National Promotions v. National Surety Corporation, an Illinois corporation

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
NATIONAL PROMOTIONS AND
ADVERTISING, INC., a California
corporation; CONTEST PROMOTIONS,
LLC, a California limited liability company,
Plaintiffs-Appellants,
v.
NATIONAL SURETY CORPORATION, an
Illinois corporation,
Defendant-Appellee.
No. 22-56046
D.C. No.
2:20-cv-09491-JAK-E
MEMORANDUM*
Appeal from the United States District Court
for the Central District of California
John A. Kronstadt, District Judge, Presiding
Argued and Submitted November 14, 2023
Pasadena, California
Before: PARKER,** BYBEE, and DESAI, Circuit Judges.
National Promotions and Advertising, Inc. (“NPA”) appeals the district
court’s dismissal of its complaint for failure to state a claim under Federal Rule of
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The Honorable Barrington D. Parker, Jr., United States Circuit Judge for
the U.S. Court of Appeals for the Second Circuit, sitting by designation.
FILED
JAN 31 2024
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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Civil Procedure 12(b)(6). NPA is a business that posts advertising signs on
temporary construction sites on behalf of clients. While insured by National Surety
Corporation (“National Surety”), NPA was sued for trespass, conversion, and other
torts arising out of its business activities. National Surety declined to defend NPA in
the prior lawsuit. NPA sued National Surety, alleging that National Surety breached
its duty to defend NPA. We have jurisdiction under 28 U.S.C. § 1291. We review
the dismissal of a complaint under Rule 12(b)(6) de novo. Capp v. County of San
Diego, 940 F.3d 1046, 1052 (9th Cir. 2019). We affirm.
1. NPA failed to allege facts establishing a covered “occurrence” under NPA’s
general liability policy and, therefore, failed to state a claim against National Surety
for violating a duty to defend. The policy defines “occurrence” as an “accident,”
which is “an unexpected, unforeseen, or undesigned happening or consequence from
either a known or an unknown cause.” Liberty Surplus Ins. Corp. v. Ledesma &
Meyer Constr. Co., 418 P.3d 400, 403 (Cal. 2018). Here, NPA’s contractor intended
to enter the site and remove posters, which gave rise to the trespass claim in the
underlying lawsuit. NPA argues that the contractor’s actions were based on
erroneous information but, under California law, NPA’s mistaken belief that it had
a right or duty to enter the site and remove the posters does not transform the
contractor’s intentional conduct into an accident. See Delgado v. Interinsurance
Exch. of Auto. Club of S. Cal., 211 P.3d 1083, 1089 (Cal. 2009). Even if the causal

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chain of events resulting in the property damage began when NPA investigated its
right to enter the site, no accident occurred because “the insured intended all of the
acts that resulted in the victim’s injury[.]” Merced Mut. Ins. Co. v. Mendez, 261 Cal.
Rptr. 273, 279 (Ct. App. 1989).
2. NPA’s complaint alleges that the underlying lawsuit included a potential
claim for negligent supervision, which triggered National Surety’s duty to defend.
For the same reasons that NPA’s complaint fails to state a claim for a duty to defend
the trespass claim, it fails to allege that the facts giving rise to the potential negligent
supervision claim constitute an occurrence. NPA does not allege that its employee’s
conduct was unexpected or unforeseeable. See Liberty Surplus, 418 P.3d at 406
(explaining that a suit involving intentional acts of hiring and supervision can
nevertheless constitute an occurrence if the insured’s employee acts in an
“additional, unexpected, independent, and unforeseen” manner “that produces the
damage” (quoting Merced, 261 Cal. Rptr. at 279)). Rather, NPA’s employee acted
at NPA’s direction when removing the posters. Because the employee’s actions were
foreseeable, the complaint does not allege the possibility of coverage.
AFFIRMED.

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