22 California Real Property Journal • Volume 21 Number 3 I. INTRODUCTION Property owners usually maintain liability insurance that requires an insurer to defend and indemnify against, among other things, lawsuits for wrongful “eviction.” This coverage typically is found within the section of a general liability policy insuring against “personal injury” offenses, often defined to include “wrongful entry or eviction.” 1 When a residential ten- ant files suit alleging that an apartment owner has locked the tenant out of the rental unit, it is obvious that the tenant has alleged an actual eviction, triggering coverage under the liability policy. There are, however, additional scenarios in which an insurer may have to defend or indemnify a property owner for wrongful “constructive” eviction. Consider the situation in which a commercial tenant sues a landlord based on a failure or refusal to repair a chronically leaky roof. The tenant alleges that the leaky roof prevented the tenant from using the leased premises for its intended purposes or required the tenant to move elsewhere to conduct its operations, resulting in a variety of damages. Although not claiming that the landlord threw the tenant out of the building or locked the doors to prevent the tenant from gaining entry, the tenant still has alleged what amounts to an “eviction.” California courts have recognized for many decades that an eviction may be “con- structive,” as well as actual, as in the case of the leaky roof or a variety of other circumstances in which a tenant claims that the landlord has interfered with or disturbed the tenant’s possession of the premises. II. CALIFORNIA CASES In 1938, the court in Giraud v. Milovich 2 explained the wide range 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 need not be actual dispossession of the tenant from the leased premises. An eviction may be actual, as where there is a physical expulsion, or it may be constructive as where, though amounting to an eviction at law, the tenant is not deprived of actual occupancy. Any dis- turbance of a tenant’s possession by a landlord or by someone acting under his authority, whereby the premises are rendered unfit for occupancy for the pur- pose for which they are demised, or the tenant is deprived 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 the court affirmed a judgment in favor of tenants under a commer- cial lease based upon constructive eviction where a landlord failed to repair a leaky roof. The court explained that “[a] constructive eviction occurs when the acts or omissions to act of a landlord, or any disturbance or interference with the tenant’s possession by the landlord, renders the premises, or a substantial portion there- of, unfit for the purposes for which they were leased, or has the effect of depriving the tenant for a substantial period of time of the beneficial enjoyment or use of the premises.” 5 California cases involving disputes over insurance coverage have 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 of Legarra v. Federated Mutual Insurance Co., 6 the court noted that the insurance policy at issue provided coverage for personal injury offenses, including “wrongful entry or eviction or other invasion of the right of private occupancy.” The court then explained that of those three terms, “eviction is best understood. An eviction is the actual or constructive dispossession of a tenant from leased premises by the landlord or one acting under his authority.” 7 The following year, in General Accident Insurance Co. v. West American Insurance Co., 8 the court explained the meaning of the phrase “wrongful entry or eviction” as used in a liability insur- ance policy and confirmed that it includes what would amount to a “constructive” eviction: West American’s policy language . . . provides coverage for injury arising out of “wrongful entry or eviction, or other invasion of the right of private occupancy” com- mitted in the conduct of the insured’s business. This phrase, adopted by the insurance industry as part of the standard broad form comprehensive general liabil- ity endorsement, has been construed as applying to tort claims arising out of the interference with an inter- est in real property . . . . These claims have included physical invasions of property, such as trespass and nui- sance . . . and noninvasive interferences with the use and enjoyment of property. 9 In a case decided just last year, the California court of appeal in Cunningham v. Universal Underwriters 10 again confirmed that a “wrongful eviction” within the meaning of an insurance policy may be actual or constructive. The court stated: “[a]n eviction is actual when a landlord takes direct action to physically expel the tenant 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.