by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
randolphp@umkc.edu

INSURANCE; LOSS OF EASEMENT: Homeowner's policy provision protecting against "loss of use" does not protect against loss of an easement right through adverse possession. Gunderson v. Fire Insurance Exchange, 44 Cal. Rptr. 2d 272 (Cal. App. 1995) The case arose out of the insurer's refusal to defend a quiet title action brought against the landowner by the neighbor, alleging interference with her title in the claimed easement area. The neighbor was attempting to show that the landowner had lost his original easement right through the neighbor's exclusive adverse use for the prescriptive period. (California apparently requires only five years.)

Although the "loss of use" clause did not protect the homeowner, the court seems to hold out a possibility that the landowner could have involved the insurer in a defense through invoking a clause for protection against liability for property damage to neighbor's property. The neighbor had complained that the insured had damaged her land by driving go-carts on it, partially removing a fence, and cutting some trees. Of course, the insured did all of these things pursuant to his belief that he had an easement.

But the neighbor never actually identified the injury from these activities in her lawsuit, perhaps because they would have been admissions that she lacked exclusive possession of the easement area for the prescriptive period. Therefore, the court held that the lawsuit did not address liability for injury to property, and the insurance company had no duty to defend. The insurer had no duty to anticipate that the neighbor might bring further claims for damages after the easement issue was resolved.

But what if the claim of the easement right was fundamental to a claim that the insured had trespassed upon and damaged neighboring property? Believe it or not, the court seems to assume that the insurer might have had the duty to defend. It does indicate that there would be no liability of the actions alleged to cause the injury were intentional and not "accidental." This is because there is insurance only for an "occurence," which is defined as a "sudden event . . . neither intended nor anticipated by the insured." The tearing down of the fence, for instance, was an intentional act. The court doesn't consider whether the go-kart damage or destruction of the trees might have resulted from "occurences." There probably are some types of injury to neighbors that might fall within the definition of injury from an "occurence" that would be actionable only if they occurred on the neighbor's land, rather than on easement property, leading to the conclusion that defense of the easement is a necessary element of the defense from liability. (That noise in the background is the insurance company drafters hitting the computers to clarify the language of their policies.)

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