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Liberty Surplus Ins. Corp. v. Ledesma & Meyer Construction Co., Inc.

Filed 6/4/18 IN THE SUPREME COURT OF CALIFORNIA LIBERTY SURPLUS INSURANCE ) CORPORATION et al., ) ) Plaintiffs and Respondents, ) ) S236765 v. ) ) 9th Cir. No. 14-56120 LEDESMA & MEYER ) CONSTRUCTION COMPANY, INC., ) et al., ) ) Defendants and Appellants. ) ____________________________________) Here we consider a question of California insurance law posed by the United States Court of Appeals for the Ninth Circuit: When a third party sues an employer for the negligent hiring, retention, and supervision of an employee who intentionally injured that third party, does the suit allege an “occurrence” under the employer’s commercial general liability policy? (Liberty Surplus Ins. Corp. v. Ledesma & Meyer Constr. Co. (9th Cir. 2016) 834 F.3d 998, 1000.)1 The answer turns on whether the injury can be considered “accidental.” We conclude that it can. 1 We have rephrased the question slightly. (See Cal. Rules of Court, rule 8.548(f)(5).) SEE CONCURRING OPINION I. BACKGROUND Appellants Ledesma & Meyer Construction Company, Inc. and its principals, Joseph Ledesma and Kris Meyer (collectively, L&M) contracted with the San Bernardino Unified School District to manage a construction project at a middle school. In 2003, L&M hired Darold Hecht as an assistant superintendent and assigned him to the project. In 2010, Jane Doe, a 13-year-old student at the school, sued in state court alleging that Hecht had sexually abused her. Doe’s claims include a cause of action against L&M for negligently hiring, retaining, and supervising Hecht. L&M tendered the defense to its insurers, Liberty Surplus Insurance Corporation and Liberty Insurance Underwriters, Inc. (collectively, Liberty). Liberty defended L&M under a reservation of rights. It also sought declaratory relief in federal court, contending it had no obligation to defend or indemnify L&M. The commercial general liability policy at issue provided coverage for “ ‘bodily injury’ ” “caused by an ‘occurrence.’ ” “Occurrence” was defined as “an accident.”2 The district court granted summary judgment to Liberty on the cause of action for negligent hiring, retention, and supervision. 2 In a section titled “Insuring Agreement,” the policy stated: “a. We will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ . . . to which this insurance applies. We will have the right and duty to defend the insured against any ‘suit’ seeking those damages. However, we will have no duty to defend the insured against any ‘suit’ seeking damages for ‘bodily injury’ . . . to which this insurance does not apply. . . . “b. This insurance applies to ‘bodily injury’ and ‘property damages’ only if: “(1) The ‘bodily injury’ . . . is caused by an ‘occurrence’ that takes place in the ‘coverage territory’ . . . .” In the “Definitions” section, the policy stated: “ ‘Occurrence’ means an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” 2 The court reasoned that Doe’s injury was not caused by an “occurrence” because the “alleged negligent hiring, retention and supervision were acts antecedent …
Original document
Source: California Supreme Court