Filed 4/14/22; Certified for Publication 5/5/22 (order attached)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
MARYAM GHUKASIAN, B311310
Plaintiff and Appellant, (Los Angeles County
v. Super. Ct. No.
20STCV15761)
AEGIS SECURITY INSURANCE
COMPANY,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Monica Bachner, Judge. Affirmed.
Law Offices of Dale E. Washington, Dale E. Washington;
The Ehrlich Law Firm and Jeffrey I. Ehrlich for Plaintiff and
Appellant.
Selman Breitman, Sheryl W. Leichenger, Eldon S. Edson,
and Laura R. Ramos for Defendant and Respondent.
INTRODUCTION
Maryam Ghukasian sued Aegis Security Insurance
Company (Aegis) for breach of contract, insurance bad faith, and
declaratory relief after Aegis denied her tender of a lawsuit
brought against her by her neighbors. The underlying lawsuit
alleged Ghukasian graded land and cut down trees on her
neighbors’ property. The trial court granted Aegis’s motion for
summary judgment, holding Aegis had no duty to defend because
Ghukasian’s homeowner’s policy did not provide coverage for
nonaccidental occurrences. It explained that intentionally cutting
trees on the neighbors’ land, even if Ghukasian acted on the good
faith but mistaken belief that the trees were on her land, is not
an accident for purposes of insurance coverage.
Ghukasian appeals from the judgment, contending our
Supreme Court’s decision in Liberty Surplus Ins. Corp. v.
Ledesma & Meyer Construction Co. (2018) 5 Cal.5th 216 (Liberty
Surplus) impliedly disapproved caselaw holding an intentional
act is not an “accident,” as the term is used in the coverage clause
of a liability policy, even if the intentional act causes unintended
harm. We decline to read Liberty Surplus in that fashion, and
therefore affirm.
FACTUAL AND PROCEDURAL BACKGROUND
The following facts are undisputed. Ghukasian owns a
home in Glendale, California. Ghukasian purchased a
homeowner’s policy from Aegis for the period between June 13,
2018 to June 13, 2019. In August 2018, she hired contractors to
level land and clear trees on land she understood to be a part of
her property. The land Ghukasian’s contractor cleared and
leveled was not owned by Ghukasian, however, but by
Ghukasian’s neighbors, Vrej and George Aintablian (collectively,
the neighbors).
2
In February 2019, the neighbors sued Ghukasian and
others, including the contractor, in what we will refer to as the
underlying action. The complaint alleged two causes of action
against Ghukasian: trespass and negligence. Both causes of
action alleged the same facts: Ghukasian and her contractor
“entered upon [the neighbors’] [p]roperty without [the neighbors’]
consent,” “made deep cuts . . . into a natural hill on [the
neighbors’ property],” “caused a natural swale located on
[neighbors’ property] to be filled with dirt[,]” which “prevented
the flow of water in and through the swale,” and “removed, cut
down and carried off timber, trees, and underwood from [the
neighbors’ property].”
Ghukasian tendered the underlying action to Aegis. The
policy provides coverage if a “suit is brought against [Ghukasian]
for damages because of . . . property damage caused by an
occurrence to which this coverage applies.” An “occurrence” is
defined in turn as “an accident, including continuous or repeated
exposure to substantially the same general harmful conditions,
which results during the policy period in . . . [p]roperty damage.”
Aegis denied coverage for the underlying action on the ground it
owed no duty to defend because the complaint alleged intentional
(as opposed to accidental) conduct and various exclusions in the
policy barred coverage.
Ghukasian sued Aegis for breach of the insurance contract,
declaratory relief, and insurance bad faith. All three causes of
action are based on Aegis’s denial of Ghukasian’s requested
coverage of claims brought against her in the underlying action.
Aegis moved for summary judgment on the ground it had no duty
to defend Ghukasian in the underlying action as a matter of law
and therefore, it did not breach the insurance contract. Aegis
contended there was no coverage for the underlying action
because it did not allege an “occurrence,” as required for
coverage, and it was excluded by various policy exclusions. The
trial court agreed, explaining: Ghukasian’s “mistaken belief as to
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the boundaries of the property does not transform her intentional
act [of hiring contractors to clear and level land] into an accident
for the purposes of being covered as an ‘occurrence’ under the
Policy.” It also concluded the underlying action’s allegations
against Ghukasian “involved conduct excluded from coverage”
under certain exclusions in the policy.
The trial court entered judgment in favor of Aegis.
Ghukasian appeals from the judgment.
DISCUSSION
A. Standard of Review and Duty to Defend Principles
“[T]he party moving for summary judgment bears the
burden of persuasion that there is no triable issue of material fact
and that he is entitled to judgment as a matter of law.” (Aguilar
v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 (Aguilar).)
“Once the [movant] has met that burden, the burden shifts to the
[other party] to show that a triable issue of one or more material
facts exists as to that cause of action.” (Code Civ. Proc., § 437c,
subd. (p)(2); see Aguilar, supra, at p. 850.) Where summary
judgment has been granted, we review the trial court’s ruling de
novo. (Aguilar, supra, at p. 860.) 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. (Code Civ. Proc., § 437c, subds. (c), (f).) “Our
review of the interpretation of an insurance contract on
undisputed facts is also de novo.” (Albert v. Mid-Century Ins. Co.
(2015) 236 Cal.App.4th 1281, 1289 (Albert).)
“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
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claim is not covered, or may not be covered, but are insufficient to
eliminate the possibility that resultant damages (or the nature of
the action) will fall within the scope of coverage, therefore add no
weight to the scales.’ (Montrose Chemical Corp. v. Superior
Court (1993) 6 Cal.4th 287, 300.)” (Albert, supra, 236 Cal.App.4th
at p. 1290.) “‘[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.]” (Ibid.)
In contrast, an insured must prove its claim may fall within
policy coverage, even when the insurer has moved for summary
judgment. (Ibid.)
B. The Undisputed Evidence Establishes Aegis Did Not
Have a Duty to Defend
As discussed above, the policy at issue covers property
damage resulting from an occurrence, which is defined as an
accident. Relying on Albert, supra, 236 Cal.App.4th 1281, and
Fire Ins. Exchange v. Superior Court (2010) 181 Cal.App.4th 388
(Fire Exchange), the trial court concluded Ghukasian’s deliberate
act of hiring contractors to clear and level the neighbors’ land,
which was ultimately cleared and leveled, constituted intentional
conduct. That conduct, therefore, was not an accident within the
meaning of the policy.
Albert is directly on point. There, the plaintiff’s neighbor
sued plaintiff for damage caused to his property when plaintiff
erected an encroaching fence and pruned trees on his property.
(Albert, supra, 236 Cal.App.4th at p. 1284.) After plaintiff
tendered the claim to her insurer, and the insurer denied
coverage, plaintiff sued the insurer for declaratory relief, breach
of contract and bad faith. (Ibid.) The trial court granted the
insurer’s motion for summary judgment. (Ibid.) The Court of
Appeal affirmed the judgment, holding the neighbor’s claims
against plaintiff “arise from nonaccidental conduct, outside the
terms of the policy” (the policy defined an “occurrence” as an
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“accident”). (Ibid.) The court explained: “[I]t is completely
irrelevant that plaintiff did not intend to damage the trees,
because she intended for them to be pruned. [Citations.]
Moreover, it is undisputed that the contractor intended to cut the
trees, and absolutely no facts exist, in the complaint or otherwise,
indicating that some unforeseen accident (such as a slip of the
chainsaw) caused the damage to the trees. In fact, it was always
plaintiff’s position that the trees had not been damaged or pruned
excessively (and therefore were not subject to an accident), and
that they had been cut in accordance with the city’s brush
clearance ordinance.” (Id. at p. 1292.)
In reaching its conclusion, Albert relied on Fire Exchange
for the proposition that “[w]hen an insured intends the acts
resulting in the injury or damage, it is not an accident ‘merely
because the insured did not intend to cause injury. . . . The
insured’s subjective intent is irrelevant.” (Albert, supra, 236
Cal.App.4th at p. 1291, quoting Fire Exchange, supra, 181
Cal.App.4th at p. 392.) In Fire Exchange, the court held there
was no accident (and therefore, no insurance coverage) where the
policyholders constructed a building that encroached on their
neighbor’s property. (Fire Exchange, supra, 181 Cal.App.4th at p.
390.) The court reasoned: “Accepting their contention that they
believed they owned the five-and-one-half-foot strip of land and
had the legal right to build on it, the act of construction was
intentional and not an accident even though they acted under a
mistaken belief that they had the right to do so.” (Id. at p. 396.)1
1 In holding the subjective intent of the insured is irrelevant
for purposes of determining whether the insured’s act was
intentional, the Fire Exchange court explained the decision in
State Farm Fire & Casualty Co. v. Superior Court (2008) 164
Cal.App.4th 317 (Wright) “seems to stand in variance to this
rule.” (Fire Exchange, supra, 181 Cal.App.4th at p. 393, fn. 1.)
The Fire Exchange court explained: “[In Wright], the insured
picked up a man and tried to throw him into a swimming pool.
The man fell short of the pool and broke his clavicle. The
6
Like the situations in Albert and Fire Exchange, the
complaint in the underlying action alleges harm from
Ghukasian’s intentional conduct. The leveling of land and cutting
of trees were not unexpected or unforeseen events. (See Merced
Mutual Ins. Co. v. Mendez (1989) 213 Cal.App.3d 41, 50 (Merced)
“[An accident . . . is never present when the insured performs a
deliberate act unless some additional, unexpected, independent,
and unforeseen happening occurs that produces damage.”]; see
also Delgado v. Interinsurance Exchange of Automobile Club of
Southern California (2009) 47 Cal.4th 302, 308 [“In the context of
liability insurance, an accident is “‘an unexpected, unforeseen,
undesigned happening or consequence from either a known or an
unknown cause.’” [Citation.]”].) To the contrary, it is undisputed
Ghukasian specifically instructed her contractor to level certain
land and cut trees, which is exactly what was done. Ghukaskian’s
mistaken belief about the boundaries of her property is irrelevant
to determining whether the conduct itself—leveling land and
cutting trees—was intentional. (See Albert, supra, 236
Cal.App.4th at p. 1291.)2
appellate court concluded that the injury was caused by an
accident, reasoning that the act directly responsible for the
injury—throwing too softly so as to miss the water, was an
unforeseen or undesigned happening or consequence and was
thus fortuitous. The conclusion reached in this case can perhaps
be harmonized, if at all, when it is viewed in the context of the
examples given in [Merced Mutual Ins. Co. v. Mendez (1989) 213
Cal.App.3d 41.] Like the speeding driver who intended to speed
but not to hit another car, the insured intended to throw the
other man but did not intend for him to hit the concrete.” (Fire
Exchange, supra, 181 Cal.App.4th at p. 393, fn. 1.) As
acknowledged by Ghukasian in her opening brief, “[t]he response
by other appellate courts to the Wright decision was distinctly
negative.”
2 We acknowledge Ghukasian’s argument—that her act of
cutting trees and clearing land was accidental because she
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Ghukasian concedes Albert and Fire Exchange support the
trial court’s ruling. She contends, however, that our Supreme
Court overruled those cases in Liberty Surplus. We are
unpersuaded.
In Liberty Surplus, the United States Court of Appeals for
the Ninth Circuit certified the following question to the
California Supreme Court: “When a third party sues an employer
for the negligent hiring, retention, and supervision of an
employee who intentionally injured that third party, does the suit
allege an ‘occurrence’ under the employer’s commercial general
liability policy?” (Liberty Surplus, supra, 5 Cal.5th at p. 216.) The
court concluded it can, absent an applicable exclusion. (Ibid.)
In summarizing the meaning of the term “accident” in a
liability insurance policy, the Liberty Surplus court began by
stating “‘[t]he term ‘accident’ is more comprehensive than the
term ‘negligence’ and thus includes negligence.’ [Citation].”
(Liberty Surplus, supra, 5 Cal.5th at p. 221.) Because the causal
sequence of events that led to the alleged injury began with the
employer’s negligence in hiring the employee, the Liberty Surplus
court concluded the employer’s alleged negligent hiring
constituted an occurrence under the policy (i.e., an accident). (Id.
at p. 225.) It explained the employee’s molestation of the third
party “may be deemed an unexpected consequence of [the
employer’s] independently tortious acts of negligence.” (Id. at p.
unintentionally did so on her neighbor’s property—is plausible.
But it is inconsistent with settled law. A similar argument was
raised by Justice Miller’s dissenting opinion in Fire Exchange,
but as discussed above, the majority rejected that argument. (See
Fire Exchange, supra, 181 Cal.App.4th at p. 402 (dis. opn. of
Miller, J.) [“[T]he record provides support for the conclusion that
the [insureds] did not have the objective to encroach on the
[other] property, and therefore, the encroachment was an
accident because the [insureds’] objective was to build on their
own property, and that objective was allegedly not
accomplished.”].)
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229.) By contrast, here Ghukasian’s intentional conduct (leveling
land and cutting trees) was the immediate cause of the injury;
there was no additional, independent act that produced the
damage. Liberty Surplus is therefore distinguishable from the
facts of this case. Moreover, Liberty Surplus contains no language
indicating it intended to overrule prior caselaw holding
intentional acts are not “accidents” merely because the insured
did not intend to cause injury. To the contrary, it cited Merced’s
definition of what constitutes an accident with approval, i.e.,
there is no accident when the insured performs a deliberate
act “‘unless some additional, unexpected, independent, and
unforeseen happening occurs that produces the damage.’”
(Liberty Surplus, supra, 5 Cal.5th at p. 225, quoting Merced,
supra, 213 Cal.App.3d at p. 50 [emphasis added by Liberty
Surplus court].)
We likewise reject Ghukasian’s contention that because the
underlying action alleges a cause of action for negligence, the
complaint alleges an “occurrence” under Liberty Surplus. “The
scope of the duty [to defend] does not depend on the labels given
to the causes of action . . . ; instead it rests on whether the alleged
facts or known extrinsic facts reveal a possibility that the claim
may be covered by the policy.” (Cunningham v. Universal
Underwriters (2002) 98 Cal.App.4th 1141, 1148.) It is undisputed
that both the trespass and negligence causes of action alleged the
same facts: Ghukasian and her contractor entered the neighbors’
property without consent and made deep cuts into the hill and
removed timber, trees, and underwood from the property. There
are no allegations or evidence that the neighbors’ property was
damaged by an accident (e.g., by inadvertently dropping
equipment on the neighbors’ property). Thus, although the
underlying action alleges a cause of action for negligence, the
factual allegations reflect intentional acts.
Because the undisputed evidence demonstrates the acts for
which the neighbors seek to impose liability on Ghukasian were
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not accidental, Ghukasian failed to carry her burden to show the
neighbors’ claims may fall within the scope of the policy.
(Montrose Chemical Corp. v. Superior Court, supra, 6 Cal.4th at
p. 300.) As Ghukasian is not entitled to coverage (and therefore,
her claims for breach of contract and declaratory relief fail as a
matter of law), her bad faith claim also fails. (Love v. Fire Ins.
Exchange (1990) 221 Cal.App.3d 1136, 1151 [“Where benefits are
withheld for proper cause, there is no breach of the implied
covenant [of good faith and fair dealing] [Citation].”])
Accordingly, the trial court did not err in granting Aegis’s motion
for summary judgment.3
3 Because we conclude the underlying action does not allege
an “occurrence” under the policy, we need not address whether
any of the policy’s exclusions apply.
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DISPOSITION
The judgment is affirmed. Aegis is awarded its costs on
appeal.
CURREY, J.
We concur:
MANELLA, P.J.
COLLINS, J.
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Filed 5/5/22
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
MARYAM GHUKASIAN, B311310
Plaintiff and Appellant, (Los Angeles County
v. Super. Ct. No.
20STCV15761)
AEGIS SECURITY INSURANCE
COMPANY,
Defendant and Respondent.
THE COURT:*
The opinion in the above-entitled matter, filed on April
14, 2022, was not certified for publication in the Official
Reports. For good cause it now appears that the opinion should
be certified for publication in its entirety in the Official Reports
and it is so ordered.
There is no change in judgment.
* CURREY, J., MANELLA, P.J., COLLINS, J.