Vincent v. Certain Underwriters at Lloyd's London CA2/6 ( 2022 )

Filed 12/19/22 Vincent v. Certain Underwriters at Lloyd’s London CA2/6
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
MARTHA VINCENT et al., 2d Civ. No. B316786
(Super. Ct. No. 56-2012-
Plaintiffs and Appellants, 00421417-CU-BC-VTA)
(Ventura County)
v.
CERTAIN UNDERWRITERS
AT LLOYD’S LONDON,
Defendant and Respondent.
Tenants were evicted from landlord’s premises. Landlord
refused to allow them to retrieve their personal property.
Tenants sued landlord, alleging conversion of and negligent
damage to their personal property. Landlord tendered the
lawsuit to the insurer, Underwriters at Lloyd’s London (Lloyd’s).
The insurer denied coverage. Tenants obtained a judgment
against landlord for conversion and negligence. Landlord sued
the insurer for breach of contract and bad faith. The trial court
granted the insurer summary judgment on the grounds that the
conversion occurred prior to the policy period and was not an
occurrence covered by the policy.
We agree with the trial court and affirm the summary
judgment in all respects.
FACTS
Martha Vincent leased her single family residence in
Westlake Village to Dawn Christie for two years beginning
January 1, 2009. Christie and her husband intended to operate a
spa business, Togetherness Productions, LLC on the premises.1
Because the premises was used as a business, Vincent did not
have liability insurance for the premises.
Christie soon began falling behind on her rent. As a result,
Vincent brought an unlawful detainer action that resulted in a
judgment of possession and damages for unpaid rent in the
amount of $115,708. Vincent obtained the judgment on April 10,
2010, but Christie remained in possession until July 27, 2010,
when the sheriff executed a “lockout” and evicted her.
During the eviction Christie was allowed to take only a few
personal items with her. Christie requested that she be allowed
to return to the residence to remove her personal property.
Vincent’s husband, who was managing the property, refused.
The bulk of her personal property, including exercise and spa
equipment, remained on the premises.
On July 28, 2010, the day after the eviction, Christie spoke
with Vincent’s attorney about the return of her personal
property. Vincent’s attorney suggested Christie call back in two
days “in order to try and hash out the details of how to return
[her] personal property subject to [Vincent’s] claim that any
1 We refer to Christie, her husband, and their business
collectively as “Christie.”
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valuable items be held for execution and levy by the sheriff in
order to be applied to the outstanding money judgment owed by
[Christie] to [Vincent].”
Christie spoke again with Vincent’s attorney on August 2,
2010. She again demanded the return of her property. On the
same day, Christie filed an ex parte motion to compel “emergency
mediation” to work out terms to get her business equipment,
office supplies, and other personal property returned.
On August 2, 2010, at 5:35 p.m., Vincent’s insurance broker
sent an e-mail to the underwriter for Lloyd’s as follows:
“[T]enants that were conducting business out of home are
no longer renting at property location. They have been evicted
and are not physically at location. However, some of their
personal property is still at house in the control of insured. There
is a court date this Wednesday to determine what will be done
with the items still at residence.
“Insured is now trying to rent out property as single family
private residence. I would like to add Liability ($500,000) and
Medical ($10,000) coverage to existing policy as soon as possible.”
Vincent opposed Christie’s ex parte motion on August 4,
2010, stating that she is willing and able to return all of
Christie’s personal property except the spa and exercise
equipment. She also stated she will seek a court order allowing
her to execute on the equipment to satisfy the judgment against
Christie. The trial court denied Christie’s ex parte motion on
August 18, 2010.
Lloyd’s policy providing Vincent with liability coverage
went into effect on August 3, 2010.
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The parties could not settle their differences. On December
3, 2010, Christie filed an action2 against Vincent, the gravamen
of which was the conversion and negligent damage to her
personal property.
On January 20, 2011, Vincent tendered Christie’s lawsuit
to Lloyd’s for defense. Lloyd’s denied coverage. Vincent brought
the instant action against Lloyd’s for breach of contract under the
policy and breach of the covenant of good faith and fair dealing.
Ruling in conversion action
In June 2014, the trial court issued a ruling in Christie’s
conversion action. The court found that Vincent converted
Christie’s property and negligently damaged the property in
moving and storing it. The court found the conversion was
accomplished on July 27, 2010, the day of the lockout.
Ruling in instant case
The trial court found that it is undisputed that the tortious
acts underlying the conversion litigation arose before Vincent
applied for and Lloyd’s issued the property damage liability
policy at issue. Vincent was aware of the underlying dispute
prior to the effective date of the liability endorsement. Thus,
Lloyd’s was justified in denying coverage. The court also found
the conversion was not an occurrence within the meaning of the
policy.
DISCUSSION
I.
Standard of review
Summary judgment is properly granted only if all papers
submitted show there is no triable issue as to any material fact
2Christie v. Vincent (Super. Ct. Ventura County, 2010, No.
56-2010-00386347-CU-BC-VTA) (conversion action).
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and the moving party is entitled to a judgment as a matter of
law. (Code Civ. Proc., § 437c, subd. (c).) The court must draw all
reasonable inferences from the evidence set forth in the papers
except where such references are contradicted by
other inferences or evidence which raise a triable issue of fact.
(Ibid.) In examining the supporting and opposing papers,
the moving party's affidavits or declarations are strictly
construed and those of his opponent liberally construed, and
doubts as to the propriety of granting the motion should be
resolved in favor of the party opposing the motion. (Szadolci
v. Hollywood Park Operating Co. (1993) 14 Cal.App.4th 16, 19.)
The moving party has the initial burden of showing that
one or more elements of a cause of action cannot be established.
(Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768.)
Where the moving party has carried that burden, the burden
shifts to the opposing party to show a triable issue of material
fact. (Ibid.) Our review of the trial court's grant of the motion is
de novo. (Id. at p. 767.)
II.
Conversion
(a) Policy period
The undisputed evidence is that the conversion occurred
prior to the effective date of the policy.
Conversion is the wrongful exercise of dominion over the
personal property of another. (Sheley v. Harrop (2017)
9 Cal.App.5th 1147, 1173.) The trial court found in the
underlying conversion action that the conversion occurred on
July 27, 2010, the day of the lockout. Vincent’s husband, who
was managing the property admitted that on the day of the
lockout, he did not allow Christie back into the property to pick
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up her personal property. On July 28, 2010, Vincent’s attorney
told Christie that Vincent was holding the property so she could
execute on it to satisfy her judgment for unpaid rent. Vincent
confirmed in her response to Christie’s ex parte motion that she
was holding the property to execute on it. The conversion and
dispute arose prior to the August 3, 2010, effective date of the
policy.
Vincent argues that both the trial court in the underlying
conversion action and the court in this case determined that the
date of conversion was August 16, 2010. That is simply not true.
The trial court in the underlying conversion case found “[W]hen
[Vincent] prevented [Christie] from retrieving their property on
the day of the lockout (July 27, 2010), and then put them in
storage, she accomplished a conversion of [Christies’] property.”
The exercise of dominion over Christie’s property began on July
27, 2010, when Vincent’s husband refused to let Christie back
into the house to remove her property.
In the instant case the trial court found: “It is materially
undisputed that the tortious acts underlying the [conversion
action] litigation (conversion of tenants’ personal property by
landlord) arose before [Vincent] applied for and Lloyd’s issued the
property damage liability policy at issue in this action. It is
undisputed that [Vincent was] aware of the underlying dispute
concerning the personal property damages claimed by the tenants
prior to the effective date of the liability endorsement here.”
Vincent claims that she was lawfully holding Christie’s
personal property until Christie paid for the storage costs. It is
true that Vincent demanded storage costs. But the undisputed
evidence shows that Vincent was holding the property so that she
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could execute on it to satisfy her judgment against Christie for
unpaid rent.
Vincent’s reliance on Chu v. Canadian Indemnity Co.
(1990) 224 Cal.App.3d 86 (Chu) is misplaced. Owners in a
condominium complex sued the developer for damages arising
from construction defects. The developer tendered defense to its
insurer. Some of the defects were known prior to the effective
date of the policy. Other defects appeared after the effective date.
The insurer neither accepted nor denied coverage. The developer
settled the claims on its own and sued the insurer for bad faith.
The trial court granted summary judgment to the insurer on the
ground that the defects that appeared after the effective date of
the policy were simply a manifestation of the faulty construction
that existed prior to the effective date of the policy. The Court of
Appeal reversed, holding that each set of distinct defects must be
analyzed separately.
Vincent argues that like Chu, there is a triable issue of fact
as to whether the events during the policy period can be
characterized as necessary extensions of pre-coverage events.
But here, there is only one event, conversion of Christie’s
property. It occurred prior to the effective date of the policy. (See
Bono v. Clark (2002) 103 Cal.App.4th 1409, 1433 [cause of action
for conversion accrues when defendant acts in a manner
inconsistent with the owner’s interest].) Here, unlike Chu, there
is no arguable basis for distinguishing events that that occurred
prior to the policy period from events occurring during the policy
period.
(b) Occurrence
The undisputed evidence shows that Christie’s claim for
conversion arose prior to the effective date of Lloyd’s policy. In
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addition, the conversion did not constitute an “occurrence” to
which the policy applies. The policy defines “occurrence” as “an
accident, including continuous or repeated exposure to
substantially the same harmful conditions . . . .” An accident is
““an unexpected, unforeseen or undesigned happening or
consequence from either a known or unknown cause.”” (Collin v.
American Empire Ins. Co. (1994) 21 Cal.App.4th 787, 807.)
Here the undisputed evidence shows that Vincent did not
accidentally convert Christie’s property. Instead, Vincent
intentionally retained Christie’s personal property with the
expectation she could execute on it to satisfy her judgment. That
does not constitute an occurrence covered by Lloyd’s policy.
III.
Negligence
Vincent contends she was entitled to defense and
indemnity for Christie’s cause of action for negligence.
Christie’s complaint in the underlying conversion action
alleged that Vincent negligently damaged her property while it
was in Vincent’s custody. The trial court in the underlying action
awarded damages against Vincent for negligence.
Vincent raised the argument concerning negligence for the
first time in her reply brief. We do not consider issues raised for
the first time in the reply brief. (American Drug Stores, Inc. v.
Stroh (1992) 10 Cal.App.4th 1446, 1453.) Moreover, the
negligence cause of action was subsumed within the conversion
cause of action. It was simply part of Vincent’s exercise of
dominion and control over Christie’s personal property.
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DISPOSITION
The summary judgment is affirmed. Costs are awarded to
Respondent.
NOT TO BE PUBLISHED.
GILBERT, P. J.
We concur:
YEGAN, J.
BALTODANO, J.
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Matthew P. Guasco, Judge
Superior Court County of Ventura
______________________________
Law Office of David B. Cohen and David B. Cohen for
Plaintiffs and Appellants.
Vanderford & Ruiz, Ty S. Vanderford and Mark R. Irvine
for Defendant and Respondent.
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