In Upasani v. State Farm (No. G048399, filed 6/6/14, ord. pub. 6/26/14), a California appeals court held that bare allegations of negligence will not trigger a duty to defend claims for conspiracy to aid child abduction, because such claims are nonaccidental, intentional, and purposeful.
State Farm’s insureds were sued for conspiring to aid a mother in abducting her son from his father. The father’s lawsuit alleged violation of Civil Code section 49(a) (child abduction), negligence per se, intentional infliction of emotional distress, and negligent infliction of emotional distress. The father alleged that his wife abducted their infant son and hid him in India for almost 18 years with the knowledge and help of the insureds.
State Farm denied the insureds’ tender of defense on the ground that abduction claims do not arise out of accidental conduct and, therefore, there is no occurrence and no duty to defend or indemnify.
In the resulting bad faith lawsuit, the insureds did not dispute that the conduct alleged by the father was all intentional and nonaccidental. Rather, they opposed State Farm’s motion for summary judgment by establishing that the father had failed to prove that they had committed any acts related to the abduction of the child at all, as demonstrated by a special jury verdict in their favor at the underlying trial. But the court agreed that there was no coverage or duty to defend. The court found that all of the facts alleged in the complaint or claimed in discovery were nonaccidental, intentional, and purposeful.
Factually, the insureds were alleged to be co-conspirators in the abduction, and the court found that conspiracy is nonaccidental or intentional because “[t]he sine qua non of a conspiratorial agreement is the knowledge on the part of the alleged conspirators of its unlawful objective and their intent to aid in achieving that objective.” To the extent that the insureds were alleged to have violated Civil Code section 49, subdivision (a), which prohibits “[t]he abduction or enticement of a child from a parent,” the court said that “a material point of inquiry is the intent with which the defendant has acted. It must appear that the defendant has acted with improper motives.”
Despite the presence of causes of action for negligence and negligent infliction of emotional distress, the court found that all the allegations in the complaint, as supplemented by the discovery responses, established that the only claims against the insureds were for conspiracy to abduct the plaintiff’s son. The court said that the underlying special verdict in favor of the insureds made no express finding of accidental conduct and could not be argued to create an implied finding that the insureds’ conduct was accidental.
The Upasani court also rejected a claim that a possibility of liability for aiding and abetting triggered coverage, saying that “California courts have long held that liability for aiding and abetting depends on proof the defendant had actual knowledge of the specific primary wrong the defendant substantially assisted.”
The court then dismissed an argument that the intervening and arguably unforeseeable lapse of 18 years constituted an accident, saying that “the term ‘accident’ in the policy’s coverage clause refers to the injury-producing acts of the insured.”
Finally, the Upasani court rejected an argument that because a renewal policy from State Farm had changed the definition of “bodily injury” to expressly exclude emotional distress without physical injury, the earlier policy must have covered pure emotional distress, stating that “long before State Farm modified its policies to make a specific reference to emotional distress, well established California law made clear that bodily injury did not include emotional distress damages.”
Thus, the court ruled that State Farm did not have a duty to provide coverage or a defense because the father’s damages did not arise from bodily injury caused by an accidental occurrence.
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