On April 30, 2010, the Second Appellate District filed its opinion in Legacy Vulcan v. Superior Court, 184 Cal. App. 4th 285, holding Transport Insurance Company had a duty to defend under an umbrella policy where scheduled underlying insurance did not apply and despite [...]]]> Summary by Rebecca B. Aherne, Esq.

On April 30, 2010, the Second Appellate District filed its opinion in Legacy Vulcan v. Superior Court, 184 Cal. App. 4^th 285, holding Transport Insurance Company had a duty to defend under an umbrella policy where scheduled underlying insurance did not apply and despite the fact that insured’s SIR had not been paid.

Factual and Procedural Background

The City of Modesto and others sued Vulcan alleging a product it manufactured and sold to the dry cleaning industry had resulted in environmental contamination.  The alleged damage was apparently continuous over a number of policy periods, including when Transport’s policy, and the policies directly underlying it, were in effect.  Vulcan tendered the defense of the actions to several insurers, none of which provided a defense.  Vulcan paid for its own defense and settled the lawsuits.  Transport filed a declaratory relief action against Vulcan to determine the rights and obligations under its excess catastrophe policy.

The Transport policy provided the insurer would indemnify Vulcan for the “ultimate net loss (UNL) in excess of the retained limit” that Vulcan became legally obligated to pay as damages because of property damage.  The insuring agreement stated Transport would indemnify Vulcan, for the UNL in excess of the retained limit, with respect to any property damage covered by the Transport policy, but not underlying insurance (clause 1), or if the limits of liability of the underlying insurance are exhausted (clause 2).  The insuring agreement further provided Transport had the duty to defend any suit against Vulcan seeking damages for property damage.

The declarations stated the retained limit was underlying insurance or $100,000 because of property damage arising out of any one occurrence covered by the Transport policy, but not underlying insurance.  Transport’s limit of liability was the UNL in excess of Vulcan’s retained limit which was the greater of “an amount equal to the limits of liability of underlying insurance listed in Schedule A, plus the applicable limits of any other underlying insurance collectible by the insured (clause a), or $100,000 because of property damage not covered by underlying insurance listed in Schedule A (clause b).  The term “underlying insurance” was not defined.

The trial court held the policy provided both excess and umbrella coverage, but that for purposes of the duty to defend, Transport’s duties were limited to those of an excess insurer.  The trial court concluded that a duty to defend could arise under the terms of the policy only upon exhaustion of all underlying insurance (policies directly underlying Transport’s policies and any other underlying policies in effect during the period of loss) and upon a showing that the claims were actually covered.  On appeal, the decision was reversed.

Judicial Holding and Analysis

The appellate court confirmed the Transport policy provided both excess and umbrella coverage.  The umbrella coverage was primary coverage, and the existence of the duty to defend with respect to the umbrella coverage did not depend on the exhaustion of any underlying insurance.  The term “underlying insurance” as used in clause 1 was ambiguous and therefore had to be interpreted in Vulcan’s favor to refer to only the scheduled underlying policies rather than all of the collectible primary insurance available to Vulcan.  Vulcan need not have shown the claims were actually covered to establish the duty to defend with respect to the primary umbrella coverage, but needed only to show a potential for coverage.  The retained limit provision in a policy providing primary coverage relieves the insurer of the duty to provide an immediate, “first dollar” defense only if the policy expressly so provides.  Vulcan need not have incurred a liability in excess of the retained limit before Transport’s duty to defend could arise.

On appeal, Vulcan argued, as respects clause 1, that 1) the duty to defend relates to the umbrella coverage and extends to suits potentially covered, so that Vulcan need not have shown actual coverage to trigger the duty to defend; and 2) the term “underlying insurance” includes only the underlying policies listed in Schedule A, rather than all primary policies in effect during the period of the continuous loss.

The court found that clause a provided excess insurance and clause b provided primary umbrella coverage.  Clause 1 established a duty to defend in connection with the umbrella coverage.  Because the umbrella coverage was primary, the ordinary rules regarding a primary insurer’s duty to defend applied.  As such, Transport had a duty to defend with respect to umbrella coverage under clause 1 if any of the claims were potentially covered by the Transport policy and not covered by the underlying policies listed in Schedule A.

Clause a of the retained limit provision referred specifically to the underlying insurance listed in schedule A, plus the applicable limits of any other underlying insurance.  Clause b limited underlying insurance to the policies listed on Schedule A.  In the court’s mind, this raised the issue as to whether the reference to underlying insurance in clause 1 referenced only the policies listed in Schedule A, or all underlying insurance.

Clause b established an indemnity obligation relating to the umbrella coverage, while clause 1 established a defense obligation regarding that coverage.  The indemnity obligation extended to the underlying insurance listed in Schedule A.  It was reasonable for Vulcan to conclude that the claims for which clause 1 provided a defense obligation were the same claims for which clause b provided an indemnity obligation.  Vulcan reasonably expected Transport to provide a defense for all claims potentially covered by the umbrella provision.

The court held the term “underlying insurance”, as used in clause 1, was ambiguous because it reasonably could have been interpreted to mean either the insurance listed in Schedule A or all underlying insurance.  Resolving the ambiguity in favor of Vulcan (as required), the court concluded the term “underlying insurance”, as used in clause 1, encompassed only the policies listed in Schedule A.  Thus, if the scheduled underlying policies did not provide coverage, and there was a potential for coverage under the Transport policy, Transport had a duty to defend Vulcan, regardless of the availability of other underlying primary coverage.

The court rejected Transport’s argument there is a general rule that an insurer has no duty to defend until the insured has become legally obligated to pay an amount in excess of the SIR.  The impact of an SIR or retained limit on the duty to defend depends on the particular policy language.  The general rule, that an excess carrier has no duty to defend unless the underlying insurance is exhausted, should not apply to insurers who provide primary coverage with an SIR absent clear policy language so providing.  To require the exhaustion of an SIR before an insurer will have a duty to defend would be contrary to the reasonable expectations of the insured to be provided an immediate defense in connection with its primary coverage.  Any limitation on the insurer’s defense obligation must be conspicuous, plain and clear.  Clause 1 expressly stated that Transport had a duty to defend claims that were not within the coverage of the underlying insurance, but were within the coverage of the Transport policy.  The duty to indemnify with respect to the umbrella coverage was limited to amounts in excess of the $100,000 retained limit, but the policy did not provide that the duty to defend such claims was limited by the retained limit in any manner.  Absent an express limitation on the duty to defend, the court concluded the duty to defend was not so limited.

Comments and Implications

In Community Redevelopment v. Aetna (1996) 50 Cal. App. 4th 329, the court held in favor of an excess insurer on the ground it had no duty to defend until all of the primary insurance had been exhausted. The excess policy unambiguously stated that it was in excess of “any other underlying insurance.” This language included all available primary insurance, not just specifically scheduled underlying policies. Because not all primary insurance policies had been exhausted, the excess insurer’s duty to defend was never triggered.

The different result in Vulcan can be explained by the fact the Transport policy provided umbrella, as well as excess, coverage, and the court was not satisfied that the policy clearly enunciated the insurer’s duties as to the each of the coverages.

On April 5, 2010, the 9th Circuit Court of Appeals, in Hyundai Motor America v. National Union Fire Ins. Co., held the insurer had a duty to defend a patent infringement claim under the advertising injury provision.  The insured, Hyundai, placed certain features on its website.  It was sued by Orion [...]]]> By Rebecca Aherne

On April 5, 2010, the 9th Circuit Court of Appeals, in Hyundai Motor America v. National Union Fire Ins. Co., held the insurer had a duty to defend a patent infringement claim under the advertising injury provision.  The insured, Hyundai, placed certain features on its website.  It was sued by Orion IP LLC for patent infringement for the use of the features.  Hyundai sought a defense from National Union on the ground the lawsuit alleged covered “advertising injury” because the infringement concerned its advertising methods.  National Union declined to defend.  Hyundai sued the insurer seeking to recover its defense costs.  The district court found in favor of National Union.  The Court of Appeals reversed the decision holding the infringement claims against Hyundai constituted allegations of “misappropriation of advertising ideas.”  The case was remanded to the district court with instructions to grant summary judgment to Hyundai for declaratory relief on the duty to defend.

Hyundai’s website contained a “build your own vehicle” (BYO) feature which allowed users to navigate a series of questions to select automobile colors, engines, options, etc. In response to the input, the feature displayed customized vehicle images and pricing information.  Orion held patents concerning methods of generating customized product proposals for potential customers of an automobile dealer.  Orion alleged Hyundai’s BYO feature infringed its patent.

The National Union policy provided the company would defend Hyundai against suits seeking damages for “advertising injury” caused by an offense committed in the course of advertising Hyundai’s products.  “Advertising injury” is defined as including the “misappropriation of advertising ideas or style of doing business.”  Hyundai asserted the patent infringement claims in the Orion action were claims alleging the misappropriation of advertising ideas.

Three elements are needed to establish a duty to defend for an advertising injury:  1) the insured was engaged in advertising during the policy period when the alleged advertising occurred; 2) the allegations against the insured created a potential for liability under one of the covered offenses; and 3) a causal connection existed between the alleged injury and the advertising.

“Advertising” means widespread promotional activities directed to the public at large, but does not include solicitation.  Orion’s complaint alleged advertising activities because it alleged Hyundai’s BYO feature constituted making and using supply chain methods, sales methods, sales systems, marketing methods, marketing systems, and inventory systems.  Marketing methods or systems fits within the definition of advertising.  The court rejected National Union’s argument, that each individual’s use of the BYO feature constitutes an individualized solicitation, on the ground the feature is widely distributed to the public at large even though the precise information conveyed to each user varies with user input.

The court next determined that a lay person reasonably would read the phrase “misappropriation of advertising ideas” to include the Orion infringement claim.  Patent infringement claims can qualify as an advertising injury if the patent involves any process or invention which could reasonably be considered an advertising idea.  Orion patented a method of displaying information to the public at large for the purpose of facilitating sales and its complaint alleged that Hyundai violated its patent by using the patented technologies as part of its marketing method.  Thus, Orion’s claim alleged a misappropriation of advertising ideas.

The Court of Appeals also found a casual connection between the advertisement and the alleged advertising injury, because Hyundai’s advertising constituted the use of the patented marketing tool.  The casual connection was established as the infringement occurred in the course of advertising.  The court distinguished those situations in which the infringement occurs independent of advertisement of the underlying product.  The causal connection is not typically established if the patent concerns the underlying product.  For example, in Iolab v. Seaboard Sur. Co., 15 F. 3d 1500, a patent holder sued the insured for infringement regarding the manufacture and sale of an intraocular lens.  The court held there was no causal connection because the infringement claim was based, not on the advertising of the lens, but on its manufacture and sale.

On March 23, 2010, the Second Appellate District filed its opinion in Amerigraphics, Inc. v. Mercury Casualty Company, 182 Cal. App. 4th 1538, holding the insurer erroneously, and in bad faith, denied coverage to its insured for continuing operating expenses pursuant to business-interruption coverage provided by a “Special Multi-Peril Policy.”  The [...]]]> By Rebecca Aherne

On March 23, 2010, the Second Appellate District filed its opinion in Amerigraphics, Inc. v. Mercury Casualty Company, 182 Cal. App. 4^th 1538, holding the insurer erroneously, and in bad faith, denied coverage to its insured for continuing operating expenses pursuant to business-interruption coverage provided by a “Special Multi-Peril Policy.”  The court further held the insured was entitled to punitive damages, but it reduced the amount of punitive damages from $1.7 million to $500,000.

Factual and Procedural Background

Amerigraphics is a printing and graphics design company established in 1997 by Mark Volper and Boris and Marina Smordinsky.  The company leased space in Sherman Oaks, CA and made tenant improvements over the next several years in the approximate amount of $70,000.  The company was very successful until 2001 when it experienced a substantial drop in business.  In April 2003, its premises were flooded by a broken water heater in a second floor restroom.  The water damaged all of the company’s electrical equipment including a $12,000 printer and a $5,000 scanner.  Volper contacted the seller of the equipment, RM Consulting, which determined it was irreparably damaged.

The policy issued to the company by Mercury included business-interruption coverage which provided the company will pay for the actual loss of business income sustained due to necessary suspension of operations during the period of restoration.  Business income was defined as net income that would have been earned if no loss had occurred and continuing normal operating expenses incurred.

Volper promptly reported the loss to Mercury and the claim was assigned to adjuster Ken Brown.  Although Brown subsequently called Volper, he failed to discuss the available coverages with Volper as required by company guidelines.  In May, Volper provided Mercury with a preliminary loss evaluation listing items of business personal property worth approximately $43,000.  Mercury paid $10,000 toward the business property loss.

It was not until more than a month after the flood that Mercury arranged for an inspection of the printer and scanner.  The tests were performed in June, but the results were not given to Volper until September.  Mercury’s position was that the equipment had been restored to pre-loss condition, but Volper asserted the tests were inaccurate and inconclusive.  When Mercury finally reexamined the equipment in June 2004, it was found to be inoperable.

When Volper inquired about normal operating expenses, Brown denied such coverage existed until Volper provided him with a copy of the relevant policy language.  Pursuant to Brown’s request, Volper sent him a list of $59,467 in expenses as of September 12, 2003 with the indication that the funds were needed ASAP in order for his business to survive.  A year later, Mercury denied the claim on the ground Amerigraphics did not incur a loss in business because its expenses exceeded its income, resulting in an operating loss.

When Volper submitted a claim for tenant improvement loss in June of 2004, Mercury denied such coverage existed.  Again, Volper sent Mercury a copy of the portion of the policy providing such coverage as well as a letter identifying the $73,000 in tenant improvements.  Mercury denied the claim on the ground there was no damage to the tenant improvements as a result of the flooding, but subsequently directed an investigation to determine whether such damage had occurred.  Six months later, Volper wrote several letters to Mercury inquiring as to the status of the claim, including several letters to the president of the company which were routed to the vice-president of claims and the claims supervisor, but never answered.  It was not until February 2005, that Mercury sent Amerigraphics a check for $23,000 as “payment in full” for the tenant-improvement claim.

Amerigraphics sued Mercury for breach of contract and bad faith.  The trial judge held the insured was entitled to recover both net income and continuing normal operating expenses without having to offset one against the other.  The jury determined that Mercury breached the insurance contract, and that Amerigraphics sustained damages as a result thereof in the amount of $130,000.  The jury also found that Mercury breached the implied covenant of good faith and fair dealing, and in addition, that it acted with fraud, malice and oppression.  The jury awarded Amerigraphics $3 million in punitive damages and $40,000 in prejudgment interest. The judge reduced the award of punitive damages to $1.7 million – ten times the amount of the compensatory damages and interest.

Judicial Holding and Analysis

The appellate court affirmed the judgment except for the amount of punitive damages which it reduced to $500,000.  As respects the application of the business income provision, Amerigraphics argued it required Mercury to pay for (i) lost income and (ii) continuing normal business expenses during the period of business suspension.  To the extent there was no lost income (i.e., there was only a net loss), there would be no amount paid under subpart (i), but the insured would still be paid under subpart (ii) for its operating expenses.  Mercury, relying on several non-California cases, argued that if the insured’s net income during the period before the loss was a net loss that was greater than its operating expenses, the insured would not recover any proceeds under this provision.  Stating that it was not bound by out-of-state authorities, the court adopted the insured’s interpretation.  In its opinion, the plain meaning of the policy language would lead an ordinary insured to conclude that in the event of a covered loss that forced the suspension of its business operations, the policy would provide coverage for any lost profits, and even if there were no lost profits, for ongoing expenses incurred during the period of suspension.  There is nothing in the policy language to suggest to an insured that if a business is not earning a profit it should not expect coverage for its continuing expenses during the period it cannot operate.

As respects the determination that Mercury breached the implied covenant of good faith and fair dealing, the jury was instructed that it could find Mercury liable for bad faith if it found Mercury unreasonably failed to pay, or unreasonably delayed payment or failed to properly investigate the loss.  There was substantial evidence on which the jury could find that Mercury engaged in bad faith.  There was also more than substantial evidence to support an award of punitive damages.  Pursuant to Civil Code section 3294(a), punitive damages may be awarded if the defendant is guilty of oppression, fraud or malice.  The evidence showed Mercury was intentionally dishonest and showed a conscious disregard of Amerigraphic’s rights.  Mercury failed to abide by its own guidelines, unreasonably delayed in responding to demands for coverage, failed to promptly and fully investigate Amerigraphics’ claims, denied the existence of coverage provided by the policy, and denied coverage prior to conducting an investigation.

Regarding the amount of punitive damages, the court held that $1.7 million was constitutionally excessive.  The due process clause of the Fourteenth Amendment places constraints on punitive damage awards.  “Grossly excessive or arbitrary awards” are prohibited.  Citing the Sate Farm v. Campbell case, (2003) 538 U.S. 408, the court noted the following factors determine the appropriateness of punitive damage awards:  1) the degree of reprehensibility of the defendant’s misconduct; 2) the disparity between the harm suffered and the damages awarded; and 3) the difference between the punitive award and the civil penalties authorized in similar cases.  The most important of these factors is the degree of reprehensibility of the defendant’s conduct.  Courts look at a number of factors to determine the degree of reprehensibility.  Because only one of the factors applied here-Amerigraphics was financially vulnerable, the court did not discern a high degree of reprehensibility.  Regarding the ratio of punitive damages to the compensatory award, the trial court relied on the Simon v. San Paolo case, (2005) 35 Cal. 4^th 1159, in reducing the award of punitive damages to a ten-to-one ratio, but on appeal Mercury argued that a one-to-one limit was appropriate in most cases, especially those involving pure economic loss.  The appellate court decided that neither the interest in deterrence, nor Mercury’s substantial wealth, justified a punitive damages award of ten times the amount of compensatory damages.  On the other hand, the $10,000 statutory penalty for deceptive practices by insurers was not sufficient where, as in this case, the insurer engaged in a course of conduct over a period of years that involved many prohibited acts.  The court concluded that the maximum award of punitive damages, consistent with due process, was $500,000, an award based on a 3.8-to-one ratio.

Comments and Implications

The determination of the appropriate amount of punitive damages is not an exact science.  As the court stated, “[t]o state a particular level beyond which punitive damages in a given case would be grossly excessive, and hence unconstitutionally arbitrary, is not an enviable task.  In the last analysis, an appellate panel, convinced it must reduce an award of punitive damages, must rely on its combined experience and judgment.”  The pendulum appears to be swinging back in the direction of defendants.  In the Roby v. McKesson case, (2009) 47 Cal. 4^th 686, the California Supreme Court, for the first time, reduced the amount of punitive damages awarded by a jury.  In this employment discrimination/harassment case, the jury awarded $15 million in punitive damages and $3 million in compensatory damages.  Based on its finding the defendant’s conduct represented a relatively low degree of reprehensibility, the Supreme Court reduced the compensatory damages to $1,905,000, and concluded that for punitive damages, a one-to-one ratio was the constitutional limit.  However, courts have applied a higher ratio depending on the degree of reprehensibility of the defendant’s conduct.  In Txo Productions v. Alliance Res. Corp., 509 U.S. 443, the U.S. Supreme Court upheld a punitive damage award of $10 million even though the actual damages were only $19,000.  The court eschewed an approach that focuses entirely on the relationship between actual and punitive damages, and considered the magnitude of the potential harm the defendant’s conduct would have caused to the intended victim as well as the possible harm to other victims.

On January 26, 2010, the Fourth Appellate District filed its opinion in Fire Insurance Exchange v. Superior Court, 181 Cal. App. 4th 388, holding the insurer had no duty to defend its insureds in an action by an adjoining landowner as a result of an encroachment because building [...]]]> Summary by Rebecca B. Aherne, Esq.

On January 26, 2010, the Fourth Appellate District filed its opinion in Fire Insurance Exchange v. Superior Court, 181 Cal. App. 4^th 388, holding the insurer had no duty to defend its insureds in an action by an adjoining landowner as a result of an encroachment because building a structure that encroaches onto another’s property is not an accident within the meaning of the policy even if the insureds acted in the good faith, but mistaken, belief they were legally entitled to build.

Factual and Procedural Background

Kenneth and Dorothy Bourguignon owned property adjoining land owned by Louise Leach.  Ms. Leach granted the Bourguignons an access easement over a five-and-one-half-foot-wide portion of her property that bordered theirs.  When the Bourguignons decided to rebuild and renovate their house, Leach, unbeknownst to co-owners of the property, agreed to a “Lot Line Adjustment.”  When Ron and Marie Parsons purchased Leach’s property, they discovered the Bourguignons house encroached on their property.  The Bourguignons sued the Parsons for quiet title and adverse possession of the five-and-one-half-foot strip.  The Parsons cross-complained alleging that the Bourguignons knew the newly built residence encroached on the Leach property and had misrepresented the facts to obtain Leach’s approval.

The Bourguignons tendered the defense of the claim to Fire Insurance Exchange (FIE) under the homeowner policy issued to them.  FIE refused to defend.  The Bourguignons sued FIE for breach of contract and bad faith.  FIE contended it had no obligation to defend, because the alleged loss resulted from the Bourguignons’ intentional act of building over the lot line, and thus was not the result of an accident.  The trial court disagreed, finding there was a potential for coverage because the intentional act of constructing the home could constitute an “accident” if done with the mistaken belief of ownership of the disputed property.

Judicial Holding and Analysis

The appellate court reversed the trial court decision holding there was no coverage because the claimed damage did not arise from an “accident.”  The policy covered damages the insured becomes legally obligated to pay because of property damage resulting from an occurrence.  “Occurrence” was defined as “an accident including exposure to conditions which results during the policy period in . . . property damage.”  The commonsense interpretation of the term “accident” is an unintentional, unexpected, chance occurrence.  An accident does not occur when the insured performs a deliberate act unless some additional, unexpected, independent, and unforeseen happening occurs that produces the damage.  The court cited Merced Mutual v. Mendez (1989) 213 Cal. App. 3d 41 which explained:  When a driver intentionally speeds, and as a result, negligently hits another car, the speeding is an intentional act.  However, the act directly responsible for the injury-hitting the other car-was not intended by the driver and was fortuitous.  Accordingly, the occurrence resulting in injury would be deemed an accident.  This situation is distinct from an instance where a driver speeds and deliberately hits the other car.

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.  The insured’s subjective intent is irrelevant.  The term “accident” refers to the nature of the act giving rise to liability, not to the insured’s intent to cause harm.  (The court noted that State Farm v. Superior Court (2008) 164 Cal. App. 4^th 317 appears to conflict with this rule.  In that case, the insured tried to throw a man into a swimming pool, but the man hit the stairs of the pool injuring his ankle.  The court held the injury was caused by an accident because it was not foreseen.  The insured intended the man to fall into the water, not on the steps.)

The Bourguignons intended to build the house where they built it.  The act of construction was intentional and not an accident even though the insureds acted under a mistaken belief that they had a right to build.  The reason for their failure to obtain title to the disputed property was irrelevant to the determination of whether their construction of the building could be characterized as an accident.  The Bourguignons mistaken belief in their legal right to build did not transform their intentional act of construction into an accident.

Comments and Implications

The court cited several cases for the proposition that an insured’s mistake of fact or law does not transform a purposeful act into an accident.  For example:  Sexual assault/molestation is not an accident notwithstanding the insured’s belief the victim consented.  Quan v. Truck Ins. Exch. (1998) 67 Cal. App. 4^th 583; Lyons v. Fire Ins. Exch. (2008) 161 Cal. App. 4^th 880.  An insured’s belief in the need for self-defense does not turn the resulting intentional act of assault and battery into an accident.  Delgado v. Interinsurance Exch. (2009) 47 Cal. 4^th 302.  A misunderstanding of legal rights does not turn conversion of property into an accident.  Collin v. American Empire Ins. Co. (1994) 21 Cal. App. 4^th 787.  A mistaken belief that acts were lawful does not render wrongful eviction of a tenant an accident.  Swain v. California Casualty (2002) 99 Cal. App. 4^th 1.  An employment termination, even if due to a mistake of fact, is an intentional act, not an accident.  Lipson v. Jordache Enterprises (1992) 9 Cal. App. 4^th 151.

The court also discussed three federal court cases involving property disputes.  Two of the cases ruled that trespass was not an accident.  Allstate v. Salahutdin (N.D. Cal. 1992) 815 F. Supp. 1309; Bailey v. State Farm (N.D. Cal. 1992) 810 F. Supp. 267.  In the other case, the court held there was a potential for coverage because the insureds did not know they had been trespassing on their neighbors’ property.  Allstate v. Vavasour (N.D. Cal. 1992) 797 F. Supp 785.  The FIE court followed Salahutdin and Bailey as they were in accord with the California rule that the term accident refers to the nature of the conduct itself rather than to its consequences.  The suggestion in Vavasour that the harm occasioned by intentional conduct may constitute an accident when the insured is unaware of its wrongful character is contrary to California authorities.

Judge Miller dissented from the majority opinion in FIE on the ground the record supported the finding the Bourguignons’ conduct was executed without the objective of encroaching on their neighbors’ property.  The dissent referred to the examples given in the Delgado case finding that, like the speeding driver who intended to speed, but not hit another car, the Bourguignons intentionally constructed their house, but did not intend to encroach on their neighbors’ property.  Thus, the encroachment, in Judge Miller’s mind, was an accident.  The majority opinion recognized that, unlike the speeding driver who did not intend to hit the other car, the Bourguignons intentionally constructed their house on property belonging to their neighbors.  The majority opinion is the better reasoned decision as it follows the general rule in California that an intentional act is not an accident even where the insured does not intend to cause harm.

However, I found a terrific book where the author details his own negotiation over several outstanding loans and credit cards, and how he saved over $130,000 [...]]]> I’ve had many clients, and potential clients, ask me about debt reduction and negotiation.  Unfortunately, I don’t practice in this area, so I can’t offer any legal advice at all.

However, I found a terrific book where the author details his own negotiation over several outstanding loans and credit cards, and how he saved over $130,000 in the process.  The author reduced his own credit card debt from over $200,000 to just $15,000 in about a year and saved over $130,000 by talking directly to his banks without using an agency.

If you are interested in this area, I highly recommend this book:

http://www.settleyourcreditcards.com