Opinion ID: 655503
Heading Depth: 2
Heading Rank: 2

Heading: The Peterson Claims

Text: 10 Although it was later discovered that none of the lawsuits against CU arising out of the Peterson Incident [the Peterson Claims] were filed within the Travelers Policy period, Travelers initially undertook the defense of the Peterson Claims at CU's request. Weavers monitored Travelers' defense of the Peterson Claims during this period as well. 11 Later, in June 1982, CU informed Travelers that it had determined that no timely claim based on the Peterson Incident had been filed during the Travelers Policy period. CU accordingly released Travelers from all obligations under the Travelers Policy, in the interest of 'fair business dealings.'  Meanwhile, CU settled the Peterson Claims for approximately $2.5 million, obtaining primary indemnification in the amount of $1 million from American Employers Insurance Company [American Employers]. 2 12 Upon learning that CU had released Travelers, Weavers informed CU that the Weavers Umbrella did not cover the Peterson Claims. Consequently, in November 1982, CU brought the present action for a judicial declaration that the Weavers Umbrella covered the Peterson Claims, and therefore that Weavers must indemnify CU for the approximate $1.5 million cost of settling the Peterson Claims over and above the $1 million paid by American Employers. 3 After years of contentious discovery proceedings, CU and Weavers filed cross-motions for summary judgment. The district court thereafter granted summary judgment in favor of Weavers. 13 CU advances alternative arguments on appeal. First, it urges that the main body of the Weavers Umbrella must cover EPL on an occurrence basis because the Weavers EPL Endorsement, rather than diminishing the EPL coverage extended under the main body of the Weavers Umbrella, provides additional EPL coverage on a claims-basis. Alternatively, CU insists, the Peterson Claims pleaded in its complaint include non-EPL claims which are covered under the main body of the Weavers Umbrella. 4 14 Weavers proposes a very different interpretation, one which results in no EPL coverage under the main body of the Weavers Umbrella. As Weavers sees it, the sole source of EPL coverage is the Weavers EPL Endorsement itself. But since the EPL coverage provided in the Weavers EPL Endorsement is concededly claims-based, CU's declaratory judgment action fails as a matter of law, because the Peterson Claims were not filed within the Weavers Umbrella policy period. II