McKINSTER, J.
Defendant Paraiso Tropical, Inc., a suspended California Corporation, appeals through intervener Topa Insurance Company (hereafter sometimes Topa), from a personal injury judgment in favor of plaintiff Evelyn Osorio Solis.
While the personal injury action was pending, Topa filed an action seeking a declaration that it had no obligation to defend or indemnify Paraiso Tropical, Inc., under the business insurance it provided to Paraiso Tropical, Inc. (Topa Insurance Co. v. Solis, case No. E060487.) It contended that the policy did not cover plaintiff's injuries, because the policy excluded bodily injury losses resulting from the use of a motor vehicle in connection with the business. After entry of judgment in case No. E056230, the trial court entered summary judgment for Topa. Solis appeals.
We consolidated the two cases for purposes of argument and decision. We conclude that, contrary to Paraiso Tropical, Inc.'s contention, the record supports the conclusion that its negligence was a substantial factor in plaintiff's injuries. We therefore affirm the personal injury judgment. However, because we conclude that plaintiff's injury is excluded from coverage under the business liability insurance policy, we will also affirm the summary judgment in favor of Topa.
Sixteen-year-old Evelyn Osorio Solis (hereafter plaintiff or Solis) was rendered quadriplegic when a vehicle driven by Rita Montano and registered to Alicia Belmarez overturned. Solis, who was not wearing a seatbelt, was ejected from the vehicle. Leticia Perales and Richard Gomez were also ejected from the vehicle and suffered serious injuries.
Multiple witnesses testified that they and friends of theirs were admitted to Tequilaz despite being under the age of 18. Rosanna Castaneda testified that she and several other girls were hired by Richard Gomez at the age of 15 or 16 to admit customers to the club and to dance and make sure people were having a good time. They were told to dress "cute." Gomez took her shopping and bought her sexy clothes to wear at the club. She understood that he wanted the girls to wear sexy clothing to attract male customers. Tequilaz also had "ladies' nights," when girls would dance for money. The sexiest dancer got a prize. Many of the girls who participated were less than 18 years old. Tequilaz used photographs of some of the girls to publicize the club.
Paraiso Tropical was originally a restaurant owed by Richard Gomez's parents, Ricardo Gomez and Alicia Belmarez. In 1986, they incorporated the business. They opened the Paraiso Tropical nightclub in 2002 and opened Tequilaz in 2006. Ricardo, Alicia and Richard were officers and directors of the corporation. Richard "helped" with security and at some point took over running Tequilaz. One of his roles was to find ways to attract customers. Both he and his brother, Jerry, hired disc jockeys and bands to play at Tequilaz. Many witnesses understood that Richard Gomez was the owner or manager of Tequilaz. His mother, Alicia Belmarez, testified that Richard Gomez was involved in all aspects of the family business.
On the date of the accident, Richard Gomez arranged to drive several young women to Tequilaz. The understanding was that Gomez would drive them there and then drive them home. Gomez, driving a Ford Explorer registered to his mother, Alicia Belmarez, picked up plaintiff, Leticia Perales, Juana (or Juanita) Cruz, Rita Montano, Cristal Montano, Zulema Smith and Mary Smith and drove them to the club. None of the young women were asked for identification at the club.
The jury found plaintiff 45 percent liable for her injuries. It found Rita Montano 45 percent liable and found defendant 10 percent liable. It awarded plaintiff $8,612,000 in damages. Judgment was entered against defendant in the amount of $4,241,000.
Defendant contends that there is no substantial evidence to support the verdict because there is no evidence that its conduct was a substantial factor in plaintiff's injuries under either of the two theories plaintiff relied upon at trial. Defendant characterizes plaintiff's two theories as (1) that defendant's negligence in permitting minors to enter Tequilaz was a substantial factor in plaintiff's injuries and (2) that Richard Gomez was negligent in transporting plaintiff because he allowed an unlicensed driver to drive the vehicle while transporting the girls to and from Tequilaz for business purposes.
We need not address defendant's contentions concerning the negligent entrustment theory. That theory was alleged in the complaint, but Solis dismissed her cause of action for negligent entrustment before trial. Perales also abandoned that theory. Accordingly, it was not submitted to the jury on behalf of either plaintiff.
Contrary to defendant's other contention, however, plaintiff's second theory is both legally tenable and supported by substantial evidence. Plaintiff does appear to assert, as defendant contends, that defendant's practice of serving alcohol to minors and admitting minors to the club and using them in various unsavory ways to foster its business directly caused her injuries. She does not, however, explain how these practices could possibly have caused her injuries, and of course, they did not. Alcohol was not a factor in the accident, and plaintiff was not injured on the premises. However, plaintiff's actual theory, as was better explained at oral argument than in plaintiff's briefing, was that defendant's practice of getting underage girls to come to the club in order to entice male customers and thus sell more food and alcohol was a substantial factor in causing plaintiff's injuries because it set in motion a chain of events that culminated in the accident. This chain of events included Gomez's acts in transporting plaintiff to and from the club, and the fact that Montano was driving and operated the vehicle negligently is the final link in that chain. In the trial court, plaintiff characterized this course of conduct as negligence, as well as a public nuisance. The trial court accepted that characterization and instructed the jury that if it found that defendant's violation of the ordinance prohibiting the presence of unaccompanied minors under the age of 18 at a place where entertainment is taking place was a substantial factor in plaintiff's injuries, it must find defendant negligent. The jury did find that defendant was negligent.
"A defendant's negligence is considered a cause in fact if it is `"[a] substantial factor in causing harm,"' which means it is `"more than a remote or trivial factor."' [Citation.]" (Pedeferri v. Seidner Enterprises (2013) 216 Cal.App.4th 359, 371-372 (Pedeferri).) "`Conduct can be considered a substantial factor in bringing about harm if it "has created a force or series of forces which are in continuous and active operation up to the time of the harm" [citation], or stated another way, "the effects of the actor's negligent conduct actively and continuously operate to bring about harm to another" [citation].' [Citation.]" (Mayes v. Bryan (2006) 139 Cal.App.4th 1075, 1093.) Here, the evidence, which we have discussed above, overwhelmingly supports plaintiff's theory that defendant used underage girls to foster its business, and defendant does not contend otherwise. Defendant contends, however, that it is not liable for plaintiff's injuries because there is no substantial evidence that Gomez was acting on its behalf in any capacity when the accident occurred.
In reviewing a claim that there is insufficient evidence to support a verdict, we review the record to determine whether there is any substantial evidence, contradicted or uncontradicted, to support the verdict. (Bickel v. City of Piedmont (1997) 16 Cal.4th 1040, 1053, abrogated by statute on another point as noted in DeBerard Properties, Ltd. v. Lim (1999) 20 Cal.4th 659, 668-669.) If there is substantial evidence which supports the disputed finding, the judgment will be upheld even though substantial evidence to the contrary also exists and the trier of fact might have reached a different conclusion had it believed other evidence. (Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 631.) Substantial evidence is evidence that a reasonable person "`might accept as adequate to support a conclusion'" (Estate of Teed (1952) 112 Cal.App.2d 638, 644), or evidence "that is reasonable, credible and of solid value." (Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 651.)
Here, it was necessary for the jury to find that Gomez was acting on defendant's behalf in some capacity when the accident occurred in order to sustain the chain of causation from defendant's negligent business practices to the accident.
Accordingly, there is no question that if Gomez had been driving and had negligently caused the accident, defendant would be liable for plaintiff's injuries under a theory of respondeat superior. (Lathrop v. HealthCare Partners Medical Group (2004) 114 Cal.App.4th 1412, 1421 [employer is vicariously liable for torts of employee committed within scope of employment].) Neither party expressly addresses the issue of defendant's liability in light of the fact that Gomez was not driving when the accident occurred.
Whether a third party's negligence constitutes a superseding cause is a question of law which we review de novo. (Pedeferri, supra, 216 Cal.App.4th at p. 372.) A cause is superseding only when the third party's intervening negligence is "`"highly unusual or extraordinary"' [citation], and `"far beyond the risk the original tortfeasor should have foreseen"' [citation]. In making this assessment, we are to make a `"more focused, fact-specific" inquiry that takes into account a particular plaintiff's injuries and the particular defendant's conduct. [Citations.]' [Citation.]" (Pedeferri, supra, 216 Cal.App.4th at p. 373.) Here, even if Gomez had been found negligent in allowing Montano to drive, his doing so was neither highly unusual nor extraordinary, nor far beyond the risk that defendant should have foreseen in allowing Gomez to transport underage girls to and from the nightclub. And, it is not uncommon for drivers to be negligent. Accordingly, neither Gomez's act of allowing Montano to drive nor Montano's negligent driving was a superseding cause.
Because the verdict finding defendant partially liable for plaintiff's injuries is supported both legally and factually, we will affirm the judgment.
As we have discussed above, plaintiff based her claim in part on the theory that defendant's business practices constituted a nuisance and that the nuisance was a substantial factor in causing her injuries. Her complaint pled nuisance and negligence separately. Plaintiff states that she asked the trial court to give the jury separate verdict sheets for negligence and nuisance. She does not provide a citation to the record to support that assertion. Our review of the record shows that there was discussion between the court and plaintiff's attorney as to whether separate verdicts were appropriate, but that counsel acquiesced without objection in the court's decision to give the jury a single verdict form for negligence and nuisance. Accordingly, any contention that separate verdicts on negligence and nuisance should have been given is forfeited.
A business liability policy issued by plaintiff and respondent Topa Insurance Company to Paraiso Tropical, Inc. (Topa), was in effect on the date of the accident which resulted in the injuries to defendant and appellant Solis. The policy covered bodily injury claims arising out of the corporation's business operations. It provided that Topa had the "right and duty" to defend any lawsuit seeking damages for bodily injury and the duty to indemnify the corporation and its officers, directors, and employees for any amounts the insured was required to pay. The policy excluded coverage for bodily injuries arising out of the use of an automobile.
While the personal injury suit was pending, Topa filed this action seeking a declaration that because Solis's injuries arose from the use of an automobile within the meaning of the language of the policy, it had no duty to defend the suit or to indemnify its insured. After judgment was entered in favor of Solis and against Paraiso Tropical, Inc., Topa moved for summary judgment or summary adjudication. The trial court found that the automobile exclusion applied and granted the motion. Judgment was entered in favor of Topa as to all defendants. Solis appealed.
We apply a de novo standard of review to an order granting summary judgment when, on undisputed facts, the order is based on the interpretation or application of the terms of an insurance policy. (Smith Kandal Real Estate v. Continental Cas. Co. (1998) 67 Cal.App.4th 406, 414.)
Here, the underlying facts were established by the verdict in the companion case. Specifically, the jury's verdict establishes that Paraiso Tropical was partially liable for Solis's injuries because Gomez was engaged in acts within the course and scope of his employment, i.e., taking some of the girls home, when he entrusted the vehicle to Montano, and Montano's negligence in operating the vehicle was not a superseding cause of Solis's injuries. The sole issue in this appeal is whether the automobile exclusion applies to those facts. Solis asserts two reasons why it does not apply.
Solis contends that Paraiso Tropical's negligence in admitting underage girls to its club and the automobile accident are independent concurrent causes of her injuries. Solis contends that because one of the two causes of her injury does not involve the use of an automobile and was covered under the business liability policy, the automobile exclusion does not apply. She relies on a line of cases beginning with State Farm Mutual Auto. Ins. Co. v. Partridge (1973) 10 Cal.3d 94, 103 (Partridge).
In Partridge, the California Supreme Court held that an occurrence may be covered under both an automobile policy and a homeowner's or business liability policy that excludes coverage for injuries arising out of the use of a vehicle if "the liability of the insured arises from his non-auto-related conduct [which] exists independently of any `use' of his car." (Partridge, supra, 10 Cal.3d at p. 103; see also Belmonte v. Employers Ins. Co. (2000) 83 Cal.App.4th 430, 433 [Partridge analysis applies in context of business liability insurance].) In Partridge, the insured was hunting from his car using a gun he had modified to create a "hair trigger" action. After he drove the car off road in pursuit of a rabbit, the car hit a bump and the gun fired, hitting and paralyzing a passenger, who sued the insured. (Partridge, at pp. 97-98.) Partridge's homeowner's liability policy covered liability resulting from the gun modification, but not injuries arising out of the use of a motor vehicle. The Supreme Court concluded that where two independent risks jointly caused the injury, the insurer is liable so long as one of the risks is covered by the policy. (Id. at pp. 102-103.) The court found that "although the accident occurred in a vehicle, the insured's negligent modification of the gun suffices, in itself, to render him fully liable for the resulting injuries. . . . [I]nasmuch as the liability of the insured arises from his non-auto-related conduct, and exists independently of any `use' of his car, we believe the homeowner's policy covers that liability." (Id. at p. 103.)
Solis contends that in this case, as in Partridge, Paraiso Tropical's negligent operation of its business is an independent cause of her injury. We disagree.
Solis also asserts that the automobile exclusion does not apply because of the wording of the exclusion clause, which we discuss below. She notes that a clause excluding coverage must be construed, if possible, to provide coverage and that any ambiguity in the language must be interpreted in favor of the insured.
Solis is correct that an exclusion or limitation on coverage "must be clearly stated and will be strictly construed against the insurer. If an exclusion ambiguously lends itself to two or more reasonable constructions, the ambiguity will be resolved against the insurer and in favor of coverage." (Smith Kandal Real Estate v. Continental Casualty Co., supra, 67 Cal.App.4th at p. 414.) Here, however, there is no ambiguity in the language of the exclusion; rather, it is a factual question whether it applies to the facts in this case. Substantial evidence supports the determination that it does apply.
The policy states that "`Bodily injury' or `property damage' arising out of the ownership, maintenance, use or entrustment to others [of] any . . . `auto' . . . owned or operated by or rented or loaned to any insured" is excluded from coverage. The policy defines "insured" as employees of Paraiso Tropical other than executive officers, for acts within the scope of their employment. Executive officers and directors are insureds, but only with respect to their duties as officers or directors. Solis contends that Gomez was an officer and director, but not an employee, and that he was not acting within the scope of his duties as an officer or director when the accident occurred. As we have discussed above, the court instructed the jury that Gomez was an employee of Paraiso Tropical. Moreover, there is substantial evidence that in addition to his functions as an officer and director, Gomez acted in the capacity of an employee, with the function of "bringing" customers into the club, whether physically or by generating publicity, and working in security and eventually conducting the day-to-day operations of the club. These are not acts within the scope of the duties of an officer or director. As we have also discussed above, there was substantial evidence that he was acting within the scope of his capacity as an employee when the accident occurred.
Solis also argues that Belmarez was not an insured for purposes of the automobile exclusion clause because she was not acting in furtherance of her duties as an officer or director. However, the exclusion clause does not require that the vehicle be lent or entrusted by an insured; it only requires that it be lent or entrusted to an insured, the evidence showed that the vehicle was lent by Belmarez to an employee, Gomez, who then entrusted it to Montano. This brings the incident within the unambiguous wording of the automobile exclusion clause. Accordingly, the trial court correctly granted the motion for summary judgment.
Under a separate heading, Solis preemptively argues that the trial court correctly found that the policy's "expected and intended" exclusion does not apply. She contends that defendant may not now argue that the exclusion does apply because it did not file a cross-appeal. Defendant responds that it is entitled to raise any argument asserting that the judgment was correct on any ground, even one not relied on by the trial court. Having rejected Solis's arguments and having found that the trial court correctly granted summary judgment, however, we need not address alternative grounds for affirming the judgment.
The judgment in Solis v. Parasio Tropical, Superior Court of Riverside County case No. INC085655 (E056230), is affirmed. The judgment in Topa Insurance Company v. Solis, Superior Court of Riverside County case No. INC1102911 (E060487), is also affirmed.
The parties are to bear their own costs on appeal in both cases.
RAMIREZ, P. J. and CODRINGTON, J., concurs.
Paraiso Tropical, Inc., was the sole defendant at trial. Before trial, former defendants Rita Montano, Alicia Belmarez and Richard Gomez settled with plaintiff and with Leticia Perales, who was also a plaintiff. It appears that summary judgment was granted in favor of Ricardo Gomez and other corporate officers and/or shareholders before the trial. Leticia Perales is not a party to this appeal.
