The State Bar of California
Insurance Law Committee of the Business Law Section
APPELLATE LAW UPDATE
June 8, 2011
Submitted by H. Thomas Watson
Horvitz & Levy LLP
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SUPREME COURT: The California Supreme Court did not publish any recent decisions regarding insurance law.
COURT OF APPEAL: The California Court of Appeal recently published the following decisions that may be of interest to attorneys practicing insurance law:
1. Summary judgment regarding excess insurer’s liability for continuous injury loss stemming from exposure to asbestos is improper where triable issues exist regarding whether all primary policies have been exhausted. (Kaiser Cement and Gypsum Corp. v. Ins. Co. of the State of Pennsylvania (June 3, 2011, B222310) __ Cal.App.4th __ [2011 WL 2163737] [Second Dist., Div. Four].)
This litigation concerns coverage under numerous primary and excess liability insurance policies for Kaiser Cement and Gypsum Corporation’s liability for thousands of asbestos bodily injury claims spanning several decades. An earlier appeal held that each of the claimed injurious exposures to asbestos was a separate “occurrence” within the meaning of the primary insurance policies issued by Truck Insurance Exchange (TIE). Under the “ ‘continuous injury’ trigger of coverage” announced in Montrose Chemical Corp. v. Admiral Ins. Co. (1995) 10 Cal.4th 645, 654-655, 689, bodily injuries occurring in several policy periods are potentially covered by all policies in effect during those periods. This declaratory relief action concerned when Kaiser’s excess insurer, Insurance Company of the State of Pennsylvania (ICSOP), became liable for paying asbestos claims that exceeded TIE’s $500,000 per occurrence limits.
The Court of Appeal held: (1) under the terms of its excess policy and the principle of “horizontal exhaustion” of primary policy limits, ICSOP’s indemnity obligation did not attach until the limits of all collectible primary policies have been exhausted; (2) under the terms of its primary policy, TIE’s maximum exposure for asbestos bodily injury claims is $500,000 per occurrence, not $500,000 per occurrence per year; and (3) the record was insufficient to determine whether ICSOP’s indemnity obligation was triggered because the court could not determine whether the coverage limits of all primary policies other than the ones issued by TIE had been exhausted.
2. The trial court has discretion to defer appraisal of fire loss required under Insurance Code section 2071 pending judicial declaration of the parties’ rights under the insurance policy and statutes, including the appropriate method for determining depreciation value under Insurance Code section 2051. (The Doan v. State Farm General Ins. Co. (May24, 2011, H034426) __ Cal.App.4th __ [2011 WL 1992020] [Sixth Dist.].)
NINTH CIRCUIT COURT OF APPEALS: The Ninth Circuit Court of Appeals did not publish any recent decisions regarding insurance law.