Citations
- 187 Cal. App. 4th 766
Full opinion text
Opinion
FLIER, J.
MRI Healthcare Center of Glendale, Inc. (MHC), appeals from a judgment entered by the superior court after it denied MHC’s motion for summary judgment and granted respondent State Farm General Insurance Company’s (State Farm) cross-motion for summary judgment. The action arises from State Farm’s denial of MHC’s claim under a business insurance policy for loss as a result of claimed damage to its MRI (magnetic resonance imaging) machine and loss of income after the machine failed to satisfactorily “ramp up” after it was “ramped down.”
MHC asserts triable issues of fact precluded the grant of summary judgment to State Farm and MHC is entitled to summary judgment because State Farm has no defense against MHC’s claims. State Farm contends (1) the undisputed facts establish that the MRI machine did not sustain “physical loss,” nor was the alleged loss the result of an “accident”; (2) rainstorms MHC contends were the predominant cause of the loss were not a legally cognizable cause of the claimed loss; and (3) all potential causes of MHC’s loss are specifically excluded under the policy. We affirm.
FACTS
1. The Parties
MHC provided MRI scanning services as its sole business. State Farm issued MHC a business policy, effective June 1, 2006, to June 1, 2007. The policy was also in effect during the two prior policy years. The policy provided insurance coverage for business liability, business personal property and loss of income.
2. Factual Background
MHC contends, and State Farm concedes for the limited purpose of appeal, that the facts are as follows. As a result of storms in the spring of 2005, MHC’s landlord was required to repair the roof over the room housing MHC’s MRI machine. These repairs could not be undertaken unless and until the MRI machine was demagnetized, or “ramped down.” Once the machine was ramped down, it failed to ramp back up. This failure purportedly constituted “damage” to the MRI machine and resulted in loss of business income to MHC. Because the chain of events was set in motion by the spring 2005 storms, MHC claims the storms were the “efficient proximate cause” of the loss; and, because the storms were covered under the business policy issued to MHC by State Farm, MHC claims it is entitled to recover both the amount it expended to repair the MRI machine and the income loss sustained while the machine was inoperable.
3. Policy Terms
The business policy State Farm issued to MHC provides, in “SECTION I [1] PROPERTY COVERAGES,” “COVERAGE B — [f] BUSINESS PERSONAL [1] PROPERTY” (boldface omitted): “When a limit of insurance is shown in the Declarations for Coverage B, we will pay for accidental direct physical loss to business personal property at the premises described in the Declarations caused by an insured loss. Business personal property includes the following types of property located in or on the buildings at the described premises . .. : [¶] 1. property, used in your business, that you own, lease from others or rent from others, or that is loaned to you; [ 14 years) the possibility exists that major damage / failure can occur.” Ms. Valenzuela testified at deposition that the “damage” MHC incurred consisted of the MRI machine “being forced . . . to be ramped down.”
Because we rely on the essentially undisputed facts, we do not address whether the trial court should have ruled on the parties’ objections to evidence or the admissibility of objected-to evidence.
We note that the cause of loss in the context of property insurance is wholly different from that in a liability policy. In liability insurance, unlike in property insurance, the right to coverage for third party liability depends on traditional tort concepts of fault, proximate cause and duty. Property insurance, on the other hand, depends upon the relationship between perils that are either covered or excluded in the insurance contract. In third party insurance, by agreeing to cover the insured for personal liability, including liability for the insured’s own negligence, the insurer agrees to cover the insured for a “broader spectrum of risks” than in property insurance. (Garvey, supra, 48 Cal.3d at pp. 406-407.)
MHC further claims a fire occurred in the ramp up process and fire is a specified cause of loss under the policy triggering coverage. MHC never filed a claim with State Farm for fire damage and nothing in the record establishes such a fire occurred. The sole reference to any fire was a notation in a Masterplan invoice of “a strong burnt electrical smell” during a single service visit.