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The U.S. Court of Appeals for the Ninth Circuit, affirming a district court's decision, has ruled that, under California law, there is no insurance coverage for a lawsuit alleging intentional conduct, even if the insured did not intend to cause injury.

The Case

The Sonoma Land Trust (“SLT”) sued Henstooth Ranch, LLC, in a California state court alleging that Henstooth's landscaping activities had violated SLT's conservation easement.

Henstooth then sued its insurer, The Burlington Insurance Company, seeking a judgment that Burlington owed Henstooth a defense.

The U.S. District Court for the Northern District of California granted summary judgment to Burlington and denied Henstooth's motion for summary judgment, finding that the Burlington policy did not extend to coverage for intentional acts.

Henstooth appealed to the Ninth Circuit.

The Ninth Circuit's Decision

The circuit court affirmed.

In its decision, the Ninth Circuit explained that the Burlington policy covered property damage caused by an “occurrence,” defined as “an accident.” The circuit court added that if Henstooth had shown that one of the claims in SLT's suit potentially was based on its accidental conduct, that would have required Burlington to defend Henstooth from the entire suit.

The circuit court ruled, however, that because the landscaping that SLT alleged had caused its damages was entirely intentional, the district court had correctly decided that Burlington had no duty to defend Henstooth.

The Ninth Circuit was not persuaded by Henstooth's argument that “the damage was unintentional” even if the actions it allegedly took were intentional. The circuit court reasoned that, under California law, “where the insured intended all of the acts that resulted in the victim's injury, the event may not be deemed an 'accident' merely because the insured did not intend to cause injury.”

Because SLT's suit did not concern accidental conduct under this state law standard, Burlington had no duty to defend Henstooth from it, the Ninth Circuit concluded.

The case is Henstooth Ranch, LLC v. Burlington Ins. Co., No. 18-15167 (9th Cir. May 22, 2019).

Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. Mr. Meyerowitz is the Director of the Insurance Coverage Law Center and editor-in-chief of journals on insurance law, banking law, bankruptcy law, energy law, government contracting law, and privacy and cybersecurity law, among other subjects. He may be contacted at smeyerowitz@meyerowitzcommunications.com.