Borjon Auto Center King City v. Sentry Select Ins. Co. CA6

I. INTRODUCTION

Appellant Sentry Select Insurance Company (Sentry) issued a property and liability insurance policy to respondent Borjon Auto Center King City, Inc. (Borjon Auto Center), which operated General Motors and Chrysler auto dealerships in a dealership building located on leased premises at 905 Broadway Street in King City (hereafter 905 Broadway). The franchise agreements required Borjon Auto Center to operate at the 905 Broadway location. After the dealership building was destroyed in a fire, Borjon Auto Center made a claim to Sentry for policy benefits, including payment under the building coverage included in the policy. Sentry denied building coverage on the ground that Borjon Auto Center did not have an insurable interest in a building it did not own and was not obligated under its lease to insure. After building coverage was denied, Borjon Auto Center brought an action against Sentry for breach of contract and breach of the covenant of good faith and fair dealing. Before the matter proceeded to a jury trial, the trial court granted Borjon Auto Center’s motion for summary adjudication and ruled that Borjon Auto Center had an insurable interest in the dealership…