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Hartford Fire Insurance Company v. Century Properties3/27/2003
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
Hospital Learning Centers, Elie Scharf, Robin Salame, Mark Fronen and Nationwide Mortgage Services (collectively, tenants) leased office space in a building owned by ITL-VEN, Inc. and managed by Century Properties, Inc. (Century). Tenants obtained a damage judgment against ITL-VEN and Century for personal property destroyed when the building was demolished shortly after the January 17, 1994 Northridge earthquake.
Hartford Fire Insurance Company, which insured the office building, was called upon to indemnify ITL-VEN and Century for the judgment. Hartford filed a declaratory relief action against ITL-VEN, Century and tenants, seeking a determination it had no duty to indemnify ITL-VEN and Century. Two cross-actions, one by Century and one by tenants, were filed against Hartford for breach of contract and breach of the implied covenant of good faith and fair dealing. The trial court granted summary judgment and entered a judgment in favor of Hartford and against Century and tenants. Century and tenants appeal, contending the judgment must be reversed because Hartford has a duty as a matter of law to pay the judgment in the underlying action under the personal injury and property damage provisions of its insurance policy. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
1. The Underlying Action
Tenants, lessees of office space in a building on Ventura Boulevard in Sherman Oaks owned by ITL-VEN and managed by Century, filed a lawsuit alleging that, after the January 1994 Northridge earthquake, ITL-VEN and Century wrongfully refused to permit them to retrieve their personal property from the premises prior to its demolition. The property destroyed included furniture, furnishings, computer hardware and software and supplies. Tenants alleged causes of action for conversion, claim and delivery, interference with contractual relationship, breach of the lease agreement, fraud, negligence and negligent misrepresentation and sought both compensatory and punitive damages.
The trial court ruled as a matter of law that the actions of ITL- VEN and Century constituted conversion, and the jury concluded the conversion of personal property caused the damage sustained by tenants. The jury also found for tenants on the negligence cause of action and in favor of one of the tenants on the cause of action for interference with contract. The jury found for ITL-VEN and Century on the cause of action for breach of the lease agreement. The jury awarded $370,000 in compensatory damages, found ITL-VEN and Century had acted with oppression and fraud, but deadlocked on an award of punitive damages. The parties stipulated to entry of judgment in the amount of $501,010 to avoid a retrial, but retained the right to appeal. Century appealed the judgment, and Division Three of this court affirmed the jury's award.
2. Hartford's Declaratory Relief Action and the Cross-actions
ITL-VEN and Century initially did not notify Hartford of tenants' lawsuit. Shortly before the verdict was returned in the underlying action, however, tenants informed Hartford of their suit and stated they would look to Hartford to satisfy any judgment they obtained. After receipt of tenants' letter, Hartford furnished a defense for ITL-VEN and Century under a reservation of rights through the posttrial proceedings and on appeal. C
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