Intentionally felling trees on the neighbors’ land, even if the insured acted in good faith, but misconception that the trees were on her land, is not an accident for insurance protection purposes. IN Maryam Ghukasian v. Aegis Security Insurance CompanyB311310, California Court of Appeals, Second District, Fourth Division (April 14, 2022) declared the California Court of Appeal the difference between intentional acts and accidents required for the occurrence of an event for which a defense is required.
Maryam Ghukasian sued Aegis Security Insurance Company (Aegis) for breach of contract, bad faith in the insurance and declaratory relief after Aegis denied her bid in a lawsuit brought against her by her neighbors. The underlying lawsuit alleges that Ghukasian graded land and cut down trees on her neighbors’ property. The trial court granted Aegis ‘request for summary judgment, as Aegis had no obligation to defend because Ghukasian’s homeowners’ policy did not cover accidental events. It explained that deliberately chopping down trees on the neighbors’ land, even though Ghukasian acted in good faith, but mistakenly believed that the trees were on her land, was not an accident for insurance coverage.
Ghukasian appealed and sued California’s Supreme Court decision Liberty Surplus Ins. Corp. v. Ledesma & Meyer Construction Co. (2018) 5 Cal.5th 216 (Liberty surplus) implicitly disapproved case law that contains an intentional act is not an “accident”, as the term is used in the coverage clause of a liability insurance, even if the intentional act causes unintentional damage.
Ghukasian owns a home in Glendale, California. Ghukasian bought a homeowner’s policy from Aegis. In August 2018, while the policy was in effect, she hired contractors to level the land and clear trees on land that she understood was part of her property. However, the land that Ghukasian’s contractor cleared and leveled was not owned by Ghukasian, but by Ghukasian’s neighbors, Vrej and George Aintablian (together, the neighbors).
Neighbors sued Ghukasian and others, including the contractor, in the underlying action. The complaint that Ghukasian and her contractor “were part of [the neighbors’] [p]property without [the neighbors’] consent “,” made deep cuts. . . into a natural hill on [the neighbors’ property]”” caused a natural swallow placed on [neighbors’ property] to be filled with dirt[, ]”Which” prevented water from flowing into and through the swallow “, and” removed, cut down and removed timber, trees and undergrowth from [the neighbors’ property]. ”
Aegis denied coverage of the underlying measure because it was not required to defend itself because the complaint alleged intentional (as opposed to unintentional) behavior and various exclusions in the policy blocked coverage.
In a summary judgment, the insured must prove that there is one potential for coveragewhile the insurer must determine the absence of such potential.
The insurance in question covers property damage as a result of an event, which is defined as an accident. Ghukasian’s deliberate act of hiring contractors to clear and level the neighbors’ land, which was eventually cleared and leveled, was intentional behavior.
The Court of Appeal found that the insured’s subjective intent was irrelevant. The complaint in the underlying action alleged damage from Ghukasian’s intentional conduct. Soil leveling and felling of trees were not unexpected or unforeseen events. An accident, on the other hand, is never present when the insured performs an intentional act unless any further, unexpected, independent and unforeseen event occurs that causes damage.
In the context of liability insurance, an accident is an unexpected, unforeseen, unplanned event or consequence of either known or unknown cause. On the contrary, it is undisputed that Ghukasian specifically instructed his contractor to level some land and cut down trees, which was exactly what was done. Ghukaskian’s misconception about the boundaries of her property is irrelevant in determining whether the behavior itself – leveling the land and felling trees – was intentional.
Ghukasian’s intentional behavior was immediate the cause of the injury; there was no further, independent action that caused the damage. Because Liberty Surplus Ins. the case was not controlled.
The extent of the defense obligation does not depend on the markings given to the grounds for the action. There are no allegations or evidence that the neighbors’ property was damaged in an accident despite their complaints using the term negligence. Although the underlying action alleges a plea of negligence, the actual allegations reflect intentional acts.
Since the indisputable evidence shows that the actions that the neighbors are trying to hold Ghukasian responsible for were not unintentional, Ghukasian could not bear the burden of showing the neighbors’ demands. May covered by the policy. Ghukasian is not entitled to coverage and therefore her claim for breach of contract and declaratory relief under law fails, her claim in bad faith also fails.
The judgment was upheld and Aegis was ordered to pay the costs of the appeal.
The plaintiff’s lawyer, who understands insurance, tried to bind Ghukasian’s insurer by claiming that her conduct was negligent. The court, which was not bound by the eight-corner rule applicable in certain jurisdictions, interpreted the policy and facts as alleged, all of which were intentional conduct and concluded that there was no potential for an accident causing the damage.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, now limits his internship to the position of insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as a lawyer for insurance coverage and claims management and more than 54 years in the insurance industry. He is available at http://www.zalma.com and email@example.com.
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