NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, Plaintiff

- counter

defendant

- Appellee,

v. COUNTY OF SAN BERNARDINO, Defendant

- counter

- claimant

Appellant. No. 17

- 56825
D.C. No. 5:16

- cv - 00128

- PSG

- SS

MEMORANDUM *

Appeal from the United States District Court for the Central District of California Philip S. Gutierrez, District Judge, Presiding Argued and Submitted May 14, 2019 Pasadena, California Before: LIPEZ, ** WARDLAW, and HURWITZ, Circuit Judges.
Th e question in this diversity case is whether certain language (“Condition C”) in three policies issued by the Insurance Company of the State of Pennsylv ania

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36

- 3.

** The Honorable Kermit V. Lipez, United States Circuit Judge for the First Circuit, sitting by designation. 

# FILED

JUN 10 2019 MOLLY C. DWYER, CLER K U.S. COURT OF APPEAL S2 17

- 56825

( “ ICSOP ” ) to the County of San Bernardino ( “ the County ” ) is an enforceable antistacking provision that pr ecludes the County from aggregating the per

occurrence policy limits in the three policies. Revie wing the district court ’ s summary judgment decision in favor of ICSOP de novo , Rocky Mountain Farmers Union v. Corey , 730 F.3d 1070, 1086 (9th Cir. 2013) , and applying California substantive law, Karen Kane Inc. v. Reliance Ins. Co. , 202 F.3d 1180, 1183 (9th Cir. 2000), we conclude that Condition C is an enforceable antistacking provision , and affirm.
1. Under California law, the plain language of an insurance contract governs.
State v. Cont ’ l Ins. Co. , 281 P.3d 1000, 1004 (Cal. 2012). Like the majority of courts to interpret Condition C, we conclude that its plain language unambiguously precludes sta cking. See , e.g. , Olin Corp. v. OneBeacon Am. Ins. Co. , 864 F.3d 130,
147

– 48 (2d Ci r. 2017) ; Plantation Pipeline Co. v. Cont ’ l Cas. Co. , No

. 1:03

- CV

- 2811

- WBH, 2008 WL 10884027, at *3 (N.D. Ga. July 9, 2008); Stonewall Ins. Co. v. E.I. du Pont de Nemours & Co. , 996 A.2d 1254, 1259 (Del. 2010)

. 1 The County relies on cases that found ambiguity in contractual language that differed from Condi tion C and involved disputes about the definition of

1 We do not rely on the unpublished section of Fuller

- Austin Insulation Co mpany v. Highlands Ins urance Company , No. B170079, at 65

– 66 (Cal. Ct. App. Jan. 19, 2006), which both parties contended at oral argument support s their respective positions.3 17

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“ occurrence ” as applied to a highly specific factual scenario. See A.B.S. Clothing Collection, Inc. v. Home Ins. Co. , 41 Cal. Rptr. 2d 166, 170

– 74 (Cal. Ct. App. 1995);
Karen Kane Inc. , 202 F.3d at 118 3

– 88.
2. California “ [c]ourts will not strain to create an ambiguity where none exists. ” Waller v. Truck Ins. Exch., Inc. , 900 P.2d 619, 627 (Cal. 1995). The County ’ s various attempts to create ambiguity are ineffectual. In particular, the County ’ s alternative reading of Condition C

— that its purpose is to prevent double recovery of specific expenses

— would render other language in the contract superfluous. See Mirpad, LLC v. Cal. Ins. Guar. Ass ’ n , 34 Cal. Rptr. 3d 136, 147 (Cal. Ct. App. 2005) ( “ An interpretation of the policy that creates an ambiguity where none existed by rendering words redundant or superfluous violates all rules of construction. ” ). The County ’ s proffered interpretation of “ any amounts due ” would lead to the pote ntially absurd conclusion that policy limits are reduced so long as the prior insurer has not paid its policy limits but are not r educed once the limits are paid

. T he County ’ s arguments based on the use of the term “ loss ” in the policies

are also unpersuasive. Conditi on C applies to any “ covered ” loss , and courts have typically rejected any interpretation of “ covered ” in an insurance contract as meaning something other than “ within the scope of coverage. ” See , e.g. , Wells Fargo Bank, N.A. v. Cal. Ins. Guar. Ass ’ n , 45 Cal. Rptr. 2d 53 7, 544

– 45 (Cal. Ct. App. 1995).4 17

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3. T he ICSOP policies are “ excess policies ” within the scope of Condition C.
T he policies are labelled as “ umbrella liability ” policies, and umbrella policies ordinarily “ are excess policies in the sense they afford coverage that is excess over underlying insurance. ” CSE Ins. Grp. v. Northbrook Prop. & Cas. Co. , 29 Cal. Rptr. 2d 120, 122 n.1 (Cal. Ct. App. 1994). The ICSOP poli cies also exhibit the hallmarks of excess policies: they include a schedule of underlying insurance and are not ordinarily triggered until the underlying policies are exhausted. 2 See H. Walter Croskey, et al., California Practice Guide: Insurance Litigati on , Ch. 8

- C, § 8:177 (Aug. 2018). Finally, the language of Condition C

— “ any other excess policy ”

— suggests that each ICSOP policy is itself an excess policy for purposes of Condition
C. 4. The County ’ s suggestion that reading Condition C as an antistac king provision is antithetical to their reasonable expectations of coverage is unavailing. By purchasing the second and third policies, the County did receive additional
coverage

—

the first policy would not c over claims for property damage resulting

2 The County ’ s argument that the ICSOP policies sometimes act as primary insurance, and thus cannot be considered to be “ excess policies, ” depends on acce pting the proposition that the self

- insured retention is not technically equivalent to an und erlying insurance policy. Courts, however, have generally treated policies that are only triggered once self

- insurance is exhausted as excess policies, at least in the context of indemnification. See, e.g. , Pac. Emp ’ rs Ins. Co. v. Domino ’ s Pizza, Inc. , 144 F.3 d 1270, 1276

– 77 (9th Cir. 1998). The cases cited by the County are distinguishable because they involve the specific question of an insurer ’ s duty to defend when a policy includes a self

- insured retention.5 17

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from a n occurrence that developed after the expiration of the first policy period. Furthermore, t he promise in Condition C ’ s second paragraph of continuing c overage after the policy period ’ s expiration is entirely consistent with interpreting Condition
C as an antistacking provision. The second paragraph simply memorializes the principle under California law that insurers are “ liable to indemnify the insured, ” subject to policy limits, “ against all claims that resulted from some triggering har m during the respective policy periods, even if the claims arose after the policy period expired. ” Cont ’ l Ins. , 281 P. 3d at 1006 (emphasis o mitted).
5

. Condition C is no t an u n enforceable “ escape cl ause. ” California law makes clear that insurance provi sions should be interpreted in their context, including as they are applied to the facts underlying the coverage dispute. See, e.g. , Bay Cities Paving & Grading, Inc. v. Lawyers ’ Mut. Ins. Co. , 85 5 P.2d 1263, 1271 (Cal. 199 3);
Cont ’ l Ins. , 281 P.3d at 100 4

- 05 ( “ [L]anguage in a contract must be construed . . . in the circumstances of that case, and cannot be found to be ambiguous in the abstract. ” (alteration in original) (internal quotation marks omitted)). To the extent Condition C precludes the County f

rom stacking the per

- occurrence limits of the three ICSOP policies, it is not an unenforceable escape clause b ecause it neither reduces ICSOP ’ s coverage obligations to zero nor shifts liability wholly or largely to another insurer

. See Dart Indus

. , Inc. v. Commercial Union Ins. Co. , 52 P.3d 79, 93 (Cal. 2002). The County ’ s reliance on cases suggesting that all antistacking provisions are escape6 17

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clauses is unavailing given the California Supreme Court ’ s recognition that antistacking pro visions are enforceable. See Cont ’ l Ins. , 281 P.3d at 1009.
AFFIRM ED.