Tinseltown Video, Inc. v. Transportation Ins. Co.
| Citation | 71 Cal.Rptr.2d 371,61 Cal.App.4th 184 |
| Decision Date | 30 January 1998 |
| Docket Number | No. D024037,D024037 |
| Court | California Court of Appeals Court of Appeals |
| Parties | , 98 Cal. Daily Op. Serv. 869, 98 Daily Journal D.A.R. 1123 TINSELTOWN VIDEO, INC., et al., Plaintiffs and Appellants, v. TRANSPORTATION INSURANCE COMPANY, Defendant and Respondent. |
Robert J. Kaplan and Richard H. Benes, San Diego, for Plaintiffs and Appellants.
McInnis, Fitzgerald, Rees & Sharkey and Richard J. Elliott, San Diego, for Defendant and Respondent.
Plaintiffs Tinseltown Video, Inc. (doing business as Blockbuster Video), Gary Leonhard and Jeff D'Arcy (collectively, Tinseltown) appeal from various orders and a judgment on the pleadings entered in favor of defendant Transportation Insurance Company (Transportation). This appeal raises issues regarding the scope of personal injury liability coverage in a comprehensive general liability policy (policy) that Transportation issued to its insured Tinseltown, and whether Transportation owed a duty to defend Tinseltown against a third party lawsuit (the Chew action) brought against Tinseltown by partners (hereafter, the Chews) of a partnership which owned the video stores.
Specifically, we are asked to determine whether policy language insuring Tinseltown's liability for personal injury arising out of a "wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises," provided potential coverage for a "trespass" claim asserted in the Chew action alleging Tinseltown intermeddled with the Chews' use of the partnership's real property which consisted of two Blockbuster Video stores. The determination of this issue in turn requires us to determine the purely legal issue of whether the Chews' interest in the video stores was an interest in realty such that Tinseltown's liability (if any) for the alleged "trespass" was potentially covered under the policy; or whether the Chews' interest in the stores was personalty such that there was no "wrongful eviction from" or "wrongful entry into" real property, and thus no possibility of coverage under the policy and no duty on the part of Transportation to defend the Chew action.
Simply stated, the pivotal issue presented reduces to whether the Chews' allegedly trespassed-upon partnership interest in the video stores was an interest in realty or personalty.
Tinseltown appeals, contending that (1) the Chews' partnership interest in the Blockbuster Video stores was an interest in real property; (2) the Chews' responses to contention interrogatories in the Chew action show that the Chews have always contended Tinseltown trespassed upon real property; and thus (3) because the Chews' trespass cause of action potentially alleges Tinseltown interfered with the Chews' statutory right to possess the video stores, there existed a potential for personal injury liability coverage of the Chews' trespass claim under the policy at the time Transportation refused to defend the Chew action such that Transportation owed Tinseltown a duty to defend that action.
Tinseltown further contends (4) the court erred in denying Tinseltown's motion for an order summarily adjudicating that Transportation owed it a duty to defend the Chew action; (5) Tinseltown's insurance bad faith complaint against Transportation in the instant action states facts sufficient to constitute a cause of action and the court thus erred in entering judgment on the pleadings in favor of Transportation; and (6) the court abused its discretion in denying Tinseltown's motion for leave to amend its insurance bad faith complaint.
We disagree with these contentions. We hold that a partner's interest in partnership property of whatever character (realty or personalty) is an interest in personalty for all purposes. We also hold the Chews' statutory rights in the partnership video stores do not include a personal right to sue a nonpartner third party (Tinseltown) for trespass damages; as a matter of law there was no possibility of coverage under the policy for the Chew action trespass claim against Tinseltown; and thus Transportation did not owe Tinseltown a duty to defend the Chew action.
Finally, we conclude the court properly denied Tinseltown's motion for summary adjudication on the duty to defend issue, properly granted Transportation's motion for judgment on the pleadings, and did not abuse its discretion in denying Tinseltown's motion for leave to file a first amended complaint. Accordingly, we affirm the judgment.
The relevant material facts in this case are undisputed. On or about December 15, 1991, plaintiffs Gary Leonhard and Jeff D'Arcy formed plaintiff Tinseltown Video, Inc., a California corporation doing business as Blockbuster Video. 1
Transportation issued to Tinseltown an insurance policy which included a "Commercial General Liability Coverage Form." The insuring agreement in the personal injury liability coverage clause is found in Coverage B ("Personal and Advertising Injury Liability") of the policy and states in part:
The insuring agreement also provides in part:
"This insurance applies to: [p] (1) 'Personal injury' caused by an offense arising out of your business ... [p] ... during the policy period."
The term "personal injury" is defined as "injury, other than 'bodily injury,' arising out of one or more of the following offenses: [p] ... c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies by or on behalf of its owner, landlord or lessor."
In March 1993, while the policy was in effect, a third party action for money damages (the Chew action) was brought against Tinseltown (and others) in the San Diego County Superior Court. 2 The complaint was filed by Wilbur Chew and Barbara Chew (the Chews). In their first amended complaint the Chews allege nine causes of action, of which the following eight are directed against Tinseltown: specific recovery of personal property (second cause of action); intentional interference with contractual relations (third cause of action); conspiracy to intentionally interfere with contractual relations (fourth cause of action); conversion (fifth cause of action); conspiracy to commit conversion (sixth cause of action); trespass (seventh The Chews claim they suffered economic losses resulting from a dispute with co-investors and Tinseltown in a business venture. Specifically, the Chews allege they had entered into a written partnership agreement with their co-investors Larry Young and Kathy Young (the Youngs) under which they and the Youngs acquired and operated two Blockbuster Video stores, one in Lake Elsinore, California, and the other in Temecula, California. The Chews further allege Tinseltown conspired with the Youngs to intentionally interfere with the Chews' contractual partnership relationship with the Youngs, and that Tinseltown entered into an agreement with the Youngs whereby the Youngs transferred all of the partnership assets to Tinseltown without the Chews' consent.
cause of action); conspiracy to commit trespass (eighth cause of action); and constructive trust (ninth cause of action).
In connection with their second cause of action for recovery of personal property, the Chews allege they were "the owners of a 50% partnership interest in two Blockbuster Video Stores" in Riverside County, and they "had a 50wnership interest in all of the assets of the partnership that owned said two Blockbuster Video Stores." In paragraphs 16 and 17 of their pleading the Chews characterize their interest in the partnership assets as "personal property," and allege they "are, and at all times mentioned were, entitled to the immediate possession of the personal property described hereinabove." (Italics added.) In paragraph 18, they allege Tinseltown "wrongfully and without plaintiffs' consent took possession of the personal property described above...." (Italics added). The Chews further allege that as a result of Tinseltown's "wrongful possession and detention of the personal property described above" they have suffered "loss of use and enjoyment of their personal property " (par. 19), "loss of the depreciation of their personal property " (par. 20), and "deterioration or business loss of their personal property " (par. 21). (Italics added.)
In their seventh cause of action for trespass (which is of central importance to this appeal) the Chews allege in paragraph 48:
In paragraph 49 the Chews also allege they are and were "the owners of the assets of the Blockbuster [V]ideo stores, and were entitled to actual possession of said assets," and they have suffered monetary damages as a result of Tinseltown's acts.
Tinseltown promptly requested that Transportation defend them in the Chew action. On or about April 30, 1993, Transportation refused to provide a defense.
In September 1994, Tinseltown filed a complaint against Transportation alleging causes of action for breach...
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