No Accident, No Occurrence, No Duty to Defend or Indemnify
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Intentionally cutting trees on the neighbors’ land, even if the insured acted on the good faith, but mistaken belief, that the trees were on her land, is not an accident for purposes of insurance coverage. In Maryam Ghukasian v. Aegis Security Insurance Company, B311310, California Court of Appeals, Second District, Fourth Division (April 14, 2022) the California Court of Appeal explained the difference between intentional acts and accidents required for there to be an occurrence for which a defense is required.
FACTUAL BACKGROUND
Maryam Ghukasian sued Aegis Security Insurance Company (Aegis) for breach of contract, insurance bad faith, and declaratory relief after Aegis denied her tender of a lawsuit brought against her by her neighbors. The underlying lawsuit alleged Ghukasian graded land and cut down trees on her neighbors’ property. The trial court granted Aegis’s motion for summary judgment, holding Aegis had no duty to defend because Ghukasian’s homeowner’s policy did not provide coverage for nonaccidental occurrences. It explained that intentionally cutting trees on the neighbors’ land, even if Ghukasian acted on the good faith, but mistaken belief, that the trees were on her land, is not an accident for purposes of insurance coverage.
Ghukasian appealed, contending the California Supreme Court’s decision in Liberty Surplus Ins. Corp. v. Ledesma & Meyer Construction Co. (2018) 5 Cal.5th 216 (Liberty Surplus) impliedly disapproved case law holding an intentional act is not an “accident,” as the term is used in the coverage clause of a liability policy, even if the intentional act causes unintended harm.
Ghukasian owns a home in Glendale, California. Ghukasian purchased a homeowner’s policy from Aegis. In August 2018, while the policy was in effect, she hired contractors to level land and clear trees on land she understood to be a part of her property. The land Ghukasian’s contractor cleared and leveled was not owned by Ghukasian, however, but by Ghukasian’s neighbors, Vrej and George Aintablian (collectively, the neighbors).
The neighbors sued Ghukasian and others, including the contractor, in the underlying action. The complaint that Ghukasian and her contractor “entered upon [the neighbors’] [p]roperty without [the neighbors’] consent,” “made deep cuts . . . into a natural hill on [the neighbors’ property],” “caused a natural swale located on [neighbors’ property] to be filled with dirt[, ]” which “prevented the flow of water in and through the swale,” and “removed, cut down and carried off timber, trees, and underwood from [the neighbors’ property].”
Aegis denied coverage for the underlying action on the ground it owed no duty to defend because the complaint alleged intentional (as opposed to accidental) conduct and various exclusions in the policy barred coverage.
DISCUSSION
On summary judgment, to prevail on the duty to defend issue, the insured must prove the existence of a potential for coverage, while the insurer must establish the absence of any such potential.
The policy at issue covers property damage resulting from an occurrence, which is defined as an accident. Ghukasian’s deliberate act of hiring contractors to clear and level the neighbors’ land, which was ultimately cleared and leveled, was intentional conduct.
The Court of Appeal noted that the insured’s subjective intent was irrelevant. The complaint in the underlying action alleged harm from Ghukasian’s intentional conduct. The leveling of land and cutting of trees were not unexpected or unforeseen events. An accident, on the other hand, is never present when the insured performs a deliberate act unless some additional, unexpected, independent, and unforeseen happening occurs that produces damage.
In the context of liability insurance, an accident is an unexpected, unforeseen, undesigned happening or consequence from either a known or an unknown cause. To the contrary, it is undisputed Ghukasian specifically instructed her contractor to level certain land and cut trees, which is exactly what was done. Ghukaskian’s mistaken belief about the boundaries of her property is irrelevant to determining whether the conduct itself-leveling land and cutting trees-was intentional.
Ghukasian’s intentional conduct was the immediate cause of the injury; there was no additional, independent act that produced the damage. Therefore, the Liberty Surplus Ins. case did not control.
The scope of the duty to defend does not depend on the labels given to the causes of action. There are no allegations, or evidence, that the neighbors’ property was damaged by an accident even though their complaint uses the term negligence. Thus, although the underlying action alleges a cause of action for negligence, the factual allegations reflect intentional acts.
Because the undisputed evidence demonstrates the acts for which the neighbors seek to impose liability on Ghukasian were not accidental, Ghukasian failed to carry her burden to show the neighbors’ claims may fall within the scope of the policy. Ghukasian is not entitled to coverage and therefore, her claims for breach of contract and declaratory relief fail as a matter of law, her bad faith claim also fails.
The judgment was affirmed and Aegis was awarded its costs on appeal.
ZALMA OPINION
The plaintiff’s lawyer, understanding insurance, tried to bind Ghukasian’s insurer by alleging that her conduct was negligent. The court, not bound by the eight corners rule that applies in some jurisdictions, interpreted the policy and facts as alleged, all of which were intentional conduct and concluded that there was no potential of an accident causing the damage.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and [email protected].
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Interpleader Protects All Claimants Against Life Policy and the Insurer
Who’s on First to Get Life Insurance Proceeds
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Interpleader Protects All Claimants Against Life Policy and the Insurer
In Metropolitan Life Insurance Company v. Selena Sanchez, et al, No. 2:24-cv-03278-TLN-CSK, United States District Court, E.D. California (September 3, 2025) the USDC applied interpleader law.
Case Overview
This case involves an interpleader action brought by the Metropolitan Life Insurance Company (Plaintiff-in-Interpleader) against Selena Sanchez and other defendants (Defendants-in-Interpleader).
Key Points
Plaintiff-in-Interpleader’s Application:
The Plaintiff-in-Interpleader...
A Claim by Any Other Name is not a Claim
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It is Imperative that Insured Report Potential Claim to Insurers
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In Jeffrey B. Scott v. Certain Underwriters At Lloyd’s, London, Subscribing To Policy No. B0901li1837279, RLI Insurance Company, Certain Underwriters At Lloyds, London And The Insurance Company, Subscribing To Policy No. B0180fn2102430, No. 24-12441, United States Court of Appeals, Eleventh Circuit (August 25, 2025) the court explained the need for a claim to obtain coverage.
Case Background:
This appeal arises from a coverage dispute under a Directors & Officers (D&O) insurance policy. Jeffrey B. Scott, the plaintiff-appellant, was terminated from his role as CEO, President, and Secretary of Gemini Financial Holdings, LLC in October 2019. Following his termination, Scott threatened legal action against Gemini, and ...
A Claim by Any Other Name is not a Claim
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It is Imperative that Insured Report Potential Claim to Insurers
Read the full article at https://lnkd.in/gfbwAsxw, See the full video at https://lnkd.in/gea_hgB3 and at https://lnkd.in/ghZ7gjxy, and at https://zalma.com/blog plus more than 5150 posts.
In Jeffrey B. Scott v. Certain Underwriters At Lloyd’s, London, Subscribing To Policy No. B0901li1837279, RLI Insurance Company, Certain Underwriters At Lloyds, London And The Insurance Company, Subscribing To Policy No. B0180fn2102430, No. 24-12441, United States Court of Appeals, Eleventh Circuit (August 25, 2025) the court explained the need for a claim to obtain coverage.
Case Background:
This appeal arises from a coverage dispute under a Directors & Officers (D&O) insurance policy. Jeffrey B. Scott, the plaintiff-appellant, was terminated from his role as CEO, President, and Secretary of Gemini Financial Holdings, LLC in October 2019. Following his termination, Scott threatened legal action against Gemini, and ...
Barry Zalma: Insurance Claims Expert Witness
Posted on September 3, 2025 by Barry Zalma
The Need for a Claims Handling Expert to Defend or Prove a Tort of Bad Faith Suit
© 2025 Barry Zalma, Esq., CFE
When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.
On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive ...
The Need for a Claims Handling Expert to Defend or Prove a Tort of Bad Faith Suit
© 2025 Barry Zalma, Esq., CFE
When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.
On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive and became a consultant and expert witness for lawyers representing insurers and lawyers ...
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It’s a Waste of Time to Sue Your Insurer if You Don’t Have Evidence
Evidence Required to Prove Breach of Contract
Read the full article at https://www.linkedin.com/pulse/evidence-required-prove-breach-contract-barry-zalma-esq-cfe-rfelc, see the full video at https://rumble.com/v6yd2z0-evidence-required-to-prove-breach-of-contract.html and at https://youtu.be/2ywEjs3hZsw, and at https://zalma.com/blog plus more than 5150 posts.
It’s a Waste of Time to Sue Your Insurer if You Don’t Have Evidence
In Debbie Beaty and Jonathan Hayes v. Homeowners Of America Insurance Company, No. 01-23-00844-CV, Court of Appeals of Texas, First District (August 26, 2025) Debbie Beaty and Jonathan Hayes filed a claim under their homeowner’s insurance policy with Homeowners of ...