Hartford Fire Insurance Co. v. turner/devcon ( 2021 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAR 29 2021
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
HARTFORD FIRE INSURANCE No. 20-15418
COMPANY,
D.C. No. 5:19-cv-01622-NC
Plaintiff-counter-
defendant-Appellee,
MEMORANDUM*
v.
TURNER/DEVCON, a Joint Venture,
Defendant-counter-claimant-
3rd-party-plaintiff-
Appellant,
v.
WESTCHESTER SURPLUS LINES
INSURANCE COMPANY; ALTERRA
AMERICA INSURANCE COMPANY,
Third-party-defendants-
Appellees.
Appeal from the United States District Court
for the Northern District of California
Nathanael M. Cousins, Magistrate Judge, Presiding
Submitted February 5, 2021**
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
San Francisco, California
Before: RAWLINSON and BUMATAY, Circuit Judges, and S. MURPHY, ***
District Judge.
In this insurance dispute, Turner/Devcon appeals the district court’s grant of
summary judgment in favor of Hartford Fire Insurance and Alterra American
Insurance, and dismissal in favor of Westchester Surplus Lines Insurance Company.
The parties agree that California law governs this case. Reviewing de novo, Price
v. Hawaii, 939 F.2d 702, 706 (9th Cir. 1991), we affirm.
1. The district court did not err by looking to the allegations in the putative
civil rights class action complaint filed against the 49ers by Abdul Nevarez and
others (“the Nevarez complaint”). “The determination whether the insurer owes a
duty to defend usually is made in the first instance by comparing the allegations of
the complaint with the terms of the policy.” Montrose Chem. Corp. v. Superior
Court, 6 Cal. 4th 287, 295 (1993) (in bank) (simplified). The question that the court
must answer is whether the allegations show a potential for coverage within the
policy. Hurley Constr. Co. v. State Farm Fire & Cas. Co., 10 Cal. App. 4th 533,
538 (Ct. App. 1992).
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Stephen J. Murphy III, United States District Judge for
the Eastern District of Michigan, sitting by designation.
2
Here, that question was answered by looking to the Nevarez complaint, which
is the lawsuit underlying this indemnity litigation. The 49ers complaint seeks only
indemnification, and is thus “wholly derivative” of the underlying Nevarez
complaint. W. S.S. Lines, Inc. v. San Pedro Peninsula Hosp., 8 Cal. 4th 100, 115
(1994). Further, the 49ers complaint expressly incorporates by reference all the facts
alleged in the Nevarez complaint. Finally, “[f]acts extrinsic to the complaint also
give rise to a duty to defend when they reveal a possibility that the claim may be
covered by the policy.” Montrose Chem. Corp., 6 Cal. 4th at 295, 298 (holding that
an insurer may seek “summary adjudication that no potential for liability exists and
thus that it has no duty to defend” based on extrinsic evidence). Given these
principles of California law, the district court properly considered the allegations
and claims laid out in the Nevarez complaint to determine whether a duty to defend
exists.
2. The district court correctly concluded that the Nevarez complaint did not
allege an “occurrence” within the meaning of the policies. “The insurer is excused
from its defense obligation only when the third party complaint can by no
conceivable theory raise a single issue which could bring it within the policy
coverage.” Fire Ins. Exch. v. Superior Court, 181 Cal. App. 4th 388, 391–92 (Ct.
App. 2010) (simplified).
In California, the design and construction of a structure that allegedly violates
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accessibility laws generally does not fall within the plain meaning of “accident”
when used in insurance contracts. See Mod. Dev. Co. v. Navigators Ins. Co., 111
Cal. App. 4th 932, 943 (Ct. App. 2003) (explaining that the construction of an
inaccessible structure was not an “accident” and thus not an “occurrence” because
the defendants in the underlying suit “intended for the [inaccessible area] to be
configured” as it was). Put another way, an event is not an “accident” where the
insured intended the acts that caused the victim’s injury. Merced Mut. Ins. Co. v.
Mendez, 213 Cal. App. 3d 41, 50 (Ct. App. 1989) (simplified). And an insured’s
intentional act does not become an accident simply because it had the unintended
effect of violating federal and state accessibility laws. See Loyola Marymount Univ.
v. Hartford Accident & Indem. Co., 219 Cal. App. 3d 1217, 1225 (Ct. App. 1990).
With these principles in mind, we agree with the district court that the Nevarez
complaint does not allege an “occurrence” within the meaning of the policies. The
Nevarez complaint alleges that the 49ers violated the Americans With Disabilities
Act by designing and constructing their stadium in a manner that did not comply
with federal disability access design standards. Because the design and construction
of the stadium was not an “accident,” it was not an “occurrence,” and is not covered
by the policies in issue.1
1
It is not to the contrary that the 49ers complaint uses the word “negligence”
within the equitable indemnity cause of action. The discrete use of the word
4
For the foregoing reasons, we AFFIRM the district court.
“negligence,” does not transform any of the allegations against Turner/Devcon into
conduct involving “an accident.” See Quan v. Truck Ins. Exch., 67 Cal. App. 4th
583, 596 (Ct. App. 1998) (“‘[N]egligence’ does not necessarily equate with an
‘accident[.]’”). Rather, as explained above, and consistent with California law, the
allegations regarding the design and construction of the stadium remain an
intentional act.
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