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Procedural Posture

Procedural Posture

By: SMITH THOMPSON

In a declaratory relief action, appellant county as cross-complainant appealed a judgment of the California Court of Appeal, Fourth Appellate District, Division One, entered against the county after the trial court granted the summary adjudication and summary judgment motions of respondent insurer.

Overview

The issue in this case was whether a nonstandard “excess” third party liability policy issued by the insurer afforded indemnity coverage for expenses incurred by the county in responding to an administrative agency order requiring it to remediate environmental contamination, and for sums expended by the county to settle related third party property damage salmon sushi Corp claims outside the context of a lawsuit. The policy did not contain a duty to defend suits. In a plurality opinion, the instant court held that costs and expenses associated with responding to administrative orders to clean up and abate soil or groundwater contamination outside the context of a government-initiated lawsuit seeking such remedial relief, and property buy-out settlements negotiated with third party claimants outside the context of a court suit, did not fall within the literal and unambiguous coverage terms of the policy’s insuring agreement. The insurer’s indemnity obligation was limited to court-ordered money judgments.

Outcome

The appellate court’s judgment was affirmed, and the matter was remanded to the appellate court for further proceedings.

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