Opinion
F084350
11-06-2023
CALIFORNIA CAPITAL INSURANCE COMPANY, Plaintiff and Appellant, v. GOTHAM INSURANCE COMPANY, Defendant and Respondent.
Grant, Genovese & Baratta and Lance D. Orloff for Plaintiff and Appellant. Musick, Peeler & Garrett, Lawrence A. Tabb and Michelle C. Ferrara for Defendant and Respondent.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Fresno County Super. Ct. No. 18CECG03205, Kristi Culver Kapetan, Judge.
Grant, Genovese & Baratta and Lance D. Orloff for Plaintiff and Appellant.
Musick, Peeler & Garrett, Lawrence A. Tabb and Michelle C. Ferrara for Defendant and Respondent.
OPINION
DETJEN, J.
Plaintiff and appellant California Capital Insurance Company (CCIC) appeals from a judgment rendered in favor of defendant and respondent Gotham Insurance Company (Gotham) on CCIC's complaint for equitable contribution toward funds it paid and costs it incurred in defending and settling a claim against a mutual insured. We affirm the judgment.
INTRODUCTION
CCIC and Gotham each provided commercial general liability (CGL) insurance for Sunnyside Mobile Estates, a mobilehome park located in Fresno, California (sometimes, "mobilehome park" or "park") during different policy periods. Over the course of approximately nine years, CCIC issued a number of CGL insurance policies for the mobilehome park commencing July 8, 2007, and ending July 19, 2016. The owner of the mobilehome park then switched his insurance carrier to Gotham which insured the park under a CGL insurance policy for the policy period July 19, 2016, to July 19, 2017 (the Gotham policy).
In July of 2016, several days before the Gotham policy was issued, residents of the mobilehome park sued the park's owner, Peter M. Ormond (Ormond), in his individual capacity and as trustee of the Peter M. Ormond Trust, under Declaration of Trust dated May 7, 2013 (Ormond Trust), which did business as Sunnyside Mobile Estates (the Alonso action). (Ormond, the Ormond Trust, and the mobilehome park are sometimes collectively referred to as the "Ormond insureds.") The Alonso action included claims for alleged failure to maintain and service the mobilehome park. Gotham had been made aware of the potential for such litigation during the insurance application process and issued its policy with an endorsement it contends was intended to exclude coverage for claims that might be raised in such litigation.
Alonso v. Ormond (Super. Ct. Fresno County, 2016, No. 16CECG02262).
The named insureds under the various CCIC policies have varied over the years. The parties have not raised any issues on appeal relating to the named insured provisions in any of the CCIC or Gotham policies.
Ormond's insurance agent tendered the defense and indemnity of the Alonso action to both CCIC and Gotham. CCIC provided a defense to the Ormond insureds. Gotham, however, disclaimed any obligation to defend or indemnify the Ormond insureds.
Ultimately, CCIC settled with the Alonso plaintiffs and brought the present action seeking equitable contribution from Gotham to pay its fair share of settlement funds expended, and defense costs incurred, by CCIC.
Gotham prevailed at trial. This appeal followed.
FACTUAL AND PROCEDURAL BACKGROUND
The relevant facts are undisputed and were stipulated to by the parties.
I. The Underlying Action and Claims Against the Ormond Insureds
A. Mobilehome Park Residents' Notice of Intention to Commence Action
On April 8, 2016, mobilehome park residents, by and through one of the residents, sent Ormond a Notice of Intention to Commence Action dated March 1, 2016 (the "notice of intention to sue") pursuant to Civil Code section 798.84, a provision of the Mobilehome Residency Law (MRL) (Civ. Code, § 798 et seq.). The notice of intention to sue stated, "[t]his notice lists the problems I and/or other homeowners and residents have had in the [p]ark and the remedies we seek. This notice includes problems that at least one homeowner/resident has suffered in the last four years ...."
All further statutory references are to the Civil Code unless otherwise indicated.
The notice of intention to sue identified numerous alleged issues with the mobilehome park and its management, the following being among them:
(1) sewage system issues-including spills, "backups and overflows" in park resident homes and neighboring areas (e.g., streets and common areas) "result[ing] in damage[s] to homes and/or personal property, and pos[ing] a health hazard to residents."
(2) water system issues-including "contaminated, odorous, discolored, cloudy, bad tasting, bacterial infested, non-potable water," which "endangers the safety and health of the public and residents" and has caused residents to become ill from drinking it.
(3) electrical system issues-including "inadequate power" resulting in "power outages, brownouts, breaker trips, power surges, flickering and dimming lights . . . and [the] inability to run multiple appliances at one time," which has led to "safety hazards, loss of food, and/or property damage."
(4) drainage system issues-including clogged drains and poor drainage resulting in water "accumulat[ing] in front of, around or under homes, in streets, common areas, in driveways" and "un-leveling, sinking and damage to . . . homes and personal property."
(5) gas line issues-including exposed and unsupported gas lines and meters "resulting in gas leaks." "Residents have been overcharged for gas. Gas has been shut[]off because of the [p]ark owner and/or manager's failure to pay the utility bill."
(6) failure to maintain common areas-involving (a) streets, walkways and driveways; (b) the pool; (c) insufficient and inoperable lighting; (d) the clubhouse; (e) landscaping; (f) park restrooms and showers; (g) trash areas; (h) the laundry room; (i) storage areas; (j) fences; (k) mailbox posts;
(l) faded lot identifiers that are difficult to read; (m) overall poor maintenance "resulting in a rundown appearance and affecting homes sales"; (n) failure to enforce pet rules and regulations; (o) lack of security and lighting "result[ing] in vandalism, criminal, drug activity and theft of personal property"; (p) lack of safe play areas for children; and (q) insufficient parking and lack of enforcement of parking-related rules and regulations. The notice of intention to sue also stated, "[p]oor street, driveway, and walkway conditions, along with improper lighting conditions, make it difficult for residents to walk, resulting in personal injury."
Additional matters alleged in the notice of intention to sue include the following:
(7) management's disregard of park resident safety-including management's failure to address cars speeding in the park; (8) failure to provide title to residents that have purchased mobilehomes; (9) unavailable and unresponsive management; (10) unequal enforcement of park rules and regulations; (11) interference with residents' use and enjoyment of their homes by unauthorized entries onto residents' lots; (12) "allow[ing] unauthorized vehicles and individuals to enter the [p]ark"; (13) "cit[ing] residents . . . in violation of [p]ark rules and regulations without basis"; (14) "lack of proper management . . . result[ing] in overcharges or improper billing for utilities"; (15) lengthy delays and refusal to make repairs which, when done, are performed poorly; (16) reduction in park facilities and services; (17) "[d]eterioration of [p]ark infrastructure and . . . appearance . . . result[ing] in difficulty and/or inability to sell homes"; and (18) "[p]ark stigma and bad reputation [that] have affected home sales."
The final management/maintenance issues identified in the notice of intention to sue read, as follows: "Numerous violations of the [MRL], Mobilehome Parks Act,building codes, ordinances, Health and Safety Code, Business and Professions Code, California Code of Regulations, Public Utilities Code, Government Code, Civil Code, among others."
Health and Safety Code section 18200 et seq. (hereafter, Mobilehome Parks Act).
The notice of intention to sue then set forth the various legal remedies the park residents intended to pursue including, without limitation, general damages, special damages for physical injury, compensation for property and home damage, injunctive relief, statutory penalties, treble damages, punitive damages, and an award of attorneys' fees and costs.
B. The Ormond Insureds' Insurance and Their Tender of Defense and Indemnity of the Alonso Action to CCIC and Gotham
At the time the notice of intention to sue was served, the Ormond insureds were protected by a CGL insurance policy issued by CCIC, the insured's insurance provider since 2007. The CCIC policy stated the policy period ran to July 8, 2016. CCIC issued a subsequent policy extending the policy period to July 19, 2016.
In or about early June 2016-before the Alonso action was filed-Ormond, through his insurance agents at California Southwestern Insurance Agency (CSIA), sought new insurance to cover the mobilehome park. CSIA agent, Sharon Matchett, submitted Ormond's application and a request for quote to Janet Duncan of Propel Insurance (Propel), a wholesale insurance broker. Propel, in turn, referred the application and quote request to program underwriter Nicole Hatch of ProSight Specialty (ProSight), an "authorized agent for Gotham, relative to issuance of what was ultimately the Gotham . . . policy . . ., and claim handling regarding the Alonso [a]ction." The referral correspondence from Propel to ProSight read, in part: "Referral due to intent to sue for FTM[ i.e., failure to maintain]/ We would utilize our FTM Exclusion GL0448: [¶] . . . [¶] . . . Bill Joseph[, President of CSIA,] advised that the residents have filed an intent letter. [¶] The park owner has recently upgraded the park in order [to] squash any movement forward on the FTM." On June 29, 2016, Hatch responded to the referral as follows: "To the extent that there are no other losses and we are utilizing the FTM Exclusion, I don't see an issue with this risk.... [¶] We're okay to move forward as you've outlined."
"A wholesale [insurance] broker is a type of insurance broker who acts as an intermediary between a retail broker and an insurer but has no contact with the insured. Wholesale agents place business brought to them by retail agents." <https://www.irmi.com/term/insurance-definitions/wholesale-broker> [as of Nov. 6, 2023].)
On July 14, 2016, while the CCIC policy was in effect, the mobilehome park residents filed the Alonso action setting forth 10 causes of action in their "Complaint for: [¶] (1) nuisance[;] [¶] (2) breach of contract[;] [¶] (3) breach of the covenant of good faith and fair dealing[;] [¶] (4) intentional interference with property rights[;] [¶] (5) negligence[;] [¶] (6) breach of statutes[;] [¶] (7) breach of warranty of habitability[;] [¶] (8) breach of covenant of quiet enjoyment[;] [¶] (9) breach of unfair competition law[;] and . . . [¶] (10) declaratory and injunctive relief" (the "Alonso complaint") (boldface &some capitalization omitted).
Approximately five days after the Alonso complaint was filed, Gotham issued the Gotham policy to the Ormond insureds for the policy period July 19, 2016, to July 19, 2017. The Gotham policy contained an endorsement titled "Failure to Maintain Exclusion, Mobile Home Parks-California" (boldface &some capitalization omitted) (the "FTM exclusion"), which Gotham contends was intended to exclude coverage for matters addressed in the notice of intention to sue.
On July 27, 2016, CSIA President Bill Joseph sent an e-mail to Janet Duncan of Propel, tendering defense and indemnity of the Alonso action to Gotham. In his e-mail, Joseph wrote, in part, "I was instructed by the insureds['] counsel to tender this complaint to all Carriers. [¶] . . . [¶] I think Propel/Gotham should not be involved. As you might recall we specifically wrote this account with an FTM exclusion." CCIC was likewise notified of the Alonso action and accepted the Ormond insureds' tender of defense and indemnity subject to a reservation of rights. CCIC appointed counsel to represent its insureds.
On August 24, 2016, Ormond's appointed defense counsel wrote Gotham's agent at ProSight to again tender the defense and indemnity of the Alonso complaint to Gotham. On August 31, 2016, ProSight responded that the policy "affords no coverage for the claims." In so concluding, Gotham relied on a number of exclusions in the Gotham policy including the FTM exclusion and the Ormond insureds' pre-policy notice of the Alonso plaintiffs' claims.
On October 24, 2016, CCIC's coverage counsel (and counsel herein) wrote Gotham's ProSight agent and indicated CCIC's disagreement with Gotham's adverse coverage analysis and determination. CCIC's counsel requested Gotham reverse its coverage determination and share in the insureds' defense. On December 17, 2016, Gotham's coverage counsel (and current counsel herein) responded to CCIC's renewed tender and again declined the tender.
Over a year later, on January 26, 2018, Ormond's appointed counsel again wrote Gotham's ProSight agent requesting Gotham accept the defense and indemnity of Ormond. In it, Ormond's appointed counsel noted that one of the Alonso plaintiffs had claims relating to several trip-and-fall incidents occurring in July 2014 (during a CCIC policy period) and February 2017 (during Gotham's policy period) and that said plaintiff was injured as a result.
On March 7, 2018, Gotham's counsel responded to the January 2018 tender and requested more information and documentation concerning the February 2017 trip-and-fall claims. Gotham's counsel observed the 2014 and February 2017 trip and falls were not alleged in the Alonso complaint and requested copies of any amended pleadings. The Alonso complaint was never amended to include allegations of the trip-and-fall incidents.
Six days later, on or about March 13, 2018, Ormond settled the Alonso action and the aforementioned trip-and-fall claims. The matters were settled in a global agreement, which provided, among other things, for the payment of $925,000-$25,579 of which was allocated to the trip-and-fall claimant and the remainder to the Alonso plaintiffs, collectively.
CCIC paid the settlement funds. Gotham did not contribute any funds to the settlement. In defending the insureds against the Alonso action, CCIC paid $80,004.61 in attorney fees and costs. Gotham did not contribute any funds to these defense fees and costs.
II. The Instant Lawsuit for Equitable Contribution
On August 30, 2018, CCIC filed suit against Gotham for equitable contribution toward the funds it paid in settlement and its defense costs (the "equitable contribution complaint"). In it, CCIC alleged that Gotham had a duty to defend and indemnify the insureds and that the Gotham policy exclusions did not exclude coverage for claims asserted in the Alonso action. As a result, CCIC contended it was entitled to equitable contribution from Gotham. Gotham generally denied the allegations of the equitable contribution complaint and asserted 38 affirmative defenses.
On November 8, 2021, trial commenced on the equitable contribution complaint. No witnesses were called. Instead, the evidence consisted of 44 facts jointly stipulated to by CCIC and Gotham along with specified exhibits admitted into evidence. A one-day trial was had, which consisted solely of argument based upon the stipulated facts and exhibits.
On January 21, 2022, the trial court issued its proposed statement of decision, which became the court's statement of decision.
On February 2, 2022, the trial court entered judgment against CCIC and in favor of Gotham. Notice of entry of the judgment was served on February 18, 2022.
On February 28, 2022, CCIC filed notice of its intention to move for a new trial. The motion was heard on April 19, 2022. On April 25, 2022, the trial court denied CCIC's motion for a new trial.
On May 16, 2022, CCIC timely filed its notice of appeal.
DISCUSSION
I. Equitable Contribution
"Equitable contribution apportions costs among insurers sharing the same level of liability on the same risk as to the same insured, and is available when several insurers are' "obligated to indemnify or defend the same loss or claim, and one insurer has paid more than its share of the loss or defended the action without any participation by the others.". . . "The purpose of this rule of equity is to accomplish substantial justice by equalizing the common burden shared by coinsurers, and to prevent one insurer from profiting at the expense of others." '" (Safeco Ins. Co. of America v. Superior Court (2006) 140 Cal.App.4th 874, 879.)
" 'In an action for equitable contribution by a settling insurer against a nonparticipating insurer, the settling insurer has met its burden of proof when it makes a prima facie showing of potential coverage under the nonparticipating insurer's policy. [Citation.] The settling insurer does not have to prove actual coverage. [Citation.] After the settling insurer has satisfied its burden of proof, the burden shifts to the nonparticipating insurer to prove an absence of actual coverage under its policy. [Citation.]' [Citation.] In such a situation, the absence of actual coverage is an affirmative defense." (St. Paul Mercury Ins. Co. v. Mountain West Farm Bureau Mutual Ins. Co. (2012) 210 Cal.App.4th 645, 654, italics omitted.)
II. Standard of Review
" 'The interpretation of an insurance contract, as with that of any written instrument, is primarily a judicial function. [Citation.] Unless the interpretation of the instrument turns upon the credibility of conflicting extrinsic evidence, a reviewing court makes an independent determination of the policy's meaning.'" (Westoil Terminals Co., Inc. v. Industrial Indemnity Co. (2003) 110 Cal.App.4th 139, 145 (Westoil).) If interpretation depends on the resolution of a disputed factual issue, we must accept the trial court's factual determination if it is supported by substantial evidence. (Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 632.)
Here, the material facts are undisputed. Interpretation of the Gotham policy based on undisputed facts presents this court with a question of law which we review de novo. (Garamendi v. Mission Ins. Co. (2005) 131 Cal.App.4th 30, 40.)
"[I]t is a fundamental principle of appellate procedure that a trial court judgment is ordinarily presumed to be correct and the burden is on an appellant to demonstrate, on the basis of the record presented to the appellate court, that the trial court committed an error that justifies reversal of the judgment. [Citations.] 'This is not only a general principle of appellate practice but an ingredient of the constitutional doctrine of reversible error.'" (Jameson v. Desta (2018) 5 Cal.5th 594, 608-609.) Moreover, "[w]e may affirm the trial court's ruling on any ground supported by the record." (Taylor v. Elliott Turbomachinery Co. Inc. (2009) 171 Cal.App.4th 564, 573, fn. 5.)
III. The Parties' Contentions
A. CCIC's Contentions
CCIC contends the trial court erred in finding Gotham had no duty to defend or indemnify the Ormond insureds because, according to CCIC, the Alonso plaintiffs alleged "their damages were continuing into Gotham's time on the risk." In that regard, CCIC points to the Alonso plaintiffs' allegation that" 'acts, omissions and breaches . . . have occurred continuously and continue to occur'" (italics added). CCIC also contends "the Alonso plaintiffs also asserted in discovery that bodily-injury damages actually occurred within Gotham's policy period, including two trip-and-fall accidents in February 2017."
CCIC also argues the FTM exclusion did not negate any duty to defend on the part of Gotham because it did not exclude coverage for the Alonso plaintiffs' "common-law premises-liability theories" and that the trial court's contrary interpretation of the FTM exclusion renders the Gotham policy illusory.
CCIC contends whether Gotham had a duty to defend must be evaluated "on those facts available to Gotham at the time of tender of defense"; that the duty is excused" 'only when the [Alonso] [c]omplaint by no conceivable theory raise[s] a single issue which could bring it within the coverage of the [Gotham] policy' "; and that any doubt as to whether the duty to defend was triggered "must be resolved in favor of Gotham paying its fair share of the defense and indemnity." Finally, CCIC contends that if Gotham had a duty to defend any claim, then Gotham had a duty to defend the entire Alonso action even if there was no potential for coverage of other claims.
B. Gotham's Contentions
Gotham contends there is no potential for coverage under the Gotham policy for the Alonso plaintiffs' claims. It contends the CGL insuring provisions do not apply to the claims because they were not the result of an" 'occurrence'" as defined in the policy, and were known (in whole or part) to the Ormond insureds prior to issuance of the policy.
Gotham further contends the FTM exclusion actually excludes, and was intended by Ormond and Gotham to exclude, claims contained in the notice of intention to sue. Gotham maintains that all the statutory, contractual, and common law causes of action contained in the Alonso complaint were based on the same alleged facts and violations contained in the notice of intention to sue; that the prayer for relief for all causes of action seeks attorney fees under the MRL-the statutory scheme that required the Alonso plaintiffs to serve their notice of intention to sue; and that the FTM exclusion is not limited to alleged violations of the MRL (and similar statutes) and excludes coverage for injury and damages" 'arising out of any statutory or common law claims . . . directly or indirectly based on, attributed to, or arising out of, any actual or alleged "Failure to Maintain" claim.'" (Underlining omitted.) Gotham argues the" 'arising out of'" language in the exclusion is broad and brings the Alonso claims within the scope of the FTM exclusion. In addition, Gotham counters CCIC's contention that the FTM exclusion contained in the Gotham policy renders the policy illusory by providing examples of how coverage for other types of claims might be triggered.
With regard to the trip-and-fall claims, Gotham argues the fact they were not alleged in the Alonso complaint precludes any duty to defend or indemnify on its part and that those incidents stem from the same property conditions disclosed in the notice of intention to sue.
Finally, Gotham argues that CCIC's proposed allocation of shared costs of settlement and defense of the Alonso action is inequitable and that, if this court determines Gotham had a duty to indemnify, the allocation should "follow a pro-rata 'time on the risk' analysis to determine Gotham's share of indemnity."
IV. Gotham Did Not Have a Duty To Defend the Ormond Insureds in the Alonso Action
A. Applicable Law
" 'It has long been a fundamental rule of law that an insurer has a duty to defend an insured if it becomes aware of, or if the third party lawsuit pleads, facts giving rise to the potential for coverage under the insuring agreement.' [Citations.] The duty to defend is both separate from and broader than a duty to indemnify. [Citations.] Thus, to prevail in a duty to defend action 'the insured must prove the existence of a potential for coverage, while the insurer must establish the absence of any such potential .... [T]he insured need only show that the underlying claim may fall within policy coverage; the insurer must prove it cannot.'" (Food Pro Internat., Inc. v. Farmers Ins. Exchange (2008) 169 Cal.App.4th 976, 985, italics added, italics omitted (Food Pro).) An" 'insurer need not defend if the third party complaint can[,] by no conceivable theory[,] raise a single issue which could bring it within the policy coverage.'" (Montrose Chemical Corp. v. Superior Court (1993) 6 Cal.4th 287, 300, italics omitted (Montrose).)
" 'The determination whether the insurer owes a duty to defend usually is made in the first instance by comparing the allegations of the complaint with the terms of the policy. Facts extrinsic to the complaint also give rise to a duty to defend when they reveal a possibility that the claim may be covered by the policy. [Citation.]' [Citation.] As one Court of Appeal has put it, '[f]or an insurer, the existence of a duty to defend turns not upon the ultimate adjudication of coverage under its policy of insurance, but upon those facts known by the insurer at the inception of a third party lawsuit. [Citation.] Hence, the duty "may exist even where coverage is in doubt and ultimately does not develop." '" (Montrose, supra, 6 Cal.4th at p. 295.) However," 'where the extrinsic facts eliminate the potential for coverage, the insurer may decline to defend even when the bare allegations in the complaint suggest potential liability.'" (Food Pro, supra, 169 Cal.App.4th at p. 986; see Montrose, at pp. 298-299.) "Any doubt as to whether the facts give rise to a duty to defend is resolved in the insured's favor." (Modern Development Co. v. Navigators Ins. Co. (2003) 111 Cal.App.4th 932, 942.)
"Although insuring clauses normally are interpreted broadly [citation] and exclusions are strictly construed [citation], 'where an exclusion is clear and unambiguous, it is given its literal effect.'" (Westoil, supra, 110 Cal.App.4th at p. 146.)" 'If contractual language is clear and explicit, it governs. [Citation.] On the other hand, "[i]f the terms of a promise are in any respect ambiguous or uncertain, it must be interpreted in the sense in which the promisor believed, at the time of making it, that the promisee understood it." [Citations.] This rule, as applied to a promise of coverage in an insurance policy, protects not the subjective beliefs of the insurer but, rather, "the objectively reasonable expectations of the insured." [Citation.] Only if this rule does not resolve the ambiguity do we then resolve it against the insurer.'" (Cooper Companies v. Transcontinental Ins. Co. (1995) 31 Cal.App.4th 1094, 1102.)
In mixed action cases involving both claims potentially covered by the insurance policy and claims not potentially covered by the policy, California law generally provides the insurer has a "duty to defend the entire 'mixed' action prophylactically, as an obligation imposed by law in support of the policy." (Buss v. Superior Court (1997) 16 Cal.4th 35, 49.)
B. Allegations in the Alonso Complaint
The first cause of action in the Alonso complaint is for nuisance and states the Ormond insureds "maintained a nuisance on their property and breached their duties to Plaintiffs by substantially failing to provide and maintain the [p]ark's common areas, facilities, services, and physical improvements in good working order and condition and by reducing services ...." The Alonso complaint then goes on to itemize nearly all the issues that were itemized in the notice of intention to sue in substantively identical, nearly verbatim, language as that used in the notice of intention to sue ("maintenance and service issues"). No additional "maintenance and service issues" are itemized in the first cause of action. The Alonso plaintiffs alleged a variety of general and special damages, including "bodily and personal injury," and sought punitive damages, statutory penalties for violation of the MRL, and treble damages under section 3345 due to the alleged senior citizen status of some of the Alonso plaintiffs. The Alonso plaintiffs further alleged they "served Defendants and/or their agent(s) with their Notice of Intention to commence this action" and that "Defendants created and maintained both a private and a public nuisance at common law and under . . . [section] 798.87" of the MRL.
Each of the nine additional causes of action in the Alonso complaint reallege the allegations of the first cause of action. Six of these additional causes of action (i.e., causes of action for breach of contract, breach of the covenant of good faith, intentional interference with property rights, negligence, breach of warranty of habitability, and breach of the covenant of quiet enjoyment) allege the same maintenance and service issues set forth in the first cause of action by express reference to the specific allegations of the first cause of action. The remaining three additional causes of action are for breach of statutes, breach of unfair competition law, and declaratory and injunctive relief-each of which invokes the same itemized issues contained in the notice of intention to sue as described below.
The sixth cause of action for breach of statutes is premised on numerous alleged violations of the MRL; the Mobilehome Parks Act; and Title 25, Chapter 2, of the California Code of Regulations-the same statutes that the Gotham policy's FTM exclusion references in excluding claims based on an alleged" 'Failure to Maintain.'" A comparison of the alleged violations against the notice of intention to sue reveals they are based on the same general violations.
The ninth cause of action is similarly premised on alleged violations of the MRL and Mobilehome Parks Act and, as with all causes of action, incorporates the violations alleged in all preceding causes of action.
The tenth and final cause of action incorporates the violations alleged in all preceding causes of action and is premised on "the conditions alleged" in the Alonso complaint.
The prayer for relief in the Alonso complaint indicates that, on all causes of action except the ninth, the Alonso plaintiffs sought "a permanent injunction requiring [Ormond] to repair the [p]ark's sewer, water, gas, drainage, lighting, street, and electrical systems, trees and landscaping; abate any other nuisances alleged herein; as well as to comply with codes, statutes, and ordinances; and to not interfere with sales of homes"-all of which are subjects contained in the notice of intention to sue. As for their ninth cause of action, the Alonso plaintiffs sought a "permanent injunction enjoining unfair methods of competition, unfair, fraudulent or unlawful business practices, or unfair or deceptive acts or practices on consumers," as well as restitution and disgorgement of profits. On all causes of action, the Alonso plaintiffs sought "attorneys' fees incurred herein pursuant to the [MRL] and express contracts" entered into between the Alonso plaintiffs and Ormond defendants, and "statutory penalties under applicable causes of action, or as an alternative to punitive damages under the MRL."
C. Comparison of Alonso Complaint Allegations with the Insuring Provisions and Exclusions in the Gotham Policy
1. There Was No Possibility of Coverage Under the Gotham Policy Insuring Provisions for the Alonso Complaint Allegations
We address CCIC's coverage contentions relating to the February 2017 trip-and-fall claims in a subsequent section of this opinion.
The effective date of the Gotham policy was July 19, 2016. The CGL coverage included within the Gotham policy was of two types: Coverage A which protected the insureds from liability for" 'bodily injury'" and" 'property damage,'" and Coverage B which protected the insureds from liability for" 'personal and advertising injury.'" CCIC's argument on appeal that the Alonso plaintiffs' allegations are covered by the Gotham policy is premised solely on Coverage A of the Gotham policy's CGL coverage.The policy provides, in part:
At the trial court level, CCIC argued coverage existed under Coverage B for "personal and advertising injury." On appeal, however, CCIC does not cite to Coverage B provisions and provides no related argument or analysis. As a result, we conclude CCIC has abandoned the argument. (See In re Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 830.)
"SECTION I-COVERAGES "COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY
"1. Insuring Agreement
"a. We will pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies. We will have the right and duty to defend the insured against any 'suit' seeking those damages. However, we will have no duty to defend the insured against any 'suit' seeking damages for 'bodily injury' or 'property damage' to which this insurance does not apply.... [¶] . . . [¶]
"b. This insurance applies to 'bodily injury' and 'property damage' only if: [¶] (1) The 'bodily injury' or 'property damage' is caused by an 'occurrence' that takes place in the 'coverage territory'; [¶] (2) The 'bodily injury' or 'property damage' occurs during the policy period; and [¶] (3) Prior to the policy period, no insured . . ., knew that the 'bodily injury' or 'property damage' had occurred, in whole or in part. If . . . insured . . . knew, prior to the policy period, that the 'bodily injury' or 'property damage' occurred, then any continuation, change or resumption of such 'bodily injury' or 'property damage' during or after the policy period will be deemed to have been known prior to the policy period. [¶] . . . [¶]
"d. 'Bodily injury' or 'property damage' will be deemed to have been known to have occurred at the earliest time when any insured . . .: [¶] . . . Reports all, or any part, of the 'bodily injury' or 'property damages' to us or any other insurer; [¶] . . . Receives a written or verbal demand or claim for damages because of the 'bodily injury' or 'property damage' ...."
Thus, under section 1.a., CGL coverage exists for "sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies" (italics added). Conversely, said section further provides Gotham has no duty to defend against claims "seeking damages for 'bodily injury' or 'property damage' to which this insurance does not apply" (italics added).
In order for Coverage A insurance to apply, the bodily injury or property damage at issue must have been caused by an" 'occurrence' "-defined in the Gotham policy as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions"; that took place in the" 'coverage territory' "-defined in the Gotham policy as including the United States of America; that occurred during the policy period-i.e., July 19, 2016, to July 19, 2017; and resulting in bodily injury or property damage that the insureds did not know of "in whole or in part." If the insureds knew such injury or damage occurred prior to the Gotham policy period, then "any continuation, change or resumption" of such injury or damage thereafter would also be "deemed to have been known prior to the policy period." Such injury or damage is considered known to the insured when the insureds receive a "demand or claim for damages" or when the insureds report such injury or damage to Gotham.
Here, the undisputed evidence demonstrates the Ormond insureds knew that "bodily injury" and "property damage" alleged in the Alonso complaint occurred prior to the Gotham policy period. This is so because each cause of action in the Alonso complaint is premised on the same allegations contained in the notice of intention to sue served on Ormond, through his agents, on April 8, 2016. In addition, CCIC's "claim notes report" (capitalization omitted) reveal CCIC was made aware of the maintenance and service issues raised by park residents as early as May 12, 2016, and had related discussions with Ormond insureds and managers of the mobilehome park on subsequent dates in May 2016. Moreover, the application questionnaire for Gotham insurance, signed by Susan Johnson Ormond as Ormond's attorney-in-fact prior to issuance of the Gotham policy, disclosed the existence of the notice of intention to sue.
The questionnaire contained the following questions and responses, "Has the park ever been involved in litigation with a group of residents?" The "No" box was checked. "Does a threat of litigation with the park residents currently exist?" The "Yes" box was checked and included the following explanation, "Compl[ai]nts by residents in letter. Working to fix problems." The next question read, "Our mobilehome park insurance program assumes that the insured property presents a low hazard for becoming involved in 'Failure to Maintain' litigation. Briefly explain why you feel this to be the case." Susan Johnson Ormond responded, "Keep the property in nice condition and repair problems."
The express language of the Gotham policy insuring agreement states that the "insurance applies . . . only if: [¶] . . . [¶] . . . [t]he 'bodily injury' or 'property damage' occurs during the policy period." It is indisputable that any such injury or damage that existed at the time the Alonso complaint was filed did not occur during the policy period since the filing of the Alonso complaint preceded issuance of the Gotham policy.
CCIC's contention that a potential for coverage exists because the Alonso plaintiffs alleged that the" 'acts, omissions and breaches . . . have occurred continuously and continue to occur,'" does not persuade us that a potential for coverage existed. Coverage is not premised upon whether the alleged" 'acts, omissions and breaches'" continue to occur. Coverage only exists to indemnify against liability for bodily injury and property damage. The complaint only speaks in terms of injuries and damages actually suffered or incurred and the risk of future injury or damage.
Moreover, the Gotham policy's insuring provision provides that if an insured knew of bodily injury or property damage that occurred prior to the policy's inception, "any continuation, change or resumption" of such injury or damage is "deemed to have been known prior to the policy period." Thus, to the extent there was continuing injury or continuing damage stemming from the claims asserted in the Alonso complaint, coverage would not exist.
Based on the foregoing, we conclude there was no possibility of coverage under the insuring provisions of the Gotham policy. Accordingly, Gotham was under no duty to defend the Ormond insureds from claims asserted in the Alonso complaint.
2. The FTM Exclusion Relied Upon By Gotham and the Statutes and
Regulations Identified Therein
The Gotham policy contained an endorsement titled "Failure to Maintain Exclusion, Mobile Home Parks-California" (boldface &some capitalization omitted) (i.e., the "FTM exclusion"), which reads, in relevant part:
"A. Section I, Coverage, paragraph 2. Exclusions is amended by the addition of the following: [¶] In consideration of the premium charged, this insurance does not apply to: [¶] 'Bodily injury', 'personal injury' or 'property damage' arising out of any statutory or common law claims for indemnification or defense costs, directly or indirectly based on, attributed to, or arising out of, any actual or alleged 'Failure to Maintain' claim.
"B. Section V, Definitions is amended by the addition of the following: [¶] For purposes of this Exclusion the following definition is added: 'Failure to Maintain' shall mean any actual or alleged violation of the California Mobile Home Residence law (. . . Sections 798 through 799.6, inclusive, and any amendments thereto) or the California Mobile Home Parks Act (California Health and Safety Code Sections 18200 through 18700, inclusive, and any amendments thereto) and/or the administrative rules and regulations pertaining thereto (25 California Administrative Code Sections 1000 through 1778 inclusive, and any amendments thereto), including any suit or administrative action commencing with or requiring as a prerequisite the service of a Notice of Intention to Commence Action under . . . Section 798.84."
Under the FTM exclusion, the insurance provided by the Gotham policy does not apply to bodily injury, personal injury, and property damage "arising out of any statutory or common law claims for indemnification or defense costs, directly or indirectly based on, attributed to, or arising out of, any actual or alleged 'Failure to Maintain' claim."
A "Failure to Maintain" claim is defined for purposes of CGL coverage as any "actual or alleged violation" of the MRL, the Mobilehome Parks Act, or sections 1000 through 1778 of Title 25 of the California Code of Regulations and includes "any suit or administrative action commencing with or requiring . . . service of a Notice of Intention to Commence Action under . . . Section 798.84." These statutes and regulations referenced in the FTM exclusion are the very statutes and regulations expressly referenced in the notice of intention to sue and the Alonso complaint. We examine them below.
The California Administrative Code is now the California Code of Regulations. (Gov. Code, § 11344.9, subds. (a), (c).)
The MRL
The MRL" 'regulates relations between the owners and the residents of mobilehome parks.'" (SC Manufactured Homes, Inc. v. Canyon View Estates, Inc. (2007) 148 Cal.App.4th 663, 674.) Section 798.84 provides, in part: "No action based upon the management's alleged failure to maintain the physical improvements in the common facilities in good working order or condition or alleged reduction of service may be commenced by a homeowner unless the management has been given at least 30 days' prior notice of the intention to commence the action." (Id., subd. (a).) Section 798.84 "does not apply to actions for personal injury ...." (Id., subd. (f).) A prevailing party in an action subject to section 798.84 is entitled to an award of reasonable attorney's fees and costs. (§ 798.85.) Moreover, the MRL provides a trial court with discretion to award punitive damages or statutory penalties to a prevailing party. (§ 798.86.)
The MRL provides, in part, "[t]he substantial failure of the management to provide and maintain physical improvements in the common facilities in good working order and condition shall be deemed a public nuisance" (§ 798.87, subd. (a)) and "[t]he substantial violation of a mobilehome park rule shall be deemed a public nuisance" (id., subd. (b)). The residents of a mobilehome park are authorized under the MRL to file a civil action to remedy such public nuisances (§ 798.87, subd. (c)) and the court is authorized to enjoin the "continuing or recurring violation of reasonable rule[s] or regulation[s] of a mobilehome park" (§ 798.88, subd. (b); see id., subds. (a)-(c)).
The MRL also prohibits owners and managers of the mobilehome park from entering a "mobilehome or enclosed accessory structure without the prior written consent of the resident." (§ 798.26, subd. (a).)
In addition, the MRL contains provisions authorizing the removal of motor vehicles from the park under certain conditions. (§ 798.28.5.) It prohibits a homeowner from being "charged a fee for other than rent, utilities, and incidental reasonable charges for services actually rendered." (§ 798.31.) The MRL provides that park management is "solely responsible for the trimming, pruning, or removal of any tree, and the costs thereof" in common areas and, under certain conditions, in the rental spaces of the park (§ 798.37.5, subds. (a)-(b)) and for "maintenance, repair, replacement, paving, sealing, and the expenses related to the maintenance of all driveways installed by park management" (id., subd. (c)) in connection with "rental agreements entered into, renewed, or extended on or after January 1, 2001" (id., subd. (f)).
The MRL regulates billing for utilities. (§§ 798.40-798.44.) Among other things, it states that management "shall be liable . . . for actual damages" for failure to provide statutory notice regarding a nonemergency related interruption in utility services exceeding two hours. (§ 798.42.)
The Mobilehome Parks Act
A stated purpose of the Mobilehome Parks Act (the Act) is to "[a]ssure protection of the health, safety, and general welfare of all mobilehome park residents." (Health &Saf. Code, § 18254, subd. (a)(1).) The Legislature determined it necessary to establish "standards and requirements . . . for construction, maintenance, occupancy, use, and design of mobilehome parks [that] guarantee park residents maximum protection of their investment and a decent living environment." (Id., § 18251.)
Among other things, the Act makes it unlawful "to permit any wastewater, sewage, or waste material" from plumbing fixtures and/or sewage or waste disposal systems from being "discharged onto or deposited upon the surface of the ground" (Health &Saf. Code, § 18554, subd. (a)) and requires a mobilehome park to have "sufficient artificial light to adequately illuminate every building containing toilets and showers, and roadways and walkways" (id., § 18602). The Act authorizes the Department of Housing and Community Development (the Department) to adopt regulations to, among other things, "establish minimum requirements to protect the health and safety of the occupants and the public" and to "provide for the repair or abatement of any unsafe or unsanitary condition" of mobilehomes. (Health &Saf. Code, § 18605.)
The Department's Regulations
Among other things, the Department's regulations (1) provide that the park owner is responsible "for the safe operation and maintenance of all common areas, park-owned electrical, gas, and plumbing equipment . . . and all park-owned permanent buildings or structures ...." (Cal. Code Regs., tit. 25, § 1102, subd. (a)); (2) set lighting standards for the park in and around "toilet and shower buildings, laundry buildings, and recreation buildings" and walkways and roadways in use during "hours of darkness" (id., § 1108); (3) prohibit allowing the free roaming of dogs, cats, and domestic animals, or the accumulation of animal feces in common areas that create a nuisance (id., § 1114); (4) require common areas and lots to have adequate surface water drainage (id., § 1116); and (5) require the "park area . . . be kept clean and free from the accumulation of refuse, garbage, rubbish, excessive dust, or debris" (id., § 1120, subd. (c)). The regulations further provide, "[a]ny permanent building, structure, or portion thereof, or the premises on which it is located, shall be deemed substandard and a nuisance when any of the following conditions exist that endanger the life, limb, health, property, safety, or welfare of the occupants or the public" (id., § 1605) and, thereafter, the regulations list a number of health hazards/inadequate sanitation conditions (id., subd. (a)); structural hazards (id., subd. (b)); electrical hazards (id., subd. (d)); nonconforming and poorly maintained plumbing conditions (id., subd. (e)) (including, without limitation, that which results in "contamination of the potable water supply" (id., § 1606, subd. (e)(5))); and the "accumulation of weeds, vegetation, rubbish, dead organic matter, debris, garbage, offal, rat harborages, stagnant water" which "constitute fire, health, or safety hazards" (id., § 1605, subd. (j)).
3. The FTM Exclusion Further Eliminated the Potential for Coverage
CCIC contends the FTM exclusion "only excludes damages awarded for the precise statutory claims identified in the policy's [Failure to Maintain] definition" and notes that the Alonso complaint "alleges common-law premises-liability claims in addition to the excluded 'claims arising from any actual or alleged violation" of the MRL, the Act, and Department rules and regulations. In support of this contention, CCIC points to the Alonso complaints' "claims for common law nuisance, premises liability, and negligence ...." Thus, CCIC is contending that it is the theory of liability pursued by the Alonso plaintiffs-not the underlying factual allegations-that determines whether coverage is excluded by the FTM exclusion. We are not persuaded.
The FTM exclusion provides "this insurance does not apply to: [¶] '[b]odily injury', 'personal injury' or 'property damage' arising out of any statutory or common law claims for indemnification or defense costs, directly or indirectly based on, attributed to, or arising out of, any actual or alleged 'Failure to Maintain' claim" (italics added). A" 'Failure to Maintain'" claim is defined as an "actual or alleged violation" of the MRL, the Mobilehome Parks Act, and/or related rules and regulations, "including any suit . . . commencing with or requiring as a prerequisite the service of a Notice of Intention to Commence Action under . . . Section 798.84."
The complaint expressly alleges "On April 8, 2016, Plaintiffs served Defendants and/or their agent(s) with their Notice of Intention to commence this action" (italics added). It then references, attaches, and incorporates the notice of intention to sue as an exhibit to the complaint. Thus, the Alonso action unmistakably commenced with the notice of intention to sue. Moreover, each and every cause of action asserted in the Alonso complaint was premised, at least in part, on provisions of the MRL and, to that extent at least, service of the notice of intention to sue was required.
" 'California courts have consistently given a broad interpretation to the terms "arising out of" or "arising from" in various kinds of insurance provisions." (Fireman's Fund Ins. Cos. v. Atlantic Richfield Co. (2001) 94 Cal.App.4th 842, 849.) In Davis v. Farmers Ins. Group (2005) 134 Cal.App.4th 100, the court considered use of the phrase in an insurance exclusion provision. In so doing it wrote," '"' "[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"....'"' [Citations.] Policy exclusions are also interpreted according to their plain meaning. [Citations.] Moreover, although we strictly construe policy exclusions against the insurer, 'strict construction does not mean strained construction.'" (Id., at p. 107.)
The contention that the FTM exclusion does not apply to common law claims is at odds with that portion of the exclusion which reads: "this insurance does not apply to: [¶] '[b]odily injury', 'personal injury' or 'property damage' arising out of any statutory or common law claims for indemnification or defense costs, directly or indirectly based on, attributed to, or arising out of, any actual or alleged 'Failure to Maintain' claim."
The FTM exclusion expressly precludes such coverage. The close relationship between the allegations and all causes of action in the Alonso complaint, on the one hand, and the MRL, the Act, and Department rules and regulations, on the other hand, is established. Thus, the FTM exclusion further precludes coverage under the Gotham policy. Any other construction would be strained indeed.
We reject CCIC's contention that our construction of the FTM exclusion renders the Gotham policy illusory. As noted by Gotham, "coverage for bodily injury and property damage caused by an occurrence that is not an FTM claim or otherwise excluded" would be covered under the Gotham policy. CCIC has not demonstrated such coverage is tantamount to no coverage. Moreover, the policy continues to provide coverage for personal and advertising injury under Coverage B of the CGL provisions. Thus, the policy is not illusory.
Although unnecessary to our opinion, it is clear from discussions between individuals from ProSight, Propel and CSIA, that Gotham intended the FTM exclusion to preclude coverage for the Alonso complaint. Moreover, the CSIA agent that procured the insurance for the Ormond insureds knew the policy was being written with the FTM exclusion and stated, "Our insured knows that they have an FTM exclusion attached to the Gotham policy." Gotham notified the Ormond insureds that its insurance program "assumes that the insured property presents a low hazard for becoming involved in 'Failure to Maintain' litigation" and was conditioned on a low risk of failure to maintain claims. In response to questions on Gotham's application for insurance, Ormond's agentin-fact disclosed the notice of intention to sue. Based on all the circumstances of this case, the Ormond insureds could not have reasonably expected coverage for claims asserted in the notice of intention to sue, and filed in litigation prior to the Gotham policy taking effect.
V. Gotham Did Not Have a Duty To Indemnify the Ormond Insureds in the Alonso Action
Because there was no possibility of coverage under the Gotham policy for claims asserted in the Alonso action, Gotham did not have a duty to indemnify the Ormond insureds. (Certain Underwriters at Lloyd's of London v. Superior Court (2001) 24 Cal.4th 945, 958.) The undisputed facts do not give rise to a duty to indemnify.
VI. Gotham Did Not Have a Duty To Defend or Indemnify the Ormond Insureds Against the February 2017 Trip-and-fall Claims
As mentioned, CCIC re-tendered the defense and indemnity of the Alonso complaint to Gotham in January 2018. In doing so, CCIC noted that one of the Alonso plaintiffs, Kathy Randall, claimed (in discovery) to have suffered trip-and-fall accidents in July 2014 and February 2017-the latter of which occurred during the Gotham policy period. In their opening trial brief, CCIC noted the Alonso complaint's allegation that" 'acts, omissions and breaches [] have occurred continuously and continue to occur.'" CCIC argued Randall's 2017 claims constitute "new and distinct damages [that] occurred almost a year after the Gotham policy took effect in July 2016" and, together with the Alonso complaint allegations, "create potential coverage" under the Gotham policy not excluded by the FTM exclusion.
Notably, Randall's February 2017 trip-and-fall claims did not exist at the time the Alonso complaint was filed in 2016. CCIC characterizes this fact as "new and distinct damages" resulting from the hazardous conditions alleged in the Alonso complaint. However, that is not the only element of the claims that was missing at the time the Alonso complaint was filed." 'The elements of a cause of action for premises liability are the same as those for negligence.' [Citation.] Accordingly, the plaintiff must prove,' "a legal duty to use due care, a breach of such legal duty, and the breach as the proximate or legal cause of the resulting injury." '" (Jones v. Awad (2019) 39 Cal.App.5th 1200, 1207.) Although it may be fairly argued that the first two elements of such a claim (i.e., duty and breach of duty) were alleged in the Alonso complaint, neither the third or fourth element (i.e., causation and damages) existed at the time it was filed.
Because facts supporting these elements of Randall's 2017 claims were not in existence at the time the Alonso complaint was filed, the complaint did not encompass them. "[A]n insured 'may not trigger the duty to defend by speculating about . . . ways in which the third party claimant might amend its complaint at some future date.'" (24th & Hoffman Investors, LLC v. Northfield Ins. Co. (2022) 82 Cal.App.5th 825, 840; see Gunderson v. Fire Ins. Exchange (1995) 37 Cal.App.4th 1106, 1114.) Moreover, the parties stipulated that the Alonso complaint "was never amended to include allegations of a 'trip and fall' accident by . . . Randall."
The Gotham policy's CGL coverage for bodily injury and property damage liability reads, in part: "[Gotham] will pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies. [Gotham] will have the right and duty to defend the insured against any 'suit' seeking those damages. However, [Gotham] will have no duty to defend the 'insured' against any 'suit' seeking damages for 'bodily injury' or 'property damage' to which this insurance does not apply." The term" 'suit'" in the foregoing provision is defined in the policy as "a civil proceeding in which damages because of 'bodily injury', 'property damage' . . . to which this insurance applies are alleged." The term also includes "[a]n arbitration proceeding in which such damages are claimed and to which the insured must submit or does submit with our consent" and "[a]ny other alternative dispute resolution proceeding in which such damages are claimed and to which the insured submits with our consent."
The definition of" 'suit'" is not met with regard to Randall's 2017 trip-and-fall claims. As discussed, the claims were not encompassed by the Alonso complaint. Moreover, there were no arbitration proceedings in this case and, to the extent the mandatory settlement conference which led to the Alonso settlement and resolution of the claims constituted an "alternative dispute resolution proceeding in which such damages [were] claimed," there is no evidence before this court that Gotham consented to the claims being part of the proceedings. Consequently, we conclude there was no duty to defend the claims under the terms of the Gotham CGL policy.
As our state high court has said, "where there is no duty to defend, there cannot be a duty to indemnify." (Certain Underwriters at Lloyd's of London v. Superior Court, supra, 24 Cal.4th at p. 958.) Furthermore, the terms of the Gotham policy require indemnification only where "the insured becomes legally obligated to pay" damages associated with bodily injury or property damage. Although the Alonso settlement agreement-which includes a resolution of Randall's February 2017 trip-and-fall claims-is, absent any defenses to enforcement, a legal obligation to pay damages associated with the claims, the Gotham CGL policy further provides, "[t]his insurance does not apply to: [¶] . . . [¶] '[b]odily injury' or 'property damage' for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement." The settlement agreement constitutes a contractual assumption of liability for Randall's 2017 claims. Absent that contract, Ormond was under no legal obligation to pay damages associated with the claims.
Based on the foregoing, we conclude Randall's 2017 claims did not trigger a duty to defend or indemnify on the part of Gotham.
DISPOSITION
The judgment in favor of Gotham on CCIC's complaint for equitable contribution is affirmed. Gotham is awarded its costs on appeal.
WE CONCUR: POOCHIGIAN, Acting P. J., SNAUFFER, J.