9th Circuit: Insured’s Contract, Bad Faith Claims Get The Gate

SAN FRANCISCO, Feb. 11 – The U.S. Court of Appeals for the Ninth Circuit has affirmed a district court’s dismissal of breach of contract and bad faith claims against Allstate, arising out of Allstate’s refusal to defend or indemnify its insured from a claim that the insureds committed trespass by destroying property.

In Zimmerman v. Allstate, Allstate’s insureds were sued by a homeowner’s association for trespassing upon and destroying a residential community gate.  The destruction was pre-meditated, according to the district court record.  After the insureds submitted the claim for defense and indemnity, Allstate denied the claim, and the insureds filed suit.  The district court entered summary judgment for Allstate, finding that the underlying complaint did not seek damages for an accidental occurrence, but rather for trespass, an intentional tort.

In affirming, the Ninth Circuit Court of Appeals found that the premeditated act of destruction of property committed by the insureds was neither “unexpected” nor “unintended,”  and therefore not an occurrence as defined in the policy.  The Court also affirmed dismissal of claims of breach of the duty of good faith and fair dealing.

Zimmerman v. Allstate, (9th Cir. Feb. 11, 2016)

Author: CJ Haddick

C.J. Haddick is a Director with the law firm of Dickie, McCamey, & Chilcote, PC, based in Pittsburgh, Pa. He has advised and represented insurers in insurance coverage and bad faith litigation for more than three decades, and written and spoken throughout the United States on insurance coverage and bad faith prevention and litigation. He is Managing Director of the firm's Harrisburg, Pa. office. Reach him at chaddick@dmclaw.com or 717-731-4800. View all posts by CJ Haddick