Ghukasian v. Aegis Security Insurance Co. ___ Cal.App.5th ¬¬¬___ [certified for publication May 5, 2022, B311310]
Plaintiff hired a contractor to grade land and cut trees that plaintiff believed she owned but that actually belonged to her neighbor. The neighbor sued plaintiff for trespass and negligence. Plaintiff’s insurer declined to defend her on the ground her homeowner’s policy limited liability coverage to property damage caused by an “occurrence,” defined as “an accident . . . which results during the policy period in . . . [p]roperty damage.” In this action by plaintiff against the insurer for breach of contact and bad faith, the trial court granted summary judgment for the insurer, ruling the insurer had no duty to defend.
The Court of Appeal affirmed, holding the insured’s deliberate acts of grading land and cutting trees were not potentially covered “accidents,” even though plaintiff acted under the mistaken belief she owned the land and trees. A deliberate act is not an accident, even when the injury it produces is unintended or unexpected. The neighbor’s allegation of “negligence” did not require a contrary result. The duty to defend turns on the alleged and known extrinsic facts, not legal labels.
The Court of Appeal distinguished the Supreme Court’s decision in Liberty Surplus Ins. Corp. v. Ledesma & Meyer Construction Co. (2018) 5 Cal.5th 216, in which an employer was sued for negligently hiring and supervising an employee who deliberately injured a third party. The Supreme Court held that, though the employer’s acts of hiring and supervising were deliberate, the employer was potentially liable for an accident because those deliberate acts did not directly produce the third party’s injury. Rather, the injury, from the employer’s perspective, was an unexpected consequence of the employee’s deliberate acts. Here, in contrast, the insured’s deliberate acts directly caused the neighbor’s injury. Those deliberate acts could not be accidents because “there was no additional, independent act that produced the damage.”
