Michael Zimmerman v. Allstate Insurance

Opinion

UNITED STATES COURT OF APPEALS FILED FOR THE NINTH CIRCUIT MAR 25 2016 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

MICHAEL ZIMMERMAN; DONNA No. 13-57091 ZIMMERMAN, D.C. No. 2:13-cv-00122-MMM- Plaintiffs - Appellants, RZ Central District of California, v. Los Angeles

ALLSTATE INSURANCE COMPANY, ORDER

Defendant - Appellee.

Before: PREGERSON, WARDLAW, and HURWITZ, Circuit Judges.

The Appellants’ Petition for Panel Rehearing is DENIED.

The Memorandum Disposition filed on February 11, 2016 is hereby

amended as follows:

In paragraph 5, the phrase

Yousef’s plan, and> is replaced with

Yousef’s plan, so>.

No further petitions for rehearing or rehearing en banc will be entertained. NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS MAR 25 2016 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

MICHAEL ZIMMERMAN; DONNA No. 13-57091 ZIMMERMAN, D.C. No. 2:13-cv-00122-MMM- Plaintiffs - Appellants, RZ

v. AMENDED MEMORANDUM* ALLSTATE INSURANCE COMPANY,

Appeal from the United States District Court for the Central District of California Margaret M. Morrow, District Judge, Presiding

Submitted February 5, 2016** Pasadena, California

Michael and Donna Zimmerman (“the Zimmermans”) appeal a summary

judgment entered in favor of Allstate Insurance Company (“Allstate”) in this action

concerning the insurer’s duty to defend the Zimmermans in a tort action filed by

* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). Donald and Joan Burnett (“the Burnetts”). We have jurisdiction under 28 U.S.C.

§ 1291 and affirm.

1. The Burnetts’ complaint alleged that the Zimmermans and three neighbors,

Yousef, Gale, and Nafissa Maiwandi (“the Maiwandis”), “encroached and

trespassed upon and then destroyed” a gate to the community in which all parties

lived. Yousef Maiwandi allegedly damaged the gate, but told Michael Zimmerman

of his plan in advance. The complaint alleged that Yousef acted as the

Zimmermans’ agent.

2. The Zimmermans were covered by an Allstate “Deluxe Plus Homeowners

Policy” (“the Policy”), which required Allstate to “pay damages . . . arising from an

occurrence to which this policy applies.” The Policy defined an “occurrence” as

“an accident . . . resulting in bodily injury or property damage.” Allstate also owed

a duty under the Policy to “provide a defense” if the Zimmermans were “sued for

[covered] damages.”

3. Allstate refused to defend the Burnett suit. “An insurer must defend its

insured against claims that create a potential for indemnity under the policy.”

Scottsdale Ins. Co. v. MV Transp., 115 P.3d 460, 466 (Cal. 2005). Potential liability

is evaluated by reference to the complaint and “extrinsic facts known to the insurer.”

Id. An insurer must also defend if, “under the facts alleged, reasonably inferable,

2 or otherwise known, the complaint could fairly be amended to state a covered

liability.” Id.

4. Thus, Allstate’s duty to defend turns on whether the Zimmermans could

potentially be liable under the Burnett complaint for damages resulting from an

“accident.” In the context of liability insurance, California law defines an

“accident” as “an unexpected, unforeseen, or undesigned happening or consequence

from either a known or an unknown cause.” Delgado v. Interinsurance Exch. of

Auto. Club of S. Cal., 211 P.3d 1083, 1086 (Cal. 2009) (quotation marks omitted).

5. The district court correctly found that the Burnett complaint does not seek

to impose liability arising out of an “accident.” Trespass is an intentional tort, see

Spinks v. Equity Residential Briarwood Apartments, 90 Cal. Rptr. 3d 453, 484 (Ct.

App. 2009), and “it is well settled that intentional . . . acts are deemed purposeful

rather than accidental,” Chatton v. Nat’l Union Fire Ins. Co., 13 Cal. Rptr. 2d 318,

328 (Ct. App. 1992). The agency allegations do not create potential liability for an

“accident;” moreover, Michael admitted that he knew of Yousef’s plan, so the

eventual injury was not “unexpected, unforeseen, or undesigned.” Delgado, 211

P.3d at 1086.

6. Nor was a duty to defend triggered by the possibility that the Burnetts

might amend their complaint to allege that the Zimmermans were negligent either

by failing to warn their neighbors of Yousef’s plan or in supervising their “agent.”

3 “‘Negligent’ and ‘accidental’ are not synonymous.” Am. Int’l Bank v. Fid. &

Deposit Co., 57 Cal. Rptr. 2d 567, 575 (Ct. App. 1996). Because Michael knew of

Yousef’s plan, the damage cannot have been “unexpected” or “unforeseen.” See

Ticor Title Ins. Co. v. Emp’rs Ins. of Wausau, 48 Cal. Rptr. 2d 368, 376 (Ct. App.

1995) (finding that a complaint based on failure to disclose known information “did

not allege an occurrence giving rise to a duty to defend”).

7. Absent a duty to defend, Allstate did not breach the implied covenant of

good faith and fair dealing, Waller v. Truck Ins. Exch., 900 P.2d 619, 639 (Cal.

1995), and cannot be assessed punitive damages, Tibbs v. Great Am. Ins. Co., 755

F.2d 1370, 1375 (9th Cir. 1985) (applying California law).

AFFIRMED.