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Binkley v. State Farm Fire and Casualty Co.12/28/2001
at pp. 833-834 (Laguna).)
Laguna is easily distinguishable from this case. In Laguna, there was no insured loss due to the inverse condemnation policy exclusion. By contrast, in this case, State Farm does not dispute that an insured loss existed, and indeed has paid out sums to rectify the damage to the Goddards' property caused by the landsliding.
State Farm also argues that there can be no coverage by virtue of the "owned property" exclusion. This contention is easily answered. As the court in Titan explained, courts have rejected application of the owned property exclusion when measures are taken "to abate continuing harm from extant sources of contamination." (Titan, supra, at p. 473.) In fact, in Vann v. Travelers Companies (1995) 39 Cal.App.4th 1610 the court explained that the owned property exclusion did not apply: "We note at the outset that Williamson's complaint alleges threatened contamination of the groundwater beneath Williamson's property. Allegations of potential groundwater contamination may reasonably be read to include concerns for off-site contamination and such allegations are thus not necessarily limited to property occupied or controlled by Vann." (Id. at p. 1618.)
Finally, State Farm argues that public policy prohibits finding coverage in these circumstances. It emphasizes that insuring the Binkley property in these circumstances undermines the fundamental public policy that every property owner has a duty to maintain his or her property in such a manner as not to cause injury to others. State Farm argues that allowing coverage in this case gives landowners an incentive to ignore dangerous conditions of their property. We disagree. We do not see any reason why an insured would allow a condition on his land to result in damage to others merely to secure coverage when preventative measures could avoid such damage and also prevent sizable claims or damages against the insured and his insurer. Moreover, State Farm's public policy argument is not supported by the facts of this case. The facts reveal that after the first slide, Binkley installed jut mats on the hillside. For the first year after the initial slide, State Farm held the parties in suspense as it was trying to determine whether it would pay for remedial repairs. After initially agreeing to pay for the cost of the retaining wall, State Farm then decided that its policy did not cover such costs. Subsequently, as part of the settlement of the lawsuit, Binkley agreed to pay for the construction of the retaining wall. Thus, the facts of this case plainly do not fit the picture painted by State Farm -- that of a recalcitrant landowner blithely ignoring the continuous landsliding so that insurance would cover the loss.
In conclusion, we hold that the trial court properly found that State Farm had a duty to pay for the cost of constructing the retaining wall because that cost was covered under the terms of the policy.
Disposition
The judgment is affirmed.
WE CONCUR:
Premo, Acting P.J.
Mihara, J.
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