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Liberty Surplus Ins. Corp. v. Ledesma & Meyer Constr. Co.

Liberty Surplus Ins. Corp. v. Ledesma & Meyer Constr. Co.

Supreme Court of California

June 4, 2018, Filed

Case No. S236765

Opinion

 [***489]  [**402]   CORRIGAN, J.—Here we consider a question of California insurance law posed by the United States Court of Appeals for the Ninth Circuit: When a third party sues an employer for the negligent hiring, retention, and supervision of an employee who intentionally injured that third party, does the suit allege an “occurrence” under the employer's commercial general liability policy? (Liberty  [****1001] Surplus Ins. Corp. v. Ledesma & Meyer Construction Co. (9th Cir. 2016) 834 F.3d 998, 1000.) 3 The answer turns on whether the injury can be considered “accidental.” We conclude that it can.

I. BACKGROUND

Appellants Ledesma & Meyer Construction Company, Inc., and its principals, Joseph Ledesma and Kris Meyer (collectively, L&M), contracted with the San Bernardino Unified School District to manage a construction project at a middle school. In 2003, L&M hired Darold Hecht as an assistant superintendent and   assigned him to the project. In 2010, Jane Doe, a 13-year-old student at the school, sued in state court alleging that Hecht had sexually abused her. Doe's claims include a cause of action against L&M for negligently hiring, retaining, and supervising Hecht.

L&M tendered the defense to its insurers, Liberty Surplus Insurance Corporation and Liberty Insurance Underwriters, Inc. (collectively, Liberty). Liberty defended L&M under a reservation of rights. It also sought declaratory relief in federal court, contending it had no obligation to defend or indemnify L&M. The commercial  [***490]  general liability policy at issue provided coverage for “‘bodily injury’” “caused by an ‘occurrence.’” “Occurrence” was defined as “an accident.” 4 The  [**403]  district court granted summary judgment to Liberty on its claim for declaratory relief.

 [*221] 

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5 Cal. 5th 216 *; 418 P.3d 400 **; 233 Cal. Rptr. 3d 487 ***; 83 Cal. Comp. Cases 999 ****; 2018 Cal. LEXIS 4063; 2018 WL 2470975

LIBERTY SURPLUS INSURANCE CORPORATION et al., Plaintiffs and Respondents, v. LEDESMA & MEYER CONSTRUCTION COMPANY, INC., et al., Defendants and Appellants.

Subsequent History: Modified by Supreme Court, on Court's Own Motion (No Change in Judgment) July 25, 2018

Reported at Liberty Surplus Ins. Corp. v. Ledesma & Meyer Construction Co., Inc., 2018 Cal. LEXIS 4405 (Cal., June 4, 2018)

Modified by Liberty Surplus Ins. Corp. v. Ledesma & Meyer Construction Co., Inc., 2018 Cal. LEXIS 5315 (Cal., July 25, 2018)

Modified by Liberty Surplus Ins. Corp. v. Ledesma & Meyer Construction Co., Inc., 2018 Cal. LEXIS 5511 (Cal., July 25, 2018)

Prior History:  [1] Civil No. 14-56120—United States Court of Appeal for the Ninth Circuit

Liberty Surplus Ins. Corp. v. Ledesma & Meyer Constr. Co., 834 F.3d 998, 2016 U.S. App. LEXIS 15352 (9th Cir., Aug. 22, 2016)

Disposition: Opinion after request made pursuant to California Rules of Court, rule 8.548, requesting California Supreme Court decision answering question of California state law presented in matter pending before United States Court of Appeal for the Ninth Circuit. Opinion filed.

CORE TERMS

insured, coverage, supervision, molestation, unexpected, unforeseen, retention, sexual, occurrence, negligent hiring, accidental, deliberate, assault, liability policy, district court, happening, causal, intentional act, hiring, impose liability, inflict injury, undesigned, causation, refers, allegation of negligence, insurance coverage, insurance policy, series of events, injured party, cause injury

Insurance Law, Commercial General Liability Insurance, Coverage, Accidental Injuries, Claim, Contract & Practice Issues, Policy Interpretation, Civil Procedure, Judgments, Declaratory Judgments, State Declaratory Judgments, Business Insurance, Duty to Defend, Torts, Business Torts, Negligent Hiring, Retention & Supervision, Bodily Injuries, Negligence, Elements, Causation, Intentional Torts, Assault & Battery, Exclusions, Intentional Acts, Intentional Acts Exclusions, Coverage