LIBERTY SURPLUS INSURANCE v. LEDESMA AND MEYER CONSTRUCTION

Amicus Curiae Brief of National Center for Victims of Crime

Cal.May 16, 2017

CRO 825 . OQ UnY)Case No. S236765 STL MAY 16 2017 rge Navarrete Clerk. IN THE SUPREME COURT OF CALIFORNIA° es Deputy LEDESMA AND MEYER CONSTRUCTION COMPANY, INC., et al, | Petitioners, Vv. LIBERTY SURPLUS INSURANCECORPORATION, et al., Respondents. After Order Certifying Question by the U.S. Court ofAppeals for the Ninth Circuit APPLICATION TO FILE AMICUS CURIAE BRIEF AND BRIEF OF AMICUS CURIAE NATIONAL CENTER FOR VICTIMS OF CRIMEINSUPPORT OF PETITIONERS LEDESMA AND — MEYER CONSTRUCTION COMPANY,INC.; JOSEPH LEDESMA; ANDKRIS MEYER Antonio R. Sarabia II (SBN 90109) IP Business Law,Inc. 3463 Tanglewood Lane Rolling HillsEstates, CA 90274-4131 Phone: (310) 377-5171 Attorneyfor Amicus Curiae Case No. 8236765 IN THE SUPREME COURT OF CALIFORNIA LEDESMA AND MEYER CONSTRUCTION COMPANY,INC., et al., Petitioners, Vv. LIBERTY SURPLUS INSURANCE CORPORATION,etal., Respondents. After Order Certifying Question by the U.S. Court of Appeals for the Ninth Circuit APPLICATION TO FILE AMICUS CURIAE BRIEF AND BRIEF OF AMICUS CURIAE NATIONAL CENTER FOR VICTIMS OF CRIME IN SUPPORT OF PETITIONERS LEDESMA AND MEYER CONSTRUCTION COMPANY, INC.; JOSEPH LEDESMA; AND KRIS MEYER Antonio R. Sarabia II (SBN 90109) IP Business Law,Inc. 3463 Tanglewood Lane Rolling Hills Estates, CA 90274-4131 Phone: (310) 377-5171 Attorneyfor Amicus Curiae TABLE OF CONTENTS TABLE OF CONTENTS.........ccccececc ences e eee neeeeen eee eee e nee ee eee ee ne ne ee ne ee te aes i TABLE OF AUTHORITIES............cccccccccccecceveecee eens neeeneenseeceneneneeere eres ill APPLICATION TO FILE BRIEF OF AMICUS CURIAE NATIONAL CENTERFOR VICTIMS OF CRIME IN SUPPORT OF PETITIONERS, LEDESMA AND MEYER CONSTRUCTION COMPANY,INC.; JOSEPH LEDESMA; ARGUMENT...........ccceceee tens eee e teen ee ne neces ence eee e eee eee a eee ee SESE SESE EO EEE en ED 3 I. I. CLAIMS AGAINST AN EMPLOYER ARISING FROM ITS NEGLIGENTHIRING, RETENTION, AND SUPERVISION OF ITS EMPLOYEE CONSTITUTES AN “OCCURRENCE” UNDER THE RELEVANT COMMERCIAL GENERAL LIABILITY (CGL) POLICY.......cccccccscceccsceceseeseesesesseeasvasenseceseease 3 A. Liberty Acknowledges That Its Conduct In This Matter Constitutes an “Accident,” and Thus an “Occurrence,” Under The Terms ofIts CGL Policy..............cccccecceececeseeseeaeeneeees 3 B. Liberty Incorrectly Asserts That Darold Hecht’s Conduct, Not L&M?’s Own Distinct Conduct, Is Most Germane To Whether Coverage Is Available To L&M Under The TermsofIts Own CGL POolicy...........ccccececeneceeeeeenceteteneeesorseeneues 3 L&M’S NEGLIGENT HIRING, RETENTION, AND SUPERVISION OF ITS EMPLOYEE ARE NOT “TOO ATTENUATED”TO CONSTITUTE AN “OCCURRENCE”, AND LIBERTY’S SUGGESTION TO THE CONTRARY IS UNSUPPORTEDBY THE TEXT OF ITS CGL POLICY, CALIFORNIA LAW, AND ESTABLISHED PUBLIC POLICY CONSIDERATIONS. ............ccccccceeecseeceeenenenseenees3 A. Pursuant To State v. Allstate Ins. Co., The Only Reasonable Interpretation of Liberty’s CGL Policy Is That L&M’s Negligent Conduct of Hiring, Retaining, and Supervising Its Employee Are Not “Too Attenuated” To Establish COVELAZE..... ccc cece ecencne cence ene eee eee ee enna eee en ee eens eee ee rene ee ea eeb een ens 5 B. Even If It Is Assumed, Arguendo, That There Are Additional Reasonable Interpretations of “Caused By”, As Used in Liberty’s CGLPolicy, California Law and Public Policy Still Dictate That There Must Be Coverage for L&M Under the Terms of Liberty’s CGL POlicy.............ccccecceceseteeenesenenseneeaes il CONCLUSION..........:cceccscteneeeeteee ence ences ese ee ee ee ens enenenneeeeneneeenenteneness 14 CERTIFICATION OF WORD COUNT...........:ccsccceeeeeeeceeneeeetoseeseeenenenens 15 il TABLE OF AUTHORITIES Cases Blythe v. Gately (1876) 51 Cal. 236.0... eccceccene rene ee ee een eeneeee eee ee se eebebeeeaeeesee ee tees 12 Bockrath v. Aldrich Chemical Co. (1999) 21 Cal. 4” JLo. cccccccccsssesssssseccsessseeesssesssssseeesesessntsegenen 6 Delgadov. Interinsurance Exchange of Automobile Club of Southern California (2009) 47 Cal. 4" 302........cccecsccssccccceessssesenseeeesaeeeeecessteesessnssteaesin 4 Dyerv. Northbrook Property & Casualty Ins. Co. (1989) 210 Cal. App. 3d 1540.0...cicecccceceeeeeeee ener eeete een eeen seen eases4,5 Evan F. v. Hughson United Methodist Church (1992) 8 Cal. App. 4 828.0.......cccccccssssscecessseteeeceeeeecesssseestseanesaas8,9 Garveyv. State Farm Fire & Casualty Co. (1989) 48 Cal 3d 395...cece eee c ec ee eee eeeeee ne ene te eee eeeeeeaeene nena enes 6 Hooperv. Wells, Fargo & Co. (1864) 27 Cal. LL... ceccccececeeneneeneeeasen sepa en eaeaeeeeeeeeaeeesete ees 12 La Jolla Beach & Tennis Club v. Industrial Indemnity Co. (1994) 9 Cah. 427. ccccccseeecccceecsceeecseeeeseeaseseeeeseseneeeseseeseues 12 Logacz v. Limanski | (1999) 71 Cal. App. 4° 1149......cccceccccsccccccessssssesssseettsstesseseeesene wuss 6 MacKinnonv. Truck Ins. Exchange (2003) 31 Cal. 4° 635........ccccccecssssssccecsetssecerssssecestsseecssetesesseeeenn 11 Minkler v. Safeco Ins. Co. of America (2010) 49 Cal. 4 315.0... ceecccccccecerecsecceeeeeeessassaeerteneeenes 5, 12-13 Mitchell v. Gonzales (1991) 54 Cal. 3d 1041...cece teste ree nent ee eneeeeeaseaee nea eaenenaees 6 Rahmel v. Lehndorff (1904) 142 Cal. 681.0... cece ceeee scree eee eeneenee ene ee seuss teensene een een pees 8 iii Rutherford v. Owens-Illinois, Inc. (1997) 16 Cal. 4953... ..cccccccceceesseeccesceveesccsesseussssesseeueuevaveeseesaass 6 State v. Allstate Ins. Co. (2009) 45 Cal. 4° 1008......cccecceeccseceeseseereesnseeesceseeeeseeseveees 5, 10, 12 Other Authorities California Civil Jury Instruction, § 430.Leese eeceeeeenesenesseaeeseeseeaueneuenesas 6,7 California Civil Jury Instruction, § 431..............cccceceeeneeeteeeeseneeeenens 6,7 California Civil Code, § 1636............cccecccccecsceee nen eeeeteneaeeee ra eeaeeaeeens 5 California Civil Code, § 1639............ccccceccscesseneeneeseneneeeeeseneeseeaeenees 5 California Civil Code, § 1654...........ccccccececcccct ee eeneneee tees eet eneeteeenens 12 California Code of Civil Procedure, § 638............ccccccescescteeceeeeeesceesenes 7 Restatement (Second) ofAgency, § 231.........cccccceceeeeec nets sence eeceneneeeees 8 iv CERTIFICATE OF INTERESTED ENTITES OR PERSONS Amicus Curiae know ofno entity or person that must be listed under (1) or (2) of Rule 8.208(d). Case No. 8236765 IN THE SUPREME COURT OF CALIFORNIA LEDESMA AND MEYER CONSTRUCTION COMPANY,INC., et al., Petitioners, Vv. LIBERTY SURPLUS INSURANCE CORPORATION,et al., Respondents. APPLICATION TO FILE BRIEF OF AMICUS CURIAE NATIONAL CENTER FOR VICTIMS OF CRIME IN SUPPORT OF PETITIONERS, LEDESMA AND MEYER CONSTRUCTION COMPANY,INC.; JOSEPH LEDESMA; AND KRIS MEYER The National Center for Victims of Crime (NCVC), formerly the National Victim Center, was founded in 1985, and is a nonprofit organization headquartered in Washington D.C. The NCVCrespectfully applies for leave to file the accompanying amicus curiae brief in support of Petitioners, Ledesma and Meyer Construction Company,Inc.; Joseph Ledesma; and Kris Meyer pursuant to Rule 8.520(f) of the California Rules of Court. The NCVCis familiar with the content of the parties’ briefs. The NCVCis regarded as oneofthe nation’s most effective resource and advocacy centers for victims of crime. The NCVChas an interest in this case due to its extensive work 1 and dedication in representing the interests of crime victims, including those who have been victims of sexual abuse, incest, rape, and other violent crimes. The NCVCitselfhas no interest in or connection with any of the parties in this case. The NCVCbelieves its views will assist the Court in resolving this case by addressing the certified question of the Ninth Circuit Court of Appeals A party’s counsel has not authored the brief in whole or in part, nor has a party’s counsel contributed money in any way in support ofthis amicusbrief. Dated: May 9, 2017 Respectfully submitted, LA Sate Antonio R. Sarabia II (SBN 90109) Attorney for Amicus Curiae NATIONAL CENTER FOR VICTIMS OF CRIME ARGUMENT I. CLAIMS AGAINST AN EMPLOYER ARISING FROM ITS NEGLIGENT HIRING, RETENTION, AND SUPERVISION OF ITS EMPLOYEE CONSTITUTES AN “OCCURRENCE” UNDER THE RELEVANT COMMERCIAL GENERAL LIABILITY (CGL) POLICY A. Liberty Acknowledges That Its Conduct In This Matter Constitutes an “Accident,” and Thus an “Occurrence,” Under The Termsof Its CGL Policy This Honorable Court has accepted the certified question from the Ninth Circuit Court of Appeals, asking whetherthere is an “occurrence” under an employer’s commercial generalliability (CGL) policy when third party brings claims against that employerforits negligent conductin hiring,retaining, and supervising an employee who intentionally injures the third party. Conspicuously missing throughout Liberty’s entire answering brief, though, is any analysis of this fundamental question. Instead, as it relates to this issue, the only indication of Liberty’s position can be directly traced back to its correspondencein this matter, explicitly acknowledging that the negligence claims lodged against L&M related to conduct that was “accidental in nature.” Accordingly,in answering this question, this Court need not look any further than Liberty’s own concessions. B. Liberty Incorrectly Asserts That Darold Hecht’s Conduct, Not L&M’s OwnDistinct Conduct, Is Most Germane To Whether CoverageIs Available To L&M Under The TermsofIts Own CGL Policy While Liberty has already conceded that L&M’s negligent conduct (Hiring, Retention, and Supervision) constitutes an “accident”, it continues to make much ado aboutthe nature of Darold Hecht’s conduct and how that somehowcontrols the analysis. This contention, however, patently ignores Delgado v. Interinsurance Exchange of Automobile Club ofSouthern California, (2009) 47 Cal. 4" 302, which instructs that the analysis of what constitutes an “accident”, and therefore an “occurrence”, must be inextricably linked to L&M’s negligent conduct, not the conduct of Hecht, an individual whois nota party to the insurance contract. Asstated in Delgado,“the word accidentin the coverageclause of a liability policy refers to the conduct ofthe insured for which liability is sought to be imposed on the insured.” (/d., 47 Cal. 4" at p. 311, emphasis added). In apparent support ofthis flawed premise, Liberty surprisingly cites to Dyery, Northbrook Property & Casualty Ins. Co., (1989) 210 Cal. App. 3d 1540, a wrongful termination case. Frankly, Dyer is unpersuasive, at best. As a threshold matter, Dyer pre-dates Delgado by twenty (20) years and, thus, the analysis ofDyer lacks the guidance of existing law. Second,the nature of the employer-insured’s conduct in Dyeris categorically distinct from the nature ofL&M’s conduct here. Whereas in Dyer the employer-insured’s conduct was wholly derivative ofits agent whointentionally terminated an employee with intended and foreseen consequences, L&M’sconduct in negligently hiring, retaining, and supervising Hecht represents its own independent conduct involving unintended and unforeseen consequences to Doe. Third,the legal claims averred against the employer-insured in Dyer were exclusively derivative and vicarious in nature, whereas the claims averred against L&M were premised upon L&M’s ownindependent, negligent conductofhiring, retaining, and supervising Hecht. This, of course, is a clear byproductofthe distinctions in conduct between the employer- 4 insured in Dyer and L&M. Obviously, the nature of the insured’s conductis the primary variable to considerin this “accident”/“occurrence” analysis, rending Dyer an unworkable guide. Il. L&M’S NEGLIGENT HIRING, RETENTION, AND SUPERVISION OF ITS EMPLOYEEARE NOT “TOO ATTENUATED” TO CONSTITUTE AN “QOCCURRENCE”, AND LIBERTY’S SUGGESTION TO THE CONTRARYIS UNSUPPORTED BY THE TEXT OF ITS CGL POLICY, CALIFORNIA LAW, AND ESTABLISHED PUBLIC POLICY CONSIDERATIONS A. Pursuantto State v. Allstate Ins. Co., The Only Reasonable Interpretation of Liberty’s CGL Policy Is That L&M’s Negligent Conductof Hiring, Retaining, and Supervising Its Employee Are Not “Too Attenuated” To Establish Coverage In California,it is well-settled that when seeking to determine the meaning of an insurance contract, the court should attempt to enforce the mutual intent of the parties at the time the contract was created. (Minkler v. Safeco Ins. Co. ofAmerica, (2010) 49 Cal. 4" 315 (internal citations omitted); Civ. Code, §1636). Where feasible, the Court should look only to the written terms of the insurance policy. (Civ. Code, §1639). Here, the term Liberty utilized to trigger coverage for bodily injury under its CGL policy is when such bodily injury is “caused by an ‘occurrence’ ... .” (OBOMatp.7, emphasis added). Indeed, this Court has unequivocally held that when interpreting these wordsor similar causation-based language,traditional tort concepts govern. More specifically, in State v. Allstate Ins. Co., this Court explained that “[i]n analyzing coverage under liability policy, a ‘tort approach’ . . . to causation of damages is precisely whatis called for... .” (State v. Allstate Ins. Co., (2009) 45 Cal. 4 1008, 1035, emphasis added). This is not a novel concept, though. It is one that this Court already recognized and explained in Garvey v. State Farm Fire & Casualty Co., stating that “the right to coveragein the third party liability insurance context draws on traditional tort concepts of fault, proximate cause and duty.” (Garvey v. State Farm Fire & Casualty Co., (1989) 48 Cal. 3d 395, 407, emphasis added). Asit relates to these traditional tort concepts — and necessarily the right to coverage underthis Court’s holdings — it is the “substantial factor” test that has applied for decades. (See, e.g., Mitchell vy. Gonzales, (1991) 54 Cal. 3d 1041, 1052). To the extent there was any lingering doubt about the applicability of the “substantial factor” test following Mitchell, this Court madeits role in causation analysis abundantly clear in Rutherford vy. Owens-Illinois, Inc., when it held: “California has definitively adopted the substantialfactortest of the Restatement SecondofTorts... .” (Rutherford v. Owens- Illinois, Inc., (1997) 16 Cal. 4" 953, 968, emphasis added). To be clear, “[t]he substantial factor standardis a relatively broad one, requiring only that the contribution of the individual cause be more than negligible or theoretical.” (Bockrath v. Aldrich Chemical Co., (1999) 21 Cal. 4" 71, 79, emphasis added). This Court even went on to emphasize that “[uJndue evidence should not be placed on the word ‘substantial’”, (/d., 16 Cal. 4" at p. 969). Moreover, for one’s conduct to be deemed a “substantial factor,”it is important to note that such conduct does not have to be the exclusive, or even the most direct, cause of the harm. (Id., 16 Cal. 4"at p. 969; Logacz v, Limanski, (1999) 71 Cal. App. 4" 1149; see also California Civil Jury Instruction, §§ 430 and 431). It merely has to be found that the harm caused would not have occurred without that conduct. (California Civil Jury Instruction, §430). Here, L&M’s negligent conduct surely constitutes a “substantial factor” of the harm caused to Doe. Without L&M’srole in negligently hiring, retaining, and supervising Hecht, Hecht simply never would have had access or opportunity to abuse Doe,a victim who he only came upon because he was working for L&M at oneofits middle school construction projects. In fact, in the underlying case leading to this declaratory judgment action, L&M was found — as a matter of law — to be liable for Doe’s injuries. This was decided during a judicial reference,’ which waspresided over by the Honorable Judge Nuss, Ret. Importantly, the only type of claims Doe lodged against L&M werethose sounding in negligence, specifically Negligent Hiring/Retention, Negligent Supervision, and Negligence. Judge Nuss’s decision in favor ofDoe, and thus adverse to L&M (and Joseph Ledesma/Kris Meyer, owners of the business), served as a direct acknowledgment that L&M’s conduct wasa substantial factor in causing Doe’s injuries, thereby satisfying the causal link requirement under California law. Indeed, the former cannot be reached withoutpropersatisfaction of the latter. It is, simply put, a necessary prerequisite. ' A Judicial referenceis codified in California Code of Civil Procedure (CCP), § 638, which provides for the appointmentofa referee to “hear and determine anyorall of | the issues in an action or proceeding, whether of fact or of law, and to report a statement of decision.” The judicial reference decision by Judge Nuss to hold L&Mdirectly liable to Doe for its own negligent conduct (in contrast with vicariously liability concepts) is by no meansan outlier. Courts throughout California, including this Court, have routinely recognized the viability of negligent hiring, retention, and supervision claims against employers for an employee’s acts that are akin to those committed by Hecht. (See Evan F. v. Hughson United Methodist Church, (1992) 8 Cal. App. 4" 828 (holding that“in California, an employercan be held liable for negligent hiring if he knows the employee is unfit, or has reason to believe the employeeis unfit or fails to use reasonable care to discover the employee’s unfitness before hiring him.”); see also Rahmel v. Lehndorff, (1904) 142 Cal. 681). In this vein, California follows the rule and commentset forth in Restatement (Second) ofAgency, § 213, providing — in relevant part ~ that: [t]he principal may be negligent because he hasreason to know that the servant or other agent, because ofhis qualities, is likely to harm others in view of the work . . . entrusted to him... An agent, although otherwise competent, may be incompetent because ofhis reckless or vicious disposition, andifa principal, without exercising due care in selection, employsa vicious person to do an act which necessarily brings him in contact with others while in the performance of a duty, he is subject to liability for harm causedbythe vicious propensity. Significantly, in Evan F. y. Hughson United Methodist Church, the court not only made clear that direct negligent claims against an employerare viable for the precise types of circumstancesthat exist here, but also explained that the public policy component of causation/proximate cause, namely the appropriate scope for whichliability extends, are not disturbed by these claims whatsoever. (Evan F., 8 Cal. 4" at p. 841).”. Thisis significant because, as stated above,these traditional tort causation principles apply with equal force to causation questions involved in the type of coverage disputesat issue in this appeal. Here, the objective decision reached on causation by Judge Nuss during the judicial reference proceeding, as wellas this Court’s acknowledgementthat these legal theories are both viable and predicated on sound public policy, collectively dictate that Liberty provide coverage to L&M. Indeed, for this Court to hold otherwise, such decision would supplant the findings of fact and law made by Judge Nussand uproot sound jurisprudencethat has already been firmly established by this Court. * For context, in Evan F. v. Hughson United Methodist Church, a young boy (Evan) was sexually abused by a minister of the Hughson United Methodist Church. (Evan F., 8 Cal. 4" App. at p. 831). After being molested, Evan then began doing sexually inappropriate things to his sister (Eyrene) who was six years old. (/d.). An adolescent psychiatrist opined that Evan’s inappropriate sexual contact with his sister was dueto the abuseinflicted upon him bythe Hughson United Methodist Church minister, as described above. (/d.). Accordingly, claims were brought by both Evan and Eyrene against Hughson United Methodist Church for, among other things, Negligent Hiring. (/d., 8 Cal. 4f App.at p. 834). While the court held that Eyrene’s claims against Hughson United Methodist Church ran afoul of causation’s public policy considerations, the court held that Evan’s claims for Negligent Hiring against Hughson United Methodist Church presented no such policy concerns. (/d., 8 Cal. 4" App.at p. 841). 9 In its answering brief on the merits, Liberty seemingly rejects that tort-based concepts, and thus the substantial-factortest, are applicable in analyzing the scope of coverage issue here: whether L&M’s conductis, or is not, “too attenuated” to constitute an “occurrence” under its CGL policy. (ABOMatp. 34). In particular, Liberty attempts to argue that the approachlaid out in State v. Allstate Ins. Co. is reserved only for cases involving a “concurrent cause”. (/d.). This, however, merely represents yet another example of Liberty artificially inserting phantom limitations into text. This time, instead of Liberty manufacturing the limitation into its own CGLpolicy,it is imposing it on this Court’s prior opinions. While this text of State v. Allstate Ins. Co.is already partially cited above, the broader quotation is worth highlighting here: In analyzing coverage undera liability policy, @ ‘tort approach’ .. . to causation ofdamagesis precisely whatis calledfor .... When the insurer has promised to indemnify the insured for all ‘sums which the Insured shall become obligated to pay .. . for damages .. . because of nonexcluded property damage, or similar language, coverage necessarily turns on whether the damages for which the insured became liable resulted — under tort law — from covered causes. ' (State v. Allstate Ins. Co., 45 Cal. 4" at p. 1035, emphasis added). Clearly, the exact restrictions that Liberty wishes to introduce appear nowhere within the pertinent section of this Court’s opinion in State v. Allstate Ins. Co., or anywhere else, for that matter. 10 B. Even If It Is Assumed, Arguendo, That There Are Additional Reasonable Interpretations of “Caused By”, As Used in Liberty’s CGL Policy, California Law and Public Policy Still Dictate That There Must Be Coverage for L&M Underthe Termsof Liberty’s CGL Policy As discussed above, the coverage-triggering words in Liberty’s policy, “caused by’, can only be properly construed to include L&M’s negligent managementofits employee, a “substantial factor” of the harm suffered by Doe. Said differently, such negligent managementcannot be considered “too attenuated” under the terms of Liberty’s CGL policy pursuant to California law. However, even if this Court were to find that this interpretation of “caused by” is not the only reasonable interpretation, and that it would somehowalso be possible to reasonably interpret “caused by” to mean only conductthat is the absolute most direct and immediate cause of the harm, Liberty’s argumentstill must fail. First, in such scenarios, this Court has made unmistakably clear that “insurance coverageis ‘interpreted broadly so as to afford the greatest possible protection the insured ....°”. (MacKinnon y. Truck Ins. Exchange, (2003) 31 Cal. 4" 635, 648 (internal citations omitted), emphasis added). In this case, to conform with this principle, the term “caused by” must be given meaning that reasonably expands coverage to L&M,not constricts it. Indeed, Liberty’s proposed interpretation of “caused by” does exactly the opposite. Morespecifically, in narrowly seeking to define “caused by” to mean only the most direct and immediate cause — something which garners no support from the actual language of its CGL policy — Liberty advocates that we contravenethe rules of 11 interpretation that have already been shapedsoas to afford L&M,as the insured,the least possible protection. Furthermore, in harmony with the aboverationale, a broader interpretation of “caused by” that reasonably expandsprotections of the insured is in lockstep with this Court’s holding in State v. Allstate Ins. Co., applying tort principles of causation — specifically the “substantial factor” test — to these types of insurance coverage matters instead of a more limited, less-inclusive test. Nonetheless, nowhere in Liberty’s answering brief did it once identify a different causation-based metric other than that which is governed bytort principles to measure these facts up against. Instead, Liberty only baldly insists that “caused by” should beasrestrictive and exclusiveas possible. Second, in such scenarios, this Court has long-recognized and applied the doctrine of contra proferentem, which necessarily cuts directly against Liberty’s proposed, narrow interpretation of its CGL policy. The doctrine of contra proferetem providesthat if there is any ambiguity in the contract, it must be construed strongly againstthe drafting party. (Blythe v. Gately, (1876) 51 Cal. 236; see also Civil Code, § 1654). This Court has said, “It]hey who choose the words, frame the language, draft the instrument, and executeit, oughtrather to be heldto a strict interpretation of the paper than he who merely accepts it.” (Hooperv. Wells, Fargo & Co., (1864) 27 Cal. 11). This maxim is especially apt in the insurance coverage context, where the insurer, as drafter, must be held accountable for the ambiguities in which they themselves create. (See La Jolla Beach & Tennis Club v. Industrial Indemnity Co., (1994) 9 Cal. 4" 27, 37-38; see also Minkler, 49 Cal. 4° 315, 12 321 (stating that this rule of construction against the insurer “stems from the recognition that the insurer generally drafted the policy and received premiumsto provide the agreed protection.”)) While Liberty seeks to impute narrow meaningto the term “caused by”so thatit only includes coverage for occurrences that were the most direct and immediate ofthe injury, it cannot be ignored that it was Liberty who had sole discretion over the language choice in its CGL policy. Surely, if Liberty truly intended such restrictive meaning at the time of drafting, it simply would not have issued a policy devoid ofthe very language that would have unequivocally accomplishedits desired result. For one, Liberty could have just inserted any number of words immediately in front of “caused by” to narrowly modify its meaning, such as the words “directly” or “immediately”. Similarly, and with equal ease, Liberty could have crafted an exclusion to ensure its policy was given the effect it now conveniently purports was intended(i.e., to deny coverage for the negligent hiring, retention, and supervision of an employee). In sum, Liberty, as drafter, must bear the consequencesof its own poordrafting choices. 13 CONCLUSION In light of the foregoing, the Court should answerthe certified question in the affirmative, holding that claims against an employerarising from its negligenthiring, retention, and supervision of its employee constitute an “occurrence” under a CGL policy. Dated: May9, 2017 Respectfully submitted, By: AASL : AntohioR. Sarabia IT(SBN 90109) Attorney for Amicus Curiae NATIONAL CENTER FOR VICTIMS OF CRIME 14 CERTIFICATION OF WORD COUNT Pursuant to California Rule of Court 8.520(c)(1), I certify that, according to the word count feature of Microsoft Word, this amicus curiae brief contains approximately 3,432 words, not including the Tables of Contents and Authorities, proof of service, signature blocks or this certification page. LUE SadJ Antonio R. Sarabia IT (SBN 90109) 15 Liberty Surplus Insurance Corporation, et al.v. Ledesma and Meyer Construction, etal. Supreme Court No. 8236765 9" Circuit No. 14-56120 D.C. No. 2:12-cv-00900-RGK-SP PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF LOS ANGELESI am employedin the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action; my business addressis: 3463 Tanglewood Lane, Rolling Hills Estates, California 90274-4131. On May9, 2017, I served the foregoing documents as Application to File Amicus Curiae Brief and Brief of Amicus Curiae on the interested parties in this action as follows: [] BY MAIL I am “readily familiar” with the firm’s practice of collection and processing correspondence for mailing. Underthat practice it would be deposited with U.S. postal service on that same day with postage thereon fully prepaid at Rolling Hills Estates, CA, in the ordinary course of business. I am aware that on motion of party served,service is presumed invalid if postal cancellation date or postage meter date is more than one (1) after date of deposit for mailing in affidavit. [XX] ELECTRONIC Pursuant to CRC Rule 8.212(c)(2) and/or the Court’s Local Rules, a copy was submitted electronically via the Court’s website as indicated on the service list. [] BY OVERNIGHT MAIL/COURIERTo expedite service, copies were sent via FEDERAL EXPRESS [XX] (State) I declare under penalty ofperjury under the laws of the State of California that the aboveis true and correct. Executed on May9, 2017, at Rolling Hills Estates, California. Antonio R. Sarabia I (SBN 90109) 16 C O R R S i n a en tm re t aap ot Liberty Surplus Insurance Corporation, et al.v, Ledesma and Meyer Construction,et al. Supreme Court No. 8236765 9" Circuit No. 14-56120 D.C. No. 2:12-cv-00900-RGK-SP SERVICE LIST Patrick P. Fredette, Esq. Christopher M. Ryan, Esq. McCORMICK BARSTOW SHEPPARD WAYTE & CARRUTH LLP 7647 North Fresno Street Fresno, CA 93720 Telephone: (559) 433-1300 Christopher M. Ryan, Esq. McCORMICK BARSTOW SHEPPARD WAYTE & CARRUTH LLP 312 Walnut Street, Suite 1050 Cincinnati, OH 45202 Telephone: (513) 762-7520 Ricardo Echeverria SHERNOFF BIDART ECHEVERRIA LLP 600 South Indian Hill Boulevard Claremont, California 91711 Telephone: (909) 621-4935 Jeffrey I. Ehrlich THE EHRLICH LAW FIRM 16130 Ventura Boulevard, Suite 610 Encino, California 91436 Telephone: (818) 905-3970 17 Attorneysfor Plaintiffs and Respondents Liberty Surplus Insurance Corporation and Liberty Insurance Underwriters, Inc. Attorneys for Plaintiffs and Respondents Liberty Surplus Insurance Corporation and Liberty Insurance Underwriters, Inc. Attorneys for Petitioners Ledesma and Meyer Construction Company,Inc.; Joseph Ledesma; and Kris Meyer Attorneys for Petitioners Ledesma and Meyer Construction Company,Inc.; Joseph Ledesma; and Kris Meyer Clerk of the Supreme Court California Supreme Court 350 McAllister Street San Francisco, CA 94102 18 Filed Via Federal Express Original and 8 copies / plus electronic copy submission illSM Antonio R. Sarabia II (SBN 90109) Attorney for Amicus Curiae NATIONAL CENTER FOR VICTIMS OF CRIME