Court Opinion

ID: 9943837
Source: CourtListenerOpinion
Date Created: 2024-02-26 14:53:00.385856+00
Date Added: 2024-06-11T13:46:01.488133
License: Public Domain

I concur in the result. I write separately to make an observation or two regarding the majority opinion.
First, the majority opinion can be read to suggest that valid territorial clauses are limited to automobile liability policies. I find no such restriction. Indeed, it would be entirely understandable for an insurance company to want to limit the coverage of its policy to actions prosecuted only in particular jurisdictions and not want to obligate itself to the defense of claims in foreign jurisdictions having different laws and different legal systems. There is no reason why an unambiguous clause limiting coverage in that manner should not, as a matter of contract, be enforceable.
Second, the majority opinion sees support for its holding in the thought that, since the "majority of Sovereign's business was contracted through Lloyd's and Sovereign's agreement with Lloyd's contained an arbitration clause mandating that all disputes be arbitrated in London" (maj. opn., ante, at p. 820), it would have been unreasonable for Sovereign to buy a policy that did not cover a majority of its business. But there is no evidence in this record that National Casualty knew of the arbitration provision at or before the time the parties entered into the insurance contract. If the policy had been unambiguous concerning the meaning of the territorial clause, there would be no reason to lay at National Casualty's feet the fact that Sovereign would have purchased insurance that perhaps did not cover a majority of its business.
There is weight to National Casualty's argument that the terms "claims made" and "claims brought" logically must refer to two different events. This was a "claims made" policy and its coverage depended on a claim being made against the insured within the time period covered by me policy. Separately, a claim had to be "brought" within the geographical coverage of the policy. Since demand letters are common before formal litigation commences, reading the policy to say that a claim is "brought" with regard to the territorial clause when a demand letter is received in the United States, as a practical matter, reads the territorial clause out of the policy.
Even so, I concur in the result because both phrases use the word "claim" and "claim" is identified in the policy as "`a demand or assertion of a legal right seeking Damages made against any of You.'" (Maj. opn., ante, at *Page 825 
p. 816.) The letter received by Sovereign in Stockton, California can reasonably be construed as a demand or assertion of a legal right brought in Stockton seeking damages. The common use of the word "claim" in the phrases "claims made" and "claims brought" introduces an ambiguity that must be held against National Casualty and in favor of coverage. (Powerine Oil Co., Inc.v. Superior Court (2005) 37 Cal.4th 377
[33 Cal.Rptr.3d 562].)
Appellant's petition for review by the Supreme Court was denied May 24, 2006, S142601. *Page 826