Title: Truck Ins. Exchange v. Kaiser Cement & Gypsum Corp.
Citation: N/A
Docket Number: S273179
State: California
Issuer: California Supreme Court
Date: June 17, 2024

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 asbestos-
related 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 non-
Truck 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 first-
level excess policy from Scottsdale.  The Scottsdale policy stated 
that its indemnity obligations would attach upon exhaustion of 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT  
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 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT  
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 
 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT  
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 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT  
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, 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT  
AND GYPSUM CORP. 
Opinion of the Court by Groban, J. 
 
27 
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 all-
sums-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 
TRUCK INSURANCE EXCHANGE v. KAISER CEMENT  
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 first-
level 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 first-
level 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 all-
sums-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