Amex Assurance Co. v. Allstate Insurance

A plumber installs a propane water heater at his Mend’s house. He allegedly causes a fire that destroys the house. The plumber’s homeowner’s policy excludes damages arising from professional services and business activities. We affirm summary judgment in favor of the plumber’s homeowner’s insurance carrier because the plumber could have no reasonable expectation of coverage under these circumstances.

FACTS

Micheline Zumbrun owns a home in Thousand Oaks. She lives there with her daughter, the Toulet family, and three renters. On the evening of April 5, 1995, the house burned to the ground. Shortly before the fire, Jan Cox, a plumber and friend of the Toulets, had installed a propane water heater at the house.

Zumbrun made a claim against her homeowner’s insurance carrier, appellant Amex Assurance Company (Amex). Amex denied coverage and brought an action against Zumbrun for declaratory relief. Zumbrun in turn brought an action against Amex for breach of contract and bad faith. These actions were consolidated. Amex cross-complained against Cox, alleging that the fire was the result of his negligence.

Eventually, Amex paid more than $1.5 million to settle Zumbrun’s…