An insurer is not obligated to defend or indemnify a landscaping company for a catastrophic landslide that occurred at homeowners’ properties under a policy exclusion, a federal appeals court ruled Friday in affirming a lower court ruling.

A homeowner hired Sonoma, California-based JKT Associates Inc. to perform landscape work at her home in the Hidden Hills subdivision of Napa, California, in 2011, according to the ruling by the 9th U.S. Circuit Court of Appeals in San Francisco in Atain Specialty Insurance Co. v. JKT Associates Inc. et al.

In 2019, after the property was purchased by new owners, a catastrophic landslide occurred that caused portions of the rear of the property to slide 15 feet downhill.

JKT was among the parties sued by the property owners and an adjacent property owner.

JKT’s insurer, Farmington Hills, Michigan-based Atain, provided a defense to the company subject to a reservation of rights. Atain filed coverage litigation against JKT in U.S. District Court in San Francisco, which ruled in the insurer’s favor.

 The court also directed JKT to reimburse Atain $105,609 for costs the insurer had incurred defending JKT under its reservation of rights.

A three-judge appeals court panel affirmed the lower court’s ruling, saying, “We agree with the district court’s conclusion that the Atain policies’ ‘Subsidence Exclusion’ unambiguously precludes any possibility of coverage for the claims asserted against JKT” in the litigation, the ruling said.

The exclusion states it applies to “earth movement,” which is defined as “any movement of land or earth.”

“Because a landslide is an ‘earth movement,’ the plain terms of this exclusion bar any coverage for any claim ‘arising in whole or part,’ from the landslide at the Hidden Hills properties or from any ‘settling’ or ‘slipping’ that preceded that landslide, and it does so regardless of the cause of the landslide,” the ruling said.

JKT attorney Noreen Evans, of Evans Kingsbury LLP in Santa Rosa, California, said in a statement, “We were very disappointed in the result. Landscaping inherently involves the movement of soil.

“When an insurance carrier sells a policy of general commercial liability insurance to a landscaper which excludes the very risks inherent in landscaping, the policy is defective and not a policy of insurance at all. In this case, the insured did not get the benefit of the policy for which he paid.”

Atain’s attorney did not respond to a request for comment.

Last month, the 9th Circuit ruled in Atain’s favor in a case where it sought to rescind a homeowners association policy, holding the association had failed to disclose a situation likely to give rise to a claim in its coverage application.