Sell v. Nationwide Mutual Insurance Company, No. 2:2009cv01584 - Document 57 (E.D. Cal. 2011)
Court Description: ORDER GRANTING SUMMARY JUDGMENT signed by Judge Garland E. Burrell, Jr. on 1/25/2011 ORDERING that Nationwide has met its burden of establishing that there is no potential for coverage under the policy, and it is entitled to summary judgment on Sell's breach of contract claim. Therefore, judgment shall be entered in favor of Dft in accordance with this Order and the Order filed on 11/17/2010. CASE CLOSED. (Zignago, K.)
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Sell v. Nationwide Mutual Insurance Company Doc. 57 1 2 3 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE EASTERN DISTRICT OF CALIFORNIA 6 7 8 WANDA A. SELL, individually and a Trustee of the Nancy A. Muhs Trust, Plaintiff, 9 v. 10 11 12 13 NATIONWIDE MUTUAL INSURANCE COMPANY and DOES 1 through 10, inclusive, Defendant. ________________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) 2:09-cv-01584-GEB-GGH ORDER GRANTING SUMMARY JUDGMENT IN FAVOR OF DEFENDANT 14 15 After the parties filed their Joint Pretrial Statement, they 16 were directed to brief the remaining breach of contract issue in this 17 case. Oral argument was held on the sua sponte scheduled summary 18 judgment motion on January 24, 2011. See Portsmouth Square Inc. v. 19 S’holders Protective Comm., 770 F.2d 866, 869 (9th Cir. 1985) (stating 20 a court may sua sponte decide summary judgment if each party was 21 “afforded a full and fair opportunity to make its case”). 22 This matter concerns an insurance coverage dispute between 23 Plaintiff 24 Insurance Company (“Nationwide”). The dispute concerns the following 25 “personal and advertising injury” provision in a policy Nationwide 26 issued on real property located at 13091 Willow Glen Road, Stockton, 27 California (the “Property”): “‘Personal and advertising Injury' means 28 injury . . . arising out of one or more of the following offenses: Wanda A Sell (“Sell”) and Defendant Nationwide Mutual 1 Dockets.Justia.com 1 . . . The wrongful eviction from, wrongful entry into, or invasion of 2 the right of private occupation of a room, dwelling or premises that a 3 person occupies, committed by or on behalf of its owner, landlord or 4 lessor.” 5 I. Legal Standard 6 Under California insurance coverage law, an insurer “must 7 defend a suit which potentially seeks damages within the coverage of the 8 policy.” Montrose Chemical Corp. v. Superior Court, 6 Cal. 4th 287, 295 9 (1993). The insured “has the burden to show a claim falls within the 10 scope of basic coverage.” Am. Star Ins. Co. v. Ins. Co. of the West, 232 11 Cal. App. 3d 1320, 1325 (1991). “[I]f, as a matter of law, neither the 12 [third-party] complaint nor the known extrinsic facts indicate any basis 13 for potential coverage, the duty to defend does not arise in the first 14 instance.” Scottsdale Ins. Co. v. MV Transp., 36 Cal. 4th 643, 655 15 (2005). 16 “[I]nterpretation of an insurance policy is a question of 17 law.” Waller v. Truck Ins. Exch., Inc., 11 Cal. 4th 1, 18 (1995). 18 “Insurance policies are construed under the same rules that govern the 19 interpretation 20 Frontier Pac. Ins. Co., 111 Cal. App. 4th 1234, 1243 (2003). “Under 21 statutory rules of contract interpretation, the mutual intention of the 22 parties at the time the contract is formed governs interpretation.” 23 Waller, 11 Cal. 4th at 18. “Such intention of the parties is to be 24 ascertained from the ‘clear and explicit’ language of the contract.” St. 25 Paul Fire and Marine Ins. Co. v. Am. Dynasty Surplus Lines Ins. Co., 101 26 Cal. App. 4th 1038, 1048 (2002) (quoting CAL . CIV . CODE §§ 1638-39). 27 “[U]nless given some special meaning by the parties, the words of a 28 contract are to be understood in their ‘ordinary and popular sense.’” of other contracts.” 2 St. Paul Mercury Ins. Co. v. 1 Id. 2 construed 3 circumstances of the case, and cannot be found to be ambiguous in the 4 abstract.” St. Paul Mercury Ins. Co. v. Frontier Pac. Ins. Co., 111 Cal. 5 App. 4th at 1243 (internal quotation marks omitted). “An interpretation 6 of the policy that creates an ambiguity where none existed by rendering 7 words redundant or superfluous violates all rules of construction.” 8 Mirpad, LLC v. California Ins. Guarantee Assn., 132 Cal. App. 4th 1058, 9 1073 (2005). (quoting in CAL . CIV . CODE § 1644). the the context 10 of “Coverage policy as a provisions whole, must and be in the II. Background 11 The dispute concerns Nationwide’s refusal to accept Sell’s 12 tender of defense of a “Petition for Order”, which a third-party 13 claimant named Rigoberto Ocegueda filed against Sell in San Joaquin 14 County Superior Court in California, in March of 2007. Ocegueda alleged 15 in that Petition: “[Sell] had the right to possession and had control” 16 of the Property but never occupied the Property as her residence; 17 “[Ocegueda] demanded to be provided possession of the [Propertyunder 18 provisions in a trust];” and “[a]fter [Ocegueda’s] demand to occupy the 19 [Property], [Sell] responded that she was going to occupy the [Property] 20 and not allow [Ocegueda to] reside on the [Property].” (Def.’s Req. for 21 Judicial 22 Interpretation (“Def.’s RJN”) 354-55, at ¶¶ 7-10.) Ocegueda’s Petition 23 sought “an order . . . to compel [Sell] to provide him with possession 24 and control of [the Property] and allow him to occupy it.” Id. 355, at 25 ¶ 11. 26 Notice The in Supp. parties’ of dispute Mem. of whether P. the & A. phrase Regarding “that a Policy person 27 occupies” in the personal and advertising injury provision requires 28 third-party claimant Ocegueda to actually occupy the Property as a 3 1 condition precedent to coverage under this provision of the policy. 2 Neither Ocegueda’s state court Petition nor the known extrinsic facts 3 indicate Ocegueda ever occupied the Property. 4 III. Discussion 5 Sell argues the personal and advertising injury provision does 6 not 7 required to defend Sell against Ocegueda’s Petition. Sell contends 8 Ocegueda’s Petition is potentially within the coverage of the policy 9 since Ocegueda has alleged an “interest” in the Property by claiming a 10 right to occupy the Property. (Sell's Brief Re Policy Interpretation 11 5:16-17.) Sell cites the Court’s previous order denying Nationwide’s 12 summary judgment motion on Sell’s breach of contract claim as support 13 for this argument, and the authority cited therein. In that order, the 14 Court cited California authority "suggest[ing] that Ocegueda’s actual 15 possession 16 [Nationwide] owes Sell a duty to defend under the disputed provision.” 17 Sell v. Nationwide Mut. Ins. Co., No. 2:09-cv-01584-GEB-GGH, 2010 WL 18 4720882, at *3 (E.D. Cal. Nov. 17, 2010). However, the term “occupies” 19 in the phrase “that a person occupies” was not analyzed in that order 20 under California’s statutory rules of contract interpretation. require Ocegueda and to control occupy [of the the Property Property] is before not Nationwide required is before 21 Nationwide argues the determinative term in the personal and 22 advertising injury provision is the word “occupies” in the phrase “that 23 a person occupies;” and the word “occupies” requires an existing, 24 present tense actual occupancy of the Property, not a future expectation 25 of occupancy. 26 The word “occupies” is not defined in the insurance policy. 27 However, the policy defines the terms “unoccupancy” and “unoccupied” as 28 4 1 follows: “‘Unoccupancy’ or ‘unoccupied’ means the condition of: . . . A 2 ‘dwelling’ (except while being constructed) not being lived in; or 3 . . . Any other building or structure (except while being constructed) 4 not being used; even if it contains furnishings or other property 5 customary to its intended use or occupancy.” (Def.’s RJN 59.) The words 6 “lived in” and “used” indicate that “occupy” means a person actually 7 lived in or used a structure on the Property. Since the phrase “that a 8 person occupies” is to be construed “in the context of the policy as a 9 whole,” St. Paul Mercury Ins. Co. v. Frontier Pac. Ins. Co., 111 Cal. 10 App. 4th at 1243, the definitions of “unoccupancy” and “unoccupied” 11 support interpreting the phrase “that a person occupies” to require 12 actual occupation of the Property by third-party claimant Ocegueda. 13 Further, a California court of appeal has defined “occupancy” 14 as “the taking and holding possession of real property.” Nichols v. 15 Great 16 California court of appeal looked to Black’s Law Dictionary to define 17 the word “occupancy”. See Martin Marietta Corp. v. Ins. Co. of N. Am., 18 40 Cal. App. 4th 1113, 1134 (1995). Black’s Law Dictionary defines 19 “occupancy” as “[t]he act, state, or condition of holding, possessing, 20 or 21 tenancy, esp. of a dwelling or land.” BLACK ’S LAW DICTIONARY (9th ed. 2009). 22 These definitions also support interpreting the phrase “that a person 23 occupies” as requiring actual occupation of the Property by third-party 24 claimant Ocegueda. Am. Ins. residing in Cos., or on 169 Cal. App. something; 3d actual 766, 775 (1985). possession, Another residence, or 25 Sell counters that construing occupancy to mean having actual 26 possession of the Property or residing on the Property renders ambiguous 27 and meaningless the phrase “invasion of the right of private occupation 28 of a room, dwelling or premises” in the personal and advertising injury 5 1 provision. However, the “invasion” phrase connotes interference with a 2 person occupying the Property or a person’s enjoyment of that occupancy. 3 “‘Invasion of the right of private occupancy’ resembles the definition 4 of nuisance, an ‘interference with the interest in the private use and 5 enjoyment of the land.’” Martin Marietta Corp., 40 Cal. App. 4th at 1134 6 (quoting Wilson v. Interlake Steel Co., 32 Cal. 3d 229, 233 (1982). 7 “Actual physical interference with land use constitutes the most obvious 8 and common type of nuisance.” Id. However, here, there is no need to 9 determine the entire scope of the “invasion” term since Ocegueda never 10 occupied the Property. 11 Lastly, if the phrase “that a person occupies” is interpreted 12 as Sell requests–-specifically, to require only a right to occupy the 13 Property–-that 14 superfluous. “An interpretation of the policy that creates an ambiguity 15 where none existed by rendering words redundant or superfluous violates 16 all rules of construction.” Mirpad, LLC, 132 Cal. App. 4th at 1073. would render 17 the phrase “that a person occupies” IV. Conclusion 18 For the stated reasons, Nationwide has met its burden of 19 establishing that there is no potential for coverage under the policy, 20 and it is entitled to summary judgment on Sell’s breach of contract 21 claim. Therefore, judgment shall be entered in favor of Defendant in 22 accordance with this Order and the Order filed on November 17, 2010. 23 Dated: January 25, 2011 24 25 26 GARLAND E. BURRELL, JR. United States District Judge 27 28 6
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