Albert v. Truck Ins. Exchange ( 2018 )

Filed 5/15/18
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
SHELLY ALBERT, B278295
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC583505)
v.
TRUCK INSURANCE EXCHANGE,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of
Los Angeles County, Howard L. Halm, Judge. Reversed.
Law Offices of James T. Hudson and James T. Hudson for
Plaintiff and Appellant.
Haight Brown & Bonesteel, Victor R. Anderson III, Valerie
A. Moore and Vangi M. Johnson for Defendant and Respondent.
________________________________
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 (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.
2
(Id. at p. 108.) 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
1 “‘Primary insurance provides coverage immediately upon
the occurrence of a loss or an event giving rise to liability, while
excess insurance provides coverage only upon the exhaustion of
specified primary insurance. [Citation.] Insurance policies
sometimes include both excess and umbrella insurance.
Umbrella insurance provides coverage for claims that are not
covered by the underlying primary insurance. [Citation.] An
umbrella insurer “drops down” to provide primary coverage in
those circumstances. [Citations.] Thus, a policy that provides
both excess and umbrella insurance provides both excess and
primary coverage.’” (Federal Ins. Co. v. Steadfast Ins. Co. (2012)
209 Cal.App.4th 668, 680.) Albert’s Truck policy provided both
umbrella and excess coverage. But because Albert’s homeowners
3
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
policy did not provide personal injury coverage, Truck’s umbrella
coverage is at issue in this action.
2 The policy excluded coverage for “damages . . . [e]ither
expected or intended from the standpoint of an insured.” Truck
does not argue this (or any other) exclusion applies.
4
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
3 Baccouche also alleged Albert engaged in other wrongful
conduct occurring before the Truck umbrella policy took effect,
including trespassing onto Baccouche’s property and pruning his
mature olive trees, leaving them in a “pitiable state.” Albert does
not argue these other allegations created a potential for coverage
under the policy. (See Hartford Casualty Ins. Co. v. Swift
Distribution, Inc. (2014) 59 Cal.4th 277, 288 [“[i]n a ‘mixed’
action, where some claims are potentially covered while others
are not, ‘the insurer has a duty to defend as to the claims that are
at least potentially covered’”].)
5
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
4 At that point, Albert had appealed adverse judgments in
the underlying action and her insurance coverage action against
Mid-Century.
6
“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.”
7
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 another, then interference with said interest cannot
constitute ‘unauthorized entry onto the land of another.’” The
court also ruled that maintaining the fence could not be an
“invasion of the right of private occupancy” because Baccouche
8
did not control the easement and “[o]ccupancy means having
possession, which in turn, requires having control.”
The trial court granted Truck’s motion for summary
judgment and denied Albert’s cross-motion for summary
adjudication. Albert timely appealed from the judgment.
DISCUSSION
Albert states her appeal “is based solely on a claim that
there was a duty to defend [her] in the underlying Baccouche
Complaint for Abatement of Private Nuisance, and that her claim
was only under the ‘personal injury’ coverage, not under the
‘bodily injury’ or ‘property damage’ coverages in the Truck
policy.” Albert argues Truck had a duty to defend under the
personal injury coverage for “invasion of the right of private
occupancy” because Albert’s “alleged interference with the
roadway easement . . . interfered with Baccouche’s use and
enjoyment of his adjoining property. To the extent that a
‘possessory interest’ in the land is required, Baccouche certainly
had a possessory interest in his adjoining land.” Albert asserts
“Baccouche clearly had a right to occupy his own property, which
right was interfered with by Albert’s fence over the roadway
easement.”5
5 Although Albert did not make this precise argument in the
trial court, we can consider it. (See DD Hair Lounge, LLC v.
State Farm General Ins. Co. (2018) 20 Cal.App.5th 1238, 1243
[“we may exercise our discretion to address purely legal questions
based on an undisputed factual record”]; C9 Ventures v. SVC-
West, L.P. (2012) 202 Cal.App.4th 1483, 1492 [“[o]n appeal, a
party may raise a new issue of law based on undisputed facts
9
Truck does not respond to Albert’s argument there was a
potential for coverage under the personal injury provision of the
policy because Albert allegedly interfered with Baccouche’s right
of private occupancy of his property, even though this is Albert’s
main argument on appeal. Instead, Truck relies on the trial
court’s ruling that “Mr. Baccouche had no ‘right of private
occupancy’ in or to the reciprocal easement on Ms. Albert’s
property.” We agree with Albert, however, that this is not the
issue.6
[citation] and may even ‘change the legal theory he relied upon at
trial, so long as the new theory presents a question of law to be
applied to undisputed facts in the record’”].) Truck does not
argue Albert forfeited this argument.
6 Truck’s brief includes other arguments that are, to put it
mildly, not relevant to this appeal. Truck’s first argument, in a
section titled “No Property Damage,” is that “there is no coverage
for ‘property damage’ under the Policy” because “the claims for
interference with the easement in the Baccouche Action do not
constitute ‘property damage’ as a matter of law.” As noted,
Albert does not argue there was a potential for coverage under
the property damage provision of the policy. Truck also argues,
in a section titled “No Accident – Undisputed Willful Acts,” that,
“[u]ntil the insured makes out a prima facie showing of an
‘accident,’ the insurer has no burden whatsoever,” and that
Albert is collaterally estopped from arguing that cutting down
olive trees is an accident. The occurrence required for personal
injury coverage, however, is one of the offenses listed in the
policy, not an accident, and, in any event, Albert does not argue
cutting down the trees was an accident.
10
A. Applicable Law and Standard of Review
1. Interpreting an Insurance Contract
“Our goal in construing insurance contracts, as with
contracts generally, is to give effect to the parties’ mutual
intentions.” (Boghos v. Certain Underwriters at Lloyd’s of
London (2005) 36 Cal.4th 495, 501; accord, Minkler v. Safeco
Ins. Co. of America (2010) 49 Cal.4th 315, 321; Bank of the West
v. Superior Court (1992) 2 Cal.4th 1254, 1264 (Bank of the West);
see AIU Ins. Co. v. Superior Court (1990) 51 Cal.3d 807, 821-822
[“[u]nder statutory rules of contract interpretation, the mutual
intention of the parties at the time the contract is formed
governs interpretation”]; Jon Davler, Inc. v. Arch Ins. Co. (2014)
229 Cal.App.4th 1025, 1033 [same].) The parties’ mutual
intention “‘is to be inferred, if possible, solely from the written
provisions of the contract. If the language of the insurance
contract is clear and explicit, it governs.’” (Pulte Home Corp. v.
American Safety Indemnity Co. (2017) 14 Cal.App.5th 1086, 1105
(Pulte Home Corp.); see Vandenberg v. Superior Court (1999)
21 Cal.4th 815, 840 [“[i]f the meaning a layperson would ascribe
to insurance contract language is not ambiguous, courts will
apply that meaning”]; Qualcomm, Inc. v. Certain Underwriters at
Lloyd’s, London (2008) 161 Cal.App.4th 184, 195 [same].)
If the language of an insurance contract is ambiguous,
however, “‘in order to protect the objectively reasonable
expectations of the insured, the courts endeavor to interpret the
ambiguous language in the sense in which the insurer believed,
at the time of making it, the insured understood it. Only if this
approach does not resolve the ambiguity, do the courts then
resolve it against the insurer.’” (Pulte Home Corp., supra,
11
14 Cal.App.5th at p. 1105; see Delgado v. Interinsurance
Exchange of Automobile Club of Southern California (2009)
47 Cal.4th 302, 311 [“[i]nsurance policies are read in light of the
parties’ reasonable expectations and, when ambiguous, are
interpreted to protect the reasonable expectations of the
insured”]; Bank of the West, supra, 2 Cal.4th at p. 1265 [“a court
that is faced with an argument for coverage based on assertedly
ambiguous policy language must first attempt to determine
whether coverage is consistent with the insured’s objectively
reasonable expectations,” and “[i]n so doing, the court must
interpret the language in context, with regard to its intended
function in the policy”].) “Where . . . the insurer has drafted the
policy language, it is usually held responsible for ambiguous
policy language, through the rule of construction in favor of
the insured’s reasonable expectations.” (Pulte Home Corp.,
at p. 1106.)
Finally, “‘the term personal [in personal injury] is used in a
highly specialized sense. It does not mean physical damage to a
person; rather it means injury arising out of one or more specified
offenses.’” (General Accident Ins. Co. v. West American Ins. Co.
(1996) 42 Cal.App.4th 95, 103 (General Accident); see
Stonelight Tile, Inc. v. California Ins. Guarantee Assn. (2007)
150 Cal.App.4th 19, 38 (Stonelight Tile) [“‘“[p]ersonal injury
liability” is a term of art that covers certain enumerated
offenses’”].) Thus, “personal injury coverage ‘is triggered by one
of the offenses listed in the policy,’ not the injury or damages that
a plaintiff suffers.” (Stonelight Tile, at p. 38.)
12
2. The Duty To Defend
“‘[A] liability insurer owes a broad duty to defend its
insured against claims that create a potential for indemnity.’”
(Riddell, Inc. v. Superior Court (2017) 14 Cal.App.5th 755, 764.)
The duty “‘is broader than the duty to indemnify.’” (Id. at p. 765)
It “arises even if the evidence suggests, without conclusively
establishing, that the loss is not covered.” (The Traveler’s
Property Casualty Co. of America v. Actavis, Inc. (2017)
16 Cal.App.5th 1026, 1036-1037, review granted Feb. 21, 2018,
S245867.) Thus, “‘[a]n insurer may have a duty to defend even
when it ultimately has no obligation to indemnify, either because
no damages are awarded in the underlying action against the
insured, or because the actual judgment is for damages not
covered under the policy.’” (Hartford Casualty Ins. Co. v. Swift
Distribution, Inc. (2014) 59 Cal.4th 277, 287.)
“Whether an insurer owes an insured a duty to defend a
third party’s lawsuit depends, in the first instance, on a
comparison of the allegations of the third party’s complaint and
the terms of the insured’s policy. [Citation.] If any facts stated in
or fairly inferable from the complaint, or otherwise known or
discovered by the insurer, suggest a claim potentially covered by
the policy, the insurer’s duty to defend arises.”7 (McMillin
Management Services, L.P. v. Financial Pacific Ins. Co. (2017)
17 Cal.App.5th 187, 191; see Jon Davler, Inc. v. Arch Ins. Co.,
supra, 229 Cal.App.4th at p. 1032 [“‘[a]n insurer must defend its
insured against claims that create a potential for indemnity
7 Albert does not argue that any facts other than those
alleged in Baccouche’s complaint give rise to Truck’s duty to
defend.
13
under the policy’”].) “In general, doubt as to whether an insurer
owes a duty to defend ‘must be resolved in favor of the insured.’”
(Hartford Casualty Ins. Co. v. Swift Distribution, Inc., supra,
59 Cal.4th at p. 287.)
“The duty to defend, though broad, is measured by the
nature and kinds of risk insured by the policy.” (The Traveler’s
Property Casualty Co. of America v. Actavis, Inc., supra,
16 Cal.App.5th at p. 1037.) “The proper focus is on the facts
alleged in the complaint, rather than the alleged theories for
recovery. . . . ‘The ultimate question is whether the facts alleged
“fairly apprise” the insurer that the suit is upon a covered claim.’”
(Albert v. Mid-Century Ins. Co. (2015) 236 Cal.App.4th 1281,
1289-1290; see Gonzalez v. Fire Ins. Exchange (2015)
234 Cal.App.4th 1220, 1230 [“‘[s]ince pleadings are easily
amended, the proper focus is on the facts alleged, rather than the
theories for recovery’”].)
3. Summary Judgment Standard and Standard of
Review
The legal framework governing the duty to defend “shapes
a party’s burden when seeking summary judgment.” (Gonzalez v.
Fire Ins. Exchange, supra, 234 Cal.App.4th at p. 1229.) “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
14
action) will fall within the scope of coverage, therefore add no
weight to the scales.’ [Citation.] ‘[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.] In contrast, an insured must prove its
claim falls within the policy’s coverage, even when the insurer
has moved for summary judgment.” (Albert v. Mid-Century Ins.
Co., supra, 236 Cal.App.4th at p. 1290; see Hartford Casualty Ins.
Co. v. Swift Distribution, Inc., supra, 59 Cal.4th at p. 288 [“an
insurer may be excused from a duty to defend only when ‘“the
third party complaint can by no conceivable theory raise a single
issue which could bring it within the policy coverage”’”].)
“‘Where summary judgment has been granted, we review
the trial court’s ruling de novo. [Citation.] We consider all the
evidence presented by the parties in connection with the motion
(except that which was properly excluded) and all the
uncontradicted inferences that the evidence reasonably supports.
[Citation.] 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. [Citation.]
Our review of the interpretation of an insurance contract on
undisputed facts is also de novo.” (Albert v. Mid-Century Ins. Co.,
supra, 236 Cal.App.4th at p. 1289.)
B. There Was No Potential for Coverage Based on
Wrongful Entry
Albert argues Baccouche’s allegation she erected and
maintained a fence on her property, which Baccouche claimed
constituted a nuisance, was an allegation of “wrongful entry”
because wrongful entry includes nuisance claims. The court in
15
Martin Marietta Corp. v. Insurance Co. of North America (1995)
40 Cal.App.4th 1113 (Martin Marietta) did state that “trespass
and nuisance claims may include wrongful entry or invasion by
pollutants” and that personal injury coverage for wrongful entry
may apply to claims alleging nuisance. (Id. at p. 1132.) But not
because they are nuisance claims. Rather, the court in Martin
Marietta stated personal injury coverage may apply to nuisance
claims because nuisance claims may allege wrongful entry or
other physical invasion. (See Croskey et al., Cal. Practice Guide:
Insurance Litigation (The Rutter Group 2017) ¶ 7:1075.2, p.7C-45
[citing Martin Marietta for the proposition that “[n]uisance
claims involving physical entry onto another’s land constitute a
‘wrongful entry’ for purpose of ‘personal injury liability’
coverage”].)
“‘Wrongful entry’ is a term not altogether foreign to the
law. Our Supreme Court long ago said, ‘It is elementary law,
that every wrongful entry upon lands in the occupation or
possession of the owner constitutes a trespass’” (Martin Marietta,
supra, 40 Cal.App.4th at p. 1132), and trespass requires a “direct
or indirect entry or intrusion . . . upon the plaintiffs’ lands.”
(Fibreboard Corp. v. Hartford Accident & Indemnity Co. (1993)
16 Cal.App.4th 492, 512 (Fibreboard).) “‘The essence of the cause
of action for trespass is an “unauthorized entry” onto the land of
another.’” (Spinks v. Equity Residential Briarwood Apartments
(2009) 171 Cal.App.4th 1004, 1042.)
Thus, wrongful entry requires entry. Although Albert’s
actions (erecting and maintaining a fence that interfered with her
neighbor’s easement) may have been wrongful, her entry onto her
own property was not. Baccouche’s nuisance allegations did not
allege wrongful entry or physical invasion by pollutants or
16
anything else. Therefore, there was no potential for coverage
under the umbrella policy’s personal injury coverage for wrongful
entry.
C. There Was a Potential for Coverage Based on Invasion
of the Right of Private Occupancy
1. An Invasion of the Right of Private Occupancy
Does Not Have To Be Physical
“Occupancy goes to the holding, possessing or residing in or
on something.” (Fibreboard, supra, 16 Cal.App.4th at p. 515.)
“The rights which attend occupancy may be, arguably, many.”
(Martin Marietta, supra, 40 Cal.App.4th at p. 1134.) “‘Invasion of
the right of private occupancy’ resembles the definition of
nuisance, an ‘“interference with the interest in the private use
and enjoyment of the land.”’ [Citation.] ‘The typical and familiar
nuisance claim involves an activity or condition which causes
damage or other interference with the enjoyment of adjoining or
neighboring land.’” (Ibid.)
“‘[A]ctual physical interference with land use constitutes
the most obvious and common type of nuisance.’” (Rancho
Viejo v. Tres Amigos Viejos (2002) 100 Cal.App.4th 550, 561.) But
it is not the only type. An invasion of the right of private
occupancy does not have to be a physical invasion of the land; a
non-physical invasion of real property rights can interfere with
the use and enjoyment of real property. In General Accident,
supra, 42 Cal.App.4th 95 the court (before the same court
disagreed with itself in Sterling Builders) stated that invasion of
the right of private occupancy includes “noninvasive interferences
with the use and enjoyment of property.” (General Accident,
17
at p. 104; cf. Stonelight Tile, supra, 150 Cal.App.4th at p. 39
[“California courts have construed ‘wrongful entry or eviction’ as
applying to tort claims arising out of the interference with an
interest in real property, such as trespass, nuisance, and
noninvasive interferences with the use and enjoyment of
property”].) Federal courts applying California law have reached
similar conclusions. (See, e.g., Sell v. Nationwide Mut. Ins. Co.
(9th Cir. 2012) 492 Fed.Appx. 740, 743 [invasion of the right of
private occupancy may include “‘suits by neighboring landowners
for nuisance and trespass claims’”]; Hirschberg v. Lumbermens
Mut. Cas. (N.D.Cal. 1992) 798 F.Supp. 600, 604-605
[“commentators have recognized that in the context of personal
injury coverage of general comprehensive liability policies, the
‘invasion of the right of private occupancy’ affords coverage ‘for
interference with possession and enjoyment by means such
as . . . obstruction of access, . . . actionable on a variety of
theories such as . . . nuisance’”].)
Baccouche alleged Albert blocked half of the only road
providing access to his undeveloped property, which “interfere[d]
with [his] comfortable enjoyment . . . of his property, including
access thereto.” Such alleged conduct invaded Baccouche’s right
of private occupancy by interfering with his right to use and enjoy
18
his property, or at least Albert reasonably believed it did.8 Truck
does not suggest why (or even that) it believed, at the time it
issued Albert her policy, Albert understood that allegations by a
neighbor relating to damages caused by a fence she might erect
and maintain on or around her property would not be covered
under the policy. (See Pulte Home Corp., supra, 14 Cal.App.5th
at p. 1105; see also Kitsap County v. Allstate Ins. Co. (1998)
136 Wash.2d 567, 590 [“the plain, ordinary, and popular meaning
that an average purchaser of insurance would ascribe to the
phrase ‘other invasion of the right of private occupancy’ would
include a trespass on or against a person’s right to use premises
or land that are secluded from the intrusion of others”].)
“[I]nvasion of the right of private occupancy,” a phrase
“insurance companies have consistently refused to define,” has
“generated literally hundreds of lawsuits, with widely varying
results.” (New Castle County, DE v. National Union Fire Ins. Co.
of Pittsburgh, PA (3d Cir. 2001) 243 F.3d 744, 756 (New Castle
County).) Many courts have held that an invasion of the right of
private occupancy encompasses interference with land use,
including two of the leading and most frequently cited cases on
8 Truck does not argue a 13-foot-wide access road would be
sufficient for the full use and enjoyment of Baccouche’s property.
In any event, Albert is entitled to all reasonable inferences from
the allegations in Baccouche’s complaint. (See Hartford Casualty
Ins. Co. v. Swift Distribution, Inc., supra, 59 Cal.4th at p. 298.) It
is “fairly inferable” (McMillin Management Services, L.P. v.
Financial Pacific Ins. Co., supra, 17 Cal.App.5th at p. 191), and
the trial court ultimately found, that a 13-foot-wide road was not
sufficient access for construction equipment and other vehicles
necessary for Baccouche to develop his property.
19
this issue, Town of Goshen v. Grange Mut. Ins. Co. (1980)
120 N.H. 915 (Town of Goshen) and New Castle County, supra,
243 F.3d 744. In Town of Goshen the New Hampshire Supreme
Court rejected the argument “that an appreciable and tangible
interference with the physical property itself is necessary to
constitute an ‘invasion of the right of private occupancy.’”
(Town of Goshen, at p. 917.) The allegations in the underlying
complaint in Town of Goshen included “that the [town’s] planning
board created economic hardships that destroy the viability of the
complainant’s project [to develop his land], deprived him of his
ability to ever recover the money, time and other resources
invested in the development of his property, thus causing him
substantial damage, and denied plaintiff’s right to the free
enjoyment of his property without due process of law.”
(Id. at pp. 917-918.)
In New Castle County, supra, 243 F.3d 744 the court, nine
years before Truck issued its umbrella policy to Albert, asked
why, after 20 years of legal decisions finding the term ambiguous,
insurance companies continued to use, but not define, “invasion
of the right of private occupancy.” (Id. at p. 755.) The court
stated: “A simple definition of the phrase, indicating, for
example, that it refers only to offenses requiring a physical
invasion . . . would be dispositive.” (Id. at p. 756.) The court held
that personal injury coverage for invasion of the right of private
occupancy could apply to allegations challenging a political
subdivision’s zoning and permitting decisions. (Ibid.) Numerous
courts have agreed with Town of Goshen and New Castle County
that allegations of non-physical interference with the use and
20
enjoyment of property may fall under personal injury coverage for
invasion of the right of private occupancy, including allegations
in actions based on zoning decisions,9 discrimination claims,10
pollution,11 and landlord-tenant disputes.12
9 See, e.g., Town of Stoddard v. Northern Sec. Ins. Co., Inc.
(D.N.H. 1989) 718 F.Supp. 1062, 1064 [allegations the town’s
“actions in enacting the zoning amendment deprived [the
underlying plaintiff] of its intended use of the property”].)
10 See, e.g., Lime Tree Village Community Club Assn., Inc. v.
State Farm General Ins. Co. (11th Cir. 1993) 980 F.2d 1402, 1407
[discriminatory amendments to CC&Rs had “‘the effect of
imposing an unreasonable restraint on trade’”]; City of
Glendale v. National Union Fire Ins. Co. of Pittsburgh, PA
(D. Ariz., Mar. 29, 2013, No. CV-12-380-PHX-BSB) 2013
WL 1296418, at pp. 1, 12, 19 [allegations the city discriminated
against a lessee of hangars at a municipal airport because the
city intended “‘to make the land lease unprofitable and
uneconomical’” in order to “‘take over the land and its
improvements’”]; Pellegrino Food Products Co., Inc. v. American
Automobile Ins. Co. (W.D. Pa. 2008) 655 F.Supp.2d 569, 578-579
[allegations of discriminatory zoning and property sales]; Ranger
Ins. Co. v. Bal Harbour Club, Inc. (Fla. Dist. Ct. App. 1985)
509 So.2d 940, 941-942 [claim that requiring purchasers of
property to be members of a club that discriminated against Jews
“was a sham to exclude Jews from the use and occupancy of the
property”].
11 See, e.g., Titan Holdings Syndicate, Inc. v. City of Keene,
N.H. (1st Cir. 1990) 898 F.2d 265, 273 [allegations that “sewage
treatment plant’s noxious odors, noise and light” interfered with
the underlying plaintiffs’ “‘quiet enjoyment of the homestead and
have substantially deprived [them] of the use of the homestead’”];
Kitsap County v. Allstate Ins. Co., supra, 136 Wash.2d
21Baccouche’s allegations are similar to those in Town of
Goshen and New Castle County. Baccouche alleged Albert
interfered with his right “to the free enjoyment of his property”
(Town of Goshen, supra, 120 N.H. at p. 918), and it is a
reasonable inference from Baccouche’s allegations that Albert’s
conduct in obstructing the easement limited his ability to develop
his land. Like a municipality whose zoning ordinance affects a
property owner’s ability to develop his or her property, a polluter
whose odor or noise restricts an owner’s use and enjoyment of his
or her property, and other insureds who engage in conduct that
invade the right of private occupancy by interfering with a
neighbor’s property rights, Albert engaged in conduct that
Baccouche alleged invaded his right of private occupancy of his
property by interfering with his ability to access, use, develop,
and enjoy it. The personal injury provision of Albert’s umbrella
policy potentially covered Baccouche’s allegations, and Truck
at pp. 571-572, 592 [claims that contaminants, foul odors, and
hazardous waste interfered with the use and enjoyment of nearby
property].
12 See, e.g., Nautilus Ins. Co. v. BSA Ltd. Partnership
(D. Md. 2009) 602 F.Supp.2d 641, 654 [allegations that
“a financial harm” “interfer[ed] with the tenants’ right to
remain on their property”]; Winters v. Transamerica Ins. Co.
(10th Cir. Sept. 9, 1999, No. 98-2000) 1999 WL 699835, at p. 3
[allegations a landlord “harassed, coerced, intimidated and
threatened the tenants, causing them emotional distress”];
Beltway Management Co. v. Lexington-Landmark Ins. Co.
(D.D.C. 1990) 746 F.Supp. 1145, 1156 [breach of the implied
warranty of habitability].
22
breached its duty to defend by not providing Albert with a
defense in the underlying action.
2. The Cases Truck Cites (or Should Have Cited)
Are Distinguishable
Truck relies on Kazi v. State Farm Fire & Casualty Co.
(2001) 24 Cal.4th 871 (Kazi) and Evergrow Industrial Co., Inc. v.
Travelers Ins. Co. (9th Cir. 2002) 37 Fed.Appx. 300 (Evergrow).
Neither case is helpful. Kazi involved insurance coverage for
property damage, not personal injury. The Supreme Court held
the insurers in that case did not have a duty to defend under the
property damage provisions of the insurance policies because
interference with an easement is not damage to tangible
property. (Kazi, at p. 887.) The Supreme Court did not address
whether an insurer breached its duty to defend based on personal
injury coverage. (Id. at pp. 876, 879, fn. 1.)
In Evergrow, supra, 37 Fed.Appx. 300 the Ninth Circuit
cited Kazi and rejected an argument that interference with an
easement could trigger coverage for “‘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.’”
(Evergrow, at p. 301.) Although the court’s brief, unpublished
opinion in Evergrow does not disclose the facts of the case (see
ibid. [“[b]ecause the parties are familiar with the factual and
procedural history of this case, we will not recount it here”]), it
appears the plaintiff in the underlying action in Evergrow alleged
the insured interfered with the underlying plaintiff’s right to use
an easement, not the underlying plaintiff’s right to use land it
owned. (See ibid. [“[t]he claim [was] that Evergrow interfered
with [the underlying plaintiff’s] easement”].) This is the
23
argument Albert does not make in this appeal; Albert argues
Baccouche alleged her fence interfered with Baccouche’s use and
enjoyment of his property, not with Baccouche’s use and
enjoyment of the easement. The court in Evergrow held the
insurer did not have a duty to defend because, “[u]nder California
law, the clause ‘invasion of the right of private occupancy’
requires interference with an enforceable possessory interest in
real property and not just an interference with the use or
enjoyment of real property,” and “‘an easement is a nonpossessory
interest in the land of another . . . .’” (Id. at pp. 301-302.)
Baccouche may not have had an enforceable possessory interest
in the easement, but he did have one in his property, and he
alleged Albert interfered with it.
The strongest support for Truck’s position is Sterling
Builders, supra, 79 Cal.App.4th 105, which Truck for some
reason expressly disavows and asserts has “nothing to do with
the issue before this court.”13 In Sterling Builders, the same
court that four years earlier had decided General Accident,
supra, 42 Cal.App.4th 95 held that “claims that do not involve the
physical occupation of or trespass upon real property are not
within the meaning of the phrase [‘wrongful entry or eviction or
other invasion of the right of private occupancy’], even though the
claim may entail interference with rights relating to such
property.” (Sterling Builders, at p. 108.) The Sterling Builders
13 In a section of its brief titled “Misapplication of Sterling
Builders,” Truck states that Albert “asserts that there is a case
directly on point, which will resolve the issue before this Court -
Sterling Builders,” but Truck argues that Albert “is mistaken.”
Indeed, Truck does not even argue an invasion of the right of
private occupancy must be a physical invasion.
24
court said its previous statement in General Accident, “that a
‘noninvasive interference with the use and enjoyment of property’
may constitute an ‘other invasion’ under such an insuring
clause,” was “erroneous.” (Sterling Builders, at p. 107.)
We think the General Accident/Sterling Builders court was
right the first time. The court’s analysis in Sterling Builders
relied on the Oxford English Dictionary’s definition of “invasion,”
which the court stated must be physical: “‘Invasion’ denotes an
incursion, not a misrepresentation.” (Sterling Builders, supra,
79 Cal.App.4th at p. 112.) The Oxford English Dictionary,
however, also provides examples of non-physical invasions
including “invasion [of] civil liberties” and “invasions of the
constitution.” (8 Oxford English Dict. (2d ed. 1989) p. 37.) As do
other dictionaries. (See, e.g., Merriam-Webster Unabridged
(2018 online) [including as its third definition of invasion
“encroachment, intrusion; specifically: an encroachment upon a
right protected by law affording grounds for an action for
damages or some other remedy”]; Webster’s 3d New Internat.
Dict. (1993) p. 1188 [same]; Webster’s New Twentieth Century
Dict. (1983) p. 965 [including as its second definition of invasion
“an attack on the rights of another; infringement or violation”].)
Indeed, courts relying on other dictionaries have applied
“invasion of the right of private occupancy” to non-physical
invasions. (See, e.g., City of Glendale v. National Union Fire
Ins. Co. of Pittsburgh, PA, supra, 2013 WL 1296418 at p. 6 [“[t]he
[Merriam-Webster dictionary] definition of invade also includes
terms that do not appear to require a physical intrusion,
including ‘to encroach upon,’ [‘]infringe,’ or ‘affect injuriously’”];
Kitsap County v. Allstate Ins. Co., supra, 136 Wash.2d at p. 590
[“an ‘invasion’ is defined [by Webster’s New World Dictionary,
25
Webster’s Deluxe Unabridged Dictionary, and American Heritage
Dictionary] as an ‘act of . . . encroachment or trespassing,’” which,
in the context of invasion of the right of private occupancy, would
include a “trespass on or against a person’s right”].)
Moreover, the cases the court in Sterling Builders cited do
not support its conclusion. According to Sterling Builders, “In
Fibreboard[, supra, 16 Cal.App.4th at p.] 512, the court stated
the ‘other invasion’ language implicates a ‘trespass paradigm.’”
(Sterling Builders, supra, 79 Cal.App.4th at p. 109.) This
statement mischaracterizes Fibreboard. The personal injury
coverage in Fibreboard was significantly different from Truck’s
coverage. The policy in Fibreboard provided coverage for
“‘wrongful entry or eviction or other invasion of an individual’s
right of privacy.’” (Fibreboard, at p. 511, emphasis added.) The
court in Fibreboard did not analyze the “other invasion” language
because the insured did not argue the asbestos products at issue
in Fibreboard could have invaded the right of privacy. The
“trespass paradigm” in Fibreboard referred to coverage for
“wrongful entry,” not “invasion of the right of private occupancy,”
and, as noted, we agree with the Fibreboard court’s analysis on
that point.
In Tinseltown Video, Inc. v. Transportation Ins. Co. (1998)
61 Cal.App.4th 184 (Tinseltown Video) the court held “a partner’s
interest in partnership property of whatever character (realty or
personalty) is an interest in personalty for all purposes.”
(Id. at p. 187.) There was no potential for personal injury
coverage because the plaintiffs in the underlying action in
Tinseltown Video “had no . . . real property interest in their own
names, but merely held a statutory right to equal possession of
two . . . stores incident to their personalty interest in the
26
partnership which owned the stores.” (Id. at p. 201.) The limited
holding that a partner does not occupy space owned (and
occupied) by a partnership in which he or she is a partner does
not support the court’s analysis or conclusion in Sterling
Builders.
In Wilmington Liquid Bulk Terminals, Inc. v. Somerset
Marine Inc. (1997) 53 Cal.App.4th 186 (Wilmington Liquid),
disapproved on another ground in Vandenberg v. Superior Court
(1999) 21 Cal.4th 815, 841, fn. 13, the insured agreed to “obtain
all permits for and construct a dock suitable for use by [the
plaintiff in the underlying action] for loading and unloading of
cement products.” (Wilmington Liquid, at p. 190.) The court held
there was no potential for personal injury coverage because there
was no allegation the plaintiff in the underlying action had ever
occupied any property, and thus there could be no alleged
violation of the right of private occupancy. (See id. at pp. 195-196
[“[n]owhere did [the underlying plaintiff] allege in its very
detailed complaints that there was an interference with the use
of real property which it had ever occupied or possessed”].)
Finally, the court in Stein-Brief Group, Inc. v. Home
Indemnity Co. (1998) 65 Cal.App.4th 364 (Stein-Brief) relied on
the distinction between contract claims and tort claims to hold
there was no potential coverage for the insured’s contract claims.
(See id. at p. 372 [“like bodily injury and property damage
coverage, personal injury coverage is limited to tort damages”].)
The Supreme Court rejected that distinction the following year.
(See Vandenberg v. Superior Court, supra, 21 Cal.4th at p. 839
[“we reject the ex contractu/ex delicto distinction”].) Thus, Stein-
Brief does not “show[ ] . . . there must be an occupation of the real
property, as distinct from a mere affecting of a right related to
27
real property, before an invasion takes place.” (Sterling Builders,
supra, 79 Cal.App.4th at p. 109.)
DISPOSITION
The judgment is reversed. The trial court’s order granting
Truck’s motion for summary judgment is vacated, and the trial
court is directed to enter a new order denying the motion. The
trial court’s order denying Albert’s motion for summary
adjudication is vacated, and the trial court is directed to enter a
new order granting the motion. Albert is to recover her costs on
appeal.
SEGAL, J.
We concur:
PERLUSS, P. J. ZELON, J.
28