California Court of Appeals, Second District, Seventh Division
Pub. order & mod. 10/28/13 (see end of opn.; reposted as corrected 10/28/13)
ORIGINAL PROCEEDINGS, in mandate (Los Angeles County Super. Ct. No. BC477720), Salvatore Sirna, Judge.
Archer Norris, Limor Lehavi, Mariyetta A. Meyers-Lopez; Greines, Martin, Stein & Richland, Robert A. Olson and Feris M. Greenberger for Petitioner.
No appearance for respondent.
Louis G. Fazzi and Fernando J. Bernheim for Real Parties in Interest.
Farmers Insurance Exchange (Farmers) petitions this court for a writ of mandate directing the trial court to set aside its order denying Farmers’ motion for summary adjudication. Farmers brought this action for declaratory relief and sought summary adjudication on the ground there was no potential for coverage under the homeowners insurance policy it issued to its insureds, real parties in interest Jose Luis Cervantes Bautista and Sara Bautista. We agree with Farmers and grant the petition.
FACTUAL AND PROCEDURAL BACKGROUND
Farmers issued a homeowners insurance policy for a house in Pomona to Jose Bautista and Lourdes M. Sanchez. Sara Bautista, Jose’s wife, was an additional insured under the policy. The policy provided personal liability coverage in the amount of $300, 000 per occurrence under Coverage E, which states: “We pay those damages which an insured becomes legally obligated to pay because of bodily injury... resulting from an occurrence to which this coverage applies.” (Bold omitted.) The policy excludes from Coverage E bodily injury that “7. results from the ownership, maintenance, use, loading or unloading of... b. motor vehicles....” (Bold omitted.)
Farmers also issued a vehicle insurance policy covering a 2004 Dodge pickup truck owned by Jose Bautista. The policy provided coverage for bodily injury in the amounts of $30, 000 per person and $60, 000 per occurrence. Under Coverage A, the policy provided: “We will pay damages for which any insured person is legally liable because of bodily injury to any person... arising out of the ownership, maintenance or use of a private passenger car, a utility car, or a utility trailer.”
On August 17, 2007 the Bautistas’ granddaughter, Valerie Bautista, who was less than two years old, was killed in the driveway of the Bautistas’ house when Jose Bautista ran over her with his pickup truck. Sara Bautista routinely allowed the grandchildren to greet Jose at his truck when he came home. She knew that she needed to take extra precautions and supervise the younger grandchildren, including Valerie, when they went to greet Jose, to keep them out of what the Bautistas call the “zone of danger.” On the day of the accident, however, Valerie “got out of the house without [Sara] knowing it.” She walked in front of Jose’s truck, and he ran her over.
On August 14, 2009 Valerie’s mother, Kenia Casaya, and her sisters filed an action against the Bautistas and Valerie’s father, Jose Luis Bautista, Jr., for wrongful death, negligence, and negligent supervision. Their second amended complaint, which included Valerie’s father as a plaintiff rather than a defendant, contained two causes of action, the first for negligence in operating a motor vehicle and the second for general negligence. In the second cause of action, the plaintiffs alleged that “[d]efendant SARA BAUTISTA, so negligently cared for, supervised, watched, managed, controlled and failed to care for, supervise, watch, manage and control decedent Valerie Bautista, who was a[t] the time an infant under the age of two (2) years, as to allow decedent Valerie Bautista to leave Defendant’s [sic] home unsupervised, where she was run over and killed by Defendant JOSE LUIS BAUTISTA, while in the driveway of Defendants’ home.” (Underscoring omitted.)
Farmers provided a defense to the Bautistas in the Casaya action. On July 6, 2012 the parties resolved that action by a stipulated judgment in the amount of $360, 000. In addition, the plaintiffs signed a covenant not to execute on the judgment in exchange for an assignment of action by the Bautistas.
Farmers then filed this action against the Bautistas for declaratory relief. Farmers sought a declaration that it was not obligated to provide coverage under the Bautistas’ homeowners insurance policy with respect to the Casaya action for two reasons: (1) The motor vehicle exclusion in the homeowners policy precluded any potential coverage because all of the claims in the Casaya action arose out of Jose Bautista’s use of a motor vehicle; and (2) the homeowners policy excluded coverage for residents of the insureds’ household, and Valerie was a resident of the Bautistas’ household at the time of the accident. The Bautistas filed a cross-complaint for breach of the implied covenant of good faith and fair dealing and for fraud based on Farmers’ failure to pay benefits due under both the homeowners and automobile insurance policies.
Farmers filed a motion for summary adjudication on the complaint and the Bautistas’ cross-complaint on the ground there was no potential for coverage and thus no duty to defend or indemnify the Bautistas under the homeowners insurance policy. Relying on State Farm Mut. Auto. Ins. Co. v. Partridge (1973) 10 Cal.3d 94 (Partridge) and National American Ins. Co. v. Coburn (1989) 209 Cal.App.3d 914 (Coburn), Farmers argued that because Jose’s use of a vehicle caused Valerie’s death, and Sara’s negligent supervision of Valerie was not an independent cause of Valerie’s death, the motor vehicle exclusion in the homeowners insurance policy precluded coverage under that policy. The Bautistas opposed the motion on the ground that two independent negligent acts, Jose’s negligent use of the vehicle and Sara’s negligent supervision of the children, caused Valerie’s death. The Bautistas argued that under Partridge and State Farm Fire & Cas. Co. v. ...