IN THE SUPREME COURT OF 

CALIFORNIA

TRUCK INSURANCE EXCHANGE,

Plaintiff and Appellant,

v.

KAISER CEMENT AND GYPSUM CORP. et al.,

Defendants, Cross-complainants and Appellants;

LONDON MARKET INSURERS, 

Defendant and Appellant;

INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, 

Cross-defendant and Appellant;

GRANITE STATE INSURANCE COMPANY et al., 

Defendants and Respondents. 

S273179

Second Appellate District, Division Four

B278091

Los Angeles County Superior Court

BC249550

June 17, 2024

Justice Groban authored the opinion of the Court, in which 

Chief Justice Guerrero and Justices Corrigan, Liu, Kruger, 

Jenkins, and Evans concurred.
1

TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

S273179

Opinion of the Court by Groban, J.

This appeal requires us to decide when a first-level excess 

insurer’s indemnity obligations attach in the context of a 

continuous injury that triggers multiple policy periods. In 

Montrose Chemical Corp. of California v. Superior Court (2020) 

9 Cal.5th 215 (Montrose III),1 we addressed the sequence in 

which an insured could access its excess insurance policies for 

continuous environmental damage that had occurred over two

decades. The insured sought a rule of “vertical exhaustion,” 

which would allow it to access an excess insurance policy as soon 

as all the directly underlying insurance from that policy period 

(i.e., any primary and any excess policies with a lower 

attachment point) were exhausted. (See id. at p. 225.) The 

insurer sought a rule of “horizontal exhaustion,” which would 

not allow the insured to access an excess policy until it had 

exhausted every excess policy with a lower attachment point 

across all relevant policy periods. (See ibid.) The parties to 

Montrose III did not dispute that all primary policies had been 

exhausted. Thus, the only issue before us was whether, upon 

exhaustion of all primary policies, the availability of excess 

1 Because Montrose Chemical Corp. of California v. 

Superior Court (2020) 9 Cal.5th 215, is the third and most recent 

decision in a series of cases involving the Montrose litigation, 

the Court of Appeal and the parties refer to it as “Montrose III.” 

We will use the same short form here.
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

2

policies was governed by a rule of vertical or horizontal 

exhaustion. (See id. at p. 226, fn. 4 [“Because the question is not 

presented here, we do not decide when or whether an insured 

may access excess policies before all primary insurance covering 

all relevant policy periods has been exhausted”].)

This case requires us to resolve the question that we left 

open in Montrose III: whether standard language in commercial 

general liability policies that are excess to primary insurance 

policies should be interpreted to require vertical or horizontal 

exhaustion. In other words, can an insured access a first-level 

excess insurance policy upon exhaustion of underlying primary 

insurance obtained for the same policy period (vertical 

exhaustion), or is the insured required to exhaust all primary 

policies issued during the continuous period of damage

(horizontal exhaustion)?

The appellant in this case is Truck Insurance Exchange 

(Truck), a primary insurer for Kaiser Cement and Gypsum 

Corporation (Kaiser). Truck filed an equitable contribution 

claim against several insurers that had issued first-level excess 

policies to Kaiser for policy years where the directly underlying 

primary policy had been exhausted. Relying on our reasoning 

in Montrose III, supra, 9 Cal.5th 215, Truck argued that the 

excess insurers’ indemnity obligations were triggered 

immediately upon exhaustion of the directly underlying primary 

policies. Truck further reasoned that because the excess 

insurers owed a coverage duty to Kaiser, they were effectively 

responsible for indemnifying the same loss as Truck and should 

therefore be required to contribute to Truck’s coverage costs. 

The excess insurers, however, argued that they had no duty to 

indemnify Kaiser until it had exhausted every primary policy 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

3

issued during the period of continuous damage (including the 

policy Truck had issued), and thus there was no possible basis 

for contribution. According to the excess insurers, Montrose III’s 

analysis is limited to excess policies that sit over other excess 

policies, not first-level excess policies that sit over primary

insurance. The Court of Appeal agreed that Montrose III did not 

extend to excess policies that sit over primary insurance, which 

has characteristics that are distinct from excess insurance

including immediate coverage and defense obligations. In so 

ruling, the court rejected SantaFe Braun, Inc. v. Insurance Co. 

of North America (2020) 52 Cal.App.5th 19 (SantaFe), which 

held that Montrose III’s reasoning does apply in the context of 

first-level excess policies. The court further concluded that 

because the excess insurers had no coverage obligation under 

their policies until all primary insurance had been exhausted 

(including Truck’s primary policy), Truck was not entitled to 

contribution.

Contrary to the Court of Appeal, we conclude that our 

analysis in Montrose III applies equally here. The language of 

the first-level excess policies at issue in this case is essentially 

identical — and in some cases actually identical — to the policy 

language in the higher-level excess policies that we considered 

in Montrose III. The policies also share many of the same 

characteristics that we found “strongly suggest[ive]” (Montrose 

III, supra, 9 Cal.5th at p. 233) of vertical, rather than 

horizontal, exhaustion. Thus, as in Montrose III, we believe the 

first-level excess policies are most reasonably construed as 

requiring only vertical exhaustion.

The excess insurers seem to concede — or at least do little 

to dispute — that the language of their policies is substantially 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

4

identical to the policies at issue in Montrose III. They argue, 

however, that such language should be assigned a different 

meaning in the current context given the “qualitative 

distinctions” between primary and excess insurance. 

Specifically, they note that primary insurers generally receive 

higher premiums and offer lower liability limits in exchange for 

coverage that attaches immediately upon the happening of an

insurable occurrence and provide defense costs. We are not 

persuaded that those distinctions justify adopting a different 

interpretation of the exact same policy language that we 

construed in Montrose III.

Our conclusion that the first-level excess policies only 

require vertical exhaustion does not, however, fully resolve the 

questions presented in this appeal. Unlike in Montrose III,

which involved an insurance coverage dispute between an 

insured and its insurer, this case involves a contribution claim 

between coinsurers. While coverage disputes between insureds 

and their insurers are a form of contract action that turns on the 

meaning of the policy language, “an equitable contribution claim 

between coinsurers is not based upon contract, but instead 

involves ‘ “equitable principles designed to accomplish ultimate 

justice in the bearing of a specific burden.” ’ ” (Axis Surplus Ins. 

Co. v. Glencoe Ins. Ltd. (2012) 204 Cal.App.4th 1214, 1227–1228

(Axis), quoting Signal Companies, Inc. v. Harbor Ins. Co. (1980) 

27 Cal.3d 359, 369 (Signal).) Although the terms of the relevant 

policies are an important factor when deciding whether 

contribution is appropriate, courts may consider “a variety of 

[other] factors” (Travelers Casualty & Surety Co. v. Century 

Surety Co. (2004) 118 Cal.App.4th 1156, 1162), including “ ‘ “the 

nature of the claim, the relation of the insured to the insurers 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

5

. . . and any other equitable considerations.” ’ ” (Truck Ins. 

Exchange v. Unigard Ins. Co. (2000) 79 Cal.App.4th 966, 974 

(Unigard); see Signal, at p. 369.) Thus, our finding that the 

first-level excess policies do not require the insured to 

horizontally exhaust primary insurance issued during different 

policy periods does not resolve whether Truck is entitled to 

contribution from the excess insurers.

In the proceedings below, the excess insurers and Kaiser 

argued that even if the policy agreements were, as a matter of 

contract interpretation, properly construed as authorizing the 

insured (Kaiser) to access its first-level excess insurance upon 

exhaustion of the directly underlying primary insurance, it 

would nonetheless remain unfair as a matter of equity to allow 

a primary insurer to obtain contribution from an excess insurer 

given the distinct roles those two types of carriers play in 

covering a loss. (See generally Dart Industries, Inc. v. 

Commercial Union Ins. Co. (2002) 28 Cal.4th 1059, 1080 (Dart) 

[“the obligation of successive primary insurers to cover a 

continuously manifesting injury is a separate issue from the 

obligations of the insurers to each other”].) They further

contended that ordering contribution would be particularly 

unfair under the specific circumstances of this case because it 

would effectively allow Truck to pay less insurance than it had 

promised to Kaiser, while leaving Kaiser and injured asbestos 

claimants with less overall coverage. 

Because the Court of Appeal rejected Truck’s contribution 

claim based entirely on its erroneous interpretation of the excess 

policies (i.e., that the excess insurers had no coverable obligation 

under the policies until Kaiser horizontally exhausted all 

primary insurance), it did not reach these alternative 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

6

arguments regarding the fairness of ordering the excess 

insurers to contribute to Truck. Having now concluded that the 

excess policies require only vertical exhaustion, we remand the 

matter to allow the Court of Appeal to address these alternative 

arguments in the first instance. (See Hamilton v. Asbestos Corp. 

(2000) 22 Cal.4th 1127, 1149 (Hamilton) [“It is appropriate to 

remand for the Court of Appeal to resolve . . . in the first 

instance” issues that the court chose “not [to] reach because of 

its holdings”].)

I. BACKGROUND

From 1944 through the 1970s, Kaiser manufactured 

asbestos-containing products at numerous different facilities. 

By 2004, more than 24,000 claimants had filed product liability 

suits against Kaiser alleging that they had suffered bodily 

injury (primarily asbestosis or cancer) as a result of exposure to 

Kaiser’s asbestos products. (See London Market Insurers v. 

Superior Court (2007) 146 Cal.App.4th 648, 652.) Kaiser 

tendered these claims to Truck, one of several primary insurers 

that had issued commercial general liability (CGL) policies to 

Kaiser during the relevant time period. 

In 2001, Truck initiated this insurance coverage action to 

determine its indemnity and defense obligations to Kaiser. 

Several years later, Truck amended its complaint to add a cause 

of action for contribution against several of Kaiser’s excess 

insurers. The litigation has generated multiple appellate 

decisions that have addressed a wide range of complex questions 

regarding insurance coverage and policy interpretation. In this 

appeal, we review only one of the issues decided by the Court of 

Appeal: Whether Truck is entitled to contribution from various 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

7

coinsurers that issued first-level excess policies to Kaiser during 

the period in question. 

A. The All Sums with Stacking Approach to 

Continuous Injuries 

Before turning to the procedural history of the parties’ 

current dispute, it is helpful to review general principles of 

insurance law that govern “continuous or ‘long-tail’ injury . . ., 

where damage occurs over multiple policy periods.” (Montrose 

III, supra, 9 Cal.5th at pp. 226–227.) In the context of standard

“occurrence based” CGL insurance policies,

2 California has 

adopted what is known as the “all-sums-with-stacking” 

approach to continuous injuries. This approach has three 

primary components. First, in Montrose I, supra, 10 Cal.4th 

645, we adopted the “continuous injury trigger of coverage” 

principle (id. at p. 685), under which “bodily injury and property 

damage that is continuous or progressively deteriorating 

throughout several policy periods is potentially covered by all 

policies in effect during those periods.” (Id. at p. 655.) In other 

2 While the specifics of their language may vary, traditional 

“occurrence based” CGL policies generally insure the 

policyholder for “ ‘all sums which the insured shall become 

legally obligated to pay as damages because of . . . bodily injury, 

or . . . property damage to which this insurance applies, caused 

by an occurrence.’ ” (Montrose Chemical Corp. v. Admiral Ins. 

Co. (1995) 10 Cal.4th 645, 656 (Montrose I); see id. at pp. 669–

670 [discussing drafting history of standardized CGL policy 

language].) 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

8

words, the insured may call upon any policy that was in effect 

during the continuous period of injury.3

Second, in Aerojet-General Corp. v. Transport Indemnity 

Co. (1997) 17 Cal.4th 38, we adopted “the ‘all sums’ rule” (State 

of California v. Continental Ins. Co. (2012) 55 Cal.4th 186, 191 

(Continental)), pursuant to which each policy triggered during a 

long-tail injury is potentially liable for the total amount of the 

loss, regardless of whether a portion of the loss occurred outside 

the policy’s coverage period. The rule “envisions that each 

successive insurer is potentially liable for the entire loss up to 

its policy limits. When the entire loss is within the limits of one 

policy, the insured can recover from that insurer, which may 

then seek contribution from the other insurers on the risk 

during the same loss.” (Id. at p. 200.) 

Third, in Continental, supra, 55 Cal.4th 186, we construed 

language in standard CGL policies to permit “stacking,” which

allows an insured “to add together the maximum limits of all 

consecutive policies that [were] in place during the [period of 

continuous injury].” (12 Couch on Insurance (3d ed. 2010)

§ 169:5; see Continental, at p. 200 [“ ‘stacking’ generally refers 

to the stacking of policy limits across multiple policy periods 

that were on a particular risk”].) In other words, “ ‘[w]hen the 

3

In Armstrong World Industries, Inc. v. Aetna Casualty & 

Surety Co. (1996) 45 Cal.App.4th 1, the court held that asbestosrelated bodily injury claims qualify as a form of continuing 

injury that triggers all policies “ ‘in effect from [the claimant’s] 

first exposure to asbestos or asbestos-containing products until 

date of death or date of claim, whichever occurs first[.]’ ” (Id. at 

p. 43.) The parties appear to assume (at least for the purposes 

of this appeal) that Armstrong states the proper trigger rule for 

asbestos-related injury claims. We will do the same. 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

9

policy limits of a given insurer are exhausted, [the insured] is 

entitled to seek indemnification from any of the remaining 

insurers [that were] on the risk [during the continuous period of 

injury].’ ” (Continental, at p. 200.) If, for example, an insured 

purchased 10 annual policies that each had a coverage limit of 

$1 million, and all the policies were triggered by a continuous 

injury, the insured would be permitted to stack all of the policies

to collect up to $10 million in total coverage. (See id. at p. 201 

[the “all-sums-with-stacking indemnity principle . . . ‘effectively 

stacks the insurance coverage from different policy periods to 

form one giant “uber-policy” with a coverage limit equal to the 

sum of all purchased insurance policies’ ”].) 

In adopting this all-sums-with-stacking approach, 

however, we have cautioned that “future . . . contracting parties 

can write into their policies whatever language they agree upon, 

including limitations on indemnity, equitable pro rata coverage 

allocation rules, and prohibitions on stacking.” (Continental, 

supra, 55 Cal.4th at p. 202.)

B. Summary of Kaiser’s Insurance Policies

Having summarized general principles of insurance law 

relating to continuous injuries, we turn now to the specific facts 

at issue in this appeal. During the relevant time period, Kaiser 

purchased primary and excess CGL insurance from numerous 

different insurers. “Primary insurance refers to the first layer 

of coverage, whereby ‘liability attaches immediately upon the 

happening of the occurrence that gives rise to liability.’ ” 

(Montrose III, supra, 9 Cal.5th at p. 222.) “Primary insurers 

generally have the primary duty of defense.” (Olympic Ins. Co. 

v. Employers Surplus Lines Ins. Co. (1981) 126 Cal.App.3d 593, 

597.) “Excess insurance, by contrast, ‘refers to indemnity 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

10

coverage that attaches upon the exhaustion of underlying 

insurance coverage for a claim.’ [Citation.] An excess insurer’s 

coverage obligation begins once a certain level of loss or liability 

is reached; that level is generally referred to as the ‘ “attachment 

point” ’ of the excess policy.” (Montrose III, at pp. 222–223.)

Kaiser’s primary insurers included Fireman’s Fund 

Insurance Company (Fireman’s Fund) (1947–1964), Truck (1964 

to 1983), Home Insurance Company (1983–1985) and National 

Union Fire Insurance Company (1985–1987). The primary 

policy that Truck issued for the 1974–1975 period provided a 

“per occurrence” limit of $500,000, meaning that Truck would 

provide up to $500,000 of coverage for each claim alleging 

injurious exposure to asbestos. However, the policy did not 

include any aggregate limit of coverage. In contrast, all the 

primary policies issued by non-Truck insurers did contain an 

aggregate limit on coverage. 

Kaiser also obtained first-level excess policies from 

multiple insurers. The first-level excess policies that are the 

subject of Truck’s contribution claim were issued for policy years

in which Truck was not the primary insurer. London Market 

Insurers (LMI) provided first-level excess policies during the 

years that Fireman’s Fund was the primary insurer (1947 to 

1964), while First State (1983–1984) and Westchester Fire 

(1984–1985) each provided a first-level excess policy during the 

years that Home Insurance Company was the primary insurer.

Each of the first-level excess policies include language 

stating that coverage will not attach until Kaiser has exhausted

underlying primary policies that are listed in a schedule of 

underlying insurance. The policies require Kaiser to maintain 

those scheduled primary policies during the relevant period of 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

11

coverage. Each excess policy also includes an “other insurance”

provision that states, in a variety of ways, that the insured must 

also exhaust any “other insurance” or “other underlying 

insurance” before the excess policy can be accessed.

4

C. Procedural History 

Kaiser assigned all asbestos-related bodily injury claims 

that triggered Truck’s 1974 primary policy — which presumably

includes any claims alleging that the claimant’s initial exposure 

to asbestos occurred in or before 1974 (see ante, p. 8, fn. 3) — to 

the 1974 policy. According to the excess insurers, Kaiser 

selected Truck’s 1974 policy because it “has no aggregate limit, 

does not require Kaiser to pay an allocated share of defense (like 

Truck’s other primary policies), and . . . has the lowest 

deductible per occurrence ($5,000).” Truck subsequently 

entered into agreements with the other primary insurers to 

share defense and indemnity costs.

1. Kaiser Cement and Gypsum Corp. v. Insurance 

Co. of Pennsylvania (Apr. 8, 2013, B222310) 

(nonpub. opn.)

Truck initiated this litigation in 2001 to determine its 

coverage obligations to Kaiser. In a prior appeal, Kaiser Cement 

and Gypsum Corp. v. Insurance Co. of Pennsylvania (Apr. 8, 

2013, B222310) (review den. and opn. ordered nonpub. July 17, 

2013) (Kaiser Cement), the Court of Appeal decided two issues 

4 The specific wording of these “other insurance” clauses is 

explored in more detail below. 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

12

that have relevance to the current dispute.5 First, the court held 

that Kaiser could not access a 1974 first-level excess policy that 

sat over Truck’s 1974 primary policy until Kaiser had 

horizontally exhausted every primary policy issued during the 

claimant’s period of continuous damage. In support, the court 

relied on language in the excess policy stating that the insurer’s 

indemnity obligations would attach upon exhaustion of Truck’s 

1974 primary insurance plus the “ ‘ “applicable limit(s) of any 

other underlying insurance collectible by the insured.” ’ ” 

(Italics omitted.) Following the reasoning of Community 

Redevelopment Agency v. Aetna Casualty & Surety Co. (1996) 

50 Cal.App.4th 329 (Community Redevelopment) — a case we 

discuss in more detail below — the court explained that the 

“policy’s reference to ‘any other underlying insurance’ 

necessarily means ‘whatever’ . . . primary insurance is available 

to Kaiser — not, as Kaiser suggests, only that primary 

insurance that expressly covers the 1974 policy year.”

Second, the court ruled that Truck’s 1974 primary policy 

included an anti-stacking provision that prohibited Kaiser from 

obtaining coverage from any of the other primary policies Truck 

had issued between 1964 and 1983. Although the court 

acknowledged that insureds are generally permitted to stack 

successive policies (see Continental, supra, 55 Cal.4th at p. 200; 

ante, at pp. 8–9), it reasoned that Truck’s 1974 policy contained 

language that expressly prohibited Kaiser from receiving 

5 An unpublished decision may be cited “[w]hen the opinion 

is relevant under the doctrines of law of the case, res judicata, 

or collateral estoppel.” (Cal. Rules of Court, rule 8.1115(b)(1).) 

Kaiser Cement is relevant here as law of the case and we cite it 

solely for that reason. 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

13

indemnification from any other policy that Truck had issued. As 

a result of the court’s ruling, Truck’s total indemnity obligation

for each asbestos claim triggering the 1974 policy was only

$500,000, which was substantially less than the $8.3 million per 

claim that the excess insurers allege Truck would have been 

obligated to pay if Kaiser was allowed to stack all 19 of its Truck 

policies. In subsequent litigation, it was determined that all 

primary policies issued by non-Truck insurers had been 

exhausted as of 2004. 

Thus, the Kaiser Cement decision had two important 

effects on the insurance coverage litigation. First, the court’s 

interpretation of the “other insurance” provision in Kaiser’s 

1974 first-level excess policy effectively precluded Kaiser from 

accessing any of its excess insurance until it had exhausted 

every primary policy issued during the period of continuous 

injury. Second, Kaiser could not obtain coverage from any of the 

primary policies that Truck had issued other than the 1974

policy. As a result of those rulings, and the subsequent

exhaustion of all primary policies that had been issued by nonTruck insurers, Truck’s 1974 policy is currently the only

primary insurance that remains available to Kaiser for any 

asbestos-related bodily injury claim alleging initial exposure in 

or before the 1974–1975 policy period. As noted, that policy 

requires Truck to provide up to $500,000 for each asbestos claim, 

with any amounts exceeding that level going to excess 

insurance. Following Kaiser Cement, various excess insurers 

entered into an agreement with Kaiser regarding the funding of

the excess portion of any individual claims that exceed Truck’s 

$500,000 obligation. 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

14

2. Current litigation

At some point after it was determined that Truck’s 1974 

policy was the only remaining primary insurance (but before we 

had decided Montrose III), Truck filed the current equitable 

contribution claim against each of the first-level excess insurers 

that sit above the now-exhausted primary policies that were 

issued by non-Truck insurers. Presenting arguments that are 

substantially similar to those that Kaiser had raised in Kaiser 

Cement, Truck argued that the first-level excess insurers’ 

indemnity obligations to Kaiser attached upon exhaustion of the 

directly underlying primary policies. Truck further contended 

that because the excess insurers’ coverage obligations had been 

triggered, they should be ordered to “contribute to Truck’s 

indemnity and defense obligations under the 1974 policy.” The 

excess insurers, however, argued there was no basis for 

contribution because all of the applicable excess policies 

contained “other insurance” provisions that conditioned 

coverage on the exhaustion of all available underlying primary 

insurance that had been issued during the continuous period of 

damage, which necessarily included Truck’s 1974 primary 

policy.

Following a bench trial in 2016, the trial court issued an 

order denying Truck’s contribution request. Citing Community 

Redevelopment, supra, 50 Cal.App.4th 329, and the Kaiser 

Cement decision previously issued in this litigation (see ante, at 

pp. 11–13), the trial court agreed with the excess insurers that 

the “other insurance” provisions in the first-level excess policies 

called for horizontal exhaustion of all primary insurance, 

including Truck’s 1974 primary policy. The trial court further 

reasoned that because the excess insurers’ policies did not 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

15

attach until Truck’s 1974 primary policy was exhausted, there 

was no possible basis for Truck to receive contribution.

While Truck’s appeal of the order denying contribution

was pending, we issued our decision in Montrose III, supra, 

9 Cal.5th 215. As discussed in more detail below, Montrose III

held that an insured’s excess insurance policies required only 

vertical exhaustion, meaning that the insurers’ indemnity 

obligations attached as soon as the insured had exhausted any

excess policies with lower attachment points that had been 

issued for the same policy year. In reaching that conclusion, we 

rejected the excess insurers’ contention that the policies’ “other 

insurance” provisions required horizontal exhaustion of all

excess policies with lower attachment points that had been 

issued during the period of continuous injury. 

On appeal, Truck argued that Montrose III’s 

interpretation of “other insurance” policies had effectively 

rejected (and overruled) the Court of Appeal’s analysis in 

Community Redevelopment and Kaiser Cement. Truck noted 

that a recent appellate decision, SantaFe, supra, 52 Cal.App.5th 

19, had reached exactly that conclusion in a coverage dispute in 

which the insured had sought access to a first-level excess policy 

immediately upon exhaustion of the directly underlying primary 

policy. The SantaFe court held that Community Redevelopment

and other decisions that had embraced horizontal exhaustion 

based on “other insurance” provisions had “rel[ied] on an 

interpretation of policy language rejected by the Supreme Court 

in Montrose III.” (SantaFe, at p. 30.)

The Court of Appeal, however, disagreed with Truck and

expressly rejected SantaFe’s application of Montrose III. In the 

court’s view, Montrose III’s interpretation of “other insurance” 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

16

provisions was limited to situations involving “multiple layers 

of excess insurance” and had no application to “layers of primary 

and excess insurance.” In support, the court noted the 

“qualitative[]” distinctions between primary and excess 

insurance. According to the court, whatever effect “other 

insurance” clauses might have in other contexts, for purposes of 

first-level excess policies that sit over primary insurance, such 

provisions were most reasonably construed to include any 

primary policies that had been issued during the relevant period 

of continuous injury.

Having concluded that the first-level excess insurers did 

not owe Kaiser any indemnity obligation until Kaiser had 

exhausted every primary policy issued during the period of 

continuous damage, the court concluded there was no possible 

basis to award Truck contribution. We granted review.

II. DISCUSSION

A. Summary of Applicable Law

We begin our analysis by summarizing legal principles

and prior decisional law that relate to the complex questions of 

insurance coverage presented in this appeal. 

1. Insurance coverage actions versus contribution 

action

We have previously distinguished between two forms of 

insurance disputes: insurance coverage actions, which typically

involve a dispute between an insured and an insurer regarding

the insurer’s indemnity and defense obligations, and equitable 

contribution claims, in which one insurer seeks recovery from 

another insurer that allegedly covered the same risk and failed 

to pay its proportionate share. (See, e.g., Dart, supra, 28 Cal.4th 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

17

at p. 1080 [“the obligation of successive . . . insurers to cover a 

continuously manifesting injury is a separate issue from the 

obligations of the insurers to each other. . . . ‘[A]pportionment 

among multiple insurers must be distinguished from 

apportionment between an insurer and its insured’ ”].) 

Insurance coverage claims between an insured and its 

insurer are a form of contract dispute and thus focus on “the 

language of the insurance policies at issue.” (Montrose III, 

supra, 9 Cal.5th at pp. 229–230.) “ ‘ “Our goal in construing 

insurance contracts, as with contracts generally, is to give effect 

to the parties’ mutual intentions. [Citations.] ‘If contractual 

language is clear and explicit, it governs.’ [Citations.] If the 

terms are ambiguous [i.e., susceptible of more than one 

reasonable interpretation], we interpret them to protect ‘ “the 

objectively reasonable expectations of the insured.” ’ ” ’

[Citation.] If these rules do not resolve an ambiguity, we may 

then ‘ “resort to the rule that ambiguities are to be resolved 

against the insurer.” ’ ” (Id. at p. 230, bracketed text in 

original.) “ ‘Because the insurer writes the policy, it is held 

“responsible” for ambiguous policy language, which is therefore 

construed in favor of coverage.’ ” (Montrose I, supra, 10 Cal.4th 

at p. 667.) 

“[A]n equitable contribution claim between coinsurers[, in 

contrast,] is not based upon contract, but instead involves 

‘ “equitable principles designed to accomplish ultimate justice in 

the bearing of a specific burden” ’ ” (Axis, supra, 

204 Cal.App.4th at pp. 1227–1228, quoting Signal, supra, 

27 Cal.3d at p. 369.) “In the insurance context, the right to 

contribution arises when several insurers are obligated to 

indemnify or defend the same loss or claim, and one insurer has 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

18

paid more than its share of the loss or defended the action 

without any participation by the others. . . . The purpose of this 

rule of equity is to accomplish substantial justice by equalizing 

the common burden shared by coinsurers, and to prevent one 

insurer from profiting at the expense of others.” (Fireman’s 

Fund Ins. Co. v. Maryland Casualty Co. (1998) 65 Cal.App.4th 

1279, 1293 (Fireman’s Fund).) 

Under California law, there is no “definitive rule” that 

governs equitable contribution. (Signal, supra, 27 Cal.3d at 

p. 369.) Rather, when evaluating a contribution claim, courts 

should consider a variety of factors, including “the particular 

policies of insurance, the nature of the claim made, . . . the 

relation of the insured to the insurers” (ibid.) and “ ‘any other 

equitable considerations.’ ” (Unigard, supra, 79 Cal.App.4th at 

p. 974.) Although equitable contribution claims are not 

“ ‘controlled by the language of [the insurers’] contracts with the 

respective policy holders’ ” (Signal, at p. 369), we have 

emphasized that the policy language nonetheless remains an 

important factor. (See ibid. [courts should not impose 

contribution on an insurer that “contraven[es] . . . the provisions 

of its policy” absent “some compelling equitable consideration”];

Unigard, at p. 978.) As explained by one court, “if [an] insurer 

never had an obligation to provide coverage, it would be 

extremely unfair to enforce a contribution action.” (Axis, supra, 

204 Cal.App.4th at p. 1228.)

2. Contribution between primary and excess insurers

In the context of traditional “noncontinuous injury” 

insurance claims — meaning a claim that implicates only a 

single policy period — it has long been the rule that there is “no 

contribution between a primary and excess carrier without a 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

19

specific agreement to the contrary.” (Reliance Nat. Indemnity

Co. v. General Star Indemnity Co. (1999) 72 Cal.App.4th 1063, 

1080; see Fireman’s Fund, supra, 65 Cal.App.4th at p. 1294, 

fn. 4.) The basis for that rule is rooted in the purpose of 

contribution, which is to “equaliz[e] the common burden” 

(Fireman’s Fund, at p. 1293) shared by coinsurers that “share 

the same level of liability on the same risk as to the same 

insured.” (Maryland Casualty Co. v. Nationwide Mutual Ins. 

Co. (2000) 81 Cal.App.4th 1082, 1089 (Maryland); see Morgan 

Creek Residential v. Kemp (2007) 153 Cal.App.4th 675, 684

[contribution applies only when there is a “ ‘common burden of 

liability’ ”].) When a claim implicates only a single policy period, 

and an excess policy provides that the insurer’s coverage 

obligations attach upon exhaustion of the primary insurance

listed in the schedule of underlying insurance, the excess and 

primary insurer cannot be said to “share the same level of

liability.” (Maryland, at p. 1089.)

That analysis becomes more complicated in the context of 

continuous injuries, which extend over multiple policy periods. 

In that circumstance, the question arises whether the excess 

insurers’ indemnity obligations to the insured attach: (1) only 

after the exhaustion of all primary layers of insurance issued 

during the continuous period of injury (horizontal exhaustion);

or (2) whether attachment occurs upon exhaustion of the 

directly underlying primary insurance that was issued during 

the same policy year (vertical exhaustion). If the excess insurers 

have no coverage obligation until all primary policies have 

exhausted (horizontal exhaustion), it follows that the excess 

insurer cannot be said to be on the same level of liability as any

of the primary insurers, thus precluding any basis for 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

20

contribution between the two types of insurers. In effect, 

horizontal exhaustion results in the same situation between 

excess and primary insurers that occurs where a claim 

implicates only one policy period: the excess insurer and 

primary insurer remain on distinct levels of liability, with the 

excess insurer’s obligations being triggered only after the 

primary coverage is exhausted, thus precluding contribution.

Under vertical exhaustion, however, the excess insurer

owes an indemnity obligation to the insured as soon as the 

directly underlying primary policy has exhausted. That is true 

even if primary insurance issued for a precedent or subsequent 

policy period remains unexhausted (and thus available to the 

insured). Thus, unlike the situation with horizontal exhaustion, 

under a rule of vertical exhaustion, a first-level excess insurer

from one policy period and a primary insurer from a different

policy period might simultaneously owe coverage to the same 

insured for the same injury. In that situation, it becomes less 

clear that the excess insurer remains on a different “level of 

liability” (Maryland, supra, 81 Cal.App.4th at p. 1089) than 

primary insurers that issued unexhausted policies during 

different periods of the continuous injury. 

Prior to our decision in Montrose III, supra, 9 Cal.5th 215, 

the leading case addressing contribution between primary and 

excess injuries in the continuous injury context was Community 

Redevelopment, supra, 50 Cal.App.4th 329. The insured in 

Community Redevelopment obtained annual primary policies 

from United between 1982–1985. For the 1985–1986 period, the 

insured obtained a primary policy from State Farm and a firstlevel excess policy from Scottsdale. The Scottsdale policy stated 

that its indemnity obligations would attach upon exhaustion of 
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AND GYPSUM CORP.

Opinion of the Court by Groban, J.

21

the underlying State Farm policy “ ‘plus the applicable limits of 

any other underlying insurance collectible by the insured.’ ” (Id. 

at p. 335, italics and capitalization omitted.) 

State Farm entered a settlement on behalf of the insured 

that exhausted the limits of its 1985–1986 primary policy. 

United thereafter brought a contribution action against 

Scottsdale, contending “that Scottsdale had a duty to . . .

contribute to the primary coverage burden as soon as State 

Farm’s underlying primary policy was exhausted. According to 

United, Scottsdale’s policy was expressly excess to State Farm’s 

policy; as soon as the latter was exhausted, Scottsdale’s duty 

arose and the existence of other primary coverage was 

irrelevant.” (Community Redevelopment, supra, 50 Cal.App.4th 

at p. 337.)

The court rejected that argument, explaining that “[i]t is 

settled under California law that an excess or secondary policy 

does not cover a loss, nor does any duty to defend the insured 

arise, until all of the primary insurance has been exhausted.” 

(Community Redevelopment, supra, 50 Cal.App.4th at p. 339.) 

In support, the court cited case law that addressed excess 

coverage in the context of noncontinuous injury claims (i.e., 

injuries that triggered only one policy period). The courts in 

those cases ruled that first-level excess policies containing 

“other insurance” provisions required not only the exhaustion of 

the primary insurance expressly listed in the excess policy, but 

also any other primary insurance the insured had obtained for 

that period. (See ibid.)

The Community Redevelopment court concluded that 

“other insurance” provisions should apply the same way in the 

context of a continuous injury that triggers multiple policy 
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AND GYPSUM CORP.

Opinion of the Court by Groban, J.

22

periods. According to the court, the “other insurance” provision 

in Scottsdale’s excess policy made clear that the coverage was 

purchased “as excess to the . . . primary policy issued by State 

Farm” and “ ‘any other underlying insurance collectible by the 

[insured parties].’ ” (Community Redevelopment, supra, 

50 Cal.App.4th at p. 338, italics omitted.) In the court’s view, 

“[t]he only reasonable interpretation of this policy language is 

that the term ‘underlying insurance’ must be read to include all 

available primary insurance, not just the policy expressly listed 

on the schedule of underlying insurance.” (Id. at p. 341.) The 

court reasoned that because Scottsdale’s excess policy called for 

horizontal exhaustion of all primary insurance, Scottsdale 

remained on a different level of liability than United’s primary 

policy, thus precluding contribution. 

As noted above, the Court of Appeal in this case (and in its

prior Kaiser Cement decision) chose to follow the reasoning of 

Community Redevelopment, concluding both that: (1) the “other 

insurance” provisions unambiguously compelled a rule of 

horizontal exhaustion; and (2) because the first-level excess 

insurers owed no coverage obligation to the insured until all 

primary insurance had exhausted, there was no possible basis 

for Truck to obtain contribution.6

6 Although the Court of Appeal’s decision denying 

contribution in the instant matter did not rely on its prior ruling 

regarding horizontal exhaustion set forth in the Kaiser Cement

appeal, the excess insurers nonetheless contend that Kaiser 

Cement’s ruling on horizontal exhaustion is now “law of the 

case” and cannot be relitigated here. The law of the case 

doctrine generally “precludes a party from obtaining appellate 
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AND GYPSUM CORP.

Opinion of the Court by Groban, J.

23

3. Montrose III 

In Montrose III, supra, 9 Cal.5th 215, we addressed the 

application of “other insurance” provisions in the context of

excess policies issued during successive periods of a continuous 

injury. The insured was sued for causing continuous 

environmental contamination between 1947 and 1982. During 

that period, the insured obtained annual policies for primary 

insurance and multiple layers of excess insurance. The parties 

stipulated that all primary insurance had been exhausted. The 

question we had to decide was “the sequence in which [the 

insured could] access the excess insurance policies covering this 

period.” (Id. at p. 222.) The insured sought a rule of vertical 

exhaustion, which would allow it to access an excess insurance 

policy upon the exhaustion of any excess policies with lower 

attachment points that had been issued for the same policy 

review of the same issue more than once in a single action.” 

(Katz v. Los Gatos-Saratoga Joint Union High School Dist. 

(2004) 117 Cal.App.4th 47, 62.) It is well-settled, however, that 

the doctrine may be disregarded where the “controlling rules of 

law have been altered or clarified by a decision intervening 

between the first and second appellate determinations.” (People 

v. Stanley (1995) 10 Cal.4th 764, 787.) Even assuming that 

application of law of the case would otherwise be appropriate, 

we are satisfied — as apparently was the Court of Appeal —

that our intervening decision in Montrose III, supra, 9 Cal.5th 

215, justifies departure from the doctrine here. 

We also find no merit in the excess insurers’ contention 

that various arguments and admissions Truck made in the 

Kaiser Cement appeal regarding the anti-stacking issue 

judicially estop Truck from now arguing that under Montrose 

III, supra, 9 Cal.5th 215, the first-level excess policies should be 

construed as attaching upon exhaustion of the directly 

underlying primary policy.
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

24

period. The insurer sought a rule of horizontal exhaustion, 

which would not allow the insured to access an excess policy 

until it had exhausted every excess policy with a lower 

attachment point that had been issued during the continuous 

period of injury. (See id. at p. 229.)

The dispute centered on the meaning of “other insurance” 

clauses in the excess insurance policies. Those clauses provided, 

in varying ways, that the policies shall be excess to “other 

insurance” or “ ‘other underlying insurance’ ” (Montrose III, 

supra, 9 Cal.5th at pp. 224–225, italics omitted) available to the 

insured, “whether or not the other insurance is specifically listed 

in the policy’s schedule of underlying insurance.” (Id. at p. 230.) 

Citing Community Redevelopment, supra, 50 Cal.App.4th 329, 

the insurers argued that the “other insurance” clauses “call[ed] 

for a rule of horizonal exhaustion because they restrict 

indemnification from any excess policy until the insured has 

exhausted all other available insurance — which, in a case of 

long-tail injury, means every policy with a lower attachment 

point from every policy period triggered by the continuous 

injury.” (Montrose III, at p. 230.) The insureds, however, 

argued that the “other insurance” clauses were intended to refer 

only to “other insurance” policies with lower attachment points

that were in effect during the same policy period as the 

overlaying excess policy. (See id. at pp. 230–231.) 

While finding that both parties had offered reasonable

interpretations of the “other insurance” provisions (see Montrose 

III, supra, 9 Cal.5th at pp. 230, 234), we ultimately concluded 

that when read “in light of background principles of insurance 

law, and considering the reasonable expectations of the parties” 

(id. at p. 222), the policy language was “most naturally read to 
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AND GYPSUM CORP.

Opinion of the Court by Groban, J.

25

mean that [the insured] may access its excess insurance 

whenever it has exhausted the other directly underlying excess 

insurance policies that were purchased for the same policy 

period” (id. at p. 234).

Turning first to the text of the “other insurance” 

provisions, we found that certain characteristics weighed 

against the excess insurers’ assertion that such language 

unambiguously mandated a rule of horizontal exhaustion.

First, none of the policies contained any language “clearly or 

explicitly stat[ing] that [the insured] must exhaust insurance 

with lower attachment points purchased for different policy 

periods.” (Montrose III, supra, 9 Cal.5th at p. 230.) Second, we 

noted that some formulations of the “other insurance” clauses 

included broad language that, “[i]f . . . read to apply to 

insurance purchased for other policy periods, . . . could fairly be 

understood to require the exhaustion of every other insurance 

policy at every attachment point — not merely, as the insurers’ 

theory of horizontal exhaustion would have it, excess policies 

from other policy periods that contain lower attachment points.” 

(Id. at p. 231.) Third, we explained that contrary to the excess 

insurers’ proposed interpretation, our prior decisions (and the 

decisions of several other jurisdictions) made clear that “other 

insurance” provisions “have not traditionally been used to 

address questions concerning the obligation of successive 

insurers to indemnify policyholders for a continuously 

manifesting injury.” (Id. at p. 232.) Instead, such clauses have 

historically been understood to “address ‘[a]llocation questions 

with respect to overlapping concurrent policies.’ ” (Ibid.)

Looking next to the text of the excess policies as a whole, 

we found that “other aspects of the insurance policies strongly 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

26

suggest[ed] that the exhaustion requirements were meant to 

apply to directly underlying insurance and not to insurance 

purchased for other policy periods.” (Montrose III, supra, 

9 Cal.5th at p. 233.) First, we noted that many of the policies 

“explicitly state their attachment point, generally by referencing 

a specific dollar amount of underlying insurance in the same 

policy period that must be exhausted.” (Ibid.) We explained 

that under the “insurers’ theory of horizontal exhaustion,” there 

would be no coverage until the insured had exhausted that 

attachment amount “for every relevant policy period” (ibid.), 

thus substantially increasing the “operative attachment point” 

well beyond what the terms of the policy suggested.

Second, and “[r]elatedly” (Montrose III, supra, 9 Cal.5th at 

p. 234), we noted that the excess policies “regularly include or 

reference schedules of underlying insurance — all for the same 

policy period” (ibid.). We explained that under the insured’s 

reading, “these schedules provide a presumptively complete list 

of insurance coverage that must be exhausted before the excess 

policy may be accessed, with the ‘other insurance’ clauses 

serving as a backstop to prevent double recovery in the rare 

circumstance where underlying coverage changes after the 

excess policy is written. [Citation.] But under the insurers’ rule 

of horizontal exhaustion, these schedules would represent only 

a fraction — perhaps only a small fraction — of the insurance 

policies that must be exhausted before a given excess policy may 

be accessed.” (Ibid.)

Looking beyond the language of the parties’ policies, we 

further concluded that “[c]onsideration of the parties’ 

reasonable expectations favors a rule of vertical exhaustion 

rather than horizontal exhaustion.” (Montrose III, supra, 
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AND GYPSUM CORP.

Opinion of the Court by Groban, J.

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9 Cal.5th at p. 234.) First, we noted that “applying the 

horizontal exhaustion rule would be far from straightforward” 

given the lack of “standardization” between the excess policies 

on issues such as attachment points, level of coverage and 

specific terms and conditions. (Ibid.) To illustrate the 

complexity, we noted that “the first layer of excess insurance in 

1984 . . . would appear to reach as high as the 13th layer of 

excess coverage in 1974. To which horizontal layer does the 

1984 policy belong? The policies do not say. Nor does anything

in the text of these policies tell us how an ‘other insurance’ 

clause in a policy from one period ought to apply to a policy from 

another period that contains both a lower attachment point and 

a higher coverage limit. The policies’ silence on these basic, 

foundational questions tends to undermine the idea the parties 

expected such a rule to apply.” (Id. at p. 235.)

We also noted that because “exclusions, terms, and 

conditions may vary from one policy to another, a rule of 

horizontal exhaustion would create significant practical 

obstacles to securing indemnification. . . . Such a rule would put 

the insured to the considerable expense of establishing a right 

to coverage under the definitions, terms, conditions, and 

exclusions from policies in every policy period triggered by the 

continuous injury. Coverage under less restrictive policies 

would be delayed until more restrictive policy terms are 

adjudicated. In sum, ‘[h]orizontal exhaustion would create as 

many layers of additional litigation as there are layers of 

policies.’ ” (Montrose III, supra, 9 Cal.5th at p. 235.)

We rejected the excess insurers’ contention that a rule of 

vertical exhaustion would frustrate the parties’ reasonable 

expectations by unfairly requiring “a single insurer to shoulder
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

28

the burden” of indemnifying “ ‘decades’ worth of environmental 

damage.’ ” (Montrose III, supra, 9 Cal.5th at p. 236.) We noted 

that this argument was “not different in kind from arguments 

we have already considered and rejected in adopting the allsums-with-stacking approach to the coverage of long-tail 

injuries” (ibid.), explaining that “[t]here is no evident unfairness 

to insurers when their insureds incur liabilities triggering 

indemnity coverage under the negotiated policy contract” (ibid.).

We further explained that a rule of vertical exhaustion “does not 

alter the usual rules of equitable contribution between insurers. 

An insurer required to provide excess coverage for a long-tail 

injury may lessen its burden by seeking reimbursement from 

other insurers that issued policies during the relevant period.” 

(Ibid.) 

We also rejected the insurers’ reliance on Community 

Redevelopment, supra, 50 Cal.App.4th 329, explaining that a 

contribution action between a primary insurer and an excess 

insurer presented “a meaningfully different scenario” than a 

coverage action between an insured and its excess insurers, and

thus “offer[ed] no real lessons for resolving the question now 

before us.” (Montrose III, supra, 9 Cal.5th at p. 237.) In a 

footnote, we emphasized that because the question had not been 

presented, we need not “decide when or whether an insured may 

access excess policies before all primary insurance covering all 

relevant policy periods has been exhausted.” (Id. at p. 226, 

fn. 4.)

B. Analysis

As in Montrose III, we are faced with questions regarding 

whether language in standard CGL excess insurance policies 

impose a rule of vertical or horizontal exhaustion in the context 
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AND GYPSUM CORP.

Opinion of the Court by Groban, J.

29

of continuous injury insurance claims. The Court of Appeal 

concluded that because the excess policies at issue in this case 

sat above primary insurance, they were most reasonably 

construed as requiring the insured (Kaiser) to horizontally

exhaust all primary insurance, including Truck’s 1974 policy. 

The court further reasoned that because the excess policies did 

not create any coverage obligation until Truck’s policy was 

exhausted, there was no possible basis for Truck to receive 

contribution.

Given that the court’s contribution analysis turns entirely 

on its interpretation of the first-level excess policies, we will 

begin our review by assessing the court’s construction of those 

contracts, which is “a question of law” to which we apply 

independent review. (E.M.M.I. Inc. v. Zurich American Ins. Co. 

(2004) 32 Cal.4th 465, 470.)7

7 The excess insurers argue that because this case involves 

a claim for equitable contribution, we should apply an abuse of 

discretion standard of review. While it is true that our courts 

have applied a deferential standard to some aspects of equitable 

contribution awards that are not at issue in this case (such as 

the trial court’s chosen method for allocating a loss among 

insurers), the Court of Appeal’s interpretation of the excess 

policies remains a question of law to which we apply de novo 

review. (Compare Fireman’s Fund, supra, 65 Cal.App.4th at 

p. 1308 [“trial court’s determination of the correct allocation 

[method] . . . for purposes of contribution” is reviewed for abuse 

of discretion] with Truck Ins. Exchange v. AMCO Ins. Co. (2020) 

56 Cal.App.5th 619, 629 [applying de novo review where 

contribution claim turned on interpretation of insurance 

policies]; Certain Underwriters at Lloyds, London v. Arch 

Specialty Ins. Co. (2016) 246 Cal.App.4th 418, 429 [“Although 

equitable contribution may call for judicial discretion, here the 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

30

1. The Court of Appeal erred in interpreting the 

policy language

As was the case in Montrose III, the Court of Appeal’s 

interpretation of the excess policies centered on the meaning of 

the “other insurance” clauses in the excess insurance policies. 

The text of those clauses are as follows:

• The LMI policies in effect from 1953–1958 provide that 

liability shall attach only after the primary insurers 

listed in the schedule of underlying insurance have paid 

“the full amount of their respective ultimate loss,” and 

then define “ultimate net loss” as “the sums paid in 

settlement of losses for which the Assured is liable after 

making deductions for all recoveries, salvages and 

other insurances (other than recoveries under the 

policy/ies of the [scheduled primary insurers]), whether 

recoverable or not” (italics added);

• The LMI policies in effect from 1958–1964 include an 

independent “Other Insurance” clause that provides: 

“If other valid and collectible insurance with any other 

insurer is available to the Assured covering a loss also 

covered by this policy, other than insurance that is in 

excess of the insurance afforded by this policy, the 

insurance afforded by this policy shall be in excess of 

and shall not contribute with other insurance”;

• The First State policy in effect from 1983–1984 

provides that the Company shall be liable for loss in 

excess of “an amount equal to the limits of liability 

trial court expressly stated it decided the matter as a question 

of law, and our review is de novo”].)
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

31

indicated beside the underlying insurance listed in the 

Schedule A of underlying insurance, plus the applicable 

limits of any other underlying insurance collectible by 

the insured”; “[i]f other collectible insurance with any 

other insurer is available to the insured covering in loss 

covered here [sic], except insurance purchased to apply 

in excess of the sum of [this policy], the insurance 

hereunder shall be in excess of and not contribute with 

such other insurance” (italics added).8

Following the analysis in Community Redevelopment, 

50 Cal.App.4th 329, the court interpreted these “other 

insurance” provisions as unambiguously requiring Kaiser to 

exhaust all primary policies that it had purchased for every 

policy period triggered by the continuous injury. Truck, 

however, contends that our core holding in Montrose III — that 

standard “other insurance” provisions appearing in excess 

policies are only intended to refer to insurance purchased for the 

same policy period — applies equally in the context of excess 

policies that sit over primary insurance. As discussed in more 

detail below, we agree with Truck that the policy language at 

issue here cannot be meaningfully distinguished from the 

policies that we addressed in Montrose III. We also agree that 

the qualitative distinctions between primary and excess 

insurance do not justify assigning an entirely different meaning 

to standardized “other insurance” clauses merely because the 

excess policy sits over primary insurance rather than another 

level of excess insurance. 

8 The Westchester policy in effect from 1984–1985 includes 

language that is essentially identical to the First State policy. 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

32

The Court of Appeal made no attempt to differentiate the 

text of the “other insurance” provisions at issue here and those 

at issue in Montrose III. Nor have the excess insurers attempted 

to do so in their briefing. That is not particularly surprising 

given that the provisions are substantially identical, and in 

several formulations exactly identical,

9

each providing in 

various ways that the excess policy shall be excess to the 

underlying primary policy identified in the schedule of 

underlying insurance along with any “other insurance” or “other 

underlying insurance” available to the insured. As in Montrose 

III, none of the provisions explicitly reference “other insurance”

purchased for different policy periods.

Our observations in Montrose III regarding the historical 

use of “other insurance” provisions also weigh against the excess 

9 For example, one of formulations at issue in Montrose III

provided that “ ‘[i]f other valid and collectible insurance with 

any other insurer is available to the Insured covering a loss also 

covered by this policy, other than insurance that is in excess of 

the insurance afforded by this policy, the insurance afforded by 

this policy shall be in excess of and shall not contribute with 

such other insurance.’ ” (Montrose III, supra, 9 Cal.5th at 

pp. 224–225.) Several of the LMI policies at issue in this case 

include an identically worded provision. (See ante, at p. 30.) A 

second formulation in Montrose III defined the excess insurer’s 

attachment point as the total of the liability limits set forth in 

the excess policy listed in the schedule of underlying insurance 

plus “ ‘the applicable limits of any other underlying insurance 

collectible by the insured.’ ” (Montrose III, at p. 224.) The First 

State policy at issue in this case likewise defines the attachment 

point as the total of the liability limit set forth in the primary 

policy listed in the schedule of underlying insurance plus “the 

applicable limits of any other underlying insurance collectible by 

the insured.” (See ante, at pp. 30–31.)
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

33

insurers’ contention that such language is most reasonably 

interpreted as requiring the insured to exhaust primary 

insurance that was issued during precedent or successive policy 

periods of a continuous injury. As we explained there, such 

provisions have historically been understood as referring only to 

“other insurance” that was issued for the same policy period, not

(as the excess insurers suggest) other insurance issued “for 

different policy periods.” (Montrose III, supra, 9 Cal.5th at 

p. 230; see id. at p. 234.) Indeed, as Montrose III noted and we 

reiterate here, most jurisdictions that have addressed analogous 

arguments have concluded that “ ‘other insurance’ clauses” do 

not mandate horizontal exhaustion nor are they otherwise 

relevant to policies issued during different periods of coverage. 

(Id. at pp. 232–233.) The Restatement of Liability Insurance 

likewise explains that “ ‘ “other insurance” ’ clauses have 

generally been used to address ‘[a]llocation questions with 

respect to overlapping concurrent policies.’ ” (Montrose III, at 

p. 232, quoting Rest., Liability Insurance, § 40, com. c, p. 345.) 

The excess insurers have presented no argument as to why the 

historical understanding of “other insurance” clauses, which is 

generally supportive of vertical rather than horizontal 

exhaustion, is inapplicable when the excess policy sits over a 

primary policy. 

The first-level excess policies also share the same general 

characteristics that we found in Montrose III to be “strongly 

suggest[ive]” of requiring only vertical, not horizontal 

exhaustion. (Montrose III, supra, 9 Cal.5th at p. 233.) For 

example, the excess policies “include or reference schedules of 

underlying insurance — all for the same policy period.” (Id. at 

p. 234.) Indeed, every single policy at issue in this case describes 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

34

its attachment point by directly referencing primary insurance 

that was issued for the same policy period. As in Montrose III, 

we believe these schedules are most reasonably construed as a 

“presumptively complete list of insurance coverage that must be 

exhausted before the excess policy may be accessed, with the 

‘other insurance’ clauses serving as a backstop to prevent double 

recovery in the rare circumstance where underlying coverage 

changes after the excess policy is written.” (Ibid.)10

Moreover, several of the policies not only refer to 

underlying primary insurance issued during the same policy 

period, but also “referenc[e] a specific dollar amount of 

underlying insurance in the same policy period that must be 

exhausted.” (Montrose III, supra, 9 Cal.5th at p. 233.) Under 

the excess insurers’ theory of horizontal exhaustion, however, 

this attachment would not occur until Kaiser had exhausted 

that amount, plus the limits of every other primary policy it had 

obtained for every relevant policy period.

Furthermore, the same practical concerns with 

administering a rule of horizontal exhaustion that we discussed

in Montrose III are likewise implicated here. We explained, for 

example, that applying horizontal exhaustion would be “far from 

straightforward” given that the attachment points of the 

insured’s layers of excess insurance did not align from policy 

year to policy year. (Montrose III, supra, 9 Cal.5th at p. 234.) 

10 The first-level excess policies also include provisions 

stating that upon exhaustion of those scheduled underlying 

policies, the excess policy shall “continue in force as underlying 

insurance.” Again, these express references to the directly 

underlying primary policies tend to support a view of vertical, 

rather than horizontal exhaustion.
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

35

The Court of Appeal concluded this rationale was inapplicable 

in the current context because “there is only one underlying 

layer of insurance, namely, primary insurance and it is easy to 

ascertain whether that insurance has been exhausted.” That 

reasoning, however, overlooks that the plain text of the firstlevel excess policies’ “other insurance” provisions is not limited 

to other underlying primary insurance. Rather, the provisions 

speak generally to “any other insurance” or “any other 

underlying insurance.” (Italics added.) If the excess insurers 

are correct that these provisions were intended to apply to 

insurance purchased for different policy periods, their plain 

language indicates that Kaiser would have to exhaust any other 

underlying insurance — i.e., any policy with a lower attachment 

point — not merely any other underlying primary insurance. 

While that might not create any particular administrative

complications if the attachment points of Kaiser’s first-level 

excess policies were standardized across policy years, the record 

shows that is not the case. Rather, as in Montrose III, the firstlevel excess policies appear to come in different “shapes and 

sizes.” (Montrose III, supra, 9 Cal.5th at p. 234.) For example, 

in the 1983 policy year, Kaiser obtained primary insurance for 

the first $2 million of liability and obtained a first-level excess 

policy that attaches above that amount. In 1958, however, 

Kaiser obtained only $1 million in primary insurance with a 

first-level excess policy for the next $2 million. If the “other 

insurance” provisions truly apply across all policy periods, does 

Kaiser’s 1983 first-level excess policy (with an attachment point 

of $2 million) require Kaiser to exhaust the 1958 primary policy 

(with an attachment point of $1 million) and the first $1 million 

of the 1958 first-level excess policy? Or can Kaiser access the 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

36

1983 first-level excess policy as soon as the $1 million 1958 

primary policy is exhausted? Stated more simply, if the $1 

million 1958 primary policy qualifies as “other underlying 

insurance” to the 1983 first-level excess policy, why wouldn’t the 

initial $1 million of the 1958 first-level excess policy likewise 

qualify as underlying insurance that would have to be 

exhausted prior to accessing the 1983 policy? As noted in 

Montrose III, “[t]he policies’ silence on these basic, foundational 

questions tends to undermine the idea the parties expected . . . 

a rule [of horizontal exhaustion] to apply.” (Id. at p. 235.)

Finally, Montrose III expressed concern that “because the 

exclusions, terms, and conditions may vary from one [excess] 

policy to another” (Montrose III, supra, 9 Cal.5th at p. 235), a 

rule of horizontal exhaustion would “put the insured to the 

considerable expense of establishing a right to coverage under 

the definitions, terms, conditions, and exclusions from policies 

in every policy period triggered by the continuous injury” (ibid.). 

Again, neither the Court of Appeal nor the excess insurers have 

provided any explanation as to why those concerns are 

inapplicable in the context of primary insurance. During the 

relevant time frame Kaiser bought dozens of primary policies 

from multiple insurers. While the parties have not provided 

detailed information regarding the specific terms of those 

policies, the excess insurers’ own briefing indicates that the

terms of the primary policies vary with respect to coverage

amounts, aggregate limits, allocation of defense costs and 

deductible requirements. Moreover, as discussed above, Kaiser, 

Truck and the excess insurers previously spent years litigating 

whether a specific provision in Truck’s 1974 policy barred Kaiser 

from accessing any of Truck’s other 18 primary policies (a 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

37

provision apparently absent in the non-Truck primary policies). 

Thus, based on the limited record before us, it is reasonable to 

assume that the same concerns regarding the amount of 

litigation a rule of horizontal exhaustion would create due to 

variations in policy terms and conditions are equally present in 

the context of primary insurance.

11

 

Despite the textual overlap between the policy language 

at issue here and in Montrose III, and the similar practical 

complications that a rule of horizontal exhaustion would present 

to the insured in the context of primary insurance, the Court of 

Appeal concluded that “other insurance” provisions should 

nonetheless be assigned a different meaning when the excess 

policy sits over primary insurance. The sole reason the court 

provided in support of this conclusion was the “qualitative[]” 

distinctions between primary and excess insurance. As 

explained by the court, primary policies receive higher 

premiums because they “attach as first-dollar coverage and have 

an immediate obligation to respond,” whereas excess policies 

may never be called upon to indemnify. Moreover, primary 

insurers generally have the right to control defense and 

settlement without input from excess insurers and “do not use 

11 Although Kaiser has joined the excess insurers in arguing 

that Truck’s contribution claim should be denied on unfairness 

grounds, it has notably declined to take a position as to whether 

the Court of Appeal properly interpreted the first-level excess 

policies as requiring horizontal exhaustion. In the prior Kaiser 

Cement appeal, however, Kaiser specifically argued against

such a rule, contending that it was “objectively reasonable” to 

expect that its 1974 first-level excess policy would become

available immediately upon exhaustion of the underlying 1974 

Truck primary policy. 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

38

defense costs to reduce limits.” The court provided no further 

discussion or explanation as to why it believed these distinctions 

warranted a departure from the interpretation of “other 

insurance” provisions that we adopted in Montrose III. We find 

the Court of Appeal’s reasoning unavailing. 

In SantaFe, supra, 52 Cal.App.5th 19, the First District

reached a contrary conclusion, reasoning that the distinctions 

between primary insurance and excess insurance “provide little 

justification for construing the policy language interpreted in 

Montrose III differently.” (Id. at p. 28.) Regarding the 

differences in the premiums paid for primary and excess 

insurance, the court explained that “the evaluation of risk based 

on the assumption of vertical exhaustion is straightforward and 

can be made based on known parameters. However, if the risk 

assessment were to be made based on the assumption of 

horizontal exhaustion, the evaluation would be speculative and 

unpredictable” as the “level of liability at which the excess 

coverage would attach would be unascertainable. . . . The 

difference between premiums paid for excess and for primary 

policies does not justify an interpretation that renders the point 

of attachment so unpredictable and unascertainable when the 

policy is issued.” (Id. at p. 29.)

Regarding “the differing defense obligations” between 

primary and excess insurance (SantaFe, supra, 52 Cal.App.5th 

at p. 29), the court explained that requiring the insured to 

exhaust only the directly underlying primary policy does not

alter the “well settled [rule] that an excess insurer [generally] 

has no duty to defend unless the underlying primary insurance 

is exhausted” (ibid.). The court noted that “[f]rom the 

perspective of the insured, one would reasonably expect the 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

39

excess insurer to contribute to the defense once the scheduled 

primary policies have been exhausted and the attachment 

points reached.” (Ibid.)12

We believe that SantaFe has the better view. We are not 

persuaded that the differences in characteristics between 

primary and excess insurance is sufficient to demonstrate that

“other insurance” provisions are meant to require horizontal 

exhaustion when used in first-level excess policies. As noted, 

Montrose III concluded that identical language appearing in 

higher-level excess policies is most reasonably construed as 

applying only to underlying insurance that covers the same 

policy period. We do not believe that the meaning of the 

language is transformed to say exactly what we concluded it did 

not say in Montrose III merely because the policy sits over 

primary insurance rather than another level of excess 

insurance.

Furthermore, as SantaFe explained, even under the rule 

of vertical exhaustion that we adopted in Montrose III, the 

differences in premiums between primary and excess insurance 

continue to reflect the fact that the excess insurer still has no 

indemnity obligations unless and until the insured exhausts the 

limits of the directly underlying primary policy. Given that 

these excess policies were written long before we adopted the 

all-sums-with-stacking approach to continuous injuries (see 

ante, at pp. 7–9), we are dubious that the excess insurers priced 

12 The specific defense obligations that a first-level excess 

insurer owes to the insured, and whether defense costs are 

included in the aggregate limits of the excess policy, will of 

course turn on the specific terms of each excess policy. 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

40

their premiums on the assumption that their policies would not 

attach until the insured had exhausted the directly underlying 

primary policies along with any other primary insurance the 

insured might acquire in later years. Were that truly the 

insurers’ intent, we would expect a clearer statement than a 

mere reference to “other insurance.” (See Montrose I, supra,

10 Cal.4th at p. 647 [“ ‘Because the insurer writes the policy, it 

is held “responsible” for ambiguous policy language, which is 

therefore construed in favor of coverage’ ”].) While the excess 

insurers may not have anticipated the coverage and allocation 

rules that have emerged from the Montrose, Aerojet, and 

Continental line of decisions, we cannot now rewrite what they 

promised to the insured.

We are also dubious that even after our adoption of the allsums-with-stacking approach, excess insurers would choose to 

price premiums — or that the insured would agree to pay 

premiums — based on a horizontal exhaustion approach that 

carries the inherent uncertainty of what other primary 

insurance the insured might acquire in later years. By raising 

the excess policy’s attachment point with each subsequent 

primary policy that the insured acquires during the period of 

continuous injury, a rule of horizontal exhaustion effectively 

operates to penalize the insured for obtaining more insurance. 

It is not clear why the insured would agree to such an approach. 

Thus, absent clear policy language to that effect, we decline to 

read “other insurance” language to reflect such an agreement 

between the insured and excess insurer.

In sum, we believe that the language of the first-level 

excess policies, when considered in conjunction with the 

insured’s reasonable expectations and the historical role of 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

41

“other insurance” provisions, is most naturally read to mean 

that the insured may access the policies upon exhaustion of the 

directly underlying policies that were purchased for the same 

period. Excess insurers do, however, remain free to write their 

future excess policies in a manner that expressly requires 

horizontal exhaustion. (See Montrose III, supra, 9 Cal.5th at 

p. 237 [“Parties to insurance contracts are, of course, free to 

write their policies differently to establish alternative 

exhaustion requirements or coverage allocation rules if they so 

wish”].)

As noted above, Community Redevelopment, supra, 

50 Cal.App.4th 329, which predates our decision in Montrose III, 

reached a different conclusion. The court there found that 

similarly worded “other insurance” provisions required the 

insured to horizontally exhaust all primary insurance. As noted 

above, in reaching that conclusion, the court relied primarily on 

case law that addressed noncontinuous injury claims (i.e., 

claims that triggered only one policy period). (See ante, at 

pp. 20–22; Community Redevelopment, at p. 339, citing Olympic 

Ins. Co. v. Employers Surplus Lines Ins. Co. (1981) 

126 Cal.App.3d 593 [concerning an aircraft collision],

McConnell v. Underwriters at Lloyds (1961) 56 Cal.2d 637 

[concerning an automobile collision], and Lamb v. Belt Cas. Co.

(1935) 3 Cal.App.2d 624 [concerning an automobile collision].) 

The courts in those cases held that the excess policies’ “other 

insurance” provisions required the insured to exhaust not only 

the underlying primary insurance expressly listed in the excess 

policy, but also any other underlying primary insurance that the 

insured had obtained for the same policy period. (See ante, at 

p. 21.) Community Redevelopment concluded that “other 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

42

insurance” provisions should operate in the same manner for 

continuous injury claims that trigger multiple policy periods. 

Community Redevelopment, however, failed to recognize 

that cases construing “other insurance” provisions in the context 

of noncontinuous injuries do not speak to the ambiguity that we 

address here (which was the same ambiguity at issue in 

Montrose III): are “other insurance” clauses most reasonably 

construed as applying to other underlying insurance issued

during the same policy year or do such clauses extend to other 

underlying insurance issued during different policy years within 

the continuous period of injury? Because cases addressing 

noncontinuous injury claims do not speak to this ambiguity, 

Community Redevelopment erred in relying on them.

13

 

For the reasons explained above, we disapprove

Community Redevelopment’s conclusion that standardized 

“other insurance” provisions appearing in first-level excess 

policies compel a rule of horizontal exhaustion. We likewise 

disapprove language in Padilla Construction Co., Inc. v. 

Transportation Ins. Co. (2007) 150 Cal.App.4th 984 and 

13 In addition to finding that the “other insurance” provisions 

compelled a rule of horizontal exhaustion, the Community 

Redevelopment court believed that “a horizontal exhaustion rule 

. . . is most consistent with the [all-sums] principles enunciated 

in Montrose [I, supra, 10 Cal.4th 645].” (Community 

Redevelopment, supra, 50 Cal.App.4th at p. 340.) However, we 

rejected an essentially identical argument in Montrose III. (See 

Montrose III, supra, 9 Cal.5th at pp. 235–236 [rejecting 

insurers’ assertion that a “rule of horizontal exhaustion is 

logically compelled by our adoption of an all-sums-with-stacking 

approach to liability for long-tail injuries”; “There is no evident 

inconsistency between an all sums approach and [vertical 

exhaustion]”].)
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

43

Stonewall Ins. Co. v. City of Palos Verdes Estates (1996) 

46 Cal.App.4th 1810, suggesting that California law generally 

requires horizontal exhaustion of all primary insurance in cases 

of continuous loss. (See Padilla, at pp. 986–987; Stonewall, at 

pp. 1852–1853.)

2. Additional considerations regarding Truck’s 

contribution claim

Montrose III was a coverage action that required us to 

determine whether the insured was permitted to access its 

higher-level excess policies. The answer to that question 

depended entirely on our interpretation of the policies at issue 

in that case. Here, however, we are faced with an equitable 

contribution claim between insurers. As noted above, the terms 

of the insurers’ policies comprise only one of the factors courts 

may consider when evaluating whether contribution would 

“ ‘accomplish ultimate justice’ ” (Signal, supra, 27 Cal.3d at 

p. 369) in a particular case (see ibid.; ante, at pp. 17–18). Thus, 

the fact that we have rejected the Court of Appeal’s conclusion 

that the excess policies do not create any indemnity obligation

until all primary insurance has been exhausted, and instead 

have interpreted those policies in a manner that would permit 

the insured (Kaiser) to access the policies upon exhaustion of the 

directly underlying primary policies, does not resolve whether

Truck is entitled to contribution from the excess insurers.

To that end, the excess insurers and Kaiser argue that 

even if, as a matter of contract interpretation, the policies are 

most reasonably construed as allowing the insured (Kaiser) to 

access the first-level excess policies upon exhaustion of the 

directly underlying primary insurance, it would nonetheless 

remain unfair as a matter of equity to ever order an excess 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

44

insurer to contribute to a primary insurer given the distinct role 

those two types of carriers play in covering a loss. Although we 

have concluded that the qualitative distinctions between 

primary and excess insurance do not present a sufficient basis 

to depart from the interpretation of the “other insurance” 

provisions that we adopted in Montrose III (i.e., that such 

provisions impose only a rule of vertical exhaustion on the 

insured), whether those distinctions might have more salience 

in the context of equitable contribution between insurers 

remains an open question. (See generally Dart, supra, 28 

Cal.4th at p. 1080 [“the obligation of successive primary 

insurers to cover a continuously manifesting injury is a separate 

issue from the obligations of the insurers to each other”]; 

SantaFe, supra, 52 Cal.App.5th at p. 29 [whether a policy 

requires horizontal or vertical exhaustion presents “a different 

question” than determining “the rights of . . . carriers . . . to 

contribution”].) 

The excess insurers and Kaiser further argue that even if 

there might be some circumstances where it would be 

appropriate to order contribution between primary and excess 

insurers, such an order would be unjust under the facts 

presented in this case. They explain that because Truck agreed 

to indemnify Kaiser up to $500,000 for each asbestos-related 

bodily injury claim but placed no aggregate limit on coverage

(something no other primary insurer did), ordering the excess 

insurers to contribute to that initial $500,000 in coverage would 

effectively allow Truck to pay less coverage than it promised

under its 1974 policy. They further contend that ordering 

contribution would simultaneously leave Kaiser (and asbestos 

claimants) with less overall coverage by prematurely exhausting
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

45

excess insurance that could otherwise be used to cover 

individual asbestos claims that exceed Truck’s $500,000 per 

occurrence limit or claims that do not trigger Truck’s 1974 policy 

(i.e., claims in which initial exposure occurred after the 1974 

policy period). In support of these arguments, Kaiser and the 

excess insurers cite expert testimony and other evidence

regarding claims allocation that was presented during the bench 

trial. 

Because the Court of Appeal denied contribution based 

solely on its erroneous interpretation of the first-level excess 

policies, it did not consider these or any other alternative 

arguments related to the question of contribution. Having now 

clarified that the first-level excess insurers’ indemnity

obligations to Kaiser attach upon exhaustion of the directly 

underlying primary policies, we find it appropriate to remand 

the matter for the court to reevaluate whether contribution 

would “ ‘accomplish ultimate justice’ ” (Signal, supra, 27 Cal.3d 

at p. 369) among the insurers and their policy holder. (See, e.g.,

Coast Community College Dist. v. Commission on State 

Mandates (2022) 13 Cal.5th 800, 822 [remanding to allow the 

court to “ ‘resolve [unexamined issues] . . . in the first 

instance’ ”]; Hamilton, supra, 22 Cal.4th at p. 1149 [“It is 

appropriate to remand for the Court of Appeal to resolve . . . in 

the first instance” issues that the court chose “not [to] reach 

because of its holdings”].)

On remand, the parties are free to raise any arguments 

they believe may aid the court in deciding whether contribution 

is ever appropriate between primary and excess insurers and, if 

so, whether contribution would be appropriate under the 

circumstances of this case. The Court of Appeal, in turn, retains 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

46

discretion to make a further remand to the trial court if it 

concludes that the trial court is better positioned to address any 

questions of contribution that may arise in the further 

proceedings.

14

III. DISPOSITION

The Court of Appeal’s judgment is reversed, and the 

matter is remanded for further proceedings consistent with this 

opinion. 

14 Like the Court of Appeal, the trial court’s decision to deny 

contribution was predicated exclusively on its finding that the 

excess policies required horizontal exhaustion. (See ante, at 

pp. 14–15.) As a result, the trial court did not address any of the 

parties’ other arguments regarding contribution, much of which 

was presented through expert testimony at trial. Thus, to the 

extent the Court of Appeal concludes that Truck is potentially 

eligible for contribution, it may further conclude that the trial 

court is in a better position to weigh the equities at stake given 

its familiarity with the parties and their relative positions in 

this long-running litigation. (See Hartford Casualty Ins. Co. v. 

Travelers Indemnity Co. (2003) 110 Cal.App.4th 710, 724 [“In 

evaluating competing claims for equitable contribution, the trial 

court exercises its discretion to weigh the equities to 

‘ “ ‘accomplish ultimate justice’ ” ’ ”]; Axis, supra, 

204 Cal.App.4th at p. 1228 [“in an equitable contribution action, 

a court reviews the applicable facts and policies and decides 

what is fair between the potential coinsurers”].) We leave those 

determinations to the Court of Appeal.
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT 

AND GYPSUM CORP.

Opinion of the Court by Groban, J.

47

GROBAN, J.

We Concur:

GUERRERO, C. J.

CORRIGAN, J.

LIU, J.

KRUGER, J.

JENKINS, J.

EVANS, J.
See next page for addresses and telephone numbers for counsel who 

argued in Supreme Court.

Name of Opinion Truck Insurance Exchange v. Kaiser Cement and 

Gypsum Corp.

__________________________________________________________

Procedural Posture (see XX below)

Original Appeal

Original Proceeding

Review Granted (published) 

Review Granted (unpublished) XX NP opn. filed 1/7/22 – 2d Dist., 

Div. 4

Rehearing Granted

__________________________________________________________

Opinion No. S273179

Date Filed: June 17, 2024

__________________________________________________________

Court: Superior

County: Los Angeles

Judge: Kenneth R. Freeman

__________________________________________________________

Counsel:

Pia Anderson Moss Hoyt, Scott R. Hoyt, Adam L. Hoyt; Greines, 

Martin, Stein & Richland, Robert A. Olson, Jonathan H. Eisenman and 

Edward L. Xanders for Plaintiff and Appellant.

The Cook Law Firm, Philip E. Cook and Brian J. Wright for 

Defendant, Cross-complainant and Appellant Kaiser Cement and 

Gypsum Corporation.

Covington & Burling, David B. Goodwin, Breanna K. Jones and Billie 

T.H. Mandelbaum for United Policyholders as Amicus Curiae on behalf 

of Defendant, Cross-complainant and Appellant Kaiser Cement and 

Gypsum Corporation.

Morgan, Lewis & Bockius and Jeffrey S. Raskin for Santa Fe Braun, 

Inc., as Amicus Curiae on behalf of Defendant, Cross-complainant and 

Appellant.
Duane Morris, Brian A. Kelly, Paul J. Killion and Kathryn T.K. 

Schultz for Defendant and Appellant.

Lynberg & Watkins, Sinnott, Puebla, Campagne & Curet and Wendy 

E. Schultz for Cross-defendant and Appellant and Defendant and 

Respondent.

Squire Patton Boggs, G. David Godwin and Tania L. Rice for

Defendant and Respondent The Continental Insurance Company.

Selman Breitman, Elizabeth M. Brockman and Calvin S. Whang for 

Defendants and Respondents National Casualty Company and Sentry 

Insurance a Mutual Company.

Crowell & Moring, Mark D. Plevin and Christine E. Cwiertny for 

Defendants and Respondents Fireman’s Fund Insurance Company and 

Allianz Underwriters Insurance Company.

Kendall Brill & Kelly, Alan Jay Weil; Shipman & Goodwin, Ruggeri 

Parks Weinberg, James P. Ruggeri, Katherine M. Hance and Edward 

B. Parks II for Defendant and Respondent First State Insurance 

Company.

Aiwasian & Associates and Deborah A. Aiwasian for Defendant and 

Respondent Westchester Fire Insurance Company.

Davis Wright Tremaine, Everett W. Jack, Jr., and Lawrence B. Burke 

for Defendant and Respondent Transport Insurance Company.

Traub Lieberman Straus & Shrewsberry, Robert Dennison, Kevin P. 

McNamara, Giuseppe Castaldi and Laura Siegel-Puhala for Defendant 

and Respondent Evanston Insurance Company.
Counsel who argued in Supreme Court (not intended for 

publication with opinion):

Robert A. Olson

Greines, Martin, Stein & Richland LLP

6420 Wilshire Boulevard, Suite 1100

Los Angeles, CA 90048

(310) 859-7811

Brian A. Kelly

Duane Morris LLP

Spear Tower, One Market Plaza, Suite 2200

San Francisco, CA 94105-1127

(415) 957-3213

Philip E. Cook

The Cook Law Firm, P.C.

601 S. Figueroa Boulevard, Suite 2050

Los Angeles, CA 90017

(213) 988-6100