A liability policy covering the “personal injury” offense of “invasion of the right of private occupancy” required the insurer to defend an insured against a suit alleging a non-physical invasion of the claimant’s rights in real property. ( Albert v. Truck Ins. Exch. (2018) — Cal.App.5th —-, 2018 WL 2213874)
Facts
A 400-foot long, 26-foot wide private road straddled the boundary between Shelly Albert’s property and another neighbor’s property, so that Albert and the other neighbor each owned half (i.e., 13 feet) of the road measured from the center of the road. The private road, in turn, allegedly provided a third neighbor, Henri Baccouche, with the only access to Baccouche’s property. Baccouche claimed that he had an easement over the private road so that he could get to and from his property.
Albert built a fence on her own property that prevented Baccouche from using the half of the private road located on Albert’s property. In other words, after Albert built the fence, Baccouche could only access his property using a 13-foot wide road rather than a 26-foot wide road.
As a result, Baccouche sued Albert for private nuisance, alleging that Albert had “erected a permanent chain-link fence on certain portions of [Albert’s] property that were subject to a reciprocal easement as a private roadway for ingress and egress.” Baccouche further alleged that the fence “constitutes a nuisance within the meaning of Civil Code Section 3479 in that it … interferes with the comfortable enjoyment by [Baccouche] of his property, including access thereto.”
Albert sought a defense from her personal umbrella insurer, Truck Insurance Exchange (Truck). The Truck umbrella policy provided that Truck would indemnify Albert against damages because of specified “personal injury” offenses, including “wrongful eviction, wrongful entry or invasion of the right of private occupancy.” The policy further provided that Truck would defend Albert against any claim or suit seeking damages “covered by this insurance but not covered by other insurance.” Truck refused to defend Albert against Baccouche’s lawsuit.
Albert then sued Truck for breach of contract and bad faith, alleging that Baccouche’s underlying lawsuit against Albert was potentially covered under the “personal injury” provisions of the Truck policy, and that Albert was thus entitled to a defense from Truck. The trial court disagreed. The trial court thus granted Truck’s motion for summary judgment on all issues and denied Albert’s cross-motion for summary adjudication on the duty to defend issue. Albert appealed.
Holding
The Court of Appeal reversed, and held that Truck did have a duty to defend Albert against Baccouche’s lawsuit.
The appellate court agreed that Baccouche was not seeking any damages from Albert because of the personal injury offense of “wrongful entry.” According to the appellate court, a “wrongful entry” requires that the insured enter onto another’s real property. Here, Albert built a fence on her own property. Although Albert’s act of building a fence on her own property might have wrongfully interfered with Baccouche’s easement rights, Albert could not have “wrongfully entered” onto Albert’s own property.
However, the appellate court held that Baccouche was seeking damages from Albert because of the personal injury offense of “invasion of the right of private occupancy.” After an exhaustive review of case law, the appellate court held that the term “invasion of the right of private occupancy” is susceptible to more than one reasonable interpretation and hence is “ambiguous.” According to the appellate court, an invasion of the right of private occupancy “does not have to be a physical invasion of the land; a non-physical invasion of real property rights can interfere with the use and enjoyment of real property.” Here, Baccouche alleged that Albert blocked half of the only road providing access to Baccouche’s property, which in turn “interfered with [Baccouche’s] comfortable enjoyment … of his property, including access thereto.” Thus, Albert’s alleged conduct “invaded Baccouche’s right of private occupancy by interfering with his right to use and enjoy his property.”
Because Baccouche sought damages against Albert that were potentially covered by Truck’s personal umbrella policy, Albert was entitled to a defense from Truck.
Comment
This is the second time the “neighbor dispute” between Baccouche and Albert has resulted in a published case regarding insurance coverage issues. In the first case, Albert v. Mid-Century Ins. Co. (2015) 236 Cal.App.4th 1281, the appellate court held that a homeowners insurer had no duty to defend Albert against allegations that she trimmed trees located on or near the property line between Albert and Baccouche. In that case, the homeowners policy limited coverage to “property damage” caused by an “accident,” and Albert’s alleged conduct in trimming Baccouche’s trees was not an “accident.”
By contrast, the current case involved a personal umbrella policy that provided separate coverage for “personal injury,” without any requirement of an “accident.” The appellate court gave an expansive interpretation of the personal injury offense of “invasion of the right of private occupancy,” essentially holding that the term can encompass any act by an insured that interferes with the claimant’s ability to access, use, develop or enjoy real property. The appellate court disagreed with an earlier case, Sterling Builders, Inc. v. United Nat. Ins. Co. (2000) 79 Cal.App.4th 105, in which the appellate court held that an “invasion of the right of private occupancy” must involve a ” physical occupation of or trespass on” real property.