LIBERTY SURPLUS INSURANCE v. LEDESMA AND MEYER CONSTRUCTION

Respondents’ Response to Amicus Curiae Brief

Cal.July 18, 2017

Case No. S 8236765 THE SUPREME COURT OF THE STATE OF CALIFORNIA SUPREME COURT LIBERTY SURPLUS INSURANCE CORPORATION,etal. FI L E D 1 Plaintiffs and Respondents, JUL 18 2017 Jorge Navarrete Clerk Vv. LEDESMA AND MEYER CONSTRUCTION COMPANY,INC., et al, Peputy Defendants and Appellants. After Order Certifying Question by the U.S. Court of Appeals for the Ninth Circuit RESPONDENTS’ CONSOLIDATED ANSWERINGBRIEF TO AMICI CURIAE BRIEFS McCormick, Barstow, Sheppard, Wayte & Carruth LLP * Patrick Fredette, #207284 patrick,fredette@mccormickbarstow.com Christopher Ryan, #294854 christopher.ryan@mccormickbarstow.com 7647 North Fresno Street Fresno, California 93720 Telephone: (559) 433-1300 Facsimile: (559) 433-2300 Attorneys for Plaintiffs and Respondents Liberty Surplus Insurance Corporation and Liberty Insurance Underwriters Inc. TABLE OF CONTENTS INTRODUCTION ooecccccsecseceseeeeeseesseesessecsseccnanecsseeenatesseeeseaeecsteneeecatecesseeeesssesensens 6 ARGUMENTou. eeccccccessccnsecsscssscnscesaceeeccssscecnssssaseesseceseeceseevsserssseseeecsaeesseeeessseeessseeenees 9 I. The Issue Before the Court Turns on the Specific Languagein the Liberty Policies, And Does NotDictate All Potential Liability Coverage ..0........cceccecceeescesseeeeseeeeeessessseeessesssensesseeses 9 Il. This Court’s Decisions Do Not Support Amici’s Suggestion that Coverage is Coextensive with Potential Liability... ccc cccceeseecceesseeessecceeeseesesscecsseeeseeeseseeeesseceseacsssesesesseecsseesessanats 16 A. Amici Misconstrue Deloado......ccccccecccccssseseeetsetsseeessescnssscesesessneneeess 16 B. Delgado Does Not Allow the “Occurrence” Analysis to Turn on Remote Acts in the Causal CHAIN... eeeececcseeeeeesseeeeseeeseeceeeaseseeeeeeeseeecseesseesesseesessesseeesesereeeess 22 C. State v. Allstate and Partridge Do not Support AMICI 0... ee eeeeeceeecescceeecessacesecseeececssaeeceaecesaeeeseeesssecaeeeasesssteseesessesesenses 24 D. Safeco Ins. Co. v. Robert S. Provides No Support for a Finding of an “Occurrence” Here ........cccesessecssesseesseeessseeeenees 3] IH. This Court’s Precedent Does Not Limit Determination of an “Accident”or “Occurrence”to the Insured’s “Point of VICW” oo ecceeecccccccuccccsssseeccccccccecccccceccceceeccenscsecececsavececsssessauesereseceuaseussecensaes 32 IV. Amici’s Request that Court Define an Accident to Embrace Either the Conduct or the Consequences of Conduct May Reflect Amici’s Policy Objectives, But Does Not Dictate the Result in this Action... eeecsecssessesesseeesessneees 40 V. Amici’s Argument that the Existence of Coverage in Certain CasesofVicarious Liability Implicates Coverage Here is Misplaced 000... eee ccceesssessssecsceceesseessnessseeesaeesseserssseesssesseeeeeeesaaeeeses 43 VI. Cases Cited by Amici are Inapposite and Do NotReflect that California Law Requires a Finding of Coverage HOTC eee cccecceeeesceeesesneeeeeeecnaasuceecseneeeeceneeeseeenaneeeeeeseeesesssesensteseecsessseceseeeesens 47 CONCLUSION00...eeeccsccesseseceseeseeseseessssessessssssessuesessecesseessecesutseeseeesesesneeeessteeeesaneens 49 TABLE OF AUTHORITIES Cases Aerojet-Gen. Corp. v. Transp. Indem. Co. (1997) 17 Cal.4th 38 ooo cc ccceccecceceesseneeseecececseeeesaeeaeceeteessneseeeaeessseees 38 Board ofEduc. v. Nat. Union (Pa.Super.Ct.1988) 709 A.2d 910...eeeeee cee ceeceeeeeeteesnasenenentenseeeaeeas 15 C.A. v. William S. Hart Union High Sch. Dist. (2010) 189 Cal.App.4th 1166 [117 Cal.Rptr.3d 283], rev'd, (2012) 53 Cal.4th 861... eeecccecesecseseeeeceeeeneseeeesateesaesseeseenes 14, 15 C.A. v. William S. Hart Union High Sch. Dist. (2012) 53 Cal.4th 861 oo.ceeesecseecessreseceseseesseeeecneeseaeceaecneceeneseateaas 13 Camelot by the Bay Condo. Owners’ Assn. v. Scottsdale Ins. Co. (1994) 27 Cal.App.4th 33 oo.eeeeccsessesseerseeesieeeseesaeenseeesaeeeeceerieesseeens 10 Century Transit Sys., Inc. v. Am. Empire Surplus Lines Ins. Co. (1996) 42 Cal.App.4th 121 ceeceecsccesecsseseseessessaceesesceasesssseseesesseens 31 Certain Underwriters at Lloyd’s ofLondon v. Superior Court (2001) 24 Cal. 4th 945 oocecccccessessseseeesseeceessaeeseeeseseaeeaeeeeeeeeas 22 Cypress Point Condo. Ass’n, Inc. v. Adria Towers, L.L.C., (2016) 226 N.J. 403 ooo. cccceceeereseseeeeeesneseessesaecssesesesseesseesesnessseaseretsneeas 39 Daggs v. ForemostIns. Co. (1983) 148 Cal.App.3d 726 0... eesccccesceeecetseneeeeeseseeseeeneeeseeeaesateateneeeaes 29 Debbie Reynolds Prof. Rehearsal Studios v. Superior Court (1994) 25 Cal. App. 4th 222 ooo. ceeeccecceeceeceneeceneeennectsneeeeeateaseeeeeeaeeeas 42 Delgadov. Interinsurance Exch. ofAuto. Club ofS. California (2007) 152 Cal.App.4th 671 [61 Cal.Rptr.3d 826], rev'd (2009) 47 Cal. 4th 302.0... ceeesceeseeseesereceseeeenereners 16, 19, 20, 30 Delgadov. Interinsurance Exch. ofAuto. Club ofS. California (2009) 47 Cal.4th 302ee 16, 19, 20, 21, 22, 23, 24, 31, 32, 47 Durham Bd. ofEduc. v. Nat. Union (1993) 109 N.C.App. 152 oe cceccesccceseseeeseeeeseceeeseeeseeeneeesaeseereneaeseeeaes 15 Dyerv. Northbrook Prop. & Cas. Ins. Co. (1989) 210 Cal.App.3d 1540 ooo. eseeseeeecceseeseecseeesseeseeesesseeaneeees 43 Dykstra v. ForemostIns. Co. (1993) 14 Cal.App.4th 361 oc.eeeenceesecersereesaeeeeseseeseaeeeeseerseseeaees 12 Farmer v. Allstate Ins. Co. (C.D. Cal. 2004) 311 F. Supp. 2d 884, aff'd (9th Cir. 2006) 171 Fed. App’x 111ceeeeseeeneeneees 39, 40 Farmers Ins. Exch. v. Superior Court (2013) 220 CalApp.4th 1199 ooo. cecseecsecseeseeeenessessetaseseeseseaeeeeas 30 Fireman’s Fund Ins. v. Nat. Bankfor Cooperatives (N.D.Cal. 1994) 849 F.Supp. 1347 oo... sseseeseetseeeeessaeeseeesseneseeeens 48 FMCCorp. v. Plaisted & Companies (1998) 61 Cal.App.4th 1132 oo. ceeeeeeeeecsecseeeeeecsreeceeeeesesesaessreeees 10 Golden Eagle Refinery Co. v. Associated Int'l Ins. Co. (2001) 85 Cal.App.4th 1300 oo... ee eeeeeseeseeeseseceesseeseeeseesesssteesneeaeeaeeres 27 Gray v. Zurich Ins. Co. (1966) 65 Cal.2d 263 ...eececccccsseeeseeeeneeneeneeeseeseseaetsesseeessaeeatens 17, 18, 46 Hogan v. Midland Nat.Ins. Co. (1969) 2 Cal. App. 3d 761 [82 Cal. Rptr. 865], vacated, (1970) 3 Cal.3d 553 we ceeceessececeeseenceeteseeseeeaeesseecseceeeesetarenanees 34 Hogan v. Midland NationalIns. Co. (1970) 3 Cal. 3d 553 weeeeeeeeeeceesseeeteeeeeees 8, 32, 33, 34, 35, 36, 37, 38 Ins. Co. ofPenn. v. City OfLong Beach (9th Cir. 2009) 342 F.App’x 274 oo... cecescsseeceeseceeeesesseeseseeeseseeaeeneteeaes 12 John R. v. Oakland Unified School Dist. (1989) 48 Cal.3d 438 ooccccssccesceceeeeneeeeeeneeessaeeseesaeseseeeaeseseeeteneesaes 14 Keating v. National Union Fire Ins. Co. (C.D. Cal. 1990)754 F.Supp. 1431, rev'd, (9th Cir. 1993) 995 F.2d 154 ooo. eeeessceeseeeesaeeeeeseseeeseeeeeesnenees 48 Lisa M. v. Henry Mayo Newhall Mem’l Hosp. (1995) 12 Cal.4th 291] oo. ceceeececccceenceeseeetseeteeeneereneeeatens 42, 43, 44, 45, 46 Maples vy. Aetna Casualty & Surety Co. (1978) 83 CalApp.3d 641... ececeeeceeseeeseeseeetsereesesieneeneaseneesseeneneeneeneeens 22 Merced Mut. Ins. Co. v. Mendez (1989) 213 CalApp.3d 41 oo. cceccccccecseeeseeneeseesreteeeereeseseseeseesenstessreeaeees 24 Miller v. W. Gen. Agency, Inc. (1996) 41 Cal. App. 4th 1144oeceeceeceecseeseeseeeessesseesseteeseseaeees 10 Minkler v. Safeco Insurance Co. ofAmerica (2010) 49 Cal.4th 315 oooccccceseccsseceeeeseereenerseeeeeaesesaeseestaeerenes 21, 33 Mullen v. Glens Falls Ins. Co. (1977) 73 Cal. App. 3d 163eeeceeeescesceeeeeresesenseeeeeensensessetsesrensetiess 19 Napa Cmty. Redevelopment Agency v. Cont’l Ins. Companies (9th Cir. 1998) 156 F.3d 1238 oo. eceeeeeseeeeseeeeeeeseseeeeeseeeeesettseesseeeaees 10 National American Ins. Co. v. Coburn (1989) 209 Cab.App.3d 914 oo. ccecccccseseeteerseeseeceseeeseeseeseessaeeseesneetaees 30 Rosen v. State Farm Gen. Ins. Co. (2003) 30 Cal. 4th 1070 oo. eeccseeecececesseeeeeeseeneceeeeeseeeeesearsaetarsaeesseeaees 22 Rowland v. Christian (1968) 69 Cal.2d 108 woo. cccccceesecceeeeeeeneerseretsecsaeseseeeseseeesaeeneeeerentes 13 Safeco Ins. Co. ofAm. v. Robert S. (2001) 26 Cal4th 758 oo. eeceeceeeneessseceeeeseseeeeeseeteeseseeteteseeneeeateeae 31, 32 Safeco Ins. Co. v. Gilstrap (1983) 141 Cal.App.3d 524 ooocccssecnecsscetecesecneeesecssessaeeseeneeseaeensens 30 State Farm Fire & Cas. Co. v. Westchester Inv. Co. (C.D. Cal. 1989) 721 F.Supp. 1165 oo... eeeceesseeeesneeeeecesteeeseeenes 48, 49 State Farm Mut. Auto. Ins. Co. v. Partridge (1973) 10 Cal.3d 94 ooocecccssseeceeseceeseeteeeseeseetseteneaaeeaesenaeees 27, 28, 29 State v. Allstate Ins. Co. (2009) 45 Cal.4th 1008 oo.eeeeeeceeceeeseseeeeeseseeeees 24, 25, 26, 27, 28 United Pac. Ins. Co. v. McGuire Co. (1991) 229 Cal.App.3d 1560 oo... cece eccceseeeeeneesseeseeesaeeseesenerseeeeats 11,12 Watkins Glen Cent. v. Nat. Union (N.Y. App. 2001) 286 A.D.2d 48 ooo. ecceeeceeeeereeeeressesesesesseeecsesnessaeees 15 Westfield Ins. Co. v. TWT, Inc. (N.D.Cal. 1989) 723 F.Supp. 492 000... eeessseesecseeseneeeeeeseeseeeeeeneeeneees 48 ZV. v. Cty. ofRiverside (2015) 238 Cal. App. 4th 889, 896, review denied (Sept. 23, 2015) oo... eee eseessesessceseecesseesseneseeeseeeseeeeeees 42 INTRODUCTION Several amici curiae submitted briefs in this action in support of Appellants Ledesma & Meyer Construction Company,Inc., Kris Meyer, and Joseph Ledesma(collectively, “L&M”) and in opposition to Respondents Liberty Surplus Insurance Corporation (“LSIC”) and Liberty Insurance Underwriters Inc. (“LIUI’’) (collectively, “Liberty”). The amici curiae that havefiled briefs in support of L&M are United Policyholders (“UP”); Los Angeles Unified SchoolDistrict (“LAUSD”); California Catholic Conference and Association of Christian Schools International (together, “CCC”); Franciscan Friars of California, Inc. and Province of Holy Name, Inc. (together “FFC”); and Steven W. Murray (“Murray”) (collectively “amici”). Amici present several overlapping, but ultimately misguided arguments in support oftheir varied interests in seeing the most expansive coverage possible under the Liberty policies, and presumably other policies. However, amici misconstrue California law. The insurance policies issued by Liberty to L&M apply to covered “bodily injury’ caused by an ‘occurrence.’” The Liberty policies define “occurrence” as an “accident, including continuous or repeated exposure to substantially the same general harmful conditions.” The plaintiff (“Doe”) in the underlying action, Jane JS Doe, et al. v. Ledesma & Meyer Constr. Co., Inc., et al., San Bernardino County Superior Court, Case No. CIVDS 1007001 (“Doe action’), alleged she was sexually abused and raped by Darold Hecht (“Hecht”), an employee ofL&M,in 2006 as a student at Cesar Chavez Middle School. The trial court in the Doe action ruled, in response to L&M’s motion for summaryjudgment, that plaintiffs had produced evidence “that Hecht was convicted twice related to sexual misconduct with minors with oneprior to his employment and one whilestill employed with L&M.” (2AER 45.) Further, according to the Doe court, evidenceindicated that L&M “knew ofthe 1998 incident soonafter they hired Hecht” and L&M “were further informed in February 2004 of the second conviction.” (2AER 45.) Thus, evidenceindicated that “with this knowledge [of Hecht’s sex offender status] L&M allowed Hecht to work on the Cesar Chavezproject while school children were present...” (2AER 45-46.) Further, the trial court found that “L&M’s principals were aware ... that [Hecht] was a registered sex offender,” and thus L&M could notestablish thatL&M “lacked knowledge of Hecht’s unfitness to work at a school.” (2AER 48.) Certain of amici’s briefs adoptas an initial premise that the Court must find coverage for L&M in relation to the Doeaction, becauseto find otherwise would rendera significant numberofpotential liabilities uninsurable. Thisis mistaken. The question before the Court involves the interpretation of the specific language of the Liberty policies in relation to the facts of the Doe action, and does not require a pronouncementas to all potential liability insurance coverage. Indeed, there are disparate forms of insurance policies that include distinct language, thus rendering nonsensical the mistaken “one size fits all” premise. Amici mistakenly argue that California law requires that insurers look to the alleged source of liability as to its insured, such as alleged negligent hiring or supervision, and not to the injury-causing act itself (here, the molestation and rape) in order to determine whether there has been an “occurrence” triggering coverage. The argument ignores that California courts, including this Court, have consistently focused on the actual cause of the “bodily injury” and whether that cause is accidental. If the cause of the “bodily injury” is not accidental, the “insuring agreement”is not satisfied and coverage is not implicated. This is true even if there are remote, antecedent events that are alleged to have invited the actual cause of the “bodily injury.” Thisis also true ifanother actor besides the insured seeking coverage engaged in the intentional act that caused the injury. Amici largely ignore this Court’s holding in Hogan v. Midland National Ins. Co. (1970) 3 Cal. 3d 553 that addressed the issue and turn to inapposite “concurrent cause” principles and cases in a misguided attempt to invent coverage. Amici are also incorrect in their contention that an “accident” must be determined from the insured’s point of view. This Court has rejected such an approach. | Amici’s focus on the contention that an “accident” may be found when either conduct or the consequences of that conduct are unintentional is misplaced. The question is not relevantto the issue before the Court and only reflects amici’s own particular policy interests. In any case, amici are incorrect in their suggestion that such a determination would result in coverage for the Doe action under the Liberty policies because the conduct and consequence of the sexual assault—the determinative cause of the injury— were both intentional. Amici are also mistaken in their focus on cases relating to vicarious liability. The fact that liability coverage is not foreclosed in relation to vicarious liability either for an employee’s intentional act, or for a public employee’s negligent acts, does not inform the present analysis, as the determination turns on California law in light ofthe allegations and undisputed facts ofthe Doe action and the termsofthe Liberty policies. Here, the policy language providesthat there is no coverage unless the injury is caused by an “occurrence,” which the law indicates is the injury-causing act. Because there wasno “occurrence”here, the Liberty policies do not provide coverage. ARGUMENT I. The Issue Before the Court Turns on the Specific Languagein the Liberty Policies, And Does Not Dictate All Potential Liability Coverage Muchofamici’s arguments are premised on the mistaken assumption that, if the Court were to find no “occurrence” as defined under the Liberty policies in the Doe action, then employers and other entities would be categorically unable to obtain insurance coverage applicable to similar scenarios. Within this argument are two incorrect assumptions. First is the assumption that the Liberty policies, governed by the specific language therein, should necessarily extend to the bounds of the insured’s potential liability. This concept is plainly not supported by California law. “The insurer does not ... insure the entire range of an insured's well-being, outside the scope ofand unrelated to the insurance policy, with respectto paying third party claims.” (Camelot by the Bay Condo. Owners’ Assn. v. Scottsdale Ins. Co. (1994) 27 Cal.App.4th 33, 52.) A “general liability” policy does not connote “unlimited coverage. ... It is invariably necessary to consult the languageofanyparticular generalliability policy to determine what coverages it affords.” (FMC Corp. v. Plaisted & Companies (1998) 61 Cal.App.4th 1132, 1146-47, disapproved of on other grounds by State v. Cont’! Ins. Co. (2012) 55 Cal.4th 186.) Liability policies generally provide coverage for certain types of risk and do not provide coverage that extends to the boundaries of all of the insured’s potential tort liability. (See, e.g., Miller v. W. Gen. Agency, Inc. (1996) 41 Cal. App. 4th 1144, 1150 [whether misrepresentations were “intentional or simply negligent, they did not constitute an ‘accident’ in its plain, ordinary sense”]; Napa Cmty. Redevelopment Agency v. Cont’l Ins. Companies (9th Cir. 1998) 156 F.3d 1238 [‘‘Accident’ or ‘occurrence’-based liability policies ... do not cover intentional or fraudulent behavior, only accidental or negligent [acts]’’].) 10 Second, amici appear to assumethatotherliability insurance coverage undera different coverage formulation than foundin the Liberty policies could not exist to potentially provide coverage. Thatis simply not the case. In this regard, United Pac. Ins. Co. v. McGuire Co. (1991) 229 Cal.App.3d 1560 is instructive. In United Pac., the insured sought coverage for a wrongful termination action under an insurancepolicy that provided coverage for “bodily injury ... caused by an occurrence....” (United Pac., supra, 229 Cal.App.3d at p. 1563.)' The insuring agreement defined the term “occurrence” as “an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpointofthe insured....” (Jd.) However,the policy also had a “Special 99 66.Form Comprehensive General Liability Endorsement,” “which the insureds purchased for an increased premium.” (/d.) The endorsement contained an “Extended Definition of Occurrence” which defined “occurrence” to mean “an accident, an event or a continuous or repeated exposure to conditions which results, during the policy period, in bodily injury or property damage neither expected nor intended by the insured.” (/d., emphasis added.) ' The United Pac. court put aside the issue of whether “‘bodily injury’ embrace[d] emotional distress” caused by wrongful termination under California law. (See United Pac., supra, 229 Cal.App.3d at p. 1563.) 1] The United Pac. court foundthat, while the wrongful termination may not have been an “accident” under California law, the policy’s definition of “occurrence” as modified by the “Extended Definition” was not so limited: “The context does not suggest that the term ‘event’ is synonymous with ‘accident’—andtherefore simply redundant—sinceit appears in a definition purporting to provide additional coverage. ... The word [‘event’] has no connotation of fortuity; under any accepted usage, it obviously embraces intentional conduct.” (/d. at 1565.) Asa result, the United Pac. court found the insurer had a duty to defend. (See id. at 1567.) The significance of the extended definition of“occurrence” in United Pac. was affirmed in Dykstra v. ForemostIns. Co. (1993) 14 Cal.App.4th 361, 367 (noting that the policiesat issue did “not extend coverage to both ‘accidents’ and ‘events’”); and Jns. Co. ofPenn. v. City OfLongBeach (9th Cir. 2009) 342 F.App’x 274, 276 (“[T]he policies, by including the term ‘events’ within an occurrence, cover intentional acts which cause harm unintendedbythe insured.”). The existence of alternative formulations ofliability coverage, such as that in United Pac., moots several of amici’s arguments. In particular, LAUSD’s briefrests on the assumption that the Court’s ruling in relation to the languageofthe Liberty policies at issue here will control broaderissues of whether such allegations can be covered, divorced from any analysis of the actual policy language at issue in a given case. (See LAUSD Br., p. 8.) According to LAUSD,California courts have imposedvicariousliability on 12 public entities like school districts under Gov. Code § 815.2, for the negligent—butnotintentional—acts ofemployees. (See LAUSD Br., p. 6-7.) In doing so, LAUSD notes the Court has examined a numberoffactors that include the potential availability of liability insurance in determining whether the law should imposevicariousliability upon a party. (See id., citing CLA. v. William S. Hart Union High Sch. Dist. (2012) 53 Cal.4th 861, 877.)° But LAUSDfails to bridge the gap between an understandingthat negligence may be “more readily insurable” than sexual assault, (see LAUSD Br.,p.8.), to the conclusion that LAUSD implicitly seeks: a determination that all liability policies provide such coverage in relation to sexual assault, regardless of policy language. Such a finding is unnecessary to preserve the Court’s * In actuality the Court’s exercise in relation to this issue has been somewhat different than LAUSDsuggests. As the Court in Rowland v. Christian (1968) 69 Cal.2d 108, 112, noted, the general rule in California is that “[a]ll persons are required to use ordinary care to preventothers being injured asthe result of their conduct” andthat “a personis liable for injuries caused byhis failure to exercise reasonablecare ....” It is the potential departure from that general rule that requires an examination of the “Rowland factors,” which LAUSD selectively quotes, andare: ... the foreseeability of harm to the plaintiff, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant’s conduct and the injury suffered, the moral blameattached to the defendant’s conduct, the policy ofpreventing future harm, the extent ofthe burden to the defendant and consequencesto the community of imposing a duty to exercise care with resulting liability for breach, and the availability, cost, and prevalence of insurance for the risk involved. (Rowland, supra, 69 Cal.2d at pp. 112-13.) 13 rationale in declining to impose vicarious liability in C.A., and John R. v. Oakland Unified School Dist. (1989) 48 Cal.3d 438.° Unsurprisingly, amici would prefer the benefit of the more expansive coverage afforded by the United Pac. policy, or other similar policies, without being required to actually obtain and pay for policies that incorporate such language (and thus with insurers that contemplated such risk and imposed commensurate premiums). However, the unambiguous language of the Liberty policies control here, and as discussed below, the precedent ofthis Court reflects that language does not encompassthe allegations of the Doe action. In his vindicated dissent’ to the intermediate appellate court’s opinion in C.A. v. William S. Hart Union High Sch. Dist. (2010) 189 Cal.App.4th 1166 [117 Cal.Rptr.3d 283], rev’d, (2012) 53 Cal.4th 861 , Judge Mallano observed that “[e]rrors and omissions policies are commonin the field of education,” noting that they “insure a member ofa designated calling against liability arising out ofthe mistakes inherentin the practice ofthat particular profession > It is importantto note that insurance policies issued to the San Bernardino County Unified School District (“SBCUSD”)are notat issue in this case. The language of any policies issued to SBUSDare not before the Court, and thus forcing a ruling, as LAUSD suggest, based on theoretical insurance coverage acquired by public entities would be inappropriate. * This Court reversed the intermediate appellate court in C.A. In doing so,the Court adopted much of the same reasoning that animated Judge Mallano’s dissent. (See C.A., supra, 53 Cal.4th 861, passim.) 14 or business .... An errors and omissions policy effectively provides malpractice insurance coverage to membersofprofessionsotherthan thosein the legal and medicalfields.” (C_A., supra, 189 Cal. App. 4th 1166 [117 Cal. Rptr. 3d 283, 306], Mallano, J., dissenting, quoting Watkins Glen Cent. v. Nat. Union (N.Y. App. 2001) 286 A.D.2d 48, 72.) Judge Mallano discussed several cases involving errors and omissions policies issued to educational institutions that reflect that such policies do not rest on the same “occurrence” formulation as is typical in general liability policies. (See C.A., supra, 189 Cal. App. 4th 1166 [117 Cal. Rptr. 3d at pp. 305-07], citing Board ofEduc.v. Nat. Union (Pa.Super.Ct.1988) 709 A.2d 910; Durham Bd. ofEduc. v. Nat. Union (1993) 109 N.C.App. 152; Watkins Glen, 286 A.D.2d 48.) For example, the policy in Durham provided coverage for “Wrongful Act[s],” which were defined as “any actual or alleged breach of duty, neglect, error, misstatement, misleading statement or omission committed solely in the performance of duties for the School District....” Durham, supra, 109 N.C. App. at p. 157. The relevant policy provision in Board of Education was identical. (See Board ofEduc., supra, 709 A.2d at p. 913.) Citing Board of Educ., 709 A.2d 910, the Watkins Glen court found that the policy before it contained a “nearly identical definition of coverage.” (Watkins Glen, supra, 286 A.D.2d at p. 52, citing Board ofEduc., supra, 709 A.2d at p. 913.) Thetypeofliability policy that provides coverage for “Wrongful Acts” commonly procured by educational entities, public institutions and other 15 entities and organizations, is not at issue here. The relatively narrow determination of whether sexual molestation can be considered an “occurrence,” defined as an “accident” would not bear on such errors and omissions coverage. LAUSDcites a concern that insurers would “almost certainly use” a determination in Liberty’s favor here in an attempt to resist coverage, (LAUSD Br., at 8), but also acknowledges that “the insurance policiesat issuein those cases differ from the policy at issue here ...” (LAUSD Br., at 3) and provides no context indicating how or why the Court’s decision here would impact distinct insurancepolicies that reflect different language. I. This Court’s Decisions Do Not Support Amici’s Suggestion that Coverage is Coextensive with Potential Liability A. Amici Misconstrue Delgado Amicipresent as a major themeoftheir briefingthat the tort concept of causation andthepotential for negligence liability should be determinative of 39whether or not there has been an “occurrence.” But this is essentially the reasoning of the intermediate appellate court in Delgado v. Interinsurance Exch. of Auto. Club of S. California (2007) 152 Cal.App.4th 671 [61 Cal.Rptr.3d 826], rev’d (2009) 47 Cal. 4th 302 (“Delgado I’), which this Court rejected in Delgado v. Interinsurance Exch. of Auto. Club of S. California (2009) 47 Cal.4th 302 (“Delgado II’). Adopting amici’s argument would ask the Court to ignore the reasoning that led it to reverse the lower 16 court in Delgado JI and institute a sweeping newrulethatis not supported by existing California law. A review ofthe casesis instructive, beginning with a case upon which the intermediate appellate court in Delgado I relied heavily, Gray v. Zurich Ins. Co. (1966) 65 Cal.2d 263. In Gray, the insured was sued for assault and battery while the insured contended he had acted in self-defense. (Gray, supra, 65 Cal.2d at p. 267.) The insurer rejected the insured’s tender ofthe defense of the suit based on the contention that the policy excluded coverage for damage “caused intentionally by or at the direction of the insured.” (See id. at pp. 267, 273.) In Gray, this Court found that the insurer had a duty to defend based on two independent reasons. First, and not germanehere, the Court reasonedthat the exclusionary language wasnot clear and conspicuous and so should be resolved in the insured’s favor. (See id. at pp. 272-73.) Second, and more relevant, the Court found that the underlying action “presented the potentiality ofajudgment based upon nonintentional conduct, and since liability for such conduct would fall within the indemnification coverage, the duty to defend became manifestat the outset.” (/d. at p. 276.) The Court noted that the insurer had an obligation to defend the insured against even “groundless,false or fraudulent claims”for “damages because of 17 bodily injury,” and reasoned that “the basic promise would support the insured’s reasonable expectation that he had bought the rendition of legal services to defend against a suit for bodily injury which alleged he had caused it, negligently, nonintentionally, intentionally or in any other manner.” (Id. at pp. 273-74, emphasis added.) The Court noted that the insured “might have been able to show that in physically defending himself, even if he exceeded the reasonable boundsofself-defense, he did not commit willful and intended injury, but engaged only in nonintentionaltortious conduct.” (d. at p. 277.) As a result, because of the Court’s broad interpretation of the insuring agreement, and the supposed potential for a judgment resulting from nonintentional conduct, the insurer had a duty to defend its insured. (/d.) The Court’s decision in Gray heavily influenced the intermediate appellate court’s decision in Delgado I. In Delgado I, the underlying complaint alleged two causes ofaction against the insured:“[t]he first alleged an intentional tort in that [the insured] ... physically struck, battered and kicked [the claimant] Delgado. The second causeofaction allegedthat [the insured] negligently and unreasonably believed he was engaging in self- ° Significantly, and discussed further below,the insuring agreementat issue in Gray did not contain an “occurrence” requirement,but obligated the insurer to “pay on behalfofthe insured all sums whichthe insured shall becomelegally obligated to pay as damages because ofbodily injury..., and ... defend any suit againstthe insured alleging such bodily injury ... and seeking damagesthatare payable underthe termsofthis endorsement, evenifany ofthe allegationsare groundless,false or fraudulent.” (Gray, supra, 65 Cal.2d at p. 267.) 18 defense and unreasonably acted in self defense ....”. (Delgado II, supra, 47 Cal.4th at p. 306.) In addition to an exclusionpertaining to intentionalacts,as in Gray, the policy in Delgado I provided coverage for “[b]odily injury... caused by an occurrence to whichthis coverage applies,” with “occurrence” defined as “‘an accident, including continuousor repeated injurious exposure to essentially the same conditions.” (Delgado I, supra, 152 Cal.App.4th 671 [61 Cal.Rptr.3d at p. 835].) The Delgado I court reasoned that the case before it was “similar to [Gray]*”and reasonedthat“it is clear that the underlying complaintpledfacts showing that a potential for coverage existed under the ... policy. [The claimant,] Delgado’s second causeofaction against[the insured] allegedthat [the insured] actedin self-defense; that is, Delgado’s injuries were caused by unintentional conduct.” (Delgado I, supra, 152 Cal.App.4th 671 [61 Cal.Rptr.3d 826 at p. 836].) Similar to the amici in this action, the Delgado I court reasonedthat, because the insured could be held liable for nonintentional tortious conduct, coverage should apply: “[S]uch conduct is properly ® In addition to Gray, the Delgado I court found the case to be similar to an intermediate appellate case, Mullen v. Glens Falls Ins. Co. (1977) 73 Cal. App. 3d 163, which essentially mirrored Gray. In Mullen, the court foundthat the alleged injuries “were the result of a fight; for all the insurance company could have knownatthattime, plaintiff started the fight and wasstruck by [the insured] in self-defense,” which would have rendered the injuries “not ‘intended’ or ‘expected’” and thus implicated a duty to defend. (Mullen, supra, 73 Cal.App.3d at p. 170.) 19 characterized as nonintentional tortious conduct. It is an act ofnegligence and necessarily presents an example of an unintended and fortuitous act.” (DelgadoI, supra, 152 Cal.App.4th 671 [61 Cal.Rptr.3d at p. 837], emphasis in original.) This Court, in Delgado II considered the Delgado I court’s reasoning—which mirrors amici’s arguments—butrejected it. Because the Delgado I court found Gray controlling, this Court in Delgado II explained at some length its reasoning in finding that Gray did not dictate the same outcome. (See DelgadoI, supra, 47 Cal.4th at p. 313.) Distinguishing Gray, this Court noted: Unlike the case now before us, the policy’s coverage clause in Gray did not define coverage in termsofinjuries resulting from ‘an accident.’ ... Gray and the cases that havecited it pertained to the question of unreasonable use of force or unreasonable self-defense in the context ofan insurance policy’s exclusionary clauses, not as here in the context of a policy’s coverageclause. Atissue here is whether unreasonableself-defense comes within the policy’s coverage for ‘an accident,’ not whether it falls within a particular policy exclusion. (Delgado II, supra, 47 Cal.4th at p. 313, emphasis in original, citations omitted.) 20 Thus, this Court correctly recognized that the determination ofwhether there has been an “accident” under a coverage grant is fundamentally different than determining whether an exclusion applies to preclude coverage. Gray and Delgado IT both presented very similar facts; and in fact the cases are nearly identical. In both casesthe insured allegedly assaulted the claimant, but a mistaken or unreasonable belief for the need for self-defense created the potential for negligence liability. And it was onthis basis that the insuredsin both cases sought coverage. Both policies contained an exclusion that precluded coverage for intentional acts. The only relevant, substantive difference between the two casesis that the policy in Delgado II applied to provide coverage for bodily injury caused by an “occurrence,” defined as an “accident.” However, this difference was determinative.’ The Court in Delgado IT explainedthat “the law looks for purposes of causation analysis to those causes which are so closely connected with the result and of such significance that the law is justified in imposingliability.” (id. at p. 315, citations omitted.) Noting that “the term ‘accident’ unambiguously refers to the event causing damage, not the earlier event ’ This key difference that the Court found dictated the outcomeexplains why amici miss the mark in citing to various cases that examined “expected or intended injury” or similar exclusions, rather than the meaning of the term “occurrence.” This Court, in Minkler v. Safeco Insurance Co. ofAmerica (2010) 49 Cal.4th 315, 324-25 , discussedat length in Liberty’s principle brief, (see Liberty Br., at pp. 30-32), affirmed that the issues required separate and distinct analyses. 21 creating the potential for future injury,” (id. at p. 316 (emphasis added), quoting Maples v. Aetna Casualty & Surety Co. (1978) 83 Cal.App.3d 641, 647-648), the Court explained, to “look to acts within the causal chain that are antecedent to and more remote from the assaultive conduct would renderlegal responsibilities too uncertain.” (DelgadoIT, supra, 47 Cal.4th at3 16.)* The Court made clear that the law requires an examination of the injury-causing act—which in the Doe action is sexual molestation and rape—and then a determination of whetherthe act is an “accident.” (/d. at pp. 315-16.) Such act doesnot satisfy the “occurrence” definition, which in turn meansthereis no duty to defend or indemnify under the Liberty policies in relation to the Doeaction. B. Delgado Does Not Allow the “Occurrence” Analysis to Turn on Remote Acts in the Causal Chain Amici incorrectly suggest that Liberty argues for an invented “immediate cause” standard that is unsupported. In fact, Liberty has simply applied this Court’s reasoning in De/gado II to the question: Does the Doe action allege injury caused by an “occurrence,” which is defined under the ® Thus,this Court has determined the “occurrence” term “unambiguous.” Asa result, the plain language of the policy controls. (See, e.g., Rosen v. State Farm Gen. Ins. Co. (2003) 30 Cal. 4th 1070, 1073, citing Cal. Civ. Code § 1644). Asaresult, FFC’s argument—thatthe term “occurrence” mustbe read in favorofthe insured becauseit is ambiguous—fails at the first hurdle. (See FFC Br., p. 8-10.) This Court “do[es] not rewrite any provision of any contract, including [an insurance policy], for any purpose.” Certain Underwriters at Lloyd’s ofLondon v. Superior Court (2001) 24 Cal. 4th 945, 960. 22 Liberty policies as an “accident”? Delgado IJ clearly—and correctly— indicates the answeris “no.” In Delgado II, the Court considered whether the insured’s mistaken understandingas to the need forselfdefense was “unforeseen and unexpected from the perspective of the insured, making the insured’s responsive acts unplanned and therefore accidental.” (Delgado II, supra, 47 Cal.4th atp. 314.) The Court rejected this argumentas well, explaining that “the law looks for purposes of causation analysis to those causes which are so closely connected with the result and of such significance that the law is justified in imposingliability.” (/d. at p. 315.) “In a caseof assault andbattery,it is the use of force on another that is closely connectedto the resulting injury.” (Ud. at pp. 315-16.) To “look to acts within the causal chain that are antecedentto and more remote from the assaultive conduct would render legal responsibilities too uncertain.” (/d.) To that end, the Court notedthat “the term ‘accident’ unambiguously refers to the event causing damage, not the earlier event creating the potential for future injury.” (/d., quoting Maples, 83 Cal.App.3dat pp. 647-48.)’ The Court providedanillustrative exampleofits reasoning: * Amici suggest that cases related to “timing” of an “occurrence,” such as Maples cannot inform the analysis here. Clearly, as reflected in Delgado I, this Court has not chosento so limit the influence ofMaples, butrather relied on it and its reasoning to formulate its holding. (See Delgado II, supra, 47 Cal.4th at p. 316.) 23 Whena driverintentionally speeds and,as a result, negligently hits another car, the speeding would be an intentional act. However,the act directly responsible for the injury—hitting the other car—was notintended by the driver and wasfortuitous. Accordingly, the occurrence resulting in injury would be deemed an accident. (Delgado II, supra, 47 Cal4th at p. 316, quoting Merced Mut. Ins. Co. v. Mendez (1989) 213 Cal.App.3d 41, 50.) The Merced court, from which Delgado IJ draws the example, continuedtheillustration: “On the other hand, where the driver was speeding and deliberately hit the othercar, the act directly responsible for the injury— hitting the other car—would beintentional and any resulting injury would be directly caused by the driver’s intentional act.” (Merced, supra, 213 Cal.App.3d at p. 50.) Thus confirming that under California law determination ofwhetherthere has been an “occurrence” focuses on the “the act directly responsible for the injury” and not antecedent events. C. State v. Allstate and Partridge Do not Support Amici In addition to misreading Delgado, amici rely upon this Court’s opinion in State v. Allstate Ins. Co. (2009) 45 Cal.4th 1008, to mistakenly suggestthat liability coverageis necessarily coextensive with potential negligenceliability. Amici’s treatment of State is superficial and does not accurately reflect its holding, and thus a closer examination of the opinionis instructive. 24 As explained in State, the State of California operated a hazardous wastefacility and obtained liability insurance in connection withits operation. (State, supra, 45 Cal.4th at p. 1014.) The relevant liability policies all contained similar pollution exclusions, but several policies contained an exception for “sudden and accidental” discharges as to “land or air”, but excluded coverage absolutely for “pollution to watercourses and bodies of water.” (/d. at p. 1016.) It was discoveredthat the waste containmentfacility had not been constructed on suitable ground and the waste eventually contaminated groundwater that flowed underthe site. (/d.) Further, there were “two major overflow episodes” in 1969 and 1978 in which the waste ponds overflowed, sending polluted water down the canyon outside the facility. (Id.) Coverage thus turned on whetherthe pollution was “sudden and accidental” and whether it implicated only water contamination, or also contamination of land. (See id. at pp. 1022-27.) The Court foundthat issues of material fact existed as to whether the exclusion and/or its exception was triggered. (See id. at pp. 1023-24, 1027.) The insurers had also arguedthat, even ifcoverage existed as to certain events and damages, the insured bore the burden of demonstrating covered damages, which would notinclude the gradual exposure and seepage ofwaste material over time. (See id. at p. 1028.) As the Court noted, “the State admitted it could not differentiate the property damage causedby the 1969 and 1978 releases from that caused by the gradual leakage of wastes .... [and] 25 could not differentiate between the ‘work performed to date’ to remedy the property damage causedby the varioussets ofreleases.” (/d. at p. 1028.) And in fact, on summary judgment,“thetrial court ruled ... the State could recover nothing because it could not prove how much of the property damage was caused by sudden and accidental releases.” (/d.) The intermediate appellate court reversed thetrial court, and this Court affirmed the appellate court “at least as to the result on summary judgment.” (Id. at p. 1029.) In its opinion in State, this Court noted that “[t]he 1969 and 1978 releases would haverenderedthe State fully liable for the contamination of soils and groundwater below the [site] without consideration of the subsurface leakage, if they were substantial factors in causing the contamination.” (/d. at p. 1031.) In its discussion ofwhether the insured was responsible for establishing allocation of damages to covered causes (the narrative on which amici place their focus) the Court found that coverage applied to indivisible injuries, if covered occurrenceis a “substantial cause” even if excluded causes are also present and damage cannot be allocated between the two. (/d. at pp. 1035-38.) The Court in State did not decide or even opine on what might constitute an “occurrence” or “accident” under a third party liability policy. (See id., passim.) Rather, State simply stands for the principle that a covered, independent “concurrent cause” can implicate coverage undera third-party liability policy even when an excluded causeis also present. 26 In doing so, the Court disapproved of Golden Eagle Refinery Co. v. Associated Int'l Ins. Co. (2001) 85 Cal.App.4th 1300.'° Amici place special emphasis on selected quotes in the State opinion criticizing Golden Eagle. In Golden Eagle, the appellate court found that the insured had the burden of apportioning damages between covered and uncovered causes.'! (Golden Eagle, supra, 85 Cal.App.4th at p. 1313-14.) The Golden Eagle court reasonedthat the measure ofdamagesfor the breach ofthe insurance contract was contractual in nature, and so the insured would haveto use a contractual standard to establish covered damages. (/d. at p. 1314.) Because the injury wasapparently indivisible, the insured could not do so. (See id.) The Court in State criticized Golden Eagle and concludedthat finding a covered cause was a “substantial factor” in the damage to property was sufficient to trigger coverage, even where another excluded cause also contributed to the single, indivisible injury. (See State, supra, 45 Cal.4th atp. 1035.) In doing so, State relied heavily on State Farm Mut. Auto. Ins. Co. v. Partridge (1973) 10 Cal.3d 94, discussed further below, to find that the “sudden and accidental” discharges were an independent, concurrent proximate cause ofthe damage. (See State, supra, 45 Cal.4th at pp. 1031-32.) '° Though Murray mistakenly claims State “reversed” Golden Eagle. (See MurrayBr., p. 11.) ‘7 ike in State, the ostensibly “covered” causes of damage were “sudden and accidental” releases of contaminants. (See Golden Eagle, supra, 85 Cal.App.4th at 1312.) 27 Asthe Court in State noted, Partridge “concluded that when multiple acts or events ‘constitute concurrent proximate causes of an accident, the insureris 399liable so long as one of the causes is covered by the policy.’” (State, supra, 45 Cal.4th at p. 1036, quoting Partridge, supra, 10 Cal.3d at p. 102.) Amici suggest that Partridge and the “concurrent cause” doctrine indicate that coverage should apply in this case. Amici are mistaken. An analysis of Partridge and its progeny reflect that the “concurrent cause” doctrine is not applicable in this instance. In Partridge, the underlyingliability arose due to two independent acts ofthe insured, each ofwhich separately created liability: the insured had “filed the trigger mechanism ofhis pistol to lighten the trigger pull so that the gun would have‘hair trigger action;” (Partridge, supra, 10 Cal. 3d at p. 97); and the insured drove his vehicle off the pavement into rough terrain, hitting a bump and causing the gun to fire. (Ud. at p. 98). The insured had a homeowner’s policy that excluded coveragefor injury arising outofthe use of an automobile and an auto policy. (/d. at p. 98). The insurer, which issued both policies, argued that because the use ofthe car played somecausalrole in the accident in question, the injuries “arose out of the use of the car” within the meaning of the homeowner’s exclusionary provision, and thus that only the automobile policy (which happened to have a lower limit) provided coverage for the injuries. (/d. at pp. 98-99.) The Court noted that, in determining both policies applied, “[t]he trial court [in the coverage action] 28 first found that the insured, Partridge, had been negligent both in modifying the gun by filing its trigger mechanism andin driving his vehicle offthe paved road onto the rough terrain, and that these two negligent acts were independent, concurrentproximate causesof[the claimant’s] injuries.” (/d. at p. 99, emphasis added.) This Court agreed with the reasoning and found that whena covered risk and an excluded risk “constitute concurrent proximate causes of an accident, the insurer is liable so long as one of the causesis covered by the policy.” (/d. at p. 102, emphasis added.) Thus, a concurrent cause exists when a loss occurs because of two independent causes, one of whichis covered and another excluded. (Seeid.) Applied in this context, the question then becomes: does the alleged negligent hiring/supervision/retention constitute an “independent, concurrent proximate cause”ofthe injury? In order for the concurrent-causeprinciple “to apply there must be two negligent acts or omissions of the insured, one of which, independently ofthe excluded cause, renders the insuredliable for the resulting injuries.” (Daggs v. Foremost Ins. Co. (1983) 148 Cal.App.3d 726, 730, emphasis added.) The negligent hiring/supervision/retention claims against L&M here do not create an “independent” cause of the injury; without the molestation by Hecht, the negligent hiring or supervision would notitselfhave caused injury to Doe. Rather, it is properly considered a precipitating or dependent“cause.” California courts have consistently found that precipitating, dependent causes 29 such as negligent supervision do not act to independently trigger coverage underthe “concurrent cause” doctrine. (See Farmers Ins. Exch. v. Superior Court (2013) 220 Cal.App.4th 1199, 1210, as modified on denial of reh’g (Oct. 28, 2013) [negligent supervision not a proximate, independent, concurrent cause of injury]; National AmericanIns. Co. v. Coburn (1989) 209 Cal.App.3d 914, 921-922 [same]; Safeco Ins. Co. v. Gilstrap (1983) 141 Cal.App.3d 524, 528 [negligent entrustment not an independent, concurrent cause of injury].) Thus, application ofthe “concurrent cause” doctrine under Partridge does not bring the Doe action under coverage becausethe alleged injury was not caused by an “occurrence” constituting an “independent, concurrent, proximate cause.” Amici mistakenly suggest that State and Partridge require there to be coverage under the Liberty policies because L&M faced potential liability under a negligence theory in relation to Doe’s sexual molestation. But this is simply an attempt to restore the reversed holding ofDelgado I, dressingit up in alternative “concurrent cause” garb. Understandably, the appellate court in Delgado I did not rely on Partridge or State, (see Delgado I, supra, 152 Cal.App.4th 671 [61 Cal.Rptr.3d 826], passim), because the “concurrent cause” doctrine would not have applied to the precipitating, dependent cause alleged, even ifthat dependent cause carried withit the potential for liability. This Court understood that as well; it did not cite Partridge or State in any relevant substantive way in its Delgado IT opinion. (See DelgadoII, supra, 47 30 Cal.4th 302, passim.) Partridge, State, and the “concurrent cause” doctrine provide no support for L&M and amici here.”? D. Safeco Ins. Co. v. Robert S. Provides No Support for a Finding of an “Occurrence” Here Oneofthe amici, Murray, argues that the Liberty policies necessarily provide coverage because “[t]his Court has previously determined a very similarly worded ‘occurrence’ definition in a liability includes negligent conduct,” citing Safeco Ins. Co. ofAm. v. Robert S. (2001) 26 Cal.4th 758. (Murray Br., p. 8.) Respectfully, this is entirely beside the point; Liberty has neverargued thatthe Liberty policies exclude coveragefor negligent conduct, only that the injury-causingact itself must be an “occurrence.” Additionally, the holding ofSafeco has no relevance. In Safeco, the Court rendered invalid an “illegal act” exclusion because it could not “reasonably be given meaning 2 In Delgado II, this Court cited State once for the simple, general concept that “[iJnsurance policies are read in light of the parties’ reasonable expectations and, when ambiguous, are interpreted to protect the reasonable expectations of the insured.” (Delgado II at 311, citing State at 1018.) Delgado II did not cite Partridge at all. (See Delgado I, passim.) '3 Tiberty discussed inapplicability of the “concurrent cause”approachin its principle brief. (See Liberty Br., pp. 33-37.) In particular, we note that the court in Century Transit Sys., Inc. v. Am. Empire Surplus Lines Ins. Co. (1996) 42 Cal.App.4th 121, explained how negligenthiring or retention could not be a “concurrent cause” in relation to an intentional act under Partridge. (See Century Transit, supra, 42 Cal.App.4th at p. 128, fn. 6.) Where an employer allegedly negligently hired an employee whothenintentionally fired a gun in employer’s store,“liability for negligent hiring was wholly dependent upon an injury caused by excluded event and wasnota true ‘independent’ cause ofthe plaintiff's injury.” (/d., citations omitted.) 31 under established rules of construction of a contract....” (Safeco, supra, 26 Cal.4th at p. 766.) The Court did so in part by reasoning that negligent acts were “illegal acts,” i.e., in violation of civil law, and thus an “illegal act” exclusion (as opposed to a “criminal act” exclusion) would exclude all negligence. (Seeid. at p. 765.) The same reasoning cannotbe appliedto the Liberty policies here. Ill. This Court’s Precedent Does Not Limit Determination of an “Accident” or “Occurrence” to the Insured’s “Point of View” Amici argue that Delgado II requiresthat only the insured’s “point of view”be considered in determining whetherthere has been an “occurrence,” defined as an “accident.” But, in doing so, amici ignore two things: the context of this Court’s decision in Delgado IT, and this Court’s previous decision that addressed this precise topic in Hogan v. Midland National Ins. Co. (1970) 3 Cal.3d 553. First, the facts in Delgado IJ presented a different scenario. The insured wasthe actor that committed the alleged assault. Thus when the Court noted “an injury-producing event is not an ‘accident’ within the policy’s coverage language whenall oftheacts, the mannerin which they were done, and the objective accomplished occurred as intendedbytheactor,” the “actor” and the “insured” were one in the same. (Delgado II, 47 CalAth at pp. 311-312,citing Hogan, 3 Cal.3d at p. 560.) As a result, there was no need to considerthat the injury-causing act separate and distinct from theacts ofthe insured. 32 In deciding to focus on the “objective” of the “actor,” the Court understandably cited Hogan because in Hoganthis Court squarely addressed the subject.’* It is telling that none of the amici, save one,’ cite Hogan,let alone attemptto discussor distinguish it. The reasonis simple: Hoganreflects that this Court has already considered and rejected amici’s core argument. In Hogan, this Court considered whether two distinct injuries were covered undera policy that provided coveragefor “injury to or destruction of property ... caused by accident....’ (Hogan, supra, 3 Cal.3d at p. 558, italics added by the Court.) In Hogan, the insured (Dieh!) manufactured and sold woodprocessing machinery,“insuring it againstliability for property damage caused by accident.” (Jd. at p. 557.) The underlying claimant, Kaufman, purchased a saw manufactured by Diehl and began to use it in September 4 This Court also cited Hogan, along with Delgado II, in Minkler v. Safeco Insurance Co. ofAmerica, 49 Cal.4th 315, 324-25 (2010) suggesting those cases would dictate the analysis in its footnote stating: [The insurer] doesnotassert that [the claimant’s] claimsrelated to his alleged molestations by [an insured] are beyond the scope of this basic coverage because the molestations were not “accident[s],” and we have not been asked to addressthat issue. Wetherefore do not do so. (But see Delgado v. Interinsurance Exchange ofAutomobile Club ofSouthern California (2009) 47 Cal. 4th 302, 308-17, 97 Cal.Rptr.3d 298, 211 P.3d 1083; Hogan v. MidlandNationalIns. Co. (1970) 3 Cal. 3d 553, 560, 91 Cal.Rptr. 153, 476 P.2d 825.) (Minkler, supra, 49 Cal.4th at p. 322, fn. 3.) 'S Only the brief submitted by CCCbriefly discusses Hogan. CCC’sattempt to distinguish Hoganis discussed further below. 33 1961. Ud.) The saw wasallegedly defective causing lumberto be cut in widthsthat were too narrow. (/d. at p. 558.) After customers hadrejected the lumberbecauseit had beencut too narrow,“to avoid complaints in the future, Kaufman deliberately cut lumber wider than specified in orders,” beginning after April 24, 1962. (Ud. at p. 559.) Based on the resulting losses, Kaufman initiated a liability action against the saw manufacturer. (See id. at 557.) Diehl called uponits insurer to defend the liability action, but the insurer denied coverage and refused to defend. (Hogan v. Midland Nat. Ins. Co. (1969) 2 Cal. App. 3d 761 [82 Cal. Rptr. 865, 866], vacated, (1970) 3 Cal.3d 553.) Diehl hired its own attorney and defended the action, which resulted in a judgment in Kaufman’s favor. Ud.) Diehl paid the judgment, and assigned to Hogan’®its claim againstits insurerarising from the failure to defend the Kaufmanaction. (/d.) In the ensuing coverage action, the insurer argued that damageto the boardsresulting both from cutting the widths too narrow and too wide were notthe result of “an accident.” (See Hogan, supra, 3 Cal.3d at p. 559.) The Court determined that there was “no merit” to the insurer’s “assertion that damagesresulting from undercutting were foreseeable under [Geddes].” (Id. at p. 560.) However, the Court determinedthat “[t]he circumstances, and the '© Therelationship between Hogan and Kaufman,if any,is not discussed in either the intermediate appellate court’s or this Court’s opinion. 34 legal consequences, differ[ed] as to the boards cut too wide.” (/d.) Even though, after April 24, 1962, Kaufman cut boards extra wide to compensate for the defective saw, the Court concluded that “[w]hatever the motivation, there is no question that these boards were deliberately cut wider than necessary; the conduct being calculated and deliberate, no accident occurred ...” Ud., emphasis in original.) Again, the saw manufacturer Diehl, and not Kaufman,wasthe insured. (See id. at p. 557.) The policy insured Diehl “against liability for property damagecaused by an accident.” (/d.) In Hogan this Court did not discuss in any way whether the under- or overcutting was “accidental” from the point of view ofthe insured, Diehl. (See id., passim.) It was simply not relevant to the analysis. The only question was whether the injury-causing act itself was deliberate. (See id. at pp. 560-61.) This Court reasoned: “The deliberate nature of Kaufman’s act(i.e., he contemplated the result of his act before he cut the boards) prevented the overcutting from constituting an accident....” (Id. at p. 560,italics added.) CCC attempts to distinguish Hoganin theirbrief, but fail to raise any real barrierto its application here. Amici suggest that Hogan is inapplicable here becauseit was the “claimant[that] deliberately made the over-width cuts ...” but they fail to explain why that should matter to the analysis. (CCC Br. at 22, emphasis in original.) In fact, it does not. As the Court explained in Hogan,“there is no question that these boards were deliberately cut wider than 35 necessary”and thus “no accident occurred....” (Hogan, supra, 3 Cal.3dat p. 560,italics in original.) The focus is on theact itself, even if the actor is not the insured. The Court in Hogandid not place any significance inthefact that the claimant was the one whohad acted deliberately. In fact, the Court’s reasoning indicates the same result would obtain had the claimant been a customer seeking redress for the overcut boards, and for the same reason.” Amici also argue that “the only claimed ‘damage’ [in relation to the over-cut boards] was ... economicloss.... [and] [t]he lack ofresulting damage explains why undercut lumber (which wasnotaccidental) was different from intentionally overcut wood (which wasnot).” (CCC Br., at p. 23.) In doing so, CCC incorrectly suggests that the Hogan ruling was based on the alternative ground that claimed damages inrelation to the overcut boards did not constitute “property damage” underthe policy. CCC’s insinuation does not, however, reflect the reasoning behind the Court’s analysis and holding. While the Court noted the different formulation of damages as awarded in relation to the overcut boards, (see Hogan, supra, 3 Cal.3d at p. 560), the Court did not discuss whether or not those items could be considered '’ CCC attempts to further minimize this Court’s decision in Hogan by positing an entirely inapposite theoretical scenario and concluding, without any support whatsoever, that “the result likely would have been different.” (CCC Br., at p. 23.) By inventing an entirely different factual scenario in order to speculate about a more favorable conclusion that would support its agenda, CCCeffectively admits that Hogan does not support its position. 36 “property damage” under the policy. (See id. at pp. 560-61.) The Court simply did not reachthe issue; it was unnecessary after having determined the overcutting was not the result of an “accident.” Hoganis importantin another respect. In Hogan,the plaintiffargued— muchlike amici here—that an insured’s precipitating negligence should be the focus of the analysis, rather than the actual cause of the harm. (Seeid. atp. 561.) In Hogan, the plaintiff argued that “Diehl’s reasonable expectations werethat the policy would cover claims for negligence, breach ofwarranty or strict liability in tort,” and that the insurer’s position would meanthat “Diehl would have obtained nothing of value for its premium dollar.” (/d.) In Hogan,this Court concededthat“[i]t was establishedin the prior actionthat, due to Diehl’s improper conduct in delivering a defective saw, Kaufman deliberately cut boards too wide.” (/d. at p. 560,italics added.) But, the Court did not view the term “accident” as coextensive with the insured’s potential negligence (orstrict) liability. Rather the Court found: There was no evidencein the record asto the expectations ofthe parties and no indication that Diehl anticipated coverage for liability not attributable to accident. The basic coverage for property damageliability due to accident is commonin products liability policies.... One who purchases an insurance policy against liability for property damage due to accident cannot 37 reasonably expect to obtain coverage for consequencesclearly outside the scope of the definition of accident. (Hogan, supra, 3 Cal.3d at p. 561, citations omitted.) Thus Hogan makesclear that the determination of an “accident”rests on the injury-causing conduct(i.e., the deliberate overcutting of the lumber) and not any antecedent act that precipitated the injury. Applied here, the Court’s decision in Hogan explains that the sexual molestation itself is the focus of the “occurrence”inquiry. Further, changesto the ISO “occurrence” form make explicit this focus on an “objective” standard, as with the formspresent in the Liberty policies. The languageofthe Liberty policies themselves indicate an objective focus on the injury-causing act to determine an “occurrence,” with a focus onthe act, not the actor. As noted in Liberty’s principle brief, the 1966 ISO CGLpolicy form introduced the “occurrence” coverage trigger, which required that damageor injury be caused by an “occurrence.” (See Aerojet-Gen. Corp.v. Transp. Indem. Co. (1997) 17 Cal.4th 38, 49.) In the 1966 form,“occurrence” wasdefined as an “accident, including injurious exposure to conditions, which results during the policy period in [bodily injury or property damage] neither expected nor intended from the standpointofthe insured.” (See id.) After an earlier change in 1973, the 1986 form subsequently again changed the definition of “occurrence,” but this time removed the clause relating to the point ofthe view ofthe insured, leaving an objective definition: “an accident, 38 including continuous or repeated exposure to substantially the same general harmful conditions,” (Cypress Point Condo. Ass’n, Inc. v. Adria Towers, L.L.C., (2016) 226 N.J. 403, 417), as reflected in the Liberty policies. (See 3AER 289, 4AER 431.) Exemplifying the “objective” approach required by the 1986 ISO “occurrence”definition is Farmerv. Allstate Ins. Co. (C.D. Cal. 2004) 311 F. Supp.2d 884,aff'd (9th Cir. 2006) 171 Fed. App’x 111, discussed in Liberty’s principle brief. In Farmer,the policy at issue provided coverageto the insured for liability arising out of an “occurrence,” which was defined objectively as “an accident ... resulting in bodily injury or property damage,”reflecting the 1986 ISO form, and mirroring the language in the Liberty policies. (/d. at p. 887.) The district court examined coverage for an in-home daycare operator (Mrs. Varela) in relation to an alleged molestation by her husband (Mr. Varela). (/d. at p. 886.) The district court noted that the alleged molestation “was not an ‘occurrence’ because child molestation cannot be an ‘accident.’” (Id. at p. 891.) The Farmer court reasonedthatit was “inclined to find that Mrs. Varela’s negligent supervision does not qualify as an “occurrence.” ... In the instant case, the injury causing events were clearly Mr. Varela’s molestations of Plaintiff—without such behavior, Plaintiff would not have brought the underlying action against the Varelas. In that Mrs. Varela’s negligence enabled Mr. Varela to molest Plaintiff, Mrs. Varela’s conductonly 39 created the potential for Plaintiff's injuries.” (Id. at p. 893.)'* Like this Court’s analysis in Delgado II, Farmer thus reflects—correctly—that the focus of the “occurrence”analysis is the injury-causing molestation, and not dependent, precedenteventslike alleged negligent supervision. IV. Amici’s Request that Court Define an Accident to EmbraceEither the Conduct or the Consequences of Conduct May Reflect Amici’s Policy Objectives, But Does Not Dictate the Result in this Action Like L&M,amici argue that the unintended result of deliberate acts may constitute an “occurrence.” The themeis misplaced becauseit places the cart before the horse: Delgado instructs that the injury-causing act, and not remote, precipitating factors determine whether an injury is “caused by an ‘occurrence.’” Amici would prefer the Court look at all numberofallegedly causative factors, no matter how remote, andas to each oneaskthe question of whether the conduct or the consequences of that conduct were accidental. According to amici, if the answeris “yes” to either question, then there has been an injury “caused by an ‘occurrence.’” This is not the question before the Court in this case. Rather, it reflects a strawman creation of amici: the question they would prefer the Court to focus on, rather than the direct 18 While the Farmer court correctly applied an objective standard under California law in its discussion indicating that the alleged “bodily injury” was not caused by an “occurrence,” the court ultimately based its finding of no coverage on other provisions in the policy. (See Farmer, supra, 311 F.Supp.2d at 893.) 40 question of whether injury caused by sexual molestation can be considered “caused by an ‘occurrence’” under the Liberty policies. An examination ofUP’s theoreticals (UP Brief, p. 33) is instructive and reveals that the theme doesnot address the issue before the Court. Thefirst theoretical consists ofan insured tossing a lit match on the ground,ignorant of gasolinethat is also there, which in turn ignites and causes damage. (Seeid.) The second theoreticalis similar, and reflects an insured swinginga golf club, and unaware ofthe person behind him,hits that person during the swing. (See id.) UP argues that in both instances, Liberty’s position requires that thereis no “occurrence” and thus no coverage under an “occurrence’’-type liability policy. This is simply not the case, and doesnotreflect Liberty’s position. In neither instance is an actor (whether the insured or another actor) engaged in conduct that by definition is intended to injure (e.g., sexual assault), and thus the theoreticals (like L&M’s “baseball”theoretical, see L&M Br., p. 41), do not address the issue before the Court. UP also presentsas a “theoretical” the scenario ofPartridge itself, and mistakenly suggest that Liberty’s position is that there would no “occurrence” there either. (See UP Br., p. 34.) Liberty has made no such suggestion, and the reading ofthe requirementthat an injury be “caused by an ‘occurrence’” as informed by Delgado, and that Liberty has relied upon, would notpreclude a finding ofan “occurrence”in the Partridge fact pattern. No actor in Partridge acted to intentionally injure the claimant, and so the same analysis would not 41 apply, independent from the fact that the hiring and supervision here are dependent, not independent causes ofthe bodily injury. Finally, and somewhatcloser to the issue before the Court is UP’s third theoretical in which a “disgruntled chef” deliberately taints food, and the injured patrons then sue the restaurant owner“for negligent supervision orfor the restaurant’s vicariousliability.” (UP Br., p. 34.) Asan initial matter, the restaurant owner maybe subject to vicariously liability becausethe act offood preparation is in the course and scope of a chefs employmentand thus may subject the restaurant to liability under a respondeat superior theory. In contrast, California courts have repeatedly found that sexual assault cannot be consideredto be in the “course and scope” ofemployment. (See, e.g., ZV. v. Cty.ofRiverside (2015) 238 Cal. App. 4th 889, 896, review denied (Sept.23, 2015); Debbie Reynolds Prof. Rehearsal Studios v. Superior Court (1994) 25 Cal. App. 4th 222, 227.) But, to the extent liability is claimed under a negligent supervision theory for the employee’s deliberate actto intentionally injure a person(s), then the same analysis under Delgado that Liberty advocates here would apply.” '9 Ofcourse,there is generally no vicariousliability for sexual assault because sexual assault would almost never be considered in the “course and scope” of one’s employment. (See,e.g., Lisa M. v. Henry Mayo Newhall Mem’l Hosp. (1995) 12 Cal.4th 291, 302-04.) 42 V. Amici’s Argumentthat the Existence of Coverage in Certain Cases of Vicarious Liability Implicates Coverage Here is Misplaced Several amici argue that the potential for liability coverage in relation to vicariousliability for an employee’s intentional torts requires a finding of coverage here. UP mistakenly suggests that Liberty argues that vicarious liability cannot trigger coverage undera liability policy. (See UP Br.at p. 44, n. 12.) However, an examination of Liberty’s argument reveals this is inaccurate. The portion ofLiberty’s briefto which UP refers states: “Without making the argument explicit, L&M suggests that an employer’s vicarious liability for an employee’s intentional tort should be considered the accident for the purposesofliability coverage. ... However, where an intentionalact is the immediate cause of the injury, the mere fact that the insured’s liability is vicarious does not meanthe injury is caused by an ‘occurrence.’” (Liberty Br. at p. 19, citing Dyer v. Northbrook Prop. & Cas. Ins. Co. (1989) 210 Cal.App.3d 1540, 1551-53.) Though Liberty clearly and explicitly rooted its reasoning in the “occurrence” requirement, UP seeks to fault Liberty for not citing the case Lisa M. v. Henry Mayo Newhall Mem'l Hosp., 12 Cal. 4th 291 (1995), which (a) was not an insurance coveragecase, and (b) did not discuss in any way the meaning of “occurrence”as used in a liability policy. Tellingly, UP selectively quotes from Lisa M., but doesnotprovide the context ofthe case, which in fact does not support UP’s position and doesnot inform the “occurrence” analysis. Briefly, Lisa M. involved an alleged 43 molestation by a hospital employee of a patient during an ultrasound examination. (See Lisa M., supra, 12 Cal. 4th at p. 295.) The patient sued the hospital, arguing that the hospital was liable for her injury under a theory of vicariousliability and respondeat superior, among others. (See id. at p. 296.) Onappeal, this Court addressed only the question ofwhether the employee’s intentional tort was within the scope ofhis employmentsuchthat the hospital could beliable under a theory of vicariousliability. (See id. at pp. 299-306.) The Court concludedthat, in fact, the hospital could not be held vicariously liable for the molestation. (See id. at p. 306.)” In doing so, the Court examined a numberof “policy goals” that underlie the respondeat superior doctrine, including the goal of ensuring compensation for injury. (See id. at 305.) On this topic, the Court stated: Asfor ensuring compensation,the briefing does not enable usto say with confidence whether or not insurance is actually available to medical providers for sexual torts of employees and, if so, whether coverage for such liability would drastically °° Thus, while UP pins muchofits argumentfor coverage here on the premise that employers maypotentially be vicariously liable for the intentionaltorts of their employees, Lisa M. reflects that L&M could not be held vicariously liable for Hecht’s molestation in this instance. As the Court concluded in Lisa M., the hospital “by employing the technician and providing the ultrasound room, mayhaveset the stage for his misconduct, but the script was entirely of his own independentinvention.” (Lisa M., supra, 12 Cal. 4th at p. 306.) The same reasoning would apply to Hecht’s molestation. 44 increase the insurance costs—or,if not, the uninsured liability costs—of nonprofit providers such as Hospital. (Id. at p. 305, emphasis added.) The Court then added a footnote of dicta to that discussion, which UP quotes only in part. The footnote (including the portion selectively omitted by UP)states: Whether a health care professional’s sexual misconduct is covered underthe professional’s malpractice policy”! is “amuch litigated issue,” depending in part on the exact factual relationship between the misconduct and the professional services for which the professional was engaged. But even where the misconductis not sufficiently related to the provision of professional services to be covered under malpractice insurance, the hospital or other institutional provider may be covered for its vicarious liability under a commercial general liability policy. Neither Insurance Codesection 533 norrelated policy exclusions for intentionally caused injury or damage preclude a California insurer from indemnifying an employer held vicariously liable for an employee’s willful acts. *] The policies before the Court here are not professional’s malpractice policies. 45 (Ud. at p. 305, n. 9.) The Lisa M. footnote does not indicate a finding of coverage, nor doesit even suggestthat policies will necessarily cover the type ofinjury at issue. Rather, the Court’s footnote only reflects that neither Ins. Code § 533 nor certain commonpolicy exclusions necessarily preclude such coverage. This is a relatively unremarkable statement, and Liberty has never suggested otherwisein this litigation. In fact, if one wereto take the dicta in the Court’s Lisa M. footnote as controlling authority as to liability insurance coverage in relation to negligent hiring/supervision (as UP appearto propose), one would simply wind up with this Court’s opinion in Gray. In Gray, this Court found that an exclusion for injury “caused intentionally by or at the direction of the insured” did not preclude coverage, where negligence may haveprecipitated an intentionaltort. (See Gray, supra, 65 Cal.2d at p. 276.) Of course, this Court encountered a virtually identical fact pattern to Gray in Delgado, and cameto the opposite conclusion. The key difference was the “occurrence” requirement in the relevant insurance policy, which wasnottriggered in thefirst instance. Relying in part on Lisa M., amici also suggest that law developed in relation to Ins. Code § 533 indicates that coverage should apply here. But, this too misses the mark. In explaining the result in Gray, this Court in Delgado IT noted that “[a] policy clause excluding intentional injury, such as the one in Gray, is treated as having the same meaning as the language in Insurance Codesection 533, which provides that an insurance companyisnotliable for a 46 loss caused by a willful act of the insured.” (DelgadoII, supra, 47 Cal.4th at pp. 331-14.) Thus, in Delgado II this Court recognized that the scope and impact of a coverage provision that limited the grant of coveragein the first instanceto an “accident” was fundamentally different in scope to an exclusion, or Ins. Code § 533. Thus,it is irrelevant that § 533 or certain exclusions may not prohibit insurance coverage in this instance. In DelgadoI, this Court has already considered the argument and rejected it. Where there is no “occurrence,” there is no coverage, whetheror not § 533 would independently act to remove coverage. VI. Cases Cited by Amici are Inapposite and Do Not Reflect that California Law Requires a Finding of Coverage Here Amici argue that some California courts have foundthat there can be an “occurrence” where an employee commitsan intentional tort and the employer wasallegedly negligent in its supervision or hiring ofthat employee, andthat this in turn suggests the Court must do so here. (See UP Br., p. 45.)But, the *? UP mistakenly states “Liberty implies that only one California case has addressed whether insurance coverageis available for a negligent supervision claim.” (UP Br., p. 45, citing Liberty Br. at p. 43.) This is flatly untrue. The portion of Liberty’s brief referenced by UPstates: “Ofthe cases cited by the district court, only Bay Area Cab Lease involved an underlying claim of negligent supervision.” (Liberty Br., p. 43, emphasis added.) In context, Liberty was responding to L&M’scriticism of certain cases cited by the district court, and discussing only those cited cases. Liberty wascorrectin its characterization ofthe cases cited by the District Court in its opinion. UP’s mischaracterization of Liberty’s brief reflects, at best, an unfortunate, superficial understanding ofthis case and Liberty’s position. 47 cases that amici cite are, at best, superficial, conclusory and are simply not rooted in California law. Amici rely on Fireman’s FundIns. v. Nat. Bankfor Cooperatives (N.D. Cal. 1994) 849 F.Supp. 1347, and Westfield Ins. Co. v. TWT, Inc. (N.D. Cal. 1989) 723 F.Supp. 492, both of which predate Delgado II. In Westfield Ins. Co., the district court did not engage in any analysis or cite any California law related to its finding that where there were allegations of intentional fraud along with allegations of antecedent negligent supervision, an “occurrence” could have been alleged. (See Westfield Ins. Co., supra, 723 F.Supp.at p. 492.) The court in Fireman’s Fund simply adopted the holding in Westfield Ins. Co., which like Fireman’s Fund Ins. was a claim against a financial institution involving alleged misrepresentations, to conclude without analysis that “negligent supervision could constitute an ‘occurrence’ underthe policy language.” (Fireman’s Fund. Ins., supra, 849 F.Supp. at p. 1368.) Amici also cite Keating v. National Union Fire Ins. Co. (C.D. Cal. 1990)754 F.Supp. 1431, rev'd, (9th Cir. 1993) 995 F.2d 154. The district court’s opinion in Keating is similarly flawed. While the Ninth Circuit reversedthe district court in Keating, the district court suggested that negligent supervision could constitute an “accident” under a generalliability policy. In support of the proposition, the Keating court cited only State Farm Fire & Cas. Co. v. Westchester Inv. Co. (C.D. Cal. 1989) 721 F.Supp. 1165 and one Florida case. (See Keating, supra, 754 F.Supp. at pp. 1440-41.) 48 Understandably, amici do not cite Westchester at his stage, as it provides no reasoned support for their position. In the brief Westchester opinion, the district court makes a conclusory statement that negligent supervision may constitute an “occurrence” in the context of a Fair Housing claim. (See Westchester, supra, 721 F. Supp. at p. 1168.) However, the Westchester court cites no authority for the statement, and provides no reasoning in support. (See id.) Thus, there is no indication that the opinion reflected California law at the time, even less so now as Westchester predates Delgado. In turn, there is no indication that Keating, now reversed,ever reflected California law, and certainly does not today. CONCLUSION Liberty respectfully submits that the Court should answerthe certified question in the negative in the context of the undisputed facts of this action, and find that the Doe action does not allege an “occurrence” within the meaning of the Liberty policies. 49 Dated: July 17, 2017 McCORMICK, BARSTOW, SHEPPARD, WAYTE & CARR LP By: Patric istopher Ryan Attorneys fo mtffis and Respondents Liberty Surplus Insurance Corporation and Liberty Insurance Underwriters Inc. 50 CERTIFICATE OF WORD COUNT The text of this Answering Brief to Amici Curiae contains 11,238 words, according to the word count generated by the word-processing program used to preparethe brief. Dated: July 17, 2017 Christopher Ryan Attorney for Plaintiffs and Respondents Liberty Surplus Insurance Corporation and Liberty Insurance Underwriters Inc. 51 PROOF OF SERVICE STATE OF OHIO, COUNTY OF HAMILTON Atthe time of service, I was over 18 years of age and not a party to this action. I am employed in the County of Hamilton, State of Ohio. My business address is 312 Walnut Street, Suite 1050, Cincinnati, Ohio, 45202. On July 17, 2017, I served true copies of the following document(s) described as RESPONDENTS’ CONSOLIDATED ANSWERING BRIEF TO AMICI CURIAE BRIEFSonthe interested parties in this action as follows: See attached Mailing List BY MAIL: | am readily familiar with the firm’s practice of collection and processing correspondence for mailing. Under that practice it would be deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid in the ordinary course ofbusiness. I am awarethat on motion of the party served, service is presumed invalid if postal cancellation date or postage meterdate is more than one day after date of deposit for mailing in affidavit. I declare under penalty of perjury under the laws of the State of Ohio that the foregoingis true andcorrect. Executed on July 17, 2017, at Cincinnati, Ohio. ZrMp—~ Christopher Ryan MAILING LIST Ricardo Echeverria SHERNOFF BIDART ECHEVERRIA LLP 600 South Indian Hill Boulevard Claremont, California 91711 Attorney for Appellants: Ledesma & Meyer Construction Company, Inc.; Joseph Ledesma; and Kris Meyer STEVEN W. MURRAY, APC 14930 Ventura Blvd., Ste. 205 Sherman Oaks, CA 91403 Attorney for Amicus Curiae Steven W. Murray Antonio R. Sabaria II IP BUSINESS LAW,INC. 3463 Tanglewood Lane Rolling Hills Estates, CA 90274 Attorney for Amicus Curiae National Center for Victims of Crime Jeffrey I. Ehrlich THE EHRLICH LAW FIRM 16130 Venture Boulevard, Suite 610 Encino, CA 91436 Attorney for Appellants: Ledesma & Meyer Construction Company, Inc.; Joseph Ledesma; and Kris Meyer Brian P. Brosnahan KASOWITZ BENSON TORRES LLP 101 California Street, Suite 2300 San Francisco, CA 94111 Attorney for Amici Curiae Franciscan Friars of California, Inc. and Province of the Holy Name, Inc. (Western Dominican Province) Barron L. Weinstein Charles H. Numbers Shanti Eagle WEINSTEN & NUMBERS LLP 115 Ward St. Larkspur, CA 94939 Attomeys for Amici Curiae California Catholic Conference and Association of Christian Schools International David B. Goodwin Michael S. Greenberg Marienna H. Murch COVINGTON & BURLING LLP OneFrontStreet San Francisco, CA 94111 Attorneys for Amicus Curiae United Policyholders David W.Steuber Tara C. Kowalski JONES DAY 555 South FlowerSt., 50th Floor Los Angeles, CA 90071 Attorneys for Amicus Curiae Los Angeles Unified School District 4592463.1 Sean A. Andrade Stephen V. Masterson ANDRADE GONZALEZ LLP 634 South Spring Street, Top Floor Los Angeles, CA 90014 Attorneys for Amicus Curiae Los Angeles Unified School District Brendan V. Mullan CROWELL & MORNING LLP 3 Embarcadero Center, 26th Floor San Francisco, CA 94111 Attorney for Amici Curiae Complex Insurance Claims Litigation Association and American Insurance Association