American International Bank v. Fidelity & Deposit Co.

This case presents an issue recently addressed by the Supreme Court in Waller v. Truck Inc. Exchange, Inc. (1995) 11 Cal.4th 1 [ 44 Cal.Rptr.2d 370 , 900 P.2d 619 ], “whether a commercial general liability insurer is required to defend a third party action that seeks incidental emotional distress damages caused by the insured’s noncovered economic or business torts.” ( 11 Cal.4th at p. 10 .) In conformity with that decision, we conclude that the trial court herein properly found there was no coverage, no potential for coverage, and no duty to defend where the policy applies to “damages because of ‘bodily injury’ or ‘property damage’. . . caused by an ‘occurrence.’ ” We further conclude that substantial evidence supports the trial court’s finding that the insurer conducted a reasonable investigation before declining coverage. Accordingly, the judgment is affirmed.

Factual and Procedural Background

Plaintiff and appellant American International Bank (AIB) was insured by defendant and respondent Fidelity and Deposit Company of Maryland (Fidelity). During the effective date of the policy, AIB was sued by Mike and Layla Boyajian. The complaint, as amended, alleged that the…