No Coverage for Neighbor’s Claims that Arose from Homeowner’s Non-Accidental Conduct, California Appeals Court Rules

An appellate court in California, affirming a trial court’s decision, has ruled that an insurance company was not obligated to defend a homeowner against claims brought by her neighbor that arose out of the homeowner’s non-accidental conduct.

The Case

A homeowner was sued by her neighbor when she erected an encroaching fence and pruned nine mature olive trees on his land. She tendered the claim to her homeowner’s insurance carrier, Mid-Century Insurance Company. The homeowner claimed that she did not know the fence encroached on her neighbor’s property and that she believed in good faith that the trees were hers and that she was required to trim them.

Mid-Century disclaimed coverage on the basis that the homeowner admitted that she had purposefully erected the fence and had intentionally cut the trees. Mid-Century reasoned that because the conduct giving rise to the neighbor’s claims was intentional, it was not an accident or occurrence within the meaning of the homeowner’s insurance policy. In the insurer’s view, the ownership of the trees was irrelevant to the coverage determination because the damage had occurred from non-accidental conduct.

The homeowner sued Mid-Century, alleging causes of action for declaratory relief, breach of contract, and breach of the implied covenant of good faith and fair dealing.

Mid-Century moved for summary judgment.

The trial court granted Mid-Century’s motion, concluding that the homeowner had failed to demonstrate a potential for coverage as the conduct alleged in the neighbor’s lawsuit was non-accidental, intentional conduct. The trial court also concluded that to the extent the neighbor’s complaint alleged “negligent” conduct by the homeowner, there was no evidence that the trees were injured in some accident, such as “by inadvertently striking a tree with a motor vehicle.”

The homeowner appealed.

The Appellate Court’s Decision

The appellate court affirmed the trial court’s decision in favor of Mid-Century.

In its decision, the appellate court explained that the homeowner’s insurance policy covered property damage resulting from an occurrence, which the policy defined as an “accident.” An intentional act, the appellate court continued, was not an “accident.” Moreover, the appellate court said, the term the “accident” referred to the nature of the insured’s conduct, and not to its unintended consequences.

Accordingly, the appellate court rejected the homeowner’s contention that although she had deliberately hired a contractor to trim the trees, the excessive cutting was not an intended consequence and should be deemed an accident. In the appellate court’s opinion, it was “completely irrelevant” that the homeowner had not intended to damage the trees, because she had intended for them to be pruned. The appellate court also noted that the contractor had intended to cut the trees, and it found that no facts existed indicating that some unforeseen accident (such as a slip of the chainsaw) had caused the damage to the trees.

The appellate court also ruled that there was no support for the homeowner’s theory that her negligent supervision of the contractors brought the neighbor’s complaint within the terms of the policy. “Under any view of the underlying events, the trimming of the trees was no accident,” the appellate court declared.

The appellate court concluded that the trial court had not erred in granting Mid-Century’s motion for summary judgment.

The case is Albert v. Mid-Century Ins. Co., No. B257792 (Cal. Ct. App. April 28, 2015).