                                                                           FILED
                            NOT FOR PUBLICATION                              JAN 05 2012

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U.S . CO U RT OF AP PE A LS




                            FOR THE NINTH CIRCUIT



MICHAEL BOCK; LORIE BOCK,                        No. 10-17297

              Plaintiffs - Appellants,           D.C. No. 3:10-cv-00722-RS

  v.
                                                 MEMORANDUM *
TRAVELERS PROPERTY CASUALTY
INSURANCE COMPANY,

              Defendant - Appellee.


                    Appeal from the United States District Court
                       for the Northern District of California
                     Richard Seeborg, District Judge, Presiding

                     Argued and Submitted December 9, 2011
                            San Francisco, California

Before: O'SCANNLAIN, COWEN,** and BERZON, Circuit Judges.

       The Bocµs appeal from the district court's grant of judgment on the

pleadings in favor of Travelers. They argue that Travelers had a duty to defend

them under their homeowners' policy against a cross-complaint filed by their

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
       **
               The Honorable Robert E. Cowen, Senior Circuit Judge for the Third
Circuit, sitting by designation.
neighbors, the Braµesmans. Separately, the Bocµs argue that Travelers was under

a duty to investigate the facts underlying the cross-complaint. Each contention will

be discussed in turn.

                                           I

      Under California law, an insurer 'must defend a suit which potentially seeµs

damages within the coverage of the policy.' Gray v. Zurich Ins. Co., 65 Cal. 2d

263, 275 (1966). However, '[a]n insured is not entitled to a defense just because

one can imagine some additional facts which would create the potential for

coverage.' Friedman Prof'l Mgmt. Co. v. Norcal Mut. Ins. Co., 120 Cal. Rptr. 3d

359, 372 (Ct. App. 2004). '[T]he insured may not speculate about unpled third

party claims to manufacture coverage.' Hurley Constr. Co. v. State Farm Fire &

Cas. Co., 12 Cal. Rptr. 2d 629, 631 (Ct. App. 1992).

      We have examined the cross-complaint filed by the Braµesmans and

conclude that it only states a cause of action for encroachment, an intentional tort

not covered by the Bocµs' insurance policy. Only through speculation --

unpermitted by California law -- could we conclude that the Braµesmans' cross-

complaint also alleged unintentional conduct, which would trigger the duty to

defend. Accordingly, we conclude that Travelers was under no duty to defend the

Bocµs against the Braµesmans' cross-complaint.


                                           2
                                           II

      Separately, the Bocµs argue that Travelers was under a duty to investigate

the facts underlying the Braµesmans' cross-complaint. Under California law, an

insurer satisfies its duty to investigate 'by comparing the allegations of the

complaint with the terms of the policy,' Horace Mann Ins. Co. v. Barbara B., 4

Cal. 4th 1076, 1081 (1993), and by considering 'the extrinsic facts . . . µnown by

the insurer at the inception of the third party lawsuit,' Gunderson v. Fire Ins.

Exch., 44 Cal. Rptr. 2d 272, 277 (Ct. App. 1995).

      In this case, it is uncontested that Travelers was not aware of any extrinsic

facts at the time the cross-complaint was tendered that would have triggered a duty

further to investigate. Indeed, Travelers specifically told the Bocµs that if they

were 'aware of any other facts or theories which . . . are relevant to the duty to

defend . . . , we welcome your thoughts and will give serious consideration to any

information that you may provide.' It is uncontested that the Bocµs tendered no

further information to Travelers. Accordingly, Travelers was under no duty to

investigate the facts underlying the Braµesmans' cross-complaint.

      AFFIRMED.




                                           3
                                                                              FILED
Bocµ v. Travelers Prop. Cas. Ins. Co., No. 10-17297                             JAN 05 2012

                                                                          MOLLY C. DWYER, CLERK
BERZON, Circuit Judge, dissenting in part:                                 U.S . CO U RT OF AP PE A LS




      I join in Part II of the majority disposition but dissent as to Part I. The

majority's conclusion that the cross-complaint only states an intentional tort and so

did not give rise to the duty-to-defend is inconsistent with the language of the

cross-complaint and with California duty-to-defend law.

      Both the claim for trespass and the prayer for relief refer to property

'damage' and seeµ monetary relief for the injury, including for 'repairs.' Nothing

in the complaint confines the claim to the injury caused by the intentional act of

building on the Braµesmans' property, as opposed to injury due to the negligent

design or construction that caused an injury to the Braµesmans' property separate

from the encroachment itself. And the references to 'damaged' property and to

'repairs' suggests some such additional injury, as one does not usually refer to the

encroaching structure as 'property [that was] damaged' and in need of 'substantial

repairs.'

      With that degree of ambiguity, the allegations 'sufficed to raise the

possibility that [the Bocµs] would be liable for property damage covered by the

policies.' Montrose Chemical Corp. v. Superior Court, 6 Cal. 4th 287, 304 (Cal.

1993). The complaint does not 'compel the conclusion' that it is based solely on

the intentional encroachment, Horace Mann Ins. Co. v. Barbara B., 4 Cal. 4th
1076, 1084 (Cal. 1993), and, as noted, there is language consistent with the

conclusion that it is not.

       I would therefore reverse the judgment on the pleadings, and so respectfully

dissent.
