The Homeowner's Insurance Policy

The policy provided personal liability coverage in the amount of $300,000 per occurrence under Coverage E, which stated:

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.

The policy excluded from Coverage E bodily injury that:

7. results from the ownership, maintenance, use, loading or unloading of … b. motor vehicles….”

The Appellate Court's Decision

The appellate court rejected the trial court's ruling.

In its decision, the court of appeal explained that the coverage issue turned on whether Mr. Bautista's alleged negligent operation of his truck and Ms. Bautista's alleged negligent supervision of her granddaughter were dependent or independent concurrent proximate causes of the girl's fatal injuries. It then decided that Ms. Bautista's alleged negligent supervision of her granddaughter allowed her to become exposed to the specific hazard created by the arrival of Mr. Bautista in his truck. None of the alleged negligent supervision existed “independently of [Mr. Bautista's] use … of the vehicle,” the appeals court added.

Therefore, the appellate court ruled, the trial court had erred in finding that Ms. Bautista's alleged negligent supervision of her granddaughter existed independently of the “use” of a motor vehicle. Her alleged negligence “was sufficiently related to [Mr. Bautista's] use of the vehicle and 'part of a course of uninterrupted conduct' that it fell within the motor vehicle exclusion.” Farmers had no liability under the homeowner's insurance policy as a matter of law and was entitled to summary adjudication on its complaint and the Bautistas' cross-complaint that it had no duty to indemnify or defend the Bautistas in the underlying action, the appellate court concluded.

The case is Farmers Ins. Exchange v. Superior Court, No. B248324 (Cal.Ct.App. Oct. 28, 2013). Attorneys involved include: Archer Norris, Limor Lehavi, Mariyetta A. Meyers–Lopez; Greines, Martin, Stein & Richland, Robert A. Olson and Feris M. Greenberger for Petitioner; Louis G. Fazzi and Fernando J. Bernheim for Real Parties in Interest.

FC&S Legal Comment

Cases from other jurisdictions have reached similar conclusions. See, e.g., Bartow v. Homesite Ins. Co., Inc., No. 09–2061 (D.N.J. Dec. 29, 2009) (automobile exclusion in homeowner's insurance policy applied because alleged negligent supervision by father, who ran over his toddler son with his SUV, was not “a wholly independent, discrete, act … that would constitute a dual cause of” the toddler's death, and the father's alleged “failure to monitor the toddler's whereabouts is inextricably tied to [the father's] manipulation of the vehicle”); Phoenix Ins. Co. v. Churchwell, 785 N.E.2d 392 (Mass.Ct.App. 2003) (“it would be difficult to separate [the mother's] negligent supervision claim” of failing to place a child, subsequently injured in a car accident, into a proper child restraint seat, from the insured's “operation of her motor vehicle and to hold that [the child's] injuries did not arise out of the operation of a motor vehicle, a risk not covered by the homeowner's policy”); Austin Mut. Ins. Co. v. Klande, 563 N.W.2d 282 (Minn.Ct.App. 1997) (“the insureds' alleged negligent supervision of the child [who was injured when a motorcycle in the garage fell on him] was not a divisible concurrent cause of the accident, such as would implicate coverage under insureds' homeowner policy notwithstanding the motor vehicle exclusion,” but rather was “so intertwined with and intimately connected to the insureds' ownership and use of the motorcycle it cannot be said that the claim arose independently of the motorized vehicle related cause”).