plaintiff–Appellant; Michael Barnes, Sonia Martin, Megan Barker, Dentons U.S. LLP, San Francisco, CA, for Defendant–Appellee.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].