Gunderson v. Fire Ins. Exchange

Gunderson v. Fire Ins. Exchange

Opinion

 [*1108]  [**274]   MERRILL, J. 

Gordon and Vera Gunderson appeal from a grant of summary judgment in their action against respondent Fire Insurance Exchange  [*1109]  for breach of their insurance contract and tortious bad faith, arising out of respondent's denial of appellants' tender of the defense of a third party lawsuit. Appellants contend that the trial court erred in granting summary judgment in respondent's favor because there were triable issues of material fact concerning respondent's duty to defend appellants in the underlying [***2]  lawsuit on the basis of a potential for coverage under the policy. For the reasons which follow we affirm the judgment. ² 

I. FACTUAL AND PROCEDURAL BACKGROUND

Appellants purchased property in Sonoma in 1986. At the time, they believed on the basis of the grant deed and the assurances of the previous owner that they had the use of an easement for ingress and egress, consisting of a gravel driveway approximately 10 by 200 feet running the entire length of appellants' property and which was located on the adjoining property owned by Mildred R. Ferrando. The easement gave appellants access to the rear portion of their property. For three years after their purchase of the property, the [***3]  appellants used the easement without incident. From 1963 to 1989, a fence stood along the back end of the Ferrando property, crossing a portion of the easement. In February 1989, appellants removed the portion of the fence crossing the easement.

On March 20, 1989, Ferrando's attorney wrote a letter to appellants, stating that appellants' claim of an easement of right-of-way "came as a complete surprise" to Ferrando; that "[a]t no time" during Ferrando's ownership of their property had appellants' "predecessors in title ever claimed to have a right-of-way" across the property; that Ferrando was "very upset" about appellants' "recent conduct in tearing down the fence" and parking cars on her property; that even if appellants had an easement of right-of-way, "neither of these actions would be permitted under the easement"; and that the act of "tearing down the fence constitute[d] trespass" for which appellants "could be legally liable" to Ferrando. Aside from telling appellants not to park cars on the easement or remove any more fencing or other improvements, Ferrando's attorney asked appellants to "refrain" from using the right-of-way altogether pending the completion of his investigation [***4]  of the status of the easement.

By letter dated March 23, 1989, Ferrando's attorney memorialized an agreement with appellants that, pending completion of investigation of the  [*1110]  matter, neither appellants nor Ferrando would park on the right-of-way; appellants could continue to use the roadway for access to and from the back of their property, but "in a way to minimize the inconvenience" to Ferrando; and appellants would not remove any other fence posts, fencing material or other improvements located  [**275]  near the boundary line. The letter stated that the agreement was without prejudice to either party's position with regard to the easement.

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