Albert v. Truck Ins. Exch.

• Decision Date: 15 May 2018
• Docket Number: B278295
• Citation: 23 Cal.App.5th 367,232 Cal.Rptr.3d 774
• Court: California Court of Appeals Court of Appeals
• Parties: Shelly ALBERT, Plaintiff and Appellant, v. TRUCK INSURANCE EXCHANGE, Defendant and Respondent.

23 Cal.App.5th 367

232 Cal.Rptr.3d 774

Shelly ALBERT, Plaintiff and Appellant,

v.TRUCK INSURANCE EXCHANGE, Defendant and Respondent.

B278295

Court of Appeal, Second District, Division 7, California.

Filed May 15, 2018

Law Offices of James T. Hudson and James T. Hudson, Los Angeles, for Plaintiff and Appellant.

Haight Brown & Bonesteel, Victor R. Anderson III, Valerie A. Moore and Vangi M. Johnson, Los Angeles, for Defendant and Respondent.

SEGAL, J.

INTRODUCTION

Good fences make good neighbors. Unless they obstruct an easement.

Shelly Albert's neighbor, Henri Baccouche, sued her for "abatement of private nuisance," alleging Albert had erected and refused to remove a fence that partially blocked the only road leading to Baccouche's undeveloped property. Albert tendered Baccouche's complaint to her homeowners and umbrella insurers, but each declined to provide a defense. Albert first sued her homeowners insurer for breach of contract and breach of the implied covenant of good faith and fair dealing, but the trial court and the Court of Appeal in that action determined there was no potential for coverage under the policy.

Albert then sued her umbrella insurer, Truck Insurance Exchange, in this action for breach of contract and breach of the implied covenant of good faith and fair dealing. The trial court granted Truck's motion for summary judgment. Albert appeals, arguing the complaint in the underlying action created a potential for coverage under the umbrella policy's "personal injury" coverage for "injury arising out of ... wrongful entry ... or invasion of the right of private occupancy."

We agree with cases from California and other jurisdictions that "invasion of the right of private occupancy" is ambiguous and may include non-physical invasions of rights in real property. We disagree with one California case, Sterling Builders, Inc. v. United Nat. Ins. Co. (2000) 79 Cal.App.4th 105, 93 Cal.Rptr.2d 697 ( Sterling Builders ), which relied on part of the Oxford English Dictionary's definition of "invasion" to hold a covered claim must involve "physical occupation of or trespass" on real property. ( Id. at p. 108, 93 Cal.Rptr.2d 697.) Therefore, because there was a potential for coverage under Albert's umbrella policy, we reverse.

FACTUAL AND PROCEDURAL BACKGROUND

A. The Policy

Albert's umbrella policy with Truck provided: "We will ... pay damages caused by an occurrence in excess of the retained limit on the insured's behalf." The policy defined "retained limit" as the greater of "the total limits of liability of any underlying insurance providing coverage for damages as the result of an occurrence" or $1,000. The policy further provided: "If underlying insurance does not cover damages covered by this policy, we will pay damages which exceed [$250]."

Because Albert's homeowners policy did not include coverage for personal injury, the umbrella policy's personal injury provision provided coverage for damages from personal injury that exceeded $250.¹ In addition to providing indemnification for damages, Truck agreed to "defend any insured for any claim or suit that is covered by this insurance but not covered by other insurance."

The policy's definition of "Damages" included "the total of damages that the insured must pay ... because of ... personal injury ... caused by an occurrence covered by this policy."² "[W]ith regard to personal injury," "occurrence" was defined as "offenses committed during the policy period, even if the resulting injury takes place after the policy expires." Finally, the policy's definition of personal injury included "injury arising out of ... wrongful eviction, wrongful entry, or invasion of the right of private occupancy."

B. The Underlying Action

Baccouche filed his complaint in the underlying action during the umbrella policy period. Baccouche alleged that a 400-foot long, 26-foot wide private road provided the only access to his property from any public road. The private road straddled the property line separating two of Baccouche's neighbors, so that each neighbor owned half (i.e., 13 feet) of the road from the center of the road. Albert owned one half of the road and the other neighbor (who is not a party to this action) owned the other half. Baccouche alleged that he had an easement over the road, giving him access to his property, but that Albert erected and refused to remove a fence that obstructed the easement and precluded Baccouche from using the half of the road on Albert's property.

Specifically, Baccouche alleged Albert "erected a permanent chain-link fence on certain portions of her property that were subject to a reciprocal easement as a private roadway for ingress and egress," which "constitutes a nuisance within the meaning of Civil Code Section 3479 in that it ... interfere[s] with the comfortable enjoyment by plaintiff of his property, including access thereto." Instead of using a 26-foot wide road, Baccouche could only access his property using a 13-foot wide road. He sought damages including the "diminishment in value" of his property. Albert points to these allegations as the basis for potential coverage under the personal injury provision of the umbrella policy, and hence the duty to defend.³

C. The Tenders

Albert tendered Baccouche's complaint to Mid-Century Insurance Company, which issued her homeowners policy, and to Truck. Mid-Century denied the claim, stating it did not owe Albert a "defense or indemnity obligation" under the homeowners policy.

Three years later, Albert re-tendered the complaint to Truck.⁴ Counsel for Truck responded by denying Truck had a duty to defend or indemnify Albert under the umbrella policy. Counsel for Truck wrote there was "no potentiality that [Baccouche's] claims can be brought within the insurance coverage provided by" the umbrella policy because, according to Truck, "all of the claims of Mr. Baccouche occurred prior to the first effective date of the" policy. Counsel for Truck discussed the allegations in Baccouche's complaint that, prior to the effective date of the umbrella policy, Albert had damaged Baccouche's trees and trespassed on his property. Counsel for Truck did not mention Baccouche's allegation that, during the policy period, Albert impeded his access to his property by maintaining the fence on the easement.

Counsel for Albert responded to Truck's denial letter and pointed out that Baccouche's complaint alleged Albert "had erected and continued to maintain a chain-link fence on property subject to a reciprocal easement," which "constituted a nuisance," and that Baccouche sought damages "for the diminished value of his real property and emotional distress." Counsel for Truck responded by "disagree[ing] with [the] assertion" that "the erection of the fence and the maintenance of the fence on the easement was a ‘wrongful eviction, wrongful entry or invasion of the right of private occupancy.’ " Counsel for Truck stated that "Ms. Albert could not be said to have ‘wrongfully entered’ the easement since the easement was on her own property" and that "Mr. Baccouche could not be said to have made a claim for ‘invasion of the right to private occupancy’ with respect to the easement since he never had a right to ‘private occupancy’ of the easement."

D. Albert's Complaint Against Truck

Albert sued Truck for breach of contract and breach of the implied covenant of good faith and fair dealing on the theory Truck had a duty to defend and indemnify her under the umbrella policy's personal injury coverage. Albert alleged Truck's duties to defend and indemnify arose from Baccouche's allegations that Albert "erected and maintained a permanent chain-link fence on real property subject to a reciprocal easement, thereby interfering with Baccouche's right of full use of said easement for ingress and egress to his real property; that said interference with the reciprocal easement constituted a nuisance; and that as a result Baccouche was entitled to an injunction and damages for diminishment in value of his real property and emotional distress." Albert alleged "Truck ... breached [its] contract of insurance by failing and refusing to defend and indemnify [Albert] in connection with [the] Baccouche action" and "Truck ... breached its duties of good faith and fair dealing [by] fail[ing] to pay contract benefits to [Albert] at the time when [Truck] knew, or should have known, that [Albert was] entitled to defense and indemnity under the terms of [its] insurance policy."

E. Truck's Motion for Summary Judgment and Albert's Motion for Summary Adjudication

Truck moved for summary judgment, arguing "[t]he claims for erection and maintenance of a fence on Mr. Baccouche's easement do not constitute a ‘wrongful entry, wrongful eviction or invasion of the right of private occupancy’ under the ‘personal injury’ coverage of the Truck personal umbrella policy as a matter of law." Albert moved for summary adjudication on whether Truck owed Albert a duty to defend. In her opposition to Truck's motion for summary judgment and her motion for summary adjudication, Albert argued Baccouche's complaint alleged wrongful entry because "Baccouche alleged he had a property right (reciprocal easement) which was physically invaded by Albert's placement of the fence. In other words, Baccouche claimed that Albert's ownership of the property gave her no right to impede his use of the easement; if so, it would be a ‘wrongful entry.’ " Albert also argued Baccouche's complaint alleged an "invasion of right of private occupancy" because "an easement creates a ‘right to enter and use land in another's possession’ and to that extent grants a limited right to occupy the land. Albert's fence allegedly interfered with that right, and hence was an ‘invasion of the right of private occupancy.’ "

The trial court ruled there was no potential coverage for wrongful entry onto the easement because, "if the interest in real property is nothing more than a limited privilege to use land belonging to...