United States: Shelly Albert v. Truck Insurance Exchange

In Albert v. Truck Ins. Exch., 23 Cal.App.5th 367 (May 15, 2018), the California Second District Court of Appeal reversed the trial court's entry of summary judgment in favor of Truck Insurance Exchange ("Truck") and held that a duty to defend was triggered under Truck's umbrella policy in connection with an underlying lawsuit alleging abatement of private nuisance. The underlying lawsuit arose out of the insured, Shelly Albert's, interference with the plaintiff, Henri Baccouche's, right to use a private road to access his property. Albert erected a chain link fence across one-half of the road, reducing Baccouche's easement for accessing his property from 26 feet to 13 feet. Boccouche contended that Albert's active interference with his ability to use the road constituted a private nuisance which interfered with his right to enjoy and occupy his private property.

Albert tendered the defense of the Baccouche lawsuit to her primary insurer as well as Truck under the umbrella policy. Albert contended that the Baccouche lawsuit alleged facts triggering potential coverage under the primary policy as well as the Truck umbrella policy. The primary insurer declined coverage of the claim because it did not afford personal injury coverage under its policy to Albert. In response, Albert argued that a duty to defend was triggered under the Truck umbrella policy based on the personal injury coverage afforded by such policy. The Truck umbrella policy stated as follows in connection with personal injury coverage:

The policy's definition of "Damages" included "the total of damages that the insured must pay ... because of ... personal injury ... caused by an occurrence covered by this policy." "[W]ith regard to personal injury," "occurrence" was defined as "offenses committed during the policy period, even if the resulting injury takes place after the policy expires." Finally, the policy's definition of personal injury included "injury arising out of ... wrongful eviction, wrongful entry, or invasion of the right of private occupancy."

Albert argued that the underlying Baccouche lawsuit alleged facts implicating potential "wrongful entry or invasion of the right of private occupancy" as those phrases are used in the definition of "personal injury" in the Truck umbrella policy.

Truck declined coverage of Albert's tender of the Baccouche lawsuit. Thereafter, Albert filed a complaint for declaratory relief, breach of contract and bad faith against Truck, arguing that it was obligated to defend Albert against the Baccouche lawsuit based on the personal injury coverage afforded under the Truck umbrella policy. In response, Truck filed a motion for summary judgment arguing that the underlying complaint did not allege facts implicating wrongful entry in that Albert could not have trespassed upon her own property. In addition, Truck argued that Baccouche did not retain a right to personal occupancy with respect to the easement. The trial court agreed with Truck and entered summary judgment in its favor.

In reversing the trial court's decision, the Court of Appeal noted that Baccouche's claim for nuisance did not allege facts supporting a claim for potential wrongful entry in that entry constitutes trespass. The Court of Appeal noted that trespass requires a "direct or indirect entry or intrusion upon the plaintiffs' lands." "The essence of the cause of action for trespass is an 'unauthorized entry' onto the land of another." Here, Albert could not have trespassed on her own property by erecting a chain link fence interfering with Baccouche's easement to access his property.

On the other hand, the Court of Appeal found that Baccouche's complaint alleged facts implicating the offense of "invasion of the right of private occupancy" as used in the definition of "personal injury" in the Truck umbrella policy. The Court of Appeal held that such phrase was ambiguous and could encompass Baccouche's claim that Albert's conduct interfered with his right to private occupancy of his property. As a result, the Court of Appeal held that Truck was obligated to defend Albert against the Baccouche lawsuit. The Court of Appeal reasoned as follows:

Occupancy goes to the holding, possessing or residing in or on something." (Fibreboard, supra, 16 Cal.App.4th at p. 515). "The rights which attend occupancy may be, arguably, many." (Martin Marietta, supra, 40 Cal.App.4th at p. 1134.) "'Invasion of the right of private occupancy' resembles the definition of nuisance, an "'interference with the interest in the private use and enjoyment of the land.'" [Citation.] 'The typical and familiar nuisance claim involves an activity or condition which causes damage or other interference with the enjoyment of adjoining or neighboring land.'" (Ibid.)

"'[A]ctual physical interference with land use constitutes the most obvious and common type of nuisance.'" (Rancho Viejo v. Tres Amigos Viejos (2002) 100 Cal.App.4th 550, 561.) But it is not the only type. 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. In General Accident, supra, 42 Cal.App.4th 95 the court (before the same court disagreed with itself in Sterling Builders) stated that invasion of the right of private occupancy includes "noninvasive interferences with the use and enjoyment of the property." (General Accident, at p. 104; cf. Stonelight Tile, supra, 1509 Cal.App.4th at p. 39 ["California courts have construed 'wrongful entry or eviction' as applying to tort claims arising out of the interference with an interest in real property, such as trespass, nuisance, and noninvasive interferences with the use and enjoyment of property"].) Federal courts applying California law have reached similar conclusions. (See, e.g., Sell v. Nationwide Mut. Ins. Co. (9th Cir. 2012) 492 Fed.Appx. 40, 743 [invasion of the right of private occupancy may include "'suits by neighboring landowners for nuisance and trespass claims'"]; Hirschberg v. Lumbermens Mut. Cas. (N.D.Cal. 1992) 798 F.Supp. 600, 604-605 ["commentators have recognized that in the context of personal injury coverage of general comprehensive liability policies, the 'invasion of the right of private occupancy' affords coverage 'for interference with possession and enjoyment by means such as . . . obstruction of access, . . . actionable on a variety of theories such as . . . nuisance'"].)

Baccouche alleged Albert blocked half of the only road providing access to his undeveloped property, which "interfere[d] with [his] comfortable enjoyment...of his property, including access thereto." Such alleged conduct invaded Baccouche's right of private occupancy by interfering with his right to use and enjoy his property, or at least Albert reasonably believed it did. Truck does not suggest why (or even that) it believed, at the time it issued Albert her policy, Albert understood that allegations by a neighbor relating to damages caused by a fence she might erect and maintain on or around her property would not be covered under the policy. (See Pulte Home Corp., supra, 14 Cal.App.5th at p. 1105; see also Kitsap County v. Allstate Ins. Co. (1998) 136 Wash.2d 567, 590 ["the plain, ordinary, and popular meaning that an average purchaser of insurance would ascribe to the phrase 'other invasion of the right of private occupancy' would include a trespass on or against a person's right to use premises or land that are secluded from the intrusion of others"].)

The Court of Appeal also noted that the phrase "invasion of the right of private occupancy" did not require physical intrusion on the part of the insured. Rather, a "non-invasive interference with the use and enjoyment of property may constitute an 'invasion of the right of private occupancy."'

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