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Executive Direction11/14/2003
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
Executive Direction, Inc. (Executive Direction), an employee search and consulting firm, appeals after the trial court granted the motion of Federal Insurance Company (Federal) for summary adjudication of issues on Executive Direction's causes of action for breach of contract and bad faith. On appeal, Executive Direction contends the trial court erred in concluding that (1) Federal, Executive Direction's insurance carrier, had no duty to defend Executive Direction in a lawsuit brought by a third party that alleged, inter alia, negligent recruitment of a candidate for employment, and (2) Federal did not breach the implied covenant of good faith and fair dealing. According to Executive Direction, the third party lawsuit against it was covered by the computer software and services errors or omissions provisions of the Federal insurance policy because Executive Direction utilized computers in its allegedly negligent candidate search. We shall affirm the judgment.
PROCEDURAL BACKGROUND
On December 22, 2000, Executive Direction filed the present action against defendants Chubb Group of Insurance Companies; Federal Insurance Company; California Associated Insurance Brokers, Inc.; ISG International, Inc. (ISG); P&M;Insurance Services; and Charlie Catania. Executive Direction alleged four causes of action in its complaint, including breach of contract, breach of implied covenant of good faith and fair dealing, breach of contract to insure, and negligent and intentional misrepresentation.
On April 20, 2001, Federal filed a motion for summary adjudication of issues as to Executive Direction's first and second causes of action, for breach of contract and breach of the implied covenant of good faith and fair dealing. On July 17, 2001, the trial court granted Federal's motion and dismissed the first two causes of action.
On December 26, 2001, the trial court granted Federal's subsequent motion for summary adjudication of issues as to the remaining causes of action in Executive Direction's lawsuit. This timely appeal followed.
FACTUAL BACKGROUND
Executive Direction is a search and consulting firm that places temporary and permanent employees with clients in information systems, telecommunications, and computer-related industries. Approximately 80 percent of the employees it places are temporary, and 20 percent are permanent.
Beginning on March 14, 1996, Executive Direction obtained an insurance policy from Federal (written by ISG) that included coverage for general liability, employee benefits errors or omissions, and computer software and services errors or omissions. Charles Catania of P&M;Insurance Services assisted Executive Direction in obtaining the policy, which Executive Direction renewed yearly until March 14, 1999. The policy was based on a special program of insurance for computer consulting businesses.
Federal's computer software and services errors or omissions coverage provided in relevant part: "Subject to the applicable Limits of Insurance, we will pay damages the insured becomes legally obligated to pay for any claim arising out of a negligent act, error or omission, to which this insurance applies, by or on behalf of the insured:
* in the performance of or failure to perform electronic data processing;
* in the p
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