In a sad fact situation, the property owner had no coverage when sued for the death of one child and serious injury to another who were playing on his property. Allstate Ins. Co. v. Naai, No. 10-15415 (9th Cir. July 24, 2012).
A driver backed her vehicle over two children on property owned by defendant Naai. The children's parents sued and named Naai as a defendant for negligently designing or constructing the property in such a way that the resident manager's building and parking area were located in an area used by tenants' children as a playground.
Naai tendered the defense to Allstate. Allstate filed for declaratory relief in the Hawaii federal district, court seeking a declaration that there was no possibility for coverage. The policy excluded coverage for bodily injury or property damage arising out of the ownership, operation, maintenance, use, occupancy, renting, loaning, entrusting, loading or unloading of any motorized land vehicle or trailer. Judge Ezra found the exclusion barred coverage. See Allstate Ins. Co. v. Naai, 684 F. Supp. 2d 1220 (D. Haw. 2010).
The Ninth Circuit affirmed. The exclusion was not limited to the insured's ownership, operation, maintenance, or use of an automobile, as argued by Naai. Instead, by its terms, the exclusion did not cover bodily injury arising out of the operation of any motor vehicle.
Here, the children's injuries arose from the operation of a motor vehicle. Therefore, the policy unambiguously excluded coverage for the injuries no matter who was operating the motor vehicle at the time.
Special thanks to Daniel Kim, Esq. who represented the insured, for the heads up on this case.
