Michael Bock v. Travelers Property Casualty Insurance

MEMORANDUM **

The Bocks appeal from the district court’s grant of judgment on the pleadings in favor of Travelers. They argue that Travelers had a duty to defend them under their homeowners’ policy against a cross-complaint filed by their neighbors, the Brakesmans. Separately, the Bocks argue that Travelers was under a duty to investigate the facts underlying the cross-complaint. Each contention will be discussed in turn.

I

Under California law, an insurer “must defend a suit which potentially seeks damages within the coverage of the policy.” Gray v. Zurich Ins. Co., 65 Cal.2d 263, 275 , 54 Cal.Rptr. 104 , 419 P.2d 168 (1966). However, “[a]n insured is not entitled to a defense just because one can imagine some additional facts which would create the potential for coverage.” Friedman Prof'l Mgmt. Co. v. Norcal Mut. Ins. Co., 120 Cal.App.4th 17 , 15 Cal.Rptr.3d 359, 372 (Ct.App.2004). “[Tjhe insured may not speculate about unpled third party claims to manufacture coverage.” Hurley Constr. Co. v. State Farm Fire & Cas. Co., 10 Cal.App.4th 533, 12 Cal.Rptr.2d 629, 631 (Ct.App.1992).

We have examined the cross-complaint filed by the Brakesmans and conclude that it only states a…

dissenting in part:

I join in Part II of the majority disposition but dissent as to Part I. The majority’s conclusion that the cross-complaint only states an intentional tort and so did not give rise to the duty-to-defend is inconsistent with the language of the cross-complaint and with California duty-to-defend law.

Both the claim for trespass and the prayer for relief refer to property “damage” and seek monetary relief for the injury, including for “repairs.” Nothing in the complaint confines the claim to the injury caused by the intentional act of building on the Brakesmans’ property, as opposed to injury due to the negligent design or construction that caused an injury to the Brakesmans’ property separate from the encroachment itself. And the references to “damaged” property and to “repairs” suggests some such additional injury, as one does not usually refer to the encroaching structure as “property [that was] damaged” and in need of “substantial repairs.”

With that degree of ambiguity, the allegations “sufficed to raise the possibility that [the Bocks] would be liable for property damage covered by the policies.” Montrose Chemical Corp. v. Superior Court, 6 Cal.4th 287,…

facts at the time the cross-complaint was tendered that would have triggered a duty

further to investigate. Indeed, Travelers specifically told the Bocµs that if they

were 'aware of any other facts or theories which . . . are relevant to the duty to

defend . . . , we welcome your thoughts and will give serious consideration to any

information that you may provide.' It is uncontested that the Bocµs tendered no

further information to Travelers. Accordingly, Travelers was under no duty to

investigate the facts underlying the Braµesmans' cross-complaint.

AFFIRMED.

FILED

Bocµ v. Travelers Prop. Cas. Ins. Co., No. 10-17297 JAN 05 2012

MOLLY C. DWYER, CLERK

BERZON, Circuit Judge, dissenting in part: U.S . CO U RT OF AP PE A LS

I join in Part II of the majority disposition but dissent as to Part I. The

majority's conclusion that the cross-complaint only states an intentional tort and so

did not give rise to the duty-to-defend is inconsistent with the language of the

cross-complaint and with California duty-to-defend law.

Both the claim for trespass and the prayer for relief refer to…