Court Opinion

ID: 9759672
Source: CourtListenerOpinion
Date Created: 2023-08-29 00:24:31.27218+00
Date Added: 2024-06-11T07:29:04.024750
License: Public Domain

KENNARD, J., Concurring.
I concur in the judgment. In Foster-Gardner, Inc. v. National Union Fire Ins. Co. (1998) 18 Cal.4th 857 [77 Cal.Rptr.2d 107, 959 P.2d 265] (Foster-Gardner), a decision signed by four justices, this court used a “ ‘literal meaning’ approach” in construing the term “suit” in a standard comprehensive general liability (CGL) insurance policy that did not define that term. (Id. at pp. 869-870, 878-880.) Adopting what it termed a “ ‘bright-line rule’ ” (id. at p. 887), the Foster-Gardner majority held that as used in a CGL policy to define the insurer’s duty of defense, “suit” unambiguously refers only to court proceedings, and CGL insurers are therefore not obligated to undertake the defense of their policyholders in responding to an administrative agency’s pollution remediation order. (Id. at pp. 881-882.) I was among the three dissenting justices. (Id. at p. 888 (dis. opn. of Kennard, J.).)
When it was decided in 1998, Foster-Gardner represented a distinctly minority view. (See Governmental Interinsurance Exchange v. City of Angola (N.D.Ind. 1998) 8 F.Supp.2d 1120, 1130 [“ ‘The vast majority of courts around the United States . . . have found that all kinds of coercive administrative actions ... are “suits” covered by general liability insurance policies . . . .’ ”].) Since Foster-Gardner was decided, no sister state court has adopted its “literal meaning approach,” or its resulting “bright-line rule,” in construing the term “suit” in a CGL insurance policy, while courts in nine sister states and federal courts applying the law of two other sister states have rejected that approach, instead adopting either the “functional equivalent” approach or the “hybrid” approach that the Foster-Gardner majority rejected. (Compass Ins. Co. v. City of Littleton (Colo. 1999) 984 P.2d 606, 622; R.T. Vanderbilt Co., Inc. v. Continental Casualty Co. (2005) 273 Conn. 448 [870 A.2d 1048, 1058]; Travelers Indemnity Co. v. Summit Corp. of America (Ind.Ct.App. 1999) 715 N.E.2d 926, 934; Aetna Casualty & Surety Co. v. *1388Commonwealth (Ky. 2005) 179 S.W.3d 830, 837-838; Dutton-Lainson Co. v. Continental Ins. Co. (2010) 279 Neb. 365 [778 N.W.2d 433, 446-449]; Carpentier v. Hanover Ins. Co. (N.Y.App.Div. 1998) 248 A.D.2d 579 [670 N.Y.S.2d 540, 542]; Schnitzer Investment Corp. v. Certain Underwriters at Lloyd’s of London (2005) 197 Ore.App. 147 [104 P.3d 1162, 1168-1169]; State v. CNA Ins. Cos. (2001) 172 Vt. 318 [779 A.2d 662, 667]; Johnson Controls v. Employers Ins. of Wausau (2003) 264 Wis.2d 60 [665 N.W.2d 257]; Briggs & Stratton Corp. v. Royal Globe Ins. Co. (M.D.Ga. 1999) 64 F.Supp.2d 1340, 1345 [applying Ga. law]; Pacific Employers Ins. Co. v. Servco Pacific Inc. (D. Hawaii 2003) 273 F.Supp.2d 1149, 1156 [applying Hawaii law].) Thus, over the past 12 years, it has become increasingly apparent that Foster-Gardner lies far outside the mainstream of American insurance law.
Here, the court limits Foster-Gardner’s “bright-line rule” by holding that it does not apply to administrative agency adjudicative proceedings. The court reaches this result by concluding that the word “suit,” when used in a CGL policy that does not define that word, is sufficiently ambiguous that it should be construed to protect the insured’s reasonable expectation of coverage. (See maj. opn., ante, at p. 1386.) In so doing, the court implicitly rejects Foster-Gardner’s reasoning that “suit” unambiguously refers only to court proceedings. (Foster-Gardner, supra, 18 Cal.4th at pp. 878-879.) Although I would prefer that Foster-Gardner be overruled, the decision here is at least a step in the right direction.
On January 19, 2011, the opinion was modified to read as printed above.