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CALIFORNIA COURT OF APPEAL AFFIRMS POLICY LIMITATIONS
The California Court of Appeal recently reaffirmed existing law - holding that where a homeowner's policy does not contain coverage for "personal injury," claims for defamation and allegations of intentional defamation against an insured do not constitute a covered "occurrence" because the statements are not accidental.
In the case of Stellar v. State Farm the Court analyzed whether a homeowners' policy of insurance issued by State Farm afforded coverage for alleged acts of defamation.
In the underlying action, State Farm's insured(s) filed a claim against Philip Stellar (insured Richard Stellar's brother) alleging causes of action for defamation, intentional infliction of emotional distress, and intentional interference with contract. The complaint alleged that, following the sale of Richard’s and Philip’s mother’s home, Philip made false written and verbal statements designed to injure Richard and Nuala (State Farm's insureds).
Subsequently, Philip Stellar answered and filed a cross-complaint against Richard Stellar (State Farm's insured), and his son Miles Stellar, alleging causes of action for slander per se, libel, and intentional infliction of emotional distress.
Richard Stellar tendered the defense of the cross-complaint to State Farm, which subsequently declined to defend on the grounds that the cross-complaint failed to allege either an “occurrence” defined by the policy as an accident or unforeseen event, or any claim for “bodily injury” defined by the policy as physical injury. The Stellar insured(s) then filed a complaint against State Farm alleging breach of contract, bad faith insurance practices, and declaratory relief.
State Farm answered the complaint and moved for summary judgment. The trial court granted State Farm's motion, and its insureds appealed.
In the end, the appellate court affirmed the trial court's decision and awarded State Farm its costs on appeal.
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Related Attorney(s):
Timothy D. Lake
Related Practice Area(s):
Bad Faith and Coverage
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LOS ANGELES ORANGE COUNTY VENTURA/OXNARD CENTRAL COAST
BAY AREA SACRAMENTO LAS VEGAS RENO PHOENIX
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