Meyer v. Pacific Employers Ins. Co.

• Decision Date: 30 March 1965
• Citation: 43 Cal.Rptr. 542,233 Cal.App.2d 321
• Court: California Court of Appeals Court of Appeals
• Parties: Henry and Marea MEYER, Robert and Rebekah Rood, Robert B. and Monica M. Baker and Karl and Esther Heiland, Plaintiffs and Appellants, v. PACIFIC EMPLOYERS INSURANCE COMPANY, Defendant and Respondent. Civ. 27641.

Page 542

43 Cal.Rptr. 542

233 Cal.App.2d 321

Henry and Marea MEYER, Robert and Rebekah Rood, Robert B. and Monica M. Baker and Karl and Esther Heiland, Plaintiffs and Appellants, v. PACIFIC EMPLOYERS INSURANCE COMPANY, Defendant and Respondent.

Civ. 27641.

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

March 30, 1965.

Cantillon & Cantillon and R. Michael Cantillon, Beverly Hills, for appellants.

Wise, Kilpatrick & Clayton, Sterling S. Clayton, Long Beach, for respondent.

NOURSE, Justice pro tem. ^*

The plaintiffs by their complaint in this action sought a judgment declaring their rights and the liabilities of the respondent under a policy of liability insurance issued by respondent to M. R. Peck and Earl P. Kent, Jr., doing business as M. R. Peck & Son, a co-partnership, and each plaintiff sought judgment against respondent for the amount of the judgment obtained by him or her against M. R. Peck and Earl P. Kent, Jr., in an action in the municipal court. The facts are not in dispute.

The partnership drilled a water well on property adjacent to that of plaintiffs. In so doing they caused the ground to vibrate and these vibrations resulted in damage to the respective buildings of the plaintiffs. Plaintiffs brought suit in the municipal court against the partnership and the individual partners (the action was dismissed as against all defendants except M. R. Peck and Earl P. Kent, Jr.). In the complaint filed in the municipal court each plaintiff alleged two causes of action, namely, 'That the defendants so negligently, wantonly, recklessly, and unlawfully performed some or all of the drilling operations at said site that, to the defendants' knowledge, dangerous vibrations were sent into the earth; that these vibrations extended to, throughout and beyond the real property on which plaintiffs' residence and real-property improvements are situate; that thereby damage was caused to and sustained by said residence and improvements, as particularized below.' By the second cause of action each plaintiff alleged: 'That while drilling at the said site, as aforesaid, the defendants discharged certain vibrations into the earth, which vibrations went forth directly and invaded plaintiffs' real property and assailed their proprietary interest to and in said land and the improvements thereon; that directly thereby and because thereof said realty and improvements were damaged * * *.' ¹

The municipal court found that all of the allegations of the paragraph quoted above from the first cause of action were untrue and all of the allegations which we have quoted from the second cause of action were true. In its conclusions of law the court found that the defendants 'intentionally caused an indirect trespass or trespasses into the various freeholds respectively owned by the plaintiff, who in consequence were damaged by said trespass or trespasses * * *.' It rendered judgment against M. R. Peck and Earl P. Kent, Jr., for the amounts of said damages.

The judgment was not paid. Demand for payment was made on respondent and refused and the present action brought. In addition to the judgment roll in the municipal court action the only evidence received in the present action was the policy of insurance sued upon and the deposition of Peck who testified, in substance, that nothing out of the ordinary occurred in either the drilling operation or in putting in the casing; that in his opinion the vibrations set in motion by the drilling operation were not sufficient to cause damage to the improvements on the plaintiffs' properties; that one of the plaintiffs in the municipal court told him that some cracks had appeared in her house.

In the policy sued upon the business of the partnership was stated to be 'Waterwell Driller.' The policy named as insured: 'M. R. PECK AND EARL P. KENT, JR., doing business as M. R. PECK & SON' and the word 'Insured' is defined to include any partner but only with respect to his liability as such. In the policy the insuring agreement insofar as pertinent reads: 'TO PAY ON BEHALF of the insured all sums which the insured shall become legally obligated to pay * * * as damages because of: * * * COVERAGE B--Injury to or destruction of property, * * * arising out of such of the following divisions of coverage as are shown as 'Included' in the Schedule of Coverages * * * Division 3--Other than Automobile or Products.' (Division 3 is included in the schedule of coverages.) By that part of the policy denominated 'EXCLUSIONS' it is provided: 'This Policy does not apply:

'(4) under Coverage B: * * *

'Divisions 2 and 3: unless caused by accident.'

By a rider attached coverage of the liability of Peck and Kent arising out of their activities other than in the conduct of the business of the partnership is provided for. This rider by its express terms is made inapplicable to liability arising from activities of Peck and Kent in the conduct of the business of the partnership. The exclusions and conditions set forth in the rider are different than those contained in the policy. The exclusion in the policy which we have quoted above is omitted from the rider which, however, excludes 'injury, * * * or destruction caused intentionally by or at the direction of the insured.'

The court below found that the acts which gave rise to the municipal court lawsuit and judgment rendered therein were not accidental in nature; 'That each and every act or activity giving rise to the Municipal Court cause of action, and judgment therein rendered, was caused intentionally by * * * the insured * * *.'; that the terms of the policy excluded coverage for damage to property 'unless caused by accident' and further found that the policy excluded coverage of any damage or destruction 'caused intentionally or at the direction of the insured.' As a conclusion of law the court found that the policy issued by respondent did not provide coverage for the acts or activities which gave rise to the municipal court action and the judgment rendered therein.

It is undisputed that the trespass and damage to plaintiffs' property occurred in the conduct of the business of the partnership, the named assured in the policy. Therefore, the trial court's finding that the policy excluded from coverage any injury or destruction caused intentionally is clearly erroneous as that exclusion is not contained in the policy but in the rider and the coverage of the rider, as we have said, by its express terms is made inapplicable to liability arising from the activities of Peck and Kent in the conduct of the business of the partnership.

The case here, therefore, hinges upon the question whether the court's findings that the damage covered by the municipal court judgment was not accidental but was intentional is a correct interpretation of the policy and the effect of the judgment of the municipal court. In Webster's New International Dictionary the word 'accident' is defined as 'An event that takes place without one's foresight or expectation; * * *' In Geddes & Smith, Inc. v. St. Paul Mercury Indemnity Co., 51 Cal.2d 558, 563, 564, 334 P.2d 881, 884, the following definition is given: "Accident, as a source and cause of damage to property, within the terms of an accident policy, is an unexpected, unforeseen, or undesigned happening or consequence from either a known or an unknown cause." (Emphasis added.) ²

We approach the question as to whether damage to plaintiffs' property was accidental from the standpoint as to whether it was unexpected by the insured. Respondent asserts that the finding of the municipal court that the trespass was intentional conclusively establishes that the damage resulting therefrom was not accidental. The municipal court did not find that the damage was intentional and that issue was not before it. That court having found that the trespass was intentional the liability of the defendant (there) was established even though the consequences of the trespass were unintentional and unforeseeable. (Herzog v. Grosso, 41 Cal.2d 219, 225, 259 P.2d 429; Hawthorne v. Siegel, 88 Cal. 159, 163, 25 P. 1114; Civil Code § 3333.)

The trial court in its memorandum opinion relied and respondent here relies upon the presumption set forth in section 1963, subdivision 3 of the Code of Civil Procedure, 'That a person intends the ordinary consequence of his voluntary act;' as evidence that the consequences of the insured's trespass on plaintiffs' property were intentional, and, therefore, not accidental. ³

While this presumption is evidence to establish liability where intent is a necessary element of the crime or wrong it has no bearing on the question of whether the consequences of an intentional act were unexpected and, therefore, accidental within the meaning of a contract of insurance. Here, intent to trespass was an essential element of the cause of action upon which the municipal court judgment is based (Gallin v. Poulou, 140 Cal.App.2d 638, 645, 295 P.2d 958), and the presumption was, in the municipal court action, evidence to uphold the finding of intent to trespass. Intent to cause damage was not, however, an element of the tort and, as we have pointed out, the trespasser was liable...