Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
APPEAL from a judgment of the Superior Court of San Diego County, Ct. No. GIC866777, William R. Nevitt, Judge.
McDONALD, Acting P. J.
Plaintiffs Michael York and M. York & Associates, Inc. (together York) were hired to remodel the residence of Mr. and Mrs. Jacobsen, and filed a lawsuit against the Jacobsens seeking payment. The Jacobsens responded with a cross-complaint alleging numerous claims against York, one of which was for negligence. York, insured under a general liability insurance policy issued by defendant NIC Insurance Company (NIC), tendered defense of the cross-complaint to NIC, which declined the tender. York subsequently filed the present lawsuit against NIC alleging breach of contract and breach of the implied covenant of good faith and fair dealing.
NIC moved for summary judgment on two independent grounds. First, NIC argued, the policy was subject to rescission because York made material misrepresentations in the application for the policy and therefore NIC was entitled to rescind the policy (the rescission issue). Second, NIC argued even were it not entitled to rescind, the policy contained exclusions from coverage that negated any potential coverage for any of the claims included in the Jacobsen cross-complaint, and therefore NIC had no duty to defend that action (the no potential coverage issue). The trial court found no triable issue of material fact existed on either the rescission issue or the potential for coverage issue, and NIC was entitled to judgment as a matter of law.
On appeal, York asserts the court erred in finding no triable issues of fact on the rescission issue. However, York neither identifies disputed issues of material fact on the no potential coverage issue nor presents any legal argument why the exclusions do not negate any possibility for coverage.
I
RELEVANT UNDISPUTED FACTS
A. Underlying Lawsuit
York was insured under a commercial general liability insurance policy (the policy) issued by NIC. York was hired to remodel the residence of the Jacobsens. York performed the work on the foundation, framing and retaining wall, and hired subcontractors to perform other work. However, when disputes arose between York and the Jacobsens, York filed a lawsuit against the Jacobsens seeking payment. The Jacobsens responded with a cross-complaint alleging, among other things, that York had negligently performed the work and that the foundation, framing and retaining wall were defective.
York tendered defense of the cross-complaint to NIC, but NIC declined the tender. In the underlying action, the Jacobsens were awarded damages.
B. The Present Lawsuit
York filed this action against NIC alleging it had breached its contractual duty, and the covenant of good faith and fair dealing, when it declined to provide a defense to the Jacobsen's cross-complaint. NIC moved for summary judgment, alleging in part that, based on the allegations of the Jacobsens' cross-complaint, there was no potential for coverage because the damages sought by the Jacobsens' lawsuit were expressly excluded from coverage, and therefore it properly denied a defense to York.
II
LEGAL STANDARDS
A. Standard of Review
" 'A trial court properly grants summary judgment where no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) We review the trial court's decision de novo.' [Citations.] If, in deciding this appeal, we find there is no issue of material fact, we affirm the summary judgment if it is correct on any legal ground applicable to this case, whether that ground was the legal theory adopted by the trial court or not . . . . [Citation.]" (Westoil Terminals Co., Inc. v. Industrial Indemnity Co. (2003) 110 Cal.App.4th 139, 145.) Similarly, we apply the de novo standard of review to the interpretation of an insurance policy. (Ibid.)
B. The Duty to Defend
An insurer must defend its insured against a suit that "potentially seeks damages within the coverage of the policy." (Gray v. Zurich Insurance Co. (1966) 65 Cal.2d 263, 275.) However, the insurer has no duty to provide a defense when 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.)
"[W]hile the duty to defend is broad, it is not unlimited. It is entirely dependent upon a showing by the insured that the third party claim for which it seeks a defense is one for damages which potentially fall within the policy coverage. It is the nature and kind of risk covered by the policy which both defines and limits the duty to defend." (Lebas Fashion Imports of USA, Inc. v. ITT Hartford Ins. Group (1996) 50 Cal.App.4th 548, 556.) When assessing whether the insurer owes a duty to defend, a court begins by comparing the allegations of the complaint with the terms of the policy, although "[f]acts extrinsic to the complaint [can] give rise to a duty to defend when they reveal a possibility that the claim may be covered by the policy." (Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 19.) "If, at the time of tender, the allegations of the complaint together with extrinsic facts available to the insurer demonstrate no potential for coverage, the carrier may properly deny a defense." (We Do Graphics, Inc. v. Mercury Casualty Co. (2004) 124 Cal.App.4th 131, 136.)
C. Analysis
NIC argued, and the trial court found, that the "work performed" exclusions of the policy eliminated any possibility for coverage for the claims asserted in the Jacobsens' cross-complaint, and there were no triable issues of material fact on whether those exclusions conclusively negated the potential of any coverage. In Insurance Co. of North America v. National American Ins. Co. (1995) 37 Cal.App.4th 195, the court noted that when a comprehensive general liability policy excludes coverage for " 'property damage to work performed by or on behalf of the named insured arising out of the work or any portion thereof,' " such exclusion has the effect of eliminating coverage for damage the insured or those working on its behalf might cause to the very work the insured is constructing, thereby placing on the insured the cost of repairing the work. (Id. at p. 201.) The court went on to explain that "courts, construing [a work performed exclusion], have opined: '[Such a policy] is neither a performance bond nor an "all risk" policy. [Citation.] Rather, the effect of the policy is to make the contractor stand its own replacement and repair losses while the insurer takes the risk of injury to the property of others. [¶] . . . By excluding repair and replacement losses, the insurer gives the contractor an incentive to exercise care in workmanship thereby reducing the risk that is covered: damage to property of third parties. Coverage of repair and replacement costs would undermine this incentive.' [Quoting Western Employers Ins. Co. v. Arciero & Sons, Inc. (1983) 146 Cal.App.3d 1027, 1031.]" (Ibid.)
On appeal, York does not argue, or cite any authority suggesting, the trial court erred when it ruled the combined effect of the so called "work-performed" exclusions conclusively negated any potential for coverage. We therefore deem York to have conceded that this ruling was correct. (See, e.g., Niko v. Foreman (2006) 144 Cal.App.4th 344, 368 [failure of appellant to satisfy his burden of making legal argument demonstrating error waives or abandons claim of error; appellate court will not act as appellant's counsel to independently ascertain whether court made legal error]; Dills v. Redwoods Associates, Ltd. (1994) 28 Cal.App.4th 888, 890, fn. 1.)
Indeed, in the proceedings below, although York raised an issue of fact on whether it had finished work on the project, the trial court expressly noted York made no effort to rebut NIC's argument that impact of the combined "work-performed" exclusions was to conclusively negate any potential for coverage regardless of whether York had in fact completed all work on the project.
York's failure to demonstrate error on the ruling that the "work-performed" exclusions conclusively negated any potential for coverage mandates that we affirm the judgment. Although York on appeal makes several potentially meritorious arguments in support of the claim that it was error to find no triable issue of material fact on the rescission issue, York does not explain how this latter error was prejudicial error. The court in In re Marriage of McLaughlin (2000) 82 Cal.App.4th 327, after noting that the existence of error only mandates reversal if it resulted in a miscarriage of justice, explained:
" '[W]e can reverse the judgment only if we conclude ". . . it is reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error." [Citation.]' [Citation.] [¶] 'The burden is on the appellant in every case to show that the claimed error is prejudicial; i.e., that it has resulted in a miscarriage of justice.' [Citation.] Injury is not presumed from error, but injury must appear affirmatively upon the court's examination of the entire record. 'But our duty to examine the entire cause arises when and only when the appellant has fulfilled his duty to tender a proper prejudice argument. Because of the need to consider the particulars of the given case, rather than the type of error, the appellant bears the duty of spelling out in his brief exactly how the error caused a "miscarriage of justice." ' [Citation.] [Appellant] does not direct us to anything in the record to support a finding of prejudice. Indeed, [appellant] relies solely on the . . . error of law, but not evidence of prejudice. 'Where any error is relied on for a reversal it is not sufficient for appellant to point to the error and rest there.' " (Id. at p. 337.)
York makes no effort to explain, considering the fact NIC had no duty to defend under the policy because of the operation of the "work-performed" exclusions, how any purported errors as to the rescission issues were prejudicial. We therefore conclude the errors, if any, as to the trial court's determination of rescission issues were harmless, and therefore affirm the judgment.
DISPOSITION
The judgment is affirmed. NIC is entitled to costs on appeal.
WE CONCUR: O'ROURKE, J., AARON, J.