Jafari v. EMC Ins.

Filed 1/19/10 Jafari v. EMC Ins. CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

APPEAL from a judgment of the Superior Court of Los Angeles County. Robert L. Hess, Judge. Affirmed.

Snyder Dorenfeld, David K. Dorenfeld and Rodger S. Greiner for Plaintiff and Appellant.

Clifford Hirsch and Robert V. Closson; Summers & Shivers and Ian G. Williamson for Defendants and Respondents.

___________________________

Davar Jafari doing business as Glendora Tire & Brake Center appeals from the judgment entered after the court granted summary judgment in favor of defendants EMC Insurance Companies and Employers Mutual Casualty Company. Defendants provided insurance to Jafari under a commercial auto (garage keepers) policy (the Policy), which provided coverage for bodily injury caused by an accident and insured against loss and damages resulting from the operation of Jafaris business. The superior court granted summary judgment on the basis the Policy did not cover the type of claim asserted against the insured, i.e., a customer sued the insured for, among other things, assault and battery by the insureds business manager in an altercation on the insureds business premises.

In a published opinion, this court concluded the trial court erred in finding the insurer had no duty to defend as facts extrinsic to the complaint indicating the business manager acted in self-defense raised the possibility of coverage under the Policy, reasoning acts committed in self-defense might be deemed an accident because of the unexpectedness of the third partys actions. The California Supreme Court granted defendants petition for review and subsequently transferred the matter back to this court with directions to vacate our decision and reconsider the cause in light of Delgado v. Interinsurance Exchange of Automobile Club of Southern California (2009) 47 Cal.4th 302.^[1] We affirm.

FACTUAL AND PROCEDURAL SYNOPSIS

I. The Policy

Under liability coverage, the Policy provided: We will pay all sums an insured legally must pay as damages because of bodily injury or property damage to which this insurance applies caused by an accident and resulting from garage operations other than the ownership, maintenance or use of covered autos. The policy defined insured to include employees acting within the scope of their duties.

Under paragraph 1, expected or intended injury, of section B, exclusions, the policy provided: Bodily injury or property damage expected or intended from the standpoint of the insured. But for garage operations other than covered autos this exclusion does not apply to bodily injury resulting from the use of reasonable force to protect persons or property.

II. The Claim

On August 30, 2003, Mark Mitchell,^[2]the manager of Glendora Tire & Brake Center, hit Farhad Nazemzadeh, a customer, in the face. On July 22, 2004, appellant was named as a defendant in a lawsuit filed by Nazemzadeh (the underlying action). The complaint alleged causes of action for general negligence, assault, battery, negligent infliction of emotional distress, intentional infliction of emotional distress, premises liability and negligent hiring. After appellant was served with a copy of the summons and complaint, he tendered defense and indemnification of the underlying action to respondents. Respondents denied the tender stating the suit was the result of Mitchells intentional acts, intentional acts were not accidents, and consequently the suit did not fall within the coverage provision of the Policy.

Appellant then filed this complaint for breach of contract and breach of the covenant of good faith and fair dealing for respondents failure to defend and indemnify appellant for the claims asserted in the underlying action. Respondents filed a motion for summary judgment on the basis it had no duty to defend as there was no accident. In opposition, appellant argued an act of self-defense could be considered an accident under the Policy. The court granted summary judgment and entered judgment in favor of respondents.

Appellant filed a timely notice of appeal.

DISCUSSION

I. Standard of Review

Appellant contends the Policy covered the claim under section B1, the exception to the exclusion, as the underlying action involved the use of reasonable force by appellants employee to protect the person of appellants employee and appellants property. Respondents contend the underlying action did not trigger coverage because there was no accident as required by the Policy for coverage.

We apply a de novo standard of review to an order granting summary judgment when, on undisputed facts, the order is based on the interpretation or application of the terms of an insurance policy. [] In reviewing de novo a superior courts summary adjudication order in a dispute over the interpretation of the provisions of a policy of insurance, the reviewing court applies settled rules governing the interpretation of insurance contracts. (Citations omitted.) (County of San Diego v. Ace Property & Casualty Ins. Co. (2005) 37 Cal.4th 406, 414.)

II. Coverage

In Delgado, the Court discussed the duty to defend: At issue here is whether the insurer had a duty to defend its insured in an action brought by a third party. To prevail in an action seeking declaratory relief on the question of the duty to defend, 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. The duty to defend exists if the insurer becomes aware of, or if the third party lawsuit pleads, facts giving rise to the potential for coverage under the insuring agreement. We look first to the terms of the policy. (Citations, italics & fn. omitted.) (Delgado v. Interinsurance Exchange of Automobile Club of Southern California, supra, 47 Cal.4th at p. 308.) The Court also noted that because the duty to defend is broader than the duty to indemnify, a determination an insurer did not have a duty to defend would be dispositive of a claim it had a duty to indemnify. (Id., at p. 308, fn. 1.)

In pertinent part, a CGL policy, often referred to as a business general liability policy, provides liability insurance for businesses. The policy is written in two essential parts: the insuring agreement, which states the risk or risks covered by the policy, and the exclusion clauses, which remove coverage for risks that would otherwise fall within the insuring clause. Before even considering exclusions, a court must examine the coverage provisions to determine whether a claim falls within [the policy terms]. This is significant for two reasons. First, . . . when an occurrence is clearly not included within the coverage afforded by the insuring clause, it need not also be specifically excluded. [] Second, although exclusions are construed narrowly and must be proven by the insurer, the burden is on the insured to bring the claim within the basic scope of coverage, and (unlike exclusions) courts will not indulge in a forced construction of the policys insuring clause to bring a claim within the policys coverage. Accordingly, the insured has the burden of showing that there has been an occurrence within the terms of the policy. (Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 16-17.)

Citing Mullen v. Glens Falls Ins. Co. (1977) 73 Cal.App.3d 163, 171, appellant essentially argues self-defense is an accident within the meaning of the Policy. Mullen dealt with the interpretation of an exclusion clause. On the other hand, the threshold question in the case at bar is not whether the exclusion applies, but whether the conduct in question constituted an accident within the meaning of the Policys coverage clause. (Quan v. Truck Ins. Exchange (1998) 67 Cal.App.4th 583, 595.)

In the context of liability insurance, an accident is an unexpected, unforeseen, or undesigned happening or consequence from either a known or an unknown cause. This common law construction of the term accident becomes part of the policy and precludes any assertion that the term is ambiguous. (Citations omitted.) (Delgado v. Interinsurance Exchange of Automobile Club of Southern California, supra, 47 Cal.4th at p. 308.)

In Delgado, the injured party argued that because the insureds assault and battery was motivated by an unreasonable belief in the need for self-defense, the act fell within the policys definition of an accident, because from the perspective of the injured party, the assault was unexpected and unforeseen because of the provocative act by the injured party. (Delgado v. Interinsurance Exchange of Automobile Club of Southern California, supra, 47 Cal.4th at pp. 311, 314.) The Court rejected that argument, noting, among other things, that an injury-producing event is not an accident within the policys coverage language when all of the acts, the manner in which they were done, and the objective accomplished occurred as intended by the actor and that an insureds mistake of law or fact could not transform a knowingly and purposefully inflicted harm into an accidental injury. (Id., at pp. 311-312.) The Court concluded an insureds unreasonable belief in the need for self-defense does not turn the resulting purposeful and intentional act of assault and battery into an accident within the policys coverage clause. (Id., at p. 317.)

In the instant case, in its ruling the court looked to the coverage provisions and stated: Here the evidence before the Court, including Mr. Mitchells declaration in opposition to the motion, leave no doubt that the touching of Mr. Nazemzadeh was not accidental, but deliberately aimed blows which connected with the intended target -- Mr. Nazemzadehs face.

As part of the summary judgment motion, the declaration of Lawrence Black, the assistant claim manager, stated that he hired Adrian LaGrave to investigate the facts of Nazemzadehs claim, and LaGrave obtained a copy of the police report relative to the incident. The police report indicated Nazemzadeh stated Mitchell hit Nazemzadeh in the face three times and threatened to kill him. Mitchell told the police that Nazemzadeh yelled at him to fix his vehicle and threatened to kill him. According to the police report, He [Mitchell] said he punched Nazemzadeh twice in the face because he kept coming closer. He told me he hit him because Nazemzadeh refused to get out of his face and he was defending himself.

Appellant disputed respondents fact number 9, which stated the police report indicated Mitchell hit Nazemzadeh in the face, by objecting it was hearsay.^[3] However, although the court did not expressly rule on the objection, in its ruling, it referred to Mitchells declaration in which Mitchell stated Nazemzadeh became upset when Mitchell told him his vehicle was not ready, became more upset when asked to leave, got in Mitchells face and then threatened to kill Mitchell. According to Mitchell, I was afraid he was going to strike me and, in an effort to defend myself and the store, I struck him.

All the evidence indicated Mitchell escalated the verbal encounter into a physical attack. Thus, the acts alleged in the underlying action were intentional and not within the coverage clause. (See Delgado v. Interinsurance Exchange of Automobile Club of Southern California, supra, 47 Cal.4th at p. 312.) It is axiomatic that if the insuring clause does not cover a claimed loss, then there is no coverage. In such a circumstance, there is no need to consider policy exclusions because exclusions serve to limit coverage granted by an insuring clause and thus apply only to hazards covered by the insuring clause. An exclusion cannot act as an additional grant or extension of coverage. (Citations omitted; original emphasis.) (Old Republic Ins. Co. v. Superior Court (1998) 66 Cal.App.4th 128, 144 disapproved on another point in Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 841, fn. 13; accord Ray v. Valley Forge Ins. Co. (1999) 77 Cal.App.4th 1039, 1048.)

As respondents had no duty to defend under the Policy, they did not breach the implied covenant of good faith and fair dealing as asserted by appellant. (Waller v. Truck Ins. Exchange, Inc., supra, 11 Cal.4th at p. 36.)

III. Evidentiary and Procedural Issues

Appellant raises some collateral issues contending the court overstepped its authority, considered inadmissible evidence, and improperly denied his request to continue the hearing.

Appellant asserts the court weighed the evidence when it made factual determinations Mitchell deliberately punched the customer, about the contents of the police report, and about whether Mitchell acted in self-defense. The court did not weigh the evidence in reaching its decision; there was no dispute Mitchell struck the customer.

The police report was evidence of the information available to respondents at the time they determined there was no coverage for the underlying action. (See Waller v. Truck Ins. Exchange, Inc., supra, 11 Cal.4th at p. 19 [Facts extrinsic to the complaint give rise to a duty to defend when they reveal a possibility that the claim may be covered by the policy. [] Conversely, where the extrinsic facts eliminate the potential for coverage, the insurer may decline to defend even when the bare allegations in the complaint suggest potential liability. (Citations omitted.)].)

In his opposition to summary judgment, appellant requested a continuance of the hearing stating he had noticed the deposition of Lawrence Black and indicated he had not proceeded with the deposition as it [sic] felt that the law on the issue of coverage was in its [sic] favor and did not want to incur the time and expense. However, facts essential to justify further opposition to the claim that Defendant EMC breached the covenant of good faith and fair dealing may be elicited from Mr. Blacks deposition. No affidavit accompanied the request as required by Code of Civil Procedure section 437c, subdivision (h).

The covenant of good faith was not relevant as there was no breach of contract. Moreover, appellant admits he did not take the deposition because he did not want to incur the time and expense of doing so. Thus, as appellant has not shown due diligence or justification for why essential facts could not be presented, the court did not abuse its discretion in impliedly denying the request for a continuance. (Cooksey v. Alexakis (2004) 123 Cal.App.4th 246, 257.)

DISPOSITION

The judgment is affirmed. Respondents to recover costs on appeal.

WOODS, J.

We concur:

PERLUSS, P. J. JACKSON, J.

Publication courtesy of California pro bono lawyer directory.

Analysis and review provided by Chula Vista Property line attorney.

San Diego Case Information provided by www.fearnotlaw.com

^[1] No supplemental briefs were filed. (See Cal. Rules of Court, rule 8.200(b).)

^[2] Sometimes identified as Scott Mitchell.

^[3] When a party makes objections to evidence submitted as part of a summary judgment motion, but does not obtain a court ruling on the objections, we consider the objections as waived and view the evidence as having been admitted. (See Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 670, fn. 1.)