Horsemen's Benevolent & Protective Assn. v. Insurance Co. of North America

• Decision Date: 31 July 1990
• Docket Number: No. A043879,A043879
• Citation: 222 Cal.App.3d 816,271 Cal.Rptr. 838
• Court: California Court of Appeals Court of Appeals
• Parties: HORSEMEN'S BENEVOLENT AND PROTECTIVE ASSOCIATION, INC., Plaintiff and Appellant, v. INSURANCE COMPANY OF NORTH AMERICA, Defendant and Respondent.

Page 838

271 Cal.Rptr. 838

222 Cal.App.3d 816

HORSEMEN'S BENEVOLENT AND PROTECTIVE ASSOCIATION, INC., Plaintiff and Appellant, v. INSURANCE COMPANY OF NORTH AMERICA, Defendant and Respondent.

No. A043879.

Court of Appeal, First District, Division 3, California.

July 31, 1990.

Review Denied Oct. 18, 1990.

Isidoor Bornstein, Bornstein & Sturm, San Rafael, for plaintiff and appellant.

Victoria B. Henley, Glenn W. Angers, Long & Levit, San Francisco, for defendant and respondent.

MERRILL, Associate Justice.

Horsemen's Benevolent and Protective Association (Horsemen's) appeals from the summary judgment granted in favor of respondent Insurance Company of North America (INA) on Horsemen's complaint for bad faith breach of insurance contract, breach of fiduciary duties, misrepresentation and fraud and breach of duties under Insurance Code section 790.03. We affirm.

I

Preliminarily we note that on motion for summary judgment the moving party's affidavits are strictly construed while those of the opposing party are liberally construed. (Miller v. Bechtel Corp. (1983) 33 Cal.3d 868, 874, 191 Cal.Rptr. 619, 663 P.2d 177.) On appeal, we review directly the papers submitted in connection with the motion, considering only their construction and effect. (AARTS Productions, Inc. v. Crocker National Bank (1986) 179 Cal.App.3d 1061, 1064, 225 Cal.Rptr. 203.) The following facts are set forth in consideration of these principles.

Underlying lawsuits--the Rivera action

Horsemen's is an organization which provides benevolent and financial assistance to its members, approximately 50,000 licensed owners and trainers of thoroughbred horses. For the benefit of its members, Horsemen's purchased a public liability insurance policy from the Bellefonte Insurance Company for the time period January 1, 1978, to January 1, 1980. Horsemen's represented to its members, in two publications, that the Bellefonte policy included liability for accidents occurring on the racetrack. However, the policy contained an explicit exclusion, for "bodily injury to any person while ... rac[ing,] ... exercising or training any horse."

On July 10, 1979, jockey Armando Rivera was injured permanently during a training session at the Sonoma County racetrack. Rivera filed a lawsuit against three members of Horsemen's; the owners of the horse upon which he was riding, Harris Farms, Inc., and Kemper Marley, Sr., and the trainer, Gregory Gilchrist. The Rivera defendants tendered their defense to Bellefonte, under their belief that the policy acquired by Horsemen's for their benefit provided coverage.

In turn, based on the racing and training exclusion, Bellefonte filed a declaratory relief action against the three Rivera defendants and Horsemen's, seeking a declaration that its policy provided no liability coverage for this accident. The Rivera defendants filed separate cross-complaints against Horsemen's, alleging that in its official publications it had misrepresented the extent of coverage provided in the Bellefonte policy.

Horsemen's tendered the defense of the cross-complaint to INA, one of several insurance companies from which it had purchased a general liability policy for its business activities. However, INA denied coverage and refused to provide Horsemen's a defense based on the following provisions of the policy: "The Company will pay on behalf of the Insured, except as hereafter provided, all sums which the Insured shall become legally obliged to pay as damages because of: [p] ... PERSONAL INJURY or [p] ... PROPERTY DAMAGE caused by an occurrence during the policy period and within the policy territory." " 'Occurrence' " is defined as "an accident, including continuous or repeated exposure to conditions, which results in personal injury or property damage neither expected nor intended from the standpoint of the Insured; [p] ... 'Personal injury' means bodily injury or if arising out of bodily injury, mental anguish.... [p] ... 'Property damage' means (1) physical injury to or destruction of tangible property including the loss of use thereof at any time resulting therefrom, or (2) loss of use of tangible property which has not been physically injured or destroyed[.]"

The instant action

Horsemen's settled the claims of Harris, Marley and Gilchrist. It then filed a complaint against INA and other insurers for bad faith breach of the insurance contract, among other causes of action, for the failure to defend or indemnify Horsemen's in connection with the cross-complaints filed by the Rivera defendants in the declaratory relief action instituted by Bellefonte. The complaint alleges that INA's failure to indemnify and defend Horsemen's in the action gave rise to the various causes of action.

The papers submitted by INA in support of summary judgment demonstrate that the cross-complaints of the Rivera defendants resulted from Horsemen's misrepresentations and omissions in connection with the Bellefonte policy. The INA policy provided no coverage for such liability. Horsemen's did not become liable to the cross-complainants because of any personal injury or property damage suffered by them.

In its opposing declarations, Horsemen's conceded that the publications informing its membership of the Bellefonte policy failed to make reference to the racing and training exclusion.

II

The sole issue presented by Horsemen's appeal is whether a triable issue of material fact exists as to the existence of coverage under the INA policy for the liability created by the cross-complaints. Horsemen's argues that it became liable to cross-complainants Harris, Marley and Gilchrist "because of personal injury" as defined in the policy. If not for Rivera's personal injury, Horsemen's submits, it would not have become liable in the subsequent cross-complaint. Horsemen's argument is unpersuasive.

A summary judgment motion shall be granted if all the papers submitted show that there is no triable issue of material fact and that the moving party is entitled to judgment as a matter of law. (Code Civ.Proc., § 437c, subd. (c).) In order to prevail on a summary judgment motion, the defendant must conclusively negate a necessary element of the plaintiff's case or establish a complete defense. (LaRosa v. Superior Court (1981) 122 Cal.App.3d 741, 744-745, 176 Cal.Rptr. 224.)

The papers submitted in connection with the summary judgment here conclusively demonstrate the...