Court Opinion

ID: 8407870
Source: CourtListenerOpinion
Date Created: 2022-11-02 16:36:09.776007+00
Date Added: 2024-06-11T16:47:30.987280
License: Public Domain

DAVID R. THOMPSON, Circuit Judge,
dissenting:
I agree with the majority on the statute of limitations issue, but I would affirm the district court’s judgment on the stacking issue. Thus, I respectfully dissent.
In the present case, there was one occurrence causing damages in successive policy years. This fact distinguishes this case from the California Court of Appeal’s decision in Stonewall Ins. Co. v. City of Palos Verdes, 46 Cal.App.4th 1810, 54 Cal.Rptr.2d 176 (1996), in which there were multiple occurrences. In Stonewall, the court relied upon “occurrences” that were “continuously occurring throughout a period of time....” Id. at 1853, 54 Cal.Rptr.2d 176. The court’s use of the plural “occurrences” was not, as the majority asserts in footnote 7, a “reference to broad principles of law.” It reflected the facts of the case as recounted by the court:
as a result of the City’s ongoing periodic design, maintenance and mitigation activities, relatively minor erosion damage to the Papworth property was occurring in 1978 and the deep-seated landslide was activated which effectively destroyed the property in 1981.
Id. at 1843, 54 Cal.Rptr.2d 176.
We are compelled to decide the present case according to California law. That law was set forth in FMC Corp. v. Plaisted & Cos., 61 Cal.App.4th 1132, 72 Cal.Rptr.2d 467 (1998). FMC was a property damage case involving alleged continuous injury-arising out of a single occurrence. The California Court of Appeal specifically rejected the stacking of limits of an insurer’s *1222policy for consecutive periods when the continuous injury arose out of a single occurrence, reasoning that stacking would afford “the insured substantially more coverage, for liability attributable to any particular single occurrence, than the insured bargained or paid for.” Id. at 1189, 72 Cal.Rptr.2d 467.
The California Supreme Court’s decision in Montrose Chemical Corp. v. Admiral Ins. Co., 10 Cal.4th 645, 42 Cal.Rptr.2d 324, 913 P.2d 878 (1995) is not to the contrary. In Montrose, the court addressed the duty to defend, not the duty to indemnify. Id. at 694, 42 Cal.Rptr.2d 324, 913 P.2d 878. Because the duty to defend is broader than the duty to indemnify, even a potentially covered injury would obligate the insurer to provide a defense. See Id. at 660 n. 9, 42 Cal.Rptr.2d 324, 913 P.2d 878. The California Court of Appeal in FMC distinguished Montrose on this ground and so should we. See FMC, 61 Cal.App.4th at 1200, 72 Cal.Rptr.2d 467.
In sum, I agree with the district court’s decision on the stacking issue, and would affirm its judgment in favor of Wausau.