Court Opinion

ID: 6959212
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:42:38.300103+00
Date Added: 2024-06-11T16:08:22.483009
License: Public Domain

BOOCHEVER, Circuit Judge,
concurring:
I concur in the majority’s result, and would agree with its reasoning concerning an insurer’s duty to defend were it not for California law to the contrary.
In this action for declaratory relief, if Travelers could have established by undisputed evidence that there was no possibility of groundwater contamination giving rise to damage to property other than that of its insured, California law would hold that there is no duty to defend. In Montrose Chemical Corp. v. Superior Court, 6 Cal.4th 287, 24 Cal.Rptr.2d 467, 474, 861 P.2d 1153, 1160 (1993), the California Supreme Court, concurring in and quoting the reasoning of the Court of Appeals, stated
[0]nee the insured has established potential liability by reference to the factual allegations of the complaint, the terms of the policy, and any extrinsic evidence upon which the insured intends to rely,, the insurer must assume its duty to defend unless and until it can conclusively refute that potential. Necessarily, an insurer will be required to defend a suit where the evidence suggests, but does not conclusively establish, that the loss is not covered .... A carrier remains free to seek declaratory relief if undisputed facts conclusively show, as a matter of law, that there is no potential for liability.
(Emphasis added.)
Similarly, in Waller v. Truck Ins. Exch, 11 Cal.4th 1, 44 Cal.Rptr.2d 370, 377-78, 900 P.2d 619, 627 (1995), the court stated
*1063[T]he determination whether the insurer owes a duty to defend usually is made in the first instance by comparing the allegations of the complaint with the terms of the policy. Facts extrinsic to the complaint give rise to a duty to defend when they reveal a possibility that the claim may be covered by the policy.
Conversely, where the extrinsic facts eliminate the potential for coverage, the insurer may decline to defend even when the bare allegations in the complaint suggest potential liability. This is because the duty to defend although broad, is not unlimited; it is measured by the nature and kinds of risks covered by the policy.
(Citations omitted and emphasis added.)
Thus, if Travelers had established by undisputed evidence that there was no possibility of groundwater contamination so that damage was confined to property owned by the insured, under the law as stated by the California Supreme Court, Travelers would be entitled to a declaratory judgment that it had no duty to defend.
In this ease, however, Travelers did not carry its burden to produce undisputed extrinsic evidence that there was no possibility of coverage. A consultant’s report Travelers proffered to the district court stated both that further and deeper testing was necessary to determine that metals contamination had not leached to greater depths than the eighteen inches at which the site had been tested, and that it was unclear whether perched groundwater existed on the site, requiring further testing as well. Traveler’s extrinsic evidence thus did not eliminate the possibility of groundwater contamination.
Applying the California Supreme Court’s holdings in this case, I reach the same conclusion as the majority. Because Travelers did not carry its heavy burden to show by undisputed evidence that there was no possibility of coverage, it has a duty to defend appellants.