22 California Real Property Journal • Volume 21 Number 3

I. INTRODUCTION

Property owners usually maintain liability insurance thatrequires an insurer to defend and indemnify against, amongother things, lawsuits for wrongful “eviction.” This coveragetypically is found within the section of a general liability policyinsuring against “personal injury” offenses, often defined toinclude “wrongful entry or eviction.”1 When a residential ten-ant files suit alleging that an apartment owner has locked thetenant out of the rental unit, it is obvious that the tenant hasalleged an actual eviction, triggering coverage under the liabilitypolicy. There are, however, additional scenarios in which aninsurer may have to defend or indemnify a property owner forwrongful “constructive” eviction.

Consider the situation in which a commercial tenant sues alandlord based on a failure or refusal to repair a chronically leakyroof. The tenant alleges that the leaky roof prevented the tenantfrom using the leased premises for its intended purposes orrequired the tenant to move elsewhere to conduct its operations,resulting in a variety of damages. Although not claiming thatthe landlord threw the tenant out of the building or locked thedoors to prevent the tenant from gaining entry, the tenant stillhas alleged what amounts to an “eviction.” California courtshave recognized for many decades that an eviction may be “con-structive,” as well as actual, as in the case of the leaky roof or avariety of other circumstances in which a tenant claims that thelandlord has interfered with or disturbed the tenant’s possessionof the premises.

II. CALIFORNIA CASES

In 1938, the court in Giraud v. Milovich2 explained the widerange of circumstances that may amount to a “constructive”eviction:

It is often difficult to determine what acts will consti-tute an eviction. It is settled, however, that there neednot be actual dispossession of the tenant from theleased premises. An eviction may be actual, as wherethere is a physical expulsion, or it may be constructiveas where, though amounting to an eviction at law, thetenant is not deprived of actual occupancy. Any dis-turbance of a tenant’s possession by a landlord or bysomeone acting under his authority, whereby thepremises are rendered unfit for occupancy for the pur-pose for which they are demised, or the tenant isdeprived of the beneficial enjoyment of the premises,amounts to a constructive eviction.3

Several decades later, in Groh v. Kover’s Bull Pen, Inc.,4 thecourt affirmed a judgment in favor of tenants under a commer-cial lease based upon constructive eviction where a landlord failedto repair a leaky roof. The court explained that “[a] constructiveeviction occurs when the acts or omissions to act of a landlord, orany disturbance or interference with the tenant’s possession bythe landlord, renders the premises, or a substantial portion there-of, unfit for the purposes for which they were leased, or has theeffect of depriving the tenant for a substantial period of time ofthe beneficial enjoyment or use of the premises.”5

California cases involving disputes over insurance coveragehave confirmed that a landlord’s actual or constructive dispos-session of a tenant from leased premises constitutes an “eviction”within the meaning of a liability policy. In the 1995 case ofLegarra v. Federated Mutual Insurance Co.,6 the court noted thatthe insurance policy at issue provided coverage for personalinjury offenses, including “wrongful entry or eviction or otherinvasion of the right of private occupancy.” The court thenexplained that of those three terms, “eviction is best understood.An eviction is the actual or constructive dispossession of a tenantfrom leased premises by the landlord or one acting under hisauthority.”7

The following year, in General Accident Insurance Co. v. WestAmerican Insurance Co.,8 the court explained the meaning of thephrase “wrongful entry or eviction” as used in a liability insur-ance policy and confirmed that it includes what would amountto a “constructive” eviction:

West American’s policy language . . . provides coveragefor injury arising out of “wrongful entry or eviction, orother invasion of the right of private occupancy” com-mitted in the conduct of the insured’s business. Thisphrase, adopted by the insurance industry as part ofthe standard broad form comprehensive general liabil-ity endorsement, has been construed as applying totort claims arising out of the interference with an inter-est in real property. . . . These claims have includedphysical invasions of property, such as trespass and nui-sance . . . and noninvasive interferences with the useand enjoyment of property. 9

In a case decided just last year, the California court of appealin Cunningham v. Universal Underwriters10 again confirmed thata “wrongful eviction” within the meaning of an insurance policymay be actual or constructive. The court stated: “[a]n eviction isactual when a landlord takes direct action to physically expel thetenant from the premises. An eviction is constructive if the land-

READER ALERT:Insurance Coverage for Constructive Eviction

By Randy G. Gerchick*© 2003. All Rights Reserved.

lord engages in acts that render the premises unfit for occupan-cy for the purpose for which it was leased, or deprive the tenantof the beneficial enjoyment of the premises.”11

III. CONCLUSION

A variety of factual circumstances may trigger a liability pol-icy’s coverage for wrongful eviction. Moreover, it is the factsalleged in the tenant’s complaint, or otherwise known to theinsurer, that may give rise to a potentially covered claim, regard-less of how the plaintiff denominates its legal cause of action.12

Even if a tenant sues only for “breach of contract,” a landlordmay rightly call on its insurer to defend and indemnify if thetenant’s claim might amount to an eviction.

* Randy G. Gerchick practices insurance coverage and businesslitigation law in the Orange County office of Latham &Watkins LLP.

ENDNOTES

1. In addition to the “personal injury” coverage section of ageneral liability policy, other coverage sections and othertypes of insurance policies also might require an insurer todefend and indemnify an insured.

2. 29 Cal. App. 2d 543 (1938).3. Id. at 547.4. 221 Cal. App. 2d 611 (1963).5. Id. at 614.6. 35 Cal. App. 4th 1472 (1995).7. Id. at 1484.8. 42 Cal. App. 4th 95 (1996).9. Id. at 103.10. 98 Cal. App. 4th 1141 (2002).11. Id. at 1152.12. Barnett v. Fireman’s Fund Ins. Co., 90 Cal. App. 4th 500 (2001).

This article is reprinted from Vol. 21, No.3 of the California Real Property Journal, a publication of the Real Property LawSection of the State Bar of California.

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