{"id":1173,"date":"2012-12-28T09:47:44","date_gmt":"2012-12-28T16:47:44","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=1173"},"modified":"2012-12-28T09:55:44","modified_gmt":"2012-12-28T16:55:44","slug":"california-court-reaffirms-negligent-professional-advice-not-an-occurrence","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/california-court-reaffirms-negligent-professional-advice-not-an-occurrence\/","title":{"rendered":"California Court Reaffirms Negligent Professional Advice not an Occurrence"},"content":{"rendered":"<p>In its recent decision in Aquarius Well Drilling, Inc. v. American States Insurance Co., 2012 U.S. Dist. LEXIS 172770 (E.D. Cal. Dec. 4, 2012), the United States District Court for the Eastern District of California had occasion to consider whether an insured\u2019s professional negligence constituted an occurrence for the purpose of triggering coverage under a general liability policy.<\/p>\n<p>The insured, Aquarius Well Drilling, was a well drilling and testing company.\u00a0 In 2007, it was hired by a title company to test a well on a property that was in escrow and pending sale.\u00a0 The purchasers of the property later brought suit against Aquarius, alleging that the company erred in performing the tests, which resulted in inaccurate information being disclosed regarding the well.\u00a0\u00a0 Aquarius\u2019 general liability insurer, American States, denied coverage for the underlying suit on the basis that it did not allege property damage arising out of an occurrence.\u00a0 Aquarius filed a declaratory judgment action against American States, which was dismissed earlier this year, although the court granted Aquarius leave to file an amended complaint.\u00a0 Aquarius subsequently filed an amended complaint which American States moved to dismiss on the same grounds; namely, that the underlying suit did not allege an \u201coccurrence.\u201d<\/p>\n<p>Aquarius claimed that its negligence in testing the well was an occurrence, defined in pertinent part as an accident, because it did not intend for the unintended consequences of the well testing, i.e., harm to the underlying plaintiffs.\u00a0 American States, on the other hand, argued that Aquarius\u2019 testing of the well was intentional, and as such could not be considered an occurrence regardless of the unexpected and unanticipated consequences of its negligence.\u00a0 In considering the issue, the Eastern District acknowledged that under California law, the term \u201caccident\u201d as used in the standard general liability policy definition of occurrence \u201crefers to the nature of the act giving rise to liability; not the insured&#8217;s intent to cause harm.\u201d\u00a0 The only exception to this rule is when \u201csome additional, unexpected, independent, and unforeseen happening occurs that produces the damage.\u201d<\/p>\n<p>Aquarius argued that despite this body of case law, its conduct in testing the well should nevertheless be considered an occurrence because it provided its client with objective information concerning the well, and because it did not offer any opinions as to the condition or future viability of the well.\u00a0 In other words, Aquarius argued that it was not giving professional advice, and as such, cases addressing whether an insured\u2019s professional services can be an occurrence were distinguishable.\u00a0 The court did not find this to be a relevant distinction, explaining that the key consideration is whether the insured\u2019s conduct can be considered accidental:<\/p>\n<p>California courts have stated &#8220;accident&#8221; refers to the nature of the insured&#8217;s conduct, not his state of mind or to the consequences of the conduct \u2026 Thus, whether Aquarius&#8217; well testing was done negligently or not, regardless of the unintended consequences, &#8220;the insured&#8217;s conduct alleged to have given rise to\u00a0claimant&#8217;s injuries is necessarily non-accidental, not because any &#8216;harm&#8217; was intended, but simply because the conduct could not be engaged in by &#8216;accident&#8217;.&#8221;\u00a0 \u2026 Plaintiffs could not have engaged in the well testing by &#8220;accident<\/p>\n<p>Thus, the court concluded, the insured\u2019s degree of knowledge concerning its negligence, and the content of its report, were irrelevant.\u00a0 Instead, because the insured intentionally tested the wells and provided information to its client in its professional capacity, such could not be considered an accident for the purpose of a general liability policy.<\/p>\n<p>via <a href=\"http:\/\/www.lexology.com\/library\/detail.aspx?g=b41a3ba9-42a0-4656-ba76-565cc35d67f5&amp;utm_source=Lexology+Daily+Newsfeed&amp;utm_medium=HTML+email+-+Body+-+Other+states+section&amp;utm_campaign=Lexology+subscriber+daily+feed&amp;utm_content=Lexology+Daily+Newsfeed+2012-12-19&amp;utm_term=\">California court reaffirms negligent professional advice not an occurrence &#8211; Lexology<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In its recent decision in Aquarius Well Drilling, Inc. v. American States Insurance Co., 2012 U.S. Dist. LEXIS 172770 (E.D. Cal. Dec. 4, 2012), the United States District Court for the Eastern District of California had occasion to consider whether an insured\u2019s professional negligence constituted an occurrence for the purpose of triggering coverage under a&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/california-court-reaffirms-negligent-professional-advice-not-an-occurrence\/\">Continue reading <span class=\"screen-reader-text\">California Court Reaffirms Negligent Professional Advice not an Occurrence<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[172,3],"tags":[3,261],"class_list":["post-1173","post","type-post","status-publish","format-standard","hentry","category-construction-law-2","category-insurance-claims","tag-insurance-claims","tag-occurancce","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>California Court Reaffirms Negligent Professional Advice not an Occurrence - Advise &amp; Consult, Inc.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/california-court-reaffirms-negligent-professional-advice-not-an-occurrence\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"California Court Reaffirms Negligent Professional Advice not an Occurrence - Advise &amp; Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"In its recent decision in Aquarius Well Drilling, Inc. v. 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