Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of Riverside County No. RIC483119. Gary B. Tranbarger, Judge.
Law Offices of Todd Rash and William J. Light for Plaintiff and Appellant.
Mandell & Associates and Barbara J. Mandell for Defendant and Respondent.
OPINION
Gaut, J.
1. Introduction
Jack Matthew Kelly sued defendant Interinsurance Exchange of the Automobile Club for insurance bad faith. Kelly appeals from a judgment entered after the trial court sustained defendant’s demurrer without leave to amend. We agree Kelly was not covered for criminal acts under his insurance policy. We affirm the judgment.
2. Factual and Procedural Background
Because we are reviewing an order on demurrer, we recite the facts as alleged in Kelly’s complaint.
On October 8, 2002, Kelly, an off-duty Border Patrol officer, was involved in a traffic dispute with another motorist, a teenage driver named Sheree Fetkin. As alleged in Fetkin’s lawsuit against Kelly, after Fetkin honked at Kelly, he confronted her three times. He used threatening and profane language and banged his fists on her car.
We grant Kelly’s request for judicial notice of the first amended complaint filed in the underlying Fetkin action on November 12, 2004. (Evid. Code, §§ 452, subd. (d), and 459.)
Kelly was criminally charged with violations of Penal Code sections 415 (publicly fighting or using offensive words) and 422 (criminal threats). In May 2004, Kelly pleaded guilty to a misdemeanor charge of stalking. (Pen. Code, § 646.9.)
Subsequently in July 2004, Fetkin filed an action against Kelly, which was later amended in November 2004. The Fetkin lawsuit was for assault, battery, false imprisonment, intentional infliction of emotional distress, negligence, and negligent infliction of emotional distress.
A civil rights claim was dismissed after demurrer.
Kelly tendered defense of the Fetkin action to defendant under his homeowner’s policy. In September and December 2004, defendant denied coverage, relying on an exclusion from coverage for criminal acts under the policy and Insurance Code section 533. The policy language provides a defense and payment of damages for “personal injury to which this coverage applies” including false imprisonment. In addition, “... the Policy provides that it does not apply to personal injury ‘arising out of: (a) criminal acts or omissions committed by... any insured....’” The policy itself is not part of the record so we must rely wholly on the language as cited in the complaint.
In April 2005, Fetkin offered to settle her case for $100,000 and defendant offered $10,000 to settle Fetkin and Kelly’s claims.
In December 2005, Kelly’s guilty plea for stalking was set aside and the criminal case was dismissed. (Pen. Code, § 1203.4, subd. (a).)
In October 2006, the Fetkin case was tried before a jury. The jury found Kelly liable only for assault and awarded Fetkin damages of $7,500.
Kelly then filed the present lawsuit against defendant for breach of contract, breach of the covenant of good faith and fair dealing, and declaratory relief. Kelly claims damages against defendant of $48,288.95 and $7,500 for a total amount of $55,788.95, plus attorney’s fees.
Defendant demurred on the grounds that there was no coverage under the insurance policy for criminal acts. Kelly countered he should have been covered for Fetkin’s claims of false imprisonment. The court sustained the demurrer without leave to amend.
3. Discussion
We apply an independent standard of review: “‘On review of an order sustaining a demurrer without leave to amend, our standard of review is de novo, “i.e., we exercise our independent judgment about whether the complaint states a cause of action as a matter of law.” [Citation.]’ (Santa Teresa Citizen Action Group v. State Energy Resources Conservation & Development Com. (2003) 105 Cal.App.4th 1441, 1445.)” (Bardin v. Daimlerchrysler Corp. (2006) 136 Cal.App.4th 1255, 1264.) Furthermore, “[i]n reviewing the sufficiency of a complaint against a general demurrer that was sustained, we treat the demurrer as admitting all material facts that are properly pleaded and determine whether the complaint states facts sufficient to constitute a cause of action.” (Shafer v. Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone (2003) 107 Cal.App.4th 54, 67, citing Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.)
At the outset, Kelly argues that he was entitled to coverage for personal injury arising out of Fetkin’s false imprisonment claim. That contention seems arguable because of case law holding that nonaccidental false imprisonment does not qualify for insurance coverage. In Lyons v. Fire Ins. Exchange (2008) 161 Cal.App.4th 880, 887-890, the court held that there was no coverage and no duty to defend where insured was accused of an intentional sexual attack in a hotel alcove. (Lyons, supra, at pp. 887-890.) Similarly, Kelly’s angry and intentional encounters with Fetkin might supply a reason to deny coverage.
As explained in Lyons, false imprisonment can be criminal or civil and intentional or negligent: “[R]egarding the definition of false imprisonment, it is defined in the Penal Code as ‘the unlawful violation of the personal liberty of another.’ (Pen. Code, § 236.) The Penal Code definition applies in both civil and criminal actions. (Parrott v. Bank of America (1950) 97 Cal.App.2d 14, 22, 217 P.2d 89.) ‘The elements of a tortious claim of false imprisonment are: (1) the nonconsensual, intentional confinement of a person, (2) without lawful privilege, and (3) for an appreciable period of time, however brief.’ (Easton v. Sutter Coast Hospital (2000) 80 Cal.App.4th 485, 496, 95 Cal.Rptr.2d 316.) Although false imprisonment is an intentional tort because it entails an intentional act resulting in confinement, it can arise through negligence.” (Lyons v. Fire Ins. Exchange, supra, 161 Cal.App.4th at p. 888.)
Lyons offers some examples of accidental or negligent false imprisonment, such as when an employer inadvertently locks an employee in a storeroom or mistakenly detains a customer as a shoplifter. (Lyons v. Fire Ins. Exchange, supra, 161 Cal.App.4th at p. 888.) The present case, however, unquestionably illustrates intentional conduct by Kelly toward Fetkin but the question becomes whether his actions, in addition to being intentional, were also criminal.
Nevertheless, we cannot fully evaluate the validity of coverage for false imprisonment because we do not have a complete copy of the insurance policy for review and we cannot ascertain how the policy treats accidental and intentional conduct. Instead, the appeal must be decided based on the applicability of the criminal-acts exclusion upon which defendant relies.
Kelly’s complaint alleges that the insurance policy does not apply to “personal injury ‘arising out of: (a) criminal acts or omissions committed by... any insured....’” “Personal injury” is defined to mean “‘injury which, during the policy period, arises out of one or more of the following: a. false arrest, detention or imprisonment;....’” Therefore, personal injury arising out of false imprisonment may be covered but personal injury arising out of a criminal act is not covered.
The case supporting defendant’s denial of coverage is 20th Century Ins. Co. v. Schurtz (2001) 92 Cal.App.4th 1188, 1195-1998 (Schurtz), in which the appellate court held the trial court properly granted summary judgment in favor of the insurer because the insured had been criminally convicted based on her nolo contendere plea of felony assault with a firearm; the injured party had successfully sued the insured civilly for the torts of assault and battery; and the insurance policy excluded recovery for damages which were the result of a criminal act of the insured. Similarly, in the present case, Kelly had pleaded guilty to the crime of stalking; Fetkin sued Kelly for various torts; and the insurance policy excludes coverage for criminal acts. Schurtz was decisive on the issue of coverage: “[W]here, as here, an insurer does want to exclude criminal acts from coverage and has expressly done so in language that is clear and unambiguous, the exclusion will be given effect. [Citations.]” (Schurtz, supra, at pp. 1195-1196; General Reinsurance Corp. v. St. Jude Hospital (2003) 107 Cal.App.4th 1097, 1107.)
Defendant argues that, under Schurtz, it could properly deny coverage to Kelly because Kelly had pleaded guilty to stalking and Fetkin sued Kelly for torts that encompassed criminal conduct. Kelly deems Schurtz to be wrongly decided and contends that defendant’s insurance policy provided coverage for false imprisonment—even though the jury found Kelly liable only for assault—and, therefore, defendant should have provided him with a defense to Fetkin’s claim.
It is not disputed that Kelly was charged with two crimes and had pleaded guilty to the crime of stalking when defendant denied him coverage. It was more than a year later—presumably after Kelly completed probation—that the court granted his motion to withdraw his guilty plea and ordered a dismissal of the criminal case under Penal Code section 1203.4, subdivision (a). Under these circumstances, Kelly cannot reasonably argue that the criminal-acts exclusion did not apply.
In 20th Century Insurance Co. v. Stewart (1998) 63 Cal.App.4th 1333, 1338-1339, the appellate court held there was no coverage for accidental shooting where the shooter pleaded guilty to voluntary manslaughter. The court also rejected the insured’s contentions that the criminal-act exclusion was ambiguous “because it is unclear whether its applicability (1) requires a criminal prosecution, (2) can be determined unilaterally by the insurer or requires a conviction, (3) requires a particular burden of proof to establish a criminal act, or (4) depends on the commission of only certain, rather than any criminal acts.” (Id. at pp. 1337-1338.)
Relying on Stewart, another court in Century-National Ins. Co. v. Glenn (2001) 86 Cal.App.4th 1392, 1397, held that, although it does not have collateral estoppel effect, a no contest plea and conviction constituted admissible evidence that an insured committed the crime of willfully discharging a firearm. (Pen. Code, § 246.3.) Even if the shooter’s intention had been only to scare the victim, the meaning of the term “willfully” “is patently inconsistent with the notion that the weapon was fired inadvertently or by accident.” (Century-National Ins. Co. v. Glenn, supra, at p. 1397.) Therefore, the insured could not reasonably expect coverage. (Ibid.)
Schutrz also addressed the issue of collateral estoppel, holding that collateral estoppels is not relevant to the question of whether the criminal-acts exclusion applied. Because the Schurtz insured had been convicted of a crime, no coverage applied for her criminal conduct. (Schurtz, supra, 92 Cal.App.4th at pp. 1196-1197.) In the civil case, she was found liable for negligence but, because her nolo plea arose out of the same facts as the negligence claim, coverage was excluded for a criminal act. (Ibid.)
California courts broadly interpret the term “arising from” when used in an exclusionary clause: “It is settled that this language does not import any particular standard of causation or theory of liability into an insurance policy. Rather, it broadly links a factual situation with the event creating liability, and connotes only a minimal causal connection or incidental relationship. [Citations.]” (Acceptance Ins. Co. v. Syufy Enterprises (1999) 69 Cal.App.4th 321, 328; Continental Cas. Co. v. City of Richmond (9th Cir. 1985) 763 F.2d 1076, 1080-1081.) “Rather, ‘“[a]rising out of” are words of much broader significance than “caused by.” They are ordinarily understood to mean “originating from[,]” “having its origin in,” “growing out of” or “flowing from” or in short, “incident to, or having connection with”....’” (Davis v. Farmers Ins. Group (2005) 134 Cal.App.4th 100, 107.)
Kelly was sued civilly for false imprisonment and other torts. Unquestionably, the personal injury to Fetkin was minimally connected or incidentally connected to the same events underlying the criminal charges. Kelly’s guilty plea in the criminal case arose out of the same set of facts as Fetkin’s other claims. Just as in Schurtz, the insurer could properly deny coverage.
The final issue raised by Kelly is new on appeal. He contends that, because his guilty plea was set aside and the criminal case dismissed, the criminal-acts exclusion does not apply. Kelly relies on Grain Dealers Mutual Ins. Co. v. Marino (1988) 200 Cal.App.3d 1083, 1088-1089, holding that a criminal conviction that has been reversed on appeal will have no collateral estoppel effect in a subsequent coverage action.
As discussed above, collateral estoppel is generally not relevant to the applicability of the criminal-acts exclusion. Moreover, the circumstances were significantly different in Grain Dealers than here. In Grain Dealers, the judgment of conviction was reversed upon a federal petition for writ of habeas corpus. Kelly, in contrast, first pleaded guilty and then obtained dismissal of his criminal case for reasons not disclosed on the record. Furthermore, Kelly never claimed that he was innocent of the conduct against Fetkin. Instead, he maintained only that his conduct was covered under the insurance policy.
Kelly should probably not be able to raise a new issue at this juncture. But even if we considered it persuasive—which we do not—the record demonstrates that, when defendant denied coverage in September and December 2004, Kelly had already pleaded guilty to stalking. Based on the information available to defendant at the time of the tender of defense, denial under the criminal-acts exclusion was appropriate: “An insurer has no duty to continue to investigate the potential for coverage after it makes an informed decision on coverage at the time of tender. (Gunderson v. Fire Ins. Exchange (1995) 37 Cal.App.4th 1106, 1114.) ‘Once it determined on the basis of the lawsuit itself and the facts known to it at that time that there was no potential for coverage, [the insurer] did not have a continuing duty to investigate or monitor the lawsuit to see if the third party later made some new claim, not found in the original lawsuit.’ (Id. at p. 1117.)” (Travelers Cas. & Sur. Co. v. Employers Ins. of Wausau (2005) 130 Cal.App.4th 99, 110.) There are no allegations or offer of proof that Kelly ever informed defendant about his plea being set aside or sought to have defendant review the coverage issue again.
4. Disposition
We affirm the judgment. Defendant shall recover its costs on appeal.
We concur: McKinster, Acting P. J., King, J.