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ALLSTATE INS. CO. v. MORGAN

September 24, 1992

ALLSTATE INSURANCE COMPANY, an Illinois corporation, Plaintiff,
v.
DAVID J. MORGAN, et al., Defendants


ARMSTRONG


The opinion of the court was delivered by: SAUNDRA BROWN ARMSTRONG

I

 INTRODUCTION

 Plaintiff Allstate Insurance Company ("Allstate") filed this action against defendant David J. Morgan, and other defendants, seeking a declaration that it has no duty to defend or indemnify defendants in an underlying state court action. The parties are now before the Court on plaintiff Allstate's motion for summary judgment or, in the alternative, partial summary judgment. After having read the papers submitted and considered the arguments of the parties, and being fully informed, the Court finds that the motion should be granted.

 II

 BACKGROUND

 The instant insurance coverage dispute arises from an underlying action entitled Arnold R. Trombler and Lynn Trombler v. David J. Morgan, et al., No. 144375 ("the Trombler action") which is currently pending in California Superior Court, Marin County. The Tromblers allege that on or about January 6, 1989, they and the Morgans entered into a contract for the sale of the Morgan's property located at 2425 Topaz Drive in Novato, California ("the Topaz property"). *fn1" Trombler Compl. P 12, Livingston Decl. Ex. A. The Tromblers claim that the Morgans misrepresented and failed to disclose certain facts to induce them to enter into a contract to purchase the Topaz property. *fn2" The Trombler complaint alleges causes of action for violation of California Civil Code section 1102 et. seq., fraud, and negligent misrepresentation. See Trombler Compl. PP 6-13, Livingston Decl. Ex. A.

 During the negotiation and sale of the Topaz property, Allstate insured the Morgans under a homeowner's insurance policy (policy no. 034088479) covering the Topaz property. The effective policy period ran from October 27, 1987 to June 27, 1989. The Family Liability and Guest Medical Protection portion of the policy states, in pertinent part:

 Allstate will pay damages which an insured person becomes legally obligated to pay because of bodily injury or property damage arising from an accident and covered by this part of the policy.

 Homeowner's Policy, Section II at 23 (emphasis added), Burke Decl. Ex. A. The policy defines "bodily injury" as "physical harm to the body, including sickness or disease, and resulting death, . . . ." Id. at 3. "Property damage" is defined as "physical injury to or destruction of tangible property, including loss of its use resulting from such physical injury or destruction." Id. at 4.

 The Morgans tendered the defense of the Trombler action to Allstate and requested that Allstate defend and indemnify them for any damages recovered in that litigation. Allstate subsequently filed a declaratory relief action based on diversity jurisdiction in this Court on April 3, 1992, seeking a declaration of its rights and liabilities under the subject policy. On July 28, 1992, Allstate filed the present motion for summary judgment or, in the alternative, partial summary judgment. Defendants oppose the summary judgment motion and they request, under Federal Rule of Civil Procedure 56(f), a continuance of the motion only if the court decides to grant the motion.

 III

 DISCUSSION

 A. Legal Standard for Summary ...


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