Shaub v. Praetorian Ins. Co. CA2/1

Filed 12/30/14 Shaub v. Praetorian Ins. Co. CA2/1 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

MAURICE E. SHAUB et al., B255458

Plaintiffs and Appellants, (Los Angeles County Super. Ct. No. SC120147) v.

PRAETORIAN INSURANCE COMPANY,

Defendant and Respondent.

APPEAL from a judgment of the Superior Court of Los Angeles County. Allan J. Goodman, Judge. Affirmed. Shaub & Williams, David R. Shaub and Lisbeth Bosshart Merrill for Plaintiffs and Appellants. Nelsen, Thompson, Pegue & Thornton, Timothy M. Thornton, Jr., and Elizabeth A. Farny for Defendant and Respondent.

_____________________________________________

This is a derivative action by a group of condominium owners on behalf of their homeowners’ association against the association’s commercial liability insurer. Plaintiffs seek indemnity to the association for money it paid to settle claims by other owners based on the association’s alleged negligence in failing to prevent earth movement that damaged their homes. The trial court held that even assuming the homeowners’ association was negligent in failing to prevent the earth movement, liability for the association’s negligence was not covered by its policy because the policy excludes liability for property damage “arising out of . . . ‘movement of land or earth.’” The court sustained the insurer’s demurrer without leave to amend and entered judgment for the insurer. We affirm. FACTS AND PROCEEDINGS BELOW In the underlying action, two home owners in the condominium development of Malibu Villas sued the Malibu Villas Owners Association (“MVOA”) for failing to prevent “continuing soil movement” that damaged their homes. The owners alleged causes of action for breach of contract, breach of fiduciary duty, injunctive relief, nuisance and negligence. MVOA tendered defense of the owners’ suit to the Praetorian Insurance Company under its commercial liability insurance policy in force at the time. The policy provided that Praetorian “will pay those sums that the insured becomes legally obligated to pay as damages because of . . . ‘property damage’ to which this insurance applies.” (Italics added.) “Property damage” is defined in the policy in relevant part as “[p]hysical injury to tangible property.” As pertinent to this appeal, Praetorian denied coverage and refused to defend MVOA on the basis that the liability coverage of the policy does not apply to claims for property damage “caused by, arising out of, relating to, resulting from, contributed to, or aggravated by any ‘movement of land or earth.’” (The parties refer to this provision as the Earth Movement Exclusion.)