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Watson v. Financial Pacific Insurance Co.2/6/2002
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 977.
Appellants Mark Watson and Jeanne Watson appeal from a summary judgment in favor of respondent Financial Pacific Insurance Company (FPIC), entered after the trial court found that respondent had no duty to defend or indemnify appellants with respect to claims asserted against them in a particular action in federal court. We affirm the judgment.
PROCEDURAL BACKGROUND
Michelle Renee Watson, appellants' adult daughter, operated a foster home at her residence at 1785 Renee Avenue in Fortuna. In May 1997, Clarissa Darby, one of Watson's foster children, was seriously injured while in her care and died.
Darby's mother and others filed a complaint in United States District Court, Northern District of California, against Michelle Watson and several other defendants, including appellants Mark and Jeanne Watson, alleging deprivation of civil rights, wrongful death, negligent supervision, negligence per se, premises liability, and other claims.
Plaintiffs in this federal action (the Darby action) alleged in part that appellants owned the Renee Avenue residence and were involved in a joint venture with their daughter to operate a foster home for profit. Plaintiffs also alleged that appellants allowed their daughter to operate a foster home on their property, knowing that she was emotionally unstable and a danger to the foster children in her care.
At the time of the child's death, a commercial general liability insurance policy issued by FPIC to appellants, doing business as Watson Construction & Development, was in effect. Appellants tendered the defense of the Darby action to FPIC, which declined to defend on the ground that there was no coverage or potential for coverage of the claims.
Appellants then commenced the current action against FPIC, seeking a declaration that the insurer had a duty to defend them in the Darby action. They also sought damages based on various tort theories, including fraud and negligent misrepresentation.
Appellants moved for summary judgment or in the alternative, summary adjudication on the issue of FPIC's duty to defend. They asserted as an undisputed fact that Watson Construction & Development owned the Renee Avenue residence. Their supporting evidence included the declaration of Mark Watson, stating the following. Appellants and Watson Construction & Development, a sole proprietorship, are "one and the same." Watson Construction & Development built the Renee Avenue residence as part of its normal course of business. During the interim between the completion of construction and the sale of the residence, Watson Construction & Development rented the residence to Michelle Watson; this "business relationship" between lessee Michelle Watson and lessor Watson Construction & Development was in effect when the foster child died.
FPIC also moved for summary judgment or summary adjudication. FPIC argued that the policy did not cover risks associated with the ownership and leasing of residential premises owned by appellants. In addition, FPIC disputed the assertion that Watson Construction & Development owned the Renee Avenue house and had rented the house to Michelle Watson in the ordinary course of its business. FPIC submitted excerpts from deposition testimony of Mark and Jeanne Watson in the Darby action. In tha
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