In an opinion remarkably short on detailed analysis, the Court of Appeal for the Second District has ruled that an insurer owed no duty to defend or indemnify under a Commercial General Liability policy when the insured was sued for damages and injunctive relief based on the failure of the insured’s premises to comply with access requirements under the Americans with Disabilities Act (ADA).
Modern Development operates a swap meet at the site of a former drive-in movie theater in Paramount, California. Juan Moreno filed suit against Modern Development alleging that its most recent modernizations and remodeling of the facility had placed the property within the ambit of the ADA and that he had been unable to access restroom facilities on the premises because of his being in a wheelchair. Moreno sought damages for his “serious emotional and physical injuries” as well as injunctive relief under the ADA and California’s Unfair Practices Act. Modern Development tendered defense of the litigation to its insurer, Navigators Insurance Company. Navigators denied coverage, on the stated ground that no portion of the claims arose from a covered “occurrence.” Modern Development filed suit against Navigators, and the trial court granted summary judgment in the insurer’s favor.
The Court of Appeal affirmed, essentially adopting the trial court’s rationale (itself the rationale of the insurer) that Modern Development “intended the architectural layout” to be as it was, so that there was no “accident” or “occurrence” underlying Moreno’s claims.
The original, unpublished version of the decision included a lengthy footnote discussing one federal case and several unpublished California appellate decisions that the Court had found addressing the issue. In ordering its decision to be published in the official reports, the Court ordered the deletion of that footnote. (The footnote can still be found online, and it is reproduced in the Continuation of this post, below.) The entirety of the Court’s rationale now consists of a single paragraph:
In this appeal, the allegations in Moreno’s complaint relate to injuries (both emotional and physical) resulting from his inability to access the restroom facilities at the Swap Meet. The complaint alleged that the Swap Meet failed to comply with various anti-discrimination laws relating to the disabled and that because of the resulting lack of access he was injured. These events are not covered events under Navigators commercial general liability policy because they do not constitute “accidents” or “occurrences” as such terms are defined in the Policy. As argued by Navigators, Moreno’s alleged injuries were caused by the architectural configuration of the Paramount Swap Meet and Modern Development’s alleged failure to remove architectural barrier, not by an accident. The Swap Meet intended for the bathrooms to be configured as they were. The result is that the incident involving Mr. Moreno is not a covered event.
The decision in Modern Development Company v. Navigators Insurance Co. (Aug. 29, 2003), Case No. B157874, can be found at these links in PDF and Word formats.
Continuation:
Footnote 8, which the Court ordered deleted when it ordered its decision to be published in the official reports, is as follows:
In MacAnnan v. General Insurance Co. of America, supra, a wheelchair bound man filed a lawsuit because he could not enter a restaurant without assistance. The Ninth Circuit Court of Appeals affirmed a grant of summary judgment for the insurance company, holding that the alleged harm (psychic trauma) did not result from an 'accident.' They found that the insured 'intended to configure the steps to the restaurant and intended to provide assisted access for wheelchair patrons as he did. [] [C]overage here did not depend on whether the insured’s acts were willful or negligent, but only on whether the insured’s architectural choices constituted an ‘occurrence’ within the terms of the policies.' (MacAnnan at pp. 1-2.)
A more recent California Court of Appeal case is Morris C.M. Yip v. The Dentists Insurance Company (2000 B139850 (Cal.App.2 Dist.)). Yip involved an appeal from a dismissal following the sustaining of a demurrer in favor of an insurance company. In Yip, a disabled man was unable to access a dental office in his wheelchair and sued the dentist. The plaintiff’s allegations were similar to the charges to Moreno’s complaint; claiming humiliation, embarrassment, and frustration, as well as emotional, bodily and physical injury. The company issuing the premises liability policy for the dental office declined to provide a defense. The Court of Appeal in Yip held:
'The entire body of the complaint concerns statutory violations based on inaccessible facilities that are not covered under the TDIC policy. Nothing in the factual allegations of the complaint suggests that an accident occurred which caused Felix bodily injury. Because the factual allegations of the Felix complaint did not describe an event that was potentially covered under the policy, the insurance company was not required to provide a defense.' (Yip at p. 7.)
A case with strikingly similar facts is Original Joe’s, Inc. v. Golden Eagle Insurance Company (2002 WL 192737 (Cal.App.1 Dist.)) This was the only case located which found for the insured, but it is not helpful to Modern. In Original Joe’s, a wheelchair bound man was unable to access the restroom facilities and filed a complaint alleging non-compliance with California’s disability requirements. His complaint did not allege any 'bodily injury' but rather 'damages resulting from physical discomfort and pain, mental and emotional shock, emotional distress, embarrassment and humiliation.' (Original Joe’s at p. 1.) The insurance company denied coverage on three grounds: First, the allegations alleged intentional conduct that did not constitute an accident; second, there was no 'occurrence' under the policy; and, lastly, the alleged statutory violations did not constitute 'bodily injury' under the policy.
The Court of Appeal concluded that the respondent insurance company failed to meet its burden to demonstrate there was no possibility of coverage based on admissible evidence negating coverage.
'Here, Louie’s allegations of physical discomfort and pain adequately suggest a physical injury or its manifestations. Thus, respondent had a duty to defend appellant on the complaint if the injury was caused by an occurrence.' (Original Joe’s at p. 2.) 'Here, there was a possibility that Louie’s alleged injuries were caused by an occurrence under the policy. Though the facts were not developed below, it is possible that the allegedly inaccessible condition of the restroom was excused or that there was an additional "'happening'" that together with appellant’s maintenance of the restroom resulted in an accident.' (Original Joe’s at p. 4.)
We understand this language in Original Joe’s to mean that the circumstances surrounding the infliction of the plaintiff’s injuries was not sufficiently well-identified to allow the conclusion there was no coverage as a matter of law. We do not believe Original Joe’s rationale to extend to a requirement that the insurance company defend the case if the only “occurrence” was the inaccessibility of the bathroom.
The most recent case located was Hebert v. Travelers Indemnity Company of Illinois ( 2003 WL 1122796 (Cal.App. 1st Dist.)). In Hebert, summary judgment was granted for an insurance company after they declined to defend a lawsuit by a man claiming just that he had been denied service at a coffee house in violation of state and federal laws outlawing discrimination against disabled persons. He claimed emotional distress, humiliation and physical injury. The First District Court of Appeal affirmed the summary judgment holding:
'Even assuming that plaintiffs had no intention to discriminate against Murphy and no intention to cause him bodily injury, the conduct giving rise to his complaint cannot be regarded as an "accident." There is no dispute that plaintiff’s intended to exclude Murphy from their coffee house. Even assuming plaintiffs acted fully within their legal rights in doing so, there also can be no dispute that the plaintiff’s intention act by its nature was intended to and did detrimentally affect Murphy, in that it prevented him from entering a place where he desired to spend time. Cases construing standard form general liability policies indistinguishable from those issued to plaintiffs have uniformly held that intentional acts by their nature having a detrimental effect on another person cannot be considered ‘accidents’ even if the harm turns out to be different from that expected.' (Hebert at p. 5, emphasis in original.)
Presumably, the Court deleted this footnote because it realized, or had it pointed out to it, that by citing unpublished California case law, it was violating the controlling Rule of Court prohibiting the use of unpublished decisions as precedent. Whether the Court found these cases on its own or whether they were cited in the parties’ briefs (which would itself be a violation of the Rules of Court) is not clear from the opinion.
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