The California Supreme Court has held that a homeowners insurer had no duty to defend its insured in an assault and battery case, even though the insured may negligently and unreasonably have believed that he was acting in “self-defense.” ( Delgado v. Interinsurance Exchange of the Automobile Club of Southern California (2007) WL 1519893)
Facts
Craig Reid and Jonathan Delgado got into an altercation, during which Reid allegedly hit and kicked Delgado. Delgado later filed a personal injury action against Reid, asserting two causes of action. In the first cause of action for intentional tort, Delgado alleged that Reid “in an unprovoked fashion and without justification physically struck, battered and kicked” Delgado. In the second cause of action for negligence, Delgado alleged that Reid “ negligently and unreasonably believed” he was engaging in self-defense when he “negligently and unreasonably physically and violently struck and kicked” Delgado.
Reid tendered defense of the action to his homeowners insurer, Interinsurance Exchange of the Automobile Club (ACSC), under a policy with liability limits of $100,000. ACSC denied coverage and refused to defend. ACSC asserted that Reid’s alleged liability (1) did not arise from an “occurrence,” or “accident,” as required by the policy’s insuring clause, and (2) fell within the policy’s exclusion for “intentional acts” committed by an insured.
After ACSC rejected Reid’s tender, Delgado and Reid reached a settlement of the personal injury action. As part of the settlement, Delgado dismissed his intentional tort claim against Reid, and Delgado and Reid stipulated that Reid had negligently believed he was acting in self-defense. The trial court then entered a judgment of $150,000 on Delgado’s negligence claim against Reid. Thereafter, Reid paid Delgado $25,000 in partial satisfaction of the judgment and assigned to Delgado any rights Reid might have against ACSC for its refusal to defend. In return, Delgado gave Reid a partial satisfaction of judgment and a covenant not to execute on the remainder of the judgment against Reid’s own assets.
Delgado (as assignee) then sued ACSC for declaratory relief, bad faith and enforcement of the underlying judgment. After proceedings in the trial court and the California Court of Appeal, the parties ended up before the California Supreme Court.
Holding
The California Supreme Court held that ACSC did not have any duty to defend or indemnify Reid in the underlying action filed by Delgado. As such, Delgado (as Reid’s assignee) could not recover anything in the bad faith action against ACSC.
The Supreme Court reasoned that the ACSC homeowners policy only covered bodily injury caused by an “occurrence,” which the policy defined as an “accident.” According to the Court, in the context of liability insurance, an “accident” is “an unexpected, unforeseen, or undesigned happening or consequence from either a known or an unknown cause.” The Court clarified that the issue of whether there has been an “accident” is determined from the perspective of the insured , not from the perspective of the injured party. Otherwise, any injury-causing event – including sexual molestation, arson, premeditated murder, etc. – would be deemed an “accident” simply because the victim did not expect or foresee the event.
The Court further held that even if Reid (the insured) had an unreasonable, subjective belief in the need for self-defense, that did not convert his act of hitting and kicking Delgado (the claimant) into an “accident.” According to the Court, “an injury-producing act is not an ‘accident’ … when all of the acts, the manner in which they were done, and the objective accomplished occurred as intended by the actor.” Because Reid’s acts of hitting and kicking Delgado were done “with the intent to cause injury,” there was no “accident” and hence no potential for coverage.
The Court explained that while some prior appellate cases do contain language suggesting that an insured’s acts of self-defense might be covered, those cases all dealt with exclusionary clauses for “intentional injuries”, not coverage clauses requiring an “accident.” Moreover, it was irrelevant that Delgado may have provoked Reid into attacking Delgado, since “[t]he term ‘accident’ in a policy’s coverage clause refers to the injury producing acts of the insured, not those of those of the injured party.”
In short, since Delgado’s claims against Reid in the underlying action were not potentially covered under the ACSC homeowners policy, ACSC had no duty to defend Reid in the underlying action. Therefore, Delgado (as Reid’s assignee) could not recover against ACSC in the bad faith action.
Comment
The Delgado case clears up confusion generated by prior California cases involving whether a liability insurer has a duty to defend an insured who is sued for assault and battery. In several of those prior cases, courts had suggested that an insured’s unreasonable belief in the need for self-defense could result in a finding of coverage. However, Delgado now makes it clear that an insured’s unreasonable belief in the need for self-defense does not turn the insured’s deliberate act of assault and battery into an “accident” within a policy’s coverage clause.
The Delgado case represents a significant victory for insurers, who have long resisted the notion that a standard liability policy might cover an insured’s alleged act of assault and battery. At least under standard policies covering injuries caused by “accident,” such conduct should not be covered – even if the insured claims he was acting in “self-defense.”