Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_07-cv-01744/USCOURTS-caed-2_07-cv-01744-29/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

CONTINENTAL CASUALTY 

COMPANY,

Plaintiffs,

v.

ST. PAUL SURPLUS LINES 

INSURANCE COMPANY; DOES 1 

through 10, inclusive,

Defendants.

No. 2:07-cv-01744-TLN-EFB

ORDER CLARIFYING THIS COURT’S 

FINDINGS OF FACT AND CONCLUSION 

OF LAW

The instant matter is before the Court pursuant to Defendant St. Paul Surplus Lines 

Insurance Company’s (“St. Paul”) Motion for Clarification of Findings of Fact and Conclusions 

of Law. (ECF No. 273.) Plaintiff Continental Casualty Company (“Continental”) opposes St. 

Paul’s interpretation of this Court’s Findings of Fact and Conclusions of Law. (ECF No. 281.) 

The Court has considered the arguments presented by both parties’ briefing and hereby issues the 

following order to clarify the Court’s Findings of Fact and Conclusions of Law.

The question presented by the parties is actually one that was not litigated or argued 

before this Court—whether the $250,000 self-insured retention (“SIR”) clause within St. Paul’s 

policy was satisfied through the $1,000,000 insurance policy that Continental exhausted in 

defending their insured, Tasq Technology, Inc. (“Tasq”) and its lessor Crown Equipment 

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Corporation (“Crown”). The parties have requested the Court’s determination on this matter

which is appropriate and necessary since there are no material issues of fact, and since this

determination concerns a matter of law. For the reasons set forth below, the Court finds that the 

SIR was satisfied by payments made by Continental on Crown’s behalf while defending the 

wrongful death lawsuit brought against Crown and Tasq.

I. BRIEF FACTUAL BACKGROUND 

As discussed in detail in the Court’s Findings of Fact and Conclusions of Law, this matter 

involves a dispute between two insurance companies that issued policies for Crown and Tasq in a 

wrongful death action. (Findings of Fact and Conclusions of Law, ECF No. 270.) Continental 

issued a general liability insurance policy with a per occurrence limit of $1,000,000 that applied 

to Tasq. (ECF No. 270.) This policy covered Crown as an additional insured. (ECF No. 270.) 

Continental also provided a $25,000,000 umbrella policy to cover additional liability exceeding 

the limits of its primary policy. St. Paul issued a general liability policy with limits of $5,000,000

to Crown. (ECF No. 270.)

In settling the underlying wrongful death lawsuit, Continental paid the entire $1,000,000 

limit of its primary policy along with $2,500,000 of its umbrella policy to settle all claims against 

both Crown and Tasq. St. Paul refused to contribute to that settlement despite its $5,000,000 in 

general liability coverage inuring to Crown’s benefit.

On September 17, 2014, this Court found as follows:

29. [T]he Court finds that an appropriate allocation of the 

settlement paid to settle the Coupé action is 75% to Crown and 25% 

to Tasq. Although earlier estimates of fault opined that Tasq and 

Crown shared similar exposure, Continental has put on persuasive 

evidence that the Coupé plaintiffs were shifting their trial strategy 

focusing on a purported malfunction of the forklift to the refusal of 

Crown to incorporate vertical posts in its design. 

30. Therefore, Continental shall recover judgment from St. Paul 

in the amount of $1,875,000, which represents 75% of the 

$2,500,000 paid by Continental from its umbrella policy. (See RT 

874:13-22 (setting forth damages calculations incorporating pro rata 

share of policies and $250,000 self-insured retention).)

(ECF No. 270.) The Court did not decide the matter of whether the $250,000 SIR had been paid 

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because the parties did not address this matter during the trial. Although, the SIR was mentioned 

during trial, the parties’ counsel did not address whether Continental’s payments in defending 

Crown sufficed to satisfy the SIR clause in the insurance policy issued by St. Paul.

II. LEGAL STANDARD

After a nonjury trial, the court may, upon motion, clarify findings of fact, which 

materially affect the parties’ rights and obligations. Fed. R. Civ. P. 52(b); Crane-McNab v. Cnty 

of Merced, 773 F. Supp. 2d 861, 873 (E.D. Cal. 2011); Davis v. Mathews, 450 F. Supp. 308, 318 

(E.D. Cal. 1978). Rule 52(b) provides: “On a party’s motion filed no later than 28 days after the 

entry of judgment, the court may amend its findings—or make additional findings—and may 

amend the judgment accordingly.” Fed. R. Civ. P. 52(b). Motions under Rule 52(b) are primarily 

designed to correct findings of fact which are central to the ultimate decision; the Rule is not 

intended to serve as a vehicle for a rehearing. See Davis v. Mathews, 450 F. Supp. at 318.

Here, the parties have differing interpretations of the Findings with respect to the

application of the SIR in St. Paul’s policy, which materially affect the amount of the Judgment. 

Thus, clarification is in order so that the parties will know with certainty their rights and 

obligations.

III. ANALYSIS

The question here is whether the funds that Continental paid on behalf of Crown’s defense 

satisfies the SIR provision within St. Paul’s policy. At the outset, the Court notes that the policy 

is silent as to whether the insured itself, not other insurers, must pay the SIR amount. Thus, the 

facts of this case are analogous to those in Vons Companies v. United States Fire Company, 78 

Cal. App. 4th 52 (2000). There, the Second District Court of Appeals held that the policy did not 

preclude payment of the SIR through other insurance. For the reasons set forth below, this Court 

finds that the holding in Vons applies to this case and thus the $250,0000 SIR requirement was 

satisfied by Continental’s $1,000,000 payment on behalf of Tasq and Crown.

 Insurance contracts are subject to the ordinary rules of contract interpretation. Gen. Star 

Indem. Co. v. Superior Court, 47 Cal. App. 4th 1586, 1592 (1996). “The fundamental goal of 

contractual interpretation is to give effect to the mutual intention of the parties, and such intent is 

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to be inferred, if possible, solely from the written provisions of the contract.” Id. “If contractual 

language is clear and explicit, it governs.” Bank of the W. v. Superior Court, 2 Cal. 4th 1254, 

1264 (1992). “Policy provisions are ambiguous only if they are capable of two or more 

reasonable constructions.” Vons Companies, Inc., 78 Cal. App. 4th at 58. Policy terms must be 

“construed in the context of the whole policy and the circumstances of the case and cannot be 

deemed ambiguous in the abstract.” Id. (citing General Star, 47 Cal. App. 4th at 1592–93). “If 

an ambiguity cannot be eliminated by the language and context of the policy, then the court must

invoke the principle that ambiguities are construed against the party who caused the uncertaintythe insurer-in order to protect the insured’s reasonable expectations of coverage.” Id.

The St. Paul policy provides:

The self-insured retentions shown in the Coverage Summary and 

the information contained in this section fix the amount of damages 

which you’ll be required to pay, and over which the limits of 

coverage will apply in accordance with the Limits Of Coverage 

section, regardless of the number of.

• persons or organizations making claims or bringing suits.

We’ll consider any voluntary payment of, or assumption of any

obligation to pay, damages for covered injury or damage above a 

self-insured retention without our consent to be your responsibility.

Bodily injury and property damage each event retention - other than 

products and completed work. You’ll be responsible for the 

amount of damage up to this retention for all covered bodily injury 

and property damage that:

• results from other than your products and completed work;

• is sustained by all persons and organizations; and

• results from any one event.

This retention is reduced up to the amount of the medical expenses 

each person retention paid by you.

Products and completed work bodily injury and property damage 

each event retention.

You’ll be responsible for the amount of damages up to this 

retention for all covered bodily injury and property damage that

• results from our products or completed work;

• is sustained by all persons and organizations; and

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• results from any one event.

. . . 

If there is any other valid and collectible insurance for injury or 

damage covered by this agreement, other than insurance 

specifically purchased to be excess over this agreement, the Other 

primary insurance section applies.

Other insurance means insurance, or the funding of losses, that’s 

provided by or through:

• another insurance company;

• a risk retention group;

• a self-insurance method or program, other than any funded by you 

and over which this agreement applies; or

• any similar risk transfer or risk management method.

. . .

When this agreement is excess insurance over any other insurance, 

we’ll pay only the amount of damages that’s in excess of:

• the total amount that all such other insurance would pay if this 

agreement didn’t exist and

• the total of all deductible and self-insured amounts under all such 

other insurance.

Thus, like Vonn, 78 Cal. App. 4th at 60, and General Star National Insurance Corp. v. World Oil 

Co., 973 F. Supp. 943, 947–48 (C.D. Cal. 1997) [hereinafter World Oil], the St. Paul policy is 

silent as to whether payments from other insurance companies apply to the SIR provision and 

thus ambiguous as to whether Crown was required to pay the deductible from its own funds or 

could insure that amount elsewhere. Here, like in Vonn and World Oil that ambiguity is resolved 

against the insurer. Vonn Companies Inc., 78 Cal. App. 4th at 60; World Oil Co., 973 F. Supp. at 

947–48.

The SIR amount was $250,000. The Court has already determined that appropriate 

allocation of the settlement paid to settle the Coupé action is 75% to Crown and 25% to Tasq.

(ECF No. 270 at ¶ 29.) Therefore, 75% of the $1,000,000 settlement paid by Continental was on 

behalf of Crown, totaling $750,000. That $750,000 payment more than satisfies Crown’s 

$250,000 SIR. Accordingly, the Court’s Findings of Fact and Conclusions of Law (ECF No. 

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270) is hereby amended as follows:

The Court finds that the SIR within St. Paul’s insurance policy was satisfied by 

Continental’s $750,000 settlement payment on Crown’s behalf. Accordingly, St. Paul is hereby 

ordered to reimburse Continental in the amount of $1,875,000, which represents 75% of the 

$2,500,000 paid by Continental from its umbrella policy. 

IT IS SO ORDERED.

Dated: June 19, 2015

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