Ghukasian v. Aegis Sec. Ins. Co.

• Decision Date: 14 April 2022
• Docket Number: B311310
• Citation: 78 Cal.App.5th 270,292 Cal.Rptr.3d 923
• Parties: Maryam GHUKASIAN, Plaintiff and Appellant, v. AEGIS SECURITY INSURANCE COMPANY, Defendant and Respondent.
• Court: California Court of Appeals Court of Appeals

78 Cal.App.5th 270

292 Cal.Rptr.3d 923

Maryam GHUKASIAN, Plaintiff and Appellant,

v.AEGIS SECURITY INSURANCE COMPANY, Defendant and Respondent.

B311310

Court of Appeal, Second District, Division 4, California.

Filed April 14, 2022

Law Offices of Dale E. Washington, Dale E. Washington ; The Ehrlich Law Firm and Jeffrey I. Ehrlich for Plaintiff and Appellant.

Selman Breitman, Sheryl W. Leichenger, Eldon S. Edson, and Laura R. Ramos, Los Angeles, for Defendant and Respondent.

CURREY, J.

INTRODUCTION

Maryam Ghukasian sued Aegis Security Insurance Company (Aegis) for breach of contract, insurance bad faith, and declaratory relief after Aegis denied her tender of a lawsuit brought against her by her neighbors. The underlying lawsuit alleged Ghukasian graded land and cut down trees on her neighbors’ property. The trial court granted Aegis's motion for summary judgment, holding Aegis had no duty to defend because Ghukasian's homeowner's policy did not provide coverage for nonaccidental occurrences. It explained that intentionally cutting trees on the neighbors’ land, even if Ghukasian acted on the good faith but mistaken belief that the trees were on her land, is not an accident for purposes of insurance coverage.

Ghukasian appeals from the judgment, contending our Supreme Court's decision in Liberty Surplus Ins. Corp. v. Ledesma & Meyer Construction Co . (2018) 5 Cal.5th 216, 233 Cal.Rptr.3d 487, 418 P.3d 400 ( Liberty Surplus ) impliedly disapproved caselaw holding an intentional act is not an "accident," as the term is used in the coverage clause of a liability policy, even if the intentional act causes unintended harm. We decline to read Liberty Surplus in that fashion, and therefore affirm.

FACTUAL AND PROCEDURAL BACKGROUND

The following facts are undisputed. Ghukasian owns a home in Glendale, California. Ghukasian purchased a homeowner's policy from Aegis for the period between June 13, 2018 to June 13, 2019. In August 2018, she hired contractors to level land and clear trees on land she understood to be a part of her property. The land Ghukasian's contractor cleared and leveled was not owned by Ghukasian, however, but by Ghukasian's neighbors, Vrej and George Aintablian (collectively, the neighbors).

In February 2019, the neighbors sued Ghukasian and others, including the contractor, in what we will refer to as the underlying action. The complaint alleged two causes of action against Ghukasian: trespass and negligence. Both causes of action alleged the same facts: Ghukasian and her contractor "entered upon [the neighbors’] [p]roperty without [the neighbors’] consent," "made deep cuts ... into a natural hill on [the neighbors’ property]," "caused a natural swale located on [neighbors’ property] to be filled with dirt[,]" which "prevented the flow of water in and through the swale," and "removed, cut down and carried off timber, trees, and underwood from [the neighbors’ property]."

Ghukasian tendered the underlying action to Aegis. The policy provides coverage if a "suit is brought against [Ghukasian] for damages because of ... property damage caused by an occurrence to which this coverage applies." An "occurrence" is defined in turn as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results during the policy period in ... [p]roperty damage." Aegis denied coverage for the underlying action on the ground it owed no duty to defend because the complaint alleged intentional (as opposed to accidental) conduct and various exclusions in the policy barred coverage.

Ghukasian sued Aegis for breach of the insurance contract, declaratory relief, and insurance bad faith. All three causes of action are based on Aegis's denial of Ghukasian's requested coverage of claims brought against her in the underlying action. Aegis moved for summary judgment on the ground it had no duty to defend Ghukasian in the underlying action as a matter of law and therefore, it did not breach the insurance contract. Aegis contended there was no coverage for the underlying action because it did not allege an "occurrence," as required for coverage, and it was excluded by various policy exclusions. The trial court agreed, explaining: Ghukasian's "mistaken belief as to the boundaries of the property does not transform her intentional act [of hiring contractors to clear and level land] into an accident for the purposes of being covered as an ‘occurrence’ under the Policy." It also concluded the underlying action's allegations against Ghukasian "involved conduct excluded from coverage" under certain exclusions in the policy.

The trial court entered judgment in favor of Aegis. Ghukasian appeals from the judgment.

DISCUSSION

A. Standard of Review and Duty to Defend Principles

"[T]he party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law." ( Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850, 107 Cal.Rptr.2d 841, 24 P.3d 493 ( Aguilar ).) "Once the [movant] has met that burden, the burden shifts to the [other party] to show that a triable issue of one or more material facts exists as to that cause of action." ( Code Civ. Proc., § 437c, subd. (p)(2) ; see Aguilar, supra , at p. 850, 107 Cal.Rptr.2d 841, 24 P.3d 493.) Where summary judgment has been granted, we review the trial court's ruling de novo. ( Aguilar, supra , at p. 860, 107 Cal.Rptr.2d 841, 24 P.3d 493.) We affirm summary judgment where the moving party demonstrates that no triable issue of material fact exists and that it is entitled to judgment as a matter of law. ( Code Civ. Proc., § 437c, subds. (c), (f).) "Our review of the interpretation of an insurance contract on undisputed facts is also de novo." ( Albert v. Mid-Century Ins. Co. (2015) 236 Cal.App.4th 1281, 1289, 187 Cal.Rptr.3d 211 ( Albert ).)

"On summary judgment, ‘[t]o prevail [on the duty to defend issue], the insured must prove the existence of a potential for coverage , while the insurer must establish the absence of any such potential . In other words, the insured need only show that the underlying claim may fall within policy coverage; the insurer must prove it cannot . Facts merely tending to show that the claim is not covered, or may not be covered, but are insufficient to eliminate the possibility that resultant damages (or the nature of the action) will fall within the scope of coverage, therefore add no weight to the scales.’ ( Montrose Chemical Corp. v. Superior Court (1993) 6 Cal.4th 287, 300, 24 Cal.Rptr.2d 467, 861 P.2d 1153.)" ( Albert, supra , 236 Cal.App.4th at p. 1290, 187 Cal.Rptr.3d 211.) " ‘[W]hen an insurer seeks summary judgment on the ground the claim is excluded, the burden is on the insurer to prove that the claim falls within an exclusion.’ [Citation.]" ( Ibid . ) In contrast, an insured must prove its claim may fall within policy coverage, even when the insurer has moved for summary judgment. ( Ibid . )

B. The Undisputed Evidence Establishes Aegis Did Not Have a Duty to Defend

As discussed above, the policy at issue covers property damage resulting from an occurrence, which is defined as an accident. Relying on Albert, supra, 236 Cal.App.4th 1281, 187 Cal.Rptr.3d 211, and Fire Ins. Exchange v. Superior Court (2010) 181 Cal.App.4th 388, 104 Cal.Rptr.3d 534 ( Fire Exchange ), the trial court concluded Ghukasian's deliberate act of hiring contractors to clear and level the neighbors’ land, which was ultimately cleared and leveled, constituted intentional conduct. That conduct, therefore, was not an accident within the meaning of the policy.

Albert is directly on point. There, the plaintiff's neighbor sued plaintiff for damage caused to his property when plaintiff erected an encroaching fence and pruned trees on his property. ( Albert, supra , 236 Cal.App.4th at p. 1284, 187 Cal.Rptr.3d 211.) After plaintiff tendered the claim to her insurer, and the insurer denied coverage, plaintiff sued the insurer for declaratory relief, breach of contract and bad faith. ( Ibid . ) The trial court granted the insurer's motion for summary judgment. ( Ibid . ) The Court of Appeal affirmed the judgment, holding the neighbor's claims against plaintiff "arise from nonaccidental conduct, outside the terms of the policy" (the policy defined an "occurrence" as an "accident"). ( Ibid . ) The court explained: "[I]t is completely irrelevant that plaintiff did not intend to damage the trees, because she intended for them to be pruned. [Citations.] Moreover, it is undisputed that the contractor intended to cut the trees, and absolutely no facts exist, in the complaint or otherwise, indicating that some unforeseen accident (such as a slip of the chainsaw) caused the damage to the trees. In fact, it was always plaintiff's position that the trees had not been damaged or pruned excessively (and therefore were not subject to an accident), and that they had been cut in accordance with the city's brush clearance ordinance." ( Id. at p. 1292, 187 Cal.Rptr.3d 211.)

In reaching its conclusion, Albert relied on Fire Exchange for the proposition that "[w]hen an insured intends the acts resulting in the injury or damage, it is not an accident ‘merely because the insured did not intend to cause injury.... The insured's subjective intent is irrelevant." ( Albert, supra , 236 Cal.App.4th at p. 1291, 187 Cal.Rptr.3d 211, quoting Fire Exchange, supra , 181 Cal.App.4th at p. 392, 104 Cal.Rptr.3d 534.) In Fire Exchange , the court held there was no accident (and therefore, no insurance coverage) where the policyholders constructed a building that encroached on their neighbor's property. ( Fire Exchange, supra , 181 Cal.App.4th at p. 390, 104 Cal.Rptr.3d 534.) The court reasoned: "Accepting their contention that they believed they owned the five-and-one-half-foot strip of land and had the legal right to build on it, the act of construction was intentional and not an accident even...