Court Opinion

ID: 4541464
Source: CourtListenerOpinion
Date Created: 2020-06-15 20:00:30.924077+00
Date Added: 2024-06-11T12:48:42.101230
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                               JUN 15 2020
                    UNITED STATES COURT OF APPEALS                         MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

SAN DIEGO UNIFIED PORT                           No.   19-55409
DISTRICT,
                                                 D.C. No.
              Plaintiff-Appellee,                3:15-cv-01401-BEN-MDD

 v.
                                                 MEMORANDUM*
LANDMARK INSURANCE COMPANY,

              Defendant,

 and

NATIONAL UNION FIRE INSURANCE
COMPANY OF PITTSBURGH, PA,
successor-in-interest to Landmark
Insurance Company,

              Defendant-Appellant.

                    Appeal from the United States District Court
                      for the Southern District of California
                    Roger T. Benitez, District Judge, Presiding

                        Argued and Submitted June 2, 2020
                              Pasadena, California

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: LIPEZ,** RAWLINSON, and N.R. SMITH, Circuit Judges.

      National Union Fire Insurance Company of Pittsburgh, PA (“National

Union”) appeals the district court’s summary judgments in favor of San Diego Port

District (“the Port”) granting declaratory relief. We have jurisdiction pursuant to

28 U.S.C. § 1291; we reverse and remand.

1.    The district court erred in determining that the umbrella/excess policies were

ambiguous thereby imposing a duty on National Union to defend claims and

indemnify the Port for losses stemming from non-litigated disputes, including costs

resulting from agency orders requiring the Port to remediate and abate

environmental contamination and pollution. The language of the umbrella/excess

policies “governs” because it is “clear and explicit.” See Cty. of San Diego v. Ace

Prop. & Cas. Ins. Co., 118 P.3d 607, 612 (Cal. 2005) (quoting Bank of the West v.

Superior Court, 833 P.2d 545, 552 (Cal. 1992)). The central insuring provisions in

the umbrella/excess policies provide coverage only for “damages.” See id. at

614–16. Similarly, National Union’s duty to defend only extends to “suit[s],” but

National Union retains “the right”—but has no obligation—to investigate,

negotiate, or settle “any claim or suit.” Cf. CDM Inv’rs v. Travelers Cas. & Sur.

      **
              The Honorable Kermit V. Lipez, United States Circuit Judge for the
First Circuit, sitting by designation.
                                          2
Co., 43 Cal. Rptr. 3d 669, 672–73 (Ct. App. 2006). Nothing in the umbrella/excess

policies—including the “continue in force as underlying insurance” language in

Endorsement 2—obligates National Union to defend or indemnify expenses or

claims unrelated to “suits” and “damages.” Thus, coverage under the

umbrella/excess policies is limited to “damages,” i.e., liabilities assessed against

the Port within the context of a lawsuit.

2.    The district court erred in holding the umbrella/excess policies were

ambiguous thereby containing no aggregate limit of liability for property damage

losses. Multiple provisions in the umbrella/excess policies clearly and

unambiguously contemplate a general aggregate limit for covered losses, including

the endorsement entitled “Ultimate Net Loss Limit of Liability Amended”

(Endorsement 2), Item 3(B) on the declarations page, and the “Limit of

Liability–Retained Limit” section of the base policy. The Port seeks to sidestep the

clear and unambiguous language in those provisions that the umbrella/excess

policies contain a general aggregate limit by pointing to the italicized portion of the

following language in Endorsement 2: “in respect of each occurrence—subject to a

limit as stated in item 3(B) of the declarations in the aggregate for each annual

period during the currency of this policy, separately in respect of products liability

and in respect of personal injury . . . by occupational disease.” However, the only

                                            3
reasonable interpretation of Endorsement 2 is that general covered losses,

including property damage (or environmental contamination) claims, are subject to

a per-policy cap of $20 or $50 million, depending on the respective policy, and that

separate aggregate limits in those same amounts apply to products liability and

personal injury by occupational disease claims. Cf. Garamendi v. Mission Ins. Co.,

31 Cal. Rptr. 3d 395, 408–10 (Ct. App. 2005). Thus, the umbrella/excess policies

contain a general aggregate limit in the amounts noted above for each policy

period, and the policies contain separate aggregate limits for products liability and

personal injury by occupational disease.

      REVERSED and REMANDED.

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