Unpublished Disposition, 921 F.2d 279 (9th Cir. 1990)
Annotate this CaseGENERAL INSURANCE COMPANY OF AMERICA, Plaintiff-Appellee,v.Daniel L. PLIES, et al., Defendants-Appellants.
No. 89-55118.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted April 13, 1990.
Decided Dec. 27, 1990.
Before NELSON, WILLIAM A. NORRIS, and O'SCANNLAIN, Circuit Judges.
MEMORANDUM*
General Insurance Company (hereafter "General"), appellee, prevailed in a declaratory action against Anita and Daniel Plies, appellants. The court ruled on summary judgment that General did not have a duty to defend the Plieses in a lawsuit. Appellee claims that the underlying lawsuit, an action captioned Alexander Almoian, et al. v. Plies, alleged intentional acts which did not cause the type of injury for which the Plieses are covered by General. Because we find that the underlying complaint fails to state an "occurrence" within the terms of the insurance policy, we hereby affirm.
We review de novo a district court's grant of summary judgment. See Milgard Tempering, Inc. v. Selas Corp. of Am., 761 F.2d 553, 555 (9th Cir. 1985) (citation omitted). This is a diversity action in which the events forming the basis of the lawsuit occurred in California. Therefore, this panel is required to apply California law. Guaranty Trust Co. v. York, 326 U.S. 99 (1945); Wirth v. Clark Equip. Co., 457 F.2d 1262, 1264 (9th Cir.), cert. denied, 409 U.S. 876 (1972).
The burden is on the insured initially to show that an event is within the scope of basic coverage. Royal Globe Ins. Co. v. Whitaker, 226 Cal. Rptr. 435, 437. By demonstrating that their policies created a duty to defend lawsuits alleging bodily injury or property damage, the Plieses have met this initial burden.
After this initial burden is met, questions of doubt as to whether an insured is covered should be resolved against the insurer. Gray v. Zurich Ins. Co., 54 Cal. Rptr. 104, 107 (1966). An insurer's duty to defend is broader than its duty to indemnify. St. Paul Fire and Marine Ins. Co. v. Sears Roebuck and Co., 603 F.2d 780, 786 (9th Cir. 1979). In keeping with this general duty, "the carrier must defend a suit which potentially seeks damages within the coverage of the policy." Gray, 54 Cal. Rptr. at 112 (emphasis in original). However, "where there is no possibility of coverage, there is no duty to defend." Merced Mutual Ins. Co. v. Mendez, 213 Cal. App. 3d 41, 45-46 (Cal.App. 5 Dist.1989) (citation omitted).
The two policies obtained by the Plieses from the General Insurance Company include coverage for lawsuits over "occurrences" defined as "event [s]" leading to "bodily injury or property damage neither expected nor intended from the standpoint of the insured." Appellants argue that the underlying complaint's actual or potential claims fall within this definition of an "occurrence," thus giving rise to potential claims under the policies, which in turn creates the insurer's duty to defend.
However, rather than basing the decision whether to require the insurer to defend appellants on the pleadings in the underlying suit, the Gray court explicitly stressed the importance of the facts supporting those pleadings:
Since modern procedural rules focus on the facts of a case rather than the theory of recovery in the complaint, the duty to defend should be fixed by the facts which the insurer learns from the complaint, the insured, or other sources. An insurer, therefore, bears a duty to defend its insured whenever it ascertains facts which give rise to the potential liability under the policy.
65 Cal. 2d at 276-77 (emphasis added). We hold that the facts of the underlying suit do not "give rise to the potential of liability under the polic [ies]" Id. at 277.
The facts of the underlying suit here are that appellants had undertaken to sell their property and then foreclosed upon it because of the purchaser's default. However framed, the losses or damages alleged in the underlying suit by the purchaser2 were caused by these twin actions--which, whatever else they may be, cannot be deemed "occurrences" within the meaning of the policies. There is no question that these actions were "deliberate act [s]" leading to foreseen consequences; " [n]o additional, unexpected, independent or unforeseen act occurred." Merced, 213 Cal. App. 3d at 50. As intent is the essence of contract, the Plieses cannot reasonably claim that any potential liability to the Almoian group stems from damages unintended or unforeseen from the standpoint of appellants-insured.3
Because we find that the Almoian claims do not arise out of a covered "occurrence," we need not decide whether they allege property damage or bodily injury as required by the policies. No occurrence means no duty to defend. The judgment is
AFFIRMED.
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3
Specifically, the trial court found that the underlying suit charged the following: "a first claim for inducing breach of contract and intentional interference with contractual relations, a second claim for inducing breach of fiduciary duties, a third claim for intentional interference with prospective economic advantage, a fourth claim for fraud and conspiracy to defraud, a fifth claim for conspiracy to induce breach of contract, a sixth claim for conspiracy to induce breach of fiduciary duties, a seventh claim for conspiracy to interfere with prospective economic advantage, an eighth claim for breach of fiduciary duty, a ninth claim for breach of written contract, a tenth claim for intentional infliction of emotional distress, and an eleventh claim for fraudulent violation of the ... Securities Act ...; a twelfth claim for violation of ... the California Corporate Securities Law of 1968, a thirteenth claim for negligent violation of Section 12(2) of the Securities Act ...; a fourteenth claim for rescission and restitution based upon concealment and suppression of a material fact in connection with the purchase and sale of security [sic] in violation of Rule 10b-5 of the Security [sic] Exchange Act of 1934; a fifteenth claim for negligence; and a sixteenth claim for constructive trust and equitable lien." District Court Judgment, Excerpt of Record at 6-7
In their brief, the Plieses devote only one paragraph to the argument that there has been a covered "occurrence." See Appellant's Opening Brief at 10. Even in that paragraph, they achieve the ironic result of presenting a strong case against such a conclusion:
The Almoian complaint alleges such an occurrence in its claims that through their business dealings, the Plies [sic] ... deprived plaintiffs of the use of the Ranch Cucamonga property by preventing its development and of their [the Almoian group's] ownership of the property through foreclosure in addition to the claim that because of the Plies' [sic] business dealings, plaintiff Hardy suffered extreme emotional and physical pain.
Id. (emphasis added).
By the Plieses' own admission, the events leading to the Almoian group's alleged losses were mere "business dealings" which cannot reasonably be construed as an "occurrence" within the coverage provision.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
